Amended in Senate May 20, 2015

Senate Bill No. 434

Introduced by Senator Allen

February 25, 2015

An act to amend begin delete Section 18551 of the Health and Safety Code, end delete begin insert Section 18119 of the Health and Safety Code, and to amend Sections 5801 and 5802 of, and to add Section 5826 to, the Revenue and Taxation Code, end insert relating to manufactured begin delete housing. end delete begin insert housing, to take effect immediately, tax levy. end insert

LEGISLATIVE COUNSEL’S DIGEST

SB 434, as amended, Allen. Manufactured housing: vehicle license fee: property taxation.

The Mobilehome Parks Act requires the Department of Housing and Community Development to establish regulations for manufactured home, mobilehome, and commercial modular foundation systems. Existing law requires the installation of a manufactured home, mobilehome, or commercial modular as a fixture or improvement to real property to comply with specified provisions, including obtaining a building permit and submission of plans as required by the department’s regulations.

The Vehicle License Fee Law exempts from imposition of the vehicle license fee mobilehomes sold and installed on a foundation system pursuant to the above-described provisions and provides that a mobilehome exempted by this provision is subject to local property taxation. Existing law also requires the Department of Housing and Community Development to transfer a manufactured home or mobilehome which is subject to the vehicle license fee to local property taxation upon a request executed by the owner, legal owner, and each junior lienholder.

This bill would begin delete require the owner of a manufactured home or mobilehome to request a transfer from the vehicle license fee to local property taxation in order for the manufactured home or mobilehome to be installed as a fixture or improvement on real property. end delete begin insert authorize the assessor to transfer a manufactured home, subject to vehicle license and registration fees, to property taxation where the assessor finds that the manufactured home has been rebuilt to the substantial equivalent of a new residential structure, as specified, and would require the base year value of the manufactured home to be its full cash value on the date of completion of new construction. The bill would require the assessor to notify each assessee whose manufactured home is to be placed on the local assessment roll, and to also give notification to the Department of Housing and Community Development and the legal owner, if any, of the manufactured home. This bill would require the Department of Housing and Community Development to transfer the manufactured home or mobilehome to local property taxation upon notification by the assessor. This bill would also make related conforming changes. end insert

begin insert

This bill would include a change in state statute that would result in a taxpayer paying a higher tax within the meaning of Section 3 of Article XIII A of the California Constitution, and thus would require for passage the approval of 2⁄3 of the membership of each house of the Legislature.

end insert begin insert

This bill would take effect immediately as a tax levy.

end insert

Vote:  begin delete majority end delete begin insert ²⁄₃ end insert . Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program: no.

The people of the State of California do enact as follows:

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Section 18119 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

18119.  

(a)  If the license fee has not been paid on or before
the 60th day following the date on which the fee became
delinquent, the department shall mail a notice to the registered
owner, legal owner and each junior lienholder shown on the
permanent title record as of that date, containing the following
information:

(1)  That the license fee is delinquent.

(2)  That the manufactured home or mobilehome will become
subject to a penalty of fifty dollars ($50) per transportable unit
pursuant to subdivision (b) of Section 18116, if the fees and
penalties are not paid on or before the 120th day after the date of
delinquency.

(b)  On or before the last day of each calendar month, the
department shall furnish a listing of new registrations and transfers
of title to manufactured homes and mobilehomes subject to local
property taxation under Section 5801 of the Revenue and Taxation
Code, and of all voluntary transfers to local property taxation, as
provided in subdivision (c), to the county assessor of the county
in which the manufactured home or mobilehome is sited.

(c)  The department shall transfer a manufactured home or
mobilehome which is subject to vehicle license fee to local property
taxation upon a request for the transfer, as prescribed by the
department, executed by the registered owner, legal owner, and
each junior lienholder. Transfer pursuant to this subdivision shall
be final. Persons obtaining such a transfer thereby waive all
entitlement to petition for reinstatement to the vehicle license fee,
and are not entitled to the refund of any vehicle registration fees
or vehicle license fees paid which apply to the period between the
date of voluntary transfer and the expiration of the registration
period for which the fees were paid.

begin insert

(d) The department shall transfer a manufactured home or
mobilehome that is subject to the vehicle license fee to local
property taxation upon notification by the assessor that the
manufactured home or mobilehome has become subject to local
property taxation pursuant to Section 5826 of the Revenue and
Taxation Code.

end insert

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 5801 of the end insert begin insert Revenue and Taxation Code end insert begin insert is
amended to read: end insert

5801.  

(a) As used in Part 0.5 (commencing with Section 50),
Part 1 (commencing with Section 101), Part 2 (commencing with
Section 201), and this part, “manufactured home” means a
manufactured home as defined in Section 18007 of the Health and
Safety Code or a mobilehome as defined in Section 18008 of the
Health and Safety Code which:

(1) Was first sold new on or after July 1, 1980.

(2) Was, at the request of the owner, and following his or her
notification of the Department of Housing and Community
Development and the assessor, made subject to taxation under this
part.

begin insert

(3) Was first sold new on or before June 30, 1980, and following
his or her notification by the assessor, subsequently made subject
to taxation under this part.

end insert

(b) (1) “Manufactured home,” as used in this part, does not
include a manufactured home which has become real property by
being affixed to land on a permanent foundation system pursuant
to Section 18551 of the Health and Safety Code and is taxed as all
other real property is taxed.

(2) Except as provided in paragraph (1), a manufactured home,
otherwise subject to taxation pursuant to this part, shall not be
classified as real property for property taxation purposes that would
be excluded from taxation pursuant to this part.

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Section 5802 of the end insert begin insert Revenue and Taxation Code end insert begin insert is
amended to read: end insert

5802.  

(a) Except as provided in subdivisions (b), (c), and (d),
“base year value” as used in this part means the full cash value of
a manufactured home on the date the manufactured home is
purchased or changes ownership. If the manufactured home
undergoes any new construction after it is purchased or changes
ownership, the base year value of the new construction is its full
cash value on the date on which the new construction is completed,
and if uncompleted, on the lien date.

(b) The base year value of a manufactured home for which the
license fee is delinquent shall be its full cash value on the lien date
for the fiscal year in which it is first enrolled.

(c) The base year value of a manufactured home converted
pursuant to Section 18119 of the Health and Safety Code from
taxation under Part 5 (commencing with Section 10701) of Division
2 to taxation under this part shall be its full cash value on the lien
date for the fiscal year in which that manufactured home is first
enrolled. A manufactured home that has been converted is not
subject to supplemental assessment pursuant to Section 75.5 by
reason of the conversion.

(d) The base year value of a manufactured home that changes
ownership in the same calendar year after a conversion in the same
calendar year, shall be its full cash value on the date of the change
in ownership and its value shall be enrolled on the next lien date.
The change in ownership is not subject to supplemental assessment
as provided in Section 75.5.

begin insert

(e) The base year value of a manufactured home converted
pursuant to Section 5826 from taxation under Article 6
(commencing with Section 18114) of Chapter 8 of Part 2 of
Division 13 of the Health and Safety Code to taxation under this
part shall be its full cash value on the date of completion of the
new construction. The completion of new construction is subject
to supplemental assessment as provided in Section 75.5.

end insert begin delete

(e) This section shall become operative on January 1, 1999.

end delete

begin insert

begin insert SEC. 4. end insert   

end insert

begin insert Section 5826 is added to the end insert begin insert Revenue and Taxation
Code end insert begin insert , to read: end insert

begin insert

begin insert 5826. end insert   

(a) The assessor may transfer a manufactured home,
subject to vehicle license and registration fees pursuant to Article
6 (commencing with Section 18114) of Chapter 8 of Part 2 of
Division 13 of the Health and Safety Code, to property taxation
under this part, where the assessor finds that the manufactured
home has been rebuilt to the substantial equivalent of a new
residential structure with a construction completion date of
January 1, 2016, or later and deems that the manufactured home
is no longer transportable in one or more sections pursuant to
Sections 18007 and 18008 of the Health and Safety Code.

(b) The assessor shall notify each assessee whose manufactured
home is to be placed on the local assessment roll pursuant to this
section. The notification shall be given to the Department of
Housing and Community Development and the legal owner, if any,
of the manufactured home, at the same time it is given to the
assessee.

end insert

begin insert

begin insert SEC. 5. end insert   

end insert begin insert

This act provides for a tax levy within the meaning of
Article IV of the Constitution and shall go into immediate effect.

end insert

begin delete

SECTION 1.  

Section 18551 of the Health and Safety Code is
amended to read:

18551.  

(a) The department shall establish regulations for
manufactured home, mobilehome, and commercial modular
foundation systems that shall be applicable throughout the state.
When established, these regulations supersede any ordinance
enacted by any city, county, or city and county applicable to
manufactured home, mobilehome, and commercial modular
foundation systems. The department may approve alternate
foundation systems to those provided by regulation if the
department is satisfied of equivalent performance. The department
shall document approval of alternate systems by its stamp of
approval on the plans and specifications for the alternate foundation
system. A manufactured home, mobilehome, or commercial
modular may be installed on a foundation system as either a fixture
or improvement to the real property, in accordance with subdivision
(b), or a manufactured home or mobilehome may be installed on
a foundation system as a chattel, in accordance with subdivision
(c).

(b) Notwithstanding any other law, prior to a manufactured
home, mobilehome, or commercial modular being deemed a fixture
or improvement to the real property, the installation shall comply
with all of the following:

(1) Prior to installation of a manufactured home, mobilehome,
or commercial modular on a foundation system, the manufactured
home, mobilehome, or commercial modular owner or a licensed
contractor shall obtain a building permit from the appropriate
enforcement agency. To obtain a permit, the owner or contractor
shall provide the following:

(A) Written evidence acceptable to the enforcement agency that
the manufactured home, mobilehome, or commercial modular
owner owns, holds title to, or is purchasing the real property where
the mobilehome is to be installed on a foundation system. A lease
held by the manufactured home, mobilehome, or commercial
modular owner, that is transferable, for the exclusive use of the
real property where the manufactured home, mobilehome, or
commercial modular is to be installed, shall be deemed to comply
with this paragraph if the lease is for a term of 35 years or more,
or if less than 35 years, for a term mutually agreed upon by the
lessor and lessee, and the term of the lease is not revocable at the
discretion of the lessor except for cause, as described in
subdivisions 2 to 5, inclusive, of Section 1161 of the Code of Civil
Procedure.

(B) Written evidence acceptable to the enforcement agency that
the registered owner owns the manufactured home, mobilehome,
or commercial modular free of any liens or encumbrances or, in
the event that the legal owner is not the registered owner, or liens
and encumbrances exist on the manufactured home, mobilehome,
or commercial modular, written evidence provided by the legal
owner and any lienors or encumbrancers that the legal owner,
lienor, or encumbrancer consents to the attachment of the
manufactured home, mobilehome, or commercial modular upon
the discharge of any personal lien, that may be conditioned upon
the satisfaction by the registered owner of the obligation secured
by the lien.

(C) Plans and specifications required by department regulations
or a department-approved alternate for the manufactured home,
mobilehome, or commercial modular foundation system.

(D) The manufactured home, mobilehome, or commercial
modular manufacturer’s installation instructions, or plans and
specifications signed by a California-licensed architect or engineer
covering the installation of an individual manufactured home,
mobilehome, or commercial modular in the absence of the
manufactured home, mobilehome, or commercial modular
manufacturer’s instructions.

(E) Building permit fees established by ordinance or regulation
of the appropriate enforcement agency.

(F) A fee payable to the department in the amount of eleven
dollars ($11) for each transportable section of the manufactured
home, mobilehome, or commercial modular, that shall be
transmitted to the department at the time the certificate of
occupancy is issued with a copy of the building permit and any
other information concerning the manufactured home, mobilehome,
or commercial modular that the department may prescribe on forms
provided by the department.

(2) (A) Within five business days of the issuance of the
certificate of occupancy for the manufactured home, mobilehome,
or commercial modular by the appropriate enforcement agency,
the enforcement agency shall record a document naming the owner
of the real property, describing the real property with certainty,
and stating that a manufactured home, mobilehome, or commercial
modular has been affixed to that real property by installation on a
foundation system pursuant to this subdivision. The document
shall be recorded with the county recorder of the county where the
real property, upon which the manufactured home, mobilehome,
or commercial modular that has been installed, is situated.

(B) When recorded, the document referred to in subparagraph
(A) shall be indexed by the county recorder to the named owner
and shall be deemed to give constructive notice as to its contents
to all persons thereafter dealing with the real property.

(C) Fees received by the department pursuant to subparagraph
(F) of paragraph (1) shall be deposited in the
Mobilehome-Manufactured Home Revolving Fund established
under subdivision (a) of Section 18016.5.

(3) The certification of title and other indicia of registration
shall be surrendered to the department pursuant to regulations
adopted by the department providing for the cancellation of
registration of a manufactured home, mobilehome, or commercial
modular that is permanently attached to the ground on a foundation
system pursuant to this subdivision. For the purposes of this
subdivision, permanent affixation to a foundation system shall be
deemed to have occurred on the day a certificate of occupancy is
issued to the manufactured home, mobilehome, or commercial
modular owner and the document referred to in subparagraph (A)
of paragraph (2) is recorded. Cancellation shall be effective as of
that date and the department shall enter the cancellation on its
records upon receipt of a copy of the certificate of occupancy. This
subdivision shall not be construed to affect the application of
existing laws, or the department’s regulations or procedures with
regard to the cancellation of registration, except as to the
requirement therefor and the effective date thereof.

(4) Once installed on a foundation system in compliance with
this subdivision, a manufactured home, mobilehome, or commercial
modular shall be deemed a fixture and a real property improvement
to the real property to which it is affixed. Physical removal of the
manufactured home, mobilehome, or commercial modular shall
thereafter be prohibited without the consent of all persons or
entities who, at the time of removal, have title to any estate or
interest in the real property to which the manufactured home,
mobilehome, or commercial modular is affixed.

(5) For the purposes of this subdivision:

(A) “Physical removal” shall include, without limitation, the
unattaching of the manufactured home, mobilehome, or commercial
modular from the foundation system, except for temporary
purposes of repair or improvement thereto.

(B) Consent to removal shall not be required from the owners
of rights-of-way or easements or the owners of subsurface rights
or interests in or to minerals, including, but not limited to, oil, gas,
or other hydrocarbon substances.

(6) At least 30 days prior to a legal removal of the manufactured
home, mobilehome, or commercial modular from the foundation
system and transportation away from the real property to which it
was formerly affixed, the manufactured home, mobilehome, or
commercial modular owner shall notify the department and the
county assessor of the intended removal of the manufactured home,
mobilehome, or commercial modular. The department shall require
written evidence that the necessary consents have been obtained
pursuant to this section and shall require application for either a
transportation permit or manufactured home, mobilehome, or
commercial modular registration, as the department may decide
is appropriate to the circumstances. Immediately upon removal,
as defined in this section, the manufactured home, mobilehome,
or commercial modular shall be deemed to have become personal
property and subject to all laws governing the same as applicable
to a manufactured home, mobilehome, or commercial modular.

(7) When an owner of a manufactured home or a mobilehome
subject to the vehicle license fee submits building plans to, and
requests building permits from, the department pursuant to
paragraph (1) to rebuild the manufactured home or mobilehome
on a foundation system, leaving only the chassis of the original
home in place, the manufactured home or mobilehome owner shall
also request a transfer from the vehicle license fee to local property
taxation as specified in subdivision (c) of Section 18119.

(c) The installation of a manufactured home or a mobilehome
on a foundation system as chattel shall be in accordance with
Section 18613 and shall be deemed to meet or exceed the
requirements of Section 18613.4. This subdivision shall not be
construed to affect the application of sales and use or property
taxes. No provisions of this subdivision are intended, nor shall
they be construed, to affect the ownership interest of any owner
of a manufactured home or mobilehome.

(d) Once installed on a foundation system, a manufactured home,
mobilehome, or commercial modular shall be subject to
state-enforced health and safety standards for manufactured homes,
mobilehomes, or commercial modulars enforced pursuant to
Section 18020.

(e) No local agency shall require that any manufactured home,
mobilehome, or commercial modular currently on private property
be placed on a foundation system.

(f) No local agency shall require that any manufactured home
or mobilehome located in a mobilehome park be placed on a
foundation system.

(g) No local agency shall require, as a condition for the approval
of the conversion of a rental mobilehome park to a resident-owned
park, including, but not limited to, a subdivision, cooperative, or
condominium for mobilehomes, that any manufactured home or
mobilehome located there be placed on a foundation system. This
subdivision shall only apply to the conversion of a rental
mobilehome park that has been operated as a rental mobilehome
park for a minimum period of five years.

end delete