BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 477|
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THIRD READING
Bill No: SB 477
Author: Leyva (D)
Amended: 4/29/15
Vote: 27
SENATE GOVERNANCE & FIN. COMMITTEE: 7-0, 4/22/15
AYES: Hertzberg, Nguyen, Beall, Hernandez, Lara, Moorlach,
Pavley
SENATE APPROPRIATIONS COMMITTEE: 7-0, 5/28/15
AYES: Lara, Bates, Beall, Hill, Leyva, Mendoza, Nielsen
SUBJECT: Property tax postponement: mobilehomes and floating
homes
SOURCE: Golden State Manufactured-Home Owners' League
DIGEST: This bill adds mobilehomes to the property tax
postponement (PTP) program.
ANALYSIS:
Existing law:
1)Enacts the Senior Citizens and Disabled Citizens Property Tax
Postponement Law, which allows the State Controller to pay
property taxes to county tax collectors on behalf of
individuals over the age of 62 or disabled persons making less
than $39,000 in income per year.
2)Requires the Controller to secure repayment of postponed taxes
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by recording a lien against the claimant's property, which is
satisfied when the home is sold or refinanced.
3)Allows the Controller to pay property taxes for new applicants
when liens are satisfied out of sales proceeds.
4)Enacts the following administrative provisions for the PTP
program:
a) States that the lien secures all sums paying and owing
under PTP,
b) Provides that the lien is secured when the Controller
transfers funds to the county,
c) Requires the lien to be evidenced by a notice of lien
for property taxes executed by the Controller or his or her
authorized delegate, and recorded in the county recorder's
office in the county in which the property is located
within 14 days of transfer of funds,
d) Allows the notice of lien to bear the Controller's
facsimile signature,
e) Prescribes specified information appear on the lien, and
f) Authorizes the Controller to design the form and content
of the notice of lien.
5)Directs the Department of Housing and Community Development
(HCD) to maintain a title registry for all the state's
mobilehomes.
This bill:
1)Expands PTP eligibility to include mobilehomes by amending
several sections of the Government Code that govern PTP to
incorporate mobilehomes, with some modifications.
a) Instead of sending the notice of lien to the county,
directs the Controller to transmit it to HCD at its
Sacramento office,
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b) Requires HCD to amend the permanent title record of the
mobilehome to reflect that the property taxes have been
postponed upon receipt of the lien,
c) Requires HCD to provide the Controller with
acknowledgement of receipt and amendment of the permanent
title lien,
d) Additionally requires HCD to impose a moratorium on any
other amendments to the permanent title record of the
mobilehome for purposes of transferring any ownership
interest or transferring or creating any security interest
until released or authorized by the Controller,
e) Directs the Controller to maintain a record of all
properties against which HCD has been notified to withhold
transfer of title, including the claimant's name, a
description of the mobilehome against which the lien is
charged, and the amount secured by the lien,
f) Requires the Controller to provide a written statement
showing the amount of the obligation secured by the lien on
the mobilehome in addition to any other information as will
reasonably enable a person or entity to determine the
amount that must be paid to the Controller to release or
discharge the lien for postponed taxes, similar to
traditional homes enrolled in PTP, and
g) States that once a notice of lien is filed, the lien
attaches to the mobilehome for which taxes have been
postponed.
2)Directs the Controller to reduce any obligation amounts by the
amount of payment received.
3)Provides that the Controller must release the lien upon
satisfaction of all amounts it secures, and direct the tax
collector to remove specified information required of PTP
properties from the secured roll, and transmit a release of
lien to the owners of the mobilehome or the owner's heirs or
assigns. Once the owners, heirs, or assigns receive the
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release of lien, they must send it to HCD with a $6 fee.
4)Adds "mobilehomes" to the law's definition of "residential
dwelling," thereby applying the new higher equity requirement
of 40%, compared to the former 20%.
5)States that any real property surrounding the mobilehome
necessary for its use as a home is included for purposes of
PTP.
6)Provides that the bill's expansion of PTP includes houseboats
and floating homes, but excludes them if taxes are already
delinquent.
7)States that should the Commission on State Mandates find that
this bill constitutes a reimbursable state mandate,
reimbursement may be made pursuant to existing statutory
provisions.
Comments
In 2009, due to budgetary constraints, and fewer funds flowing
back to the Controller's Office (SCO) as a result of diminishing
sales prices, the Legislature prohibited persons from filing new
claims under the PTP program, and the Controller from accepting
applications (SBX3-8, Ducheny, Chapter 4, Statutes of 2009-10,
Third Extraordinary Session). However, the Legislature
resuscitated the program last year by removing SBX3-8's
prohibition, albeit with tightened eligibility criteria, and a
requirement for the SCO to transfer to the General Fund
repayments received above a $20 million total (AB 2231, Gordon,
Chapter 703, Statutes of 2014). Before 2009, PTP included
mobile and manufactured homes in the program, as many low-income
persons and seniors live in these homes; however, AB 2231 didn't
include mobilehomes in the new program. Advocates for mobile
and manufactured homeowners want to expand the PTP program to
again include them.
The Legislature reestablished PTP last year to benefit many
low-income and disabled taxpayers who have difficulty paying
their property taxes; however, it didn't provide any additional
funds, so the Controller can only pay property taxes with funds
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from previous repayments, currently $7 million. While this
figure will increase over time, the Controller can't likely meet
current demand given the program's lengthy hiatus, so she plans
on paying claims out of available funds on a first-come,
first-served basis starting this fall. Adding mobilehomes to
PTP allows the Controller to help very low-income individuals
living in these homes, but doing so again adds to demand without
including any additional funds. As a result, the Controller may
have to grant fewer applications for homeowners eligible under
the current program. Additionally, mobilehomes usually
depreciate in value over time, or have no recovery value, which
could generate lower repayment amounts, again reducing the
number and amount of claims the Controller can grant. The
Controller states that the discharge rates for PTP loans (when
the state writes off the loan as a loss) is higher for
mobilehomes (16%) than for traditional homes (6%). However,
mobilehomes haven't traditionally been a large part of the
program: constituting only 4% of PTP accounts, and less than 1%
of outstanding loans in 2008.
FISCAL EFFECT: Appropriation: Yes Fiscal
Com.:YesLocal: Yes
According to the Senate Appropriations Committee, SB 477 results
in unknown expenditures for new PTP loans to mobilehome owners,
likely in the range of $150,000 to $200,000 in 2016-17 and
2017-18, decreasing to $75,000 to $125,000 in future years,
based on historical demand.
SUPPORT: (Verified5/28/15)
Golden State Manufactured-Home Owners' League (source)
California Assessors' Association
Howard Jarvis Taxpayers' Association
Western Center on Law and Poverty
20 individuals
OPPOSITION: (Verified5/31/15)
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Western Manufactured Housing Communities Association
ARGUMENTS IN SUPPORT: According to the author, last year, AB
2231 (Gordon) reestablished the PTP Program, which provides
property tax assistance to certain lower-income households.
However, in reinstating the program, AB 2231 removed mobilehomes
from eligibility. This leaves mobilehome owners, many of whom
are lower-income seniors and/or disabled, vulnerable to a tax
sale of their homes. SB 477 reinstates mobilehome owners as
eligible participants in the State PTP Program. This will
ensure that low-income disabled persons and seniors who live in
mobilehomes are not at risk of losing their homes because of
property taxes. The State PTP Program helps ensure that
lower-income residents and households in California who cannot
meet their taxes do not lose their home to a tax sale.
ARGUMENTS IN OPPOSITION: Western Manufactured Housing
Communities Association states, "By increasing the scope of the
PTP program to include mobilehomes, it's more likely that
mobilehome park owners will have to take responsibility for
tax-defaullted mobile homes, and have to pay costs to remove
them."
Prepared by:Colin Grinnell / GOV. & F. / (916) 651-4119
5/31/15 11:40:44
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