BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON APPROPRIATIONS
                             Senator Ricardo Lara, Chair
                            2015 - 2016  Regular  Session

          SB 1106 (Leyva) - Mobilehome parks
          
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          |Version: February 17, 2016      |Policy Vote: T. & H. 11 - 0,    |
          |                                |          JUD. 7 - 0            |
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          |Urgency: No                     |Mandate: No                     |
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          |Hearing Date: May 2, 2016       |Consultant: Mark McKenzie       |
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          This bill does not meet the criteria for referral to the  
          Suspense File.



          Bill  
          Summary:  SB 1106 would authorize the Department of Housing and  
          Community Development (HCD) and specified local enforcement  
          agencies to issue a citation to mobilehome park owners or  
          operators and mobilehome owners when the responsible party has  
          failed to correct specified health and safety violations, as  
          specified.  Civil penalties would range from $100 to $500, as  
          noted below.


          Fiscal  
          Impact:  
           HCD staffing costs of approximately $240,000 for two  
            additional staff for an anticipated increase in administrative  
            workload associated with informal conferences, hearings, and  
            appeals proceedings related to the new citation authority.  
            (Mobilehome-Manufactured Home Revolving Fund)







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           Estimated HCD staff cost savings of approximately $20,000 to  
            $40,000 annually associated with a reduction in second  
            reinspections associated with health and safety violations, to  
            the extent the new fines act as an incentive for owners and  
            operators to correct violations.  (Mobilehome-Manufactured  
            Home Revolving Fund)

           Estimated HCD fine and fee revenue gains, potentially in  
            excess of $300,000 initially, due to new citation authority.   
            These revenue gains would likely decrease in future years as  
            compliance increases.  (Mobilehome-Manufactured Home Revolving  
            Fund)


          Background:  Existing law, The Mobilehome Parks Act (MPA), authorizes HCD  
          to regulate mobilehome parks to assure the protection of the  
          health, safety, and general welfare of all mobilehome park  
          residents.  HCD has adopted statewide regulations to this end,  
          covering both park owners and park residents.  Local agencies  
          have the option of assuming enforcement authority within their  
          jurisdictions through an agreement with HCD.  Currently, HCD  
          exercises enforcement authority over approximately 4,200  
          mobilehome parks, and local agencies - about 70 in total -  
          enforce the act and its regulations in just over 1,000 parks.   
          One of the duties of enforcement agencies is performing health  
          and safety inspections of mobilehome parks. 
          If an enforcement agency, upon inspection, determines that a  
          mobilehome park is in violation of any provision of the MPA or  
          applicable regulations, the enforcement agency issues a notice  
          to correct the violation to the owner or operator of the  
          mobilehome park and to the responsible person, as specified.   
          The owner or operator of the mobilehome park is responsible for  
          the correction of these violations.  If an enforcement agency  
          determines that a mobilehome, an accessory building or  
          structure, or lot is in violation of specified provisions of the  
          MPA or applicable regulations, the enforcement agency must issue  
          a notice to correct the violation to the mobilehome owner and  
          occupant.  The mobilehome owner is responsible for the  
          correction of these violations.

          If the owner or operator of the mobilehome park or the mobilhome  
          owner disputes a determination by the enforcement agency  
          regarding a violation, the failure to correct the violation in  








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          the required timeframe, or the reasonableness of the deadline  
          for correction specified by the notice of violation, the park  
          owner/operator or mobilehome owner may request an informal  
          conference with the enforcement agency.  The informal  
          conference, and any subsequent hearings or appeals of the  
          decision of the enforcement agency, shall be conducted in  
          accordance with procedures prescribed by HCD.  

          Existing law establishes that a willful violation of the  
          portions of the Health and Safety Code or HCD regulations  
          related to mobilehome parks is a misdemeanor, punishable by a  
          $400 fine or 30 days in prison.  Any person who willfully  
          violates these provisions and regulations is also liable for a  
          civil penalty of $500 for each day of a continuing violation.


          Proposed Law:  
            SB 1106 would authorize HCD or a local enforcement agency to  
          issue a citation that assesses a civil penalty to a park owner  
          or operator, or mobilehome owner or other responsible party, who  
          violates the MPA or applicable regulations, if that person has  
          permitted the continuation of a violation at least 30 days after  
          the expiration of a notice to correct the violation.
          This bill specifies the amount of the civil penalty at $100 for  
          violations determined to be a hazard constituting an  
          unreasonable risk to life, health, or safety, and increases the  
          penalty to $250 for each subsequent violation within one year of  
          the first violation.  For violations determined to be an  
          imminent hazard representing an immediate risk to life, health,  
          or safety requiring immediate correction, the civil penalty  
          would be $250, and $500 for each subsequent violation within one  
          year of the first violation.  Payment must be remitted to the  
          enforcement agency within 45 days.


          SB 1106 would also authorize a park owner/operator or resident  
          to petition the enforcement agency to dismiss or modify the  
          citation within 30 days of issuance, and require the enforcement  
          agency to hold an informal hearing when it receives a petition  
          showing good cause, as specified.  A park owner/operator or  
          mobilehome owner who receives a final determination from an  
          enforcement agency may subsequently petition HCD to review and  
          investigate the enforcement activities.  HCD must consider the  
          petition and initiate corrective actions, as specified.








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          Staff  
          Comments:  Current enforcement authority for violations of the  
          MPA do not appear to serve as a sufficient incentive for park  
          owners/operators or mobilehome owners to take corrective action.  
           Enforcement data from HCD's Mobilehome Park Maintenance and  
          Inspection Task Force indicates that in 2015, 5,040 notices of  
          violation were issued to park owners, of which 2,723 had been  
          uncorrected by January 2016, and 10,860 notices were issued to  
          mobilehome owners, of which 5,317 went uncorrected.  In  
          addition, 168 of the 216 mobilhome parks inspected in 2014  
          required 599 reinspections by enforcement agencies to correct  
          violations found during initial inspections.  The average HCD  
          inspection costs are $196 per inspection, and the costs for  
          reinspection are not recoverable.
          HCD estimates that the citation authority provided by SB 1106  
          could result in the collection of approximately $319,000  
          initially, based upon a $100 citation level using the amount of  
          violations that remained uncorrected after a second park  
          reinspection.  The revenues from citations would be lower in  
          subsequent years, to the extent the citation authority serves as  
          an incentive to correct violations and compliance increases.   
          HCD also indicates that it is likely to conduct 100-200 fewer  
          reinspections annually with increased compliance, resulting in  
          inspection staff savings of approximately $20,000 to $40,000 per  
          year.


          HCD would also incur additional administrative costs to conduct  
          informal hearings from park owners and mobilehome operators  
          petition the department to review a citation, and subsequent  
          investigations and formal appeals.  These new activities would  
          require the addition of two new staff to handle the  
          administrative workload at a cost of approximately $240,000  
          annually.




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