BILL ANALYSIS                                                                                                                                                                                                    Ó






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          |SENATE RULES COMMITTEE            |                       SB 1106|
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                                   THIRD READING 


          Bill No:  SB 1106
          Author:   Leyva (D) 
          Introduced:2/17/16  
          Vote:     27 

           SENATE TRANS. & HOUSING COMMITTEE:  11-0, 4/12/16
           AYES:  Beall, Cannella, Allen, Bates, Gaines, Galgiani, Leyva,  
            McGuire, Mendoza, Roth, Wieckowski

           SENATE JUDICIARY COMMITTEE:  7-0, 4/19/16
           AYES:  Jackson, Moorlach, Anderson, Hertzberg, Leno, Monning,  
            Wieckowski

           SENATE APPROPRIATIONS COMMITTEE:  7-0, 5/2/16
           AYES:  Lara, Bates, Beall, Hill, McGuire, Mendoza, Nielsen

           SUBJECT:   Mobilehome parks


          SOURCE:    Author

          DIGEST:   This bill authorizes the Department of Housing and  
          Community Development (HCD) to issue citations that assess civil  
          penalties to mobilehome park owners and residents who do not  
          correct health and safety violations.

          ANALYSIS:  
          
          Existing law: 


          1)Directs HCD to regulate mobilehome parks to protect the  
            health, safety, and general welfare of all mobilehome park  








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            residents.  HCD has adopted statewide regulations to this end,  
            covering both park owners and park residents.


          2)Authorizes local agencies to assume enforcement authority  
            within their jurisdictions through agreement with HCD.  


          3)Authorizes enforcement agencies to perform health and safety  
            inspections of mobilehome parks.


          4)Stipulates that when a mobilehome park owner or resident is  
            found to be out of compliance with mobilehome-related health  
            and safety code provisions or HCD regulations, the enforcement  
            agency must issue a notice of violation to the park owner or  
            resident.  Additionally:


             a)   If a violation by a resident has not been corrected  
               after 60 days, the enforcement agency must notify the park  
               owner.  


             b)   If a violation by a park owner has not been corrected  
               after 60 days, the owner must post the notice of violation  
               conspicuously in the park.


             c)   If the enforcement agency determines that a violation  
               constitutes an imminent threat to health and safety, the  
               violation must be corrected within a reasonable time as  
               determined by the enforcement agency.


          1)Allows an enforcement agency to revoke or suspend a mobilehome  
            park's operating permit if the holder violates either the  
            conditions of the permit or existing law related to mobilehome  
            parks.


          2)Establishes that 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  







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            or 30 days in prison, and that any person who willfully  
            violates these provisions and regulations is also liable for a  
            civil penalty of $500 for each day of violation.


          This bill:


          1)Gives HCD and local enforcement agencies the authority to  
            issue citations that assess civil penalties to mobilehome park  
            owners or residents who fail to correct violations for at  
            least 30 days after the expiration of a notice of violation.


          2)Sets the amount of the civil penalty associated with the  
            citation to:


             a)   $100 per violation in cases where the violation presents  
               an unreasonable risk to life, health, or safety;


             b)   $250 for each subsequent violation of the same provision  
               within one year of the first violation;


             c)   $200 per violation when the violation represents an  
               imminent hazard requiring immediate correction due to the  
               risk to life, health, and safety; and


             d)   $500 for each subsequent violation of the same provision  
               representing an immediate hazard and within one year of the  
               first violation.


          1)Requires that payment be made to the enforcement agency within  
            45 days, regardless of whether the violation is corrected. 


          2)Gives a park owner or resident who receives a citation 30 days  
            to petition the enforcement agency to dismiss or modify the  
            citation, and requires the enforcement agency to hold an  
            informal hearing when it receives petitions showing good  







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            cause.


          3)Allows park owners and residents who have challenged a  
            citation in an informal hearing before a local enforcement  
            agency and received a final order to petition the outcome to  
            HCD.


          Comments

          1)Purpose.  HCD currently has the authority to issue notices of  
            violation to mobilehome park owners and residents who are out  
            of compliance with health and safety code.  According to the  
            author, however, many park owners and residents do not make  
            the necessary repairs, despite repeated notices and follow-up  
            inspections, resulting in unsafe conditions and parks that are  
            community blights.  Under current law, noncompliance with an  
            order to repair a serious health and safety defect can only be  
            enforced by expensive civil or criminal court proceedings by  
            local or state public prosecutors, which the author contends  
            "makes enforcement of serious violations virtually impossible,  
            given other prosecutorial priorities."  The purpose of this  
            bill is to provide HCD with the authority to issue citations  
            for health and safety violations.


          2)Regulation of mobilehomes and mobilehome parks.  Mobilehomes  
            are unique among housing forms in that they can move between  
            jurisdictions. Historically, some local governments have tried  
            to discourage mobilehome parks within their jurisdictions  
            through burdensome regulations. These are some of the reasons  
            that, under the state Mobilehome Parks Act, authority to  
            regulate California's approximately 4,500 mobilehome parks and  
            400,000 mobilehome lots resides at the state level with HCD.   
            However, local agencies are allowed to assume the authority to  
            enforce statewide rules from HCD. Currently, 63 cities and  
            counties in California are acting as local enforcement  
            agencies under the Act.  The agency conducting inspections and  
            issuing notices to mobilehome park owners and residents may  
            therefore be either HCD or a local government agency,  
            depending on the jurisdiction.









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          3)Common violations. Violations of health and safety  
            requirements can be issued to both park operators and  
            individual mobilehome residents, and range from relatively  
            benign maintenance failures to serious hazards.  It is  
            important to note, however, that some of the most common  
            violations fall into the latter category.  For example, at the  
            park level, "exposed live electrical parts" was the most  
            frequently cited violation in 2014 and the third most  
            frequently cited violation in 2015.  Among residents, the most  
            common violations in both years were "accumulation of rubbish  
            [and] combustible material" and "extension cord used in lieu  
            of permanent wiring."


          4)Inadequacy of current remedies.  Under existing law,  
            enforcement agencies have several tools for addressing  
            violations at mobilehome parks. However, some of these tools  
            are difficult to use, and the consequences associated with  
            other measures tend to be either immaterial or severe.   
            Because notices of violation carry no penalty, a recipient has  
            little incentive to address the violation.  Enforcement  
            agencies have been reluctant to revoke park operating permits  
            outright because doing so would displace residents, who often  
            have low incomes and may have difficulty finding other  
            housing.  Merely suspending a park's operating permit prevents  
            park owners from collecting rent.  While this provides a  
            strong incentive to correct violations, the suspension process  
            can take six months, which may be one reason enforcement  
            agencies rarely use it.  Finally, the author notes that health  
            and safety violations at mobilehome parks are often a low  
            priority for the court system, so when an enforcement agency  
            appeals to the district attorney to bring a misdemeanor charge  
            or pursue civil penalties against a violator, action is rarely  
            taken.  


          5)Impact on low-income communities.  This bill will impose costs  
            on mobilehome park owners and residents, and these costs may  
            be burdensome to low income individuals.  It is unclear what  
            percentage of health and safety violations identified by HCD  
            during its compliance inspections result from deferred  
            maintenance or repairs not undertaken because of a lack of  
            resources.  Should the civil penalties authorized in this bill  
            be levied against mobilehome residents who already lack the  







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            resources needed to maintain their properties to the  
            appropriate standard, this additional cost may actually  
            increase noncompliance by diverting funds away from needed  
            repairs.


          6)Amount of the fine.  This bill specifies the amounts of the  
            penalties that HCD is authorized to impose. They range from  
            $100 to $500 and vary based on the seriousness of the  
            violation and the number of times the recipient has received a  
            notice for the same violation in the same year.  Thus, in  
            order to receive a penalty at the high end of the scale, a  
            park owner or resident would have to fail to correct a  
            violation for 30 days after the expiration of the notice, and  
            then commit the same violation again within one year and again  
            fail to correct the second violation for 30 days after the  
            expiration of the notice. 


          7)Due process.  This bill provides certain basic due process  
            rights to parties who receive citations.  Under existing law,  
            notices of violation must be in writing and describe the  
            nature of the violation in as clear language as the  
            technicality of the violation will allow.  Individuals are  
            provided with an opportunity to contest alleged violations  
            following HCD's informal conference procedures, and can also  
            challenge enforcement actions of local jurisdictions through  
            direct petitions to HCD.  This bill offers similar informal  
            conference procedures for individuals to use when contesting  
            citations, and limits the time during which penalties may be  
            assessed to within seven months of the underlying notice of  
            violation.  This bill also suspends enforcement of penalties  
            while an alleged violator is contesting the citation.  Just as  
            with existing law, individuals would be able to challenge  
            assessments levied by local jurisdictions through a direct  
            petition to HCD.




          FISCAL EFFECT:   Appropriation:    Yes         Fiscal  
          Com.:YesLocal:   No









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          According to the Senate Appropriations Committee:


           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)

           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)


          SUPPORT:   (Verified5/4/16)


          City of Grand Terrace
          City of Montclair
          The Educational Community for Homeowners 


          OPPOSITION:   (Verified5/4/16)




          Western Manufactured Housing Communities Association 
          
          ARGUMENTS IN SUPPORT:  Supporters of this bill argue that in the  
          absence of appropriate tools for addressing violations, unsafe  
          conditions may persist at mobilehome parks for months or even  
          years.  Enforcement data from HCD's Mobilehome Park Maintenance  
          and Inspection Task Force support this claim.  Of the nearly  
          15,000 violations noticed to park owners and residents in 2015,  







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          half had been corrected as of January 2016.

          ARGUMENTS IN OPPOSITION:  The Western Manufactured Housing  
          Communities Association (WMA), writing in opposition, expresses  
          concern that the management of a mobilehome park may ultimately  
          be held responsible for correcting a resident's health and  
          safety violations, or that it may be held financially  
          responsible for civil penalties accumulated by a resident.  WMA  
          also expresses concern over the possibility that penalties may  
          be assessed by an enforcement agency while a park owner or  
          operator's "permit to operate" (PTO) the park is suspended.   
          They write, "[w]hen the PTO is suspended the management cannot  
          collect rent, which is a pretty big hammer for the enforcement  
          agency" and could "place the community in double-jeopardy."
          

          Prepared by:Sarah Carvill / T. & H. / (916) 651-4121
          5/4/16 15:04:18


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