BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 1106| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- 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 SB 1106 Page 2 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 SB 1106 Page 3 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 SB 1106 Page 4 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. SB 1106 Page 5 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 SB 1106 Page 6 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 SB 1106 Page 7 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, SB 1106 Page 8 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 **** END ****