Amended in Senate August 6, 2014

Amended in Senate July 2, 2014

Amended in Senate June 18, 2014

Amended in Assembly May 9, 2013

Amended in Assembly April 18, 2013

Amended in Assembly April 9, 2013

Amended in Assembly April 1, 2013

California Legislature—2013–14 Regular Session

Assembly Bill No. 225

Introduced by Assembly Members Chau and Nestande

(Principal coauthor: Assembly Member V. Manuel Pérez)

February 4, 2013

An act to amend Sections 18114.1, 50781, 50782, 50784, 50785, and 50786 of, and to add Sections 50784.5 and 50784.7 to, the Health and Safety Code, relating to mobilehomes, making an appropriation therefor, and declaring the urgency thereof, to take effect immediately.

LEGISLATIVE COUNSEL’S DIGEST

AB 225, as amended, Chau. Mobilehomes: loans.

Existing law authorizes the Department of Housing and Community Development to make loans from the Mobilehome Park Purchase Fund, a continuously appropriated fund, to qualified mobilehome park residents, resident organizations, and nonprofit housing sponsors or local public entities to finance conversion of the parks to resident ownership to make monthly housing costs more affordable. Existing law also requires the provision of specified information to the department before making loans for mobilehome park conversions.

This bill would change the name of the fund to the Mobilehome Park Rehabilitation and Purchase Fund. The bill would require the department to consider specified criteria in determining eligibility for, and the amount of, loans made from the fund to nonprofit housing sponsors or local public entities to acquire a mobilehome park. The bill would authorize loans to a resident organization or nonprofit housing sponsor to assist park residents with needed repairs or accessibility upgrades to the mobilehomes if specified criteria are met. The bill would also make conforming changes.

By expanding the authorization to use continuously appropriated funds, this bill would make an appropriation.

This bill would declare that it is to take effect immediately as an urgency statute.

Vote: ²⁄₃. Appropriation: yes. Fiscal committee: yes. State-mandated local program: no.

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

SECTION 1.  

Section 18114.1 of the Health and Safety Code
is amended to read:

18114.1.  

(a) In addition to the annual registration fee required
by Section 18114, an annual fee of five dollars ($5) shall be paid
to the department at the time of registration or renewal for each
transportable section of a manufactured home or mobilehome
registered pursuant to this part. All revenues derived from this fee
shall be deposited in the Mobilehome Park Rehabilitation and
Purchase Fund provided for in Chapter 11 (commencing with
Section 50780) of Part 2 of Division 31.

(b) Any transportable section of a manufactured home or
mobilehome registered pursuant to this part and located on a private
parcel owned by the registered owner of the manufactured home
or mobilehome shall be exempt from the fee imposed by
subdivision (a), if the owner provides documentation or a written
statement, signed under penalty of perjury, which establishes to
the satisfaction of the department that the manufactured home or
mobilehome is located on a private parcel owned by the registered
owner of the manufactured home or mobilehome.

(c) Pursuant to subdivision (b), upon renewal of registration in
1989, or thereafter, once the registered owner provides
documentation or a written statement to the department to establish
the exemption, the department shall not require the owner to
establish the exemption in each subsequent year upon renewal,
unless the department receives evidence that the manufactured
home or mobilehome is no longer located on a private parcel owned
by the registered owner of the home. Renewal forms for registered
owners of manufactured homes or mobilehomes who have
established the exemption shall not reflect or include the fee
required pursuant to subdivision (a).

SEC. 2.  

Section 50781 of the Health and Safety Code is
amended to read:

50781.  

Unless the context otherwise requires, the following
definitions given in this section shall control construction of this
chapter:

(a) “Affordable” means that, where feasible, low-income
residents should not pay more than 30 percent of their monthly
income for housing costs.

(b) “Conversion costs” includes the cost of acquiring the
mobilehome park, the costs of planning and processing the
conversion, the costs of any needed repairs or rehabilitation, and
any expenditures required by a governmental agency or lender for
the project.

(c) “Department” means the Department of Housing and
Community Development.

(d) “Fund” means the Mobilehome Park Rehabilitation and
Purchase Fund created pursuant to Section 50782.

(e) “Housing costs” means the total cost of owning, occupying,
and maintaining a mobilehome and a lot or space in a mobilehome
park. The department’s regulations shall specify the factors
included in these costs and may, for the purposes of calculating
affordability, establish reasonable allowances.

(f) “Individual interest in a mobilehome park” means any interest
that is fee ownership or a lesser interest that entitles the holder to
occupy a lot or space in a mobilehome park for a period of not less
than either 15 years or the life of the holder. Individual interests
in a mobilehome park include, but are not limited to, the following:

(1) Ownership of a lot or space in a mobilehome park or
subdivision.

(2) A membership or shares in a stock cooperative, as defined
in Section 11003.2 of the Business and Professions Code, or a
limited equity housing cooperative, as defined in Section 817 of
the Civil Code.

(3) Membership in a nonprofit mutual benefit corporation that
owns, operates, or owns and operates the mobilehome park.

(g) “Low-income resident” means an individual or household
that is a lower income household, as defined in Section 50079.5.
However, personal assets shall not be considered in the calculation
of income, except to the extent that they actually generate income.

(h) “Low-income spaces” means those spaces in a mobilehome
park operated by a resident organization, a qualified nonprofit
housing sponsor, or a local public entity that are occupied by
low-income residents.

(i) “Mobilehome park” means a mobilehome park, as defined
in Section 18214, or a manufactured home subdivision created by
the conversion of a mobilehome park, as defined in Section 18214,
including a senior park, to resident ownership or ownership by a
qualified nonprofit housing sponsor or local public entity.

(j) “Program” means the Mobilehome Park Rehabilitation and
Resident Ownership Program.

(k) “Qualified nonprofit housing sponsor” means a nonprofit
public benefit corporation, as defined in Part 2 (commencing with
Section 5110) of Division 2 of the Corporations Code, that (1) has
received its tax-exempt status under Section 501(c)(3) of the
Internal Revenue Code, (2) is not affiliated with or controlled by
a for-profit organization or individual, (3) has extensive experience
with the development and operation of publicly subsidized
affordable housing, (4) the department determines is qualified by
experience and capability to own and operate a mobilehome park
that provides housing affordable to low-income households, and
(5) has formal arrangements for ensuring resident participation or
input in the management of the park that may include, but not be
limited to, membership on the board of directors. “Qualified
nonprofit housing sponsor” also means a limited partnership where
all of the general partners are nonprofit mutual or public benefit
corporations that meet the requirements of paragraphs (1) to (5),
inclusive.

(l) “Resident organization” means a group of mobilehome park
residents who have formed a nonprofit corporation, cooperative
corporation, or other entity or organization for the purpose of
acquiring the mobilehome park in which they reside and converting
the mobilehome park to resident ownership. The membership of
a resident organization shall include at least two-thirds of the
households residing in the mobilehome park, or in each park of a
combination of parks where the residents of two or more parks
combine to form a single resident organization. The two-thirds of
households in the resident organization at the time of funding the
park need not be the same households that were residing in the
park when the application for assistance was submitted to the
department. A household’s membership in the resident organization
when the application was submitted to the department shall not be
a requirement for that household to receive a loan or assistance
under this chapter.

(m) “Resident ownership” means, depending on the context,
either the ownership by a resident organization of an interest in a
mobilehome park that entitles the resident organization to control
the operations of the mobilehome park for a term of no less than
15 years, or the ownership of individual interests in a mobilehome
park, or both.

SEC. 3.  

Section 50782 of the Health and Safety Code is
amended to read:

50782.  

(a) The Mobilehome Park Rehabilitation and Purchase
Fund is hereby created in the State Treasury and, notwithstanding
Section 13340 of the Government Code or any other law, is
continuously appropriated to the department for the purpose of
providing loans pursuant to this chapter and for related
administrative costs of the department. Notwithstanding Section
16305.7 of the Government Code, any moneys received by the
department pursuant to this chapter, and any other sources,
repayments, interest, or new appropriations, shall be deposited in
the fund. Except as described in subdivision (b), moneys in the
fund shall not be subject to transfer to any other fund pursuant to
any provision of Part 2 (commencing with Section 16300) of
Division 4 of Title 2 of the Government Code, except the Surplus
Money Investment Fund. The department may require the transfer
of moneys in the fund to the Surplus Money Investment Fund for
investment pursuant to Article 4 (commencing with Section 16470)
of Chapter 3 of Part 2 of Division 4 of Title 2 of the Government
Code. Notwithstanding Section 16305.7 of the Government Code,
all interest, dividends, and pecuniary gains from the investments
shall accrue to the fund.

(b) Notwithstanding any other law, the Controller may use the
moneys in the Mobilehome Park Rehabilitation and Purchase Fund
for loans to the General Fund as provided in Sections 16310 and
16381 of the Government Code. However, interest shall be paid
on all moneys loaned to the General Fund from the Mobilehome
Park Rehabilitation and Purchase Fund. Interest payable shall be
computed at a rate determined by the Pooled Money Investment
Board to be the current earning rate of the fund from which loaned.
This subdivision does not authorize any transfer that will interfere
with the carrying out of the object for which the fund was created.

SEC. 4.  

Section 50784 of the Health and Safety Code is
amended to read:

50784.  

(a) The department may make loans from the fund to
individual low-income residents of mobilehome parks that have
converted to resident ownership or resident organizations begin delete or
qualified nonprofit sponsors end delete that have converted or plan to convert
a mobilehome park to resident ownership. The purpose of providing
loans pursuant to this section is to reduce the monthly housing
costs for low-income residents to an affordable level.

(b) Loans provided pursuant to this section shall be for a term
of no more than 40 years and shall bear interest at a rate of 3
percent per annum, unless the department finds that a lower interest
rate is necessary and will not jeopardize the financial stability of
the fund.

(c) The department may establish flexible repayment terms for
loans provided pursuant to this section if the terms are necessary
to reduce the monthly housing costs for low-income residents to
an affordable level, and do not represent an unacceptable risk to
the security of the fund. begin delete Flexible repayment terms may include,
but are not limited to, graduated payment schedules with negative
amortization. end delete

(d) Loans provided to low-income residents pursuant to this
section shall be for the minimum amount necessary to reduce the
borrower’s monthly housing costs to an affordable level. All of
the following shall apply to loans to finance individual interests
pursuant to this section:

(1) To the extent possible, loan amounts shall not exceed 50
percent of the acquisition costs of the individual interests in the
mobilehome parks. However, the loan amounts may be for up to
100 percent of the acquisition costs of the individual interests in
the mobilehome parks when approved by the department.

(2) The department may grant approval to exceed 50 percent of
the acquisition costs of the individual interests only if both of the
following are demonstrated:

(A) That the low-income resident has made an effort to secure
additional funding from other sources and these funds are not
available.

(B) That the low-income resident would be unable to purchase
an individual interest without a waiver of the 50-percent financing
limitation.

(3) The total indebtedness of the loan provided pursuant to this
section plus any senior debt upon individual interests may not
exceed 115 percent of the value of the collateral securing the loan,
plus the amount of costs incidentally, but directly, related to the
acquisition.

(e) Loans provided to resident organizations pursuant to this
section shall be for the minimum amount necessary to reduce the
monthly housing costs of low-income residents to an affordable
level. All of the following shall apply to loans made to resident
organizations pursuant to this section:

(1) To the extent possible, loan amounts shall not exceed 50
percent of the conversion costs attributable to the low-income
spaces. However, the loan amounts may be for up to 95 percent
of the conversion costs attributable to the low-income spaces when
approved by the department.

(2) The department may grant approval to exceed 50 percent of
the conversion costs attributable to low-income spaces only if both
of the following are demonstrated:

(A) That the applicant has made an effort to secure additional
funds from other sources and these funds are not available.

(B) That the project would not be feasible as determined by the
department without a waiver of the 50-percent financing limitation.

(3) The total secured debt in a superior position to the
department’s loan plus the department’s loan shall not exceed the
value of the collateral securing the loan plus the amount of costs
incidentally, but directly, related to the acquisition and, if
applicable, rehabilitation of the park.

(f) Funds provided pursuant to this section shall not be used to
assist residents who are not of low income or to reduce monthly
housing costs for low-income residents to less than 30 percent of
their monthly income.

(g) Subject to the restrictions of this subdivision, funds provided
pursuant to this section may be used to finance the costs of
relocating a mobilehome park to a more suitable site within the
same jurisdiction if the department determines that the cost of the
relocation, including any and all relocation costs to the affected
households, is a more prudent expenditure of funds than the costs
of needed or repetitive repairs to the existing park. Funds provided
pursuant to this section shall not be used to relieve a park owner
of any responsibility for covering the costs of mitigating the
impacts of a park closure as may be provided for by local ordinance
or pursuant to Section 65863.7 or 66427.4 of the Government
Code.

SEC. 5.  

Section 50784.5 is added to the Health and Safety
Code, to read:

50784.5.  

(a) The department may make loans from the
Mobilehome Park Rehabilitation and Purchase Fund to a qualified
nonprofit housing sponsor or a local public entity to acquire a
mobilehome park, provided that no less than 30 percent of residents
at the time of acquisition are low income.

(b) Loans may be provided pursuant to this section where either
of the following applies:

(1) The park to be acquired has significant outstanding violations
of the Mobilehome Parks Act (Part 2.1 (commencing with Section
18200)) that threaten the long-term viability of the park and that
will be remedied by the purchaser.

(2) The department determines that the acquisition of the park
will have a substantial benefit to low- and moderate-income
homeowners and that the purchaser will maintain rents at levels
affordable to lower income households.

(c) (1) Any mobilehome park purchased by a local public entity
with a loan pursuant to this section shall be transferred to a
qualified nonprofit housing sponsor or to a resident organization
that plans to convert the park to resident ownership no later than
three years from the date of loan closing, with all obligations under
the loan assumed by the nonprofit organization or resident
organization.

(2) If a local public entity has made a good faith effort, but has
not been able, to transfer the park by the end of the three-year
period, the entity may apply to the department for an additional
three-year extension. Upon a determination by the department that
the local public entity has made a good faith effort to transfer the
park in accordance with paragraph (1), it shall have an additional
three years from the expiration date of the first three-year period
to consummate the transfer. The three-year extension shall only
be granted once by the department for each loan to a local public
entity.

(3) If a local public entity fails to make a good faith effort to
transfer the park within the first three-year period, as determined
by the department, or fails to transfer the park by the expiration
date of the extended three-year period, it shall repay the loan in
full to the department.

(d) All of the following shall apply to loans provided pursuant
to this section:

(1) Loans shall be for a term of no more than 40 years and shall
bear interest at a rate of 3 percent per annum unless the department
finds that a lower interest rate is necessary and will not jeopardize
the financial stability of the fund.

(2) The department may establish flexible repayment terms for
loans provided pursuant to this section if the terms do not represent
an unacceptable risk to the security of the fund. begin delete Flexible repayment
terms may include, but are not limited to, graduated payment
schedules with negative amortization. end delete

(3) Loans shall be for the minimum amount necessary to bring
the park into compliance with all applicable health and safety
standards and to maintain the monthly housing costs of lower
income residents at an affordable level.

(4) The total secured debt in a superior position to the
department’s loan plus the department’s loan shall not exceed the
value of the collateral securing the loan plus the amount of costs
incidentally, but directly, related to the acquisition and
rehabilitation of the park.

(e) In determining the eligibility for and amount of loans
pursuant to this section, the department shall take into
consideration, among other factors, all of the following:

(1) The current health and safety conditions in the park and the
likelihood that conditions would be remedied without the loan.

(2) The degree to which the loan will benefit lower income
homeowners.

(3) The age of the park and the age of the infrastructure that
will be rehabilitated with the loan proceeds.

(f) Before providing financing pursuant to this section, the
department shall require provision of, and approve, at least all of
the following:

(1) Verification that either no park residents shall be
involuntarily displaced as a result of the purchase or that the
impacts of the displacement shall be mitigated as required under
state and local law. For purposes of this requirement, compliance
with Section 66427.5 of the Government Code shall be
conclusively presumed to have mitigated economic displacement.

(2) Projected costs and sources of funds for all purchase and
rehabilitation activities.

(3) Projected operating budget for the park after the purchase.

(4) A management plan for the operation of the park.

SEC. 6.  

Section 50784.7 is added to the Health and Safety
Code, to read:

50784.7.  

(a) The department may make loans to begin delete applicant end delete
resident organizations or qualified nonprofit sponsors from the
Mobilehome Park Rehabilitation and Purchase Fund for the purpose
of assisting lower income homeowners to make needed begin delete repairs,
or make end delete begin insert repairs or end insert accessibility-related upgrades to their
mobilehomes. Loans made pursuant to these provisions shall meet
both of the following requirements:

(1) The applicant entity begin delete is authorized to receive loans end delete begin insert has
received a loan or loans end insert pursuant to Section 50783, 50784, or
50784.5 for the purpose of assisting homeowners within a park
proposed for acquisition or conversion.

(2) The applicant entity demonstrates sufficient organizational
stability and capacity to manage a portfolio of individual loans
over an extended time period. This capacity may be demonstrated
by substantial successful experience performing similar activities
or through other means acceptable to the department.

(b) The department may adopt guidelines to implement this
section.

SEC. 7.  

Section 50785 of the Health and Safety Code is
amended to read:

50785.  

(a) In determining the eligibility for and amount of
loans pursuant to this chapter, the department shall take into
consideration, among other factors, all of the following:

(1) The reasonableness of the conversion costs relating to
repairs, rehabilitation, construction, or other costs.

(2) Any administrative and security factors affecting the
department’s program operation and administration.

(3) Whether or not the projects complement the implementation
of a local housing program to preserve or increase the supply of
housing for persons and families of low or moderate income.

(4) Whether or not state funds are utilized in the most efficient
and effective manner.

(5) In the case of a loan to a qualified nonprofit housing sponsor
or to a local public entity, evidence of resident participation in the
conversion and management of the park, in the form of either
resident participation on the board of directors of the entity that
acquires ownership of the park, or the establishment of, and
consultation with, a permanent resident advisory board.

(b) To the extent consistent with requests for assistance, the
department shall allocate funds available for the purposes of this
chapter throughout the state in accordance with identified housing
needs, including seeking to allocate not less than 20 percent to
rural areas.

SEC. 8.  

Section 50786 of the Health and Safety Code is
amended to read:

50786.  

(a) The department shall adopt regulations for the
administration and implementation of this chapter.

(b) The department shall obtain the best available security for
loans made pursuant to this chapter. The security may include a
note, deed of trust, assignment of lease, or other form of security
on real or personal property that the department determines is
adequate to protect the interests of the state. To the extent
applicable, these documents and any regulatory provisions shall
be recorded or referenced in a recorded document in the office of
the county recorder of the county in which the mobilehome park
is located.

(c) The degree of continuing regulatory control with respect to
park operations and resident loans exercised by the department in
making loans pursuant to this chapter shall be commensurate with
the level of financial assistance provided and in all cases shall be
adequate to protect the state’s security interest and ensure the
accomplishment of the purposes of the program authorized by this
chapter. The regulatory requirements shall be set forth in a
regulatory agreement, deed of trust, or other lien, and any violation
of these requirements shall be considered a violation of a security
document. If loans are made to a qualifying nonprofit housing
sponsor or local public entity, a regulatory agreement shall be
recorded against the mobilehome park. This regulatory agreement
shall contain provisions limiting occupancy, rents, and park
operation for the entire loan term. The department may release
individual spaces from the regulatory agreement only if they are
purchased by residents who occupy them.

(d) Before providing financing pursuant to Sections 50783 and
50784, the department shall require provision of, and approve, at
least all of the following:

(1) Verification at the time of application and prior to funding
that at least two-thirds of the households residing in the
mobilehome park support the plans for acquisition and conversion
of the park.

(2) Verification that either no park residents shall be
involuntarily displaced as a result of the park conversion or the
impacts of the displacement shall be mitigated as required under
state and local law. For purposes of this requirement, compliance
with Section 66427.5 of the Government Code shall be
conclusively presumed to have mitigated economic displacement.

(3) Verification that the conversion is consistent with local
zoning and land use requirements, other applicable state and local
laws, and regulations and ordinances.

(4) Projected costs and sources of funds for all conversion
activities.

(5) Projected operating budget for the park during and after the
conversion.

(6) A management plan for the conversion and operation of the
park.

(7) If necessary, a relocation plan for residents not participating
that is in compliance with Chapter 16 (commencing with Section
7260) of Division 7 of Title 1 of the Government Code.

(e) The department shall, to the greatest extent feasible, do all
of the following:

(1) Require participation by cities and counties in loan
applications submitted pursuant to this chapter.

(2) Contract with private lenders or local public entities to
provide program administration and to service loans made pursuant
to this chapter.

(3) Give priority to applications for resident-owned parks.

(f) The department may provide technical assistance to loan
applicants, or may contract with a qualified nonprofit entity to
provide that technical assistance, and may include the reasonable
costs of the technical assistance as a part of the loan principal.

SEC. 9.  

This act is an urgency statute necessary for the
immediate preservation of the public peace, health, or safety within
the meaning of Article IV of the Constitution and shall go into
immediate effect. The facts constituting the necessity are:

In order to immediately increase the accessibility of funds to
mobilehome residents who suffer from unaffordable housing costs,
it is necessary that this bill go into immediate effect.