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AB-225 Mobilehomes: loans.(2013-2014)

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AB225:v89#DOCUMENT

Assembly Bill No. 225
CHAPTER 493

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.

[ Approved by Governor  September 20, 2014. Filed with Secretary of State  September 20, 2014. ]

LEGISLATIVE COUNSEL'S DIGEST


AB 225, 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   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.
(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 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.
(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 100 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 115 percent of 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.
(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 115 percent of 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 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 repairs or accessibility-related upgrades to their mobilehomes. Loans made pursuant to these provisions shall meet both of the following requirements:
(1) The applicant entity has received a loan or loans 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.