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SB-136 Mobilehome parks: mobilehome park program funding. (2017-2018)

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Date Published: 04/17/2017 05:00 PM
SB136:v97#DOCUMENT

Amended  IN  Senate  April 17, 2017
Amended  IN  Senate  February 13, 2017

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Senate Bill No. 136


Introduced by Senator Leyva

January 12, 2017


An act to amend Sections 50781, 50782, 50784.5, and 50784.7 of, to amend the heading of Chapter 11 (commencing with Section 50780) of Part 2 of Division 31 of, and to add Section 50787 to, the Health and Safety Code, relating to mobilehome parks, making an appropriation therefor, and declaring the urgency thereof, to take effect immediately.


LEGISLATIVE COUNSEL'S DIGEST


SB 136, as amended, Leyva. Mobilehome parks: mobilehome park program funding.
Existing law authorizes the Department of Housing and Community Development to make loans from the Mobilehome Park Rehabilitation and Purchase Fund, a continuously appropriated fund, to qualified mobilehome park residents, resident organizations, and nonprofit housing sponsors, and also authorizes the use of fund moneys for related administrative costs of the department. Existing law authorizes the department to adopt regulations for the administration and implementation of these provisions.
This bill would authorize the department to contract directly with nonprofit corporations that have significant experience representing or working with mobilehome park residents, or acquiring, rehabilitating, and preserving affordable housing, and have statewide or regional capacity to deliver technical assistance to mobilehome park residents or community-based nonprofit corporations in order to assist them in acquiring, financing, operating, and improving mobilehome parks occupied by low- and moderate-income households. The bill would authorize moneys in the fund to be used for grants to provide these services. By adding a new purpose to a continuously appropriated fund, this bill would make an appropriation. The bill would prohibit the use of funds for the purpose of advising mobilehome park residents concerning the taking of the mobilehome park by the state, county, or city by eminent domain. The bill would rename the Mobilehome Park Rehabilitation and Purchase Fund as the Mobilehome Park Rehabilitation and Resident Ownership Program Fund.

This bill would appropriate an unspecified amount from the Mobilehome Park Rehabilitation and Resident Ownership Program Fund to the department in order to finance the program.

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.

 The Legislature finds and declares as follows:
(a) The preservation and improvement of mobilehome parks throughout the state is a critical factor in providing decent, safe, and affordable housing for persons and families of low and moderate income.
(b) The preservation and improvement of mobilehome parks also assists low- and moderate-income households in protecting their equity in their homes as well as providing healthy and supportive communities.
(c) The Mobilehome Park Rehabilitation and Resident Ownership Program, as set forth in Chapter 11 (commencing with Section 50780) of Part 2 of Division 31 of the Health and Safety Code, is a critical component, along with private and local government financial assistance, in assisting residents and nonprofit corporations to purchase and rehabilitate existing mobilehome parks.
(d) The Mobilehome Park Rehabilitation and Resident Ownership Program Fund has been underutilized and purchase and rehabilitation projects have taken too long from inception to completion. These projects often cannot be completed successfully, because mobilehome parks are inherently more difficult to acquire, finance, and operate than conventional housing. Moreover, additional technical assistance is needed for nonprofit corporations performing these activities, which cannot be provided by the Department of Housing and Community Development.
(e) It is to the benefit of the people of the State of California, the Department of Housing and Community Development, and an efficient and effective use of funds from the Mobilehome Park Rehabilitation and Resident Ownership Program for a portion of the moneys from the fund established pursuant to Section 50782 of the Health and Safety Code to be used as a grant to finance technical assistance to nonprofit organizations and mobilehome park resident associations seeking to acquire and improve mobilehome parks occupied by low- and moderate-income households in order to preserve decent, safe, and affordable housing.

SEC. 2.

 The heading of Chapter 11 (commencing with Section 50780) of Part 2 of Division 31 of the Health and Safety Code is amended to read:
CHAPTER  11. Mobilehome Park Rehabilitation and Resident Ownership Program Fund

SEC. 3.

 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 Resident Ownership Program 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. 4.

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

50782.
 (a) The Mobilehome Park Rehabilitation and Resident Ownership Program 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 Resident Ownership Program 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 Resident Ownership Program 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. 5.

 Section 50784.5 of the Health and Safety Code is amended to read:

50784.5.
 (a) The department may make loans from the 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) of Division 13) 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 of the Health and Safety Code is amended to read:

50784.7.
 (a) The department may make loans to resident organizations or qualified nonprofit sponsors from the fund for the purpose of assisting lower income homeowners to do any of the following:
(1) Make repairs to their mobilehomes.
(2) Make accessibility-related upgrades to their mobilehomes.
(3) Replace their mobilehomes.
(b) Loans made pursuant to these provisions subdivision (a) 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.
(c) The department may adopt guidelines to implement this section.

SEC. 7.

 Section 50787 is added to the Health and Safety Code, to read:

50787.
 (a) In addition to the other uses of the fund and activities authorized by this chapter, the department may contract directly with nonprofit corporations that have significant experience representing or working with mobilehome park residents, or acquiring, rehabilitating, and preserving affordable housing, and have statewide or regional capacity to deliver technical assistance to mobilehome park residents or community-based nonprofit corporations in order to assist them in acquiring, financing, operating, and improving mobilehome parks occupied by low- and moderate-income households, including reasonable administrative costs for the grant recipient or recipients. Notwithstanding any other provision of this chapter, moneys in the fund may be used for grants to provide services for initial terms of no more than three years.
(b) Funds shall not be used for the purpose of advising the mobilehome park residents concerning the taking of the mobilehome park by the state, county or city by eminent domain pursuant to Section 19 of Article I of the California Constitution.

(b)

(c) The department may adopt, amend, or repeal guidelines to implement this chapter. Any guidelines adopted to implement this chapter shall not be subject to Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code. Awards of funding made pursuant to this section shall not be subject to review or approval by the Local Assistance Loan and Grant Committee of the department operating pursuant to Subchapter 1 (commencing with Section 6900) of Chapter 6.5 of Division 1 of Title 25 of the California Code of Regulations.

SEC. 8.

The sum of ____ dollars ($____) is hereby appropriated from the Mobilehome Park Rehabilitation and Resident Ownership Program Fund, established in Section 50782 of the Health and Safety Code, to the Department of Housing and Community Development in order to finance the purposes set forth in Section 7 of this act.

SEC. 9.SEC. 8.

 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 California Constitution and shall go into immediate effect. The facts constituting the necessity are:
In order to provide necessary assistance to nonprofit organizations seeking to acquire and preserve mobilehome parks that are deteriorating or threatened with closure or conversion to other uses throughout the state and to more efficiently and effectively utilize funds available for the Mobilehome Park Rehabilitation and Resident Ownership Program, it is necessary that this act take effect immediately.