Existing law, the Mobilehome Parks Act, generally requires the Department of Housing and Community Development to enforce the act, except that a city, county, or city and county may assume the responsibility for the enforcement of the act upon the approval of the department, as provided. Existing law requires the enforcement agency to enter and inspect mobilehome parks, as prescribed. Existing law also requires an enforcement agency to issue notice to correct a violation and provides for procedures for owners or operators to dispute and appeal violation notices, as specified. Existing law repeals these provisions as of January 1, 2024. A violation of these provisions is a misdemeanor.

This bill would extend these provisions from January 1, 2024, to January 1, 2025.

The Mobilehome Parks Act imposes prescribed fees, including, among others, a fee of $4 per lot to be used exclusively for the inspection of mobilehome parks and mobilehomes to determine compliance with the act. Existing law repeals the $4 fee per lot on January 1, 2024.

This bill would extend the repeal date of these provisions to January 1, 2025, thereby extending imposition of the $4-per-lot fee until that date.

Existing law incorporates additional changes to the prescribed fees imposed by the Mobilehome Parks Act to become operative on January 1, 2024.

This bill would delay the operative date for these additional changes until January 1, 2025.

Existing law, the Political Reform Act of 1974, requires state agencies to adopt and promulgate a conflict of interest code with certain provisions, as specified.

This bill would require the department, no later than January 1, 2025, and in accordance with the Political Reform Act of 1974 and specified regulations, to establish policies to review the statement of economic interests, as defined, by each inspector, as defined, who is a designated employee for purposes of the conflict of interest code adopted by the department and identify any potential conflict due to an interest in real property disclosed by the inspector, except as specified. The bill would also require the department to establish policies to promptly notify an inspector if a required statement of economic interests has not been filed or if the filed statement is incomplete or incorrect in any material aspect. The bill would require the department to establish policies to notify the Fair Political Practices Commission of each inspector who has not submitted a statement of economic interests after the department has made at least 2 attempts at attaining compliance, as specified.

This bill would require the department, no later than January 1, 2025, to establish policies to document complaints against inspectors and the steps taken to address those complaints. The bill would require the department to refer all complaints against inspectors alleging misconduct to the departments equal employment opportunity officer, unless otherwise specified.

This bill would also make other technical, nonsubstantive changes to these provisions.

Because this bill would extend the application of a crime, it would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Existing law, the Mobilehome Parks Act, generally requires the Department of Housing and Community Development to enforce the act, except that a city, county, or city and county may assume the responsibility for the enforcement of the act upon the approval of the department, as provided. Existing law requires the enforcement agency to enter and inspect mobilehome parks, as prescribed. Existing law also requires an enforcement agency to issue notice to correct a violation and provides for procedures for owners or operators to dispute and appeal violation notices, as specified. Existing law repeals these provisions as of January 1, 2024. A violation of these provisions is a misdemeanor.

This bill would extend these provisions from January 1, 2024, to January 1, 2025.

The Mobilehome Parks Act imposes prescribed fees, including, among others, a fee of $4 per lot to be used exclusively for the inspection of mobilehome parks and mobilehomes to determine compliance with the act. Existing law repeals the $4 fee per lot on January 1, 2024.

This bill would extend the repeal date of these provisions to January 1, 2025, thereby extending imposition of the $4-per-lot fee until that date.

Existing law incorporates additional changes to the prescribed fees imposed by the Mobilehome Parks Act to become operative on January 1, 2024.

This bill would delay the operative date for these additional changes until January 1, 2025.

Existing law, the Political Reform Act of 1974, requires state agencies to adopt and promulgate a conflict of interest code with certain provisions, as specified.

This bill would require the department, no later than January 1, 2025, and in accordance with the Political Reform Act of 1974 and specified regulations, to establish policies to review the statement of economic interests, as defined, by each inspector, as defined, who is a designated employee for purposes of the conflict of interest code adopted by the department and identify any potential conflict due to an interest in real property disclosed by the inspector, except as specified. The bill would also require the department to establish policies to promptly notify an inspector if a required statement of economic interests has not been filed or if the filed statement is incomplete or incorrect in any material aspect. The bill would require the department to establish policies to notify the Fair Political Practices Commission of each inspector who has not submitted a statement of economic interests after the department has made at least 2 attempts at attaining compliance, as specified.

This bill would require the department, no later than January 1, 2025, to establish policies to document complaints against inspectors and the steps taken to address those complaints. The bill would require the department to refer all complaints against inspectors alleging misconduct to the departments equal employment opportunity officer, unless otherwise specified.

This bill would also make other technical, nonsubstantive changes to these provisions.

Because this bill would extend the application of a crime, it would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Existing law, the Mobilehome Parks Act, generally requires the Department of Housing and Community Development to enforce the act, except that a city, county, or city and county may assume the responsibility for the enforcement of the act upon the approval of the department, as provided. Existing law requires the enforcement agency to enter and inspect mobilehome parks, as prescribed. Existing law also requires an enforcement agency to issue notice to correct a violation and provides for procedures for owners or operators to dispute and appeal violation notices, as specified. Existing law repeals these provisions as of January 1, 2024. A violation of these provisions is a misdemeanor.

This bill would extend these provisions from January 1, 2024, to January 1, 2025.

The Mobilehome Parks Act imposes prescribed fees, including, among others, a fee of $4 per lot to be used exclusively for the inspection of mobilehome parks and mobilehomes to determine compliance with the act. Existing law repeals the $4 fee per lot on January 1, 2024.

This bill would extend the repeal date of these provisions to January 1, 2025, thereby extending imposition of the $4-per-lot fee until that date.

Existing law incorporates additional changes to the prescribed fees imposed by the Mobilehome Parks Act to become operative on January 1, 2024.

This bill would delay the operative date for these additional changes until January 1, 2025.

Existing law, the Political Reform Act of 1974, requires state agencies to adopt and promulgate a conflict of interest code with certain provisions, as specified.

This bill would require the department, no later than January 1, 2025, and in accordance with the Political Reform Act of 1974 and specified regulations, to establish policies to annually review the statement of economic interests, as defined, by each inspector, as defined, who is a designated employee for purposes of the conflict of interest code adopted by the department and identify potential conflicts of interest, including any potential conflict due to an interest in real property disclosed by the inspector on the statement of economic interests. inspector, except as specified. The bill would also require the department to establish policies to send specified reminders to designated employees and promptly notify the filing officer with whom the departments designated employees are required to file their statements an inspector if a required statement of economic interests of all designated employees who are inspectors employed by the department. has not been filed or if the filed statement is incomplete or incorrect in any material aspect. The bill would require the department to establish policies to notify the Fair Political Practices Commission of each inspector who has not submitted a statement of economic interests, as specified. interests after the department has made at least 2 attempts at attaining compliance, as specified.

This bill would require the department, no later than January 1, 2025, to establish policies to document complaints against inspectors and the steps taken to address those complaints. The bill would require the department to refer all complaints against inspectors alleging misconduct to the departments equal employment opportunity officer, unless otherwise specified.

This bill would also make other technical, nonsubstantive changes to these provisions.

Because this bill would extend the application of a crime, it would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Existing law, the Mobilehome Parks Act, generally requires the Department of Housing and Community Development to enforce the act. act, except that a city, county, or city and county may assume the responsibility for the enforcement of the act upon the approval of the department, as provided. Existing law requires the department or a city, county, or city and county that assumes responsibility for the enforcement of the act enforcement agency to enter and inspect mobilehome parks, as prescribed. Existing law also requires an enforcement agency to issue notice to correct a violation and provides for procedures for owners or operators to dispute and appeal violation notices, as specified. Existing law repeals these provisions as of January 1, 2024. A violation of these provisions is a misdemeanor.

Existing law, the Political Reform Act of 1974, requires state agencies to adopt and promulgate a conflict of interest code with certain provisions, as specified.

This bill would require the department, no later than January 1, 2025, to establish policies to annually review the statement of economic interests, as defined, by each inspector, as defined, who is a designated employee for purposes of the conflict of interest code adopted by the department and identify potential conflicts of interest, including any potential conflict due to an interest in real property disclosed by the inspector on the statement of economic interests. The bill would also require the department to establish policies to send specified reminders to designated employees and notify the filing officer with whom the departments designated employees are required to file their statements of economic interests of all designated employees who are inspectors employed by the department. The bill would require the department to establish policies to notify the Fair Political Practices Commission of each inspector who has not submitted a statement of economic interests, as specified.

This bill would require the department, no later than January 1, 2025, to establish policies to document complaints against inspectors and the steps taken to address those complaints. The bill would require the department to refer all complaints against inspectors alleging misconduct to the departments equal employment opportunity officer, unless otherwise specified.

Existing law, the Mobilehome Parks Act, requires the Department of Housing and Community Development to enforce the act. Existing law requires the department or a city, county, or city and county that assumes responsibility for the enforcement of the act to enter and inspect mobilehome parks, as prescribed.

Existing law, the Political Reform Act of 1974, requires state agencies to adopt and promulgate a conflict of interest code with certain provisions, as specified.

This bill would provide that an inspector, as defined, is a designated employee for purposes of the conflict of interest code adopted by the department and would require an inspector to disclose all interests in real property. The bill would require the department, no later than January 1, 2025, to establish policies to annually review the statement of economic interests, as defined, by all inspectors with reportable financial interests each inspector, as defined, who is a designated employee for purposes of the conflict of interest code adopted by the department and identify potential conflicts of interest. interest, including any potential conflict due to an interest in real property disclosed by the inspector on the statement of economic interests. The bill would also require the department to establish policies to send specified reminders to inspectors designated employees and notify the departments Form 700 filing officer with whom the departments designated employees are required to file their statements of economic interests of all designated employees who are inspectors employed by the department. The bill would require the department to establish policies to notify the Fair Political Practices Commission of all inspectors who have each inspector who has not submitted the a statement of economic interests, as specified.

This bill would require the department, no later than January 1, 2025, to establish policies to document complaints against inspectors and the steps taken to address those complaints. The bill would require the department to refer all complaints against inspectors alleging misconduct to the departments equal employment opportunity officer, unless otherwise specified.

Existing law, the Mobilehome Parks Act, requires the Department of Housing and Community Development to enforce the act. Existing law requires the department or a city, county, or city and county that assumes responsibility for the enforcement of the act to enter and inspect mobilehome parks, as prescribed.

Existing law, the Political Reform Act of 1974, requires state agencies to adopt and promulgate a conflict of interest code with certain provisions, as specified.

This bill would provide that an inspector, as defined, is a designated employee for purposes of the conflict of interest code adopted by the department and would require an inspector to disclose all interests in real property, excluding ones primary personal residence. property. The bill would require the department, no later than January 1, 2025, to review the annual statement of economic interests, as defined, by all inspectors with reportable financial interests and identify potential conflicts of interest. The bill would also require the department to send specified reminders to inspectors and notify the departments Form 700 filing officer of all inspectors employed by the department. The bill would require the department to notify the Fair Political Practices Commission of specified information, including all inspectors employed by or leaving the department. of all inspectors who have not submitted the statement of economic interests, as specified.

This bill would require the department, no later than January 1, 2025, to establish policies to document complaints against inspectors and the steps taken to address those complaints. The bill would require the department to refer all complaints against inspectors alleging misconduct to the departments equal employment opportunity officer, unless otherwise specified.

Existing law, the Mobilehome Parks Act, requires the Department of Housing and Community Development to enforce the act. Existing law requires the department or a city, county, or city and county that assumes responsibility for the enforcement of the act to enter and inspect mobilehome parks, as prescribed.

Existing law, the Political Reform Act of 1974, requires state agencies to adopt and promulgate a conflict of interest code with certain provisions, as specified.

This bill would provide that an inspector, as defined, is a designated employee for purposes of the conflict of interest code adopted by the department and would require an inspector to disclose all interests in real property, excluding ones primary personal residence. The bill would require the department, no later than January 1, 2025, to review the annual statement of economic interests, as defined, by all inspectors with reportable financial interests and identify potential conflicts of interest. The bill would also require the department to send specified reminders to inspectors and notify the Fair Political Practices Commission of specified information, including all inspectors employed by or leaving the department.

This bill would require the department, no later than January 1, 2025, to establish policies to document complaints against inspectors and the steps taken to address those complaints. The bill would require the department to refer all complaints against inspectors alleging misconduct to the departments equal employment opportunity officer, unless otherwise specified.

 THIRD READING  

Bill No: AB 319

Author: Connolly (D)

Amended: 5/18/23 in Assembly

Vote: 21

SENATE HOUSING COMMITTEE: 11-0, 6/20/23

AYES: Wiener, Ochoa Bogh, Blakespear, Caballero, Cortese, McGuire, Padilla, Seyarto, Skinner, Umberg, Wahab

SENATE APPROPRIATIONS COMMITTEE: 7-0, 9/1/23

AYES: Portantino, Jones, Ashby, Bradford, Seyarto, Wahab, Wiener

ASSEMBLY FLOOR: 75-0, 5/25/23 - See last page for vote

SUBJECT: Mobilehome Parks Act: inspectors: conflict of interest: enforcement actions: sunset

SOURCE: Author

DIGEST:

This bill extends the sunset date on the Mobilehome Parks Maintenance (MPM) inspection program by one year, and requires the Department of Housing and Community Development (HCD) to establish policies related to conflict of interest reporting for mobilehome park inspectors.

ANALYSIS:

Existing law:

1. Requires HCD, or a city, county, or city and county that assumes responsibility for the enforcement of the Mobilehome Parks Act (MPA), to enter and inspect mobilehome parks, with a goal of inspecting at least 5% of the parks per year, to ensure enforcement of the MPA and subsequent regulations. Requires the enforcement agency’s inspection to include an inspection of the exterior portions of individual manufactured homes and mobilehomes in each park inspected.
2. Authorizes the officers or agents of an enforcement agency to enter and inspect all parks, wherever situated, and inspect all accommodations, equipment, or paraphernalia used in connection with the park, including the right to examine any registers of occupants to secure the enforcement of the MPA.
3. Requires the enforcement agency, in developing its MPM inspection program, to inspect the mobilehome parks that the agency determines have serious health and safety complaints.
4. Provides that the inspection program shall remain in effect until January 1, 2024.
5. Requires HCD or the local enforcement agency to collect an annual $4 fee per space to fund the MPM inspection program.
6. Requires every agency to adopt and promulgate a Conflict of Interest Code pursuant to the provisions of Article 3 of Chapter 7 of the Political Reform Act.
7. Defines “designated employee” to mean any officer, employee, member, or consultant of an agency whose position with the agency is: exempt from state civil service; elective; designated in a Conflict of Interest Code; or involved as a state employee in the functions of negotiating or signing a contract.
8. Requires each agency’s conflict of interest code to contain the following provisions:
   1. The positions within the agency that involve the making or participation in the making of decisions which may foreseeably have a material effect on any financial interest, and for each such position, the specific types of investments, business positions, interests in real property, and sources of income which are reportable;
   2. A requirement that an investment, business position, interest in real property, or source of income be made reportable by the conflict of interest code if the business entity in which the investment or business position is held, the interest in real property, or the income or source of income may foreseeably be affected materially by any decision made or participated in by the designated employee;
   3. A requirement that each designated employee file statements disclosing reportable investments, business positions, interests in real property, and income;
   4. A requirement that an initial statement be filed by each designated employee within 30 days after the effective date of the conflict of interest code, and thereafter, a requirement that each new designated employee file a statement within 30 days after assuming office;
   5. A requirement that each designated employee file an annual statement, at the time specified in the conflict of interest code, disclosing reportable investments, business positions, interests in real property, and income held or received at any time during the previous calendar year;

• 1. A requirement that each designated employee who leaves office must file, within 30 days of leaving office, a statement disclosing reportable investments, business positions, interest in real property, and income held or received at any time during the period between the closing date of the last required statement and the date of leaving office;
  2. The circumstances in which designated employees or categories of designated employees must disqualify themselves from making, participating in making, or using their official position to influence the making of any decision; and
  3. A requirement for disqualification when the designated employee has a financial interest which it is reasonably foreseeable may be affected materially by the decision.

This bill:

1. Extends by one year, from January 1, 2024 to January 1, 2025, the sunset date on the MPM inspection program and related implementing statutes.
2. Requires HCD, by January 1, 2025, in accordance with the Political Reform Act of 1974 and specified regulations, to establish policies to do all of the following:
   1. Review the statement of economic interests filed by each inspector who is a designated employee for the purposes of the conflict of interest code;

• 1. Require HCD, when reviewing a statement of economic interests, to identify any potential conflict due to an interest in real property disclosed by the inspector, not including the inspector’s principal residence;
  2. Promptly notify an inspector if a required statement has not been filed or if the review of the statement of economic interests filed by the inspector indicates that the statement is incomplete or incorrect in any material aspect; and,
  3. After making at least two attempts at attaining compliance under c), above, notify the Fair Political Practices Commission of each inspector who has not submitted a statement of economic interests.

1. Requires HCD, by January 1, 2025, to do both of the following:
   1. Establish policies to document complaints against inspectors and the steps taken to address those complaints; and

• 1. Refer all complaints against inspectors alleging misconduct to HCD's equal employment opportunity officer or other individual specified in HCD’s policies.

Background

More than 700,000 people live in California's approximately 4,700 mobilehome parks. Mobilehome owners do not own the land the unit sits on and instead pay rent and fees to mobilehome park management for use of the lot and any community spaces. Unlike traditional single-family homes, mobilehomes are considered chattel (personal) property and not real property. As such, purchasing a mobilehome is often much less expensive than traditional site-built housing and mobilehomes represent an important source of affordable housing in the state, especially for seniors and low-income households who are increasingly priced out of traditional rental housing.

Despites their name, mobilehomes are not truly mobile and it is often cost prohibitive (up to $20,000) to relocate them. Additionally, some older homes may not be able to be moved at all due to structural concerns or the fact that parks often will not accept older mobilehomes. Recognizing this, the state has passed several laws governing the relationship between mobilehome owners and park management.

Comments

1. Author’s Statement. According to the author, “Californians living in mobile home parks should feel confident that the inspectors supervising their properties are making decisions based on what’s best for residents, not what’s best for the inspectors’ personal financial interests. AB 319 creates greater transparency and eliminates the potential for conflicts of interest that could put housing inspectors in ethically compromising situations.”
2. Legislative history of the MPM inspection program. HCD inspects parks and mobilehomes for health and safety issues. Under the MPM program, HCD annually inspects 5% of parks for compliance with health and safety requirements under the MPA and corresponding regulations. The program is funded through a $4 fee, of which the property owner may charge half ($2) to the homeowners. In addition to the MPM program, HCD also responds to health and safety complaints under the MPA. With HCD's approval, a city or county can also act as a local enforcement agency and can request authority to enforce the MPA and perform inspection activities for mobilehome parks within its jurisdiction. In 2019, HCD reported that 63 local enforcement agencies in the state were responsible for enforcing the MPA for 860 mobilehome parks.

AB 925 (O'Connell, Chapter 1175, Statutes of 1990) created the MPM inspection program and required HCD or a local enforcement agency to inspect every mobilehome and every mobilehome park in the state once every five years. In 1999, SB 700 (O'Connell, Chapter 520, Statutes of 1999) extended the MPM inspection program until January 1, 2007. About one-third of mobilehome parks in the state were inspected under the MPM program from 2000 to 2007. In 2006, SB 1231 (Dunn, Chapter 644, Statutes of 2006) extended the sunset date on the MPM inspection program until January, 1, 2012. SB 951 (Correa, Chapter 341, Statutes of 2010) extended the MPM inspection program until January 1, 2019 and SB 46 (Leyva, Chapter 835, Statutes of 2018) subsequently extended the program until January 1, 2024.

This bill extends for one additional year the sunset date on the program to afford stakeholders time to identify changes that may be beneficial to the program structure.

1. Conflict of interest requirements. MPM inspectors are "designated employees" subject to HCD's conflict of interest code, which the department was required to adopt under the provisions of the Political Reform Act. As designated employees, MPM inspectors are required to file annual statements of economic interest, commonly referred to as Form 700s, with the FPPC and must recuse themselves from being involved in department decisions that may materially affect any financial interests they possess.
2. California State Auditor's Report 2019-111. In 2020, the California State Auditor published the results of their audit, "Mobile Home Park Inspections: The Department of Housing and Community Development Must Improve Its Inspection Processes to Better Protect Park Residents."

The audit examined the MPM program and made a variety of recommendations to HCD to improve the program—develop procedures to review the annual and assuming-office Form 700s of all inspectors with reportable interests, and establish policies to document all complaints against inspectors and the steps it takes to address those complaints, and refer all complaints to its equal employment opportunity officer.

This bill codifies some recommendations from the audit by requiring HCD to establish policies and procedures related to conflict-of-interest reporting activities and procedures for documenting and addressing complaints against park inspectors. The author argues that while HCD has accepted these recommendations and made changes to their internal policies, codifying these recommendations will reduce the likelihood of future potential conflicts of interests.

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

According to the Senate Appropriations Committee:

• HCD expenditures of approximately $1.2 to $1.4 million for one year, beginning on January 1, 2024, to extend the MPM inspection program and the associated enforcement authority. Staff notes that the preliminary reported expenditures for the 2022 calendar year were approximately $1.24 million. (Mobilehome Park Revolving Fund)
  
• HCD revenues of approximately $1 to $1.1 million for one additional year, beginning on January 1, 2024 to extend the $4 per space annual fee that supports the inspection program. Staff notes that revenues for the 2022 calendar year were approximately $956,000. (Mobilehome Park Revolving Fund)
• HCD indicates that costs to establish conflict of interest and complaint documentation policies and procedures related to inspectors would be minor and absorbable. (General Fund)

SUPPORT: (Verified 9/1/23)

Western Manufactured Housing Communities Association

OPPOSITION: (Verified 9/1/23)

None received.

ASSEMBLY FLOOR: 75-0, 5/25/23

AYES: Addis, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Cervantes, Chen, Connolly, Megan Dahle, Davies, Dixon, Essayli, Flora, Mike Fong, Vince Fong, Friedman, Gabriel, Gallagher, Garcia, Gipson, Grayson, Haney, Hart, Holden, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Rendon

NO VOTE RECORDED: Aguiar-Curry, Mathis, Papan, Quirk-Silva, Soria

Prepared by: Mehgie Tabar / HOUSING / (916) 651-4124

9/5/23 9:25:12

**** END ****

SENATE COMMITTEE ON

Senator Anthony Portantino, Chair

2023 - 2024 Regular Session

AB 319 (Connolly) - Mobilehome Parks Act: inspectors: conflict of interest: enforcement actions: sunset

Bill Summary:

AB 319 would extend the sunset date for the Mobilehome Park Maintenance (MPM) inspection program and the $4 per space annual fee that supports the inspection program, from January 1, 2024 to January 1, 2025. The bill would also require HCD to establish policies related to conflict of interest reporting for mobilehome park inspectors, and to establish policies to document and act on complaints against inspectors, by January 1, 2025.

Fiscal Impact:

• HCD expenditures of approximately $1.2 to $1.4 million for one year, beginning on January 1, 2024, to extend the MPM inspection program and the associated enforcement authority. Staff notes that the preliminary reported expenditures for the 2022 calendar year were approximately $1.24 million. (Mobilehome Park Revolving Fund)
  
• HCD revenues of approximately $1 to $1.1 million for one additional year, beginning on January 1, 2024 to extend the $4 per space annual fee that supports the inspection program. Staff notes that revenues for the 2022 calendar year were approximately $956,000. (Mobilehome Park Revolving Fund)
  
• HCD indicates that costs to establish conflict of interest and complaint documentation policies and procedures related to inspectors would be minor and absorbable. (General Fund)

Background:

Under existing law, the Mobilehome Parks Act requires HCD or a local enforcement agency to inspect mobilehome parks that have had a history of the most serious health and safety code violations, or complaints regarding these violations, with a goal of inspecting five percent of all parks each year. HCD or a local enforcement agency collects a per space fee of $4 annually from mobilehome park owners to fund the program. A park owner may charge half of that amount to individual mobilehome owners. Existing law also requires HCD and local enforcement authorities to issue notices of violation to park owners/operators and mobilehome owners when it discovers violations of the Mobilehome Parks Act. The MPM inspection program and the requirement to issue notices of violations discovered in connection with an inspection are scheduled to sunset on January 1, 2019.

Existing law also requires HCD to convene a semiannual task force comprised of specified mobilehome groups, local enforcement agencies and legislative representatives to provide input on the conduct and operation of the inspection program. HCD must report to the task force information on the number of parks and spaces that were inspected, the fees collected, the most common violations discovered, and the number of violations as well as progress on correcting violations. HCD reports that tens of thousands of health and safety code violations have been cited and remedied since 1991.

There are currently 5,190 mobilehome and special occupancy parks in the state that contain 452,311 lots. HCD has enforcement responsibility over approximately 87 percent of the parks and 76 percent of the individual lots; local enforcement agencies have enforcement responsibilities over the remaining parks and lots. In its March 10, 2023 report to the MPM task force, HCD indicates that it has met its goal of inspecting five percent of all parks under its jurisdiction in 2022, inspecting 197 parks that include 29,011 lots. HCD notes that the inspection program has resulted in the correction of nearly 20,000 park and resident violations of the Mobilehome Parks Act in 2022, resulting in improvement of the health and safety of park residents.

Existing law, the Political Reform Act of 1974, requires each state agency to adopt a conflict‑of‑interest code, seeking to ensure that public officials perform their duties in an impartial manner free from bias caused by their own financial interests or the financial interests of those who support them, and it establishes several requirements related to conflicts of interest. HCD’s conflict‑of‑interest code requires certain employees, including inspectors, to disclose all investments, business positions, or sources of income from businesses that are subject to or affected by HCD’s regulations, programs, or policies by submitting a statement of economic interests known as a Form 700. Existing law requires HCD to review at least 20 percent of all Form 700s submitted on time, and all Form 700s submitted late, to determine whether inspectors have any reportable interests and, if so, whether the inspectors provided required details about these interests.

Proposed Law:

AB 319 would extend the sunset date for the MPM inspection program and the $4 per space annual fee that supports the inspection program, from January 1, 2024 to January 1, 2025, and delay the operative date of specified changes to prescribed fees imposed by the Mobilehome Parks Act until January 1, 2025. The bill would also require HCD to do the following by January 1, 2025:

• Establish policies in accordance with the Political Reform Act and specified regulations, to do the following:
  • Review the statement of economic interests filed by each inspector who is a designated employee for the purposes of the conflict of interest code, and identify any potential conflict due to an interest in real property disclosed by the inspector, not including the inspector’s principal residence.
  • Promptly notify an inspector if a required statement has not been filed or if the review of the statement of economic interests filed by the inspector indicates that the statement is incomplete or incorrect in any material aspect.
  • Notify the Fair Political Practices Commission of each inspector who has not submitted a statement of economic interests after making at least two attempts at attaining compliance with the above requirement.
• Establish policies to document complaints against inspectors and the steps taken to address those complaints.
• Refer all complaints against inspectors alleging misconduct to HCD's equal employment opportunity officer or other individual specified in HCD’s policies.

Related Legislation:

SB 46 (Leyva), Chap. 835/2018, extended the sunset on the MPM inspection program and the associated $4 per space fee from January 1, 2019 to January 1, 2024. The bill also incorporated additional changes to prescribed fees imposed by the Mobilehome Parks Act that become operative on January 1, 2024.

SB 951 (Correa), Chap. 314/2010, extended the sunset on the MPM inspection program and the associated $4 per space fee from January 1, 2012 to January 1, 2019.

SB 1231 (Dunn), Chap. 44/2006, and AB 2250 (Coto), Chap. 858/2006, both changed the program inspection requirements from inspecting all parks at least every seven years to a goal of 5% of the parks per year, and extended the sunset on the program and the associated $4 per space fee from January 1, 2007 to January 1, 2012.

SB 106 (Dunn), which was vetoed by the Governor in 2005, would have extended the inspection program for one year and increased the annual fee to $6 per unit, and required HCD to submit an evaluation of the program in order to assist the Legislature in determining the appropriate level of funding and inspection duties. SB 106 was supported by groups representing both residents and owners of mobilehome parks. The Governor’s veto message stated that, with the program sunsetting in one year, there was “no compelling reason to increase the fee at this time.”

Staff Comments:

HCD indicates that the MPM inspection program generated approximately $956,000 in 2022, but preliminary operating expenditures were approximately $1.24 million (an operating deficit of approximately $287,000). Staff notes that the program appears to have consistently run a deficit, when accounting for the full actual costs to run the inspection program, including all administrative staff time dedicated to the program. Any extension of the inspection program and current fee create General Fund cost pressures to fully fund the program.

The provisions of this bill that require HCD to establish policies related to conflict of interest reporting for mobilehome park inspectors, and to establish policies to document and act on complaints against inspectors, are the result of recommendations from the State Auditor. Specifically, the State Auditor published the results of an audit of the MPM inspection program, Report 2019-111 entitled “Mobile Home Park Inspections: The Department of Housing and Community Development Must Improve Its Inspection Processes to Better Protect Park Residents,” which made numerous recommendations to improve the program, including a section indicating that HCD could do more to ensure that it is aware of inspector’s potential conflicts of interest. This bill would codify the specific recommendations of the State Auditor regarding oversight of inspectors’ potential conflicts and recommended improvements to complaint documentation that were noted in the report.

-- END --

SENATE COMMITTEE ON HOUSING

Senator Scott Wiener, Chair

2023 - 2024 Regular

Bill No: AB 319 Hearing Date: 6/20/2023

SUBJECT: Mobilehome Parks Act: inspectors: conflict of interest: enforcement actions: sunset

DIGEST: This bill extends the sunset date on the Mobilehome Parks Maintenance (MPM) inspection program by one year, and requires the Department of Housing and Community Development (HCD) to establish policies related to conflict of interest reporting for mobilehome park inspectors.

ANALYSIS:

Existing law:

1. Requires HCD, or a city, county, or city and county that assumes responsibility for the enforcement of the Mobilehome Parks Act (MPA), to enter and inspect mobilehome parks, with a goal of inspecting at least 5% of the parks per year, to ensure enforcement of the MPA and subsequent regulations. The enforcement agency’s inspection must include an inspection of the exterior portions of individual manufactured homes and mobilehomes in each park inspected.
2. Authorizes the officers or agents of an enforcement agency to enter and inspect all parks, wherever situated, and inspect all accommodations, equipment, or paraphernalia used in connection with the park, including the right to examine any registers of occupants to secure the enforcement of the MPA.
3. Requires the enforcement agency, in developing its MPM inspection program, to inspect the mobilehome parks that the agency determines have serious health and safety complaints.
4. Provides that the inspection program shall remain in effect until January 1, 2024.
5. Requires HCD or the local enforcement agency to collect an annual $4 fee per space to fund the MPM inspection program.
6. Requires every agency to adopt and promulgate a Conflict of Interest Code pursuant to the provisions of Article 3 of Chapter 7 of the Political Reform Act.
7. Defines “designated employee” to mean any officer, employee, member, or consultant of an agency whose position with the agency is: exempt from state civil service; elective; designated in a Conflict of Interest Code; or involved as a state employee in the functions of negotiating or signing a contract.
8. Requires each agency’s conflict of interest code to contain the following provisions:
   1. The positions within the agency that involve the making or participation in the making of decisions which may foreseeably have a material effect on any financial interest, and for each such position, the specific types of investments, business positions, interests in real property, and sources of income which are reportable;
   2. A requirement that an investment, business position, interest in real property, or source of income be made reportable by the conflict of interest code if the business entity in which the investment or business position is held, the interest in real property, or the income or source of income may foreseeably be affected materially by any decision made or participated in by the designated employee;
   3. A requirement that each designated employee file statements disclosing reportable investments, business positions, interests in real property, and income;
   4. A requirement that an initial statement be filed by each designated employee within 30 days after the effective date of the conflict of interest code, and thereafter, a requirement that each new designated employee file a statement within 30 days after assuming office;
   5. A requirement that each designated employee file an annual statement, at the time specified in the conflict of interest code, disclosing reportable investments, business positions, interests in real property, and income held or received at any time during the previous calendar year;
   6. A requirement that each designated employee who leaves office must file, within 30 days of leaving office, a statement disclosing reportable investments, business positions, interest in real property, and income held or received at any time during the period between the closing date of the last required statement and the date of leaving office;
   7. The circumstances in which designated employees or categories of designated employees must disqualify themselves from making, participating in making, or using their official position to influence the making of any decision; and
   8. A requirement for disqualification when the designated employee has a financial interest which it is reasonably foreseeable may be affected materially by the decision.

This bill:

1. Extends by one year, from January 1, 2024 to January 1, 2025, the sunset date on the MPM inspection program and related implementing statutes.
2. By January 1, 2025, requires HCD, in accordance with the Political Reform Act of 1974 and specified regulations, to establish policies to do all of the following:
   1. Review the statement of economic interests filed by each inspector who is a designated employee for the purposes of the conflict of interest code;
   2. Require HCD, when reviewing a statement of economic interests, to identify any potential conflict due to an interest in real property disclosed by the inspector, not including the inspector’s principal residence;
   3. Promptly notify an inspector if a required statement has not been filed or if the review of the statement of economic interests filed by the inspector indicates that the statement is incomplete or incorrect in any material aspect; and
   4. After making at least two attempts at attaining compliance under c), above, notify the Fair Political Practices Commission of each inspector who has not submitted a statement of economic interests.
3. By January 1, 2025, requires HCD to do both of the following:
   1. Establish policies to document complaints against inspectors and the steps taken to address those complaints; and
   2. Refer all complaints against inspectors alleging misconduct to HCD's equal employment opportunity officer or other individual specified in HCD’s policies.

COMMENTS:

1. Author’s statement. “Californians living in mobile home parks should feel confident that the inspectors supervising their properties are making decisions based on what’s best for residents, not what’s best for the inspectors’ personal financial interests. AB 319 creates greater transparency and eliminates the potential for conflicts of interest that could put housing inspectors in ethically compromising situations.”
2. Background: Mobilehomes. More than 700,000 people live in California's approximately 4,700 mobilehome parks. Mobilehome owners do not own the land the unit sits on and instead pay rent and fees to mobilehome park management for use of the lot and any community spaces. Unlike traditional single-family homes, mobilehomes are considered chattel (personal) property and not real property. As such, purchasing a mobilehome is often much less expensive than traditional site-built housing and mobilehomes represent an important source of affordable housing in the state, especially for seniors and low-income households who are increasingly priced out of traditional rental housing.

Despites their name, mobilehomes are not truly mobile and it is often cost prohibitive (up to $20,000) to relocate them. Additionally, some older homes may not be able to be moved at all due to structural concerns or the fact that parks often will not accept older mobilehomes. Recognizing this, the state has passed several laws governing the relationship between mobilehome owners and park management.

1. Legislative history of the MPM inspection program. HCD inspects parks and mobilehomes for health and safety issues. Under the MPM program, HCD annually inspects 5% of parks for compliance with health and safety requirements under the Mobilehome Parks Act (MPA) and corresponding regulations. The program is funded through a $4 fee, of which the property owner may charge half ($2) to the homeowners. In addition to the MPM program, HCD also responds to health and safety complaints under the MPA. With HCD's approval, a city or county can also act as a local enforcement agency and can request authority to enforce the Mobilehome Parks Act and perform inspection activities for mobilehome parks within its jurisdiction. In 2019, HCD reported that 63 local enforcement agencies in the state were responsible for enforcing the MPA for 860 mobilehome parks.

AB 925 (O'Connell, 1990) created the MPM inspection program and required HCD or a local enforcement agency to inspect every mobilehome and every mobilehome park in the state once every five years. In 1999, SB 700 (O'Connell), extended the MPM inspection program until January 1, 2007. About one-third of mobilehome parks in the state were inspected under the MPM program from 2000 to 2007. In 2006, SB 1231 (Dunn) extended the sunset date on the MPM inspection program until January, 1, 2012. SB 951 (Correa, 2010), extended the MPM inspection program until January 1, 2019 and SB 46 (Leyva, 2018) subsequently extended the program until January 1, 2024.

This bill extends for one additional year the sunset date on the program to afford stakeholders time to identify changes that may be beneficial to the program structure.

1. Conflict of interest requirements. MPM inspectors are "designated employees" subject to HCD's conflict of interest code, which the department was required to adopt under the provisions of the Political Reform Act. As designated employees, MPM inspectors are required to file annual statements of economic interest, commonly referred to as Form 700s, with the FPPC and must recuse themselves from being involved in department decisions that may materially affect any financial interests they possess.
2. California State Auditor's Report 2019-111. In 2020, the California State Auditor published the results of their audit, "Mobile Home Park Inspections: The Department of Housing and Community Development Must Improve Its Inspection Processes to Better Protect Park Residents."

The audit examined the MPM program and made a variety of recommendations to HCD to improve the program—develop procedures to review the annual and assuming-office Form 700s of all inspectors with reportable interests, and establish policies to document all complaints against inspectors and the steps it takes to address those complaints, and refer all complaints to its equal employment opportunity officer.

This bill codifies some recommendations from the audit by requiring HCD to establish policies and procedures related to conflict-of-interest reporting activities and procedures for documenting and addressing complaints against park inspectors. The author argues that while HCD has accepted these recommendations and made changes to their internal policies, codifying these recommendations will reduce the likelihood of future potential conflicts of interests.

Related Legislation:

SB 46 (Leyva, Chapter 835, Statutes of 2018) — extended the MPM inspection program until January 1, 2024.

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

POSITIONS: (Communicated to the committee before noon on Wednesday,

June 14, 2023.)

SUPPORT:

Western Manufactured Housing Communities Association

OPPOSITION:

None received.

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 319

Author:(Connolly)

As Amended Ver:May 18, 2023

Majority vote

SUMMARY

Extends by one year the sunset date on the Mobilehome Parks Maintenance (MPM) inspection program, and requires the Department of Housing and Community Development (HCD) to establish policies related to conflict of interest reporting for mobilehome park inspectors.

Major Provisions

1. Extends by one year, from January 1, 2024 to January 1, 2025, the sunset date on the MPM inspection program and related implementing statutes.
2. By January 1, 2025, requires HCD, in accordance with the Political Reform Act of 1974 and specified regulations, to establish policies to do all of the following:
   1. Review the statement of economic interests filed by each inspector who is a designated employee for the purposes of the conflict of interest code;
   2. Require HCD, when reviewing a statement of economic interests, to identify any potential conflict due to an interest in real property disclosed by the inspector, not including the inspector’s principal residence;
   3. Promptly notify an inspector if a required statement has not been filed or if the review of the statement of economic interests filed by the inspector indicates that the statement is incomplete or incorrect in any material aspect; and
   4. After making at least two attempts at attaining compliance under c), above, notify the Fair Political Practices Commission of each inspector who has not submitted a statement of economic interests.
3. By January 1, 2025, requires HCD to do both of the following:
   1. Establish policies to document complaints against inspectors and the steps taken to address those complaints; and
   2. Refer all complaints against inspectors alleging misconduct to HCD's equal employment opportunity officer or other individual specified in HCD’s policies.

COMMENTS

Background. More than 700,000 people live in California's approximately 4,700 mobilehome parks. Mobilehomes are not truly mobile, in that it is often cost prohibitive to relocate them. The cost to move a mobilehome ranges from $2,000 to upwards of $20,000 depending on the size of the home and the distance traveled. A mobilehome owner whose home is located in a mobilehome park does not own the land the unit sits on, and must pay rent and fees for the land and any community spaces.

Legislative history of the MPM inspection program. HCD inspects parks and mobilehomes for health and safety issues. Under the MPM program, HCD annually inspects 5% of parks for compliance with health and safety requirements under the Mobilehome Parks Act (MPA) and Title 25. The program is funded through a $4 fee, of which the property owner may charge half ($2) to the homeowners. In addition to the MPM program, HCD also responds to health and safety complaints under the MPA. With HCD's approval, a city or county can also act as a local enforcement agency and can request authority to enforce the Mobilehome Parks Act and perform inspection activities for mobilehome parks within its jurisdiction. In 2019, HCD reported that 63 local enforcement agencies in the state were responsible for enforcing the MPA for 860 mobilehome parks.

AB 925 (O'Connell), Chapter 1125, Statutes of 1990, created the MPM inspection program and required HCD or a local enforcement agency to inspect every mobilehome and every mobilehome park in the state once every five years. In 1999, SB 700 (O'Connell), Chapter 520, Statutes of 1999, extended the MPM inspection program until January 1, 2007, and made some changes to the program. In particular, SB 700 limited the inspection program to mobilehome parks that had a history of serious health and safety code violations and required these inspections at least once every seven years. SB 700 limited the inspections in part because of the limited funding provided by the $4 fee that supports the MPM program. About one-third of mobilehome parks in the state were inspected under the MPM program from 2000-2007. SB 700 also created the MPM inspection task force and required it to meet once a year. The task force includes mobilehome park owners, mobilehome owners, local enforcement agencies, and legislative representatives. HCD must report to the task force information on the number of parks and spaces that were inspected, the fees collected, the most common violations discovered, and the number of violations identified plus progress on correcting those violations.

SB 106 (Dunn) of 2005 would have deleted the 2007 sunset date on the MPM inspection program and increased the $4 fee to $6 for the inspections. The Governor vetoed SB 106 because of the fee increase, so in 2006, SB 1231 (Dunn), Chapter 644, Statutes of 2006, instead extended the sunset date on the MPM inspection program until January, 1, 2012, and increased the frequency of the MPM task force meetings to every six months, but did not increase the fee. Also in 2006, AB 2250 (Coto), Chapter 858, set the goal that 5% of parks would be inspected under the MPM program each year.

SB 951 (Correa), Chapter 314, Statutes of 2010, extended the MPM inspection program until January 1, 2019. SB 46 (Leyva), Chapter 835, Statutes of 2018, subsequently extended the program until January 1, 2024. This bill extends for one additional year the sunset date on the program to afford stakeholders time to identify changes that may be beneficial to the program structure.

Conflict of interest requirements. MPM inspectors are "designated employees" subject to HCD's conflict of interest code, which the department was required to adopt under the provisions of Article 3 of the Political Reform Act. As designated employees, MPM inspectors are required to file annual statements of economic interest, commonly referred to as Form 700s, with the FPPC and must recuse themselves from being involved in department decisions that may materially affect any financial interests they possess.

California State Auditor's Report 2019-111. In 2020, the California State Auditor published the results of their audit, "Mobile Home Park Inspections: The Department of Housing and Community Development Must Improve Its Inspection Processes to Better Protect Park Residents." The audit examined the MPM program and made a variety of recommendations to HCD to improve the program. The audit examined HCD’s oversight of inspectors' activity and found that HCD "has not taken adequate steps to determine whether inspectors have potential conflicts of interest related to the parks they are responsible for inspecting, and it has not reported certain complaints of inspector misconduct to its equal employment opportunity officer, as its policy requires" (CSA Report 2019-111, p. 3).

In particular, the audit found:

"HCD did not take adequate steps to address disclosures on inspectors' Form 700s that indicate possible conflicts of interest. Our review of the Form 700s of 77 current and former inspectors for 2017 through 2019 noted that three inspectors reported financial interests related to mobile home parks. Although HCD's conflict‑of‑interest code does not require inspectors to report real property, two inspectors reported owning property adjacent to mobile home parks under HCD's jurisdiction, and two inspectors—including one of the same inspectors who reported owning real property—reported ties to construction businesses in the general vicinity of their assigned areas. Under state law, inspectors’ financial interests may constitute a conflict of interest if the inspectors make decisions that could affect the value of real property they own or if their businesses are subject to any inspections by HCD." (p. 45)

The audit recommended HCD develop procedures to review the annual and assuming-office Form 700s of all inspectors with reportable interests and ensure staff promptly notify the Form 700 filing officer of all inspectors hired or leaving HCD. It further recommended that HCD amend its conflict-of-interest code to require inspectors to disclose financial interest in real property, and follow up with inspectors who failed to file Form 700s and ultimately notify the FPPC of those inspectors who still had not submitted their Form 700 by a specific timeline.

As it relates to inspector misconduct complaints, the audit recommended HCD establish policies to document all complaints against inspectors and the steps it takes to address those complaints, and refer all complaints to its equal employment opportunity officer.

This bill codifies some recommendations from the audit by requiring HCD to establish policies and procedures related to conflict-of-interest reporting activities and procedures for documenting and addressing complaints against park inspectors. The author argues that while HCD has accepted these recommendations and made changes to their internal policies, codifying these recommendations will reduce the likelihood of future potential conflicts of interests.

According to the Author

"Californians living in mobile home parks should feel confident that the inspectors supervising their properties are making decisions based on what's best for residents, not what’s best for the inspectors' personal financial interests. AB 319 creates greater transparency and eliminates the potential for conflicts of interest that could put housing inspectors in ethically compromising situations."

Arguments in Support

According to the Western Manufactured Housing Communities Association, "[this] legislation will ensure that both parkowners and residents maintain a high level of trust of the dedicated inspectors working on behalf of HCD. Just as legislators, legislative staff and decision makers within the Executive Branch are required to file statements of economic interest to allow the public to maintain confidence in their government officials being free from financial conflicts arising from their decisions, AB 319 will help provide transparency about financial interests of HCD inspectors."

Arguments in Opposition

None on file.

FISCAL COMMENTS

According to the Assembly Committee on Appropriations: Estimated one-time special fund costs of approximately $1.1 million to HCD to extend the MPM inspection program by one year. This program is fully-funded by a $4 annual per-lot fee on park owners. These costs do not include the 860 parks monitored by 63 local enforcement agencies.

VOTES

ASM HOUSING AND COMMUNITY DEVELOPMENT: 8-0-0

YES: Wicks, Joe Patterson, Wendy Carrillo, Gabriel, Juan Carrillo, Quirk-Silva, Sanchez, Ward

ASM APPROPRIATIONS: 11-0-5

YES: Holden, Bryan, Calderon, Wendy Carrillo, Mike Fong, Hart, Lowenthal, Papan, Pellerin, Weber, Ortega

ABS, ABST OR NV: Megan Dahle, Dixon, Mathis, Robert Rivas, Sanchez

UPDATED

VERSION: May 18, 2023

CONSULTANT: Nicole Restmeyer / H. & C.D. / (916) 319-2085 FN: 0000982

Date of Hearing: April 26, 2023

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Chris Holden, Chair

ABPCA Bill Id:AB 319

Author:(Connolly) – As Amended Ver:March 30, 2023

Urgency: No State Mandated Local Program: Yes Reimbursable: No

SUMMARY:

This bill extends the sunset date on the mobilehome park maintenance (MPM) inspection program, and the associated $4 fee, to January 1, 2025, and requires the Department of Housing and Community Development (HCD) to establish policies related to conflict-of-interest reporting for mobilehome park inspectors.

Specifically, this bill:

1. Extends the repeal dates on the MPM inspection program and the associated $4 fee that funds the program, from January 1, 2024, to January 1, 2025.
2. Requires HCD, by January 1, 2025, to establish policies to do the following:
   1. Annually review the statement of economic interests filed by each inspector who is a designated employee and identify potential conflicts of interest for each inspector, including any potential conflict due to an interest in real property disclosed by the inspector on the statement of economic interests.
   2. Remind designated employees of missed filing deadlines, as specified.
   3. Notify the filing officer with whom HCD’s designated employees are required to file their statements of economic interests of all designated employees who are inspectors employed by HCD, and of all designated employees who are inspectors upon assuming or leaving office.
   4. Notify the FPPC, after the reminders in b) are sent, of each inspector who has not submitted a statement of economic interests within 45 days after the final reminder.
3. Requires HCD, by January 1, 2025, to do both of the following:
   1. Establish policies to document complaints against inspectors and the steps taken to address those complaints.
   2. Refer all complaints against inspectors alleging misconduct to HCD’s equal employment opportunity officer or other individual specified in HCD’s policies.

FISCAL EFFECT:

1. Estimated one-time special fund costs of approximately $1.1 million to HCD to extend the MPM inspection program by one year. This program is fully-funded by a $4 annual per-lot fee on park owners. These costs do not include the 860 parks monitored by 63 local enforcement agencies.
2. Estimated ongoing General Fund costs in the range of $320,000 to $640,000 annually, to HCD for additional staff to implement the conflict-of-interest- and complaint-related provisions in the bill. These provisions are intended to implement several California State Auditor (Auditor) recommendations resulting from a 2020 audit of the MPM inspection program. However, HCD has fully implemented all of the Auditor’s recommendations to the satisfaction of the Auditor. HCD indicates the provisions of this bill would require additional work beyond the procedures HCD has already put in place to comply with the Auditor’s findings.

COMMENTS:

1. Purpose. This bill seeks to preserve and improve the MPM inspection program by extending the sunset date of the program by one year and codifying several State Auditor recommendations regarding inspector conflicts-of-interest. According to the author:

Californians living in mobile home parks should feel confident that the inspectors supervising their properties are making decisions based on what’s best for residents, not what’s best for the inspectors’ personal financial interests. [This bill] creates greater transparency and eliminates the potential for conflicts of interest that could put housing inspectors in ethically compromising situations.

1. Background. More than 700,000 people live in California's approximately 4,500 mobilehome parks. A mobilehome owner whose home is located in a mobilehome park does not own the land the unit sits on, and must pay rent and fees for the land and any community spaces.

Existing law requires HCD, or a local agency that assumes responsibility for the enforcement of the Mobilehome Parks Act (MPA), to enter and inspect mobilehome parks, with a goal of inspecting at least 5% of the parks per year, to ensure enforcement of the MPA and subsequent regulations. The MPM inspection program is funded through a $4 per-lot fee, of which the park property owner may charge half ($2) to the mobilehome owners. The MPM inspection program sunset date has been extended numerous times since it was created in 1990, most recently by SB 46 (Leyva), Chapter 835, Statutes of 2018, which extended the program until January 1, 2024.

This bill delays the MPM inspection program sunset date by one year, until January 1, 2025. Accordingly, it also extends the repeal date on the $4 per-lot fee used to pay for the program, until January 1, 2025.

1. MPM Inspection Program Audit. Existing law requires HCD to adopt a conflict-of-interest code under the Political Reform Act. As a designated employee subject to HCD’s conflict-of-interest code, an MPM inspector is required to file an annual statement of economic interest, commonly referred to as Form 700, with the Fair Political Practices Commission (FPPC) and must recuse them self from HCD decisions that may materially affect any financial interests the designated employee possesses.

In July 2020, the Auditor released an audit examining the MPM inspection program and HCD’s oversight of inspectors’ activity. Among the findings was that HCD “has not taken adequate steps to determine whether inspectors have potential conflicts of interest related to the parks they are responsible for inspecting, and it has not reported certain complaints of inspector misconduct to its equal employment opportunity officer, as its policy requires.” The Auditor made a variety of recommendations to HCD to improve the program. The Auditor has indicated HCD has fully implemented all the audit recommendations.

This bill codifies some of the recommendations from the audit by requiring HCD to establish policies and procedures for documenting and addressing conflict-of-interest complaints against park inspectors. The author asserts codifying these recommendations, even though HCD has complied with the audit recommendations, will reduce the likelihood of future potential conflicts of interests among inspectors.

Analysis Prepared by: Jennifer Swenson / APPR. / (916) 319-2081

Date of Hearing: March 29, 2023

ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT

Buffy Wicks, Chair

ABPCA Bill Id:AB 319 (

Author:Connolly) – As Amended Ver:March 1, 2023

SUBJECT: Mobilehome Parks Act: inspectors: conflict of interest

SUMMARY: Requires the Department of Housing and Community Development (HCD) to establish policies related to conflict of interest reporting for mobilehome park inspectors. Specifically, this bill:

1. By January 1, 2025, requires HCD to establish policies to do all of the following:
   1. Annually review the statement of economic interests filed by each inspector who is a designated employee for the purposes of the conflict of interest code.
   2. Require HCD, when reviewing a statement of economic interests, to identify potential conflicts of interest for each inspector, including any potential conflict due to an interest in real property disclosed by the inspector on the statement of economic interests;
   3. No later than 120 days after the deadline for a designated employee to file a statement of economic interests, send a written reminder to submit the statement of economic interests to each designated employee from whom HCD has not already received a statement;
   4. No later than 60 days after sending the reminder in b), send a written, telephone, or electronic reminder to submit the statement of economic interests to each designated employee from whom the department has not already received the statement;
   5. Notify the filing officer with whom HCD’s designated employees are required to file their statements of economic interests of all designated employees who are inspectors employed by HCD, and of all designated employees who are inspectors upon assuming or leaving office;
   6. Notify the Fair Political Practices Commission, after the reminders in b) and c) are sent, of each inspector who has not submitted a statement of economic interests within 45 days after the reminder in c).
2. By January 1, 2025, requires HCD to do both of the following:
   1. Establish policies to document complaints against inspectors and the steps taken to address those complaints; and
   2. Refer all complaints against inspectors alleging misconduct to HCD’s equal employment opportunity officer or other individual specified in HCD’s policies.

EXISTING LAW:

1. Requires HCD, or a city, county, or city and county that assumes responsibility for the enforcement of the Mobilehome Parks Act, to enter and inspect mobilehome parks, with a goal of inspecting at least 5 percent of the parks per year, to ensure enforcement of the MPA and subsequent regulations. The enforcement agency’s inspection must include an inspection of the exterior portions of individual manufactured homes and mobilehomes in each park inspected. (Health and Safety Code (HSC) 18400.1)
2. Authorizes the officers or agents of an enforcement agency to enter and inspect all parks, wherever situated, and inspect all accommodations, equipment, or paraphernalia used in connection with the park, including the right to examine any registers of occupants to secure the enforcement of the MPA. (HSC 18400)
3. Requires the enforcement agency, in developing its mobilehome park maintenance inspection program, to inspect the mobilehome parks that the agency determines have serious health and safety complaints. (HSC 18400.1)
4. Provides that the inspection program shall remain in effect until January 1, 2024. (HSC 18400.1)
5. Requires HCD or the local enforcement agency to collect an annual $4 fee per space to fund the inspection program. (HSC 18502)
6. Requires every agency to adopt and promulgate a Conflict of Interest Code pursuant to the provisions of Article 3 of Chapter 7 of the Political Reform Act. (Government Code (GC) 87300)
7. Defines “designated employee” to mean any officer, employee, member, or consultant of an agency whose position with the agency:
   1. Is exempt from state civil service, unless the position is elective or solely secretarial, clerical, or manual;
   2. Is elective, other than an elective state office;
   3. Is designated in a Conflict of Interest Code because the position entails the making or participation in the making of decisions which may foreseeably have a material effect on any financial interest; or
   4. Is involved as a state employee, at other than a clerical or ministerial level, in the functions of negotiating or signing a contract awarded through the competitive bidding process or pursuant to certain provisions of the Public Contract Code. (GC 82109)
8. Requires each agency’s conflict of interest code to contain the following provisions:
   1. The positions within the agency that involve the making or participation in the making of decisions which may foreseeably have a material effect on any financial interest, and for each such position, the specific types of investments, business positions, interests in real property, and sources of income which are reportable;
   2. A requirement that an investment, business position, interest in real property, or source of income be made reportable by the conflict of interest code if the business entity in which the investment or business position is held, the interest in real property, or the income or source of income may foreseeably be affected materially by any decision made or participated in by the designated employee;
   3. A requirement that each designated employee file statements disclosing reportable investments, business positions, interests in real property, and income;
   4. A requirement that an initial statement be filed by each designated employee within 30 days after the effective date of the conflict of interest code, and thereafter, a requirement that each new designated employee file a statement within 30 days after assuming office;
   5. A requirement that each designated employee file an annual statement, at the time specified in the conflict of interest code, disclosing reportable investments, business positions, interests in real property, and income held or received at any time during the previous calendar year;
   6. A requirement that each designated employee who leaves office must file, within 30 days of leaving office, a statement disclosing reportable investments, business positions, interest in real property, and income held or received at any time during the period between the closing date of the last required statement and the date of leaving office;
   7. The circumstances in which designated employees or categories of designated employees must disqualify themselves from making, participating in making, or using their official position to influence the making of any decision; and
   8. A requirement for disqualification when the designated employee has a financial interest which it is reasonably foreseeable may be affected materially by the decision. (GC 87302)

FISCAL EFFECT: Unknown.

COMMENTS:

Author’s statement. According to the author, “Californians living in mobile home parks should feel confident that the inspectors supervising their properties are making decisions based on what’s best for residents, not what’s best for the inspectors’ personal financial interests. AB 319 creates greater transparency and eliminates the potential for conflicts of interest that could put housing inspectors in ethically compromising situations.”

Background. More than 700,000 people live in California's approximately 4,700 mobilehome parks. Mobilehomes are not truly mobile, in that it is often cost prohibitive to relocate them. The cost to move a mobilehome ranges from $2,000 to upwards of $20,000 depending on the size of the home and the distance traveled. A mobilehome owner whose home is located in a mobilehome park does not own the land the unit sits on, and must pay rent and fees for the land and any community spaces.

Legislative history of the MPM inspection program. HCD inspects parks and mobilehomes for health and safety issues. Under the Mobilehome Park Maintenance (MPM) program, HCD annually inspects 5 percent of parks for compliance with health and safety requirements under the Mobilehome Parks Act (MPA) and Title 25. The program is funded through a $4 fee, of which the property owner may charge half ($2) to the homeowners. In addition to the MPM program, HCD also responds to health and safety complaints under the MPA. With HCD’s approval, a city or county can also act as a local enforcement agency and can request authority to enforce the Mobilehome Parks Act and perform inspection activities for mobilehome parks within its jurisdiction. In 2019, HCD reported that 63 local enforcement agencies in the state were responsible for enforcing the MPA for 860 mobilehome parks.

AB 925 (O'Connell), Chapter 1125, Statutes of 1990, created the MPM inspection program and required HCD or a local enforcement agency to inspect every mobilehome and every mobilehome park in the state once every five years. In 1999, SB 700 (O'Connell), Chapter 520, Statutes of 1999, extended the MPM inspection program until January 1, 2007, and made some changes to the program. In particular, SB 700 limited the inspection program to mobilehome parks that had a history of serious health and safety code violations and required these inspections at least once every seven years. SB 700 limited the inspections in part because of the limited funding provided by the $4 fee that supports the MPM program. About one-third of mobilehome parks in the state were inspected under the MPM program between 2000 and SB 700's sunset date of January 1, 2007. SB 700 also created the MPM inspection task force and required it to meet once a year. The task force includes mobilehome park owners, mobilehome owners, local enforcement agencies, and legislative representatives. HCD must report to the task force information on the number of parks and spaces that were inspected, the fees collected, the most common violations discovered, and the number of violations identified plus progress on correcting those violations.

SB 106 (Dunn) of 2005 would have deleted the 2007 sunset date on the MPM inspection program and increase the $4 fee to $6 for the inspections. The Governor vetoed SB 106 because of the fee increase, so in 2006, SB 1231 (Dunn), Chapter 644, Statutes of 2006, extended the sunset date on the MPM inspection program until January, 1, 2012, and increased the frequency of the MPM task force meetings to every six months, but did not increase the fee. Also in 2006, AB 2250 (Coto), Chapter 858, set the goal that five percent of parks would be inspected under the MPM program each year.

SB 951 (Correa), Statutes of 2010, extended the MPM inspection program until January 1, 2019. SB 46 (Leyva), Chapter 835, Statutes of 2018, subsequently extended the program until January 1, 2024.

Committee staff notes the MPM inspection program will sunset on January 1, 2024 absent legislation to extend the operation of the program or remove the sunset.

Conflict of interest requirements. MPM inspectors are “designated employees” subject to HCD’s conflict of interest code, which the department was required to adopt under the provisions of Article 3 of the Political Reform Act. As designated employees, MPM inspectors are required to file annual statements of economic interest, commonly referred to as Form 700s, with the FPPC and must recuse themselves from being involved in department decisions that may materially affect any financial interests they possess.

California State Auditor’s Report 2019-111. In 2020, the California State Auditor published the results of their audit, “Mobile Home Park Inspections: The Department of Housing and Community Development Must Improve Its Inspection Processes to Better Protect Park Residents.” The audit examined the MPM program and made a variety of recommendations to HCD to improve the program. The audit examined HCD’s oversight of inspectors’ activity and found that HCD “has not taken adequate steps to determine whether inspectors have potential conflicts of interest related to the parks they are responsible for inspecting, and it has not reported certain complaints of inspector misconduct to its equal employment opportunity officer, as its policy requires” (CSA Report 2019-111, p. 3).

In particular, the audit found:

“HCD did not take adequate steps to address disclosures on inspectors’ Form 700s that indicate possible conflicts of interest. Our review of the Form 700s of 77 current and former inspectors for 2017 through 2019 noted that three inspectors reported financial interests related to mobile home parks. Although HCD’s conflict‑of‑interest code does not require inspectors to report real property, two inspectors reported owning property adjacent to mobile home parks under HCD’s jurisdiction, and two inspectors—including one of the same inspectors who reported owning real property—reported ties to construction businesses in the general vicinity of their assigned areas. Under state law, inspectors’ financial interests may constitute a conflict of interest if the inspectors make decisions that could affect the value of real property they own or if their businesses are subject to any inspections by HCD.” (p. 45)

The audit recommended HCD develop procedures to review the annual and assuming-office Form 700s of all inspectors with reportable interests and ensure staff promptly notify the Form 700 filing officer of all inspectors hired or leaving HCD. It further recommended that HCD amend its conflict-of-interest code to require inspectors to disclose financial interest in real property, and follow up with inspectors who failed to file Form 700s and ultimately notify the FPPC of those inspectors who still had not submitted their Form 700 by a specific timeline.

As it relates to inspector misconduct complaints, the audit recommended HCD establish policies to document all complaints against inspectors and the steps it takes to address those complaints, and refer all complaints to its equal employment opportunity officer.

HCD concurred with all recommendations made in the audit and indicated to CSA it was taking actions to implement them at the time the audit was published in July 2020. Specifically, for the audit’s recommendations related to conflict of interest reporting, HCD stated it was “identifying all past and current employees who have not filed their Form 700 statements and notifying them of potential penalties for noncompliance. HCD will also continue to review Form 700 statements to identify any potential conflicts of interest.”

For recommendations related to complaints alleging inspector misconduct, HCD stated it was establishing internal investigation procedures to handle those complaints.

This bill codifies some recommendations from the audit by requiring HCD to establish policies and procedures related to conflict-of-interest reporting activities and procedures for documenting and addressing complaints against park inspectors. The author contends that while HCD has accepted these recommendations and made changes to their internal policies, codifying these recommendations will reduce the likelihood of future potential conflicts of interests among inspectors.

Committee amendments. As previously noted, without legislative action to extend the sunset date of the MPM inspection program, the program is scheduled to expire on January 1, 2024. Staff recommends that this bill be amended to extend the MPM inspection program sunset date for one year, from January 1, 2024 to January 1, 2025, to allow more time for the Legislature to consider policy changes and improvements to the program.

1. Add a Section 2 to the bill amending Health and Safety Code Section 18400.1 as follows:

18400.1 (g) This section shall remain in effect only until January 1, 2025 2024, and as of that date is repealed.

Arguments in support. According to the Western Manufactured Housing Communities Association, “[this] legislation will ensure that both parkowners and residents maintain a high level of trust of the dedicated inspectors working on behalf of HCD. Just as legislators, legislative staff and decision makers within the Executive Branch are required to file statements of economic interest to allow the public to maintain confidence in their government officials being free from financial conflicts arising from their decisions, AB 319 will help provide transparency about financial interests of HCD inspectors.”

Arguments in opposition. None on file.

Related legislation:

SB 46 (Leyva), Chapter 835, Statutes of 2018, extended the MPM inspection program until January 1, 2024.

SB 951 (Correa), Statutes of 2010, extended the MPM inspection program until January 1, 2019.

AB 2250 (Coto), Chapter 858, Statutes of 2006, set the goal that five percent of parks would be inspected under the MPM inspection program each year.

SB 1231 (Dunn), Chapter 644, Statutes of 2006, extended the sunset date on the MPM inspection program until January, 1, 2012, and increased the frequency of the MPM task force meetings to every six months, but did not increase the fee.

SB 106 (Dunn) of the 2005-2006 Session would have deleted the 2007 sunset date on the MPM inspection program and increase the $4 fee to $6 for the inspections. This bill was vetoed by the Governor.

SB 700 (O'Connell), Chapter 520, Statutes of 1999, extended the MPM inspection program until January 1, 2007, and made some changes to the program.

AB 925 (O'Connell), Chapter 1125, Statutes of 1990, created the MPM inspection program and required HCD or a local enforcement agency to inspect every mobilehome and every mobilehome park in the state once every five years.

REGISTERED SUPPORT / OPPOSITION:

Support

Western Manufactured Housing Communities Association

Opposition

None on file.

Analysis Prepared by: Nicole Restmeyer / H. & C.D. / (916) 319-2085