Legislature(1993 - 1994)
03/03/1994 08:00 AM House STA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 358 - MOBILE HOME REGISTRATION & TITLES CHAIRMAN VEZEY reconvened the meeting at 8:57 a.m. CSHB 358 was opened for discussion. CSHB 358: "An Act requiring a mobile home owner to obtain a certificate of title and requiring the Department of Public Safety to issue a certificate of title to a mobile home owner." Number 011 PATRICK LOUNSBURY, STAFF FOR REPRESENTATIVE BRIAN PORTER, gave the sponsor statement for HB 358. He said, in 1992, the Governor's Omnibus and Fee Reduction bill eliminated the mobile registration service and the state's ability to issue titles to mobile home owners. Without a title, there is no certain way to determine a person selling a mobile home is the real owner, or whether they first must pay off a lean holder. HB 358 would give mobile home owners a tool to facilitate honest transactions. He noted dealers, financial institutions, consumers, and owners are all agree they should pay an appropriate fee to maintain the cost of maintaining a title system. Number 049 CHAIRMAN VEZEY noted he did not have a title on his home, which is real property. Number 057 MR. LOUNSBURY responded real property uses another form, rather than mobile homes which currently do not have documentation. Number 066 CHAIRMAN VEZEY pointed out he owns a large amount of expensive equipment which also does not have titles. Number 071 MR. LOUNSBURY stated businesses are required by law to provide titles; however, individuals are not as structured. Therefore, documentation is needed to facilitate the selling of mobile homes. (REPRESENTATIVE SANDERS returned to the meeting at 9:00 a.m.) Number 087 REPRESENTATIVE G. DAVIS responded to CHAIRMAN VEZEY's comment that he did not have a title to his home. He commented that it may be cheaper to receive a title to his home, instead of the process that we currently go through to assure lenders that we do properly own our residences. Number 095 CHAIRMAN VEZEY pointed out a title does not actually guarantee ownership. People often legally buy and sell items without changing the title. Number 112 REPRESENTATIVE KOTT moved to adopt the committee substitute to HB 358, version K. CHAIRMAN VEZEY recognized the motion, the committee secretary called the roll, and the CSHB 358, version K, was adopted. Number 129 REPRESENTATIVE KOTT asked MR. LOUNSBURY to explain the differences between the original HB 358 and CSHB 358. Number 132 MR. LOUNSBURY responded the committee substitute was introduced to tighten up the title, so when it goes over to the Senate, they could not add anything on to it. CSHB 358 reads, "An act requiring a mobile home owner," instead of, "An act allowing." CSHB 358 also raises the fee from $50 to $100 to generate an effective program for the state in terms of cost responsibility, which was approved by the home owners, realtors and banks. Number 154 CHAIRMAN VEZEY pointed out the fiscal note was for the original HB 358. REPRESENTATIVE OLBERG clarified the fiscal note states it is for the sponsor substitute dated March 2, 1994; however, he believed it was intended for the committee substitute. CHAIRMAN VEZEY replied JUANITA HENSLEY signed the fiscal note and the committee would clarify her intent when she testified. Number 172 TRACI WALKER, MANAGER, THUNDER MOUNTAIN MOBILE HOME PARK, testified in favor of CSHB 358. She felt anyone could claim ownership to a mobile home and a system was needed to keep track of them. Mobile homes are taxed by municipalities as real property. She asked if the fee charged for a title would include a history search and if there would be assurance that the chain of title would remain on file. She continued the new types of mobile homes currently fabricated are sturdy, lasting many years, and possibly changing ownership at least a dozen times. She stressed banks were very difficult to deal with without proof of ownership. She stated an example of a couple having bought a mobile home, not transferring the title, fixed it up, sold it again, and the original owner has passed away. The people who are buying the home have paid it off, the middle couple has a title with the deceased's name on it and no bill of sale, and there is no one to prove they bought it. With a title standard, this type of confusion could be avoided. She also felt some people may begin to resell the same mobile home repeatedly and there would not be any proof of who owns it. Number 231 CHAIRMAN VEZEY commented there is also a lot of real property in the state which is in the same dilemma. He asked MS. WALKER if it was her testimony that at this time a title does not guarantee who the owner is? Number 238 MS. WALKER replied, on the surface a title does not. Number 240 CHAIRMAN VEZEY clarified owners, sellers, and operators of mobile home parks need a system to provide a chain of title. Number 244 MS. WALKER agreed. Number 248 CHAIRMAN VEZEY stated ROD HULSE, SWITZER VILLAGE, deferred his testimony, but he was available to testify. Number 257 KATE CAMPBELL, RESIDENT of CHURCHILL WAY MOBILE HOME PARK, testified in favor of CSHB 358. She would like an effective title system which would give security to title owners. She gave an example of her and her husband's own personal experience in buying a mobile home. After they bought their home, they looked for a title transfer. The seller, however, stated the title had been stolen. They have had a very difficult time trying to locate an agency to receive an official title from file. They could only get a computer printout from the Juneau Division of Motor Vehicles (DMV), which stated the seller really did own the mobile home, and after two tries, has now received a legal bill of sale. MS. CAMPBELL would like an official record of the title change and would prefer a computer record at the DMV. She was surprised at the increase in of the fee from $50 to $100. Number 344 CHAIRMAN VEZEY suggested MS. CAMPBELL talk to an attorney to protect her property investment. MS. CAMPBELL preferred to not seek an attorney's help. Number 355 REPRESENTATIVE OLBERG clarified that CHAIRMAN VEZEY was suggesting MS. CAMPBELL should seek an attorney because of the degree of the situation she is in. Number 360 CHAIRMAN VEZEY pointed out there are many options available to protect an ownership interest. CHAIRMAN VEZEY introduced JUANITA HENSLEY, DMV, and asked her if the DMV believes it is a proper function of DMV to act in this role? Number 377 JUANITA HENSLEY, DIVISION OF MOTOR VEHICLES, DEPARTMENT OF PUBLIC SAFETY, answered questions on CSHB 358. She responded the DMV suggested with the Governor's 1992 Omnibus bill to delete the titling of mobile homes. DMV felt mobile homes were a function of real property, and should be treated as such, as opposed to a vehicle. In meeting with REPRESENTATIVE PORTER and others over the problems in obtaining the proper documentation on mobile homes they agreed, providing the burden was not placed on the DMV and the program would pay for itself, the DMV would reissue titles to mobile homes. During this period there were title searches through a real estate title search and the Recorder's Office was having to do extensive research as well in UCC filings. DMV had requested mobile home titling be deleted from the statute, in 1992, because titling was not required by the owners. There was an immense amount of research to go through, especially in cases where ownership may have changed 4-5 times. Past files had even been purged from the filing system making the process very labor intensive. Prior to the mandate, as proposed in HB 408, DMV issued approximately 200 mobile home titles a year. DMV estimates it would issue 2,500 titles, based on information from the industry. This figure includes the 1,500 new units sold per year statewide by the industry, plus an additional 1,000 from individuals who may sell theirs. DMV suggested the $100 fee believing it would not be too costly, because it would cost more to go through the UCC filing, and also title searches through a real estate company. MS. HENSLEY's fiscal note indicates CSHB 358 would bring in $250,000 a year in revenue, at an operating cost of $110,000 to the state. DMV has no objection to titling mobile homes as long as it pays for itself. Number 430 CHAIRMAN VEZEY inquired if the DMV had to do a UCC search to issue a title. MS. HENSLEY responded that the DMV does not do a UCC search. DMV offers a title based on a bill of sale or, if the vehicle is new, documentation from a bank or a manufacturer's certificate of origin. Whenever that vehicle is sold the owner would then be required to change titles just as motor vehicles do. Number 439 CHAIRMAN VEZEY did not feel his constituents, of which many live in mobile homes, would like him to pass a bill which would require them to go in and title their home. He asked if mobile homes were considered as real property if they were sold in improvement to real property. MS. HENSLEY could not answer if mobile homes were treated as real estate property or not. Number 449 CHAIRMAN VEZEY clarified real property refers to the fee simple, a stake in land, and the improvements thereon. He felt CSHB 358 would require a lot of people to have to go and buy a title, when they may have already gone through the recording process for real property. Number 457 MS. HENSLEY was not familiar with the requirements for leans by financial institutions for real property, when a mobile home is set on it. Number 462 CHAIRMAN VEZEY asked if MS. HENSLEY was including UCC agreements, in the category of leans, on mobile homes. Number 464 MS. HENSLEY responded the DMV made the suggestion to the Governor's Omnibus bill because if, for example, a person bought a boat, a UCC filing lean would be required if it is financed. A person would have to pay a filing fee for banks to file a UCC lean on the boat. DMV used to do an immense amount of research. Number 474 CHAIRMAN VEZEY asked the cost of filing or recording a UCC agreement, deed, or bill of sale. He believed it was $10. Number 479 MS. HENSLEY answered, according to information from REPRESENTATIVE PORTER's office, titling through the DMV would be more cost effective to the owners, even at $100. Number 497 CHAIRMAN VEZEY asked why it costs more to record an ownership transaction dealing with real property, than dealing with vehicle property and titles. Number 500 MS. HENSLEY responded real estate companies would require full land recorder title searches and UCC title searches even on mobile homes. Number 514 CHAIRMAN VEZEY clarified DMV could title mobile homes cheaper than the private sector in conjunction with the Recorder's Office. He thought the DMV might be presumptuous in their cost expectations and did not feel the cost of the private sector was fair in comparison to the DMV. Number 526 MS. HENSLEY felt the DMV was efficient and information received back from the sponsor, from a meeting last summer with other legislators and their constituents, regarding mobile home owners and dealers, they felt it was very costly to continue the current process of title acquirement. Number 535 REPRESENTATIVE OLBERG stated the 1,500 new units sold per year would take five minutes for the DMV, noting the efficiency. The 1,000 used mobile home sales per year, everyone who already has a title without too many changes of ownership, would still be relatively simple. There will be some titles extremely complicated. He pointed out UCC searches and title searches are expensive. Number 545 CHAIRMAN VEZEY stated the amount of money spent in insuring land through searches is much more guaranteed than a title received by DMV. He thought a type of insurance policy which guarantees a mobile home title might be helpful. MS. HENSLEY responded a guarantee is not available for mobile home owners. Number 560 CHAIRMAN VEZEY thought the guarantee was available if they own the land the improvement sits on. A mobile home on rented space would not have this option. Number 562 MS. HENSLEY commented, in the municipality of Anchorage, they show 4,884 mobile homes in parks where the land is not usually owned. Fairbanks Community Research Center advised they have 2,268 mobile homes in mobile home parks. Number 570 REPRESENTATIVE OLBERG clarified when a mobile home becomes permanently attached to the ground by foundation on a specific piece of land, it is no longer a mobile home. Number 575 CHAIRMAN VEZEY believed a title company would not issue title insurance unless the owner also had a fee simple interest in the property where the improvement sits. REPRESENTATIVE OLBERG agreed, but the mobile home would only be an improvement and would not relate to the property title. Number 581 MS. HENSLEY pointed out every mobile home without a title, under CSHB 358, would have to get one. She did not have the exact number, and offered CHAIRMAN VEZEY could revise the total cost of the title down further. DMV suggested the $100 fee to pay for the process. New and used mobile home sales, 2,500 per year, would be the focus of the DMV. Number 591 REPRESENTATIVE G. DAVIS stated the large amount of mobile home owners in certain districts was of concern to him. He clarified these owners would not have to rush down and get titles. CSHB 358 states the DMV shall issue a certificate of title to the owner upon application and payment. If an owner wanted to sell their mobile home, a guarantee of ownership could be acquired at the DMV. Number 599 CHAIRMAN VEZEY pointed out CSHB 358 is "an Act requiring" a mobile home owner. CSHB 358 does not distinguish between those renting a space or those who own the property. Number 601 REPRESENTATIVE OLBERG sensed his constituents would not all rush down to obtain a title. He felt the vast majority of mobile homes probably do have titles, because it's been less than a year since the program was in effect. Number 612 CHAIRMAN VEZEY stated mobile homes in his district have sold numerous times, without the proper transfer of titles. In- depth research would be involved. Seeing no more testimony from MS. HENSLEY, CHAIRMAN VEZEY let MS. WALKER readdress the committee. Number 627 MS. WALKER asked MS. HENSLEY if it would be possible to set up some kind of fee scheduling, whereby those requiring less research could pay a lesser amount. Number 635 CHAIRMAN VEZEY answered anything was possible and a subcommittee would be formed to create a bill of useful commercial purpose, and not offensive to the public. CHAIRMAN VEZEY asked MR. LOUNSBURY to join the table. The committee understands the intent of CSHB 358. CHAIRMAN VEZEY suggested a subcommittee be formed and MR. LOUNSBURY be a part of it. He would like to meet with those knowledgeable of the legal ramifications of establishing ownership. MR. LOUNSBURY stated, in reference to CHAIRMAN VEZEY's constituents, that he was informed by staff of Les Fickes, Riverview Mobile Home Park Owner, that he would be in favor of a bill like CSHB 358. MR. LOUNSBURY said he had no objection with forming a subcommittee. Number 666 CHAIRMAN VEZEY knew both Mr. Fickes and Mr. Rahoy who own mobile parks in his districts, but believed there was a general lack of understanding in commercial standards and legality of ownership. He thought the committee should have "an expanded picture." Number 674 REPRESENTATIVE OLBERG thought "when ownership changes" could be added to the title of the CSHB 358. Number 679 CHAIRMAN VEZEY responded this change would make CSHB 358 more palatable. He pointed out those who buy and sell real property are not required to record their transactions. Number 683 REPRESENTATIVE OLBERG thought the requirement would also not be 100 percent complied with, either. Number 684 REPRESENTATIVE G. DAVIS proposed the title might be changed to read, "An Act relating to a mobile home owner to obtain," instead of, "requiring." He noted "requiring" is the word the committee is having problems with. Number 689 CHAIRMAN VEZEY stated the original bill is "An Act allowing a mobile home owner." Number 691 REPRESENTATIVE OLBERG liked the original title better, but questioned the concern that it was too broad. Number 692 REPRESENTATIVE KOTT inquired if the was a companion Senate Bill in the Senate presently. Number 698 CHAIRMAN VEZEY paused the committee to change the tape. TAPE 94-21, SIDE A Number 000 CHAIRMAN VEZEY resumed the meeting. Number 002 REPRESENTATIVE G. DAVIS felt eliminating the word "requiring" would satisfy his concerns with CSHB 358. There will always be those individuals who do not follow the transfer process. He moved page 1, line 1, to read, "An Act relating to a mobile home owner to obtain a title." Number 034 CHAIRMAN VEZEY interjected he could entertain the motion, however, he would like more testimony on CSHB 358 before it is passed out of committee. He did agree flexibility needed to be created in CSHB 358. CHAIRMAN VEZEY stated CSHB 358 would be rescheduled in the near future. REPRESENTATIVE G. DAVIS withdrew his motion. Number 054 REPRESENTATIVE KOTT commented the subcommittee should also examine the fee schedule. He believed 2,500 titles at $45 would cost $112,000, which would be more appropriate. Number 063 CHAIRMAN VEZEY referred to the time, risk and liability, involved in doing title searches as MS. HENSLEY had mentioned. He noted a title search could not be bought for $100 for property. Number 079 REPRESENTATIVE KOTT commented there may be constitutional problems in varying the fees for those requiring less research. Number 088 CHAIRMAN VEZEY felt if a person could establish qualified ownership and have it recorded for posterity, then a $100 fee would not be unreasonable. CSHB 358 was held in committee to be rescheduled. Number 119
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