Legislature(2011 - 2012)BARNES 124
04/04/2012 03:15 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| SB122 | |
| SB104 | |
| HB326 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 326 | TELECONFERENCED | |
| + | SB 122 | TELECONFERENCED | |
| + | SB 104 | TELECONFERENCED | |
| + | TELECONFERENCED |
SB 104-MANUFACTURED HOMES AS REAL PROPERTY
3:36:57 PM
CHAIR OLSON announced that the next order of business would be
CS FOR SENATE BILL NO. 104(JUD), "An Act relating to
manufactured homes, including manufactured homes permanently
affixed to land, to the conversion of manufactured homes to real
property, to the severance of manufactured homes from real
property, to the titling, conveyance, and encumbrance of
manufactured homes, and to manufacturers' certificates of origin
for vehicles; and providing for an effective date."
3:37:16 PM
SENATOR HOLLIS FRENCH, Alaska State Legislature, summarized that
SB 104 is designed to allow individual Alaskans who own their
manufactured or mobile home and the land upon which the mobile
home sits the ability to title their mobile home as real
property. He explained that it takes many, many pages to get
there. He pointed out that Alaska statutes relating to mobile
homes consist of a series of statutes that treat mobile homes as
vehicles and these statutes need to be moved to the real estate
provisions in statute and to do so results in the lengthy bill
currently before the committee.
3:38:53 PM
SENATOR FRENCH explained that SB 104 establishes a formal method
to eliminate the certificate of title for a manufactured home -
a mobile home - and converts the home to real property when the
home is or will be permanently affixed to real property. He
further explained that the bill helps manufactured homeowners -
who own a manufactured home on a permanent foundation and also
own the land beneath it - gain access to title the mobile home
as real property. He clarified that this conversion is purely
voluntary since nothing in SB 104 compels mobile homeowners to
do so; however, this bill would allow mobile homeowners to gain
access to better interest rates on borrowing and selling. He
reiterated that there is not any compulsion to convert a mobile
home to real property since it is all voluntary. He stated that
Alaska, unlike the vast majority of other states, has no formal
statutory procedure for converting a manufactured home to real
property. The bill would also bring state definitions of
manufactured homes in accordance with the U.S. Department of
Housing and Urban Development (HUD) definitions for property
conversion. He stated that the bill is intended to meet
eligibility requirements for a bank or other lender to sell a
mortgage or manufactured home to Federal National Mortgage
Association (Fannie Mae) or Federal Home Loan Mortgage
Corporation (Freddie Mac). The bill would create a means for
titling manufactured homes which were fixed real property if the
title has been misplaced or lost. He stated that the bill has
considerable support, including support of the Alaska Land Title
Association, First American Title, Wells Fargo, and the Alaska
Bankers Association (ABA). He listed the ABA's members as the
Alaska Pacific Bank, Denali State Bank, KeyBank, First Bank of
Ketchikan, First National Bank of Alaska, Mt. McKinley Bank,
Northrim Bank, and Wells Fargo. The letter from the ABA is
signed by Joe Beedle. He recapped that this list indicates deep
support for SB 104 within the business community in the state.
He concluded by acknowledging this subject area is not an area
in which he is an expert. He indicated the Senate spent
considerable time reviewing SB 104 and there is not any known
opposition to the bill.
3:42:29 PM
REPRESENTATIVE SADDLER asked for any revenue implications for an
owner of a manufactured home and the associated land. He
clarified he is interested in any fees, tax consequences, and
mortgage implications for converting manufactured homes to real
property under the bill.
SENATOR FRENCH deferred the fee portion to the state's
witnesses. He answered, with respect to the financial
implications for the individual, by relating a scenario in which
a party holds a loan on the mobile home with "used car rates",
titled by Division of Motor Vehicles, (DMV), with an interest
rate of approximately 10-12 percent. He estimated using this
scenario the party could reduce his/her rates dramatically since
real estate loan interest rates are much lower. He pointed out
it would depend on the size of the loan, but some manufactured
homes are very nice, ranging from $50,000 to $100,000, plus the
land value. He recapped that it is hard to quantify, but the
savings is potentially substantial.
3:43:48 PM
REPRESENTATIVE SADDLER remarked that he has friends engaged in
the real estate business and his family has been involved in
that business, too. He offered his belief that there is always
a way to recover costs from any transaction. He expressed
interest in having any associated costs identified for the
record.
SENATOR FRENCH deferred to the experts.
3:44:14 PM
REPRESENTATIVE SADDLER asked whether there would be any
implications for property taxes on conversions.
SENATOR FRENCH pointed out that question has not been raised
before, but he, too, is interested in the answer.
3:44:41 PM
CHAIR OLSON asked whether the property would qualify for the
Alaska Housing Energy Program.
SENATOR FRENCH answered yes. He commented he moved to Anchorage
in 1978 and bought a trailer on Piper Street, a 12 by 65-foot
Astro Home that he winterized himself. He has since sold it,
but he says he was quite attached to it as many homeowners are
about their first homes.
3:45:39 PM
REPRESENTATIVE SADDLER asked Mr. Ginsberg what would be changed
in financing terms to convert the mobile home to real property.
3:46:26 PM
GEORGE GINSBERG, Attorney, McGlinchey Stafford, PLLC, Legal
Counsel to Wells Fargo asked for clarification on the question.
REPRESENTATIVE SADDLER asked whether there would be any
underlying requirements if a person were to convert his/her
property from a vehicle to real property. He recognized the
party would not have a home mortgage.
3:47:12 PM
MR. GINSBERG answered that part of the problem is the situation
can occur, in which an Alaskan owns a mobile home without the
certificate and title, but the mobile home is already
permanently affixed to land. He characterized the
aforementioned situation as the worst case scenario since
legally the mobile home may be neither personal or real property
since currently the Alaska DMV will not issue a certificate of
title to a manufactured home that is permanently affixed. He
emphasized the party does not have any way to finance or sell
the home, yet, legally it is not clear that the property is real
property. This bill would create a procedure to make the
manufactured home either personal property or real property. It
is advantageous for the most part for a homeowner to have the
mobile home and associated land treated as real property to
allow for financing. He agreed with Senator French's comments
that financing a mobile home as real property would likely allow
the owner to obtain lower interest rates, especially given that
there is not a clear loan market on manufactured homes.
3:49:13 PM
MR. GINSBERG related that certainly the loan could not be sold
to Fannie Mae or Freddie Mac unless clear procedures exist in
state law to identify the mobile home and associated land as
real estate. He turned to costs. He suggested that first, the
owner would be subject to filing fees to file an application
with the department to cancel the title or certificate of
origin, or to apply for a confirmation of conversion if neither
record exists. Second, the owner would need to file recording
fees with the recorder's office. He stated that nothing in
statutes pertains to taxes, but once the procedure set forth in
statute has been completed, the manufactured home is considered
real estate for all purposes. He said he assumes the property
would be considered real estate for tax purposes and be re-
assessed. He emphasized, as Senator French indicated earlier,
this procedure is entirely optional. He highlighted that for
those who do want to take advantage of converting their mobile
home and associated land to real property that this bill
provides a means and a public record for the lender or buyer to
research the real estate records.
3:51:46 PM
REPRESENTATIVE SADDLER asked which department the provision
refers to in the bill.
MR. GINSBERG answered the [Division] of Motor Vehicles would be
the entity. He emphasized unless the manufactured home is
converted that it is considered a vehicle covered by a
certificate of title. He pointed out the vehicle doesn't move
since it is already affixed to land.
.
3:52:22 PM
REPRESENTATIVE SADDLER asked whether the municipality would
automatically be notified of the conversion.
MR. GINSBERG answered that the statute does not address this.
He indicated that the recorded affidavit of affixation that
identifies the home is permanently affixed to real property. He
was unsure of the communication between the recorder's office
and tax office.
3:53:08 PM
REPRESENTATIVE SADDLER related his understanding that the
assessor's office would likely contact the owner.
3:53:19 PM
REPRESENTATIVE JOHNSON asked for a definition of permanently
affixed and if that mean wheels off or on blocks.
MR. GINSBERG answered no. He said the statute addresses this.
He referred to page 20, lines 3-21, read: is permanently
affixed when it is (1), (2), or (3).
3:55:13 PM
SENATOR FRENCH referred to page 20, lines 3-11. He read:
Sec. 34.85.150. Permanently affixed. A manufactured
home is permanently affixed when it is
(1) anchored to real property by attachment to a
permanent foundation;
(2) constructed in accordance with applicable state
and local building codes and manufacturer's
specifications as provided in ... the federal
Department of Housing and Urban Development (24 C.F.R.
3285): and (3) connected to a residential utility,
including water, gas, electricity, sewer, or septic
service.
3:55:27 PM
SHELLY MELLOTT, Deputy Director, Director's Office, Division of
Motor Vehicles (DMV), introduced herself.
3:56:20 PM
REPRESENTATIVE SADDLER how many motor homes are titled under
DMV's laws.
MS. MELLOTT answered 8,200 mobile homes are registered. In
further response to a question, she restated 8,200.
REPRESENTATIVE SADDLER asked for any estimation on the number of
anticipated conversions to real property.
MS. MELLOTT answered she could not say.
3:57:07 PM
REPRESENTATIVE THOMPSON asked whether 8,200 referred to the
number of titles.
MS. MELLOTT answered yes, current the DMV has 8,287 mobile homes
titled in its system.
3:57:29 PM
REPRESENTATIVE SADDLER asked how many mobile homes are
permanently affixed.
MS. MELLOTT answered that she did not know.
3:58:03 PM
CHAIR OLSON, after first determining no one else wished to
testify, closed public testimony on SB 104.
3:58:16 PM
REPRESENTATIVE THOMPSON remarked that the bill is 21 pages long.
3:58:30 PM
REPRESENTATIVE HOLMES remarked that she has not had many
comments, but the ones she has received are positive as some
mobile homeowners would like to sell but cannot currently do so.
3:59:00 PM
CHAIR OLSON commented that he has not received any negative
comments on the bill.
3:59:06 PM
REPRESENTATIVE JOHNSON moved to report CSSB 104(JUD) out of
committee with individual recommendations and the accompanying
fiscal notes. There being no further objection, the CSSB
104(JUD) was reported from the House Labor and Commerce Standing
Committee.