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First Substitute H.B. 142

Representative Wayne A. Harper proposes the following substitute bill:


             1     
MANUFACTURED HOME AND MOBILE HOME

             2     
AMENDMENTS

             3     
2003 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Sponsor: Wayne A. Harper

             6      This act modifies the Mortgage Financing Regulation Act and Motor Vehicle Act. The
             7      act provides definitions and modifies the procedures and requirements for classifying
             8      manufactured homes and mobile homes as real property or personal property. The act
             9      repeals Part 6 of the Property Tax Act. The act makes technical changes. The act takes
             10      effect on January 1, 2004.
             11      This act affects sections of Utah Code Annotated 1953 as follows:
             12      AMENDS:
             13          9-4-1202, as renumbered and amended by Chapter 30, Laws of Utah 1997
             14          58-56-17, as last amended by Chapter 42, Laws of Utah 1999
             15          59-2-1109, as last amended by Chapters 221 and 310, Laws of Utah 2001
             16      ENACTS:
             17          41-1a-1320, Utah Code Annotated 1953
             18          70D-1-19, Utah Code Annotated 1953
             19          70D-1-20, Utah Code Annotated 1953
             20      REPEALS:
             21          59-2-601, as last amended by Chapter 1, Laws of Utah 2000
             22          59-2-602, as last amended by Chapter 264, Laws of Utah 1998
             23          59-2-604, as last amended by Chapter 264, Laws of Utah 1998
             24      Be it enacted by the Legislature of the state of Utah:
             25          Section 1. Section 9-4-1202 is amended to read:



             26           9-4-1202. Legislative policy and purpose.
             27          (1) It is the policy of the state that to promote the general welfare of its citizens it is
             28      necessary to remedy the unsafe and unsanitary housing conditions and the acute shortage of
             29      decent, safe, and sanitary dwellings for families of medium and low income, in urban and rural
             30      areas. These conditions cause an increase and spread of disease and crime, and constitute a
             31      menace to the health, safety, morals, and welfare of the state.
             32          (2) It is the policy of the state:
             33          (a) to make adequate provision of affordable housing for:
             34          (i) persons of medium or low income who are unable to provide themselves with
             35      decent housing including:
             36          (A) elderly persons;
             37          (B) persons with disabilities;
             38          (C) veterans;
             39          (D) special needs populations;
             40          (E) low income persons living on tribal trust lands;
             41          (F) persons receiving public assistance under self-sufficiency programs; or
             42          (G) low income persons living in mobile homes as defined in Section [ 59-2-601 ]
             43      70D-1-19 ; and
             44          (ii) during limited periods, for disaster victims; and
             45          (b) that the provision of safe and sanitary dwelling accommodations at rents or prices
             46      that persons of medium and low income can afford will materially assist in developing more
             47      desirable neighborhoods and alleviating the effects of poverty in this state.
             48          (3) The purposes of this part and Part 6, Housing Authorities, are to meet these
             49      problems by:
             50          (a) providing low-cost housing for medium and low income persons; and
             51          (b) encouraging cooperation between political subdivisions and the nonprofit sector to
             52      make available low-cost housing in all areas of the state.
             53          (4) It is in the public interest to use the broad financial resources and technical services
             54      available to government in cooperation with the ingenuity and expertise of private enterprise to
             55      alleviate this lack of safe and sanitary dwellings while stimulating local industry, according to
             56      the following principles:



             57          (a) The private sector, including nonprofit entities, shall be the primary source of
             58      developing and providing affordable housing with state and local incentives to encourage
             59      housing development.
             60          (b) State money used in the development of housing shall:
             61          (i) be heavily leveraged when possible;
             62          (ii) be primarily invested as loans;
             63          (iii) be primarily spent on housing production; and
             64          (iv) give priority to needs of persons of medium or low income who are unable to
             65      provide themselves with decent housing including:
             66          (A) elderly persons;
             67          (B) persons with disabilities;
             68          (C) veterans;
             69          (D) special needs populations;
             70          (E) low income persons living on tribal trust lands;
             71          (F) persons receiving public assistance under self-sufficiency programs; and
             72          (G) low income persons living in mobile homes as defined in Section [ 59-2-601 ]
             73      70D-1-19 .
             74          (c) When possible based on economic feasibility and effectiveness, state housing
             75      programs shall encourage:
             76          (i) mixed income developments;
             77          (ii) socio-economic diversity in neighborhoods; and
             78          (iii) new, multifamily construction.
             79          (d) State resources may be used in partnership with political subdivisions or the private
             80      sector to promote affordable housing.
             81          (e) Within appropriations from the Legislature, the state may provide training and
             82      technical assistance to Utah's political subdivision, quasi-governmental, and nonprofit housing
             83      providers.
             84          Section 2. Section 41-1a-1320 is enacted to read:
             85          41-1a-1320. Tax clearance required to move manufactured home or mobile home.
             86          (1) A manufactured home or mobile home may not be transported by any person,
             87      including its owner, unless a tax clearance has been obtained from the assessor of the county in


             88      which the real property upon which the manufactured home or mobile home was last located
             89      showing that all property taxes, including any interest and penalties, have been paid.
             90          (2) The tax clearance described in Subsection (1):
             91          (a) is proof of having paid all property taxes, interest, and penalties; and
             92          (b) shall be displayed in a conspicuous place on the rear of the manufactured home or
             93      mobile home so as to be plainly visible while in transit.
             94          (3) (a) Any person, including the owner, who transports a manufactured home or
             95      mobile home without a valid tax clearance is:
             96          (i) in violation of Section 59-2-309 ; and
             97          (ii) subject to the penalty provisions of Section 59-2-309 .
             98          (b) In addition to the penalty provided in Subsection (3)(a), any commercial mover
             99      who transports any manufactured home or mobile home without a valid tax clearance is guilty
             100      of a class B misdemeanor.
             101          Section 3. Section 58-56-17 is amended to read:
             102           58-56-17. Fees on sale -- Escrow agents -- Sales tax.
             103          (1) Each dealer shall collect and remit a fee of $75 to the division for each factory built
             104      home the dealer sells that has not, as of the date of the sale, been permanently affixed to real
             105      property and converted to real property as provided in Section 70D-1-20 . The fee shall be
             106      payable within 30 days following the close of each calendar quarter for all units sold during
             107      that calendar quarter. The fee shall be deposited in a restricted account as provided in Section
             108      58-56-17.5 .
             109          (2) Any principal real estate broker, associate broker, or sales agent exempt from
             110      registration as a dealer under Section 58-56-16 who sells a factory built home that has not been
             111      permanently affixed to real property shall close the sale only through a qualified escrow agent
             112      in this state registered with the Insurance Department or the Department of Financial
             113      Institutions.
             114          (3) Each escrow agent through which a sale is closed under Subsection (2) shall remit
             115      all required sales tax to the state.
             116          Section 4. Section 59-2-1109 is amended to read:
             117           59-2-1109. Indigent persons -- Deferral or abatement -- Application -- County
             118      authority to make refunds.


             119          (1) A person under the age of 65 years is not eligible for a deferral or abatement
             120      provided for poor people under Sections 59-2-1107 and 59-2-1108 unless:
             121          (a) the county finds that extreme hardship would prevail if the grants were not made; or
             122          (b) the person is disabled.
             123          (2) (a) An application for the deferral or abatement shall be filed on or before
             124      September 1 with the county in which the property is located.
             125          (b) The application shall include a signed statement setting forth the eligibility of the
             126      applicant for the deferral or abatement.
             127          (c) Both husband and wife shall sign the application if the husband and wife seek a
             128      deferral or abatement on a residence:
             129          (i) in which they both reside; and
             130          (ii) which they own as joint tenants.
             131          (d) A county may extend the deadline for filing under Subsection (2)(a) until December
             132      31 if the county finds that good cause exists to extend the deadline.
             133          (3) (a) For purposes of this Subsection (3):
             134          (i) "Property taxes due" means the taxes due on a person's property:
             135          (A) for which an abatement is granted by a county under Section 59-2-1107 ; and
             136          (B) for the calendar year for which the abatement is granted.
             137          (ii) "Property taxes paid" is an amount equal to the sum of:
             138          (A) the amount of the property taxes the person paid for the taxable year for which the
             139      person is applying for the abatement; and
             140          (B) the amount of the abatement the county grants under Section 59-2-1107 .
             141          (b) A county granting an abatement to a person under Section 59-2-1107 shall refund
             142      to that person an amount equal to the amount by which the person's property taxes paid exceed
             143      the person's property taxes due, if that amount is $1 or more.
             144          (4) For purposes of this section:
             145          (a) a poor person is any person:
             146          (i) whose total household income as defined in Section 59-2-1202 is less than the
             147      maximum household income certified to a homeowner's credit under Subsection 59-2-1208 (1);
             148          (ii) who resides for not less than ten months of each year in the residence for which the
             149      tax relief, deferral, or abatement is requested; and


             150          (iii) who is unable to meet the tax assessed on the person's residential property as the
             151      tax becomes due; and
             152          (b) "residence" includes a mobile home as defined under Section [59-2-601 ] 70D-1-19 .
             153          (5) If the claimant is the grantor of a trust holding title to real or tangible personal
             154      property on which an abatement or deferral is claimed, the claimant may claim the portion of
             155      the abatement or deferral under Section 59-2-1107 or 59-2-1108 and be treated as the owner of
             156      that portion of the property held in trust for which the claimant proves to the satisfaction of the
             157      county that:
             158          (a) title to the portion of the trust will revest in the claimant upon the exercise of a
             159      power:
             160          (i) by:
             161          (A) the claimant as grantor of the trust;
             162          (B) a nonadverse party; or
             163          (C) both the claimant and a nonadverse party; and
             164          (ii) regardless of whether the power is a power:
             165          (A) to revoke;
             166          (B) to terminate;
             167          (C) to alter;
             168          (D) to amend; or
             169          (E) to appoint;
             170          (b) the claimant is obligated to pay the taxes on that portion of the trust property
             171      beginning January 1 of the year the claimant claims the abatement or deferral; and
             172          (c) the claimant meets the requirements under this part for the abatement or deferral.
             173          (6) The commission shall adopt rules to implement this section.
             174          (7) Any poor person may qualify for:
             175          (a) the deferral of taxes under Section 59-2-1108 ;
             176          (b) if the person meets the requisites of this section, for the abatement of taxes under
             177      Section 59-2-1107 ; or
             178          (c) both:
             179          (i) the deferral described in Subsection (7)(a); and
             180          (ii) the abatement described in Subsection (7)(b).


             181          Section 5. Section 70D-1-19 is enacted to read:
             182          70D-1-19. Definitions.
             183          As used in this part:
             184          (1) "Manufactured home" means a transportable factory built housing unit constructed
             185      on or after June 15, 1976, according to the National Manufactured Housing Construction and
             186      Safety Standards Act of 1974, in one or more sections, which, in the traveling mode, is eight
             187      body feet or more in width or 40 body feet or more in length, or when erected on site, is 400 or
             188      more square feet, and which is built on a permanent chassis and designed to be used as a
             189      dwelling with or without a permanent foundation when connected to the required utilities, and
             190      includes the plumbing, heating, air-conditioning, and electrical systems.
             191          (2) "Mobile home" means a transportable factory built housing unit built prior to June
             192      15, 1976, in accordance with a state mobile home code which existed prior to the National
             193      Manufactured Housing Construction and Safety Standards Act of 1974.
             194          (3) "Permanently affixed" means anchored to, and supported by, a permanent
             195      foundation or installed in accordance with an installation standard as defined in Subsection
             196      58-56-3 (8).
             197          Section 6. Section 70D-1-20 is enacted to read:
             198          70D-1-20. Qualification of manufactured home or mobile home as improvement
             199      to real property -- Requirements -- Removal from property.
             200          (1) Except as provided in this section, a manufactured home or mobile home shall be
             201      considered personal property.
             202          (2) Notwithstanding Subsection (1), if the requirements of this section are met, a
             203      manufactured home or mobile home shall be:
             204          (a) considered to be an improvement to real property; and
             205          (b) considered as real property.
             206          (3) A manufactured home or mobile home shall be considered to be an improvement to
             207      real property if:
             208          (a) the manufactured home or mobile home is permanently affixed to real property;
             209          (b) the person seeking to have the manufactured home or mobile home considered to
             210      be an improvement to real property:
             211          (i) owns the manufactured home or mobile home; and


             212          (ii) (A) owns the real property to which the manufactured home or mobile home is
             213      permanently affixed; or
             214          (B) leases the real property to which the manufactured home or mobile home is
             215      permanently affixed and the real property is financed in accordance with Subsection (4); and
             216          (iii) meets the requirements of Subsections (5) and (6); and
             217          (c) in accordance with Subsection (7), the following are recorded by the county
             218      recorder:
             219          (i) the affidavit of affixture described in Subsection (7); and
             220          (ii) the receipt of surrender described in Subsection (7).
             221          (4) For purposes of Subsection (3)(b)(ii)(B), a manufactured home or mobile home
             222      shall be financed in accordance with the guidelines established by:
             223          (a) the Federal Home Loan Mortgage Corporation;
             224          (b) the Federal National Mortgage Association;
             225          (c) the United States Department of Agriculture; or
             226          (d) another entity that requires as part of the entity's financing program restrictions:
             227          (i) on:
             228          (A) ownership; and
             229          (B) actions affecting title and possession; and
             230          (ii) if the restrictions described in Subsection (4)(d)(i) are similar to restrictions
             231      imposed by one or more of the entities described in Subsections (4)(a) through (c).
             232          (5) (a) An owner of a manufactured home or mobile home seeking to have the
             233      manufactured home or mobile home considered to be an improvement to real property and
             234      considered real property shall complete an affidavit of affixture.
             235          (b) An affidavit of affixture described in Subsection (5)(a) shall contain:
             236          (i) the vehicle identification numbers of the manufactured home or mobile home;
             237          (ii) the legal description of the real property to which the manufactured home or mobile
             238      home is permanently affixed;
             239          (iii) a statement certified by the assessor of the county in which the manufactured home
             240      or mobile home is located that the owner of the manufactured home or mobile home:
             241          (A) is not required to pay personal property tax in this state on the manufactured home
             242      or mobile home; or


             243          (B) if the manufactured home or mobile home is subject to personal property tax in this
             244      state, has paid all current and prior year personal property taxes assessed on the manufactured
             245      home or mobile home;
             246          (iv) a description of any security interests in the manufactured home or mobile home;
             247      and
             248          (v) a receipt of surrender issued by the Motor Vehicle Division of the State Tax
             249      Commission in accordance with Subsection (6).
             250          (6) (a) The Motor Vehicle Division of the State Tax Commission shall issue a receipt
             251      of surrender under Subsection (5)(b)(v) if an owner described in Subsection (5) surrenders to
             252      the Motor Vehicle Division the:
             253          (i) manufacturer's original certificate of origin; or
             254          (ii) title to the manufactured home or mobile home.
             255          (b) After issuing the receipt of surrender in Subsection (6)(a), the Motor Vehicle
             256      Division shall maintain a permanent record of:
             257          (i) the receipt of surrender; and
             258          (ii) the certificate or title described in Subsection (6)(a)(ii).
             259          (7) (a) An owner shall present to the county recorder:
             260          (i) the affidavit of affixture described in Subsection (5); and
             261          (ii) the receipt of surrender described in Subsection (6).
             262          (b) A county recorder who receives an affidavit of affixture and receipt of surrender
             263      described in Subsection (7)(a) shall record the receipt of surrender and affidavit of affixture.
             264          (c) An owner of property described in Subsection (5) shall provide a copy of the
             265      recorded affidavit of affixture to:
             266          (i) the Motor Vehicle Division of the Tax Commission; and
             267          (ii) the assessor of the county in which the manufactured home or mobile home is
             268      located.
             269          (8) A lien on the manufactured home or mobile home that is considered to be an
             270      improvement to real property shall be perfected in the manner provided for the perfection of a
             271      lien on real property.
             272          (9) If a manufactured home or mobile home owner separates the manufactured home or
             273      mobile home from the real property, the owner may acquire a new title by submitting to the


             274      Motor Vehicle Division of the State Tax Commission:
             275          (a) a recorded affidavit that the manufactured home or mobile home has been removed
             276      from the real property; and
             277          (b) an application for a new title.
             278          (10) The determination of whether a manufactured home or mobile home is considered
             279      real property or personal property under this section may not be considered in determining
             280      whether the manufactured home or mobile home is real property or personal property for
             281      purposes of taxation under Title 59, Chapter 2, Property Tax Act.
             282          Section 7. Repealer.
             283          This act repeals:
             284          Section 59-2-601, Definitions.
             285          Section 59-2-602, Qualification of manufactured home or mobile home as
             286      improvement to real property -- Requirements -- Removal from property.
             287          Section 59-2-604, Tax clearance required to move manufactured home or mobile
             288      home.
             289          Section 8. Effective date.
             290          This act takes effect on January 1, 2004.


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