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H.B. 396

This document includes House Committee Amendments incorporated into the bill on Fri, Mar 8, 2013 at 9:13 AM by jeyring. -->              1     

MODULAR HOME AMENDMENTS

             2     
2013 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Gage Froerer

             5     
Senate Sponsor: ____________

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill modifies the Financial Institution Mortgage Financing Regulation Act to
             10      address modular homes.
             11      Highlighted Provisions:
             12          This bill:
             13          .    defines terms;
             14          .    exempts modular homes from provisions that address manufactured or mobile
             15      homes;
             16          .    provides a process by which modular homes are treated as real property; and
             17          .    makes technical changes.
             18      Money Appropriated in this Bill:
             19          None
             20      Other Special Clauses:
             21          None
             22      Utah Code Sections Affected:
             23      AMENDS:
             24          70D-2-102, as last amended by Laws of Utah 2011, Chapter 14
             25          70D-2-401, as renumbered and amended by Laws of Utah 2009, Chapter 72
             26      ENACTS:
             27          70D-2-401.5, Utah Code Annotated 1953


             28     
             29      Be it enacted by the Legislature of the state of Utah:
             30          Section 1. Section 70D-2-102 is amended to read:
             31           70D-2-102. Definitions.
             32          As used in this chapter:
             33          (1) (a) Except as provided in Subsection (1)(b), "broker" means a person who in the
             34      regular course of business assists a person in obtaining a mortgage loan for a fee or other
             35      consideration paid directly or indirectly.
             36          (b) "Broker" does not include a person solely because of the person's:
             37          (i) real estate brokerage activities; or
             38          (ii) activities as an attorney licensed to practice law in this state who, in the course of
             39      the attorney's practice as an attorney, assists a person in obtaining a mortgage loan.
             40          (2) "Business as a lender, broker, or servicer" means a person who engages in an act for
             41      compensation or in the expectation of compensation that makes the person a lender, broker, or
             42      servicer.
             43          (3) (a) Except as provided in Subsection (3)(b), "lender" means a person who in the
             44      regular course of business originates a loan secured by a mortgage.
             45          (b) "Lender" does not include a person who:
             46          (i) as a seller only receives one or more mortgages as security for a purchase money
             47      obligation; or
             48          (ii) only receives a mortgage as security for an obligation:
             49          (A) payable on an installment or deferred payment basis; and
             50          (B) arising out of materials furnished or services rendered in the improvement of real
             51      property.
             52          (4) "Manufactured home" means a transportable factory built housing unit that:
             53          (a) is constructed:
             54          (i) on or after June 15, 1976, according to the National Manufactured Housing
             55      Construction and Safety Standards Act of 1974; and
             56          (ii) in one or more sections, which:
             57          (A) in the traveling mode, is eight body feet or more in width or 40 body feet or more
             58      in length; or


             59          (B) when erected on site, is 400 or more square feet;
             60          (b) is built on a permanent chassis;
             61          (c) is designed to be used as a dwelling with or without a permanent foundation when
             62      connected to the required utilities; and
             63          (d) includes the plumbing, heating, air-conditioning, and electrical systems.
             64          (5) "Mobile home" means a transportable factory built housing unit built before June
             65      15, 1976, in accordance with a state mobile home code that existed before the National
             66      Manufactured Housing Construction and Safety Standards Act of 1974.
             67          (6) "Modular home" means a modular unit as defined in Section 15A-1-302 .
             68          [(6)] (7) "Permanently affixed" means anchored to, and supported by, a permanent
             69      foundation or installed in accordance with the manufactured housing installation standard code
             70      referred to in Section 15A-1-202 .
             71          [(7)] (8) "Servicer" means a person who in the regular course of business assumes
             72      responsibility for servicing and accepting payments for a mortgage loan.
             73          Section 2. Section 70D-2-401 is amended to read:
             74           70D-2-401. Qualification of manufactured home or mobile home as improvement
             75      to real property -- Requirements -- Removal from property -- Exception for modular
             76      home.
             77          (1) Except as provided in this section, for purposes of this chapter, a manufactured
             78      home or mobile home is considered personal property.
             79          (2) Notwithstanding Subsection (1), for purposes of this chapter, if the requirements of
             80      this section are met, a manufactured home or mobile home is:
             81          (a) considered to be an improvement to real property; and
             82          (b) considered as real property.
             83          (3) A manufactured home or mobile home is considered to be an improvement to real
             84      property if:
             85          (a) the manufactured home or mobile home is permanently affixed to real property;
             86          (b) the person seeking to have the manufactured home or mobile home considered to
             87      be an improvement to real property:
             88          (i) owns the manufactured home or mobile home;
             89          (ii) (A) owns the real property to which the manufactured home or mobile home is


             90      permanently affixed; or
             91          (B) leases the real property to which the manufactured home or mobile home is
             92      permanently affixed and the real property is financed in accordance with Subsection (4); and
             93          (iii) meets the requirements of Subsections (5) and (6); and
             94          (c) in accordance with Subsection (7), the following are recorded by the county
             95      recorder:
             96          (i) the affidavit of affixture described in Subsection (7); and
             97          (ii) the receipt of surrender described in Subsection (7).
             98          (4) For purposes of Subsection (3)(b)(ii)(B), a manufactured home or mobile home
             99      shall be financed in accordance with the guidelines established by:
             100          (a) the Federal Home Loan Mortgage Corporation;
             101          (b) the Federal National Mortgage Association;
             102          (c) the United States Department of Agriculture; or
             103          (d) another entity that requires as part of the entity's financing program restrictions:
             104          (i) on:
             105          (A) ownership; and
             106          (B) actions affecting title and possession; and
             107          (ii) if the restrictions described in Subsection (4)(d)(i) are similar to restrictions
             108      imposed by one or more of the entities described in Subsections (4)(a) through (c).
             109          (5) (a) An owner of a manufactured home or mobile home seeking to have the
             110      manufactured home or mobile home considered to be an improvement to real property and
             111      considered real property shall complete an affidavit of affixture.
             112          (b) An affidavit of affixture described in Subsection (5)(a) shall contain:
             113          (i) the vehicle identification numbers of the manufactured home or mobile home;
             114          (ii) the legal description of the real property to which the manufactured home or mobile
             115      home is permanently affixed;
             116          (iii) a statement certified by the assessor of the county in which the manufactured home
             117      or mobile home is located that the owner of the manufactured home or mobile home:
             118          (A) is not required to pay personal property tax in this state on the manufactured home
             119      or mobile home; or
             120          (B) if the manufactured home or mobile home is subject to personal property tax in this


             121      state, has paid all current and prior year personal property taxes assessed on the manufactured
             122      home or mobile home;
             123          (iv) a description of any security interests in the manufactured home or mobile home;
             124      and
             125          (v) a receipt of surrender issued by the Motor Vehicle Division of the State Tax
             126      Commission in accordance with Subsection (6).
             127          (6) (a) The Motor Vehicle Division of the State Tax Commission shall issue a receipt
             128      of surrender under Subsection (5)(b)(v) if an owner described in Subsection (5) surrenders to
             129      the Motor Vehicle Division the:
             130          (i) manufacturer's original certificate of origin; or
             131          (ii) title to the manufactured home or mobile home.
             132          (b) After issuing the receipt of surrender in Subsection (6)(a), the Motor Vehicle
             133      Division shall maintain a permanent record of:
             134          (i) the receipt of surrender; and
             135          (ii) the certificate or title described in Subsection (6)(a)(ii).
             136          (7) (a) An owner shall present to the county recorder:
             137          (i) the affidavit of affixture described in Subsection (5); and
             138          (ii) the receipt of surrender described in Subsection (6).
             139          (b) A county recorder who receives an affidavit of affixture and receipt of surrender
             140      described in Subsection (7)(a) shall record the receipt of surrender and affidavit of affixture.
             141          (c) An owner of property described in Subsection (5) shall provide a copy of the
             142      recorded affidavit of affixture to:
             143          (i) the Motor Vehicle Division of the Tax Commission; and
             144          (ii) the assessor of the county in which the manufactured home or mobile home is
             145      located.
             146          (8) A lien on the manufactured home or mobile home that is considered to be an
             147      improvement to real property shall be perfected in the manner provided for the perfection of a
             148      lien on real property.
             149          (9) If a manufactured home or mobile home owner separates the manufactured home or
             150      mobile home from the real property, the owner may acquire a new title by submitting to the
             151      Motor Vehicle Division of the State Tax Commission:


             152          (a) a recorded affidavit that the manufactured home or mobile home is removed from
             153      the real property; and
             154          (b) an application for a new title.
             155          (10) The determination of whether a manufactured home or mobile home is considered
             156      real property or personal property under this section may not be considered in determining
             157      whether the manufactured home or mobile home is real property or personal property for
             158      purposes of taxation under Title 59, Chapter 2, Property Tax Act.
             159          (11) This section does not apply to a modular home.
             160          Section 3. Section 70D-2-401.5 is enacted to read:
             161          70D-2-401.5. Qualification of modular home as improvement to real property --
             162      Requirements.
             163          (1) Except as provided in this section, for purposes of this chapter, a modular home is
             164      considered personal property.
             165          (2) Once a modular home is constructed on real property and the modular home is
             166      taxed as real property, it is presumed that the owner of the real property also owns the modular
             167      home.
             168          (3) For purposes of this chapter, if the requirements of this section are met, a modular
             169      home is:
             170          (a) considered to be an improvement to real property; and
             171          (b) considered as real property.
             172          (4) A modular home is considered to be an improvement to real property if:
             173          (a) the modular home is permanently affixed to real property;
             174          (b) the person seeking to have the modular home considered to be an improvement to
             175      real property:
             176          (i) (A) owns the real property or is in the process of obtaining financing for the real
             177      property to which the modular home is or will be permanently affixed; or
             178          (B) leases the real property to which the modular home is permanently affixed and the
             179      real property is financed in accordance with Subsection (5); and
             180          (ii) controls the use and possession of the modular home or is in the process of
             181      obtaining financing for the purchase of the modular home;
             182          (c) records the document required to be recorded under Subsection (7); and


             183          (d) the modular home is assessed or is intended to be assessed as real property for
             184      purposes of property taxes.
             185          (5) For purposes of Subsection (4)(b)(i)(B), a modular home shall be financed in
             186      accordance with the guidelines established by:
             187          (a) the Federal Home Loan Mortgage Corporation;
             188          (b) the Federal National Mortgage Association;
             189          (c) the United States Department of Agriculture; or
             190          (d) another entity that requires, as part of the entity's financing program, restrictions:
             191          (i) on:
             192          (A) ownership; and
             193          (B) actions affecting title and possession; and
             194          (ii) if the restrictions described in Subsection (5)(d)(i) are similar to restrictions
             195      imposed by one or more of the entities described in Subsections (5)(a) through (c).
             196          (6) (a) The person seeking to have a modular home considered to be an improvement
             197      to real property and considered real property shall complete an affidavit of real property.
             198          (b) An affidavit of real property described in Subsection (6)(a) shall contain:
             199          (i) the legal description of the real property to which the modular home is or will be
             200      permanently affixed;
             201          (ii) (A) a statement certified by the assessor of the county in which the modular home
             202      is located that the modular home is taxed as real property for purposes of property taxes; or
             203          (B) a statement that the person obtaining financing for the modular home intends that
             204      the modular home be taxed as real property; and
             205          (iii) a statement that all liens or security interests in the modular home under Title 70A,
             206      Uniform Commercial Code, as personal property have been released.
             207          (7) (a) The person seeking treatment of a modular home as real property shall present
             208      to the county recorder the affidavit of real property described in Subsection (6).
             209          (b) A county recorder who receives an affidavit of real property described in
             210      Subsection (7)(a) shall record the affidavit of real property.
             211          (c) A person described in Subsection (7)(a) shall provide a copy of the recorded
             212      affidavit of real property to the assessor of the county in which the modular home is located.
             213          (8) A lien on a modular home that is considered to be an improvement to real property


             214      shall be perfected in the manner provided for the perfection of a lien on real property.
             215           H. [ (9) The determination of whether a modular home is considered real property or
             216      personal property under this section may not be considered in determining whether the modular
             217      home is real property or personal property for purposes of taxation under Title 59, Chapter 2,
             218      Property Tax Act.
] .H





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