Mobile Home Taxation Task Force Overview in Colorado

Mobile Home Taxation Task Force Overview Brigitte Grimm, MBA Weld County Treasurer & Public Trustee 1

SENATE BILL 24-183 Introduced on March 18, 2024 Signed by the Governor on May 31, 2024. Bill addresses: Bill addresses: The distraint sale of Mobile Homes to collect delinquent property taxes Temporarily suspending the distraint process Creating a Mobile Home Task Force on ownership and taxation that is also charged with studying and making recommendations related to the valuation for assessment, titling, and taxation of mobile homes. First meeting held before 6/15/2024 with 3 appointed members (DOH, DOLA, ) 2

SENATE BILL 24-183 In addition to recommending changes to the statute governing the distraint sale of mobile homes, the Task Force shall: Examine and recommend legislation to modify the statute for the distraint sale of a mobile home to collect delinquent taxes to comply with federal law by e any sale proceeds in excess of the owner's tax debt are paid to the owner in order to any sale proceeds in excess of the owner's tax debt are paid to the owner in order to bring state law into compliance with the United States supreme court's recent bring state law into compliance with the United States supreme court's recent decision affirming a property owner's constitutional right to the value of their decision affirming a property owner's constitutional right to the value of their property in excess of their tax debt. property in excess of their tax debt. by ensuring that nsuring that 3

JUNE 6, 2024 MEETING SUMMARY Meetings with Attorney General s office to discuss legislation and US Supreme Court Case, Tyler vs. Hennepin County Start Statement of Work and outline final report document Create website and google form for a survey send to all shareholder groups for input as described in the bill 4

17 COMMITTEE MEMBERS 3 County Representatives 3 County Representatives 2 Colorado House Representatives 2 Colorado House Representatives Appointed by CCTPTA, CCCA, CAA Appointed by Speaker of the House and Minority leader of the House of Representatives 3 Mobile Homeowners 3 Mobile Homeowners Appointed by DOH 2 Colorado Senators 2 Colorado Senators 2 County Commissioners 2 County Commissioners Apointed by President of the Senate and Minority Leader of the Senate Appointed by Minority Leader of the Senate and Speaker of the House 4 Various Representatives 4 Various Representatives 1 Advocacy Group 1 Advocacy Group Affordable Housing Affordable Housing Appointed by DOH, DOR and Colorado Banker s Association DOLA, DOH 5

MEETINGS, AGENDAS, RECORDINGS Dates selected via google form survey on July 16, 2024 JUNE 6, 2024 JULY 25, 2024 AUGUST 13, 2024 SEPTEMBER 5, 2024 SEPTEMBER 26, 2024 https://doh.colorado.gov/mobile-home-taxation-task-force 6

JULY 25, 2024 Introductions Introductions 17 Tax Force Members and staff advisors Guidelines/Overview/Scope Guidelines/Overview/Scope Understanding of SB24-183 Executive Session Executive Session - Colorado Attorney General s Office discussed Open Records, Open Meetings, Sunshine Laws, Ethical Behavior, best practices and consequences of CORA violations Staff updates Staff updates provided summary of the June 6th meeting Schedule Schedule - - Future meetings 7

JULY 25, 2024 Outlined Tasks: Outlined Tasks: Examine and recommend legislation to modify statute with respect to distraint sale of a mobile home to collect delinquent distraint sale of a mobile home to collect delinquent property taxes to comply with federal law, and to protect a property taxes to comply with federal law, and to protect a property owners constitutional right to the excess value property owners constitutional right to the excess value. Study and review other state s statutes and rules with respect to assessment, titling and taxation 8

JULY 25, 2024 Obtain input from shareholder groups Obtain input from shareholder groups The public, and the respective groups from the Task Force were encouraged to provide shareholder input for the SB-183 Mobile Home Taxation Forces by August 15, 2024. Selection of a Chair and Vice Chair Selection of a Chair and Vice Chair o Brigitte Grimm Chair o Tammie Barnes Vice Chair 9

JULY 25, 2024 Develop a statement of work for a system for titling and registering mobile homes and tiny homes. Submit a report to the Legislative Oversight Committee Concerning Tax Policy before 10/1/2024. 10

PRIMARY GOAL FOR NEXT MEETING Understand the current laws/process for collecting taxes for mobile homes in terms of: Annual calendar deadlines, advertising, etc Collections - process Similarities and differences between real and mobile home Tax lien sale 11

CHALLENGES No quick fix Complex subject in three meetings Confusion & Assumptions foreclosure vs. tax lien sale, certificate of ownership, not enough notice, not in multiple languages Are counties selling mobile homes? Or just the liens? 12

CHALLENGES Federal government, banks, insurance companies consider MH as personal property Colorado assesses and taxes mobile homes as real property Clarity needed around the goal of the task force Minimum response from public and respective groups 13

Manufacturer Entities and Agencies Dealer Lender Owner County Recorder County Assessor County Treasurer County Motor Vehicle State Title Section 14

QUESTIONAIRE What changes should be made to the statutory scheme for the distraint sale of a mobile home to collect delinquent property taxes? What changes should be made to existing Colorado statutes, administrative rules and policies related to mobile home valuation for assessment titling taxation 15

QUESTIONAIRE Do you have any input or comments regarding other states statutes, regulations, or policies, concerning the valuation for assessment, titling, and taxation of mobile homes? Do you have any input or comments regarding recommended legislation or changes in administrative rules or policies to promote fair, equitable, efficient, and effective practices for the valuation, titling, and taxation of mobile homes in Colorado? 16

QUESTIONAIRE What changes should be made to legislation, administrative rules or policies to promote practices for the valuation, titling and taxation of mobile homes in Colorado that are: fair, equitable, effective, efficient Input or comments regarding a potential computer program system for titling, and registering mobile homes, including tiny homes? 17

AUGUST 13, 2024 - PRESENTATION Outline of Similarities Statements mailed Deadlines Taxed Valued on market sales NOV Eligible for Senior and Veteran exemptions 18

AUGUST 13, 2024 - PRESENTATION Outline of Differences Advertising (same of PP) Distraints Added collection efforts ex. Orange tags Final letter CRS 39-10-111.5 (II)(b) Notice to lienholder CRS 39-10-111(2) Redemption period (1 year vs 3 years) 9-year disability cure period is not available Issuance of Certificate of Ownership Exemption $28K 19

AUGUST 13, 2024 - PRESENTATION Seldom Enforced Laws CRS 38-29-143(1), 39-5-204(1)(a) and 39-5-205 provide that the owner of a titled manufactured home has the responsibility of notifying the assessor and treasurer of any change of location within the county, or from one county to another. This notification is to take place within 20 days and non-notification is punishable by a fine. CRS 38-29-108(1) states that a buyer must apply for a new title within 45 days of the sale of a new new manufactured home, or 30 days from the sale of a used home. This statute also provides for a misdemeanor fine as punishment for non- compliance. used mobile 20

AUGUST 13, 2024 DISCUSSION DISCUSSION 3 Primary concerns identified with current system o Redemption Period o Exemption threshold needs to tie to something o 9-year cure period for disabilities ROBUST CONVERSATION & CONCLUSION ROBUST CONVERSATION & CONCLUSION to meet the Task Force requirements: o Best to follow the same guidelines of HB24-1056 versus creating another process for Mobile Homes Statute review Statute review Attorney input 21

SEPTEMBER 26, 2024 FINAL DRAFT PRESENTED TO TASK FORCE FINAL DRAFT PRESENTED TO TASK FORCE Ensure practices for valuation, titling, and taxation for Mobile Homes was: Fair Efficient Effective Submit Report to Legislative Oversight Committee concerning tax policy Due October 1st, 2024 Per Statute Task force is disbanded by statute on Jan 1, 2025 22

FINDINGS & RECOMMENDATION T The task force does not want Colorado to be the subject of the next U.S. Supreme Court case he task force does not want Colorado to be the subject of the next U.S. Supreme Court case regarding this topic, we recommend that statute be changed as follows: regarding this topic, we recommend that statute be changed as follows: 1. Modify statute to require that mobile homes on leased/rented lots more closely follow the mobile homes on leased/rented lots more closely follow the procedure updated in statute in HB24 procedure updated in statute in HB24- -1056 1056 to have units sold at auction, with a certificate of ownership process to be followed with any overbid amount (in excess of the taxes and fees due) to be returned to the mobile homeowner. 23

FINDINGS & RECOMMENDATION 2. Consider that the amount of time before a real property sale (3 years to cure) is different for personal property (1 year to cure). This difference may be seen as unfair to mobile homeowners. The task force recommends changing the redemption period for a personal property from 1 year changing the redemption period for a personal property from 1 year to 3 years to align with real property. to 3 years to align with real property. 24

FINDINGS & RECOMMENDATION 3. Include a nine-year accommodation for a mobile homeowner with a legal disability to make redemption of their property. The status quo for mobile homeowners with disabilities is not acceptable. The task force recommends that mobile homeowners with legal disabilities, recommends that mobile homeowners with legal disabilities, located on property where a title has not been purged, have the same nine located on property where a title has not been purged, have the same nine- -year accommodation as provided for real property owners with disabilities under Colorado accommodation as provided for real property owners with disabilities under Colorado Revised Statute (C.R.S.) 39 Revised Statute (C.R.S.) 39- -12 12- -104. 104. year *The task force further recommends that this nine further recommends that this nine- -year accommodation only be allowed for an owner owner- -occupied mobile home. occupied mobile home. year accommodation only be allowed for an 25

FINDINGS & RECOMMENDATION 4. The task force acknowledges that the auction value of mobile homes may be very acknowledges that the auction value of mobile homes may be very low. low. Therefore, an auction may still not return a significant overbid amount to the homeowner and is a way to establish the value similar to the real property solution that was solved by HB24-1056. 26

FINDINGS & RECOMMENDATION 5. Raise the mobile home property tax valuation threshold to a higher level. The current exemption level is $28,000. The task force recommends changing to the current level of personal property tax exemption of $52,000. Further, we recommend incorporating an personal property tax exemption of $52,000. Further, we recommend incorporating an inflationary index to increase this amount automatically as the cost of living rises. inflationary index to increase this amount automatically as the cost of living rises. recommends changing to the current level of Raising mobile homes exemption values will take many lower value mobile homes out of the distraint sale and tax lien process. No taxes, no tax lien, no sale; raising the mobile home property tax valuation threshold will allow owners to stay in their units. *This may impact county revenue, but the task force agrees that this would be minimal, and if *This may impact county revenue, but the task force agrees that this would be minimal, and if current taxes are not being paid already (struck to county), then the impact to the county is even current taxes are not being paid already (struck to county), then the impact to the county is even less. less. 27

FINDINGS & RECOMMENDATION 6. Review and revise Colorado Revised Statute 39-10-111.5(6)(a)(I) to be consistent with the policies of HB24-1056, especially regarding the redemption process for mobile homes where the title has not been purged. 28

PART 2 OTHER FINDINGS Appendix F Appendix F is a complete set of comments received from interested parties via a Google Form survey that was sent out. A sample of comments received show a wide range of concerns from interested parties regarding How mobile homes are taxed (real property vs. personal property) How long owners have to clear their tax bills Possibility of increasing exemptions Other interested parties believe that since mobile homes on leased or rented lots are not generally sold at auction generally sold at auction, there is no excess value collected or returned, therefore there is not a distraint sale situation. are not 29

PART 3 SCOPE OF WORK (New titling computer system) As approved in the SB24-183, the Department of Local Affairs Division of Housing is working Department of Local Affairs Division of Housing is working closely with the Office of Information Technology to provide the initial scope of work for a titling closely with the Office of Information Technology to provide the initial scope of work for a titling system. system. A business analyst has been assigned to assess current systems and work with interested parties to determine new requirements. CHALLENGE CHALLENGE - take what has historically been a decentralized approach to mobile home titles and provide a centralized solution that can be used by all clerk and recorders, treasurers and assessors, as well as public and private institutions. Completion date Completion date - Scope of work to be done by December 1, 2024. 30

PART 4 MOBILE HOME TITLING WORKING GROUP The task force wants to acknowledge that there has been an informal working group that has The task force wants to acknowledge that there has been an informal working group that has been assessing a new centralized way to process mobile home titles for Colorado. been assessing a new centralized way to process mobile home titles for Colorado. The mobile home titling working group s goal is to separate mobile home title requirements from the vehicle titling sections of the Department of Revenue. This group has been working for over three years to review all statutory references to mobile home titles, manufactured home titles, three years to review all statutory references to mobile home titles, manufactured home titles, and most recently, tiny home titles. and most recently, tiny home titles. This group has been working for over The group has provided subject matter experts to the Department of Local Affairs and the Office of Information Technology for the team drafting the mobile home titling computer program scope of work. 31

NEXT STEPS Start the Mobile Home Title Program Project Assign members Write scope of work Multilingual Outreach Robust outreach Pocket Title Review process 32

RESOURCES o Colorado General Assembly: SB24-183 Mobile Home Taxation Task Force o Opinion of the US Supreme Court in Tyler vs. Hennepin County o Opinion of the Attorney General of the State of ColoradoHB24-1056 Issuance of Treasurer's Deeds o Draft Bill SB24-097 Property Tax Distraint Sale Mobile Home https://doh.colorado.gov/mobile-home-taxation-task-force 33

THANK YOU! Questions? 34