BILL ANALYSIS H.B. 353 By: Cook 3-14-95 Committee Report (Amended) BACKGROUND Currently, under Vernon's Texas Civil Statute, Article 5221f, a manufactured home is not attached to the property upon which that manufactured home resides for occupancy unless the title for the manufactured home is cancelled, absent of a lien, under article 5221f(j). This article does not provide a vehicle for cancelling a title upon which there remains a lien, and there is no actual document provided to the owner that demonstrates the manufactured home as being attached to the property. In property transactions involving manufactured homes, a title check must be requested of the Department of Licensing and Regulation in Austin, which can take weeks. PURPOSE This legislation adds Chapter 2 Nature of Property, Sec. 2.001 to the Property Code which defines under what terms a manufactured home is considered to be real property. It also amends Vernon's Texas Civil Statute 5221f to allow the department the authority to create a "certificate of attachment" and the accompanying procedure to be used with the certificate in attaching a manufactured home to real property. The certificate of attachment will allow a manufactured home to be documented as real property with the county's real property records, therefore negating the need for a title check to be processed by the department. RULEMAKING AUTHORITY It is the committee's opinion that this bill gives the Department of Licensing and Regulation the authority to prescribe the certificate of attachment, and to establish rules as to the procedures to be used with regards to the certificate of attachment. SECTION BY SECTION ANALYSIS SECTION 1. Amends Title 1, Property Code as follows: CHAPTER 2. NATURE OF PROPERTY Sec. 2.001. New Title: MANUFACTURED HOUSING. Provides that a manufactured home shall be considered personal property if the home is permanently attached to real property, and a "certificate of attachment" (as defined by Texas Manufacturing Housing Standards Act under Article 5221f, Vernon's Texas Civil Statutes) is filed in the real property records of the county in which the home is located. SECTION 2. Amends Vernon's Texas Civil Statute, Article 5221f, as follows: Sec. 21. New Title: CERTIFICATE OF ATTACHMENT. Provides that the Department of Licensing and Regulation with the authority shall issue a certificate of attachment to the owner of a manufactured home after certifying that the home is permanently attached to real property. In addition, the section instructs the department to prescribe the form of the certificate and establish procedures for certifying that a manufactured home is permanently attached to real property and for applying for and issuing a certificate attachment. SECTION 3. Emergency Clause EXPLANATION OF AMENDMENTS COMMITTEE AMENDMENT #1 amends subsection (b) under Section 2.001, Chapter 2, Title 1, Property Code. This language specifies the conditions under which a manufactured home becomes and constitutes real property. This section states that (1) the manufactured home must be permanently attached to real property and that (2) the manufacturer's certificate of origin or the original document of title must be relinquished and thereby cancelled. In its place, a certificate of attachment is filed in the real property records of the county in which the home is attached to the property, pursuant to the provisions of the Texas Manufactured Housing Standards Act, (Article 5221f, Vernon's Texas Civil Statutes). COMMITTEE AMENDMENT #2 amends Section 2.001, Chapter 2, Title 1, Property Code by adding subsection (d). This new subsection does not affect nor does it change the classification of a manufactured home as personal or real property, if the manufactured home was permanently affixed to real estate prior to January 1, 1996. SUMMARY OF COMMITTEE ACTION House Bill 353 was considered in a public hearing on March 14, 1995. Testifying on the bill was Jane Brinkman, representing the Texas Department of Licensing and Regulation. The Business & Industry Committee considered two (2) amendments to the bill. The two (2) amendments were adopted without objection. A motion to report HB 353 as amended to the full house with the recommendation that it do pass and be printed, carried with a record vote of 8 Ayes, 0 Nays, 0 present-not-voting, and 1 absent.