By Stiles H.B. No. 2703
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the regulation of manufactured housing; providing
1-3 penalties.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 3, Texas Manufactured Housing Standards
1-6 Act (Article 5221f, Vernon's Texas Civil Statutes), is amended to
1-7 read as follows:
1-8 Sec. 3. Definitions. Whenever used in this Act, unless the
1-9 context otherwise requires, the following words and terms have the
1-10 following meanings:
1-11 (1) "Advertising" or "advertisement" means a
1-12 commercial message that promotes the sale, exchange, or
1-13 lease-purchase of a manufactured home and that appears in, or is
1-14 presented on, radio, television, a public-address system,
1-15 newspapers, magazines, leaflets, flyers, catalogs, direct mail
1-16 literature, other printed material, an inside or outside sign or
1-17 window display, or in point-of-sale literature or price tags.
1-18 Educational materials or materials required by law do not
1-19 constitute advertising. An advertisement relating to manufactured
1-20 housing is considered to be an offer to sell, exchange, or
1-21 lease-purchase to consumers.
1-22 (2) "Alteration" means the replacement, addition, and
1-23 modification, or removal of any equipment or the installation of
1-24 equipment in a new manufactured home after the sale by a
2-1 manufacturer to a retailer but before the sale and installation by
2-2 a retailer to a purchaser that may affect the construction, fire
2-3 safety, occupancy, plumbing, heat-producing, or electrical system.
2-4 The term includes any modification made in the manufactured home
2-5 that may affect the compliance of the home with the standards. The
2-6 term does not include:
2-7 (A) the repair or replacement of a component or
2-8 appliance requiring plug-in to an electrical receptacle in which
2-9 the replaced item is of the same configuration and rating as the
2-10 item being replaced; and
2-11 (B) the addition of an appliance requiring
2-12 plug-in to an electrical receptacle if the appliance was not
2-13 provided with the manufactured home by the manufacturer and if the
2-14 rating of the appliance does not exceed the rating of the
2-15 receptacle to which it is connected.
2-16 (3) "Board" means the governing board of the
2-17 department.
2-18 (4) "Broker" means a person engaged by one or more
2-19 other persons to negotiate or offer to negotiate a bargain or a
2-20 contract for the sale, exchange, or lease-purchase of a
2-21 manufactured home to which a certificate or document of title has
2-22 been issued and is outstanding. A broker may be an agent of a
2-23 party involved in the transaction. A person who maintains a
2-24 location for the display of manufactured homes is not a broker.
2-25 The term does not apply if the manufactured home is affixed to a
2-26 permanent foundation, the manufacturer's certificate or the
2-27 document of title is canceled, and the home is offered as real
3-1 estate, but The Real Estate License Act (Article 6573a, Vernon's
3-2 Texas Civil Statutes) does apply.
3-3 (5) "Code" means the Texas Manufactured Housing
3-4 Standards Code.
3-5 (6) "Consumer" means a person other than a person
3-6 registered under this Act that seeks or acquires by purchase,
3-7 exchange, or lease-purchase a manufactured home.
3-8 (7) "Department" means the Texas Department of Housing
3-9 and Community Affairs.
3-10 (8) "Director" means the executive director of the
3-11 department.
3-12 (9) "HUD-code manufactured home" means a structure
3-13 constructed on or after June 15, 1976, under the rules of the
3-14 United States Department of Housing and Urban Development,
3-15 transportable in one or more sections, that, in the traveling mode,
3-16 is eight body feet or more in width or 40 body feet or more in
3-17 length, or, when erected, is 320 or more square feet, and that is
3-18 built on a permanent chassis and designed to be used as a dwelling
3-19 with or without a permanent foundation when connected to the
3-20 required utilities. The term includes the plumbing, heating,
3-21 air-conditioning, and electrical systems of the home. The term
3-22 does not include a recreational vehicle as defined by 24 C.F.R.
3-23 Section 3282.8(g).
3-24 (10) "Installation," in reference to manufactured
3-25 housing, means the transporting of a manufactured home or
3-26 manufactured home component to the place where the home or
3-27 component will be used by the consumer, the construction of a
4-1 temporary or permanent foundation system, and the placement and
4-2 erection of a manufactured home or manufactured home component on
4-3 the foundation system. The term includes supporting, blocking,
4-4 leveling, securing, anchoring, and the proper connection of
4-5 multiple or expandable sections or components, the installation of
4-6 air-conditioning, and minor adjustments.
4-7 (11) "Installer" means a person, including a retailer
4-8 or manufacturer, that performs installation functions on
4-9 manufactured housing.
4-10 (12) "Label" means a device or insignia issued by the
4-11 director to indicate compliance with the standards, rules, and
4-12 regulations established by the United States Department of Housing
4-13 and Urban Development, and that is permanently affixed to each
4-14 transportable section of each HUD-code manufactured home for sale
4-15 to a consumer.
4-16 (13) "Lease-purchase" means to enter into a lease
4-17 contract containing a provision conferring on the lessee an option
4-18 to purchase the manufactured home.
4-19 (14) "License holder" means a person that holds a
4-20 license issued by the department as a manufactured housing
4-21 manufacturer, retailer, broker, salesperson, or installer.
4-22 (15) "Manufactured housing" or "manufactured home"
4-23 means a HUD-code manufactured home or a mobile home.
4-24 (16) "Manufacturer" means a person that constructs or
4-25 assembles manufactured housing for sale, exchange, or
4-26 lease-purchase in the state.
4-27 (17) "Mobile home" means a structure that was
5-1 constructed before June 15, 1976, transportable in one or more
5-2 sections, that, in the traveling mode, is eight body feet or more
5-3 in width or 40 body feet or more in length, or, when erected, is
5-4 320 or more square feet, and that is built on a permanent chassis
5-5 and designed to be used as a dwelling with or without a permanent
5-6 foundation when connected to the required utilities. The term
5-7 includes the plumbing, heating, air-conditioning, and electrical
5-8 systems of the home.
5-9 (18) "Person" means an individual, partnership,
5-10 company, corporation, association, or other group.
5-11 (19) "Retailer" means a person engaged in the business
5-12 of buying for resale, selling, or exchanging manufactured homes or
5-13 offering manufactured homes for sale, exchange, or lease-purchase
5-14 to consumers. A person is not considered to be a retailer unless
5-15 the person is engaged in the sale, exchange, or lease-purchase of
5-16 two or more manufactured homes to consumers in any consecutive
5-17 12-month period.
5-18 (20) "Salesperson" means a person who for any form of
5-19 compensation sells or lease-purchases or offers to sell or
5-20 lease-purchase manufactured housing to a consumer as an employee or
5-21 agent of a retailer or broker.
5-22 (21) "Seal" means a device or insignia issued by the
5-23 director to be affixed to used manufactured homes for titling
5-24 purposes, as required by the director. The seal remains the
5-25 property of the department.
5-26 [(1) "Mobile home" means a structure that was
5-27 constructed before June 15, 1976, transportable in one or more
6-1 sections, which, in the traveling mode, is eight body feet or more
6-2 in width or 40 body feet or more in length, or, when erected on
6-3 site, is 320 or more square feet, and which is built on a permanent
6-4 chassis and designed to be used as a dwelling with or without a
6-5 permanent foundation when connected to the required utilities, and
6-6 includes the plumbing, heating, air-conditioning, and electrical
6-7 systems.]
6-8 [(2) "Retailer" means any person engaged in the
6-9 business of buying for resale, selling, or exchanging manufactured
6-10 homes or offering such for sale, exchange, or lease-purchase to
6-11 consumers. No person shall be considered a retailer unless engaged
6-12 in the sale, exchange, or lease-purchase of two or more
6-13 manufactured homes to consumers in any consecutive 12-month period.]
6-14 [(3) "Manufacturer" means any person who constructs or
6-15 assembles manufactured housing for sale, exchange, or
6-16 lease-purchase within the state.]
6-17 [(4) "Department" means the Texas Department of
6-18 Housing and Community Affairs.]
6-19 [(5) "Person" means an individual, partnership,
6-20 company, corporation, association, or other group, however
6-21 organized.]
6-22 [(6) "Broker" means a person engaged by one or more
6-23 other persons to negotiate or offer to negotiate bargains or
6-24 contracts for the sale, exchange, or lease-purchase of a
6-25 manufactured home to which a certificate or document of title has
6-26 been issued and is outstanding. A broker may or may not be an
6-27 agent of any party involved in the transaction. A person who
7-1 maintains a location for the display of manufactured homes is not a
7-2 broker but is a retailer. The term shall not apply if the
7-3 manufactured home is affixed to a permanent foundation, the
7-4 manufacturer's certificate or the document of title is canceled,
7-5 and the home is offered as real estate; however, the provisions of
7-6 The Real Estate License Act (Article 6573a, Vernon's Texas Civil
7-7 Statutes) shall apply.]
7-8 [(7) "Consumer" means any person other than one
7-9 registered under this article who seeks or acquires by purchase,
7-10 exchange, or lease-purchase a manufactured home.]
7-11 [(8) "Seal" means a device or insignia issued by the
7-12 director to be affixed to used manufactured homes for titling
7-13 purposes, as required by the director. The seal shall remain the
7-14 property of the department.]
7-15 [(9) "Label" means a device or insignia issued by the
7-16 director to indicate compliance with the standards, rules, and
7-17 regulations established by the Department of Housing and Urban
7-18 Development, and is permanently affixed to each transportable
7-19 section of each HUD-code manufactured home constructed after June
7-20 15, 1976, for sale to a consumer.]
7-21 [(10) "Installation," when used in reference to
7-22 manufactured housing, means the transporting of manufactured homes
7-23 or manufactured home components to the place where they will be
7-24 used by the consumer, the construction of the foundation system,
7-25 whether temporary or permanent, and the placement and erection of a
7-26 manufactured home or manufactured home components on the foundation
7-27 system, and includes supporting, blocking, leveling, securing,
8-1 anchoring, and proper connection of multiple or expandable sections
8-2 or components, the installation of air conditioning, and minor
8-3 adjustments.]
8-4 [(11) "Installer" means any person, including a
8-5 retailer or manufacturer, who performs installation functions on
8-6 manufactured housing.]
8-7 [(12) "Alteration" means the replacement, addition,
8-8 and modification, or removal of any equipment or its installation
8-9 in a new manufactured home after sale by a manufacturer to a
8-10 retailer but prior to sale and installation by a retailer to a
8-11 purchaser which may affect the construction, fire safety,
8-12 occupancy, plumbing, heat-producing or electrical system. It
8-13 includes any modification made in the manufactured home which may
8-14 affect the compliance of the home with the standards, but it does
8-15 not include the repair or replacement of a component or appliance
8-16 requiring plug-in to an electrical receptacle where the replaced
8-17 item is of the same configuration and rating as the one being
8-18 replaced. It also does not include the addition of an appliance
8-19 requiring "plug-in" to an electrical receptacle, which appliance
8-20 was not provided with the manufactured home by the manufacturer, if
8-21 the rating of the appliance does not exceed the rating of the
8-22 receptacle to which it is connected.]
8-23 [(13) "Lease-purchase" means to enter into a lease
8-24 contract with a provision conferring on the lessee an option to
8-25 purchase the manufactured home.]
8-26 [(14) "Director" means the executive director of the
8-27 department.]
9-1 [(15) "Code" means the Texas Manufactured Housing
9-2 Standards Code.]
9-3 [(16) "Salesperson" means any person who for any form
9-4 of compensation sells or lease-purchases or offers to sell or
9-5 lease-purchase manufactured housing to consumers as an employee or
9-6 agent of a retailer or broker.]
9-7 [(17) "Manufactured housing" or "manufactured home"
9-8 means a HUD-code manufactured home or a mobile home and
9-9 collectively means and refers to both.]
9-10 [(18) "Registrant" means any person who has registered
9-11 with the department and has been issued a certificate of
9-12 registration as a manufactured housing manufacturer, retailer,
9-13 broker, salesperson, or installer.]
9-14 [(19) "HUD-code manufactured home" means a structure,
9-15 constructed on or after June 15, 1976, according to the rules of
9-16 the United States Department of Housing and Urban Development,
9-17 transportable in one or more sections, which, in the traveling
9-18 mode, is eight body feet or more in width or 40 body feet or more
9-19 in length, or, when erected on site, is 320 or more square feet,
9-20 and which is built on a permanent chassis and designed to be used
9-21 as a dwelling with or without a permanent foundation when connected
9-22 to the required utilities, and includes the plumbing, heating,
9-23 air-conditioning, and electrical systems. The term does not
9-24 include a recreational vehicle as that term is defined by 24 C.F.R.
9-25 Section 3282.8(g).]
9-26 [(20) "Advertising" or "advertisement" means any
9-27 commercial message which promotes the sale, exchange, or
10-1 lease-purchase of manufactured homes and which appears in, or is
10-2 presented on, radio, television, a public-address system,
10-3 newspapers, magazines, leaflets, flyers, catalogs, direct mail
10-4 literature, other printed material, an inside or outside sign or
10-5 window display, or in point-of-sale literature or price tags.
10-6 Materials which are educational or that may be required by law do
10-7 not constitute advertising. Any advertisement relating to
10-8 manufactured housing shall be considered as an offer to sell,
10-9 exchange, or lease-purchase to consumers.]
10-10 [(21) "Board" means the governing board of the
10-11 department.]
10-12 SECTION 2. Section 3A, Texas Manufactured Housing Standards
10-13 Act (Article 5221f, Vernon's Texas Civil Statutes), is amended to
10-14 read as follows:
10-15 Sec. 3A. Definitions Binding. The definitions of "mobile
10-16 home," "HUD-code manufactured home," and "manufactured housing" set
10-17 forth in Section 3 of this article are binding on all persons and
10-18 agencies in this state as a matter of law including local political
10-19 subdivisions and home-rule cities. A mobile home is not a HUD-code
10-20 manufactured home and a HUD-code manufactured home is not a mobile
10-21 home for any purpose under the laws of this state. These terms may
10-22 not be defined in any manner that is not identical to the
10-23 definitions set forth in Section 3 of this Act.
10-24 SECTION 3. Sections 4(g)-(i), Texas Manufactured Housing
10-25 Standards Act (Article 5221f, Vernon's Texas Civil Statutes), are
10-26 amended to read as follows:
10-27 (g) A local governmental unit of this state, without the
11-1 express approval of the board following a hearing on the matter,
11-2 may not adopt different standards from those promulgated by the
11-3 director for the construction or installation of manufactured
11-4 housing within the local governmental unit. In order to obtain
11-5 board approval, the local governmental unit must demonstrate that
11-6 the public health and safety require the different standards.
11-7 (h) Before the adoption or promulgation of any standards or
11-8 requirements authorized by this section, any change in or addition
11-9 to the standards authorized in this section, or the approval of
11-10 different standards by any local governmental unit, the director
11-11 shall publish a notice and conduct a public hearing under Section 9
11-12 of this Act [in accordance with Chapter 2001, Government Code, not
11-13 sooner than the 30th day following the publication of notice].
11-14 (i) Every requirement or standard or modification,
11-15 amendment, or repeal of a requirement or standard adopted by the
11-16 director shall state the date it shall take effect as provided by
11-17 Section 9 of this Act.
11-18 SECTION 4. The Texas Manufactured Housing Standards Act
11-19 (Article 5221f, Vernon's Texas Civil Statutes) is amended by adding
11-20 Section 4B to read as follows:
11-21 Sec. 4B. INSPECTIONS; FEDERAL STANDARDS FOR WIND ZONE II.
11-22 (a) The department shall establish an inspection program whereby
11-23 at least twenty five percent of the manufactured homes installed
11-24 are inspected on a sample basis for compliance. The department's
11-25 program shall place priority on multi-section homes and homes
11-26 installed in Wind Zone II.
11-27 (b) Aransas, Brazoria, Calhoun, Cameron, Chambers,
12-1 Galveston, Jefferson, Kenedy, Kleberg, Matagorda, Nueces, Orange,
12-2 Refugio, San Patricio, and Willacy counties are in Wind Zone II.
12-3 All other counties are in Wind Zone I.
12-4 (c) A manufactured home constructed on or after the
12-5 effective date of this section must meet the Wind Zone II standards
12-6 adopted by the U.S. Department of Housing and Urban Development in
12-7 order to be installed in a Wind Zone II county.
12-8 (d) All manufactured homes constructed prior to the
12-9 effective date of this section may be installed in Wind Zone I or
12-10 Wind Zone II without restriction.
12-11 (e) A consumer purchasing a manufactured home constructed on
12-12 or after the effective date of this section to Wind Zone I
12-13 standards must be given a notice by the selling retailer that:
12-14 (1) the home was not designed nor constructed to
12-15 withstand hurricane force winds which may occur in Wind Zone II or
12-16 III areas; and
12-17 (2) the home is not permitted to be installed in Wind
12-18 Zone II counties in Texas, and there may be restrictions in other
12-19 states prohibiting installation in Wind Zone II or III areas.
12-20 (f) The notice required by this section shall be given the
12-21 consumer prior to the execution of any mutually binding sales
12-22 agreement or retail installment sales contract.
12-23 SECTION 5. Section 6, Texas Manufactured Housing Standards
12-24 Act (Article 5221f, Vernon's Texas Civil Statutes), is amended by
12-25 amending Subsections (e)-(h) and by adding Subsection (l) to read
12-26 as follows:
12-27 (e) It is unlawful for a manufacturer to sell, exchange, or
13-1 lease-purchase or offer to sell, exchange, or lease-purchase a
13-2 manufactured home to any person in the state other than a licensed
13-3 [registered] retailer.
13-4 (f) A person may not make any announcement concerning the
13-5 sale, exchange, or lease-purchase of, nor offer to sell, exchange,
13-6 or lease-purchase, a manufactured home to consumers in this state
13-7 through any form of advertising unless such person is a duly
13-8 licensed [registered] manufacturer, retailer, or broker. This
13-9 prohibition against advertising shall not apply to a person to whom
13-10 a certificate or document of title has been issued showing such
13-11 person to be the owner of the home, provided that such person does
13-12 not offer to sell, exchange, or lease-purchase two or more
13-13 manufactured homes in any consecutive 12-month period. This
13-14 prohibition also shall not apply to the advertising of real estate
13-15 on which a manufactured home has been permanently attached and
13-16 affixed.
13-17 (g) It is unlawful for a retailer to purchase for resale to
13-18 a consumer, or to sell, exchange, or lease-purchase or offer to
13-19 sell, exchange, or lease-purchase, any new HUD-code manufactured
13-20 home which was constructed by a manufacturer which was not licensed
13-21 [registered] with the department at the time of construction.
13-22 (h) It is unlawful for a person to sell, convey, or
13-23 otherwise transfer to a consumer in this state a salvaged
13-24 manufactured home as such term is defined in Section 8 of this
13-25 article. A salvaged manufactured home may only be sold to a
13-26 licensed [registered] retailer or licensed [registered] rebuilder.
13-27 (l) It is unlawful for a salesperson to aid or assist a
14-1 consumer in preparing or providing false or misleading information
14-2 on a document related to the purchase or financing of a
14-3 manufactured home or for a salesperson to submit information known
14-4 to be false or misleading to a retailer or a credit underwriter.
14-5 SECTION 6. Section 7, Texas Manufactured Housing Standards
14-6 Act (Article 5221f, Vernon's Texas Civil Statutes), is amended to
14-7 read as follows:
14-8 Sec. 7. REGISTRATION. (a) A person may not construct or
14-9 assemble a new HUD-code manufactured home in the state or ship a
14-10 new HUD-code manufactured home into the state, unless the person is
14-11 licensed [registered] as a manufactured housing manufacturer with
14-12 the department and possesses a valid manufacturer's license
14-13 [certificate of registration] at the time the home is constructed
14-14 or assembled.
14-15 (b) Except as otherwise expressly provided in this article,
14-16 a person may not sell, exchange, lease-purchase, or offer to sell,
14-17 exchange, or lease-purchase two or more manufactured homes to
14-18 consumers in the state in any consecutive 12-month period, unless
14-19 the person possesses a valid manufactured housing retailer's
14-20 license [certificate of registration].
14-21 (c) A person may not offer to negotiate or negotiate for
14-22 others a bargain or contract for the sale, exchange, or
14-23 lease-purchase of two or more manufactured homes to consumers in
14-24 the state in any 12-month period, unless the person possesses a
14-25 valid manufactured housing broker's license [certificate of
14-26 registration].
14-27 (d) A person may not perform any installation functions on
15-1 manufactured housing in the state, unless the person possesses a
15-2 valid installer's license [certificate of registration] and files
15-3 proof of insurance as required by the director. The director may
15-4 issue a temporary installer's license [certificate of registration]
15-5 to a homeowner for the installation of the owner's home in
15-6 accordance with applicable requirements, standards, and regulations
15-7 of the director, on application and payment of the required fee and
15-8 on submission of proof of insurance by the owner as required by the
15-9 department.
15-10 (e) Each applicant for a license [certificate of
15-11 registration] as a manufacturer, retailer, broker, or installer
15-12 must file with the director an application for a license
15-13 [registration] containing the following information:
15-14 (1) the legal name, address, and telephone number of
15-15 the applicant;
15-16 (2) the trade name by which the applicant does
15-17 business and, if incorporated, the name registered with the
15-18 secretary of state and the address of the business; and
15-19 (3) the dates on which the applicant became the owner
15-20 and operator of the business.
15-21 (f) Each application for a license [certificate of
15-22 registration] must be accompanied by proof of the security required
15-23 by this Act and payment of the required fee for the issuance of the
15-24 license [certificate].
15-25 (g) All licenses [certificates of registration] are valid
15-26 for one year and are renewable as provided by the director.
15-27 (h) [(i)] If a change occurs in the information filed with
16-1 the director under Subsection (e) of this section, the applicant
16-2 shall file an amendment to his or her application that states the
16-3 correct information.
16-4 (i) [(j)] While acting as an agent for a license holder
16-5 [registrant], an employee is covered by the business entity's
16-6 license [certificate of registration] and is not required to be
16-7 individually licensed [registered]. An independent contractor or
16-8 business entity may not operate under the license [certificate of
16-9 registration] of another business entity except as an agent or
16-10 subcontractor of a licensed [registered] installer who shall remain
16-11 fully responsible for all installation functions performed by such
16-12 agent as subcontractor except as provided in Subsection (l) [(m)]
16-13 of this section.
16-14 (j) [(k)] The director, after notice and hearing under
16-15 Section 9 of this Act, may refuse to issue or may permanently
16-16 revoke, or suspend for a definite period of time and for a
16-17 specified geographic area or sales location, any license
16-18 [certificate of registration] if the director finds that the
16-19 applicant or license holder [registrant]:
16-20 (1) knowingly and wilfully violated any provision of
16-21 this Act [article] or any rule, administrative order, or regulation
16-22 made pursuant to this Act;
16-23 (2) without lawful authorization retained or converted
16-24 any money, property, or any other thing of value from consumers in
16-25 the form of down payments, sales and use taxes, deposits, or
16-26 insurance premiums;
16-27 (3) failed to deliver proper title documents or
17-1 certificates of title to consumers;
17-2 (4) failed to give or breached any manufactured home
17-3 warranty required by this Act or by the Federal Trade Commission;
17-4 (5) engaged in any false, misleading, or deceptive
17-5 acts or practices as the term is set forth in and as those acts are
17-6 declared unlawful by the provisions of Chapter 17, Subchapter E,
17-7 Business & Commerce Code;
17-8 (6) failed to furnish or file any reports required by
17-9 the department for the administration and enforcement of this Act;
17-10 (7) furnished false information on any application,
17-11 report, or other document filed with the department;
17-12 (8) has a record of criminal convictions within the
17-13 five years preceding the date of the application that, in the
17-14 opinion of the director, renders the applicant unfit for licensing
17-15 [registration]; or
17-16 (9) failed to file the bond or post other security for
17-17 each location as required by Section 13 of this Act.
17-18 (k) [(l)] The director shall conduct any hearing involving
17-19 the denial, renewal, revocation or suspension of a license
17-20 [certificate of registration] in accordance with Chapter 2001,
17-21 Government Code.
17-22 (l) [(m)] A retailer or an installer may not contract with
17-23 any person for the installation of any air-conditioning equipment,
17-24 devices, or components in connection with the installation of a
17-25 manufactured home unless the person is licensed [registered] as an
17-26 installer with the department or is otherwise licensed by the state
17-27 as an air-conditioning contractor. This subsection shall not apply
18-1 to a new manufactured home being installed on a permanent
18-2 foundation within a municipality which regulates air-conditioning
18-3 contractors unless some other state statute provides otherwise.
18-4 (m) [(n)] A person may not act as a salesperson of
18-5 manufactured housing unless the person is licensed [registered]
18-6 with the department. Each applicant for a salesperson's license
18-7 [certificate of registration] shall file with the director an
18-8 application giving such information as the director deems necessary
18-9 and pay the required fee. The owner of a sole proprietorship, a
18-10 partner in a partnership, or an officer of a corporation which is
18-11 duly licensed [registered] as a retailer or broker does not have to
18-12 apply for licensing [register] as a salesperson so long as such
18-13 individual is properly listed in the retailer's or broker's
18-14 application for license [registration]. The salesperson is the
18-15 agent of the retailer or broker. The license [registration] shall
18-16 be an annual license [registration]. A retailer or broker shall
18-17 not employ, retain, or otherwise use the services of a salesperson
18-18 who is not licensed [registered]. A licensed [registered]
18-19 salesperson may work or sell for one or more retailers, brokers, or
18-20 sales locations.
18-21 (n) [(o)] A person may not alter, repair, or otherwise
18-22 rebuild a salvaged manufactured home, as such term is defined in
18-23 Section 8 of this Act, unless the person is duly licensed
18-24 [registered] with the department as a manufactured home rebuilder
18-25 or retailer and unless the person complies with the rules and
18-26 regulations of the director relating to the rebuilding of salvaged
18-27 manufactured homes.
19-1 (o) [(p)] Any person not licensed or registered with the
19-2 department or a predecessor agency as of September 1, 1987, must
19-3 attend and complete twenty (20) hours of instruction in the law and
19-4 consumer protection regulations as a prerequisite for a license
19-5 [prior to any registration]. The instruction shall be given not
19-6 less than one time each quarter. No test shall be made a
19-7 prerequisite of licensing [registration], but actual attendance at
19-8 the instruction sessions is required. The director shall not issue
19-9 a license [registration] until the instruction is completed. This
19-10 subsection does not apply to a registrant making application to
19-11 license [register] additional business locations or to renew or
19-12 reinstate a license, or making application for licensing [to
19-13 register] as a salesperson. In lieu of this instruction
19-14 requirement, a manufacturer may request that a one-day, in-plant
19-15 training session be presented by an authorized representative of
19-16 the department. The manufacturer shall reimburse the department
19-17 for the actual costs of the training session.
19-18 (p) [(q)] Notwithstanding any provision of this Act to the
19-19 contrary, any state or national bank, state or federal savings and
19-20 loan association or federal savings bank, or state or federal
19-21 credit union engaged in the business of selling or offering for
19-22 sale, exchange, or lease-purchase manufactured homes that the
19-23 institution has acquired as a result of repossession of its
19-24 collateral is not required to attend any school or file any bond or
19-25 post other security in order to be licensed [registered] as a
19-26 retailer.
19-27 (q) [(r)] In lieu of the instruction requirements imposed
20-1 under Subsection (o) [(p)] of this section, the director may
20-2 recognize and approve a one-day training program for installers
20-3 that is conducted in the field by a private institution or other
20-4 person.
20-5 (r) A license may be renewed if the renewal application and
20-6 payment of the annual fee are received by the department before the
20-7 date on which the license expires. The renewal license expires on
20-8 the first anniversary of the date the license was renewed. If the
20-9 department needs additional information for a renewal application
20-10 or verification of the continuing insurance or bond coverage, the
20-11 license holder must furnish the requested information or
20-12 verification before the 21st day after the date of receipt of
20-13 notice from the department.
20-14 SECTION 7. Section 7A, Texas Manufactured Housing Standards
20-15 Act (Article 5221f, Vernon's Texas Civil Statutes), is amended to
20-16 read as follows:
20-17 Sec. 7A. [CONTINUING] EDUCATION PROGRAMS. The director may
20-18 recognize, prepare, or administer certification programs and
20-19 continuing education programs for persons regulated under this Act.
20-20 Participation in the programs is voluntary. The director shall
20-21 issue an appropriate certificate to a person who completes a
20-22 certification program or who participates in a continuing education
20-23 program.
20-24 SECTION 8. Sections 9(d)-(g) and (m), Texas Manufactured
20-25 Housing Standards Act (Article 5221f, Vernon's Texas Civil
20-26 Statutes), are amended to read as follows:
20-27 (d) In this section the word "rule" means a standard,
21-1 requirement, regulation, order, and statement of general
21-2 applicability that implements, interprets, or prescribes law or
21-3 policy or that describes the procedures or practices of the
21-4 department. Internal management operating procedures that
21-5 prescribe the use of a particular form or that affect the private
21-6 rights or procedures of a license holder or consumer are also
21-7 rules. An administrative order that is not of general
21-8 applicability but that is directed to a specific license holder
21-9 relating to a warranty, the correction of a defect or compliance
21-10 with the law and regulations is not a rule [At least 30 days before
21-11 the adoption or promulgation of any change in or addition to the
21-12 rules and regulations authorized in Subsections (b) and (c) of this
21-13 section, the director shall publish in the Texas Register a notice
21-14 including:]
21-15 [(1) a copy of the proposed changes and additions; and]
21-16 [(2) the time and place that the director will
21-17 consider any objections to the proposed changes and additions].
21-18 (e) Rules shall be adopted as provided by Chapter 2001,
21-19 Government Code, and this section [After giving the notice required
21-20 by Subsection (d) of this section, the director shall afford
21-21 interested persons an opportunity to participate in the rule-making
21-22 through submission of written data, views, or arguments with the
21-23 opportunity to present the same orally on any matter].
21-24 (f) A proposed rule, amendment to a rule, and repeal of a
21-25 rule must be published in the Texas Register not less than 30 days
21-26 before the date of a public hearing set to consider the testimony
21-27 of interested persons. Notice of the time and place of the public
22-1 hearing must be published in the Texas Register not less than 30
22-2 days before the date of the hearing. The director shall afford
22-3 interested persons the opportunity to participate in the
22-4 rule-making process through the submission of written data and
22-5 statements of support or opposition [Every rule or regulation or
22-6 modification, amendment, or repeal of a rule or regulation adopted
22-7 by the director shall state the date it shall take effect].
22-8 (g) A rule, amendment to a rule, and repeal of a rule
22-9 finally adopted shall be published in the Texas Register and
22-10 include a statement of the effective date. The effective date of a
22-11 rule relating to installation standards shall be not less than 60
22-12 days following the date of publication of notice that the rule has
22-13 been adopted. Any other rule is effective as provided by Chapter
22-14 2001, Government Code, or on a later published date [Immediately
22-15 after their promulgation, the director shall publish in the Texas
22-16 Register all rules and regulations or amendments thereto].
22-17 (m) In order to protect the public health, safety, and
22-18 welfare, and to assure the availability of low cost manufactured
22-19 housing for all consumers, the director shall establish rules and
22-20 regulations for the protection of the interests of consumers who
22-21 occupy or desire to purchase or install manufactured housing and
22-22 for the business conduct of those persons required to be licensed
22-23 [registered] under this Act.
22-24 SECTION 9. Sections 11(c) and (d), Texas Manufactured
22-25 Housing Standards Act (Article 5221f, Vernon's Texas Civil
22-26 Statutes), are amended to read as follows:
22-27 (c) The board shall set fees for the issuance and renewal of
23-1 manufacturers', retailers', brokers', salespersons', and
23-2 installers' licenses [certificates of registration]; and fees for
23-3 the issuance of rebuilder licenses [registrations].
23-4 (d) A fee shall be set and charged to each person attending
23-5 the course of instruction in the law and consumer protection
23-6 regulations for applicants for licenses [registration].
23-7 SECTION 10. Sections 13(a) and (f)-(i), Texas Manufactured
23-8 Housing Standards Act (Article 5221f, Vernon's Texas Civil
23-9 Statutes), are amended to read as follows:
23-10 (a) The department may not issue or renew a license
23-11 [certificate of registration] unless a surety bond or other
23-12 security in the form prescribed by the director is filed with the
23-13 department as provided by this section.
23-14 (f) A manufacturer shall be bonded or post other security in
23-15 the amount of $100,000. A retailer shall be bonded or post other
23-16 security in the amount of $50,000 [$30,000]. A broker shall be
23-17 bonded or post other security in the amount of $20,000. An
23-18 installer shall be bonded or post other security in the amount of
23-19 $10,000. A rebuilder shall be bonded or post other security in the
23-20 amount of $30,000. In order to assure the availability of prompt
23-21 and satisfactory warranty service, a manufacturer, which does not
23-22 have a licensed [registered] manufacturing plant or other facility
23-23 in this state from which warranty service and repairs can be
23-24 provided and made, shall be bonded or post other security in an
23-25 additional amount of $100,000. A retailer holding a valid license
23-26 [certificate of registration] shall not be required to be bonded or
23-27 file any security to secure a license [certificate of registration]
24-1 as a broker or an installer. A new bond shall not be required for
24-2 any change of ownership of a corporation licensed [registered] with
24-3 the department nor for any change of a location; however, a proper
24-4 endorsement of the original bond may be required by the director.
24-5 (g) The bonding company must provide written notification to
24-6 the director at least 60 days prior to the cancellation of a surety
24-7 bond required by this section. Any other security on file with the
24-8 department shall remain on file and be maintained for two years
24-9 after the person ceases business as a manufacturer, retailer,
24-10 broker, rebuilder, or installer or at such later time as the
24-11 director may determine that no claims exist against the security.
24-12 (h) If a bond is canceled, the license [certificate of
24-13 registration] is suspended on the effective date of cancellation.
24-14 If a surety files for liquidation or reorganization in bankruptcy
24-15 or is placed in receivership, the license holder [registrant] is
24-16 entitled to 60 days from the date notice of the filing or
24-17 receivership was received to obtain other security. If the
24-18 required face amount of any other security is impaired by the
24-19 payment of a claim, the license holder [registrant] is entitled to
24-20 60 days to restore the security to its required face value.
24-21 (i) Subject to the limitations in this section, the bond or
24-22 other security is liable for, and shall reimburse the recovery fund
24-23 under Section 13A of this Act, the amount of any claim paid out of
24-24 the fund by the director to a consumer that resulted from an act or
24-25 omission of the license holder [registrant] who filed the bond or
24-26 other security. Payment by the surety or from the other security
24-27 shall be made not later than the 30th day from the date of receipt
25-1 of notice from the director that a consumer claim has been paid.
25-2 If for any reason the surety or other security fails to make timely
25-3 payment of a claim to the fund, the attorney general shall file
25-4 suit for recovery of the amount due the fund. Venue for the suit
25-5 is in Travis County.
25-6 SECTION 11. Sections 13A(e)-(g) and (k), Texas Manufactured
25-7 Housing Standards Act (Article 5221f, Vernon's Texas Civil
25-8 Statutes), are amended to read as follows:
25-9 (e) Subject to the limitations of Section 13 of this Act and
25-10 of this section, the fund shall be used to compensate consumers who
25-11 sustain actual damages resulting from unsatisfied claims against a
25-12 manufacturer, retailer, broker, or installer licensed [registered]
25-13 with the department if the claims resulted from a violation of:
25-14 (1) this Act;
25-15 (2) a rule issued by the director;
25-16 (3) the National Manufactured Housing Construction and
25-17 Safety Standards Act;
25-18 (4) the rules and regulations of the United States
25-19 Department of Housing and Urban Development; or
25-20 (5) the Deceptive Trade Practices-Consumer Protection
25-21 Act, Section 17.41 et seq., Business & Commerce Code.
25-22 (f) The consumer must file a verified written complaint in
25-23 the form required by the director not later than the second
25-24 anniversary of the date of the alleged act or omission causing the
25-25 actual damages, or the second anniversary of the date the act or
25-26 omission is discovered or should reasonably have been discovered.
25-27 Failure to timely file the claim precludes recovery from the fund.
26-1 On receipt of a properly verified complaint, the department shall
26-2 notify the license holder [registrants] as appropriate and
26-3 investigate the claim to determine its validity and whether or not
26-4 the complaint can be resolved by remedial action of the license
26-5 holder [registrants]. If there is a dispute between the license
26-6 holders [registrants] as to responsibility for the complaint, or
26-7 between any license holder [registrant] and the consumer, the
26-8 department shall conduct an informal dispute resolution process,
26-9 including a home inspection if appropriate, for a resolution of the
26-10 disputes. If it is possible to secure the agreement of the
26-11 parties, the department shall prepare and file with the director a
26-12 written report of the agreement.
26-13 (g) During the informal dispute resolution process, the
26-14 department shall make a preliminary determination as to the
26-15 responsibility and liability of the manufacturer, retailer, and
26-16 installer for claims determined to be valid. The license holders
26-17 [registrants] shall be afforded an opportunity to comment on the
26-18 preliminary determination under consideration by the department
26-19 before the department makes a final determination. If a license
26-20 holder [registrant] is out of business, is no longer licensed
26-21 [registered], or has filed for liquidation or reorganization in
26-22 bankruptcy, the department shall notify the license holder's
26-23 [registrant's] surety and give the license holder's [registrant's]
26-24 surety an opportunity to participate in the informal dispute
26-25 resolution process. If a license holder [registrant] or the
26-26 license holder's [registrant's] surety fails or refuses to
26-27 participate in the informal dispute resolution process after
27-1 receiving notice of the claim, the license holder [registrant] and
27-2 the license holder's [registrant's] surety are bound by the
27-3 department's final determination of responsibility and liability,
27-4 and the department may suspend or revoke the license holder's
27-5 license [registrant's certificate of registration].
27-6 (k) The provisions of this section do not apply to, and a
27-7 consumer shall not recover against the fund as a result of, any
27-8 claim against a license holder [registrant] resulting from a cause
27-9 of action directly related to the sale, lease-purchase, exchange,
27-10 brokerage or installation of a manufactured home prior to September
27-11 1, 1987.
27-12 SECTION 12. Section 14, Texas Manufactured Housing Standards
27-13 Act (Article 5221f, Vernon's Texas Civil Statutes), is amended by
27-14 amending Subsections (f) and (k) and adding Subsections (n) and (o)
27-15 to read as follows:
27-16 (f) If the manufacturer or retailer fails to provide
27-17 warranty service within the reasonable time allowed by the rules of
27-18 the director, the manufacturer or retailer must show good cause in
27-19 writing why such service was not provided. Failure to show good
27-20 cause constitutes sufficient basis for suspension or revocation of
27-21 the license [registration].
27-22 (k) If the manufacturer or retailer, or both, fails or
27-23 refuses to provide the warranty service in accordance with the
27-24 orders of the department following a home inspection, the director
27-25 shall set a hearing at which the manufacturer or retailer, or both,
27-26 shall show cause why the license [registration] should not be
27-27 suspended or revoked. If, following the hearing, the director
28-1 finds that the prior warranty service orders were correct, the
28-2 failure or refusal of the manufacturer or retailer to comply with
28-3 the orders is sufficient cause for the suspension or revocation of
28-4 the license [registration]. If the director finds that the prior
28-5 warranty service orders were incorrect in the determination of the
28-6 respective responsibilities of the manufacturer, retailer, or both,
28-7 the director shall enter a final order setting forth the correct
28-8 responsibilities and the right of either the manufacturer or
28-9 retailer to indemnification from the other. The director may also
28-10 enter an order directing the manufacturer or retailer whose license
28-11 [registration] is not revoked, or who is not out of business, to
28-12 perform the warranty service responsibilities of the retailer or
28-13 manufacturer whose license [registration] is revoked, or who is out
28-14 of business, by giving the manufacturer or retailer performing such
28-15 warranty service the right of indemnity against the other. The
28-16 manufacturer or retailer entitled to indemnification by virtue of
28-17 an order of the director pursuant to this subsection is a
28-18 "consumer" for purposes of Sections 13 and 13A of this Act and may
28-19 recover its actual damages and attorney's fees from the
28-20 manufactured homeowners' recovery fund.
28-21 (n) When a new HUD-code manufactured home is permanently
28-22 affixed to real estate:
28-23 (1) the manufacturer's certificate of origin is
28-24 canceled;
28-25 (2) a certificate of attachment shall be filed in the
28-26 deed records of the county; and
28-27 (3) the seller of the real estate may give the initial
29-1 purchaser a written warranty that combines the manufacturer's
29-2 warranty and the retailer's warranty required in this section.
29-3 (o) If a combination warranty is given, the manufacturer and
29-4 retailer are not required to give separate written warranties. The
29-5 manufacturer and retailer are jointly liable with the seller of the
29-6 real estate to the purchaser for the performance of the respective
29-7 warranty responsibilities of the manufacturer and retailer.
29-8 SECTION 13. Section 17(b), Texas Manufactured Housing
29-9 Standards Act (Article 5221f, Vernon's Texas Civil Statutes), is
29-10 amended to read as follows:
29-11 (b) In addition to the injunctive relief set forth in
29-12 Section 18 of this Act, a person who fails to obtain or maintain a
29-13 license [registration] as required by this Act, may be assessed a
29-14 civil penalty by the director payable to the state in an amount not
29-15 to exceed $10,000 for each violation of this Act in addition to the
29-16 reasonable attorney's fees, court costs, witness fees,
29-17 investigative costs, and deposition expenses.
29-18 SECTION 14. Sections 18(d), (f), and (g), Texas Manufactured
29-19 Housing Standards Act (Article 5221f, Vernon's Texas Civil
29-20 Statutes), are amended to read as follows:
29-21 (d) If a retailer, broker, or installer does not possess a
29-22 valid license [certificate of registration] at the time of entering
29-23 into any contract with a consumer, the contract between the
29-24 consumer and the retailer, broker, or installer is voidable within
29-25 two years from the date of the purchase of the manufactured home at
29-26 the option of the consumer. A consumer's contract for the
29-27 purchase, exchange, or lease-purchase of a new manufactured home is
30-1 also voidable within two years from the date of the purchase of the
30-2 manufactured home, if the retailer purchased the home from an
30-3 unlicensed [unregistered] manufacturer in violation of Section 6,
30-4 Subsection (h) of this Act.
30-5 (f) Notwithstanding any provisions of any other statute,
30-6 regulation, or ordinance to the contrary, a licensed [registered]
30-7 retailer or licensed [registered] installer is not required to
30-8 secure any permit, certificate, or license or pay any fee for the
30-9 transportation of manufactured housing to the place where it is to
30-10 be installed except as required by the department or by the Texas
30-11 Department of Transportation under [pursuant to] Subchapter E,
30-12 Chapter 623, Transportation Code. The department shall cooperate
30-13 with the Texas Department of Transportation by providing current
30-14 lists of licensed [registered] manufactured housing manufacturers,
30-15 retailers, and installers.
30-16 (g) A local governmental unit or home-rule city may not
30-17 require any permit, fee, bond, or insurance for the installation of
30-18 manufactured housing by a licensed [registered] retailer or
30-19 installer except as may be approved by the department.
30-20 SECTION 15. Section 19(k), Texas Manufactured Housing
30-21 Standards Act (Article 5221f, Vernon's Texas Civil Statutes), is
30-22 amended to read as follows:
30-23 (k) A lien on the manufactured homes in the inventory is
30-24 perfected by filing a security agreement with the department in a
30-25 form that contains the information the director requires. Once
30-26 perfected, the lien applies to the manufactured homes in the
30-27 inventory as well as to any proceeds of the sale of those homes.
31-1 Failure to pay or satisfy any inventory lien filed and recorded
31-2 against a manufactured home pursuant to the terms of the security
31-3 agreement by the retailer is sufficient cause to revoke or suspend
31-4 the retailer's license [registration] with the department.
31-5 SECTION 16. (a) This Act takes effect September 1, 1997.
31-6 (b) A certificate of registration that is valid immediately
31-7 before the effective date of this Act remains valid until the
31-8 expiration date of the registration.
31-9 SECTION 17. The importance of this legislation and the
31-10 crowded condition of the calendars in both houses create an
31-11 emergency and an imperative public necessity that the
31-12 constitutional rule requiring bills to be read on three several
31-13 days in each house be suspended, and this rule is hereby suspended.