By Telford                                            H.B. No. 1193
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to the licensing and regulation of manufactured housing.
 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-4           SECTION 1.  Section 3(1), Texas Manufactured Housing
 1-5     Standards Act (Article 5221f, Vernon's Texas Civil Statutes), is
 1-6     amended to read as follows:
 1-7                 (1)  "Advertising" or "advertisement" means any
 1-8     commercial message which promotes the sale, exchange, or
 1-9     lease-purchase of manufactured homes and which appears in, or is
1-10     presented on, radio, television, a public-address system,
1-11     newspapers, magazines, leaflets, flyers, catalogs, direct mail
1-12     literature, other printed material, electronic media, an inside or
1-13     outside sign or window display, or in point-of-sale  literature or
1-14     price tags.  Materials which are educational or that may be
1-15     required by law do not constitute advertising.  Any advertisement
1-16     relating to manufactured housing shall be considered as an offer to
1-17     sell, exchange, or lease-purchase to consumers.
1-18           SECTION 2.  Section 4, Texas Manufactured Housing Standards
1-19     Act (Article 5221f, Vernon's Texas Civil Statutes), is amended to
1-20     read as follows:
1-21           Sec. 4.  MANUFACTURED HOUSING STANDARDS.  (a)  The director
1-22     shall adopt standards and requirements for the installation and for
1-23     the construction of manufactured housing, that are reasonably
1-24     necessary in order to protect the health, safety, and welfare of
 2-1     the occupants and the public.  The collection of these standards
 2-2     and requirements is the Texas Manufactured Housing Code.
 2-3           (b)  [The requirements and standards for the plumbing,
 2-4     heating, air-conditioning and electrical systems and construction
 2-5     of manufactured  homes in effect on September 1, 1989, remain in
 2-6     full force and effect until amended in accordance with the
 2-7     procedure set forth in this section.]
 2-8           [(c)]  The director shall adopt standards and requirements
 2-9     for the construction of HUD-code manufactured homes in compliance
2-10     with  the federal standards and requirements established under
2-11     Title VI of the Housing and Community Development Act of 1974,
2-12     entitled the National Manufactured Home Construction and Safety
2-13     Standards Act of 1974.
2-14           (c) [(d)]  The director shall adopt standards and
2-15     requirements for the installation of all manufactured housing in
2-16     the  state that are necessary for the protection of the health,
2-17     safety, and welfare of all the citizens.  The standards must assure
2-18     that the installation of manufactured housing on both permanent and
2-19     nonpermanent foundation systems resists overturning and lateral
2-20     movement of the housing according to the design loads for the
2-21     particular wind zone for which the housing was constructed.
2-22           (d) [(e)  The requirements and standards for the installation
2-23     of manufactured homes as adopted by the state in existence on
2-24     September 1, 1989, remain in force until amended in accordance with
2-25     the procedure set forth in this section.]
2-26           [(f)]  All manufactured housing must be installed in
2-27     compliance with the standards, rules, regulations, or
 3-1     administrative orders of the director.  The department shall
 3-2     establish an inspection program whereby at least 25 percent of the
 3-3     manufactured homes installed are inspected on a sample basis for
 3-4     compliance.  The department's program shall place priority on
 3-5     multi-section homes and homes installed in Wind Zone II.
 3-6           (e) [(g)]  A local governmental unit of this state, without
 3-7     the express approval of the board following a hearing on the
 3-8     matter, may not adopt different standards from those promulgated by
 3-9     the director for the construction or installation of manufactured
3-10     housing within the local governmental unit.  The local governmental
3-11     unit must demonstrate that the public health and safety require the
3-12     different standards.
3-13           (f) [(h)]  Before the adoption or promulgation of any
3-14     standards or requirements authorized by this section, any change in
3-15     or addition to the standards authorized in this section, or the
3-16     approval of different standards by any local governmental unit, the
3-17     director shall publish a notice and conduct a public hearing under
3-18     Section 9 of this Act.
3-19           (g) [(i)]  Every requirement or standard or modification,
3-20     amendment, or repeal of a requirement or standard adopted by the
3-21     director shall state the date it shall take effect as provided by
3-22     Section 9 of this Act.
3-23           (h) [(j)]  The department shall cooperate with all units of
3-24     local government in this state and shall authorize local  units of
3-25     government, on request, to make and perform inspection and
3-26     enforcement activities related to the construction of foundation
3-27     systems and the erection and installation of manufactured housing
 4-1     at the homesite pursuant to contracts or other official
 4-2     designations and the rules and regulations of the director.  The
 4-3     department shall notify each local governmental unit biennially in
 4-4     writing to advise the local governmental unit of the program for
 4-5     contracting installation inspections.  The department shall
 4-6     encourage local building inspection officials to perform
 4-7     enforcement and inspection activities for manufactured housing
 4-8     installed within the local governmental unit and may establish
 4-9     cooperative inspection training programs.  The department may
4-10     withdraw the authorization if the local governmental unit fails to
4-11     follow the rules, regulations, interpretations, and written
4-12     instructions of the department.
4-13           SECTION 3.  Section 4A, Texas Manufactured Housing Standards
4-14     Act (Article 5221f, Vernon's Texas Civil Statutes), is amended by
4-15     amending Subsection (c) and adding Subsection (d) to read as
4-16     follows:
4-17           (c)  A municipality shall not regulate a new HUD-code
4-18     manufactured home to be affixed to a permanent foundation and
4-19     classified as real property under Section 2.001, Property Code, in
4-20     any manner that is different from the municipality's regulation of
4-21     new industrialized housing.  A municipality must permit the use and
4-22     occupancy of the new HUD-code manufactured home in any area in
4-23     which an industrialized home would be permitted, provided that:
4-24                 (1)  all local permits and licenses that are applicable
4-25     to other residential dwellings are obtained;
4-26                 (2)  the plans and specifications for the permanent
4-27     foundation and other on-site construction are approved by the
 5-1     municipal building official or bear the seal of a registered
 5-2     professional engineer; and
 5-3                 (3)  the site plan meets local requirements for
 5-4     building setback, side and rear yard offsets, subdivision control,
 5-5     architectural landscaping, aesthetics, square footage, and other
 5-6     local requirements applicable to other residential dwellings.
 5-7           (d)  This section shall not affect the validity of any deed
 5-8     restriction that is otherwise valid.
 5-9           SECTION 4.  Sections 6(h) and (l), Texas Manufactured Housing
5-10     Standards Act (Article 5221f, Vernon's Texas Civil Statutes), are
5-11     amended to read as follows:
5-12           (h)  It is unlawful for a person to sell, convey, or
5-13     otherwise transfer to a consumer in this state a [salvaged]
5-14     manufactured home for which a salvage title has been issued under
5-15     [as such term is defined in] Section 8 of this Act.  A salvaged
5-16     manufactured home may only be sold to a licensed retailer or
5-17     licensed rebuilder.
5-18           (l)  It is unlawful for a retailer or a salesperson to aid or
5-19     assist a consumer in preparing or providing false or misleading
5-20     information on a document related to the purchase or financing of a
5-21     manufactured home or for a salesperson to submit information known
5-22     to be false or misleading to a retailer or for a retailer or a
5-23     salesperson to submit information known to be false or misleading
5-24     to a credit underwriter or lending institution.
5-25           SECTION 5.  Section 7, Texas Manufactured Housing Standards
5-26     Act (Article 5221f, Vernon's Texas Civil Statutes), is amended by
5-27     amending Subsections (o) and (q) and adding Subsection (s) to read
 6-1     as follows:
 6-2           (o)  Any person not licensed or registered with the
 6-3     department or a predecessor agency as of September 1, 1987, must
 6-4     attend and complete twenty (20) hours of instruction in the law and
 6-5     consumer protection regulations as a prerequisite for a license.
 6-6     The instruction shall be given not less than one time each quarter.
 6-7     No test shall be made a prerequisite of licensing, but actual
 6-8     attendance at the instruction sessions is required.  The director
 6-9     shall not issue a license until the instruction is completed.  This
6-10     subsection does not apply to a license holder or registrant making
6-11     application to license additional business locations, to renew or
6-12     reinstate a license, or to make application for licensing as a
6-13     salesperson.  In lieu of this instruction requirement, a
6-14     manufacturer may request that a one-day, in-plant training session
6-15     be presented by an authorized representative of the department.
6-16     The manufacturer shall reimburse the department for the actual
6-17     costs of the training session.
6-18           (q)  In lieu of the instruction requirements imposed under
6-19     Subsection (o) of this section, the director may recognize and
6-20     approve a training program for an applicant for a license
6-21     [installers] that is conducted [in the field] by a private
6-22     institution or other person.
6-23           (s)  A person who is licensed as a broker or salesperson
6-24     under The Real Estate License Act (Article 6573a, Vernon's Texas
6-25     Civil Statutes) may act as a manufactured housing broker or
6-26     salesperson and is not required to be licensed or post bond or
6-27     other security under this Act, provided negotiations for the sale,
 7-1     exchange, or lease-purchase of the manufactured home are conducted
 7-2     on behalf of a person for whom the real estate licensee otherwise
 7-3     acts as a real estate broker or salesperson.
 7-4           SECTION 6.  Sections 8(b) and (g), Texas Manufactured Housing
 7-5     Standards Act (Article 5221f, Vernon's Texas Civil Statutes), are
 7-6     amended to read as follows:
 7-7           (b)  It is unlawful for a person to sell, exchange, or
 7-8     lease-purchase any used manufactured home to a consumer for use as
 7-9     a dwelling or residence without giving a written warranty that the
7-10     manufactured home is habitable.  The consumer has 60 days after the
7-11     date of the sale, exchange, or lease-purchase agreement to notify
7-12     the seller in writing of any defects that make the home
7-13     uninhabitable.  Failure to give this required notice terminates any
7-14     obligations and liabilities of the seller under this section.  The
7-15     warranty must conspicuously disclose this requirement to the
7-16     consumer. If the sale, exchange, or lease-purchase is to a
7-17     purchaser for the purchaser's business use, the manufactured home
7-18     need not be habitable; however, the title to the home shall be
7-19     surrendered to the department for cancellation by the seller.
7-20     "Business use" means any use other than for a dwelling or
7-21     residence.  This subsection does not apply to a sale, exchange, or
7-22     lease-purchase from one consumer to another consumer.
7-23           (g)  For the purposes of this Act, a "salvaged" manufactured
7-24     home means a manufactured home that has been scrapped, dismantled,
7-25     or destroyed or for which an insurance company has paid the full
7-26     insured value [obtained by a property and casualty insurer from the
7-27     insured by reason of the insurer's payment of the policy value
 8-1     written on the home to the insured].  The reasonableness of the
 8-2     insurer's judgment that the costs of repair to the home would
 8-3     exceed the insured value of the home does not affect the status of
 8-4     the home as salvage.  The person possessing the original document
 8-5     of title to a used [salvaged] manufactured home that is salvaged
 8-6     must surrender such document of title to the director for
 8-7     cancellation of the title and issuance of a salvage title.  If a
 8-8     new manufactured home becomes salvaged, the retailer must remove
 8-9     the label and must surrender the label along with the
8-10     manufacturer's certificate of origin to the director for issuance
8-11     of the salvage title.  If the manufactured home is rebuilt in
8-12     accordance with the provisions of this Act and the rules and
8-13     regulations of the director, the director shall issue, upon proper
8-14     application, a [new original] document of title in lieu of the
8-15     salvage title.
8-16           SECTION 7.  Sections 9(e) and (g), Texas Manufactured Housing
8-17     Standards Act (Article 5221f, Vernon's Texas Civil Statutes), are
8-18     amended to read as follows:
8-19           (e)  All rules shall be promulgated and adopted in accordance
8-20     with Chapter 2001, Government Code, and with the provisions of this
8-21     section.  Public and administrative hearings shall be held in
8-22     Travis County unless all parties agree to another location.
8-23           (g)  A rule, amendment to a rule, or repeal of a rule as
8-24     finally adopted shall be published in the Texas Register and
8-25     include a statement of the effective date.  The effective date of a
8-26     rule relating to installation standards shall be not less than 60
8-27     days following the date of publication of notice that the rule has
 9-1     been adopted.  All other rules are effective 30 days following the
 9-2     date of publication [Any other rule is effective as provided by
 9-3     Chapter 2001, Government Code, or such later date as is published].
 9-4           SECTION 8.  Sections 14(d), (i), and (j), Texas Manufactured
 9-5     Housing Standards Act (Article 5221f, Vernon's Texas Civil
 9-6     Statutes), are amended to read as follows:
 9-7           (d)  The retailer shall give the consumer a written warranty
 9-8     that the installation of the new HUD-code manufactured home at the
 9-9     initial homesite will be completed in accordance with all
9-10     standards, rules, regulations, administrative orders, and
9-11     requirements of the department and that any appliances or equipment
9-12     included with the sale of the home to be installed by the retailer
9-13     have been, or will be, installed in accordance with the
9-14     instructions or specifications of the manufacturer of the appliance
9-15     or equipment and are free from defects in materials or workmanship.
9-16     The retailer's warranty is for a period of one year from the date
9-17     of initial installation of the home at the consumer's homesite.
9-18     The retailer must give the consumer a copy, or a general
9-19     description, of the manufacturer's new home construction warranty
9-20     and the retailer's installation warranty  prior to the signing of
9-21     any binding retail installment sales contract or other binding
9-22     purchase agreement.  At the time of the initial installation at the
9-23     consumer's homesite, the retailer must deliver [shall deliver to
9-24     the consumer at the time the contract of sale is signed] the
9-25     following documents:
9-26                 (1)  the manufacturer's warranty;
9-27                 (2)  the retailer's warranty;
 10-1                (3)  the warranties for all appliances and equipment
 10-2    given by the manufacturers of the appliances and equipment included
 10-3    with, or installed in, the home; and
 10-4                (4)  the name and address of the manufacturer and
 10-5    retailer to which the consumer is to give notice of warranty
 10-6    service requests.
 10-7          (i)  After receipt of a request for a home inspection, the
 10-8    department shall perform an [such] inspection within 30 [15] days.
 10-9    Within 10 [five] days following the inspection, the department
10-10    shall mail a written report and orders, if any, to the consumer,
10-11    manufacturer, and retailer by certified mail, return receipt
10-12    requested.  The report shall detail each of the consumer's
10-13    complaints, whether or not each complaint is covered by either of
10-14    the warranties and which warranty.  The director shall issue
10-15    appropriate orders to the manufacturer or retailer for correction
10-16    or repair of the defects and the time allowed, which must be
10-17    reasonable, for the correction.
10-18          (j)  The manufacturer, [and] retailer, and installer shall
10-19    comply with the initial report and warranty service orders of the
10-20    director.  The department may issue an amended report and warranty
10-21    orders if all parties receive notification of and are given an
10-22    opportunity to respond to the report and warranty orders.  The
10-23    amended report and warranty orders must supersede the initial
10-24    report and warranty orders [Such orders are not contested cases
10-25    within the meaning of Chapter 2001, Government Code, so as to
10-26    provide an opportunity for an adjudicative hearing prior to
10-27    compliance].
 11-1          SECTION 9.  Section 18, Texas Manufactured Housing Standards
 11-2    Act (Article 5221f, Vernon's Texas Civil Statutes), is amended by
 11-3    amending Subsections (e) and (g) and adding Subsection (j) to read
 11-4    as follows:
 11-5          (e)  Nothing in this Act shall be construed to modify or
 11-6    amend any provisions of The Real Estate License Act, as amended
 11-7    (Article 6573a, Vernon's Texas Civil Statutes).  The provisions of
 11-8    this Act, as amended, shall not apply to a person licensed as a
 11-9    real estate broker or salesperson [salesman] pursuant to The Real
11-10    Estate License Act, as amended (Article 6573a, Vernon's Texas Civil
11-11    Statutes), who, as agent of the buyer or seller, negotiates the
11-12    sale or lease of a manufactured home and the real property to which
11-13    it is affixed; provided that the ownership of the manufactured home
11-14    and real property are of record in the same person and that such
11-15    sale or lease shall be in a single real estate transaction.
11-16          (g)  A local governmental unit or home-rule city may not
11-17    require any permit, fee, bond, or insurance for the transportation
11-18    and installation of manufactured housing by a licensed retailer or
11-19    installer except as may be approved by the department.  This
11-20    subsection does not prohibit the collection of actual costs
11-21    incurred by a local governmental unit or home-rule city that result
11-22    from the transportation of a manufactured home.
11-23          (j)  A licensed retailer is a "warehouseman" as defined by
11-24    Section 7.102, Business & Commerce Code, for the storage of
11-25    manufactured homes for hire.  The provisions of the Business &
11-26    Commerce Code relating to the storage of goods for hire apply to
11-27    the licensed retailer acting as a warehouseman.
 12-1          SECTION 10.  Section 19(g), Texas Manufactured Housing
 12-2    Standards Act (Article 5221f, Vernon's Texas Civil Statutes), is
 12-3    amended to read as follows:
 12-4          (g)  The owner designated in the original document of title
 12-5    must transfer the title on a form prescribed by the director and
 12-6    must file the form with the department before a manufactured home
 12-7    may be conveyed, transferred, or otherwise disposed of at a
 12-8    subsequent sale.  The form must include any information the
 12-9    director requires and must include a statement that the person
12-10    signing is the owner of the manufactured home and that there are no
12-11    liens on the home except a lien shown on the document of title.  If
12-12    an original document of title is unavailable because a previous
12-13    owner or lienholder, or both, cannot be located or because a home
12-14    has been abandoned, a person may apply to the department for a
12-15    replacement title by presenting evidence satisfactory to the
12-16    department that efforts to locate the previous owner or lienholder,
12-17    or both, have been unsuccessful and an affidavit stating that to
12-18    the best of the applicant's knowledge, the applicant is entitled to
12-19    have a good and marketable title to the manufactured home. A title
12-20    to a manufactured home may not pass or vest at a subsequent sale
12-21    until the transfer is executed as provided by this section and an
12-22    application for the issuance of a new document of title is sent to
12-23    the department.
12-24          SECTION 11.  The importance of this legislation and the
12-25    crowded condition of the calendars in both houses create an
12-26    emergency and an imperative public necessity that the
12-27    constitutional rule requiring bills to be read on three several
 13-1    days in each house be suspended, and this rule is hereby suspended,
 13-2    and that this Act take effect and be in force from and after its
 13-3    passage, and it is so enacted.