1-1 By: Telford (Senate Sponsor - Harris) H.B. No. 1193
1-2 (In the Senate - Received from the House April 8, 1999;
1-3 April 9, 1999, read first time and referred to Committee on
1-4 Administration; April 22, 1999, reported favorably, as amended, by
1-5 the following vote: Yeas 3, Nays 0; April 22, 1999, sent to
1-6 printer.)
1-7 COMMITTEE AMENDMENT NO. 1 By: Harris
1-8 Amend H.B. No. 1193 as follows:
1-9 1. On page 4, line 3, add a new SECTION 5 as follows:
1-10 SECTION 5. Texas Manufactured Housing Standards Act (Article
1-11 5221f, Vernon's Texas Civil Statutes) is amended by adding a new
1-12 Section 6A to read as follows and renumber subsequent Sections
1-13 accordingly:
1-14 Section 6A. LAND-HOME REGULATIONS. (a) This section is
1-15 applicable to those transactions in which the manufactured home
1-16 will be sold as personal property and titled under Section 19 of
1-17 this act. It does not apply to real estate transactions when the
1-18 manufactured home is, or will become, real estate under Section
1-19 2.001, Property Code.
1-20 (b) The retailer is prohibited from selling, or representing
1-21 for sale, or offering for sale any real estate in conjunction with
1-22 the sale of a manufactured home except as may be authorized by the
1-23 department consistent with the provisions of the Real Estate
1-24 License Act (Article 6573a, Vernon's Texas Civil Statutes).
1-25 2. On page 4, strike lines 26-27 and substitute;
1-26 "[installers] that is conducted [in the field by a private
1-27 institution or other person] by a non-profit educational
1-28 institution or foundation."
1-29 3. On page 3, strike lines 56-58 and substitute the
1-30 following:
1-31 "SECTION 4. Section 6, Texas Manufactured Housing Standards
1-32 Act (Article 5221f, Vernon's Texas Civil Statutes), is amended by
1-33 amending subsections (h) and (l) and adding subsection (m) to read
1-34 as follows:
1-35 4. On page 4, after line 3, add new subsection (m) to read
1-36 as follows:
1-37 (m) It is unlawful for a retailer, salesperson, or agent of
1-38 the retailer to refuse to refund a consumer's deposit except in
1-39 accordance with this subsection.
1-40 (1) The deposit must be refunded within 15 days
1-41 following the receipt of written notice from the consumer
1-42 requesting the refund.
1-43 (2) If a retailer, salesperson, or agent of the
1-44 retailer violates the provisions of this subsection, the consumer
1-45 may recover, cumulative of other remedies, three times the amount
1-46 of the deposit plus reasonable attorney's fees.
1-47 (3) The consumer's deposit may only be retained if:
1-48 (A) the creditor specially orders a home from
1-49 the manufacturer because the home is not in the retailer's
1-50 inventory;
1-51 (B) the home conforms to the specifications of
1-52 the special order and the representations, if any, made to the
1-53 consumer;
1-54 (C) the consumer fails or refuses to accept
1-55 delivery and installation of the home by the retailer; and
1-56 (D) the consumer was given conspicuous written
1-57 notice of the requirements for retaining the deposit.
1-58 (4) The retailer must not retain more than five
1-59 percent of the estimated cash price of the home which is specially
1-60 ordered and must refund any amount of the deposit which exceeds
1-61 five percent.
1-62 (5) This subsection does not apply to a deposit in
1-63 escrow in a real estate transaction nor to a down payment as shown
1-64 on an executed retail installment sales contract.
1-65 5. Sections 347.303, 347.304, 347.305, and 347.306, Finance
2-1 Code, are repealed.
2-2 6. Beginning on page 3, line 33 through page 3, line 55,
2-3 strike all of "SECTION 3."
2-4 7. Renumber subsequent SECTIONS accordingly
2-5 8. Add a new appropriately numbered Section to read as
2-6 follows and renumber remaining Sections accordingly:
2-7 SECTION 11. EFFECTIVE DATE. This Act takes effect September
2-8 1, 1999, except for Section 5 which takes effect January 1, 2000.
2-9 A BILL TO BE ENTITLED
2-10 AN ACT
2-11 relating to the licensing and regulation of manufactured housing.
2-12 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
2-13 SECTION 1. Section 3(1), Texas Manufactured Housing
2-14 Standards Act (Article 5221f, Vernon's Texas Civil Statutes), is
2-15 amended to read as follows:
2-16 (1) "Advertising" or "advertisement" means any
2-17 commercial message which promotes the sale, exchange, or
2-18 lease-purchase of manufactured homes and which appears in, or is
2-19 presented on, radio, television, a public-address system,
2-20 newspapers, magazines, leaflets, flyers, catalogs, direct mail
2-21 literature, other printed material, electronic media, an inside or
2-22 outside sign or window display, or in point-of-sale literature or
2-23 price tags. Materials which are educational or that may be
2-24 required by law do not constitute advertising. Any advertisement
2-25 relating to manufactured housing shall be considered as an offer to
2-26 sell, exchange, or lease-purchase to consumers.
2-27 SECTION 2. Section 4, Texas Manufactured Housing Standards
2-28 Act (Article 5221f, Vernon's Texas Civil Statutes), is amended to
2-29 read as follows:
2-30 Sec. 4. MANUFACTURED HOUSING STANDARDS. (a) The director
2-31 shall adopt standards and requirements for the installation and for
2-32 the construction of manufactured housing, that are reasonably
2-33 necessary in order to protect the health, safety, and welfare of
2-34 the occupants and the public. The collection of these standards
2-35 and requirements is the Texas Manufactured Housing Code.
2-36 (b) [The requirements and standards for the plumbing,
2-37 heating, air-conditioning and electrical systems and construction
2-38 of manufactured homes in effect on September 1, 1989, remain in
2-39 full force and effect until amended in accordance with the
2-40 procedure set forth in this section.]
2-41 [(c)] The director shall adopt standards and requirements
2-42 for the construction of HUD-code manufactured homes in compliance
2-43 with the federal standards and requirements established under
2-44 Title VI of the Housing and Community Development Act of 1974,
2-45 entitled the National Manufactured Home Construction and Safety
2-46 Standards Act of 1974.
2-47 (c) [(d)] The director shall adopt standards and
2-48 requirements for the installation of all manufactured housing in
2-49 the state that are necessary for the protection of the health,
2-50 safety, and welfare of all the citizens. The standards must assure
2-51 that the installation of manufactured housing on both permanent and
2-52 nonpermanent foundation systems resists overturning and lateral
2-53 movement of the housing according to the design loads for the
2-54 particular wind zone for which the housing was constructed.
2-55 (d) [(e) The requirements and standards for the installation
2-56 of manufactured homes as adopted by the state in existence on
2-57 September 1, 1989, remain in force until amended in accordance with
2-58 the procedure set forth in this section.]
2-59 [(f)] All manufactured housing must be installed in
2-60 compliance with the standards, rules, regulations, or
2-61 administrative orders of the director. The department shall
2-62 establish an inspection program whereby at least 25 percent of the
2-63 manufactured homes installed are inspected on a sample basis for
2-64 compliance. The department's program shall place priority on
2-65 multi-section homes and homes installed in Wind Zone II.
2-66 (e) [(g)] A local governmental unit of this state, without
2-67 the express approval of the board following a hearing on the
3-1 matter, may not adopt different standards from those promulgated by
3-2 the director for the construction or installation of manufactured
3-3 housing within the local governmental unit. The local governmental
3-4 unit must demonstrate that the public health and safety require the
3-5 different standards.
3-6 (f) [(h)] Before the adoption or promulgation of any
3-7 standards or requirements authorized by this section, any change in
3-8 or addition to the standards authorized in this section, or the
3-9 approval of different standards by any local governmental unit, the
3-10 director shall publish a notice and conduct a public hearing under
3-11 Section 9 of this Act.
3-12 (g) [(i)] Every requirement or standard or modification,
3-13 amendment, or repeal of a requirement or standard adopted by the
3-14 director shall state the date it shall take effect as provided by
3-15 Section 9 of this Act.
3-16 (h) [(j)] The department shall cooperate with all units of
3-17 local government in this state and shall authorize local units of
3-18 government, on request, to make and perform inspection and
3-19 enforcement activities related to the construction of foundation
3-20 systems and the erection and installation of manufactured housing
3-21 at the homesite pursuant to contracts or other official
3-22 designations and the rules and regulations of the director. The
3-23 department shall notify each local governmental unit biennially in
3-24 writing to advise the local governmental unit of the program for
3-25 contracting installation inspections. The department shall
3-26 encourage local building inspection officials to perform
3-27 enforcement and inspection activities for manufactured housing
3-28 installed within the local governmental unit and may establish
3-29 cooperative inspection training programs. The department may
3-30 withdraw the authorization if the local governmental unit fails to
3-31 follow the rules, regulations, interpretations, and written
3-32 instructions of the department.
3-33 SECTION 3. Section 4A, Texas Manufactured Housing Standards
3-34 Act (Article 5221f, Vernon's Texas Civil Statutes), is amended by
3-35 amending Subsection (c) and adding Subsection (d) to read as
3-36 follows:
3-37 (c) A municipality shall not regulate a new HUD-code
3-38 manufactured home to be affixed to a permanent foundation and
3-39 classified as real property under Section 2.001, Property Code, in
3-40 any manner that is different from the municipality's regulation of
3-41 new industrialized housing. A municipality must permit the use and
3-42 occupancy of the new HUD-code manufactured home in any area in
3-43 which an industrialized home would be permitted, provided that:
3-44 (1) all local permits and licenses that are applicable
3-45 to other residential dwellings are obtained;
3-46 (2) the plans and specifications for the permanent
3-47 foundation and other on-site construction are approved by the
3-48 municipal building official or bear the seal of a registered
3-49 professional engineer; and
3-50 (3) the site plan meets local requirements for
3-51 building setback, side and rear yard offsets, subdivision control,
3-52 architectural landscaping, aesthetics, square footage, and other
3-53 local requirements applicable to other residential dwellings.
3-54 (d) This section shall not affect the validity of any deed
3-55 restriction that is otherwise valid.
3-56 SECTION 4. Sections 6(h) and (l), Texas Manufactured Housing
3-57 Standards Act (Article 5221f, Vernon's Texas Civil Statutes), are
3-58 amended to read as follows:
3-59 (h) It is unlawful for a person to sell, convey, or
3-60 otherwise transfer to a consumer in this state a [salvaged]
3-61 manufactured home for which a salvage title has been issued under
3-62 [as such term is defined in] Section 8 of this Act. A salvaged
3-63 manufactured home may only be sold to a licensed retailer or
3-64 licensed rebuilder.
3-65 (l) It is unlawful for a retailer or a salesperson to aid or
3-66 assist a consumer in preparing or providing false or misleading
3-67 information on a document related to the purchase or financing of a
3-68 manufactured home or for a salesperson to submit information known
3-69 to be false or misleading to a retailer or for a retailer or a
4-1 salesperson to submit information known to be false or misleading
4-2 to a credit underwriter or lending institution.
4-3 SECTION 5. Section 7, Texas Manufactured Housing Standards
4-4 Act (Article 5221f, Vernon's Texas Civil Statutes), is amended by
4-5 amending Subsections (o) and (q) and adding Subsection (s) to read
4-6 as follows:
4-7 (o) Any person not licensed or registered with the
4-8 department or a predecessor agency as of September 1, 1987, must
4-9 attend and complete twenty (20) hours of instruction in the law and
4-10 consumer protection regulations as a prerequisite for a license.
4-11 The instruction shall be given not less than one time each quarter.
4-12 No test shall be made a prerequisite of licensing, but actual
4-13 attendance at the instruction sessions is required. The director
4-14 shall not issue a license until the instruction is completed. This
4-15 subsection does not apply to a license holder or registrant making
4-16 application to license additional business locations, to renew or
4-17 reinstate a license, or to make application for licensing as a
4-18 salesperson. In lieu of this instruction requirement, a
4-19 manufacturer may request that a one-day, in-plant training session
4-20 be presented by an authorized representative of the department.
4-21 The manufacturer shall reimburse the department for the actual
4-22 costs of the training session.
4-23 (q) In lieu of the instruction requirements imposed under
4-24 Subsection (o) of this section, the director may recognize and
4-25 approve a training program for an applicant for a license
4-26 [installers] that is conducted [in the field] by a private
4-27 institution or other person.
4-28 (s) A person who is licensed as a broker or salesperson
4-29 under The Real Estate License Act (Article 6573a, Vernon's Texas
4-30 Civil Statutes) may act as a manufactured housing broker or
4-31 salesperson and is not required to be licensed or post bond or
4-32 other security under this Act, provided negotiations for the sale,
4-33 exchange, or lease-purchase of the manufactured home are conducted
4-34 on behalf of a person for whom the real estate licensee otherwise
4-35 acts as a real estate broker or salesperson.
4-36 SECTION 6. Sections 8(b) and (g), Texas Manufactured Housing
4-37 Standards Act (Article 5221f, Vernon's Texas Civil Statutes), are
4-38 amended to read as follows:
4-39 (b) It is unlawful for a person to sell, exchange, or
4-40 lease-purchase any used manufactured home to a consumer for use as
4-41 a dwelling or residence without giving a written warranty that the
4-42 manufactured home is habitable. The consumer has 60 days after the
4-43 date of the sale, exchange, or lease-purchase agreement to notify
4-44 the seller in writing of any defects that make the home
4-45 uninhabitable. Failure to give this required notice terminates any
4-46 obligations and liabilities of the seller under this section. The
4-47 warranty must conspicuously disclose this requirement to the
4-48 consumer. If the sale, exchange, or lease-purchase is to a
4-49 purchaser for the purchaser's business use, the manufactured home
4-50 need not be habitable; however, the title to the home shall be
4-51 surrendered to the department for cancellation by the seller.
4-52 "Business use" means any use other than for a dwelling or
4-53 residence. This subsection does not apply to a sale, exchange, or
4-54 lease-purchase from one consumer to another consumer.
4-55 (g) For the purposes of this Act, a "salvaged" manufactured
4-56 home means a manufactured home that has been scrapped, dismantled,
4-57 or destroyed or for which an insurance company has paid the full
4-58 insured value [obtained by a property and casualty insurer from the
4-59 insured by reason of the insurer's payment of the policy value
4-60 written on the home to the insured]. The reasonableness of the
4-61 insurer's judgment that the costs of repair to the home would
4-62 exceed the insured value of the home does not affect the status of
4-63 the home as salvage. The person possessing the original document
4-64 of title to a used [salvaged] manufactured home that is salvaged
4-65 must surrender such document of title to the director for
4-66 cancellation of the title and issuance of a salvage title. If a
4-67 new manufactured home becomes salvaged, the retailer must remove
4-68 the label and must surrender the label along with the
4-69 manufacturer's certificate of origin to the director for issuance
5-1 of the salvage title. If the manufactured home is rebuilt in
5-2 accordance with the provisions of this Act and the rules and
5-3 regulations of the director, the director shall issue, upon proper
5-4 application, a [new original] document of title in lieu of the
5-5 salvage title.
5-6 SECTION 7. Sections 9(e) and (g), Texas Manufactured Housing
5-7 Standards Act (Article 5221f, Vernon's Texas Civil Statutes), are
5-8 amended to read as follows:
5-9 (e) All rules shall be promulgated and adopted in accordance
5-10 with Chapter 2001, Government Code, and with the provisions of this
5-11 section. Public and administrative hearings shall be held in
5-12 Travis County unless all parties agree to another location.
5-13 (g) A rule, amendment to a rule, or repeal of a rule as
5-14 finally adopted shall be published in the Texas Register and
5-15 include a statement of the effective date. The effective date of a
5-16 rule relating to installation standards shall be not less than 60
5-17 days following the date of publication of notice that the rule has
5-18 been adopted. All other rules are effective 30 days following the
5-19 date of publication [Any other rule is effective as provided by
5-20 Chapter 2001, Government Code, or such later date as is published].
5-21 SECTION 8. Sections 14(d), (i), and (j), Texas Manufactured
5-22 Housing Standards Act (Article 5221f, Vernon's Texas Civil
5-23 Statutes), are amended to read as follows:
5-24 (d) The retailer shall give the consumer a written warranty
5-25 that the installation of the new HUD-code manufactured home at the
5-26 initial homesite will be completed in accordance with all
5-27 standards, rules, regulations, administrative orders, and
5-28 requirements of the department and that any appliances or equipment
5-29 included with the sale of the home to be installed by the retailer
5-30 have been, or will be, installed in accordance with the
5-31 instructions or specifications of the manufacturer of the appliance
5-32 or equipment and are free from defects in materials or workmanship.
5-33 The retailer's warranty is for a period of one year from the date
5-34 of initial installation of the home at the consumer's homesite.
5-35 The retailer must give the consumer a copy, or a general
5-36 description, of the manufacturer's new home construction warranty
5-37 and the retailer's installation warranty prior to the signing of
5-38 any binding retail installment sales contract or other binding
5-39 purchase agreement. At the time of the initial installation at the
5-40 consumer's homesite, the retailer must deliver [shall deliver to
5-41 the consumer at the time the contract of sale is signed] the
5-42 following documents:
5-43 (1) the manufacturer's warranty;
5-44 (2) the retailer's warranty;
5-45 (3) the warranties for all appliances and equipment
5-46 given by the manufacturers of the appliances and equipment included
5-47 with, or installed in, the home; and
5-48 (4) the name and address of the manufacturer and
5-49 retailer to which the consumer is to give notice of warranty
5-50 service requests.
5-51 (i) After receipt of a request for a home inspection, the
5-52 department shall perform an [such] inspection within 30 [15] days.
5-53 Within 10 [five] days following the inspection, the department
5-54 shall mail a written report and orders, if any, to the consumer,
5-55 manufacturer, and retailer by certified mail, return receipt
5-56 requested. The report shall detail each of the consumer's
5-57 complaints, whether or not each complaint is covered by either of
5-58 the warranties and which warranty. The director shall issue
5-59 appropriate orders to the manufacturer or retailer for correction
5-60 or repair of the defects and the time allowed, which must be
5-61 reasonable, for the correction.
5-62 (j) The manufacturer, [and] retailer, and installer shall
5-63 comply with the initial report and warranty service orders of the
5-64 director. The department may issue an amended report and warranty
5-65 orders if all parties receive notification of and are given an
5-66 opportunity to respond to the report and warranty orders. The
5-67 amended report and warranty orders must supersede the initial
5-68 report and warranty orders [Such orders are not contested cases
5-69 within the meaning of Chapter 2001, Government Code, so as to
6-1 provide an opportunity for an adjudicative hearing prior to
6-2 compliance].
6-3 SECTION 9. Section 18, Texas Manufactured Housing Standards
6-4 Act (Article 5221f, Vernon's Texas Civil Statutes), is amended by
6-5 amending Subsections (e) and (g) and adding Subsection (j) to read
6-6 as follows:
6-7 (e) Nothing in this Act shall be construed to modify or
6-8 amend any provisions of The Real Estate License Act, as amended
6-9 (Article 6573a, Vernon's Texas Civil Statutes). The provisions of
6-10 this Act, as amended, shall not apply to a person licensed as a
6-11 real estate broker or salesperson [salesman] pursuant to The Real
6-12 Estate License Act, as amended (Article 6573a, Vernon's Texas Civil
6-13 Statutes), who, as agent of the buyer or seller, negotiates the
6-14 sale or lease of a manufactured home and the real property to which
6-15 it is affixed; provided that the ownership of the manufactured home
6-16 and real property are of record in the same person and that such
6-17 sale or lease shall be in a single real estate transaction.
6-18 (g) A local governmental unit or home-rule city may not
6-19 require any permit, fee, bond, or insurance for the transportation
6-20 and installation of manufactured housing by a licensed retailer or
6-21 installer except as may be approved by the department. This
6-22 subsection does not prohibit the collection of actual costs
6-23 incurred by a local governmental unit or home-rule city that result
6-24 from the transportation of a manufactured home.
6-25 (j) A licensed retailer is a "warehouseman" as defined by
6-26 Section 7.102, Business & Commerce Code, for the storage of
6-27 manufactured homes for hire. The provisions of the Business &
6-28 Commerce Code relating to the storage of goods for hire apply to
6-29 the licensed retailer acting as a warehouseman.
6-30 SECTION 10. Section 19(g), Texas Manufactured Housing
6-31 Standards Act (Article 5221f, Vernon's Texas Civil Statutes), is
6-32 amended to read as follows:
6-33 (g) The owner designated in the original document of title
6-34 must transfer the title on a form prescribed by the director and
6-35 must file the form with the department before a manufactured home
6-36 may be conveyed, transferred, or otherwise disposed of at a
6-37 subsequent sale. The form must include any information the
6-38 director requires and must include a statement that the person
6-39 signing is the owner of the manufactured home and that there are no
6-40 liens on the home except a lien shown on the document of title. If
6-41 an original document of title is unavailable because a previous
6-42 owner or lienholder, or both, cannot be located or because a home
6-43 has been abandoned, a person may apply to the department for a
6-44 replacement title by presenting evidence satisfactory to the
6-45 department that efforts to locate the previous owner or lienholder,
6-46 or both, have been unsuccessful and an affidavit stating that to
6-47 the best of the applicant's knowledge, the applicant is entitled to
6-48 have a good and marketable title to the manufactured home. A title
6-49 to a manufactured home may not pass or vest at a subsequent sale
6-50 until the transfer is executed as provided by this section and an
6-51 application for the issuance of a new document of title is sent to
6-52 the department.
6-53 SECTION 11. The importance of this legislation and the
6-54 crowded condition of the calendars in both houses create an
6-55 emergency and an imperative public necessity that the
6-56 constitutional rule requiring bills to be read on three several
6-57 days in each house be suspended, and this rule is hereby suspended,
6-58 and that this Act take effect and be in force from and after its
6-59 passage, and it is so enacted.
6-60 * * * * *