80R6854 T

By: Haggerty H.B. No. 1460

A BILL TO BE ENTITLED

AN ACT

relating to the licensing, acquisition, and regulation of manufactured housing.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 11.432, Tax Code, is amended to read as follows:

HOMESTEAD EXEMPTION FOR MANUFACTURED HOME. (a) For a manufactured home to qualify for an exemption under Section 11.13 of this code, the application for the exemption must be accompanied by a copy of the statement of ownership and location for the manufactured home issued by the manufactured housing division of the Texas Department of Housing and Community Affairs under Section 1201.207, Occupations Code, showing that the individual applying for the exemption is the owner of the manufactured home or be accompanied by [a verified copy of the purchase contract showing that the applicant is the purchaser of the manufactured home] a photostatic copy of the current title page for said home displayed on the computer website of the Texas Department of Housing and Community Affairs. Alternatively, the taxing authority may rely upon the computer records of the Texas Department of Housing and Community Affairs.

(b) [The land on which a manufactured home is located qualifies for an exemption under Section 11.13 only if:

[(1) the manufactured home qualifies for an exemption as provided by Subsection (a); and

[(2) the manufactured home is listed together with the land on which it is located under Section 25.08.] Whether the owner has elected to treat the home as real property or personal property and whether the home is listed on the tax rolls with the real property to which it is attached or separately, the consumer is entitled to obtain the homestead exemptions provided by Section 11.13 of this code.

(c) In this section, "manufactured home" has the meaning assigned by Section 1201.003, Occupations Code

SECTION 2. Section 31.072, Tax Code, is amended by adding Subsection (i) to read as follows:

(i) Notwithstanding Subsection (a), if the property owner requesting a collector to establish an escrow account under this section is the owner of a manufactured home and the escrow account is to be used solely to provide for the payment of property taxes collected by the collector on the property owner's manufactured home, the collector shall enter into a contract with the property owner under this section.

SECTION 3. Section 32.03, Tax Code, is amended by amending Subsections (a), (a-1), (a-2) and (b) and adding Subsections (c), (d) and (e) to read as follows:

(a) [Except as provided by Subsection (a-1),] A [a] tax lien may not be enforced against personal property transferred to a buyer in ordinary course of business as defined by Section 1.201 (9) of the Business & Commerce Code for value who does not have actual notice of the existence of the lien. Once a valid tax lien has been timely filed by the taxing authority with the Texas Department of Housing and Community Affairs pursuant to the rules of the department prior to the date of the transfer, the buyer is deemed to have actual notice of the lien.

(a-1) A tax lien against a manufactured home may not be enforced unless it has been recorded with the Texas Department of Housing and Community Affairs as provided by Section 1201.219, Occupations Code;

(1) before October 1, 2005; or

(2) not later than six months after the end of the year for which the tax was owed.

(a-2) A person may not transfer title of a manufactured home until all tax liens [perfected] on the home timely filed with the Texas Department of Housing and Community Affairs have been extinguished or satisfied and released as well as any personal property taxes on the manufactured home which accrued on each January 1 that falls within 18 months of the date of the sale. This subsection does not apply to the sale of a manufactured home in inventory.

(b) A bona fide purchaser for value or the holder of a lien recorded on a manufactured home statement of ownership and location is not required to pay any taxes that have not been recorded with the Texas Department of Housing and Community Affairs. Unless a tax lien has been filed timely with the Texas Department of Housing and Community Affairs, no taxing unit, nor anyone acting on its behalf, may use a tax warrant or any other method to attempt to execute or foreclose on the manufactured home as a result of the unfiled tax lien.

(c) A taxpayer shall have the right to designate which tax year will be credited with a particular payment. If a taxpayer pays all the amounts owing for a given year, the taxing unit shall issue a receipt for the payment of the taxes for the designated year.

(d) If a person with an interest in the ownership of a manufactured home believes that a collector or appraiser is acting in disregard of this statute or of the provisions of Chapter 1201 of the Occupations Code, the person may file a complaint with the Comptroller. The office of the Comptroller will conduct an administrative hearing to determine the validity of the complaint. If the Comptroller finds that the collector or appraiser is disregarding this statute or Chapter 1201 of the Occupations Code, the Comptroller shall issue a mandate that the collector or appraiser act in accordance with the Comptroller's mandate. The Comptroller shall mail the mandate to the collector or appraiser by United States Certified Mail. If the collector or appraiser fails to comply with the Comptroller's mandate within seven days of the receipt of the mandate, the Comptroller shall forward a complaint to the Attorney General's office, which shall then file proceedings to have the tax collector or appraiser held in contempt for failure to obey the Comptroller's mandate. The District Court shall impose such fines or other punishment as the Court deems appropriate to punish the collector or appraiser for their failure to obey the mandate of the Comptroller and to assure that the future actions of the collector or appraiser will be in accordance with the Comptroller's mandate.

(e) If personal property taxes on a manufactured home have not been levied by the taxing unit, the taxing unit shall provide the prospective buyer of the manufactured home with an estimated amount of taxes computed by multiplying the taxable value of the manufactured home, according to the most recent certified appraisal roll for the taxing unit, by the taxing unit's adopted tax rate for the preceding tax year. In order to enable the transfer of the manufactured home, the tax collector shall accept the payment of the estimated personal property taxes and issue a certification to the Department of Housing and Community Affairs that the estimated taxes are being held in escrow until the taxes are levied. Once the taxes are levied, the tax collector shall apply the escrowed sums to the levied taxes. At the time that the tax collector accepts the payment of the taxes, the tax collector shall notify the taxpayer that the payment of the estimated taxes is an estimate that may be raised once the appraisal rolls for the year are certified. The tax collector shall notify the new owner that the new owner of the manufactured home may be liable for the payment of any difference between the tax established by the certified appraisal roll and the estimate actually paid.

(f) If at the time the prospective buyer seeks a certification from the tax collector that taxes have been paid, the tax collector determines that the manufactured home has been omitted from the tax rolls of either or both of the two preceding years by mistake, the tax collector will calculate the taxes due for the omitted years by applying the tax rate for the omitted years to the proposed sales price that the buyer is paying for the manufactured home. Upon payment of the resulting sum, the tax collector shall issue a certification to the Department of Housing and Community Affairs that the taxes have been paid for the omitted years. Even though the buyer of the manufactured home pays the taxes calculated hereunder for the manufactured home which was omitted from the tax rolls, the buyer shall have the right to protest the value established by this provision using the protest of valuation procedures established by the Tax Code. If the protest is successful, the tax collector shall refund to the buyer all sums in excess of the taxes which were owed based upon the revised valuation.

(g) If the tax lien filed with the Department of Housing and Community Affairs reflects a taxpayer name that is different from the name of the owner of the manufactured home, the Department of Housing and Community Affairs shall provisionally record the lien on its records using the serial number or other identifying number for the manufactured home. The Department of Housing and Community Affairs shall notify the appraisal district of the disparity between the name of the taxpayer and the owner of the home. The taxing authority shall have sixty days from the date of the notice to file an amended tax lien reflecting the taxpayer as the owner of the home. The taxing authority shall notify both the taxpayer originally reflected on the tax rolls and the owner of the manufactured home reflected on the records of the Texas Department of Housing and Community Affairs of the filing of the tax lien and the disparity between the two names.

SECTION 4. Section 1201.003(15), Occupations Code, is amended to read as follows:

(15) "Manufactured home" or "manufactured housing" means a HUD-code manufactured home or a mobile home or any structure that (1) regardless of size is designed for use as a dwelling when it is connected to the required utilities, (2) is built on a permanent chassis and (3) is not a modular home as defined in Section 1202, Occupations Code.

SECTION 5. Section 1201.003, Occupations Code, is amended by adding a definition to read as follows:

"New Manufactured home" means a home which is not a Used Manufactured home

SECTION 6. Section 1201.003, Occupations Code, is amended by adding a definition to read as follows:

"Used Manufactured home" means a home which has been occupied for use.

SECTION 7. Section 1201.003, Occupations Code, is amended by adding a definition to read as follows:

"Fund" means the homeowners' recovery fund established by the director under Subchapter I.

SECTION 8. Section 1201.008 Occupations Code, is amended by adding subsection (e) to read as follows:

(e) Notwithstanding any zoning or other law to the contrary, in the event that a manufactured home occupies a lot in a municipality, the owner of the manufactured home may move the manufactured home from its location and place another manufactured home on the same property, provided that the replacement is a newer manufactured home and is at least as large in living space as the prior manufactured home.

SECTION 9. Section 1201.052(a), Occupations Code, is amended to read as follows:

(a) The board [director] shall adopt rules[, issues orders] and otherwise act as necessary to ensure compliance with the purpose of this chapter to implement and provide for uniform enforcement of this chapter and the standards code. The director shall act as necessary to implement the rules adopted by the board and to further the directions given by the board to ensure that all persons comply with the provisions of this Section whether they are licensed or not.

SECTION 10. Section 1201.053(a), Occupations Code, is amended to read as follows:

(a) The board [director] shall adopt rules[, issue order,] and otherwise act as necessary to:

(1) comply with the National Manufactured Housing Construction and Safety Standards Act of 1974 (42 U.S.C. Section 5401 et seq.), including adopting and enforcing rules reasonable required to implement the notification and correction procedures provided by 42 U.S.C. Section 5414; and

(2) provide for the effective enforcement of all HUD-code manufactured housing construction and safety standards in order to have the state plan authorized by the National Manufactured Construction and Safety Standards Act of 1974 (42 U.S.C. Section5401 et seq.) approved by the secretary of housing and urban development.

SECTION 11. Section 1201.058, Occupations Code, is amended to read as follows:

The board shall establish the fees imposed under Sections 1201.055-1201.057 in amounts that are reasonable and necessary to cover the cost of administering this chapter. If the department's rules provide an option to file a document electronically, the department may charge a discounted fee for the electronic filing.

SECTION 12. Section 1201.105(a), Occupations Code, is amended to read as follows:

(a) The department may not issue or renew a license unless a bond or other security in a form prescribed by the director is filed with the department as provided by this subchapter. The bond or other security is payable to the trust fund except for any amounts which are due directly to the retailer under Section 1201.356(c), Occupations Code.

SECTION 13. Section 1201.106(a), Occupations Code, is amended to read as follows:

(a) An applicant for a license or a license holder shall file a bond or other security under Section 1201.105 for the issuance or renewal of a license in the following amount:

(1) $100,000 for a manufacturer;

(2) $50,000 for a retailer;

(3) $50,000 [($30,000)] for a rebuilder;

(4) $50,000 for a broker; or

(5) $50,000 [($10,000)] for an installer.

SECTION 14. Section 1201.162(a), Occupations Code, is amended to read as follows:

(a) Before the completion of a credit application in credit sale and more than one day before the execution of a purchase contract in a cash sale, the retailer or agent must provide to the consumer the following statement that is printed in at least 12-point type and not attached to or combined with any other written material:

"When buying a manufactured home, there are a number of important considerations, including price, quality of construction, features, floor plan, and financing alternatives.

"The United States Department of Housing and Urban Development (HUD) helps protect consumers through regulation and enforcement of HUD design and construction standards for manufactured homes. Manufactured homes that meet HUD standards are known as "HUD-code manufactured homes.' The Texas Department of Housing and Community Affairs regulates Texas manufacturers, retailers, brokers, salespersons, installers, and rebuilders of manufactured homes.

"If you plan to place a manufactured home on land that you own or will buy, you should consider items such as:

"ZONING AND RESTRICTIVE COVENANTS. Municipalities or subdivisions may restrict placement of manufactured homes on certain lots, may prohibit the placement of homes within a certain distance from property lines, may require that homes be a certain size, and may impose certain construction requirements. You may need to obtain building permits and homeowner association approval before you place a manufactured home on a certain lot. Contact the local municipality, county, and subdivision manager to find out if you can place the manufactured home of your choice on a certain lot.

"WATER. Be sure that your lot has access to water. If you must drill a well, contact several drillers for bids. If water is available through a municipality, utility district, water district, or cooperative, you should inquire about the rates you will have to pay and the costs necessary to join the water system.

"SEWER. If your lot is not serviced by a municipal sewer system or utility district, you will have to install an on-site sewer facility (commonly known as a septic system). There are a number of concerns or restrictions that will determine if your lot is adequate to support an on-site sewer facility. Check with the local county or a licensed private installer to determine the requirements that apply to your lot and the cost to install such a system.

"HOMEOWNER ASSOCIATION FEES. Many subdivisions have mandatory assessments and fees that lot owners must pay. Check with the manager of the subdivision in which your lot is located to determine if any fees apply to your lot.

"TAXES. Your home will be appraised and subject to ad valorem taxes as are other single family residential structures. These taxes must be escrowed with your monthly payment, except that your lender is not obligated to impose an escrow requirement in a real property transaction involving a manufactured home if the lender is a federally insured financial institution and does not otherwise require the escrow of taxes, insurance premiums, fees, or other charges in connection with loans secured by residential real property. On closing, you will be notified of all provisions pertaining to federal truth in lending disclosures.

"INSURANCE. Your lender may require you to obtain insurance that meets lender requirements and protects your investment. You should request quotes from the agent of your choice to obtain the insurance.

"TYPES OF MORTGAGES AVAILABLE. The acquisition of a manufactured home may be financed by a real estate mortgage or a chattel mortgage. A real estate mortgage may have a lower interest rate than a chattel mortgage.

"RIGHT OF RESCISSION. If you acquire a manufactured home, by purchase, exchange, or lease-purchase, you may, not later than the third day after the date the applicable contract is signed, rescind the contract without penalty or charge."

SECTION 15. Section 1201.162(d) and (e), Occupations Code, is amended by renumbering and amending Subsection (c) to read as follows:

(b) [(d)] A federally insured financial institution or lender approved or authorized by the United States Department of Housing and Urban Development as a mortgagee with the direct endorsement underwriting authority that fully complies with federal Truth in Lending disclosures concerning the terms of a manufactured housing transaction is exempt from the disclosure provisions of this section.

(c) [(e)] The right of rescission described in subsection (a) shall apply only to the sale transaction between the retailer and buyer. Failure by the retailer to comply with the disclosure provisions of this section does not affect the validity of a subsequent conveyance or transfer of title of a manufactured home or otherwise impair a title or lien position of a person other than the retailer. Until three days after the retailer delivers a copy of the notice required by subsection (a), the buyer shall continue to have the right of rescission with regard to the retailer. The buyer's execution of a signed receipt of a copy of the notice required by subsection (a) shall constitute conclusive proof of the delivery of the notice. If buyer grants a person other than the retailer a lien on the manufactured home, the right of rescission shall immediately cease upon the filing of the lien with the Texas Department of Housing and Community Affairs.

SECTION 16. Section 1201.165, Occupations Code, is amended to read as follows:

The consumer may modify or waive the right to rescind as well as the time periods provided herein for disclosures prior to the execution of the contract if the consumer determines that the purchase of the manufactured home is needed to meet a bona fide personal emergency. If the consumer has a bona fide personal emergency that necessitates the immediate purchase of the manufactured home, the consumer shall give the retailer a dated written statement that describes the emergency, specifically modifies or waives the notice periods and any right of rescission and bears the signature of all of the consumers entitled to the disclosures and right of rescission. In such event the retailer shall immediately give the consumer all of the disclosures required by the Occupations Code and sell the manufactured home without the required waiting periods or the right of rescission. Printed forms for this purpose are prohibited except in a county that has been declared by the Governor to be a major disaster area. If the Governor declares a county to be a major disaster area, the retailer may use printed forms promulgated by the department. This exception shall expire one year after the county has been declared a major disaster area.

SECTION 17. Section 1201.205(5), Occupations Code, is amended to read as follows:

(5) the physical address where [the county of this state in which] the home is installed for occupancy including the name of the county and if different, the mailing address of the owner of the home:

SECTION 18. Section 1201.206, Occupations Code, is amended by renumbering the existing Subsections, amending Subsection (a) and (c) and adding Subsection (f) and (g) to read as follows:

(a) [(b)] At the first retail sale of a manufactured home, the retailer shall provide for the installation of the home and ensure that the application for the issuance of a statement of ownership and location is properly completed. The consumer shall return the completed application to the retailer. The retailer shall surrender to the department the original manufacturer's statement of origin at the same time that the retailer applies for the first Statement of Origin and Location.

(b) [(c)] Not later than the [30th] 45th day after the date of the retail sale, the retailer shall provide to the department the completed application for the issuance of a statement of ownership and location.

(c) [(d)] Not later than the [30th] 45th day after the date of each subsequent sale or transfer of a home that is considered to be personal property, the seller or transferor shall provide to the department a completed application for the issuance of a new statement of ownership and location. If the seller accepts a traded in manufactured home as part of the consideration for the sale of another manufactured home, the seller shall file a completed application for the issuance of a new statement of ownership and location reflecting the change of ownership of the traded in manufactured home from the prospective buyer to the seller. The seller shall file the application for the issuance of a new statement of ownership and location for the traded in manufactured home at the same time that the seller files the application for the issuance of a new statement of ownership and location for the manufactured home which was sold by the seller. If the seller is a retailer, the seller shall indicate on the application for the issuance of the new statement of ownership and location if the home has been added to the inventory of the retailer.

(d) [(e)] Ownership of a manufactured home does not pass or vest at a sale or transfer of the home until a completed application for the issuance of a statement of ownership and location is filed with the department.

(e) [(f)] If the owner of a manufactured home relocates the home, the owner shall apply for the issuance of a new statement of ownership and location not later than the 30th day after the date the home is relocated. The department shall require that the owner submit evidence that the home was relocated in accordance with the requirements of the Texas Department of Transportation.

(f) When the seller files an application for statement of ownership and location for a used manufactured home that is not in a retailer's inventory, the seller shall also file with the department a statement from the Tax Assessor Collector that there are no personal property taxes due on the manufactured home which may have accrued on each January 1 that falls within 18 months prior to the date of the sale.

(g) If the seller of the manufactured home to a consumer for residential use fails to file with the department the application for the issuance of a statement of ownership and location and the appropriate filing fee within forty-five (45) days of the date of the sale, the department may assess a penalty of at least ONE HUNDRED DOLLARS ($100.00). The department shall have the authority to enforce the collection of any penalty from the seller through judicial means. The department shall place on the application for the statement of ownership and location the following legend in a clear and conspicuous manner:

THE FILING OF AN APPLICATION FOR A STATEMENT OF OWNERSHIP AND LOCATION LATER THAN FORTY-FIVE (45) DAYS AFTER THE DATE OF A SALE TO A CONSUMER FOR RESIDENTIAL USE MAY RESULT IN A PENALTY OF AT LEAST ONE HUNDRED DOLLARS ($100.00) OR MORE.

SECTION 19. Section 1201.206, Occupations Code, is amended by adding Subsection (h) to read as follows:

(h) When a properly completed notice of installation on the department's promulgated form is filed that involves a secondary move, it must be accompanied by and either:

(1) one true and correct copy of the original notice of installation; or

(2) a certification that a true and correct copy of the notice of installation, has been provided to the chief appraiser for the county in which the home was installed. The delivery of the copy of the notice may be accomplished by either certified mail or by electronic mail of the electronically reproduced document in a commonly readable format.

If the method specified is subsection(2) above is used to report the installation, the department may adopt a discounted fee for the filing of the notice of installation.

(i) In addition to providing each tax assessor-collector with the monthly report required by Section 1201.220, the department shall provide ,upon request, a tax assessor-collector with one copy of any requested notice of installation.

SECTION 20. Section 1201.207 (c), Occupations Code is amended to read as follows:

(c) Except with respect to any change in use, but subject to Section 1201.2075, if the department has issued a statement of ownership and location for a manufactured home, the department may issue a subsequent statement of ownership and location for the home only if all parties reflected in the department's records as having an interest in the manufactured home give their written consent or release their interest, either in writing or by operation of law. Once the department issues a statement of ownership and location, the department shall not alter the record of the ownership or lien status of a manufactured home for any activity occurring prior to the issuance of the statement of ownership and location without either the written permission of the owner of record for the manufactured home or court order.

SECTION 21. Section 1201.207, Occupations Code is amended by adding subsection (d) to read as follows:

(d) Notwithstanding anything herein to the contrary, if the consumer purchases a manufactured home from a licensed retailer in the ordinary course of business, whether or not a statement of ownership and location has been issued for the manufactured home, the consumer is a bona fide purchaser for value without notice and is entitled to ownership of the manufactured home free and clear of all liens as well as a statement of ownership and location reflecting the same upon payment by the consumer of the purchase price to the retailer. If there is an existing lien on the manufactured home perfected with the department, the owner of the lien is entitled to recover the value of the lien from either the retailer or from the Home Owner Recovery Fund, whichever the owner of the lien chooses.

SECTION 22. Section 1201.219(b), Occupations Code, is amended to read as follows:

(b) Except as provided by Subsection (a), a lien on a manufactured home is perfected only by filing with the department the notice of lien on a form provided by the department. The form shall require the disclosure of the original dollar amount of the lien as well as the name and address of the taxpayer that is obligated to pay the taxes. The department shall disclose on its web site (1)the date of each lien filing, (2) the original amount of the lien claimed by each filing and (3) that the dollar amount shown does not include additional sums including interest, penalties and attorney fees. The recordation of a lien with the department is notice to all persons that the lien exists. Except as expressly provided by Chapter 32, Tax Code, a lien recorded with the department has priority, according to the chronological order of recordation, over another lien or claim against the manufactured home.

SECTION 23. Section 1201.352, Occupations Code, is amended by adding (d) to read as follows:

(d) Within 30 days after the installation of the home, the retailer shall deliver to the consumer a copy of the warranty given by the licensed installer.

SECTION 24. Section 1201.353, Occupations Code, is amended to read as follows:

(a) The consumer shall give written notice to the manufacturer, installer or retailer, as applicable, of a need for warranty service or repairs.

(b) Written notice to the department is notice to the manufacturer, installer or retailer.

SECTION 25. Section 1201.354, Occupations Code, is amended to read as follows:

The manufacturer, installer or retailer, as applicable, shall take appropriate corrective action within a reasonable period as required by department rules to fulfill the written warranty obligation.

SECTION 26. Section 1201.355, Occupations Code, is amended to read as follows:

(a) If the manufacturer, installer or retailer does not provide the consumer with proper warranty service, the consumer may, at any time, request the department to perform a consumer complaint home inspection. The department may not charge a fee for the inspection.

(b) On payment of the required inspection fee, the manufacturer, installer or retailer may request the department to perform a consumer complaint home inspection if the manufacturer, installer or retailer:

(1) believes the consumer's complaints are not covered by the warranty of the manufacturer, installer or retailer, as applicable;

(2) believes that the warranty service was properly provided; or

(3) disputes responsibility concerning the warranty obligation.

(c) The department shall perform a consumer complaint home inspection not later than the 30th day after the date of receipt of a request for the inspection.

SECTION 27. Section 1201.356, Occupations Code, is amended to read as follows:

(a) Not later than the 10th day after the date of a consumer complaint home inspection, the department shall send a written report and any order to the consumer, manufacturer, installer and retailer by certified mail, return receipt requested.

(b) The report shall specify:

(1) each of the consumer's complaints; and

(2) whether the complaint is covered by either the manufacturer's, installer or retailer's warranty and, if so, which of those warranties.

(c) The director shall issue to the manufacturer, installer or retailer an appropriate order for corrective action by the manufacturer, installer or retailer, specifying a reasonable period for completion of the corrective action. On new manufactured homes, both the installer and retailer are responsible for the warranty of installation. If the department determines that a complaint is covered by the installation warranty, the director shall issue the order to the installer for the corrective action. If the installer fails to perform the corrective action, the installer shall be subject to the provisions of Section 1201.357 of the Occupations Code. In that instance, the director shall issue the same order for corrective action to the retailer with a new time frame for compliance. If the retailer is compelled to perform corrective action because of the failure of the installer to comply with the director's order, the retailer may seek reimbursement from the installer. If the installer does not pay the reimbursement within 30 days, the retailer may seek reimbursement from the bond of the installer.

(d) The department may issue an amended report and order if all parties receive notice of and are given an opportunity to respond to that report and order. The amended report and order supersede the initial report and order.

(e) The manufacturer, retailer, or installer shall comply with the report and order of the director.

SECTION 28. Section 1201.357, Occupations Code, is amended to read as follows:

(a) If the manufacturer, installer or retailer, as applicable, fails to provide warranty service within the period specified by the director under Section 1201.356, the manufacturer, installer or retailer must show good cause in writing as to why the manufacturer, installer or retailer must show good cause in writing as to why the manufacturer, installer or retailer failed to provide the service.

(b) If the manufacturer, installer or retailer, as applicable, fails or refuses to provide warranty service in accordance with the department order under Section 1201.356, the director shall hold a hearing at which the manufacturer, installer or retailer must show cause as to why the manufacturer's, installer's or retailer's license should not be suspended or revoked.

(c) If the manufacturer, installer or retailer is unable to provide warranty service in accordance with the department order under Section 1201.356 as a result of an action of the consumer, the manufacturer, installer or retailer must make that allegation in the written statement required by Subsection (a). The department shall investigate the allegation, and if the department determines that the allegation is credible, the department shall issue a new order specifying the date and time of the proposed corrective action. The department shall send the order to the consumer and the manufacturer, installer or retailer, as applicable, by certified mail, return receipt requested. If the consumer refuses to comply with the department's new order, the manufacturer, installer or retailer, as applicable:

(1) is discharged from the obligations imposed by the relevant department orders;

(2) has no liability to the consumer; and

(3) is not subject to an action by the department for failure to provide warranty service.

SECTION 29. Section 1201.358, Occupations Code, is amended to read as follows:

(a) Failure by the manufacturer, installer or retailer to show good cause under Section 1201.357(a) is a sufficient basis for suspension or revocation of the manufacturer's, installer's or retailer's license.

(b) If after the hearing under Section 1201.357(b), the director determines that the order under Section 1201.356 was correct in the determination of the warranty obligation of the manufacturer, installer or retailer, failure or refusal by the manufacturer, installer or retailer to comply with the order is a sufficient cause for suspension or revocation of the manufacturer's, installer's or retailer's license. If the director determines that the order was incorrect regarding the obligation, the director shall issue a final order stating the correct obligation and the right of the manufacturer, installer or retailer to indemnification from the other.

(c) The director may issue an order:

(1) directing a manufacturer, installer or retailer whose license is not revoked and who is not out of business to perform the warranty obligation of a manufacturer, installer or retailer whose license is revoked or who is out of business; and

(2) giving the manufacturer, installer or retailer performing the obligation the right of indemnification against the other.

(d) A manufacturer, installer or retailer entitled to indemnification under this section is a consumer for purposes of Subchapter I and may recover actual damages and attorney's fees from the trust fund.

SECTION 30. Section 1201.401, Occupations Code, is amended to read as follows:

Manufactured Homeowners' Recovery [Trust] Fund

The manufactured homeowners' recovery fund is an account [in the general revenue fund] held in trust for carrying out the specific purposes of the fund.

SECTION 31. Section 1201.551(a)(3), Occupations Code, is amended to read as follows:

(3) failed repeatedly to [timely] file with the department [provide to a consumer an] completed applications for a statement of ownership and location within forty five (45) days of either the date of the sale of a manufactured home as required by 1201.206 or the date of the installation, whichever comes later [and any information necessary to complete the application]:

SECTION 32. Section 1201.605, Occupations Code, is amended by adding Subsection (c), (d), (e), (f), (g) and (h) to read as follows:

(c) In addition to all of its other authority, for each violation of Subsection (a) above, the board may assess against a licensee who either fails to take action required by this Chapter or takes an action prohibited by this Chapter, an administrative penalty in an amount not to exceed:

(1) $1,000 for the first violation;

(2) $2,000 for the second violation; and

(3) $4,000 for each subsequent violation.

(d) The board may assess against any person who is not a licensee under this Chapter, who either fails to take action required by this Chapter or takes an action prohibited by this Chapter, an administrative penalty not to exceed $10,000 for each violation of this Chapter and:

(1) reasonable attorney's fees;

(2) administrative costs;

(3) witness fees;

(4) investigative costs, and;

(5) deposition expenses.

(e) A person who is not exempt under this chapter and who acts as a manufacturer, broker, installer, retailer or salesperson without first obtaining a license required under this chapter commits an offense. An offense under this subsection is a Class B misdemeanor. A second or subsequent conviction for an offense under this subsection shall be punished as a Class A misdemeanor.

(f) A person who received money, or the equivalent of money, as a fee or profit because of or in consequence of the person acting as a manufacturer, broker, installer, retailer or salesperson without an active license or being exempt under this chapter is liable for damages in an amount that is not less than the amount of the fee or profit received and not to exceed three times the amount of the fee or profit received, as may be determined by the court. An aggrieved person may recover damages under this subsection in a court.

(g) If the director has reasonable cause to believe that a person who is not licensed or exempt under this chapter has engaged in an act or practice for which a license is required under this chapter, the director may issue without notice and hearing an order to cease and desist from continuing a particular action or an order to take affirmative action, or both, to enforce compliance with this chapter. The order shall contain a reasonably detailed statement of the facts on which the order is made. The order may assess an administrative penalty in an amount not to exceed $1,000 per day for each violation and may require a person to pay to a consumer any compensation received by the person from the consumer in violation of this chapter. If a person against whom the order is made requests a hearing, the director shall set and give notice of a hearing before the director or a hearings officer. The hearing shall be governed by Chapter 2001, Government Code. An order under this subsection becomes final unless the person to whom the order is issued requests a hearing not later than the 30th day after the date the order is issued.

(h) If a hearing has not been requested under Subsection (e) not later than the 30th day after the date the order is made, the order is considered final and not appealable. The director, after giving notice, may impose against a person who violates a cease and desist order, an administrative penalty in an amount not to exceed $1,000 for each day of a violation. In addition to any other remedy provided by law, the director may institute in district court a suit for injunctive relief and to collect the administrative penalty. A bond is not required of the director with respect to injunctive relief granted under this section. A penalty collected under this subsection shall be deposited in the fund.

SECTION 33. Section 347.254 is amended by adding (d) to read as follows:

(d) The escrow requirements of Subsection (a) does not apply if the consumer has established an escrow account with the collector pursuant to Section 31.072 of the Tax Code.

SECTION 34. Section 347.403, Finance Code, is amended to read as follows:

Sec. 347.403. AMOUNTS THAT MAY BE RECOVERED BY REAL PROPERTY OWNER. In addition to the recovery of the rental charges from the tenant, the owner of real property who is required to retain legal counsel to recover the amounts subject to the possessory lien under Section 347.402 is entitled to recover from the tenant:

(1) other actual damages;

(2) attorney's fees; and

(3) court costs.

The owning of a security interest in a manufactured home does not create an obligation of the creditor to pay rental of real property on which the home is located nor any other damages solely because of the existence of the security interest.

If the owner of a security interest in a manufactured home takes no action with regard to the manufactured home, the owner of the security interest shall not be liable to either the owner of the real property or the owner of the manufactured home for any damages accruing with regard to real property on which the manufactured home is located. The creation of the possessory lien as described in Section 347 shall take precedence over all perfected liens on the manufactured home other than tax liens. As to all parties other than the owner of the manufactured home and any person that executed the lease agreement for the real property, the owner of the real property shall look exclusively to the guarantor, co-signer, other collateral and the sale of the manufactured home to recover the owner's damages related to the rental of the real property on which the manufactured home is located.

SECTION 35. This Act takes effect immediately if it receives a vote of two-thirds of all the members elected to each house, as provided by Section 39, Article III, Texas Constitution. If this Act does not receive the vote necessary for immediate effect, this Act takes effect September 1, 2007.