| TO: | Honorable Troy Fraser, Chair, Senate Committee on Business & Commerce |
| FROM: | John S. O'Brien, Director, Legislative Budget Board |
| IN RE: | HB1460 by Haggerty (Relating to licensing, acquisition, and regulation of manufactured housing; providing penalties.), As Engrossed |
| Fiscal Year | Probable Net Positive/(Negative) Impact to General Revenue Related Funds |
|---|---|
| 2008 | ($138,388) |
| 2009 | ($76,975) |
| 2010 | ($76,975) |
| 2011 | ($76,975) |
| 2012 | ($76,975) |
| Fiscal Year | Probable Savings/(Cost) from GENERAL REVENUE FUND 1 |
Change in Number of State Employees from FY 2007 |
|---|---|---|
| 2008 | ($138,388) | 1.5 |
| 2009 | ($76,975) | 1.0 |
| 2010 | ($76,975) | 1.0 |
| 2011 | ($76,975) | 1.0 |
| 2012 | ($76,975) | 1.0 |
The bill would amend the Occupations Code, the Government Code, and the Tax Code, relating to the taxation, licensing, acquisition, and regulation of manufactured housing.
The bill would amend Chapter 1201 of the Occupations Code to expand the definition of a manufactured home or manufactured housing, including new or used homes. The bill would raise the amount of bond required for a rebuilder license to $50,000 (from $30,000) and for an installer's license to $25,000 (from $10,000) and add a new $50,000 bond for each additional branch location of a retailer.
The bill would require a retailer to surrender the original manufacturer's statement of origin at the first retail sale and apply for a statement of ownership and location within 60 days. Failing to meet the deadline could lead to an administrative penalty of not less than $100 against the seller.
Persons whose license was revoked, suspended, or denied could request a hearing conducted by the State Office of Administrative Hearings. Penalties would be forwarded to TDHCA for deposit to an escrow account.
The bill would amend Chapter 2306 of the Government Code relating to the criteria TDHCA would consider in determining the amount of an administrative penalty assessed against a housing sponsor or development owner.
The bill would amend Chapter 11 of the Tax Code to allow a person seeking a homestead exemption to provide a copy of the current title page for a manufactured home from the TDHCA website or other computer records of TDHCA. An exemption could be obtained regardless of the owner's election to treat the home as real property or personal property or if the home was listed with or separately from the real property.
The bill would limit the time a tax lien could be recorded on a home to no later than six months, following the end of a calendar year for which a tax was owed. A properly recorded tax lien could be enforced, but not against the owner of a new home when acquired from a retailer in the ordinary course of business. Title could not be transferred on a home until all tax liens perfected on a home were filed in a timely manner with TDHCA and all personal property taxes accruing on each January 1 within 18 months of the date of the sale were extinguished or satisfied and released.
The bill would place limits on the use of tax warrants in foreclosure, and it would give taxpayers the right to designate payments to a tax year. If a home had been omitted from a tax roll at any time before the second anniversary of the date taxes were due, a taxing unit could file a tax lien no later than the 150th day after the date the tax became delinquent.
The bill would require a taxing unit to provide a prospective buyer of a home with an estimate of personal property taxes due, accept payment in escrow and certify that information to TDHCA, apply payments when due, and notify a new owner of any liability that might be due.
The bill would raise the amount of bond required from an applicant for a rebuilder license to $50,000 (from the current $30,000) for an installer's license to $25,000 (from the current $10,000) and add a new $50,000 bond for each additional branch location of a retailer. There would be no fiscal impact to the state for this change.
The changes relating to qualification for the homestead exemption and the informational and other requirements imposed on taxing units cannot be estimated.
Currently, the Manufactured Housing Division of the Texas Department of Housing and Community Affairs has no staff attorneys and the Office of the Attorney General’s (OAG) Administrative Law Division provides all legal services for general counsel, enforcement, and administrative law litigation. The bill creates numerous new rights to contested case hearings. The new provisions in the bill requiring a licensee against whom administrative action is taken to request a contested case hearing (rather than the Department being required to provide one whether requested or not) is anticipated to somewhat offset the total increase in contested case hearings. However, the need for an additional attorney to handle enforcement would still be required (as reflected in the filed version of HB 1460) due to the added provisions in the bill.
The new rule making requirements are anticipated to require additional provision of general counsel services. Additionally, implementation of the bill is anticipated to require additional provision of general counsel services based on historical use of these services. General counsel services are reduced from the filed version of HB 1460 since the committee substitute is less complicated. The Department will require less counsel because the provisions relating to tax lien recordation and enforcement have been removed. Those provisions were anticipated to be difficult to interpret and advise the Department. Nonetheless, this bill still requires new agency rule making and will require additional counsel to implement in the first year.
With the passage of this bill, the OAG would require an appropriation and additional FTEs beyond the FTE cap for the FY 2008-2009 biennium. The OAG’s Administrative Law Division would require ½ FTE assistant attorney general (AAG) IV in FY 2008 only for general counsel work related to adoption of the new rules and implementation of the bill. In fiscal years 2008-2012, 1.0 FTE (AAG II) would be needed for enforcement. The OAG would require an appropriation and additional FTEs beyond the FTE cap for the FY 2008-2009 biennium.
The fiscal impact to the OAG in fiscal year 2008 is $138,388 and $76,975 in each fiscal year 2009-2012 thereafter. The total cost over the five-year period is $446,288. The method of finance is General Revenue Fund (Fund 0001).
| Source Agencies: | 302 Office of the Attorney General, 304 Comptroller of Public Accounts, 332 Department of Housing and Community Affairs
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| LBB Staff: | JOB, JRO, SD, SJS
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