TITLE 10.COMMUNITY DEVELOPMENT

Part 1. TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS

Chapter 80. MANUFACTURED HOUSING

The Texas Department of Housing and Community Affairs (Department) proposes new §80.124, and §80.136 and amendments to §§80.11, 80.20, 80.51, 80.52, 80.54, 80.55, 80.56, 80.62, 80.63, 80.66, 80.119, 80.121, 80.122, 80.123, 80.128, 80.130, 80.132, 80.135, 80.180, 80.202, 80.204, 80.205, 80.207, and 80.208 concerning the Manufactured Housing Rules.

Section 80.11 is amended to add new definitions and revise existing definitions related to manufactured housing.

Section 80.20 is amended to provide clarification of required fees for installation reports, seals, education fee, reinspection of consumer's home and habitability inspections.

Section 80.51 is amended because a provision was needed for manufacturers to file their installation manuals electronically, if they desired, and a sentence was reworded so that an installer will not mistakenly believe that an engineer could approve a wind zone I home, built after September 1, 1997, for installation in a wind zone II county.

Section 80.52(a) is amended to more clearly describe permanent foundation system characteristics. Section 80.52(b) is amended to explain how manufactured homes installed and acquired before January 1, 2002 may become real estate by borrower/lender or homeowner certifications. If a certification will be by the homeowner only, the certification must show compliance with local ordinances if applicable. This rule will help avoid the cancellation of home titles for homes installed with conditional use zoning permits. Lenders may know this requirement, but a consumer probably does not.

Section 80.54 is amended to clarify standards for installation of manufactured homes. The site preparation responsibilities are amended in §80.54(b) because the responsibility for site preparation and proper drainage will differ depending on specific circumstances. For example, when a consumer contracts to have the home installed on a lot owned by the consumer, the consumer has the site preparation and drainage responsibility; however, the retailer will be responsible if the home is installed before it is sold. Also, §80.54(b) is amended to allow installers to follow instructions for the home, specifications of an approved stabilization system, or the generic standards. Section 80.54(d)(6) is amended to decrease the required size of shims from at least 4-inches to a minimum of 3-inches because several shim producers reported that they do not make a 3.5 or 4-inch wide shim.

Figure: 10 TAC §80.54(d)(4). Notation number 5 is added to Table 3A referencing the correct American Society for Testing and Materials (ASTM) standard and defines actual block dimensions that are 3/8 inch less than the nominal dimensions.

Figure: 10 TAC §80.54(d)(6). Notation number 1 and 2 are revised because inspectors need a reference to cite after observing damaged support system components. The specifications in Pier A are updated because the present wording is incorrect and conflicts with the drawing. Plate size is updated in Pier A and B drawings because installers need another plate size to make up a pier height.

Figure: 10 TAC §80.54(d)(6)(C). Updated number 1 in the notation section in Figure 3C because installers need a method when the front face of the perimeter pier is flush with the perimeter joist.

Section 80.55(b) is amended for inspectors to have a way to identify conforming tie-down straps when inspecting the installation of manufactured homes. Section 80.55(d) is amended for installers to have a standard for the number of longitudinal ties per end when cross-drive rock anchors are used in difficult soil. Section 80.55(e) is amended to correct an inaccurate reference relating to standards for the installation of manufactured homes. Section 80.55(f) is amended to more clearly describe the requirements for longitudinal ties.

Figure: 10 TAC §80.55(c)(2). Updated number 1 in the notation section regarding placement of stabilizing plates because the illustration does not describe the diameter of the concrete collar.

Figure: 10 TAC §80.55(d)(2). Increased the maximum vertical distance in the wind zone I table up to a pier height of 80 inches and revised numbers 1 through 9 in the notation section for clarity.

Figure: 10 TAC §80.55(d)(3). The revisions are non-substantive (only changed the formatting).

Figure: 10 TAC §80.55(e)(1). Revised Table 5a concerning the maximum spacing for diagonal ties per side of the assembled unit by increasing the maximum vertical distance in the table up to a pier height of 80 inches and revised numbers 1 through 9 in the notation section for clarity.

Figure: 10 TAC §80.55(f)(4). The revisions are non-substantive (only changed the formatting).

Figure: 10 TAC §80.55(f)(6)(D). Revised figure 1 and 2 notations in the longitudinal ties drawing for clarify.

Section 80.56(a) is amended to clarify the types of material that are appropriate air and water infiltration barriers. Section 80.56(d) is amended to correct inaccurate references in paragraphs (1) and (4).

Figure: 10 TAC §80.56(a)(4). Relocated drawing from §80.56(a)(3) and made non-substantive revisions (only changed the formatting).

Figure: 10 TAC §80.56(c)(2). Revised the text in the endwall connections drawing for clarity.

Figure: 10 TAC §80.56(d)(4). The current reference is incorrect in the roof connection drawing.

Figure: 10 TAC §80.56(h)(1). The revisions are non-substantive (only changed the formatting).

Section 80.62(a) is amended to explain that we will accept certification reports that are smaller than 8.5 by 11 inches. Amendments to §80.62(d) and (e) are needed because the present wording is not clear and the referenced codes have been revised.

Section 80.63(c) is amended to include preservative treated wood components as approved materials as long as they conform to standards set by the American Wood Preserver's Association. Amendment to §80.63(e) updates the publication reference that sets standards for certain types of stabilizing systems.

Section 80.66(e) is amended to explain that a damaged home may be refurbished to its original structural configuration, if not damaged enough to be declared salvage.

Section 80.119(c) is amended to reflect the updated cite referenced in the Standards Act. Section 80.119(f) is deleted because the procedure is no longer used. Section 80.119(f) is amended to delete the procedures for the obsolete Installation Report (Form T) and add a procedure for the Notice of Installation Affidavit. Section 80.119(g) is amended to describe the procedures when the installer selects the department, a local government, or other inspectors to inspect the permanent foundation before concealment. Section 80.119(h) is amended to describe the procedure when the installer installs a manufactured home as personal property on land not owned by the consumer.

Section 80.121(a) is amended to require the retailer to at least summarize the contents of the warranties to the consumer before the contract or binding agreement is signed. Section 80.121(a) and (b) is amended to describe the retailer record keeping responsibilities. Section 80.121(c) is added so that the department may prosecute retailers who knowingly sell new or used manufactured homes to consumers in unsuitable zones.

Section 80.122(a) is amended to expound on security requirements that are also mentioned in the Standards Act.

Section 80.123(a) - (c) are amended to add the requirement to identify the corporate business name and corporate structure. Section 80.123(d) is amended because the rebuilders are considered licensed instead of certified. Section 80.123(e) is amended to require Articles of Incorporation or Assumed Name Certificate and correct a section reference. Section 80.123(f) is amended to limit the time that a temporary installer's license is valid to 30 calendar days and to allow a homeowner to install their homes by the generic installation standards. Section 80.123(g) is amended to clarify the requirements for a salesperson's license, identifies who may act as a salesperson and allows the department to track the salespersons that change their employer. Section 80.123(h) is amended to prevent a duplicate license. Section 80.123(j) is added to outline the requirements for a nonprofit educational institution or foundation to be approved for conducting a training program as sanctioned by the Standards Act, §7(q). Section 80.123(k) is added because a non-compliance history is an important factor in determining whether to deny, suspend or revoke a license. Section 80.123(k) is amended to prevent license renewals from being in a pending status indefinitely. Section 80.123(n) is amended to delete information that is no longer necessary.

New §80.124 details requirements for retaining deposits and down payments. The new rule is necessary to prevent improper deposit and down payment practices.

Section 80.128 is amended to fully define department.

Section 80.130(a) - (c) are amended to describe in more understandable terminology the requirements for delivery of warranty.

Section 80.132 is amended to comply with current consumer complaint requirements in the Standards Act and the Federal Manufactured Home Procedural and Enforcement Regulations concerning procedures for handling consumer complaints.

Section 80.135(a) is amended to clarify that a salvaged home or a home that is not habitable may not be auctioned to a consumer as a dwelling.

New §80.136 is added to describe the property classification procedures for manufactured homes acquired and installed after January 1, 2002.

Section 80.180(b)(1) is amended regarding the formaldehyde notice requirements to delete information that is covered in new §80.124 (relating to Deposits and Down Payments).

Section 80.202(a) is amended to clarify that there is a fee for reissuance of a certificate of attachment. Also that cancellations and quick titles are separate processes. Cancellations involve a unique process that cannot be accomplished within the quick title timeframe. Therefore, we need to require that quick title applications arrive by overnight mail or delivered in-person because it is impossible to ferret out the quick title applications when submitted by regular mail. Section 80.202(b) is amended to add that a fee of $35 is required for reissuance of a certificate of attachment. Section 80.202(c) is amended to add that the department will accept company or business firm checks in payment of the fee for issuance of a license. Section 80.202(d) is amended to omit the fee amount of $35 because the fee could be different.

Section 80.204(b) is amended to lessen the restriction that may have caused the department to reject more title applications for lack of completeness than necessary. Section 80.204(b)(5) describing the right of survivorship is deleted because it is outlined in the Standards Act. Section 80.204(b)(6) explains that the fees will also be submitted along with the application to the Austin headquarters for processing. Section 80.204(c) is amended to require that a map be included in the installation information furnished to the department. Section 80.204(d), describing the information found on a document of title, is amended to omit the space available for the signature of the purchaser because the title is no longer transferable in this manner.

Section 80.205(c) is amended to clarify filing of the inventory-finance security form. Section 80.205(d) is amended because the department can consider other documents for release of lien other than Form B (Release of Lien or Foreclosure of Lien). Section 80.205(g) is deleted because the right of survivorship is outlined in the Standards Act.

Section 80.207(a) is amended to clarify when a canceled document of title may be reinstated.

Section 80.208(b) and (c) are deleted because the four-part form format is no longer used for recording tax liens. The updated format coincides with the Standards Act.

Bobbie Hill, Director of the Manufactured Housing Division of the Texas Department of Housing and Community Affairs, has determined that for the first five-year period that these sections as proposed are in effect there will be no fiscal implications for state or local government as a result of enforcing or administering these sections.

Ms. Hill also has determined that for each year of the first five years the sections as proposed are in effect the public benefit as a result of enforcing the sections will be: clarification of rules that will increase compliance; improved quality of home installation; improved consumer complaint procedures; and increased safety and durability of homes. The public benefit/probable economic costs for each section of the rules is as follows:

The amendments of §§80.11, 80.51, 80.52, 80.54 are expected to have no economic costs to persons/businesses who are required to comply with these sections as proposed.

The amendments of §80.20 concerning increased licensing fees are expected to have economic costs of $150 per year for each license holder with three licenses.

The amendment of the Act, effective January 1, 2002, says a manufactured home is considered permanently attached to real property if the home is secured to a foundation and connected to a utility. Therefore, the amendment to the Act causes more home installations to be defined as permanent and more $100 reporting fees are required.

The amendment of §80.55(b)(1) will benefit consumers by increasing the quality and safety of the home installation by requiring the tie-down straps to be marked every five feet with the marking described by the certifying engineer or architect. There will also be a benefit to the inspectors because they need a way to identify conforming tie-down straps when inspecting the installation of manufactured homes. The cost impact on licensed installers will be small, since installers will buy strapping from producers who have always produced marked strapping. Producers who do not presently produce strapping marked every five feet will have to spend money on machinery to mark strapping, if the producers want to sell strapping to licensed installers.

The amendments of §80.55(d)(2), (d)(4)(A) and (f) will benefit consumers because the proposed revisions to the generic standards will require longitudinal ties for all homes installed in Wind Zone I, which will increase the stability of the home installation. For most homes, there will be four longitudinal ties per home section. The anchor, tie, and associated installation labor cost about $20 per longitudinal tie. The cost impact for a home section will be about $80.

The amendments of §80.55(e)(1) and (f) will benefit consumers because installers will be required to use from four to six longitudinal ties for each home section installed in Wind Zone II. The anchor, tie, and associated installation labor cost about $20 per longitudinal tie. The cost impact for a home section will be about $80 to $120.

The amendments of §§80.56, 80.62, 80.63, 80.66, 80.119, 80.121, and 80.122 are expected to have no economic costs to persons/businesses who are required to comply with these sections as proposed.

The amendment of §80.123 will benefit license holders by clarifying the licensing requirements. There may be a minimal cost to the manufacturer, retailer, and broker to comply with §80.123(a), (b) and (c)(1) because they must obtain the Article of Incorporation or Assumed Name Certificate for submitting with their license application.

New §80.124 will benefit consumers because it will help to prevent improper deposit and down payment practices. There are expected to be no economic costs to persons/businesses who are required to comply with the section as proposed.

The amendments of §§80.130, 80.128, 80.132, 80.135, 80.180, 80.202, 80.204, 80.205, 80.207, and 80.208 are expected to have no economic costs to persons/businesses who are required to comply with these sections as proposed.

New §80.136 is expected to have no economic costs to persons/businesses who are required to comply with these sections as proposed.

Comments may be submitted to Ms. Bobbie Hill, Director of the Manufactured Housing Division, of the Texas Department of Housing and Community Affairs, P.O. Box 12489, Austin, Texas 78711-2489 or by e-mail at the following address bhill@tdhca.state.tx.us. The deadline for comments is 30 days after publication in the Texas Register .

Subchapter B. DEFINITIONS

10 TAC §80.11

The amended section is proposed under the Texas Manufactured Housing Standards Act, Texas Civil Statutes, Article 5221f, §9, which provides the department with authority to amend, add, and repeal rules governing the Manufactured Housing Division of the department and under Texas Government Code, Chapter 2306, §2306.603, which authorizes the director to adopt rules as necessary to administer and enforce the manufactured housing program through the Manufactured Housing Division.

No other statute, code, or article is affected by the proposed amendments.

§80.11.Definitions.

The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise:

(1) - (5) (No change.)

(6) Board--Governing Board of the Manufactured Housing Division of the Texas Department of Housing and Community Affairs.

(7) [ (6) ] Business use--Any use other than for dwelling purposes.

(8) [ (7) ] Calendar days--Includes every day on the calendar.

(9) [ (8) ] Certificate of Attachment [ to Real Estate ]--A certificate issued by the department to the person who surrenders the Manufacturer's Certificate of Origin [ manufacturer's certificate of origin ] or document of title when the home has been permanently affixed to real estate.

(10) [ (9) ] Coastline--The shoreline that forms the boundary between the land and the Gulf of Mexico or a bay or estuary connecting to the Gulf of Mexico that is more than five miles wide.

(11) Covenant Disclosure Notice Affidavit--Disclosure to consumer by retailer and lender required pursuant to §21 of the Standards Act.

(12) [ (10) ] Credit document--The credit sale contract or the loan instruments including all the written agreements between the consumer and creditor that relate to the credit transaction.

(13) [ (11) ] Creditor--A person involved in a credit transaction who:

(A) extends or arranges the extension of credit; or

(B) is a retailer or broker as defined in the Standards Act and participates in arranging for the extension of credit.

(14) Creditor-Lender--A person that is involved in extending or arranging for credit in inventory financing secured by manufactured housing.

(15) [ (12) ] Custom designed stabilization system--An anchoring and support system that is not an approved method as prescribed by the state generic standards, manufacturer's installation instructions, or other systems pre-approved by the department.

(16) [ (13) ] DAPIA--The Design Approval Primary Inspection Agency.

(17) [ (14) ] Defect--A failure to comply with an applicable federal manufactured home safety and construction standard that renders the manufactured home or any part or component thereof not fit for the ordinary use for which it was intended, but does not result in an unreasonable risk of injury or death to occupants of the affected manufactured home (FMHCSS §3282.7(j)).

(18) [ (15) ] Department--The Manufactured Housing Division of the Texas Department of Housing and Community Affairs (TDHCA).

(19) Department inspector--An inspector who is an employee of the Manufactured Housing Division of the Texas Department of Housing and Community Affairs or an inspector who is an employee of an entity performing inspection services under contract with the department.

(20) Deposits--Money or other consideration given by a consumer to a retailer, salesperson, or agent of a retailer to hold a home in inventory for subsequent purchase or to special order a home for subsequent purchase.

(21) [ (16) ] Diagonal tie--A tie intended to primarily resist horizontal forces, but which may also be used to resist vertical forces.

(22) [ (17) ] Director--The Executive Director of the Manufactured Housing Division of the Texas Department of Housing and Community Affairs (TDHCA).

(23) Document of Title--The instrument issued by the department to reflect the ownership of a manufactured home and any liens on such home as provided by the records of the department.

(24) Down Payment--An amount, including the value of any property used as a trade-in, paid to a retailer to reduce the cash price of goods or services purchased in a credit sale transaction.

(25) [ (18) ] Dwelling unit--One or more habitable rooms which are designed to be occupied by one family with facilities for living, sleeping, cooking and eating.

(26) [ (19) ] FMHCSS--Federal Manufactured Home Construction and Safety Standards that implement the National Manufactured Home Construction and Safety Standards Act of 1974, 42 USC 5401, et seq., and means a reasonable standard for the construction, design, and performance of a manufactured home which meets the needs of the public including the need for quality, durability, and safety.

(27) [ (20) ] Footing--That portion of the support system that transmits loads directly to the soil.

(28) [ (21) ] Ground anchor--Any device at the manufactured home site designed to transfer manufactured home anchoring loads to the ground.

(29) [ (22) ] HUD-Code manufactured home--A structure constructed on or after June 15, 1976, according to the rules of HUD, transportable in one or more sections, which, in the traveling mode, is eight body feet or more in width or 40 body feet or more in length, or, when erected on site, is 320 or more square feet, and which is built on a permanent chassis and designed to be used as a dwelling with or without a permanent foundation when connected to the required utilities, and includes the plumbing, heating, air-conditioning, and electrical systems. The term does not include a recreational vehicle as that term is defined by 24 CFR, §3282.8(g).

(30) [ (23) ] Imminent safety hazard--A hazard that presents an imminent and unreasonable risk of death or severe personal injury that may or may not be related to failure to comply with an applicable federal manufactured home construction and safety standard (FMHCSS §3282.7(q)).

(31) [ (24) ] Independent testing laboratory--An agency or firm that tests products for conformance to standards and employs at least one engineer or architect licensed in at least one state.

(32) [ (25) ] Installation information--A term used to describe the reports used to inform the department of information needed to perform installation inspections (includes Notice of Installation Affidavit [ "Affidavit of Installation" and "Form E--Statement of Home Location" ]).

(33) [ (26) ] IPIA--The Production Inspection Primary Inspection Agency which evaluates the ability of manufactured home manufacturing plants to follow approved quality control procedures and/or provides ongoing surveillance of the manufacturing process.

(34) Lien--A security interest that is created by any kind of lease, conditional sales contract, deed of trust, chattel mortgage, trust receipt, reservation of title or other security agreement of whatever kind or character, if an interest, other than an absolute title, is sought to be held or given in a manufactured home, and any lien on a manufactured home that is created or given by the constitution or a statute.

(35) [ (27) ] Main frame--The structural components on which the body of the manufactured home is mounted.

(36) [ (28) ] Manufactured home--A HUD-Code manufactured home or a mobile home and collectively means and refers to both.

(37) [ (29) ] Manufactured home identification numbers--For purposes of title records, the numbers shall include the HUD label number(s) and the serial number(s) imprinted or stamped on the home in accordance with HUD departmental regulations. For homes manufactured prior to June 15, 1976, the Texas seal number, as issued by the department, shall be used instead of the HUD label number. If a home manufactured prior to June 15, 1976, does not have a Texas seal, or if a home manufactured after June 15, 1976, does not have a HUD label, a Texas seal shall be purchased from the department and attached to the home and used for identification in lieu of the HUD label number.

(38) [ (30) ] Manufactured home site--That area of a lot or tract of land on which a manufactured home is installed.

(39) [ (31) ] Mobile home--A structure that was constructed before June 15, 1976, transportable in one or more sections, which, in the traveling mode, is eight body feet or more in width or 40 body feet or more in length, or, when erected on site, is 320 or more square feet, and which is built on a permanent chassis and designed to be used as a dwelling with or without a permanent foundation when connected to the required utilities, and includes the plumbing, heating, air-conditioning, and electrical systems.

(40) Notice of Attachment--Notice as defined in §19(l) of the Standards Act that may be filed in property records of the county in which the home is located by a person before department can issue Certificate of Attachment when home is affixed or becomes an improvement to real estate.

(41) Notice of Improvement Attachment--Notice as defined in §19(l) of the Standards Act that must be filed in property records of the county in which the home is located by a title insurance company before department can issue Certificate of Attachment when home is affixed or becomes an improvement to real estate.

(42) [ (32) ] Permanent foundation--A system of supports and securements , including piers, either partially or entirely below grade which is constructed or certified in accordance with the criteria outlined in §80.52(a) and (b) of this title (relating to Permanent Foundation Performance Criteria).

(43) [ (33) ] Permanently affixed , permanently attached, permanently installed or becomes an improvement --Having been anchored to the real estate by attachment to a permanent foundation.

(44) [ (34) ] Rebuild--To make a salvaged manufactured home habitable in accordance with §80.66 of this title (relating to Rebuilding or Repairing a "Salvaged" Manufactured Home).

(45) [ (35) ] Rebuilder--Any person, within the state, who has been licensed [ certified ] by the department to rebuild a salvaged manufactured home, as defined in §8(g) of the Standards Act, [ §8(g), ] in accordance with the rules and regulations of the department.

(46) Refurbish--To make a nonhabitable manufactured home or section habitable by repairing, adding, replacing, modifying, or removing components.

(47) [ (36) ] Serious defect--Any failure to comply with an applicable federal manufactured home construction and safety standard that renders the manufactured home or any part thereof not fit for the ordinary use for which it was intended and which results in an unreasonable risk of injury or death to occupants of the affected manufactured home (FMHCSS §3282.7(gg)).

(48) [ (37) ] Shim--A wedge-shaped piece of cedar, oak, walnut, pecan, gum, ash, hickory, elm, or other comparable hardwood or other accepted material not to exceed one (1) inch vertical (actual) height.

(49) [ (38) ] Stabilizing components--All components of the anchoring and support system such as piers, footings, ties, anchoring equipment, ground anchors, and any other equipment which supports the manufactured home and secures it to the ground.

(50) [ (39) ] Standards Act-- Texas Manufactured Housing Standards Act, Texas Revised Civil Statutes, Article 5221f.

(51) [ (40) ] Support system--A combination of footings, piers, caps and shims that support the manufactured home.

(52) [ (41) ] TDHCA--The Manufactured Housing Division of the Texas Department of Housing and Community Affairs (Department).

[(42) TDHCA inspector--An inspector who is an employee of the department or an inspector who is an employee of an entity performing inspection services under contract with the department.]

(53) [ (43) ] TMHSA--Texas Manufactured Housing Standards Act, Texas Revised Civil Statutes, Article 5221f.

(54) [ (44) ] Used [ manufactured ] home--Any manufactured home (or mobile home) for which a document [ or certificate ] of title has previously been issued by an appropriate agency of any state or which has been occupied .

(55) [ (45) ] Vertical tie--A tie intended to primarily resist the uplifting and overturning forces.

(56) [ (46) ] Wind Zone I--All Texas counties not in Wind Zone II.

(57) [ (47) ] Wind Zone II--Aransas, Brazoria, Calhoun, Cameron, Chambers, Galveston, Jefferson, Kenedy, Kleberg, Matagorda, Nueces, Orange, Refugio, San Patricio, and Willacy counties.

(58) [ (48) ] Working days--Includes every day on the calendar except Saturday, Sunday, and federal and state holidays.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on March 25, 2002.

TRD-200201856

Bobbie Hill

Executive Director, Manufactured Housing Division of TDHCA

Texas Department of Housing and Community Affairs

Proposed date of adoption: May 5, 2002

For further information, please call: (512) 475-2206


Subchapter C. FEE STRUCTURE

10 TAC §80.20

The amended section is proposed under the Texas Manufactured Housing Standards Act, Texas Civil Statutes, Article 5221f, §9, which provides the department with authority to amend, add, and repeal rules governing the Manufactured Housing Division of the department and under Texas Government Code, Chapter 2306, §2306.603, which authorizes the director to adopt rules as necessary to administer and enforce the manufactured housing program through the Manufactured Housing Division.

No other statute, code, or article is affected by the proposed amendments.

§80.20.Fees.

(a) Annual License Fees and Renewal Fees :

(1) $425 [ $375 ] for each manufacturer's plant license;

(2) $275 [ $225 ] for each retailer's sales license;

(3) $275 [ $225 ] for each rebuilder's license;

(4) $175 [ $125 ] for each broker's license;

(5) $175 [ $125 ] for each installer's license; and

(6) $100 [ $50 ] for each salesperson's license.

(b) Installation Fees:

(1) There is a reporting fee of $20 for the installation of each manufactured home which is not installed on a permanent foundation.

(2) There is a reporting fee of $100 for the installation of a manufactured home permanently affixed to real estate or on a permanent foundation.

(3) Installation fees shall be submitted to the department as follows:

(A) When the installation occurs in conjunction with a title transfer, the fee must be submitted to the department along with the application for title and the Notice of Installation Affidavit [ Form E (Affidavit of Installation) ]; or

(B) For secondary moves (when there is no title transfer), the fee must be submitted to the department along with a completed Notice of Installation Affidavit [ Form T (Installation Report) ] within ten (10) working days following the installation date.

(4) (No change.)

(c) (No change.)

(d) Seal Fee: There is a fee of $15 for the issuance of Texas Seals. Any person who sells, exchanges, lease purchases, or offers for sale, exchange, or lease purchase a used HUD-Code manufactured home manufactured after June 15, 1976, that does not have a HUD label affixed, or a used mobile home manufactured prior to June 15, 1976, that does not have a Texas Seal affixed shall file an application to the department for a Texas Seal. The application shall be accompanied by the seal fee of $15 per section made payable to the department.

(e) - (f) (No change.)

(g) Education Fee: Each attendee at the course of instruction in the law and consumer protection regulations for license applicants shall be assessed a fee of $250 [ $125 ]. If a manufacturer requests the training be performed at his or her facility, the manufacturer shall reimburse the department for the actual costs of the training session (educational fee plus actual cost of travel).

(h) Habitability Inspection:

(1) There is a fee of $100 for the inspection of a manufactured home which is to be titled for use as a residence after the title has been previously canceled for business use or to become real estate [ other purposes and has been surrendered ]. The inspection is to determine if the home is habitable as defined by §8 of the Standards Act . The fee shall accompany a Form A to apply for reinstatement of the title along with those documents set forth in §80.207 of this title (relating to Reinstatement of Canceled Documents of Title) [ written request for the inspection ]. The person requesting the inspection for the use change of a manufactured home shall be charged for mileage and per diem incurred by department personnel traveling to and from the location of the manufactured home. The inspector shall advise the consumer of the charges incurred and no title shall be issued until all fees have been paid.

(2) There is a fee of $125 for the plan review and inspection of a salvaged manufactured home which is to be [ has been ] rebuilt to determine if the home is habitable for reinstatement of the [ issuance of a new ] title. The fee shall accompany a written request for the inspection. The rebuilder shall also be charged for mileage and per diem incurred by department personnel traveling to and from the location of the home. See §80.66 of this title (relating to Rebuilding or Repairing a "Salvaged" Manufactured Home). The inspector shall advise the rebuilder of the charges incurred and no title shall be issued until all fees have been paid.

(i) Consumer Complaint Inspection:

(1) (No change.)

(2) There is a fee of $100 for the reinspection of a consumer's home. [ The fee shall be paid by the license holder, party other than the consumer, or the consumer. ] The fee shall be paid by the party deemed responsible by the department.

(j) (No change.)

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on March 25, 2002.

TRD-200201857

Bobbie Hill

Executive Director, Manufactured Housing Division of TDHCA

Texas Department of Housing and Community Affairs

Proposed date of adoption: May 5, 2002

For further information, please call: (512) 475-2206


Subchapter D. STANDARDS AND REQUIREMENTS

10 TAC §§80.51, 80.52, 80.54 - 80.56, 80.62, 80.63

The amended sections are proposed under the Texas Manufactured Housing Standards Act, Texas Civil Statutes, Article 5221f, §9, which provides the department with authority to amend, add, and repeal rules governing the Manufactured Housing Division of the department and under Texas Government Code, Chapter 2306, §2306.603, which authorizes the director to adopt rules as necessary to administer and enforce the manufactured housing program through the Manufactured Housing Division.

No other statute, code, or article is affected by the proposed amendments.

§80.51.Manufactured Home Installation Requirements.

(a) The following tasks are the responsibility of the manufacturer:

(1) Manufacturers shall file with the department copies, in the number specified by the department, of installation instructions approved by the manufacturer's DAPIA. DAPIA approval stamps, engineer or architect approval stamps, and the installation manual effective date shall be on each page of the installation instructions or on the cover pages of bound installation manuals , unless an equivalent method of authentication is used for electronically filed documents .

(2) - (3) (No change.)

(b) - (c) (No change.)

(d) In lieu of the requirements of subsections (b) and (c) of this section, a manufactured home or an identified class of manufactured homes may be installed at a particular area with similar soil properties according to county soil survey or other geotechnical reports in accordance with a custom designed stabilization system drawing that is stamped by a Texas licensed professional engineer or architect. A custom designed stabilization system may or may not meet the definition of a permanent foundation, but must meet the wind loading requirements of zone II in order to be installed in wind zone II, and a copy of the stabilization system drawing must be forwarded to the department along with the installation report. It must be reported on the permanent foundation installation inspection report form and sent to the department at least ten (10) working days prior to the date of construction, along with the required fee, if the bottoms of the footings or piers are embedded more than 24 inches below the finished natural grade or engineered fill.

§80.52.Permanent Foundation Criteria.

(a) The permanent foundation system shall be either:

(1) (No change.)

(2) placed at an adequate depth below grade to prevent structural damage from frost heave [ damage ];

(3) - (6) (No change.)

(7) designed in accordance with accepted engineering practice to resist damage due to decay, insects, and condensation with the underfloor crawl space entirely enclosed with a perimeter foundation, skirting, retaining wall or equivalent. Underfloor access through the perimeter foundation, skirting, retaining wall, or equivalent shall be through a minimum clear opening of 18 inches by 24 inches. The opening shall be located as close as practical to the utilities so fuel, electric, water, and sewer connections are accessible for inspection, service, and repair. The panel or door for the access panel shall not require tools, more than 5 pounds of force, or the operation of more than four devices to remove or open the access panel or door. The panel or door must be easily identifiable or permanently labeled "Access" in 3/4 inch high bold letters. There must be a minimum of 30 inches of clear space directly in front of each access panel or door . A Texas licensed engineer or architect shall stamp and sign each foundation drawing. If the foundation drawing is approved by the DAPIA, the engineer or architect may be licensed in another state; or

(b) In the alternative for a home acquired and installed before January 1, 2002 [ it is ], a permanent foundation is a system which is certified by the consumer/mortgagor and the lender/mortgagee in a real estate loan transaction, or certified by the owner if there is no lien or the lien has been released, as having permanently affixed the structure to the real estate. If the certification is by the owner only, the certification must show compliance with local ordinances if applicable.

§80.54.Standards for the Installation of Manufactured Homes.

(a) (No change.)

(b) Site Preparation Responsibilities and Requirements:

(1) The purchaser is responsible for the proper preparation of the site where the manufactured home (new or used) is to be installed unless the home is installed in a rental community. Except in rental communities, the purchaser shall remove all debris, sod, tree stumps and other organic materials from all areas where footings are to be located. In areas where footings are not to be located, all debris, sod, tree stumps and other organic material shall be trimmed, cut, or removed down to a maximum height of 8 inches above the ground. The retailer must give the purchaser a site preparation notice as described in this section prior to the execution of any binding sales agreement , if the sales agreement will be executed before the home is installed . If the installation is a secondary move, not involving a retail sale, the installer must give the homeowner the site preparation notice prior to any agreement for the secondary installation of the home.

(2) If the retailer or installer provides the materials for skirting or contracts for the installation of skirting, the retailer or installer is responsible for the following: [ installing any required moisture and ground vapor control measures in accordance with the home installation instructions or the generic standards and for providing for the proper cross ventilation of the crawl space. If the purchaser or homeowner contracts with a person other than the retailer or installer for the skirting, the purchaser or homeowner is responsible for installing the moisture and ground vapor control measures and for providing for the proper cross ventilation of the crawl space. ]

(A) The retailer or installer shall install any required moisture and ground vapor control measures in accordance with the home installation instructions, specifications of an approved stabilization system, or the generic standards and shall provide for the proper cross ventilation of the crawl space. If the purchaser or homeowner contracts with a person other than the retailer or installer for the skirting, the purchaser or homeowner is responsible for installing the moisture and ground vapor control measures and for providing for the proper cross ventilation of the crawl space.

(B) The retailer or installer shall enclose the entire underfloor crawl space with a perimeter foundation, skirting, retaining wall or equivalent. The retailer or installer shall provide underfloor access through the perimeter foundation, skirting, retaining wall, or equivalent shall be through a minimum clear opening of 18 inches by 24 inches. The opening shall be located as close as practical to the utilities so fuel, electric, water, and sewer connections are accessible for inspection, service, and repair. The panel or door for the access panel shall not require tools, more than 5 pounds of force, or the operation of more than four devices to remove or open the access panel or door. The panel or door must be easily identifiable or permanently labeled "Access" in three-fourth inch high bold letters. There must be a minimum of 30 inches of clear space directly in front of each access panel or door.

(3) (No change.)

(4) Drainage: The purchaser is responsible for proper site drainage where the manufactured home (new or used) is to be installed unless the home is installed in a rental community. [ Except in rental communities, proper drainage is the responsibility of the homeowner. ] It is strongly recommended that the installer not install the home unless the exterior grade is sloped away from the home or another approved method to prohibit surface runoff from draining under the home is provided. Drainage prevents water build-up under the home. Water build-up may cause shifting or settling of the foundation, dampness in the home, damage to siding and bottom board, buckling of walls and floors, delamination of floor decking and problems with the operation of windows and doors.

(5) (No change.)

(c) (No change.)

(d) Footers and Piers:

(1) - (3) (No change.)

(4) Footer sizing and capacities: The following tables represent maximum loads and spacings based on footer size and soil bearing capacity. Other approved footers may be used if equal or greater in bearing area than those footer sizes tabulated.

Figure: 10 TAC §80.54(d)(4)

(5) (No change.)

(6) Pier design: Piers shall be constructed per the following details:

Figure: 10 TAC §80.54(d)(6)

(A) Shimming (if needed): Hardwood shims are commonly used as a means for leveling the home and filling any voids left between the bottom flange of the I-Beam and the top of the pier cap. Wedge shaped shims must be installed from both sides of the I-Beam to provide a level bearing surface. The allowable height must not exceed 1 inch. Shims shall be a minimum of 3 inches [ at least 4 inches ] wide [ (nominal) ] and 6 inches long. Over shimming should be avoided.

(B) (No change.)

(C) Table 3C - Pier loads (pounds) at tabulated spacings WITH perimeter supports:

Figure: 10 TAC §80.54(d)(6)(C)

(7) - (9) (No change.)

§80.55.Anchoring Systems.

(a) (No change.)

(b) Material Specifications:

(1) Strapping shall be Type 1, Finish B, Grade 1 steel strapping, 1­1/4 [ 11/4 ] inches wide and 0.035 inches in thickness, certified by a licensed professional engineer or architect as conforming with the American Society for Testing and Materials (ASTM) Standard Specification D3953 91, Standard Specification for Strapping, Flat Steel, and Seals. Tie materials shall be capable of resisting an allowable working load of 3,150 pounds with no more than 2% elongating and shall withstand a 50% overload (4,725 pounds total). Ties shall have a resistance to weather deterioration at least equivalent to that provided by coating of zinc on steel of not less than 0.30 ounces per square foot on each side of the surface coated (0.0005 inches thick), as determined by ASTM Standards Methods of Test for Weight of Coating on Zinc-coated (galvanized) Iron or Steel Articles (ASTM A 90-81). Slit or cut edges of zinc-coated steel strapping are not required to be zinc coated. Strapping shall be marked at least every five feet with the marking described by the certifying engineer or architect.

(2) (No change.)

(c) Anchors shall be installed per the following details:

(1) (No change.)

(2) installed against direction of load (vertical and/or angled), a stabilizer plate must be installed.

Figure: 10 TAC §80.55(c)(2)

(d) WIND ZONE I Installation:

(1) (No change.)

(2) Table 4A: The following table describes the maximum spacing for diagonal ties along each side of the unit.

Figure: 10 TAC §80.55(d)(2)

(3) Table 4B: Minimum number of diagonal ties required per side, per unit length. Table based on 2 feet inset of anchors at each end.

Figure: 10 TAC §80.55(d)(3)

(4) When approved auger anchors cannot be inserted into a difficult soil after moistening, such as mixed soil and rock or caliche (heavily weathered limestone) that is not solid rock, approved cross drive rock anchors may be used in accordance with the values and notes for Table 4A in paragraph (2) of this subsection modified as follows:

(A) since the ultimate anchor pull out in the difficult soil will be reduced, the maximum spacing for diagonal ties per side is one half the spacing allowed by Table 4A which will require adding one additional cross drive rock anchor for each anchor specified for the sides and ends ;

(B) - (C) (No change.)

(e) WIND ZONE II Installation:

(1) In place of the requirements as shown in subsection (d) of this section, units designed for Wind Zone I and built prior to September 1, 1997, and units designed for Wind Zone II and built prior to July 13, 1994, require diagonal ties as set forth in Table 5A when these units are installed in Wind Zone II. See also §80.50 of this title (relating to Wind Zone Regulations). Items not specifically addressed in this section are the same as for Wind Zone I installations.

Figure: 10 TAC §80.55(e)(1)

(2) Units built to Wind Zone II on or after July 13, 1994.

(A) - (B) (No change.)

(C) Where tie locations are clearly marked as a shear wall strap, a perimeter pier must be installed at that location. See §80.54(d) [ subsection §80.54(c) ] of this title (relating to Standards for the Installation of Manufactured Homes) for perimeter pier construction. Diagonal tie is not required.

(D) - (F) (No change.)

(3) - (4) (No change.)

(f) Bracket Installation.

(1) - (3) (No change.)

(4) When two bracket assemblies are required, they must be installed on each side of the column/opening stud(s), but no more than 12 inches from the column/opening stud(s) (see examples in figure 5C), and they must be angled away from each other a minimum of 12 inches.

Figure: 10 TAC §80.55(f)(4)

(5) (No change.)

(6) Longitudinal ties:

(A) Longitudinal ties are required for ALL wind zone [ (II) ] installations, regardless of the date of manufacture, when installation occurs after the effective date of these rules.

(B) (No change.)

(C) When conventional anchors and straps are used, install the required number of ties per Table 4A or Table 5A as appropriate. The strap(s) [ strap ] may be connected or wrapped around front or rear chassis header members, around existing [ chassis ] cross members[ , ] or spring hangers. Alternatively, brackets to receive the strap(s) may be welded to the bottom flange of the main I-beams. The [ Their ] location of the connection points along the length of the I-beams are [ home is ] not critical, as long as the number of longitudinal ties required for each end of each home section are installed with their pull in opposite directions. No two anchors shall be within 4 ft of each other. No two ties shall be attached to the same structural member of the home, other than a main longitudinal frame member or a front or rear chassis header member. [ See Figures 1 and 2 in subparagraph (D) of this paragraph. ]

(D) Anchors require stabilizer plates when the anchor shaft is not in line with strap (plus or minus 10 degrees). [ Units less than 60 feet in box length require at least two longitudinal ties per end per section. These longitudinal ties are in additional to the sidewall ties. ]

Figure: 10 TAC §80.55(f)(6)(D)

§80.56.Multi-Section Connection Standards.

(a) Air infiltration and water vapor migration at mating surfaces: before [ Before ] positioning additional sections, the mating line surfaces along the floor, endwall and ceiling, require material or procedures to limit air infiltration and water vapor migration . The following are acceptable materials and/or procedures:

(1) Expanding Foam: Foam may be used along surfaces that are accessible after the units have been joined. Where mating line walls line up between sections, non-porous materials must be installed prior to joining the units. [ expanding foam (this may also be applied after the units are joined); ]

(2) Caulking: Caulking may be used along surfaces that are accessible after the units have been joined. Where mating line walls line up between sections, non-porous materials must be installed prior to joining the units. [ carpet or carpet pad (should be held in place with fasteners); and ]

(3) Non-porous gasket installed along the perimeter of all mating lines. [ insulation, sill sealer (should be held in place with fasteners). ]

[ Figure: 10 TAC §80.56(a)(3) ]

(4) Insulation, carpet, carpet pad or other porous materials are not acceptable.

Figure: 10 TAC §80.56(a)(4)

(b) (No change.)

(c) Endwall Connections:

(1) (No change.)

(2) fastener length may need to be adjusted for gaps and/or toeing, to provide minimum 1-1/2 inch penetration into opposite endwall stud.

Figure: 10 TAC §80.56(c)(2)

(d) Roof Connection: (Note: Fasteners must not be used to pull the sections together . )[ . ]

(1) Roof [ roofs ] shall be connected with the fasteners and spacings specified in Table 56(d)(3). [ 56(6)(c); ]

(2) Gaps [ gaps ] between the roof sections (at ridge beam and/or open beam ledgers) of up to 1-1/2 inches wide maximum which do not extend the full length of the roof must be filled with lumber and/or plywood shims. Gaps up to 1/2 inch need not be shimmed. The fastener length used in the shimmed area may need to be increased to provide a minimum 1-1/4 inch penetration into the adjacent roof structural member . [ ; ]

(3) (No change.)

(4) Figure 56(d)(4) [ 56(6)(c) ].

Figure: 10 TAC §80.56(d)(4)

(e) - (g) (No change.)

(h) Water Crossover Connection (multi-sections only):

(1) If there is water service to other sections, connect the water supply crossover lines as shown in the applicable detail.

Figure: 10 TAC §80.56(h)(1)

(2) - (3) (No change.)

(i) - (k) (No change.)

§80.62.Approval of Stabilizing Components and Systems.

(a) Installers shall only use prefabricated or site built stabilizing components and systems approved by the department, specified by the home manufacturer's DAPIA approved installation instructions, or specified for one or more homes in a particular area by a Texas licensed engineer or architect. Before granting approval for any prefabricated stabilizing component or system that will be used for more than one home, the department will require the component or system to be certified by an engineer, architect, or independent testing laboratory. The engineer or architect may be licensed in any state. The independent testing laboratory must have at least one engineer or architect licensed in at least one state. The producer or vendor of the component or system seeking department approval must send a request letter to the department with at least two copies of the certification report. The department may accept certification reports in electronic formats. The certification report copies must have letter size (8.5 inch by 11 inch) or smaller pages. In the request letter, the producer or vendor must grant the department the right to reproduce the certification report. If the department approves the certification report, the department shall place a stamp of approval on the copies, keep one copy, and return all other stamped copies to the producer or vendor. The stamp of approval will have the following information:

(1) - (3) (No change.)

(b) - (c) (No change.)

(d) The department adopts the applicable standards and publications set forth in Chapter 43 [ 47 ] of the International Code Council, 2000 International Residential Code [ Council of American Building Officials (CABO) One and Two Family Dwelling Code, 1995 Edition, ] for materials used to fabricate stabilizing components and systems. The department adopts the stabilizing component destruction test failure criteria of the FMHCSS (24 CFR, Part 3280) and the 2000 International Residential Code, Appendix E. [ following publications: ]

[(1) The FMHCSS, 24 CFR, Part 3280;]

[(2) Appendix A--CABO One and Two Family Dwelling Code, 1995 Edition, published by CABO, 5203 Leesburg Pike, Suite 708, Falls Church, Virginia 22041; and]

[(3) Appendix H--Standard Building Code, 1994 Edition, published by Southern Building Code Congress International, Inc., 900 Montclair Road, Birmingham, Alabama 35213-1206.]

(e) Applicable reports of the following organizations are acceptable as certification reports: National Evaluation Service, Inc.; International Conference of Building Officials (ICBO) Evaluation Service, Inc.; Southern Building Code Congress International (SBCCI) Public Safety Testing and Evaluation Services, Inc.; Building Officials and Code Administrators International (BOCA) Evaluation Reports, Inc.; the International Code Council (ICC); or a successor of any of these organizations. [ National Evaluation Service Committee of the Council of American Building Officials, applicable evaluation reports from the International Conference of Building Officials (ICBO) Evaluation Service, Inc. of the ICBO, Southern Building Code Congress International, or applicable reports from a successor of any of the preceding organizations are acceptable as certification reports. ]

(f) - (l) (No change.)

§80.63.Other Materials and Methods for Manufactured Homes.

(a) - (b) (No change.)

(c) All stabilizing components must be resistant to all effects of weathering including that encountered along the Texas gulf coast. Nonconcrete stabilizing components and systems for use within 1500 feet of the coastline shall be specifically certified for this use. Preservation treated (PT) wood components shall conform to the applicable standards issued by the American Wood Preserver's Association and referenced by the 2000 International Residential Code. [ Treated wood components shall only be used in permanent foundations conforming to the CABO One and Two Family Dwelling Code, 1995 Edition. ]

(d) (No change.)

(e) The following types of stabilizing systems are special stabilizing systems, not associated with a particular location, and shall meet the requirements of subsection (f) of this section:

(1) - (4) (No change.)

(5) a site built stabilizing component or system with materials and methods in accordance with the applicable standards and publications set forth in Chapter 43 [ 47 ] of the 2000 International Residential Code [ CABO One and Two Family Dwelling Code, 1995 Edition ].

(f) (No change.)

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on March 25, 2002.

TRD-200201890

Bobbie Hill

Executive Director, Manufactured Housing Division of TDHCA

Texas Department of Housing and Community Affairs

Proposed date of adoption: June 4, 2002

For further information, please call: (512) 475-2206


10 TAC §80.66

The amended section is proposed under the Texas Manufactured Housing Standards Act, Texas Civil Statutes, Article 5221f, §9, which provides the department with authority to amend, add, and repeal rules governing the Manufactured Housing Division of the department and under Texas Government Code, Chapter 2306, §2306.603, which authorizes the director to adopt rules as necessary to administer and enforce the manufactured housing program through the Manufactured Housing Division.

No other statute, code, or article is affected by the proposed amendments.

§80.66.Rebuilding or Repairing a "Salvaged" Manufactured Home.

(a) Any home which has sustained sufficient damage to be declared salvage as defined in §8 of the Standards Act, [ §8, ] may be rebuilt/repaired for purposes of issuance of a manufactured home document of title at the option of the department after inspection in accordance with department procedures. Notification in writing to the department at its Austin headquarter's office shall be required before rebuilding/repair begins.

(b) - (d) (No change.)

(e) A manufactured home which has not sustained sufficient damage to be declared salvage may be refurbished to its original structural configuration so that it is habitable as defined by §8 of the Standards Act.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on March 25, 2002.

TRD-200201891

Bobbie Hill

Executive Director, Manufactured Housing Division of TDHCA

Texas Department of Housing and Community Affairs

Proposed date of adoption: May 5, 2002

For further information, please call: (512) 475-2206


Subchapter E. GENERAL REQUIREMENTS

10 TAC §80.119

The amended section is proposed under the Texas Manufactured Housing Standards Act, Texas Civil Statutes, Article 5221f, §9, which provides the department with authority to amend, add, and repeal rules governing the Manufactured Housing Division of the department and under Texas Government Code, Chapter 2306, §2306.603, which authorizes the director to adopt rules as necessary to administer and enforce the manufactured housing program through the Manufactured Housing Division.

No other statute, code, or article is affected by the proposed amendments.

§80.119.Installation Responsibilities.

(a) - (b) (No change.)

(c) The installer is fully responsible for the complete installation even though the installer may subcontract certain installation functions to independent contractors pursuant to §7(i) of the Standards Act[ , §7(j) ]. It is unlawful for a subcontractor who is acting as an agent for a licensed installer to advertise and/or offer installation services to any person unless the licensed installer's name appears prominently in the advertisement.

(d) - (e) (No change.)

(f) For all secondary moves (where there is not title transfer) the Notice of Installation Affidavit and the required fee must be submitted to the department within ten (10) working days after the installation is completed .

[(1) Except as otherwise specified for permanent foundations, the installer shall forward the installation report (Form T) to the department within ten (10) working days after the installation is completed. The installation report form shall be furnished by the department.]

[(A) When the installation occurs in conjunction with a title transfer, the installation report must be sent to the appropriate TDHCA field office. DO NOT SEND INSTALLATION FEES TO THE FIELD OFFICE.]

[(B) For secondary moves (when there is no title transfer), the installation report and the required installation fee must be submitted to the department.]

[(2) In addition, if the home is a multi-section home, the installer must notify the appropriate TDHCA field office by telephone, facsimile, or in person, the last working day prior to the day that the sections are scheduled to be connected. This notification must include the home serial numbers, label/seal numbers, names and addresses of the purchaser, the manufacturer, the retailer, the installer and the installer's phone and facsimile numbers, the exact location of the home and complete directions and instructions for the inspector to find the home, and an approximate time when the sections will be joined together. This notice may be satisfied by submitting a completed Form T with an added note of the approximate time the sections will be joined together. No additional notice is required if the scheduled connection of the sections is delayed for any reason; however, installers are expected to cooperate with the inspector and provide accurate information regarding any changes to previous installation plans, upon request.]

(g) When the installer selects the department to inspect the permanent foundation before concealment, the [ The ] installer shall file an application to install a manufactured home on a permanent foundation on a form approved by the department. The $100 fee for the permanent foundation installation report shall be forwarded with the application. After the department inspects the permanent foundation and indicates acceptance of the permanent foundation on the form, the title company, attorney, retailer, or retailer's agent later files the Notice of Installation Affidavit, including a copy of the form, with the public land records of the county and forwards a copy to the department. The $100 reporting fee does not have to be paid to the department again.

(1) Unless the retailer/installer follows the home installation manual or a department pre-approved foundation systems, a [ A ] copy of the foundation system drawing as stamped and signed by the licensed engineer or architect must be filed with the application.

(2) (No change.)

(3) Installers shall provide a copy of the application and the foundation system drawing to the department [ TDHCA ] inspector at the time an inspection is performed.

(4) If the permanent foundation system design is approved by the authorized local government official and if the applicable building inspection fees are paid to the local government, the provisions of this section do not apply. The installer must, however, file a sworn statement of these facts with the Notice of Installation Affidavit [ department prior to the date on which the construction of the foundation system is scheduled to begin ].

(5) If the permanent foundation for a home acquired and installed before January 1, 2002 is certified by the consumer/mortgagor and the lender/mortgagee in a real estate transaction, or is certified by the owner if there is no lien or the lien has been released, as having permanently affixed the structure to the real estate, the provisions of this section do not apply. The $100 fee for the [ permanent ] foundation installation must be paid and sent to the department along with the certification.

(6) When specifically requested in writing by the department with a Department Real Estate Inspection Request Form, a contracting local government shall make and perform inspection and enforcement activities related to the construction of the foundation that permanently affixes a manufactured home to real estate. If the permanent foundation system and other site improvements are inspected and accepted by a contracting local government official before concealment, the local government records may be the verification required by Section 19A(c) of the TMHSA. The retailer/installer must file a Notice of Installation, including a copy of the local government inspection report, with the public land records of the county and forward a copy of the Notice of Installation to the department with the $100 reporting fee.

(7) If the site suitability, site preparation, site improvement, foundation construction, and installation for a home acquired on or after January 1, 2002 are verified by a retailer or installer, the provisions of this section do not apply, but the title company, attorney, retailer, or retailer's agent must file a Notice of Installation with the public land records of the county and forward a copy of the Notice of Installation to the department with the $100 reporting fee.

(h) If a manufactured home will be installed as personal property on land not owned by the consumer, the retailer/installer [ The installer ] must complete the installation in accordance with the standards and requirements of this chapter and file the Notice of Installation Affidavit, marked as "Method A," and shall accompany title application within 10 working days after the installation is completed .

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on March 25, 2002.

TRD-200201892

Bobbie Hill

Executive Director, Manufactured Housing Division of TDHCA

Texas Department of Housing and Community Affairs

Proposed date of adoption: June 4, 2002

For further information, please call: (512) 475-2206


10 TAC §§80.121 - 80.124, 80.128, 80.130, 80.132, 80.135, 80.136

The new and amended sections are proposed under the Texas Manufactured Housing Standards Act, Texas Civil Statutes, Article 5221f, §9, which provides the department with authority to amend, add, and repeal rules governing the Manufactured Housing Division of the department and under Texas Government Code, Chapter 2306, §2306.603, which authorizes the director to adopt rules as necessary to administer and enforce the manufactured housing program through the Manufactured Housing Division.

No other statute, code, or article is affected by the proposed new and amended sections.

§80.121.Retailer's Responsibilities.

(a) Manufactured housing retailers shall retain as part of each sales record and make available for copying and review by department personnel, upon request during normal business hours , the following information:

(1) For all manufactured homes:

(A) (No change.)

(B) verification that the purchaser received the Formaldehyde Health Notice required by §20 of the Standards Act[ , §20 ];

(C) - (D) (No change.)

(E) verification that the purchaser received the site preparation notice; [ and ]

(F) verification that the purchaser received written notice of the two (2) year limitation of notice for filing a claim with the department ; [ . ]

(G) verification that the Covenant Disclosure Notice Affidavit was provided to the purchaser prior to completing a credit application;

(H) copies of the Notice of Installation Affidavit and attached documents, for a manufactured home installed as personal property;

(I) copies of the documents that substantiated the Notice of Installation Affidavit, for a manufactured home installed as real property;

(J) if the sale of a home includes air conditioning, the name and license number of the air conditioning contractor which installed the air conditioning system in accordance with §80.64(d) of this title (relating to Procedures for Alterations); and

(K) complete records of all alterations, in accordance with 24 CFR §3282.254.

(2) For all new manufactured homes:

(A) verification that a copy or the general description of the manufacturer's new home warranty and installation warranty were given to the consumer prior to the retailer's signing of any binding retail installment sales contract or other mutually binding agreement.

(B) [ (A) ] verification that the manufacturer's new home warranty, consumer's manual, and retailer's installation warranty were delivered to the purchaser;

(C) [ (B) ] verification of the date that the manufactured home information card was mailed to the manufacturer; and

(D) [ (C) ] verification of delivery of conspicuous notice relating to defect or damage under the new home warranty as required by §14(l) of the Standards Act[ , §14(l) ].

(3) For used manufactured homes:

(A) verification that the purchaser received the written 60-day habitability warranty; [ and ]

(B) verification that a copy or the general description of the retailer's installation warranty were given to the consumer prior to signing of any binding retail installment sales contract or other mutually binding agreement, if the retailer contracted for the installation as a part of the sales agreement; and

(C) [ (B) ] verification that the purchaser received the retailer's installation warranty if the retailer contracted for the installation as a part of the sales agreement.

(b) All verifications and copies of notices required by this chapter must be maintained in the retailer's sales file, and the sales file must be maintained for a period of not less than six (6) years from the date of sale. If a retailer has more than one sales location and wishes to maintain all of its records at a central location, it may do so provided that the retailer notifies the department more than sixty (60) days in advance that its records are being maintained at a central location by providing the address of such location. Absent such notice the records of a particular home must be maintained at the address where the home is in inventory and from which it was sold. If the retailer wishes to discontinue the centralization of its records or to change the address where its records are kept, the retailer must notify the department more than sixty (60) days in advance of the change of the location and the address and effective date of the new location.

(c) For new homes or used homes manufactured on or after September 1, 1997, a manufactured housing license holder shall not contract for sale or installation of any home under which the home would be installed in a wind zone, thermal zone, or roof load zone other than that allowed on the data plate.

§80.122.Security Requirements.

(a) For purposes of meeting the security requirements of §13 of the Standards Act, [ §13, ] "other security" means an assignment of a certificate of deposit from or on a state or federally chartered bank or savings and loan association, properly signed and filed with the department. If other security is posted, the other security must be maintained in or by a banking institution located in this state. Such deposits are hereinafter referred to as security. Forms shall be furnished by the department for filing an assignment of such security. If such security is reduced by a claim, the license holder shall, within twenty (20) calendar days, make up the deficit as required by §13(i) of the Standards Act[ , §13(i) ]. No advance notice is required by the department to the license holder, but the department shall verify receipt of the deposit.

(b) An assignment of such security filed with the department for compliance with §13 of the Standards Act, [ §13, ] shall remain on file with the department for two (2) years after the person ceases doing business as a manufacturer, retailer, broker, rebuilder, or installer, or until such later time as the director may determine that no claims exist against the security. A bond or certificate of deposit may be filed in lieu of or to replace the assigned security. In the event a bond is filed to replace the assigned security and the initial effective date of the bond is the same or prior to the date of the assignment of security, such security or deposit may be immediately withdrawn upon request.

(c) (No change.)

(d) To be exempt from the additional security as required by §13(f) of the Standards Act, [ §13(f), ] a manufacturer who does not have a manufacturing plant in this state must have a bona fide service facility.

(1) - (3) (No change.)

§80.123.License Requirements.

(a) Manufacturer. Any person constructing or assembling new manufactured housing for sale, exchange, or lease purchase within this state shall be licensed as a manufacturer. An application shall be submitted on the form required by the department and shall be completed giving all the requested information. The application shall be accompanied by the required security , Articles of Incorporation or Assumed Name Certificate, and payment of the license fee. Every distinct corporate entity must be separately licensed. Each separate plant location operated by a license holder which is not on property which is contiguous to or located within 300 feet of the license holder's licensed manufacturing facility requires a separate license and security.

(b) Retailer. Any person engaged in the business of buying for resale, selling, or exchanging manufactured homes or offering such for sale, exchange, or lease purchase to consumers shall be licensed as a retailer. An application for license shall be submitted on the form required by the department and be completed giving all the requested information. The application shall be accompanied by the required security , Articles of Incorporation or Assumed Name Certificate, and payment of the license fee. No person shall be considered a retailer unless engaged in the sale, exchange, or lease purchase of two or more manufactured homes to consumers in any consecutive twelve (12) month period. Sales, exchanges, or lease purchases by any employee or agent of a business entity are deemed to be sales of the business entity. Each separate sales location which is not on property which is contiguous to or located within 300 feet of a licensed sales location requires a separate license and security.

(c) Broker.

(1) Any person engaged by one or more other persons to negotiate or offer to negotiate bargains or contracts for the sale, exchange, or lease purchase of a manufactured home to which a certificate or document of title has been issued and is outstanding shall be licensed as a manufactured housing broker. An application for license shall be submitted on the form required by the department and be completed giving all the requested information. The application shall be accompanied by the required security , Articles of Incorporation or Assumed Name Certificate, and payment of the license fee. Each office location of the broker shall be licensed and proper security posted unless an office is on property which is contiguous to or located within 300 feet of an office licensed with the department.

(2) - (3) (No change.)

(d) Rebuilder. Any person who desires to be licensed [ certified ] by the department to alter, repair, or otherwise rebuild a salvaged manufactured home, as that term is defined in §8(g) of the Standards Act, [ §8(g), ] within this state, shall be licensed. An application shall be submitted on the form required by the department and shall be completed, giving all the requested information. The application shall be accompanied by the required license fee and Articles of Incorporation or Assumed Name Certificate . [ In addition to the license requirements, the licensed rebuilder must be certified by the department. In order to be certified by the department, the department must observe the rebuilding process of the first home to verify that the manufactured home will be rebuilt in accordance with applicable laws, codes, standards, rules, orders, and directives of the department. The department will certify the applicant as a rebuilder once all requirements have been met. ]

(e) Installer.

(1) Every person who contracts to perform or performs installations shall submit the required security, complete the necessary license forms and any other information needed, and be issued a license prior to performing an installation function. The required license fee must accompany the application for license and Articles of Incorporation or Assumed Name Certificate .

(A) - (B) (No change.)

(C) An installer, also licensed as a retailer, may satisfy the insurance requirements by filing a certificate of insurance which shows that the license holder has motor vehicle-garage liability coverage including completed operations, and has dealer's physical damage (open lot) including transit insurance coverage in amounts not less than those set forth in subparagraph (A) of this paragraph [ subsection (e)(A) of this section ].

(D) (No change.)

(2) (No change.)

(f) Homeowner's Temporary Installation.

(1) (No change.)

(2) The application must be accompanied by a certificate of insurance issued by the insurance carrier or its authorized agent to prove insurance coverage for the installation of the home as follows: public liability insurance coverage including completed operations in an amount of not less than $300,000 for bodily injury each occurrence and property damage insurance in an amount of not less than $100,000 each occurrence, for which a combined single limit of $300,000 will be considered to be in compliance with this section; and motor vehicle liability insurance coverage of not less than $250,000 bodily injury each person, $500,000 bodily injury each occurrence and $100,000 property damage each occurrence, for which a combined single limit of $500,000 will be considered to be in compliance with this section. A copy of the home manufacturer's installation instructions , custom designed [ or ] installation instructions stamped by a Texas licensed professional engineer or architect , or an installation plan with details and specifications conforming to the state's generic standards shall accompany the application.

(3) Upon approval of the application, the homeowner will be issued a temporary license for the installation of that home set out in the application and a temporary installer's (TI) number. The temporary license shall be valid only for thirty (30) calendar days [ the period of time set forth on the license certificate ].

(4) (No change.)

(g) Salesperson.

(1) A salesperson means an individual, partnership, company, corporation, association, or other group who, for any form of compensation, sells or lease-purchases or offers to sell or lease-purchase manufactured housing to consumers as an employee or agent of a retailer or broker. A person or entity licensed as a retailer or broker with the department is not required to be licensed [ register ] as a salesperson, and the owner of a sole proprietorship, a partner in a partnership, or an officer in a corporation which is duly licensed does not need [ have to register as ] a salesperson's license [ salesperson ] so long as such individual is [ properly ] listed in the ownership of the application filed with the department [ retailer's or broker's application for license ].

(2) The salesperson is an agent of the retailer or broker for whom sales or lease-purchases, or offers, are made. This includes the general manager, sales manager, office manager or anyone involved in showing and offering homes for sale. The retailer or broker is liable and responsible for the acts or omissions of a salesperson in connection with the sale or lease-purchase of a manufactured home. It is a violation of the Standards Act and this chapter for a retailer or broker of manufactured housing to employ a salesperson who is not licensed with the department.

(3) An application for license must be made by every salesperson. Each applicant for [ certificate of license as ] a salesperson's license [ salesperson ] must file with the department an application for license on a form provided by the department containing:

(A) - (B) (No change.)

(C) a statement that the applicant is the authorized agent for a manufactured housing retailer or broker; the statement shall be signed by the employer. If there is a change in name, address, telephone, email address, or employer, an amended application must be submitted to the department within ten (10) calendar days of this change.

(4) (No change.)

(5) Payment [ Salesperson annual renewal license forms shall be available at manufactured housing retailer and broker locations, or any office of the department. Renewal forms and payment ] of the renewal fee shall be made by the salesperson and submitted to the department along with the completed license renewal notice prior to the expiration of the current license.

(6) (No change.)

(h) Applicable License Holder Ownership Changes.

(1) A license holder shall not change the location of a licensed business unless the license holder first files with the department:

(A) a written notification of the address of the new location; [ and ]

(B) an endorsement to the bond reflecting the change of location ; and [ . ]

(C) original license.

(2) (No change.)

(3) For a change in ownership of less than fifty percent (50%) of the licensed business entity, no new license is required provided that the existing bond or other security continues in effect. However, the current Articles of Incorporation or Assumed Name Certificate must accompany the request.

(4) For a change in ownership of fifty percent (50%) or more, the license holder must file with the department, along with the appropriate fee and Articles of Incorporation or Assumed Name Certificate :

(A) a license addendum [ application ] by the purchaser providing information as may be required by the department; and

(B) (No change.)

(C) an application for a new license along with a new bond or other security and proof that the education requirements of §7(p) of the Standards Act, [ §7(p), ] have been met.

(i) Education Requirements. Effective September 1, 1987, all applicants for license, except salespersons, shall attend and complete 20 hours of educational instruction as required by the Standards Act and this chapter [ title ]. A manufacturer may request a one-day in-plant training session be presented by the department in lieu of completing the instruction requirement. The license will not be issued until the owner, partner, corporate officer, or other person who will personally have the day-to-day management responsibility for the business location, or the salesperson to be licensed, attends and completes this educational requirement. This section shall not apply to the renewal of licenses, nor to the license of additional business locations.

(j) Approving a training program conducted by a nonprofit educational institution or foundation as sanctioned by §7(q) of the Standards Act.

(1) An organization requesting approval to conduct the educational course required by the Standards Act must file a course approval request and course materials at least 90 calendar days before the date of the first scheduled presentation. The director shall deliver a written notice of approval or disapproval no later than 30 calendar days after receiving the request. If disapproved, the requestor may resubmit the course with corrections. The director will deliver a written notice of approval or disapproval no later than 15 calendar days after receiving the re-submittal.

(A) Approval of Training Program: The director will approve the training program if the requirements in this subsection are met and the materials submitted comply with the required course topics in paragraph (3) of this subsection.

(B) Disapproval of Training Program: The director will not approve the training program if the requirements are not met and the materials submitted do not comply with the required course topics in paragraph (3) of the subsection. The requestor will receive a written notice detailing the reason(s) for the disapproval. The requestor may re-submit the course with corrections as mentioned in paragraph (1) of this subsection.

(2) As a prerequisite for a license, the course must be twenty (20) hours in length and instruct the potential attendee in the law and consumer protection regulations.

(3) An educational training course shall consist of the following topics:

(A) Presentation of the Law and Rules.

(i) Article 5221f, the Standards Act

(ii) Chapter 80, Texas Administrative Code, Administrative Rules

(iii) Texas Finance Code (applicable sections)

(iv) Texas Transportation Code (applicable sections)

(v) Federal Truth -in-Lending Act

(vi) Property Code

(B) Titling.

(i) Seals

(ii) Titling Fees

(iii) Titling Process

(iv) Description of Forms

(v) Title Cancellation and Reinstatement Process

(C) Licensing.

(i) Manufacturer Application Form Requirements

(ii) Retailer Application Form Requirements

(iii) Installer Application Form Requirements

(iv) Salesperson Application Form Requirements

(v) Broker Application Form Requirements

(vi) Salvage/Rebuilder Application Form Requirements

(vii) Insurance and Bond Requirements

(viii) License Renewal and Revision Requirements

(ix) Sale of non-habitable homes

(x) Retailer and Installer Responsibilities

(D) Installations.

(i) Anchoring, supporting, and multi-section connecting standards

(ii) Requirements for Completing the Installation Inspection Report Form

(E) Consumer Complaints.

(i) Consumer Complaint Process

(ii) Delivery of Warranty

(iii) Correction Requirements

(iv) Requirements for Completing the Complaint Forms

(F) Dispute Resolution.

(i) Dispute Resolution Process

(ii) Texas Government Code, Chapter 2306

(iii) Federal Trade Commission Manual: "How to Advertise Consumer Credit"

(iv) Business & Commerce Code, Deceptive Trade Practices (applicable sections)

(4) The training organization must provide each attendee of the class with written proof of having completed the entire 20 hour course.

(5) The primary administrator for the training program will be notified by the director of changes to the Law and Rules and the date that the changes will become effective.

(6) The director may revoke course approval for failure to comply with the standards or procedures set forth in this subsection. Unless surrendered or revoked for cause, the approval will be valid for a period of two (2) years.

(k) Denial, Suspension, Renewal Denial, or Revocation of License Relating to Repeat Violations of the Standards Act or Department Rules.

(1) The following criteria shall be utilized to determine whether an applicant shall be issued or renewed a license if the applicant within the last two years from the date of the application has:

(A) two Agreed Final Orders of the same kind or type of violations; or

(B) one Final Order of the same kind or type of violations.

(2) If the department suspends, revokes, or denies renewal of a valid license, or denies a person's license or the opportunity to be examined for a license in accordance with this subsection because of the person's prior violations history, the department shall:

(A) notify the person in writing stating reasons for the suspension, revocation, renewal denial, denial of disqualification; and

(B) offer the person the opportunity for a hearing on the prior violation history.

(l) Denial, Suspension, Renewal Denial, or Revocation of License relating to the history of non-compliance with the Standards Act and Rules.

(1) The department will consider the background of the applicant, license holder, sole proprietor, partner officer, managing employee, chief executive officer, chief executive operating officer, and directors of a corporation.

(2) In the evaluation the department will consider the non-compliance history with the Standards Act and this chapter and will comply with the Texas Government Code, Chapter 2001, in proceeding with denial, suspension, or revocation of a license.

(m) [ (j) ] Denial, Suspension, Renewal Denial, or Revocation of License Relating to Criminal Background.

(1) The following criteria shall be utilized to determine whether an applicant shall be issued a license if that applicant states in his/her application for said license that he/she has a record of criminal convictions within five (5) years preceding the date of the application:

(A) the nature and seriousness of the crime;

(B) the relationship of the crime to the intended manufactured housing business activity;

(C) the extent to which a license holder might engage in further criminal activity of the same or similar type as that in which the applicant previously had been involved;

(D) the relationship of the crime to the ability, capacity, or fitness required to perform the duties and discharge the functions and responsibilities of the license holder's occupation or industry; and

(E) whether the offenses were defined as crimes of moral turpitude by statute or common law, from Class A misdemeanors to first, second, and third degree felonies carrying fines and/or imprisonment or both. Special emphasis shall be given to the crimes of robbery, burglary, theft, embezzlement, sexual assault, and conversion.

(2) In addition to the factors that may be considered in paragraph (1) of this subsection, the department, in determining the present fitness of a person who has been convicted of a crime, may consider the following:

(A) the extended nature of the person's past criminal activity;

(B) the age of the person at the time of the commission of the crime;

(C) the amount of time that has elapsed since the person's last criminal conviction;

(D) the conduct and work activity of the person prior to and following the criminal conviction;

(E) evidence of the person's rehabilitation or attempted rehabilitation effort while incarcerated or following release; and

(F) other evidence of the person's present fitness, including letters of recommendation from prosecution, law enforcement, and correctional officers who prosecuted, arrested, or had custodial responsibility for the person; the sheriff and chief of police in the community where the person resides; and any other persons in contact with the convicted person.

(3) It shall be the responsibility of the applicant to the extent possible to secure and provide to the department the recommendations of the prosecution, law enforcement, and correctional authorities as required by this subsection.

(4) The applicant shall furnish proof in any form, as may be required by the department, that he/she has maintained a record of steady employment and has otherwise maintained a record of good conduct and has paid all outstanding court costs, supervision fees, fines, and restitution as may have been ordered in all criminal cases in which the applicant was convicted.

(5) If the department suspends or revokes a valid license, or denies a person a license or the opportunity to be examined for a license in accordance with this subsection because of the person's prior conviction of a crime and the relationship of the crime to the license, the department shall:

(A) notify the person in writing stating reasons for the suspension, revocation, denial, or disqualification; and

(B) offer the person the opportunity for a hearing on the record.

(n) [ (k) ] License Renewal Requirements. It is the responsibility of the license holder to renew the license prior to its expiration date . [ ; however, ]

(1) The [ the ] department will mail each license holder a renewal notice and application for renewal at least forty-five (45) calendar days prior to the date on which the current license expires. Notice will be mailed to the last known address indicated in department records . [ ; ]

(2) In [ in ] order to prevent the expiration of a certificate of license, all applications for license renewals must be received by the department prior to the date on which the current license expires . [ ; and ]

(3) If [ if ] an application for license renewal is received by the department after the date on which the current license expires, the license will not be reinstated except with approval of the director. The director may require a hearing prior to reinstatement.

(4) All renewal licenses and a reinstatement license approved by the director shall be dated as of the day following the date on which the current license expires.

(o) [ (l) ] Application and Appeals.

(1) Initial application processing.

(A) It is the policy of the department to issue the license within seven (7) working days after receipt of all required information and the following conditions have been met:

(i) all required forms are properly executed; and

(ii) all requirements of applicable statutes and department rules have been met.

[(B) Applicants may make application for license in person at the department's headquarters office in Austin during regular working hours. However, the issuance of a license number will be delayed until the application has been thoroughly reviewed. ]

(B) [ (C) ] License applications and accompanying documents received shall be processed and issued within seven (7) working days if all conditions for license have been met.

(C) [ (D) ] License [ Within seven (7) working days of the date received by the department, license ] applications and accompanying documents found to be incomplete or not properly executed shall be returned to the applicant with an explanation of the specific reason and what information is required to complete license. Upon receipt of all required information, the license will be issued within seven (7) working days.

(D) [ (E) ] Upon written request, the department will call the license holder and provide the license number assigned.

(2) Appeals. Applicants may appeal any dispute arising from a violation of the time periods set for processing an application. An appeal is perfected by filing with the director a letter explaining the time period dispute. The letter of appeal must be received by the director no later than twenty (20) calendar days after the date of the letter of explanation from the department outlined in paragraph (1)(C) [ subparagraph (D) ] of this subsection. The department will decide the appeal within twenty (20) calendar days of the receipt of the letter of appeal by the director.

§80.124.Deposits and Down Payments.

(a) The retailer, salesperson, or agency of the retailer shall not retain or keep a deposit except in accordance with this section.

(b) A deposit on a home in inventory must be refunded within fifteen (15) calendar days following the date of written notice from the depositing consumer requesting the refund. The retailer must hold the home in inventory for purchase by the consumer making the deposit until the deposit is refunded. The retailer may refund the deposit at any time to the depositing consumer, but the retailer must not sell the home to any other consumer until the deposit on the home in inventory has been refunded.

(c) A deposit on a special ordered home which is not in inventory must be refunded within fifteen (15) calendar days following the date of written notice from the depositing consumer requesting the refund if the retailer, salesperson, or agent fails to provide or perform the following:

(1) Has record of the consumer being given conspicuous written notice of the requirements for retaining the deposit as set forth by §6(n) in the Standards Act, along with all of the notices and forms required by §6(n) in the Standards Act to be given to the consumer prior to the execution of any mutually binding contract.

(2) The special ordered home is delivered or ready to be delivered and fails to conform to the specifications or representations, if any, made to the consumer by the retailer.

(d) On a special ordered home which is not in inventory, the retailer may retain the deposit provided that:

(1) the home conforms to the specifications of the special order and the representations, if any, made to the consumer are not altered without the consumer's consent;

(2) the consumer fails or refuses to accept delivery and installation of the home by the retailer;

(3) the consumer is given conspicuous written notice of the requirements for retaining the deposit as set forth in this subsection along with all of the notices and forms required by this chapter to be given the consumer prior to the execution of any mutually binding contract.

(e) the retailer may not retain more than five percent (5%) of the estimated cash price of the home which is specially ordered, and the retailer must refund any amount of the deposit which exceeds five percent (5%); and

(f) In a financed transaction, the deposit becomes the down payment, or part thereof, following credit approval and the execution of a retail installment sales contract, and the provisions of this section do not apply.

(g) To ensure that the down payment required by the creditor in a financed transaction is actually received by the retailer at the time of the execution of the contract or document, the actual source of the funds for the down payment must be verified by the consumer, the retailer, and the salesperson on a form prescribed by the department. The Down Payment Verification Affidavit must be signed and notarized by the consumer, the retailer, and the salesperson prior to the execution of a retail installment sales contract or agreement.

(h) This Down Payment Verification Affidavit must denote in at least 14 point bold font "The amount of my down payment is the true amount noted on my retail installment contract."

(i) The provisions of this section do not apply to a deposit or funds held in an escrow account in connection with a real estate transaction.

§80.128.Arbitration Rules.

(a) Definitions For Arbitration. The following words and terms when used in this chapter shall have the following meanings, unless the context clearly indicates otherwise:

(1) - (3) (No change.)

(4) Department--The Manufactured Housing Division of the Texas Department of Housing and Community Affairs (TDHCA).

(5) - (9) (No change.)

(b) - (h) (No change.)

(i) Arbitration Not Using SOAH. The provisions of this subsection relate only to arbitrations for which the parties have agreed to use the services of a private, local, regional, or national arbitration service.

(1) Subject to the provisions of subsections (a) - (h) of this section , the parties shall follow the rules of the applicable arbitration service.

(2) (No change.)

(j) Arbitration Using SOAH. The provisions of this subsection relate only to arbitrations for which the parties have agreed to use the services of SOAH. Subject to the provisions of subsections (a) - (h) of this section , the parties shall follow these additional rules.

(1) - (26) (No change.)

§80.130.Delivery of Warranty.

(a) The written warranty that the manufactured home is habitable as per §8 of the Standards Act, shall have been timely delivered if given to the homeowner at or prior to the time the contract for sale is signed. [ For purposes of the Standards Act, §§7, 8, and 14, the written warranty documents shall have been timely delivered if given to the homeowner at the time the contract for sale is signed. ]

(b) The written manufacturer's new home construction warranty per §14 of the Standards Act, shall be timely delivered if given to the homeowner at or prior to the time of initial installation at the consumer's homesite. [ The "installer" as defined in §80.119(a) of this title (relating to Installation Requirements), shall deliver the installation warranty required by the Standards Act, §14(d) and (m), to the consumer at the time of entering into the installation contract. If the retail sale of a used manufactured home includes installation, the selling retailer must, as the contracting installer, give the installation warranty. The installer must keep a copy of the installation warranty and proof of delivery to the consumer in a permanent file for review by the department. ]

(c) For secondary installations, the "installer" as defined in §80.119(a) of this title (relating to Installation Requirements) shall deliver the installation warranty required by §14(d) and (m) of the Standards Act, to the consumer at the time of the installation at the consumer's homesite. The installer must keep a copy of the installation warranty and proof of delivery to the consumer in a permanent file for review by the department.

§80.132.Procedures for Handling Consumer Complaints.

In order to comply with §2 of the Standards Act, [ §2, ] to provide for the protection of the citizens who purchase manufactured housing and to provide fair and effective consumer remedies, the following procedures will be followed:

(1) (No change.)

(2) The department shall make a consumer complaint home inspection if a consumer, manufacturer, or retailer requests such inspection.

(A) - (B) (No change.)

(C) The department will perform the inspection within thirty (30) calendar [ fifteen (15) working ] days from the date an inspection is requested. The inspector shall:

(i) (No change.)

(ii) For each item inspected, the inspector shall review the manufacturer's determinations in accordance with 24 CFR §3282.404(b) and evaluate [ determine ] whether or not the item is covered by either the manufacturer's, retailer's, or installer's warranty and, if covered, by which of the respective warranties. In addition, the inspector shall categorize items as follows:

(I) - (IX) (No change.)

(D) Within ten (10) [ five (5) ] working days following the consumer complaint home inspection, the department shall mail its written report and orders (includes amended reports and orders), if any, to the consumer, manufacturer, retailer, and installer by certified mail, return receipt requested.

(3) (No change.)

(4) Each license holder must maintain both a current physical location address and a current mailing address with the department. Service of notice of hearing or other notice sent by certified mail will be sent to the license holder's current mailing address according to the department's records. If the department sends a notice to the manufacturer, retailer, or installer at the mailing address by certified mail, and the notice is refused or unclaimed, the department may presume that the license holder was provided proper notice. All written amended reports and orders will be serviced in this manner.

(5) If service or repairs cannot be made within the specified time frame, the license holder shall notify the department in writing prior to the expiration of the specified time frame by certified mail. The notice shall list those items which have been, or will be, completed within the time frame and shall show good cause why the remainder of the service or repairs cannot be made within the specified time frame. The license holder shall request an extension for a specific time. If the department fails to respond in writing to the request within five (5) working days of the date of receipt of the notice of request for extension, the extension has been granted. [ Once the department receives the service or work orders with the consumer's signature indicating that all items have been satisfactorily completed, the department shall send a notice to the consumer that the department has closed the complaint file. ]

(6) Once the department receives the service or work orders with the consumer's signature indicating that all items have been satisfactorily completed, the department shall send a written notice to the consumer, stating that if the department does not receive a written reply within the thirty (30) calendar days the complaint file will be closed. [ If service or repairs cannot be made within the specified time frame, the license holder shall notify the department in writing prior to the expiration of the specified time frame by certified mail. The notice shall list those items which have been, or will be, completed within the time frame and shall show good cause why the remainder of the service or repairs cannot be made within the specified time frame. The license holder shall request an extension for a specific time. If the department fails to respond in writing to the request within five (5) working days of the date of receipt of the notice of request for extension, the extension has been granted. ]

(7) (No change.)

§80.135.Manufactured Housing Auctions.

(a) Auction of Manufactured Housing to Texas Consumers.

(1) - (4) (No change.)

(5) A manufactured home that has been salvaged or is not habitable may not be sold , conveyed, or transferred to a consumer as a manufactured home for dwelling purposes. The seller must surrender the title and HUD label or Texas Seal, or a statement that there was no label or seal, to the department along with the required fee and an application to cancel the title to business use, before the home is auctioned.

(6) The retailer must give notice to each person attending the auction, and the notice shall contain the following:

(A) a statement that the homes offered for sale are habitable pursuant to §8(b) of the Standards Act[ , §8(b) ];

(B) (No change.)

(C) the appropriate warning concerning formaldehyde as required by §20 of the Standards Act[ , §20 ]; and

(D) (No change.)

(7) (No change.)

(b) (No change.)

§80.136.Homes Acquired on or after January 1, 2002.

(a) The provisions of this section apply only to manufactured homes acquired by a consumer on or after January 1, 2002 through any means of financing. The term "acquired by a consumer" means the date on which the consumer is bound by contract to purchase the home.

(b) Real Property.

(1) The manufactured home is real property if the owner of the home is the same as the owner of record of the real estate and if the home is secured to a foundation and connected to a utility. If the land and manufactured home are being acquired by the consumer, and the ownership of the land and home will be the same, the home is classified as real property.

(2) The department will not issue a document of title if the ownership of the land and the manufactured home is, or will be, the same. If a document of title has previously been issued for the home, it must be surrendered for cancellation.

(c) With the exception of community property, when the ownership of the land and home is not the same, a document of title will be issued. The recorded ownership of the land shall be determined as of the date the home is acquired by the consumer by either executing the credit documents necessary to finance the purchase of the home or paying the cash proceeds for the purchase of the home.

(d) For new manufactured homes the retailer is the "installer" in accordance with the provisions of the Standards Act.

(e) The purchase of all manufactured homes considered to be real property shall be closed at the office of a federally insured financial institution, a title company, or attorney at law.

(f) Disclosures.

(1) Prior to the completion of a credit application, the retailer must provide the information required by §21(a) of the Standards Act.

(2) Prior to completion of the closing, the retailer or its agent shall provide to the consumer the information required by §21(b) of the Standards Act. The retailer shall comply with the federal Truth-in-Lending Act to disclose the purchase price, agreed interest rate, and the length of time for the loan repayment required by §21(b)(1) of the Standards Act. All disclosure requirements may be in separate documents.

(3) Within thirty (30) working days after the date on which the installation is completed for manufactured homes classified as real estate, the retailer shall file a Notice of Installation Affidavit in the public land records for the county in which the real estate is located in accordance with the provisions of §2.001(e), (f), and (g), Property Code.

(4) When a consumer relocates a manufactured home, the relocation shall be reported as a personal property installation by the installer.

(g) This section, as relates to the giving of disclosures required for credit transactions and as relates to the requirement of surrendering previously issued documents of title for cancellation, does not apply to transactions in which the consumer purchases the manufactured home from the retailer for cash.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on March 25, 2002.

TRD-200201893

Bobbie Hill

Executive Director, Manufactured Housing Division of TDHCA

Texas Department of Housing and Community Affairs

Proposed date of adoption: May 5, 2002

For further information, please call: (512) 475-2206


Subchapter F. CONSUMER NOTICE REQUIREMENTS

10 TAC §80.180

The amended section is proposed under the Texas Manufactured Housing Standards Act, Texas Civil Statutes, Article 5221f, §9, which provides the department with authority to amend, add, and repeal rules governing the Manufactured Housing Division of the department and under Texas Government Code, Chapter 2306, §2306.603, which authorizes the director to adopt rules as necessary to administer and enforce the manufactured housing program through the Manufactured Housing Division.

No other statute, code, or article is affected by the proposed amendments.

§80.180.Formaldehyde Notice Requirements.

(a) (No change.)

(b) In addition to the requirement of subsection (a) of this section:

(1) A retailer shall deliver a copy of the "Important Health Notice" prescribed by HUD to the consumer before the execution of any mutually binding sales agreement. [ If it is a cash sale, the copy of the notice must be delivered before the acceptance of payment or the execution of title transfer documents. An agreement to order a HUD-Code manufactured home from the manufacturer, or an agreement to hold a home in inventory for a period of time, which is secured by a forfeitable consumer deposit, is a "mutually binding sales agreement" for purposes of this section. ]

(2) - (3) (No change.)

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on March 25, 2002.

TRD-200201860

Bobbie Hill

Executive Director, Manufactured Housing Division of TDHCA

Texas Department of Housing and Community Affairs

Proposed date of adoption: May 5, 2002

For further information, please call: (512) 475-2206


Subchapter G. TITLING

10 TAC §§80.202, 80.204, 80.205, 80.207, 80.208

The amended sections are proposed under the Texas Manufactured Housing Standards Act, Texas Civil Statutes, Article 5221f, §9, which provides the department with authority to amend, add, and repeal rules governing the Manufactured Housing Division of the department and under Texas Government Code, Chapter 2306, §2306.603, which authorizes the director to adopt rules as necessary to administer and enforce the manufactured housing program through the Manufactured Housing Division.

No other statute, code, or article is affected by the proposed amendments.

§80.202.Fees for Title Documents.

(a) Title Transaction Fees.

(1) There shall be a fee of $35 for each title transaction. The [ Except as otherwise expressly provided, the ] fee shall be submitted in the form of a cashier's check or money order payable to the Texas Department of Housing and Community Affairs. The fee shall accompany the required documents forwarded to the Manufactured Housing Division of the department at its principal office in Austin. Ten dollars of the fee for each title transaction shall be deposited in the HORF. A title transaction is the issuance, reissuance, reinstatement, cancellation or recordation of :

(A) a document of title [ the issuance, reissuance, reinstatement, or cancellation of a manufactured home document of title including issuance of corrected titles (unless the correction is required because of an error by the department) ];

(B) Certificate of Attachment [ the issuance of a salvage title ];

(C) a salvage title [ the cancellation of a manufacturer's certificate of origin ];

(D) a Manufacturer's Certificate of Origin [ the filing of an inventory financing lien ];

(E) the filing of an inventory financing lien; [ the filing of foreclosure documents or a repossession affidavit; and ]

(F) the filing of foreclosure documents or a repossession affidavit; and [ the recording of a transfer of ownership from a lienholder to or through a retailer. ]

(G) the recording of a transfer of ownership from a lienholder to or through a retailer.

(2) There shall be a separate filing fee of $100 when a certification form is provided for a home that is permanently affixed.

(3) [ (2) ] There shall be a separate transaction fee of $35 for Quick Title Service related to the issuance [ or cancellation ] of titles in addition to the $35 for each title transaction. Quick Title Service shall be defined as the processing of the documents related to a title transfer [ or cancellation ] within three (3) working days from the day the application is received in the Manufactured Housing Division. Title transfer documents must be received in good [ transfer ] order in the department's manufactured housing division in Austin for the issuance of a manufactured housing title [ or cancellation ] on a Quick Title Service basis. Title transfer documents which are not in good transfer order or which are incomplete will be returned to the sender, and the title application will be processed within three (3) working days from the date that correct and completed documents are received. All quick title applications must be submitted by overnight mail or delivered in-person.

(b) If a correction of a document is required as a result of a mistake by the department, the issuance of a new document shall not require a fee. [ The $35 fee is payable for any subsequent issuance or reissuance of a manufactured home document of title except for the issuance of a corrected document of title in those instances where an error was made by the department in the document of title. ]

(c) All persons licensed with the department as a manufacturer, retailer, broker, or installer may submit company or business firm checks in payment of any [ the ] fee described herein [ for the issuance of titles ]. All state or federally chartered banks, savings banks or savings institutions and all commercial lenders or mortgage bankers who extend credit for the retail purchase of manufactured homes may also pay any [ title transaction or title search ] fees with company or business firm checks at the discretion of the department. All checks shall be made payable to the Manufactured Housing Division of TDHCA [ Texas Department of Housing and Community Affairs ].

(d) One check may be submitted in payment of the aggregate fees for multiple [ title ] transactions or the issuance of more than one document [ of title ]. When multiple applications are submitted, a form prescribed by the department must be included which shall identify each application and reconcile the [ $35 ] fee for each application with the total amount of the check.

(e) (No change.)

§80.204.Titling Forms.

(a) Manufacturer's Certificate of Origin (MCO).

(1) (No change.)

(2) The MCO shall be surrendered to the department upon application for the issuance of an initial document of title to the home or the application for Certificate of Attachment .

(3) (No change.)

(b) Application for Issuance of Document of Title , or Certificate of Attachment to a Manufactured Home.

(1) The manufactured home document of title , or Certificate of Attachment shall be issued on the basis of information submitted on a properly executed application for a document of title containing the following information:

(A) - (H) (No change.)

(2) The MCO shall accompany the application for a document of title or Certificate of Attachment on the original sale from retailer to private individual.

(3) (No change.)

(4) The department may return [ will not process ] the application without processing if the lienholder information is not complete or appears to have been modified .

(5) The right of survivorship may be elected by the [ when husband and wife are ] purchasers or transferees. The document of title shall indicate whether the right of survivorship has been elected.

(6) (No change.)

(7) The application and fees shall be submitted to the Manufactured Housing Division [ Texas Department of Housing and Community Affairs ] at the Austin headquarter's office, with supporting documents.

(c) Installation Information.

(1) The installation information, on forms approved by the department, must accompany each application for a document of title, or Certificate of Attachment and shall contain the following information:

(A) description of the home, including:

(i) - (iii) (No change.)

(iv) name of manufacturer; [ and ]

(v) Wind Zone, if available ; and [ . ]

(vi) map of the location of the home.

(B) - (F) (No change.)

(2) If the home was installed as a result of the sale or transfer, the installation fee required under §80.20(b) of this title (relating to Fees) must be submitted along with the installation information ( Notice of Installation Addidavit [ Form E ]). The installation fee may be combined with the titling fee for each home.

(d) Manufactured Home Document of Title.

(1) The department shall maintain records of ownership of manufactured homes. The department shall issue a manufactured home document of title for each manufactured home, except of the manufactured homes that are not titled by virtue of their attachment to real property, which shall set forth the ownership of the home in accordance with the records of the department.

(2) The document of title shall contain the following information:

(A) - (F) (No change.)

(G) [ space for the signature(s) of the purchaser(s) and a ] designation of right of survivorship;

(H) - (J) (No change.)

(3) (No change.)

(4) The department shall issue a manufactured home document of title in the following cases:

(A) after receipt of a properly executed application for a document of title, Notice of Improvement Attachment, or Notice of Attachment, installation information on forms approved by the department, and the MCO upon the initial retail sale; [ and ]

(B) after receipt of a properly executed application for a document of title, Notice of Improvement Attachment, installation information on forms approved by the department, and the original manufactured home document of title when there is a transfer of ownership or the addition of a lien or lienholder ; [ . ]

(C) after receipt of a properly executed application by the owner for cancellation of the Certificate of Attachment due to the sale or transfer and removal of the home from the real property, and following an inspection by the department for habitability; notice of the cancellation of the Certificate of Attachment shall be filed with the county in which the real property is located.

(5) (No change.)

(e) Certificate of Attachment.

(1) In the event that a manufactured home is real property either because the owner has surrendered the document of title or no document of title has been issued because the manufactured home has been installed on property owned by the owner of the manufactured home, then the department shall issue a Certificate of Attachment.

(2) The Certificate of Attachment shall contain the following information:

(A) the name and address of the owner of the manufactured home;

(B) the legal description of the real property where the manufactured home is installed;

(C) the name and address of the manufacturer of the manufactured home, the model designation of the home, the number of sections, the HUD label and/or Texas seal number, the serial number, and the size (excluding hitch) of the manufactured home;

(D) certification by the department that the Manufacturer's Certificate of Origin or any document of title have been canceled; and

(E) name, address and license number of the selling retailer.

(f) Disclosure Required by §21(b) of the Standards Act.

(1) The disclosures required by §21(b) of the Standards Act are required to be given prior to the transfer of title to a manufactured home.

(2) Such disclosures are to be provided to the purchaser of a manufactured home in written form from a manufactured home retailer (or to one of the purchasers if more than one (1) purchaser). Acknowledgment of receipt by the purchaser is not required.

(3) In the context of a purchase which is financed through a financing source obtained by the purchaser, and in the context of a cash purchase, disclosure by the retailer in the purchase agreement between the retailer and the purchaser of the manufactured home's purchase price is sufficient to meet the requirements of §21(b)(1) of the Standards Act.

§80.205.Titling Transactions.

(a) Corrected Manufactured Housing Document of Title.

(1) The department shall make corrections to a manufactured home document of title upon receipt of a properly executed application for a document of title and the previously issued original.

(2) - (3) (No change.)

(b) For manufactured homes that are presumed to be personal property pursuant to §2.001 of the Property Code, the [ The ] department shall issue a certified copy of the original manufactured home document of title or of the nontransferable copy upon receipt of a properly executed application for a document of title. If a lien is recorded on the document of title, the certified copy of the original document of title shall be mailed to the lienholder of record.

(c) Inventory Financing Liens.

(1) A lien and security interest on manufactured homes in the inventory of a retailer , as well as to any proceeds of the sale of those homes, is perfected by filing an inventory finance security form approved by the department and in compliance with these sections.

(2) (No change.)

(3) The inventory finance security form shall contain the following:

(A) signatures of both the retailer and the creditor-lender [ the date of the security agreement between the parties ];

(B) the name, and chief executive office address of the retailer; and [ signatures of both the retailer and the creditor-lender; ]

(C) the name and address of the creditor-lender. [ name, address, and license number of the retailer; and ]

[(D) the name and address of the creditor-lender.]

(4) A separate form must be filed for each licensed sales location [ retailer ].

(5) For manufactured homes for which no document of title has been issued, the filing of the inventory-finance security form perfects a security interest in all manufactured homes, whether then owned or thereafter acquired, as well as to any proceeds of the sale of those homes, provided that: [ The filing of the inventory-finance security form perfects a security interest in all manufactured homes which have been financed by the creditor-lender or for which the creditor-lender has advanced any funds or has incurred any obligation which enabled the retailer to acquire the manufactured home. The filing of the inventory-finance security form also perfects a security interest in all manufactured homes which are thereafter acquired by the retailer, for which the creditor-lender advances any funds or incurs any obligation. The security interest for these future acquisitions attaches immediately upon the advancement of funds or the incurrence of the obligation. The creditor-lender is not required to file additional inventory-finance security forms. ]

(A) the home is financed by the creditor-lender;

(B) the creditor-lender has advanced any funds for the home; or

(C) the creditor-lender has incurred any obligation for the home.

(D) This security interest attaches to a particular manufactured home only when the act described in either subparagraph (A), (B), or (C) of this paragraph would either:

(i) enable the retailer to acquire the manufactured home;

(ii) pay the existing balance of a creditor-lender for funds secured by a security interest in the manufactured home;

(iii) in the event that the retailer and manufacturer are the same entity, pay funds to the manufacturer-retailer after completion of the manufacture of the manufactured home; or

(iv) in the event that the retailer has no debt owed against untitled new inventory, enable the retailer to use the manufactured home as security for a new debt.

(6) (No change.)

(d) For Release of Lien.

(1) The lienholder of a lien recorded on a manufactured home document of title with the department shall deliver a properly executed release of lien form prescribed by the department to the owner of record within thirty (30) calendar days of the satisfaction of the debt or obligation secured by the lien .

(2) The lien recorded on a manufactured home document of title recorded with the department shall be released by the department upon receipt of a release of lien form properly executed by the lienholder of record, and a new document of title shall be issued to the owner(s) of record if the manufactured home is not real property .

(e) Foreclosure or Repossession.

(1) In the event of sale after either foreclosure or repossession of a manufactured home that is not real property , the department shall issue a new manufactured home document of title in the name of the purchaser [ lienholder ], upon receipt of a properly executed application for title containing the following information:

(A) - (C) (No change.)

(D) A certification that the home will not be located on the same property of the previous owner.

(2) In the event of foreclosure or repossession of a manufactured home that is not real property , the department will not issue a new manufactured home document of title until receipt of release of lien.

(f) Surrender of Title Documents for Cancellation.

(1) The department shall cancel any outstanding title to a manufactured home upon receipt of a properly executed application or Notice of Installation Affidavit . Title documents shall be surrendered for cancellation in the following instances:

(A) (No change.)

(B) The manufactured home, or transportable section, has been declared salvage as defined in §8 of the Standards Act[ , §8 ]; or

(C) (No change.)

(2) (No change.)

(g) Right of Survivorship: If two or more eligible persons [ both husband and wife ] are shown as purchasers or transferees, they may execute the right of survivorship election on an application for title. Such election constitutes an agreement for the right of survivorship. If the survivorship election is taken, then the department will issue a new document of title to the surviving person(s) [ spouse ] upon receipt of a copy of the death certificate of the deceased person(s) [ spouse ], and a properly executed application for title.

§80.207.Reinstatement of Canceled Documents of Title.

(a) A manufactured home document of title issued by the department which has been canceled because the home has been permanently affixed to real estate upon inspection by the department for habitability and upon representation by the owner of the owner's intent to transfer or sell the manufactured home may be reinstated subject to the following documents being filed with the department:

(1) - (3) (No change.)

(4) a certification from a title insurance company authorized to do business in Texas that no other liens exist on the manufactured home and if a Certificate of Attachment [ certificate of attachment ] to real estate has been filed in the deed records of the county in which the real estate is located, that a notice of removal from real estate has been filed in the deed records of the county in which the real estate from which the home was removed is located; and

(5) - (6) (No change.)

(b) (No change.)

§80.208.Recording Tax Lien on Manufactured Homes.

[(a) The collector for a taxing unit may file notice of the unit's tax lien on a manufactured home with the department, if the tax has not been paid by January 31 of the year following the year for which the tax is assessed. The notice must include:]

[(1) name and address of owner of the manufactured home;]

[(2) address and location of the manufactured home as shown on the collector's records;]

[(3) amount of tax owed, tax year for which tax was imposed, and name of taxing unit that imposed the tax;]

[(4) tax roll account number and taxing unit identification (ID) number; and]

[(5) manufacturer name, correct serial number and HUD label number or Texas seal number.]

[(b) The notice must be on a form prescribed by the department, and will consist of four parts:]

[(1) white--for TDHCA;]

[(2) blue--for lienholder;]

[(3) orange--for notice of cancellation;]

[(4) yellow--for collector.]

[(c) The white and blue portions of the notice are sent to the department to file the notice of tax lien. The department will stamp both portions received and recorded. The white portion will be returned to the collector, and the blue portion will be returned to the lienholder, if applicable. The orange portion will be retained by the collector for notice of lien cancellation. Upon cancellation of the lien, the orange portion should be completed and sent to the department where it will be date stamped upon receipt, recorded, and returned to the collector. ]

[(d) The collector may simultaneously file notice of tax liens of all the taxing units served by the collector. However, notice of any lien for taxes for the prior calendar year must be filed with the department prior to September 1 of the following year. Any lien for which the notice is not received and recorded by the department by the September 1 deadline is extinguished and is not enforceable.]

[(e) If the information on the tax lien notice matches that of the title of record, the department shall record a tax lien notice, and shall indicate the existence of the lien on any document of title for the manufactured home issued by the department, until the collector for the taxing unit files a notice canceling the tax lien. Simultaneously with the recording of a tax lien, the department must mail a notice of the tax lien to any other lienholders of record.]

[(f) If the information on the tax lien notice does not match that of the title of record, the notice will be returned to the taxing unit.]

(a) [ (g) ] For all manufactured homes sold, or to which ownership is transferred, after December 31, 1985 and before August 31, 2001 and for all manufactured homes that are not real property sold, or to which ownership is transferred after December 31, 1985 , the recording of a tax lien notice filed with the department constitutes constructive notice of the existence of the lien to all purchasers of the manufactured home who purchase it after the date or recordation of the lien and before the collector for the taxing unit files a notice canceling the tax lien.

(b) [ (h) ] If a tax lien filed with the department in accordance with this section ceases to exist, the collector for the taxing unit shall file a notice with the department stating that the lien no longer exists. Such notice shall be filed no later than ten (10) calendar days after payment of the taxes.

[(i) For the purposes of this section, the term "manufactured housing" has the meaning assigned by the Standards Act, §3(17), but does not apply to any manufactured home which has been declared to be real estate and for which the document of title has been canceled.]

(c) [ (j) ] A personal property tax lien may not be enforced against a manufactured home transferred to a bona fide purchaser who does not have constructive notice of the existence of the lien.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on March 25, 2002.

TRD-200201861

Bobbie Hill

Executive Director, Manufactured Housing Division of TDHCA

Texas Department of Housing and Community Affairs

Proposed date of adoption: May 5, 2002

For further information, please call: (512) 475-2206


Part 5. TEXAS DEPARTMENT OF ECONOMIC DEVELOPMENT

Chapter 174. DEFENSE ECONOMIC ADJUSTMENT ASSISTANCE GRANT PROGRAM

10 TAC §§174.1, 174.2, 174.6 - 174.8, 174.11

The Texas Department of Economic Development (agency) proposes amendments to Chapter 174, §§174.1, 174.2, 174.6, 174.7, 174.8, and 174.11 Defense Economic Adjustment Assistance Grant Rules, relating to providing state funds to assist communities that have been adversely affected by decreased defense expenditures and defense worker employment, as authorized by Government Code, Chapter 486, Subchapter A, Grants to Local Areas Affected by Defense Base Reduction.

The proposed amendments are necessary to accurately reflect current law, to reflect current program practices, and to allow for the re-adoption of the rules. Minor spelling corrections were made. In addition:

Proposed amendments to §174.1 update the rules to reflect legislative changes to include certain educational entities eligible to participate in the program and clarify the acceptable uses of grant proceeds and the parties to be benefitted by the program.

Proposed amendment to §174.2 clarifies the date by which program funds must be expended.

Proposed amendments to §174.6 update the rules to reflect legislative changes to include provisions for the purchase or lease of equipment for training purposes.

Proposed amendments to §174.7 updates the procedure for the processing and review of applications to more accurately reflect current program practices.

Proposed amendments to §174.8 provides that the department may offer less funding than the applicant requests.

Proposed amendments to §174.11 clarify the reporting responsibilities of awardees by specifying the types of documentation required and the time frame for submission of documentation and specify the penalty for the failure to meet the reporting requirements.

George O'Kelley, Director of Office of Defense Affairs, has determined for each year of the first five years that the amendments are in effect there will be no fiscal implications to the state or to local governments as a result of the amendments. No cost to either government or the public will result from the amendments. There will be no impact on small businesses or micro-businesses.

Mr. George O'Kelley has also determined that for each year of the first five years the amendments are in effect the public benefit anticipated as a result of the amendments is a clearer understanding of the rules and processes for participation in the program. No economic costs are anticipated to persons who are required to comply with the proposed amendments.

Written comments on the proposed amendments may be hand delivered to Texas Economic Development, 1700 North Congress, Suite 130, Austin, Texas 78701, mailed to P.O. Box 12728, Austin, Texas 78711-2728, or faxed to (512)936-0415 and should be addressed to the attention of Mary Herrick, Legal Assistant. Comments must received within 30 days of publication of the proposed amendments.

The amendments are proposed pursuant to Government Code §481.0044(a), which directs the Governing Board of the agency to adopt rules for administration of agency programs, Government Code §486.002(d), which directs the department to adopt rules necessary to carry out the Defense Economic Adjustment Assistance Grant Program, and Government Code, Chapter 2001, Subchapter B which prescribes the standards for rulemaking by state agencies.

Texas Government Code, Chapter 486, Subchapter A, is affected by this proposal.

§174.1. Introduction and Purpose.

(a) Background. The Texas Defense Economic Adjustment Assistance Grant Program was authorized by the 75th Legislature to provide state funds to assist communities that have been adversely impacted by decreased defense expenditures and defense worker employment. The program provides affected municipalities, counties, public junior college districts, a campus or extension center of the Texas State Technical College System, or regional planning commissions access to state funding. The funds may be used for the purpose of acquiring federal grant assistance or for sharing in the costs of property purchases from the United States Department of Defense or its designated agent, new construction, rehabilitation, or renovation of facilities or infrastructure, the purchase of capital equipment or project related insurance. If the grantee is a public junior college or technical college, grant proceeds may be used to purchase or lease equipment to train defense workers whose jobs have been threatened or lost.

(b) The primary goal of the program is to increase employment opportunities for dislocated defense workers and residents of adversely affected defense dependent communities and reuse vacated property as efficiently as possible.

(c) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Awardee--The local governmental entity whose application is approved by the governing board.

(2) Defense worker--

(A) an employee of the United States Department of Defense, including a member of the armed forces and a government civilian worker; or

(B) an employee of a government agency or private business, or entity providing a Department of Defense related function, who is employed on a defense facility; or

(C) an employee of a business that provides direct services or products to the Department of Defense and whose job is directly dependent on defense expenditures;

(D) an employee of a local, state or federal agency that provides direct services through contract or memorandum of agreement or an employee of a private business that provides direct services, supplies or equipment under a government contract or purchase agreement to the Department of Defense; or

(E) an employee or private contractor employed by the United States Department of Energy working on a defense or department of energy facility in support of a department of defense related project.

(3) Defense worker job--

(A) a department of defense authorized permanent position, such as a position contained on the appropriate unit manning documents; or

(B) a position held or occupied by one or more defense workers for more than 12 months.

(4) Department--The Texas Department of Economic Development.

(5) Executive director--The executive director of the Texas Department of Economic Development or his designee.

(6) Financial partners--Federal and state agencies, private and public non-profit foundations, local taxing authorities, and private investors who agree to provide money for a project eligible for funding under this grant.

(7) Fiscal year-The State of Texas fiscal year, September 1 through August 31.

(8) [ (7) ]Governing board--The governing board of the Texas Department of Economic Development.

(9) [ (8) ]Local governmental entity--A municipality, [ or ]county, public junior college district, campus or extension center of the Texas State Technical College System, or [ governing body ] regional planning commission.

(10) [ (9) ] Panel--The Defense Economic Adjustment Assistance Panel, a group of [ five ] professional full-time employees from within the department, who evaluate grant applications and make grant award recommendations to the department's governing board.

(11) Public junior college-A public junior college district within the State of Texas, all or part of which is located in an adversely affected defense dependent community.

§174.2.Program Coverage.

State funds provided under the Texas Defense Economic Adjustment Assistance Grant Program must be expended not later than the end of the second full fiscal year after the fiscal year [ the biennium ] in which the grant was awarded.

§174.6.Application for Funds.

(a) The department may develop a formal application form to be included in the formal application process to assist in the evaluation of the grant submission. The application may require certain attachments and certifications.

(b) At a minimum the application for funds will include:

(1) a summary overview of the use of the funds:

(A) a general description of the project to be financed;

(B) an analysis of the importance of the project in the overall reuse or redevelopment plan of the defense site and the surrounding community;

(C) the total amount of state grant assistance required and partners involved in financing the project, along with their respective shares;

(D) the total number of jobs to be created or retained as a result of the project;

(2) a brief summary of the event(s) that qualify the local government, under the eligibility criteria described above, to apply for the grant program; and

(3) an impact statement detailing the adverse effect caused by the event(s) described in §174.3(a) of this title (relating to Eligibility for Funds) on the local governmental entity to include:

(A) a brief analysis of the loss of defense worker jobs and the impact of job loss on total employment within the governmental entity, to include total number of defense worker jobs lost or predicted to be lost and current and projected changes in the unemployment rate;

(B) an analysis of the impact of the event on the economy of the community or region; and

(C) a completed Environmental Impact Statement, if available;

(4) a detailed description of the projected use of funds to allow determination of project eligibility for funding to include, as appropriate:

(A) a preapplication for federal funds, if state funds are to be part of a local share. It is not necessary to receive final approval for federal grants to apply for state funds under this program;

(B) a description of property to be purchased from the department of defense or its agent;

(C) a description of new construction, rehabilitation or renovation of facilities or infrastructure;

(D) a description of capital equipment to be purchased or a description of equipment to be purchased or leased for training purposes; and

(E) a description of insurance to be purchased, including type and coverage limits.

(5) a financial plan for the project detailing the following:

(A) breakdown of project costs;

(B) funding sources for the project and percentage contribution; and

(C) certification for state funding where the state is the sole partner in financing a project or in cases where the local governmental entity is requesting state participation in excess of a 50% share.

(6) a summary of the extent to which the local governmental entity has used its existing resources to promote local economic development, including:

(A) brief description of past general local economic development efforts which may include:

(i) adoption of an economic development sales tax;

(ii) establishment and financing of a local industrial development corporation; and

(iii) use of the Texas Capital Fund, Texas Leverage Fund and local economic development bond initiatives;

(B) a summary of current efforts to support redevelopment necessary to promote private investment and create or retain jobs in the area, including:

(i) financing of capital improvement projects and equipment;

(ii) support of site operations and maintenance;

(iii) availability of tax incentives and/or establishment of a defense readjustment zone or enterprise zone; and

(iv) local funding constraints;

(7) the amount money previously received under this program and number of applications submitted;

(8) the anticipated number of permanent jobs and the economic benefit to the community if the application is successful and the project is funded. If the application includes renovation or construction, interim jobs should be included and referred to as interim jobs; and

(9) name and contact [ contract ] information for person responsible for the grant application.

§174.7.Processing and Review of Applications.

(a) The local governing body will submit applications for the program to the [ Executive ] Director of the Office of Defense Affairs. [ Texas Department of Economic Development ]

(b) The Office of Defense Affairs will:

(1) publicize the program to potential applicants and provide grant solicitation information; and

(2) evaluate each application for completeness. The Office of Defense Affairs will work closely with the applicant to ensure all relevant information is included in the application.

(c) The executive director will:

(1) appoint a review panel consisting of three to five members to evaluate applications; and

(2) appoint a review panel chairman [ and vice chairman. ]

(d) The review panel will:

(1) review applications, score, and make recommendations to the governing board;

(2) develop procedures to ensure that one adversely affected defense-dependent community is not [ disproportionally ] favored over another in recommending funding;

(3) provide evaluations and recommendations for grant awards for all grant applications received based on the following criteria:

(A) the significance of the adverse effect within the local governmental entity, including the number of jobs lost in relation to the workforce in the local governmental entity's jurisdiction and the effect on the area's current and/or projected economy and tax revenue;

(B) the extent to which the local governmental entity has used its existing resources to promote local economic development;

(C) the amount of any grant that the local governmental entity has previously received under this chapter;

(D) the anticipated number of jobs to be created in relation to the amount of the grant sought; and

(E) the extent to which the grant will affect the region in which the local governmental entity is located.

(e) The governing board of the department will approve or disapprove the award of the grant. Award of the grant may be contingent on the receipt of federal grants or other partnership monies necessary to complete the project.

§174.8.Availability of Funds.

(a) Funds commitment. Once approved by the governing board for award, program money becomes committed to the awardee subject to the availability of funds.

(1) When the department determines that a qualified Defense Economic Adjustment Assistance Grant Program awardee proposal has been rejected by the federal agency or other financial partners, the commitment of funding previously committed will be withdrawn and the funding amount re-allocated to other applicants. The awardee will be given 30 days to renegotiate financial arrangements prior to withdrawal of the state program commitment.

(2) When the department has determined that an awardee has secured final approval from federal agencies and other financial partners, program funds will be encumbered to the awardee, subject to availability of funds.

(3) If the only partner in the project is the local governmental entity, funds will be encumbered to the entity upon final approval and encumbrance of funds by the awardee.

(b) Non-availability of funds. The department expects that availability of program funds will decrease significantly as a state funding biennium progresses. When all monies appropriated by the Texas Legislature to the department for a funding biennium have been encumbered to qualified awardees, remaining applicants shall be notified that funds are no longer available.

(c) The department may offer less funding than is requested by the applicant.

§174.11.Reporting Responsibilities.

(a) Disbursement of funds will be conditioned on the receipt of documentary evidence of completion of project phases as set forth in the grant contract. The evidence required will be tailored to the project and included in the contract. As a general rule, funds are disbursed as follows: [ Awardees will be required to provide written reports on the status of projects and expenditures related to the grant as determined by the department. ]

(1) fifty percent of the total contract amount upon presentation of required documentation of

(A) receipt of federal or other funds;

(B) permit approval;

(C) approval of plans and specifications; and

(D) other relevant evidence of satisfactory planning and commencement of the project set forth in the contract;

(2) forty percent of the total contract amount upon presentation of required documentation of fifty percent completion of the project;

(3) ten percent of the total contract amount upon presentation of required documentation of completion of the project.

(b) After completion of the project, the awardee will provide the following milestones and updates, including photographs where appropriate:

(1) base line and semi-annual data on the impact of the project on the local economy over a four year period beginning with the completion of the project;

(2) base-line and semi-annual data on any jobs generated by the project and data on the employment of dislocated defense and economically disadvantaged workers for a period of four years;

(3) satisfactory documentation of required job creation as required by the contract, which may include but is not limited to payroll records; and

(4) other relevant documentation of job creation and economic impact set forth in the contract.

(c) Throughout the project period, the awardee must provide copies of all reports required by federal agencies pursuant to the terms of individual federal grants received, within 30 days of their submission to the granting agencies.

(d) Failure to submit reports in a timely and satisfactory manner may result in the withholding of funds due or requested by the awardee. Failure to document post-completion requirements may result in the return of funds to the department as set forth in the contract.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on March 20, 2002.

TRD-200201748

Tracye McDaniel

Deputy Executive Director

Texas Department of Economic Development

Earliest possible date of adoption: May 5, 2002

For further information, please call: (512) 936-0177