HBA-GUM C.S.H.B. 2838 76(R)BILL ANALYSIS Office of House Bill AnalysisC.S.H.B. 2838 By: Keffer Urban Affairs 4/19/1999 Committee Report (Substituted) BACKGROUND AND PURPOSE Manufactured home retailers are only required to attend a 20-hour instruction course in the law and consumer protection regulations. No test is required. C.S.H.B. 2838 requires an unlicensed or unregistered retailer to attend and complete a course of instruction in the law and consumer protection regulations, and to pass an examination on that course in order to receive a license for the sale of manufactured homes. C.S.H.B. 2838 authorizes a manufactured home consumer to notify the retailer in writing of a need for warranty service or repairs, including service or repairs under the manufacturer's warranty, and authorizes the consumer to contact the Texas Department of Housing and Community Affairs (department) if the retailer does not respond to the request within a reasonable time. In addition, this bill requires a manufacturer of manufactured homes to construct such a home using standard materials designated by the director of the Texas Department of Housing and Community Affairs. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 7, Article 5221f, V.T.C.S., by amending Subsection (o) and adding Subsection (s), as follows, (o) Subjects this subsection to the provisions of this Subsection (s). (s) Requires a manufactured homes retailer not licensed or registered with the Texas Department of Housing and Community Affairs (department) or a predecessor agency as of September 1, 1987, to attend and complete the instruction in consumer protection regulations described by Subsection (o). Requires a retailer to pass an examination based on that instruction as a prerequisite for a license. Prohibits the department's director (director) from issuing a retailer's license until the instruction is completed and the examination is passed. SECTION 2. Amends Section 11(d), Article 5221f, V.T.C.S., to require that an additional fee be set and charged to each retailer who takes the required examination based on the course of instruction in the law and consumer protection regulations. SECTION 3. Amends Section 14, Article 5221f, V.T.C.S., by adding Subsection (o), as follows: (o) Authorizes a consumer, notwithstanding other provisions of this Act, while the retailer's warranty is in effect, to notify the retailer in writing of a need for warranty service or repairs, including service or repairs under the manufacturer's warranty. Authorizes the consumer, if the retailer does not take corrective action within reasonable time as required by department rules, to notify the department in writing of the retailer's failure to provide the warranty service or repairs. Authorizes the director to enter an order directing a retailer to perform the warranty service or repairs and, if appropriate, giving the retailer the right of indemnity against the manufacturer. Provides that a retailer entitled to indemnification under this subsection is a "consumer" under Sections 13 and 13A. Authorizes the retailer to recover the retailer's actual damages and attorney's fees from the manufactured homeowners' recovery fund. Provides that the consumer's rights and remedies under this subsection are cumulative of any other consumer rights or remedies relating to the retailer of manufacturer. SECTION 4. Amends Section 18, Article 5221f, V.T.C.S., by adding Subsection (j), to require a manufacturer to construct a manufactured home in this state using standard materials designated by the director. SECTION 5. Makes application of this Act prospective. SECTION 6. Effective date: September 1, 1999. SECTION 7. Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE The substitute modifies the original in SECTION 3 (proposed Section 14(o), Article 5221f, V.T.C.S.) to provide that a consumer is authorized to notify only the retailer, of the need for warranty service or repairs, and to specify that such warranty service or repairs include service or repairs under the manufacturer's warranty. The substitute also modifies the original in SECTION 3 to authorize, rather than require, the consumer, if the retailer does not take appropriate corrective action within a reasonable time, to notify the Texas Department Housing and Community Affairs in writing of the retailer's failure to provide the warranty service or repairs. Furthermore, the substitute modifies SECTION 3 of the original to provide that the consumer's rights and remedies under Section 14(o) (Texas Manufactured Housing Standards Act), Article 5221f, V.T.C.S., are cumulative of any other consumer rights or remedies relating to the retailer or manufacturer.