HBA-JLV H.B. 1869 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 1869 By: Wohlgemuth Financial Institutions 3/9/2001 Introduced BACKGROUND AND PURPOSE Manufactured housing represents a growing proportion of the homes currently being purchased in Texas. Although manufactured housing can be constructed and sold more quickly than site-built housing, some counties and school districts have experienced difficulties in keeping up with the rapid growth and the need to provide services for the community. Consumers may be unaware of their obligation to pay county and school taxes, unaware of their duty to maintain private roads, and unaware of their need to provide for and maintain on-site sewage disposal. House Bill 1869 establishes financing and acquisition procedures for retailers and consumers of manufactured homes and provides for notification to consumers of their responsibilities before purchasing a manufactured home. 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. ANALYSIS House Bill 1869 amends the Texas Manufactured Housing Standards Act to provide that manufactured homes on nonpermanent foundation systems are considered real property. The provisions of the bill apply only to a consumer who acquires a manufactured home (home) that is to be placed on a nonpermanent foundation system located on land owned by the consumer or located on land to be purchased by the consumer in conjunction with the acquisition of the home, regardless of whether the consumer acquires the land and home from the same person. The bill provides that a home acquired by a consumer is considered to be real property, unless the consumer elects to designate the home as personal property. The bill requires a consumer who does not elect to designate a home as personal property to make monthly payments to the retailer, who must place the payments in escrow, to provide for any required property taxes on the home, any required maintenance of private roads, and any required on-site sewage disposal system. The bill provides that escrow deposits may be placed in interest-bearing accounts, and the interest is payable as may be agreed in writing between the consumer and the retailer. The bill provides that a consumer is not required to make the monthly payments if, at the time the consumer acquires the home, the consumer makes a down payment equal to at least 25 percent of the total purchase price of the home and any land purchased by the consumer in conjunction with the acquisition of the home. The bill prohibits a retailer from transferring title to a home or otherwise selling, assigning, or conveying a home to a consumer unless the retailer delivers to the consumer a written document disclosing certain relevant financial information and the consumer's responsibilities, before the consumer signs the documents relating to the closing of the loan. The bill requires the executive director of the Texas Department of Housing and Community Affairs (director) to prepare and administer continuing education programs for retailers. The bill requires a retailer to complete 25 hours of continuing education programs, within the period specified by the director, that address state and federal laws affecting manufactured housing retailing practices, applicable consumer protection regulations, and ethics. EFFECTIVE DATE September 1, 2001.