By: Parker S.B. No. 1955
A BILL TO BE ENTITLED
AN ACT
relating to the regulation of industrial housing and buildings.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle C, Title 7, Occupations Code, is
amended by adding a new Chapter 1203 to read as follows:
SECTION 1
CHAPTER 1203. MODULAR DWELLING SYSTEM REGULATION.
Sec. 1203.001. LEGISLATIVE FINDINGS AND POLICY.
(a) The legislature finds that:
(1) there is a continuing need to provide safe,
affordable, and well-constructed housing;
(2) regulations in connection with industrial
housing, mobile homes, and manufactured homes,
along with partial building systems such as
structurally insulated panels serve the state
well;
(3) private construction creativity and market forces
have derived(?) new, innovative housing
construction techniques, including modular and
complete residential building systems, from
preapproved components or modules that are
manufactured off-site, then transported to a site
for final assembly and completion on a permanent
foundation;
(4) because of the nature of construction, modular,
complete residential building system assembly
presents unique opportunities to optimize uniform
health and safety standards at the place of
manufacture, while minimizing inspection
procedures and time delays associated with
traditional on-site inspection procedures; and
(5) there is a significant public benefit to
encouraging home ownership, by utilizing modular,
complete residential building construction
techniques to address the growing need for safe,
affordable, and well-constructed housing.
Sec. 1203.002 SUBCHAPTER A. GENERAL PROVISIONS.
Sec. 1203.003. APPLICABILITY OF CHAPTER. (a) Except as otherwise
provided by this chapter, this chapter applies only to a
municipality with a population of 300,000 or more. Except as
otherwise provided by this chapter, this chapter applies
exclusively to a modular, complete residential dwelling for
residential occupancy by one or more families. Unless clearly
indicated otherwise by context, the following words and terms when
used by this chapter shall have the following meanings.
Sec. 1203.003 GENERAL DEFINITIONS. In this chapter:
(1) "Commission" means the Texas Commission of
Licensing and Regulation.
(2) "Council" means the Texas Industrialized Building
Code Council.
(3) "Department" means the Texas Department of
Licensing and Regulation.
(4) "Executive director" means the executive director
of the department.
Sec. 1203.004 DEFINITIONS FOR MODULAR RESIDENTIAL DWELLINGS. In
this chapter:
(1) "Modular residential technique" means a method of
construction that utilizes a pre-engineered, complete building
assembly or system of building subassemblies, designed, built and
constructed in one or more three dimensional modules in a factory
that are transported to a residential site for assembly and
finishing.
(2) "Modular Residential Dwellings" means a structure
designed and built for residential use and constructed using a
modular technique in one or more three dimensional modules in a
factory, designed, and built utilizing an agency approved method of
construction that consists of pre-engineered, inspection
factory-fabricated sections that are transported to a site for
final assembly and finishing to completion on a permanent
foundation for residential occupancy by one or more families and
including the necessary electrical, plumbing, heating,
ventilation, and other service systems, which is of closed
construction. Modular residential dwelling does not include mobile
homes, recreational vehicles, or manufactured homes. A modular
residential dwelling located in Texas is regulated by the Texas
Department of Licensing and Regulation.
(3) "Approved foundation and support system" means,
for a modular residential dwelling unit, a closed perimeter
formation consisting of materials such as concrete, mortared
concrete block, mortared brick, steel, or treated lumber extending
into the ground.
(4) "Closed construction" is any residential building
component, assembly or system manufactured in such a manner that
all portions cannot readily be inspected at the installation site
with disassembly, damage to, or destruction thereof.
(5) "Code compliance certificate" means the
certificate provided by the manufacturer or builder to the
Department that warrants that the modular residential dwelling unit
complies with appropriate safety codes as established by the
Department. The Codes shall contain the standards and requirements
for modular residential dwellings so that adequate performance for
the intended use is made to test the acceptability, provided that
the structural requirements adopted for modular residential
dwellings shall be no more stringent than the requirements
contained in the most recent edition of the International
Residential Code for One and Two Family Dwellings or the
International Building Code, as applicable. The Code of Standards
shall permit the use of new technology, techniques, methods, and
materials for modular residential dwellings, consistent with
recognized and accepted codes and standards developed by the
International Code Council, the National Fire Protection
Association, and the International Association of Plumbing and
Mechanical Officials.
(6) "Approved Inspection Agency" means a person,
organization, or local government approved by the executive
director to be especially qualified by reason of facilities,
personnel, experience, and demonstrated reliability to
investigate, test, evaluate, and inspect modular residential
dwelling units, systems, or the component parts of modular
residential dwelling units together with the plans,
specifications, and quality control procedures to ensure that such
units, systems, or component parts are in full compliance with the
minimum standards adopted by the executive director pursuant to
this part and to label such units complying with those standards.
Any person, or any organization whose membership is composed of
persons, employed by a manufacturer of modular residential dwelling
units or owning any interest in any such manufacturing business
shall be ineligible for approval by the executive director to serve
as an inspection agency.
(7) "Installation" means the assembly of a modular
residential dwelling or dwellings onsite and/or the process of
affixing a modular residential dwelling or dwellings, which may
include the structural, electrical, mechanical, plumbing, fire
protection, or other structurally integrated system or systems
thereof affecting life safety.
(8) "Installer" means a company or general contractor
certified by the department that is responsible for design,
engineering, manufacturing, and installation of the components for
a modular residential dwelling unit at the final onsite location
pursuant to the Original Building Manufacturer's (OBM)
instructions.
(9) "Person" means any individual, group of
individuals, association, trust, partnership, limited liability
company, corporation, person doing business under an assumed name,
county, municipality, the State of Texas, or any political
subdivision or department thereof, or any other entity.
(10) "Complete application" means a submitted plan,
application for construction of a modular residential dwelling, or
request for inspection that contains all the information and
supporting documentation required by the county or municipality to
enable making the determination as to whether the plan,
application, or request is in compliance with regulatory
requirements of this Act and department rules.
(11) "Certification". The department shall issue an
authorizing certification to any manufacturer or installer upon
submittal of an application that is supported by affidavit in
addition to other evidence which the department deems necessary to
satisfy itself that the project meets the modular residential
dwelling criteria and that the project is compliant with this Act
and thereby approved to manufacture, install, rent, sell, or offer
for sale a modular residential dwelling.
(12) "Modular Residential Dwelling Fund" (Fund) means
a fund established within the department's budget, consisting of
fines and penalties, subject to appropriation, to be used for
enforcement of this Act.
Sec. 1203.005 PREREQUISITES TO SALE OR INSTALLATION. (a) After
the effective date of the rules adopted pursuant to this part, no
modular residential dwelling shall be offered for sale, sold, or
installed in this state unless it is approved and bears the insignia
of approval of the executive director, the executive director's
designee, or an approved inspection agency. It is unlawful for any
person to manufacture, rent, sell, or offer for sale for location
within this state any modular residential dwelling unless such
modular residential dwelling complies with this Act and all rules
adopted by the department.
(b) All modular residential dwelling units manufactured in
this state, or intended to be offered for sale, sold, or
installed in this state, shall be inspected by the
executive director, the executive director's designee,
or an approved inspection agency, at the place of
manufacture of the modular residential dwelling unit.
(c) No more than 30 days after receipt of both a modular
residential dwelling unit or project application and
the affidavit from a qualifying manufacturer,
installer, or construction contractor, the department
shall issue the requested authorization or provide
written notice to the applicant identifying the
specific plan features that do not comply with the
applicable regulatory requirements, as well as the
specific code chapters and sections of such regulatory
requirements. If the department or any local governing
authority fails to provide written notice of alleged
deficiencies within the prescribed 30-day period, the
application shall be deemed approved as a matter of law
and the project may proceed.
(d) Nothing in this chapter prohibits a city, town, village,
or county from adopting construction standards for
modular residential dwelling units under local
ordinances, provided such ordinances are in substantial
compliance with state requirements and reviewed and
approved by the department.
(e) No local standard relating to the construction or
installation of modular residential dwelling units
shall be applicable to any modular residential dwelling
unit subject to this part, unless such standard is
identical to that set by the department pursuant to this
Chapter. Any residential modular dwelling unit bearing
an insignia of approval issued by the executive
director, the executive director's designee, or an
approved inspection agency pursuant to this part shall
be deemed to comply with any local standard relating to
the construction of modular residential dwelling units.
(f) Subject to subdivision 1203.005(C), a local government
may make, and charge a fee for, an inspection of the
installation of a modular residential dwelling unit.
Any such fee shall not exceed the amount charged for the
equivalent inspection on conventionally, onsite, built
housing.
(e) Local land use and zoning requirements and flood control
areas are specifically and entirely reserved to local
government. Such local requirements and rules that may
be enacted by a local government must be reasonable and
uniformly applied and enforced without any distinction
as to whether a residential dwelling is conventionally,
onsite constructed or a modular residential dwelling
unit under this Chapter.
(f) Modular residential dwelling units bearing an insignia
of approval issued by the executive director, the
executive director's designee, or an approved
inspection agency pursuant to this part shall not be
modified prior to or during installation, except in
conformance with the rules of the executive director.
(g) The department shall promulgate a standard form notice
and a standard form certificate that shall be used to
administer this Act. Any local inspectors shall make
copies of the standard forms available to contractors.
(h) Upon submission of the certification required by this
subsection, the local governing authority shall be
required to accept the inspection without the necessity
of further inspection or approval, except that the
local governing authority may perform an inspection at
any time and may issue a stop-work order for the project
or any portion thereof as provided by law, after giving
prompt, written notice to the manufacturer or
installer, or the contractor of record, if the work is
found to be in violation of code requirements.
(i) If a local governing authority issues a stop-work order,
the local official shall be available to meet with the
person responsible for manufacturing, installing, or
constructing the modular residential dwelling unit
within two business days to resolve any dispute.
Sec. 1203.006 POWERS AND DUTIES OF THE EXECUTIVE DIRECTOR.
(A) The executive director shall enforce and administer this part.
(1) The executive director shall promulgate such rules
and regulations as the executive director finds necessary to
protect health and safety of the public against dangers inherent in
the use of substandard construction and unsafe plumbing,
electrical, and heating systems, and other appropriate regulations
to carry out this part, in accordance with the Texas Administrative
Procedures Act found in Title 10, Chapter 2001, Texas Government
Code.
(2) The executive director may impose an
administrative penalty against any person who violates this Act, or
any rule adopted under this Act, or who violates any determination
or order of the department under this Act. The department shall
establish violations and penalties by rule, with each day's
violation constituting a separate offense. The maximum penalty
shall be $1,000 per day per violation. All penalties collected
under this section shall be deposited into the "Modular Residential
Dwelling Fund". Subject to appropriation, moneys in the Fund shall
be used for enforcement of this Act.
(3) The executive director is authorized to require
licenses of manufacturers and any other person involved in the
construction, installation, sale, or lease of a modular residential
dwelling unit, and to set reasonable fees and conditions for such
licenses.
(4) The executive director may also establish record
keeping requirements from manufactures and installers.
(B) In addition to any other powers conferred on the executive
director by law, the executive director is authorized to perform
necessary inspection of manufacturing facilities and products to
implement the provisions of this Act, including:
(1) Prescribe all forms required to be filed pursuant to
this part;
(2) Establish a schedule of fees to pay the cost incurred by
the department for the administration and uniform
enforcement of the codes consistent with rules,
regulations, and interpretations promulgated by the
department;
(3) Appoint and employ such qualified personnel as are
necessary to carry out the duties imposed upon the
executive director by this part;
(4) Delegate inspection authority under this part, by
contract or other agreement, to local governments,
private persons, corporations, associations, and
agencies of other states, as an approved inspection
agency; and
(5) After notice and opportunity for hearing to an applicant
or insignia holder, may deny, suspend, or revoke a
certification or asses a civil penalty not to exceed
five thousand dollars ($5,000) for each violation of
this Act in any case where a finding of substantial
failure to comply with the provisions of this Act or the
minimum standards, rules, and regulations adopted by
the department under this Act.
(6) All final administrative or civil penalty decisions by
the executive director shall be subject to judicial
review.
(C) If a modular residential dwelling is manufactured, sold, or
installed in violation of this part, the executive director may
require:
(1) The manufacturer or installer in violation of this part
to provide the executive director with as-built plans
to be evaluated and approved by the executive director
for compliance with state building codes;
(2) The manufacturer or installer in violation of this part
to make available for inspection any components and
concealed spaces of the structure and to repair any
damages made when making the components and concealed
spaces available for inspection;
(3) Inspections to be made during the remanufacturing
process and may require that closed construction or
concealed spaces be opened or made accessible as
necessary to determine that components comply with
state building codes; and
(4) The manufacturer or installer to be responsible for all
costs or expenses incurred pursuant to this subsection
(c).
Sec. 1203.007 RECIPROCITY - INTERSTATE AGREEMENTS. If the
executive director determines that the minimum standards for
construction and inspection of modular residential dwelling units
prescribed by statute or rule of another state are at least equal to
rules prescribed under this part and that such standards are
enforced by such other state, the executive director may negotiate
and enter into reciprocal agreements with appropriate officials of
other states.
SECTION 2. This Act does not make an appropriation. A provision in
this Act that creates a new governmental program, creates a new
entitlement, or imposes a new duty on a governmental entity is not
mandatory during a fiscal period for which the legislature has not
made a specific appropriation to implement the provision.
SECTION 3. (a) As soon as practicable after the effective
date of this Act, the executive director of the Texas Department of
Licensing and Regulation shall adopt rules as necessary to
implement the changes in law made by this Act.
(b) As soon as practicable after the effective date of this
Act, the Texas Commission of Licensing and Regulation shall adopt
rules necessary to implement the changes in law made by Chapter
1203, as added by this Act.
SECTION 40. This Act takes effect immediately if it
receives a vote of two-thirds of all the members elected to each
house, as provided by Section 39, Article III, Texas Constitution.
If this Act does not receive the vote necessary for immediate
effect, this Act takes effect September 1, 2023.