Manufactured Home Installation Program, 34476-34505 [06-5389]

Agencies

• DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Federal Register Volume 71, Number 114 (Wednesday, June 14, 2006)]
[Proposed Rules]
[Pages 34476-34505]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 06-5389]



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Part V





Department of Housing and Urban Development





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24 CFR Part 3286



Manufactured Home Installation Program; Proposed Rule

Federal Register / Vol. 71, No. 114 / Wednesday, June 14, 2006 / 
Proposed Rules

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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Part 3286

[Docket No. FR-4812-P-02; HUD-2006-0167]
RIN 2502-AH97


Manufactured Home Installation Program

AGENCY: Office of the Assistant Secretary for Housing-Federal Housing 
Commissioner, HUD.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would establish a federal manufactured home 
installation program. HUD is required to establish such a program in 
accordance with the National Manufactured Housing Construction and 
Safety Standards Act of 1974, as amended by the Manufactured Housing 
Improvement Act of 2000. States that have their own installation 
programs that include the elements required by statute are permitted to 
administer under their state installation programs, the new 
requirements that would be established through this proposed and final 
rulemaking. The new elements required by statute to be integrated into 
an acceptable manufactured home installation program are: Establishment 
of qualified installation standards; licensing and training of 
installers; and inspection of the installation of manufactured homes.

DATES: Comment Due Date: August 14, 2006.

ADDRESSES: Interested persons are invited to submit comments regarding 
this rule to the Regulations Division, Office of General Counsel, 
Department of Housing and Urban Development, 451 Seventh Street, SW., 
Room 10276, Washington, DC 20410-0500. Interested persons also may 
submit comments electronically through the Federal eRulemaking Portal 
at www.regulations.gov. HUD strongly encourages commenters to submit 
comments electronically in order to make them immediately available to 
the public. Commenters should follow the instructions provided on that 
site to submit comments electronically.
    Facsimile (FAX) comments are not acceptable. In all cases, 
communications must refer to the docket number and title. All comments 
and communications submitted to HUD will be available, without change, 
for public inspection and copying between 8 a.m. and 5 p.m. weekdays at 
the above address. Due to security measures at the HUD Headquarters 
building, an advance appointment to review the public comments must be 
scheduled by calling the Regulations Division at (202) 708-3055 (this 
is not a toll-free number). Copies of all comments submitted are 
available for inspection and downloading at www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: William W. Matchneer III, Associate 
Deputy Assistant Secretary for Regulatory Affairs, Office of Regulatory 
Affairs and Manufactured Housing, Department of Housing and Urban 
Development, 451 Seventh Street, SW., Room 9164, Washington, DC 20410-
8000; telephone (202) 708-6401 (this is not a toll-free number). 
Persons with hearing or speech impairments may access this number via 
TTY by calling the toll-free Federal Information Relay Service at (800) 
877-8389.

SUPPLEMENTARY INFORMATION: 

I. Background

    The National Manufactured Housing Construction and Safety Standards 
Act of 1974 (42 U.S.C. 5401-5426) (the Act) is intended, in part, to 
protect the quality, safety, durability, and affordability of 
manufactured homes. The Act was amended on December 27, 2000 
(Manufactured Housing Improvement Act of 2000, Title VI, Pub. L. 106-
659, 114 Stat. 2997) to require HUD to, among other things, establish 
and implement a new manufactured home installation program for states 
that choose not to operate their own installation programs. 
Specifically, section 605 of the Act (42 U.S.C. 5404) calls for the 
establishment of an installation program that includes installation 
standards, the training and licensing of manufactured home installers, 
and inspection of the installation of manufactured homes.
    A state that wants to operate its own installation program is not 
required to be a State Administrative Agency (SAA) under HUD's 
manufactured home program (see 24 CFR part 3282). Under the Act, 
however, any state that submits a new state plan to become an SAA after 
December 26, 2005, must include a complying installation program as 
part of its plan. As a result, after December 26, 2005, any state that 
becomes an SAA for the first time, or any state that becomes an SAA 
again after a lapse in its SAA status, will be required to administer 
its own compliant installation program.
    The installation standards that will provide a basis for qualifying 
an installation program under section 605 of the Act were the subject 
of a separate proposed rule, which was published on April 26, 2005 (70 
FR 21498). In addition, an Advance Notice of Proposed Rulemaking that 
solicited public input on the installation program requirements was 
published on March 10, 2003 (68 FR 11448). Twenty-six commenters 
responded to the March 2003 notice, including a dozen state agencies, 
five state and national industry groups, a manufacturer, four state and 
national consumer groups, and four individuals. The comments and 
suggestions received from all of these commenters, as well as from the 
Manufactured Housing Consensus Committee (MHCC), were taken into 
consideration in the development of this proposed rule. However, not 
all of the comments could be accommodated, because of statutory 
authority or cost considerations. For example, the MHCC and commenters 
have recommended that HUD develop a program database to record and 
verify installations and to record how installers and other parties 
meet the installation program requirements. Such a database would be 
available for recording training, including continuing education; 
licensing; and installation inspections and verifications. Due to cost 
considerations, the proposed rule provides for the possibility of such 
a tracking system, but also provides for less expensive alternative 
methods. Further, the Department is seeking comment regarding what 
information should be sent to the Department and what should be 
retained by retailers and installers.
    A number of the comments focused on the administration of state 
installation programs rather than HUD's development and administration 
of a federal installation program. These comments were helpful, and HUD 
is examining the degree to which HUD has authority to use additional 
suggested approaches to implement its installation program. For 
example, both the MHCC and a number of commenters suggested that 
parties that participate in and receive the benefits of the 
installation program pay at least a portion of the direct costs 
associated with the program. This is an approach used by many states 
that currently have installation programs. Such user charges would 
generally not be intended to cover the purely administrative costs to 
HUD of implementing the program, but might include fees to obtain an 
installer's license or to be qualified as a trainer. Other 
administrative costs of the program in HUD-administered states would be 
funded as general program expenses. HUD is currently reviewing this 
approach and will not introduce any user fees until HUD's authority on

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such an approach is clear. Nevertheless, HUD is requesting comments on 
the advisability of incorporating such fees into the installation 
program for HUD-administered states.

II. General Principles

    HUD identified several general principles to guide it in developing 
this proposed rule. As a starting point, HUD wanted to encourage states 
to establish and implement their own installation programs. For the 
federal program, HUD determined that it wanted to concentrate its 
limited resources on assuring a quality end product, rather than on 
micromanagement of the installation process, such as negotiating 
specific methods used by each installer, retailer, and manufacturer.
    So that installers would not be dependent on the actions of HUD in 
order to complete any phase of home installation, HUD wanted to 
minimize its role in the actual installation process. Instead, HUD has 
sought to maintain knowledge of the parties involved in the 
installation process by assuring the collection of certain information 
regarding the parties' work. Ultimately, the goal for HUD's continued 
administration of its installation program would be to identify trends 
or early indicators of potential problems and then address those areas 
on a systemic basis.
    HUD has based its program design on limiting HUD's day-to-day 
oversight and encouraging participation in the oversight process by 
local building code authorities. Such a program design would be the 
most economical and effective approach. In addition, this design would 
take advantage of the expertise of qualified state and local 
authorities that are already providing oversight for the installation 
of manufactured homes.
    The HUD-administered installation program outlined in this proposed 
rule would be based on qualified installer self-certification of the 
proper installation of the manufactured home, similar to the 
certification concept used for manufacturers to assert compliance of 
the home with construction and safety standards. The installation 
certification would include certification that the work had passed the 
required inspection, which would include at least certain elements 
specified in the rule. At the same time, by requiring the retailer to 
be responsible for certain recordkeeping functions, the rule would 
recognize that the retailer is an important component of the 
installation process.
    The rule also would establish disclosure requirements to help the 
purchaser or lessee understand the installation requirements, and would 
set out installation-related responsibilities for home manufacturers.
    Finally, the rule would establish special procedures for adding to 
or revising the regulations that would be included in this new part 
3286. These procedures would involve the MHCC, a consensus committee 
established in section 604(a)(3) of the Act (42 U.S.C. 5403), in the 
issuance of regulations for the installation program and would be in 
addition to the rulemaking procedures that would otherwise apply.

III. Manufactured Home Installation Program Overview

    The statutory concept of the manufactured home installation 
program, whether HUD-administered or state-administered, is to apply 
minimum standards to the installation of new manufactured homes, so 
that qualified persons will install the homes properly. Manufactured 
homes that are properly installed can provide safe and durable quality 
housing that can also be highly affordable, since proper installation 
can mean fewer repairs and longer home-lives.
    The proposed rule sets out, in discrete subparts: (1) Manufactured 
home installation requirements that are applicable in all states 
(subparts A and H) and to all manufacturers; (2) requirements that are 
applicable in only those states in which HUD is administering the 
installation program (subparts B-G); and (3) requirements for states 
that wish to apply to administer their own installation programs in 
lieu of the HUD program (subpart I). Further, to make the applicable 
requirements more readily identifiable, the proposed rule separately 
organizes the requirements that apply to the retailers, distributors, 
installers, installation trainers, and installation inspectors in 
states where HUD administers the installation program. If a term is 
defined in both this proposed rule and other parts of HUD's 
manufactured housing program regulations, the final rule may include 
conforming amendments to assure consistency of the definitions, as 
appropriate.
    Manufacturer Responsibilities (All States). All manufacturers would 
be required to provide, with each home, an installation design and 
instructions that have been deemed by a Design Approval Primary 
Inspection Agency (DAPIA) as providing at least the level of protection 
that would be provided under the installation standards that will be 
adopted by HUD in 24 CFR part 3285 (see 70 FR 21498, April 26, 2005). 
If a home is installed in accordance with instructions provided by the 
manufacturer and those instructions do not provide at least the 
required level of protection, the manufacturer will be responsible for 
the failure of the home to comply with the installation standards.
    The manufacturer's installation instructions also must include 
instructions for supporting the manufactured home temporarily before 
the home is first sited for occupancy. In order to prevent the home 
from being brought out of compliance with the construction and safety 
standards, the instructions must be adequate to assure support for each 
transportable section of a manufactured home that is temporarily or 
permanently located on a site used by the manufacturer, by the retailer 
or at the home site.
    For each home a manufacturer ships, the manufacturer must 
concurrently provide HUD with certain information that identifies the 
home and the destination of the shipment. This information is similar 
to what is required already from manufacturers under regulations set 
out in 24 CFR 3282.552 relating to the construction of homes. HUD 
anticipates that the manufacturer's reporting requirements for 
identifying the home and the destination of the shipment will be 
satisfied by a consolidated report. Manufacturers, with their homes 
shipped to retailers and distributors, would also be required to 
include confirmation that this tracking information has been provided 
to HUD, and the information must be updated by the retailer or 
distributor. Manufacturers would also be required to include in their 
consumer manuals a recommendation that if a manufactured home is 
reinstalled, the new installation work should be inspected.
    Retailer/Distributor Responsibilities (All States). The proposed 
rule defines ``retailer'' to include manufacturers and distributors 
that sell manufactured homes directly to purchasers. All retailers and 
distributors would be required to support each transportable section of 
a manufactured home that is temporarily or permanently located on a 
site used by the retailer or distributor in accordance with the 
manufacturer's instructions for temporary storage, in order to prevent 
the home from being brought out of compliance with the construction and 
safety standards.
    The rule would require retailers to provide certain disclosures to 
purchasers or lessees, either as a separate section of the sales or 
lease contract or in a separate document. The disclosures are intended 
to provide important information to consumers

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regarding the installation requirements that will apply to their 
manufactured homes. The proposed rule also reminds parties that the Act 
prohibits provisions in agreements or contracts that would allow 
purchasers or lessees to waive any rights afforded to them by the Act.
    For each home that is sold or leased, retailers and distributors 
would be required to maintain a sales or lease record containing 
specified information for 5 years. For each home that is installed in a 
state where HUD administers the installation program, retailers and 
distributors would also be required to update the tracking information 
that the manufacturers had provided to HUD. This information will 
enable HUD to determine which homes are to be installed in accordance 
with the HUD-administered installation program. Additional information 
provided by the retailers for homes sited in states where HUD 
administers the installation program will help HUD ascertain whether 
the installation requirements have been met, and will help HUD identify 
ways to improve the program.
    The proposed rule also assigns other responsibilities to the 
retailer. Before the manufactured home is sold or leased, the retailer 
must verify that the home is appropriate for the wind, thermal, and 
roof loads where the home is to be sited. If the initial home site is 
not yet known, the retailer must provide additional disclosures to the 
purchaser or lessee about the design limits of the home and about the 
risk that an improperly sited home may not pass required inspections. 
The retailer must also provide the installer with a copy of the 
approved installation design and instructions.
    Installer Responsibilities (HUD-Administered States). The quality 
of the installation work on a manufactured home will depend primarily 
on the installer. Because HUD has not previously exercised authority 
over installers, they are likely to be in need of education about the 
new requirements that would apply to their work. The amendments to the 
Act that mandate an installation program recognize the importance of 
quality installation work to the performance of a purchaser's home. HUD 
hopes that the network of manufacturers and retailers, who are already 
familiar with the federal role in manufactured housing, will work to 
assure an educated and qualified pool of manufactured home installers. 
To be qualified, an installer will have to demonstrate adequate 
training, including experience, in order to be recognized by HUD as a 
licensed installer. The term ``installation license'' or ``installer's 
license'' is defined in a specific way in the proposed rule, to 
acknowledge that the term ``license'' is often understood to imply 
other characteristics than are applicable under the proposed rule.
    An installer would be required to obtain training from approved 
trainers, who would be responsible for teaching a curriculum that 
enables installers to pass a HUD-administered or HUD-approved test. The 
proposed rule establishes both initial training requirements and 
continuing education requirements for installers.
    In addition, an installer seeking a license from HUD would be 
required to provide evidence of, and maintain, general liability 
insurance. The term of the license would be 3 years, but the license 
could be renewed. If an applicant is denied a license on grounds other 
than failure to pass the installation license test, or if a licensee 
receives notice that his or her license might be revoked or suspended, 
the applicant or licensee could request an opportunity to challenge the 
adverse action in an administrative proceeding.
    Not all persons who perform installation work would be required to 
be licensed. Only licensed installers, however, would be permitted to 
certify the installation as being in conformance with the applicable 
instructions and the requirements of HUD's installation program, and 
the licensed installer would be responsible for all of the installation 
work. The proposed rule also lists typical work related to the siting 
of a manufactured home for which an installation license is not 
required.
    After meeting the licensing requirements, an installer would be 
qualified to install a manufactured home in a state where HUD 
administers the installation program. The installer would be 
responsible for installing the home in accordance with the 
manufacturer's instructions, which must reflect the requirements 
established by HUD. As part of the installation work, the installer 
would be required to verify: (1) The suitability of the site for 
placement of the home and (2) suitability of the proposed foundation or 
support and stabilization system. If the installer believes the home 
cannot be installed properly at the site, the installer must notify the 
contracting parties, including the retailer, and must decline to 
install the home until the deficiencies are remedied.
    After completion of the installation work, the installer or 
retailer would be required to arrange on a timely basis for the work to 
be inspected by an appropriate third-party inspector. The proposed rule 
does not specify a time for completion of the inspection; rather, the 
rule merely requires that it be arranged within 5 business days after 
completion of the installation work. HUD recognizes that inspector 
availability may be beyond the control of the installer and retailer, 
but expects that the installer and retailer will have sufficient 
incentive to complete the inspection without having to establish a 
deadline for completion.
    When the installer has received the verification of compliance from 
a qualified inspector, the installer may certify the installation work. 
The installer would then provide the certification to the retailer and 
a copy of the certification to the purchaser. Finally, the installer is 
required to maintain certain records relating to the installation for 5 
years.
    Trainers (HUD-Administered States). The proposed rule establishes 
experience and curriculum criteria for persons who wish to register as 
installation trainers under the HUD-administered installation program. 
HUD proposes allowing a broad range of private persons and entities to 
provide the required training, which HUD hopes will assure continued 
ready access to trainers by installer-license candidates throughout the 
country. Qualified trainers would be required to maintain attendance 
and other records and to provide certificates of completion of 
training, and may be authorized to administer the tests required for 
installers to obtain licenses from HUD. The curriculum that trainers 
would be required to develop includes an overview of the Act and the 
regulatory structure of HUD's manufactured home program, as well as 
general and specific instruction of installation standards and 
requirements.
    The requirements for continuing education to maintain an 
installer's license beyond the initial 3-year term would be more 
flexible. Only qualified trainers would be permitted to train on 
subject areas required by HUD for continuing education, but the balance 
of the required hours could be met in a variety of ways.
    Interested individuals and entities would apply to HUD to be 
recognized as qualified trainers for a renewable 5-year term. The 
proposed rule also provides a right for applicants and qualified 
trainers to request an opportunity to challenge, in an administrative 
proceeding, any adverse action on their qualification by HUD.
    Inspectors (HUD-Administered States). HUD proposes to rely on local 
building inspectors and professional engineers and architects as

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independent, third-party inspectors of all installations of new 
manufactured homes in states where HUD administers the installation 
program. Generally, the installer would be responsible for obtaining 
and paying for the inspection services. The proposed rule sets out the 
elements that would be included in the inspection checklist, including 
required permits, specific elements of the minimum installation 
standards, and operational checks to be completed. The inspector would 
verify that the installation has been completed in accordance with the 
requirements of the regulations and would provide evidence of the 
verification to the installer. The installer must receive this 
verification before the installer could certify the installation work. 
The proposed rule also addresses what would happen if an installation 
cannot be verified as meeting the requirements of the regulations. As 
with other categories of program participants, inspectors would have a 
right to request administrative review of an adverse action by HUD on 
their authority to serve as inspectors in the HUD-administered states.
    Enforcement (HUD-Administered States). The proposed rule reiterates 
that failure to comply with the installation program requirements would 
be a prohibited act under section 610(a)(7) of the Act (42 U.S.C. 
5409(A)). As a result, the violator would be subject to civil and 
criminal penalties and actions for injunctive relief. In addition, 
installation defects that are reported in the first year after 
installation may be addressed in a dispute resolution program that 
meets the requirements in section 623 of the Act (42 U.S.C. 5422). HUD 
has published a separate proposed rule to implement the requirements 
for a qualifying dispute resolution program on October 20, 2005, at 70 
FR 61178.
    Recordkeeping (All States). As proposed, the rule would require 
retailers and distributors to maintain a sales or lease record 
containing specified information for all homes that they sell or lease. 
In addition, retailers and distributors would be required to report to 
HUD certain information about each home that is installed in states 
where HUD administers the installation program, so that HUD can 
determine which homes are to be installed in accordance with the HUD-
administered installation program. This information may be useful if 
HUD is to structure fees according to the siting of the home. Such a 
reporting structure might eventually be simplified by establishing 
Internet-based data entry, rather than using hard-copy reports, and by 
consolidating installation and construction reporting requirements.

IV. State Installation Programs

    Qualifying State Programs. One of HUD's guiding principles in 
developing the proposed HUD Manufactured Home Installation Program is 
to encourage the development and continued innovation of state 
installation programs. The proposed rule would establish that the HUD-
administered installation program will operate in a state unless that 
state certifies, using a form provided in the rule, that it has its own 
qualifying installation program. A state installation program would be 
required to meet criteria listed in the self-certification form, but 
the rule would not specify how the criteria are to be met. In this way, 
states will have more flexibility to design installation programs or 
modify existing ones according to their individual preferences and 
circumstances.
    A state's certification would encompass those elements expressly 
required by the Act to be part of a qualifying program, i.e., standards 
that provide protection to residents that equals or exceeds the level 
of protection provided by HUD's model standards; the state's training 
and licensing of installers; and the state's inspection of 
installations. An appropriate state official would sign the self-
certification, and, at least initially, HUD would perform only a 
limited review of such certifications. If a state provides for its 
installation program as part of a state plan, HUD would also consider 
the installation program when it reviews the state plan. 
Recertification would be required every 3 years or whenever there is a 
significant revision in either the state's installation standards or 
its installation program elements.
    Generally, a state that wants to administer its own program will 
have to assure HUD that all geographical areas of the state would be 
covered by the applicable installation standards and the other program 
requirements. An exception would be provided for limited areas of the 
state that are subject to federal law that prevents the state from 
having jurisdiction over manufactured home installations in those 
areas. The certification form would include an item asking the state 
for information about such situations. The certification form also asks 
the state to provide other information that will help HUD understand 
and evaluate its overall approach to implementation of the Act's 
installation program. Those parts of the certification form that ask 
for information beyond what is required for the self-certification 
would be used to assess the utility of future modifications of HUD's 
installation program.
    The proposed rule would permit a state that complies in significant 
part with the requirements for a state-administered installation 
program, and that is moving toward full compliance, to be conditionally 
accepted as a qualifying program for up to 3 years. These states would 
have to require compliance with the minimum installation standards and 
would have to provide adequate funding and staffing support to their 
programs. Similar to the provision for rejection of state plans (see 24 
CFR 3282.304), in the proposed rule HUD would provide notice to the 
state if HUD finds the state's certification inadequate, and HUD would 
also provide an opportunity to cure the inadequacy. In the event of a 
failure to cure, HUD would notify the state, by using the procedures in 
24 CFR part 3282, subpart D, that the HUD installation program would 
apply in that state, and that the state has a right to a hearing on the 
disapproval.
    Effect of Other State and Local Requirements. The Act provides 
specific criteria only for the installation-standards component of a 
qualifying installation program. In order for a state installation 
program to satisfy the criteria of the Act, the installation standards 
imposed by the state must provide at least the specified level of 
protection to residents of manufactured homes. See section 605(c)(3)(A) 
of the Act (42 U.S.C. 5404(c)(3)(A)). The Act does not establish such 
minimum requirements for the other elements that are required to be in 
a qualifying state program: training and licensing of installers, and 
inspections.
    Further, section 604(d) of the Act (42 U.S.C. 5403(d)) generally 
reserves to each state the right to establish standards for the 
stabilizing and support systems and foundation systems of manufactured 
homes sited in the state. Therefore, state and local requirements that 
are not inconsistent with the minimum installation standards required 
by the Act and HUD's regulations might also be applicable to particular 
installations. For example, a state or local requirement that only 
licensed persons may perform work to connect the home to utilities 
would not be affected by this proposed rule.

V. Specific Issues for Comment

    In addition to commenting on the specific provisions included in 
this proposed rule, the public is invited to provide comment on the 
following questions and any other related matters:
    (1) Limited exemptions from requirements. The proposed rule 
provides that, in limited circumstances, a state may qualify to 
administer its own

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installation program even if the minimum installation standards cannot 
be applied and enforced in all areas of the state. This limited 
exemption is intended to apply only where the state can demonstrate 
that it lacks legal authority, as a matter of federal law, to impose 
the installation requirements, and the proposed rule would require that 
the minimum installation standards and other requirements do apply in 
all other areas of the state. Similarly, the proposed rule provides an 
exception to application of the installation program requirements to 
temporary housing units provided to victims of Presidentially declared 
disasters, when the manufactured home is installed by persons holding 
an emergency contractor license issued by: (1) The state in which the 
home is sited or (2) by the Federal Emergency Management Agency. Should 
the final rule recognize any other exemptions?
    (2) Should the manufacturer be required to provide notice about the 
installation program in the home or in the consumer's manual, in 
addition to the required disclosure on the sales contract?
    (3) Should the final rule set out specific language for the 
installer to use in certifying that the installation of the home 
complies with the requirements of HUD's installation program? If so, 
what information should be included in the installer's certification?
    (4) Should the final rule include any requirements for training 
relating to assuring accessibility and visitability for mobility-
challenged persons?
    (5) Should the final rule include any special method for tracking 
homes that are released from one retailer to another? If so, what 
should be the method?
    (6) The proposed rule includes a requirement that retailers notify 
HUD about new manufactured homes that will be installed in a state 
where HUD administers the installation program. Should the final rule 
include a requirement that, when a manufactured home is sold, retailers 
notify either HUD or the state in which the home is to be installed (if 
that state has a qualifying installation program)?
    (7) For purposes of HUD's enforcement of requirements related to 
installation standards and construction and safety standards, HUD may 
establish a different completion-of-sale date in HUD-administered 
states than would be applicable in non-HUD-administered states. How 
should the completion-of-sale date of a manufactured home be affected 
by the new requirements for installation oversight in: (1) HUD-
administered states? (2) In states with their qualifying installation 
programs? (See 24 CFR 3282.252(b) in HUD's procedural and enforcement 
regulations, and Sec.  3286.117 in this proposed rule.)
    (8) Section 3286.203(b) of this proposed rule lists kinds of work 
or activities for which an installation license would not be required. 
Are there other areas that should be included in any such listing in 
the final rule?
    (9) Should holding an installer's license or certification that is 
issued in a state with a qualifying installation program be recognized 
as a basis for exempting a HUD license applicant from having to meet 
the experience requirements that would otherwise apply?
    (10) Should a professional engineer, a registered architect, or a 
Primary Inspection Agency (PIA) be permitted to conduct an installation 
inspection only if an inspector from the appropriate local jurisdiction 
is not available to perform the inspection? Should any other persons be 
permitted to conduct the installation inspections in HUD-administered 
states, such as qualified inspectors from other states with HUD-
approved installation programs or private third parties experienced in 
residential building construction?
    (11) Disclosures. Section 3286.603(b) in the proposed rule requires 
a retailer disclosure when the initial siting location of the 
manufactured home is not known at the time of sale. Should the final 
rule instead require the retailer to know at the time of sale where the 
home is to be sited? If not, should the final rule include the Sec.  
3286.603(b) disclosure in the list of written disclosures required in 
Sec.  3286.7(b) of the proposed rule? Should the final rule expressly 
require that any or all of these disclosures be signed by the 
purchaser, as evidence that the required disclosure was made?
    (12) Use of the word ``should'' instead of ``must.'' Occasionally 
in the proposed rule, HUD has used the word ``should,'' rather than the 
mandatory ``must.'' This usage has been deliberate and generally 
indicates an area that HUD recognizes as being important to the 
successful installation of a manufactured home, but in which HUD 
believes its authority is limited. Commenters are invited to point out 
instances of where the choice of terminology may be inappropriate.

VI. Findings and Certifications

Regulatory Planning and Review

    The Office of Management and Budget (OMB) reviewed this rule under 
Executive Order 12866 (entitled ``Regulatory Planning and Review''). 
OMB determined that this rule is a ``significant regulatory action'' as 
defined in section 3(f) of the order (although not an economically 
significant regulatory action, as provided under section 3(f)(1) of the 
order). Any changes made to the rule subsequent to its submission to 
OMB are identified in the docket file, which is available for public 
inspection in the Regulations Division, Office of General Counsel, 
Department of Housing and Urban Development, 451 Seventh Street, SW., 
Room 10276, Washington, DC 20410-0500.

Paperwork Reduction Act

    The proposed information collection requirements contained in this 
rule have been submitted to the OMB for review under the Paperwork 
Reduction Act of 1995 (44 U.S.C. 3501-3520). Under this Act, an agency 
may not conduct or sponsor, and a person is not required to respond to, 
a collection of information unless the collection displays a valid 
control number.
    The public reporting burden for this collection of information is 
estimated to include the time for reviewing the instructions, searching 
existing data sources, gathering and maintaining the data needed, and 
completing and reviewing the collection of information.
    The following table provides information on the estimated public 
reporting burden:

----------------------------------------------------------------------------------------------------------------
                                     Number of     Responses per   Total annual      Hours per
     Information collection         respondents     respondent       responses       response       Total hours
----------------------------------------------------------------------------------------------------------------
Sec.   3286.5(d)--Manufacturer's              78            1                 78           20              1,560
 temporary installation
 instructions...................
Sec.   3286.7(a)--Manufacturer's             222          608            135,000            0.17          22,500
 notice in the consumer manual..
Sec.   3286.7(b)--Retailer                 5,151           26            135,000            0.17          22,500
 disclosure before sale (Sec.
 3286.503(b), Sec.
 3286.603(a)(2)(i)).............

[[Page 34481]]

 
Sec.   3286.9(a)--Manufacturer               222          608            135,000            0.17          22,500
 providing information to HUD
 prior to shipment..............
Sec.   3286.9(c)--Manufacturer               222          608            135,000            0.17          22,500
 providing notice to retailer at
 time of shipment...............
Sec.   3286.9(d)--Manufacturer's             222          608            135,000            0.17          22,500
 notice in the installation
 instructions...................
Sec.   3286.13--Retailer                     340           20              6,750            0.17           1,125
 providing information to HUD
 (Sec.   3286.605(a))...........
Sec.   3286.103(a)--Retailer                 340           20              6,750            0.17           1,125
 providing installation
 instructions to the purchaser..
Sec.   3286.103(b)--Retailer                 340           17              5,738            0.17             956
 providing installation
 instructions to the installer..
Sec.   3286.111(a)--Installer              1,021            7              6,750            0.5            3,375
 conduct installation
 certification of installation
 (Sec.   3286.411(a), Sec.
 3286.507(b))...................
Sec.   3286.111(b)--Installer              1,021            7              6,750            0.17           1,125
 providing installation
 certification to retailer and
 purchaser (Sec.   3286.411(a),
 Sec.   3286.507(b))............
Sec.   3286.113(a)--Retailer                 340           20              6,750            0.25           1,688
 providing installation
 information to HUD (Sec.
 3286.605(a))...................
Sec.   3286.207(a)--Installation           1,021            1              1,021            1              1,021
 license application............
Sec.   3286.207(b)--Proof of               1,021            1              1,021            1              1,021
 experience for license.........
Sec.   3286.207(c)--Proof of               1,021            1              1,021            0.25             255
 training for license...........
Sec.   3286.207(d)--Proof of               1,021            1              1,021            0.25             255
 insurance for license..........
Sec.   3286.207(e)--List of                1,021            1              1,021            0.08              85
 states in which the applicant
 holds a license................
Sec.   3286.211(b)--Installation           1,021            1              1,021            1              1,021
 license renewal................
Sec.   3286.303(b)--Trainers                  50            1                 50          104              5,200
 required to keep attendance
 records........................
Sec.   3286.303(c)--Trainers                  50           20              1,021            0.17             170
 required to provide completion
 certificates...................
Sec.   3286.307(a)--Trainer                   50            1                 50            1                 50
 registration application.......
Sec.   3286.307(b)--Trainer                   50            1                 50            1                 50
 proof of experience required...
Sec.   3286.307(c)--Other                     50            0.02               1            0.25            0.25
 trainer qualification required.
Sec.   3286.313--Expiration and               50            1                 50            1                 50
 renewal of trainer
 qualification..................
Sec.   3286.405(b)--Installer              1,021            0.07              68            0.5               34
 notification of inappropriate
 site...........................
Sec.   3286.413--Installer                 1,021            1              1,021           24             24,504
 recordkeeping requirements.....
Sec.   3286.805(a)--State                     35            1                 35            2                 70
 Installation Program
 Certification Form.............
Sec.   3286.807(a)--State                     35            1                 35            1                 35
 Installation Program
 Recertification Form...........
                                 -------------------------------------------------------------------------------
    Totals......................  ..............        2,583            723,073  ..............         157,276
----------------------------------------------------------------------------------------------------------------

    In accordance with 5 CFR 1320.8(d)(1), HUD is soliciting comments 
from members of the public and affected agencies concerning the 
proposed collection of information to:
    (1) Evaluate whether the proposed collection of information is 
necessary for the proper performance of the functions of the agency, 
including whether the information will have practical utility;
    (2) Evaluate the accuracy of the agency's estimate of the burden of 
the proposed collection of information;
    (3) Enhance the quality, utility, and clarity of the information to 
be collected; and
    (4) Minimize the burden of the collection of information on those 
who are to respond, including through the use of appropriate automated 
collection techniques or other forms of information technology, e.g., 
permitting electronic submission of responses.
    Interested persons are invited to submit comments regarding the 
information collection requirements in this proposal. Under the 
provisions of 5 CFR part 1320, OMB is required to make a decision 
concerning this collection of information between 30 and 60 days after 
today's publication date. Therefore, any comment on the information 
collection requirements is best assured of having its full effect if 
OMB receives the comment within 30 days of today's publication. This 
time frame does not affect the deadline for comments to the agency on 
the proposed rule, however. Comments must refer to the proposal by name 
and docket number (FR-4812-P-02) and must be sent to:

HUD Desk Officer, Office of Management and Budget, New Executive Office 
Building, Washington, DC 20503, FAX: (202) 395-6974;
     and
Kathleen O. McDermott, Reports Liaison Officer, Office of the Assistant 
Secretary for Housing--Federal Housing Commissioner, Department of 
Housing and Urban Development, 451 Seventh Street, SW., Room 9116, 
Washington, DC 20410-8000.

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 
1531-1538) establishes requirements for federal agencies to assess the 
effects of their regulatory actions on state, local, and tribal 
governments and the private sector. This proposed rule does not impose 
any federal mandates on any state, local, or tribal government or the 
private sector within the meaning of the Unfunded Mandates Reform Act 
of 1995.

Environmental Review

    A Finding of No Significant Impact with respect to the environment 
has

[[Page 34482]]

been made in accordance with HUD regulations at 24 CFR part 50, which 
implement section 102(2)(C) of the National Environmental Policy Act of 
1969 (42 U.S.C. 4332(2)(C)). The Finding of No Significant Impact is 
available for public inspection between the hours of 8 a.m. and 5 p.m. 
weekdays in the Regulations Division, Office of General Counsel, 
Department of Housing and Urban Development, 451 Seventh Street, SW., 
Room 10276, Washington, DC 20410-0500.

Executive Order 13132, Federalism

    Executive Order 13132 (entitled ``Federalism'') prohibits, to the 
extent practicable and permitted by law, an agency from promulgating a 
regulation that has federalism implications and either imposes 
substantial direct compliance costs on state and local governments and 
is not required by statute, or preempts state law, unless the relevant 
requirements of section 6 of the Executive Order are met. This rule 
does not have federalism implications and does not impose substantial 
direct compliance costs on state and local governments or preempt state 
law within the meaning of the Executive Order.
    HUD is required by statute to establish an installation program 
through the National Manufactured Housing Construction and Safety 
Standards Act of 1974 (42 U.S.C. 5401-5426). However, in accordance 
with the Act and as set forth in Sec.  3286.15 of this proposed rule, 
this Manufactured Home Installation Program is not preemptive.

Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires 
agencies to consider the impact of their rules on small entities. When 
the proposed regulation will impose a significant economic impact on a 
substantial number of small entities, the agency must evaluate 
alternatives that would accomplish the objectives of the rule without 
unduly burdening small entities.
    HUD conducted a preliminary analysis of the cost impact on small 
entities for this rule. The completed preliminary analysis concluded 
that the Manufactured Home Installation Program would have a 
significant economic impact on a substantial number of small entities. 
Pursuant to the requirements of the Regulatory Flexibility Act (5 U.S.C 
603), HUD performed an Initial Regulatory Flexibility Analysis (IRFA) 
that evaluates the potential economic impact on the small entities the 
regulations will affect, including: manufacturers, retailers, 
installers, and trainers. The IRFA also evaluates the differences in 
cost depending whether the home is single-section or multi-section. A 
summary of the IRFA follows. As noted above in the preamble, on 
December 27, 2000, the National Manufactured Housing Construction and 
Safety Standards Act of 1974 (42 U.S.C 5401-5426) (the Act) was amended 
by the Manufactured Housing Improvement Act of 2000, which, among other 
things, required the Secretary to establish an Installation Program for 
the enforcement of the Model Manufactured Home Installation Standards 
in each state that does not have an installation program established by 
state law and approved by HUD.
    The rule would regulate establishments primarily engaged in making 
manufactured homes (NAICS 321991), the sale or lease of manufactured 
homes (NAICS 453930), the installation of manufactured homes (NAICS 
238990), the training of installers (NAICS 611519), and states 
administering their own installation programs. The following table 
summarizes the number of regulated entities and the number of small 
entities that the proposed rule would affect:

----------------------------------------------------------------------------------------------------------------
                                                    Number of                                      Percentage of
          NAICS code            Description of      regulated        SBA size        Number of       regulated
                                primary entity      entities         standard     small entities     entities
----------------------------------------------------------------------------------------------------------------
                                All states--Subpart A is applicable in all states
----------------------------------------------------------------------------------------------------------------
321991.......................  Manufacturers...             222  500 emp........             198              89
453930.......................  Retailers.......           5,151  500 emp........           5,151             100
----------------------------------------------------------------------------------------------------------------
            States without installation programs--Subparts B through H are applicable in these states
----------------------------------------------------------------------------------------------------------------
453930.......................  Retailers.......             340  500 emp........             340             100
238990.......................  Installers......           1,021  $12 mil........           1,021             100
611519.......................  Trainers........              50  $6 mil.........              50             100
----------------------------------------------------------------------------------------------------------------
                   States with installation programs--Subpart I is applicable in these states
----------------------------------------------------------------------------------------------------------------
                               States..........              35  50,000 pop.....               0               0
----------------------------------------------------------------------------------------------------------------

    Of the 222 firms included under the NAICS 321991 definition, 198 
are small manufacturers that fall below the small business threshold of 
500 employees. Of the remaining firms involved in the manufactured 
housing industry regulated by this proposed rule included under NAICS 
453930, NAICS 238990, and NAICS 611519 definitions, none exceed the 
small business thresholds established for the category. States are not 
considered small entities since they exceed the small jurisdiction 
threshold population of 50,000. Therefore, the rule would affect a 
substantial number of small entities.
    The following table summarizes the cost impacts associated with the 
proposed rule:

Current manufactured home production--Total.................         \1\
                                                                $135,000
Current manufactured home production--HUD-administered         \1\ 6,750
 states.....................................................
Number of manufacturers--Total..............................         222
Estimated number of retailers--Total........................       5,151
Estimated number of retailers--HUD-administered states......         340
Estimated number of installers--HUD-administered states.....       1,021
Estimated number of trainers--HUD-administered states.......          50
Estimated number of HUD-administered states.................          15

[[Page 34483]]

 
Total increase for a single wide--All states................          17
Total increase for a double wide--All states................          17
Total increase for a single wide--HUD-administered states...         974
Total increase for a double wide--HUD-administered states...       1,023
Total compliance cost per manufacturer--All states..........       6,672
Total compliance cost per retailer--All states..............         186
Total compliance cost per retailer--HUD-administered states.         514
Total compliance cost per installer--HUD-administered states       6,371
Total compliance cost per trainer--HUD-administered states..       2,045
Total compliance cost per state--HUD-administered states....         120
Total estimated economic impact.............................         \2\
                                                              9,006,000
 
\1\ Consisting of about 30 percent single-section homes and 70 percent
  multi-section homes.
\2\ The paperwork component, associated with the reporting and
  recordkeeping requirements, described above in the Paperwork Reduction
  Act section of the preamble, accounts for $3.31 million of the total
  estimated economic impact.

    The overall cost impact for a single-section home is determined to 
be approximately $974 per home, and the cost impact for a multi-section 
home is determined to be about $1,023 per home in states where HUD 
administers the installation program. The cost impact for single-
section and multi-section homes is determined to be approximately $17 
per home in states where HUD does not administer the installation 
program. Because state-administered installation programs would be 
funded through state mechanisms, they are not included in this 
analysis. State-administered installation programs would also have to 
encompass those elements expressly required by the Act to be part of a 
qualifying program, i.e., standards that equal or exceed the level of 
protection provided by HUD's model standards, training and licensing of 
installers, and inspection of installations.
    Current manufactured home production is approximately 135,000 homes 
with approximately 6,750 homes in states where HUD will administer the 
installation program. Of the total production, approximately 30 percent 
consists of single-section homes and 70 percent consists of multi-
section homes. The combined cost impact for all homes in all states is 
approximately $9 million annually.
    Based on a current installation cost of about $5,000 for a single-
wide home, the $974 increase in states where HUD would administer the 
installation program would represent an increase of approximately 20 
percent from the current cost of installing a single-section home. 
Similarly, the current cost of installing a multi-section home is about 
$8,000. Therefore, the cost impact of $1,023 per multi-section home in 
states where HUD would administer the installation program would 
represent an increase of about 13 percent from the current cost. These 
estimated costs and cost impacts represent a significant economic 
effect on an industry-wide, per-home basis. The increase in total cost 
associated with this proposed rule would have a significant economic 
impact on a substantial number of small entities.
    The Department is unaware of any federal rules that conflict with 
the proposed rule. However, the proposed rule requires duplicative 
information to that required in 24 CFR 3282.552, which requires 
manufacturers to submit monthly label reports to their Production 
Inspection Primary Inspection Agency (IPIA). 24 CFR 3282.553 requires 
each IPIA to provide the information in the monthly label reports to 
the Department. Proposed Sec.  3286.9 requires the manufacturer to 
provide similar information to the Department for the purposes of 
installation.
    In this rule, the Department combined the reporting requirements in 
24 CFR 3282.552 and 3286.9 by revising form HUD-302 so that the 
manufacturer must complete only one form. The proposed rule seeks 
specific comments regarding this issue.
    In drafting the proposed rule, HUD considered numerous alternatives 
to reduce the economic impacts on small entities. Below are the 
significant alternatives that were considered:
    Section 3286.5(d) Alternative Considered--The Department considered 
eliminating this requirement. However, the importance of assuring that 
the temporary supports will be sufficient to prevent the home and its 
transportable sections from being brought out of conformance with the 
Construction and Safety Standards in 24 CFR part 3280 prior to sale is 
a necessary consumer protection.
    Section 3286.7(a) Alternative Considered--The Department considered 
eliminating this requirement. However, the importance of consumer 
protection with regard to reinstalled homes justifies the costs 
associated with this section.
    Section 3286.7(b) Alternative Considered--The Department considered 
eliminating this requirement. However, the importance of consumer 
protection during the purchase or lease of a manufactured home 
justifies the costs associated with this section.
    Section 3286.9(a) Alternative Considered--The Department considered 
requiring manufacturers to provide the initial tracking information 
about homes installed in only those states in which HUD administers the 
installation program. Such a requirement would reduce the reporting 
burden on the manufacturers; however, in many instances, manufacturers 
do not know the destination or address of the home at the time of 
shipment. Therefore, it is not practical to collect information on 
homes being installed in HUD-administered states only. In addition, 
this information is very similar to that information required in 24 CFR 
3282.552, and the OMB-approved form HUD-302 has been revised to collect 
the information using a single form.
    Section 3286.9(c) Alternative Considered--The Department considered 
requiring manufacturers to provide notice to the retailers only for 
those homes installed in states where HUD administers the installation 
program. Such a requirement would reduce the reporting burden on the 
manufacturer; however, in many instances, manufacturers do not know the 
destination or address of the home at the time of shipment. Therefore, 
it is not practical to provide notices on homes being installed in HUD-
administered states only.
    Section 3286.9(d) Alternative Considered--The Department considered 
eliminating this requirement. However, the importance of consumer 
protection with regard to the installation of manufactured homes 
justifies the small costs associated with this section.
    Section 3286.13 Alternative Considered--The Department considered 
requiring the retailer or distributor to provide HUD with tracking 
information for all homes at the time that a purchaser or lessor enters 
into a contract to purchase or lease a

[[Page 34484]]

manufactured home. As proposed, the rule would significantly reduce the 
reporting burden for retailers and distributors by requiring them to 
provide tracking information about homes that are to be installed only 
in HUD-administered states, and by requiring them to keep all sales 
records for 5 years.
    Section 3286.103(a) Alternative Considered--The Department 
considered eliminating this requirement. However, the importance of 
consumer protection with regard to the installation of manufactured 
homes justifies the costs associated with this section.
    Section 3286.111(a) Alternative Considered--The Department 
considered using contractors to inspect and certify that the 
installation of the home has been completed correctly. This alternative 
model would be similar to that of a local building department that 
monitors the construction of buildings. However, this alternative 
method would have a substantially larger economic impact on small 
entities than the proposed requirement. The proposed requirements in 
Sec.  3286.111(a) models the requirements in 24 CFR 3282.362(c)(2)(i) 
that requires the home manufacturer to certify that the home has been 
built in conformance with the Construction and Safety Standards.
    Section 3286.113(a) Alternative Considered--The Department 
considered eliminating this requirement. However, the Department 
determined that this requirement is necessary to keep necessary records 
regarding the installation of the home. This section will encourage 
retailers to use competent installers and keep the retailer part of the 
installation process. Without this requirement, the retailer would be 
able to sell homes and take fees for the installation of the homes 
without being held accountable by the regulations for poor workmanship 
of the installation.
    Section 3286.211 Alternative Considered--Installers are required to 
renew their licenses every 3 years. This schedule was chosen to reduce 
the burden of yearly renewals and to ensure that installers will 
receive timely training on updates to the installation requirements.
    Subpart D Alternatives Considered--Subpart D establishes the 
minimum requirements for a person to provide installation training. The 
installation training is required for manufactured home installers who 
want to be licensed in accordance with the HUD-administered 
installation program.
    This Subpart requires qualified trainers to:

--Adequately address the curriculum and instruction time requirements
--Maintain attendance records
--Provide certificates of completion
--Maintain records for 5 years
--Meet minimum experience prerequisites
--Certify that their curriculum meets HUD requirements
--Apply to HUD for qualification

    ?>The Department considered requiring trainers to obtain training 
from the Department prior to qualification; however, this requirement 
would have an increased cost to the trainer and the federal government. 
In addition, this requirement may limit the number of eligible trainers 
since all trainers would have to complete training prior to training 
installers.
    Notwithstanding HUD's determination that this rule would have a 
significant economic effect on a substantial number of small entities, 
HUD specifically invites comments regarding any less burdensome 
alternatives to this rule that will meet HUD's objectives and those of 
federal statutes. The complete IRFA is available for downloading at 
https://www.regulations.gov and for public inspection between the hours 
of 8 a.m. and 5 p.m. weekdays in the Regulations Division, Office of 
General Counsel, Department of Housing and Urban Development, 451 
Seventh Street, SW., Room 10276, Washington, DC 20410-0500.

Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance number for Manufactured 
Housing is 14.171.

List of Subjects in 24 CFR Part 3286

    Administrative practice and procedure, Consumer protection, 
Intergovernmental relations, Manufactured homes, Reporting and 
recordkeeping requirements.

    Accordingly, for the reasons stated in the preamble, HUD proposes 
to add a new part 3286 in chapter XX of Title 24 of the Code of Federal 
Regulations to read as follows:

PART 3286--MANUFACTURED HOME INSTALLATION PROGRAM

Subpart A--Generally Applicable Provisions and Requirements
Sec.
3286.1 Purpose.
3286.2 Applicability.
3286.3 Definitions.
3286.5 Overview of installation program.
3286.7 Consumer information.
3286.9 Manufacturer shipment responsibilities.
3286.11 Temporary storage of units.
3286.13 Tracking of homes sold by retailer or distributor.
3286.15 Waiver of rights invalid.
3286.17 Consultation with the Manufactured Housing Consensus 
Committee
Subpart B--Certification of Installation in HUD-Administered States
3286.101 Purpose.
3286.103 DAPIA-approved installation instructions.
3286.105 Requirement for installer licensing.
3286.107 Installation in accordance with standards.
3286.109 Inspection requirements--generally.
3286.111 Installer certification of installation.
3286.113 Information provided by retailer.
3286.115 Date of installation.
3286.117 Completion of sale date.
Subpart C--Installer Licensing in HUD-Administered States
3286.201 Purpose.
3286.203 Installation license required.
3286.205 Prerequisites for installation license.
3286.207 Process for obtaining installation license.
3286.209 Denial, suspension, or revocation of installation license.
3286.211 Expiration and renewal of installation licenses.
Subpart D--Training of Installers in HUD-Administered States
3286.301 Purpose.
3286.303 Responsibilities of qualified trainers.
3286.305 Installation trainer criteria.
3286.307 Process for obtaining trainer's qualification.
3286.308 Training curriculum.
3286.309 Continuing education--trainers and curriculum.
3286.311 Suspension or revocation of trainer's qualification.
3286.313 Expiration and renewal of trainer