Committee Substitute
House Bill 4374 History
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COMMITTEE SUBSTITUTE
FOR
H. B. 4374
(By Delegates Kuhn, Butcher and Martin)
(Originating in the Committee on Government Organization)
[February 18, 2004]
A BILL to amend and reenact §21-9-4, §21-9-10, §21-9-11 and §21-9-
12 of the code of West Virginia, 1931, as amended, all
relating to manufactured housing construction and safety
standards; removing out-dated language; providing for
inspections and the payment of the costs of inspection;
authorizing the issuance of cease and desist orders and
establishing penalties for violations of the article;
establishing the state manufactured housing recovery fund; and
providing permitted uses of interest on the fund.
Be it enacted by the Legislature of West Virginia:
That §21-9-4, §21-9-10, §21-9-11 and §21-9-12 of the code of
West Virginia, 1931, as amended, be amended and reenacted, all to
read as follows:
ARTICLE 9. MANUFACTURED HOUSING CONSTRUCTION AND SAFETY STANDARDS.
§21-9-4. General powers and duties; persons adversely affected entitled to hearing.
(a) The board shall have the power to:
(1) Regulate its own procedure and practice;
(2) Promulgate reasonable rules to implement any provision of
this article or of the federal standards, such including rules to
be promulgated in accordance with the provisions of article three,
chapter twenty-nine-a of this code;
(3) Advise the commissioner in all matters within his
jurisdiction under this article;
(4) Prepare and submit to HUD a state plan application seeking
the designation of the board as a state administrative agency for
the purpose of administering and enforcing the federal standards
and take all other action necessary to enable the board to serve as
such a the state administrative agency;
(5) Study and report to the governor and the Legislature on
matters pertinent to the manufacture, distribution and sale of
manufactured housing in this state and recommend such changes in
the law as the board may determine determined by the board to be
necessary to promote consumer safety and protect purchasers of
manufactured housing;
(6) Conduct hearings and presentations of views consistent
with its rules and regulations and the federal standards;
(7) Approve or disapprove applications for licenses to
manufacturers, dealers, distributors and contractors in accordance with section nine of this article, and revoke or suspend such
licenses in accordance with such that section, and set the amounts
of license fees and bonds or other forms of assurance in accordance
with sections nine and ten of this article;
(8) Realizing the inability of the citizens of the state of
West Virginia to obtain fire insurance on manufactured housing, the
Legislature directs the board to conduct a study in regard to this
crisis and to report to the Legislature by the fifth day of
February, one thousand nine hundred eighty-nine. The report shall
include specific recommendations to correct this crisis and improve
the availability and reduce the cost of fire insurance;
(9) (8) Delegate to and authorize the commissioner to exercise
such the powers and duties of the board as that the board may from
time to time determine, including, without limitation, the
authority to approve, disapprove, revoke or suspend licenses in
accordance with section nine of this article.
(b) Any person adversely affected by a decision of the board
or the commissioner shall be afforded an opportunity for hearing
before the board in accordance with section one, article five,
chapter twenty-nine-a of this code.
§21-9-10. Licensee to furnish bond or other form of assurance.
(a) Each manufacturer, dealer, distributor or contractor which
applies for a license under section nine of this article shall, at
the time of making application for the license, furnish a surety bond or any other form of assurance of the applicant's financial
responsibility permitted by the board by rule or regulation, the
surety bond or other form of assurance to be in the amount
prescribed by rule or regulation. In the event of forfeiture of
any bond or security, the proceeds thereof shall be deposited in
the special account created under section nine of this article.
(b) The bond or other form of assurance shall cover any
misappropriation of funds of a purchaser or prospective purchaser
of a manufactured home, any deception or false or fraudulent
representations or deceitful practices in selling or representing
a product, any failure by a licensee, because of bankruptcy,
insolvency or other reason, to fulfill warranty obligations and any
failure of the licensee, its agents or employees, to comply with
federal standards, this article or any rules or regulations
promulgated by the board pursuant to this article: Provided, That
any payment to purchasers or prospective purchasers by the board
from licensee bonds or other forms of financial assurance shall not
include punitive or exemplary damages, any compensation for
property damage other than to the manufactured home, any recompense
for any personal injury or inconvenience, any reimbursement for
alternate housing, or any payments for attorney fees, legal
expenses or court costs.
(c) There is hereby continued the state manufactured housing
recovery fund within the special treasury account described in subsection (g) of section nine of this article for the purposes set
forth in section ten of this article. Fees shall be assessed in
accordance with the legislative rules promulgated by the board.
(d) The board may use the current interest of the recovery
fund for special enforcement efforts in the event of natural
disasters and other emergencies as determined by the board:
Provided, That the board may not use the current interest of the
recovery fund unless the principle balance of the fund is one
million dollars or more.
§21-9-11. State may act as primary inspection agency.
(a) This state, acting through the board, is hereby granted
all powers and authority necessary to act as a primary inspection
agency and to perform the functions of a "design approval primary
inspection agency" and a "production inspection primary inspection
agency," as such the terms are defined in the federal standards.
The board may apply to the secretary of HUD on behalf of this
state to act as such a the primary inspection agency including
application for approval to act as the exclusive production
inspection primary inspection agency in this state. The board
shall promulgate such may propose rules and regulations as are for
legislative approval in accordance with the provisions of article
three, chapter twenty-nine-a of this code necessary to enable the
board to act on behalf of this state as such a the primary
inspection agency .
(b) The board may provide inspections to private home sites to
aid in the resolution of a consumer complaint filed with the board
by the home owner. The board may provide, free of charge, one
initial and one follow-up inspection related to each consumer
complaint: Provided, That the board may charge the licensee an
inspection fee for any follow-up inspections which are necessitated
by the licensee's failure to comply with an order of the board. The
inspection fee may not exceed seventy-five dollars per hour, plus
expenses.
§21-9-12. Violation of article; injunction; civil penalties;
criminal penalties.
(a) Upon a determination that a person is engaging in business
without a valid license as required by section nine of this
article, the board or commissioner may immediately issue a cease
and desist order requiring the person to cease all operations
within this state. After a hearing, the board shall impose a
penalty of not less than two hundred dollars nor more than one
thousand dollars upon any person found to have been engaging in
business in this state without a valid license.
(b) Any person continuing to engage in business in this state
without a valid license after the issuance of a cease and desist
order is guilty of a misdemeanor and, upon conviction thereof, is
subject to the following penalties:
(1) For a first offense, a fine of not less than two hundred dollars nor more than one thousand dollars;
(2) For a second offense, a fine of not less than five hundred
dollars nor more than five thousand dollars, or confinement in a
county or regional jail for not less than thirty days nor more than
six months or both a fine and confinement; and
(3) For a third or subsequent offense, a fine of not less than
one thousand dollars nor more than five thousand dollars, and
confinement in the country or regional jail for not less than
thirty days nor more than one year.
(c) The board may institute proceedings in the circuit court
of the county in which the alleged violation occurred or are
occurring to enjoin any violation of the provisions of this
article.
(a) (d) Any person who violates any of the following
provisions relating to manufactured homes or any rule promulgated
by the board pursuant to the provisions of this article is liable
to the state for a penalty, as determined by the court board, not
to exceed one thousand dollars for each violation. Each violation
constitutes a separate violation with respect to each manufactured
home, except that the maximum penalty may not exceed one million
dollars for any related series of violations occurring within one
year from the date of the first violation. No person may:
(1) Manufacture for sale, lease, sell, offer for sale or
lease, or introduce or deliver, or import into this state any manufactured home which is manufactured on or after the effective
date of any applicable standard established by a rule promulgated
by the board pursuant to the provisions of this article, or any
applicable federal standard, which does not comply with that
standard.
(2) Fail or refuse to permit access to or copying of records,
or fail to make reports or provide information or fail or refuse to
permit entry or inspection as required by the provisions of this
article.
(3) Fail to furnish notification of any defect as required by
the provisions of 42 U.S.C. §5414.
(4) Fail to issue a certification required by the provisions
of 42 U.S.C. §5415 or issue a certification to the effect that a
manufactured home conforms to all applicable federal standards,
when the person knows or in the exercise of due care would have
reason to know that the certification is false or misleading in a
material respect.
(5) Fail to establish and maintain records, make reports, and
provide information as the board may reasonably require to enable
the board to determine whether there is compliance with the federal
standards; or fail to permit, upon request of a person duly
authorized by the board, the inspection of appropriate books,
papers, records and documents relative to determining whether a
manufacturer, dealer, distributor or contractor has acted or is acting in compliance with the provisions of this article or
applicable federal standards.
(6) Issue a certification pursuant to the provisions of 42
U.S.C. §5403(a), when the person knows or in the exercise of due
care would have reason to know that the certification is false or
misleading in a material respect.
(b) (e) Subdivision (1), subsection (a) (d) of this section
does not apply to: (i) (1) The sale or the offer for sale of any
manufactured home after the first purchase of it in good faith for
purposes other than resale; (ii) (2) any person who establishes
that he did not have reason to know in the exercise of due care
that such the manufactured home is not in conformity with
applicable federal standards; or (iii) (3) any person who, prior to
the first purchase, holds a certificate by the manufacturer or
importer of the manufactured home to the effect that such the
manufactured home conforms to all applicable federal standards,
unless that person knows that the manufactured home does not
conform to those standards.
(c) (f) Any manufacturer, dealer, distributor or contractor
who engages in business in this state without a current license as
required by the provisions of this article or without furnishing a
bond or other form of assurance as required by the provisions of
this article is guilty of a misdemeanor and, upon conviction
thereof, shall be fined not more than fifty dollars for each day the violation continues.
(d) (g) Any person or officer, director, partner or agent of
a corporation, partnership or other entity who willfully or
knowingly violates any of the provisions listed in subsection (a)
(d) of this section, in any manner which threatens the health or
safety of any purchaser, is guilty of a misdemeanor and, upon
conviction thereof, shall be fined not more than one thousand
dollars or confined in the county or regional jail for a period of
not more than one year, or both fined and imprisoned: Provided,
That nothing in this article may apply applies to any bank or
financial institution engaged in the disposal of foreclosed or
repossessed manufactured home(s) homes.
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