Chairman Mark Luttich (NE) called the meeting to order and welcomed everyone to the committee conference call.

Present on the call:

Mark Luttich, NE, Chairman
Randy Vogt, MN
Curtis McIver, VA
Cindy Bocz, TX
Paul Hancher, IBTS
Dennis Newman, PFS
Thayer Long, Modular Housing Council
Steve Bernia, CO
Ujjval Dave, MD
Brian Ferris, WI
Robert Wible, NCSBCS

Chairman Mark Luttich asked if there were any comments on the draft minutes of the March 28, 2005, conference call meeting. There being no changes, upon a motion by Mark Luttich and a second by Steve Bernia, the minutes were approved as distributed.

Mr. Luttich noted there were three topics to be covered during this call:

• The May 4 committee letter to HUD on the pending "Onsite Completion Rule"
• The April 26 Federal Register Notice calling for comments on HUD’s proposed rule on "Manufactured Home Installation Standards"
• State regulation of rehabilitated manufactured homes

He asked if there were any other items that should be covered today. There were none.

Chairman Luttich reviewed the committee’s May 4, 2005, letter to William Matchneer, III, Administrator of the HUD Office of Manufactured Housing Programs (Attachment A), regarding the committee’s areas of concern that HUD needed to address in drafting their pending "onsite completion rule." Mr. Luttich thanked those who provided input to the draft and said that the committee would continue to monitor the development of the draft rule and would report to everyone when it finally appeared in the Federal Register for public comment. It was noted that would probably occur sometime during the summer months, although no one had any further information from HUD as to just when that might be.

Mr. Luttich said that he had a copy of a March 8 letter from HUD to NFPA (Attachment B) which described HUD’s efforts to go forward on the "onsite completion rule" and transmitting to NFPA and the Manufactured Housing Consensus Committee (MHCC) a summary of HUD’s current proposal.

The Chairman noted that HUD is proposing to allow onsite completion of manufactured homes without the traditional AC letter. These will be homes that have been substantially completed in the factory and will conform to the standard onsite. Originally AC letters should have covered homes that were completed onsite but would not comply with standards. Under HUD’s proposal, a home that receives an AC letter will still not meet the federal standards when it is completed.

Mr. Luttich summarized the following items as the major elements in HUD’s Onsite Completion Rule:

1. Onsite work will be recognized as a part of the production process covered under present standard. Onsite work becomes part of Subpart I, and the IPIA and DAPIA must agree with all of the onsite procedures.
2. Would apply to multi-story, penetration of roof to gain completion. QC will be extended to the site by HUD. Homes so completed under the onsite completion rule would then receive a different colored label (green) from HUD to distinguish them from the traditional, all factory built homes that receive the HUD red label.
3. The IPIA will inspect the manufacturer’s onsite work for compliance. IPIA will then provide information regarding the home to the homeowner, FHA, HUD, noting that the home will comply only when all onsite work has been completed according to the manufacturer’s specifications.
4. A final site inspection report as inspected and approved by IPIA then will complete the sale of the home.

Discussion of Issue: Members noted they had concerns regarding ability of state IPIA to inspect these homes under this new program, especially homes that are shipped out of state and sited elsewhere.

Curtis McIver shared a HUD letter on this program to Virginia building officials and homebuilders and got feedback of their concerns on the manufactured home installation standard. Building officials had some preliminary concerns with the HUD onsite completion rule and so does his state’s contractors licensing board. There could be a conflict here in that it appears the HUD rule would preempt his state’s licensing laws. This would especially be true if people install furnaces and water heaters in the field and they are not state-licensed contractors or state-certified installers. Virginia building inspectors were concerned about who would inspect construction onsite.

In a discussion of other concerns the following issues were raised:

Are the IPIA’s really going to get out there and inspect these units? Right now that is not happening. States don’t have staff to do these inspections as state IPIA.

Nebraska noted that if the house went to a state and the state was an IPIA then Nebraska allowed that state to do inspection. Otherwise Nebraska had to go out of state.

Industry has requested Nebraska to see if state will allow private sector contractors to do these out-of-state inspections instead of the state sending people out. Nebraska is checking on the legality of this and will get back to the committee. This may not be allowed in Nebraska as it could affect licenses.

Minnesota noted they don’t have a problem with what state IPIA does, but the state does have some problems with what private third party agencies are doing. It will be tough for local building officials and tradesmen to accept this. HUD’s current proposal will generate a lot of comment from people.

Several states on the call said they would send out HUD’s proposed rule to their state’s local building officials when the Federal Register Notice comes out and will urge them to comment on it.

Mr. Luttich offered to share a background briefing paper he had prepared on this subject and a list of questions that building officials should ask themselves about this and comment on when this does appear in the Federal Register (Attachment C).

Messrs. Luttich and Wible noted that Mr. Luttich’s briefing paper would be posted to the NCSBCS website for review.

The Chairman noted that he has prepared a similar briefing document that he would share with everyone concerning the Department’s recently released "Model Manufactured Home Installation Standards" (Attachment D). He noted this briefing document was prepared for retailers in his state.

He added that members should be contacting their local jurisdictions concerning the proposed rule that appeared in the April 26^th Federal Register and that they should be encouraged to comment to HUD by the June 27^th deadline.

In discussion it was noted that some localities are adopting the International Residential Code’s (IRC) installation provisions and that it will have to be seen if that will be accepted by HUD as meeting the federal mandated minimum installation standard.

If so, other jurisdictions that adopt the IRC will have to allow HUD homes in their communities.

It was noted that some of the manufactured housing industry wants the installation standard put directly into 3280 as a preemptive federal standard and also becomes preemptive maximum. This could be a major issue to jurisdictions. There was consensus that states need to comment that this should not be included in 3280. States should comment that this should be a stand-alone document and not put into 3280.

It was agreed that comments on this issue in particular are extremely important for HUD to receive. Virginia has forwarded to the webmaster for their building officials association to provide the link to the federal website where people can comment on the proposed standard.

One of the questions for which they will try to receive input from members is the issue of where do they (HUD) stop onsite completion responsibilities and start installer’s responsibilities under the proposed Federal Minimum Installation Requirements?

Mr. Luttich noted that in general industry wants more to be done by the retailer and not by them.

Mr. Luttich noted that this topic was a holdover from the last conference call. He asked if anyone on the call now had a program to regulate rehab? No one did, but it was noted that Arizona, Arkansas, California and New Mexico have regulations in this area.

Virginia reported that the closest thing they have to manufactured home rehab provisions are the rehab provisions in their existing state building code for residential structures. Under those provisions, local building officials can inspect alterations and additions to homes. This includes some homes on dealer lots in Virginia. Onsite work is done by permit from local building officials.

It was noted that this topic should be placed on the agenda again for the next conference call.

The Chairman asked if there were any other items to be discussed.

Maryland asked about how the HUD minimum installation standard addressed the issue of 2-story manufactured homes, as they don’t see it in the installation standard?

Several members responded that they believe that 2-story homes are an onsite completion rule issue and therefore wouldn’t be covered in the draft installation standard.

In general, for a 2-story home HUD directed industry to "sound engineering practices, " and HUD now points out an ASCE standard that addresses a portion of that issue. The ASCE Standard is 32 and the section of the HUD manufactured housing standard where it is covered is Section 3285.312. It was noted that HUD regulations of 2-story manufactured homes also bears watching in the future as 2-story HUD code homes certainly blur the lines between what is a state or local government regulated modular or site-built home and what is a federally preemptive manufactured home.

To close out the call, Mr. Luttich said that the committee will need to work over the next few weeks to get their comments prepared to meet the June 27 HUD deadline for input on the Model Minimum Manufactured Home Installation Standard. He said that it made sense for the next call to be held at least one week prior to that submission deadline.

It was agreed that the topics for that call would be the committee’s submission to HUD, the possible need for further input to HUD on the pending Onsite Completion Rule and the continuation of the discussion of manufactured home rehab codes. It was further agreed that members should be asked if there are any items regarding state regulated modular housing they would like included in the next meeting call.

The date and time for the next call will be on or about June 16 at noon (EDST). A formal notice will be sent out later.

There being no further business to come before the Factory-Built Structures Committee, the Chairman thanked everyone for participating and adjourned the call at 12:55 p.m.

Respectfully Submitted,

Robert Wible
NCSBCS Executive Director