MODEL # 98-1

INDUSTRIALIZED BUILDINGS COMMISSION:
AN INTERSTATE COMPACT FOR INDUSTRIALIZED/MODULAR CONSTRUCTION

EXECUTIVE SUMMARY

Jurisdiction Statistics (member states):

4,375,09 (Minnesota)

988,480 (Rhode Island)

8,052,849 (New Jersey)

3,826,794 (Kentucky)

79,548 (Minnesota)

1,054 (Rhode Island)

8,204 (New Jersey)

39,732 (Kentucky)

$9.1 billion (New Jersey)

Regulatory Areas:

PROBLEM:

Regulation of Industrialized/Modular Buildings

The industrialized/modular buildings industry was forced to cope with a tremendous lack of uniformity in the regulation of the siting and design of its products. Over the last 20 years, 36 states acted to facilitate the production, shipment, and siting of factory-built industrialized and modular commercial and residential buildings by adopting and enforcing preemptive statewide laws covering the design and construction of such buildings.

SOLUTION:

Interstate Coordinating Compact

The National Governors' Association (NGA), the Council of State Governments (CSG), the National Conference of States on Building Codes and Standards (NCSBCS), and the National Association of Attorneys General (NAAG) worked together to develop model enabling legislation to establish a coordinating interstate compact. Minnesota, Rhode Island, and New Jersey adopted the legislation in 1992 and early 1993 to form the first interstate compact, overseen by the Industrialized Buildings Commission (IBC). The compact establishes a mechanism through which industry and states can build and regulate to one common set of rules, regulations, and procedures.

DESCRIPTION:

Governing Structure

The IBC is comprised of one governor-appointed commissioner from each compacting state, and one compact-appointed industry commissioner for every three state commissioners. One consumer commissioner will be appointed for every six state commissioners. The compact sustains itself financially by selling regulatory labels to all industrialized units built in member states.

The compact provides for the development of model rules, regulations, and procedures through a consensus-based committee comprised of representatives of state government, consumers, manufacturers (both residential and commercial), and private third-party agencies that provide design review and inspection services.

In regards to code requirements, currently each structure a manufacturer produces need only meet the code of the siting state. In the near future, the IBC will focus its attention to achieving more uniformity in the construction codes of compacting states.

Compact Membership

The compact is turning its attention to working with elected and administrative officials and industry in other states to encourage participation in the compact. There are no fees to join the compact, and participation can be accomplished in three ways. Legislatively, a state may adopt the compact's enabling legislation, which gives the state full voting rights in the IBC, but is slower as the state must approve the compact through its sometimes lengthy legislative process. Administratively, it may enter into a two-year interim reciprocal agreement with the IBC. This option, while faster and easier to achieve, does not permit the state to vote. The third way is to recognize units bearing IBC labels for shipment into and siting within that state. The Commonwealth of Kentucky recently signed a reciprocal agreement with the IBC. Under the agreement, Kentucky agrees to accept modular units bearing an IBC label.

Any model documents reviewed and adopted by the IBC go to the member states for implementation. This can be accomplished by adopting the model documents in their entirety, or by modifying existing state rules and regulations to ensure that they are at least equivalent to the IBC model documents' provisions.

Becoming a compact member or entering into an interim reciprocal agreement does not preclude a state from taking immediate action under its laws. The only requirement is that a state taking action must notify the IBC of its action so that compacting states can take similar action regarding that third-party agency or manufacturer if they choose, or the IBC itself may recommend such action to its members.

Membership Benefits

One benefit of membership is that the member state no longer handles label sales. State staff need no longer travel to monitor every manufacturing facility across the country that ships into the state, or conduct plan reviews for every single unit model. Localities benefit as well by gaining confidence that units sited in their jurisdictions meet code requirements. A city or county in a compacting state will have more diverse manufacturers bringing different products for siting, and savings will be passed on to these localities that utilize modular buildings. Manufacturers can now produce within or ship into member states using only one set of rules, regulations, and procedures. They need develop designs only for the state where the home is ultimately sited, and manufacturers are no longer prevented by uncertainty about design and construction from building for individual states. This opens up a much larger marketplace to the manufacturers. Additionally, the single third-party approval mechanism means that manufacturers do not need to hire different third-parties to work in different states or to have the same plans reviewed repeatedly. Finally, member states, consumers, manufacturers, and third-parties have the opportunity to provide input into the rules, regulations, and procedures under which the IBC program operates.

RESULTS:

Since its inception, the IBC program has labeled over 20,000 modules produced by over 100 different manufacturers located in more than 30 states. The compact's label sales are providing sufficient revenue, and member states have reduced the overall cost of their previous regulatory programs. Manufacturers shipping units into two or more compacting states have likewise seen reductions in overall regulatory costs. The elimination of redundant design review and in-plant inspection programs has lowered the cost to a manufacturer producing or shipping into two or more member states. The cost of third-party agencies conducting duplicate design review and state monitoring visits have been eliminated, as is the cost of multiple labeling programs.

EVALUATION BY STREAMLINING COMMITTEES:

Advantages

The Administration & Enforcement and Energy Task Groups stated that time, cost, and workload savings; the program's consistency; and its model of interstate cooperation are strengths of this program. The Construction Codes group approved of the program's uniform standards, formal interpretations, and monitoring of processes and procedures. The Education & Certification Task Group valued the preclusion of a need for a pre-emptive federal standard.

Drawbacks

Administration & Enforcement listed the lack of accommodation of state and local amendments, and the administrative complexity, as two negative aspects of the program. Construction Codes felt the exclusion of a national building code is a drawback. Education & Certification determined that having a state pass its legislation without modifications is a weakness. The Energy group questioned the objectivity and impartiality of a third-party inspection process.

The Streamlining Committees designated this program a streamlined model to be paired with Model # 98-7, Reciprocal Agreements for Subsequent Siting of Modular Structures, for presentation purposes. The Committees also made the following recommendations:

FOR MORE INFORMATION OR ASSISTANCE IN CONSIDERING THE USE OF THIS MODEL, PLEASE CONTACT:

Richard Z. Osworth
Assistant Commissioner
Industrialized Buildings Commission
505 Huntmar Park Drive, Suite 210
Herndon, VA 20170
Phone: (703) 481-2022
FAX: (703) 481-3596

Or NCSBCS STAFF:

Carolyn Fitch
National Conference of States on Building Codes and Standards, Inc.
505 Huntmar Park Drive, Suite 210
Herndon, VA 20170.
Phone: (703) 437-0100
FAX: (703) 481-3596
Email: cfitch@ncsbcs.org