MINUTES OF MEETING

      ASSEMBLY COMMITTEE ON COMMERCE

 

      Sixty-seventh Session

      May 3, 1993

 

 

 

The Assembly Committee on Commerce was called to order by Chairman Gene T. Porter at 3:45 p.m., Monday, May 3, 1993, in Room 332 of the Legislative Building, Carson City, Nevada.  Exhibit A is the Meeting Agenda, Exhibit B is the Attendance Roster.

 

 

COMMITTEE MEMBERS PRESENT:

 

      Mr. Gene T. Porter, Chairman

      Mr. Morse Arberry, Jr., Vice Chairman

      Ms. Kathy M. Augustine

      Mr. Rick C. Bennett

      Mr. John Bonaventura

      Mr. Val Z. Garner

      Ms. Chris Giunchigliani

      Mr. Dean A. Heller

      Mr. David E. Humke

      Ms. Erin Kenny

      Mr. Richard Perkins

      Mr. Scott Scherer

      Ms. Myrna T. Williams

 

 

COMMITTEE MEMBERS ABSENT:

 

      None

 

GUEST LEGISLATORS PRESENT:

 

      None

 

STAFF MEMBERS PRESENT:

 

      Mr. Paul Mouritsen, Senior Staff Analyst, Legislative    Counsel Bureau

 

OTHERS PRESENT:

 

      Charlie Joerg, Nevada Manufactured Housing Association; Gub Mix, Executive Director, Manufactured Housing Division; Ms. Joan Clements, Administrator, Manufactured Housing Division (See Exhibit B attached hereto).

 

AB 483      Makes various changes concerning mobile and manufactured homes.

 

Charlie Joerg, Nevada Manufactured Housing Association, introduced Mr. Gub Mix, Executive Director, Manufactured Housing Division, and Ms. Joan Clements, Administrator, Manufactured Housing Division.

 

Mr. Gub Mix testified.  He explained the purpose of AB 483 was to provide the Manufactured Housing Division with authority to receive complaints regarding alleged substandard manufactured homes or mobile homes, to inspect those homes to determine if a problem existed and if a problem did exist, to require those homes be brought up to standard before they might be sold, rented or occupied.  He pointed out AB 483 required notice be given to the occupants of a home prior to any inspection being conducted and provided for collection of reasonable fees to cover the cost of such inspection.

 

Mr. Mix explained the difference between "mobile home" and "manufactured home".  He advised a "manufactured home" was a home built in a factory to the HUD building code, which code was instituted on June 15, 1976.  He said any (factory built homes) manufactured prior to June 15, 1976, were known as "mobile homes" and were manufactured according to the building code of the state in which they were manufactured.  He stated AB 483 addressed the need to inspect older mobile homes and commercial coaches which might have problems.

 

Mr. Bonaventura asked if "anybody" could make a complaint about a mobile home.  Ms. Clements responded to Mr. Bonaventura's question and advised the division's current procedure, under NRS 461A, required a complainant, other than a representative of a governmental agency, to file a written, signed complaint.

 

Chairman Porter referred to Section 5, lines 15 through 17, of AB 483, and commented the penalty resulting from a mobile home or manufactured home being determined to be substandard was  the home might not be rented, leased or sold.  He asked, "Why don't we make them fix it?"  Mr. Mix advised the problems which prompted AB 483 involved units which had been neglected and unmaintained over a protracted period of time.  He said such a unit was likely to be a rental unit, and the provisions of AB 483 were needed to protect the health and safety of occupants of such units. 

 

Chairman Porter asked if the owner of a unit determined to be substandard was the one responsible for repairs to the unit.  Mr. Mix replied the owner was.  Chairman Porter suggested many owners of mobile homes determined to be substandard and which AB 483 would prohibit being rented would be unable to afford to repair those homes.  He asked what could be done in such situations.  Mr. Mix responded he perceived the greatest risk to the public involved homes owned by owners of older mobile home parks or by absentee owners who rented those homes to others without fulfilling the obligations of a landlord to ensure habitability.  He advised currently, there were no means to address such a situation.

 

Ms. Clements stated the division encountered problems with electrical systems and gas lines in used mobile homes bought out of state and brought into Nevada.  She indicated the division was concerned about safety hazards.

 

Mrs. Williams asked if building code standards for mobile homes and manufactured homes were the same as all other building code standards and if those standards varied from county to county.  Ms. Clements replied all manufactured homes constructed since June 15, 1976, were constructed to federal construction standards.  Mrs. Williams asked how the federal construction standards related to county building standards.  Ms. Clements answered county building standards generally enforced the Uniform Building Codes, which applied to "stick-built", on-site homes.

 

Mrs. Williams asked if there were HUD standards for mobile homes.  Ms. Clements answered there were not.  She advised prior to June 15, 1976, each state had its own standards for the building of such homes, and the homes were called "mobile homes."

 

Mr. Mix advised beginning in 1968, Nevada had a code for any mobile home sold within the state, but that code was superseded by the federal standard which took effect on June 15, 1976.

 

Mrs. Williams asked if the building code for mobile homes differed from county to county.  Mr. Mix answered the building code was a state code and did not differ from county to county.  Mrs. Williams related a situation in which the owner of certain mobile homes encountered difficulties when attempting to relocate those homes because the electrical wiring in those homes did not meet the standards of a county code.  Mrs. Williams said she was trying to discern "...where does county fit in?  What is state code and what is federal code?"  Ms. Clements suggested county codes established requirements which must be met in order to pass an installation inspection.  Following a colloquy between Mrs. Williams and Ms. Clements, Ms. Clements said she did not think counties became involved in mobile home construction.

 

Mr. Scherer asked to what extent county electrical and plumbing codes applied to manufactured homes or mobile homes.  Mr. Mix replied the HUD code governed those matters.  He suggested the standards of the HUD code and those of the Uniform Building Code were nearly identical.  He explained the Uniform Building Code was a model code which was adopted by state or local governments which then had the ability to make changes.  He advised because homes built on assembly lines were built differently than "stick-built" homes, the HUD code was given more latitude with respect to use of factory techniques, but both types of homes had to meet the same tests at such time as they were ready for occupancy.

 

Mr. Scherer asked who was responsible for enforcing the HUD code.  Mr. Mix replied HUD and its agent were responsible for enforcing the HUD code.  He advised in the state of Nevada, the Manufactured Housing Division had entered into a contract with HUD and was HUD's monitoring agent.  Mr. Scherer asked Ms. Clements if the division had a cooperative agreement with Clark County that the county perform some monitoring for the division.  Ms. Clements replied the division had such an agreement with Clark County with respect to installation only.  She advised under its agreement with HUD, the division handled warranty and construction complaints. 

 

Mr. Scherer asked to what extent local nuisance ordinances applied to a substandard mobile home or manufactured home.  Ms. Clements replied she believed most counties would refer a problem regarded as a nuisance or health or safety problem to the Manufactured Housing Division. 

 

Chairman Porter read portions of NRS 461A and NRS 489 and asked Mr. Mix what NRS 489 (as it would be amended by AB 483) provided which NRS 461A did not provide.  Mr. Mix responded NRS 489 would provide for an inspection label.

 

A colloquy ensued among Chairman Porter, Mr. Mix and Ms. Clements regarding the Manufactured Housing Division's desire to utilize inspection labels.  Mr. Mix advised the prime purpose of AB 483 was to provide for use of inspection labels.

 

Discussions were held among committee members regarding a provision in NRS 461A requiring "reasonable cause" for inspection of a mobile home, mobile home lot or mobile home park.

 

Mrs. Williams commented on the fact testimony was heard by the Assembly Committee on Taxation concerning individuals' objections to placing labels on their mobile homes to reflect payment of taxes and the fact AB 483 now proposed placing labels on mobile homes to reflect those homes had been inspected.  She questioned how often inspection would take place and suggested perhaps the inspection sticker and tax sticker could be combined.  Mr. Joerg advised tax stickers would be placed on a home each quarter of the year, but the inspections stickers being discussed would be placed on a home only after an inspection had been conducted as the result of a complaint being filed.

 

Mrs. Williams expressed concern for elderly individuals who might be unable to afford repairs to their homes required pursuant to an inspection.  Mr. Mix advised the same situation could occur in connection with site-built homes.

 

Mr. Mix advised there was one additional problem AB 483 was designed to address.  He stated there had long been a requirement that a mobile home manufactured on or after July 1, 1968, but before June 15, 1976, bear a certificate of compliance if the mobile home was to be rented, leased or sold in Nevada.  He indicated it had become nearly impossible to be certain each such mobile home unit bore such a sticker.  He contended it was better to address individual problems than to attempt to inspect each unit, as those units numbered in the thousands and were located all over Nevada.

 

Chairman Porter closed the hearing on AB 483.

 

AB 485      Makes various changes regarding manufactured homes, mobile homes and similar structures.

 

Mr. Charlie Joerg, Nevada Manufactured Housing Association, testified.  He advised AB 485 would accomplish several things about which the association was concerned.

 

He explained AB 485 would require ordinances or regulations adopted by local governing bodies be no more stringent than the provisions of NRS 489 pertaining to installation or inspection  of a (manufactured or mobile) home.  He said, in the past, some local governments had requirements or restrictions which did not make technical sense and appeared to be generated by individuals familiar with site-built homes but not familiar with the engineering of manufactured homes. 

 

He advised the state had adopted an installation standard for manufactured housing which required manufacturer's instructions be followed, but if such instructions were not available, that the specific state statute be followed.   He stated the association merely wished it made clear that each local governing body should follow the state statutes.  He indicated one exception, contained in Section 4 of AB 485, provided that a local governing body might apply to the Administrator of the Manufactured Housing Division for a variance.  He explained a geographical condition in one area might require a different approach to installation than the approach being used in other areas.

 

Mr. Joerg referred to Section 5 of AB 485.  He stated the association felt if there was a state installation standard, there should also be a uniform standard for inspections, whether the state conducted those inspections or contracted with local governments to conduct those inspections.  He suggested some local governments had inspectors in the field who did not know what to look for and tried to apply "site-built" standards.  He advised Section 5 of AB 485 would require a program of education for building inspectors be provided by the Manufactured Housing Division.

 

Mr. Joerg said the last portion of AB 485 pertained to transfers of equity.  He advised many times a party transferred equity (in a mobile or manufactured home) to another party without notifying the lien holder, the true legal owner of the property.  He said Section 8 of AB 485 would not prohibit parties from transferring equity but would merely require notification to the lender of such transfer.  He explained in the case of the association's licensees, AB 485 would require a licensee to obtain written acknowledgment from a holder of a lien or secured interest of the holder's receipt of written notification of pendency of a sale.

 

Mr. Arberry referred to Section 2, subsection 2, of AB 485 and asked what was meant by the language "may engage an independent contractor to perform any inspection."  Ms. Clements explained she presently engaged independent contractors to perform inspections for the division.  She advised the division had 22 cooperative agreements with local governments and six contracts with independent individuals to conduct inspections.  She indicated those individuals generally were retired from the construction industry or were retired contractors and were trained by the division to conduct inspections and run tests.

Mr. Arberry stated his purpose in asking his question was to be certain the division was not circumventing local government entities (by engaging independent contractors).  Ms. Clements contended she utilized independent contractors only when local government agencies either had no building department or did not choose to be involved in inspections.

 

Mr. Arberry cited the language in Section 5, subsection 2, of AB 485, "The division shall charge fees for participation in the programs..." and asked if that meant a local government would be charged for sending its inspectors, who would be performing the division's enforcement duties, to the educational program to be provided by the division.  Ms. Clements suggested she could request of the Interim Finance Committee that the program be included in those covered by the division's education fund.

 

Mr. Arberry pointed out Section 6 of AB 485 provided no person might issue a certificate of installation or label of installation unless he had successfully completed the division's training program and asked how long the division's training program would be.  Ms. Clements responded she believed the program would be a one-day class, consisting of instruction regarding codes and perhaps including a demonstration and "hands-on" training.  Mr. Arberry asked if the division would issue a certificate or other verification of successful completion of its course.  Ms. Clements said some provision for verification of an individual's participation in the training class could be included in the division's regulations.  Mr. Arberry explained the basis for his question regarding verification of completion of the division's course was the possibility the division might have a number of inspectors in the field of whom only two or three had completed the training course.  Ms. Clements suggested the reason for requesting provision for a training course for inspectors was to provide better and more uniform inspections throughout the state and to eliminate frustrations resulting from inspections conducted by inadequately trained inspectors.

 

Mr. Perkins asked if standards changed so radically and so often that a training program need be completed within the preceding 12 months (of an inspector's issuing a certificate or label of inspection).  Ms. Clements responded in the past, standards had not changed drastically, but she anticipated drastic changes as a result of a study of construction and installation codes and requirements being conducted by a national manufactured housing commission.  Ms. Clements advised formerly, she notified building officials with whom she had cooperative agreements and individuals who performed inspections of changes in requirements by various means, depending on the magnitude of a change.  She proposed if everyone involved in inspections could be brought together on at least a yearly basis, the division would be provided not only an opportunity to teach those individuals better ways of conducting inspections but also an opportunity to learn their problems and concerns with respect to inspections and to address those problems and concerns.

 

Mr. Perkins referred to the proposed deletion of subsections 2 and 3 of Section 7 of NRS 489.261.  He suggested by deleting those sections, the path being taken was directly opposed to the path taken in the past.  He pointed out subsection 3 of Section 7 of NRS 489.261 provided "Local governing bodies may adopt ordinances at least as stringent....", while the language proposed in AB 485 would provide that local governing bodies might adopt ordinances only  "as stringent" (as the applicable state or federal statutes or regulations).  He asked if his understanding was correct.  Ms. Clements answered affirmatively.  She stated the association felt ordinances should not be "more stringent" and provided an example of the basis for that position.

 

Mr. Heller asked if in the past, the division had permitted variances.  Ms. Clements responded the division had not.  She contended additional requirements imposed by local government ordinances created conflicts.  Mr. Heller asked if the Manufactured Housing Division would determine (whether to permit) variances.  Ms. Clements replied affirmatively.  Mr. Heller asked what would occur in case of a disagreement with the division's ruling on a variance.  Ms. Clements suggested she could point out in the federal standards the basis for (the division's) requirements and perhaps a compromise could be reached.

 

Mr. Mix offered it was sometimes a local building inspector's opinion rather than a local ordinance which created problems.

 

Mr. Porter asked if uniformity was the only objective of AB 485.  Ms. Clements replied both uniformity and better quality (of inspections) were the objectives.

 

Chairman Porter closed the hearing on AB 485.

 

SB 199      Makes various changes to protect ownership or other interests upon sale of mobile homes and similar vehicles.

 

Ms. Joan Clements, Administrator, Manufactured Housing Division, testified.  She advised the purpose of SB 199 was to provide the Manufactured Housing Division authority to adopt regulations requiring anyone who sold a mobile home or similar vehicle on a contract of sale to record information of the sale with the division.  She said currently the division's ownership certificate records would reflect only an original purchaser and lender.  She suggested if someone wished to file a lien against property which was the subject of a subsequent sale and researched the division's records to ascertain whom to notify of the lien, those records would not reflect the needed information.  She contended the authority provided under SB 199 would allow the division to provide more accurate information to the public and to avoid problems and confusion.

 

Chairman Porter closed the hearing on SB 199.

 

      ASSEMBLYMAN GIUNCHIGLIANI MOVED DO PASS SB 199.

 

      ASSEMBLYMAN GARNER SECONDED THE MOTION.

 

      THE MOTION CARRIED UNANIMOUSLY.

 

SB 209      Adopts more recent edition of certain uniform codes for manufactured buildings and authorizes most recent edition of uniform codes to be adopted by regulation.

 

Ms. Joan Clements, Manufactured Housing Division, testified.  She advised SB 209 would adopt the most recent edition of the Uniform Building Codes.  She said if the division was granted authority to adopt the most current Uniform Building Codes by means of regulation, the division would not need to appear before the legislature each legislative session to ask permission to do so.

 

Mr. Arberry asked if Ms. Clements was implying mobile homes would conform to the Uniform Building Codes.  Ms. Clements replied she was not.  She stated, "We have another chapter where we review plans for Uniform Building Code factory buildings.  They're manufactured in a factory but to the Uniform Building Code standards."  She indicated the division wished to maintain its codes on a par with those of cities and counties and to be able to update its codes by means of regulation rather than statute change.

 

Mr. Arberry asked if the division would write any amendments to the (Uniform Building Code) codes.  Ms. Clements responded it would not.

 

Ms. Giunchigliani asked if "portables" were considered manufactured housing and if any schools were conducted in manufactured housing.  Ms. Clements responded most such (manufactured housing) schools were "built to the Uniform Building Code."

 

Ms. Giunchigliani asked if the reason the division conducted inspections in rural areas was because those rural areas had no city or county inspectors.  Ms. Clements responded the division had third party inspectors who, on behalf of the division, inspected manufactured housing during its manufacture.  She advised the division had jurisdiction over construction and manufacture (of manufactured housing), but cities and counties were responsible for installation. 

 

Chairman Porter closed the hearing on SB 209.

 

      ASSEMBLYMAN SCHERER MOVED DO PASS SB 209.

 

      ASSEMBLYMAN BENNETT SECONDED THE MOTION.

 

      THE MOTION CARRIED UNANIMOUSLY.

 

Chairman Porter reopened the hearing on AB 485 for committee discussions.

 

Mr. Arberry expressed concern about the proposed fee to be charged by the Manufactured Housing Division for participation in its training program and proposed AB 485 be amended by deleting Section 5.  Mr. Scherer suggested only subsection 2 of Section 5 needed to be deleted.

 

Mr. Scherer asked if federal code permitted the state to adopt less stringent codes than the federal code.  Ms. Clements responded federal code did not give such permission.

 

      ASSEMBLYMAN ARBERRY MOVED TO AMEND AB 485 BY DELETING LINES       NINE THROUGH ELEVEN ON PAGE 2 AND DO PASS AS AMENDED.

 

      ASSEMBLYMAN GIUNCHIGLIANI SECONDED THE MOTION.

 

Discussions were held among committee members.

 

      MOTION CARRIED UNANIMOUSLY.

 

Chairman Porter assigned AB 485 to Mr. Arberry for a floor statement.

 

No action was taken by the committee on AB 483.

 

There being no further business before the committee, Chairman Porter adjourned the meeting.

 

                                   RESPECTFULLY SUBMITTED,

 

 

 

 

                                   ________________________

                                   SARA J. KAUFMAN

                                   Committee Secretary

 

 

 

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Assembly Committee on Commerce

May 3, 1993

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