From the 86th: TMHA’s Top 2019 Legislative Priorities

One of our main goals this session was to provide energy code flexibility and choice to our modular home manufacturers and builders.  This was the culmination of several years of work where ultimately, we had to turn to the legislature for the remedies we needed. 

With a 25-percent decline in residential modular production while manufactured home and site-built production were experiencing 20-30 percent increases, and nearly every residential modular builder no longer building homes destined for any area north of Waco, we turned to the legislature to advocate for a more equal playing field.

HB 2546 by Rep. Ryan Guillen, and sponsored in the Senate by Sen. Bryan Hughes, passed the legislature and was sent to Gov Abbott’s desk on May 29. It was signed into law on June 14 and will become effective on September 1, 2019. 

Both Rep. Guillen and Sen. Hughes have been tireless supporters of our industry.  In fact, Rep. Guillen has sponsored numerous bills in past sessions to advance the goals of manufactured and modular home consumers and the industry that serves them.  Sen. Hughes has also been a long-time supporter and hailing from East Texas has a sizable presence of manufactured home owners and businesses in his senate district.  TMHA cannot thank them and their staff enough for their continued effort to advance through the laborious legislative process HB 2546 and get it to Gov. Abbott’s desk.

The problem we set out to solve is that in the more northern areas of the state the 2015 unamended energy code requires a level of air tightness in a house, 3-air exchanges per hour, that proved especially difficult with some of the current modular products.  After investigation of our site-built competitors, TMHA learned that the state law allows for cities and counties to request code amendments or alternative paths towards the same level of energy efficiency.  For a city to go to an alternative route the city or county must submit their alternative request to the Energy Systems Laboratory at the Texas Engineering Experiment Station of The Texas A&M University System (“laboratory”). 

The concept is simple. Have an objective third-party comprised of academics review the proposed alternative and have the academics determine if an alternative path achieves the same result from an energy efficiency standpoint.

TMHA then learned there are currently three local submissions that have been approved by the laboratory for amendments or alternative paths by the laboratory. 

When TMHA made the request to the IHB Code Council with the Texas Department of Licensing and Regulation, the legal response was the state statute limited the ability to request amendments or alternative paths to only “cities and counties” and as a state agency they were not allowed.  Thus, the reason TMHA then needed to go to the state legislature with the hope to change the law.

The bill, in its final form, allows a modular manufacturer or builder the ability to choose either the state adopted energy code, which is currently the 2015 IECC, or the energy code of the state with any local amendments or alternative compliance paths that have been requested by a city or county and reviewed by the systems laboratory as being equivalent to the unamended code for the same Climate Zone where the home will be located. 

That might sound a bit confusing, but what this means is that a modular builder who wants to use the North Texas COG approved energy code amendments to put a radiant barrier in the roof of a home and then only have to achieve 4 air exchanges per hour, rather than the unamended code requirement of 3 per hour, they can now do this in any area in Climate Zone III. 

The new law will provide maximum flexibility because it can “piggy-back” on any local code the builder or manufacturer would prefer but is not limited to applying that code in only the city or county that has adopted it. 

For example, a builder can choose to use the North Texas COG standard in any area with Climate Zone III, not just the areas of North Texas COG.  So, the builder can add the radiant barrier and get the increase in air exchanges for a home going into Abilene, Lubbock, or even El Paso.

Currently, there are three local governments who have submitted local code amendments that have been approved by the laboratory, but HB 2546 is set to also apply if more local jurisdictions make additional code amendment appeals that receive approval.

This was an active session in the modular housing space.  HB 1385 was signed into law by Gov. Abbott on May 24 and is effective September 1, 2019. H.B. 1385 removes the four-story height restrictions on industrialized housing and buildings

TMHA supported Rep. Tracey King’s bill throughout the legislative process to help open markets and future opportunities for industrialized housing and buildings.  Rep. King from the Uvalde area not only has a large number of manufactured homeowners as his constituents, he was also the sponsor in the 2017 session for TMHA supported HB 2019.  His help and leadership were once again greatly appreciated as was Sen. Kelly Hancock’s who picked up HB 1385 when it came to the Senate.

Sen. Hancock is the chairman of the powerful Senate Business and Commerce Committee, which is the key committee for nearly all legislation that impacts our industry.  Once passed over from the House, Sen. Hancock took HB 1385 the rest of the way, passing it first out of his B&C committee, and then the Senate as a whole.

One of our other major efforts came in the form of one of the half-dozen bills we worked to amend this session.  However, for this particular bill, HB 2620, we worked on a special amendment to benefit our retailers and transportation companies.

There are 14 cities in Texas who have been requiring police escorts in addition to the state requirements mandated in the Transportation Code and the Department of Motor Vehicles.  The most visible of these types of requirements occurred last summer in Houston where for about a week off-duty police escorts were required.  But in other cities like Kerrville and Alpine, to name just a couple, the police escorts for manufactured home moving though the city limits has caused numerous problems for our industry and our customers.

TMHA’s Lobby Team approached Rep. Armondo Martinez when he filed HB 2620.  He agreed to amend his bill with a section that reads:

SECTION 8.  Section 623.099, Transportation Code, is amended by adding Subsection (g) to read as follows:

                      (g)  A county or municipality may not require the use of an escort flag vehicle or any other kind of escort for the movement of a manufactured house under a permit issued under this subchapter that is in addition to the escort flag vehicle requirements of this       section.

HB 2620 had a perilous life traversing the pitfalls and expiring deadline clocks throughout the session.  Several times nearly dying on the vine as deadlines appeared to be eminently fatal to the bill.  But our “little engine that could” kept advancing barely ahead of the bill-killing clocks.  Barely surviving the House by being voted out just before the last possible day a House bill could be passed out, HB 2620 then made its way to the Senate, where Sen. Jose Rodriguez signed on as the Senate sponsor. 

Late in the Session thousands of bills were bottlenecked all desperately trying to get heard in committee.  Senate Transportation Committee chairman, Sen. Robert Nichols, heard HB 2620 in committee on May 17, which is just ten days before the end of session.  Then they voted the bill out two days later from committee and sent it to the full Senate, where this “little engine” got passed in the Senate on the final day a bill could be heard on the Senate floor. Again, narrowly avoiding by the thinnest of margins another final deadline.

The bill ultimately landed on Gov. Abbott’s desk who signed it into law on June 14, and the law will become effective September 1, 2019. TMHA is exceedingly appreciative to Rep. Martinez, Sen. Rodriguez, Sen. Nichols, and of course Gov. Abbott for putting his signature on it.

The amended language enhances state level preemption narrowly applied to escort vehicles required for transportation of manufactured and modular homes.  Subchapter E, Chapter 623 Transportation Code governs the transportation of manufactured and modular homes in Texas.  Specifically, Section 623.099 establishes the criteria when a  transported manufactured home is required to have one or two escort vehicles.  The new subsection (g) will limit any county or city from requiring additional types of “any other kind of escort” in addition to what the current law has required for decades under Section 623.099.

TMHA was also active in the property tax and disaster recovery issues addressed by the legislature this session.  Specifically, our work on HB 492 and HJR 34 – “relating to a temporary exemption from ad valorem taxation of a portion of the appraised value of certain property damaged by a disaster.”

This bill and enabling legislation in HJR 34 are intended to mitigate some of the devastating impacts inflicted by a natural disaster by allowing for a new property tax exemption. The changes allow for income-producing personal property, improvements to real property, and a manufactured home that is used as a dwelling to qualify for a property tax exemption if it is in a governor declared disaster area and is at least 15 percent damaged by the disaster as determined by the chief appraiser. The bill creates four different qualified properties based on the amount of damage the property incurred.

As filed, this bill did not include manufactured housing as being eligible to receive this possible new property tax exemption.  TMHA’s Lobby Team advocated to industry supporter and author of this bill, Rep. Hugh Shine, to add manufactured housing to the list of eligible property.  Rep. Shine then added a committee amendment which included the manufactured housing language. 

After passing the House, the manufactured housing language was removed when the bill came out of the Senate.  Rep. Shine did not concur with the Senate amendments, so the bill went to a conference committee, where the manufactured housing language was once again added back in. 

TMHA cannot thank Rep. Shine and his staff enough for their continued work on this and willingness to not only include manufactured housing but fight to keep it included in the final version of this bill.

And finally, starting in the summer before the 2019 Session gaveled in, TMHA has been working and involved on the sunset process and eventual legislation for The Office of Consumer Credit Commission, The Department of Banking, The Department of Savings and Mortgage Lending, and the Department of Motor Vehicles.  The details and results of this long effort can be found in our specific sunset article.