Part IX

The States Role in This Federal Program

Let us start by looking back at the last two lines Section 620, Inspection Fees so that it is fresh in your mind.

Title VI §620 Inspection Fees

In carrying out the inspections required under this chapter, the Secretary may establish and impose on manufactured home manufacturers, distributors, and dealers such reasonable fees as may be necessary to offset the expenses incurred by him in conducting such inspections, and the Secretary may use any fees so collected to pay expenses incurred in connection with such inspections, except that this section shall not apply in any State which has in effect a State plan under section 5422 of this title.

If you have not already, pay special attention to the last two lines of Section 620, that exclude this section in States with SAA programs. Congress precludes HUD from imposing fees in SAA States. All fees collected in SAA States by HUD are collected under State Authority, not Federal.

Section 623, State Jurisdiction; State Plans

(b) Any State which, at any time, desires to assume responsibility for enforcement and manufactured home safety and construction standards relating to any issue with respect to which a Federal Standard has been established under Section 604, shall submit a plan for enforcement of such standards.

It could not be any clearer that this Act allows the States to enforce the federal standards. We will need to go to the regulations again to see what HUD/FHA have done to undermine this part of the Act.

3282.307, FMHCSS regulations

(a) Each approved State shall establish a monitoring inspection fee in an amount required by the Secretary. This fee shall be an amount paid by each manufactured home manufacturer in the State for each transportable section of each manufactured housing unit produced by the manufacturer in that State. In non-approved and conditionally-approved States, the fee shall be set by the Secretary.

(b) The monitoring inspection fee shall be paid by the manufacturer to the Secretary or to the Secretary's Agent, who shall distribute a portion of the fees collected from all manufactured home manufacturers among the approved and conditionally-approved States in accordance with an agreement between the Secretary and the States and based upon the following formula:

The formula is not relevant because the Secretary of HUD has no authority to establish inspection fees, determine the amount of inspection fees, except to insure that what the states are charging are sufficient to carry out their duties, or to require fees to be paid to him in any State with an approved SAA program, provided such State assumes responsibility for the enforcement of the Federal Standards. The only place that this regulation is accurate and within the law is the last sentence in (a).

The best way to show what HUD has done through regulation is to compare apples to apples. We will take the regulation regarding the states role and authority in this program if they so choose and then the paragraph from the Act itself that is related. There are occasions where the regulations resemble the Act but not many. It has a much better impact to just see them in a side-by-side comparison. Notes will be made in Italics.

Title VI §623

(c) Criteria for approval of State plan by Secretary
The Secretary shall approve the plan submitted by a State under subsection (b) of this section, or any modification thereof, if such plan in his judgment

Title VI §623(c)
(1) Title VI §623 designates a State agency or agencies as the agency or agencies responsible for administering the plan throughout the State;

3282.302, FMHCSS regulations
(1) The name and address of the State agency designated as the sole agency responsible for administering the plan throughout the State,

This is one of the big ones, HUD/FHA have unlawfully limited the States rights to have more than one agency, it would appear HUD/FHA thought that it would be easier to control the flow of information from a single agency beholding to them for money. What this would mean to the States is that they could separate the handling of consumer complaints for handling consumer complaints to some kind of regulatory agency and the inspections and enforcement to another agency. In this manner they could insure that complaints were being processed as required and document patterns related to problems needing correction, do follow-up inspections to insure compliance was being met etc. Since it would be quite easy to place this function under an agency that had nothing to gain from cooperation with the manufacturers of this product, the system would be much more difficult for the manufacturers to exert political influence over.

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Title VI §623(c)
(2) Provides for the enforcement of manufactured home safety and construction standards promulgated under section 604 of this title;

3282.302, FMHCSS regulations
This provision of the Act is excluded from the regulations.

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Title VI §623(c)
(3) Provides for a right of entry and inspection of all factories, warehouses, or establishments in such State in which manufactured homes are manufactured and for the review of plans, in a manner which is identical to that provided in section 614 of this title;

3282.302, FMHCSS regulations
(2) Provide that personnel of the designated agency shall, under State law or as agents of HUD, have the right at any reasonable time to enter and inspect all factories, warehouses, or establishments in the State in which manufactured homes are manufactured.

This following part of this provision of the Act in brackets is excluded from the regulations. [And for the review of plans, in a manner, which is identical to that provided in section 614 of this title]

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Title VI §623(c)
(4) Provides for the imposition of the civil and criminal penalties under section 611 of this title;

3282.302, FMHCSS regulations
(3) Provide for the imposition under State authority of civil and criminal penalties which are identical to those set out in section 611 of the Act, 42 U.S.C. 5410 except that civil penalties shall be payable to the State rather than to the United States,

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Title VI §623(c)
(5) Provides for the notification and correction procedures under section 615 of this title;

3282.302, FMHCSS regulations
(4) Provide for the notification and correction procedures under subpart I of this part where the State Administrative Agency is to act under that subpart by providing for and requiring approval by the State Administrative Agency of the plan for notification and correction described in Sec. 3282.410, including approval of the number of units that may be affected and the proposed repairs, and by providing for approval of corrective actions where appropriate under subpart I,

Remember in the section where we discussed the break in the record keeping chain.

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Title VI §623(c)
(6) Provides for the payment of inspection fees by manufacturers in amounts adequate to cover the costs of inspections;

3282.302, FMHCSS regulations
(6) Provide for the setting of monitoring inspection fees in accordance with guidelines established by the Secretary and provide for participation in the fee distribution system set out in Sec. 3282.307.

Section 623(c)(6) is identical in most ways to Section 620 with one notable exception. Instead of the fees going to the Secretary of HUD to offset his expenses in connection with the required inspections, the fees now go to the State since they are now carrying out the inspections specified under Section 614 that are necessary to carry out this Act. This was discussed in detail earlier

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Title VI §623(c)
(7) Contains satisfactory assurances that the State agency or agencies have or will have the legal authority and qualified personnel necessary for the enforcement of such standards;

3282.302, FMHCSS regulations
(7) Contain satisfactory assurances in whatever form is appropriate under State law that the designated agency has or will have the legal authority necessary to carry out the State plan as submitted for full or conditional approval,

The modification to the Act by the regulations by the exclusion of [and qualified personnel necessary for the enforcement of such standards] is picked up by 3282.302 (8) & (9). When you get to the end of this section, you will understand why this is beyond logic.

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Title VI §623(c)
(8) Give satisfactory assurances that such State will devote adequate funds to the administration and enforcement of such standards;

3282.302, FMHCSS regulations
(12) Give satisfactory assurances that the State shall devote adequate funds to carrying out its State plan,

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Title VI §623(c)
(9) Requires manufacturers, distributors, and dealers in such State to make reports to the Secretary in the same manner and to the same extent as if the State plan were not in effect;

3282.302, FMHCSS regulations
(13) Indicate that State Law requires manufacturers, distributors, and dealers in the State to make reports pursuant to section 614 of the Act 42 U.S.C. 5413 and this chapter of these regulations in the same manner and to the same extent as if the State plan were not in effect,

There is no indicate to it, they either have it or they DO NOT, if they do not then they cannot be a State Administrative Agency

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Title VI §623(c)
(10) Provides that the State agency or agencies will make such reports to the Secretary in such form and containing such information as the Secretary shall from time to time require; and

3282.302, FMHCSS regulations
(14) Provide that the designated agency shall make reports to the Secretary as required by subpart L of this part in such form and containing such information as the Secretary shall from time to time require,

Again, deleted the States right to use or create more than one agency for carrying out the State plan.

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Title VI §623(c)
(11) Complies with such other requirements as the Secretary may by regulation prescribe for the enforcement of this chapter.

This is implied throughout this section of the regulation, by the Secretary prescribing other requirements.

This paragraph does not grant the Secretary of HUD the Authority to modify the minimum requirements and he has taken GREAT liberty in doing so. He may create additional requirements and nothing else is authorized.

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(c) A state plan may be granted conditional approval if all of the requirements of Sec. 3282.302 (a) and (b) are met except paragraphs (b)(2), (b)(3), (b)(6) or (b)(13). When conditional approval is given, the state shall not be considered approved under section 623 of the Act, 42 U.S.C. 5422, but it will participate in all phases of the program as called for in its State plan. Conditional approval shall last for a maximum of five years, by which time all requirements shall be met for full approval, or conditional approval shall lapse.

If the State submits a plan that shows that they have the necessary qualified personnel necessary to enforce the standards, then the Secretary has no legal authority under this Act to grant anything less than full approval. In fact, he has no authority to grant Any such thing as a conditional approval, the State, either meets the requirements specified in the Act, or they do not. The Secretary of HUD has the authority under Section 614 to carry out training programs within a State to qualify that State's personnel to allow for approval of a State Plan and that is all.

This is how the Secretary of HUD is defeating the requirement under section 620, Inspection Fees. The problem with the conditional approval requirement is that provided the state submits a plan that meets the requirements of Section 623 the Secretary is not authorized to issue any such conditional approval. Research has indicated that there are State programs that have been under conditional approval for +20 years.