BILL ANALYSIS
AB 880
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Date of Hearing: May 12, 2009
ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS
Mary Hayashi, Chair
AB 880 (Niello) - As Amended: May 5, 2009
SUBJECT : Manufactured housing: prefabricated panelized homes.
SUMMARY : Requires a person who constructs a "prefabricated
panelized home" (PPH) to obtain a contractor's license from the
Contractor's State License Board (CSLB). Specifically, this
bill :
1)Defines a PPH as a structure that meets all of the following
requirements:
a) Is transportable in one or more sections or panels,
including exterior siding;
b) Is eight feet or more in width, or 40 feet or more in
length;
c) Is built to be permanently attached to a piece of real
property; and,
d) Is designed to be used as a single-family dwelling with
or without a foundation when connected to the required
utilities.
2)Amends the definition of "contractor" to include any person
engaged in the business of the construction, installation,
alteration, repair, or preparation for moving or a PPH.
3)States that "contractor" does not include a seller of a PPH
who holds a retail manufactured home or mobilehome dealer's
license if the installation of the PPH is performed by a
contractor.
4)Requires a PPH structure to comply with the standards
established under the National Manufactured Housing
Construction and Safety Standards Act.
EXISTING LAW :
AB 880
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1)Provides for the licensure and regulation of contractors by
the CSLB.
2)Defines "contractor" as any person engaged in the business of
the construction, installation, alteration, repair, or
preparation for moving a mobilehome or mobilehome accessory
building and structure upon a site for occupancy purposes.
3)Provides for the licensure and regulation of sellers of
manufactured homes or mobilehomes by the Department of Housing
and Community Development (DHCD).
FISCAL EFFECT : Unknown
COMMENTS :
Purpose of the bill . According to the author's office, "The
purpose of the bill is to define an industry that is currently
not specifically recognized in California code. Similar
industries are recognized and defined, such as manufactured
housing, but the PPH process is not described, as it doesn't
entail a permanent chassis or air conditioning, heating, or
plumbing that is installed prior to delivery. Because there is
no codified definition, purchasers of such housing are
vulnerable to abuse by unscrupulous businesses who take
advantage of the loophole. The bill clarifies what constitutes
a PPH, as well as stating conditions under which a seller of a
PPH is not required to have a contractor's license; namely, that
the company possess a retail manufactured housing license as
well as an assurance that the final assembly be performed by a
licensed contractor."
Background . There is no clear entity that regulates the sale of
PPHs. The DHCD regulates manufactured homes and mobilehomes,
which are different because they are pre-constructed, inspected,
and delivered intact to the home site. In addition,
manufactured homes and mobilehomes also include fire safety,
plumbing, heat, air conditioning components that are installed
prior to sale and delivery. Current law requires a licensed
contractor to install a manufactured home and mobilehome, but
not a PPH. PPHs are commonly sold throughout the country.
Support . Individuals who have purchased a PPH allege a
particular manufacturer provided shoddy materials and
workmanship that resulted in financial loss or additional costs
AB 880
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to repair the PPH. The PPHs are not regulated by the CLSB or
the DHCD and consumers have to resort to litigation to recover
financial losses. One consumer who sued the manufacturer and
was awarded financial restitution had the award nullified when
the company declared bankruptcy. That company has since
reorganized under a different name.
A current lawsuit against the particular PPH manufacturer
accuses the company of the following actions: breach of
contract, breach of guaranty, fraud and deceit,
misrepresentation, and unfair business practices in violation of
the Business and Professions Code. Additional allegations
against the owners include wrongfully using customer payments
for personal expenses.
REGISTERED SUPPORT / OPPOSITION :
Support
American Contractors' Indemnity Contractor
California Chapter of the American Fence Contractors'
Association
California Fence Contractors' Association
Engineering Contractors' Association
Flasher/Barricade Association
Marin Builders' Association
7 individuals
Opposition
None on file.
Analysis Prepared by : Joanna Gin / B. & P. / (916) 319-3301