BP BHEAD INT H

AN ACT Relating to alternative dispute resolution for purchasers of manufactured homes; adding a new chapter to Title 59 RCW; and providing an effective date.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. The legislature finds that the purchase of a manufactured home is a sizeable investment for most families. The legislature also finds that consumer remedies for purchases of manufactured homes lack clarity, are time consuming, and are often inadequate. Therefore, the legislature declares that it is the purpose of this chapter to strengthen consumer warranties, to create a fund from which consumers may be compensated for established deficiencies in the purchased product, and to set up the mechanics for establishing procedures by which claims can be made against the fund, acted upon, and resolved without the consumer resorting to the courts or other governmental agencies for relief. The procedures and fund established in this chapter shall be deemed a system of alternative dispute resolution for public benefit without public cost.

NEW SECTION. Sec. 2. Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

(1) "Advisory committee" means the citizens' advisory committee established under section 4 of this act.

(2) "Association" means the Washington manufactured housing recovery fund association created in section 4 of this act.

(3) "Board" means the Washington manufactured housing recovery fund board created in section 4 of this act.

(4) "Consumer" means a person who has purchased a manufactured home at retail from an authorized dealer that both is licensed to do business and conducts business in the state of Washington.

(5) "Dealer" means a person or entity who is licensed and authorized to sell manufactured homes/mobile homes, is bonded, and is engaged in that activity. The term is interchangeable with the term "retailer."

(6) "Fund" means the Washington manufactured housing recovery fund.

(7) "Manufactured home" means a single-family dwelling built in accordance with the department of housing and urban development manufactured home construction and safety standards act, which is a national, preemptive building code.

(8) "Manufacturer" means an enterprise, wherever located, building manufactured homes and licensed to ship them into or within the state of Washington for sale to the public.

(9) "Mobile home" means a factory-built dwelling constructed prior to June 15, 1976, to standards other than the department of housing and urban development manufactured home construction and safety standards act.

NEW SECTION. Sec. 3. (1) There shall be established a fund to be known as the Washington manufactured housing recovery fund, which shall be created and maintained by payments from manufacturers predicated on home shipments made to or sales made in the state of Washington. The payments shall be deposited in one or more banks selected by the board. The fund shall be administered by the board, shall be separately maintained and accounted for, and shall be used for no other purpose than as directed by the board for the purposes enumerated and reasonably implied in this chapter.

(2) After the effective date of this act, each manufacturer shall remit to the board for deposit in the fund the sum of twenty-five dollars per manufactured home shipped to or offered for sale in the state of Washington. The fund shall be maintained at or above three hundred fifty thousand dollars after once reaching this threshold.

(3) The fund and contributions called for in this section shall be due and received by the board within sixty days after the month being reported on for shipments. Manufacturers who fail to contribute or report in a timely manner shall accrue interest on any delinquent amounts at the statutory rate. The board may pursue such collection efforts, including litigation, as may seem appropriate and shall be entitled to also recover reasonable attorneys' fees and costs for such efforts.

NEW SECTION. Sec. 4. (1) A nonprofit, unincorporated, legal entity to be known as the Washington manufactured housing recovery fund association is created. Each manufacturer doing business in this state and contributing to the fund shall be a member of the association. The association is not a subdivision of state government and is not subject to the open meeting laws. The association need not hold meetings.

(2) A seven-member board of directors shall be created and shall be composed of four members selected from and designated by the association, together with three dealers selected by and from the manufactured home dealers doing business in the state. The dealer members shall be designated by the state trade association representing the majority of manufactured housing dealers. The board shall adopt its own rules and regulations for the management of the fund, the administration and settlement of claims made against the fund, and all such matters as shall be necessary to carry out the beneficial purposes of this chapter.

(3) The board of directors may designate from among its membership an executive committee of not less than three members who shall be authorized to act for and on behalf of the board of directors between its scheduled meetings. The executive committee shall have such powers as the board delegates.

(4) The board shall establish a citizens' advisory committee for the purpose of assisting and advising the board in matters of policy and procedure. This advisory committee shall be of whatever size the board determines and shall be composed of persons active in or familiar with the manufactured housing industry, and particularly with persons who own and reside in manufactured homes. The advisory committee shall meet at the pleasure of the board without compensation for serving, but may receive expenses in connection with attendance at meetings. The board shall establish such requirements for the advisory committee as are appropriate and necessary, and may establish panels of three members from the advisory committee to hear disputes arising out of the purchase and sale of manufactured homes and recommend final decisions to the board.

NEW SECTION. Sec. 5. The board shall have the following powers and duties:

(1) To establish reporting requirements, to define the procedures for and the nature of claims to be submitted and acted upon, and to establish a date not later than July 1, 1996, on which the board will begin accepting consumer claims;

(2) After the date established by the board under subsection (1) of this section, to receive and resolve all consumer claims directed to it for breach of warranty either by the manufacturer or a dealer in delivering or installing the home;

(3) To collect contributions to the fund and to change the amount of contributions for the purpose of reducing, increasing, canceling, suspending, or otherwise adjusting the fund and the amount in the fund based on experience in carrying out the purposes of this chapter;

(4) To subrogate against any member manufacturer or any dealer who, in the opinion of the board, has caused the fund to sustain loss or expense that should have been paid by the party being subrogated against. In such an action the court shall allow the prevailing party its costs and attorney's fees;

(5) To remove or suspend any member of the board. Such removal or suspension shall be for cause and shall require a two-thirds affirmative vote of the total members of the board;

(6) To hire staff and establish an office for the fund, including the hiring of an administrator for the fund to carry out the purpose of the association on a day-to-day basis, to investigate claims, to interface between the claimant and the manufacturer or dealer, to resolve claims expeditiously by negotiation or compromise, to refer those claims that cannot be resolved to prompt hearing, to report regularly to the board, and to support the board to achieve the beneficial purposes of this chapter;

(7) To hire or retain a hearing examiner, either on a full-time or part-time basis, to hear and judge disputes and recommend final decisions to the board;

(8) To establish procedures for reviewing proposed final decisions made by the hearing examiner or a panel of the citizens' advisory committee. Decisions of the board shall be final and appealable into the courts only on the grounds that the decision is arbitrary and capricious or contrary to law; and

(9) To make all reasonable efforts to publicize the existence of the fund and the procedures established for making claims. Such information shall be available, at a minimum, from all member manufacturers and dealers.

NEW SECTION. Sec. 6. The fund shall be exempt from payment of all fees and taxes levied by this state or any of its subdivisions, except taxes levied on real or personal property.

NEW SECTION. Sec. 7. Any consumer who makes a claim that is satisfied by payment from the fund thereby waives any and all other claims or rights on the same subject against the manufacturer, the dealer, the fund, or their agents. No claimant shall have any direct right of action against the fund, the advisory committee, the staff, or the board created in this chapter.

NEW SECTION. Sec. 8. (1) It is the purpose of this chapter to provide remedies for breach of warranties and physical defects, damage, and shortcomings in the physical manufactured home. Personal injury claims or alleged consequential damages shall not be considered.

(2) The maximum allowable recovery from the fund is the retail purchase price of the home involved.

NEW SECTION. Sec. 9. Membership in good standing in the recovery fund created in this chapter shall be a condition of a manufacturer's license to do business in the state of Washington.

NEW SECTION. Sec. 10. Sections 1 through 9 of this act shall constitute a new chapter in Title 59 RCW.

NEW SECTION. Sec. 11. This act shall take effect September 1, 1995.