MISSISSIPPI LEGISLATURE

1998 Regular Session

To: Insurance

By: Senator(s) Kirby

AN ACT TO AMEND SECTION 75-49-9, MISSISSIPPI CODE OF 1972, TO REVISE THE ANNUAL LICENSE FEES FOR MANUFACTURERS, DEALERS, AND INSTALLERS/TRANSPORTERS OF FACTORY-BUILT HOMES; TO AUTHORIZE THE COMMISSIONER OF INSURANCE TO EXAMINE FOREIGN MANUFACTURED OR RELOCATABLE HOME COMPANIES APPLYING FOR PRIVILEGE LICENSES OR ALREADY LICENSED TO DO BUSINESS IN MISSISSIPPI; TO REQUIRE MANUFACTURERS, DEALERS, AND INSTALLERS/TRANSPORTERS TO MAINTAIN A CONSUMER PROTECTION BOND WITH THE MANUFACTURED HOUSING DIVISION OF THE DEPARTMENT OF INSURANCE; AND FOR RELATED PURPOSES. 

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

SECTION 1. Section 75-49-9, Mississippi Code of 1972, is amended as follows:

75-49-9. (1) After July 1, 1992, every manufacturer, every transporter or installer and every dealer who sells, manufactures, transports or installs new or used factory-built homes within the State of Mississippi shall apply for and obtain a license from the commissioner.

(2) If a factory-built home is new, the applicant shall certify in the application to the commissioner that the applicant will comply with the construction standards set forth under rules and regulations provided in Section 75-49-5 herein, and that the applicant has obtained a current and valid tax identification number.

(3) Applications shall be obtained from and submitted to the commissioner on forms prescribed by the commissioner.

(4) The original license fee and all annual renewals thereof shall be Three Hundred Dollars ($300.00) for manufacturing plants which build manufactured homes and Five Hundred Dollars ($500.00) for manufacturing plants which manufacture relocated (modular) homes located within or without the State of Mississippi manufacturing or delivering homes for sale within the State of Mississippi and Two Hundred Dollars ($200.00) per manufactured home's and/or relocatable (modular) home's dealer location within the State of Mississippi. The licensing fee for a manufactured home and/or relocatable (modular) home independent contractor transporter or installer is Two Hundred Dollars ($200.00) for each company. The fee for relocatable (modular) home plan review shall be Four Hundred Dollars ($400.00) per floor plan. Except as otherwise provided in subsection (10) of this section, the license shall be valid for a period of one (1) year from the date of issuance, or until revoked as provided herein.

(5) After the effective date of this chapter, every manufacturer, transporter or installer or seller who first sells, manufactures, transports or installs a new or used factory-built home in this state, before such first construction, sale, transportation or installation shall apply for and obtain a license from the commissioner. The fee shall be paid to the commissioner in such manner as the commissioner may by rule require. All funds received by the commissioner shall be deposited in a special fund account in the State Treasury to the credit of the Department of Insurance.

(6) Every manufacturer of manufactured homes in the state shall pay a monitoring inspection fee to the Secretary of Housing and Urban Development, or the secretary's agent, for each manufactured home produced in the state by the manufacturer. The fee shall be in an amount established by the secretary pursuant to the National Manufactured Home Construction and Safety Standards Act of 1974, 42 U.S.C.S. 5401 et seq. The portion of the fee which is returned to the state shall be deposited by the commissioner in a special fund account in the State Treasury to the credit of the Department of Insurance.

(7) The commissioner shall investigate and examine all applicants for all licenses by holding such hearings as he shall deem necessary or conducting investigations or examinations, or any combination thereof, as to the fitness or expertise of the applicant for the type of license for which the applicant applied. A license shall be granted only to a person who bears a good reputation for honesty, trustworthiness, integrity and competency to transact the business in such a manner as to safeguard the interest of the public and only after satisfactory proof of such qualifications has been presented to the commissioner.

(8) The commissioner shall take all applicants under consideration after having examined them through oral or written examinations, or both, before granting any license. If the applicant is an individual, examination may be taken by his personal appearance for examination or by the appearance for examination of one or more of his responsible, full-time managing employees; and if a partnership or corporation or any other type of business or organization, by the examination of one or more of the responsible, full-time managing officers or members of the executive staff of the applicant's firm. Every application by an individual for a license to sell, transport or install new or used mobile, manufactured and relocatable homes shall be verified by the oath or affirmation of the applicant, and every such application by a partnership or corporation shall be verified by the oath or affirmation of a partner or an officer thereof. The applications for licenses shall be in such form and detail as the commissioner shall prescribe.

(9) The holder of any valid license issued by the commissioner at the time this section becomes effective shall be automatically issued an equivalent license in the same category for which his previous license was issued.

(10) Beginning July 1, 1988, every license issued under this chapter shall be issued annually and shall expire on June 30 following the date upon which it was issued. License fees shall not be prorated for the remainder of the year in which the application was made but shall be paid for the entire year regardless of the date of the application. The commissioner shall, on or before April 30, 1989, and on or before April 30 of each succeeding year thereafter, forward a "Notice of Renewal," by regular United States mail, to each licensee at his or its last known post office address. After depositing the "Notice of Renewal" in the United States mail, the commissioner shall have no other duty or obligation to notify the licensee of the expiration of his or its annual license. The failure of the licensee to obtain a renewal license on or before June 30 of the ensuing license period shall act as an automatic suspension of the license unless the commissioner, for good cause shown in writing and the payment of an amount equal to double the renewal fee for said delinquency, lifts the suspension and issues the renewal license. During the period of suspension any practice by the licensee under the color of such license shall be deemed a violation of this chapter. Annual renewals of a dealer's license shall require, as a condition precedent, that the dealer verify by oath or affirmation that he maintains a retail sales lot in accordance with all rules and regulations promulgated by the commissioner and that the lot has three (3) or more new or used factory-built homes located thereon for retail sale as a residential dwelling or for any other use at the time of application.

SECTION 2. Whenever the Commissioner of Insurance deems it prudent for the protection of the consumers who purchase factory-built homes in this state, he shall in like manner visit and examine, or cause to be visited and examined by some competent person or persons he appoints for that purpose, any foreign manufactured or relocatable (modular) home company applying for privilege licenses or already licensed to do business in this state, and such companies shall pay the proper charges incurred in such examination, including the expense of the commissioner or his deputy and the expenses and compensation of his assistants employed therein. For the purpose aforesaid, the commissioner or his deputy or persons making examination shall have free access to all the books and papers of the manufactured or relocatable (modular) home company that relate to its business and to the books and papers kept by any of its agents, and may summon and qualify as witnesses, under oath, and examine the directors, officers, agents and trustees of any such company, and any other persons in relation to its affairs, transactions and conditions. The compensation and expense of the commissioner or such examiner for the commissioner shall not exceed that approved by the commissioner for all examiners on such examinations, itemized account of such charges being rendered.

SECTION 3. (1) (a) Each manufacturer shall maintain consumer protection bonds with the Manufactured Housing Division of the Department of Insurance equal to the number of locations or plants shipping units into Mississippi or constructing units in Mississippi. Each bond may be satisfied by a surety bond or other security in the form and in an amount prescribed by the Manufactured Housing Division which shall not be less than Fifty Thousand Dollars ($50,000.00) for each location. Each surety in the form of a cash consumer protection bond shall be posted with a financial institution located in Mississippi. Out-of-state manufacturers shall submit an affidavit consenting to service of process in Mississippi in connection with all claims filed pursuant to the provisions of the law.

(b) Each bond shall be indemnity for any loss sustained by any consumer as a result of:

(i) A violation by the manufacturer of any provision of the laws, rules and regulations herein;

(ii) A violation of the manufacturer's written warranty;

(iii) Fraud by the manufacturer in the execution of performance of a contract;

(iv) The misrepresentation and/or the making of false promises through the advertising, the agents and/or the salespersons of the manufacturer; or

(v) The refusal, failure and/or inability of the manufacturer to provide a legal and valid contract to the consumer.

(2) (a) Each dealer shall maintain consumer protection bonds with the Manufactured Housing Division equal to the number of locations at which the dealer does business. Each bond may be satisfied by a surety bond or other security in the form and in an amount prescribed by the Manufactured Housing Division which shall not be less than Twenty-five Thousand Dollars ($25,000.00) for each location. Each surety in the form of a cash consumer protection bond shall be posted with a financial institution located in Mississippi.

(b) Each bond shall be indemnity for any loss sustained by any consumer as a result of:

(i) A violation by the dealer of any provision of the laws, rules and regulations herein;

(ii) A violation of the dealer's written warranty;

(iii) Fraud by the dealer in the execution or in the performance of a contract;

(iv) The misrepresentation and/or the making of false promises through the advertising, the agents and/or the salespersons of the dealer; or

(v) The refusal, failure and/or inability of the dealer to provide a legal and valid contract to the consumer.

(3) (a) Each installer/transporter shall maintain consumer protection bonds with the Manufactured Housing Division. Each bond may be satisfied by a surety bond or other security in the form and in an amount prescribed by the Manufactured Housing Division which shall not be less than Ten Thousand Dollars ($10,000.00) for each location. Each surety in the form of a cash consumer protection bond shall be posted with a financial institution located in Mississippi. Out-of-state installers/transporters shall submit an affidavit consenting to service of process in Mississippi in connection with all claims filed pursuant to the provisions of the law.

(b) Each bond shall be indemnity for any loss sustained by any consumer as a result of:

(i) A violation by the installer/transporter of any provision of the laws, rules and regulations herein;

(ii) Fraud by the installer/transporter in the execution and/or in the performance of a contract;

(iii) The misrepresentation and/or the making of false promises through the advertising and/or the agents of the installer/transporter; or

(iv) The refusal, failure and/or inability of the installer/transporter to provide a legal and valid contract to the consumer.

(4) Consumer protection bonds or other security as approved by the commissioner shall not be released by the Manufactured Housing Division until all claims and complaints against the licensee have been finally resolved or until two (2) years after the licensee ceased doing business in Mississippi, whichever period is later.

(5) All liability on a consumer protection bond or other form of security allowed by the commissioner shall be applicable to the bond or other security in effect as of the date of the occurrence which gave rise to the liability. In the event that the total claim against a consumer protection bond exceeds the aggregate total amount of any bond or other form of approved security, the commissioner may distribute the proceeds of such bond as other approved security pro rata to the claimants.

(6) After notice and hearing, the commissioner may order the Manufactured Housing Division to attach and disburse a licensee's consumer protection bond without necessarily taking action against the licensee's license. Any hearing held concerning a licensee's consumer protection bond will be held in accordance with the procedure outlined in Section 75-49-13, Mississippi Code of 1972, and the commissioner may attach any licensee's consumer protection bond and indemnify a consumer for losses to the limit of the bond for damages resulting from the licensee's violation of the rules and regulations or from fraud, misrepresentation, making of false promises or the refusal, failure or inability to provide a legal and good contract. The Manufactured Housing Division, upon a finding of a violation by a licensee, may further require the licensee to increase the amount of any bond. Any increase shall be in proportion to the seriousness of the offense or to the repeat nature of the licensee's violation, but shall not exceed One Hundred Thousand Dollars ($100,000.00) for manufacturers, Fifty Thousand Dollars ($50,000.00) for dealers, and Twenty Thousand Dollars ($20,000.00) for installers/transporters. The commissioner may reduce any increased bond when satisfied that violations have been cured by appropriate corrective action and that the licensee is otherwise in good standing.

(7) After the commissioner issues a decision attaching a bond in order to indemnify a consumer and repair work is required on the consumer's home, the commissioner shall direct the consumer to obtain at least three (3) written estimates from licensed repairmen for performance of the work. The requirement of the estimates may be waived by the commissioner if conditions require a waiver. The Manufactured Housing Division shall select the lowest estimate to perform the repair work. The requirement of selecting the lowest estimate may be waived only if it is clear that the work cannot properly be performed at that level. Payment from the bond shall be authorized by the Manufactured Housing Division only after the work is completed, inspected and approved.

(8) If reimbursement to a consumer for repairs, parts and/or other work is requested in a complaint, the Manufactured Housing Division shall determine the reasonable value of such repairs, parts and/or work. The consumer shall not be reimbursed from the bond in an amount more than the reasonable value of such repairs, parts or work.

(9) If a licensee has posted more than one (1) consumer protection bond with the Manufactured Housing Division, the Manufactured Housing Division may, upon written request from such licensee, review the performance record of the licensee and authorize the release of one (1) or more bonds. In no case shall the Manufactured Housing Division authorize the release of all bonds except in accordance with subsection (5) of this section.

(10) If a licensee does not conduct any business after issuances of his license and the posting of the application bond, the Manufactured Housing Division, upon receipt of satisfactory evidence that no business was conducted, and upon surrender of the license, may release the licensee's bond.

(11) A corporate surety which issues a surety bond for a license may cancel the surety bond by giving sixty (60) days' prior written notice to the Manufactured Housing Division of such cancellation; provided, however, that no such cancellation shall be effective unless the Manufactured Housing Division has approved the cancellation by appropriate signature on the notice.

(12) The Manufactured Housing Division shall give written notice to any corporate surety of any formal notice of contemplated disciplinary action served upon a licensee that is insured by that corporate surety.

SECTION 4. This act shall take effect and be in force from and after July 1, 1998.