[Federal Register Volume 68, Number 46 (Monday, March 10, 2003)]
[Proposed Rules]
[Pages 11452-11454]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-5647]



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Part III





Department of Housing and Urban Development





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24 CFR Part 3286



Manufactured Housing Dispute Resolution Program; Advance Notice of 
Proposed Rulemaking

  Federal Register / Vol. 68, No. 46 / Monday, March 10, 2003 / 
Proposed Rules  

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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Part 3286

[Docket No. FR-4813-A-01]
RIN 2502-AH98


Manufactured Housing Dispute Resolution Program; Advance Notice 
of Proposed Rulemaking

AGENCY: Office of the Assistant Secretary for Housing--Federal Housing 
Commissioner.

ACTION: Advance notice of proposed rulemaking.

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SUMMARY: This document requests comments on issues related to the 
development of the manufactured housing dispute resolution program. 
Under the Manufactured Housing Improvement Act, HUD is required to 
establish a program for the timely resolution of disputes among 
manufacturers, retailers, and installers of manufactured homes 
regarding responsibility for defects in manufactured homes; and the 
issuance of appropriate orders for the correction or repair of defects 
in manufactured homes.

DATES: Comment Due Date: April 24, 2003.

ADDRESSES: Interested persons are invited to submit comments regarding 
this advance notice of proposed rulemaking to the Rules Docket Clerk, 
Office of General Counsel, Room 10276, Department of Housing and Urban 
Development, 451 Seventh Street, SW., Washington, DC 20410-0500. 
Communications should refer to the above docket number and title. 
Facsimile comments are not accepted. A copy of each communication 
submitted will be available for public inspection and copying between 
7:30 am and 5:30 pm weekdays at the above referenced address.

FOR FURTHER INFORMATION CONTACT: William W. Matchneer III, 
Administrator, Office of Manufactured Housing Programs, Room 9156, 
Department of Housing and Urban Development, 451 Seventh Street, SW., 
Washington, DC 20410; telephone (202) 708-6401 (this is not a toll-free 
number). Persons with hearing or speech impairments may access this 
number via TTY by calling the toll-free Federal Information Relay 
Service at 1-800-877-8339.

SUPPLEMENTARY INFORMATION:

Background

    The National Manufactured Housing Construction and Safety Standards 
Act of 1974 (the Act) (42 U.S.C. 5401-5426) is intended to protect the 
quality, safety, durability, and affordability of manufactured homes. 
The Act was amended on December 27, 2000, by Public Law 106-569, in 
part to require the Secretary to establish and implement two new 
national manufactured housing programs, one for installation and one 
for dispute resolution.
    This notice requests public input on what HUD should consider as it 
develops a proposed rule to establish the dispute resolution program. 
When the subsequent proposed rule is published, the public will also 
have an opportunity to comment on the elements of HUD's specific 
proposals. An advance notice of proposed rulemaking soliciting comments 
on the installation program is being published separately in today's 
Federal Register. The public is invited to submit comments separately 
in response to that notice, and should refer to the docket number and 
title of that notice in any such response.

Dispute Resolution Program

    Section 623(c)(12) of the Act (42 U.S.C. 5422(c)(12)) provides for 
``a dispute resolution program for the timely resolution of disputes 
between manufacturers, retailers, and installers of manufactured homes 
regarding responsibility, and for the issuance of appropriate orders, 
for the correction or repair of defects in manufactured homes that are 
reported during the 1-year period beginning on the date of 
installation.'' Any states submitting a state plan after December 26, 
2005, must provide for such a dispute resolution program as part of the 
state plan. Additionally, section 623(g) of the Act (42 U.S.C. 5422 
(g)) calls for HUD to implement, beginning in December 2005, a dispute 
resolution program that meets the above requirements in any state that 
does not establish a program that complies with the Act.

Dispute Resolution Background

    In preparation for designing its dispute resolution program, HUD 
has examined manufactured housing dispute resolution programs 
established in various states. HUD has also examined a wide variety of 
dispute resolution models. A brief description of a few of the models 
examined follows below:
    1. Arbitration--An adjudicative process in which a decisionmaker or 
a panel of decisionmakers makes a ruling after hearing arguments. In 
this process, the parties are usually represented by attorneys.
    2. Mediation--A process that uses a neutral, or mediator, to 
facilitate discussion between the disputing parties. The primary goal 
of mediation is to have the parties reach a mutually agreeable solution 
to their dispute. The mediator acts as a guide through the process and 
helps the parties focus on the issues, but has no final decisionmaking 
authority.
    3. Mediation-Arbitration (Med-Arb)--A process that combines 
elements of mediation and arbitration. In this process, the parties 
attempt to reach resolution through mediation. However, if mediation 
fails, the parties must submit the remaining issues to arbitration.
    4. Mediation-then-Arbitration (Med-then-Arb)--A process similar to 
Med-Arb, however, in this process a different neutral party is used 
during the mediation and arbitration phases.
    5. Neutral Evaluation--A process that allows a neutral to assess 
the merits of a case and recommend settlement options.
    6. Minitrial--A process designed for business disputes. In a 
minitrial, attorneys argue their clients' cases before a panel of 
business officials from the respective organizations involved in the 
disputes. The business officials must have settlement authority so that 
they can negotiate a settlement after the case presentations.
    7. Negotiation--A process by which parties work out an agreement 
without any third party intervention.

Request for Comments

    There are a number of issues that arise in connection with the 
creation and implementation of the mandated federal and state dispute 
resolution programs. The purpose of this Advance Notice Proposed 
Rulemaking is to allow HUD to gather ideas concerning how the federal 
dispute resolution program should be structured and how HUD should 
approve the state programs for operation. Even though HUD requests 
comments and suggestions on all issues related to the establishment and 
creation of the federal and state dispute resolution programs, the 
following issues are of particular interest:

State Program Standards

    1. What process should be used to determine whether the proposed 
state programs meet the Act's requirements? Is proof of adequate 
funding of a state's program necessary for approval?
    2. How will the state programs be funded? Is there a difference for 
funding purposes between a dispute resolution program that is a part of 
an approved state plan and a program that is not?

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Can accepted states establish additional fees to cover the cost of 
their programs?
    3. What type of oversight should HUD exercise over the state 
programs to ensure that the programs continue to meet statutory 
requirements? Should HUD conduct periodic reviews of the state programs 
to ensure that their programs still meet the Act's standards? If so, 
how often?
    4. If HUD determines that state programs meet statutory 
requirements, how long should that determination be in effect? How 
should HUD provide notice that a state's program will be acceptable and 
HUD's program will not be used in the state?

Federal Program Structure

    5. What type of dispute resolution program should be instituted in 
order to achieve the Act's goal of protecting the quality, durability, 
safety, and affordability of manufactured homes? Should HUD model its 
program after one of the widely recognized dispute resolution programs 
e.g. arbitration, mediation, a hybrid of the two, or some other method? 
Please articulate your reasons.
    6. Should HUD's dispute resolution program be modeled after a 
preexisting state run dispute resolution program? If so, identify the 
state model that should be followed and indicate the reasons why. What 
changes would be needed to make the state program fully compliant with 
the purposes and requirements of the Act?
    7. Should HUD incorporate an adversarial component (e.g., parties 
are represented by attorneys) into its dispute resolution program?

Federal Program Complaint Process

    8. Who should be permitted to lodge a complaint? Who are the 
parties eligible to participate in the dispute resolution process? How 
can a consumer initiate the dispute resolution process? Who should 
incur the costs associated with filing and addressing a complaint? How 
should the dispute resolution initiation process be structured? What 
type of information and documentation should the complainant provide in 
order to initiate an action?
    9. Should HUD involve consumers in a process that involves 
manufacturers, retailers, and installers?
    10. Should time limits be established for presenting evidence or 
reaching a decision or resolution? If so, how long?
    11. Should the decisionmaker or any other authority be permitted to 
dismiss a complaint if it is deemed not credible, or frivolous? What 
criteria or filtering process should be established to eliminate 
complaints that lack merit?
    12. Once a complaint has been reported, what process should be used 
if a complainant elects to withdraw the complaint? If the complainant 
withdraws the complaint, may the decisionmaker still issue a corrective 
order?
    13. How will the parties be notified that a complaint has been 
reported (such as by registered letter, etc.)? How much advance notice 
will be given to the parties before they must appear before the 
decisionmaker? What kinds of information should HUD provide to the 
parties in a notice?
    14. Should any persons, decisionmakers, or HUD be permitted to join 
together several complaints involving common issues?

Federal Program Mechanics

    15. Should the decisionmaker's corrective orders be final or should 
there be an appellate process? If there is an appellate process, how 
should it be structured?
    16. If one party does not wish to participate in the resolution of 
a dispute through the program, should there be a default decision? If 
so, is there a need to provide protections against nuisance filings?
    17. Should the decisionmaker be required to have knowledge of the 
manufactured housing industry? How much experience, if any, should the 
decisionmaker be required to have and what type? If the decisionmaker 
is required to have experience, how will this experience be measured? 
If no prior industry experience is necessary, should the decisionmaker 
be given training related to the industry? If yes, who should provide 
the training and how should it be funded?
    18. Under what circumstances and how should a decisionmaker be 
removed from a case?
    19. Who should be approved to serve as a decisionmaker? Should 
anyone be disqualified from serving as a decisionmarker based on 
conflicts of interest or other concerns? Should complaints and 
corrective orders be made public?

Federal Program Evidence Standards

    20. What kinds of evidence should be accepted during the dispute 
resolution process? Should the presentation of evidence be conducted 
via oral testimony or in writing? If evidence is presented in writing, 
should there still be an opportunity for oral testimony? If there is an 
oral hearing, how much time should each party be given to present its 
evidence? Should cross-examination be permitted if there is an oral 
hearing?
    21. Should the decisionmaker be permitted to conduct outside 
investigations or be limited to the specific facts of the complaint? 
Should the decisionmaker be permitted to consider extraneous 
information, such as the past behaviors of the parties? Should the 
decisionmaker be permitted to conduct on-site visits?
    22. Should the decisionmaker have the authority to compel 
testimony?
    23. Should the contents of the hearing be recorded or transcribed? 
If so, who should be responsible for verifying the accuracy of the 
records or transcripts? Who should incur the cost of reporting and/or 
transcription? Where should the records from a proceeding be kept? If 
there is a record-retention requirement, how long should the records be 
maintained?

Defects

    24. What types of events constitute the reporting of a defect 
within the 1-year period for initiating a dispute resolution process?
    25. What will define the date of installation as prescribed by the 
Act? Should there be any limit on the kinds of defects subject to 
resolution through such procedure?
    26. What should the decisionmaker do if she or he deems a situation 
is likely to cause imminent peril to the public health, safety, or 
welfare? Should the decisionmaker be permitted to issue an interim 
order to provide temporary relief pending a final decision? Should the 
decisionmaker be required to report the defect immediately to HUD?

Federal Program Corrective Action Process

    27. How long will a party subject to an order have to take 
corrective measures? Should the decisionmaker have the authority to 
grant additional time to make corrections?
    28. Who should determine whether the corrections are acceptable? If 
the decisionmaker has to conduct a final review to ensure that the 
corrections have been made, which party should incur the cost? Should 
the decisionmaker notify the parties after corrections have been found 
to be acceptable?
    29. What should the penalty be if a party fails to comply with a 
corrective order?
    30. What should be the scope of the corrective orders? Should a 
corrective order be limited to the affected home? Should parties be 
allowed to make corrections to a home involved in a

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dispute before the decisionmaker issues an order?

General Questions

    31. How should consumers be made aware of the existence of the 
federal and state programs (e.g., by use of consumer manuals, posting a 
notice in each home, etc.)?
    32. Are consumers and other parties limited in the types of 
disputes that can be raised? If so, how are they limited?
    33. Should contractors be used to assist HUD in carrying out its 
new responsibilities for dispute resolution under the Manufactured 
Housing Improvement Act?

    Authority: 42 U.S.C. 3535(d), 5422, and 5424.

    Dated: February 25, 2003.
John C. Weicher,
Assistant Secretary for Housing--Federal Housing Commissioner.
[FR Doc. 03-5647 Filed 3-5-03; 3:35 pm]
BILLING CODE 4210-27-P