[Federal Register Volume 68, Number 137 (Thursday, July 17, 2003)]
[Proposed Rules]
[Pages 42327-42329]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-18175]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Part 3282

[Docket No. FR-4867-N-01]


Manufactured Housing Consensus Committee--Rejection of Land Use 
Proposal

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

ACTION: Notice of Rejection of Manufactured Housing Consensus Committee 
Recommendation of Proposed Regulation.

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SUMMARY: The Secretary has rejected a proposed recommendation by the 
Manufactured Housing Consensus Committee to promulgate a regulation 
concerning restrictions on the use of land for the placement of 
manufactured housing. The Secretary has determined that the Department 
has no legal authority to promulgate such a regulation under the 
National Manufactured Housing Construction and Safety Standards Act of 
1974.

FOR FURTHER INFORMATION CONTACT: William W. Matchneer III, 
Administrator, Manufactured Housing Program, U.S. Department of Housing 
and Urban Development, 451 Seventh Street, SW., Washington, DC 20410-
8000; telephone (202) 708-6401 (this is not a toll-free number). 
Hearing- or speech-impaired individuals may access this number via TTY 
by calling the toll-free Federal Information Relay Service at (800) 
877-8339.

SUPPLEMENTARY INFORMATION: The Manufactured Housing Consensus Committee 
has transmitted to the Secretary a recommendation dated March 14, 2003, 
that the Manufactured Housing Home Procedural and Enforcement 
Regulations, 24 CFR part 3282, be amended to include the following 
statement:
    ``No state or local jurisdiction shall allow a landowner to place 
restrictions

[[Page 42328]]

on their [sic] land prohibiting homes built to the federal manufactured 
home construction and safety standards when the landowner allows other 
forms of single-family residential construction.''

I. Background: Applicable Statutory Provisions.

    Consensus Committee. The Consensus Committee was established by the 
National Manufactured Housing Construction and Safety Standards Act of 
1974, 42 U.S.C. 5401 et seq. (``the Act'') for the purpose of providing 
periodic recommendations to the Secretary to adopt, revise, and 
interpret the federal manufactured housing construction and safety 
standards and the procedural and enforcement regulations. 42 U.S.C. 
5403(a)(3)(A). It may submit to the Secretary proposed procedural and 
enforcement regulations and recommendations for the revision of the 
regulations. 42 U.S.C. 5403(b)(1).
    Within 120 days from the date on which the Secretary receives a 
proposed procedural or enforcement regulation from the Consensus 
Committee, the Secretary must approve or reject the proposal. If he 
rejects the proposal, he must provide to the Consensus Committee a 
written explanation of the reasons for rejection and publish in the 
Federal Register the rejected proposal and the reasons for the 
rejection. 42 U.S.C. 5403(b)(4).
    Preemption. It appears that the legal underpinning of the Consensus 
Committee's recommendation is the preemption provision of the Act, 42 
U.S.C. 5403(d). The preemption provision allows federal construction 
and safety standards promulgated under the Act to preempt state and 
local laws. See ``Notice of Staff Guidance, 62 FR 3456 (1997);'' 
``Statement of Policy'', 62 FR 24337 (1997). The provision states that 
Federal construction and safety standards promulgated under the Act 
preempt state and local laws to the extent that such are applicable to 
the same aspect of performance of a manufactured home and are not 
identical to Federal construction and safety standards. 42 U.S.C. 
5403(d).
    Congress amended the preemption provision in 2000 to provide that 
preemption ``shall be broadly and liberally construed to ensure that 
disparate state or local requirements or standards do not affect the 
uniformity and comprehensiveness of the [Federal construction and 
safety] standards promulgated under this section nor the Federal 
superintendence of the manufactured housing industry as established by 
this title [the Act].'' 42 U.S.C. 5403(d).
    This amendment to the Act provided explicit statutory support for 
paragraph (d) of HUD's regulation at 24 CFR 3282.11 that implements the 
preemption authority. Paragraph (d) states: ``No State or locality may 
establish or enforce any rule or regulation or take any action that 
stands as an obstacle to the accomplishment and execution of the full 
purposes and objectives of Congress. The test of whether a State rule 
or action is valid or must give way is whether the State rule can be 
enforced or the action taken without impairing the Federal 
superintendence of the manufactured home industry as established by the 
Act.''
    The U.S. Court of Appeals for the 11th Circuit had raised a concern 
as to whether this paragraph was valid, stating that section 3282.11(d) 
``seems to expand the scope of the unambiguous preemption provision 
enacted by Congress.'' Georgia Manufactured Housing v. Spalding County, 
148 F.3d 1304, n8 (11th Cir. 1998).
    The amendment expressed Congress' intent that the preemption over 
local construction standards should be construed so as to recognize the 
nationwide scope of the Federal manufactured housing program and the 
manufactured housing industry.
    The amendment did not modify the basic substance of the statutory 
preemption provision. By its specific terms, the provision apply to 
construction and safety standards, generally codified in 24 CFR part 
3280. It does not apply to other regulations, including the 
Manufactured Home Procedural and Enforcement Regulations in 24 CFR part 
3282.
    The 2000 Congressional amendments also revised the Purpose of the 
Act to include, ``to facilitate the availability of affordable 
manufactured homes and to increase homeownership for all Americans'', 
42 U.S.C. 5401(b)(2). The amendment cannot be found to expand the 
applicability of the preemption provision beyond the federal 
construction and safety standards. There is no indication of 
congressional intent to preempt local land use or zoning laws. Accord, 
Burton v. City of Alexander City, 2001 U.S. Dist. LEXIS 6651, M.D. Ala. 
2001. (``* * * Congress plainly did not intend to preempt zoning laws 
that operate only where HUD does not. The most that can be said about 
the 2000 Act is that it removed any possible ambiguity created by a 
cryptic footnote in Spalding County * * * See 148 F.3d 1309 n.8.'').
    Authority of the Secretary and the Administrative Procedure Act. 
All regulations promulgated by the Department must be consistent with a 
statutory grant of authority. Generally, with respect to the 
manufactured housing program that authority would be found in a 
specific authority such as in the Act or in some general authority such 
as that found in Section 7(d) of the Department of Housing and Urban 
Development Act, 42 U.S.C. 3535(d). All regulations must also comply 
with the procedural and substantive requirements of the Administrative 
Procedure Act (APA), 5 U.S.C. 551 et seq. Under the APA, federal 
regulations will be held unlawful and set aside if found to be ``in 
excess of statutory jurisdiction, authority, or limitations, or shore 
of statutory right * * *'' 5 U.S.C. 706(2).

Decision of the Secretary

    The Secretary rejects the proposed recommendation of the Consensus 
Committee. The Secretary need not publish the proposal or his reasons 
for rejection for the following reasons. Nevertheless, since the 
proposal is the first recommendation issued by the Consensus Committee, 
the Secretary is publishing the proposal and his reasons for rejection 
in order to explain the statutory limitations on the Consensus 
Committee's authority and the Secretary's obligations under the Act.
    Bases for Rejection. 1. The Act gives no specific jurisdiction or 
authority to the Consensus Committee to proposed procedural or 
enforcement regulations that have no relationship to the revision or 
enforcement of the federal construction and safety standards. As such, 
the proposed regulation is beyond the authority granted by the Act to 
the Consensus Committee to propose and is beyond the scope of what the 
Secretary is required to respond to under the procedures established in 
the Act.
    The jurisdiction of the Consensus Committee is limited by the 
provisions of the Act. The Consensus Committee may make recommendations 
to adopt, revise, or interpret the procedural and enforcement 
regulations. The Consensus Committee does not have authority under the 
Act to make recommendations concerning the Procedural and Enforcement 
Regulations that are beyond the scope of the regulations.
    The scope of 24 CFR 3282.1(b), the Procedural and Enforcement 
Regulations, is to prescribe procedures for the implementation of the 
Secretary's responsibilities under the Act to conduct inspections and 
investigations necessary to enforce the federal construction and safety 
standards, to determine that a manufactured home fails to comply

[[Page 42329]]

with an applicable standard or contains an imminent safety hazard, and 
to direct manufacturers to notify owners, and to remedy violations of 
the federal construction and safety standards and, in some cases, to 
remedy the defect or imminent safety hazard.
    The proposal is a mandate upon local jurisdiction to prohibit 
landowners from restricting the use of their land. The use of real 
property, or private or contractual restrictions upon it, is not within 
the scope of the Secretary's authority under the Act or within the 
applicability of the procedural and enforcement regulations.
    2. Regardless of the authority given to the Consensus Committee 
under the Act to propose regulations, it proposal would seek the expand 
the authority of the Department beyond a reasonable interpretation of 
any provisions in the Act.
    The Department may not expand its jurisdiction of the limitations 
of its statutory powers through statutory interpretation. The 
Department's statutory jurisdiction and authority must be delegated to 
it by Congress and be found within an authorizing provision of a 
statute. 5 U.S.C. 706(2).
    The proposal is not based upon the federal construction and safety 
standards or the enforcement of those federal standards. It seeks to 
establish mandates on state and local jurisdictions, and to expand 
responsibilities and authority beyond what Congress had granted by 
requiring HUD to become involved in state and local land use issues and 
to take remedial action against local governments if they do not 
comply. There is no congressional authorization in the Act permitting 
or mandating the Department to be involved in such issues. As such, any 
actions by the Secretary to promulgate the proposal would be held 
unlawful under the APA.
    HUD has long interpreted its authority under the Act to exclude 
involvement in local land use issues. 62 FR 3456, 3458 (1997). It had 
not previously interpreted the preemption provisions in the Act to 
preempt local laws unless the local laws involved building or 
construction standards. There is nothing in the Act or in the 
legislative history of the Act that would suggest a directive by 
Congress to change HUD's long-held legal position.
    In addition, there is no applicable authority under any other 
statutory grant of power of the Secretary. The action requested by the 
Consensus Committee is not within any general authority of the 
Secretary, such as it granted in Section 7(d) of the Department of 
Housing and Urban Development Act, 42 U.S.C. 3535(d).
    For HUD to promulgate and enforce a regulation of such massive 
impact upon individual landowners and local jurisdictions nationwide 
and to assert federal involvement in areas traditionally reserved to 
the states, the Department would need a more specific statement from 
Congress of its intent.
    3. The proposed regulation does not delineate a procedure by which 
state or local jurisdictions are to ascertain or to prohibit 
restrictions on land use nor a procedure by which the Department is to 
enforce against a state or local jurisdiction that does not comply. 
While the proposal purports to create a mandate, the regulation is only 
one sentence and does not contain any structure by which to enforce it 
or to ascertain violations. As such, the regulation is administratively 
incomplete.
    Accordingly, for these reasons, the Secretary rejects the proposed 
regulation of the Consensus Committee.

    Dated: July 11, 2003.
John C. Weicher,
Assistant Secretary for Housing-Federal Housing Commissioner.
[FR Doc. 03-18175 Filed 7-15-03; 10:08 am]
BILLING CODE 4210-27-M