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F I S C A L I M P A C T R E P O R T

SPONSOR Griego

ORIGINAL DATE

LAST UPDATED

2/07/07

3/12/07 HB

SHORT TITLE Manufactured Housing Division Powers & Duties SB 497/aHJC

ANALYST Wilson

REVENUE (dollars in thousands)

Estimated Revenue

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

FY09

$100.0

$100.0+ Recurring General Fund

(Parenthesis ( ) Indicate Revenue Decreases)

ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT (dollars in thousands)

FY07 FY08 FY09 3 Year

Total Cost

Recurring

or Non-Rec

Fund

Affected

Total

NFI

$0.1

$0.1 Recurring

General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Regulation & Licensing (RLD)

SUMMARY

Synopsis of HJC Amendment

The House Judiciary Committee amendment states that a consumer complaint can only be filed

against an applicant and not against the Manufactured Housing Division.

The amendment also clarifies if any unlicensed person who has performed unlicensed work

settles the claims against that unlicensed person without becoming licensed, the claims are

considered to be administrative.

Synopsis of Original Bill

Senate Bill 497 amends Section 60-14-4 NMSA 1978 pertaining to the Manufacturing Housing

Act (MHA), to allow the Superintendent of RLD to employ personnel necessary to investigate

Senate Bill 497/aHJC– Page

2

and institute legal action against licensees and individuals who are unlicensed manufactured

housing contractors and are violating the act.

Currently, the MHA requires administrative actions shall be instituted by the Office of the

Attorney Genera against manufactured housing licensees who may be dealers, brokers,

salespersons, repairmen, installers, and manufacturers.

SB 497 also amends the MHA to provide an internal process through which an unlicensed

manufactured housing contractor may administratively resolve criminal misdemeanor charges

against him or her and become licensed—therefore allowing a person to avoid a criminal action

in a court of competent jurisdiction.

Before being allowed to pursue such an administrative settlement of unlicensed charges and

licensure, the following must be achieved:

The Director of the Manufactured Housing Division (MHD) must be satisfied no incident

of unlicensed work caused monetary damage to a consumer, or otherwise resulted in an

unresolved consumer complaint filed with the Manufactured Housing Division, and

The unlicensed contractor must pay an administrative penalty as follows:

•

In an amount up to 10% of the contract price or the value of the unlicensed work (as

determined appropriate according to the discretion of the Manufactured Housing

Committee). Or

•

In an amount between 1% and 5% of the total bid amount- if the work was bid for by

the unlicensed contractor, but not awarded to and performed by the unlicensed

contractor.

SB 497 states that an unlicensed contractor may, on a first offense only, resolve criminal

misdemeanor charges for unlicensed work without becoming licensed. However, to do this, the

administrative penalty outlined above must be paid before the issuance of a license.

Finally, this bill provides for the assessment of an additional administrative fee in the amount of

10%, to address compliance activity costs incurred by the MHD staff.

FISCAL IMPLICATIONS

RLD is currently planning to absorb the additional staff and resource costs associated with

implementing this new MHD administrative process will be handled by RLD’s existing staff and

budget resources.

It is expected that the administrative penalties collected through this new MHD process will

result in income to the general fund. It is difficult to predict the amount of income to the general

fund because it is likely that increased compliance enforcement efforts on the part of RLD will

increase over the course of the next several years. For the first year RLD expects at least

$100,000 in revenue.

As cases are pursued and resolved, an increase over the next several years, it is expected that the

Senate Bill 497/aHJC– Page

3

MHD will require additional staff and budget resources. RLD may be capable of absorbing the

initial phases of implementation of this administrative process in its existing staff and budget

resources. However, if the program continues to grow with successful enforcements, additional

resources will be necessary.

SIGNIFICANT ISSUES

This bill is modeled after the administrative process available to the Construction Industries

Division (CID) of the RLD. The process has proven to be an effective and expeditious manner

of resolution of unlicensed contracting matters for the CID.

The Office of the Attorney General, the local District Attorneys, and the courts do not make

unlicensed contracting a criminal misdemeanor charge a priority for prosecution. This means

many actions fall through the cracks. This process will allow the MHD to address these matters

without having to go through these other judicial agencies, all of which already experience

stressed staff and lack of resources.

Consumer’s benefit from provisions in this bill because the MHD can negotiate restitution to the

consumer as part of the resolution of the complaint.

ADMINISTRATIVE IMPLICATIONS

RLD will absorb the costs for the first year, but expects to come back to the legislature for an

appropriation to expand this program.

DW/mt