The Spring 2016 installment of the federal Semi-Annual Regulatory Agenda (SRA) was officially published in the Federal Register on June 9, 2016. The SRA details expected developments and projected timetables for pending and anticipated federal regulatory actions. As is typically the case, this edition of the SRA contains information concerning rulemaking activity that will impact HUD Code manufactured housing – in this instance, an anticipated rulemaking by HUD and a final rule from the Environmental Protection Agency (EPA), regarding formaldehyde standards for composite wood products.[1] Each of these activities is addressed in greater detail below.
1) Department of Housing and Urban Development (HUD)
The SRA, surprisingly, addresses only one rulemaking by HUD – a proposed rule to implement the so-called “third” set of standards revisions recommended by the Manufactured Housing Consensus Committee (MHCC). The SRA states that the proposed rule would: “add new standards that would establish requirements for carbon monoxide detection, stairways, fire safety considerations for attached garages, and for draft-stops when there is a usable space above and below the concealed space of a floor/ceiling assembly, and would establish requirements for venting systems to ensure that proper separation is maintained between the air intake and
exhaust systems.” This air intake and exhaust separation issue was originally highlighted by the Government Accountability Office (GAO) in a report issued in October 2012.
The SRA indicates that a proposed rule concerning these standards could be published for notice and comment as early as June 2016.
The SRA, however, is inherently misleading with respect to manufactured housing — a significant problem that has only worsened under the current program Administrator. Specifically, the SRA does reflect a large number of de facto standards and regulations imposed on the industry and consumers by HUD that circumvent the fundamental rulemaking requirements of both the Manufactured Housing Improvement Act of 2000 and the Administrative Procedure Act. Recent examples include, but are not limited to new “interpretations” and de facto mandates concerning: (1) “attached garages” and designs that “facilitate” attached garages; (2) inspections of home assemblies and components fabricated “off-site;” (3) attic live load structural and design criteria added by “interpretation” to the new on-site construction rule; (4) aspects of frost-free and frost-protected shallow foundations; (5) “tankless” water heaters; (6) mixing valves and water temperature devices; (7) design and quality assurance manual deviation reports; and (8) numerous HUD intrusions with respect to installation standards in compliant states with HUD-approved installation programs, among many others. Thus, even though Congress took decisive action in the 2000 reform law to eliminate non-transparent, closed-door de facto rulemaking by HUD and its revenue-driven contractors, this practice continues and, indeed, has intensified under the current career program Administrator.
Given the now two-year track record of the program Administrator in seeking to impose such high-cost pseudo-regulatory mandates that impair the industry’s ability to compete in new and emerging markets – providing a windfall for industry competitors (i.e., site-builders realtors and the rental housing industry), large industry businesses and the program’s revenue-driven contractors at the expense of consumers and smaller industry businesses – MHARR will closely scrutinize the proposed standards when they are issued, submit appropriate comments to HUD and update industry members as warranted.
2) U.S. Environmental Protection Agency (EPA)
The U.S. Environmental Protection Agency (EPA) published proposed rules to establish federal standards for formaldehyde emissions from certain defined composite wood products (i.e., hardwood plywood, medium-density fiberboard and particleboard), as well as a framework for a third-party certification program for composite wood product panel producers – in accordance with the Formaldehyde Standards for Composite Wood Products Act of 2010 – in the June 10, 2013 edition of the Federal Register. MHARR filed written comments in this proceeding on September 9, 2013. EPA then extended the comment period on this proposed rule and conducted a public meeting with affected stakeholders in April 2014 (attended by MHARR) in order to obtain and consider information specifically pertaining to the treatment of laminated wood products. The latest SRA indicates that a final rule implementing both the standards and enforcement regulations could be issued as early as July 2016.
The proposed standards are important for manufactured housing because their authorizing legislation directs HUD to revise its own manufactured housing standards to “reflect” the final EPA standards. Given the fact that the EPA standards will mean more restrictive emissions criteria and higher costs for composite wood products used in all homes, MHARR’s comments noted that both the industry and manufactured homebuyers deserve relief in the form of the repeal of the existing HUD formaldehyde standards, and the red formaldehyde “health” notice concurrent with the effective date of the EPA standards. As emphasized by MHARR, if all composite wood products supplied to the home-building industry in the future will comply with the higher EPA formaldehyde standards, there is no need for the costs associated with the HUD standards enforced at the home manufacturer level or the discriminatory formaldehyde “health” notice.
