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RULES AND REGULATIONS

Title 12—COMMERCE, TRADE AND LOCAL GOVERNMENT

DEPARTMENT OF COMMUNITY AND ECONOMIC DEVELOPMENT

[ 12 PA. CODE CH. 145 ]

Industrial Housing and Components

[46 Pa.B. 6976]
[Saturday, November 5, 2016]

 The Department of Community and Economic Development (Department), under the authority of section 5 of the Industrialized Housing Act (act) (35 P.S. § 1651.5), amends Chapter 145 (relating to industrial housing and components) to read as set forth in Annex A. The purpose of this final-form rulemaking is to comply with the amendment to the act that expands the Department's role to include monitoring the production of industrialized buildings and clarify certain areas of the current industrialized housing regulations.

 The act established uniform State standards and procedures for the identification, inspection and surveillance of the manufacture, assembly, installation and overall quality process required for certification of industrialized housing and components for use in communities in this Commonwealth. As amended, the act extends these standards and procedures to include industrialized buildings and components. The act authorizes the Department to promulgate rules and regulations, to interpret and make specific provisions of the act.

 The purpose of this final-form rulemaking is to satisfy the amendments to the act requiring the Department to promulgate regulations to administer a certification program to oversee the production, installation and inspection of new industrialized buildings. Industrialized buildings that are produced under this certification program will be deemed to comply with the Pennsylvania Construction Code Act (35 P.S. §§ 7210.101—7210.1103). This type of certification program mirrors the current program established for industrialized housing.

 The term ''industrialized building'' is used in this final-form rulemaking to capture every type of modular building being produced offsite for placement in this Commonwealth with the exception of those constructed for residential use. The factories that produce these industrialized buildings are located across the United States. Industrialized buildings are categorized in one of nine use and occupancy classifications in the ICC International Building Code: assembly (for example, theaters, restaurants and churches); business (for example, banks, United States Post Offices, certain show rooms and laboratories); educational (for example, classrooms and certain day care facilities); factory (any type of factory that is not high hazard or storage use, for example, bakeries, food processing, furniture production, millwork and machine shops); high hazard (building that house manufacturing, processing or storing materials that constitute a physical or health hazard); institutional (for example, assisted living facilities, nursing homes, certain child care facilities, correctional facilities and hospitals); mercantile (for example, department, drug and retail stores); storage (storage type buildings that are not classified as high hazard); and utility (buildings or structures accessory to a main structure, such as certain garages and possibly aircraft hangars).

 Any of these industrialized buildings could be a single module possibly used as a kiosk or movable office space or a 90-module school building, medical services center or office complex, several floors high. Either of these two extremes falls under the definition of ''industrialized building'' if the building is produced remote from the job site.

 Additionally, the manufacturers that produce these industrialized buildings are just as varied as the buildings themselves. The few industrialized building factories in this Commonwealth currently export the vast majority of their production to other states and this final-form rulemaking does not apply to production destined for other states. This final-form rulemaking only applies to buildings being produced for use in this Commonwealth. Every state in the mid-Atlantic region and New England, except Delaware, Vermont and West Virginia, already have programs in place for industrialized buildings. This final-form rulemaking utilizes the same internal quality assurance, inspection and insignia processes already in place in these facilities. Therefore, it is not expected that these producers will see any increase in costs beyond the insignia fee.

 Currently, while the Pennsylvania Construction Code Act establishes the building code for all commercial buildings to be erected in this Commonwealth, the Uniform Construction Code does not make special provisions for pre-fabricated type buildings that do not allow for inspection by the code official without disassembly. This final-form rulemaking establishes a mechanism for local code officials to verify that the required inspections did occur on these buildings. While the cost impact on local government may not be measurable in terms of increased costs or savings, the ability of the municipality to know that buildings are constructed under a quality control program designed to certify code compliance will prove very valuable.

 The proposed rulemaking was published at 44 Pa.B. 5026 (July 26, 2014) with a 30-day public comment period that closed on August 25, 2014. A public hearing was held on August 25, 2014. Public comments were received from eight commentators. The Independent Regulatory Review Commission (IRRC) also provided comments. The Department issued an Advanced Notice of Final Rulemaking (ANFR) and draft final-form rulemaking, which were published at 45 Pa.B. 3342 (June 27, 2015). Seven public comments were received. IRRC's first and third comments regarding the proposed rulemaking encompassed the public comments to the proposed rulemaking and the draft final-form rulemaking. Therefore, responses to all comments are included in the following responses to IRRC's comments.

Comments to Proposed and Draft Final-Form Rulemakings

 IRRC's first comment to the proposed rulemaking stated that the final version of the proposed rulemaking was not presented to the Industrialized Housing Advisory Commission (IHAC) as required under section 5(a) of the act and section 8 of the act (35 P.S. § 1651.8), which require the Department to consult with and obtain advice from IHAC in the drafting and promulgation of rules and regulations adopted under the act. Section 8 of the act provides for the establishment of IHAC to consist of 15 members appointed by the Governor by and with the advice and consent of 2/3 of the members of the Senate. Section 8 of the act further provides that the term for IHAC members, other than those initially appointed, is to be 3 years. IHAC members do not receive compensation for their service as members, but receive reimbursement for necessary expenses incurred in connection with their member duties. The composition of IHAC is not addressed in the act. The only reference to duties charged to IHAC is in section 8 of the act, which provides that the Department shall consult with and obtain advice from IHAC in the drafting and promulgation of rules and regulations adopted under the act. The act does not address how often IHAC is to meet.

 Although IHAC was established in section 8 of the act as originally passed in 1972, IHAC has not been formed and program staff has advised the Department of this with each change of administration. The Department formed the Industrialized Housing Advisory Group (Group) for the purpose of consulting with and obtaining advice from the Group in drafting and promulgating rules and regulations. As with previous rulemakings, the Department consulted with the Group regarding this final-form rulemaking to achieve the regulatory goals required under the act. The Group first met on January 31, 2008, and has met a total of nine times (roughly every year). There are currently 15 members of the Group. The members represent the following segments of the industry: two members from the trade associations representing the industrialized housing industry; one builder (installer) of industrialized housing; six producers of industrialized housing; one producer of industrialized buildings; one producer of industrialized buildings and industrialized housing; one engineer with industry experience; two building code officials; and one independent inspection/evaluation agency that participates in the industrialized housing program.

 Additionally, the Pennsylvania Housing Research Center at the Pennsylvania State University is represented as a resource for the Group. Department program staff facilitates the Group.

 The Group members were originally chosen by Department program staff based on suggestions from trade associations. Currently, when a member resigns membership, the Group will suggest a replacement. The members are not compensated or reimbursed for expenses incurred as a result of their membership and participation.

 The Group was consulted multiple times during the drafting of the proposed rulemaking. The Group met on November 4, 2009, September 21, 2010, September 21, 2011, March 1, 2012, and September 6, 2012. Regional meetings were conducted on June 13, 2013, and June 18, 2013.

 When it was determined that the act did not provide the necessary authority to support the amendment of Chapter 145 to include the certification of industrialized buildings and components, the act was amended by the act of May 21, 2013 (P.L. 27, No. 8) (Act 8) to authorize the proposed rulemaking. A public hearing was held on August 25, 2014. Additionally, the proposed rulemaking was e-mailed to the members of the Group on September 4, 2014, for their comments, all of which were favorable. On August 26, 2015, the Group met to discuss the rulemaking and gave their unanimous support.

 However, as recommended by IRRC, to provide for the opportunity to build consensus on the language of the regulations prior to submittal of the final-form rulemaking, the Department prepared an ANFR and draft final-form rulemaking for additional public comment. Public and industry comments in response to the ANFR and draft final-form rulemaking are addressed in the following responses to the comments to the proposed rulemaking.

 IRRC's first comment to the proposed rulemaking included the concern that the regulations do not address existing buildings and components and, therefore, effectively ban existing inventory without an insignia. IRRC stated that:

The regulation needs to be amended to directly address existing inventories to be consistent with the business protections established by 35 P.S. § 1651.4(d). Some of the commentators cite the language of Section 145.31(a) as the specific problem. However, given the above concern regarding consultation with IHAC, we ask the Department to review the entire regulation in consultation with the regulated community and explain how the final-form regulation complies with 35 P.S. § 1651.4(d).

 In the draft final-form rulemaking, § 145.3 (relating to scope) was amended to state that Chapter 145 applies to new industrialized housing, buildings and housing or building components. In addition, § 145.31 (relating to requirement of certification) was amended to provide that Chapter 145 does not apply to industrialized housing, buildings, or housing or building components produced prior to the effective date of the final-form rulemaking. These amendments were in the ANFR and draft final-form rulemaking and thus the Department complied with IRRC's request to review the regulation with the regulated community.

 This final-form rulemaking complies with the amendments to section 4(j) of the act (35 P.S. § 1651.4(j)) as amended by Act 8 mandating that the Department promulgate regulations to administer a certification program to oversee the production, installation and inspection of industrialized buildings, as opposed to industrialized housing. Thus, this regulation cannot comply with section 4(d) of the act, as section 4(d) of the act deals only with industrialized housing, not industrialized buildings. As previously stated, §§ 145.3 and 145.31 have been revised to make clear that these sections apply to industrialized housing, buildings, or housing or building components produced after November 6, 2018.

 The Department received public comments from seven commentators in response to the ANFR and draft final-form rulemaking. These comments addressed the handling of relocatable, fleet type, industrialized buildings that were constructed prior to implementation of the subject certification program.

 The Department has been consistent in the position that the act does not provide legislative authority to include existing relocated industrialized buildings in the regulations and that such buildings are currently addressed in the Uniform Construction Code Act.

 After much discussion with the Group and other interested parties, the Modular Building Institute (MBI) offered two amendments to the draft final-form rulemaking that would satisfy their demands: add a sentence to the end of the § 145.33 (relating to manufactured homes excluded) to indicate that the definition of ''residential permanent foundation'' does not apply to industrialized buildings; and add a sentence to § 145.3 that states ''[e]xisting industrialized buildings may continue to be utilized in the commonwealth subject to approval of the local code official and the provisions of the existing building code.''

 The Department and the Department of Labor and Industry object to the phrase ''and the provisions of the existing building code'' of the suggested amendment to § 145.3 because the phrase exceeds legislative authority and could cause confusion regarding which building code should be applied.

 On October 22, 2015, the Department advised MBI and two of its key members that it was prepared to move forward with the final-form rulemaking incorporating its amendments, with the objectionable phrase in § 145.3 omitted. MBI advised on December 8, 2015, that they were satisfied.

 Accordingly, the two previously-referenced revisions to the draft final-form rulemaking offered by MBI are made in this final-form rulemaking, with the objectionable phrase in § 145.3 omitted.

 In its second comment to the proposed rulemaking, IRRC listed responses to certain questions in the Regulatory Analysis Form (RAF) that it stated should be further explained. IRRC stated that questions 19, 20 and 21 of the RAF ask for ''specific estimates of the costs and/or savings.''

 This final-form rulemaking has very little impact on the regulated community and no impact on local government that is measurable. The regulated community includes manufacturers of industrialized buildings that are located in North America and abroad. The intent of this final-form rulemaking is not to impact these individual producers, but rather to provide them with a clear benchmark that, when met, will indicate to the municipal code inspectors that the building in question complies with the applicable building code.

 Additionally, the physical location of a manufacturing facility in this Commonwealth does not trigger any action under this final-form rulemaking. This final-form rulemaking only addresses the actual buildings produced for installation in this Commonwealth. The building code requirements for these buildings are already established by the Pennsylvania Construction Code Act. This final-form rulemaking only legitimizes the quality assurance program that every manufacturer already has in place for other states to which they ship buildings. Likewise, these manufacturers already utilize the third-party evaluation and inspection agencies that are critical to the success of this program. In essence, this final-form rulemaking utilizes processes and procedures already in place at every legitimate industrialized building production facility. The only added cost would be the very minimal cost of the Insignia of Certification (ranging from $40 to $90 per insignia) that will stand as evidence of compliance.

 In terms of savings to the regulated community, as the 2,562 local municipalities take varied approaches to issuing buildings permits for industrialized buildings, savings may be realized in many of these municipalities based on the establishment of a uniform procedure. However, to attempt to estimate any savings would be impossible. With regard to State government, through the fees generated from Insignia of Certification, this program continues to generate sufficient revenues to cover all expenses.

 The form referenced as attached in response to RAF question 22, which was inadvertently omitted upon submission of the proposed rulemaking, was attached to the RAF for the final-form rulemaking.

 RAF question 24 asks for information regarding the impact on small businesses. It is important to note that this certification program will apply to producers of industrialized buildings shipping into this Commonwealth from across the United States. Some manufacturers may only produce a single project while others may routinely ship into this Commonwealth. As far as any adverse impact on small businesses, code compliance is already required for these buildings. This program only requires the manufacturers certify the buildings code compliance through an insignia.

 RAF question 26 speaks to alternative provisions that may have been considered. Producers of industrialized buildings currently participate with other states that use the same approach. Also, this is the same approach utilized in the industrialized housing program, which is widely accepted and recognized for its efficient procedures.

 RAF question 27 asks if special or less stringent requirements were considered for small businesses. As Chapter 145 speaks to building code compliance and the required reporting is minimal, this question is not applicable.

 RAF question 28 inquires if data was the basis for this final-form rulemaking. It was not.

 IRRC stated that fees were amended but not mentioned in the RAF. The certification program for industrialized buildings currently does not exist and as a result fees had to be established for this new program. Fees were adjusted for out-of-State manufacturers to cover the additional travel costs of the Department when monitoring these manufacturers. The fees imposed on current Pennsylvania-based industrialized housing manufacturers remains unchanged.

 Per IRRC's recommendation, the Department reviewed the RAF responses and provided more detailed and complete responses when possible to assist IRRC in its determination of whether the final-form rulemaking is in the public interest.

 In its third comment to the proposed rulemaking, under the Pennsylvania Code & Bulletin Style Manual, IRRC recommended moving the definition of ''permanent foundation'' to the body of the regulations, since it includes substantive provisions addressing how the foundation shall be constructed. IRRC also listed comments from commentators regarding the requirements for permanent foundations.

 The omission of a definition of ''permanent foundation'' in Chapter 145 has proven problematic for the industry and municipal code enforcers in recent years. The definition was provided by the Modular Building Systems Association and agreed upon by the Group and others involved with industrialized housing. Furthermore, this same definition is utilized by many other states. The comments received by IRRC on this issue are inaccurate. The Uniform Construction Code does not define ''permanent foundation'' and the definition does not require nor favor one installation approach over another. The definition was simply provided for clarity to allow consumers of industrialized housing to more efficiently obtain a mortgage for their home.

 Per IRRC's recommendation, the definition of ''permanent foundation'' is deleted from § 145.1 (relating to definitions) and added to § 145.33. This section provides exact language that must appear on certain documents. The definition in this final-form rulemaking was further revised from the draft final-form rulemaking per MBI's suggestions, without changing the definition substantively.

 IRRC's fourth comment to asked for additional information regarding the amendment and addition of fees in § 145.94 (relating to fees).

 The $40 insignia fees for industrialized housing and housing components produced in this Commonwealth are not changed. For clarity and simplicity, in amending § 145.94 to include industrialized buildings and building modules or components, the $40 insignia fees for industrialized housing and housing components produced in this Commonwealth were moved from § 145.94(c) and (d) to § 145.94(e)(1) and (2), respectively. The industrialized building insignia fee is set at $60 in § 145.94(e)(3). This is consistent with the fees charged by other states.

 The industrialized building components insignia fee is set at $60 in § 145.94(e)(4). This is consistent with the fees charged by other states. The provision allowing a manufacturer to request relief is unique to this Commonwealth and has the support of the industry.

 The fees for industrialized housing and buildings produced outside of this Commonwealth are set at $60 and $90, respectively, in § 145.94(f). As out-of-State manufacturers require the same monitoring by the Department as those manufacturers in this Commonwealth, the fees are increased to recover the additional travel costs incurred. In the past, due to budgetary travel restrictions, out-of-State manufacturers were subjected to a lesser level of monitoring as compared to manufacturers in this Commonwealth. The Department is attempting to rectify this inequity.

 In § 145.94(g), fees to the Department from manufacturers when the Department is authorized to monitor or inspect manufacturing facilities, or provide evaluation or inspection services regarding products for certification, or both, were revised from those previously in § 145.94(e) for simplification and to reflect the Department's actual costs.

 It is impossible to estimate the fees to be generated through the industrialized building insignias and monitoring as this segment of the industry has not been monitored in the past. Repeated requests to the National trade association have not been answered. It is the intent of the Department to closely watch these activities to assure that sufficient funds are generated to cover all costs without causing financial hardship to the manufacturers.

Analysis

 Section 145.1 is amended to provide definitions of ''industrialized building or industrialized commercial building,'' ''industrialized building component or industrialized commercial building component'' and ''industrialized building module.'' The terms ''industrialized buildings'' and ''building components'' are incorporated into the definitions of ''compliance assurance program,'' ''compliance control program,'' ''insignia of certification,'' ''installation,'' ''manufacturing facility,'' ''Notice of Approval'' and ''site or building site.''

 The definitions of ''building system'' and ''building system documentation'' are amended for clarity and to be more consistent with programs established in other states. The definition of ''module'' is deleted and redefined to specifically address industrialized housing or industrialized buildings. The Site Installation Inspection Report Form underwent a title change and will be a part of the building system documentation or design package which will allow this document to be more easily modified to address changes in the building process.

 The proposed definition of ''permanent foundation'' has been deleted from final-form § 145.1.

 Section 145.2 (relating to purpose) is amended to include industrialized buildings and building components.

 Section 145.3 is amended to include industrialized buildings and building components. The section was revised from the proposed rulemaking to state that Chapter 145 applies to new industrialized housing, buildings, and housing or building components. In addition, in this final-form rulemaking, this section was revised from the draft final-form rulemaking per the MBI's suggested amendment by adding the provision that existing industrialized buildings may continue to be utilized in this Commonwealth subject to approval of the local code official, without the suggested objectionable phrase as previously discussed.

 Section 145.31 is amended to include industrialized buildings and building components in the requirements of certification and to eliminate unnecessary regulation. In the draft final-form rulemaking, this section was revised to provide that Chapter 145 would apply to industrialized housing, buildings, or housing or building components produced after the effective date of the final-form rulemaking. The section was then revised in this final-form rulemaking from the draft final-form rulemaking per the MBI's request by providing that Chapter 145 does not apply to industrialized housing, buildings, or housing or building components produced before November 6, 2018.

 Section 145.33 is amended per IRRC's recommendation by adding the definition of ''residential permanent foundation'' to this section. The definition is further revised from the draft final-form rulemaking per MBI's suggestions, without changing the definition substantively.

 Section 145.36 (relating to applicability of locally-enacted codes and ordinances) is amended to clarify how locally enacted codes and ordinances apply to industrialized buildings and building components.

 Section 145.41 (relating to adoption of standards) is amended to address the standards to which industrialized buildings and building components would be designed and constructed. This section was also amended to comply with the act of April 25, 2011 (P.L. 1, No. 1) (Act 1) as it applies to code provisions specifically omitted from adoption under Act 1. At this time, those specifically omitted provisions include fire sprinkler systems for one-family and two-family dwellings and the wall bracing requirements provided for in the 2009 International Residential Code.

 Section 145.42 (relating to alternate standards) is amended to allow for an alternate energy standard to which industrialized buildings and building components would be designed and constructed.

 Section 145.51 (relating to general requirements for certification) is amended to establish the general requirements under which industrialized buildings and building components would be certified.

 Section 145.53 (relating to variations) is amended to allow some variation in the building system documentation to which industrialized buildings and building components would be designed and constructed.

 Section 145.54 (relating to Building System Approval Report and Summary) is amended to establish control criteria for building systems documentation for industrialized buildings and building components.

 Section 145.57 (relating to approval of compliance assurance program) is amended to establish basic requirements for a compliance control program to be approved by evaluation agencies.

 Section 145.58 (relating to basic requirements for a compliance control program) is amended to establish basic requirements for a compliance control program needed for certification of industrialized buildings and building components.

 Section 145.60 (relating to insignia of certification) is amended to delete unnecessary text on the insignia of certification and establish a separate insignia for industrialized buildings and building components.

 Section 145.61 (relating to insignia of inspection agencies) is amended to address the attachment of the insignia of the inspection agencies for industrialized buildings and building components.

 Section 145.62 (relating to data plates) is amended to establish and clarify basic requirements for data plates for industrialized housing and buildings.

 Section 145.63 (relating to procedures for requesting, controlling and attaching insignia of certification) is amended to establish criteria for requesting, controlling and attaching insignias of certification for industrialized buildings and building components.

 Section 145.64 (relating to modification after certification) is amended to limit modifications to certified industrialized buildings and building components.

 Section 145.66 (relating to emergency suspension) is amended to prohibit the certification of industrialized buildings and components while a manufacturer is under an emergency suspension.

 Section 145.67 (relating to revocation of certification) is amended to give the Department and the appropriate third-party agency the authority to revoke the certification of industrialized buildings and building components and to establish criteria to provide the manufacturer of industrialized buildings and building components the authority to attach insignias of certification.

 Section 145.69 (relating to suspension of certificate of approval of out-of-State manufacturer for lack of activity) is amended to allow for the suspension of an out-of-State manufacturer of industrialized buildings and building components for lack of activity.

 Section 145.70 (relating to Departmental evaluation and inspection) is amended to preserve the ability of the Department to perform as an evaluation or inspection agency, or both, in the event that these services may be required.

 Section 145.71 (relating to responsibilities of evaluation agencies) is amended to provide responsibilities for evaluation agencies to provide the same oversight in reviewing and approving building system documentation and compliance assurance programs for each manufacturer of industrialized buildings or components.

 Section 145.72 (relating to responsibilities of inspection agencies) is amended to provide responsibilities for inspection agencies to provide oversight in monitoring the manufacturers of industrialized buildings or components in the same manner as housing manufacturers are monitored.

 Section 145.72a (relating to frequency of inspections) is amended to provide the minimum inspection frequency for inspection agencies providing inspection services to industrialized building manufacturers. This section is also amended by changing the former requirement for manufacturer's certification that required 100% inspection of the first ten homes produced. The amended process will depend on the professional judgment of the third-party agencies in determining the level of inspection needed to certify a manufacturer. The Department retains final approval of the third-party agencies' proposal regarding the minimum frequency needed to adequately certify the facility.

 Section 145.73 (relating to criteria for approval of evaluation and inspection agencies) is amended to provide criteria for the approval of evaluation and inspection agencies for industrialized buildings or building components.

 Section 145.74a (relating to prohibition on consulting services) is amended to prohibit third-party agencies from performing consulting engineering services for an industrialized building or building component manufacturer while the third party has an implementing contract with that manufacturer.

 Section 145.76 (relating to reapprovals of third-party agencies) is amended to provide a reapproval process for industrialized building third-party evaluation and inspection agencies.

 Section 145.78 (relating to contractual arrangements) is amended to require implementing contracts between manufacturers of industrialized buildings and approved third-party evaluation and inspection agencies.

 Section 145.79 (relating to suspension and revocation of third-party agencies) is amended to allow the Department to take appropriate action in the event that problems occur as a result of suspension or revocation of approval of a particular third-party evaluation or inspection agency.

 Sections 145.81—145.83 (relating to local enforcement agencies) are amended to outline the responsibilities of the local enforcement agencies regarding their permitting and inspection process of certified industrialized buildings.

 Section 145.91 (relating to reports to the Department) is amended to extend the Department's authority to require reporting from inspection and evaluation agencies and manufacturers of industrialized buildings as well as extending the requirement of the Site Installation Inspection Report to these buildings.

 Section 145.92 (relating to reports by the Department) is amended to reduce the frequency of certain reports issued by the Department and to include the Notice of Approval in the list of reports the Department will provide.

 Section 145.93 (relating to factory inspections; right of entry) is amended to extend the authorized inspections by the Department to include industrialized buildings, records of such buildings, transport facilities, building sites, and the like.

 Section 145.94 is amended to establish a fee structure for industrialized building and building component insignias as well as an approval and reapproval fee for industrialized buildings evaluation and inspection agencies. Additionally, to defray the additional costs incurred to the Department for out-of-State travel, this section is amended to increase the insignia fee for manufacturing facilities outside of this Commonwealth. This increase in insignia fees for facilities outside of this Commonwealth ($20 residential and $30 commercial) is patterned after current programs in New Jersey, Minnesota and Rhode Island. Other fees charged by the Department for engineering and administrative services are increased to reflect the actual costs to the Department. This section is further amended to allow the Department to accept fees electronically.

 Section 145.97 (relating to amendments to this chapter) is amended to reflect the current practice of notifying interested parties of proposed amendments to Chapter 145.

 Section 145.99 (relating to remedies) is amended to provide remedies to the Department for industrialized buildings or components which have not been manufactured consistent with the act or this chapter.

 Sections 145.101—145.105 (relating to interstate acceptability) are amended to establish the procedures needed for the Department to enter into reciprocal agreements with other states to facilitate interstate acceptability of industrialized buildings and building components.

Tolling Letter Analysis

 On August 30, 2016, at the suggestion of IRRC, the Department tolled the review period for this final-form rulemaking and resubmitted the regulations to IRRC, the House Commerce Committee and the Senate Community, Economic and Recreational Development Committee with the following changes:

 • Section 145.1 was revised to include the definition of ''residential permanent foundation'' which stated ''[t]he structure or assembly provided at the installation site to support and stabilize industrialized housing as described at § 145.33(c).''

 • Section 145.3 was revised to clarify that the effective date of this final-form rulemaking is 1 year from publication in the Pennsylvania Bulletin and industrialized buildings manufactured before 1 year after the effective date of this final-form rulemaking may continue to be utilized in this Commonwealth subject to approval of the local code official. The clarification was accomplished by:

 o Deleting the sentence that stated ''[t]his chapter applies to new industrialized housing, buildings, and housing or building components manufactured in manufacturing facilities located within or outside this Commonwealth.''

 o Adding a sentence to state that ''[i]ndustrialized buildings manufactured before ______ (Editor's Note: The blank refers to the date 1 year after the effective date of adoption of this final-form rulemaking.) may continue to be utilized in the Commonwealth subject to approval of the local code official.''

 • Section 145.31(c) was revised to clarify that the effective date of this final-form rulemaking is 1 year from publication in the Pennsylvania Bulletin and Chapter 145 does not apply to industrialized buildings or building components produced before 1 year after the effective date of this final-form rulemaking. The clarification was accomplished by adding subsection (c), which stated ''[t]his chapter shall not apply to industrialized buildings or building components produced before _____. (Editor's Note: The blank refers to the date 1 year after the effective date of adoption of this final-form rulemaking.)''

 • Section 145.33(c) was added to address substantive provisions regarding residential permanent foundations. The first sentence of § 145.33(c) stated ''[a] residential permanent foundation must be constructed in accordance with the prescriptive provisions of the adopted building code or, when required, designed by a licensed professional engineer.''

 • Section 145.33(c)(4)(i) includes ''construction,'' which was inadvertently left out of the citation in the proposed definition of ''permanent foundation.''

 • ''MIS'' was not included in § 145.33(c)(4)(ii), as the acronym is not used in the industry and not referenced elsewhere in the regulations.

Fiscal Impact

Commonwealth

 Through the fees generated from approvals of third- party agencies and insignias applied to industrialized buildings and building components, the Department expects this program to generate sufficient revenues to cover all expenses. Using Maryland as an example, the 1,538 industrialized building insignias assigned in 2008 would result in revenues of over $92,000. While it is impossible to accurately project insignia usage in this Commonwealth, it is a reasonable expectation that insignia usage in this Commonwealth would match or exceed that of Maryland. Until production levels increase to 2006 levels for industrialized housing, additional staffing is not required to carry out this expansion to the program.

Political subdivisions

 There is no fiscal impact upon political subdivisions.

Public

 This final-form rulemaking will not have fiscal impact on the public at large, as multimillion dollar projects involving industrialized housing, buildings, and housing and building components generate only a handful of $60 and $90 insignia fees. However, with regard to the fiscal impact on the regulated community as part of the public, the insignia fee is $60 for industrialized buildings and building components produced in this Commonwealth. This is consistent with the fees charged by other states. The insignia fees for industrialized housing and housing components, and industrialized buildings and building components produced outside of this Commonwealth, are $60 and $90, respectively. As out-of-State manufacturers require the same monitoring by the Department as those manufacturers in this Commonwealth, the fees are higher for out-of-State manufacturers to recover the additional travel costs incurred. In the past, due to budgetary travel restrictions, out-of-State manufacturers were subjected to a lesser level of monitoring as compared to manufacturers in this Commonwealth. The Department is attempting to rectify this inequity.

Paperwork

 Manufacturers of new industrialized buildings and building components are required to complete a Manufacturer's Application for Insignia of Certification for Industrialized Buildings or Building Components Form and a Pennsylvania Industrialized Building Insignia of Certification Monthly Inventory Control Report Form for insignias applied. These forms will be made available by the Department on the Department's web site prior to November 6, 2017. These manufacturers currently do this for most of the states that receive their products. Therefore, the impact is very minimal.

Regulatory Review

 Under section 5(a) of the Regulatory Review Act (71 P.S. § 745.5(a)), on July 2, 2014, the Department submitted a copy of the notice of proposed rulemaking, published at 44 Pa.B. 5026, to IRRC and the Chairperson of the House Commerce Committee and the Chairperson of the Senate Community, Economic and Recreational Development Committee for review and comment.

 Under section 5(c) of the Regulatory Review Act, the Department shall submit to IRRC and the House and Senate Committees copies of comments received during the public comment period, as well as other documents when requested. In preparing the final-form rulemaking, the Department has considered all comments from IRRC and the public.

 Under section 5.1(j.2) of the Regulatory Review Act (71 P.S. § 745.5a(j.2)), on September 14, 2016, the final-form rulemaking was deemed approved by the House and Senate Committees. Under section 5.1(e) of the Regulatory Review Act, IRRC met on September 15, 2016, and approved the final-form rulemaking.

Effective and Sunset Dates

 This final-form rulemaking will become effective November 6, 2017. Chapter 145 will be monitored on an annual basis and updated as needed.

Contact Person

 For an explanation of this final-form rulemaking, contact Mark Conte, Chief, Housing Standards Division, Office of Community Development, Department of Community and Economic Development, Commonwealth Keystone Building, 400 North Street, 4th Floor, Harrisburg, PA 17120, (717) 720-7416.

Findings

 The Department finds that:

 (1) Public notice of intention to adopt the regulations has been given under sections 201 and 202 of the act of July 31, 1968 (P.L. 769, No. 240) (45 P.S. §§ 1201 and 1202).

 (2) This final-form rulemaking is necessary and appropriate for the Industrialized Housing and Components Program.

Order

 The Department, acting under the authorizing statute, orders that:

 (1) The regulations of the Department, 12 Pa. Code Chapter 145, are amended by amending §§ 145.1—145.3, 145.31, 145.33, 145.36, 145.41, 145.42, 145.51, 145.53, 145.54, 145.57, 145.58, 145.60—145.64, 145.66, 145.67, 145.69, 145.70—145.72, 145.72a, 145.73, 145.74a, 145.76, 145.78, 145.79, 145.81—145.83, 145.91—145.94, 145.97, 145.99 and 145.101—145.105 to read as set forth in Annex A.

 (Editor's Note: The amendment to § 145.33 was not included in the proposed rulemaking published at 44 Pa.B. 5026.)

 (2) The Department shall submit this order and Annex A to the Office of Attorney General and the Office of General Counsel for approval as to legality as required by law.

 (3) This order shall take effect November 6, 2017.

DENNIS M. DAVIN, 
Secretary

 (Editor's Note: See 46 Pa.B. 6195 (October 1, 2016) for IRRC's approval order.)

Fiscal Note: Fiscal Note 4-95 remains valid for the final adoption of the subject regulations.

Annex A

TITLE 12. COMMERCE, TRADE AND LOCAL GOVERNMENT

PART V. COMMUNITY AFFAIRS AND DEVELOPMENT

Subpart C. COMMUNITY DEVELOPMENT AND HOUSING

CHAPTER 145. INDUSTRIAL HOUSING AND COMPONENTS

GENERAL PROVISIONS

§ 145.1. Definitions.

 The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise:

ANSI—The American National Standards Institute.

ASHRAE—American Society of Heating, Refrigeration and Air Conditioning Engineers.

Act—The Industrialized Housing Act (35 P.S. §§ 1651.1—1651.12).

Approved—Approved by the Department, or agent of the Department, under this chapter.

Building system—The method of constructing a type of industrialized home, building, or housing or building component described by plans, specifications and other documentation which together establish a set of limits meeting the building standards in §§ 145.41 and 145.42 (relating to adoption of standards; and alternate standards), as well as the compliance control program requirements of § 145.58 (relating to basic requirements for a compliance control program), including installation details.

Building system documentation—The plans, specifications, procedures and other documentation, approved by an evaluation agency under § 145.52 (relating to approval of building system documentation), which together describe industrialized home, building, or housing or building components, including any variation, installation detail and instruction consistent with this chapter.

Certification or certified—Conforming to the requirements of this chapter.

Compliance assurance program—The system of policies and procedures implemented by the manufacturer and the inspection agency to assure that industrialized housing, buildings, or housing or building components are manufactured, transported and installed at the site in accordance with the approved building system documentation.

Compliance control program—The system of policies and procedures utilized by the manufacturer to assure that industrialized housing, buildings, or housing or building components, as the case may be, are manufactured, transported and installed at the site in accordance with the approved building system documentation.

Department—The Department of Community and Economic Development of the Commonwealth.

Designated employee—An officer or supervisory employee of a third-party agency who has been so designated by the third-party agency in its application to the Department for approval or in another written communication to the Department.

Dwelling unit or unit—Rooms arranged for the use of an individual for residential occupancy.

Evaluation agency—A private or public agency which is approved by the Department under § 145.73 (relating to criteria for approval of evaluation and inspection agencies) to perform the functions assigned by this chapter to an evaluation agency. If the Department performs the functions of the evaluation agency in accordance with § 145.70 (relating to Departmental evaluation and inspection), the Department will be the evaluation agency for the purpose of this title.

Housing component—A manufactured subsystem or subassembly, designed for use as an integral component part of a structure designed primarily for residential occupancy, which contains concealed parts or processes of manufacture that cannot be inspected at the site without disassembly, damage or destruction and which is identified in § 145.35 (relating to applicability of Fire and Panic Act) as being subject to this chapter.

Housing structure—A structure designed primarily for residential occupancy.

ICC—International Code Council.

Industrialized building or industrialized commercial building—A structure designed for commercial occupancy classified within nonresidential use groups in accordance with the standards in § 145.41. The structure is wholly or in substantial part made, constructed, fabricated, formed or assembled in manufacturing facilities for installation or assembly and installation on the building site so that concealed parts or processes of manufacture cannot be inspected at the site without disassembly, damage or destruction.

Industrialized building component or industrialized commercial building component—A closed wall subsystem or subassembly designed for use as a structure or a part of a structure which is classified within the nonresidential use groups in accordance with the standards in § 145.41. The closed wall subsystem or subassembly is fabricated in a manufacturing facility to be separately transported to the building site and cannot be inspected at the site without disassembly. Components may be installed with or without a permanent foundation.

Industrialized building module

 (i) A closed wall structure or substantial part of a closed wall structure incorporating or designed to be assembled to form one or more rooms used as habitable, occupiable or mechanical/equipment space which is classified within nonresidential use groups in accordance with the standards in § 145.41. The structure is fabricated in a manufacturing facility to be separately transported to the building site and cannot be inspected at the site without disassembly.

 (ii) The term includes industrialized building components that are subsystems or assemblies, or other systems of closed construction designed for use in or as a part of an industrialized building.

Industrialized housing

 (i) A structure designed primarily for residential occupancy or classified within Residential Group R in accordance with the standards adopted under § 145.41 and which is wholly or in substantial part made, constructed, fabricated, formed or assembled in manufacturing facilities for installation or assembly and installation on the building site so that concealed parts or processes of manufacture cannot be inspected at the site without disassembly, damage or destruction.

 (ii) The term does not include a structure or building classified as an institutional building or manufactured home, as defined by the National Manufactured Housing Construction and Safety Standards Act of 1974 (42 U.S.C.A. §§ 5401—5426).

Industrialized housing module—Each section of an industrialized housing structure which is fabricated in the manufacturing facility to be separately transported to the building site.

Insignia of certification—The label conforming to the requirements of this chapter which, when attached to industrialized housing, housing components, industrialized building or building components under this chapter, evidences that the industrialized housing, buildings, or industrialized housing or building components have been certified.

Inspection agency—An agency, private or public, which is approved by the Department under § 145.73 to perform the functions assigned by this chapter to an inspection agency. If the Department performs the functions of the inspection agency under § 145.70, the Department will be the inspection agency for the purposes of this title.

Installation—The assembly of industrialized housing or buildings onsite and the process of affixing industrialized housing, housing components, industrialized buildings or components to land, a foundation, footings, utilities or an existing building, and may include the process of affixing housing or building components to or within the structure for which they are designed.

Insulation—An approved material which has a relatively high resistance to heat flow and is used principally to retard the flow of heat.

Local enforcement agency—The agency of local government with authority to make inspections and to enforce the laws, ordinances and regulations enacted by the Commonwealth and by local governments that establish standards and requirements applicable to the construction, installation, alteration or repair of buildings.

Local government—A county, city, borough, incorporated town, township or similar general purpose unit of government which may be created by the General Assembly with authority to establish standards and requirements applicable to construction, installation, alteration and repair of buildings.

Manufacture—The process of making, fabricating, constructing, forming or assembling a product from raw, unfinished or semifinished materials.

Manufactured home

 (i) A structure, transportable in one or more sections, which, in the traveling mode, is 8 body feet or more in width or 40 body feet or more in length, or when erected onsite, is 320 square feet or more, and which is built on a permanent chassis and designed to be used as a dwelling with or without a permanent foundation when connected to the required utilities, and includes the plumbing, heating, air-conditioning and electrical systems contained therein.

 (ii) The term includes any structure which meets the requirements of this paragraph except the size requirements and with respect to which the manufacturer voluntarily files a certification required by the Secretary of Housing and Urban Development and complies with the standards established under the National Manufactured Home Construction and Safety Standards Act of 1974.

 (iii) The term does not include any self-propelled recreational vehicle.

Manufacturing facility—A place, other than the building site, at which machinery, equipment and other capital goods are assembled and operated for the purpose of making, fabricating, constructing, forming or assembling industrialized housing or housing components, industrialized buildings or building components.

Mobile home—A structure, transportable in one or more sections, which is 8 body feet or more in width and is 32 body feet in length and which is built on a permanent chassis and designed to be used as a dwelling with or without a permanent foundation when connected to the required utilities, and including the plumbing, heating, air conditioning and electrical system combined therein manufactured in accordance with the National Manufactured Housing Construction and Safety Standards Act of 1974.

NCSBCS—National Conference of States on Building Codes and Standards.

NFPA—The National Fire Protection Association.

Notice of Approval—A notice issued by the Department to each manufacturer of industrialized housing, housing components, industrialized buildings or building components that indicates the approval of the manufacturer's building systems documentation, compliance assurance program, and the authority to receive and attach insignias of certification to industrialized housing, housing components, industrialized building or building components as applicable.

Person—An individual or organized group of any character, including partnerships; corporations; other forms of associations; and Federal, State and local instrumentalities, political subdivisions or officers, including the Department when indicated by the context.

Residential occupancy—Occupancy of a structure or building, or part thereof, classified as a one-family or two-family dwelling, townhouse or within Residential Group R in accordance with the standards adopted under § 145.41, by families, households or individuals for purposes of shelter and sleeping, without regard to the availability of cooking or dining facilities.

Residential permanent foundation—The structure or assembly provided at the installation site to support and stabilize industrialized housing as described in § 145.33(c) (relating to manufactured homes excluded).

Site or building site—The entire tract, subdivision or parcel of land on which industrialized housing, housing components, industrialized building or industrialized building components are installed.

Site Installation Inspection Checklist—A part of the manufacturers building system documentation or design package that identifies the various aspects of construction that shall be completed onsite, for inspection by the local code official, that when properly completed will result in a conforming home or building.

Thermal resistance (''R'' Value)—The accumulative resistance to heat flow through materials or arrangement of materials expressed in Fahrenheit degrees per BTU/(hours) (square foot). For wood frame construction, the effect of normal framing members may be neglected in the determination of R values.

Third-party agency—An evaluation agency or inspection agency approved by the Department.

Unheated space—A space such as a garage or crawl space which is not provided with a heat source sufficient to maintain a minimum temperature of 50°F (10°C).

§ 145.2. Purpose.

 This chapter interprets and makes specific the provisions of the act, as provided in section 5 of the act (35 P.S. § 1651.5). This chapter establishes administrative procedures for the implementation of the act which will facilitate the use of industrialized housing, buildings, and housing or building components in this Commonwealth consistent with safeguarding the health, safety and welfare of citizens of this Commonwealth and will carry out the purposes set forth in the legislative findings in section 2 of the act (35 P.S. § 1651.2). More specifically, this chapter is intended primarily to achieve the following objectives:

 (1) Establish uniform standards affecting health, safety and welfare for the design, use of materials and methods of construction for industrialized housing, buildings, and housing or building components intended for sale, lease or installation for use in this Commonwealth.

 (2) Establish uniform procedures to assure that industrialized housing, buildings, and housing or building components intended for sale, lease or installation for use in this Commonwealth will be manufactured, transported and installed in compliance with the uniform standards adopted by this chapter. In particular, this chapter establishes procedures under which the essential structural, electrical, mechanical and plumbing elements of industrialized housing, buildings, and housing or building components are subjected to compliance assurance procedures, including inspections, in the manufacturing facilities during the manufacturing process, thereby eliminating the need for subsequent inspections at the building site of those elements which are enclosed within the walls which might otherwise be subjected to disassembly, damage or destruction in the course of onsite inspections.

 (3) Establish procedures which will facilitate the movement of industrialized housing, buildings, and housing or building components between this Commonwealth and the other states for the mutual benefit of the manufacturers and citizens of this Commonwealth.

 (4) Preserve for local governments within this Commonwealth responsibilities and functions specifically reserved to local governments by the act and otherwise not inconsistent with the achievement of the purposes of the act.

§ 145.3. Scope.

 Except to the extent otherwise stated in the act and the provisions of this chapter and in other applicable laws of the Commonwealth which are not inconsistent with or superseded by the act and this chapter, this chapter governs the design, manufacture, storage, transportation and installation of industrialized housing, buildings, and housing or building components which are sold, leased or installed, or are intended for sale, lease or installation, for use on a site in this Commonwealth. Industrialized buildings manufactured before November 6, 2018, may continue to be utilized in this Commonwealth subject to approval of the local code official.

SCOPE

§ 145.31. Requirement of certification.

 (a) No person may sell, lease or install for use on a site in this Commonwealth industrialized housing, buildings, or housing or building components unless the industrialized housing, building, or housing or building component is certified and bears insignia of certification issued by the Department. The insignia of certification issued by the Department shall be attached to the industrialized housing, building, or housing or building component under this chapter, and they shall be subject to subsequent removal in accordance with this chapter.

 (b) Industrialized housing, buildings, and housing or building components of the manufacturer which have never been occupied and which serve for model or demonstration purposes for the manufacturer do not have to bear insignia of certification under this chapter until the time that the industrialized housing, building, or housing or building components are first offered for sale or lease.

 (c) This chapter does not apply to industrialized buildings or building components produced before November 6, 2018.

§ 145.33. Manufactured homes excluded.

 (a) Manufactured homes which are subject to sections 604 and 625 of the National Manufactured Housing Construction and Safety Standards Act of 1974 (42 U.S.C.A. §§ 5403 and 5424) and the regulations issued thereunder by the United States Department of Housing and Urban Development are not subject to this chapter.

 (b) The following language must appear in the installation documentation provided with the industrialized home and the data plate:

The manufacturer certifies that the structure (insert serial number) is not a manufactured home subject to the provisions of the National Manufactured Housing Construction and Safety Standards Act and is
(1) designed only for erection or installation on a site built permanent foundation
(2) not designed to be moved once so erected or installed
(3) designed and manufactured to comply with (insert applicable standards)
(4) to the manufacturer's knowledge not intended to be used other than on a site-built permanent foundation.

 (c) A residential permanent foundation shall be constructed in accordance with the prescriptive provisions of the adopted building code or, when required, designed by a licensed professional engineer. A residential permanent foundation must have attachment points to anchor and stabilize the home to transfer all code required loads to the underlying soil or rock. In either case, a residential permanent foundation must:

 (1) Be designed for vertical stability as follows:

 (i) Footings properly sized to prevent overloading of the soil.

 (ii) Minimum depth of footings below undisturbed ground surface must be 12 inches or as required by the local code, whichever is greater.

 (iii) Shallow foundation footings must be constructed of cast-in-place concrete.

 (iv) Masonry walls and piers must be mortared.

 (2) Be designed for lateral stability as follows:

 (i) Anchorage capacity to prevent uplift, sliding and overturning or other movement of the structure.

 (ii) May not utilize tension-only steel straps.

 (iii) May not utilize screw-in soil anchors.

 (3) Be constructed of durable materials, that is, concrete, mortared masonry or treated wood. This includes precast foundation systems.

 (d) A residential permanent foundation does not include alternative systems or components labeled only for use under one or more of the following standards:

 (1) 24 CFR Part 3280 (relating to manufactured home construction and safety standards).

 (2) 24 CFR Part 3286 (relating to manufactured home installation program).

 (3) NFPA 225 Model Manufactured Home Installation Standard.

 (4) ANSI A225.1 NFPA 501A Manufactured Home Installations.

 (5) International Residential Code, Appendix E.

 (e) Industrialized buildings are excluded from this section.

§ 145.36. Applicability of locally-enacted codes and ordinances.

 (a) Industrialized housing, housing components, industrialized buildings or building components bearing insignias of certification issued under this chapter will be deemed to comply with the requirements of building and related codes and ordinances enacted by local governments of the Commonwealth which codes and ordinances conform with the following:

 (1) Are applicable to residential or commercial construction, plumbing, heating, electrical and other related codes pertaining to the construction and equipment contained within.

 (2) Would otherwise be applicable to the industrialized housing, housing components, industrialized buildings or building components certified under this chapter as described in their building system documentation.

 (b) (Reserved).

 (c) If the building site is within a fire district designated by an ordinance of the local government, the requirements of the codes and standards adopted under §§ 145.41, 145.42 and 145.44 (relating to adoption of standards; alternate standards; and adoption and effective dates—code amendments) for the fire district is applicable to the industrialized housing, housing components, industrialized buildings or building components. If the fire district designated by the ordinance of the local government is different from a fire district described in the applicable codes and standards adopted under §§ 145.41, 145.42 and 145.44 the requirements for that fire district described in the applicable codes and standards which in the judgment of the evaluation agency bears the closest similarity to the description of the applicable fire district under the locally enacted ordinance is applicable.

 (d) Industrialized housing and buildings in which industrialized housing or building components have been installed shall comply with codes and ordinances of the local governments with jurisdiction over the building site which apply to the design, installation and maintenance of waterline connections from the exterior walls of housing to their main source of supply, sewer drainage connections from the exterior walls of housing to main sewers or septic systems, and electrical line connections or other energy supply connections from the exterior walls of housing to their main source of power, notwithstanding the appropriate insignia of certification as provided for in § 145.60 (relating to insignia of certification).

 (e) Nothing in the act or this chapter shall be construed as amending, repealing or superseding a local zoning ordinance, subdivision regulation, designation of fire districts or related land development code, regulation or ordinance enacted by a local government of the Commonwealth.

 (f) A dispute between a person and a local enforcement agency with respect to the application of this section shall be referred to and decided by the Department under § 145.96 (relating to interpretation of this chapter).

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