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7 LONG TITLE
8 General Description:
9 This bill modifies provisions facilitating affordable buildings.
10 Highlighted Provisions:
11 This bill:
12 ▸ defines terms and modifies definitions;
13 ▸ adopts a statewide building code for modular building units;
14 ▸ modifies the membership of the Olene Walker Housing Loan Fund Board by adding
15 a member representing the interests of modular housing;
16 ▸ modifies provisions related to reinvestment fee covenants or transfer fee covenants;
17 ▸ modifies provisions of the First-Time Homebuyer Assistance Program; and
18 ▸ makes technical and conforming changes.
19 Money Appropriated in this Bill:
20 None
21 Other Special Clauses:
22 This bill provides retrospective operation.
23 Utah Code Sections Affected:
24 AMENDS:
25 15A-1-202, as last amended by Laws of Utah 2021, First Special Session, Chapter 3
26 15A-1-205, as enacted by Laws of Utah 2011, Chapter 14
27 15A-1-302, as enacted by Laws of Utah 2011, Chapter 14
28 15A-1-304, as enacted by Laws of Utah 2011, Chapter 14
29 15A-2-103, as last amended by Laws of Utah 2023, Chapters 160, 209
30 35A-8-503, as last amended by Laws of Utah 2022, Chapter 406
31 57-1-46, as enacted by Laws of Utah 2010, Chapter 16
32 63H-8-501, as enacted by Laws of Utah 2023, Chapter 519
33 63H-8-502, as enacted by Laws of Utah 2023, Chapter 519
34 ENACTS:
35 10-9a-540, Utah Code Annotated 1953
36 15A-1-304.1, Utah Code Annotated 1953
37 15A-1-306.1, Utah Code Annotated 1953
38 15A-1-307, Utah Code Annotated 1953
39 15A-1-308, Utah Code Annotated 1953
40 15A-1-309, Utah Code Annotated 1953
41 57-1-47, Utah Code Annotated 1953
42
43 Be it enacted by the Legislature of the state of Utah:
44 Section 1. Section 10-9a-540 is enacted to read:
45 10-9a-540. Modular building.
46 (1) Title 15A, State Construction and Fire Codes Act, governs regulations related to the
47 construction, transportation, installation, inspection, fees, and enforcement related to modular
48 building.
49 (2) A municipality may adopt an ordinance regulating modular building so long as the
50 ordinance conforms with Title 15A, State Construction and Fire Codes Act, and this chapter.
51 Section 2. Section 15A-1-202 is amended to read:
52 15A-1-202. Definitions.
53 As used in this chapter:
54 (1) "Agricultural use" means a use that relates to the tilling of soil and raising of crops,
55 or keeping or raising domestic animals.
56 (2) (a) "Approved code" means a code, including the standards and specifications
57 contained in the code, approved by the division under Section 15A-1-204 for use by a
58 compliance agency.
59 (b) "Approved code" does not include the State Construction Code.
60 (3) "Building" means a structure used or intended for supporting or sheltering any use
61 or occupancy and any improvements attached to it.
62 (4) "Code" means:
63 (a) the State Construction Code; or
64 (b) an approved code.
65 (5) "Commission" means the Uniform Building Code Commission created in Section
66 15A-1-203.
67 (6) "Compliance agency" means:
68 (a) an agency of the state or any of its political subdivisions which issues permits for
69 construction regulated under the codes;
70 (b) any other agency of the state or its political subdivisions specifically empowered to
71 enforce compliance with the codes; or
72 (c) any other state agency which chooses to enforce codes adopted under this chapter
73 by authority given the agency under a title other than this part and Part 3, Factory Built
74 Housing and Modular Units Administration Act.
75 (7) "Construction code" means standards and specifications published by a nationally
76 recognized code authority for use in circumstances described in Subsection 15A-1-204(1),
77 including:
78 (a) a building code;
79 (b) an electrical code;
80 (c) a residential one and two family dwelling code;
81 (d) a plumbing code;
82 (e) a mechanical code;
83 (f) a fuel gas code;
84 (g) an energy conservation code;
85 (h) a swimming pool and spa code; [
86 (i) a manufactured housing installation standard code; and
87 (j) Modular Building Institute Standards 1200 and 1205, issued by the International
88 Code Council, except as specifically modified by provisions of this title governing modular
89 units.
90 (8) "Construction project" means the same as that term is defined in Section 38-1a-102.
91 (9) "Executive director" means the executive director of the Department of Commerce.
92 (10) "Legislative action" includes legislation that:
93 (a) adopts a new State Construction Code;
94 (b) amends the State Construction Code; or
95 (c) repeals one or more provisions of the State Construction Code.
96 (11) (a) "Local regulator" means a political subdivision of the state that is empowered
97 to engage in the regulation of construction, alteration, remodeling, building, repair, [
98 installation, inspection, or other activities subject to the codes.
99 (b) "Local regulator" may include the local regulator's designee.
100 (12) "Membrane-covered frame structure" means a nonpressurized building with a
101 structure composed of a rigid framework to support a tensioned membrane that provides a
102 weather barrier.
103 (13) "Not for human occupancy" means use of a structure for purposes other than
104 protection or comfort of human beings, but allows people to enter the structure for:
105 (a) maintenance [
106 (b) the care of livestock, crops, or equipment intended for agricultural use which are
107 kept there.
108 (14) "Opinion" means a written, nonbinding, and advisory statement issued by the
109 commission concerning an interpretation of the meaning of the codes or the application of the
110 codes in a specific circumstance issued in response to a specific request by a party to the issue.
111 (15) "Remote yurt" means a membrane-covered frame structure that:
112 (a) is no larger than 710 square feet;
113 (b) is not used as a permanent residence;
114 (c) is located in an unincorporated county area that is not zoned for residential,
115 commercial, industrial, or agricultural use;
116 (d) does not have plumbing or electricity;
117 (e) is set back at least 300 feet from any river, stream, lake, or other body of water; and
118 (f) is registered with the local health department.
119 (16) "State regulator" means an agency of the state which is empowered to engage in
120 the regulation of construction, alteration, remodeling, building, repair, and other activities
121 subject to the codes adopted pursuant to this chapter.
122 Section 3. Section 15A-1-205 is amended to read:
123 15A-1-205. Division duties -- Relationship of division to other entities.
124 (1) (a) The division shall administer the codes adopted or approved under Section
125 15A-1-204 pursuant to this chapter.
126 (b) Notwithstanding Subsection (1)(a), the division has no responsibility to:
127 (i) conduct inspections to determine compliance with the codes;
128 (ii) issue permits; or
129 (iii) assess building permit fees.
130 (c) Notwithstanding any other provision, the division, the Division of Facilities
131 Construction and Management, the state regulator, any approved third party inspection agency
132 as defined by Section 15A-1-302, or any approved third party inspector as defined by Section
133 15A-1-302 does not have the responsibility or authority to perform the duties reserved to a
134 local regulator as set forth in Section 15A-1-304, unless designated by a local regulator to
135 perform that duty.
136 (2) As part of the administration of the codes, the division shall:
137 (a) comply with Section 15A-1-206;
138 (b) schedule appropriate hearings;
139 (c) maintain and publish for reference:
140 (i) the current State Construction Code; and
141 (ii) any approved code; and
142 (d) publish the opinions of the commission with respect to interpretation and
143 application of the codes.
144 (3) (a) As part of the administration of the codes, the division shall license inspectors,
145 including approved third party inspectors.
146 (b) The Division of Facilities Construction and Management may access a list of all
147 licensed inspectors, including approved third party inspectors, on the division's website.
148 Section 4. Section 15A-1-302 is amended to read:
149 15A-1-302. Definitions.
150 As used in this part:
151 (1) "Compliance agency" [
152 15A-1-202.
153 (2) "Construction documents" means the same as that term is defined by Modular
154 Building Institute Standards 1200.
155 (3) "Decal" means a form of certification, created by the Division of Facilities
156 Construction and Management and issued by a third party inspection agency, to be permanently
157 attached to a module, panelized system, or modular building unit indicating that the module,
158 panelized system, or modular building unit has been constructed to meet or exceed applicable
159 building code requirements.
160 [
161 [
162 division to set up or install factory built housing on a temporary or permanent basis.
163 [
164 Safety Standards Act, 42 U.S.C. Sec. 5401 et seq.
165 [
166 15A-1-202.
167 [
168 constructed on or after June 15, 1976, according to the HUD Code, in one or more sections,
169 that:
170 (a) in the traveling mode, is eight body feet or more in width or 40 body feet or more in
171 length, or when erected on site, is 400 or more square feet; and
172 (b) is built on a permanent chassis and designed to be used as a dwelling with or
173 without a permanent foundation when connected to the required utilities, and includes the
174 plumbing, heating, air-conditioning, and electrical systems.
175 (9) "Manufacturing plant" means the same as that term is defined by Modular Building
176 Institute Standards 1200.
177 [
178 June 15, 1976, in accordance with a state mobile home code which existed prior to the HUD
179 Code.
180 (11) "Modular manufacturer" means the entity responsible for manufacturing a
181 panelized system or module.
182 [
183 (a) [
184 or panelized systems that is manufactured in accordance with the State Construction Code and
185 transported to a [
186 (b) the purpose of which is for human habitation, occupancy, or use; and
187 (c) is not a factory-built house, manufactured home, or mobile home.
188 (13) "Module" means a three-dimensional, volumetric section of a modular building
189 unit designed and approved to be transported as a single section, independent of other sections,
190 to a location for onsite construction.
191 (14) "Offsite construction" means a modular building unit that:
192 (a) is designed and constructed in compliance with this part;
193 (b) is wholly or in substantial part fabricated in a manufacturing plant for installation at
194 an onsite location; and
195 (c) has been manufactured in such a manner that all parts or processes cannot be
196 inspected at the end site location without disassembly, potentially resulting in damage or
197 destruction to the modular building unit.
198 (15) "Onsite construction" means:
199 (a) the preparation of a location where a modular building unit will be installed,
200 including preparation of site foundation, construction of any necessary supporting structure,
201 and preparation to connect the modular building unit to necessary utilities; and
202 (b) assembly and installation of one or more modules or panelized systems in
203 accordance with construction documents into a modular building unit, including completion of
204 any site-related construction and connecting the modular building unit to necessary utilities.
205 (16) "Panelized system" means a closed wall, roof, or floor component that is
206 constructed at a manufacturing plant or by a modular manufacturer in a manner that prevents
207 the construction from being fully inspected at an onsite location without disassembly.
208 [
209 15A-1-202.
210 (18) "Third party inspection agency" means an entity approved by the Division of
211 Facilities Construction and Management to be qualified to inspect a module or panelized
212 system for compliance with the construction documents, compliance control, and applicable
213 code.
214 (19) "Third party inspector" means a person who:
215 (a) is qualified to inspect a modular building unit for compliance with construction
216 documents, compliance control, and applicable building code;
217 (b) works under the direction of a third party inspection agency;
218 (c) has been licensed by the division under Section 15A-1-307; and
219 (d) is approved by the Division of Facilities Construction and Management to conduct
220 third party inspections, as described in Section 15A-1-307.
221 (20) "Unregistered modular unit" means a modular unit that:
222 (a) has not been inspected as required by this title; or
223 (b) does not have a required decal.
224 Section 5. Section 15A-1-304 is amended to read:
225 15A-1-304. Modular units.
226 Modular unit construction, [
227 [
228 (1) Construction, installation, and setup of a modular unit, module, or panelized system
229 shall be in accordance with the State Construction Code.
230 (2) A local regulator has the responsibility and exclusive authority [
231
232
233 (a) review and approve the elements of construction documents related to onsite
234 construction;
235 (b) issue a permit for construction of a modular building unit or a modular building
236 unit site modification;
237 (c) perform an inspection of onsite construction of a modular building unit or modular
238 building unit site modification;
239 (d) verify that a module or panelized system is installed in accordance with:
240 (i) the modular unit's construction documents;
241 (ii) the State Construction Code; and
242 (iii) applicable state and local requirements;
243 (e) verify that a decal has been permanently affixed to a modular building unit;
244 (f) subject to Subsection (3), establish and assess fees related to the construction and
245 installation of modular units;
246 (g) upon discovery of visible damage to a module or panelized system, or discovery of
247 evidence that would cause a reasonable inspector to believe that a modular building unit may
248 not be in compliance with the State Construction Code or construction documents:
249 (i) inform the Division of Facilities Construction and Management; and
250 (ii) proceed in accordance with the guidance in Modular Building Institute Standards
251 1200 and 1205;
252 (h) approve any proposed alteration or change to a set of construction documents so
253 long as the alteration or change complies with the requirements of this chapter;
254 (i) inspect any alteration to a modular unit or panelized system that occurred after
255 installation;
256 (j) notwithstanding any other provision of state law, the construction code and
257 standards, agency rule, or local ordinance:
258 (i) prevent the use or occupancy of a modular building unit that, in the opinion of the
259 local regulator, contains a serious defect or presents an imminent safety hazard; and
260 (ii) report the prevention of use or occupancy of a modular building unit to the
261 Division of Facilities Construction and Management and the division; and
262 (k) perform all other duties and responsibilities set forth in the Modular Building
263 Institute Standards 1200 and 1205 not otherwise listed in this section.
264 (3) Fees related to the construction and installation of modular building units may
265 include building permit fees, inspection fees, impact fees, and administrative fees.
266 (4) (a) In addition to any immunity and protections set forth in the Utah Governmental
267 Immunity Act, a municipality shall not be liable for a claim arising solely from the offsite
268 construction of a module, panelized system, or modular building unit.
269 (b) A local regulator may provide written notice with the certificate of occupancy that
270 explains the municipality's limitations of liability pursuant to this section and the Utah
271 Governmental Immunity Act.
272 [
273 shall conform with this chapter.
274 [
275 subdivision in which a modular unit is to be setup or is setup.
276 [
277 (a) a local regulator from contracting with a qualified third party to act as its designee
278 for the inspection or plan review provided in this section; or
279 (b) the state from entering into an interstate compact for third party inspection of the
280 construction of a modular unit.
281 Section 6. Section 15A-1-304.1 is enacted to read:
282 15A-1-304.1. Unregistered modular units.
283 (1) Except as provided in Subsection (7), the Division of Facilities Construction and
284 Management shall determine whether an unregistered modular unit is compliant with this
285 chapter.
286 (2) Upon discovery of an unregistered modular unit, the Division of Facilities
287 Construction and Management shall:
288 (a) inform the local regulator, which shall:
289 (i) issue an order to the owner of the unregistered modular unit to cease use or
290 occupancy of the unregistered modular unit until a third party inspector determines the
291 unregistered modular unit has come into compliance; or
292 (ii) determine if the unregistered modular unit is considered compliant, as described in
293 Subsection (7); and
294 (b) require the owner of the unregistered modular unit to:
295 (i) produce documentation of the modular unit's compliance with this chapter:
296 (A) if the unregistered modular unit is only missing a decal or had a decal but the decal
297 is no longer visible; or
298 (B) if the unregistered modular unit is considered compliant under Subsection (7); or
299 (ii) arrange for a third party inspector to inspect the unregistered modular unit, as
300 described in Subsection (4).
301 (3) Upon receiving and verifying the documentation described in Subsection
302 (2)(b)(i)(A), the Division of Facilities Construction and Management shall issue the owner of
303 an unregistered modular unit a decal to be affixed to the unregistered modular unit.
304 (4) (a) Upon inspection of an unregistered modular unit, a third party inspector shall
305 determine when and where the unregistered modular unit was manufactured.
306 (b) If the unregistered modular unit was manufactured in another state by a modular
307 manufacturer approved by a regulator in that state at the time the unregistered modular unit was
308 manufactured, the third party inspector shall:
309 (i) conduct a review of the original construction documents and the requirements of the
310 state in which the unregistered modular unit was manufactured as of the time of manufacturing
311 to determine the degree to which the unregistered modular unit's manufacture and installation
312 is compliant with the requirements of this chapter;
313 (ii) in accordance with Subsection (5), conduct an inspection of the unregistered
314 modular unit; and
315 (iii) determine whether the unregistered modular unit is compliant with:
316 (A) the requirements for a modular building described in this chapter; and
317 (B) the building codes that were in effect at the time the unregistered modular building
318 was manufactured.
319 (c) If the unregistered modular unit was manufactured in another state by a modular
320 manufacturer that was not approved by that state, or if the date of manufacture of the
321 unregistered modular unit cannot be determined, the third party inspector shall:
322 (i) in accordance with Subsection (5), conduct an inspection of the unregistered
323 modular unit; and
324 (ii) determine whether the unregistered modular unit is compliant with the
325 requirements for a modular building described in this chapter.
326 (d) If the third party inspector cannot determine where or when the unregistered
327 modular unit was manufactured, or if original construction documents for the unregistered
328 modular unit cannot be located or verified, the third party inspector shall inspect the
329 unregistered modular unit for compliance with this chapter, including requiring disassembly of
330 the unregistered modular unit if necessary.
331 (5) If the third party inspector is able to review and verify the original construction
332 documents for the unregistered modular unit, and the original construction documents for the
333 unregistered modular unit are sufficient to determine whether the construction of the
334 unregistered modular unit complies with this chapter, the third party inspector may not require
335 disassembly of the modular unit.
336 (6) (a) If the third party inspector determines the unregistered modular unit is
337 compliant with the requirements for modular units in this chapter:
338 (i) the third party inspector shall report the finding to:
339 (A) the Division of Facilities Construction and Management; and
340 (B) the local regulator; and
341 (ii) affix a decal to the unregistered modular unit.
342 (b) The report described in Subsection (6)(a)(i) shall include a description of any
343 changes made to the unregistered modular unit.
344 (7) If an unregistered modular unit installed before May 4, 2024, has a certificate of
345 occupancy from a local regulator, the unregistered modular unit is considered compliant with
346 the requirements for a modular unit described in this chapter so long as the unregistered
347 modular unit remains in the jurisdiction of the local regulator that issued the certificate of
348 occupancy.
349 Section 7. Section 15A-1-306.1 is enacted to read:
350 15A-1-306.1. Division of Facilities Construction and Management duties for
351 modular building units.
352 The Division of Facilities Construction and Management:
353 (1) shall maintain current information on the HUD Code and the portions of the State
354 Construction Code relevant to modular building unit installation and provide at reasonable cost
355 the information to compliance agencies or local regulators requesting the information;
356 (2) shall provide qualified personnel to advise compliance agencies and local
357 regulators regarding the standards for:
358 (a) construction and setup of modular building units;
359 (b) construction and setup inspection of modular building units; and
360 (c) additions or modifications to modular building units;
361 (3) may inspect modular building units during the construction or manufacturing
362 process to determine compliance of a modular manufacturer with this title for modular building
363 units to be installed within the state;
364 (4) upon a finding of substantive deficiency at a modular manufacturer, through
365 inspection or based on a report from an approved third party inspection agency, may:
366 (a) suspend the manufacturer's construction of modular units to be sold or installed in
367 the state;
368 (b) issue a corrective order to the manufacturer; or
369 (c) require an increase in third party inspections until the Division of Facilities
370 Construction and Management is satisfied that the deficiency is resolved;
371 (5) shall, if an action is taken pursuant to Subsection (4), provide notice of its action
372 and a copy of the corrective order to the local regulator in the political subdivision where a
373 modular unit is to be installed;
374 (6) shall have rights of entry and inspection as specified under the HUD Code and
375 Modular Building Institute Standard 1200 and Standard 1205, as applicable;
376 (7) shall make rules, in accordance with Title 63G, Chapter 3, Utah Administrative
377 Rulemaking Act, to implement this section and Section 15A-1-307, including a continuing
378 education requirement for modular building unit construction and installation contractors; and
379 (8) shall have the authority to set and collect fees associated with the provision of
380 decals to support the administration of the modular building unit program.
381 Section 8. Section 15A-1-307 is enacted to read:
382 15A-1-307. Third party review - Inspection agencies.
383 (1) By no later than July 1, 2024, the Division of Facilities Construction and
384 Management shall maintain a list of third party inspection agencies that have been approved by
385 the Division of Facilities Construction and Management to conduct:
386 (a) review of construction documents; and
387 (b) an inspection of a module or panelized system.
388 (2) An approved third party inspection agency:
389 (a) shall demonstrate knowledge of applicable sections of the Utah Code and State
390 Construction Code and other applicable laws and rules;
391 (b) shall be independent in judgment and not have any actual or potential conflict of
392 interest;
393 (c) is not affiliated with or influenced or controlled by any producer, supplier, vendor,
394 developer, builder, or related fields applicable to the construction of modular units in any
395 manner that might affect its capacity to render its conclusions and inspections without bias;
396 (d) shall carry insurance in the amount set by the Division of Facilities Construction
397 and Management to cover liabilities and losses arising or relating to possible errors and
398 omissions from its operations, reviews, and inspections; and
399 (e) shall perform all duties set forth in the Modular Building Institute Standard 1205,
400 Chapter 4, as amended.
401 (3) An approved third party inspector:
402 (a) shall demonstrate knowledge of applicable sections of the Utah Code and State
403 Construction Code and other applicable laws and rules;
404 (b) shall be independent in judgment and not have any actual or potential conflict of
405 interest;
406 (c) is not affiliated with or influenced or controlled by any producer, supplier, vendor,
407 developer, builder, or related fields applicable to the construction of modular units in any
408 manner that might affect its capacity to render its conclusions and inspections without bias;
409 (d) shall carry insurance in the amount set by the Division of Facilities Construction
410 and Management to cover liabilities and losses arising or relating to possible errors and
411 omissions from its operations, reviews, and inspections; and
412 (e) shall perform all duties set forth in the Modular Building Institute Standard 1205,
413 Chapter 4, as amended.
414 (4) A third party inspector at an approved third party agency shall:
415 (a) be licensed and certified as a combination building inspector under Title 58,
416 Occupations and Professions;
417 (b) meet the requirements for a third party inspector under the Modular Building
418 Institute Standard 1205, Chapter 4; and
419 (c) be knowledgeable regarding the construction, installation, and setup of modular
420 units.
421 (5) (a) A modular manufacturer shall contract with one or more third party agencies or
422 third party inspectors to perform offsite construction documents review and inspection.
423 (b) A contract described in Subsection (5)(a) does not constitute an actual or implied
424 conflict of interest.
425 Section 9. Section 15A-1-308 is enacted to read:
426 15A-1-308. Manufacturing plants -- Quality assurance inspections.
427 (1) The Division of Facilities Construction and Management shall approve a modular
428 manufacturer before modular building units produced by or sold by the modular manufacturer
429 may be used for human occupancy within the state.
430 (2) A modular manufacturer, or an employee of a modular manufacturer, shall meet
431 each requirement of Modular Building Institute 1200 Standard, Chapter 5 and 1205 Standard,
432 Chapters 4 and 5.
433 (3) The quality assurance and control plan, as required in Modular Building Institute
434 1200 Standard, Chapter 5, and further defined per Modular Building Institute 1205 Standard,
435 Chapter 5, shall include a conflict of interest form developed by the Division of Facilities
436 Construction and Management.
437 (4) Quality assurance personnel at the manufacturing plant shall:
438 (a) demonstrate to the Division of Facilities Construction and Management and an
439 applicable third party inspection agency that the quality assurance personnel have adequate
440 knowledge of the product, factory operations, and the codes and standards for the product being
441 manufactured;
442 (b) demonstrate to the satisfaction of the Division of Facilities Construction and
443 Management the ability of the quality assurance personnel to perform required duties, as
444 outlined by the Division of Facilities Construction and Management by rule; and
445 (c) inspect each module and panelized system for quality control.
446 (5) (a) After local building permit issuance, a modular manufacturer, third party
447 agency, or third party inspector may not amend a construction document without approval from
448 a local regulator.
449 (b) A local regulator shall approve an amendment to a construction document unless it
450 violates a site-specific provision of municipal code or affects the safety or the habitability of a
451 modular unit.
452 Section 10. Section 15A-1-309 is enacted to read:
453 15A-1-309. Decal.
454 A decal issued by the Division of Facilities Construction and Management and affixed
455 by a third party inspection agency in compliance with this part shall warrant that the modular
456 building unit has been inspected in accordance with this part and the modular building unit is:
457 (1) fit for human occupancy; and
458 (2) manufactured in accordance with applicable codes and the construction documents.
459 Section 11. Section 15A-2-103 is amended to read:
460 15A-2-103. Specific editions adopted of construction code of a nationally
461 recognized code authority.
462 (1) Subject to the other provisions of this part, the following construction codes are
463 incorporated by reference, and together with the amendments specified in Chapter 3, Statewide
464 Amendments Incorporated as Part of State Construction Code, and Chapter 4, Local
465 Amendments Incorporated as Part of State Construction Code, are the construction standards to
466 be applied to building construction, alteration, remodeling, and repair, and in the regulation of
467 building construction, alteration, remodeling, and repair in the state:
468 (a) the 2021 edition of the International Building Code, including Appendices C and J,
469 issued by the International Code Council;
470 (b) except as provided in Subsection (1)(c), the 2021 edition of the International
471 Residential Code, issued by the International Code Council;
472 (c) the residential provisions of Chapter 11, Energy Efficiency, of the 2015 edition of
473 the International Residential Code, issued by the International Code Council;
474 (d) Appendix AQ of the 2021 edition of the International Residential Code, issued by
475 the International Code Council;
476 (e) the 2021 edition of the International Plumbing Code, issued by the International
477 Code Council;
478 (f) the 2021 edition of the International Mechanical Code, issued by the International
479 Code Council;
480 (g) the 2021 edition of the International Fuel Gas Code, issued by the International
481 Code Council;
482 (h) the 2020 edition of the National Electrical Code, issued by the National Fire
483 Protection Association;
484 (i) the residential provisions of the 2015 edition of the International Energy
485 Conservation Code, issued by the International Code Council;
486 (j) the commercial provisions of the 2021 edition of the International Energy
487 Conservation Code, issued by the International Code Council;
488 (k) the 2021 edition of the International Existing Building Code, issued by the
489 International Code Council;
490 (l) subject to Subsection 15A-2-104(2), the HUD Code;
491 (m) subject to Subsection 15A-2-104(1), Appendix AE of the 2021 edition of the
492 International Residential Code, issued by the International Code Council;
493 (n) subject to Subsection 15A-2-104(1), the 2005 edition of the NFPA 225 Model
494 Manufactured Home Installation Standard, issued by the National Fire Protection Association;
495 (o) subject to Subsection (3), for standards and guidelines pertaining to plaster on a
496 historic property, as defined in Section 9-8a-302, the U.S. Department of the Interior
497 Secretary's Standards for Rehabilitation and Guidelines for Rehabilitating Historic Buildings;
498 [
499 (p) the residential provisions of the 2021 edition of the International Swimming Pool
500 and Spa Code, issued by the International Code Council[
501 (q) Modular Building Institute Standards 1200 and 1205, issued by the International
502 Code Council, except as modified by provisions of this title governing modular units.
503 (2) Consistent with Title 65A, Chapter 8, Management of Forest Lands and Fire
504 Control, the Legislature adopts the 2006 edition of the Utah Wildland Urban Interface Code,
505 issued by the International Code Council, with the alternatives or amendments approved by the
506 Utah Division of Forestry, Fire, and State Lands, as a construction code that may be adopted by
507 a local compliance agency by local ordinance or other similar action as a local amendment to
508 the codes listed in this section.
509 (3) The standards and guidelines described in Subsection (1)(o) apply only if:
510 (a) the owner of the historic property receives a government tax subsidy based on the
511 property's status as a historic property;
512 (b) the historic property is wholly or partially funded by public money; or
513 (c) the historic property is owned by a government entity.
514 Section 12. Section 35A-8-503 is amended to read:
515 35A-8-503. Housing loan fund board -- Duties -- Expenses.
516 (1) There is created the Olene Walker Housing Loan Fund Board.
517 (2) The board is composed of [
518 (a) The governor shall appoint the following members to four-year terms:
519 (i) two members from local governments, of which:
520 (A) one member shall be a locally elected official who resides in a county of the first or
521 second class; and
522 (B) one member shall be a locally elected official who resides in a county of the third,
523 fourth, fifth, or sixth class;
524 (ii) two members from the mortgage lending community, of which:
525 (A) one member shall have expertise in single-family mortgage lending; and
526 (B) one member shall have expertise in multi-family mortgage lending;
527 (iii) one member from real estate sales interests;
528 (iv) two members from home builders interests, of which:
529 (A) one member shall have expertise in single-family residential construction; and
530 (B) one member shall have expertise in multi-family residential construction;
531 (v) one member from rental housing interests;
532 (vi) two members from housing advocacy interests, of which:
533 (A) one member who resides within any area in a county of the first or second class;
534 and
535 (B) one member who resides within any area in a county of the third, fourth, fifth, or
536 sixth class;
537 (vii) one member of the manufactured housing interest;
538 (viii) one member with expertise in transit-oriented developments; [
539 (ix) one member who represents rural interests[
540 (x) one member who represents the interests of modular housing.
541 (b) The director or the director's designee serves as the secretary of the board.
542 (c) The members of the board shall annually elect a chair from among the voting
543 membership of the board.
544 (3) (a) Notwithstanding the requirements of Subsection (2), the governor shall, at the
545 time of appointment or reappointment, adjust the length of terms to ensure that the terms of
546 board members are staggered so that approximately half of the board is appointed every two
547 years.
548 (b) When a vacancy occurs in the membership for any reason, the replacement is
549 appointed for the unexpired term.
550 (4) (a) The board shall:
551 (i) meet regularly, at least quarterly to conduct business of the board, on dates fixed by
552 the board;
553 (ii) meet twice per year, with at least one of the meetings in a rural area of the state, to
554 provide information to and receive input from the public regarding the state's housing policies
555 and needs;
556 (iii) keep minutes of its meetings; and
557 (iv) comply with the procedures and requirements of Title 52, Chapter 4, Open and
558 Public Meetings Act.
559 (b) Seven members of the board constitute a quorum, and the governor, the chair, or a
560 majority of the board may call a meeting of the board.
561 (5) The board shall:
562 (a) review the housing needs in the state;
563 (b) determine the relevant operational aspects of any grant, loan, or revenue collection
564 program established under the authority of this chapter;
565 (c) determine the means to implement the policies and goals of this chapter;
566 (d) select specific projects to receive grant or loan money; and
567 (e) determine how fund money shall be allocated and distributed.
568 (6) A member may not receive compensation or benefits for the member's service, but
569 may receive per diem and travel expenses in accordance with:
570 (a) Section 63A-3-106;
571 (b) Section 63A-3-107; and
572 (c) rules made by the Division of Finance pursuant to Sections 63A-3-106 and
573 63A-3-107.
574 Section 13. Section 57-1-46 is amended to read:
575 57-1-46. Transfer fee and reinvestment fee covenants.
576 (1) As used in this section:
577 (a) "Association expenses" means expenses incurred by a common interest association
578 for:
579 (i) the administration of the common interest association;
580 (ii) the purchase, ownership, leasing, construction, operation, use, administration,
581 maintenance, improvement, repair, or replacement of association facilities, including expenses
582 for taxes, insurance, operating reserves, capital reserves, and emergency funds;
583 (iii) providing, establishing, creating, or managing a facility, activity, service, or
584 program for the benefit of property owners, tenants, common areas, the burdened property, or
585 property governed by the common interest association; or
586 (iv) other facilities, activities, services, or programs that are required or permitted
587 under the common interest association's organizational documents.
588 (b) "Association facilities" means any real property, improvements on real property, or
589 personal property owned, leased, constructed, developed, managed, or used by a common
590 interest association, including common areas.
591 (c) "Burdened property" means the real property that is subject to a reinvestment fee
592 covenant or transfer fee covenant.
593 (d) "Common areas" means areas described within:
594 (i) the definition of "common areas and facilities" under Section 57-8-3; and
595 (ii) the definition of "common areas" under Section 57-8a-102.
596 (e) "Common interest association":
597 (i) means:
598 (A) an association, as defined in Section 57-8a-102;
599 (B) an association of unit owners, as defined in Section 57-8-3; or
600 (C) a nonprofit association; and
601 (ii) includes a person authorized by an association, association of unit owners, or
602 nonprofit association, as the case may be.
603 (f) "Large master planned development" means an approved development:
604 (i) of at least 500 acres or 500 units; and
605 (ii) that includes a commitment to fund, construct, develop, or maintain:
606 (A) common infrastructure;
607 (B) association facilities;
608 (C) community programming;
609 (D) resort facilities;
610 (E) open space; or
611 (F) recreation amenities.
612 (g) "Nonprofit association" means a nonprofit corporation organized under Title 16,
613 Chapter 6a, Utah Revised Nonprofit Corporation Act, to benefit, enhance, preserve, govern,
614 manage, or maintain burdened property.
615 (h) "Organizational documents":
616 (i) for an association, as defined in Section 57-8a-102, means governing documents as
617 defined in Section 57-8a-102;
618 (ii) for an association of unit owners, as defined in Section 57-8-3, means a declaration
619 as defined in Section 57-8-3; and
620 (iii) for a nonprofit association:
621 (A) means a written instrument by which the nonprofit association exercises powers or
622 manages, maintains, or otherwise affects the property under the jurisdiction of the nonprofit
623 association; and
624 (B) includes articles of incorporation, bylaws, plats, charters, the nonprofit
625 association's rules, and declarations of covenants, conditions, and restrictions.
626 (i) "Reinvestment fee covenant" means a covenant, restriction, or agreement that:
627 (i) affects real property; and
628 (ii) obligates a future buyer or seller of the real property to pay to a common interest
629 association, upon and as a result of a transfer of the real property, a fee that is dedicated to
630 benefitting the burdened property, including payment for:
631 (A) common planning, facilities, and infrastructure;
632 (B) obligations arising from an environmental covenant;
633 (C) community programming;
634 (D) resort facilities;
635 (E) open space;
636 (F) recreation amenities;
637 (G) charitable purposes; or
638 (H) association expenses.
639 (j) "Transfer fee covenant":
640 (i) means an obligation, however denominated, expressed in a covenant, restriction,
641 agreement, or other instrument or document:
642 (A) that affects real property;
643 (B) that is imposed on a future buyer or seller of real property, other than a person who
644 is a party to the covenant, restriction, agreement, or other instrument or document; and
645 (C) to pay a fee upon and as a result of a transfer of the real property; and
646 (ii) does not include:
647 (A) an obligation imposed by a court judgment, order, or decree;
648 (B) an obligation imposed by the federal government or a state or local government
649 entity; or
650 (C) a reinvestment fee covenant.
651 (2) A transfer fee covenant recorded on or after March 16, 2010 is void and
652 unenforceable.
653 (3) (a) Except as provided in Subsection (3)(b), a reinvestment fee covenant may not
654 be sold, assigned, or conveyed unless the sale, assignment, or conveyance is to a common
655 interest association that was formed to benefit the burdened property.
656 (b) A common interest association may assign or pledge to a lender the right to receive
657 payment under a reinvestment fee covenant if:
658 (i) the assignment or pledge is as collateral for a credit facility; and
659 (ii) the lender releases the collateral interest upon payment in full of all amounts that
660 the common interest association owes to the lender under the credit facility.
661 (4) A reinvestment fee covenant recorded on or after March 16, 2010 is not enforceable
662 if the reinvestment fee covenant is intended to affect property that is the subject of a previously
663 recorded transfer fee covenant or reinvestment fee covenant.
664 (5) A reinvestment fee covenant recorded on or after March 16, 2010 may not obligate
665 the payment of a fee that exceeds .5% of the value of the burdened property, unless the
666 burdened property is part of a large master planned development.
667 (6) (a) A reinvestment fee covenant recorded on or after March 16, 2010 is void and
668 unenforceable unless a notice of reinvestment fee covenant, separate from the reinvestment fee
669 covenant, is recorded in the office of the recorder of each county in which any of the burdened
670 property is located.
671 (b) A notice under Subsection (6)(a) shall:
672 (i) state the name and address of the common interest association to which the fee
673 under the reinvestment fee covenant is required to be paid;
674 (ii) include the notarized signature of the common interest association's authorized
675 representative;
676 (iii) state that the burden of the reinvestment fee covenant is intended to run with the
677 land and to bind successors in interest and assigns;
678 (iv) state that the existence of the reinvestment fee covenant precludes the imposition
679 of an additional reinvestment fee covenant on the burdened property;
680 (v) state the duration of the reinvestment fee covenant;
681 (vi) state the purpose of the fee required to be paid under the reinvestment fee
682 covenant; and
683 (vii) state that the fee required to be paid under the reinvestment fee covenant is
684 required to benefit the burdened property.
685 (c) A recorded notice of reinvestment fee covenant that substantially complies with the
686 requirements of Subsection (6)(b) is valid and effective.
687 (7) (a) A reinvestment fee covenant or transfer fee covenant recorded before March 16,
688 2010 is not enforceable after May 31, 2010, unless:
689 (i) a notice that is consistent with the notice described in Subsection (6) is recorded in
690 the office of the recorder of each county in which any of the burdened property is located; or
691 (ii) a notice of reinvestment fee covenant or transfer fee covenant, as described in
692 Subsection (7)(b), is recorded in the office of the recorder of each county in which any of the
693 burdened property is located.
694 (b) A notice under Subsection (7)(a)(ii) shall:
695 (i) include the notarized signature of the beneficiary of the reinvestment fee covenant
696 or transfer fee covenant, or the beneficiary's authorized representative;
697 (ii) state the name and current address of the beneficiary under the reinvestment fee
698 covenant or transfer fee covenant;
699 (iii) state that the burden of the reinvestment fee covenant or transfer fee covenant is
700 intended to run with the land and to bind successors in interest and assigns; and
701 (iv) state the duration of the reinvestment fee covenant or transfer fee covenant.
702 (c) A recorded notice of reinvestment fee covenant or transfer fee covenant that
703 substantially complies with the requirements of Subsection (7)(b) is valid and effective.
704 (d) A notice under Subsection (7)(b):
705 (i) that is recorded after May 31, 2010, is not enforceable; and
706 (ii) shall comply with the requirements of Section 57-1-47.
707 (e) An amendment to a notice under Subsection (7)(b) recorded after May 31, 2010,
708 seeking to amend a notice under Subsection (7)(b) recorded before May 31, 2010, is not an
709 enforceable amendment.
710 (8) A reinvestment fee covenant recorded on or after March 16, 2010, may not be
711 enforced upon:
712 (a) an involuntary transfer;
713 (b) a transfer that results from a court order;
714 (c) a bona fide transfer to a family member of the seller within three degrees of
715 consanguinity who, before the transfer, provides adequate proof of consanguinity;
716 (d) a transfer or change of interest due to death, whether provided in a will, trust, or
717 decree of distribution; or
718 (e) the transfer of burdened property by a financial institution, except to the extent that
719 the reinvestment fee covenant requires the payment of a common interest association's costs
720 directly related to the transfer of the burdened property, not to exceed $250.
721 Section 14. Section 57-1-47 is enacted to read:
722 57-1-47. Notice requirements for continuation of existing private transfer fee
723 obligations.
724 (1) In addition to the requirements described in Subsection 57-1-46(7), a person
725 required to file a notice under this section shall:
726 (a) (i) file the notice described in this section on or before May 31, 2024; and
727 (ii) re-file the notice, no earlier than May 1 and no later than May 31, every three years
728 thereafter; and
729 (b) amend the notice to reflect any change in the name or address of any payee included
730 in the notice no later than the 30 days after the day on which the change occurs.
731 (2) A person who amends a notice filed under Subsection (1) shall include with the
732 amendment:
733 (a) the recording information of the original notice; and
734 (b) the legal description of the property subject to the private transfer fee obligation.
735 (3) To be effective, a notice filed under this section shall be approved in writing by
736 every person holding a majority of the beneficial interests in the private transfer fee obligation.
737 (4) If a person required to file a notice under this section fails to comply with this
738 section:
739 (a) payment of the private transfer fee may not be a requirement for the conveyance of
740 an interest in the property to a purchaser;
741 (b) the property is not subject to further obligation under the private transfer fee
742 obligation; and
743 (c) the private transfer fee obligation is void.
744 (5) A recorded notice of transfer fee covenant that complies with the requirements of
745 this section is valid and effective.
746 (6) (a) A person that is no longer subject to a private transfer fee obligation may seek
747 declaratory relief in court to address any encumbrance on real property owned by the person.
748 (b) Upon a successful claim for declaratory relief, as described in Subsection (6)(a), a
749 court may award the person costs and reasonable attorney fees.
750 Section 15. Section 63H-8-501 is amended to read:
751 63H-8-501. Definitions.
752 As used in this part:
753 (1) (a) "First-time homebuyer" means an individual who [
754
755 (i) the three-year requirement described in Section 143(d) of the Internal Revenue Code
756 of 1986, as amended, and any corresponding federal regulations; and
757 (ii) requirements made by the corporation by rule, as described in Section 63H-8-502.
758 (b) "First-time homebuyer" includes a single parent, as defined by the corporation by
759 rule made as described in Section 63H-8-502, who would meet the three-year requirement
760 described in Subsection (1)(a)(i) but for a present ownership interest in a principal residence in
761 which the single parent:
762 (i) had a present ownership interest with the single parent's former spouse during the
763 three-year period;
764 (ii) resided while married during the three-year period; and
765 (iii) no longer:
766 (A) has a present ownership interest; or
767 (B) resides.
768 (2) "Home equity amount" means the difference between:
769 (a) (i) in the case of a sale, the sales price for which the qualifying residential unit is
770 sold by the recipient in a bona fide sale to a third party with no right to repurchase less an
771 amount up to 1% of the sales price used for seller-paid closing costs; or
772 (ii) in the case of a refinance, the current appraised value of the qualifying residential
773 unit; and
774 (b) the total payoff amount of any qualifying mortgage loan that was used to finance
775 the purchase of the qualifying residential unit.
776 (3) "Program" means the First-Time Homebuyer Assistance Program created in Section
777 63H-8-502.
778 (4) "Program funds" means money appropriated for the program.
779 (5) "Qualifying mortgage loan" means a mortgage loan that:
780 (a) is purchased by the corporation; and
781 (b) is subject to a document that is recorded in the office of the county recorder of the
782 county in which the residential unit is located.
783 (6) "Qualifying residential unit" means a residential unit that:
784 (a) is located in the state;
785 (b) is new construction or newly constructed but not yet inhabited;
786 (c) is financed by a qualifying mortgage loan;
787 (d) is owner-occupied [
788 dwelling, at least one unit is owner-occupied within 60 days of purchase; and
789 (e) is purchased for an amount that does not exceed:
790 (i) $450,000; or
791 (ii) if applicable, the maximum purchase price established by the corporation under
792 Subsection 63H-8-502(6).
793 (7) "Recipient" means a first-time homebuyer who receives program funds.
794 (8) (a) "Residential unit" means a house, condominium, townhome, or similar
795 residential structure that serves as a one-unit dwelling or forms part of a two-unit dwelling.
796 (b) "Residential unit" includes a manufactured home or modular home that is attached
797 to a permanent foundation.
798 Section 16. Section 63H-8-502 is amended to read:
799 63H-8-502. First-Time Homebuyer Assistance Program.
800 (1) There is created the First-Time Homebuyer Assistance Program administered by
801 the corporation.
802 (2) Subject to appropriations from the Legislature, the corporation shall distribute
803 program funds to:
804 (a) first-time homebuyers to provide support for the purchase of qualifying residential
805 units; and
806 (b) reimburse the corporation for a distribution of funds under Subsection (2)(a) that
807 took place on or after July 1, 2023.
808 (3) The maximum amount of program funds that a first-time homebuyer may receive
809 under the program is $20,000.
810 (4) (a) A recipient may use program funds to pay for:
811 (i) the down payment on a qualifying residential unit;
812 (ii) closing costs associated with the purchase of a qualifying residential unit;
813 (iii) a permanent reduction in the advertised par interest rate on a qualifying mortgage
814 loan that is used to finance a qualifying residential unit; or
815 (iv) any combination of Subsections (4)(a)(i), (ii), and (iii).
816 (b) The corporation shall direct the disbursement of program funds for a purpose
817 authorized in Subsection (4)(a).
818 (c) A recipient may not receive a payout or distribution of program funds upon closing.
819 (5) The builder or developer of a qualifying residential unit may not increase the price
820 of the qualifying residential unit on the basis of program funds being used towards the purchase
821 of that qualifying residential unit.
822 (6) (a) In accordance with rules made by the corporation under Subsection (9), the
823 corporation may adjust the maximum purchase price of a qualifying residential unit for which a
824 first-time homebuyer qualifies to receive program funds in order to reflect current market
825 conditions[
826 (b) In connection with an adjustment made under Subsection (6)(a), the corporation
827 may establish one or more maximum purchase prices corresponding by residential unit type,
828 geographic location, or any other factor the corporation considers relevant.
829 (c) [
830 Subsection (6) no more frequently than once each calendar year.
831 (7) (a) [
832 residential unit or refinances the qualifying mortgage loan that was used to finance the
833 purchase of the qualifying residential unit before the end of the original term of the qualifying
834 mortgage loan, the recipient shall repay to the corporation an amount equal to the lesser of:
835 [
836 [
837 (b) Subsection (7)(a) does not apply to a qualifying mortgage loan that is refinanced
838 with a new qualifying mortgage loan if any subordinate qualifying mortgage loan, or loan from
839 program funds used on the purchase of the qualifying residential unit, is resubordinated only to
840 the new qualifying mortgage loan.
841 (8) Any funds repaid to the corporation under Subsection (7) shall be used for program
842 distributions.
843 (9) The corporation shall make rules governing the application form, process, and
844 criteria the corporation will use to distribute program funds to first-time homebuyers, in
845 accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
846 (10) The corporation may use up to 5% of program funds for administration.
847 (11) The corporation shall report annually to the Social Services Appropriations
848 Subcommittee on disbursements from the program and any adjustments made to the maximum
849 purchase price or maximum purchase prices of a qualifying residential unit under Subsection
850 (6).
851 Section 17. Effective date.
852 This bill takes effect on May 1, 2024.
853 Section 18. Retrospective operation.
854 (1) The following sections have retrospective operation to July 1, 2023:
855 (a) Section 63H-8-501; and
856 (b) Section 63H-8-502.