Court denies submetering ruling request.

The U.S. Court of Appeals for the Fourth Circuit on Oct. 25 denied a request from the Manufactured Housing Institute (MHI) to review a 2003 directive from the Environmental Protection Agency (EPA) exempting from the 1974 Safe Drinking Water Act (SDWA) apartment properties that bill residents for water using full capture water metering (MHI v. EPA, No. 04-1157 (4th Cir. 2006).

Under the SDWA, a property that "sells" water, even water that is treated by a regulated water supplier, is considered a "consecutive water supplier" and is subject to the SDWA.

In the case, MHI claimed that EPA's interpretation of the phrase "sell water" in this directive was arbitrary because it only applied to properties that use full capture metering and not to properties that use allocation or partial capture metering. It left it to the states to determine how to regulate these latter properties. EPA's directive explained that it was exempting full capture metered apartments because such a practice results in water conservation.

The agency also opined that allocation and partial capture metering had not been shown to conserve water and therefore would be left to state jurisdiction. In affirming the EPA's position, the court found that the agency's position "was supported by a rational basis." The decision does not alter EPA's directive that states may choose to impose water testing/quality assurance standards on properties that offer water for "sale" regardless of whether the property relies on meters or allocation formulae to calculate individual bills.

Information compiled by NAA/NMHC Joint Legislative Staff: Senior Vice President for Government Affairs Jim Arbury; Vice President of Housing Policy Lisa Blackwell; Vice President of Capital Markets and Technology David Cardwell; Vice President of Properly Management Jeanne McGlynn Delgado; Vice President of Communications Kim Duty; Vice President of Environment Eileen Lee; Tax Advisor Howard Menell; Vice President of Building Codes Ron Nickson; Chief Economist Mark Obrinsky; and Director of Properly Operations Belay Feigin Befus.