EPA eases water submeter regulations.

On Dec. 23, the U.S. Environmental Protection Agency (EPA) reversed its long-held position that apartment properties that submeter water must comply with the same expensive water quality testing and other requirements that are imposed on public utility systems. The move is a tremendous victory for the apartment industry.

After years of advocacy by NAA/NMHC, the EPA finally agreed that submetering encourages water conservation efforts and that EPA rules subjecting apartments that install submeters to public utility system regulations discouraged owners from installing meters. Therefore, the agency has published a memo to its field offices stating that as of Dec. 16, 2003, submetered apartments are no longer subject to the full regulatory requirements of the Safe Drinking Water Act.

The EPA memorandum does not extend to properties that employ ratio utility billing systems (RUBS) since the agency claimed there was no evidence to support the proposition that this practice results in water conservation. NAA/NMHC will press EPA to reconsider and to exempt properties that use alternative water tracking methods, since research suggests that these methods also help conserve water.

Do Not Call Rule Violations Cited

On Dec. 18, the Federal Communications Commission (FCC) announced its first enforcement action against a company for violating the national Do Not Call (DNC) rules. A California mortgage company received a warning citation for making unsolicited phone calls to residential numbers listed on the DNC registry. The statute authorizing the DNC list requires the FCC to issue firms without an FCC license or authorization a warning letter before assessing monetary fines.

According to FCCs citation letter; the mortgage firm has 30 days to inform the FCC, in person or in writing, what steps it will take to prevent future violations or face fines up to $11,000 per future violation. The DNC registry went into effect in October 2003 and is enforced by the FCC and the Federal Trade Commission (FTC), which has similar rules.

In November, the FCC announced a proposed $780,000 fine against AT&T for violating rules governing company-specific DNC lists. In issuing the citation, the FCC noted that Do Not Call enforcement is the commission's top consumer protection priority. In separate action, the FCC has imposed a record $5.37 million fine on Fax.com for sending unsolicited "junk" faxes. The commission said the firm violated the Telephone Consumer Protection Act of 1991 on 489 separate occasions.

To help firms comply with the DNC and Do Not Fax (DNF) rules, NAA/NMHC have updated our compliance guidance that was issued last August. The Members Only document titled Frequently Asked Questions on Federal Do Not Call/Do Not Fax Rules explains when firms may make unsolicited telemarketing calls and when they can send commercial faxes. The paper also advises firms about their obligation to maintain their own company-specific DNC list. The updated document can be found on NAA's Web site, www.naahq.org.

Uncertainty Over Terrorism Insurance 

Recent comments by a senior Treasury Department official regarding the future of the federal terrorism insurance program have sparked uncertainty and concern. Speaking to the Consumer Federation of America, Wayne Abernathy, Assistant Secretary for Financial Institutions, said the Treasury Department wants to make sure the federal terrorism backstop remains a temporary program and that they would oppose reauthorizing the Terrorism Risk Insurance ACT (TRIA) when it expires in late 2005.

NAA/NMHC believe that Abernathy's comments were premature and inappropriate, considering that Treasury is in the midst of studying these very issues and given the ongoing uncertainty about when the private insurance sector will be ready to cover these risks. This fall the department began surveying real estate market participants to determine whether TRIA-certified terrorism insurance has become more affordable and whether firms are choosing to purchase the coverage, as well as whether the risks of terrorist attack are being managed in other ways and whether the private market is developing the capacity to provide terrorism risk insurance without federal assistance. The survey results will play a key role in future congressional deliberations on whether or not to extend the program.

NAA/NMHC will urge Congress to ensure that terrorism insurance is affordable and available on the private market before the federal program is allowed to sunset.

Fair Housing: Source of Income Discrimination

The U.S. District Court for the District of Maryland has declined to intervene in a pending lawsuit related to a county's fair housing law prohibiting housing discrimination based on a resident's source of income. A Silver Spring, Md., apartment firm is being sued by the Montgomery County Office of Human Rights (OHR) because it declined two prospective residents who had Section 8 vouchers.

While awaiting decisions on the matters after hearings before the County's Office of Zoning and Administration Hearings, the apartment firm filed suit in the federal court seeking to have the suit dismissed. The housing provider claimed the county had violated the U.S. Housing Act by impermissibly trying to compel the firm to participate in the voucher program, even though federal regulations say participation is voluntary.

The firm said it does not intend to discriminate against individuals based on their source of income, but has chosen not to accept Section 8 vouchers due to the program's burdensome requirements. The court decided not to intervene and dismissed the claim, saying that before a federal court can rule that county law is preempted by federal law, the county must interpret its law and decide whether it requires the firm to accept vouchers. NAA/NMHC will monitor this and other related cases in efforts to support legislative intentions to make the Section 8 voucher pro-gram voluntary.

EPA Declines to Clarify Wetlands Issues

In December, the EPA and U.S. Army Corps of Engineers announced that they will not issue formal regulations to clarify federal jurisdiction over isolated wetlands. The private sector, including real estate, has long requested such regulations in order to clarify the practical significance of the Supreme Court's 2001 SWANCC decision.

While that decision appeared to significantly limit federal jurisdiction over certain isolated wetlands, the actual extent of its effect on EPA and Army Corps policy has remained in dispute. The decision not to issue regulations leaves intact a general guidance document issued last January that has been criticized by some environmental organizations as being overly restrictive in its interpretation of the SWANCC decision.

Meanwhile, further judicial interpretation of the Supreme Court decision continues with mixed implications for the extent of federal jurisdiction over isolated wetlands. In reviewing an appeal of a Louisiana court case, the U.S. Fifth Circuit Court of Appeals identified limits on federal jurisdiction over isolated wetlands.

The court noted, "In this circuit the U.S. may not simply impose regulations over puddles, sewers, roadside ditches and the like; under SWANCC 'a body of water is subject to regulation ... if the body of water is actually navigable or adjacent to an open body of navigable water.'" NAA/NMHC are reviewing the implications of both of these developments and will continue to work with other real estate trade associations to encourage clear and reasonable policies in this area.

Information compiled by NAA/NMHC Joint Legislative Staff: Senior Vice President for Government Affairs Jim Arbury; Vice President of Finance and Technology David Cardwell; Vice President of Communications Kim Duty; Vice President of Property Management Jay Harris; Vice President of Environment Eileen Lee; Tax Advisor Howard Menell; Vice President of Building Codes Ron Nickson; and Chief Economist Mark Obrinsky.

FYI 

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