Government Affairs: NAHB Quick Issues Index

1. ICC Code Hearings/Fire Sprinklers - Construction Codes & Standards Committee
   • Thanks to the great efforts of NAHB's NVPs, State Reps, EOs and CCS Committee members and staff, NAHB prevailed in educating code officials about our concerns related to fire sprinkler mandates prior to and during the ICC Final Action Hearings in Rochester this May.
   • The final votes were very close, but in the end the fire sprinkler advocates failed to achieve the two thirds majority needed to overturn the IRC Committee's recommendation for disapproval of the proposed mandates.
   • The vast majority of ICC code officials spoke in opposition to the mandates and voted in support of NAHB's position.
   • While the fire sprinkler proponents brought in a large number of fire officials who registered and voted for the first time in Rochester, NAHB's efforts to bring in additional code officials who supported our position and secure voting privileges for NAHB members proved key to our success.
   • Even so, this issue will not go away anytime soon. We can expect to face another significant effort by the sprinkler advocates at next year's code development proceedings. NAHB is therefore encouraging all those who helped with our campaign to build upon their working relationships with their local code officials and keep the lines of communication open.
   • NAHB also prevailed in our efforts related to many other proposed code changes during the Final Action Hearings in Rochester. These included our successful opposition to several proposals that would have mandated carbon monoxide alarms in the IRC, our successful promotion of a proposal to allow the wind exposure category for new homes built in a housing development to be based on the exposure that will exist a year after the start of construction rather than the more restrictive value that exists at the start of construction, and our successful removal of onerous anchorage requirements at the top of basement foundation walls.
   • More info: www.nahb.org/sprinklers; www.nahb.org/codes; Jeff Inks (800-368-5242, x8547)
2. GSE Regulatory Reform - Federal Government Affairs and Housing Finance Committees
   • The House of Representatives passed H.R. 1427, the Federal Housing Finance Reform Act, on May 22 by a solid bipartisan margin of 313 to 104. Prior to passage, NAHB designated the bill as a "key vote" and sent a letter to every representative urging their support.
   • This comprehensive reform bill offers a sound regulatory solution for our government-sponsored housing institutions that would safeguard their financial health and support their housing missions.
   • NAHB also successfully key-voted an important amendment to the bill that would clarify that a new regulator must base its evaluation of the risk of Fannie Mae's and Freddie Mac's portfolio holdings solely on mission and safety and soundness considerations, and not on broader concerns.
   • This amendment precludes a new regulator from assessing an overly broad interpretation of risk that might constrain Fannie's and Freddie's portfolio activities, which could disrupt the mortgage markets and impede the GSEs' pursuit of their housing mission.
   • The bill also contains other important provisions for advancing GSE regulatory reform, including those related to capital requirements, an affordable housing fund, high-cost conforming loan limits, program approvals, and regulatory structure.
   • In other key votes designated by NAHB, three anti-housing amendments were defeated or withdrawn.
   • The focus now turns to the Senate, where companion legislation has not yet been introduced.
   • More info: www.nahb.org/gse; Dave Crowe (800-368-5242 x8383), Scott Meyer (x8144)
3. Green Building - Construction Codes & Standards Committee
   • Legislation that is being proposed in many jurisdictions across the country seeks to mandate the U.S. Green Building Council's proposed ("pilot") LEED rating system for new homes. LEED requires upgrades and costly certification that will make housing much less affordable. Such legislation has already been passed in at least three areas.
   • To combat these efforts, NAHB is working with the ICC to develop a National Green Building Standard, based on our Model Green Home Building Guidelines.
   • NAHB is also now poised to make a substantial investment in a National Green Building Program, so that a turn-key, builder-friendly alternative to onerous and costly LEED mandates exists in the marketplace. The national program will offer certification options for custom and volume builders, as well as a quality assurance protocol or certification for existing or new HBA programs.
   • More info: www.nahb.org/greenbuilding; John Ritterpusch (800-368-5242, x8325) Calli Schmidt (x8132)
4. FHA/VA Single-Family Issues - Housing Finance Committee and FGAC
   • H.R. 1852, the Expanding American Homeownership Act of 2007, was introduced by House Financial Services Chairman Barney Frank (D-MA) in late March. NAHB provided testimony in support of FHA reform in mid April, and on May 3 the bill was passed by the committee.
   • Senate Banking Committee Chairman Chris Dodd (D-CT) is expected to introduce comprehensive FHA modernization legislation very soon. Senator Hillary Clinton has already introduced FHA reform legislation called the 21st Century Housing Act.
   • HUD recently published a Proposed Rule on down payment assistance that would prohibit home sellers from contributing to a purchaser's down payment either directly or indirectly through a third party. The proposal would allow buyers to receive assistance from family members, government or public agencies, or the borrower's employer or credit union.
   • Contributions from a tax-exempt charitable or educational organization would also be permitted as long as the source of the down payment was not a party related to the sale transaction. . NAHB has policy calling for development of criteria by which seller-assisted down payments would be allowed. Staff will seek input from members in anticipation of filing a comment letter by July 10.
   • More info: www.nahb.org/fhasinglefamily Dave Ledford (800-368-5242, x8265)
5. Subprime Mortgages - Housing Finance Committee and FGAC
   • Concerns that some subprime mortgages are causing consumers severe financial harm and that the turmoil in the subprime market could spread to the broader mortgage market have prompted calls for tighter regulation of, and possible legislation on, subprime lending.
   • Congress is considering a full range of possible solutions, including an increased role for FHA and a suitability test for borrowers. We expect extended congressional discussion of this issue this year.
   • Sen. Chris Dodd and Rep. Barney Frank have indicated they will explore ways to rein in predatory lending practices, and Rep. Frank has requested a GAO investigation into the high rate of foreclosures.
   • Sen. Charles Schumer (D-NY) introduced legislation on May 3 to deal with this issue.
   • Subprime turmoil is also providing an additional push for FHA reform efforts, especially for boosting FHA loan limits and reducing down payment requirements.
   • The subprime difficulties have had a clear impact on new home sales and production, as resulting tighter underwriting standards have reduced the number of qualified purchasers and foreclosures have added to the inventory of unsold homes. Both will put downward pressure on home prices.
   • More info: www.nahb.org/legconissues (note: from this page, click on "2007 Legislative ConferenceIssues" and scroll down to the Subprime Mortgage section); Dave Ledford (800-368-5242, x8265)
6. Wetlands - Legal Action, Environmental Issues and Federal Government Affairs Committees
   • The wetlands guidance document that EPA and the U.S. Army Corps of Engineers have developed has not yet been released.
   • In the absence of this guidance, NAHB is finalizing a paper that defines "significant nexus" in sufficient detail to make it useful on the ground.
   • The government and environmental groups have declined to appeal NAHB's latest victory on our Tulloch "discharge" case, allowing the D.C. trial court's decision to stand that says the Army Corps of Engineers can only require Clean Water Act permits where there is an "addition" of fill material. The Corps must now come up with a new regulation defining "discharge."
   • Meanwhile, litigation concerning the definition of "navigable waters" continues following the Supreme Court's Rapanos decision, and NAHB has asked the high court to consider the issue again and provide further clarity on the geographic scope of the Clean Water Act.
   • With regard to Nationwide Permits, NAHB's appeal on the 2002 suite of permits is underway. Our challenge is based on the Corp's arbitrary decision to reduce the maximum allowed impacts for coverage under these NWPs to ½ acre, thereby greatly diminishing their value to our members. Opening briefs are due in late summer.
   • NAHB also filed a lawsuit on May 25 against the 2007 suite of NWPs, focusing on the Corp's purported assertion of regulatory authority over upland drainage ditches.
   • In Congress, Rep. Jim Oberstar (D-MN) introduced H.R. 2421, the Clean Water Restoration Act, which greatly expands Clean Water Act jurisdiction. NAHB is working with the Waters Advocacy Coalition to stop members of Congress from cosponsoring or supporting this bill.
   • House Transportation & Infrastructure Committee majority staff has requested that NAHB propose a legislative fix for the Clean Water Act, but it has not been decided if this is the proper way to proceed.
   • More info: www.nahb.org/wetlands; www.nahb.org/litigation; Duane Desiderio (800-268-5242, x8146) Susan Asmus (x8538) Annie Raymond (x8307)
7. OSHA Alliance - Construction Safety & Health Committee
   • NAHB and OSHA will sign a two-year renewal of our ongoing alliance agreement on June 7, 2007.
   • With this renewal, we plan to work together to develop a comprehensive training program that will pinpoint ways to minimize the most common safety hazards found during home construction.
   • More info: www.nahb.org/osha; Rob Matuga (800-368-5242, x8507)
8. OSHA Multi-Employer Citation Policy - Construction Safety & Health Committee
   • OSHA's Multi-Employer Citation Policy permits the agency to issue citations to a "controlling employer" (general contractor) for safety violations created by subcontractors.
   • NAHB contends this provision is beyond OSHA's statutory authority. Seeking ways to challenge this application, NAHB provided an amicus brief in the case of Secretary of Labor v. Summit Contractors.
   • In April, the Occupational Safety and Health Review Commission agreed with NAHB's argument that said OSHA does not have the ability to issue such citations. The Secretary of Labor has appealed this decision, which effectively means that OSHA enforcement actions will continue unchanged for now.
   • NAHB is considering amicus options for the Circuit Court appeal.
   • More info: www.nahb.org/osha; Rob Matuga (800-368-5242, x8507)
9. FHLBank Issues (appointment process) - Housing Finance Committee
   • The Federal Housing Finance Board (FHFB) adopted a rule at the end of March regarding the process for appointing public interest directors (PIDs) to the boards of its 12 Federal Home Loan Banks.
   • Through this process, NAHB worked diligently to successfully assist a number of NAHB members in obtaining appointments, and continues to promote its member candidates for remaining vacancies.
   • For future appointments, NAHB has adopted a formal policy to assist and recommend our member candidates. This policy provides for member notification of available director positions and application deadlines, staff providing application materials by request, and assistance in completing those materials. In addition, NAHB will provide a letter of support for a member who requests such assistance, provided that member is the only builder candidate - in other cases, NAHB's Senior Officers will select a preferred candidate to receive a recommendation letter.
   • Staff will also meet with FHFB members to promote our recommended members.
   • More info: www.nahb.org/FHLBank; Dave Ledford (800-368-5242, x8265)
10. Tax Policy: Alternative Minimum Tax - Federal Government Affairs Committee
    • The Congressional tax-writing committees are focusing significant time on the AMT issue.
    • A proposal by Rep. Richard Neal (D-MA) to correct the problem would exempt anyone making less than $250,000 in taxable income from paying the AMT and would set a graduated AMT for those earning between $250,000 and $500,000.
    • While its unclear how this solution would be paid for, there's some indication that those earning more than $500,000 would receive some kind of tax increase.
    • Senate AMT legislation is still uncertain, with several senators indicating they would rather focus on a one- or two-year fix rather than a full repeal. NAHB will continue to monitor how this develops.
    • More info: www.nahb.org/taxpolicies; Greg Brown (800-368-5242, x8421) Rob Dietz (x8285)
11. Tax Policy: Independent Contractor Classification - Federal Gov. Affairs Committee
    • Recently, the House Ways and Means Committee looked into "the effects of misclassifying workers as independent contractors."
    • There are legitimate economic reasons for both employers and their workers to choose the independent contractor classification.
    • Some members of Ways and Means are concerned that abuses are occurring and that workers and fair competition in the marketplace are suffering the consequences.
    • NAHB has submitted a statement for the record expressing our core principles on this issue, and we are weighing in with the committee chairman and other key members as they move forward.
    • More info: www.nahb.org/taxpolicies; Greg Brown (800-368-5242, x8421) Rob Dietz (x8285)
12. Tax Policy: Carried Interest - Federal Government Affairs Committee
    • Carried or promoted interests are income flows paid to private equity fund participants as a disproportionate share of the participant's initial investment.
    • While generally associated with hedge fund managers, promoted interests are also a common financing vehicle for payments to home builders for real estate joint ventures in which outside partners provide gap financing.
    • Under present law, carried and promoted interests are taxed as capital gains income.
    • Senate Finance Committee Chairman Max Baucus (D-MT) and Ranking Member Charles Grassley (RIA) have recently suggested that they would like to examine the rules concerning taxation of carried and promoted interests.
    • NAHB is concerned that such proposals could negatively affect the cost of residential construction financing and damage a useful method of managing business risk.
    • At a minimum, NAHB believes that such proposals should exempt real estate development partnerships because builder carried interests represent a return on equity investment and a return on the risk of entrepreneurship borne by the builder.
    • More info:www.nahb.org/taxpolicies; Greg Brown (800-368-5242, x8421) Rob Dietz (x8285)
13. Storm Water - Environmental Issues, Legal Action and Federal Gov. Affairs Committees
    • NAHB assisted the California BIA by providing technical documents for a comment letter on a controversial Preliminary Draft Construction General Permit. NAHB also continues to help HBAs across the country respond to local storm water ordinances imposed by small municipalities in response to the Federal Phase II storm water rule.
    • NAHB is scheduling numerous meetings with government compliance and enforcement officers with the goal of increasing permit compliance through new communication, programs and resources.
    • NAHB is heavily involved in litigation defending EPA's regulatory decision to not issue a burdensome Effluent Limitation Guideline (ELG) that would impose technology-based requirements in Clean Water Act permits to control sediment runoff from development activities.
    • While moving storm water reform legislation in the current Congress will be challenging given the current leadership structure, Sen. Carper (D-DE) remains a key ally for achieving this. NAHB has also met with staff of key members in the House to discuss reintroduction of a bill in that chamber.
    • More info: www.nahb.org/stormwater; www.nahb.org/litigation; Susan Asmus (800-368-5242, x8538) Tom Ward (x8230) Annie Raymond (x8307)
14. Global Climate Change-Hsg. Finance, FGAC, CC&S, Env. Issues, Legal Act., SLGA, Land Dev.
    • NAHB's Legal Action Committee is sponsoring a session on climate change during the week of the Spring Board of Directors Meeting, the goal of which is to assess current lawsuits in the global warming arena and determine appropriate judicial vehicles for NAHB litigation involvement.
    • The Senate Energy and Natural Resources Committee passed substantial energy legislation on May 2 that may be considered during the week of NAHB's Spring Board meeting. Committee action on similar legislation in the House is scheduled for the same time.
    • The Senate bill, introduced by Sen. Jeff Bingaman (D-NM), includes an energy efficiency title that would give DOE the authority to let states set regional appliance standards for heating & AC equipment.
    • Other concerning provisions of the bill would mandate a significant increase in energy code requirements for all FHA mortgaged properties.
    • On May 15, President Bush issued an Executive Order responding to the Supreme Court decision in Mass. v. EPA directing EPA, DOT and USDA to initiate a rulemaking process for increasing the use of alternative fuels and boosting existing federal vehicle fuel efficiency standards as a means of reducing greenhouse gas emissions for motor vehicles, non-road vehicles and non-road engines.
    • A United Nations report published in May calls for prioritizing energy efficient buildings and appliances and fuel-efficient vehicles as a means of addressing climate change.
    • NAHB published a study at the end of April which concludes that residential greenhouse gases are related to energy consumption.
    • States are continuing to use existing regulatory programs as a means to address climate change. Most recently, Massachusetts is proposing to require developers and builders to quantify and mitigate both the "direct" and "indirect" greenhouse gas emissions impacts of large land development projects under the state's Environmental Policy Act.
    • More info: www.nahb.org/climatechange; Elizabeth Odina (x8570) Calli Schmidt (x8132) Amy Chai (x8232)
Fair Housing Act/Growth - Legal Action Committee, Federal Government Affairs Committee
• NAHB is challenging land use decisions made by local governments for having a disproportionate impact on housing opportunities for minorities by filing cases in West Columbia, SC and Kyle, TX, the second of which we are litigating with the NAACP.
• NAHB's standing, or right to sue, has been challenged in both cases. The head of NAHB's Advocacy staff, Bill Killmer, has been deposed recently as part of these challenges.
• Also, in the Kyle case, NAHB claimed a victory when the federal court determined that several cities could not intervene as parties to the lawsuit just because they have ordinances similar to Kyle's and fear NAHB/NAACP might sue them next. Those cities are now limited to providing amicus briefs.
• We expect the West Columbia case to go to trial this fall and the Kyle trial to begin early next year.
• More info: www.nahb.org/litigation; Mary Lynn Pickel (800-368-5242, x8485)
15. Immigration Reform - Federal Government Affairs Committee
    • Senate and Administration negotiators reached a behind-the-scenes agreement on immigration reform in mid-May.
    • As the Senate prepared to debate this legislation, NAHB announced its opposition to the bill on May 21.
    • Of particular concern for NAHB members are employment verification provisions in the bill that would give the government latitude to prosecute an employer who hires an illegal alien without knowledge that the person is unauthorized to work, and inadequate safe harbor protections that require complete adherence to all immigration regulations, no matter how obscure.
    • The bill would also give the Secretary of Homeland Security a wide berth to enact rules that would make general contractors responsible for the legal status of their subcontractors' employees.
    • NAHB ran full-page advertisements in two Capitol Hill publications opposing the bill's language.
    • The subcontractor and employer liability issues are just two among many other troubling provisions in the massive immigration bill. NAHB believes the legislation cannot be fixed without major revisions.
    • NAHB has arranged meetings with members of the Senate and their staff to air our concerns and call for major changes in the bill to address the issues of the small business and housing community.
    • More info: www.nahb.org/immigration; Jenna Hamilton (800-368-5242, x8407)
16. Pipeline Encroachment - Land Development Committee
    • The issue of land use near oil, gas and hazardous materials was first raised by Congress in 2002. Pursuant to the Pipeline Safety Improvement Act of that year, the U.S. Department of Transportation contracted with the Transportation Safety Board to research this issue. . NAHB member Bruce Boncke sat on the board and helped guide the group away from a singular focus on development setbacks as the solution to enhanced pipeline safety.
    • The Office of Pipeline Safety must now develop best practices based on the board's report, and is in the midst of convening a special alliance comprised of representatives from local governments, real estate development, environmental organizations, transmission pipeline operators and others. Bruce Boncke has agreed to serve as NAHB's representative on the alliance's steering committee, which holds its first meeting on August 1, 2007.
    • More info: Deb Bassert (800-368-5242, x8443)