Army Corps: Walnut Trees are a Wetland Species

The U.S. Army Corps of Engineers has a number of ways to determine whether a particular piece of property should be classified as a wetland, and potentially subject to regulation under the Clean Water Act.

One of them is to see what sorts of grasses, sedges, trees and other vegetation is growing on the property – and while cattails might be a dead giveaway, other plants might not seem so obvious.

But when the Corps decides that a walnut tree native to the hills of arid Southern California is a sign of a wetland, according to the National Wetlands Plant List, something’s a little haywire.

That’s why, with the help of expert consulting botanists, your Home Builders Association questioned the Corps’ determination. The good news? The association found out in May that its challenge, along with a similar request to change the rating for Japanese honeysuckle in other parts of the country, had been successful. The bad news? There are 8,055 challenges to go.

And unlike most other regulatory changes, the Corps can update the Plant List without going through the usual public notice and comment period. The list is updated at the Corps’ discretion and the changes appear online.

“This is a problem,” said NAHB Environmental Issues Committee Chair Charles “Chuck” Ellison, a builder in the Washington D.C. area and Delaware. “We need to know whether the decision to put a plant on the list is based on sound science. The process must be transparent.”

The committee is seeking the help of members whose projects have run afoul of the Plant List and will discuss its options during the National Association of Home Builders Fall Board of Directors meeting in Phoenix Sept. 3-6. For additional information, talk to Owen McDonough at 202-266-8662 or call Michael Dey at 864-254-0133.

Value of Membership: $200,000 per permit

We continue our series about how your HBA and its affiliate, NAHB, have logged significant victories advocating for members in the legal, legislative and regulatory arenas during 2012. 
Our advocacy efforts have saved the typical home builder about $7,250 per housing start in 2012, including both single-family and multifamily.

Supreme Court win could save $200,000 for those seeking wetlands permits. Agreeing with NAHB arguments (submitted in the form of two amicus briefs) that a property owner who receives a Compliance Order from the EPA should be able to obtain judicial review in court, the U.S. Supreme Court on March 21 handed down a unanimous decision in Sackett v. U.S. Environmental Protection Agency that brought relief to property owners on this matter. The case means that any builder who receives a Clean Water Act Compliance order can challenge that order in federal court. In addition, whereas builders have previously had no place to turn when the EPA or Army Corps determines that a wetland or water body on their property falls under the agency’s jurisdiction, they may now be able to seek relief in court. For builders who seek judicial review and win relief in court, savings from not being forced to file a wetlands permit can exceed $200,000.

Your HBA's Top 12 actions at the national level during the Spring

As a member of the HBA of Greenville, you also are a member of the National Association of Home Builders. NAHB's 3,000 directors and 250 staff have been working hard on your behalf this Spring.  In the series we will publish over the next 12 days we will highlight the Top 12 accomplishments during the Spring of 2012.

Accomplishment 1: introduction of three important pieces of legislation to improve conditions for home builders and remodelers

The Home Building Lending Improvement Act of 2012 (S.2078)

Because the difficulty of accessing and maintaining construction credit continues to be a major obstacle for home builders and the housing recovery in general, NAHB has been aggressively pushing for solutions to this crisis on both the regulatory and legislative fronts. NAHB worked with Senator Robert Mendendez (D-N.J.) to ensure introduction of this bill in early February. The legislation seeks to restore the flow of credit for new housing production in order to create jobs, meet rising housing demand and bolster the economic expansion. It has brought significant attention to the AD&C credit crunch in Congress, and has helped spur questions about credit availability in various congressional hearings, thereby exerting pressure on banks and regulators to help resolve the situation. Its introduction follows up on similar legislation that NAHB helped get introduced in the House last year -- H.R. 1755, the Home Construction Lending Regulatory Improvement Act -- which currently has 95 House cosponsors. For details on S. 2078 or H.R. 1755, contact Scott Meyer (800-368-5242 x8144).

The Lead Exposure Reduction Amendments Act of 2012 (S. 2148)

While NAHB supports measures to ensure that young children and pregnant women are protected from exposure to lead paint, the time and costs associated with the EPA’s flawed Lead: Renovation, Repair and Painting rule (LRRP) effectively incentivize home owners to 1) hire an uncertified remodeler who doesn’t follow the rules 2) put off needed repairs or 3) do the work themselves – each of which subverts the intention of the rule in the first place. NAHB has led the charge in Congress and with regulators to try to make this rule more workable and effective, and in early March we made a major step forward when Sen. James Inhofe (R-Okla.) and five co-sponsors introduced legislation to improve the lead paint rule. This bill gives remodelers the opportunity to lobby their political representatives in Congress, who in turn can put pressure on the EPA to make specific necessary amendments to the rule. The bill itself would:

• Reinstate the opt-out provision for homes that are not occupied by children or pregnant women, thus focusing the rule on the protection of these specific groups.
• Suspend the LRRP if EPA does not approve a commercially available test kit that meets the regulation’s requirements.
• Allow remodelers the “right to cure” paperwork errors found during an inspection.
• Eliminate the “hands on” recertification training requirements.
• Prohibit EPA from expanding the LRRP to commercial and public buildings until at least one year after the agency conducts a study demonstrating the need for such action.
• Clarify the definition of “abatement” to exclude remodeling/renovation activities.
• Provide an exemption to the regulation for emergency renovations.

The introduction of this legislation is a significant step forward in raising the visibility of issues related to the current regulation, and was urgently advocated by NAHB. Looking ahead, we will rally our members to help build support for this measure in the U.S. Senate and continue our efforts to have companion legislation introduced in the House. For more information, please contact Courtney Flezzani (800-368-5242 x8459).

The Preserve Waters of the United States Act (S. 2245) and companion legislation in the House (H.R. 4965)
The EPA and Army Corps of engineers are getting ready to issue a guidance document that will evade the more transparent rule-making process to eliminate all reasonable limits on the scope of Clean Water Act jurisdiction. As a result, the federal government’s reach would extend to essentially all waters, including storm sewers, retention basins and seasonal streams. This blatant regulatory overreach would lead to many more land development, road construction and residential projects requiring federal permits and would exacerbate permitting delays. In turn, it would increase construction costs, cause job losses, drive down housing affordability and hamper economic growth. NAHB is leading the charge against this possibility by building support for legislation that we successfully pushed to be introduced in both the House and Senate. This legislation has especially strong backing in the House after being introduced on April 27 by Transportation Chairman John Mica (R-Fla.) along with ranking member Nick Rahall (D-W.Va.), Water Resources Subcommittee Chairman Bob Gibbs (R-Ohio), Agriculture Chairman Frank Lucas (R-Okla.) and ranking member Collin Peterson (D-Minn.). Contact: Courtney Flezzani (800-368-5242 x8459).

Supreme Court Ruling a Victory for Property Rights

A unanimous decision handed down by the U.S. Supreme Court this week is a huge victory for property rights advocates and very good news for NAHB's members.

In Sackett v. U.S. Environmental Protection Agency, the high court agreed with NAHB arguments (submitted in the form of two amicus briefs) that a property owner who receives a Compliance Order from the EPA or Army Corps of Engineers should be able to obtain judicial review in court.

The case involved property owners Michael and Chantell Sackett, who owned an undeveloped half-acre lot in a residential area near Priest Lake, Idaho. When the Sacketts began the process of building their dream home by preparing the lot for development, the EPA accused them of placing fill material into a jurisdictional wetland and issued a Compliance Order requiring them to immediately remove that material and restore the wetland -- or face thousands of dollars in fines for every day they did not do so.

When the EPA denied the Sacketts' request for an administrative hearing to challenge the order, they filed an action in district court seeking relief, but both the district court and the Court of Appeals for the Ninth Circuit held that the Clean Water Act (CWA) precluded pre-enforcement judicial review of administrative compliance orders.

On March 21, every member of the U.S. Supreme Court was in agreement in deciding that "there is no reason to think that the Clean Water Act was uniquely designed to enable the strong-arming of regulated parties into 'voluntary compliance' without judicial review." Moreover, two of the Justices (Ginsburg and Alito) wrote concurring opinions in which they explained that because the EPA had determined its jurisdiction over the Sacketts' property, judicial review was appropriate.

This decision is extremely important to our industry because home builders (like the Sacketts) are often subject to Administrative Compliance Orders with no means to challenge them, unless the government decides to file an enforcement action or the builder applies for and is denied a CWA Section 404 permit.

As of now, this is no longer the case. Instead, any builder who receives a CWA Compliance Order can now challenge that order in federal court. In addition, whereas builders have previously had no place to turn when the EPA or Army Corps determines that a wetland or water body on their property falls under the agency's jurisdiction, Justices Ginsburg and Alito have now indicated that they may in fact seek relief in court.

In an official NAHB reaction statement, Chairman Barry Rutenberg summed it up in saying, "This ruling provides a check on EPA's capricious expansion of its regulatory authority. Finally, home owners and home builders have a way of challenging EPA compliance orders before they face big fines."

HBASC announces 2012 Housing Advocacy Agenda

Your Home Builders Association of South Carolina announced the Housing Advocacy Agenda for 2012 following its annual Legislative Conference in Columbia on November 9.

1. Multi-lot Discount: Allow for a grace period for annual re-certification to reduce risk of losing property tax discount, and increase from 5 to 8 the years the discount is available due to the economic downturn. Bill up in Senate. 
2. Reverse Anti-Economic Development Case: SC Supreme Court decision said any discharge into the environment must be permitted, and anyone can have standing in the case. Ominous decision for land development & construction – permit nightmare! Bill to be introduced. 
3. IECC 2009 Adoption: The PURC Advisory Committee is scheduled to move forward with recommendations to the General Assembly to adopt the IEEC 2009 energy code. Bill to be introduced. 
4. Immigration Reform: There is new political pressure in our state due to concerns over the Hispanic growing population in the US. We would anticipate that immigration reform legislation may have to be introduced if the Court rules against the recently passed state law - similar to the Arizona law. Bill challenged in court! 
5. Impact Fees: HBA has to defend the state impact fee law every year every year, as some areas of the state continue to push for school impact fees, and more liberal interpretation of our state’s impact fee law. Recent court action helped! 
6. Comprehensive Tax Reform: General Assembly will possibly pursue a comprehensive review of taxes in 2012 based on some of the TRAC Committee recommendations with additions, deletions, and changes to the SC tax code. Tax reform bill likely be introduced. 
7. Private Transfer Fees: A bill was passed last session to ban the use of private transfer fees in SC. Bill will be up for passage in Senate in 2012. 
8. Labor Unions Expand Their Influence: Business interests are concerned that labor unions will attempt to undermine our right-to-work state by state and federal legislation.

Watch for Calls to Action from your Home Builders Association in support of these housing-related public policy issues.

HBASC seeks to reverse S.C. Supreme Court decision that will kill economic development

Earlier this year the SC Supreme Court issue a ruling that sent shock waves through the development community.  The ruling, in the SC League of Women Voters vs. Smith Land Company, nullified case law practice for many years by:

1. Zero Tolerance: the court ruled that any discharge into the environment must be permitted – this case involved filing part of .19 acre on a .33 acre lot that was not required by state or federal law to have a permit.

2. Encourages Lawsuits: the court also ruled that anyone could have “standing” in a case, and they did not have to be directly impacted by the issue. In the past the individual filing the lawsuit had to be directly impacted to file the case. This now opens the door for a flood of litigation from every activist group in state.

If this ruling is allowed to stand, economic development in this state could come to a grinding halt as anti-economic development groups sue every business that wants to come to the state, and companies will locate in less litigious states.

The Home Builders Association of South Carolina will participate in legislation in 2012 intended to reverse this ruling.

If you are interested in the pro-housing agenda of your Home Builders Association, attend the Legislative Conference in Columbia on November 9.  Click here to register for the Home Builders Association Legislative Conference.

NAHB Sues Army Corps of Engineers Over Wetlands Classification

NAHB has joined in a lawsuit with the American Farm Bureau Federation and the United States Sugar Corporation that challenges a U.S. Army Corps of Engineers decision to begin treating certain farm fields as wetlands, affecting both the value of the property and the process for developing or building on it.

American Farm Bureau Federation et al. v. U.S. Army Corps of Engineers resembles a suit brought simultaneously by New Hope Power Company and Okeelanta Corporation. Both suits have been before Judge K. Michael Moore of the U.S. District Court of the Southern District of Florida and challenge the Corps’ recent attempts to improperly change a 17-year-old regulation that provides that land used for agriculture since at least 1985 can no longer be treated as wetlands.

In 1993, the Corps adopted a rule establishing that agricultural lands converted from wetlands prior to 1985 — or “prior converted croplands” — would be excluded from regulation under the Clean Water Act. Therefore, if a farmer decides to utilize land that has been excluded from regulation for some other use or to sell it to a residential or commercial builder, there is no need to get a new jurisdictional determination or go through the Clean Water Act permitting process.

However, in a 2009 memorandum, Corps Director of Civil Works Steven Stockton approved a new standard to regulate these agricultural lands when there is a change in their use. The regulatory uncertainty caused by this action is what prompted the lawsuits from NAHB and other industry groups.

In a recent positive development, this October, Judge Moore ruled in the New Hope Power case that the Corps could not change its policy without going through the usual federal process of giving public notice and offering a set time for comments from stakeholders or other interested parties. However, as yet there is no indication whether the government will appeal this ruling to the U.S. Court of Appeals for the 11th Circuit.