FHA Officials Discuss Needed Changes to Title I Program

In March, MHI and MHARR staff met with FHA officials to discuss legislative changes to FHA’s Title I program. FHA appears to be taking Title I reform seriously, with MHI learning during the meeting that FHA has awarded a contract to Integrated Engineering Services (IES) of northern Virginia to perform an operational analysis of the issues and to make recommendations. This study is intended to provide more background data than the one completed for FHA by Frontline Systems in June 2003. MHI is in the process of reaching out to IES to offer our staff and our members as resources to them.

Rep. Tom Feeney (R-Fla.) agreed to co-sponsor the manufactured housing industry’s Title I reform bill in the House, together with Rep. Barney Frank (D-Mass.), the top Democrat sitting on the Financial Services Committee. Rep. Feeney is the former speaker of the Florida House of Representatives. Special thanks to Ken Cashin for his help in working with Rep. Feeney’s office on this matter. If you are an NCC member and have any questions, contact Brian Cooney at 703-558-0660 or brian@mfghome.org.

Congressional Interest in Cleanup of Former Methamphetamine Labs

National Communities Council (NCC) members should be aware that residential cleanup of former methamphetamine labs is receiving much Congressional attention this year, with the introduction of several bills. One bill, the Methamphetamine Remediation Research Act of 2005 (H.R. 798), was approved in March by the House Science Committee. H.R. 798 would establish programs at the Environmental Protection Agency (EPA) and at the National Institute of Standards and Technology (NIST) to examine the health effects of methamphetamine production chemicals and to establish voluntary guidelines to help states establish remediation standards and programs to clean up the environmental consequences of the labs. Members of Congress are most concerned about the effect on first responders, on future inhabitants of a former lab site (particularly children) and on the environment.

Subcommittee Chairman Vernon Ehlers (R-Mich.) said of the former lab sites, “they actually become not quite superfund sites, but close to it.” H.R. 798 would cost $18 million, with a $4.5 million authorization for 2006 thru 2009. The other methamphetamine lab bills that have been introduced in this Congress include research portions that are similar to H.R. 798, as well as grants to states to combat methamphetamine abuse, with much of the funding directed toward the police and to education and prevention programs. None of the bills distinguish who is responsible for the cleanup…the homeowner, community owner, land-lease community owner, or the state and local governments. NCC members with questions may contact Sherri Cabrera at 703-558-0659 or sherri@mfghome.org.

NCC Provides Comments on EPA’s “Promoting Water Conservation in Multi-Family Housing”

The NCC recently responded to EPA’s request for comments on “Promoting Water Conservation in Multi-Family Housing” that was published in the Federal Register on Jan. 11, 2005. The comments are a re-submittal of comments to EPA’s proposed “Revised Policy on the Applicability of the Safe Drinking Water Act to Submetered Properties” that was published in the Federal Register on Aug. 28, 2003. NCC stated in its cover letter to EPA that, “Since the MHI-NCC comments, as well as those of the majority of responders to the Aug. 28, 2003 notice, directly addressed promoting water conservation but were not adopted by EPA, the MHI-NCC is resubmitting its original Oct. 27, 2003 comments as suggestions on how EPA can promote water conservation. MHI-NCC applauds EPA for this effort to improve water conservation and our comments follow.” NCC members with questions may contact Mike O’Brien at 703-558-0652 or mobrien@mfghome.org or Sherri Cabrera at 703-558-0659 or sherri@mfghome.org.

Tow Truck Legislation Could Impact Communities

The House recently passed the “Transportation Equity Act: A Legacy for Users,” legislation which includes language that would permit limited state regulation of tow truck operators. Acting in response to so-called "predatory towing", the language in H.R. 3 permits states to require the following: first, towing companies have prior written authorization from the property owner or lessee (or an employee or agent thereof), to tow a vehicle from private property without the consent of the owner or operator of vehicle or, second, such owner or lessee (or an employee or agent thereof) be present at the time the vehicle is towed from the property, or both. The Senate is preparing for final passage of the bill during the week of May 9.

Clearly such requirements would present numerous problems for community owners, and MHI is working with the National Multi Housing Council, the Building Owners and Managers Association, the International Council of Shopping Centers and the National Association of Realtors, to modify the language during conference of the final legislation. NCC members with questions may contact Mike O’Brien at 703-558-0652 or mobrien@mfghome.org or Sherri Cabrera at 703-558-0659 or sherri@mfghome.org.

Legislation to Discourage Predatory Lending

In March, Reps. Bob Ney (R-Ohio) and Paul Kanjorski (D-Penn.) introduced H.R. 1295, the “Responsible Lending Act,” which is aimed at discouraging predatory lending practices by imposing certain requirements and disclosures for “higher cost” loans as defined in the legislation. The current uneven and burdensome patchwork of state and local laws that seek to prevent mortgage lending abuses would be replaced and preempted by the uniform national lending standards established by the bill.

MHI has formed a task force of lenders and other members who have expertise in this area to analyze this legislation to determine its impact on the industry and how MHI should proceed. In addition, MHI has joined a coalition of national lending organizations that will work together on these issues during the legislative process.

The legislation has a long road ahead of it. In addition to lenders and consumer groups such as the AARP, several Members of Congress have a keen interest in this legislation. Many of these members are former state legislators who may be hesitant to enact federal requirements that usurp existing state laws. If you are an NCC member and have any questions, contact Brian Cooney at 703-558-0660 or brian@mfghome.org.

EPA to Propose Utilities Notify Occupants of Results of Any Water Testing

Following a yearlong review of the 1991 Lead and Copper Rule (LCR), the Environmental Protection Agency (EPA) found that there is not a national problem of the same magnitude as the lead in drinking water problems that have been plaguing the District of Columbia. Still, EPA identified ways to improve on the rule and guidance materials, and on ensuring effective implementation by states and localities.

Because of the findings, the EPA issued guidance last November clarifying requirements for collecting samples and calculating compliance. Now, EPA has announced its plans to propose regulatory changes to the LCR by early 2006. EPA will propose changes in monitoring water samples; in processes wherein utilities work with states prior to changing treatment; in lead service line management and lead in schools.

Of most interest NCC members, EPA will also propose changes in customer awareness. EPA will propose that water utilities notify occupants of the results of any testing that occurs within a home or facility, and seek changes to allow states and utilities to provide customers with utility-specific advice on tap flushing to reduce lead levels.

According to the EPA, lead is picked up as water passes through pipes, household plumbing fittings and fixtures that contain lead. Homes that were built before 1986 are more likely to have lead, but even new homes are at risk. Even “lead-free” plumbing may contain up to 8 percent lead. NCC members with questions may contact Mike O’Brien at 703-558-0652 or mobrien@mfghome.org or Sherri Cabrera at 703-558-0659 or sherri@mfghome.org.

Legislation Introduced to Add a REIT Index Fund as Federal Employee Thrift Savings Plan (TSP) Option

Reps. Jon Porter (R-Nev.) and Chris Van Hollen (D-Md.) introduced legislation that would add a real estate investment trust (REIT) index fund as an option to the federal employee thrift savings plan (TSP), which has 3.4 million participants. Similar to a 401(k) plan, the TSP offers federal workers and retirees many of the same savings and tax benefits associated with corporate retirement savings programs. The current menu of funds offered by the TSP does not include a real estate fund. Because investment returns from real estate are appreciably different than returns from other investments, the addition of a REIT index fund would provide significant diversification advantages to federal employees/retirees.

In a meeting with the National Association of Real Estate Investment Trusts, which is promoting this legislation, it was made clear that manufactured housing REITS would be included in the REIT index fund. This inclusion could help promote the liquidity and attractiveness of manufactured housing community REITS as investment options. MHI has joined a coalition of real estate organizations supporting this legislation. If you are an NCC member and have any questions, contact Brian Cooney at 703-558-0660 or brian@mfghome.org.

Energy Tax Legislation

The House of Representatives passed H.R. 6, the Energy Policy Act of 2005, April 21 by a vote of 249-183. The House bill offers little for conservation and does not include the provisions of importance to the manufactured housing industry. The bill does not contain the manufactured housing Energy Star tax credit or the water submetering accelerated tax depreciation language. The only manufactured housing language that is included in the House bill is the energy efficiency improvements to existing homes provision. The $391 million provision offers a 20% tax credit (up to $2,000) to consumers for efficiency upgrades that are made to the house envelope (installation, windows) of existing manufactured homes.

During the mark of the tax portion of the Energy bill, Ways and Means Committee Chairman William Thomas (R-Calif.) told his colleagues that he did not take out any provisions that haven’t been in the past Senate bills, and his strategy for now is to gain better leverage with the Senate by focusing the House version on provisions that he does not expect to be in the Senate version. The Chairman stated several times that we should consider the conference report language that passed in 2003 (which includes the manufactured housing Energy Star language but not the water submetering accelerated depreciation language) as the House energy statement, and that, “At this stage what we have in front of us is a legislative strategy. The Chairman’s hope is that what we will have coming out of conference is an energy strategy.” Specifically the final conference product will be different from what passed his committee, and it will be more diversified.

Senate Energy & Natural Resources Chairman Pete V. Domenici (R-N.M.) plans to mark-up an energy bill as early as May and to take the bill to the floor for debate by early summer. President Bush urged Congress to deliver an energy bill to his desk before the August recess.

NCC members need to continue to make themselves heard. NCC members should ask their Senators to include the water submetering depreciation language that was in last years’ Senate Energy bill in this year’s bill. Be sure to explain how the water depreciation language will affect your communities, and ask for the Senators’ strong support for the provision. Members of the U.S. Senate can be reached via the Capitol switchboard at 202-224-3121. The manufactured housing energy language is fully supported by MHI, the Manufactured Housing Research Alliance (MHRA) and by the Manufactured Housing Association for Regulatory Reform (MHARR). Please contact MHI’s Sherri Cabrera at 703-558-0659 or sherri@mfghome.org if you have questions.

Fire Sprinkler Installation Incentive Act

Legislation entitled the “Fire Sprinkler Incentive Act of 2005” has been introduced in both bodies of Congress. The bills, H.R. 1131, and S. 512, would amend the Internal Revenue Code to classify automatic fire sprinkler systems as five-year depreciable property. The bill language specifically states that “automated fire sprinkler systems” refers to sprinkler systems classified under the National Fire Protection Association “installation of sprinkler systems in one and two family dwellings and manufactured homes.”

Therefore, the legislation would change the depreciation allowances for the cost of installing fire sprinkler systems in existing buildings. This reduces the recovery period for depreciation from 27.5 years to five years, which increases the yearly depreciation expense and decreases taxable income for the installer of the system.

The House bill was introduced by Curt Weldon (R-Pa.) and has 56 cosponsors, and Rick Santorum (R-Pa.) introduced S. 512 with 5 cosponsors. Both bills were referred to the tax committees and no action has occurred to date. MHI members with questions may contact Sherri Cabrera at 703-558-0659 or sherri@mfghome.org.