Legislative Pulse

Charleston Apartment Association
Legislative Pulse

The CAA Legislative Pulse is a monthly newsletter designed to keep Charleston  Apartment Association members abreast of topical political news impacting  our  industry.  The CAA Legislative Pulse will be released to members  the fourth Tuesday  of each month.

NAA/NMHC JOINT LEGISLATIVE PROGRAM NEWS

Congress Passes Long-Term National Flood Insurance Program (NFIP) Extension

Before leaving for the July 4 recess, both the House and Senate agreed to a transportation bill (H.R. 4348) conference report that, among other things, reauthorizes the NFIP for five years.  The NFIP has operated on a series of short-term extensions since 2008.  As the primary source of insurance coverage for flood damage, more than five million policyholders, including multifamily property owners and managers, rely on the NFIP for coverage.

The legislation includes reforms to put the program, which faces program debt of $18 billion, back on a path to financial solvency. Those reforms include phasing in new actuarial rates for certain properties, such as second and vacation homes, commercial properties, homes sold to new owners and repetitive loss properties, over the next five years. It also raises the caps on annual premium increases from 10 percent to 20 percent and imposes minimum deductibles for flood claims. The legislation also raises limits available to multifamily properties to $500,000, placing them on par with commercial properties, and creates a technical advisory council to assist with map modernization.  President Obama is expected to sign this legislation into law immediately.

NAA/NMHC Support Bill to Prevent Excessive Litigation Over Alleged Americans with Disabilities Act (ADA) Violations

The U.S. House of Representatives' Committee of the Judiciary's Subcommittee on the Constitution held a hearing on June 27 to discuss H.R. 3356, the ADA Compliance for Customer Entry to Stores and Services (ACCESS) Act. The bill aims to address the numerous lawsuits filed by professional litigants whose primary goal is to extract settlement money from business owners found in noncompliance with the ADA. H.R. 3356 intends to reduce the number of abusive lawsuits and promote compliance with the ADA by providing business owners and operators an opportunity to fix alleged violations before a civil suit can be filed. While the ADA applies only to public accommodations, apartment owners can be the target of these "drive-by lawsuits" for alleged violations in areas open to the public, such as building entrances, parking lots or leasing offices.

NAA/NMHC submitted a letter to the subcommittee supporting the bill, which would prohibit civil action for failure to remove a structural barrier to entry into an area of public accommodation unless: (1) the aggrieved person has notified the owner/operator with a written notice specific enough to identify the barrier; (2) the owner/operator neglected to respond to the written notice within 60 days; or (3) the owner/operator failed to remove barriers to entry within 120 days.  A similar bill (H.R. 881) was proposed by Rep. Duncan Hunter (R-Calif.). It is uncertain at this time if these bills will advance during the 112th Congress. NAA/NMHC continue to monitor these bills and other related legislative efforts.

New Petition Asks Supreme Court to Weigh In on Disparate Impact Under Fair Housing Act

On June 11, the Township of Mount Holly, N.J., filed a petition for certiorari with the Supreme Court asking the court to review an earlier decision to determine whether disparate impact claims are cognizable under the Fair Housing Act and, if so, under which test or standard. Disparate impact claims maintain that even if an action is not intended to discriminate, it can still be considered discriminatory if its effect has an "adverse impact" on members of a protected class.

In Mount Holly v. Mount Holly Gardens Citizens in Action, Inc., the township of Mount Holly created a plan for redeveloping a blighted neighborhood occupied mostly by low- and moderate-income minority households. Residents filed suit against the township, arguing that the redevelopment lacked affordable housing and, therefore, had a disparate impact on minorities and violated the Fair Housing Act.

This case closely mirrors a disparate impact case that the Supreme Court was scheduled to hear earlier this year (Magner v. Gallagher). However, in that earlier case, the city of St. Paul, Minn., withdrew its petition, stating its concern for the potential unintended consequences of a decision in its favor.

On a similar note, last November, HUD published a proposed rule to establish uniform standards for determining when an act can be considered discriminatory based on a disproportionate negative impact on a protected class under the Fair Housing Act. NAA/NMHC submitted comments urging HUD to delay action on the proposed rule until after the Supreme Court ruled in Magner v. Gallagher. It is unclear when HUD will finalize this rule in light of the recent court activity.

NAA/NMHC will support the township of Mount Holly by filing an amicus brief with the court; industry practices, such as resident screening, recently have been the subject of legal challenges alleging disparate impact on protected classes.

House Transportation Bill Affects Project-Based Rental Assistance Program Funding, Includes Other Housing-Related Provisions

On June 29, the House approved the FY 2013 Transportation, Housing and Urban Development and Related Agencies (THUD) appropriations bill (H.R. 5972). The legislation calls for partial funding of the Section 8 Project-Based Rental Assistance (PBRA) program; the $8.7 billion allocated to the program is significantly below the level necessary to fully fund the contracts currently in place. NAA/NMHC signed an industry coalition letter on June 18 to oppose the partial funding. NAA/NMHC continue to support the funding levels in the Senate bill (S. 2322) approved in April, which fully funds the PBRA program.

In related news, Section 8 tenant-based vouchers were funded at slightly more than the FY 2012 enacted level, but the allocation was lower than the amount approved by the Senate.

The House transportation bill also drew an amendment offered by Rep. Scott Garrett (R-N.J.) that would eliminate funding for the Department of Housing and Urban Development (HUD) to establish disparate impact standards under the Fair Housing Act. The NAA/NMHC-supported amendment comes at a time when disparate impact is back in the news, as the Supreme Court considers whether to review an earlier ruling on the issue.

While both the House and Senate have approved the THUD appropriation, the issues contained in these proposals will either get worked out in conference or, more likely, will be combined with other funding measures later this year.

NAA NEWS

Bush Tax Cuts and Tax Extenders Are the Apartment Industry's Hot-Button Issues When Congress Is in Recess Next Month

Congress needs to know that you support the renewal of the Bush-era tax cuts and other current law tax policies that impact the industry. Your opportunity to tell members of Congress is when they are in recess from August 4 to September 9.

While action on tax reform is unlikely this year, Congress is looking at major tax provisions affecting the industry that either will expire at the end of 2012 or that sunset at the end of 2011. In addition to the Bush tax cuts affecting rates on ordinary and capital income, the estate tax is set to sunset this year. Other key issues include the tax extenders that provide the industry with numerous incentives (such as to construct energy efficient property) which expired in 2011. The apartment industry must start advocating now to ensure that the tax code includes these tax breaks in 2013.

Please don't delay in setting up your appointments. All the resources you need for your meetings are available in the Congressional Recess Toolkit available here.

You can also take advantage of the House's recess this month again from July 27 - 30.

Please let Carole Roper know if you plan to schedule meetings. She can be reached at Carole@naahq.org or 703/797-0616.

Your engagement with your members of Congress is critical to the industry's advocacy efforts and the future of your business. Please do all you can to stand up for our industry!

*Content source:  National Apartment Association.