Washington Update - 05/22/2009 (Plain Text Version)

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House Energy Bill Would Create National Building Code

By a 33 to 25 vote, the House Energy and Commerce Committee last week approved legislation that would limit greenhouse-gas emissions and create a national building code that completely supplants the national model code development process.

Prior to consideration of H.R. 2454, the American Clean Energy Security Act, NAHB sent a letter to members of the committee expressing the association’s concerns over the federal preemption of states’ rights to determine building codes. “NAHB is concerned that H.R. 2454 violates state and local rights to establish building codes and efficiency targets within their jurisdiction,” the letter said. “We regret that the committee did not consider NAHB’s testimony presented on April 24, 2009, and that we must oppose this legislation. H.R. 2454 is unnecessarily prescriptive, falls short of creating an effective energy policy that is constitutional and endangers housing affordability.”

The House committee approved new measures to establish a national energy code administered by the Department of Energy (DOE) that comes complete with enforcement penalties and civil action against home owners and builders occupying non-compliant homes and buildings. NAHB, along with a handful of other real estate groups, supported an amendment offered by Rep. Steve Scalise (R-La.) to strike the egregious language, but it failed on a party-line vote of 31 to 20.

The new building code provisions in HR. 2454 provide for the following:

New national energy efficiency targets taking effect on the date of the bill’s enactment that require states and localities to prove code compliance at 30% above the 2006 International Energy Conservation Code (IECC) level. By Jan. 1, 2014, the new target would be 50% above the 2006 IECC. Between years 2017 and 2029, the code target increases 5% every three years until it reaches 75% above the 2006 IECC by 2029.
The Department of Energy secretary can set interim code targets, as long as they are higher and based on the life-cycle of the home, not on economics or the payback to consumers.
Within one year after the date of enactment, a national building code will be established. States are required to adopt the national code within one year from that date, they can adopt a state code that is equally stringent or they can adopt California's Title 24 building code within two years.
If after one year the DOE doesn't have a certification from a state that its code meets the targets, then the national energy code automatically becomes the applicable building code for that state or locality.
Federal violations will be levied against builders or owners of a building if they permit occupancy of a home or building that is out of compliance with the national energy targets, even if the state refuses to adopt the new code, because the national building code will be in effect regardless.
If a state or locality is out of compliance with the codes, it will not receive emission allowances under any cap and trade plan. Also, states will lose federal funding from other parts of the bill on a sliding scale for each year of non-compliance.
If a state or locality fails to enforce either a compliant code or the national building code, then the DOE will enforce codes federally through "inspections" and enforcement fees.
The DOE will also assess a civil penalty for violators of this section. Each day of unlawful occupancy is considered a separate violation. If the home is constructed out of compliance with the provisions of this bill and it has been conveyed by a knowing builder or a knowing seller to an unknowing purchaser, then the builder or seller is the violator. The U.S. District Court has jurisdiction for all legal issues.

To read the legislation, click here and enter H. 2454 in the box at the center of the page.
It is unclear when the bill will go to the House floor. NAHB will continue to monitor the situation closely. For more information, e-mail Elizabeth Odina at NAHB, or call her at 1-800-368-5242 x8570.

Obama Signs Bill to Help Struggling Families Refinace Mortgages

President Barack Obama this week signed into law legislation that will help struggling borrowers refinance into 30-year, fixed-rate mortgages insured by the Federal Housing Administration. S. 896, the Helping Families Save Their Homes Act of 2009, received strong bipartisan support in both chambers of Congress. The measure cleared the Senate earlier this month by a vote of 91 to 5 and passed the House by a comfortable 338 to 52 margin on May 18.

The newly enacted law will revamp the Hope for Homeowners program to permit the reduction of excessive fee levels, provide greater incentives for mortgage servicers to engage in modifications under the program and reduce administrative burdens to loan underwriters. The aim is to make it easier for strapped home owners to refinance into more affordable loans.

Omitted from the final bill was a controversial “cramdown” provision to allow bankruptcy judges to modify the terms of mortgages on a primary residence.

The newly enacted law will increase the Federal Deposit Insurance Corporation's line of credit from the U.S. Treasury to $500 billion through 2010 and $100 billion thereafter. In addition, the higher FDIC deposit insurance coverage limit of $250,000 per account was extended through Dec. 31, 2013 after which it will revert back to $100,000.

The legislation contains a provision of concern to NAHB that would require investors who are buying foreclosed properties to allow Section 8 renters to remain in the property for up to one year. NAHB had sent a letter to Congress questioning the fairness of this requirement.

For more information on the legislation, click here and type S. 896 in the box in the center of the page. For further information, e-mail Scott Meyer at NAHB, or call him at x8144. [return to top]

NAHB Supports Government Efforts on Chinese Drywall

NAHB told Congress on May 21 that the nation’s home builders are determined to play a constructive role in resolving the Chinese-made drywall issue. The drywall in question is believed to have been imported into the U.S. between 2005 and 2008 and is alleged to contain high levels of sulfur and/or other contaminants that are emitting foul odors in homes that have used the material.

Testifying on behalf of NAHB before the Senate Commerce Subcommittee on Consumer Protection, Product Safety and Insurance, New Orleans area builder Randy Noel said that NAHB members are continuing to work on a daily basis to respond to home owners who are reporting problems with Chinese drywall. “As builders, we live or die by our reputation. Home building is a very competitive business and a builder who does not pay attention to quality, value and customer service won’t be in business very long,” said Noel.

To resolve the situation, Noel said that the Consumer Product Safety Commission (CPSC) and other federal agencies must inform home owners, builders, remodelers and contractors on identifying the source of the problem so that it will not be repeated and also provide a reliable test for drywall problems and an appropriate method of remediation.

“We believe that the best possible scenario would be for a national consensus to be developed on these issues based on the work currently being done by the federal government,” said Noel. “NAHB supports the CPSC’s current efforts to identify the actual scientific cause of the problem and develop an appropriate testing protocol to identify problematic drywall,” he said. “Once the cause is identified and a testing protocol is established, it will greatly help builders identify potential home owners who may have problems.”

Congress should also explore ways to identify possible sources of funding to help offset the costs of remediation, he said, particularly if it is determined that the ultimate responsibility lies with manufacturing entities located in China.

Introduced by Sens. Bill Nelson (D-Fla.) and Mary Landrieu (D-La.), S. 739, the Drywall Safety Act of 2009, would mandate that the CPSC, National Institute of Standards and Technology and the Environmental Protection Agency conduct a study of Chinese drywall to determine its effects on metal wiring, HVAC units and other metal fixtures. The study would also assess the potential health impacts from exposure to the product.

Of concern to NAHB, the bill would seek to ban the sale of any drywall product in the U.S. that contains more than 5% organic compounds by weight. Noel noted that in many cases the organic compounds in the paper backing of the drywall alone could exceed the 5% limit, regardless of the content of the drywall’s core. “We urge the subcommittee and the bill sponsors to investigate other ways in which to target the drywall that is of concern, without potentially banning all drywall produced in the U.S.,” he said.

To read the legislation, click here and enter S. 739 in the box at the center of the page.
For more information, contact Jenna Hamilton at x8407. [return to top]