49124_newsletter:49124_newsletter
9/27/11
4:39 PM
Page 14
Government Affairs Briefing Russell Riggs RLI Government Affairs Liaison, National Association of REALTORS®
The case is important because current case law limits the circumstances under which a landowner or other entity can obtain judicial review of the assertion of CWA jurisdiction by the Army Corps of Engineers or the EPA. These assertions have been held to be unreviewable because the courts have concluded that they are not final agency action or that the CWA precludes review.
RLI sUBMITs COMMENTs ON pROpOsED WATERs jURIsDICTION GUIDANCE On July 31, 2011, the REALTORS® Land Institute submitted comments on the EPA's and the Army Corps of Engineers’ draft guidance to clarify Clean Water Act responsibilities and jurisdiction. RLI’s comments, as approved by the Institute’s Government Affairs Committee and the Board of Directors, requested the withdrawal of this proposed guidance, for the following reasons:
sUpREME COURT TO hEAR pROpERTY RIGhTs CAsE; NAR WILL sUBMIT AMICUs BRIEf The U.S. Supreme Court has agreed to review the decision of the Ninth Circuit Court of Appeals in Sackett v. U.S. EPA. The Sacketts own a lot in Priest Lake, Idaho, where they started to build a home. The EPA determined that the site contained jurisdictional wetlands under the Clean Water Act (CWA), and that the Sacketts had failed to obtain a permit and were in violation of the law. EPA issued an Administrative Compliance Order (ACO) preventing further construction on the site, requiring the Sacketts to restore the wetlands and threatening the Sacketts with fines. The Sacketts did not believe that the wetlands on their site were under the jurisdiction of the CWA. The Sacketts sued the EPA, but were dismissed in District Court, and also dismissed in the Ninth Circuit Court. The Ninth Circuit accepted the government’s argument that the Sacketts could have applied for a permit, and if denied, could have challenged EPA’s jurisdiction under the CWA and permit denial. The Court will address two questions: (1) whether the Sacketts may seek pre-enforcement judicial review of the EPA order under the Administrative Procedures Act (APA); and (2) if not, whether the inability to obtain preenforcement judicial review of the ACO violates their rights under the Due Process Clause. NAR, in coalition with several other regulated associations, is developing an Amicus Brief for this case in support of the Sacketts. The brief is due on October 3, 2011. The brief will focus on three basic points. First, jurisdiction under the CWA is a fundamental and controversial concept to the law, and that the agencies have used their administrative powers to adopt broader and broader definitions of “waters of the U.S.” even though the statute has remained unchanged. Second, the brief will contend that assertion of jurisdiction under the CWA is final agency action under the APA and case law, because the decision marks the consummation of the agencies’ decision-making, and the decision has legal and practical consequences. Third, the brief would develop practical examples of the problems that arise in prohibiting judicial review of agencies asserting jurisdiction. The brief would show that the only way for a landowner to challenge the agencies’ overbroad assertions of jurisdiction is by running the gauntlet of the costly and time-consuming permitting process he believes does not apply to his property.
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1. The draft guidance document broadens the traditional definition of “waters of the U.S.,”as defined in the Clean Water Act, without Congressional authority. 2. A broader definition of “waters of the U.S.” will subject additional water bodies to time-consuming permits and costly regulation. 3. A broader definition of water infringes on property rights by decreasing the amount of property an owner can use without just compensation. RLI believes that EPA and the Army Corps of Engineers should not move forward with the guidance or any subsequent rulemaking to attempt to define “waters of the U.S.” Only Congress can fundamentally change the definition of the kinds of waters covered under the Clean Water Act.
RLI sUppORTs ENhANCED CREDIT UNION LENDING, INCREAsED COMMERCIAL MORTGAGE LIqUIDITY On Thursday, June 16, the U.S. Senate Banking, Housing, and Urban Affairs Committee held a hearing on credit union member business lending. RLI signed onto a letter in support of S. 509, the Small Business Lending Enhancement Act of 2011 (Udall, D-CO), which would raise the cap on credit union member business lending. The letter focused on the beneficial effect this source of financing would have on commercial real estate and small businesses. The current cap on credit union member business lending is 12.5 percent of a credit union's assets, but RLI seeks to raise that limit for well-capitalized credit unions. This would allow credit unions to fill in the commercial real estate financing gap and help get capital to the struggling small businesses who occupy commercial buildings. In a letter to members of the U.S. House Financial Services Committee, RLI reaffirmed its support of H.R. 940, the United States Covered Bond Act of 2011, introduced by Reps. Garrett (R-NJ) and Maloney (D-NY). This bill would provide for the development of a covered bond market in the United States. Similar to mortgage-based securities (MBS), covered bonds are securities backed by loans. In the case of covered bonds, however, lenders must hold the loans on their balance sheets and, therefore, have an incentive to make sure they are well underwritten. Covered bonds have long been used in other countries to increase liquidity and strengthen financial markets. While covered bonds will not replace commercial MBS as the primary generator of liquidity for the U.S. real estate market, RLI supports this legislation as a means to provide an additional tool to increase mortgage liquidity. RLI believes that this tool can offer increased liquidity and safety in commercial and multifamily real estate lending.