Welcome to ECBOR - CHIPS May 2003- Page 2

NEW SEPTIC RULE IS NO "HOME IMPROVEMENT"

Written by Terry Herschberger, Chairman of the IBA Septic Subcommittee, and Marlys Pedtke, IBA Code and Technical Specialist.

The Indiana Builders Association's (IBA's) Septic Sub-Committee has nearly completed their review of the proposed rule 410 IAC 6-8.2 for On-site Sewage Systems. The committee gathered builders, septic installers, soil scientists and academic experts from around the state for the purpose of evaluating the rule which will affect 14,000 new home owners every year.

As members of IBA you need to be aware of the rule's impact on the homes you will build.

Although we are not asking them to do anything at this time, we want our legislators to be aware of this issue as well. If you know a County Commissioner, State Representative or Senator, clip this article, fax it to them and follow it up with a phone call. Better yet, see them in person.

History
Members of the IBA met with officials from the Indiana State Department of Health (ISDH) several times beginning in 1998 to relay our concerns with the new proposed septic rule. As our concerns were not addressed and the rule was being put forward for preliminary adoption, we met in December of 2002 with the Governor's office to raise those issues again. In January 2003, IBA testified before the ISDH Executive Board that the rule was flawed and should not be preliminarily adopted until major issues were settled with all stakeholders. The Board proceeded with preliminary adoption on the recommendation of ISDH staff, moving the rule toward the public comment and hearing phase of the adoption process.

IBA intends to testify in writing and at the public hearings along with several other groups who have concerns of their own. A hearing officer has not yet been appointed, pending official publication of the rule in the Indiana Register. The proposed rule is slated to go into effect in January of 2004, replacing the rule adopted in 1990.

What Does This Rule Do?
410 IAC 6-8.2 combines the commercial and residential rules into one document, defining categories of residential and commercial septic systems and prescribing their design and installation. It prescribes the procedures for plan submittal and the issuance of construction permits, operating permits, approval letters, and orders of violation. It prescribes inspections for construction, operation, maintenance and repair of the systems. It addresses the special regulation of systems that it defines as experimental or alternative. The proposed rule also defines state and local administrative and enforcement responsibilities.

Some of IBA's Specific Concerns

The rule is difficult to understand and confusing for designers, installers and enforcement personnel, contains several inaccurate (and unnecessary) cross references and contains erroneous information in critical tables used for system design.
The current rule, adopted in 1990, has resulted in high quality design and installation. Two counties where the rule is vigorously enforced were found to have failure rates less than 3% in a recent Purdue University study.
Lack of enforcement of the existing rules in certain jurisdictions is not addressed. These jurisdictions will continue to ignore the new rule, while those that properly enforce the rule will be saddled with more requirements and higher costs.
The rule appears to try to cover every conceivable situation by the use of prescriptive rather than performance based language. This allows local health departments little, if any latitude to apply common sense to specific situations.
Some examples of over-regulation found throughout the rule: A requirement to run a bush-hog over an un-graded soil absorption field site at a 3" height is impractical and dangerous. To say that the site should be closely mowed would be sufficient. A requirement for compacted backfill around a tank is unnecessary and costly. Slight settling of earth around the tank has no effect on system performance. Requirements for seeding and soil stabilization are unnecessary for most systems and cause extra expense for inspection and seeding out of sequence with the rest of the project.
The rule requires expensive and complex secondary treatment for nitrate reduction, purportedly to comply with Indiana's Ground Water Protection Rule (Rule11). This requirement alone will cost Indiana home buyers over $21 million dollars per year. There is no scientific evidence that nitrates from septic systems are reaching Indiana's ground water in meaningful quantity. The benefit of this requirement is likely to be minimal at best and certainly will not attain the goals of Rule 11.
The rule uses NRCS soil maps and Nitrate Leaching Index to identify soils requiring nitrate reduction. Not only are the maps and list of soils cited by the rule outdated, but the NRCS has indicated that the maps are not designed for evaluating single home sites but for larger scale planning purposes. They have also stated that the Nitrate Leaching Index should not be used for the purposes of this rule as it was developed to guide agricultural fertilizer application at the ground surface.
It changes the way perimeter drains are installed, requiring stone backfill in drain trenches and requiring expensive and impractical installation methods. In a recent demonstration of the techniques mandated by the rule, only 1 of the 13 drains installed met the rule's requirements.
It was installed with a tiling machine that cannot be used on most home sites due to its size and lack of maneuverability. Several thousand systems installed statewide require perimeter drainage each year.
Requires two-compartment septic tanks (or tanks in series) on all conventional systems - better system, added cost.
Requires outflow filters on all systems, which is good for systems, but requires extra cost and extra maintenance.
Requires manufacturers to re-design and re-tool tanks and distribution boxes and mandates extensive testing of tanks.
Does not allow system installation when ground is frozen, significantly shortening the construction season. Often a few inches of frost are ideal because equipment will not tear up the site, however the rule precludes this due to its highly prescriptive nature.
Allows 45 days for approval of residential permits and implies 90 days for commercial permits. The time period should be reduced to a firm 10 working days for both.
Allows the use of new technology only as "experimental" systems with numerous restrictions. Little new technology has been added to the category of "alternative" systems. There is no provision to move systems from the "experimental" to "alternative" category no matter how well they work over a period of time.
ISDH estimates a figure of $8.7 million per year as the total impact of the rule for residential systems, commercial systems and enforcement. IBA has estimated a cost increase of $41.8 million per year for new residential systems only, not including commercial systems, enforcement costs (which will be substantial) or repairs of failed systems.
The rule will have a substantial, negative effect on housing affordability in the state of Indiana at a time when housing is a leading economic force.

In Conclusion
According to ISDH, the rule is being revised to clarify gray areas in the existing rule, incorporate new technologies and to combine the commercial and residential rules into one document. IBA supports updating the existing rule to clarify areas that are unclear. We also support provisions to add proven, newer technologies, some of which are in widespread use in other states, to the category of "alternative" systems. We want to see improvements in the way that septic systems are designed, built and maintained in a way that protects public health and housing affordability. Sadly, after 5 years in the making, the proposed rule fails to accomplish these goals.

For further information on this issue, please contact Marlys Pedtke, Code and Technical Specialist for the Indiana Builder's Association at (800) 377-6334.

Reprinted from the Indiana Home Builders magazine, Indiana Builders Association

The dates for these training sessions at the Board Office are:
Tuesday, May 27 10:00 am - 5:00 pm (various times)
Wednesday, May 28 9:00 am - 2:00 pm (various times)
Advanced class 2:00-3:00 pm

Space is limited - please sign up for specific time slots. eGIX representatives will be emailing sign-up sheets to your office. If your office does not receive a sign-up sheet, call Carol at the Board Office to reserve your time (875-3283).

Receive an eGIX product overview and benefit from hands-on training with a computer technician. You may bring laptops if you wish.

NOTE: If you are presently an eGIX Unified Communications user, please be sure you have logged into your egixmail.com before you attend any of these sessions.

We thought we could offer suggestions to help alleviate the most common keypad problems (listed below).

NAR Supports HUD, Appraiser, Lender Rule
NAR submitted comments to HUD applauding its proposed rule that clarifies and strengthens regulations on the responsibilities of FHA-approved lenders in selecting appraisers for properties insured by FHA. The proposed rule calls for lenders to be strictly accountable for the quality of the appraisals. For more info, contact: Peter Morgan, pmorgan@realtors.org, 202-383-1233.

American Dream Downpayment Bill Introduced
U.S. Representative Katherine Harris (R-Fla.) recently introduced H.R. 1276, the "American Dream Downpayment Act." If enacted, the bill would provide grants to first-time homebuyers for downpayment and closing costs, assisting 40,000 families a year. Grant recipients need annual incomes of 80 percent or less of area median income. The bill has been referred to the House Financial Services Committee. A companion bill is expected to be introduced in the Senate soon. For more info, contact: Megan Booth, mbooth@realtors.org, 202-383-1222.

Chrysler and Jeep Extend Realtor Bonus
REALTOR VIP Alliance Program partners Chrysler and Jeep have extended the $500 cash allowance bonus on the retail purchase or lease of select 2004 models. The program offers a $500 cash allowance bonus on select new 2003 and 2004 vehicles. Another benefit to members and association staff is that the cash allowance bonus applies in addition to most national, regional, and other select incentives in effect at the time of purchase of lease. Visit: http://www.chrysler.com/orp/ or http://www.jeep.com/orp/ for further REALTOR® VIP Program specifics or call 800-Chrysler or 800-925-Jeep.

NAR Calls for Fairness in Mold Liability
NAR is working with companies that manage and market repossessed FHA single-family properties to make sure that mold disclosure forms used in property sales provide fair treatment of the mold liability issue for all real estate professionals involved in the transaction. NAR is asking that the listing broker and selling broker or agent be listed as additional beneficiaries of the disclosure and release provisions of their mold disclosure document. Also, NAR is working with HUD to draft a uniform mold disclosure form that would be applicable to the sale of all repossessed FHA single-family properties. For more info, contact: Peter Morgan, pmorgan@realtors.org, 202-383-1233.

Realtor.com Records 5 Million Monthly Visitors
Visitor traffic at realtor.com, the official website of NAR, has surpassed a milestone, 5 million monthly visitors, according to statistics released from online traffic reporting organization, comScore Media Metrix. NAR President, Cathy Whatley, said, "The more than 350 million page views in February are harbingers of an active buying period. In anticipation of the warmer months and school vacations, people are looking ahead to plan their purchases and find their REALTORS now." For more info, go to: http://www.realtor.org/PublicAffairsWeb.nsf/Pages/WebTrendsRcom.

HUD Pushes for More Free Downpayments
Housing Secretary Mel Martinez last week urged the House to pass the American Dream Downpayment Initiative, a program to provide an estimated $5,000 each to low-income families who qualify for downpayment and closing cost assistance.

This year Congress funded the bill with $75 million. Martinez and President Bush would like to see funding increased to $200 million - providing assistance to as many as 40,000 new homeowners.

HUD has released a report concluding that if the nation can add 5.5 million minority members to the home ownership roles - the administration's target, it will stimulate an additional $256 billion in benefits to the housing sector of the U.S. economy.

War, Weak Economy Should Keep Rates Down
NAR economist David Lereah is advising Realtors that interest rates will likely remain low for awhile longer, at least until the nation figures out the cost of the war and regains some confidence in the economy.

"The war in Iraq has caused some economic uncertainty, but the housing industry is better postured to weather negative influences," he said. "With tighter consumer spending, the Federal Reserve will keep the lid on interest rates. Long-term rates on home loans also will remain low if the inflation rate remains under control. This should continue to stimulate the housing sector and help to provide a solid base for the U.S. economy."

Lereah is predicting rates, currently hovering around 5.9 percent, will rise to about 6.3 percent by the end of the year.

Mortgage Broker Group Condemns HUD's RESPA Proposal
HUD's hotly debated update to the Real Estate Settlement and Procedures Act is getting more heat from the National Association of Mortgage Brokers, who say the current proposal - which calls for packaged service - will undermine their ability to stay in business.

NAMB President Neill Fendly said, "The rule creates an unlevel playing field in the marketplace for small businesses (particularly mortgage brokers), limits consumer choice and access to credit, and is unworkable in the real world. HUD's proposal would significantly reduce small business revenue while substantially increasing the regulatory burden on small business."

Some observers believe HUD's "package pricing" proposal ultimately will favor large lenders, title companies and real estate brokers that can drive down prices because of the volume of business they do.

Housing Discrimination Complaints Still Climbing
The National Fair Housing Alliance is reporting more than 25,000 housing discrimination claims were filed last year, up about 7 percent from the year before. The Alliance said the total reflects complaints filed with local advocacy groups, HUD and the Justice Department.

The Alliance said about 30 percent of all housing complaints were based on race - mostly against African Americans - and an additional 27 percent on disability. About 15 percent of cases were based on family status, and 12 percent involved nationality.

NFHA President Shanna Smith said, "This number (of complaints) is less than 1 percent of the estimated incidence of illegal housing discrimination that occurs each year in the United States. Thirty-five years after the passage of the Fair Housing Act, discrimination persists virtually unchallenged. These low complaint levels signal a need for increased fair housing enforcement by the current administration."

Software giant, Microsoft, is targeting the real estate industry with its Publisher 2002 marketing software, offering brokers, agents and assistants free demonstration CDs and a link to a real estate industry-specific site on the Internet.

The software is used to create brochures, postcards, flyers and other marketing materials.

Microsoft already is running advertisements in The Real Estate Professional magazine and Realtor magazine and is featured on some industry Web sites.