U.S. Department of the Navy, Kingsville Naval Air Station, Kingsville, Texas

Plain-English summary

EPA alleged that the Navy violated the lead-based paint Disclosure Rule by entering into eleven Residency Occupancy Agreements for housing at Kingsville Naval Air Station without the required disclosures. The Presiding Officer treated the agreements as contracts to lease and granted accelerated decision against the Navy. The Environmental Appeals Board held that the order could not be upheld under the Presiding Officer's Texas-law analysis, but it also rejected the Navy's proposed federal property-law rule as dispositive. The Board concluded that the agency had not developed a workable interpretation establishing that the military agreements were covered, declined to create one through adjudication, reversed the order, and dismissed the complaint. No civil penalty was imposed by this decision.

Decision snapshot

• Cited authorities: 15 U.S.C. §§ 2615, 2688, and 2689, 40 C.F.R. §§ 745.107 and 745.113, and 42 U.S.C. §§ 4851a and 4852d.
• Outcome: The Presiding Officer's order was reversed and EPA's complaint was dismissed.
• Key point: Whether a military residency agreement is a contract to lease under the lead-paint Disclosure Rule requires a supportable statutory interpretation that the Board declined to create in this adjudication.

Full text (EPA EAB public release)

                        KINGSVILLE NAVAL AIR STATION                                    19

IN RE THE UNITED STATES DEPARTMENT OF NAVY,
KINGSVILLE NAVAL AIR STATION
KINGSVILLE, TEXAS
TSCA Appeal No. 99-2

                              FINAL DECISION



                           Decided March 17, 2000



                                      Syllabus

   This is an interlocutory appeal by the United States Department of the Navy, Kings-

ville Naval Air Station, Kingsville, Texas (“Navy”) from an order (the “Order”) arising out
of an administrative enforcement action by the U.S. EPA Region VI (the “Region”) against
Navy. The Region alleges that Navy violated regulations known as the “Disclosure Rule,”
which were promulgated under the Residential Lead-Based Paint Hazard Reduction Act of
1992 (“RLBPHRA”) and which require, among other things, that, before the lessee is obli-
gated under any “contract to * * * lease” housing, the lessor shall make certain disclosures
regarding lead-based paint and lead-based paint hazards located in the housing. At issue in
this matter is the Navy’s admitted noncompliance with the Disclosure Rule in connection
with housing provided by it pursuant to eleven Residency Occupancy Agreements
(“ROAs”) to certain enlisted and officer personnel and their families.

   By the Order, the Presiding Officer found that the eleven ROAs are “contracts to

lease” within the meaning of RLBPHRA and the Disclosure Rule and that Navy was re-
quired to comply with the Disclosure Rule in connection with those ROAs. In this interloc-
utory appeal, Navy argues that the Order erred in a number of respects. As one of its argu-
ments, Navy focuses on the phrase “contract * * * to lease” found in the RLBPHRA and
the Disclosure Rule, and argues that the disclosure requirement is not applicable to Navy’s
ROAs with enlisted and officer personnel because (a) ROAs are not “leases” and (b) ROAs
are not “contracts.” Navy argues that the Presiding Officer erred by applying Texas law to
determine whether the ROAs are “contracts to lease.”

   Held: Reversed and complaint is dismissed. On the narrow issue of whether state

law is controlling, the Region does not necessarily disagree that the Order is in error. The
Order cannot be upheld based upon the Presiding Officer’s analysis, which relied on Texas
law. The Board, however, does not adopt Navy’s contention that the federal property and
contract law principles cited by Navy are dispositive as to whether a transaction is a “con-
tract to lease” for purposes of the Disclosure Rule and RLBPHRA. Whether the eleven
ROAs at issue in this case are “leases” or “contracts to lease” is a question of statutory
construction. It is not clear that an ROA would necessarily be included or excluded from
any so-called “ordinary” definition of the term lease. An ROA possesses many of the char-
acteristics of an ordinary lease; yet at the same time, it has many attributes that make it sui
generis, found only in the military context and lacking any apparent counterpart in civilian
circles. However, the Region’s suggested alternative interpretation, that “lease” under the

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20 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

Disclosure Rule and RLBPHRA means any consensual residency agreement, is breathtak-
ingly overbroad. It cannot serve as a principled basis for upholding the Order’s grant of
accelerated decision in this case. Fairly read, the Disclosure Rule does not bear any con-
templation of ROAs — arrangements peculiar to the military establishment.

   The Board declines to exercise its authority, as the Agency’s final decisionmaker in

this case, to fashion through this adjudicative proceeding a legally binding interpretation of
the terms “lease” and “contract to lease” under the Disclosure Rule and the RLBPHRA. If
the Agency intends to regulate ROAs under the Disclosure Rule, it needs to develop a
workable and supportable interpretation of the Disclosure Rule to that end and, as appropri-
ate, amend the Disclosure Rule to reflect that interpretation.

Before Environmental Appeals Judges Scott C. Fulton, Ronald L.
McCallum, and Edward E. Reich.

  Opinion of the Board by Judge Fulton:

  This is an interlocutory appeal by the United States Department of the

Navy, Kingsville Naval Air Station, Kingsville, Texas (“Navy”) from an order,
dated February 18, 1999, issued by Administrative Law Judge Stephen J. Mc-
Guire (the “Presiding Officer”), titled “Order on Respondent’s Motions for Accel-
erated Decision and for Discovery and on Complainant’s Motions for Accelerated
Decision and to Strike” (the “Order”) arising out of an administrative enforcement
action by the United States Environmental Protection Agency Region VI (the “Re-
gion”) against Navy. For the following reasons, we reverse the Presiding Officer’s
Order and dismiss the Region’s Complaint.

                                  I. BACKGROUND

A. Statutory and Regulatory Background

  Congress passed Title X of the Housing and Community Development Act

of 1992 under the common name of the “Residential Lead-Based Paint Hazard
Reduction Act of 1992” (“RLBPHRA”), Pub. L. No. 102-550, 106 Stat. 3672
(1992) (codified in part at 42 U.S.C. and 15 U.S.C.). The stated purposes of RLB-
PHRA are, among other things, “to develop a national strategy to build the infra-
structure necessary to eliminate lead-based paint hazards in all housing as expedi-
tiously as possible” and “to reduce the threat of childhood lead poisoning in
housing owned, assisted, or transferred by the Federal Government.”
42 U.S.C. § 4851a(1),(6).1 In order to accomplish its goals, RLBPHRA amended
the Toxic Substance Control Act (“TSCA”), see RLBPHRA § 1021(a),
15 U.S.C. §§ 2681-2692, and required the promulgation of regulations governing

  1   The RLBPHRA is codified in part at 42 U.S.C. §§ 4851, et seq.

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 KINGSVILLE NAVAL AIR STATION 21

disclosure of lead-based paint hazards in “target housing” offered for “sale or
lease.” See RLBPHRA § 1018(a), 42 U.S.C. § 4852d(a).

  The amendments to TSCA included the addition of “Title IV — Lead Expo-

sure Reduction,” consisting of TSCA sections 401 to 412. See RLBPHRA
§ 1021(a), 15 U.S.C. §§ 2681-2692. TSCA section 408 provides in relevant part
as follows:

  Each department, agency, and instrumentality of executive, legisla-
  tive, and judicial branches of the Federal Government (1) having ju-
  risdiction over any property or facility, or (2) engaged in any activity
  resulting, or which may result, in a lead-based paint hazard, and each
  officer, agent, or employee thereof, shall be subject to, and comply
  with, all Federal * * * requirements, both substantive and procedural
  * * * respecting lead-based paint, lead-based paint activities, and
  lead-based paint hazards in the same manner, and to the same extent
  as any nongovernmental entity is subject to such requirements, in-
  cluding the payment of reasonable service charges. The Federal
  * * * substantive and procedural requirements referred to in this sub-
  section include, but are not limited to, all administrative orders and all
  civil and administrative penalties and fines regardless of whether such
  penalties or fines are punitive or coercive in nature, or whether im-
  posed for isolated, intermittent or continuing violations.

15 U.S.C. § 2688. TSCA section 409 further provides that it is “unlawful for any
person to fail or refuse to comply with a provision of (TSCA) subchapter
[IV — Lead Exposure Reduction] or with any rule or order issued under this sub-
chapter.” 15 U.S.C. § 2689. Civil penalties for violations of TSCA section 409
may be imposed pursuant to TSCA section 16(a). 15 U.S.C. § 2615(a).

  RLBPHRA also required the Secretary of the Department of Housing and

Urban Development (“HUD”) and the Administrator of EPA to promulgate regu-
lations for the disclosure of “lead-based paint hazards in target housing which is
offered for sale or lease.” RLBPHRA § 1018(a)(1), 42 U.S.C. § 4852d(a)(1).
These regulations were to require that, “before the purchaser or lessee is obligated
under any contract to purchase or lease housing,” the seller or lessor shall make
certain disclosures to the purchaser or tenant. Id. In March 1996, EPA and HUD
issued joint regulations known as the “Real Estate Notification and Disclosure
Rule.” EPA’s regulations are codified at 40 C.F.R. part 745, subpart
F — Disclosures of Known Lead-based Paint and/or Lead-Based Paint Hazards
Upon Sale or Lease of Residential Property (the “Disclosure Rule”), and HUD’s
regulations are codified at 24 C.F.R. part 35, subpart H.

  The Disclosure Rule generally provides that certain “activities shall be com-

pleted before the purchaser or lessee is obligated under any contract to purchase

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22 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

or lease target housing that is not otherwise an exempt transaction.”
40 C.F.R. § 745.107(a). As relevant to this case, the activities that are required to
be completed include the following: (1) the seller or lessor shall provide the pur-
chaser or lessee with an EPA-approved lead hazard information pamphlet,
40 C.F.R. § 745.107(a)(1); (2) each contract to lease target housing shall include
an attachment containing a Lead Warning Statement consisting of certain lan-
guage specified by the regulations, id. § 745.113(b)(1); (3) each contract to lease
target housing shall disclose the presence of any known lead-based paint and/or
lead-based paint hazards in the target housing, id. § 745.113(b)(2); (4) each con-
tract to lease target housing shall include a list of any records or reports that are
available pertaining to lead-based paint and/or lead-based paint hazards, id.
§ 745.113(b)(3); (5) each contract to lease target housing shall include a statement
by the purchaser affirming receipt of the information specified above, id.
§ 745.113(b)(4); and (6) each contract to lease target housing shall include the
signatures of the lessors and lessees certifying the accuracy of their statements, id.
§ 745.113(b)(6).

  Both RLBPHRA and the Disclosure Rule broadly define “target housing” as

“any housing constructed prior to 1978, except housing for the elderly or persons
with disabilities (unless any child who is less than 6 years of age resides or is
expected to reside in such housing for the elderly or persons with disabilities)
or any 0-bedroom dwelling.” Compare 42 U.S.C. § 4851b(27) with
40 C.F.R. § 745.103. Neither RLBPHRA nor the Disclosure Rule define the
terms “lease” or “contract to lease.” The Disclosure Rule, however, defines the
term “lessor” as “any entity that offers target housing for lease, rent, or sublease,
including but not limited to individuals, partnerships, corporations, trusts, govern-
ment agencies, Indian tribes, and nonprofit organizations.” 40 C.F.R. § 45.103.

B. Factual and Procedural Background

  On July 28, 1998, the Region filed an administrative complaint against

Navy commencing this enforcement matter (the “Complaint”). Navy filed its an-
swer to the Complaint on August 17, 1998 (the “Answer”).

   Navy is a component of the Department of Defense of the Executive Branch

of the United States Government. Complaint ¶ 1; Answer ¶ 1. Navy operates the
Kingsville Naval Air Station located in Kingsville, Texas (the “Kingsville Sta-
tion”). Complaint ¶ 2; Answer ¶ 2. As part of its operations at the Kingsville Sta-
tion, Navy provides housing to its enlisted and officer personnel and their fami-
lies. Complaint ¶ 3; Answer ¶ 3. Navy manages the housing located at the
Kingsville Station. Id.

 In April 1996, Navy prepared a “Lead Management Plan” for abating lead-

based paint hazards in housing located at Kingsville Station. Complaint ¶ 8; An-

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 KINGSVILLE NAVAL AIR STATION 23

swer ¶ 8. The housing units that are at issue in this matter are identified in the
Lead Management Plan as containing lead-based paint. Id.

  On April 12, 1997, the Region sent information to Navy concerning the

requirements of the Disclosure Rule. Complaint ¶ 9; Answer ¶ 9.2 On April 17,
1997, a lead enforcement coordinator from the Region contacted the Navy’s hous-
ing director for the Kingsville Station regarding the Disclosure Rule and con-
firmed that Navy had received the information concerning the requirements of the
Disclosure Rule. Complaint ¶ 10; Answer ¶ 10 (admitting that the telephone con-
versation occurred).

  From September through November 10, 1997, Navy entered into eleven

“Residency Occupancy Agreements” (“ROAs”) with enlisted and officer personnel
for those personnel and their families to occupy housing at the Kingsville Station.
Complaint ¶ 4; Answer ¶ 4. The housing units that are the subject of those eleven
ROAs were constructed prior to 1978. Complaint ¶ 3; Answer ¶ 3.

   Navy entered into the eleven ROAs without providing an EPA-approved

lead hazard information pamphlet to the occupants. Complaint ¶ 14; Answer ¶ 14
(asserting that the lead hazard information pamphlet was provided to each occu-
pant on or about November 12-13, 1997). The eleven ROAs at issue in this matter
did not contain, as an attachment or within the ROAs, a lead warning statement
with the language specified by 40 C.F.R. § 745.113(b)(1). Complaint ¶ 17; An-
swer ¶ 17 (stating that a lead warning is set forth in the ROAs, although not con-
forming to the specific regulatory language, and stating that a further warning
containing the regulatorily prescribed language was provided on or about Novem-
ber 12-13, 1997). The ROAs did not include, as an attachment or within the
ROAs, a statement by Navy disclosing the presence of known lead-based paint in
the housing units and did not disclose a list of records or reports pertaining to
lead-based paint hazards in the housing units, and did not include the occupants’
certified statement that they received such information. Complaint ¶¶ 22, 26, 30,
34; Answer ¶¶ 22, 26, 30, 34 (alleging that the required information was provided
to the occupants on or about November 12-13, 1997).

   The Region also alleged in its Complaint that the housing located at King-

sville Station, which Navy provides to its enlisted and officer personnel and their
families, is “target housing” as defined in the Disclosure Rule, Complaint ¶ 3, that
the eleven ROAs described above are “contracts to lease” within the meaning of
the Disclosure Rule, id. ¶ 5, and that Navy is a “lessor” with respect to the ROA
transactions. Id. ¶ 6. The Region further alleged in the Complaint that Navy’s
failure to comply with the Disclosure Rule in connection with the eleven ROAs

    2 Navy admits receiving “certain documents” from the Region on April 12, 1997, and states

that “the documents speak for themselves.” Answer ¶ 9.

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24 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

constituted sixty-six violations of TSCA section 409 for which a civil penalty of
$408,375 should be imposed pursuant to TSCA section 16.

   Both in its answers to the numbered paragraphs of the Complaint and in its

affirmative defenses, Navy raised a number of objections to liability for the viola-
tions alleged in the Complaint. In particular, Navy stated that EPA lacks authority
to assess civil penalties against Navy on the grounds that Congress has not
granted such authority by a “clear statement.” Answer ¶ 37. Navy also stated that
its ROAs are not the sale or lease of housing; instead, it alleged that it “assigned”
the housing as “quarters” pursuant to 37 U.S.C. § 403, and that such assignment
does not create a landlord-tenant relationship and does not confer a leasehold or
other property interest to the occupants. Answer ¶ 40. Navy also argued that the
ROAs are not contracts. Answer ¶ 41. Thereafter, the Navy filed a total of seven
motions for accelerated decision and one motion for authority to conduct discov-
ery. In its motions for accelerated decision, Navy reiterated the arguments de-
scribed above and it also argued that the ROAs are not “contracts” and that EPA
exceeded its rulemaking authority by defining the term “lessor” to include “gov-
ernment agencies.” The Region filed oppositions to the Navy’s motions and also
filed five motions for accelerated decision in its favor and four motions to strike
portions of the Navy’s Answer.

   By the Order, the Presiding Officer denied all of Navy’s motions for accel-

erated decision and granted the Region’s motions for accelerated decision. The
Presiding Officer also denied Navy’s motion for discovery and the Region’s mo-
tions to strike. In particular, the Order found that the ROAs are “contracts to lease”
within the meaning of RLPBHRA and the Disclosure Rule, that the Region has
authority to assess civil penalties against Navy, and that the EPA did not exceed
its rulemaking authority by defining the term “lessor” in the Disclosure Rule to
include “government agencies.”

  Navy has now raised three separate issues on appeal. Briefly summarized,

those issues are as follows:

  (1) Navy focuses on the phrase “contract * * * to lease” found in the
  RLBPHRA’s directive authorizing the promulgation of the Disclosure
  Rule, see 42 U.S.C. § 4852d, and argues that the disclosure require-
  ment is not applicable to Navy’s ROAs with enlisted and officer per-
  sonnel because (a) ROAs are not “leases” and (b) ROAs are not
  “contracts;”

  (2) Navy argues that RLBPHRA and TSCA do not contain the requi-
  site “express” statement authorizing EPA to assess civil penalties
  against another Executive Branch department; and

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 KINGSVILLE NAVAL AIR STATION 25

   (3) Navy argues that the EPA exceeded its statutory rulemaking au-
   thority by including “government agencies” within the requirements of
   the Disclosure Rule.

Appellant-Respondent’s Brief (June 10, 1999) (“Navy’s Appellate Brief”) at 1. As
discussed below, we find the first of these three issues warrants reversal of the
Order and dismissal of the Complaint. Accordingly, we do not reach the second
and third issue.

                                       II. DISCUSSION

  By its first argument on appeal, Navy contends that the ROAs between

Navy and its enlisted and officer personnel are not transactions subject to the Dis-
closure Rule because, according to Navy, the Disclosure Rule is only applicable
to “contracts to lease” and the ROAs are neither contracts nor leases. Navy’s Ap-
pellate Brief at 4-17. Navy’s argument is premised first on the language of RLB-
PHRA. In particular, RLBPHRA required HUD and EPA to promulgate regula-
tions for the disclosure of lead-based paint hazards in target housing “which is
offered for sale or lease.” RLBPHRA § 1018(a)(1), 42 U.S.C. § 4852d(a)(1).
RLBPHRA further directed that the regulations shall require the disclosures be
made “before the purchaser or lessee is obligated under any contract to * * *
lease housing.” Id. Navy argues that, by these statutory phrases, Congress made
the disclosure requirements only applicable to “contracts to lease.”3

    Navy argues that the Presiding Officer erred when he applied Texas law to

determine whether the eleven ROAs at issue in this case are “contracts to lease.”
Navy’s Appellate Brief at 4. Navy argues that when the federal government has
title to the land, federal law, not state law, governs and that under federal law the
ROAs at issue are not leases. Id. Navy argues that the ROAs cannot be leases
under federal law because, under the Constitution, only Congress has the power to
dispose of property belonging to the United States, a lease is a disposition of
property, and Congress has not authorized Navy to lease the housing units at issue
in this case. Id. at 4-5. Instead, Navy argues that Congress has only granted Navy
the authority to “assign” military members to housing. Id. at 5. Further, Navy ar-
gues that ROAs are not “contracts” because military members serve by appoint-
ment, not by contract, and their pay and benefits are governed exclusively by stat-
ute. Id. at 10-11. Thus, Navy argues that, since the eleven ROA transactions are
not contracts to lease under federal law, Navy was not required to comply with

    3 In promulgating the Disclosure Rule, HUD and EPA employed similar language insofar as

the regulations state that the required disclosures shall be “completed before the purchaser or lessee is
obligated under any contract to * * * lease target housing that is not otherwise an exempt transac-
tion.” 40 C.F.R. § 745.107(a).

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26 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

the requirements of the Disclosure Rule and cannot be found liable as charged in
the Complaint.

   Upon review, we conclude that we cannot uphold the Presiding Officer’s

Order. In analyzing the question of whether the ROAs at issue in this case are
“leases,” the Order began with the premise that “[i]t is well-settled that the law of
the place where the premises are located and where the lease was executed gov-
erns the rights of the parties to the lease.” Order at 6. As noted, Navy argues that,
while this statement is generally true, it has no application where title to the prop-
erty is held by the U.S. Government. See, e.g, California, ex rel. State Lands
Commissioner v. United States, 457 U.S. 273, 281-82 (1982). On the narrow issue
of whether state law is controlling, the Region does not necessarily disagree that
the Order is in error in this respect. See Appellee’s Appellate Brief (“Region’s
Appellate Brief”) at 6, 16 (“Appellee does not necessarily disagree with Appellant
that the law of Texas should not have been used to determine whether the ROAs
were contracts to lease under Section 1018 * * *.”). Based on this erroneous pre-
mise, the Order repeatedly turned to the law of Texas, where Kingsville Station is
located, to determine whether the ROAs are “leases.” See, e.g., Order at 6, 9-10,
12, 13-14. Accordingly, we cannot uphold the Order based upon the Presiding
Officer’s analysis, which relied on Texas law. However, as discussed below, we
also do not adopt Navy’s contention that the federal property and contract law
cited by Navy is dispositive with respect to whether a transaction is a “contract to
lease” for purposes of the Disclosure Rule and RLBPHRA section 1018.

   The question of whether the eleven ROAs at issue in this case are “leases”

or “contracts to lease” is a question of statutory construction. Navy, in effect, ar-
gues that the following cannon of statutory construction is controlling in this case:
“when Congress passes a new statute, it is assumed to be aware of all previous
statutes on the same subject.” Navy’s Appellate Brief at 9, citing Erlenbaugh v.
United States, 409 U.S. 339, 344 (1972). Based on this cannon of construction,
Navy argues that “Congress must be deemed to have been aware of the limitations
on the disposal of federal property when it passed the [R]LBPHRA.” Id. Navy
also argues that “[a] basic principle of statutory construction is that where words
in a statute are not defined, they must be given their ordinary meaning.” Appel-
lant-Respondent’s Rebuttal to Appellee’s Appellate Brief (July 28, 1999) (“Navy’s
Rebuttal Brief”) at 2. Navy argues that the ordinary meaning of lease is “a contrac-
tual obligation binding and enforceable at law against both the lessor and lessee to
convey and accept a leasehold interest in real property.” Id., citing State Nat’l
Bank of El Paso v. United States, 509 F.2d 832, 835 (5th Cir. 1975).

  It is not clear that an ROA would necessarily be included or excluded from

any so-called “ordinary” definition of the term lease, whether it be that which the

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 KINGSVILLE NAVAL AIR STATION 27

Navy propounds or some common variant found in Black’s Law Dictionary.4 An
ROA possesses many of the characteristics of an ordinary lease; yet at the same
time, it has many attributes that make it sui generis,5 found only in the military
context and lacking any apparent counterpart in civilian circles. At bottom, to
interpret the meaning of the term lease, it is incumbent upon us recognize that,
ultimately “[s]tatutory construction ‘is a holistic endeavor,’ and at a minimum,
must account for a statute’s full text, language as well as punctuation, structure,
and subject matter.” National Bank of Oregon v. Independent Ins. Agents of Am.,
508 U.S. 439 (1993) (citations omitted). The Supreme Court also has stated that
“[o]ver and over we have stressed that ‘[i]n expounding a statute, we must not be
guided by a single sentence or member of a sentence, but look to the provisions of
the whole law, and to its object and policy.’” Id. (citations omitted). Although not
citing these authorities, the Region has attempted to offer a somewhat more holis-
tic reading of the statute in an effort to show that an accelerated decision in the
Region’s favor can be upheld on an alternative theory.

   The Region states that both the Presiding Officer’s “order and Appellant’s

numerous briefs enter into a largely unnecessary analysis of the lessor-lessee rela-
tionship.” Region’s Appellate Brief at 6. The Region argues that our focus should
not be on the “lease” and “contract” language in RLBPHRA section 1018, but
rather our focus should be on the requirements of TSCA section 408. Specifically,
the Region argues that TSCA section 408 “does not merely impose duties on fed-
eral agencies that ‘lease’ housing,” Id. at 7. “Rather Section 408 imposes require-
ments on federal entities ‘having jurisdiction over any property or facility’ which
may result in a lead hazard or ‘engage in any activity * * * which may result’ in a
lead hazard.”6 Id. The Region argues further that “[t]he nature of the relationship
between the property owner federal agency and the tenant service members and
their families, and the arcane, complicated laws that may apply to various aspects
of those relationships, are not relevant to the fact that under Section 408 of TSCA
the Appellant has a duty to disclose the presence of lead-based paint and lead-
based paint hazards to those who occupy naval housing that was built before

    4
      Black’s Law Dictionary defines the term “lease” as “[a] contract by which a rightful possessor

of real property conveys the right to use and occupy that property in exchange for consideration, usu.
rent.” Black’s Law Dictionary 898 (7th Ed. 1999).
5
The Presiding Officer observed that the ROAs at issue in this case have many of the charac-
teristics of a traditional lease in that the ROAs “creat[e] the extent and boundary of the property; a
definite and agreed term and price; the tenant’s right to possess and occupy the property; consideration
to support the lease; [and] the benefit and detriment of the leasing parties.” Order at 14. In contrast,
Navy argues that its ROAs cannot be leases because, among other things, Navy only has authority to
“assign” military members to housing, military pay and benefits are governed by statute, not by con-
tract or common law, and violations of the terms of the ROA may be enforced as a felony under
military law. See Navy’s Appellate Brief at 5-6, 11-12, 15.
6 The Region did, however, concede at oral argument that in order to establish liability it must

“find a contract to lease.” Hearing Transcript (Oct. 28, 1999) (“Tr.”) at 55.

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28 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

1978 — ‘target housing.’” Id. This analysis must be rejected because it is not en-
tirely correct.

   The Region is correct that TSCA section 408 imposes requirements on fed-

eral entities having “jurisdiction” over property, or “engaged in any activity,” that
may result in a lead-based paint hazard. The Region, however, is not correct that
we can turn to the requirements of section 408 to avoid confronting the “lease”
and “contract to lease” language in the Disclosure Rule and RLBPHRA. Section
408, itself, does not require federal entities to disclose lead-based paint hazards to
housing occupants. Instead, section 408 provides that such entities “shall be sub-
ject to, and comply with, all Federal * * * requirements * * * respecting lead-
based paint, lead-based paint activities, and lead-based paint hazards in the same
manner, and to the same extent as any nongovernmental entity is subject to such
requirements.” TSCA § 408, 15 U.S.C. § 2688 (emphasis added). Therefore, as
applied to the present case, section 408 merely provides that Navy “shall be sub-
ject to and comply with” the Disclosure Rule “in the same manner, and to the
same extent as any nongovernmental entity.”7 Accordingly, we cannot find that
section 408 requires Navy to disclose lead-based paint hazards in housing man-
aged by it, unless we first confront the question of whether Navy’s ROA arrange-
ments would fall within the coverage of the Disclosure Rule. This question cannot
be resolved without a satisfactory treatment of “lease” and “contract to lease” as
used in RLBPHRA and the Disclosure Rule.

   The Region also argues that, in determining the scope of transactions cov-

ered by the Disclosure Rule and RLBPHRA section 1018, the focus should be on
the broad definition of “target housing” and on the policies and purposes of RLB-
PHRA, rather than on “lease” or “contract to lease.” Region’s Brief at 13-16. In
this vein, the Region notes that “target housing” means any housing constructed
prior to 1978, with only four exceptions. Id. at 13. (The Disclosure Rule specifi-
cally excepts from its scope: sales at foreclosure, short-term leases of 100 days or
less, leases of target housing that have been found to be lead-based paint free, and
renewals of leases in which the disclosures have previously been made.
40 C.F.R. § 745.101.) The Region argues that “[i]f the structure does not fit into
one of these exceptions, then it is considered target housing and the owner of the
structure must comply with the Disclosure Rule before entering into any type of
agreement, oral or written such as ROA, with another person who desires to re-
side in the target housing.” Region’s Appellate Brief at 13 (emphasis added). The
Region argues that Navy’s construction of the terms “lease” and “contract to lease”
seeks “to carve out a fifth exception (i.e., for military housing) so that its ROAs do
not come under Section 1018 and the Disclosure Rule.” Id. at 13-14. We disagree.
Navy’s arguments appropriately go to the issue whether ROAs are “leases” or
“contracts to lease” within the scope of the Disclosure Rule. Fairly read, RLB-

  7   The Region conceded as much at oral argument. Tr. at 43.

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PHRA and the Disclosure Rule establish two independent requirements for regu-
latory jurisdiction — first, that the housing in question be target housing and, sec-
ond, that the transaction that produces occupancy constitute a “lease” or “contract
to lease.” The Region cannot by artful interpretation of the first eviscerate the
second.

   As to the more precise issue of the meaning of “lease” and “contract to

lease,” the Region argues that these terms have a unique meaning under RLB-
PHRA and that it is not necessary for either state law or federal property law to be
consulted to ascertain the proper construction of those terms under this statute.
See Region’s Appellate Brief at 21. As noted above, the Region suggests that
“lease” under RLBPHRA means “any type of agreement.” Id. at 13. More specifi-
cally, the Region argues that a “contract to lease” for purposes of section 1018 “is
created when an owner of target housing voluntarily enters into an agreement with
another to have that person reside in the target housing.” Id. at 16. The Region
also states that its “only purpose for classifying the ROAs as ‘contracts to lease’ is
to establish that the Appellant consented to have the military families reside at the
Kingsville NAS in the target housing.” Id. at 10; see also id. at 13 (arguing that
the question is “whether there is a consensual residency agreement between the
parties (i.e., the owner and the occupant).”). In addition, the Region argues that
“[t]he terms ‘contract to lease’ ‘lessor’ and ‘lessee’ as used in Section 1018 and the
Disclosure Rule do not have the same meaning as in real property law, state con-
tract law, or the Property Clause of the U.S. Constitution, * * * and those terms
are merely used to identify who should give the Lead information and who should
get it * * *.” Id. at 18. These arguments, however, cannot serve as an alternative
rationale for upholding the Order.

   As noted above, the Region is correct that the question of what “lease” and

“contract to lease” mean in this case is necessarily a question of what those terms
mean as used by Congress in RLBPHRA section 1018. Nevertheless, despite the
absence of definitions of those terms in the statute, the broad purposes of the
statute do not alone grant the Region license to create a wholly new and almost
boundless interpretation of “lease” for the first time in this case. The Region’s
alternative theory, that “lease” under section 1018 means any consensual resi-
dency agreement, does not appear to bear any reasonable relationship to the man-
ner in which that term is used in other contexts.

  For example, “consensual residency agreement” is so broad that it would

embrace numerous familial living arrangements that fall well outside any conven-
tional sense of the meaning of “lease.” The following discussion during oral argu-
ment illustrates the potential breadth of the Region’s interpretation that “lease”
means any “consensual residency agreement:”

  JUDGE REICH: So, if I own a 1976-built condominium apartment
  and I allow my brother-in-law to use our guest bedroom for 6 months,



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30 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

   have I now subjected myself to [the Disclosure Rule]? Do I have to
   give him a lead warning based on the fact that there is a consensual
   occupancy of target housing?

   EPA COUNSEL: It depends. If he is only staying in the bedroom, the
   guest room, no, but if he is renting out the entire apartment —

                                  *   *    *   *    *   *    *

   When I am using the term “rent,” I am saying if there is some type of
   agreement where you have allowed your brother-in-law to reside in
   the entire apartment.

   JUDGE REICH: He is going to use the bedroom. He is going to use
   the bathroom. He is going to use the kitchen. I mean, he is going to be
   freely about the apartment, and now I am afraid that I have subjected
   myself to liability under the statute.

   EPA COUNSEL: Well, it is our position that in that case, if he is
   going to reside in the entire apartment, there should be some disclo-
   sure to provide information to your brother-in-law.

Tr. at 57-58. In addition, the Region stated that the Disclosure Rule also applies
when an elderly parent, who can no longer live alone, is invited to live with one of
the parent’s adult children. Id. at 58-62. We are loath to take such an expansive
view without a more clear direction from Congress that it intended to regulate
such familial arrangements. Because the Region’s suggested interpretation is
breathtakingly overbroad, it cannot serve as a principled basis for upholding the
Order’s grant of accelerated decision in this case.

   While the Board does have the authority, as the Agency’s final deci-

sionmaker in this case,8 to fashion through this adjudicative proceeding a legally
binding interpretation of the terms “lease” and “contract to lease” under the Disclo-
sure Rule and section 1018 of the RLBPHRA, we decline to exercise that author-
ity here. Fairly read, the Disclosure Rule does not bear any contemplation of
ROAs — arrangements peculiar to the military establishment. Not surprisingly
then, there is, as best we can discern, no indication that the issue of ROA cover-
age was identified during the interagency review process that accompanied the
rule’s promulgation. See Tr. at 48-49 (noting that, with the exception of barracks,
there is no mention of military housing in the preamble to the Disclosure Rule). In

   8 See, e.g., In re Ocean State Asbestos Removal, Inc., 7 E.A.D. 522, 542-43 & n. 22 (EAB

1998): In re Lazarus, Inc., 7 E.A.D. 318 (EAB 1997); In re Mobil Oil Corp., 5 E.A.D. 490, 508-09 &
n.30 (EAB 1994).

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this regard, we find it significant that EPA and HUD promulgated a definition of
the term “lessor” in the Disclosure Rule as including “government agencies” in
order to “clarify that term and to identify the regulated community which would
be covered by that term,” Region’s Appellate Brief at 32, yet at the same time
EPA and HUD did not choose during the rulemaking to clarify the meaning of
“lease” — a term for which the Region now seeks to offer a unique definition,
uncontrolled by common usage or otherwise applicable real estate law. If the
Agency intends to regulate ROAs under the Disclosure Rule, it needs to develop a
workable and supportable interpretation of the Disclosure Rule to that end and, as
appropriate, amend the Disclosure Rule to reflect that interpretation.9

                                    III. CONCLUSION

 For the foregoing reasons, we reverse the Order and dismiss the Region’s

complaint.

   So ordered.




   9 We do, however, note that the Department of Defense has issued a memorandum to the

Navy, among others, which states in part as follows:

   These rules [40 C.F.R. pt. 745, subpt. F] apply to DoD family housing built before 1978
   and to their disposal by lease or sale. Occupancy of DoD housing by military members
   and their families is considered to be leasing of housing, with regard to these rules.
   * * * Compliance with disclosure rules must be documented. * * * Disclosure of po-
   tential LBP [lead-based paint] hazards to occupants of military housing is an essential
   part of a comprehensive LBP management program. We request that you incorporate
   the responsibilities and procedures for implementing these requirements into your
   Components’ LBP Management Plans.

Order at 4, quoting Department of Defense Memorandum from the Office of the Under Secretary of
Defense to among others, the Assistant Secretary of the Navy (Feb. 18, 1997). Given the serious and
unquestioned health effects of lead-based paint, we would expect Navy to comply with the disclosure
requirements as contemplated by this Department of Defense memorandum.

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