Senate Bill S8555

                                
 
BILL NUMBER: S8555

SPONSOR: LITTLE
 
TITLE OF BILL:  An act to amend the private housing finance law, in
relation to the statewide or regional multi-state contract adminis-
tration for Section 8 project based housing assistance payments
contracts

 
PURPOSE OF THE BILL:

The purpose of this bill is to clarify and reinforce a New York State
long- standing position that the Housing Trust Fund Corporation (Corpo-
ration) and the Division of Housing and Community Renewal (DHCR) are the
authorized public housing agencies pursuant to New York state law to
undertake statewide contract administration for Section 8 project based
housing assistance administrative contracts, and pursuant to the United
States Housing Act of 1937 (the Act) that defines public housing agen-
cies.

 
SUMMARY OF PROVISIONS:

              

Subdivision 10 replaces old subdivision 10 (which is now renumbered as
subdivision 11) and notes that the Corporation is a public housing agen-
cy and explains how such agencies that may receive and administer funds
including but not limited to subsidies, loans and fees made available
through federal programs under the Housing Act of 1937.

Subdivision 10 subsection (a) clarifies that the Corporation is to be
the only statewide or regional multistate contract administrators for
Section 8 project based Housing Assistance Payments contracts issued
under the Act in New York. This subdivision also permits for subcon-
tracting, delegation, and DHCR responsibility for unwilling Corporation
participants.

Subdivision 10 (b) maintains and authorizes other public housing agen-
cies operating within the state of New York to continue to operate and
administer Section 8 project-based contracts within the political subdi-
vision in which they presently operate in the same manner as it was
prior to this bill.

Subdivision 10 is renumbered subdivision 11.

Subdivision 11 is renumbered as subdivision 12.

Subdivision 12 is renumbered as subdivision 13.

The bill provides for an immediate effective date.

 
JUSTIFICATION:

The bill clarifies the existing state housing administration and funding
scheme where only certain housing agencies have been granted jurisdic-
tion to act statewide and coordinate federal housing programs. The bill
would align the law with a 2011 opinion issued by the NYS Solicitor
General which found only four entities eligible to qualify as state
public housing agencies (PHAs). Three of those entities are included
under the New York State Homes and Community Renewal umbrella: DHCR, the
Corporation, and the Housing Finance Agency (HFA).

Further, many other states have issued similar attorneys general opin-
ions to clarify the statewide jurisdiction of their PHA(s).  Moreover,
other states have enacted laws to explicitly and exclusively authorized
a state PHA or PHAs as the sole sanctioned entity to administer federal
project-based (HAP) contracts as described under 42 USC 1437f(b)(1).
See, i.e., Vermont Act No. 69, 2017. The motivation for these state
opinions and statutory changes emanates from a controversy between 42
states and the United States Department of Housing and Urban Development
(HUD) that was finally decided in CMS v. HUD, 745 F.3d 1379 (Fed. Cir.
2014). In CMS, the Court of Appeals for the Federal Circuit decided that
the services to administer federal project-based HAP contracts must be
procured under the Federal Acquisition Regulations rather than as a
cooperative agreement as had been the case since 1999.

Although the court did require a procurement in CMS, it did not overturn
any portion of the federal Act that requires contract administration
services to be performed by state PHAs. 42 USC 1437f(b)(1) ("The Secre-
tary is authorized to enter into annual contributions contracts with
public housing agencies . . .").  Likewise, the Act declaration of poli-
cy to "assist the states" is unchanged since 1937. Indicating that for
many decades the federal government understood the appropriateness of
state housing jurisdiction over these project-based contracts.

It is in the state's interest to maintain oversight of the affordable
housing stock within the state. As administrators, the state integrates
the stock into its purview, helping to maintain affordable and safe
housing for its constituents and providing communication between owners,
tenants and state programs that sustains quality of life wherever these
federal projects are situated. This communication helps to preserve
housing funds and prevents health and safety issues through more timely
maintenance.

HUD issued Draft Requests for Proposals in December 2017 that conflict
with the Act and statewide jurisdiction and radically alters the
approach to project-based administration. HUD's new approach does a
disservice to the public though the destruction of the states' jurisdic-
tion. The State has unique knowledge regarding housing needs within its
borders and provides more focus on individual living standards and the
comfort of its people. In the present administration of Section 8 within
New York the legislature has recognized that local control is often
needed and appropriate. This bill preserves that localized approach.

The bill thus articulates and maintains the historic and rightful role
of the state and localities in maintaining oversight of the housing
within its borders.

 
PRIOR LEGISLATIVE HISTORY:

None.

 
FISCAL IMPLICATIONS:

There is no anticipated budget impact on this proposed legislation.

 
EFFECTIVE DATE:
Immediate.