BILL NUMBER: S6156

SPONSOR: STEWART-COUSINS
 
TITLE OF BILL:  An act to amend the private housing finance law, in
relation to the statewide or regional multi-state contract adminis-
tration and support services for federal section eight 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 public housing agencies authorized to undertake statewide contract
administration for Section 8 project based housing assistance adminis-
trative contracts pursuant to New York state law and the United States
Housing Act of 1937 ("the Act"). This legislation is necessary to
preserve state and local control over project based administration.
Without a clear articulation of authority for a state agency to adminis-
ter these project based contracts, it is possible for private industry
to take control of the federally assisted housing stock in New York.

              

 
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 as defmed in the Act and explains how such agencies may receive and
administer funds including but not limited to subsidies, loans and fees
made available through federal programs under the Act.

Subdivision 10 subsection (a) clarifies that the Corporation is to be
the only statewide or regional multistate contract administrator for
Section 8 project based HAP contracts issued under § 1437f of the Act in
New York. Subdivision 10 also allows for subcontracting, delegation, and
redundancy should the Corporation be unwilling or unable to participate,
as DHCR is also granted authority in such event

Subdivision 10 (b) continues authorization for other New York state
public housing authorities operating within the state to continue to
operate and administer Section 8 project-based contracts within the
political subdivision in which they presently operate in the same manner
as prior to the introduction of 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) as defmed in the Act.  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).

Many other states have issued similar attorneys general opinions to
clarify the statewide jurisdiction of their PHA(s). Other states have
also 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 in the Act at 42 USC § 1437f. 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 Acquisi-
tion 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 Act that requires contract administration services to
be performed by state PHAs. The Act's declaration of policy to "assist
the states" is unchanged since 1937, and the Act authorizes The Secre-
tary . . . to enter into annual contributions contracts with public
housing agencies . . ." (42 USC § 1437f(b)(1)).  Indicating that for
decades the federal government understood the necessity of state juris-
diction over these project based HAP administration contracts. However,
federal litigation commenced after the 2011 HUD RFP failed to fully
resolve the legal issues surrounding statutory authority to control the
administration of the project based section 8 portfolios within the
states. As a result, without legislation to ensure authority for a state
agency to administer these project based contracts, it is possible for
private industry to take control of the federally assisted housing stock
in New York.  This has happened in other states such as Connecticut. HUD
has shown a willingness to allow private industry to supplant the
states' historic control over such project based portfolios through the
terms of RFPs issued in 2011 and again, in draft form, last December.

It is in the state's interest to maintain oversight of the affordable
housing stock within the state. As administrators, the state integrates
the federal project based housing stock into its purview, applying its
assets and expertise to maintain affordable and safe housing for its
constituents and providing communication between owners, tenants and
state programs that sustain quality of life wherever these federal
projects are situated. This mission-based approach 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, statewide jurisdiction and radically alters the approach
to project-based administration. HUD's new approach does a disservice to
the public through the destruction of the states' jurisdiction. states
are in a unique position to accumulate knowledge regarding housing needs
within its borders and therefore have a unique ability to coordinate
scarce resources and provide the greatest possible benefits for constit-
uents. The New York legislature has recognized by its creation of the

state's housing scheme, that local input is needed to tailor housing
assistance to local needs.  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:

Similar proposals were introduced in the 2017-2018 session; Assembly
bill A.11221 and Senate bill S.8555. In the Senate and Assembly, the
bill remained in committee. There are no nay votes or reservations
recorded in either.

 
FISCAL IMPLICATIONS:

There is no anticipated budget impact on this proposed legislation. In
fact, this bill will help maintain funds for the state.

 
EFFECTIVE DATE:
This bill provides for an immediate effective date.