BILL NUMBER: S6974

SPONSOR: KAVANAGH
 
TITLE OF BILL:

An act to amend the private housing finance law, in relation to author-
izing statewide or regional multi-state contract administration and
support services for federal section 8 project based housing assistance
payments contracts

 
PURPOSE OF THE BILL:

The purpose of this bill is to clarify and reinforce a long- standing
position that the New York State 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 contract adminis-
tration, Without a Clear articulation of 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.

 
SUMMARY OF PROVISIONS:

Section 1 sets forth the short title, the State and Local Project Based
Housing Assistance Payment Contract Administration Act of 2020.

Section 2 of the bill renumbers subdivisions 10, 11, and 12 of
section.45-a of the Private Housing Finance Law, subdivision 11 as
renumbered by chapter 261 of the Laws of 1988, as subdivisions 11, 12,
and 13 and adds a new subdivision 10 to establish that the Corporation
is a public housing agency as defined 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, Paragraph a of subdivision 10 clarifies that the Corporation is
to be the only statewide or regional multi-state contract administrator
for Section 8 project based HAP contracts issued under § 1437f of the
Act in New York.  Subdivision 10 also allows for subcontracting, deleg-
ation, and redundancy should the Corporation be unwilling or unable to
participate, as DHCR is also granted authority in such event.

Paragraph b of 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 to the
same manner as prior to the introduction of this bill.

Section 3 of the bill provides for an immediate effective date.

 
EXISTING LAW:

A 2011 opinion issued by the NYS Solicitor General which found only four
entities eligible to qualify as state public housing agencies (PHAs) as
defined in the Act. Three of those entities are included under the New
York State Homes and Community Renewal umbrella: DHCR, the Corporation;
and the Flousing Finance Agency (HFA).
 
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 the aforementioned 2011 opinion issued by the
NYS Solicitor General.

Many other states have issued similar attorneys general opinions to
clarify the statewide jurisdiction of their PI-1A(s). Other states have
also enacted laws to explicitly and exclusively authorized a state PI-IA
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 hous-
ing agencies ." (42 USC § 1437f(b)(l)).

Indicating that for decades the federal government understood the neces-
sity of state jurisdiction over these project based HAP administration
contracts, However, federal litigation commenced alter 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.

IIUD 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:

This bill was previously submitted by HCR as LED 1109468-04-0
(HCR1/5,20)..In the 2019-20 session, the bill (S. 6156) passed unan-
imously in the Senate before dying in the Assembly Housing Committee.
Similar proposals were introduced in the 2017-2018 session: (A.11221 /
S.8555).

 
FISCAL IMPLICATIONS:

None.

 
EFFECTIVE DATE:
This bill would take effect on the one hundred and eightieth day after
it shall become law.