ARIZONA STATE SENATE
Phoenix, Arizona
office of housing
development
Purpose
An emergency measure that
removes the prohibition on the Department of Commerce from administering
Section 8 housing assistance in an area of the state where there is a local
public housing authority, and permits such administration, subject to
prescribed restrictions. (These changes enable the Department to be eligible to
become the contract administrator for project-based housing assistance.)
Background
The
Department of Commerce (DOC), which operates the state public housing authority
(PHA), has applied through the U.S. Department of Housing and Urban Development
(HUD) to become the contract administrator for the Section 8 project-based
housing assistance program for the State of Arizona. Section 8 is a rental subsidy program in which HUD awards funding
to PHAs to assist eligible families in renting housing in the private market.
The PHAs and HUD primarily
administer tenant-based Section 8 assistance, in which the assistance is
“attached” to an eligible family in the form of a certificate or voucher issued
by the PHA. Section 8 assistance may
also be project-based, in which the assistance is “attached” to a privately
owned and managed project or development.
Through the project-based assistance program, a developer receives a low
interest loan from HUD to construct low-income rental housing, and HUD
subsequently subsidizes the rent.
Because of HUD’s involvement in the development process of this type of
housing, it has historically administered the project-based program itself.
Currently, Arizona statute limits the authority of DOC in administering Section 8 housing assistance. The Department is only authorized to administer assistance programs in areas of the state where there is no local PHA. This limitation holds for assistance that is both tenant- and project-based. It should be noted that Laws 1999, First Special Session, Chapter 3 (the public finance ORB) amended statute to allow DOC to administer Section 8 programs in areas in which there is a local PHA, if the assistance was limited to persons with serious mental illness (SMI) or other disabilities. However, the public finance ORB provision was inadvertently repealed, and this provision was only effective for a few weeks in 1999. Thus, as statute currently stands, DOC may only administer Section 8 assistance in areas in which there is no local PHA.
The federal government has
recently decided to transfer the administration of the Section 8 project-based
assistance program from HUD to state PHAs or other regional contract
administrators. Because state statute
restricts the Department from administering Section 8 assistance to an area of
the state where a local PHA has been established, HUD has indicated that the
Department is ineligible for the statewide contract.
S.B. 1123 addresses the
request of DOC by allowing the Department to administer all activities
associated with the Section 8 project-based assistance program in all areas of
the state, regardless of whether a local PHA has been established. In addition, this legislation re-enacts the
provisions of the 1999 public finance ORB (in a modified format), so as to
allow DOC to administer tenant-based programs in an area of the state where
there is a local PHA, provided assistance is limited to persons with SMI or
other disabilities. (For a synopsis of
how the housing assistance programs are treated under S.B. 1123, refer to the
table below.)
There is no discernable
impact to the state general fund associated with this legislation.
|
|
HUD Housing Assistance Programs |
|
|
|
Tenant-Based Assistance
Program |
Project-Based Assistance
Program |
|
Local
PHA Established |
DOC may administer assistance only to persons with
SMI or another disability. (Re-enacts 1999 Public Finance ORB provision.) |
DOC may administer assistance and does not need
approval of the local governing body. (New provision) |
|
No
Local PHA Established |
DOC may administer assistance if the local governing
body approves. (This provision has not changed from current law.) |
DOC may administer assistance and does not need
approval of the local governing body. (No approval is a new provision.) |
Provisions
1. Eliminates the blanket prohibition on DOC from administering Section 8 housing assistance in an area of the state where there is a local public housing authority, and permits such administration, subject to prescribed restrictions.
2. Differentiates two types of housing assistance programs authorized by HUD – tenant-based rental housing assistance and project-based rental housing assistance.
3. Allows DOC to administer monies authorized under a Section 8 project-based housing assistance program in all areas of the state. Such administration does not require the authorization of a local governing body.
4. Allows DOC to administer monies authorized under a Section 8 tenant-based housing assistance program in an area of the state where a local PHA is established, if assistance is limited to persons with SMI or other disabilities. (Re-enacts provisions of Laws 1999, First Special Session, Chapter 3.)
5. Makes conforming and technical changes.
6. Contains an emergency clause.
Prepared by Senate Staff
January 22, 2001