Is the Tennessee Housing Development Agency the only entity authorized by Tennessee law to administer the state's Project-Based Section 8 housing voucher contracts with HUD?

Subject

Opinion No. 12-25, Administration of Project-Based Section 8 Housing Assistance Payments Contracts, February 29, 2012

Plain-English summary

Project-Based Section 8 is the federal program where the Department of Housing and Urban Development (HUD) makes monthly rent-subsidy payments directly to owners of specific assisted housing units (about 400 properties statewide in Tennessee in 2012). HUD contracts with a "public housing agency" in each state, through a Performance-Based Annual Contributions Contract (ACC), to monitor compliance, pay owners, and submit required documents.

THDA had served as Tennessee's performance-based contract administrator since 2000. In 2011 HUD ran a new competitive process to select one administrator per state. After protests in several states questioned whether some bidders were properly authorized "public housing agencies," HUD reopened the competition in those states. THDA's executive director asked the AG whether THDA was the only entity Tennessee law authorized to administer statewide Project-Based Section 8 contracts.

The AG said yes, walking through the federal definition and the Tennessee statutory authorization.

Federal definition. Under 42 U.S.C. § 1437f(b)(1), HUD enters annual contributions contracts with "public housing agencies." Under 42 U.S.C. § 1437a(b)(6)(A), a public housing agency is "any State, county, municipality, or other governmental entity or public body (or agency or instrumentality thereof) which is authorized to engage in or assist in the development or operation of public housing." The key phrase is "authorized to engage in or assist in the development or operation."

Tennessee's authorization scheme. The General Assembly created THDA through the Tennessee Housing Development Agency Act, Tenn. Code Ann. §§ 13-23-101 to -133. THDA is a political subdivision and instrumentality of the state, designed to act "for the benefit of the people of the state in the performance of essential public functions." Tenn. Code Ann. § 13-23-104. THDA's powers cover the waterfront: contract with HUD, accept federal funds, provide construction and permanent financing, administer grants, employ staff, and "do any and all things necessary or convenient to carry out its purposes." Tenn. Code Ann. §§ 13-23-115(14), (28).

No other Tennessee entity has this authorization. The General Assembly has not created any other statewide entity with the authority to administer Project-Based Section 8 contracts on a statewide basis. The AG read § 1437a(b)(6)(A) to implicitly require that the public-housing-agency authorization come from the state's legislature, not just from HUD's contractual selection.

Cross-check against the tenant-based assistance definition. Congress expressly carved out a different rule for tenant-based assistance: under § 1437a(b)(6)(B)(iii)(II), HUD may pick a public housing agency for another area, "notwithstanding any provision of State or local law," to administer tenant-based assistance where no local agency has been organized or is unable. Congress did not include comparable language for project-based assistance. Under the canon that disparate inclusion is presumed intentional (INS v. Cardoza-Fonseca (1987)), the absence of the override means the state-law authorization requirement applies fully to project-based administration. So a public housing agency from another state cannot step in as Tennessee's statewide project-based administrator without Tennessee legislative authorization.

Currency note

This opinion was issued in 2012. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Background and statutory framework

Section 8 program structure. Section 8 of the United States Housing Act of 1937 (added by the Housing and Community Development Act of 1974) authorizes federal rental assistance. There are two modes:

• Project-based assistance. Tied to specific housing units. Owners receive monthly payments from HUD (or HUD's performance-based contract administrator) on behalf of low-income tenants in those units. 24 C.F.R. § 982.1(b)(1).
• Tenant-based assistance. Tied to the tenant. The subsidy follows the tenant to any Section 8 unit. 42 U.S.C. § 1437f(o), (r); 24 C.F.R. §§ 982.1(b)(1), 982.314, 982.353, 982.355.

Federal "public housing agency" definition. 42 U.S.C. § 1437a(b)(6)(A): "any State, county, municipality, or other governmental entity or public body ... which is authorized to engage in or assist in the development or operation of public housing." The authorization must come from somewhere. The AG read that as requiring state legislative authorization for a statewide project-based administrator.

Tenant-based exception. § 1437a(b)(6)(B)(iii)(II) lets HUD designate a public housing agency from another area, notwithstanding state or local law, to administer tenant-based assistance where the local agency is missing or unable. No comparable override for project-based assistance.

THDA's authority. Tenn. Code Ann. §§ 13-23-101 to -133. The Act creates THDA as a state instrumentality, gives it explicit authority to contract with federal agencies and accept federal funds (§ 13-23-115(14)), and includes broad necessary-and-proper authority (§ 13-23-115(28)).

The Cardoza-Fonseca canon. Where Congress uses particular language in one section and omits it in another section of the same act, the omission is presumed intentional. INS v. Cardoza-Fonseca (1987).

Common questions

Q: Why does the public-housing-agency authorization have to come from the state, not just from HUD's contract? A: Per the AG's reading of § 1437a(b)(6)(A), being "authorized to engage in or assist in" public housing means being authorized by law, not just selected by HUD. Otherwise HUD could create a public housing agency by contract, which Congress did not authorize for project-based administration (compare the explicit override Congress did write for tenant-based assistance in § 1437a(b)(6)(B)(iii)(II)).

Q: Could a local housing authority in Tennessee administer Project-Based Section 8 for the whole state? A: The AG concluded that the General Assembly had created no entity other than THDA with statutory authority to administer a statewide Project-Based Section 8 contract. The opinion does not decide a local authority's role within its own jurisdiction.

Q: Could the Legislature add a second statewide administrator? A: The opinion describes the Tennessee statutes as they stood in 2012. It does not analyze proposed legislation creating another administrator.

Q: Did HUD have to award the contract to THDA?
A: The opinion gives an advisory reading of Tennessee statutory authority: the General Assembly had created no entity other than THDA with authority to administer a statewide Project-Based Section 8 contract. It does not direct HUD's award decision or decide applicant eligibility in HUD's competitive process.

Q: Does this affect Tennessee's other affordable-housing programs? A: The opinion addresses statewide Project-Based Section 8 contract administration. It does not decide the administration of other housing programs.

Citations and references

Federal statutes:

• 42 U.S.C. § 1437f(b)(1)
• 42 U.S.C. § 1437a(b)(6)(A)
• 42 U.S.C. § 1437a(b)(6)(B)(iii)(II)

State statutes:

• Tenn. Code Ann. §§ 13-23-101 to -133

Cases:

• INS v. Cardoza-Fonseca, 480 U.S. 421 (1987)

Source

• Landing page: https://www.tn.gov/attorneygeneral/opinions.html
• Original PDF: https://www.tn.gov/content/dam/tn/attorneygeneral/documents/ops/2012/op12-025.pdf

Original opinion text

Administration of Project-Based Section 8 Housing Assistance Payments Contracts QUESTION Is the Tennessee Housing Development Agency the only agency authorized by Tennessee law to be the administrator of Project-Based Section 8 Housing Assistance Payments contracts for the State of Tennessee? OPINION Yes. The General Assembly has created no entity other than the Tennessee Housing Development Agency with the statutory authority to administer a state-wide Project-Based Section 8 contract. ANALYSIS The Project-Based Section 8 Housing Assistance Payments program was created by the Housing and Community Development Act of 1974. The Housing Assistance Payments program is a rent subsidy program that assists eligible low income families in obtaining decent, safe, and sanitary housing. Families receive the benefit of a rent subsidy, known as a housing assistance payment, equal to the difference between their share of the rent and the rent charged by the owner. Owners, who may be public or private, receive the housing assistance payments directly from the United States Department of Housing and Urban Development ("HUD") or one of its performance-based contract administrators. See 42 U.S.C. § 1437f. In August of 2000, HUD awarded the Tennessee Housing Development Agency ("THDA") with a Performance-Based Annual Contributions Contract for oversight of properties with Section 8 Housing Assistance Payments contracts. Pursuant to this contract, THDA has continuously served as a performance-based contract administrator for HUD, overseeing Section 1 "Section 8" refers to Section 8 of the United States Housing Act of 1937, which was added by the Housing and Community Development Act of 1974, Pub.L. No. 93-383, § 201(a), 88 Stat. 633, 662-66 (codified as amended at 42 U.S.C. § 1437(f)). Section 8 housing assistance may be either "project-based" or "tenant-based." 24 C.F.R. § 982.1(b)(1). Project-based assistance is appurtenant to specific housing units, pursuant to which the federal government provides rental assistance payments to unit owners on behalf of low income tenants in those units. Id. Tenant-based assistance, on the other hand, is appurtenant to the tenant, pursuant to which the tenant may retain a rental subsidy when he or she moves to another Section 8 housing unit. See 42 U.S.C. § 1437f(o), (r); 24 C.F.R. §§ 982.1(b)(1), 982.314, 982.353, 982.355. Page 2 8 Housing Assistance Payments contracts appurtenant to approximately 400 properties located throughout Tennessee. See http://www.thda.org/s8ca/cacover.html. Currently, HUD is engaging in a new competitive process to select performance based- contract administrators for its Housing Assistance Payments contracts in each state. On March 23, 2011, HUD issued an Invitation for Submission of Applications wherein it announced that it would select one administrator for each state, other than California. See Invitation for Submission of Applications, available at http://portal.hud.gov/hudportal/documents/huddoc? id=invitationforappsfinal.pdf. The Invitation states that the successful applicant for each state will enter into a single Performance-Based Annual Contributions Contract (“ACC”) with HUD. Id. at 3 The principal tasks to be performed under the contract include, but are not limited to, the following:

• Monitoring compliance by project owners with their obligation to provide decent, safe, and sanitary housing to assisted residents;
• Paying property owners accurately and timely;
• Accurately and timely submitting required documents to HUD (or a HUD designated agent); and
• Complying with applicable Federal law and HUD regulations and requirements, as they exist at the time of ACC execution and as amended from time to time. Id. at 4. The Invitation further provides that the successful applicant must perform certain “Performance Based Tasks” set forth in the ACC. See Performance-Based Annual Contributions Contract, § 1, Exhibit A § 3, available at http://portal.hud.gov/hudportal/documents/ huddoc?id=accfinal.pdf. Importantly, the Invitation seeks applications from legally qualified “public housing agencies,” consistent with 42 U.S.C. § 1437f, which provides in pertinent part: The Secretary is authorized to enter into annual contributions contracts with public housing agencies pursuant to which such agencies may enter into contracts to make assistance payments to owners of existing dwelling units in accordance with this section. In areas where no public housing agency has been organized or where the Secretary determines that a public housing agency is unable to implement the provisions of this section, the Secretary is authorized to enter into such contracts and to perform the other functions assigned to a public housing agency by this section. 42 U.S.C. § 1437f(b)(1). 8 Housing Assistance Payments contracts appurtenant to approximately 400 properties located Currently, HUD is engaging in a new competitive process to select performance based- contract administrators for its Housing Assistance Payments contracts in each state. On March 23, 2011, HUD issued an Invitation for Submission of Applications wherein it announced that it would select one administrator for each state, other than California. See Invitation for Submission of Applications, available at The Invitation states that the successful applicant for each state will enter into a single Performance-Based Annual Contributions Contract ("ACC") with HUD. Id. at 3 The principal Lbl Lbl Lbl Lbl The Invitation further provides that the successful applicant must perform certain "Performance Based Tasks" set forth in the ACC. See Performance-Based Annual Contributions Contract, § 1, Exhibit A § 3, available at Importantly, the Invitation seeks applications from legally qualified "public housing agencies," consistent with 42 U.S.C. § 1437f, which provides in pertinent part: The Secretary is authorized to enter into annual contributions contracts with public housing agencies pursuant to which such agencies may enter into contracts to make assistance payments to owners of existing dwelling units in accordance with this section. In areas where no public housing agency has been organized or where the Secretary determines that a public housing agency is unable to implement the provisions of this section, the Secretary is authorized to enter into such contracts and to perform the other functions assigned to a public housing The term "public housing agency" is defined in pertinent part as follows: Except as provided in subparagraph (B), the term "public housing agency" means any State, county, municipality, or other governmental entity or public body (or agency or instrumentality thereof) which is authorized to engage in or assist in the development or operation³ of public housing. 42 U.S.C. § 1437a(b)(6)(A)(emphasis. added). Based on the information provided with this opinion request, HUD received protests in several states regarding whether certain applicants were legally authorized "public housing agencies" eligible to be awarded the ACC proposed to be let by the Invitation. In light of these protests, HUD has elected to engage in a new competitive process in those states where more than one application was received. Since Tennessee is one of the states in which HUD will be engaging in a new competitive process, the question posed is whether THDA is the only agency authorized by Tennessee law to be the administrator of Project-Based Section 8 Housing Assistance Payments contracts for the State of Tennessee. For the reasons set forth below, we The General Assembly created THDA when it enacted the Tennessee Housing Development Agency Act, codified at Tenn. Code Ann. §§ 13-23-101 to -133. THDA is a body, politic and corporate, and it is a political subdivision and instrumentality of the State. Tenn. Code Ann. § 13-23-104. The General Assembly has proclaimed: The Agency shall be deemed to be acting in all respects for the benefit of the people of the state in the performance of essential public functions and shall be deemed to be serving a public purpose and improving and otherwise promoting the health, welfare, and prosperity of the people of the state, and that the Tennessee housing development agency shall be empowered to act on behalf of the state of Tennessee and its people in serving this public purpose for the benefit 2 Subsection (B) of 42 U.S.C. § 1437a(b)(6) addresses the meaning of "public housing agency" for purposes of the Section 8 program for tenant-based assistance. 3 The term "development" means "any or all undertakings necessary for planning, land acquisition, demolition, construction, or equipment, in connection with a low-income housing project. 42 U.S.C. § 1437a(c)(1). The term "operation" includes "any or all undertakings appropriate for management, operation, services, maintenance, security (including the cost of security personnel), or financing in connection with a low-income housing project. " 42 U.S.C. § 1437a(c)(2). The term "low-income housing project" contained within each of these definitions means "(A) housing developed, acquired, or assisted by a public housing agency under this chapter, and (B) the improvement of any such housing." 42 U.S.C. § 1437a(b)(1). Page 3 The term “public housing agency” is defined in pertinent part as follows: Except as provided in subparagraph (B),2 the term “public housing agency” means any State, county, municipality, or other governmental entity or public body (or agency or instrumentality thereof) which is authorized to engage in or assist in the development or operation3 of public housing. 42 U.S.C. § 1437a(b)(6)(A)(emphasis added). Based on the information provided with this opinion request, HUD received protests in several states regarding whether certain applicants were legally authorized “public housing agencies” eligible to be awarded the ACC proposed to be let by the Invitation. In light of these protests, HUD has elected to engage in a new competitive process in those states where more than one application was received. Since Tennessee is one of the states in which HUD will be engaging in a new competitive process, the question posed is whether THDA is the only agency authorized by Tennessee law to be the administrator of Project-Based Section 8 Housing Assistance Payments contracts for the State of Tennessee. For the reasons set forth below, we believe that THDA is the only agency so authorized. The General Assembly created THDA when it enacted the Tennessee Housing Development Agency Act, codified at Tenn. Code Ann. §§ 13-23-101 to -133. THDA is a body, politic and corporate, and it is a political subdivision and instrumentality of the State. Tenn. Code Ann. § 13-23-104. The General Assembly has proclaimed: The Agency . . . shall be deemed to be acting in all respects for the benefit of the people of the state in the performance of essential public functions and shall be deemed to be serving a public purpose and improving and otherwise promoting the health, welfare, and prosperity of the people of the state, and that the Tennessee housing development agency shall be empowered to act on behalf of the state of Tennessee and its people in serving this public purpose for the benefit of the general public. Tenn. Code Ann. § 13-23-104. 2 Subsection (B) of 42 U.S.C. § 1437a(b)(6) addresses the meaning of “public housing agency” for purposes of the Section 8 program for tenant-based assistance. 3 The term “development” means “any or all undertakings necessary for planning, land acquisition, demolition, construction, or equipment, in connection with a low-income housing project. . . .” 42 U.S.C. § 1437a(c)(1). The term “operation” includes “any or all undertakings appropriate for management, operation, services, maintenance, security (including the cost of security personnel), or financing in connection with a low-income housing project. . .
  .” 42 U.S.C. § 1437a(c)(2). The term “low-income housing project” contained within each of these definitions means “(A) housing developed, acquired, or assisted by a public housing agency under this chapter, and (B) the improvement of any such housing.” 42 U.S.C. § 1437a(b)(1). Page 4 THDA’s purposes include promoting the production of affordable housing units and the preservation and rehabilitation of existing housing units for very low, low and moderate income individuals and families. Tenn. Code Ann. § 13-23-102. To effectuate its purposes, THDA is authorized to perform the following functions, among others: to contract for and accept funds from the United States or any agency or instrumentality thereof and to comply with the terms and conditions associated with such funds, Tenn. Code Ann. § 13-23-115(14); to provide construction and permanent financing for land development and construction of housing for lower and moderate income persons, Tenn. Code Ann. § 13-23-102(1),(2) & Tenn. Code Ann. § 13-23-115(1),(2); to make and administer grants to political subdivisions and private nonprofit corporations for housing and related services, Tenn. Code Ann. § 13-23-102(6) & Tenn. Code Ann. § 13-23-115(31); to enter into all contracts and agreements necessary, convenient or desirable to carry out its purposes or to perform its duties in connection therewith, Tenn. Code Ann. § 13-23-115(13); to employ employees and others as determined in the judgment of THDA, Tenn. Code Ann. § 13-23-115(21); to provide technical and advisory services to those involved in all aspects of affordable residential housing, Tenn. Code Ann. § 13-23-115(22); to promote research and development in proper land use planning, Tenn. Code Ann. § 13-23-115 (23); and to “[d]o any and all things necessary or convenient to carry out its purposes and exercise the powers given and granted. . . .” Tenn. Code Ann. § 13-23-115(28). In sum, the General Assembly has determined that providing affordable housing for low and moderate income persons is of critical importance, and it has established a pervasive regulatory scheme in which THDA is bestowed with sweeping powers to provide such housing on a state-wide basis – powers which include those necessary to administer Project-Based Section 8 Housing Assistance Payments contracts throughout the State of Tennessee. Moreover, the General Assembly has given THDA explicit authority to contract for and accept funds from the United States or any agency or instrumentality thereof and to comply with the terms and conditions associated with such funds. Therefore, we conclude THDA is a “public housing agency” under 42 U.S.C. § 1437a(b)(6)(A) since it is an instrumentality of the State of Tennessee that “is authorized to engage in or assist in the development or operation of public housing” in this State. Further, we conclude that THDA is the only “public housing agency” authorized to administer Project-Based Section 8 Housing Assistance Payments contracts for the State of Tennessee, given that the General Assembly has created no other entity with the authority to administer a state-wide Project-Based Section 8 contract. In so concluding, we believe the authorization provision of 42 U.S.C. § 1437a(b)(6)(A) implicitly requires that such authorization be granted by the legislative body of the State in which the public housing agency operates. While Congress could permit a public housing agency created by the laws of one state to operate as a public housing agency in another state, the contrasting definition of a public housing agency for a tenant-based assistance program indicates that Congress has not conferred such permission. In 42 U.S.C. § 1437a(b)(6)(B)(iii)(II), Congress expands the definition of public housing agency “[f]or purposes of the program for tenant-based assistance” to include, “notwithstanding any provision of State or local law, a public housing agency for another area that contracts with [HUD] to administer a program for housing assistance under section 1437f of this title, without regard to any otherwise applicable limitations on its area of operation” when “no public housing agency has been organized or where [HUD] determines that a public housing agency is unwilling or unable to THDA's purposes include promoting the production of affordable housing units and the preservation and rehabilitation of existing housing units for very low, low and moderate income individuals and families. Tenn. Code Ann. § 13-23-102. To effectuate its purposes, THDA is authorized to perform the following functions, among others: to contract for and accept funds from the United States or any agency or instrumentality thereof and to comply with the terms and conditions associated with such funds, Tenn. Code Ann. § 13-23-115(14); to provide construction and permanent financing for land development and construction of housing for lower and moderate income persons, Tenn. Code Ann. § 13-23-102(1),(2) & Tenn. Code Ann. § 13-23-115(1),(2); to make and administer grants to political subdivisions and private nonprofit corporations for housing and related services, Tenn. Code Ann. § 13-23-102(6) & Tenn. Code Ann. § 13-23-115(31); to enter into all contracts and agreements necessary, convenient or desirable to carry out its purposes or to perform its duties in connection therewith, Tenn. Code Tenn. Code Ann. § 13-23-115(21); to provide technical and advisory services to those involved in all aspects of affordable residential housing, Tenn. Code Ann. § 13-23-115(22); to promote research and development in proper land use planning, Tenn. Code Ann. § 13-23-115 (23); and to "[d]o any and all things necessary or convenient to carry out its purposes and exercise the powers given and granted. Tenn. Code Ann. § 13-23-115(28). In sum, the General Assembly has determined that providing affordable housing for low and moderate income persons is of critical importance, and it has established a pervasive regulatory scheme in which THDA is bestowed with sweeping powers to provide such housing on a state-wide basis - powers which include those necessary to administer Project-Based Section 8 Housing Assistance Payments contracts throughout the State of Tennessee. Moreover, the General Assembly has given THDA explicit authority to contract for and accept funds from the United States or any agency or instrumentality thereof and to comply with the terms and Therefore, we conclude THDA is a "public housing agency" under 42 U.S.C. § 1437a(b)(6)(A) since it is an instrumentality of the State of Tennessee that "is authorized to engage in or assist in the development or operation of public housing" in this State. Further, we conclude that THDA is the only "public housing agency" authorized to administer Project-Based Section 8 Housing Assistance Payments contracts for the State of Tennessee, given that the General Assembly has created no other entity with the authority to administer a state-wide Project-Based Section 8 contract. In so concluding, we believe the authorization provision of 42 U.S.C. § 1437a(b)(6)(A) implicitly requires that such authorization be granted by the legislative body of the State in which the public housing agency operates. While Congress could permit a public housing agency created by the laws of one state to operate as a public housing agency in another state, the contrasting definition of a public housing agency for a tenant-based assistance program indicates that Congress has not conferred such permission. In 42 U.S.C. § 1437a(b)(6)(B)(iii)(II), Congress expands the definition of public housing agency "[f]or purposes of the program for tenant-based assistance" to include, "notwithstanding any provision of State or local law, a public housing agency for another area that contracts with [HUD] to administer a program for housing assistance under section 1437f of this title, without regard to any otherwise applicable limitations on its area of operation" when "no public housing agency has been organized or where [HUD] determines that a public housing agency is unwilling or unable to Page 5 implement a program for tenant-based assistance. . . .” Where Congress includes particular language in one section of a statute but omits it in another section of the same Act, it is generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion. INS v. Cardoza–Fonseca, 480 U.S. 421, 432, (1987) (citations omitted). ROBERT E. COOPER, JR. Attorney General and Reporter WILLIAM E. YOUNG Solicitor General LAURA T. KIDWELL Senior Counsel Requested by: Ted R. Fellman, Executive Director Tennessee Housing Development Agency 404 James Robertson Parkway, Suite 1200 Nashville, TN 37243-0900 implement a program for tenant-based assistance. " Where Congress includes particular language in one section of a statute but omits it in another section of the same Act, it is generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion. INS v. Cardoza-Fonseca, 480 U.S. 421, 432, (1987) (citations omitted). Attorney General and Reporter Tennessee Housing Development Agency