B-125637, DECEMBER 7, 1955, 35 COMP. GEN. 345

B-125637: Dec 7, 1955

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HOUSING ACT OF 1954 - ANNUAL CONTRIBUTION CONTRACTS - PAYMENTS IN LIEU OF TAXES ANNUAL CONTRIBUTIONS CONTRACTS WHICH WERE ENTERED INTO BETWEEN THE PUBLIC HOUSING ADMINISTRATION AND LOCAL AUTHORITIES PRIOR TO THE HOUSING ACT OF 1954. A LOCAL HOUSING AUTHORITY WHICH WAS PRECLUDED FROM MAKING PAYMENTS IN LIEU OF TAXES AFTER FISCAL YEAR 1952 BECAUSE OF FAILURE TO EXECUTE THE ADMINISTRATIVELY REQUIRED AMENDATORY AGREEMENT MAY NOT HAVE THE DEADLINE WAIVED BY THE PUBLIC HOUSING ADMINISTRATION SO AS TO PERMIT VOLUNTARY PAYMENTS IN LIEU OF TAXES FOR THE YEARS 1952 TO DATE. THE ESTABLISHMENT OF TIME LIMITATIONS FOR PAYMENTS IN LIEU OF TAXES IN ANNUAL CONTRIBUTIONS CONTRACTS BETWEEN THE PUBLIC HOUSING ADMINISTRATION AND LOCAL HOUSING AUTHORITIES IS A PROPER EXERCISE OF ADMINISTRATIVE DISCRETION AND THE PUBLIC HOUSING ADMINISTRATION IS PROSCRIBED FROM WAIVING SUCH CONTRACT CONDITIONS TO PERMIT A LOCAL HOUSING AUTHORITY TO MAKE PAYMENTS AFTER THE EXPIRATION OF THE LIMITATION.

B-125637, DECEMBER 7, 1955, 35 COMP. GEN. 345

HOUSING ACT OF 1954 - ANNUAL CONTRIBUTION CONTRACTS - PAYMENTS IN LIEU OF TAXES ANNUAL CONTRIBUTIONS CONTRACTS WHICH WERE ENTERED INTO BETWEEN THE PUBLIC HOUSING ADMINISTRATION AND LOCAL AUTHORITIES PRIOR TO THE HOUSING ACT OF 1954, AND WHICH ALLOWED PAYMENTS IN LIEU OF TAXES IN EXCESS OF AN AMOUNT EQUAL TO 5 PERCENT OF THE SHELTER RENT, MAY BE AMENDED TO ALLOW AN ADDITIONAL PAYMENT OF RENTS SO LONG AS THE INCREASE DOES NOT EXCEED THE PERMISSIVE AUTHORIZATION OF 10 PERCENT OF ANNUAL SHELTER RENTS IN SECTION 10 (H) OF THE ACT IN EFFECT AT THE TIME OF THE CONTRACT. A LOCAL HOUSING AUTHORITY WHICH WAS PRECLUDED FROM MAKING PAYMENTS IN LIEU OF TAXES AFTER FISCAL YEAR 1952 BECAUSE OF FAILURE TO EXECUTE THE ADMINISTRATIVELY REQUIRED AMENDATORY AGREEMENT MAY NOT HAVE THE DEADLINE WAIVED BY THE PUBLIC HOUSING ADMINISTRATION SO AS TO PERMIT VOLUNTARY PAYMENTS IN LIEU OF TAXES FOR THE YEARS 1952 TO DATE; HOWEVER, IN ACCORDANCE WITH THE AMENDATORY CONTRACT PROVISION IN SECTION 10 (H) OF THE HOUSING ACT OF 1954, THE ORIGINAL CONTRIBUTIONS CONTRACT MAY BE AMENDED TO REQUIRED PAYMENTS IN LIEU OF TAXES SUBSEQUENT TO THE EFFECTIVE DATE OF THE HOUSING ACT OF 1954. THE ESTABLISHMENT OF TIME LIMITATIONS FOR PAYMENTS IN LIEU OF TAXES IN ANNUAL CONTRIBUTIONS CONTRACTS BETWEEN THE PUBLIC HOUSING ADMINISTRATION AND LOCAL HOUSING AUTHORITIES IS A PROPER EXERCISE OF ADMINISTRATIVE DISCRETION AND THE PUBLIC HOUSING ADMINISTRATION IS PROSCRIBED FROM WAIVING SUCH CONTRACT CONDITIONS TO PERMIT A LOCAL HOUSING AUTHORITY TO MAKE PAYMENTS AFTER THE EXPIRATION OF THE LIMITATION.

TO THE ADMINISTRATOR, HOUSING AND HOME FINANCE AGENCY, DECEMBER 7, 1955:

REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 27, 1955, REQUESTING A DECISION ON CERTAIN PROBLEMS ENCOUNTERED BY THE PUBLIC HOUSING ADMINISTRATION IN CONNECTION WITH THE AMENDMENT OF THE FIRST SENTENCE OF SUBSECTION 10 (H) OF THE UNITED STATES HOUSING ACT OF 1937, 42 U.S.C. 1410 (H), AS AMENDED, 42 U.S.C. 1410 (H), BY SECTION 402 OF THE HOUSING ACT OF 1954, APPROVED AUGUST 2, 1954, 68 STAT. 631.

THE FIRST AND LAST SENTENCES OF SUBSECTION 10 (H), AS AMENDED BY THE HOUSING ACT OF 1954, PROVIDE:

EVERY CONTRACT MADE PURSUANT TO THIS ACT FOR ANNUAL CONTRIBUTIONS FOR ANY LOW-RENT HOUSING PROJECT INITIATED AFTER MARCH 1, 1949, SHALL PROVIDE THAT NO ANNUAL CONTRIBUTIONS BY THE AUTHORITY SHALL BE MADE AVAILABLE FOR SUCH PROJECT UNLESS SUCH PROJECT IS EXEMPT FROM ALL REAL AND PERSONAL PROPERTY TAXES LEVIED OR IMPOSED BY THE STATE, CITY, COUNTY, OR OTHER POLITICAL SUBDIVISIONS, BUT SUCH CONTRACT SHALL REQUIRE THE PUBLIC HOUSING AGENCY TO MAKE PAYMENTS IN LIEU OF TAXES EQUAL TO 10 PERCENTUM OF THE ANNUAL SHELTER RENTS CHARGED IN SUCH PROJECT OR SUCH LESSER AMOUNT AS (I) IS PRESCRIBED BY STATE LAW, OR (II) IS AGREED TO BY THE LOCAL GOVERNING BODY IN ITS AGREEMENT FOR LOCAL COOPERATION WITH THE PUBLIC HOUSING AGENCY REQUIRED UNDER SUBSECTION 15 (7) (B) (I) OF ACT, OR (III) IS DUE TO FAILURE OF A LOCAL PUBLIC BODY OR BODIES OTHER THAN THE PUBLIC HOUSING AGENCY TO PERFORM ANY OBLIGATION UNDER SUCH AGREEMENT. * * *

CONTRACTS FOR ANNUAL CONTRIBUTIONS ENTERED INTO PRIOR TO THE EFFECTIVE DATE OF THE HOUSING ACT OF 1954 MAY BE AMENDED IN ACCORDANCE WITH THE FIRST SENTENCE OF THIS SUBSECTION. ( ITALICS SUPPLIED.)

THE ITALICIZED PORTION IS NEW LANGUAGE WHICH REPLACED THE WORDING "BUT SUCH CONTRACT MAY AUTHORIZE THE PUBLIC HOUSING AGENCY TO MAKE PAYMENTS IN LIEU OF SUCH TAXES IN AN ANNUAL AMOUNT NOT IN EXCESS OF 10 PERCENTUM OF THE ANNUAL SHELTER RENTS CHARGED IN SUCH PROJECT.'

PROBLEMS ENCOUNTERED BY THE PUBLIC HOUSING ADMINISTRATION ARISE UNDER ANNUAL CONTRIBUTIONS CONTRACTS WHICH IT HAD ENTERED INTO WITH LOCAL PUBLIC HOUSING AUTHORITIES PRIOR TO THE EFFECTIVE DATE OF THE HOUSING ACT OF 1954, AND THE BASIC FACTS CONCERNING THESE CASES ARE SET FORTH BY YOU AS FOLLOWS:

CASE 1

THE ANNUAL CONTRIBUTIONS CONTRACT BETWEEN THE PHA AND THE LOCAL AUTHORITY RECOGNIZES (AND APPROVES) A COOPERATION AGREEMENT BETWEEN THE LOCAL AUTHORITY AND THE LOCAL GOVERNMENT AS COMPLYING WITH THE REQUIREMENTS OF THE ACT AND FURTHER PROVIDES THAT THE LOCAL AUTHORITY "SHALL NOT TERMINATE, AMEND OR MODIFY" SUCH AGREEMENT "EXCEPT WITH APPROVAL OF THE PHA" AND THAT THE " LOCAL AUTHORITY SHALL NOT, WITHOUT THE APPROVAL OF THE PHA, MAKE OR AGREE TO MAKE ANY PAYMENTS IN LIEU OF TAXES IN EXCESS OF THOSE PROVIDED IN THE COOPERATION AGREEMENT.' SUCH COOPERATION AGREEMENT REQUIRES THE LOCAL AUTHORITY TO MAKE PAYMENTS IN LIEU OF TAXES IN AN ANNUAL AMOUNT EQUAL TO 5 PERCENT OF THE SHELTER RENT CHARGED FOR THE RELATED HOUSING PROJECTS.

THE LOCAL AUTHORITY HAS REQUESTED PHA APPROVAL OF A PROPOSAL THAT IT BE PERMITTED TO MAKE ADDITIONAL VOLUNTARY PAYMENTS IN LIEU OF TAXES TO THE LOCAL GOVERNMENT IN AN ANNUAL AMOUNT EQUAL TO 5 PERCENT OF THE SHELTER RENT CHARGED FOR THE PROJECTS.

CASE 2

THE ANNUAL CONTRIBUTIONS CONTRACT AUTHORIZES THE LOCAL AUTHORITY TO MAKE VOLUNTARY ANNUAL PAYMENTS IN LIEU OF TAXES IN AN AMOUNT UP TO 10 PERCENT OF THE SHELTER RENT CHARGED FOR THE RELATED PROJECTS SUBJECT TO THE CONDITION THAT NO SUCH PAYMENTS SHALL BE MADE AFTER THE FISCAL YEAR ENDING IN 1952 "UNLESS THE LOCAL AUTHORITY HAS, ON OR BEFORE SUCH DATE, ENTERED INTO A FURTHER AMENDATORY AGREEMENT WITH THE PHA IN RELATION TO THE PROJECT SUBSTANTIALLY CONFORMING THE TERMS AND CONDITIONS GOVERNING THE FURTHER DEVELOPMENT AND ADMINISTRATION OF THE PROJECT TO THE STANDARD FORM OF TERMS AND CONDITIONS GOVERNING" PROJECTS ASSISTED UNDER THE HOUSING ACT OF 1949.

THE LOCAL AUTHORITY FAILED TO ENTER INTO THE AMENDATORY AGREEMENT BY THE DEADLINE SO PRESCRIBED AND NOW REQUESTS THE PHA TO WAIVE SUCH DEADLINE SO AS TO PERMIT IT TO MAKE VOLUNTARY PAYMENTS IN LIEU OF TAXES FOR THE YEARS FROM 1952 TO DATE.

CASE 3

THE ANNUAL CONTRIBUTIONS CONTRACT IN THIS TYPE OF CASE AUTHORIZES THE LOCAL AUTHORITY TO MAKE VOLUNTARY ANNUAL PAYMENTS IN LIEU OF TAXES IN AN AMOUNT UP TO 10 PERCENT OF THE SHELTER RENT CHARGED FOR THE RELATED PROJECTS SUBJECT TO THE CONDITION THAT NO SUCH PAYMENT FOR ANY FISCAL YEAR SHALL BE MADE SUBSEQUENT TO THE END OF THE NEXT SUCCEEDING FISCAL YEAR.

THE LOCAL AUTHORITY FAILED TO MAKE THE AUTHORIZED PAYMENT FOR A PARTICULAR FISCAL YEAR PRIOR TO THE END OF THE SUCCEEDING FISCAL YEAR AND REQUESTS THE PHA TO WAIVE THE CONDITION AS TO THE TIME OF SUCH PAYMENT IN ORDER TO PERMIT IT TO NOW MAKE SUCH PAYMENT.

THE PREMISE UPON WHICH THE PROBLEM PRESENTED IN CASE NO. 1. APPEARS FROM YOUR SUBMISSION TO BE THAT THE AMENDMENT OF THE FIRST SENTENCE OF SUBSECTION 10 (H), PARTICULARLY PART (II), PLACED A LIMITATION AGAINST PAYMENTS EXCEEDING THE AMOUNT STIPULATED IN AGREEMENTS BETWEEN THE LOCAL HOUSING AUTHORITIES AND LOCAL GOVERNING BODIES. IN OTHER WORDS, THAT THE PURPOSE OF THE AMENDMENT WAS TO LIMIT PAYMENTS TO ONLY THOSE THAT ARE THE CONTRACTUAL OBLIGATIONS OF THE LOCAL AUTHORITY. THE PURPOSE OF THE AMENDMENT, HOWEVER, DOES NOT APPEAR TO BE TO RESTRICT PAYMENTS, BUT IS, ON THE OTHER HAND, TO ASSURE THE LOCAL GOVERNING BODIES THAT PAYMENTS IN LIEU OF TAXES EQUAL TO 10 PERCENT OF THE ANNUAL SHELTER RENTS WILL BE MADE TO THEM UNLESS STATE LAW PROVIDES FOR A LESSER AMOUNT OR THEY AGREE TO A LESSER AMOUNT. IN THIS CONNECTION, THE FOLLOWING STATEMENT CONCERNING THE AMENDMENT OF SECTION 10 (H) APPEARED IN THE REPORTS OF BOTH THE SENATE AND HOUSE COMMITTEES ON BANKING AND CURRENCY, 83D CONGRESS, 2D SESSION ( S. REPORT NO. 1472, PAGE 84; H. REPORT NO. 1429, PAGE 56):

THIS SECTION* IS DESIGNED TO MAKE MANDATORY ON A LOCAL HOUSING AUTHORITY ANY PAYMENTS IN LIEU OF TAXES STIPULATED IN ITS COOPERATION AGREEMENT WITH THE LOCAL GOVERNING BODY. THIS AGREEMENT WOULD PROVIDE FOR PAYMENTS IN LIEU OF TAXES OF 10 PERCENT OF SHELTER RENT UNLESS STATE LAW PRESCRIBES A LESSER AMOUNT OR UNLESS THE LOCAL GOVERNING BODY AGREES TO A LESSER AMOUNT.

THIS SECTION* ALSO PERMITS EXISTING ANNUAL CONTRIBUTIONS CONTRACTS TO BE AMENDED IN ACCORDANCE WITH THE ABOVE PROVISIONS * * *. WORD "AMENDMENT" USED IN H. REPORT.

IT IS RECOGNIZED, OF COURSE, THAT THE AMENDATORY STATUTE IS NOT TO BE CONSTRUED AS RETROACTIVE OR AS APPLYING TO PRIOR FACTS OR TRANSACTIONS--- THE FOREGOING BEING PRESENTED MERELY TO EMPHASIZE THE REASON FOR AMENDING SUBSECTION 10 (H). THE AMENDMENT, AS HERETOFORE STATED, DOES NOT IN OUR OPINION PLACE FURTHER RESTRICTIONS UPON PAYMENTS IN LIEU OF TAXES. ACCORDINGLY, SINCE THE TERMS OF THE ANNUAL CONTRIBUTIONS CONTRACT IN CASE NO. 1 ALLOW PAYMENTS IN EXCESS OF AMOUNTS STIPULATED IN THE COOPERATION AGREEMENT WHEN APPROVED BY THE PUBLIC HOUSING ADMINISTRATION, AND SINCE SUCH INCREASE DOES NOT EXCEED THE PERMISSIVE AUTHORIZATION OF THE PROVISIONS OF SECTION 10 (H) EFFECTIVE AT THE TIME THE CONTRACT WAS ENTERED INTO, NO GROUNDS OF OBJECTION ARE APPARENT TO GRANTING THE REQUEST OF THE LOCAL AUTHORITY.

CONCERNING CASE NO. 2, IT IS POINTED OUT IN YOUR SUBMISSION THAT THE LAW IN FORCE AT THE TIME THE ANNUAL CONTRIBUTIONS CONTRACT IN QUESTION WAS ENTERED INTO AUTHORIZED VOLUNTARY PAYMENTS IN LIEU OF TAXES UP TO 10 PERCENT UNDER STATED CONDITIONS WHICH DID NOT INCLUDE THE REQUIREMENT CONTAINED IN THE CONTRACT THAT AN AMENDATORY AGREEMENT BE SIGNED BEFORE THE SPECIFIED DATE. IT IS STATED THAT THIS REQUIREMENT WAS ADDED IN THE EXERCISE OF ADMINISTRATIVE DISCRETION IN ORDER TO ENCOURAGE SUBSEQUENT ACCEPTANCE OF A NUMBER OF OTHER PROVISIONS NOT RELATING TO PAYMENTS IN LIEU OF TAXES. THERE APPEARS TO BE NO QUESTION THAT THE EXERCISE OF ADMINISTRATIVE DISCRETION IN PLACING A REQUIREMENT IN THE ANNUAL CONTRIBUTIONS CONTRACT THAT AN AMENDATORY AGREEMENT BE ENTERED INTO BY A SPECIFIED DATE WAS PROPER. HENCE, THE FAILURE OF THE LOCAL AUTHORITY TO COMPLY WITH THE REQUIREMENTS OF THE CONTRACT FORFEITED ITS RIGHTS THEREUNDER TO MAKE PAYMENTS IN LIEU OF TAXES TO THE LOCAL GOVERNING BODY. IT IS A WELL ESTABLISHED RULE THAT AGENTS AND OFFICERS OF THE GOVERNMENT HAVE NO AUTHORITY TO GIVE AWAY THE MONEY OR PROPERTY OF THE UNITED STATES, OR TO WAIVE CONTRACTUAL RIGHTS WHICH HAVE ACCRUED TO THE UNITED STATES, OR TO MODIFY EXISTING CONTRACTS WITHOUT A COMPENSATING BENEFIT TO THE GOVERNMENT. 26 COMP. GEN. 365, 367. ACCORDINGLY, THE REQUEST OF THE LOCAL AUTHORITY THAT THE PUBLIC HOUSING ADMINISTRATION WAIVE THE DEADLINE SO AS TO PERMIT VOLUNTARY PAYMENTS IN LIEU OF TAXES FOR THE YEARS 1952 TO DATE MAY NOT BE GRANTED. HOWEVER, IN VIEW OF THE PURPOSE OF THE AFOREMENTIONED AMENDMENT TO SUBSECTION 10 (H) OF THE ACT, AND THE AUTHORITY CONTAINED THEREIN TO AMEND EXISTING CONTRACTS PURSUANT TO THE PROVISIONS OF THE FIRST SENTENCE THEREOF, THE CONTRACTS MAY BE AMENDED TO REQUIRE PAYMENTS IN LIEU OF TAXES SUBSEQUENT TO THE EFFECTIVE DATE OF THE HOUSING ACT OF 1954.

CASE NO. 3, AS IN CASE NO. 2, INVOLVES A TIME LIMIT CONDITION WITH RESPECT TO VOLUNTARY PAYMENTS PLACED IN THE CONTRACT WITHIN A PROPER EXERCISE OF ADMINISTRATIVE DISCRETION. FOR THE REASONS STATED ABOVE REGARDING CASE NO. 2, SUCH CONDITION MAY NOT BE WAIVED WHERE THE LOCAL PUBLIC HOUSING AUTHORITY FAILED TO MAKE TIMELY PAYMENT.