B-140866, OCTOBER 14, 1959, 39 COMP. GEN. 286

B-140866: Oct 14, 1959

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MAY BE GIVEN RETROACTIVE EFFECT IN VIEW OF THE IMPLICATION WHICH MUST BE DRAWN FROM THE LEGISLATIVE HISTORY SO THAT AMOUNTS WHICH HAVE BEEN OR MAY BE PAID BY LOCAL HOUSING AUTHORITIES FOR PUBLIC SERVICES FURNISHED PRIOR TO ENACTMENT OF THE HOUSING ACT OF 1959 NEED NOT BE OBJECTED TO BY THE PUBLIC HOUSING ADMINISTRATION. SECTION 15 OF THE UNITED STATES HOUSING ACT OF 1937 IS AMENDED BY ADDING AT THE END THEREOF THE FOLLOWING NEW PARAGRAPH: "/10) NOTWITHSTANDING ANY OTHER PROVISION OF LAW OR ANY CONTRACT OR OTHER ARRANGEMENT MADE PURSUANT THERETO. YOU SAY THAT THE ABOVE PROVISION RESULTED FROM DISPUTES WHICH HAVE ARISEN OVER THE PROPER INTERPRETATION OF SEVERAL TYPES OF COOPERATION AGREEMENTS WHICH WERE EXECUTED PRIOR TO 1950 AND WHICH.

B-140866, OCTOBER 14, 1959, 39 COMP. GEN. 286

PUBLIC SERVICE CHARGES - LOW RANT HOUSING PROJECTS - STATUTORY CONSTRUCTION - RETROACTIVE APPLICATION OF STATUTES THE PROVISION FOR PAYMENT OF CHARGES FOR PUBLIC SERVICES (GARBAGE AND TRASH COLLECTION, SEWER CONNECTIONS, ETC.) FURNISHED TO LOW RENT HOUSING PROJECTS BY MUNICIPALITIES OR OTHER LOCAL GOVERNMENT AGENCIES CONTAINED IN THE HOUSING ACT OF 1959, PUBLIC LAW 86-372, APPROVED SEPTEMBER 23, 1959, WHICH ADDED SUBSECTION (10) TO SECTION 15 OF THE UNITED STATES HOUSING ACT OF 1937, 42 U.S.C. 1415, MAY BE GIVEN RETROACTIVE EFFECT IN VIEW OF THE IMPLICATION WHICH MUST BE DRAWN FROM THE LEGISLATIVE HISTORY SO THAT AMOUNTS WHICH HAVE BEEN OR MAY BE PAID BY LOCAL HOUSING AUTHORITIES FOR PUBLIC SERVICES FURNISHED PRIOR TO ENACTMENT OF THE HOUSING ACT OF 1959 NEED NOT BE OBJECTED TO BY THE PUBLIC HOUSING ADMINISTRATION, PROVIDED THAT THE HOUSING AGREEMENTS DID NOT REQUIRE THE PARTICULAR MUNICIPALITY TO FURNISH THE SERVICE WITHOUT CHARGE.

TO THE ADMINISTRATOR, HOUSING AND HOME FINANCE AGENCY, OCTOBER 14, 1959:

YOUR LETTER OF SEPTEMBER 25, 1959, CONCERNS THE RETROACTIVE EFFECT, IF ANY, OF THE FOLLOWING PROVISION OF THE HOUSING ACT OF 1959, PUBLIC LAW 86- 372, APPROVED SEPTEMBER 23, 1959, 42 U.S.C. 1415.

SEC. 507. SECTION 15 OF THE UNITED STATES HOUSING ACT OF 1937 IS AMENDED BY ADDING AT THE END THEREOF THE FOLLOWING NEW PARAGRAPH:

"/10) NOTWITHSTANDING ANY OTHER PROVISION OF LAW OR ANY CONTRACT OR OTHER ARRANGEMENT MADE PURSUANT THERETO, ANY PUBLIC HOUSING AGENCY WHICH UTILIZES PUBLIC SERVICES AND FACILITIES OF A MUNICIPALITY OR OTHER LOCAL GOVERNMENT AGENCY MAKING CHARGES THEREFOR SEPARATE FROM REAL AND PERSONAL PROPERTY TAXES SHALL BE AUTHORIZED BY THE AUTHORITY (WITHOUT ANY AMENDMENT TO THE CONTRACT FOR ANNUAL CONTRIBUTIONS OR DEDUCTIONS FROM PAYMENTS IN LIEU OF TAXES OTHERWISE PAYABLE) TO PAY TO SUCH MUNICIPALITY OR OTHER LOCAL GOVERNMENTAL AGENCY THE AMOUNT THAT WOULD BE CHARGED PRIVATE PERSONS OR DWELLINGS SIMILARLY SITUATED FOR SUCH FACILITIES AND SERVICES.'

YOU SAY THAT THE ABOVE PROVISION RESULTED FROM DISPUTES WHICH HAVE ARISEN OVER THE PROPER INTERPRETATION OF SEVERAL TYPES OF COOPERATION AGREEMENTS WHICH WERE EXECUTED PRIOR TO 1950 AND WHICH, UNDER THE INTERPRETATION PLACED ON THEM BY THE PUBLIC HOUSING ADMINISTRATION (1PHA), WOULD HAVE REQUIRED THE MUNICIPALITY OR OTHER LOCAL GOVERNMENTAL AGENCY TO FURNISH CERTAIN MUNICIPAL SERVICES WITHOUT CHARGE OTHER THAN THE PAYMENTS IN LIEU OF TAXES PROVIDED FOR IN THE AGREEMENT. YOU ADVISE THAT THE LANGUAGE IN THESE SEVERAL AGREEMENTS HAS BEEN A MATTER OF LITIGATION IN THE COURTS OF SEVERAL OF THE STATES. YOUR LETTER INDICATES THAT THE LOWER COURTS OF TWO STATES HAVE HELD THAT THE SERVICES SHOULD BE FURNISHED WITHOUT CHARGE, WHILE THE LOWER COURTS OF FOUR STATES HAVE HELD THAT CHARGES AGAINST THE LOCAL HOUSING AUTHORITY FOR SUCH SERVICES WERE PROPER. YOU SAY THAT IN TWO OF THE LATTER STATES THE HIGHEST COURT OF EACH STATE HAS AFFIRMED THE DECISION OF THE LOWER COURT AND ADVISE THAT IN THE OTHER TWO STATES A DETERMINATION IS PENDING AS TO WHETHER APPEALS SHOULD BE TAKEN.

THE ABOVE-QUOTED PROVISION OF LAW WAS FIRST INTRODUCED BY CONGRESSMAN SISK OF CALIFORNIA IN THE 85TH CONGRESS, 2D SESSION, AS H.R. 12091. THE BILL WAS AMONG THOSE CONSIDERED BY THE SUBCOMMITTEE ON HOUSING OF THE COMMITTEE ON BANKING AND CURRENCY, HOUSE OF REPRESENTATIVES, 85TH CONGRESS, 2D SESSION, DURING ITS HEARINGS ON VARIOUS HOUSING BILLS IN JULY 1958, INCLUDING S. 4035, A BILL ENACTED BY THE SENATE WITHOUT A PROVISION. IN CONNECTION WITH THE PROVISION, NOTE THE FOLLOWING FROM THE ABOVE-CITED HEARINGS (PAGES 653, 654 AND 655):

MR. SISK.

* * * AND THE THING I WOULD LIKE TO COMMENT ON JUST BRIEFLY, MR. CHAIRMAN, AS A REASON WHY I INTRODUCED THIS LEGISLATION: I WOULD LIKE TO CITE IN MAY HOMETOWN OF FRESNO, CALIF., UNDER THE OLD CO-OP AGREEMENT, WHICH OF COURSE WAS PRIOR TO 1950, IT WAS UNDERSTOOD IN 1954 THAT IT PROVIDED THAT THE LOCAL HOUSING AUTHORITY WOULD PAY ASSESSMENTS MADE BY THE CITY THAT WERE LEVIED ON ALL OTHER RESIDENTS OF THE CITY. SO IN 1954, THE CITY OF FRESNO VOTED A SEWER TAX OF 50 CENTS PER MONTH. THE LOCAL HOUSING AUTHORITY, IN CONVERSATIONS WITH THE CITY, AGREED TO COLLECT THE 50 CENTS PER MONTH FROM THE TENANTS OF THE LOW-RENT HOUSING PROJECT, THEY RECEIVED THE APPROVAL OF THE WASHINGTON HEADQUARTERS FOR THOSE ARRANGEMENTS IN 1954, AND THEY PROCEEDED TO COLLECT THIS 50 CENTS PER MONTH AND TO PAY IT TO THE CITY UP UNTIL JANUARY OF THIS YEAR. AT THAT TIME, THEN, THE WASHINGTON OFFICE RULED THAT THEY COULD NO LONGER DO THAT, AND NOT ONLY COULD THEY NO LONGER CONTINUE TO COLLECT IT AND TURN IT OVER TO THE CITY, BUT THEY INSISTED THAT THE CITY OF FRESNO REPAY TO THE HOUSING AUTHORITY ALL OF THE THOUSANDS OF DOLLARS THAT HAD BEEN COLLECTED SINCE 1954, AND IT HAS PLACED MY LOCAL HOUSING AUTHORITY IN ALMOST A DEPLORABLE SITUATION OF BEING REQUESTED TO COLLECT FROM THE CITY THOUSANDS OF DOLLARS PAID TO THEM, NOT MONEY ACTUALLY THAT THE FEDERAL GOVERNMENT CONTRIBUTED, OR THAT THE HOUSING AUTHORITY CONTRIBUTED, BUT THAT LOCAL RESIDENTS CONTRIBUTED, AT 50 CENTS PER MONTH, AND EVEN IF THEY TAKE BACK FROM THE CITY THIS MONEY IT IS ALMOST AN IMPOSSIBLE TASK OF REDISTRIBUTING TO THE VARIOUS TENANTS WHO HAVE LIVED IN THIS LOW-RENT HOUSING OVER A PERIOD OF 4 YEARS THE 50 CENTS PER MONTH.

MR. MCDONOUGH. HOW WOULD YOUR AMENDMENT ADJUST THAT?

MR. SISK. WELL, MY AMENDMENT WOULD SIMPLY PERMIT THE COLLECTION OF THIS MONEY AND, OF COURSE, AS FAR AS OUR LOCAL SITUATION, IT WOULD BE CURED BY SIMPLY AUTHORIZING WHAT THEY HAVE BEEN DOING FOR THE PAST 4 YEARS AND IT WOULD MAKE IT POSSIBLE IN ALL OTHER CITIES WHERE THE CITY HAD VOTED AN ASSESSMENT OR A TAX OF ANY KIND REGARDING FEES SUCH AS SEWERAGE TAX, GARBAGE COLLECTION, AND SO ON, TO BE COLLECTED AND PAID TO THE CITY ON THE SAME BASIS AS ANY OTHER RESIDENTS IN THE CITY.

MR. SISK. THAT IS CORRECT, MR. CHAIRMAN. IF I MAY MAKE THIS FURTHER STATEMENT: I ORIGINALLY HAD DRAWN A MUCH NARROWER AND MORE RESTRICTIVE TYPE OF AMENDMENT APPLYING SPECIFICALLY TO INSTANCES SIMILAR TO MY CITY, BUT BECAUSE OF INTEREST, BROAD INTEREST ACROSS THE COUNTRY, I THINK IN CLEVELAND AND ST. LOUIS, AND DOWN IN SAN BERNARDINO, AND A NUMBER OF CITIES IN CALIFORNIA, SOME 15 OR 20. I AM NOT SURE THAT IT IS TRUE IN LOS ANGELES, BUT THERE ARE OTHER CITIES IN CALIFORNIA. BECAUSE OF THIS BROAD INTEREST, THEN, AND AT THE RECOMMENDATION OF THE NATIONAL ASSOCIATION OF HOUSING AND REDEVELOPMENT OFFICIALS, I HAVE BROADENED IT TO THE SCOPE IN WHICH II NOW HAVE IT BEFORE THE COMMITTEE. ( ITALICS SUPPLIED.)

SUBSEQUENTLY, THE HOUSE BANKING AND CURRENCY COMMITTEE REPORTED OUT S. 4035 WITH AMENDMENTS, ONE WHICH WAS THE ABOVE-QUOTED PROVISION OF LAW. HOWEVER, S. 4035 FAILED OF ENACTMENT IN THE HOUSE.

IN THE 86TH CONGRESS, ST SESSION, THE SAME PROVISION WAS INTRODUCED BY CONGRESSMAN SISK AS H.R. 1064, AND ULTIMATELY WAS INCLUDED AS A PROVISION IN THE BILL (S. 2654) WHICH BECAME THE HOUSING ACT OF 1959. IN COMMENTING ON A SIMILAR PROVISION CONTAINED IN H.R. 2357, 86TH CONGRESS, CONGRESSMAN SISK STATED IN HIS PREPARED STATEMENT, WHICH APPEARS AT PAGES 510 AND 511 OF HEARINGS BEFORE THE SUBCOMMITTEE ON HOUSING OF THE HOUSE BANKING AND CURRENCY COMMITTEE, 86TH CONGRESS, ST SESSION, ON THE HOUSING ACT OF 1959:

THE SECOND SECTION I REFERRED TO IS SECTION 607, HEADED " PAYMENT FOR SERVICES.' I HAVE INTRODUCED H.R. 1064, WHICH IS IDENTICAL TO SECTION 607. IT WOULD AMEND THE HOUSING ACT OF 1937 TO ALLOW A LOCAL HOUSING AGENCY TO PAY THE COST OF PUBLIC SERVICES SUCH AS GARBAGE AND TRASH COLLECTION AND SEWER CONNECTIONS FURNISHED BY A LOCAL GOVERNMENT TO LOW- RENT PUBLIC/HOUSING PROJECTS.

THIS LEGISLATION WOULD BE LIMITED IN APPLICATION TO THOSE LOCAL HOUSING AUTHORITIES THAT MADE COOPERATION AGREEMENT WITH CITIES PRIOR TO 1950. NEWER FORM OF AGREEMENT USED SINCE 1950 AUTHORIZES PAYMENT OF THESE MUNICIPAL SERVICE CHARGES, WHEREAS THE OLD AGREEMENT DOES NOT. THUS THIS LEGISLATION WOULD CORRECT AN INEQUITABLE DISCRIMINATION AGAINST LOCALITIES THAT EMBARKED EARLIER ON LOW-RENT PUBLIC/HOUSING PROJECTS. THESE INCLUDE FRESNO, CALIF., AND NUMEROUS OTHER MUNICIPALITIES. IN FRESNO THE SITUATION IS PARTICULARLY TANGLED AND CRIES OUT FOR QUICK SETTLEMENT.

I BELIEVE THE ADMINISTRATION IS ON UNTENABLE GROUND IN OPPOSING THIS CHANGE, SINCE THE JUSTICE OF PAYMENT OF THESE CHARGES HAS BEEN RECOGNIZED IN THE NEWER AGREEMENTS. THIS WOULD SIMPLY GRANT EQUITY TO COMMUNITIES SADDLED WITH THE OLDER COOPERATION AGREEMENT. OUR CITIES FACE GREAT DIFFICULTIES IN PROVIDING NEEDED SERVICES. I THINK YOU WILL AGREE OUR PUBLIC HOUSING SHOULD NOT ESCAPE SERVICE CHARGES WHILE OTHER HOUSEHOLDERS ARE REQUIRED TO PAY HIGHER FEES TO OFFSET SUCH FREE SERVICE.

I FULLY SUPPORT SECTION 607 OF H.R. 2357. AGAIN, IF THE OMNIBUS BILL SHOULD BE BLOCKED, I WOULD DEEPLY APPRECIATE IT IF THE COMMITTEE WOULD FAVORABLY REPORT OUT MY BILL SO THE URGENT NEED FOR ENDING THE EXISTING DISCRIMINATION CAN BE MET.

CONGRESSMAN RAINS, CHAIRMAN OF THE HOUSING SUBCOMMITTEE, AND FLOOR MANAGER OF S. 2539, 86TH CONGRESS, WHICH CONTAINED A SIMILAR PROVISION, MADE THE FOLLOWING STATEMENT DURING FLOOR DEBATE ON THAT MEASURE ( TEMP. CONG. REC., AUGUST 27, 1959, PAGE 15774):

MR. CHAIRMAN, WITH REFERENCE TO SECTION 507 OF TITLE V AUTHORIZING THE PAYMENT OF PUBLIC SERVICE AND UTILITY CHARGES BY THE AUTHORITY, THIS LEGISLATION WAS WRITTEN INTO THE BILL IN ORDER TO COVER A PROBLEM WHICH AROSE UNDER SOME OF THE OLDER CONTRACTS. IN THE LATER CONTRACTS, THIS MATTER HAS BEEN COVERED AND THE AUTHORITY HAS THE RIGHT TO MAKE SUCH PAYMENTS TO THE MUNICIPALITIES. IT IS MY UNDERSTANDING AND THAT OF THE COMMITTEE THAT THIS LEGISLATION WILL ADEQUATELY SOLVE THE PROBLEM OF THOSE CITIES WHERE COLLECTIONS HAVE BEEN MADE OVER A PERIOD OF YEARS AND THEY NOW FIND THEMSELVES IN A SITUATION WHERE THE HOUSING AUTHORITIES ARE DEMANDING THE CITIES TO RETURN SERVICE CHARGES ALREADY COLLECTED. I WISH TO MAKE IT COMPLETELY CLEAR THAT IT WAS THE INTENT OF THE COMMITTEE AND IS THE INTENT OF CONGRESS THAT THIS LEGISLATION IS RETROACTIVE IN THE CASES INVOLVING CITIES WHERE THIS CONDITION HAS ARISEN, AS WELL AS PROSPECTIVE WITH REGARDS TO ALL CONTRACTS BETWEEN THE FEDERAL HOUSING AUTHORITIES AND THE LOCAL AUTHORITIES.

IT APPEARS FROM THE LAST QUOTED STATEMENT THAT SOME LOCAL HOUSING AUTHORITIES HAVE PAID MUNICIPALITIES UNDER THE COOPERATION AGREEMENTS FOR THE SERVICES IN QUESTION. WE UNDERSTAND THAT IN THE FRESNO CASE THE LOCAL HOUSING AUTHORITY STOPPED MAKING PAYMENTS TO THE CITY IN DECEMBER 1957 FOR THE PRINCIPAL SERVICES INVOLVED AND SUBSEQUENTLY, WHILE NOT MAKING PAYMENTS, HAS COLLECTED AND SET ASIDE SUFFICIENT FUNDS TO PAY FOR SUCH SERVICES. ALSO, YOUR LETTER INDICATES THAT IN ADDITION TO CASES WHERE THE FUNDS HAVE BEEN COLLECTED AND SET ASIDE BUT NOT PAID, AND THOSE IN LITIGATION, THERE ARE OTHER CASES WHERE THE CITIES HAVE BILLED THE LOCAL HOUSING AUTHORITIES BUT HAVE NOT BEEN PAID FOR SERVICES ALREADY FURNISHED.

IN VIEW OF THE FOREGOING YOU REQUEST A DECISION WHETHER PHA WOULD BE REQUIRED TO OBJECT TO ANY AMOUNTS WHICH HAVE BEEN OR MAY BE PAID NOW BY LOCAL HOUSING AUTHORITIES FOR SERVICES FURNISHED PRIOR TO THE ENACTMENT OF THE HOUSING ACT OF 1959, WHICH AMOUNTS, YOU SAY, EXCEPT FOR THE PROVISIONS OF THE SEVERAL COOPERATION AGREEMENTS WOULD HAVE OTHERWISE BEEN PROPER CHARGES AGAINST THOSE AUTHORITIES. IN OTHER WORDS, YOU REQUEST A DECISION WHETHER THE PROVISION IN QUESTION MAY BE GIVEN A RETROACTIVE EFFECT.

THE GENERAL RULE IS THAT STATUTES TAKE EFFECT AT THE TIME OF THEIR PASSAGE AND ARE TO BE APPLIED PROSPECTIVELY, AND ARE NOT RETROACTIVE UNLESS MADE SO BY EXPRESS LANGUAGE THEREIN OR BY NECESSARY IMPLICATION. 34 COMP. GEN. 404 AND 38 COMP. GEN. 103.

THERE IS NOTHING IN THE LANGUAGE OF THE PROVISION IN QUESTION EXPRESSLY MAKING IT RETROACTIVE. HOWEVER, IT IS CLEAR FROM THE ABOVE QUOTED STATEMENTS OF CONGRESSMAN SISK AND CONGRESSMAN RAINS THAT IT WAS INTENDED THAT THE PROVISIONS BE GIVEN A RETROACTIVE EFFECT, AT LEAST INSOFAR AS MUNICIPALITIES OR OTHER LOCAL GOVERNMENT AGENCIES WHICH HAVE ALREADY BEEN PAID FOR THE SERVICES FURNISHED ARE CONCERNED. ALSO, IT IS APPARENT FROM THE LEGISLATIVE HISTORY OF THE PROVISION THAT ITS PURPOSE WAS TO "CORRECT AN INEQUITABLE DISCRIMINATION" AND INSURE EQUITABLE TREATMENT OF MUNICIPALITIES OR OTHER LOCAL GOVERNMENTAL AGENCIES IN CONNECTION WITH SERVICES FURNISHED LOW-RENT HOUSING PROJECTS UNDER COOPERATION AGREEMENTS. IT WOULD APPEAR DISCRIMINATORY AND INEQUITABLE TO APPLY THE PROVISION RETROACTIVELY IN THOSE INSTANCES WHERE PAYMENTS HAVE BEEN MADE TO THE LOCAL GOVERNMENTAL AGENCY AND ONLY PROSPECTIVELY WHERE SUCH PAYMENTS HAVE NOT BE MADE. ALSO, IF THE PROVISION IS CONSIDERED NOT TO HAVE A RETROACTIVE EFFECT THE STATE COURT DECISIONS REFERRED TO IN YOUR LETTER WOULD RESULT IN INEQUITABLE TREATMENT OF MUNICIPALITIES OR OTHER LOCAL GOVERNMENTAL AGENCIES DEPENDING ON WHETHER THE LOW-RENT HOUSING PROJECT IS LOCATED IN A STATE WHERE THE SERVICE CHARGES HAVE BEEN HELD PROPER BY THE STATE COURT UNDER THE COOPERATION AGREEMENT, OR IN A STATE WHERE THE COURT RULED SUCH CHARGES COULD NOT BE COLLECTED UNDER SUCH AGREEMENT. WE DO NOT BELIEVE, AND THERE IS NOTHING IN THE LEGISLATIVE HISTORY OF THE PROVISION TO INDICATE, THAT THE CONGRESS INTENDED SUCH RESULTS.

FURTHER, IT APPEARS FROM THE LEGISLATIVE HISTORY OF THE PROVISION THAT ITS ORIGINAL SPONSOR ( CONGRESSMAN SISK) INTENDED IT TO BE FOR APPLICATION IN INSTANCES OTHER THAN WHERE PAYMENT FOR SERVICE CHARGES HAVE BEEN MADE BY THE LOCAL HOUSING AUTHORITY TO THE LOCAL GOVERNMENTAL BODY. SEE PAGES 653, 654, AND 655 OF THE 1958 HOUSE HEARINGS AND PAGES 510 AND 511 OF THE 1959 HOUSE HEARINGS. WE BELIEVE THE IMPLICATION THAT MUST BE DRAWN FROM THE LEGISLATIVE HISTORY OF THE PROVISION IN QUESTION IS THAT IT WAS INTENDED THAT THE PROVISION BE GIVEN A RETROACTIVE EFFECT. THEREFORE, IT IS OUR VIEW THAT PHA WOULD NOT BE REQUIRED TO OBJECT TO ANY AMOUNTS WHICH HAVE BEEN OR MAY BE PAID NOW BY LOCAL HOUSING AUTHORITIES FOR SERVICES FURNISHED PRIOR TO THE ENACTMENT OF THE HOUSING ACT OF 1959, IN THE TYPES OF CASES SET FORTH IN THE NEXT TO THE LAST PARAGRAPH OF YOUR LETTER.

WHAT IS SAID HEREIN WOULD NOT BE FOR APPLICATION ON A RETROACTIVE BASIS IN THOSE INSTANCES, IF ANY, WHERE THE COOPERATION AGREEMENT PROVIDED THAT CERTAIN SERVICES FOR WHICH THE MUNICIPALITY CHARGED ITS OWN INHABITANTS ON THE DATE THE COOPERATION AGREEMENT WAS ENTERED INTO WOULD BE FURNISHED WITHOUT CHARGE TO THE LOCAL HOUSING AUTHORITY.