Are Housing Authorities Exempt from State Law?

Over the last number of years, some housing authorities in the State of Washington have selected contractors and administered construction projects using alternative methods other than the traditional "Design-Bid-Build" approach, and not consistent with the alternative public works contracting laws in chapter 39.10 RCW that allows for General Contractor/Construction Manager (GC/CM), Design-Build, and Job Order Contracting approaches.  

Position of Housing Authorities:  Housing authorities have long maintained that their authorizing statute (RCW 35.82.070) provides authority for them to not comply with various state laws unless the Legislature specifically states that housing authorities are subject to those laws.  

Attorney General Opinion:  Last year, the Capital Projects Advisory Review Board (CPARB) requested and obtained a written opinion from the Washington State Attorney General's Office on the subject.  The Attorney General's Office concluded that housing authorities were only exempt from certain state laws in relationship to "the acquisition, operation, or disposition of property," but not with respect to construction, alteration, repair, improvement, or development.  The impact of the opinion was to require housing authorities to comply with all of the provisions of chapter 39.10 RCW on alternative public works contracting, overturning a long practice by housing authorities.

CPARB Discussions:  At the December 10, 2010 CPARB meeting, after hearing from various housing authorities about challenges in complying with federal funding requirements and using the provisions of chapter 39.10 RCW, CPARB decided to not take action recommending that housing authorities be added to the definition of "public body" in chapter 39.10 RCW.  Click here to read CPARB's minutes with a more detailed discussion of this issue.

Legislation to Exempt Housing Authorities:  HB 2517, which was promoted by the Association of Washington Housing Authorities (AWHA), would clarify and expand the exemption for housing authorities from various state laws to include "construction, alteration, repair, improvements" unless specifically stated in state law.

Substitute HB 2517, which was approved on February 1, 2010 by the House Local Government and Housing Committee, would more narrowly restrict the exemption for housing authorities than stated in HB 2517, and subject them to the provisions of chapter 39.10 RCW except "where alternative requirements or procedures of federal law or federal regulation are authorized."  On February 3, 2010, the Senate Committee on Financial Institutions and Housing & Insurance approved SSB 6327, with the same provisions as SHB 2517.

SHB 2517 and SSB 6327 would also subject housing authorities to state prevailing wage requirements (chapter 39.12 RCW) unless specifically preempted by federal law or regulation.  WAC 296-127-025 (1) already recognizes that certain federal regulations preempt state prevailing wage requirements.  For certain HUD funded projects, federal regulations currently (CFR Title 24, Section 965.101) preempt state prevailing wage rates.