Subsidy Layering\--Delegation to HCAs

Legal Opinion: GHM-0100

Index: 3.100, 3.200, 3.295

Subject: Subsidy Layering\--Delegation to HCAs

March 25, 1994

MEMORANDUM FOR: Nicolas P. Retsinas, Assistant Secretary for

Housing-Federal Housing Commissioner, H

FROM: Nelson A. D¡az, General Counsel, G

SUBJECT: Effect of Former President Bush\'s Signing Statement on

the Implementation of Section 911 of the Housing and

Community Development Act of 1992

This memorandum responds to your request regarding the

implementation of Section 911 of the Housing and Community

Development Act of 1992 (\"1992 HCD Act\"), which section deals

with the subsidy layering review process for housing projects

receiving both HUD assistance and low-income housing tax credits.

As you are aware, when signing H.R. 5334, the \"Housing and

Community Development Act of 1992,\" into law, former

President Bush issued a statement containing an interpretation of

Section 911. Adherence to his statutory reading, however, would

preclude the full implementation of Section 911 as the Office of

Housing thinks it was envisioned by Congress and as they would

prefer to implement it. In this regard, the Office of Housing

has prepared and published guidelines that provide for full

delegation to housing credit agencies (\"HCAs\") to perform the

subsidy layering review and certification in accordance with the

HUD-established guidelines and subject to HUD monitoring. As set

forth in more detail below, we believe that there are sufficient

arguments to support the Office of Housing\'s recent issuance of

guidelines to that effect, even though such guidelines do not

expressly follow the interpretation set forth in former

President Bush\'s signing statement. In a memorandum dated February 19,

1993 from George L. Weidenfeller to

James Schoenberger, OGC took the position that Presidential statements
on the

constitutionality of Federal statutes are binding on the Federal
Government,

but that agencies could always request a reconsideration of such

determinations. OGC further recommended that the Office of Housing get
an

opinion from the Department of Justice\'s Office of Legal Counsel, the
office

charged with handling constitutional issues for the government, on its
desired

implementation. Since a request for an opinion was never transmitted to
DOJ,

we will revisit in this memorandum the legal issues connected with this

matter.

-Background-

Section 102(d) of the Department of Housing and Urban

Development Reform Act of 1989 (\"HUD Reform Act\"),

42 U.S.C. Section 3545, provides that the Secretary shall certify

that assistance within the jurisdiction of HUD \"shall not be more

than is necessary to provide affordable housing after taking

account of \[other government\] assistance.\" Section 102(b)(1) of the
HUD

Reform Act defines \"other government

assistance\" as \". . . any related assistance from the Federal
Government, a

State, or a unit of general local government, or any agency or
instrumentality

thereof, that is expected to be made available with respect to the
project or

activities for which the applicant is seeking assistance. Such related

assistance shall include but not be limited to any loan, grant,
guarantee,

insurance, payment, rebate, subsidy, credit, tax benefit, or any other
form of

direct or indirect assistance.\" Section 102(d) has

been implemented for housing projects at 24 C.F.R. Sections 12.50

and 12.52. 24 C.F.R. Section 12.52(a) provides that \"\[b\]efore HUD
makes any

assistance subject to this subpart \[D\] available with respect to a
housing

project for which other government assistance is, or is expected to be,
made

available, HUD will determine, and execute a certification, that the
amount of

the assistance is not more than is necessary to make the assisted
activity

feasible after taking account of the other government assistance.\"

24 C.F.R. Section 12.50 makes clear that mortgage insurance for
multifamily

projects, under 24 C.F.R. subtitle B, chapter II, is assistance that
triggers

the subsidy layering review and certification requirements. In addition,

prior to the recent publication of new

Administrative Guidelines for Subsidy Layering at

59 Fed. Reg. 9332 (Feb. 25, 1994), the Office of Housing followed

Administrative Guidelines for subsidy layering that it had

previously published at 56 Fed. Reg. 14436 (April 9, 1991).

Section 911(a) of the 1992 HCD Act provides that the

Secretary shall establish guidelines for HCAs to implement the

requirements of Section 102(d) of the HUD Reform Act for projects

receiving assistance within the jurisdiction of HUD and under

Section 42 of the Internal Revenue Code of 1986 (\"Code),

i.e., low-income housing tax credits. Section 911(c) further

provides that \"\[a\]s of January 1, 1993, a\[n HCA\] shall carry out

the responsibilities of Section 102(d) \... for projects allocated

a low-income housing tax credit \... if such agency certifies to

the Secretary that it is properly implementing the guidelines

established under subsection (a). The Secretary may revoke the

responsibility delegated in the preceding sentence if the

Secretary determines that a\[n HCA\] has failed to properly

implement such guidelines.\"

When former President Bush signed the 1992 HCD Act, he

issued a statement saying, among other things, that: \"\[t\]o avoid

the constitutional difficulties that would arise if Section 911

were understood to vest in housing credit agencies the exercise

of significant authority under Federal law, I interpret

Section 911 to permit the Secretary to formulate guidelines under

which he will retain the ultimate authority to make the

determinations required by Section 102(d).\"

The foregoing language in former President Bush\'s signing

statement was not drafted by HUD. The issuance of this

Presidential signing statement did, however, raise a question

about whether or not the Office of Housing could in fact issue

guidelines that do not follow the interpretation of former

President Bush, but rather provide for full delegation to the

HCAs to perform the subsidy layering review. To resolve this

question, three issues must be considered, namely: (1) absent

former President Bush\'s signing statement, whether the Office of

Housing\'s implementation is supported by the statute and the

Congressional legislative history; (2) the legal import and

effect of the signing statement; and (3) whether there is a real

constitutional problem with the duties assigned to HUD and the

HCAs under Section 911 of the 1992 HCD Act and Section 102(d) of

the HUD Reform Act which must be avoided.

I. Absent Former President Bush\'s Signing Statement, Is the

Office of Housing\'s Implementation that Fully Delegates the

Subsidy Layering Review to the HCAs Supported by the Statute and

the Congressional Legislative History?

-Statute-

We believe that the language of Section 911 and the

Congressional legislative history can be read to support the

Office of Housing\'s full delegation to the HCAs to perform the

subsidy layering review and certification in accordance with HUD

established guidelines and with HUD monitoring of the HCAs\'

performance. In this regard, the statute itself, in Section

911(c), states that an HCA \"shall carry out the responsibilities

of Section 102(d)\" for projects allocated tax credits if such HCA

certifies that it is properly implementing the HUD established

guidelines. Clearly, one of the \"responsibilities of

Section 102(d)\" is the ultimate certification that no more

assistance than is necessary is provided to housing projects with

HUD insured mortgages. Further, it is clear that this

certification cannot be made without first performing the subsidy

layering review because it is the review that provides the

information necessary to make that final certification about the

lack of excessive subsidy.

There is arguably an ambiguity in Section 911. In this

regard, Section 102(d) was not repealed or expressly amended Section 911

appears to have originated as Section 103 of S. 3031. The

Senate Report contains an explanation of this predecessor provision,
which

explanation states that the Senate was amending Section 102(d) of the
HUD

Reform Act. See S. Rep. No. 102-332, July 23, 1992, p. 124. As with the

language in Section 911 itself, however, there was no language in
Section 103

of S. 3031, i.e., the predecessor section, which actually amended

Section 102(d) of the HUD Reform Act. by

Section 911 and, thus, there still exists a statute that requires

the Secretary to perform the subsidy layering review and issue a

subsidy layering certification. Section 911 also does not

expressly state that HCAs will be the ultimate determiner on

these issues. Finally, the interpretation offered by

former President Bush suggests that the statute can be read in

more than one way.

These facts, however, do not necessarily preclude the

Office of Housing\'s implementation. Regarding the fact that

Section 102(d) was not repealed, Regarding former President Bush\'s

interpretation, which raises the

possibility of constitutional concerns, we discuss later in this
memorandum

why his reading should not hinder the Office of Housing\'s
implementation.

we first point out that

Section 911 is a more recent statute and, thus, is Congress\'

latest word on the matter. Section 911 also relates only to tax

credit projects. There can, however, exist projects with other

kinds of government assistance. Therefore, one could argue that

it makes sense that Section 102(d) was not repealed because the

Secretary\'s authority to provide the subsidy layering

certification for these other projects had to be maintained. It

also was necessary to maintain the Secretary\'s authority under

Section 102(d) in order for the Secretary to perform the subsidy

layering review and certification functions where an HCA does not

certify that it will comply with HUD\'s guidelines or where the

Secretary revokes an HCA\'s Section 911 responsibilities.

-Legislative History-

In addition to the statute itself, the Congressional

legislative history supports a reading consistent with the

approach preferred by the Office of Housing. Both the Senate and

the House Reports indicate that Congress was interested in

getting the Department \"out of the loop\" on the subsidy layering

process and in avoiding duplication of effort and delays in such

process. As noted, Section 911 appears to have originated as Section 103
of

S. 3031. In connection with Section 103, the committee stated that it
was

deeply concerned that HUD\'s implementation of Section 102(d) had led to

unnecessary project delays and had discouraged developers from

undertaking the more difficult projects which need additional federal

subsidies. S. Rep. No. 102-332, July 23, 1992, p. 11. The committee also

expressed concern with the \"inordinate time delays\" associated with
HUD\'s

review process for subsidy layering. Id. at p. 11. The Senate Report
also

said HCAs would be delegated the responsibility for carrying out

Section 102(d) if certified to be properly implementing HUD\'s
guidelines.

(Emphasis added.) Id. at 124. See also H.R. Rep. 102-760, July 30, 1992,

pp. 54, 160-161 and Congr. Rec., Aug. 5, 1992, p. H 7458. Further, the

September 10, 1992 Congressional Record, which memorialized the debates
on

S. 3031 (the original Senate

Bill), contains a \"Statement of Administration Policy\" which

indicates that the Bush Administration was opposed to the

Senate\'s proposed legislation due to the apparent delegation to

the HCAs. More specifically, this Statement of Policy says that

\"S. 3031 would weaken the HUD Reform Act by allowing subsidy

layering decisions to rest with State housing finance agencies

rather than \[HUD.\]\" (Emphasis added.) Congr. Rec., Sept. 10,

1992, p. S 13255. We would note that, at some point after this

Statement of Policy was issued, provision was made in Section 911

to empower the Secretary to revoke an HCA\'s authority where it

failed to properly implement HUD\'s guidelines.

In view of these facts, we conclude that the Office of

Housing\'s implementation of Section 911 is supported by the

statutory language and the Congressional history of that section.

II\. What Is the Legal Import and Effect of the Signing

Statement?

In statutory construction there are three major source

materials: (1) the statute itself; (2) \"intrinsic\" aids;

and (3) \"extrinsic\" aids. Sutherland, Statutes and Statutory

Construction, µ 45.14 (1992). Intrinsic aids are those which

derive meaning from the internal structure of the text of the

statute and conventional or dictionary meanings. Id. Extrinsic

aids consist of information which comprises the background of the

text, such as legislative history. Id. Clearly, if Presidential

signing statements are to be utilized at all in statutory

construction, they would be considered as an extrinsic aid.

Generally, extrinsic aids are only considered when a statute

is ambiguous and unclear. Sutherland µ 48.01. As discussed

above, there arguably is an ambiguity in the instant case.

Accordingly, we need to consider what weight, as an \"extrinsic\"

aid, former President Bush\'s signing statement carries. As

discussed in more detail below, we conclude that there are strong

arguments for concluding that former President Bush\'s signing

statement concerning Section 911 should not be dispositive for

implementing that section.

-Case Law-

We did locate decisions in which courts considered

Presidential signing statements as one of the factors to be used

in construing a statute. Although the courts have considered

signing statements in deciding cases, they do not appear to have

given them any special or uniform weight and have not expressly

analyzed the constitutional concerns raised by their use.

In some cases, a Presidential signing statement is

simply noted but is not expressly relied upon in the decision.

See, e.g., United States v. Pippin, 903 F.2d 1478, 1480, n 2

(11th Cir. 1990); Bowsher v. Synar, 478 U.S. 714, 719, n 1

(1986); United States v. Lovett, 328 U.S. 303, 313 (1946); Cohen

v\. Georgia-Pacific Corp., 819 F. Supp. 133, 139 (D.N.H. 1993);

U.S. v. Charleus, 871 F.2d 265, 269 (2nd Cir. 1989); and National

Parks and Conservation Ass\'n v. Kleppe, 547 F.2d 673, 678, n 16

(D.C. Cir. 1976). Other cases reflect a reliance upon

Presidential signing statements in reaching decisions, although

the decisions do not discuss the constitutional implications of

such reliance. See, e.g., Berry v. Dept. of Justice,

733 F.2d 1343, 1349 (9th Cir. 1984); Equal Employment Opportunity

Commission v. Home Insurance Company, 672 F.2d 252, 265

(2nd Cir. 1982); Church of Scientology, Etc. v. U.S. Dept. of

Justice, 410 F.Supp. 1297 (D. Cal. 1976); and Clifton D. Mayhew,

Inc. v. Wirtz, 413 F.2d 658, 661 (4th Cir. 1969).

A few cases do set forth some considerations noted by courts

when using Presidential signing statements. For example, in

United States v. Tharp, 892 F.2d 691 (8th Cir. 1989), the court

referred to former President Reagan\'s signing statement for the

Sentencing Reform Act and found that \"\[t\]he President \... has a

part in the legislative process, too, except as to bills passed

over his veto, and his intent must be considered relevant to

determining the meaning of a law in close cases.\" Similarly, in

United States v. Story, 891 F.2d 988, 994 (2nd Cir. 1989), the

court, although noting that in some circumstances there is room

for doubt about the weight to be accorded a Presidential signing

statement, found that former \"President Reagan\'s views \[on the

application of the Sentencing Reform Act to straddle offenses,

i.e., offenses like conspiracies that can be in existence before

the date of enactment of said Act and continue after such date of

enactment\] are significant here because the Executive Branch

participated in the negotiation of the compromise legislation.\"

It is crucial to point out, however, that although these

cases recognized a Presidential role in the legislative process,

the signing statements were not the only factor relied upon by

the courts in reaching their decisions. Rather, the signing

statements were one of several pieces of information (including

the language of the statute itself and Congressional legislative

history, such as Congressional reports) that were considered by

the courts in reaching their decisions. Further, we located at

least one case where the court explicitly rejected a request to

give deference to a Presidential signing statement, namely,

former President Bush\'s signing statement for the Civil Rights

Act of 1991, which signing statement declared that said Act was

to be applied prospectively. See Crumley v. Delaware State

College, 797 F.Supp. 341, 347-348 (D. Del. 1992). In Crumley,

the court took the view that the signing statement carried no

more interpretive weight than an Equal Employment Opportunity

Commission (\"EEOC\") Policy Statement on the issue, which

Policy Statement the court had earlier determined was not

entitled to deference because it had hinged its conclusions on

interpretations of certain Supreme Court cases and, in the

court\'s view, the EEOC\'s expertise did \"not encompass analysis of

Supreme Court cases.\"

-Law Review Articles-

In addition to the case law, we do note that the utilization

of Presidential signing statements in statutory construction has

been the subject of recent legal scholarship, most of which has

taken a negative view of such use. Two law review articles have
challenged

the constitutional legitimacy

of Presidential signing statements. See Garber & Wimmer, Presidential
Signing

Statements as Interpretations of Legislative Intent: An Executive

Aggrandizement of Power, 24 Harv. J. on Legis. 363 (1987) and Note, Let
Me

Tell You What You Mean: An Analysis of Presidential Signing Statements,

21 Geo. L. Rev. 755 (1987). These articles basically argue that to rely
on

Presidential signing statements as an aid in statutory construction
would

violate the Constitution\'s separation of powers doctrine by giving the

President the power to make law and by allowing the President to usurp
the

judiciary\'s role of interpreting statutory meaning. There are law
review

articles that have offered some support, but such support has

been limited in scope. A third article took a less negative view of
signing

statements.

See Cross, The Constitutional Legitimacy and Significance of
Presidential

\"Signing Statements,\" 40 Admin. L. Rev. 209, 212 (1988). Cross
supports

\"the legitimacy of some role for Presidential signing statements in
statutory

interpretation\" on three grounds: (1) there can be an independent role
for

signing statements as part of the legislative history when the President

drafts or influences a statutory provision; (2) the President\'s
interpretation

is entitled to weight as an independent executive statutory
interpretation,

much like a federal agency might interpret its enabling statute; and (3)
there

can be Presidential interpretive power in a limited number of
substantive

areas which involve a special claim of Presidential power, such as
foreign

relations. A fourth article, while concluding that in most instances
courts

should not rely on Presidential legislative history to interpret
statutes,

did find some potential instances where their use could be justified.

See Popkin, Judicial Use of Presidential Legislative History: A
Critique,

66 Ind. L.J. 699 (1991). Popkin indicated that Presidential legislative

history should be an interpretive aid only when it records agreements
with

legislators and cites traditional legislative history, such as committee

reports. Further, he concluded that the only other instance in which the

President arguably possesses an interpretive power involves signing
statements

attached to statutes that threaten to infringe on the President\'s
express

constitutional powers, such as statutes pertaining to the appointments
or

foreign relations powers. In our view, even the positions expressed in

these more supportive law review articles would not

warrant the use of former President Bush\'s signing statement in

the matter at hand. The Cross approach does not support use of the
signing

statement in

this case. First, Cross emphasizes that signing statements should not be

dispositive. Second, he was of the view that when the President opposed
the

provision being interpreted, his signing statements lacked persuasive

authority. As noted earlier in this memorandum, the Statement of

Administration Policy published in the September 10, 1992 Congressional
Record

indicates that former President Bush opposed vesting authority to
perform the

subsidy layering review with the HCAs. The Popkin approach also does not

support utilization of the signing statement in this case. The signing

statement in question did not cite traditional legislative history to
affirm

its position. Further, as discussed in the next section of this
memorandum,

we think that there are sufficient arguments to support a position that

Section 911 also does not improperly encroach upon the President\'s

constitutional powers.

III\. Is There a Real Constitutional Problem With the Duties

Assigned to HUD and the HCAs Under Section 911 of the 1992 HCD

Act and Section 102(d) of the HUD Reform Act?

We have identified a constitutional concern in

connection with the duties assigned to HUD and the HCAs under

Sections 911 and 102(d). This concern stems from the fact that

in Section 911 Congress is delegating administrative authority

outside of the Federal Government. To address this concern we

must consider two issues: (1) whether this delegation is a

violation of the nondelegation doctrine; and (2) whether this

delegation violates the constitutional principle of separation of

powers. As discussed in more detail below, we believe that there

are sufficient arguments to support the Office of Housing\'s

course of action involving full delegation.

-Nondelegation Doctrine-

Article I, Section 1 of the Constitution provides that

\"\[a\]ll legislative Powers herein granted shall be vested in a

Congress of the United States.\" The nondelegation doctrine,

which is rooted in this constitutional provision and in the

perceived need to preserve the separation of governmental powers,

has stood for the proposition that limits must be imposed on

Congress\' authority to delegate its legislative power. Brown,

Separated Powers and Ordered Liberty, 139 U. Pa. L. Rev. 1513,

1553-1554 (1991). Thus, Section 911 could be subject to

challenge under the nondelegation doctrine because it provides

for the delegation of legislative power (i.e., the ability to

enforce or implement a legislative objective such as subsidy

layering reviews) from Congress to both HUD and the HCAs. We

think that a challenge on this ground could be rebutted by the

Department.

Despite the nondelegation doctrine, the Supreme Court\'s

longstanding principle has been that Congress satisfies its

constitutional duties when sufficient guidelines confine its

delegate\'s discretion in implementing the Congressional mandate.

See, e.g., Skinner v. Mid-America Pipeline Co., 109 S. Ct. 1726,

1731 (1989) (\"\[S\]o long as Congress provides an administrative

agency with standards guiding its actions such that a court

could \`ascertain whether the will of Congress has been obeyed,\'

no \[improper\] delegation of legislative authority has

occurred\...\") See also American Power & Light Co. v. SEC,

329 U.S. 90, 105 (1946) and J.W. Hampton, Jr. & Co. v. United

States, 276 U.S. 394, 409 (1928).

Thus, we see only two issues regarding the nondelegation

doctrine and Section 911. First, did Congress provide sufficient

guidelines to its delegates? Second, does it matter that the

delegation, in part, runs to an entity outside of the Federal

Government? Again, we think that these questions can be answered

satisfactorily.

In the instant case we think that the Department can

argue that Congress provided adequate guidance to the HCAs.

Section 911(c) instructs the HCAs that they must \"carry out the

responsibilities of Section 102(d),\" namely, to determine that

assistance within the jurisdiction of HUD \"shall not be more than

is necessary to provide affordable housing after taking account

of \[other government\] assistance.\" Although such a delegation

does not offer step-by-step directions, the Supreme Court often

has upheld delegations where there was limited specificity.

See e.g., Lichter v. United States, 334 U.S. 742, 778-786 (1948)

(upholding delegation of authority to the War Department to

recover \"excessive profits\" earned on military contracts).

See also Yakus v. United States, 321 U.S. 414, 420, 426-427

\(1944\) and FPC v. Hope Natural Gas Co., 320 U.S. 591, 600-0601

(1944). Further, in accordance with Section 911(a), HUD has

established guidelines for the HCAs to follow. The direction to

the Department in establishing these guidelines, of course, came

from Section 102 itself (as it has since that statute was enacted

in 1989) as well as from the additional mandates about amounts of

equity capital and project costs that are contained in

Section 911(b).

Regarding the second issue, the courts have upheld

delegations involving state and local officials as well as

private parties. See Mulroy v. Block, 569 F. Supp., 256,

later op 574 F. Supp. 194, aff\'d 736 F.2d 56, cert. denied,

105 S. Ct. 907 (1985). In Mulroy, the court found that a

provision of the milk price support law authorizing the Secretary

of Agriculture to seek the assistance of state and county

officials in carrying out an assessment against the proceeds of

commercially marketed milk was not an unlawful delegation of

power to non-federal employees. The court stated that \"because

the statute merely authorizes the Secretary to seek the

assistance of non-federal employees in \`carrying out\' the

program, and not in any policy-making capacity, the contested

provision does not exceed lawful bounds.\". See also United

States v. Frame, 885 F.2d 1119 (3d Cir. 1989), cert. denied

110 S. Ct. 1168 (1990). In Frame, the court found that Congress

did not unlawfully delegate its legislative authority to members

of the beef industry merely because, under a beef promotion

statute, a board comprised with industry representatives, was

authorized to take the initiative in implementing a beef

promotion program. The court found the delegation lawful because

the amount of federal agency oversight of the board was

considerable, and no law-making authority was entrusted to the

members of the beef industry. See also Krent, Fragmenting

the Unitary Executive: Congressional Delegations of

Administrative Authority Outside the Federal Government,

85 Nw. U.L. Rev. 62, 71 (1990).

In view of the foregoing, we think that Section 911 is

supportable against a challenge under the nondelegation doctrine.

First, we have concluded that there likely is adequate guidance

in the statute. Second, the HCAs will be \"carrying out\" the

responsibilities of Section 102(d) in accordance with HUD-

established guidelines. Therefore, the HCAs are not accorded

policy-making, or law-making, roles under Section 911. Finally,

HUD intends to monitor the HCAs to ensure guideline compliance.

This monitoring would be consistent with the fact that the HCAs

must certify to HUD that they will properly implement the HUD

guidelines as well as with the fact that HUD is authorized to

revoke the subsidy layering responsibilities where it determines

that an HCA has failed to properly implement the guidelines.

Thus, there will be federal oversight in this scheme, and the

HCAs will not be accorded \"carte blanche\" and completely

unsupervised authority.

-Separation of Powers-

A final constitutional challenge that might be asserted

against Section 911 is that it violates the principle of

separation of powers because it vests responsibility for the

execution of a statute in officials independent of the

President\'s authority. Article II imposes a duty on the

President to \"take Care that the Laws be faithfully executed.\"

In addition, under Article II the President has the power to

appoint officers of the United States and the derivative power to

remove all officers exercising executive-type duties. Thus, the

argument against Section 911 would be that, by vesting

responsibilities for subsidy layering reviews in the HCAs,

Congress has impinged upon the President\'s responsibility to

superintend the implementation and enforcement of the statutory

authority for subsidy layering reviews and certifications as

delegated from Congress in the law. See Krent, supra at 72.

Although separation-of-powers is an area of jurisprudence notable

for its tortuousness, we think that sufficient arguments can be

made that Section 911 does not violate the doctrine of

separation-of-powers. See Hui, Note: A \"Tier-ful\"

Revelation: A Principled Approach to Separation of Powers,

34 Wm & Mary L. Rev. 1403 (1993).

An examination of the principal Supreme Court decisions on

separation-of-powers evidences support for the position that

Section 911 does not present a case of unconstitutional

legislative aggrandizement at the expense of the executive

branch. The court has upheld delegations to state agencies,

emphasizing the \"partnership\" between state and federal agencies.

See Harris v. McRae, 448 U.S. 297, 308 (1980). In addition, it

appears that the court has allowed Congress to restrict the

freedom of the executive branch to execute the law where Congress

does not overly insinuate itself into the process and where

Congress permits the executive branch to retain some level of

control over the delegate.

Regarding the issue of \"over-insinuation,\" the court has

struck down, as unconstitutional, statutes such as a portion of

the Balanced Budget and Emergency Deficit Control Act of 1985

because the Act required the Comptroller General to interpret

provisions of the Act and yet, under the statute, only

Congress could remove the Comptroller General from office.

See Bowsher v. Synar, 478 U.S. 714 (1985). (\"To permit the

execution of the laws to be vested in an officer answerable only

to Congress would, in practical terms, reserve in Congress

control over the execution of the laws.\" Id. at 726.) In the

instant case, however, Congress will not be controlling the

process of implementing Section 911. In fact, HUD has

established the guidelines, in accordance with statutory

requirements, that the HCAs will follow. Further, Congress will

not control the removal of the delegations to the HCAs. Instead,

HUD has the authority to revoke the delegation if the guidelines

are not complied with.

Other cases suggest that, where Congress permits the

executive branch to retain some level of control, no substantial

separation-of-powers issue is raised. For example, in

Morrison, Independent Counsel v. Olson, 487 U.S. 654 (1987) the

court upheld Congress\' creation of an \"independent counsel\" even

though the independent counsel could be removed by the Attorney

General, an executive officer, only for good cause or disability.

(\"\[W\]e \[do not\] think that the \`good cause\' removal provision at

issue here impermissibly burdens the President\'s power to control

or supervise the independent counsel, as an executive official,

in the execution of his or her duties under the Act. This is not

a case in which the power to remove an executive official has

been completely stripped from the President, thus providing no

means for the President to ensure the \`faithful execution\' of the

laws.\" Id. at 692.) As already discussed, Section 911 expressly

provides that HUD will establish the guidelines under the statute

and will have authority to revoke the delegation for non-

compliance. Thus, under Section 911, the executive branch

(through the agency) is able to retain some measure of control

over execution of the subsidy layering statutory requirements.

Finally, we think that it is useful to note that the

low-income housing tax credit program established by section 42

of the Code presently authorizes and requires HCAs to carry out a

number of responsibilities in connection with that Federal

program. In this regard, HCAs are responsible for initiating

plans with specified criteria for allocating credits among

projects, allocating only necessary credits, and making project

evaluations. See Section 42(m) of the Code. We note that, in

particular, the allocation authority bestowed upon HCAs by

section 42 is a significant grant of authority. Further,

section 42(m)(2) of the Code requires that HCAs determine that

\"the housing credit dollar amount allocated to a project shall

not exceed the amount the \[HCA\] determines is necessary for the

financial feasibility of the project and its viability as a

qualified low-income housing project throughout the credit

period.\" Thus, under section 42, HCAs already perform and are

responsible for a process that is similar in objective to

section 102(d)\'s subsidy layering requirements. We believe that

the existence of section 42, and the low-income housing tax

credit program presently operating under its statutory authority,

further supports the permissibility of a full delegation to the

HCAs under section 911.

-Conclusion-

As discussed above, we conclude that: (1) the Office of

Housing\'s implementation providing for full delegation is

supported by the statute and the Congressional legislative

history; (2) former President Bush\'s signing statement is not

dispositive for purposes of statutory construction; and

\(3\) although the full delegation to the HCAs under Section 911

could be challenged as an unconstitutional delegation of

legislative power or as an unconstitutional infringement of the

executive branch, we believe that there are sufficient arguments

under current case law to respond to any such challenge.

Finally, we wish to point out that under the present

regulations at 24 C.F.R. Part 12, Subpart D, HUD is required to

perform the subsidy layering review and to make the certification

that there is no excess subsidy. Since the Office of Housing has

issued guidelines that delegate these functions to the HCAs, we

recommend (for sake of clarity) that when 24 C.F.R. Part 12 is

next amended, the regulations at Subpart D also be amended to

take the delegation into account. Such an amendment to Subpart D

could make clear that, pursuant to section 911, HCAs will perform

the subsidy layering function for projects receiving HUD

assistance and receiving or allocated low-income housing tax

credits, as set forth in Departmental guidelines.