The state Fair Housing Commission would be merged into the Arkansas Development Finance Authority under a bill that cleared a House committee Wednesday.
In a voice vote, the House State Agencies and Governmental Affairs Committee recommended House approval of House Bill 2053 by Rep. Kim Hammer, R-Benton.
The commission's mission is to enforce state and federal fair housing and lending laws and to educate the public on fair housing laws, rules and regulations, according to its website. The Arkansas Development Finance Authority is the state's largest source of low-cost financing for low- to moderate-income housing development and other projects.
Under HB2053, the commission would become a division of the authority. Its appointed members would no longer serve and their duties would be assumed by the authority's board of directors under the legislation.
Hammer said his bill would save the state about $271,000 in general revenue a year.
"This would not result in any loss of services. It will not result in any lost federal funds," he told the House committee. "This is an example of what 80 percent of the rest of the states do as far as having these services combined or already existing in a division that is able to offer broader-based support by getting more resources than currently the way it is structured."
Hammer said legislative auditors repeatedly found the commission deficient in internal controls because it has too few staff members for sufficient segregation of duties. The agency has 12 employees, its director said.
Hammer gave committee members a copy of a 2014 news story about an Arkansas Legislative Audit finding of a $1,500 payment that the commission made to the state Democratic Black Caucus. The payment was for sponsorship of the 2013 King-Kennedy Dinner and appeared to auditors to be a prohibited political contribution.
Rizelle Aaron, president of the Arkansas chapter of the NAACP, told the House committee that the audits appeared to be "a witch hunt" by a state lawmaker, whom he didn't name, based on politics. Aaron said the caucus reimbursed the commission.
But Hammer said, "It was implied that one legislator was on a witch hunt and used the arm of Legislative Audit to do this.
"You might get away with that once, folks. But as past House chair of Legislative Audit, I can promise you're not going to get away with it twice and you are sure not going to get away with it three times. I think that argument doesn't hold water," he said.
Carol Johnson, the commission's executive director, said the finance authority is a lender for multihousing developments and she doesn't know of another state that would place a civil-rights enforcement agency in a lending institution.
The authority would be able "to bring or not bring investigations, suits or whatever into alleged fair housing violations" under the bill, she said.
Johnson said most of the commission's funding is about $1.2 million in federal funds.
"We would most likely lose those federal funds if we moved this under the control of ADFA because of those internal inherent conflicts. Basically, you would put the fox over the henhouse," Johnson said.
But Hammer said the authority "already receives the largest amount of [U.S. Department of Housing and Urban Development] funding and ... there is that aspect of them providing the low-income housing and everything else."
"But when you have the federal government looking over your shoulder, regardless of whether it is parked over here or over here, the same accountability factors are going to come into play when it's all said and done," he said.
Afterward, authority President Aaron Burkes said the agency was neutral.
"We will enthusiastically embrace this merger if it becomes law, and we will continue to carry out the important mission of reducing housing discrimination in Arkansas," he said in a written statement. He said the authority's review doesn't indicate that HUD funding is in danger under the bill.
A Section on 03/09/2017