Texas Register, Volume 38, Number 47, Pages 8313-8478, November 22, 2013 Page: 8,412
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STAFF RESPONSE: Staff requested that the IRS review
this issue and they responded: "Section 1.42-10(c)(1)
does say that "the Owner must pay for all costs incurred
in obtaining the estimates [for the utility company esti-
mate under 1.42-10(b)(4)(ii)(B), the Agency estimate under
1.42-10(b)(4)(ii)(C), the HUD utility schedule model under
1.42-10(b)(4)(ii)(D), and the energy consumption model under
1.42-10(b)(4)(ii)(E)] and providing the estimates to the Agency
and the tenants." Therefore, staff finds that the Department
does have the right to outsource the review of the allowance and
require the owner to bear the cost. Owners are not required to
use the Energy Consumption Model. If an owner is concerned
over the cost of possible outsourcing, they should consider
using another method. In addition, staff is available to discuss
the likelihood of a request being outsourced before the owner
incurs the expense. Staff does not recommend any change
based on this comment.
8. General
COMMENT SUMMARY: Commenters (1) and (2) provided a list
of inspectable items that they suggested be deleted from TDHCA
inspections.
STAFF RESPONSE: Several of the items on the list are not part
of current TDHCA inspections and therefore do not need to be
deleted. To the extent that any of the items suggested are part
of the Uniform Physical Condition Standards protocol, the De-
partment cannot delete them from the inspection. Department
staff has contacted the Internal Revenue Service about modify-
ing the Uniform Physical Condition Standards protocol and has
been advised that "State housing agencies are required to report
ALL observed noncompliance, regardless of whether the non-
compliance is subsequently corrected. Note that there are no
exceptions for "de minimis" or "beyond the owner's control, " or
anything else.... Further, failure to report all observed noncom-
pliance would mean that the agency is noncompliant with the
requirements under Treas. Reg. 1.42-5, i.e., the agency is not
complying with IRC 42(m)(1)(B)(iii)." Staff does not recommend
any change based this comments.
The Board approved the adoption of the rule on November 7,
2013.
STATUTORY AUTHORITY. The new sections are adopted pur-
suant to Texas Government Code, 2306.053, which authorizes
the Department to adopt rules.
10.614. Utility Allowances.
(a) The Department will monitor to determine if Develop-
ments comply with published rent limits which include an allowance
for tenant paid utilities. For HTC, TCAP, and Exchange buildings,
if the residents pay utilities directly to the Owner of the building or
to a third party billing company and the amount of the bill is based
on an allocation method or "Ratio Utility Billing System" (RUBS),
this monthly amount will be considered a mandatory fee. For HTC,
TCAP, and Exchange buildings, if the residents pay utilities directly
to the Owner of the building or to a third party billing company, and
the amount of the bill is based on the tenant's actual consumption,
Owners may account for the utility in an allowance. The rent, plus
all mandatory fees, plus an allowance for those utilities paid by the
resident directly to a utility provider, must be less than or equal to the
allowable limit. For HOME, Bond, HTF, and NSP buildings, Owners
may account for utilities paid directly to the Owner or to a third
party billing company in their utility allowance. Where residents are
responsible for some or all of the utilities--other than telephone, cable,and internet--Development Owners must use a utility allowance that
complies with both this section and the applicable program regulations.
(b) An Owner may not change utility allowance methods or
start charging residents for a utility without prior written approval from
the Department. Example 614(1): A Housing Tax Credit Development
has been paying for water and sewer since the beginning of the Com-
pliance Period. In year 8, the Owner decides to require residents to pay
for water and sewer. Prior written approval from the Department is
required. Any such request must include the Utility Allowance Ques-
tionnaire found on the Department's website and supporting documen-
tation. The Department will respond by approving or denying within
ninety (90) days of the date on which the party making the request has
completed the questionnaire and provided all required supporting doc-
umentation and responded to any Department requests for clarification
or additional information.
(c) Rural Housing Services (RHS) buildings or buildings with
RHS assisted tenants. The applicable utility allowance for the Develop-
ment will be determined under the method prescribed by the RHS (or
successor agency). No other utility method described in this section
can be used by RHS buildings or buildings with RHS assisted tenants.
(d) HUD-Regulated buildings layered with any Department
program. If neither the building nor any tenant in the building re-
ceives RHS rental assistance payments, and the rents and the utility al-
lowances of the building are reviewed by HUD (HUD-regulated build-
ing), the applicable utility allowance for all rent restricted Units in
the building is the applicable HUD utility allowance. No other utility
method described in this section can be used by HUD-regulated build-
ings.
(e) HOME units at HOME developments committed funds af-
ter August 23, 2013 must use the HUD Utility Schedule Model. The
utility allowance will be calculated by the Department on an annual
basis and provided to the Owner with a deadline for implementation.
(f) Other Buildings. For all other rent-restricted Units, Devel-
opment Owners must use one of the methods described in paragraphs
(1) - (5) of this subsection:
(1) The utility allowance established by the applicable Pub-
lic Housing Authority (PHA) for the Section 8 Existing Housing Pro-
gram. The Department will utilize Texas Local Government Code,
Chapter 392 to determine which PHA is the most applicable to the De-
velopment.
(A) If the PHA publishes different schedules based on
building type, the Owner is responsible for implementing the correct
schedule based on the Development's building type(s). Example
614(2): The applicable PHA publishes a separate utility allowance
schedule for Apartments (5+ units), one for Duplex/Townhomes and
another for Single Family Homes. The Development consist of twenty
buildings, ten of which are Apartments (5+ units) and the other ten
buildings are Duplexes. The Owner must use the correct schedule for
each building type.
(B) In the event the PHA publishes a utility allowance
schedule specifically for energy efficient units, and the Owner desires
to use such a schedule, the Owner must demonstrate that the building(s)
meet the housing authority's specifications for energy efficiency once
every five (5) years.
(C) If the applicable PHA allowance lists flat fees for
any utility, those flat fees must be included in the calculation of the
utility allowance if the resident is responsible for that utility.
(D) If an Owner chooses to implement a methodology
as described in paragraph (2), (3), (4), or (5) of this subsection, for38 TexReg 8412 November 22, 2013 Texas Register
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Texas. Secretary of State. Texas Register, Volume 38, Number 47, Pages 8313-8478, November 22, 2013, periodical, November 22, 2013; Austin, Texas. (https://texashistory.unt.edu/ark:/67531/metapth379965/m1/100/: accessed July 17, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu.; crediting UNT Libraries Government Documents Department.