Texas Register, Volume 38, Number 47, Pages 8313-8478, November 22, 2013 Page: 8,408
8313-8478 p. ; 28 cm.View a full description of this periodical.
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seeking a material amendment. Does the Department [sic] to
continue to apply a previous participation review to amendment
requests? If so, that needs to be contemplated here."
STAFF RESPONSE: Under current practice, material non-com-
pliance does not prevent the material amendment of a LURA.
Under current practice LURAs will not be amended if the sub-
ject Development has any uncorrected issues of noncompliance
(other than a provision being amended) or owes fees. This con-
cept has been incorporated into the Asset Management Rule in
10 TAC 10.405(b) which states:
"LURAs will not be amended if the subject Development has any
uncorrected issues of noncompliance outside of the Corrective
Action Period (other than the provision being amended) unless
otherwise approved by the Executive Award Review and Advi-
sory Committee or conditionally accepted by the Compliance
Committee. LURAs will not be amended if the Development
Owner owes fees to the Department."
Since the issue is addressed in another section of the Depart-
ment's rules, staff does not recommend any change based on
this comment.
13. General
COMMENT SUMMARY: Commenter (3) stated: "In addition,
there has been some question as to whether the Department
should impose a previous participation review for owners desir-
ing to seek a qualified contract. A qualified contract is a privilege
that could result in removal of affordability restrictions."
STAFF RESPONSE: The Department's Asset Management
Rules address compliance requirements for a qualified contract
request and state:
"Prior to the Department filing a release of the LURA, the Devel-
opment Owner must correct all instances of noncompliance at
the Property."
Since the issue is addressed in another section of the Depart-
ment's rules, staff does not recommend any change based on
this comment.
The Board approved the adoption of the rule on November 7,
2013.
STATUTORY AUTHORITY. The new section is adopted pur-
suant to Texas Government Code, 2306.053, which authorizes
the Department to adopt rules.
1.5. Previous Participation Reviews.
(a) The governing board (Board) of the Texas Department of
Housing and Community Affairs (the "Department") designates the
Executive Award and Review Advisory Committee (EARAC), estab-
lished pursuant to Texas Government Code, 2306.1112, to receive
reports regarding the compliance history of an applicant seeking ap-
proval to own an existing affordable housing Development assisted by
the Department and applicants seeking financial assistance or awards
from the Department and any affiliate as defined by 10.3 of this title
(relating to Definitions) of any such applicant and provide to the Board
the assessment contemplated in Texas Government Code, 2306.057
in order that this Board may consider the compliance history and make
and document its award decisions with full knowledge of these matters.
(b) The executive director of the Department shall designate
the membership of EARAC, and the makeup of EARAC shall include,
at a minimum, those members required by Texas Government Code,
2306.1112.(c) For any application for financial assistance or awards pre-
sented to EARAC and in addition to any application-specific consider-
ations including but not limited to threshold evaluation, selection scor-
ing criteria and underwriting, EARAC shall receive the applicant's pre-
vious participation disclosure and the following reports regarding the
applicant and each affiliate of the applicant from the division responsi-
ble for monitoring for compliance:
(1) A report of any instance(s) of noncompliance that re-
main uncorrected and for which the applicable period for corrective
action has expired;
(2) A report of any instance(s) of noncompliance that have
been corrected within the last three (3) years, but that were not cor-
rected within the applicable period for corrective action; and
(3) If the applicant or any affiliate of the applicant is subject
to the requirement of an annual single audit:
(A) A report of any required single audit or single audit
certification form that is currently past due; and
(B) If such single audit has been submitted and the most
recent single audit report contained findings, a copy of that single audit.
(d) From the division responsible for the receipt and applica-
tion of payments on loans held by the Department and the receipt of fees
associated with multifamily bond developments or housing tax credit
developments, EARAC shall receive the following reports regarding
the applicant and each affiliate of the applicant:
(1) A report of any payment of principal or interest to the
Department that is past due beyond any grace period provided for in
the applicable loan documents;
(2) A report of any failure to provide evidence of or main-
tain any required insurance on any collateral for any loan held by the
Department;
(3) A report of any failure to pay property taxes or provide
evidence of the payment of property taxes on any collateral for any loan
held by the Department unless either provision has been made for such
payment or the Department has been provided satisfactory evidence of
a tax exemption; and
(4) A report of any past due fees.
(e) From the division responsible for overseeing asset manage-
ment issues for affordable rental properties assisted by the Department
EARAC shall receive a report documenting any known current or on-
going concerns regarding the applicant or any affiliate of the applicant
to financially or operationally manage one or more affordable rental
properties assisted by the Department in a manner to keep the develop-
ment sanitary, decent, and safe, including but not limited to:
(1) The establishment and maintenance of appropriate re-
serves;
(2) Identification of the development's capacity to meet fi-
nancial obligations consistent with the minimum ratios to meet under-
writing feasibility for the long term;
(3) Requests for material modifications or amendments;
(4) Any financing known to be in a workout status; and
(5) Delays in issuance of IRS Form(s) 8609 which are
within the control of the owner.
(f) EARAC shall review the reports provided and determine
whether and the extent to which matters set forth in the report bear on
the applicant's or affiliate's ability to perform, in a compliant manner,
with regard to funding and allocation decisions by the Board. While38 TexReg 8408 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/m1/96/: accessed July 17, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu.; crediting UNT Libraries Government Documents Department.