Relating to the issuance by the Texas Department of Housing and Community Affairs of certain federal forms for purposes of allocating low income housing tax credits; authorizing an administrative penalty.

89(R) HB 1997 - Introduced version - Bill Text

89R6405 JG-D

By: Campos

H.B. No. 1997

A BILL TO BE ENTITLED

AN ACT

relating to the issuance by the Texas Department of Housing and

Community Affairs of certain federal forms for purposes of

allocating low income housing tax credits; authorizing an

administrative penalty.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Subchapter DD, Chapter 2306, Government Code, is

amended by adding Section 2306.67101 to read as follows:

Sec.

2306.67101.

ISSUANCE OF INTERNAL REVENUE SERVICE FORM

8609; REPORT. (a) In this section:

(1)

"Documentation packet" means the Internal Revenue

Service Form 8609 documentation packet required to receive an

allocation of housing tax credits under this subchapter.

(2)

"Form 8609" means Internal Revenue Service Form

8609, or that form's successor.

(b)

Not later than the 120th day after the date a

development owner submits to the department an Internal Revenue

Service Form 8609 documentation packet under this section, the

department shall issue the owner an Internal Revenue Service Form

8609.

(c) A documentation packet must consist of only:

(1) an owner's statement of certification form:

(A)

that is signed by the development owner and

notarized; and

(B)

through which the development owner

certifies the accuracy of the information included in the

documentation packet;

(2) an owner's summary form that includes:

(A)

the taxpayer identification number of the

development owner; and

(B)

information on the ownership structure of the

development owner, the developer, or the development guarantor;

(3) a development cost schedule for the development;

(4)

an independent auditor's report of the total

development cost and eligible basis of the development through

which the auditor certifies that the audit was conducted according

to generally accepted auditing standards and included:

(A)

an examination of evidence supporting the

amounts and disclosures outlined in the cost certification;

(B)

an assessment of the accounting principles

used and significant estimates made by the development owner; and

(C)

an overall cost certification evaluation and

establishment of the total eligible basis;

(5)

an independent auditor's report of bond financing

through which the auditor certifies the percentage of the

development's aggregate basis financed by tax-exempt bonds;

(6)

a complete copy of the executed carryover

allocation agreement issued to the development owner by the

department;

(7)

for a development that was awarded points for

demonstrating nonprofit participation under the sponsor

characteristics of the application, documentation evidencing the

nonprofit participation;

(8)

a placement in service form that contains

summarized information for the development on a

building-by-building basis;

(9)

an architect certification or substantial

completion form and permission to occupy form:

(A)

that are completed and signed by the

development architect; and

(B)

through which the development architect

certifies, for purposes of calculating the development's placed in

service date, the date of:

(i)

the completion of the development's

buildings; and

(ii)

the issuance of the certificate of

occupancy for the development;

(10)

a complete copy of the executed and recorded land

use restriction agreement for the development;

(11)

a projected operating pro forma to include a rent

schedule and annual operating expenses; and

(12)

a summary of the sources and uses of funds for the

development.

(d)

The form and contents of the documentation required

under Subsections (c)(1), (2), (3), (4), (5), (8), and (9) must be

the same as those prescribed by the department for the application

cycle that is based on the 2022 qualified allocation plan.

(e)

If the department determines that a development owner

intentionally provided incorrect or inconsistent information in a

documentation packet submitted to the department under this

section, the department may assess an administrative penalty

against the owner in accordance with Subchapter B. In assessing an

administrative penalty under this subsection, the department may:

(1) impose a monetary penalty; or

(2)

prohibit the owner or any person that has an

ownership interest in the development, except for a tax credit

purchaser or syndicator, from participating in the low income

housing tax credit program for a period of not more than two years.

(f)

The department shall quarterly prepare and submit to the

legislature a written report that includes the following

information for the preceding quarter:

(1)

the total number of submitted documentation

packets that the department is in the course of processing;

(2)

the total number of Forms 8609 that the department

issued, aggregated by the total number issued:

(A)

not later than the 120th day after the date a

documentation packet was submitted;

(B)

on or after the 121st day but before the 151st

day after the date a documentation packet was submitted;

(C)

on or after the 151st day but before the 181st

day after the date a documentation packet was submitted; and

(D)

on or after the 181st day after the date a

documentation packet was submitted;

(3)

a detailed statement of the reasons for the

department's delay in issuing Form 8609 in the time required by

Subsection (b), including complete copies of any requests for

information;

(4)

the average time the department required for

issuing Form 8609;

(5)

the total number of rejected applications for Form

8609; and

(6)

a detailed statement of the reason for the

department's rejection of each application.

(g)

The department shall adopt rules to implement this

section, including rules specifying the manner, deadline, and fees

for submitting a documentation packet under this section.

SECTION 2. The changes in law made by this Act apply only to

an application for low income housing tax credits that is submitted

to the Texas Department of Housing and Community Affairs during an

application cycle that is based on the 2025 qualified allocation

plan or a subsequent plan adopted by the governing board of the

department under Section 2306.67022, Government Code. An

application that is submitted during an application cycle that is

based on an earlier qualified allocation plan is governed by the law

in effect on the date the application cycle began, and the former

law is continued in effect for that purpose.

SECTION 3. This Act takes effect September 1, 2025.