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.