Part 1.
TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS
Chapter 33.
MULTIFAMILY HOUSING REVENUE BOND RULES
The Texas Department of Housing and Community Affairs (the "Department")
proposes the repeal of §§33.1 - 33.10, and proposes new §§33.1
- 33.10, concerning the Multifamily Housing Revenue Bond Rules. These sections
are proposed new in order to implement changes that will effectively improve
the 2006 Private Activity Bond Program.
Edwina P. Carrington, Executive Director, has determined that for the first
five-year period the sections are in effect, there will be no fiscal implications
for state or local government as a result of enforcing or administering the
sections.
Ms. Carrington also has determined that for each year of the first five
years the sections are in effect the public benefit anticipated as a result
of enforcing the sections will be to permit the adoption of new rules for
multifamily housing revenue bonds within the State of Texas, thereby enhancing
the State's ability to provide decent, safe and sanitary housing for Texans
through the multifamily housing revenue bond program administered by the Department.
There will be no effect on persons, small businesses or micro-businesses.
There are no anticipated economic costs to any person, business or micro-business
required to comply with the sections as proposed. The proposed sections will
not have an impact on any local economy.
The Department will conduct a public hearing in Austin on July 6, 2005
to receive comments and suggestions from the public concerning these proposed
Rules.
Comments may be submitted to Robbye Meyer, Manager of Multifamily Finance,
Texas Department of Housing and Community Affairs, P O Box 13941, Austin,
Texas 78711-3941 or email at robbye.meyer@tdhca.state.tx.us no later than
5:00 p.m., July 18, 2005.
10 TAC §§33.1 - 33.10
(Editor's note: The text of the following sections proposed for
repeal will not be published. The sections may be examined in the offices
of the Texas Department of Housing and Community Affairs or in the Texas Register
office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.)
The repeals are proposed pursuant to the authority
of the Texas Government Code, Chapter 2306.
The repeals affect no other code, article or statute.
§33.1.Introduction.
§33.2.Authority.
§33.3.Definitions.
§33.4.Policy Objectives and Eligible Housing Developments.
§33.5.Bond Rating and Investment Letter.
§33.6.Application Procedures, Evaluation and Approval.
§33.7.Regulatory and Land Use Restrictions.
§33.8.Fees.
§33.9.Waiver of Rules.
§33.10.No Discrimination.
This agency hereby certifies that the proposal has been
reviewed by legal counsel and found to be within the agency's legal authority
to adopt.
Filed with the Office of
the Secretary of State on June 13, 2005.
TRD-200502379
Edwina P. Carrington
Executive Director
Texas Department of Housing and Community Affairs
Earliest possible date of adoption: July 24, 2005
For further information, please call: (512) 475-4595
10 TAC §§33.1 - 33.10
The proposed new sections are proposed pursuant to the authority
of the Texas Government Code, Chapter 2306.
The proposed new sections affect no other code, article or statute.
§33.1.Introduction.
The purpose of this Chapter 33 is to state the Texas Department of
Housing and Community Affairs (the "Department") requirements for issuing
Bonds, the procedures for applying for multifamily housing revenue Bond financing,
and the regulatory and land use restrictions imposed upon Developments financed
with the issuance of Bonds for the 2006 Private Activity Bond Program Year.
The rules and provisions contained in Chapter 33, of this title are separate
from the rules relating to the Department's administration of the Housing
Tax Credit Program. Applicants seeking a housing tax credit allocation should
consult the Department's Qualified Allocation Plan and Rules ("QAP"), in effect
for the program year for which the Housing Tax Credit application will be
submitted. If the applicable QAP contradicts rules set forth in this chapter,
the applicable QAP will take precedence over the rules in the chapter.
§33.2.Authority.
The Department receives its authority to issue Bonds from Chapter 2306
of the Texas Government Code (the "Act"). All Bonds issued by the Department
must conform to the requirements of the Act. Notwithstanding anything herein
to the contrary, tax-exempt Bonds which are issued to finance the Development
of multifamily rental housing are specifically subject to the requirements
of the laws of the State of Texas, including but not limited to the Act, Chapter
1372 of the Texas Government Code relating to Private Activity Bonds, and
to the requirements of the Code (as defined in this chapter).
§33.3.Definitions.
The following words and terms, when used in the chapter, shall have
the following meaning, unless context clearly indicates otherwise.
(1)
Applicant--any Person or Affiliate of a Person who is a
member of the General Partner, who files a Pre-Application or full Application
with the Department requesting the Department issue Bonds to finance a Development.
(2)
Application--an Application, in the form prescribed by
the Department, filed with the Department by an Applicant, including any exhibits
or other supporting material.
(3)
Board--the Governing Board of the Department.
(4)
Bond--an evidence of indebtedness or other obligation,
regardless of the sources of payment, issued by the Department under the Act,
including a bond, note, or bond or revenue anticipation note, regardless of
whether the obligation is general or special, negotiable, or nonnegotiable,
in bearer or registered form, in certified or book entry form, in temporary
or permanent form, or with or without interest coupons.
(5)
Code--the Internal Revenue Code of 1986, as amended from
time to time, together with any applicable regulations, rules, rulings, revenue
procedures, information statements or other official pronouncements issued
by the United States Department of the Treasury or the Internal Revenue Service.
(6)
Development--property or work or a development, building,
structure, facility, or undertaking, whether existing, new construction, remodeling,
improvement, or rehabilitation, that meets or is designed to meet minimum
property standards required by the Department for the primary purpose of providing
sanitary, decent, and safe dwelling accommodations for rent, lease, or use
by individuals and families of Low Income and Very Low Income and Families
of Moderate Income in need of housing. The term includes:
(A)
buildings, structures, land, equipment, facilities, or
other real or personal properties that are necessary, convenient, or desirable
appurtenances, including streets, water, sewage facilities, utilities, parks,
site preparation, landscaping, stores, offices, and other non-housing facilities,
such as administrative, community, and recreational facilities the Department
determines to be necessary, convenient, or desirable appurtenances; and
(B)
multifamily dwellings in rural and urban areas.
(7)
Development Owner--an Applicant that is approved by the
Department as qualified to own, construct, acquire, rehabilitate, operate,
manage, or maintain a Development subject to the regulatory powers of the
Department and other terms and conditions required by the Department and the
Act.
(8)
Eligible Tenants--means
(A)
individuals and families of Extremely Low, Very Low and
Low Income,
(B)
Families of Moderate Income (in each case in the foregoing
subparagraph (A) and (B) of this paragraph as such terms are defined by the
Issuer under the Act), and
(C)
Persons with Special Needs, in each case, with an Anticipated
Annual Income not in excess of 140% of the area median income for a four-person
household in the applicable standard metropolitan statistical area; provided
that all Low-Income Tenants shall count as Eligible Tenants.
(9)
Extremely Low Income--the income received by an individual
or family whose income does not exceed thirty percent (30%) of the area median
income or applicable federal poverty line, as determined by the Act.
(10)
Family of Moderate Income--a family:
(A)
that is determined by the Board to require assistance taking
into account
(i)
the amount of total income available for the housing needs
of the individuals and family,
(ii)
the size of the family,
(iii)
the cost and condition of available housing facilities,
(iv)
the ability of the individuals and family to compete successfully
in the private housing market and to pay the amounts required by private enterprise
for sanitary, decent, and safe housing, and
(v)
standards established for various federal programs determining
eligibility based on income; and
(B)
that does not qualify as a family of Low Income.
(11)
Ineligible Building Type--as defined in the Department's
QAP and Rules in effect for the program year for which the Bond and Housing
Tax Credit applications are submitted.
(12)
Institutional Buyer--means
(A)
an accredited investor as defined in Regulation D promulgated
under the Securities Act of 1933, as amended (17 CFR §230.501(a)), but
excluding any natural person or any director or executive officer of the Department
(17 CFR §230.501(a)(4) - (6)) or
(B)
a qualified institutional buyer as defined by Rule 144A
promulgated under the Securities Act of 1935, as amended (17 CFR §230.144A).
(13)
Low Income--the income received by an individual or family
whose income does not exceed eighty percent (80%) of the area median income
or applicable federal poverty line, as determined by the Act.
(14)
Land Use Restriction Agreement (LURA)--an agreement between
the Department and the Development Owner which is binding upon the Development
Owner's successors in interest that encumbers the Development with respect
to the requirements of law, including this title, the Act and §42 of
the Code.
(15)
Owner--an Applicant that is approved by the Department
as qualified to own, construct, acquire, rehabilitate, operate, manage, or
maintain a Development subject to the regulatory powers of the Department
and other terms and conditions required by the Department and the Act.
(16)
Persons with Special Needs--persons who
(A)
are considered to be disabled under a state or federal
law,
(B)
are elderly, meaning 60 years of age or older or of an
age specified by an applicable federal program,
(C)
are designated by the Board as experiencing a unique need
for decent, safe housing that is not being met adequately by private enterprise,
or
(D)
are legally responsible for caring for an individual described
by subparagraph (A), (B) or (C) of this paragraph above and meet the income
guidelines established by the Board.
(17)
Private Activity Bonds--any Bonds described by §141(a)
of the Code.
(18)
Private Activity Bond Program Scoring Criteria--the scoring
criteria established by the Department for the Department's Multifamily Housing
Revenue Bond Program, §35.6(d) of this title.
(19)
Private Activity Bond Program Threshold Requirements--the
threshold requirements established by the Department for the Department's
Multifamily Housing Revenue Bond Program, §35.6(c) of this title.
(20)
Program--the Department's Multifamily Housing Revenue
Bond Program.
(21)
Proper Site Control--Regarding the legal control of the
land to be used for the Development, means the earnest money contract is in
the name of the Applicant (principal or member of the General Partner); fully
executed by all parties and escrowed by the title company.
(22)
Property--the real estate and all improvements thereon,
whether currently existing or proposed to be built thereon in connection with
the Development, and including all items of personal property affixed or related
thereto.
(23)
Qualified 501(c)(3) Bonds--any Bonds described by §145(a)
of the Code.
(24)
Tenant Income Certification--a certification as to income
and other matters executed by the household members of each tenant in the
Development, in such form as reasonably may be required by the Department
in satisfaction of the criteria prescribed by the Secretary of Housing and
Urban Development under §8(f)(3) of the Housing Act of 1937 ("the Housing
Act") (42 U.S.C. 1437f) for purposes of determining whether a family is a
lower income family within the meaning of the §8(f)(1) of the Housing
Act.
(25)
Tenant Services--social services, including child care,
transportation, and basic adult education, that are provided to individuals
residing in low income housing under Title IV-A, Social Security Act (42 U.S.C. §601
et seq.), and other similar services.
(26)
Tenant Services Program Plan--the plan, subject to approval
by the Department, which describes the Tenant Services to be provided by the
Development Owner in a Development.
(27)
Trustee--a national banking association organized and
existing under the laws of the United States, as trustee (together with its
successors and assigns and any successor trustee).
(28)
Unit--any residential rental Unit in a Development consisting
of an accommodation, including a single room used as an accommodation on a
non-transient basis, that contains complete physical facilities and fixtures
for living, sleeping, eating, cooking and sanitation.
(29)
Very Low Income--the income received by an individual
or family whose income does not exceed sixty percent (60%) of the area median
income or applicable federal poverty line as determined under the Act.
§33.4.Policy Objectives and Eligible Developments.
The Department will issue Bonds to finance the preservation or construction
of decent, safe and affordable housing throughout the State of Texas. Eligible
Developments may include those which are constructed, acquired, or rehabilitated
and which provide housing for individuals and families of Low Income, Very
Low Income, or Extremely Low Income, and Families of Moderate Income.
§33.5.Bond Rating and Investment Letter.
(a)
Bond Ratings. All publicly offered Bonds issued by the
Department to finance Developments shall have and be required to maintain
a debt rating the equivalent of at least an "A" rating assigned to long-term
obligations by Standard & Poor's Ratings Services, a division of The McGraw-Hill
Companies, Inc. or Moody's Investors Service, Inc. If such rating is based
upon credit enhancement provided by an institution other than the Applicant
or Development Owner, the form and substance of such credit enhancement shall
be subject to approval by the Board, which approval shall be evidenced by
adoption by the Board of a resolution authorizing the issuance of the credit-enhanced
Bonds. Remedies relating to failure to maintain appropriate credit ratings
shall be provided in the financing documents relating to the Development.
(b)
Investment Letters. Bonds rated less than "A," or Bonds
which are unrated must be placed with one or more Institutional Buyers and
must be accompanied by an investment letter acceptable to the Department.
Subsequent purchasers of such Bonds shall also be qualified as Institutional
Buyers and shall sign and deliver to the Department an investment letter in
a form acceptable to the Department. Bonds rated less than "A" and Bonds which
are unrated shall be issued in physical form, in minimum denominations of
one hundred thousand dollars ($100,000), and shall carry a legend requiring
any purchasers of the Bonds to sign and deliver to the Department an investment
letter in a form acceptable to the Department.
§33.6.Application Procedures, Evaluation and Approval.
(a)
Application Costs, Costs of Issuance, Responsibility and
Disclaimer. The Applicant shall pay all costs associated with the preparation
and submission of the Application--including costs associated with the publication
and posting of required public notices--and all costs and expenses associated
with the issuance of the Bonds, regardless of whether the Application is ultimately
approved or whether Bonds are ultimately issued. At any stage during the Application
process, the Applicant is solely responsible for determining whether to proceed
with the Application, and the Department disclaims any and all responsibility
and liability in this regard.
(b)
Pre-application. An Applicant who requests financing from
the Department for a Development shall submit a pre-application in a format
prescribed by the Department. Within fourteen (14) days of the Department's
receipt of the pre-application, the Department will be responsible for federal,
state, and local community notifications of the proposed Development. Upon
review of the pre-application, if the Development is determined to be ineligible
for Bond financing by the Department, the Department will send a letter to
the Applicant explaining the reason for the ineligibility. If the Development
is determined to be eligible for Bond financing by the Department, the Department
will score and rank the pre-application based on the Private Activity Bond
Program Scoring Criteria as described in subsection (d) of this section. The
Department will score and rank the pre-application with higher scores ranking
higher within each priority defined by §1372.0321, Texas Government Code.
All Priority 1 Applications will be ranked above all Priority 2 Applications
which will be ranked above all Priority 3 Applications, regardless of score,
reflecting a priority structure which gives consideration to the income levels
of the tenants and the rent levels of the units consistent with Section 2306.359.
This priority ranking will be used throughout the calendar year. In the event
two or more Applications receive the same score, the Department will use,
as a tie-breaking mechanism, a priority first for Applications involving rehabilitation;
then if a tie still exists, the Application with the greatest number of points
awarded for Quality and Amenities for the Development; then if a tie still
exists, the Department will grant preference to the pre-application with the
lower number of net rentable square feet per bond amount requested. Pre-Applications
must meet the threshold requirements as stated in the Private Activity Bond
Program Threshold Requirements as set out in subsection (c) of this section.
The Private Activity Bond Program Threshold Requirements will be posted on
the Department's website. After scoring, the Development and the proposed
financing structure will be presented to the Department's Board for consideration
of a resolution declaring the Department's intent to issue Bonds (the "inducement
resolution") with respect to the Development. Department staff, for good cause,
may recommend that the Board not approve an inducement resolution for an Application.
After Board approval of the inducement resolution, the scored and ranked Applications
will be submitted to the Texas Bond Review Board for its lottery, waiting
list or carryforward processing. The Texas Bond Review Board will draw the
number of lottery numbers that equates to the number of eligible Applications
submitted by the Department for participation in lottery. The lottery numbers
drawn will not equate to a specific Development. The Texas Bond Review Board
will thereafter assign the lowest lottery number drawn to the highest scored
and ranked Application as previously determined by the Department. The Texas
Bond Review Board will issue reservations of allocation for Applications submitted
for the waiting list or carryforward in the order determined by the Department.
The criteria by which a Development may be deemed to be eligible or ineligible
are explained below in subsection (g) of this section, entitled Evaluation
Criteria. The Private Activity Bond Program Scoring Criteria will be posted
on the Department's website. The pre-application shall consist of the following
information:
(1)
Completed Current Uniform Application forms in the format
required by the Department;
(2)
Texas Bond Review Board's Residential Rental Attachment;
(3)
Relevant Development Information;
(4)
Certification of Local Elected Official request for neighborhood
organization information and Public Notification Information;
(5)
Certification and agreement to comply with the Department's
rules;
(6)
Agreement of responsibility of all cost incurred;
(7)
An organizational chart showing the structure of the Applicant
and the ownership structure of any principals of the Applicant;
(8)
Evidence that the Applicant and principals are registered
with the Texas Secretary of State, or if the Applicant has not yet been formed,
evidence that the name of the Applicant is reserved with the Secretary of
State;
(9)
Organizational documents such as partnership agreements
and articles of incorporation, as applicable, for the Applicant and its principals;
(10)
Documentation of non-profit status if applicable; Evidence
of good standing from the Comptroller of Public Accounts of the State of Texas
for the Applicant and its principals; Corporate resumes and individual resumes
of the Applicant and any principals;
(11)
A copy of an executed earnest money contract between the
Applicant and the seller of the Property. For all Applications submitted the
earnest money contract must be in effect at the time of submission of the
application and expire no earlier than December 1 of the year preceding the
applicable program year for lottery Applications and expire no earlier than
120 days after the date of submission for waiting list and carryforward Applications.
The earnest money contract must stipulate and provide for the Applicant's
option to extend the contract expiration date through March 1 of the program
year for lottery Applications or option to extend an additional 120 days from
the initial expiration for waiting list and carryforward Applications, subject
only to the seller's receipt of additional earnest money or extension fees,
so that the Applicant will have site control at the time a reservation of
allocation is granted. If the Applicant owns the Property, a copy of the recorded
warranty deed is required;
(12)
Evidence of zoning appropriate for the proposed use, application
for the appropriate zoning or statement that no zoning is required;
(13)
A local map showing the location of the proposed Property
site;
(14)
A boundary survey or subdivision plat which clearly identifies
the location and boundaries of the subject Property;
(15)
Name, address and telephone number of the Seller of the
Property;
(16)
Construction draw and lease-up proforma for Developments
involving new construction;
(17)
Past two years' operating statements for existing Developments;
(18)
Current market information which includes rental comparisons;
(19)
Documentation of local Section 8 utility allowances;
(20)
Verification/Evidence of delivery of federal, state, and
local community notifications;
(21)
Self-Scoring Criteria; and
(22)
Such other items deemed necessary by the Department per
individual application.
(c)
Pre-Application Threshold Requirements.
(1)
As the Department reviews the Application, the Department
will use the following assumptions, even if not reflected in the Application.
Prequalification Assumptions:
(A)
Development Feasibility:
(i)
Debt Coverage Ratio must be greater than or equal to 1.10;
(ii)
Annual Expenses must be at least $3,800 per Unit or $3.75
per square foot;
(iii)
Deferred Developer Fees are limited to 80% of Developer's
Fees;
(iv)
Contractor Fee are limited to 6% of direct costs plus
site work cost;
(v)
Overhead are limited to 2% of direct costs plus site work
cost;
(vi)
General Requirements are limited to 6% of direct costs
plus site work cost;
(vii)
Developer Fees cannot exceed 15% of the project's Total
Eligible Basis
(B)
Construction Costs Per Unit Assumption. The acceptable
range is $55 65 per Unit for general population developments and $55 to $75
for elderly developments (Acquisition/Rehab developments are exempt from this
requirement);
(C)
Interest Rate Assumption. 6.00% for 30 year financing and
6.75% for 40 year financing;
(D)
Size of Units (Acquisition/Rehab developments are exempt
from this requirement);
(i)
One bedroom Unit must be greater than or equal to 650 square
feet for family and 550 square feet for senior Units.
(ii)
Two bedroom Unit must be greater that or equal to 900
square feet for family and 750 square feet for senior Units.
(iii)
Three bedroom Unit must be greater than or equal to 1,000
square feet for family.
(2)
Appropriate Zoning. Evidence of appropriate zoning for
the proposed use or evidence of application made and pending decision;
(3)
Executed Site Control. Properly executed and escrow receipted
site control through 12/1/05 with option to extend through 3/1/06 for lottery
Applications or 120 days from date of Application submission with option to
extend an additional 120 days from the initial expiration for waiting list
and carryforward Applications;
(4)
Previous Participation and Authorization to Release Credit
Information (located in the uniform application);
(5)
Current Market Information (must support affordable rents);
(6)
Completed current TDHCA Uniform Application and application
exhibits;
(7)
Completed Multifamily Rental Worksheets;
(8)
Certification of Local Elected Official request for neighborhood
organization information and Public Notification Information (see application
package);
(9)
Relevant Development Information (see application package);
(10)
Completed 2006 Bond Review Board Residential Rental Attachment;
(11)
Signed letter of Responsibility for All Costs Incurred;
(12)
Signed Mortgage Revenue Bond Program Certification Letter;
(13)
Evidence of Paid Application Fees ($1,000 to TDHCA, $1,500
to Vinson and Elkins and $5,000 to Bond Review Board);
(14)
Boundary Survey or Plat;
(15)
Local Area map showing the location of the Property and
Community Services/Amenities within a three (3) mile radius;
(16)
Utility Allowance from the Appropriate Local Housing Authority;
(17)
Organization Chart with evidence of Entity Registration
or Reservation with the Secretary of State; and
(18)
Required Notification. Evidence of notifications shall
include a copy of the exact letter and other materials that were sent to the
individual or entity, a sworn affidavit stating that they made all the required
notifications prior to the deadlines and a copy of the entire mailing list
(including names and complete addresses) of all the recipients. Proof of notification
must not be older than three months prior to the date of Application submission
date. Notification must be sent to all the following individuals and entities
(If the QAP and Rules in effect for the program year for which the Bond and
Housing Tax Credit applications are submitted reflect a notification process
that is different from the process listed below, then the QAP and Rules will
override the notification process listed below):
(A)
State Senator and Representative that represents the community
containing the development;
(B)
Presiding Officer of the governing body of any municipality
containing the development and all elected members of that body (Mayor, City
Council members);
(C)
Presiding Officer of the governing body of the county containing
the development and all elected members of that body (County Judge and/or
Commissioners);
(D)
School District Superintendent of the school district containing
the development;
(E)
Presiding Officer of the School Board of Trustees of the
school district containing the development; and
(F)
Evidence must be provided that a letter requesting information
on neighborhood organizations on record with the state or county in which
the Development is to be located and whose boundaries contain the proposed
Development site and meeting the requirements of "Local Elected Official Notification"
as outlined in the Application was sent no later than twenty-one (21) days
prior to the Application submission to the local elected official for the
city or if located outside of a city, then the county where the Development
is proposed to be located. If the Development is located in a jurisdiction
that has district based local elected officials, or both at-large and district
based local elected officials, the notification must be made to the city council
member or county commissioner representing that district; if the Development
is located in a jurisdiction that has only at-large local elected official,
the notification must be made to the mayor or county judge for the jurisdiction.
A copy of the reply letter or other official third-party documentation from
the local elected official must be provided. For urban/exurban areas, entities
identified in the letters from the local elected official whose listed address
has the same zip code as the zip code for the Development must be provided
with written notification, and evidence of the notification must be provided.
If any other zip codes exist within a half mile of the Development site, then
all entities identified in the letters with adjacent zip codes must also be
provided with written notification, and evidence of that notification must
be provided. For rural areas, all entities identified in the letters whose
listed address is within a half mile of the proposed Development site must
be provided with written notification, and evidence of that notification must
be provided. If no response is received from the local elected official by
seven (7) days prior to Application submission then the Applicant must submit
a statement attesting to that fact in the format provided by the Department
as part of the Application.
(d)
Pre-Application Scoring Criteria.
(1)
Construction Cost Per Unit includes: site work, contractor
profit, overhead, general requirements and contingency. Calculation will be
hard costs per square foot of net rentable area. Must be greater than or equal
to $60 per square foot (1 point) (Acquisition/Rehab will automatically receive
(1 point)).
(2)
Size of Units. Average size of all Units combined in the
development must be greater than or equal to 950 square foot for family and
must be greater than or equal to 750 square foot for elderly (5 points). (Acquisition/Rehab
developments will automatically receive 5 points).
(3)
Period of Guaranteed Affordability for Low Income Tenants.
Add 10 years of affordability after the extended use period for a total affordability
period of 40 years (1 point).
(4)
Quality and Amenities ((maximum 35 points) Acquisition/Rehab
(with no demolition/new construction) will receive double points not to exceed
35 points)). (If there are changes to the Application prior to closing that
have an adverse affect on the score and ranking order and that would have
resulted in the Application being placed below another Application in the
ranking, the Department will terminate the Application and return the reservation
to the Texas Bond Review Board (with the exception of changes to deferred
developer's fees and support or opposition points). Substitutions in amenities
will be allowed as long as the overall score is not affected). Applications
in which Developments provide specific qualities and amenities at no extra
charge to the tenant will be awarded points as follows:
(A)
Laundry Connections (2 points);
(B)
Self-cleaning or continuous cleaning ovens (1 point);
(C)
Microwave Ovens (in each Unit) (1 point);
(D)
Refrigerator with icemaker (1 point);
(E)
Laundry equipment (washer and dryers) for each Unit (3
points);
(F)
Storage Room of approximately nine (9) square feet or greater
(does not have to be in the unit but must be on the property) (1 point);
(G)
Covered entries (1 point);
(H)
Nine foot ceilings (1 point);
(I)
Covered patios or covered balconies (1 point);
(J)
Covered Parking (at least one per Unit) (3 points);
(K)
Garages (equal to at least 35% of Units) (5 points);
(L)
Ceiling Fans in all rooms except bathrooms and kitchens
(light with ceiling fan in all bedrooms) (1 point);
(M)
75% or Greater Masonry (includes rock, stone, brick, stucco
and cementious board product; excludes EFIS) (5 points);
(N)
Thirty year architectural shingle roofing (1 point);
(O)
Use of energy efficient alternative construction materials
(structurally insulated panels) with wall insulation at a minimum of R-20
(3 points);
(P)
R-15 Walls/R-30 Ceilings (rating of wall system) (3 points);
(Q)
14 SEER HVAC or evaporative coolers in dry climates for
new construction or radiant barrier in the attic for the rehabilitation (3
points);
(R)
Energy Star or equivalently rated kitchen appliances (2
points);
(S)
Playground and Equipment or Covered Community Porch (3
points);
(T)
BBQ Grills and Tables (one each per 50 Units) or Walking
Trail (minimum length of 1/4 mile) (3 points);
(U)
Full Perimeter Fencing with controlled gate access (3 points);
(V)
Computers with internet access/Business Facilities (8 hour
availability) (2 points);
(W)
Game Room or TV Lounge (2 points);
(X)
Furnished and staffed children's activity center (3 points);
(Y)
Horseshoe pit, putting green or shuffleboard court (only
qualified elderly developments) (2 points);
(Z)
Workout Facilities or Library (with comparable square footage
as workout facilities) (2 points).
(5)
Tenant Services (Tenant Services shall include only direct
costs (tenant services contract amount, supplies for services, internet connections,
initial cost of computer equipment, etc.). Indirect costs such as overhead
and utility allocations may not be included).
(A)
$10.00 per Unit per month (10 points);
(B)
$7.00 per Unit per month (5 points);
(C)
$4.00 per Unit per month (3 points).
(6)
Zoning appropriate for the proposed use or no zoning required
(appropriate zoning for the intended use must be in place at the time of application
submission date, September 6, 2005 (Applications submitted for lottery) or
first Monday of each month (Applications submitted for waiting list and carryforward),
in order to receive points) (5 points).
(7)
Proper Site Control (as defined in §33.3(21) of this
title, control through 12/01/05 with option to extend through 03/01/06 (Applications
submitted for lottery) or 120 days after the applicable submission date with
option to extend an additional 120 days after the initial expiration (Applications
submitted for waiting list and carryforward) (all information must be correct
at the time of the Application submission date, September 6, 2005 (Applications
submitted for lottery) or first Monday of each month (Applications submitted
for waiting list or carryforward), in order to receive points) (5 points).
(8)
Development Support/Opposition (Maximum net points of +24
to -24. Each letter will receive a maximum of +3 to -3. All letters received
by 5:00 PM, October 7, 2005 (Applications submitted for lottery) or fourteen
(14) days prior to the date of the Board meeting at which the Application
will be considered (Applications submitted for waiting list and carryforward)
will be used in scoring).
(A)
Texas State Senator and Texas State Representative (maximum
+6 to -6 points);
(B)
Presiding officer of the governing body of any municipality
containing the Development and the elected district member of the governing
body of the municipality containing the Development (maximum +6 to -6 points);
(C)
Presiding officer of the governing body of the county containing
the Development and the elected district member of the governing body of the
county containing the Development (if the site is not in a municipality, these
points will be doubled) (maximum +6 to -6 points);
(D)
Local School District Superintendent and Presiding Officer
of the Board of Trustees for the School district containing the Development
(maximum +6 to -6 points).
(9)
Penalties for Missed Deadlines in the Previous Year's Bond
and/or Tax Credit program year. (This includes approved and used extensions)
(-1 point with maximum 3 point deduction).
(10)
Local Political Subdivision Development Funding Commitment
that enables additional Units for the Very Low Income (CDBG, HOME or other
funds through local political subdivisions) (must be greater than or equal
to 2% of the bond amount requested and must provide at least 5% of the total
Development Units at or below 30% AMFI or an additional 5% of the total Development
Units if the Applicant has chosen category Priority 1B on the residential
rental attachment) (2 points).
(11)
Proximity to Community Services/Amenities (Community services/amenities
within three (3) miles of the site. A map must be included with the Application
showing a three (3) mile radius notating where the services/amenities are
located) (maximum 12 points)
(A)
Full service grocery store or supermarket (1 point);
(B)
Pharmacy (1 point);
(C)
Convenience store/mini-market (1 point);
(D)
Retail Facilities (Target, Wal-Mart, Home Depot, etc.)
(1 point);
(E)
Bank/Financial Institution (1 point);
(F)
Restaurant (1 point);
(G)
Indoor public recreation facilities (community center,
civic center, YMCA) (1 point);
(H)
Outdoor public recreation facilities (park, golf course,
public swimming pool) (1 point)
(I)
Fire/Police Station (1 point);
(J)
Medical Facilities (hospitals, minor emergency, doctor
or dentist offices) (1 point);
(K)
Public Library (1 point);
(L)
Public Transportation (1/2 mile from site) (1 point);
(M)
Public School (only one school required for point and only
eligible with general population developments) (1 point) .
(12)
Proximity to Negative Features (adjacent to or within
300 feet of any part of the Development site boundaries). A map must be included
with the application showing where the feature is located. Developer must
provide a letter stating there are none of the negative features listed below
within the stated area if that is correct. (maximum -20 points)
(A)
Junkyards (5 points);
(B)
Active Railways (excluding light rail) (5 points);
(C)
Heavy industrial/manufacturing plants (5 points);
(D)
Solid Waste/Sanitary Landfills (5 points);
(E)
High Voltage Transmission Towers (5 points).
(13)
Acquisition/Rehabilitation Developments will receive thirty
(30) points. This will include the demolition of old buildings and new construction
of the same number of units if allowed by local codes or less units to comply
with local codes (not to exceed 252 total units).
(14)
Preservation Developments will receive ten (10) points.
This includes rehabilitation proposals on properties which are nearing expiration
of an existing affordability requirement within the next two years or for
which the there has been a rent restriction requirement in the past ten years.
Evidence must be provided.
(e)
Financing Commitments. After approval by the Board of the
inducement resolution, and before submission of a final application, the Applicant
will be solely responsible for making appropriate arrangements with financial
institutions which are to be involved with the issuance of the Bonds or the
financing of the Development, and to begin the process of obtaining firm commitments
for financing from each of the financial institutions involved.
(f)
Final Application. An Applicant who elects to proceed with
submitting a final Application to the Department must submit the Volumes I
and II of the Application prior to receipt of a reservation of allocation
from the Texas Bond Review Board and the Volumes III and VI of the Application
and such supporting material as is required by the Department at least sixty
(60) days prior to the scheduled meeting of the Board at which the Development
and the Bond issuance are to be considered, unless the Department directs
the Applicant otherwise in writing. The final application must adhere to the
Department's QAP and Rules in effect for the program year for which the Bond
and Housing Tax Credit applications are submitted. The Department may determine
that supporting materials listed in paragraphs (1) - (42) of this subsection
shall be provided subsequent to the final Application deadline in accordance
with a schedule approved by the Department. Failure to provide any supporting
materials in accordance with the approved schedule may be grounds for terminating
the Application and returning the reservation to the Texas Bond Review Board.
The final application and supporting material shall consist of the following
information:
(1)
A Public Notification Sign shall be installed on the proposed
Development site no later than thirty (30) days after the submission of Volume
I and II of the Tax Credit Application to the Department (pictures and invoice
receipts must be submitted as evidence of installation within thirty (30)
days of the submission). The sign must be at least four (4) feet by eight
(8) feet in size and be located within twenty (20) feet of, and facing, the
main road adjacent to the site. The sign shall be continuously maintained
on the site until the day the TDHCA Board takes final action on the Application
for the development. The information and lettering on the sign must meet the
requirements identified in the Application. As an alternative to installing
a Public Notification Sign and at the same required time, the Applicant may
instead, at the Applicant's Option, mail written notification to all addresses
located within the footage distance required by the local municipality zoning
ordinance or 1,000 feet, if there is no local zoning ordinance or if the zoning
ordinance does not require notification, of any part of the proposed Development
site. This written notification must include the information otherwise required
for the sign. If the Applicant chooses to provide this mailed notice in lieu
of signage, the final Application must include a map of the proposed Development
site and mark the 1,000 foot or local ordinance area showing street names
and addresses; a list of all addresses the notice was mailed to; an exact
copy of the notice that was mailed; and a certification that the notice was
mailed through the U.S. Postal Service and stating the date of mailing. The
Applicant must mail notice to any public official that changed from the submission
of the pre-application to the submission of the final application and any
neighborhood organization that is known and was not notified at the time of
the pre-application submission. No additional notification is required unless
the Applicant submitted a change in the Application that reflects a total
Unit increase greater than 10%, an increase greater than 10% for any given
AMFI, or a change in the population being served (elderly, general population
or transitional);
(2)
Completed Uniform Application forms in the format required
by the Department;
(3)
Certification of no changes from the pre-application to
the final application. If there are changes to the Application that have an
adverse affect on the score and ranking order and that would have resulted
in the application being placed below another application in the ranking,
the Department will terminate the Application and return the reservation to
the Texas Bond Review Board (with the exception of changes to deferred developer's
fees and support or opposition points);
(4)
Certification and agreement to comply with the Department's
rules;
(5)
A narrative description of the Development;
(6)
A narrative description of the proposed financing;
(7)
Firm letters of commitment from any lenders, credit providers,
and equity providers involved in the transaction;
(8)
Documentation of local Section 8 utility allowances;
(9)
Site plan;
(10)
Unit and building floor plans and elevations;
(11)
Complete construction plans and specifications;
(12)
General contractor's contract;
(13)
Completion schedule;
(14)
Copy of a recorded warranty deed if the Applicant already
owns the Property, or a copy of an executed earnest money contract between
the Applicant and the seller of the Property if the Property is to be purchased;
(15)
A local map showing the location of the Property;
(16)
Photographs of the Site;
(17)
Survey with legal description;
(18)
Flood plain map;
(19)
Evidence of zoning appropriate for the proposed use from
the appropriate local municipality that satisfies one of these subparagraphs
(A) - (C) of this paragraph:
(A)
no later than fourteen (14) days before the Board meets
to consider the transaction, the Applicant must submit to the Department written
evidence that the local entity responsible for initial approval of zoning
has approved the appropriate zoning and that they will recommend approval
of the appropriate zoning to the entity responsible for final approval of
zoning decisions;
(B)
provide a letter from the chief executive officer of the
political subdivision or another local official with appropriate jurisdiction
stating that the Development is located within the boundaries of a political
subdivision which does not have a zoning ordinance;
(C)
a letter from the chief executive officer of the political
subdivision or another local official with appropriate jurisdiction stating
the Development is permitted under the provision of the zoning ordinance that
apply to the location of the Development or that there is not a zoning requirement.
(20)
Evidence of the availability of utilities;
(21)
Copies of any deed restrictions which may encumber the
Property;
(22)
A Phase I Environmental Site Assessment performed in accordance
with the Department's Environmental Site Assessment Rules and Guidelines (§1.35
of this title);
(23)
Title search or title commitment;
(24)
Current tax assessor's valuation or tax bill;
(25)
For existing Developments, current insurance bills;
(26)
For existing Developments, past two (2) fiscal year end
development operating statements;
(27)
For existing Developments, current rent rolls;
(28)
For existing Developments, substantiation that income-based
tenancy requirements will be met prior to closing;
(29)
A market study performed in accordance with the Department's
Market Analysis Rules and Guidelines (§1.33 of this title);
(30)
Appraisal of the existing or proposed Development performed
in accordance with the Department's Underwriting Rules and Guidelines (§1.32
of this title);
(31)
Statement that the Development Owner will accept tenants
with Section 8 or other government housing assistance;
(32)
An organizational chart showing the structure of the Applicant
and the ownership structure of any principals of the Applicant;
(33)
Evidence that the Applicant and principals are registered
with the Texas Secretary of State, as applicable;
(34)
Organizational documents such as partnership agreements
and articles of incorporation, as applicable, for the Applicant and its principals;
(35)
Documentation of non-profit status if applicable;
(36)
Evidence of good standing from the Comptroller of Public
Accounts of the State of Texas for the Applicant and its principals;
(37)
Corporate resumes and individual resumes of the Applicant
and any principals;
(38)
Latest two (2) annual financial statements and current
interim financial statement for the Applicant and its principals;
(39)
Latest income tax filings for the Applicant and its principals;
(40)
Resolutions or other documentation indicating that the
transaction has been approved by the general partner;
(41)
Resumes of the general contractor's and the property manager's
experience; and
(42)
Such other items deemed necessary by the Department per
individual application.
(g)
Evaluation Criteria. The Department will evaluate the Development
for eligibility at the time of pre-application, and at the time of final Application.
If there are changes to the Application that have an adverse affect on the
score and ranking order and that would have resulted in the Application being
placed below another Application in the ranking, the Department will terminate
the Application and return the reservation to the Texas Bond Review Board
(with the exception of changes to deferred developer's fees and support or
opposition point). The Development and the Applicant must satisfy the conditions
set out in paragraphs (1) - (6) of this subsection in order for a Development
to be considered eligible:
(1)
The proposed Development must further meet the public purposes
of the Department as identified in the Act.
(2)
The proposed Development and the Applicant and its principals
must satisfy the Department's Underwriting Rules and Guidelines (§1.32
of this title). The pre-application must include sufficient information for
the Department to establish that the Underwriting Guidelines can be satisfied.
The final Application will be thoroughly underwritten according to the Underwriting
Rules and Guidelines (§1.32 of this title).
(3)
The Development must not be located on a site determined
to be unacceptable for the intended use by the Department.
(4)
Any Development in which the Applicant or principals of
the Applicant have an ownership interest must be found not to be in Material
Non-Compliance under the compliance Rules in effect at the time of pre-application
submission. Any corrective action documentation affecting the Material Non-compliance
status score must be submitted to the Department no later than thirty (30)
days prior to final application submission.
(5)
Neither the Applicant nor any principals of the Applicant
is, at the time of Application:
(A)
barred, suspended, or terminated from procurement in a
state or federal program or listed in the List of Parties Excluded from Federal
Procurement or Non-Procurement Programs; or
(B)
has been convicted of a state or federal crime involving
fraud, bribery, theft, misrepresentation, misappropriation of funds, or other
similar criminal offenses within fifteen (15) years; or
(C)
is subject to enforcement action under state or federal
securities law, action by the NASD, subject to a federal tax lien, or the
subject of an enforcement proceeding with any governmental entity; or
(D)
neither applicant nor any principals of the applicant have
a development under their ownership or control with a Material Non-compliance
score of 30 or more; or
(E)
otherwise disqualified or debarred from participation in
any of the Department's programs.
(6)
Neither the Applicant nor any of its principals may have
provided any fraudulent information, knowingly false documentation or other
intentional or negligent misrepresentation in the Application or other information
submitted to the Department.
(h)
Bond Documents. After receipt of the final Application,
bond counsel for the Department shall draft Bond documents which conform to
the state and federal laws and regulations which apply to the transaction.
(i)
Public Hearings; Board Decisions. For every Bond issuance,
the Department will hold a public hearing in accordance with §2306.0661,
Texas Government Code and §147(f) of the Code, in order to receive comments
from the public pertaining to the Development and the issuance of the Bonds.
Publication of all notices required for the public hearing shall be at the
sole expense of the Applicant. The Board's decisions on approvals of proposed
Developments will consider all relevant matters. Any topics or matters, alone
or in combination, may or may not determine the Board's decision. The Department's
Board will consider the following topics in relation to the approval of a
proposed Development:
(1)
The Development Owner market study;
(2)
The location, including supporting broad geographic dispersion;
(3)
The compliance history of the Development Owner;
(4)
The financial feasibility;
(5)
The inclusive capture rate as described under Chapter 10,
Texas Administrative Code, §1.32(g)(2);
(6)
The Development's proposed size and configuration in relation
to the housing needs of the community in which the Development is located;
(7)
The Development's proximity to other low income Developments;
(8)
The availability of adequate public facilities and services;
(9)
The anticipated impact on local school districts, giving
due consideration to the authorized land use;
(10)
Zoning and other land use considerations;
(11)
Fair Housing law, including affirmatively furthering fair
housing;
(12)
The Applicant and/or Developer's efforts to engage the
neighborhood;
(13)
The housing needs of the community, area, region and state;
(14)
Consistency with local needs, including consideration
of revitalization or preservation needs;
(15)
Providing integrated, affordable housing for individuals
and families with different levels of income;
(16)
Meeting a compelling housing need;
(17)
Any matter considered by the Board to be relevant to the
approval decision and in furtherance of the Department's purposes and the
policies of Chapter 2306, Texas Government Code.
(j)
Approval of the Bonds.
(1)
Subject to the timely receipt and approval of commitments
for financing, an acceptable evaluation for eligibility, the satisfactory
negotiation of Bond documents, and the completion of a public hearing, the
Board, upon presentation by the Department's staff, will consider the approval
of the Bond issuance, final Bond documents and, in the instance of privately
placed Bonds, the pricing of the Bonds. The process for appeals and grounds
for appeals may be found under §1.7 and §1.8 of this title. The
Department's conduit housing transactions will be processed in accordance
with the Texas Bond Review Board rules Title 34, Part 9, Chapter 181, Subchapter
A and Chapter 1372, Texas Government Code. The Bond issuance must receive
an approving opinion from the Department's bond counsel with respect to the
legality and validity of the Bonds and the security therefore, and in the
case of tax-exempt Bonds, with respect to the excludability from gross income
for federal income tax purposes of interest on the Bonds.
(2)
Alternative Dispute Resolution Policy. In accordance with §
2306.082, Texas Government Code, it is the Department's policy to encourage
the use of appropriate alternative dispute resolution procedures ("ADR") under
the Governmental Dispute Resolution Act, Chapter 2009, Texas Government Code,
to assist in resolving disputes under the Department's jurisdiction. As described
in Chapter 154, Civil Practices and Remedies Code, ADR procedures include
mediation. Except as prohibited by the Department's ex parte communications
policy, the Department encourages informal communications between Department
staff and applicants, and other interested persons, to exchange information
and informally resolve disputes. The Department also has administrative appeals
processes to fairly and expeditiously resolve disputes. If at anytime an applicant
or other person would like to engage the Department in an ADR procedure, the
person may send a proposal to the Department's Dispute Resolution Coordinator
(fax: (512) 475-3978). For additional information on the Department's ADR
Policy, see the Department's General Administrative Rule on ADR at 10 Texas
Administrative Code §1.17.
(k)
Local Permits. Prior to the closing of the Bonds, all necessary
approvals, including building permits, from local municipalities, counties,
or other jurisdictions with authority over the Development must have been
obtained or evidence that the permits are obtainable subject only to payment
of certain fees must be provided to the Department.
(l)
Closing. Once all approvals have been obtained and Bond
documents have been finalized to the respective parties' satisfaction, the
Bond transaction will close. Upon satisfaction of all conditions precedent
to closing, the Department will issue Bonds in exchange for payment thereof.
The Department will then loan the proceeds of the Bonds to the Applicant and
disbursements of the proceeds may begin.
§33.7.Regulatory and Land Use Restrictions.
(a)
Filing and Term of LURA. A Regulatory and Land Use Restriction
Agreement or other similar instrument (the "LURA"), will be filed in the property
records of the county in which the Development is located for each Development
financed from the proceeds of Bonds issued by the Department. For Developments
involving new construction, the term of the LURA will be the longer of 30
years, the period of guaranteed affordability or the period for which Bonds
are outstanding. For the financing of an existing Development, the term of
the LURA will be the longer of the longest period which is economically feasible
in accordance with the Act, or the period for which Bonds are outstanding.
(b)
Development Occupancy. The LURA will specify occupancy
restrictions for each Development based on the income of its tenants, and
will restrict the rents that may be charged for Units occupied by tenants
who satisfy the specified income requirements. Pursuant to §2306.269,
Texas Government Code, the LURA will prohibit a Development Owner from excluding
an individual or family from admission to the Development because the individual
or family participates in the housing choice voucher program under Section
8, United States Housing Act of 1937 (the "Housing Act"), and from using a
financial or minimum income standard for an individual or family participating
in the voucher program that requires the individual or family to have a monthly
income of more than two and one half (2.5) times the individual's or family's
share of the total monthly rent payable to the Development Owner of the Development.
Development occupancy requirements must be met on or prior to the date on
which Bonds are issued unless the Development is under construction. Adequate
substantiation that the occupancy requirements have been met, in the sole
discretion of the Department, must be provided prior to closing. Occupancy
requirements exclude Units for managers and maintenance personnel that are
reasonably required by the Development.
(c)
Set Asides.
(1)
Developments which are financed from the proceeds of Private
Activity Bonds or from the proceeds of Qualified 501(c)(3) Bonds must be restricted
under one of the following two set-asides:
(A)
at least twenty percent (20%) of the Units within the Development
that are available for occupancy shall be occupied or held vacant and available
for occupancy at all times by persons or families whose income does not exceed
fifty percent (50%) of the area median income, or
(B)
at least forty percent (40%) of the Units within the Development
that are available for occupancy shall be occupied or held vacant and available
for occupancy at all times by persons or families whose income does not exceed
sixty percent (60%) of the area median income.
(2)
The Development Owner must designate at the time of Application
which of the two set-asides will apply to the Development and must also designate
the selected priority for the Development in accordance with §1372.0321,
Texas Government Code. Units intended to satisfy set-aside requirements must
be distributed evenly throughout the Development, and must include a reasonably
proportionate amount of each type of Unit available in the Development.
(3)
No tenant qualifying under either of the set-asides shall
be denied continued occupancy of a Unit in the Development because, after
commencement of such occupancy, such tenant's income increases to exceed the
qualifying limit; provided, however, that, should a tenant's income, as of
the most recent determination thereof, exceed 140% of the then applicable
income limit and such tenant constitutes a portion of the set-aside requirement
of this section, then such tenant shall only continue to qualify for so long
as no Unit of comparable or smaller size is rented to a tenant that does not
qualify as a Low-Income Tenant. (These are the federal set-aside requirements)
(d)
Global Income Requirement. All of the Units that are available
for occupancy in Developments financed from the proceeds of Private Activity
Bonds or from the proceeds of Qualified 501(c)(3) Bonds shall be occupied
or held vacant (in the case of new construction) and available for occupancy
at all times by persons or families whose income does not exceed one hundred
and forty percent (140%) of the area median income for a four-person household.
(e)
Qualified 501(c)(3) Bonds. Developments which are financed
from the proceeds of Qualified 501(c)(3) Bonds are further subject to the
restriction that at least seventy-five percent (75%) of the Units within the
Development that are available for occupancy shall be occupied (or, in the
case of new construction, held vacant and available for occupancy until such
time as initial lease-up is complete) at all times by individuals and families
of Low Income (less than or equal to 80% of AMFI).
(f)
Taxable Bonds. The occupancy requirements for Developments
financed from the issuance of taxable Bonds will be negotiated, considered
and approved by the Department on a case by case basis.
(g)
Special Needs. At least five percent (5%) of the Units
within each Development must be designed to be accessible to Persons with
Special Needs and hardware and cabinetry must be stored on site or provided
to be installed on an as needed basis in such Units. The Development will
comply with accessibility requirements in the Fair Housing Act Design manual.
The Development Owner will use its best efforts (including giving preference
to Persons with Special Needs) to:
(1)
make at least five percent (5%) of the Units within the
Development available for occupancy by Persons with Special Needs;
(2)
make reasonable accommodations for such persons; and
(3)
allow reasonable modifications at the tenant's sole expense
pursuant to the Housing Act. During the term of the LURA, the Development
Owner shall maintain written policies regarding the Development Owner's outreach
and marketing program to Persons with Special Needs.
(h)
Fair Housing. All Developments financed by the Department
must comply with the Fair Housing Act which prohibits discrimination in the
sale, rental, and financing of dwellings based on race, color, religion, sex,
national origin, familial status, and disability. The Fair Housing Act also
mandates specific design and construction requirements for multifamily housing
built for first occupancy after March 13, 1991, in order to provide accessible
housing for individuals with disabilities.
(i)
Tenant Services. The LURA will require that the Development
Owner offer a variety of services for residents of the Development through
a Tenant Services Program Plan which is subject to annual approval by the
Department.
(j)
The LURA will require the Development Owner:
(1)
To obtain, complete and maintain on file Tenant Income
Certifications from each Eligible Tenant, including:
(A)
a Tenant Income Certification dated immediately prior to
the initial occupancy of each new Eligible Tenant in the Development; and
(B)
thereafter, annual Tenant Income Certifications which must
be obtained on or before the anniversary of such Eligible Tenant's occupancy
of the Unit, and in no event less than once in every 12-month period following
each Eligible Tenant's occupancy of a Unit in the Development. For administrative
convenience, the Development Owner may establish the first date that a Tenant
Income Certification for the Development is received as the annual recertification
date for all tenants. The Development Owner will obtain such additional information
as may be required in the future by §142(d) of the Code, as the same
may be amended from time to time, or in such other form and manner as may
be required by applicable rules, rulings, policies, procedures, Regulations
or other official statements now or hereafter promulgated, proposed or made
by the Department of the Treasury or the Internal Revenue Service with respect
to obligations which are tax-exempt private activity bonds described in §142(d)
of the Code. The Development Owner shall make a diligent and good-faith effort
to determine that the income information provided by an applicant in a Tenant
Income Certification is accurate by taking steps required under §142(d)
of the Code pursuant to provisions of the Housing Act.
(C)
The Development shall comply with Title 10, Part 1, Chapter
60, Subchapter A.
(2)
As part of the verification, such steps may include the
following, provided such action meets the requirements of §142(d) of
the Code and the gross income of individuals shall be determined in a manner
consistent with the determinations of low income families under section 8
of the United States Housing Act of 1937:
(A)
obtain pay stubs sufficient to annualize income;
(B)
obtain third party written verification of income;
(C)
obtain an income verification from the applicant's current
employer;
(D)
obtain an income verification from the Social Security
Administration; or
(E)
if the applicant is self-employed, unemployed, does not
have income tax returns or is otherwise not reasonably able to provide other
forms of verification as required above, obtain another form of independent
verification as would, in the Development Owner's reasonable commercial judgment,
enable the Development Owner to determine the accuracy of the applicant's
income information. The Development Owner shall retain all Tenant Income Certifications
obtained in compliance with this subsection (b) of this section until the
date that is six years after the last Bond is retired.
(3)
To obtain from each tenant in the Development, at the time
of execution of the lease pertaining to the Unit occupied by such tenant,
a written certification, acknowledgment and acceptance in such form as provided
by the Department to the Development Owner from time to time that
(A)
such lease is subordinate to the Mortgage and the LURA;
(B)
all statements made in the Tenant Income Certification
submitted by such tenant are accurate;
(C)
the family income and eligibility requirements of the LURA
and the Loan Agreement are substantial and material obligations of tenancy
in the Development;
(D)
such tenant will comply promptly with all requests for
information with respect to such requirements from the Development Owner,
the Trustee and the Department; and
(E)
failure to provide accurate information in the Tenant Income
Certification or refusal to comply with a request for information with respect
thereto will constitute a violation of a substantial obligation of the tenancy
of such tenant in the Development;
(4)
To maintain complete and accurate records pertaining to
the Low-Income Units and to permit, at all reasonable times during normal
business hours and upon reasonable notice, any duly authorized representative
of the Department, the Trustee, the Department of the Treasury or the Internal
Revenue Service to enter upon the Development Site to examine and inspect
the Development and to inspect the books and records of the Development Owner
pertaining to the Development, including those records pertaining to the occupancy
of the Low-Income Units;
(5)
On or before each February 15 during the qualified development
period, to submit to the Department (to the attention of the Portfolio Management
and Compliance Division) a draft of the completed Internal Revenue Service
Form 8703 or such other annual certification required by the Code to be submitted
to the Secretary of the Treasury as to whether the Development continues to
meet the requirements of §142(d) of the Code and on or before each March
31 during the qualified development period, to submit such completed form
to the Secretary of the Treasury and the Department;
(6)
To prepare and submit the compliance monitoring report.
To cause to be prepared and submitted to the Department and the Trustee on
the first day of the state restrictive period, and thereafter by the tenth
calendar day of each March, June, September, and December, or other quarterly
schedule as determined by the Department with written notice to the Development
Owner, a certified compliance monitoring report and Development Owner's certification
in such form as provided by the Departments to the Development Owner from
time to time; and
(7)
To provide regular maintenance to keep the Development
sanitary, decent and safe.
(8)
To establish a reserve account consistent with the requirements
of §2306.186, Texas Government Code.
(9)
To prepare and submit the Housing Sponsor Report to the
Department no later than March 1st of each year.
§33.8.Fees.
(a)
Application and Issuance Fees. The Department shall set
fees to be paid by the Applicant in order to cover the costs of pre-application
review, Application and Development review, the Department's expenses in connection
with providing financing for a Development, and as required by law. (§1372.006(a),
Texas Government Code)
(b)
Administration, Portfolio Management and Compliance, and
Asset Management Fees. The Department shall set ongoing fees to be paid by
Development Owners to cover the Department's costs of administering the Bonds,
portfolio management and compliance with the program requirements applicable
to each Development and asset management applicable requirements.
§33.9.Waiver of Rules.
Provided all requirements of the Act, the Code, and any other applicable
law are met, the Board may waive any one or more of the Rules set forth in §§33.3
- 33.8 of this title relating to the Multifamily Housing Revenue Bond Program
in order to further the purposes and the policies of Chapter 2306, Texas Government
Code; to encourage the acquisition, construction, reconstruction, or rehabilitation
of a Development that would provide decent, safe, and sanitary housing, including,
but not limited to, providing such housing in economically depressed or blighted
areas, or providing housing designed and equipped for Persons with Special
Needs; or for other good cause, as determined by the Board.
§33.10.No Discrimination.
The Department and its staff or agents, Applicants, Development Owners,
and any participants in the Program shall not discriminate under this Program
against any person or family on the basis of race, creed, national origin,
age, religion, handicap, family status, or sex, or against persons or families
on the basis of their having minor children, except that nothing herein shall
be deemed to preclude a Development Owner from selecting tenants with Special
Needs, or to preclude a Development Owner from selecting tenants based on
income in renting Units to comply with the set asides under the provisions
of this chapter.
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed
with the Office of the Secretary of State on June 13, 2005.
TRD-200502380
Edwina P. Carrington
Executive Director
Texas Department of Housing and Community Affairs
Earliest possible date of adoption: July 24, 2005
For further information, please call: (512) 475-4595
Chapter 301.
GENERAL PROVISIONS
10 TAC §301.3
The Texas Residential Construction Commission ("commission")
proposes new §301.3, relating to a Warranties and Performance Standards
Advisory Committee. The new section sets forth the purpose and membership
requirements for an advisory committee to be appointed by the commission to
assist in the review and development of amendments to the Limited Warranties
and Building and Performance Standards adopted in Chapter 304 of this title.
The new section is proposed to provide a mechanism that allows for regular
and reasoned review of the residential construction performance standards
adopted by the commission. The committee shall review and evaluate proposed
changes to the performance standards made either by the public or internally
by the commission, and make recommendations to the commission.
The new section is proposed under Property Code §408.001, which provides
general authority for the commission to adopt rules necessary for the implementation
of Title 16 and Chapter 430, which requires the commission to adopt rules
for establishing limited warranties and building and performance standards.
The new section is also adopted in accordance with Texas Government Code Chapter
2110, regarding agency advisory committees.
Stephen D. Thomas, Executive Director, has determined that for each year
of the first five-year period the proposed section is in effect there will
be no fiscal implications for local governments as a result of enforcing or
administering the proposed section.
Mr. Thomas has also determined that for each year of the first five-year
period the proposed section are in effect the public will benefit from receiving
assurance that the commission will regularly review proposed amendments to
Chapter 304 of this title and that the commission will have a procedure in
place for the public and other interested stakeholders to provide input into
the limited warranties and building and performance standards.
Mr. Thomas has also determined that for each year of the first five-year
period the proposed section is in effect there will be no effect on large,
small and micro-businesses as a result of the adoption of the proposed section.
Mr. Thomas has also determined that for each year of the first five-year
period the proposed section are in effect there should be no effect on a local
economy; therefore, no local employment impact statement is required under
Administrative Procedure Act §2001.022.
Interested persons may submit written comments (12 copies) on the new section
to Susan K. Durso, General Counsel, Texas Residential Construction Commission,
P.O. Box 13144, Austin, Texas 78711. Comments may be submitted electronically
to comments@trcc.state.tx.us. For comments submitted electronically, please
include "Proposed Advisory Committee Rule" in the subject line. The deadline
for submission of comments is thirty days from the date of publication of
the proposed section in the
Texas Register
.
Comments should be organized in a manner consistent with the organization
of the proposed rule. Comments submitted electronically to another electronic
address or that do not include "Proposed Advisory Committee Rule" in the subject
line may not be considered.
The new section is proposed to implement Property Code Chapter
430 and Government Code Chapter 2110.
No other statutes, articles, or codes are affected by the proposal.
§301.3.Warranties and Performance Standards Advisory Committee.
(a)
The commission shall appoint an advisory committee to be
referred to as the Warranties and Performance Standards Advisory Committee.
(b)
The purpose of the committee is to provide a mechanism
that allows for regular and reasoned review of the residential construction
performance standards adopted by the commission. The committee shall review
and evaluate proposed changes to the performance standards made either by
the public or internally by the commission, and make recommendations to the
commission.
(c)
The commission shall contract with the Construction Science
Department, College of Architecture, Texas A&M University, for an individual
to serve as presiding officer for the committee. This position shall be non-voting
except in the case of a tie.
(d)
The Executive Director shall appoint a member of the commission
staff to serve and assist the committee. This position shall be non-voting.
This person shall keep minutes of committee meetings and prepare those minutes
for approval by the presiding member of the committee and shall assist the
presiding officer in preparing the reports required for submission to the
commission under paragraph m of this section.
(e)
The commission shall appoint to the committee members from
each of the following industry and consumer interests:
(1)
One third-party inspector certified by the commission under
chapter 303 of this title.
(2)
One professional engineer certified by the commission under
chapter 303 of this title.
(3)
Two persons who have experience representing consumers
or homeowner interests.
(4)
Two persons who are homeowners, who are not builders and
who do not own and are not employed or otherwise engaged in a trade involving
residential construction.
(5)
One attorney licensed in the State of Texas whose primary
practice is the representation of consumers in the area of alleged home construction
disputes with builders.
(6)
Three persons, each of whom is a registered builder or
representative of registered builders under chapter 303 of this title. It
is the desire of the commission that these members will represent remodelers
and builders of differing volumes of registered homes.
(7)
One person who is a representative of a trade association
that is composed of builders, remodelers and associate members related to
residential construction.
(8)
One attorney licensed in the State of Texas whose primary
practice is the representation of builders in the area of alleged construction
disputes with homeowners.
(f)
Removal of members. Members of the committee serve at the
pleasure of the commission. The commission may remove a member from the committee
by a majority vote of the commission.
(g)
Conditions of membership. The term of office for each member
appointed by the commission shall be staggered for a two-year term. Half of
the initial appointments will be for a three-year term and half will be for
a two-year term to achieve staggered terms thereafter. A member whose term
has expired shall continue to serve until a qualified replacement is appointed
by the commission. In the event that a member appointed by the commission
cannot complete his or her term or is removed by the commission, the commission
shall appoint a qualified replacement to serve the remainder of the term.
(h)
No compensation. Committee members appointed by the commission
shall serve without compensation. Committee members appointed by the commission
are not entitled to reimbursement from the commission for travel and per diem
incurred in the performance of their official duties.
(i)
Meetings. The committee shall meet twice a year unless
directed otherwise by the commission. The committee shall be subject to meeting
at the call of the presiding member. A quorum shall consist of a majority
of the committee membership.
(j)
Notice of meeting. The presiding member shall coordinate
with the commission to ensure all interested parties are provided with reasonable
notice of the meeting. All public notices of upcoming meetings shall encourage
interested parties to make suggested changes to the performance standards
to the committee for its consideration. Each notice of meeting shall include
information on how to submit to the committee suggested changes to the performance
standards. All meetings shall be conducted in accordance with chapter 551
of the Government Code and notices of meetings shall be posted in compliance
with chapter 551 of the Government Code.
(k)
Public participation. Any interested person may submit
suggested changes to the performance standards to the committee.
(1)
A suggested change to the performance standards must be
received by the committee no later than thirty days before the committee’s
next public meeting.
(2)
A suggested change to the performance standards shall be
in writing and shall include a brief explanation of the performance standard,
the reason the new or amended performance standard should be adopted or repealed,
and complete text for the suggested change.
(3)
All proposed text to amend a performance standard shall
be indicated by striking through the words, if any, to be deleted from the
current performance standard and by underlining the words, if any, to be added
to the current performance standard.
(4)
The submission to the committee of a suggested change to
the performance standards shall not be considered a petition for rulemaking
under §301.2 of this chapter.
(l)
Reports. Not later than thirty days after each committee
meeting, the presiding member shall prepare a report to the commission. The
report shall contain the minutes of the meeting, a memo summarizing the meeting,
and recommendations by the committee.
(m)
Recommendations. If the committee recommends a change to
the performance standards, the committee shall submit a draft rule to the
commission for consideration for rulemaking. The committee shall attach the
original suggested change to the draft rule. The committee shall also report
to the commission a synopsis of all suggested changes submitted to the committee
that the committee declined to recommend. The commission shall consider the
committee’s report at the first public commission meeting following
submission of the committee’s report.
(n)
Evaluation of costs and effectiveness. The commission shall
evaluate the committee annually. Evaluation shall be conducted by an evaluation
team appointed by the Executive Director. The evaluation team shall report
to the commission in open meeting each August of findings regarding the committee’s
work, usefulness, and the costs related to the committee’s existence,
including the cost of agency staff time spent in support of the committee.
The commission shall report this information to Legislative Budget Board biennially
in connection with the commission’s request for appropriations.
(o)
The Warranties and Performance Standards Advisory Committee
shall be abolished on December 31, 2010, unless otherwise continued by a majority
vote of the commission prior to the date of expiration.
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of
the Secretary of State on June 13, 2005.
TRD-200502381
Christopher Burnett
Assistant General Counsel
Texas Residential Construction Commission
Earliest possible date of adoption: July 24, 2005
For further information, please call: (512) 463-9638
Subchapter A. REGISTRATION OF BUILDERS
10 TAC §303.19
The Texas Residential Construction Commission (the "commission")
proposes an amendment to §303.19, concerning renewal of builder registration.
The amendment is proposed to make builder and remodeler applicants for renewal
aware that the commission will consider the failure of the applicant to comply
with the commission’s request for correspondence regarding written exchanges
between the homeowners and builders after completion of the state-sponsored
inspection and dispute resolution process (SIRP).
The amendment is proposed pursuant to Property Code §408.001, which
provides general authority for the commission to adopt rules necessary for
the implementation of Title 16, Property Code and Property Code ch. 416 which
requires the commission to consider an applicant’s honesty, integrity
and trustworthiness when reviewing the application for eligibility.
Stephen D. Thomas, Executive Director, has determined that for each year
of the first five-year period the proposed section as amended is in effect
there will be no fiscal implications for state or local government that result
of enforcing or administering the proposed rule.
Mr. Thomas has also determined that for each year of the first five-year
period the proposed section as amended is in effect the public will benefit
from knowing that builders who fail to comply with commission rules will have
that failure considered during the review of renewal applications.
Mr. Thomas has also determined that the effect of the section amendment
on individuals and businesses, whether large, small or micro-businesses, may
be a decrease in the number of builders and remodelers registered under Chapter
416.
Mr. Thomas has also determined that for each year of the first five-year
period the proposed section as amended is in effect there should be no effect
on a local economy; therefore, no local employment impact statement is required
under Administrative Procedure Act §2001.022.
Interested persons may submit written comments (12 copies) on the proposed
rule amendment to Susan K. Durso, General Counsel, Texas Residential Construction
Commission, P.O. Box 13144, Austin, Texas 78711. Comments may be submitted
electronically to comments@trcc.state.tx.us. For comments submitted electronically,
please include "Proposed Renewal Rule Amendment" in the subject line. The
deadline for submission of comments is thirty (30) days from the date of publication
of the proposed rules in the
Texas Register
.
Comments should be organized in a manner consistent with the organization
of the proposed rule. Comments submitted electronically that do not have "Proposed
Renewal Rule Amendment" in the subject line may not be considered.
The amendment is proposed to further clarify issues considered
during the annual renewal application process, including §408.001 of
the Property Code, which provides general authority for the commission to
adopt rules necessary for the implementation of Title 16 and Property Code
ch. 416 related to builder applicant eligibility.
The statutory provisions affected by the proposal are Property Code §408.001
and Property Code ch. 416.
No other statutes, articles, or codes are affected by the proposal.
§303.19.Renewal.
(a)
After March 1, 2004, a person operating as a builder in
this state must keep a current certificate of registration and must renew
its certificate of registration prior to the expiration of the effective period
shown on the certificate of registration. A builder who fails to maintain
a current certificate of registration may be subject to an administrative
penalty as determined by the commission.
(b)
In order to renew a certificate of registration, a builder
shall submit a completed application for renewal of a certificate of registration
and the required fee to the commission not later than thirty (30) days prior
to the expiration of the effective period shown on the current certificate
of registration.
(c)
The commission may deny a builder’s
application to renew the builder’s certificate of registration for failure
to comply with §313.27 of Chapter 313 on the grounds that the builder
has not satisfied the commission of the builder’s honesty, trustworthiness
and integrity.
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of
the Secretary of State on June 13, 2005.
TRD-200502382
Christopher Burnett
Assistant General Counsel
Texas Residential Construction Commission
Earliest possible date of adoption: July 24, 2005
For further information, please call: (512) 463-9638
10 TAC §303.300
The Texas Residential Construction Commission ("commission")
proposes new section §303.300, relating to the Texas Star Builder Program.
The new section outlines the rule’s purpose, the commission's eligibility
requirements, participation requirements and information of denial, renewal
and appeal of denial.
The new section is proposed to implement House Bill 730 (Act effective
Sept. 1, 2003, 78th Leg., R.S., ch. 458, §1.01). The new section is proposed
under Property Code §408.001, which provides general authority for the
commission to adopt rules necessary for the implementation of Title 16 and
Chapter 416, Property Code, which requires the commission to establish rules
and procedures for a program through which a builder can be designated as
a "Texas Star Builder."
Stephen D. Thomas, Executive Director, has determined that for each year
of the first five-year period the proposed section is in effect there will
be no fiscal implications for local governments as a result of enforcing or
administering the proposed section. There will be a minor impact on state
government from the fees received for membership; however, the fees collected
will be applied to the agency’s administrative costs for the Texas Star
Builder Program.
Mr. Thomas has also determined that for each year of the first five-year
period the proposed section are in effect the public will benefit from receiving
additional information regarding builders’ expertise, experience and
commitment to quality home building.
Mr. Thomas has also determined that for each year of the first five-year
period the proposed section is in effect there will be no effect on large,
small and micro-businesses as a result of the adoption of the proposed section.
However, there may be a minimal financial impact on persons who apply for
membership due to application and renewal fees and costs for fulfilling the
continuing education requirements.
Mr. Thomas has also determined that for each year of the first five-year
period the proposed section are in effect there should be no effect on a local
economy; therefore, no local employment impact statement is required under
Administrative Procedure Act §2001.022.
Interested persons may submit written comments (12 copies) on the new section
to Susan K. Durso, General Counsel, Texas Residential Construction Commission,
P.O. Box 13144, Austin, Texas 78711. Comments may be submitted electronically
to comments@trcc.state.tx.us. For comments submitted electronically, please
include "Proposed Star Builder Rule" in the subject line. The deadline for
submission of comments is thirty days from the date of publication of the
proposed section in the
Texas Register
. Comments
should be organized in a manner consistent with the organization of the proposed
rule. Comments submitted electronically to another electronic address or that
do not include "Proposed Star Builder Rule" in the subject line may not be
considered.
The new section is proposed to implement legislation enacted
during the 78th Legislative Session, Regular Session, House Bill 730 (Act
effective Sept. 1, 2003, 78th Leg., R.S., ch. 458, §1.01), including
Title 16, Property Code and specifically, Property Code ch. 416.
No other statutes, articles, or codes are affected by the proposal
§303.300.Texas Star Builder Program.
(a)
Purpose. The Texas Star Builder Program is a voluntary
program for builders and remodelers that have been registered and are in good
standing under Subchapter A of this chapter for a period of twelve months
immediately preceding their application to the program. Participation in this
program is not required to be a builder or remodeler in the State of Texas.
(b)
Definitions. The following words and terms, when used
in this section shall have the following meanings, unless the context clearly
indicates otherwise:
(1)
Applicant--The person identified on the Certificate of
Registration issued by the commission pursuant to subchapter A of this chapter
that applies for membership in the Texas Star Builder Program under this section
(2)
Continuing education--Commission-approved professional
education courses or professional development activities such as workshops,
seminars, institutes, conferences or short-term courses that a member must
complete annually for continued membership in the Texas Star Builder Program.
(3)
Continuous membership--a period of membership in good standing
without voluntary or involuntary interruption or lapse.
(4)
Foundation Practices--
(A)
Foundations are designed by a structural engineer based
on a site specific geotechnical report as may be required by the engineer
of record;
(B)
The site specific geotechnical report is one that is appropriate
for the circumstances with the frequency and spacing of the borings determined
by the geotechnical engineer;
(C)
Foundations are built as designed;
(D)
The construction of the foundation system is inspected
prior to the placement of the concrete by the engineer or an employee of the
engineer who issues an inspection report;
(E)
If the foundation system is designed for post-tension
cables, then the builder shall maintain a record of the stressing certification;
(F)
The builder makes a record of the elevations of the foundation
prior to substantial completion of the home or an improvement to the home;
(G)
The builder provides to the homeowner a final survey showing
that the site drainage is in accordance with the International Residential
Code;
(H)
The builder who constructs the major structural components
of a single-family dwelling or duplex or a material improvement, for a period
of ten years following the date of substantial completion, shall maintain:
(i)
the plans, specifications and recommendations provided
by the engineer and the geotechnical report if required;
(ii)
the inspection report;
(iii)
the stressing certification; and
(iv)
the record of the original elevations.
(5)
Member--A person registered as a builder or designated
agent by the commission who has been approved by the commission for admission
into the Texas Star Builder program.
(6)
Responsible Party--An individual who is authorized to
act on behalf of a business entity that is a registered builder or remodeler
in transactions involving amounts in excess of $100,000, excluding execution
of contracts or instruments of conveyance for the sale of a single lot or
dwelling unit, or the acquisition of materials for construction thereof.
(7)
SIRP--The State-sponsored Inspection and Dispute Resolution
Process.
(c)
Eligibility.
(1)
An applicant who is not a business entity must satisfy
one of the following:
(A)
twelve years of experience immediately preceding the application
acting as a builder or remodeler of single family dwellings or duplexes in
the State of Texas; or
(B)
seven years of experience immediately preceding the application
acting as a builder or remodeler of single family dwellings or duplexes in
the State of Texas, is an active member of and with continuous membership
in a trade association related to the construction industry for at least five
years preceding the date of the application; or
(C)
five years of experience immediately preceding the application
acting as a builder or remodeler of single family dwellings or duplexes in
the State of Texas and the applicant or a responsible party of the applicant
holds a four-year degree in construction science or its equivalent from an
accredited college or university; or
(D)
three years of experience immediately preceding the application
acting as a builder or remodeler of single family dwellings or duplexes in
the State of Texas and the applicant or a responsible party of the applicant
has credible documentation of completion of educational requirements administered
by an association or institution that designates a level of expertise in the
residential construction industry, such as the National Association of Home
Builders Graduate Builder and Remodeler Programs.
(2)
An applicant that is a business entity, which registered
40 homes or less in the preceding twelve months, must have at least one officer
of the applicant who satisfies one of the following:
(A)
twelve years of experience immediately preceding the application
acting as a builder or remodeler of single family dwellings or duplexes in
the State of Texas; or
(B)
seven years of experience immediately preceding the application
acting as a builder or remodeler of single family dwellings or duplexes in
the State of Texas, is an active member of and has continuous membership in
a trade association related to the construction industry for at least five
years preceding the date of the application; or
(C)
five years of experience immediately preceding the application
acting as a builder or remodeler of single family dwellings or duplexes in
the State of Texas and the applicant or a responsible party of the applicant
holds a four-year degree in construction science or its equivalent from an
accredited college or university; or
(D)
three years of experience immediately preceding the application
acting as a builder or remodeler of single family dwellings or duplexes in
the State of Texas and the applicant or a responsible party of the applicant
has credible documentation of completion of educational requirements administered
by an association or institution that designates a level of expertise in the
residential construction industry, such as the National Association of Home
Builders Graduate Builder and Remodeler Programs.
(3)
An applicant that is a business entity, which registered
more than 40 homes in the preceding twelve months, must have at least one
officer of the applicant and one employee of the member who is involved in
on-site construction activities for each 40 homes registered in the twelve
months who each satisfy one of the following:
(A)
twelve years of experience immediately preceding the application
acting as a builder or remodeler of single family dwellings or duplexes in
the State of Texas; or
(B)
seven years of experience immediately preceding the application
acting as a builder or remodeler of single family dwellings or duplexes in
the State of Texas, is an active member of and has continuous membership in
a trade association related to the construction industry for at least five
years preceding the date of the application; or
(C)
five years of experience immediately preceding the application
acting as a builder or remodeler of single family dwellings or duplexes in
the State of Texas and the applicant or a responsible party of the applicant
holds a four-year degree in construction science or its equivalent from an
accredited college or university; or
(D)
three years of experience immediately preceding the application
acting as a builder or remodeler of single family dwellings or duplexes in
the State of Texas and the applicant or a responsible party of the applicant
has credible documentation of completion of educational requirements administered
by an association or institution that designates a level of expertise in the
residential construction industry, such as the National Association of Home
Builders Graduate Builder and Remodeler Programs.
(d)
Financial Responsibility. An applicant must:
(1)
provide documentation from a financial institution, that
includes a statement of the following information that at the time of the
application:
(A)
Applicant has an excellent relationship with the financial
institution (or highest standard of relationship, as defined by the financial
institution);
(B)
Applicant is eligible for an extension of credit for the
purpose of residential construction;
(C)
Applicant is not in default of any credit obligations
to the financial institution; and
(D)
The officer or official of the financial institution that
executes the document does not have actual knowledge that the applicant, any
affiliate of the applicant, or any corporate officer, general partner or constituent
partner as identified by the applicant to the financial institution, has filed
for federal bankruptcy in this state or any state in the seven years immediately
preceding the date of the application.
(E)
The officer or official of the financial institution that
executes the document does not have actual knowledge that the applicant has
overdrafts or past due notices that have not been brought current in a timely
manner within the standards of the lending/banking industry; and
(F)
The officer or official of the financial institution that
executes the document does not have actual knowledge of any current delinquency
in property taxes, unsatisfied judgments or enforceable mechanic’s and
materialmen’s liens on any property for which applicant entered into
a transaction governed by the Act as a result of failure to pay a subcontractor
or supplier unless the builder has either:
(i)
secured a properly filed bond to indemnify the lien pursuant
to the provisions of Property Code Chapter 53, Subchapter H;
(ii)
secured the issuance of title insurance to protect the
homeowner against the lien claim; or
(iii)
initiated legal action to contest the lien and demonstrated
proof of financial responsibility to pay the costs of defense of title to
the property and pay the lien claim if the lien is proven to be proper.
(2)
provide a sworn or attested statement of the applicant
that:
(A)
the applicant, any affiliate or corporate officer, general
partner or constituent partner of the applicant has not filed for federal
bankruptcy in this state or any other state in the seven years immediately
preceding the date of the application;
(B)
the applicant is current on all state property taxes unless
a protest or legal challenge has been properly filed;
(C)
the applicant has no unpaid judgments;
(D)
the applicant has no enforceable mechanic’s and
materialmen’s liens on any property for which the applicant entered
into a transaction governed by the Act as a result of failure to pay a subcontractor
or supplier unless the builder has either:
(i)
secured a properly filed bond to indemnify the lien pursuant
to the provisions of Property Code Chapter 53, Subchapter H;
(ii)
secured the issuance of title insurance to protect the
homeowner against the lien claim; or
(iii)
initiated legal action to contest the lien and demonstrated
proof of financial responsibility to pay the costs of defense of title to
the property and pay the lien claim if the lien is proven to be proper.
(3)
The requirements of a statement prepared by a financial
institution in accordance with paragraph (1) of this subsection do not require
the financial institution to conduct any independent investigation beyond
the institution’ own records and the actual knowledge of the officer
or official who executes the document.
(e)
Insurance requirements.
(1)
A remodeler-applicant must maintain a general liability
policy of:
(A)
$300,000 per occurrence, if the applicant registered between
25-75 homes in the preceding twelve months; or
(B)
$500,000 per occurrence, if the applicant registered between
75-125 homes in the preceding twelve months; or
(C)
$1,000,000 per occurrence, if the applicant registered
126 or more homes in the preceding twelve months.
(2)
A remodeler-applicant who has registered fewer than 25
homes in the preceding twelve months does not need to comply with the general
liability insurance requirements of this section;
(3)
A builder-applicant must maintain a general liability
policy of:
(A)
$300,000 per occurrence, if the applicant registered between
50-150 homes in the preceding twelve months;
(B)
$500,000 per occurrence, if the applicant registered between
151-350 homes in the preceding twelve months;
(C)
$1,000,000 per occurrence, if the applicant registered
between 351-1000 homes in the preceding twelve months; or
(D)
$2,000,000 per occurrence, if the applicant registered
over 1,000 homes in the preceding twelve months.
(4)
A builder-applicant who registered fewer than 50 homes
in the preceding twelve months does not need to comply with the general liability
insurance requirements of this section.
(f)
Construction Practices. The applicant must provide a sworn
or attested statement that the applicant shall comply during the term of membership
with the requirements of at least three of the following:
(1)
the Green Building Program sponsored by the Texas Veterans
Land Board or the National Association of Builders, or any successor entities,
any local governmental authority or similar programs as approved by the Executive
Director;
(2)
the Energy Star Program or similar programs as approved
by the Executive Director;
(3)
Certified Aging-in-place Specialist Program or EasyLiving
Home Certification Program;
(4)
a private inspection program for at lease three (3) phases
of construction for all homes built in geographic area that are not inspected
by municipal inspectors; or
(5)
another nationally-recognized program that requires a
greater standard of residential construction practice than required by the
commission pursuant to the commission-adopted limited warranty and building
and performance standards or usual and customary residential construction
practices as approved by the Executive Director; or
(6)
Foundation Practices as defined in this section; or
(7)
Provide homeowners with whom it enters into a transaction
governed by the Act with a third-party warranty program offered by a commission-approved
third-party warranty company or provide those homeowners with a two-year warranty
for all one-year workmanship and materials items pursuant to the building
and performance standards set forth in Subchapter B, Chapter 304 of this title.
(g)
Participation. Applicants must agree to actively participate
in any eligible SIRP request submitted by a homeowner involving a residential
construction project for which the applicant was the builder and must agree
to respond to the homeowner in good faith based on the final non-appealable
SIRP report and recommendation.
(h)
Construction Defects. Effective January 1, 2007, the number
of homeowner-submitted eligible SIRP requests for alleged construction defects
against an applicant that resulted in a finding of a construction defect in
the final non-appealable inspection report may not exceed:
(1)
two homes for applicants that registered fewer than 40
homes in the preceding twelve months; or
(2)
five percent of the number of homes registered for applicants
that registered 40 or more homes in the preceding twelve months.
(i)
Application. Applicants must submit a completed commission-prescribed
application form and credible documentation supporting the information supplied
in the application for each applicant seeking membership or renewal in the
Texas Star Builder Program.
(1)
An applicant may submit an application for membership
in the Texas Star Builder Program only once during any calendar year.
(2)
For each applicant seeking membership under this section,
the commission shall publish a notice of application in the
Texas Register
.
(A)
The commission shall accept written public comment on
each application submitted to the commission for a period of twenty-one days
following the date of publication of the notice.
(B)
The commission will consider comments received in response
to published notices of application in the approval process.
(3)
Applicants shall respond to inquiries from the commission
for further information regarding an application for membership or renewal
of membership. Failure to respond to a request for information shall result
in the administrative withdrawal of the application.
(4)
The commission shall issue a Texas Star Builder certificate
of membership to each applicant approved for membership in the Texas Star
Builder Program not later than twenty-one days following the expiration of
the comment period under this section.
(5)
Failure to submit all requested documentation within fifteen
days of notice of an incomplete application will result in the administrative
withdrawal of the application.
(6)
A Texas Star Builder certificate of membership shall remain
effective for one year from the date of issuance unless revoked.
(j)
Continuing education. Beginning January 1, 2006, all members
shall complete at least 16 hours of continuing education per year. A continuing
education course cannot be repeated for credit.
(1)
For purposes of this requirement:
(A)
any individual member must maintain the continuing education
requirement;
(B)
any member that is a business entity, that registered
fewer than 40 homes in the preceding twelve months, shall require at least
one officer of the member to maintain the continuing education requirement;
or
(C)
any member that is a business entity, that registered
more than 40 homes in the preceding twelve months, shall require that:
(i)
one officer of the member maintains the continuing education
requirement; and
(ii)
for every 40 homes registered, one employee of the member
who is involved in on-site construction activities shall also maintain the
continuing education requirement.
(D)
Beginning January 1, 2007, evidence of completion of the
continuing education requirements of this section must be submitted with each
renewal application.
(E)
Approved Continuing Education Courses or Programs.
(i)
The Executive Director shall annually review all courses
or programs submitted and shall approve those sufficient to satisfy the continuing
education requirement.
(ii)
Any member that registers more than 30 homes per year
who wishes to conduct an in-house training program for its employees in order
to satisfy the continuing education requirement of this section may submit
course materials to the Executive Director for approval. The Executive Director
shall consider in the approval process of a proposed in-house training program,
the objective and purpose of the program, the content and subject matter of
each course and the qualifications of the presenters.
(iii)
Any person who wishes to sponsor a course or training
program for continuing education purposes under this section must submit a
written request for consideration, a detailed course agenda, a written course
description and resume or biographical information of each speaker or presenter
to the Executive Director for approval, not later than thirty days prior to
the proposed event.
(2)
Substitutions for Continuing Education Coursework.
(A)
A member may substitute not more than three credit hours
of continuing education per membership year for participation in an active
leadership role (such as an officer or committee chairperson) in a trade association
for the membership year in which the continuing education hours would have
been taken. To receive this leadership credit, the member shall submit to
the commission written verification from the president, executive officer,
or other equivalent of the association, certifying the member’s leadership
status.
(B)
A member may not substitute more than two credit hours
of continuing education for self-study. To receive this self-study credit,
the member must submit to the commission a statement that verifies the completion
of self-study and the materials studied.
(C)
A member may substitute instructor credit for up to five
credit hours of continuing education. Each hour of instruction given is equivalent
to an hour of continuing education credit. To receive this instructor credit,
the member must submit to the commission a copy of the published course agenda.
(k)
Renewal. In order to renew membership in the Texas Star
Builder Program, a person must submit a completed application for renewal
with the required documentation set forth in this section to the commission
not later than thirty days prior to the expiration of the effective date shown
on the current Texas Star Builder certificate of membership.
(l)
Denial.
(1)
The commission shall deny an application for membership
or the renewal of membership in the Texas Star Builder Program if the commission
determines that the applicant is ineligible for admission or for continued
membership in the program.
(2)
If the commission denies an application for membership
or the renewal of membership, the commission shall provide written notice
to the applicant not later than the fifteenth business day following the expiration
of the public comment period set forth in this section.
(3)
The commission shall state the reason(s) for denial of
membership or renewed membership in the Texas Star Builder Program in its
written notice to the applicant and provide notice of the opportunity for
appeal.
(m)
Appeal of Denial.
(1)
An applicant who receives a notice of denial under §303.306
of this subchapter may appeal the decision to the Executive Director by submitting
a written request for reconsideration not later than thirty days from receipt
of the notice of denial.
(2)
The decision of the Executive Director regarding the appeal
is a final agency decision not subject to further administrative appeal.
(n)
Revocation of Membership.
(1)
The commission shall revoke a certificate of membership
in the Texas Star Builder Program if the commission determines that:
(A)
the member has been subject to a final disciplinary action
from the commission pursuant to §418.001 of the Act;
(B)
the member used fraud or deceit in obtaining the certificate
of membership;
(C)
the member is no longer eligible for a Certificate of
Registration as a builder or is no longer eligible to serve as a designated
agent for a builder; or
(D)
the member’s Certificate of Registration has been
suspended, is placed in inactive status or the member has been placed under
a commission probation order.
(2)
If a membership is revoked, the commission shall provide
written notice to the member not later than the fifth day after the revocation
becomes effective.
(3)
The commission shall state the reason(s) for the revocation
in its written notice to the member.
(4)
A member whose certificate of membership is subject to
revocation for a finding under §303.308(a)(2) shall be provided an opportunity
for appeal.
(o)
Appeal from Revocation.
(1)
A member whose membership has been revoked under §303.308(a)(2)
may appeal the decision by submitting a written request for reconsideration
to the Executive Director within ten days of receipt of notice of revocation.
(2)
The decision of the Executive Director on the appeal is
a final agency decision not subject to further administrative appeal.
(3)
Upon expiration or notice of final revocation of membership
in the Texas Star Builder Program, the former member shall immediately return
the Texas Star Builder certificate of membership and discontinue the use and
dissemination of the "Texas Star Builder" designation on all advertisements,
promotions or written material.
(p)
Recognition of Membership. A member may display the Texas
Star Builder logo approved and submitted for trademark so long as that member
remains in good standing as a member of the Star Builder Program. Members
who have had continuous membership in the Star Builder Program may display
the number of years of continuous membership.
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of
the Secretary of State on June 13, 2005.
TRD-200502383
Christopher Burnett
Assistant General Counsel
Texas Residential Construction Commission
Earliest possible date of adoption: July 24, 2005
For further information, please call: (512) 463-9638
Part 7.
TEXAS RESIDENTIAL CONSTRUCTION COMMISSION
Chapter 303.
REGISTRATION
Subchapter E. TEXAS STAR BUILDER PROGRAM
Chapter 313.
STATE-SPONSORED INSPECTION AND DISPUTE RESOLUTION PROCESS (SIRP)