Part 1. TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS
Chapter 60. COMPLIANCE ADMINISTRATION
Subchapter A. COMPLIANCE MONITORING
The Texas Department of Housing and Community Affairs proposes amendments to §60.17, concerning Utility Allowances. The amendments are necessary to meet certain requirements of the Internal Revenue Service found in the 2007 Form 8823 Audit Guide. The Guide allows rental property owner-tax payers to calculate utility allowances for rent-restricted units in buildings based upon an average of the actual use of similarly constructed and sized units in the building using actual utility usage data and rates. The Guide requires that state agencies assure that the methodology is reasonable and computed accurately. The proposed amendments to subsections (c), (d), and (e) set forth a methodology that the Department considers to be reasonable and that results in an accurately computed utility allowance.
Michael Gerber, Executive Director, has determined that for the first five-year period the amendments are in effect there will be no additional cost to state or local governments as a result of enforcing or administering the amendments.
Mr. Gerber has also determined that for the first five-year period the amendments are in effect the public will benefit in that utility allowance estimates will more accurately track recent payment history. This is important as utility rates may fluctuate greatly from year to year. Mr. Gerber has also determined that for the first five-year period there will be no economic cost to individuals required to comply with the rule and no adverse economic effect on small businesses.
Comments on the proposed amendments may be submitted to Mr. Kevin Hamby, General Counsel, Texas Department of Housing and Community Affairs, P.O. Box 13941, Austin, TX 78711-3941, or by e-mail to kevin.hamby@tdhca.state.tx.us. Comments must be received no later than 30 days from the date that these proposed amendments are published in the Texas Register.
The amendments are proposed under Tex. Gov't Code §2306.053(b)(4) which permits the Department to adopt and enforce bylaws and rules and §2306.141 which gives the Board the duty and power to adopt rules governing the administration of the housing finance division and its programs.
No other statutes, articles, or codes are affected by the proposed amendments.
§60.17. Utility Allowances.
(a) - (b) (No change.)
(c) Owners that want to switch from using a PHA allowance to
a
utility company
[
written
] estimate or vice versa must have written approval from TDHCA.
(d) If an owner or the Department believes that the published
PHA allowance does not accurately reflect the costs of utilities, the owner
may
elect
[
be required
] to calculate
or may be
required by the Department to calculate
utility allowances for rent
restricted units in the building based upon
the methodology in subsection
(e)
[
an average cost of the actual use of similarly constructed
and sized units in the building using actual usage data and rates
].
(e)
An
[
If an
] owner
computing
[
computes
] the utility allowance estimate based on the expected or historical
use by HTC buildings/units
shall use the following methodology:
[
, the estimate must be calculated in a reasonable manner and contemporaneously
documented to show how the estimate was determined.
]
(1) The owner must obtain prior written consent from the Department to use this methodology. The request must specify the owner's calculated unit utility allowance by bedroom size (# of bedrooms per unit).
(2) The allowance must be calculated based upon a one-year billing history documenting the actual utility costs for 100% of the continuously occupied low income units over the 12 months preceding the request to the utility provider for data.
(3) Properties in lease up or with excessive vacancies must use a minimum of at least 20% of each unit type and unit size throughout the development. The units used in calculating the allowance must have been continuously occupied over the last 12 months.
(4) Owners must submit information including a listing of all units on the property, the number of bedrooms, bathrooms and square footage for each unit, and the one year billing history broken down by month for each unit used to calculate the allowance. This information must be submitted electronically in an excel spreadsheet. In addition, a rent roll for each month used to calculate the allowance must be submitted. All data must be submitted within 45 days of receipt of the information from the utility provider.
(5) The Department will respond in writing confirming or contesting the owner's calculation within 30 days of receipt. If the owner's calculation is confirmed, the letter will establish an effective date. If the allowance increases, owners must implement the allowance for all rent restricted units within 90 days of the effective date.
(6) Once this method is established, a utility study must be conducted annually and the 12 month period for all units must be same. The calculated allowance is valid for twelve months.
(7) The Department may require owners to calculate an allowance using the above methodology if there is no local Public Housing Authority or if the local Public Housing Authority allowance is outdated or does not account for utilities the resident is responsible for.
(8) Owners may use this methodology for each utility (electric, water gas etc.) or may combine this methodology with written a local estimate or local Public Housing Authority Allowance.
(f) - (g) (No change.)
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 May 22, 2007.
TRD-200701988
Michael Gerber
Executive Director
Texas Department of Housing and Community Affairs
Earliest possible date of adoption: July 8, 2007
For further information, please call: (512) 475-3916