Emergency Sections An agency may adopt a new or amended section or repeal an existing section on an emergency basis if it determines that such action is necessary for the public health, safety, or welfare of this state. The section may become effective immediately upon filing with the Texas Register, or on a stated date less than 20 days after filing, for no more than 120 days. The emergency action is renewable once for no more than 60 days. Symbology in amended emergency sections. New language added to an existing section is indicated by the use of bold text. [Brackets] indicate deletion of existing material within a section. TITLE 10. COMMUNITY DEVELOPMENT Part IV. Texas Department of Housing and Community Affairs Chapter 53. Home Investment Partnership Program 10 TAC sec.sec.53.1-53.18 The Texas Department of Housing and Community Affairs adopts on an emergency basis new sec.sec.53.1-53.18, concerning the Home Investment Partnership Program. The new sections provide procedures for the allocation of home investment partnership funds within the State of Texas to increase affordable housing. It is necessary to adopt these sections on an emergency basis to ensure the Department's compliance with new federal and state rules and regulations and to avoid loss of state allocation authority and possible disruption of the state's Home Investment Partnership Program. The new sections are adopted on an emergency basis under Texas Civil Statutes, Article 4413(501), which provide the Texas Department of Housing and Community Affairs with the authority to adopt rules governing the administration of the Department and its programs. sec.53.1. Purpose. The Texas Department of Housing and Community Affairs (department) is creating new Chapter 53 applicable to the Home Investment Partnership Program (HOME) to be administered by the department on behalf of the State of Texas (state). The United States Department of Housing and Urban Development (HUD) through the Home Investment Partnership provides funds to the State of Texas pursuant to Title II of the Cranston-Gonzalez National Affordable Housing Act of 1990, (42 United States Code, sec.sec.12701-12839) and HUD's regulations at 24 Code of Federal Regulations, Part 92, to develop and implement strategies to make available funds for affordable housing by creating a public- private partnership. The Texas program will give priority for funding to nonparticipating jurisdictions which do not receive HOME funds directly from HUD. HOME is a formula-based allocation program that draws on the expertise of a wide variety of affordable housing advocates from across Texas to create this partnership. HOME is designed: (1) to focus on the areas with the greatest need as set out in the Texas Comprehensive Housing Affordability Strategy (CHAS); (2) to provide funds for rental and homeownership housing through acquisition, new construction, rehabilitation, and tenant-based rental assistance; (3) to strengthen partnership among all levels of government and the private sector, including for-profit organizations; and (4) to provide low-income and very low-income Texans with affordable, decent, safe, and sanitary housing. sec.53.2. Definitions. The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise. ACT-The Cranston-Gonzalez National Affordable Housing Act of 1990. Agreement-The agreement between the department and an applicant. Board-The governing board of the department. Cash and management information system (CMI system) -HUD's computerized system which manages, disburses, collects, and reports information on the use of HOME funds. CHAS-The State of Texas Comprehensive Housing Affordability Strategy planning document which is reviewed and approved annually by HUD. Community Housing Development Organizations (CHDOs) -A private non-profit organization that: (A) meets the definitions of CHDOs in 24 Code of Federal Regulations, sec.92.2; (B) is registered with the Texas Secretary of State, with charter, articles of incorporation, and resolutions or by-laws in that office; (C) has tax exempt status from the Internal Revenue Service under the Internal Revenue Code of 1986, sec.501(c); (D) ensures that at least one-third of the members of its governing board of directors are low-income persons (for rural areas, communities include neighborhoods, towns, villages, and county or multi-county areas) or elected representatives of low-income neighborhood organizations. Department-The Texas Department of Housing and Community Affairs. First-time homebuyer -An individual and his or her spouse who have not owned a home during the three-year period before the purchase of a home with HOME funds. HOME-The Home Investment Partnership Program pursuant to 42 United States Code, sec.sec.12701-12839 and HUD regulations at 24 Code of Federal Regulations, Part 92. Household-One or more persons occupying a housing unit. HUD-The United States Department of Housing and Urban Development. Low-income families -Families whose annual incomes do not exceed 80% of the median income of the area, as determined by HUD, with adjustments for smaller and larger families. Participating jurisdiction -Any jurisdiction HUD has designated to receive direct funds. Project-A site or an entire building (including a manufactured housing unit) or two or more buildings together with the site or sites on which the buildings are located, that are under common ownership, management, and financing and are to be assisted with HOME funds under a commitment by the owner as a single undertaking. Project includes all the activities associated with the site and building. If there is more than one site associated with a project, the sites must be within a four block area. Substantial rehabilitation -The rehabilitation of residential property where the average cost for the project is in excess of $25,000 per dwelling unit. Tenant-based rental assistance-Is a form of rental assistance in which the assisted tenant may move from a dwelling unit with a right to continued assistance. Unit of general local government-A city, town, county, village, or other general purpose political subdivision of the state. Very low-income families-Low-income families whose annual income does not exceed 50% of the median family income for the area as established by HUD, with adjustments for smaller and larger families. sec.53.3. Allocation of Funds. (a) Description of how the state will distribute funds. The department distributes HOME funds using both a formula allocation and competitive application process. The department transfers a portion of its HOME funds to enable threshold communities to become participating jurisdictions under HOME. For the remaining nonparticipating jurisdictions, HOME funds will be distributed according to regional allocation goals established for each of the six planning regions in the CHAS. Applications for funds will be reviewed within each region according to criteria that reflect the state's housing priorities. (b) CHDO's. Not less than 15% of the total HOME funds received by the State of Texas shall be set aside by the department for a period of 18 months for CHDOs. Up to 10% of these funds may be set aside for such activities as project- specific technical assistance, site control loans, and project-specific seed money. The department may elect to waive loan repayment where it finds that to do so would impede the project development. (c) Administration costs. The department and applicants are not permitted to use HOME funds to administer the HOME program. sec.53.4. Eligible Applicants.
    Eligible applicants for HOME funds include: (1) nonprofit organizations which have established status under the Internal Revenue Code of 1986, sec.501(c); (2) CHDOs; (3) for-profit entities; (4) units of general local government; and (5) public housing authorities. sec.53.5. Eligible Activities.
      Eligible use of HOME funds include: (1) eligible HOME activities include those activities described in 24 Code of Federal Regulations, sec.92.205, that provide incentives to develop and support affordable rental housing and homeownership affordability through the acquisition, new construction, reconstruction, or moderate or substantial rehabilitation of nonluxury housing with suitable amenities, including real property acquisition, site improvement, conversion, demolition, and other expenses, including financing, costs, relocation expenses of any displaced persons, families, businesses, or organizations; and to provide tenant-based rental assistance; (2) acquisition of vacant land or demolition must be undertaken only with respect to a particular housing intended project to provide affordable housing, and for which funds for construction have been committed; (3) conversion of an existing structure to affordable housing is rehabilitation, unless the conversion entails adding one or more units beyond the existing walls, in which case, the project is new construction; sec.53.6.Eligible Costs. HOME funds may be used in connection with the following eligible costs as specified in 24 Code of Federal Regulations, s92.206: (1) development hard costs such as actual costs of constructing or rehabilitating housing, including: (A) actual construction costs to meet the applicable new construction standards; (B) actual rehabilitation costs to meet the applicable rehabilitation standards for the area or correcting substandard conditions to make essential improvements including energy-related repairs; improvements that will enable use by handicapped persons; abatement of lead-based paint hazards; repair or replace major housing systems in danger of failure; and costs to demolish existing structures for both new construction and rehabilitation (2) soft costs that are reasonable and necessary: (A) architectural, engineering or related professional services required to prepare plans, including specifications and work write-ups; (B) costs to process and settle financing for a project such as private lenders origination fees, credit reports, fees for title evidence, legal fees, private appraisals, building permits, independent costs estimates, and builder/developer fees; (C) acquisition costs for improved or unimproved real estate; (D) cost necessary to provide affirmative marketing and fair housing information to homeowners and tenants; (E) costs of relocation payments and other assistance for permanently and temporarily relocated individuals, families, businesses, and nonprofit organizations. sec.53.7. Prohibited Activities.
        As approved in 24 Code of Federal Regulations, sec.92.214, HOME funds shall not be used to: (1) provide non-federal matching contribution required under any other federal program; (2) provide a project reserve account for replacements, a project reserve account for unanticipated increases in operating costs, or operating subsidies; (3) defray administrative costs of the program; (4) provide tenant-based rental assistance for the special purposes of the existing sec.8 program, or preventing displacement from project assisted with rental rehabilitation projects; (5) assist public housing development, modernization, or maintenance. sec.53.8. Tenant-Based Rental Assistance. HOME funds may be used for tenant- based rental assistance where: (1) the need for assistance is an essential element of an approved housing strategy for expanding the supply, affordability and availability of decent, safe, sanitary, and affordable housing and specifies the local market conditions that lead to the choice; (2) the project provides tenants with a training program that leads to self- sufficiency and the removal from public assistance; (3) families will be selected from the sec.8 waiting list based on preferences of the applicable public housing authority. Eligible families currently residing in units designated for rehabilitation may also be selected for rental assistance; and (4) the department shall invest HOME funds made available during a fiscal year so that, with respect to tenant-based rental assistance and rental units: (A) not less than 90% of such funds are invested with respect to dwelling units that are occupied by families whose annual incomes do not exceed 60% of the median family income for the area; (B) the remaining of these funds are invested with respect to dwelling units that are occupied by households that qualify as low-income families at the time of occupancy or at the time funds are invested whichever is later. sec.53.9. Homeownership-Rehabilitation of Existing Property.
          To be eligible for owner-occupied rehabilitation: (1) property owners must own and occupy the single family housing (one to four residences, condominium unit, manufactured home, mobile home and cooperative unit) as their principal residence; (2) the owner must be a low-income homeowner, that is the owner must have a gross annual income that does not exceed 80% of the median income for the area; and (3) after rehabilitation, the property must meet at a minimum the sec.8 Housing Quality Standards (HQS). sec.53.10. Rental Housing.
            To qualify as affordable housing under HOME, a rental housing project must: (1) bear rent not greater than the lesser of: (A) the fair market rent for existing housing for comparable units in the area, less the monthly allowance for the utilities and services to be paid by the tenant; or (B) a rent that does not exceed 30% of the annual income adjusted for family size whose gross income equals 65% of the median income for the area; in determining the maximum monthly rent that may be charged for a unit, the owner must subtract a monthly allowance for any utilities and services (excluding telephone) to be paid by the tenant; (2) have not less than 20% of the units: (A) occupied by very low-income families and bearing rents not greater than 30% of the gross income of a family whose income equals 50% of the median income for the area; and (B) will remain affordable, pursuant to deed restrictions, for not less than the appropriate period, beginning after project completions, without regard to the terms of the mortgage or to transfer of ownership: five years where less than $15,000 of HOME funds have been invested in the project; 10 years if $15,000-$40,000; 15 years if over $40,000 for rehabilitated housing; and 20 years for all new construction; (3) ensure that with respect to tenant-based rental assistance and rental units; (A) not less than 90% of such funds are invested with respect to dwelling units that are occupied by families whose annual incomes do not exceed 60% of the median family income for the area; and (B) the remaining of these funds are invested with respect to dwelling units that are occupied by households that qualify as low-income families at the time of occupancy or at the time funds are invested, whichever is later. sec.53.11. Rehabilitation. (a) HOME funds may be used for multi-family and single-family rehabilitation projects as follows: (1) moderate-where unit cost is less than $25,000; and (2) substantial-where unit cost is greater than $25,000; (b) HOME funds may also be used for reconstruction where a new structure is built on an existing foundation. sec.53.12. New Construction.
              HOME funds may be used for new construction in the following situations: (1) if authorized by HUD, and placed on the official list of new construction locations; (2) is part of a neighborhood revitalization program and has: (A) certified that rehabilitation is not the most cost-effective approach for a neighborhood; (B) provided documentation that new construction is needed for a neighborhood revitalization project that emphasizes rehabilitation; and (C) shown that at least 51% of funds spent within the last year were spent on rehabilitation of substandard housing; (3) is part of a plan that addresses special needs for one or more of the following: (A) housing for families of five or more persons; (B) housing for persons with disabilities as defined in 24 Code of Federal Regulations, sec.92.2; (C) single-room occupancy housing as defined in 24 Code of Federal Regulations, sec.92.2; and (D) housing necessary to further the desegregation or racial deconcentration of housing pursuant to a court-approved settlement agreement, compliance agreement, or voluntary plan approved by HUD. sec.53.13. Mixed-Income and Mixed-Use Projects. Only units in a project that are assisted with HOME funds must meet the affordability requirement. Housing units that are in a project that are designed for other use may qualify for HOME funds if the residential living space constitutes at least 51% of the project space and all buildings within the project must contain residential space. sec.53.14. Application Process.
                The department announces the availability of funds in the Texas Register
                  and establishes a deadline for receiving all applications. Upon receipt, applications will be reviewed and scored. Recommendations for funding will be submitted to the board. Applications that fail to meet all the threshold criteria shall be returned to the applicant without further review, however, they may be revised and resubmitted if submitted prior to deadline. sec.53.15. Criteria for Funding. The department reviews applications to determine eligibility and conformance with the threshold requirements. In considering applications for funding, the department will consider the following. (1) the proposed HOME project must meet the requirements of the HUD regulations and these rules in all respects. (2) the applicant has provided evidence of his or her ability to carry out the project and the project must address an identified housing need. This assessment will be based on statistical data, surveys, or other indicators of need as appropriate. sec.53.16. Scoring. All applications that meet the threshold requirements will then be scored based on the following: (1) the extent to which the project will provide affordable housing; (2) the extent to which other funds have been committed to the project; (3) the extent to which the proposal assists the special needs of the disabled or large families; (4) the extent to which the project addresses environmental, affirmative marketing, and fair housing issues; (5) the extent to which the applicant is ready to proceed and the experience of the development team; (6) the extent to which the project serves a higher percentage of very low- income persons than is required by the state; (7) the extent to which the project will provide affordable housing to residents for a longer period of time than is required under HUD regulations for HOME funded projects; (8) the extent to which the project is located in a community with a severe need for affordable housing; (9) the extent to which the project involves a particularly new or innovative approach for meeting housing needs in the area being served; (10) the extent to which local government will eliminate or reduce barriers to affordable housing created by existing public policies, such as zoning regulations, building permit requirements, etc. sec.53.17. Application Procedure and Requirements. (a) The department shall, from time to time, solicit applications from eligible applicants. (b) The applicants shall submit, in an application form and by a process prescribed by the department, which includes, but is not limited to, the following information: (1) the name, address and telephone number of the applicant; (2) the description of the proposed activity including the number of low-and very low-income persons to be served; (3) the names of additional funding sources; (4) description of how the proposed activities addresses the priorities of the CHAS; (5) detailed description of the type of experience the applicant has had with a project of this nature in the past or currently; (6) description of market conditions for rental housing, including vacancy rates, market trends, and population growth; (7) evidence of economic feasibility of the project and of the ability to repay the loan; (8) the availability of alternative sources of financing and the effect of utilizing such sources; (9) the experience and financial condition of the developer; (10) brief description of developer's or applicant's business, including a statement as to financial condition and experience with multi-family development if applicable; (11) location of property to be financed; (12) description of multi-family project for which financing is being sought, including, if available, a copy of the plans for the project; (13) name, address and telephone number of the person from whom additional information can be obtained; (14) statement of the public policy criteria with which the project shall comply; and (15) other underwriting information which the applicant, the agency or the originator/servicer consider relevant to the consideration of the application including, but not limited to, available financial statements. sec.53.18. Program Administration. (a) Local HOME account. The department shall establish a local HOME account for the HOME Investment Trust Fund. The HOME account shall include repayments of HOME funds and matching contributions and any payment or interest or other return on the investment of HOME funds. The funds in the account shall be used solely for investment in eligible activities. All transactions are managed through the CMI System for the HOME program. (b) Disbursement of HOME funds. HOME funds drawn must be expended on eligible activities within 15 days or returned to the CMI System which will ensure that a deposit is made into State of Texas' United States Treasury Account of the HOME Investment Trust Fund. HOME funds in the local HOME account must be disbursed before a request can be made for additional funds. (c) Agreement. Upon selection by the board, each applicant shall be required to enter into, execute, and deliver to the department all documents necessary to insure that he or she is in compliance with HOME regulations, as described in 24 Code of Federal Regulations, sec.92.504, prior to entering into a written agreement between the department and the eligible applicant. The agreement shall remain in effect for the period of affordability or, if the applicant is a subrecipient, during any period that the entity has control over HOME funds. In awarding funds to an applicant, the board reserves the right to modify, amend, or reduce the funding of the scope of activities as proposed in the application. At a minimum, the agreement shall include the following items: (1) description of the use of HOME funds; (2) terms of affordability and a requirement that the funds must be repaid if the housing does not meet requirements for the specified time period; (3) use of interest, repayments, and other return on investment; (4) compliance with the uniform administrative requirements as described in 24 Code of Federal Regulations, sec.92.505; (5) compliance with project requirements that are set out for the type of project funded; (6) compliance by owners of rental housing to maintain the applicable housing quality standards and local housing code requirements for the duration of the agreement; (7) compliance with all of the program requirements including but not limited to: equal opportunity and fair housing; affirmative marketing; environmental review; displacement, relocation, and acquisition; labor; lead-based paint; conflict of interest; debarment and suspension; and flood insurance; (8) compliance with affirmative marketing requirements as described in 24 Code of Federal Regulations, sec.92.350 and sec.92.351 with regard to minority business enterprises and women's business enterprises; (9) conditions for religious organizations as prescribed in 24 Code of Federal Regulations, sec.92.257; (10) shall specify that the entity may not request disbursement of funds under the agreement until the funds are needed for payment of eligible cost. The amount of each request must be limited to the amount needed; (11) where the entity is a subrecipient, shall specify that upon expiration of the agreement, the entity must transfer to the department any HOME funds on hand at the time of expiration and any accounts receivable attributable to the use of HOME funds; (12) must specify the particular records that must be maintained and any information or reports that must be submitted to the department; (13) must provide for a means of enforcement by the department or the intended beneficiaries. This will include specific remedies for breach of the provisions of the agreement. (14) shall state the required period of affordability. (d) Monitoring. The department will on behalf of the State of Texas from time to time carry out field inspections to ensure compliance with the requirements as defined in 24 Code of Federal Regulations, sec.92.504 and these rules. Each applicant will be required to attend a compliance seminar after the award of funds and prior to the first draw. (e) Recordkeeping. Recipients shall be required to maintain and submit to the department records that are described under 24 Code of Federal Regulations, sec.92.508. The department will provide workshops and each applicant will be required to attend. (f) Performance Reports. Recipients must prepare and submit periodic performance reports as the department requests and upon completion of each project shall submit a detailed report. If these reports are not submitted, the applicant may be required to repay all funds immediately. (g) Reallocation. In the event that the department fails to receive adequate applications from a particular region, it will be within the discretion of the department to elect to reallocate funds to other regions where applicants have documented their ability to proceed. The department will continue to work with the original applicant and will review the proposed project during the last two years for possible allocation of funds at that time. Issued in Austin, Texas, on December 29, 1992. TRD-9217090 Susan J. Leigh Executive Director Texas Department of Housing and Community Affairs Effective date: December 30, 1992 Expiration date: April 29, 1993 For further information, please call: (512) 475-3916 Title 34. Public Finance Part I. Comptroller of Public Accounts Chapter 3. Tax Administration Subchapter O. State Sales and Use Tax 34 TAC sec.3.360 The Comptroller of Public Accounts proposes to adopt on an emergency basis an amendment to sec.3.360, concerning customs brokers. The emergency amendment deletes subsection (g)(2) and is necessary because that subsection may conflict with federal statutes. The amendment is adopted on an emergency basis under the Tax Code, sec.111. 002, which provides the comptroller with the authority to prescribe, adopt, and enforce rules relating to the administration and enforcement of the provisions of the Tax Code, Title 2. sec.3.360. Customs Brokers. (a)-(f) (No change.) (g) Records required. A licensed customs broker must keep available for inspection by the comptroller books and records that include, at a minimum, the following: (1) an exact copy of each export certification issued [(2) a copy of a Mexican passport, a United States visa, or a crossing card (Mica) attached to each certification issued for an item exported to Mexico]; (2)
                    [(3)] a ledger that lists sequentially all export certifications issued or voided; (3)
                      [(4)] an inventory of export certification stamps received from the comptroller; (4)
                        [(5)] a current list of all employees authorized to issue and sign export certifications. (h)-(i) (No change.) Issued in Austin, Texas, on December 30, 1992. TRD-9217070 Martin Cherry Chief, General Law Section Comptroller of Public Accounts Effective date: January 1, 1993 Expiration date: May 1, 1993 For further information, please call: (512) 463-4028