The following reporting requirements apply to Developments
owned by a Public Facility Corporation (PFC), subject to Sections
303.0421 and 303.0425 of the Texas Local Government Code, and not
eligible to be grandfathered under previous law pursuant to the criteria
established by House Bill 2071, 88th Texas Legislative Session, effective
June 18, 2023.
(1) No later than June 1 of each year, the Public Facility
User will submit to the Department an Audit Report from an Auditor,
obtained at the expense of the Public Facility User. Concurrently
with submission of the Audit Report, the Operator will complete the
contact information form available on the Department's website.
(2) The first Audit Report must include a copy of the
Regulatory Agreement. The first Audit Report for a Development must
be submitted no later than June 1 of the year following the first
anniversary of:
(A) The date of the PFC acquisition for an occupied
Development; or
(B) The date a newly constructed PFC Development first
becomes occupied by one or more tenants.
(3) No later than 60 days after the receipt of the
Audit Report, the Department will post a summary of the Audit Report
on its website. A copy of the summary will also be provided to the
Development and all Responsible Parties. The summary must describe
in detail the nature of any noncompliance.
(4) If any noncompliance with Sections 303.0421 and
303.0425 are identified by the Auditor, no later than 45 days after
receipt of the Audit Report the Department will notify the Public
Facility User. The notification must include a detailed description
of the noncompliance and at least one option for corrective action
to resolve the noncompliance. The Public Facility User will be given
60 days to correct the noncompliance. At the end of the 60 days, the
Department will post a final report on its website.
(5) If all noncompliance is not corrected within the
60 days, the Department will notify the Public Facility User, appropriate
appraisal district, and the Texas Comptroller. The Department will
also recommend a loss of tax-exempt status.
(6) The qualification of the Auditor must be submitted
with each Audit Report. Qualifications must include experience auditing
housing compliance, a current Certified Occupancy Specialist (COS)
certification or an equivalent certification, and resume. The Auditor
may not be affiliated with or related to any Responsible Parties.
Additionally, a current or previous Management Agent that has or had
oversight of the Development or is/was responsible for reviewing and
approving tenant files does not qualify as an Auditor under these
rules.
(7) The Public Facility User may not engage the same
individual as Auditor for a particular Development for more than three
consecutive years. After the third consecutive Audit Report by the
same Auditor, the Public Facility User must engage a new Auditor for
at least two reporting years before re-engaging with a prior Auditor.
(8) Audit Reports and supporting documentation and
required forms must be submitted to the following email address: pfc.monitoring@tdhca.state.tx.us.
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