| (A) The number of uncorrected Events of Noncompliance
plus the number of corrected Events of Noncompliance that were not
corrected during the Corrective Action Period totals at least three
but is less than 50% of the number of Actively Monitored Developments
in the Combined Portfolio; or
(B) There are uncorrected Events of Noncompliance but
the number of Events of Noncompliance is 10% or less than the number
of Actively Monitored Developments in the Combined Portfolio. Corrective
action uploaded to the Department's Compliance Monitoring and Tracking
System (CMTS) or submitted during the seven day period referenced
in subsection (f) of this section will be reviewed and the Category
determination may change as appropriate; or
(C) Within the three years immediately preceding the
date of Application, any Person subject to previous participation
review failed to respond during the Corrective Action Period to a
Monitoring Event; however, the number of times is less than 25% of
the number of Actively Monitoring Developments in the Combined Portfolio;
or
(D) The Applicant is required to have a Single Audit
and a relevant issue was identified in the Single Audit (e.g. Notes
to the Financial Statements), or the required Single Audit is past
due.
(3) Category 3. An Application will be considered a
Category 3 if any one or more of the following criteria are met:
(A) The number of uncorrected Events of Noncompliance
plus the number of corrected Events of Noncompliance that were not
corrected during the Corrective Action Period total at least three
and equal or exceed 50% of the number of Actively Monitored Developments
in the Combined Portfolio;
(B) The number of Events of Noncompliance that are
currently uncorrected total 10% or more than the number of Actively
Monitored Developments in the Combined Portfolio. Corrective action
uploaded to CMTS or submitted during the seven day period referenced
in subsection (f) of this section will be reviewed and the Category
determination may change as appropriate;
(C) Within the three years immediately preceding the
date of Application, any Person subject to previous participation
review failed to respond during the Corrective Action Period to a
Monitoring Event and the number of times is equal to or greater than
25% of the number of Actively Monitored Developments in the Combined
Portfolio;
(D) Any Development Controlled by the Applicant has
been the subject of an agreed final order entered by the Board and
the terms have been violated;
(E) Any Person subject to previous participation review
failed to meet the terms and conditions of a prior condition of approval
imposed by the Executive Director, the Governing Board, voluntary
compliance agreement, or court order;
(F) Payment of principal or interest on a loan due
to the Department is past due beyond any grace period provided for
in the applicable documents for any Development currently Controlled
by the Applicant or that was Controlled by the Applicant at the time
the payment was due and a repayment plan has not been executed with
the Department, or an executed repayment plan has been violated;
(G) The Department has requested and not been provided
evidence that the Owner has maintained required insurance on any collateral
for any loan held by the Department related to any Development Controlled
by the Applicant;
(H) The Department has requested and not been provided
evidence that property taxes have been paid or satisfactory evidence
of a tax exemption on any collateral for any loan held by the Department
related to any Development Controlled by the Applicant;
(I) Fees or other amounts owed to the Department by
any Person subject to previous participation review are 30 days or
more past due and a repayment plan has not been executed with the
Department, or an executed repayment plan has been violated;
(J) Despite past condition(s) agreed upon by any Person
subject to previous participation review to improve their compliance
operations, three or more new Events of Noncompliance have since been
identified by the Department, and have not been resolved during the
corrective action period;
(K) Any Person subject to previous participation review
has or had Control of a TDHCA funded Development that has gone through
a foreclosure; or
(L) Any Person subject to previous participation review
or the proposed incoming owner is currently debarred by the Department
or currently on the federal debarred and suspended listing.
(f) Compliance Notification to Applicant. The Compliance
Division will notify Applicants of their compliance status from the
categories identified in paragraphs (1) to (4) of this subsection.
(1) Previously approved. If the Executive Director
or the Board previously approved the compliance history of an Applicant,
with or without conditions (including approvals resulting from a Dispute
under §1.303(g) of this subchapter such conditions have not been
violated, and no new Events of Noncompliance have occurred since the
last approval, the compliance history will be deemed acceptable without
further review or discussion and recommended as approved or approved
with the same prior conditions. For 4% Housing Tax Credit Applications
(without other Department resources), where it has been determined
by staff that the Determination Notice can be issued administratively,
and for which the Board previously approved a set of conditions associated
with a prior Application of the Applicant's, and those same conditions
are to be applied to the new 4% Application by Program or Compliance,
or if an Application only has underwriting conditions, then the new
4% Application does not need to be approved by the Executive Director
and is not required to be presented to the Board.
(2) Category 1. The compliance history of Category
1 applications will be deemed acceptable (for Compliance purposes
only) without further review or discussion.
(3) Category 2 and Category 3. Category 2 and 3 Applicants
will be informed by the Compliance Division that the Application is
a Category 2 or 3 and provided a seven calendar day period to provide
written comment, submit any remaining evidence of corrective action
for uncorrected events, propose one or more of the conditions listed
in §1.303 of this subchapter, or propose other conditions for
consideration before the Compliance Division makes its final submission
to the Executive Director.
(4) The Department will not make an award or approve
an Ownership Transfer to any entity who has an Affiliate, Board member,
or a Person identified in the Application that is currently on the
Federal Debarred and Suspended Listing. An Applicant or entity requesting
an Ownership Transfer will be notified of the debarred status and
will be given the opportunity (subject to other Department rules)
to remove and replace the Affiliate, Board member, or Person so that
the transfer or award may proceed.
(g) Compliance Recommendation to Executive Director
for Awards.
(1) After taking into consideration the information
received during the seven-day period, Category 2 Applications will
be recommended for approval or approval with conditions (for compliance
purposes only). Any recommendation for an award with conditions will
utilize the conditions identified in §1.303 of this subchapter.
The Applicant will be notified if their award is recommended for approval
with conditions.
(2) After taking into consideration the information
received during the seven-day period, Category 3 applications will
be recommended for approval, approval with conditions (for compliance
purposes only) or denial. Any recommendation for an award or ownership
transfer with conditions will utilize the conditions identified in §1.303
of this subchapter. The Applicant will be notified if their award
is recommended for denial or approval with conditions.
(3) An Applicant that will be recommended for denial
or awarded with conditions will be informed of their right to file
a Dispute under §1.303 of this subchapter.
(4) In the case of 4% Housing Tax Credit Applications
where it has been determined by staff that the Determination Notice
can be issued administratively, Category 2 and 3 applications being
approved with conditions that are specifically listed in §1.303
of this subchapter and that have been previously approved by the Board
for the Applicant, do not require approval of the Executive Director
or the Board unless the Applicant is requesting to Dispute the Compliance
Recommendation.
(h) Compliance Recommendation for Ownership Transfers.
After taking into consideration the information received during the
seven-day period the results will be reported to the Executive Director
with a recommendation of approval, approval with conditions, or denial.
If the Executive Director determines that the request should be denied,
or approved with conditions and the requesting entity disagrees, the
matter may be appealed to the Board under §1.7 of this title
(relating to Appeals).
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