H.B. No. 1997 amends the Government Code by adding Section 2306.67101, which outlines the process for the Texas Department of Housing and Community Affairs (TDHCA) to issue Internal Revenue Service Form 8609 for low-income housing tax credits. The bill specifies that within 120 days of receiving a documentation packet from a development owner, the department must issue Form 8609. The documentation packet must include various forms and reports, such as an owner's statement of certification, an independent auditor's report, and a projected operating pro forma, among others. Additionally, the bill allows the department to impose administrative penalties if a development owner intentionally provides incorrect information in their documentation.

The bill also mandates that the TDHCA submit quarterly reports to the legislature detailing the number of documentation packets processed, Forms 8609 issued, and any delays in issuing the forms. The changes introduced by this Act will only apply to applications submitted during the 2025 qualified allocation plan cycle or later, while applications from earlier cycles will continue to be governed by the previous law. The Act is set to take effect on September 1, 2025.

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