H.B. No. 1997 proposes amendments to the Government Code regarding the issuance of Internal Revenue Service Form 8609 by the Texas Department of Housing and Community Affairs (TDHCA) for the allocation of low-income housing tax credits. The bill introduces a new section, 2306.67101, which outlines the requirements for submitting a documentation packet necessary for receiving Form 8609. This packet must include various forms and reports, such as an owner's statement of certification, development cost schedules, and independent auditor's reports, among others. The TDHCA is mandated to issue Form 8609 within 120 days of receiving a complete documentation packet.

Additionally, the bill allows the TDHCA to impose administrative penalties on development owners who intentionally provide incorrect information in their documentation packets. These penalties may include monetary fines or restrictions on participation in the low-income housing tax credit program for up to two years. The TDHCA is also required to submit quarterly reports to the legislature detailing the processing of documentation packets and the issuance of Form 8609. The changes will apply to applications submitted during the 2025 qualified allocation plan cycle or later, with the act taking effect on September 1, 2025.

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