SECTION 190.3. Filing Requirements for Applications for Reservation

(a) Form. Applications must be filed on forms prescribed by the board and must contain all information and documentation required under the Act and this chapter, as applicable.

(b) Application Filing. The issuer shall submit one electronic copy or one original application for reservation. Each application must be accompanied by the following:

(1) the application fee;

(2) the certificate regarding fees, on the form prescribed by the board;

(3) a copy of the inducement resolution or other similar official action taken by the issuer with respect to the bonds and the project which are the subject of the application, certified by an officer of the issuer; or a copy of the certified resolution of the issuer authorizing the filing of the application for reservation, in either case certified with an authorized signature by an officer of the issuer and unless the resolution authorizes the issuer to seek an allocation in multiple program years, adopted within 18 months of the application date;

(4) a copy of the issuer's articles of incorporation as certified by the secretary of state of Texas and bylaws, including amendments thereto and restatements thereof, or alternatively, a certification with an authorized signature by an authorized representative of the issuer that there have been no amendments to the articles of incorporation or bylaws since the last submission of these items to the board;

(5) a copy of the issuer's certificate of continued existence from the secretary of state of Texas dated within 30 days of submission of application, an issuer's certificate of good standing is not an acceptable substitution for this requirement;

(6) a copy of the borrower's and, if the borrower is a partnership, each partner's certificate of good standing from the comptroller of public accounts of Texas, dated within 30 days of submission of application;

(7) a statement by the issuer, other than an issuer of a state-voted issue or the Texas Department of Housing and Community Affairs (TDHCA) or the Texas State Affordable Housing Corporation (TSAHC) that the bonds are not being issued for the same stated purpose for which the issuer has received sufficient carryforward during a prior year or for which there exists unexpended proceeds from a prior issue or issues of bonds issued by the same issuer, or based on the issuer's population;

(8) if unexpended proceeds exist, including transferred proceeds representing unexpended proceeds, from a prior issue or issues of bonds, other than a state-voted issue or an issue by the TDHCA or TSAHC, issued by the issuer or on behalf of the issuer, or based on the issuer's population, for the same stated purpose for which the bonds are the subject of this application, a statement by the trustee as to the current amount of unexpended proceeds that exists for each such issue. The issuer of the prior issue of bonds shall certify to the current amount of unexpended proceeds that exists for each issue should a trustee not administer the bond issues;

(9) if unexpended proceeds, including transferred proceeds representing unexpended proceeds, other than prepayments exist from a prior issue or issues of bonds, other than a state-voted issue or an issue by TDHCA or TSAHC, issued by the issuer or on behalf of the issuer, or based on the issuer's population, for the same stated purpose for which the bonds are the subject of this application, a definite and binding financial commitment agreement must accompany the application in such form as the board finds acceptable, to expend the unexpended proceeds by the later of 12 months after the date of receipt by the board of an application for reservation or December 31 of the program year for which the application is being filed. For purposes of this paragraph, the commitment by lenders to originate and close loans within a certain period of time shall be deemed a definite and binding agreement to expend bond proceeds within such period of time and any additional period of time during which such origination period may be extended under the terms of such agreement; provided that any extension provision may be amended, prior to the date on which the bond authorization requirements described in subsection (c) of this section must be satisfied, to provide that such period shall not be extended beyond the later of 12 months after the date of receipt by the board of an application for reservation or December 31 of the program year for which the application is being filed. For purposes of this paragraph, issuers of qualified student loan bonds authorized by §53B.47, Education Code, may satisfy the requirements of Government Code §1372.028(c)(3)(F), in lieu of a definite and binding agreement, by providing with the application evidence as certified by the issuer that the issuer has purchased, in each of the last three calendar years, qualified student loans in amounts greater than or equal to the amount of the unexpended proceeds;

(10) if unexpended proceeds exist from a prior issue or issues of bonds, other than a state-voted issue or an issue by the TDHCA or TSAHC, issued by the issuer or on behalf of the issuer, or based on the issuer's population, for the same stated purpose for which the bonds are the subject of the pending application, a written opinion of legal counsel, addressed to the board, to the effect, that the board may rely on the representation contained in the application to fulfill the requirements of the Act and that the agreement referred to in paragraph (9) of this subsection constitutes a legal and binding obligation of the issuer, if applicable, and the other party or parties to the agreement;

(11) a written opinion of legal counsel, addressed to the board, stating the bonds are required to be included under the state ceiling and that the issuer is legally authorized to issue bonds for projects of the same type and nature as the project which is the subject of the application. This opinion shall cite by constitutional or statutory reference, the provision of the Constitution or law of the state which authorizes the bonds for the project;

(12) a qualified mortgage bond issuer that submits an application for reservation as described in §1372.032, Government Code, shall provide a statement certifying to the most recent closing of qualified mortgage bonds determined as provided in §190.2(c)(3) of this title (relating to Allocation and Reservation System), and the most recent date of a reservation received for mortgage revenue bonds and state the government unit(s) for which the local population was based for the issuance of bonds or for receipt of a reservation; and for said issuers who have received an allocation of volume cap for the purposes of issuing qualified mortgage bonds within the six years prior to the date of application, a statement on the form prescribed by the Board as to the utilization percentage relating to its most recent allocation calculated in accordance with Government Code §1372.0261. If during the previous year, a qualified mortgage bond issuer submitted an application for reservation that has not been granted at the time of application for the lottery, the issuer may opt to file a statement explaining whether there are any changes in information from the application filed the previous year in lieu of submitting a complete application. If there are changes, the statement must specify current information. The issuer must pay the same application fee whether filing a statement or a complete application;

(13) for a qualified residential rental project issue, an issuer shall provide a copy of an active executed earnest money contract between the borrower and the seller of the project. The earnest money contract for Tax-Exempt Bond Lottery Applications must be in effect at the time of submission of the application to the board and expire no earlier than December 1 of the year preceding the applicable program year. The earnest money contract must stipulate and provide for the borrower's option to extend the contract expiration date through March 1 of the program year, subject only to the seller's receipt of additional earnest money or extension fees, so that the borrower will have site control at the time a reservation is granted. If the borrower owns the property, evidence of ownership must be provided. For subsequent reservations granted throughout the remainder of the program year, the borrower must provide within the close of three business days following the notification of pending reservation:

(A) if applicable, proof of application for Low Income Housing Tax Credits with TDHCA; and

(B) a copy of an earnest money contract that is in full force and effect or the reservation will automatically expire;

(14) the borrower must be specified in the application for reservation of allocation. The borrower may be identified as a to-be-formed entity only if the application for reservation of allocation specifies a related entity or an entity that will be a component of the to-be-formed entity as borrower;

(15) for qualified residential rental project issues where the borrower is an entity or to-be-formed entity that is designated or intends to seek abatement from ad valorem taxation, that intent to seek abatement must be specified on the application for reservation of allocation;

(16) each issuer of qualified student loan bonds authorized by §53B.47, Education Code, shall submit with the application for reservation the information as required in Government Code 1372.0281.

(c) Bond authorization requirements. Not later than 35 calendar days after an issue's reservation date, the board or Comptroller of Public Accounts, as applicable, must be in receipt of the following from the issuer:

(1) one-third of the closing fee;

(2) the certificate regarding fees, on the form prescribed by the board;

(3) a certificate signed by the issuer or authorized representative of the issuer that certifies the principal amount of the bonds to be issued or the portion of the state ceiling that will be converted to mortgage credit certificates;

(4) a list of finance team members with their addresses and telephone numbers;

(5) if applicable, an amended agreement pursuant to subsection (b)(9) of this section;

(6) a bond authorization requirements checklist, on the form prescribed by the board;

(7) if the borrower was originally identified as a to-be-formed entity, the final formation of the borrower must be identified as part of the submission and must meet the specifications set forth in the application for reservation of allocation. No changes will be permitted in the general partner of the borrower after the 35th day after the date of reservation;

(8) if an issuer fails to meet the 35-day deadline, the issuer may request a waiver from the board. The board will consider taking action to waive the missed deadline only if:

(A) the board is notified via facsimile transmission or e-mail of the missed deadline and intent to seek waiver not later than 36 calendar days after an issue's reservation date, and;

(B) the Bond Authorization Requirements filing, accompanied by a statement and evidence regarding extenuating circumstances that prevented a timely filing, is made not later than 38 calendar days after an issue's reservation date. Extenuating circumstances that would be grounds for waiver include acts of God, unforeseen acts of war, or medical emergency;

(9) an issuer described by Government Code §1372.022(a)(2) is not required to submit items described under paragraphs (1) and (2) of this subsection.

(d) Closing fee. The remaining two-thirds of the fee must be paid by all issuers other than those described by Government Code §1372.022(a)(2) simultaneously with closing on the bonds. The board shall be in receipt of the fee from the issuer as confirmed by the Comptroller of Public Accounts not later than the fifth business day after the day on which the bonds are closed.

(e) Closing documents. Not later than the fifth business day after the day on which the bonds are closed the issuer shall file with the board:

(1) a certificate regarding fees, on the form prescribed by the board;

(2) a closing documents checklist, on the form prescribed by the board;

(3) a certificate of delivery on the form prescribed by the board;

(4) a certified copy of the bond resolution authorizing the issuance of bonds, and setting forth the specific principal amount of the bond issue and, unless the resolution authorizes the issuer to seek an allocation in multiple program years, adopted within 18 months of the application date;

(5) if one is required, a copy of the approval of the local government unit or local government units, certified by a public official with the authority to certify such approval. This requirement shall not apply to any bonds for which the Code does not require such a public hearing and approval of a local government unit or local government units;

(6) the document evidencing compliance with Government Code §1372.040;

(7) other documents relating to the issuance of bonds, including a statement of the bonds':

(A) principal amount;

(B) interest rate or the formula by which the interest is calculated;

(C) maturity schedule; and

(D) purchaser or purchasers;

(8) an official statement;

(9) for mortgage credit certificates the issuer shall file item in paragraph (1) of this subsection and the following:

(A) a certified copy of the issuer's resolution electing to convert state ceiling to mortgage credit certificates;

(B) issuer's mortgage credit certificate election; and

(C) program plan;

(10) for a residential rental project described in §190.2(d)(1), (2) or (3) of this title, evidence from the Texas Department of Housing and Community affairs that an award of Low Income Housing Tax Credits has been approved for the project;

(11) if for a program year Government Code §1372.037(b) applies, the certification issued by the Attorney General pursuant to Government Code §1202.003(b-1).

(f) Additional information. The board may require additional information at any time before granting a certificate of reservation or certificate of allocation.

(g) Application restrictions.

(1) In order to submit an application for reservation prior to October 21 of the year immediately preceding the program year an issuer or borrower must have been in existence on October 1 of that year.

(2) Project substitutions will not be allowed after the application for reservation has been delivered to the board. Alterations to the project, including changes to unit size, number of total units and unit mix, as well as changes to the land size necessitated as part of the development or finance approval process in the case of residential rental projects will be permitted only if said changes:

(A) are agreed to by the issuer; and

(B) do not include the addition of land that is the subject of another application in the current program year.

(3) No issuer may submit an application for reservation for the same or substantially the same project or projects as are contained in the application of another issuer.

(4) No issuer prior to August 15 of the program year may apply for an amount that exceeds the maximum application limits as described in Government Code §1372.037(a).

(5) The board may not accept applications for more than one project located at, or related to, a business operation at a particular site for any one program year.

(6) For a qualified residential rental project issue, the Residential Rental Attachment contained in the Application packet for Reservation of Allocation must correctly reflect the regional designation of the project's location at the time of the lottery. If it is found to be incorrect on or after the lottery date, the project will be placed at the end of the lottery list once the region designation error is detected and corrected.

(7) For a qualified residential rental project, an applicant may not ever amend the priority status of the project once the application for reservation of allocation has been submitted to the Board.

(8) Qualified residential rental projects submitted post-lottery will be placed after all qualified residential rental projects submitted prior to the lottery, regardless of priority designation.

Source Note: The provisions of this §190.3 adopted to be effective January 3, 1992, 16 TexReg 7646; amended to be effective January 11, 1993, 18 TexReg 65; amended to be effective February 10, 1994, 19 TexReg 634; amended to be effective December 21, 1995, 20 TexReg 10389; amended to be effective October 8, 1997, 22 TexReg 9895; amended to be effective October 6, 1999, 24 TexReg 8566; amended to be effective February 27, 2002, 27 TexReg 1338; amended to be effective September 26, 2002, 27 TexReg 8957; amended to be effective September 18, 2003, 28 TexReg 8136; amended to be effective April 10, 2008, 33 TexReg2831;amended to be effective October 8, 2009, 34 TexReg 6860; amended to be effective December 2, 2019, 44 TexReg 7403; amended to be effective October 13, 2021, 46 TexReg 6948; amended to be effective October 11, 2023, 48 TexReg 5825