1. (a)

   1. (1) Since the 1986 enactment of the LIHTC, the United States Congress has changed or amended the laws governing the program, yet many changes have not been retroactive.
   2. (2) In some cases, the change in regulations brought forth by a technical correction is minor, and in others, the effect is substantial.
   3. (3) Owners must be aware of the differences in regulations and which credit period applies to each building or development.
   4. (4) The period considered for management/compliance purposes is the year in which tax credits were allocated by the Arkansas Development Finance Authority.

2. (b) Currently, there are four (4) specific credit regulation periods as follows:

   1. (1)

      1. (A) January 1, 1987 – December 31, 1989.
      2. (B) Properties receiving credit allocations during this period based rent on the number of people living in the unit.
      3. (C) Rents were subject to change whenever the household composition changed.
      4. (D) The Omnibus Reconciliation Act of 1993 allowed owners of these developments a one-time opportunity to either:

3. (i) Maintain the per-person formula; or

   1. (ii) Elect to change to the formula based on apartment bedroom size used for 1990 and later allocations.

      1. (E) The owner had to write to the Internal Revenue Service no later than February 6, 1994, to request this election.
      2. (F) Once made, the decision to switch formulas or retain the per-person formula was irrevocable.
      3. (G) The new rent formula only affected any new move-ins on or after the election date.

      4. (H) A copy of the election letter must be:

         1. (i) Provided to the authority; or
         2. (ii) Available during the on-site inspection;

   2. (2)

      1. (A) 1990.

      2. (B)

         1. (i) Rent is calculated by number of bedrooms in a unit.
         2. (ii) This rule was not retroactive.

      3. (C)

         1. (i) Gross rent floor was adopted.
         2. (ii) This rule was not retroactive.
         3. (iii) See definition herein.

      4. (D)

         1. (i) Extended low-income housing commitment required.
         2. (ii) See 15 CAR § 86-104 for further discussion;

   3. (3)

      1. (A) 1991.

      2. (B)

         1. (i) The Aid to Families with Dependent Children student rule exception was retroactive.
         2. (ii) See 15 CAR § 86-317.
      3. (C) Farmers Home Administration overage rule (not retroactive) is discussed in 15 CAR § 86-307.

      4. (D)

         1. (i) Extension on initial compliance with set-aside (not retroactive).
         2. (ii) Minimum set-aside requirements are discussed in 15 CAR § 86-301; and

   4. (4)

      1. (A) August 10, 1993.
      2. (B) Married students rule (retroactive).
      3. (C) 1987-1989 rent change option (special rule).
      4. (D) Section 8 requirement (retroactive) that states owners cannot refuse to lease to Section 8 tenants.

Codification Notes: "LIHTC" means low-income housing tax credit. The Farmers Home Administration is now the United States Department of Agriculture Rural Development. "Section 8" refers to Section 8 of the Housing Act of 1937 and is codified at 42 U.S.C. § 1437f. This section as promulgated prior to codification into the Code of Arkansas Rules provided as follows: "References: Blue Book, Section 42 of the Code, Congressional Laws" This section as promulgated prior to codification into the Code of Arkansas Rules contained the following footnote at subdivision (b)(4)(A) of this section: "1 We discuss students in Section III.Q. Single Parent Student Rule (not retroactive)."