1. (a)

   1. (1) Compliance with the requirements of the Internal Revenue Code is the development owner's responsibility.
   2. (2) The Arkansas Development Finance Authority’s obligation to monitor the development for compliance does not make the authority liable for an owner's noncompliance, nor does it alleviate an owner's duty to comply with applicable Internal Revenue Code requirements.

2. (b) In compliance with I.R.C. § 42 and in accordance with this part, the owner, by accepting the allocation of low-income housing tax credits, is obligated to:

   1. (1) Manage the development in accordance with:

      1. (A) The Internal Revenue Code; and
      2. (B) All other applicable regulations and agreements;
   2. (2) Ensure that, once the development is placed in service, it is suitable for occupancy by meeting Uniform Physical Conditions Standards and/or authority-approved design standards;
   3. (3) Ensure that the development is continually managed in accordance with all applicable federal, state, local, and fair housing laws;
   4. (4) Ensure that the complete records for the first year of the credit period are maintained for a minimum of twenty-one (21) years;
   5. (5) Ensure that the records for subsequent years are maintained for a minimum of six (6) years after the due date for filing the federal income tax return for that year;

   6. (6)

      1. (A) Immediately notify the authority of the placed in service date, initial credit year, completion of the development, as well as any material changes such as ownership or management that is made at any time during all phases of development.
      2. (B) See 15 CAR § 86-701 et seq., for ownership or management notification requirements;
   7. (7) Furnish to the authority a signed copy of the completed Internal Revenue Service Form 8609, and make available all such 8609 forms to the authority’s staff during any on-site review;
   8. (8) Cooperate with the authority’s staff during compliance reviews;
   9. (9) Furnish a copy of the election request to the Internal Revenue Service, showing change from family size to unit size in determining maximum allowable rents;

   10. (10)

       1. (A) Furnish the annual Owner's Certificate of Continuing Program Compliance no later than February 1 of the year following the first credit year and every year thereafter during the compliance period.
       2. (B)

3. (i) The authority will no longer provide copies of forms.

   1. (ii) The owner is responsible for downloading forms from the authority’s website, www.arkansas.gov/adfa.

      1. (C) The owner’s certification is an annual requirement for the duration of the compliance period.

      2. (D)

         1. (i) Tenant data must be submitted electronically via the authority’s computer software.
         2. (ii) Owners or managers must enter tenant data online as events (move-ins, recertifications, move outs, etc.) occur.
         3. (iii) The authority requires that you update the system no later than the fifteenth day of each month following the event.
         4. (iv) Your data must be accurate and current;
   2. (11) Assume liability for any instance of noncompliance and to correct such deficiencies as required; and

   3. (12) Notify the authority of any casualty loss of a unit or building within thirty (30) days of the loss.

      1. (c)
   4. (1) Partial release reporting forms must be submitted to the authority annually for three (3) years following the termination of the extended use requirement.
   5. (2) Owners will initially provide a list of existing tenants on the authority’s annual reporting form.

   6. (3) The owner:

      1. (A) Shall not evict or terminate the tenancy of an existing tenant of any low-income unit other than for good cause; and
      2. (B) Shall not increase the gross rent above the maximum allowed under the Internal Revenue Code with respect to such low-income unit.

   7. (4)

      1. (A) The reporting form listing all existing tenants will be updated annually, documenting:

         1. (i) The current rents; and
         2. (ii) Any tenants that have vacated their unit.

      2. (B) The report will identify:

         1. (i) The date the unit was vacated; and
         2. (ii) A detailed explanation why the tenant vacated.
   8. (5) The owner will update electronically via the authority’s computer software only when an existing tenant vacates their unit.
   9. (6) If the project has other authority funding that requires the software to be updated monthly the owner must continue to update the software to document the tenant data of the other funding.

Codification Notes: This section as promulgated prior to codification into the Code of Arkansas Rules contained a footnote at subdivision (b)(4) of this section that provided as follows: "2 Refer to the IRS Compliance Monitoring Requirements – Page A-72(b)(2) Record Retention Provision."