1. (a)

   1. (1) Utilities include the costs for:

      1. (A) Heat;
      2. (B) Lights;
      3. (C) Air conditioning;
      4. (D) Water;
      5. (E) Sewer; and
      6. (F) Trash removal.

   2. (2)

      1. (A) Generally, telephone, cable television, and internet are not included in utilities.
      2. (B)

2. (i) However, if a supportive service or any other charge is mandatory, such charge becomes part of the gross rent calculation.

   1. (ii) This may include:
3. (a) (a) Parking fees;

4. (b) (b) A telephone if it is required to open the door for visitors;

   1. (c) (c) Meal service; or

      1. (d) (d) Other required costs.

5. (b)

   1. (1) Whenever a tenant directly pays utility costs, a utility allowance must be used to determine the maximum unit rent that may be charged.
   2. (2) The utility allowance must be subtracted from the maximum gross rent to determine the maximum tenant portion of rent.

   3. (3) Utilities are part of rent.

      1. (c) Overcharging rent can take the unit out of compliance even if the excessive amount is returned to the tenant.

         1. (d) The Internal Revenue Service released final regulations regarding utility allowances for the LIHTC program.

6. (e)

   1. (1) The Arkansas Development Finance Authority is currently accepting the following:

      1. (A) Department of Housing and Urban Development-regulated properties. Buildings that receive Department of Housing and Urban Development rental assistance or are required to have rents and utility allowances reviewed annually by the Department of Housing and Urban Development must use the Department of Housing and Urban Development-provided utility allowances for all rent-restricted units;
      2. (B) United States Department of Agriculture Rural Development-assisted buildings. Buildings that receive assistance from the United States Department of Agriculture Rural Development must use the allowances provided by the United States Department of Agriculture Rural Development for all rent-restricted units;
      3. (C) Buildings with United States Department of Agriculture Rural Development-assisted tenants. If any tenant in a building receives United States Department of Agriculture Rural Development rental assistance, the applicable rental allowance for all rent-restricted units in the building is the applicable United States Department of Agriculture Rural Development utility allowance;
      4. (D) Tenants receiving Department of Housing and Urban Development rental assistance. If none of the rules in subdivisions (e)(1)(A) – (C) of this section applies, the utility allowance for any rent-restricted units occupied by tenants receiving Department of Housing and Urban Development rental assistance (Department of Housing and Urban Development tenant assistance) is the applicable public housing authority utility allowance established for the Section 8 Existing Housing Program;
      5. (E) Conventional buildings. Use local public housing authority utility allowances unless utility company data can support alternate amounts;
      6. (F) Conventional building with Section 8 subsidy through certificates or vouchers. Owners must use the local public housing authority Section 8 existing utility allowances for those Section 8 units;

      7. (G) Utility company estimates.

         1. (i) Owners may obtain written estimates from local utility companies that provide services to that building.
         2. (ii) Information must be based on comparable property of similar size, construction for the geographical area, and to specific types of units (e.g., by number of bedrooms).
         3. (iii) Once obtained, a private utility estimate must be used for a building.
         4. (iv) Owners must average the utility costs for each unit type and divide by twelve (12) to determine monthly utility allowance;
      8. (H) Department of Housing and Urban Development Utility Schedule Model. An owner may calculate a utility allowance using the United States Department of Housing and Urban Development’s Utility Schedule Model found at http://www.huduser.org/resources/utilmodel.html; and

      9. (I) Energy consumption model.

         1. (i) A building owner may calculate utility allowances using an energy and water and sewage consumption and analysis model.
         2. (ii) The energy consumption model must, at a minimum, take into account specific factors including, but not limited to:
7. (a) (a) Unit size;

8. (b) (b) Building orientation;

   1. (c) (c) Design and materials;

      1. (d) (d) Mechanical systems;
9. (e) (e) Appliances; and

10. (f) (f) Characteristics of the building location.

    1. (iii) The energy consumption estimates must be calculated by either a properly licensed engineer or qualified professional approved by the Arkansas Development Finance Authority.

       1. (iv) The Arkansas Development Finance Authority will provide more details on the submission process.
    2. (2) The above options in subdivisions (e)(1)(A) – (D) are mandatory.
11. (f) The Arkansas Development Finance Authority does not provide estimates at this time.

12. (g)

    1. (1) All utility allowances must be updated annually.
    2. (2) Any changes in utility allowances have a direct impact on the net chargeable rent to the tenant.
    3. (3) Any new allowance must be implemented within ninety (90) days of the effective date.
    4. (4) Properties utilizing HOME only must implement the new rate at lease renewal.
    5. (5) It is the owner's responsibility to keep track of changes in applicable PHA utility allowances and to implement them.
    6. (6) Owners must be sure that the lease indicates when and under what circumstances the rent and utilities may change.

Codification Notes: "Section 8" refers to Section 8 of the Housing Act of 1937 and is codified at 42 U.S.C. § 1437f. "PHA" means public housing authority.