1. (a) Definitions. The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise.

   1. (1) Administrator--The Person responsible for performing under a Contract with the Department.
   2. (2) Affiliated Party--A person in a relationship with the Administrator on a Contract with the Department. Does not apply to an Affiliated Party for Application purposes.
   3. (3) Appeal--An Appealing Party's notice to challenge a decision or decisions made by staff and/or the Executive Director regarding an Application, Commitment, Contract, Loan Agreement or LURA as governed by this section.
   4. (4) Appeal file--The written record of an Appeal that contains the applicant's Appeal; the responses, if any, of Department staff, and the executive director, and the final decision.
   5. (5) Appealing Party--The Administrator, Affiliated Party, Applicant, or Person who files, intends to file, or has filed on their behalf, an Appeal before the Department.
   6. (6) Applicant--A person who has submitted to the Department an Application for Department funds or other assistance.
   7. (7) Application--The written request for Department funds or other assistance in the format required by the Department including any exhibits or other supporting material.
   8. (8) Board--The Governing Board of the Texas Department of Housing and Community Affairs.
   9. (9) Commitment--A fully executed document that commits the Department to funding or other activity related to a program administered by the Department.
   10. (10) Contract--The executed written agreement between the Department and an Administrator performing an activity related to a program that outlines performance requirements and responsibilities assigned by the document.
   11. (11) Department--The Texas Department of Housing and Community Affairs.
   12. (12) Executive Director--As defined under Texas Government Code §2306.036 and/or §2306.038.
   13. (13) Loan Agreement--An agreement between the Department and a Person regarding the terms and conditions of a loan provided to the Person from the Department.
   14. (14) LURA--A Land Use Restriction Agreement that has been executed by the Department and a Person related to a specific property or properties and filed with the responsible recording authority.
   15. (15) Person--Any individual, partnership, corporation, association, unit of government, community action agency, or public or private organization of any character.

2. (b) Grounds to Appeal Staff Decision. This appeal process is available to an Appealing Party under the following grounds:

   1. (1) An Applicant for funding-including tax exempt bonds and low income housing tax credits under 26 U.S.C. §42, (except for low income housing tax credits which are subject to the State housing credit ceiling and which have a separate appeals process) or other assistance from the Department may only appeal the disposition of the Application by Department staff based on one or more of the following:

      1. (A) Misplacement of an Application where all or a portion of the Application is lost, misfiled, or otherwise misplaced by Department staff resulting in unequal consideration of the Applicant's proposal.
      2. (B) Mathematical error where in rating an Application, the score on any selection criteria is incorrectly computed by the Department due to human or computer error.
      3. (C) Procedural error where the Application was not processed by Department staff in accordance with the Application and selection rules in effect for the current application cycle.

   2. (2) An Administrator may appeal the denial of a Contract amendment that was requested in writing regarding:

      1. (A) Extension of a Contract;
      2. (B) Request to change any term of a Contract affecting the affordability period, number of persons served, or alteration of income levels served; or
      3. (C) Alteration of funding.
   3. (3) A Person may Appeal the denial of a change to a Commitment.
   4. (4) A Person may Appeal the denial of a change to a Loan Agreement.
   5. (5) A Person may Appeal a denial of a change to a LURA.
   6. (6) An Affiliated Party may appeal a finding of failure to adequately perform under an Administrator's Contract, resulting in a "Debarment" or a similar action.

3. (c) Appeal of Staff Decision to the Executive Director. An Appealing Party must file a written Appeal with the Department for the Executive Director not later than the seventh day after notice has been provided to the Appealing Party. For purposes of this section, posting on the Department's website is considered adequate notice when identified in the application process as a public notification mechanism. The written appeal must include specific information relating to the disposition of the Application or written request for change to the Contract, Commitment, Loan Agreement, and/or LURA. The Appealing Party must specifically identify the grounds for the Appeal based on the disposition of underlying document. Upon receipt of an Appeal, staff shall prepare an Appeal file for the Executive Director's. The Executive Director shall respond in writing to the Appeal not later than the fourteenth day after the date of receipt of the Appeal. The Executive Director may take one of the following actions.

   1. (1) Concur with the Appeal and make the appropriate adjustments to the staff's decision; or
   2. (2) Disagree with the Appeal and provide the basis for rejecting the Appeal to the Applicant.
4. (d) Appeal of Executive Director's Decision to the Board. If the Appealing Party is not satisfied with the Executive Director's response to the Appeal, they may appeal in writing directly to the Board within seven days after the date of the Executive Director's response. In order to be placed on the next Board agenda, the appeal must be received by the Department at least fourteen days prior the next scheduled Board meeting. Appeals requested under this section received after the fourteenth calendar day prior to the Board meeting will be scheduled at the next subsequent Board meeting. The Executive Director shall prepare an Appeal file for the board's review based on the information provided. If the Appealing Party receives additional information after the Executive Director has denied the Appeal, but prior to the posting of the Appeal for Board consideration, the new information must be provided to the Executive Director for further consideration or the Board will not consider any information submitted by the Applicant after the written Appeal. New information will cause the deadlines in this subsection to begin again. The Board will review the Appeal de novo and may consider any information properly considered by the Department in making its prior decision(s).
5. (e) Public Comment. The Board will hear public comment on the Appeal under its usual procedures. While public comment will be heard, persons making public comment are not parties to the Appeal and no rights accrue to them under this section or any other Appeal process. Nothing in this section provides a right to Appeal any decision made on an Application, Commitment, Contract, Loan Commitment, or LURA if the Appealing Party does not have direct grounds to appeal. An Affiliated Party is allowed to appeal only those decisions that directly impact the Affiliated Party, not the underlying agreements.
6. (f) Possible actions regarding Applications. In instances in which the Appeal if sustained by the Board could have resulted in an award to the Applicant, the Application shall be approved by the Board contingent on the availability of funds. If no funds are available in the current year's funding cycle, then the Applicant shall be awarded funds from the next year's available funding or from the pool of deobligated funds. In the case of private activity mortgage revenue bond programs, the Applicant shall be encouraged to reapply in the next year's program funding cycle. If the Appeal is denied, the Department shall notify the Applicant of the decision.
7. (g) Possible actions regarding all other Appeals. On any appeal not governed under subsection (f) of this section, the Board shall direct staff to provide the adequate remedy allowable under current laws and rules. If the Appeal is denied, the Department shall notify the Applicant of the decision.
8. (h) Decisions are Final. Appeals not submitted in accordance with this section will not be considered, unless the Department or Board, in the exercise of its discretion, determines there is good cause to consider the appeal. The decision of the Board is final.
9. (i) Limited Scope. The appeals process provided in this rule is of general application. Any statutory or specific rule with a different appeal process will be governed by the more specific statute or rule.

Source Note:The provisions of this §1.7 adopted to be effective January 1, 2002, 26 TexReg 10864; amended to be effective June 24, 2003, 28 TexReg 4631; amended to be effective December 10, 2006, 31 TexReg 9821.