1. (a) This section applies to program awards not covered by §1.301 or §1.302 of this subchapter. With the exception of a household or project commitment contract, prior to awarding or allowing access to Department funds through a contract or through a Reservation Agreement a previous participation review will be performed.
2. (b) Capitalized terms used in this section shall have the meaning ascribed in the definitions section of the applicable program of this title or as required by federal or state law.

3. (c) When applying for an award or a new Reservation Agreement, entities will be required to submit:

   1. (1) A listing of the members of its current board of directors, council, or other governing body as applicable;
   2. (2) Any pending state or federal litigation (including administrative proceedings) against the entity along with any final decrees within the last three years;
   3. (3) A list of any multifamily Developments owned or Controlled by the applicant that are monitored by the Department; and
   4. (4) Identification of all Department programs that the entity has participated in within the last three years.

4. (d) The entity's financial obligations to the Department will be reviewed to determine if any of the following deficiencies exist:

   1. (1) Payment of principal or interest on a loan due to the Department is past due beyond any grace period provided for in the applicable loan documents;
   2. (2) The Department has requested and not been provided evidence that the owner has maintained required insurance on any collateral for any loan held by the Department;
   3. (3) The Department has requested and not been provided evidence that property taxes have been paid or satisfactory evidence of a tax exemption on any collateral for any loan held by the Department; or
   4. (4) Fees or other amounts owed to the Department are thirty days or more past due.
5. (e) If any deficiencies in subsection (c) of this section are identified, or if the most recent Single Audit contained findings or if there have been any monitoring findings identified during the last three years, the applicant will be notified that EARAC will be informed of such issues (with the exception of events of noncompliance precluded by Texas Government Code §2306.6719(e)). The entity will be provided a 5 business day period to provide written comment or propose conditions or mitigations. Although there will be an opportunity to respond and comment within the five day period, a response is not required.
6. (f) EARAC will review the information and may recommend approval, denial or approval with conditions. EARAC may request any other information from the Compliance Division that is documented in the compliance history with the exception of events of noncompliance precluded by Texas Government Code §2306.6719(e).
7. (g) Any entity which will be recommended for denial or award with conditions will be informed in writing and will be required submit a written response or propose conditions or mitigations. If the entity's response does not result in EARAC recommending award with no conditions or award with conditions that the entity agrees to, the entity will have the opportunity to appeal EARAC's recommendation in accordance with §1.304 of this subchapter.
8. (h) Consistent with §1.3 of Subchapter A of this chapter, concerning Delinquent Audits and Related Issues, the Department will not enter into a contract or extend a contract with any entity who is delinquent in the submission of their Single Audit unless an extension has been approved in writing by the cognizant federal agency.
9. (i) The Department will not enter into a contract with any entity who has a Board member on the Department's debarment list or the federal debarred and suspended listing. However, individual Board member's participation in other Department programs is not required to be disclosed and will not be taken into consideration.
10. (j) The Department will not enter into a contract with any entity who is on the Department's or the federal debarred and suspended listing.
11. (k) Previous Participation reviews will not be conducted for contract extensions. However, if the entity is delinquent in submission of its Single Audit, the contract will not be extended.
12. (l) For the Emergency Solutions Grant, full Previous Participation reviews will not be conducted for contract amendments unless the amendment is an increase in funds of more than 15%. However, EARAC will be notified of any monitoring findings that have been identified since the most recent previous participation review and for which the corrective action period has elapsed. In addition, EARAC will be notified of any Single Audit findings that have been identified since the most recent previous participation review. Subsections (d) and (f) of this section shall not apply to amendments that award additional funds under this subsection. Full Previous Participation reviews will be conducted for contract amendments if the increase in funds is greater than 15%.
13. (m) Approval of an entity's Previous Participation made for awards or Reservation System Agreements under this section is effective for 12 months unless there has been a significant change in the entity's compliance status or there are significant differences in the compliance requirements of the programs.

Source Note:The provisions of this §1.303 adopted to be effective July 26, 2015, 40 TexReg 4685.