1. (a) The Committee may debar a Responsible Party, a Consultant and/or a Vendor who has exhibited past failure to comply with any condition imposed by the Department in the administration of its programs. A Responsible Party, Consultant or Vendor is subject to debarment for, but not limited to the following:

   1. (1) The Responsible Party has been placed on Modified Cost Reimbursement and failed to provide the Compliance Division with an acceptable plan to implement and adhere to procedures to ensure compliant operation of the program; or
   2. (2) The Responsible Party, Consultant or Vendor meets any of the ineligibility criteria referenced in §10.202 of this title (relating to Ineligible Applicants).
   3. (3) Providing fraudulent information, knowingly falsified documentation, or other intentional or negligent material misrepresentation or omission with regard to any documentation, certification or other representation made to the Department.
2. (b) Debarment of an Eligible Entity under the CSBG Act, for CSBG funds, shall not take effect until and unless proceedings to terminate Eligible Entity status have concluded and no right of appeal or review remains.

3. (c) The Department may debar any Responsible Party who has:

   1. (1) Materially or repeatedly violated any condition imposed by the Department in connection with the administration of a Department program, including a material or repeated violation of a land use restriction agreement (LURA) regarding a development supported with a housing tax credit allocation; or
   2. (2) Is debarred from participation in any program administered by the United States Government.
4. (d) Material violations of a LURA. In general LURAs entered into between Responsible parties and the Department require owners to maintain property in a manner that is suitable for occupancy and in accordance with State and Federal regulations. To determine compliance with this requirement, in accordance with Treasury Regulations, the Department uses the Uniform Physical Condition Standards protocol. A person will be considered to have materially violated a Land Use Restriction Agreement if they control a Development that has, on more than one occasion scored 50 or less on a UPCS inspection, transfers a Development without regard for a Right of First Refusal requirement, refused to allow a monitoring visit, or refuses to reduce rents to less than the highest allowed under the LURA.

5. (e) Repeated Violations of a LURA that shall be considered grounds for Debarment. A person shall be recommended for debarment if they control a Development that during two sequential monitoring visits are found to be out of compliance with the following events of noncompliance:

   1. (1) No evidence of, or failure to certify to, material participation of a non-profit or HUB, if required by the Land Use Restriction Agreement;
   2. (2) Development failed to meet additional state required rent and occupancy restrictions;
   3. (3) Development failed to provide supportive services required by LURA;
   4. (4) Development failed to provide housing to the elderly as promised at application;
   5. (5) Utility allowance not properly calculated cited for failure to update or failure to request permission to switch methodologies or miscalculation causes overcharge of rents; or
   6. (6) Owner failed to execute required lease provisions, including language required by §10.613 of this title (relating to Lease Requirements) or exclude prohibited language.

6. (f) Material or repeated violations of conditions imposed in connection with the administration of Programs administered by the Department. Single Family subrecipients, Contractors, multifamily applicants, and related parties shall be referred to the Committee for consideration for sanctions or debarment for material or repeated violations including but not limited to:

   1. (1) Excessive loan defaults in the first 12 months of the loan agreement;
   2. (2) Taking "choice limiting" actions prior to receiving HUD environmental clearance (24 CFR §58.22);
   3. (3) Disallowed costs that are not repaid;
   4. (4) Substandard construction and repeated failure to conduct required inspections;
   5. (5) Repeatedly participating in procurement violations;

   6. (6) Davis Bacon Act Violations including but not limited to:

      1. (A) Failure to pay restitution (underpayment of wages). 29 CFR §5.31.
      2. (B) Failure to pay liquidated damages (overtime violations). 29 CFR §5.8.
      3. (C) Repeated failure to pay full prevailing wage, including fringe benefits, for all hours worked. 29 CFR §5.31.

   7. (7) Uniform Relocation Act and §104(d) Violations including but not limited to:

      1. (A) Repeated failure to provide the General Information Notice to tenants prior to application. 49 CFR §24.203, 24 CFR §92.353 and HUD Handbook 1378.
      2. (B) Repeated failure to provide all required information in the General Information Notice. 49 CFR §24.203, 24 CFR §92.353 and HUD Handbook 1378.
      3. (C) Repeated failure to provide the Notice of Eligibility and/or Notice of Non-displacement on or before the Initiation of Negotiations date. 49 CFR §24.203 and 24 CFR §92.353, Displacement.
      4. (D) Repeated failure to provide all required information in the Notice of Eligibility and/or Notice of Non-displacement. 49 CFR §24.203 and 24 CFR §92.353.
      5. (E) Repeated failure to provide 90 Day Notices to all "displaced" tenants and/or repeated failure to provide 30 Day Notices to all "non-displaced" tenants. 49 CFR §24.203 and 24 CFR §92.353.
      6. (F) Repeated failure to perform and document "decent, safe and sanitary" inspections of replacement housing. 49 CFR §24.203 and 24 CFR §92.353.
      7. (G) Failure to properly provide Uniform Relocation Act or 104(d) assistance. 49 CFR §24.203, 24 CFR §92.353 and §104(d) of the Housing & Community Development Act of 1974 - 24 CFR 42.
   8. (8) Repeated failure to serve income eligible households;
   9. (9) Repeated failure to provide eligible match. 24 CFR §92.220 and 24 CFR §576.201;
   10. (10) Repeated failure to report program income. 24 CFR §570.500, 24 CFR §576.407(c) and OMB A-110 Relocated to 2 CFR Part 215 (if applicable), 10 TAC §20.9;
   11. (11) Participating in activities leading to or giving the appearance of "Conflict of Interest". OMB A-110 Relocated to 2 CFR Part 215 (if applicable), 24 CFRs §84.42, §92.356 (if applicable) 10 TAC §20.9;
   12. (12) Repeated material financial system deficiencies. 24 CFR §§84.21, 84.43, 85.20, 85.22, 85.36, 92.205, 92.206, 92.350, 92.505, and 92.508 (if applicable), OMB A-110 Relocated to 2 CFR Part 215 (if applicable), OMB A-87 Relocated to 2 CFR Part 225 (if applicable), OMB A-122 Relocated to 2 CFR Part 230 (if applicable), 10 TAC §20.9 and Uniform Grant Management Standards (if applicable).

7. (g) Material or repeated violations of conditions imposed in connection with the administration of Community Affairs Programs administered by the Department. Community Affairs subrecipients, Contractors and related parties shall be referred to the Committee for consideration for debarment for material or repeated violations including but not limited to:

   1. (1) Instance of Fraud, Waste and/or Abuse;
   2. (2) Commingling of funds, Misapplication of funds;
   3. (3) Failure to timely submit a required Single Audit or other programmatic audit;
   4. (4) Failure to provide requested documentation/item(s) for monitoring;
   5. (5) Failure to timely respond to Report/provide required correspondence;
   6. (6) Failure to reimburse excess cash on hand;
   7. (7) Failure to reimburse disallowed expenditures; and/or
   8. (8) Failure to meet Board of Director Requirements.
8. (h) Before any Party is recommended for debarment that Party shall be given written notice of the matter, setting forth the facts and circumstances justifying debarment. That Party shall then be offered the opportunity to attend an Informal Conference with the Committee to discuss resolution of the matter and if they have not already been provided a ninety day corrective action period.

9. (i) An Informal Conference may result in:

   1. (1) An agreement to dismiss the matter with no further action, which will then be reported to the Executive Director;
   2. (2) An agreement to resolve the matter through corrective action without debarment which will then be reported to the Executive Director;
   3. (3) An Agreed debarment which will then be reported to the Executive Director and presented to the Board for approval. A CSBG eligible entity that enters into an Agreed debarment must also voluntarily relinquish their eligible entity status;
   4. (4) A recommendation by the Committee to the Executive Director for debarment; or
   5. (5) Other action as the Committee deems appropriate.
10. (j) The Committee's recommendation to the Executive Director regarding debarment shall include a recommended period of debarment. Recommended periods of debarment will be based on material factors such as repeated occurrences, seriousness of underlying issues, and presence or absence of corrective action, including corrective action to install new responsible persons and ensure they are qualified and properly trained. Recommended periods of debarment if based upon HUD debarment, shall be for the period of the remaining HUD debarment; or, if based upon criminal conviction, shall be up to ten (10) years or until fulfillment of all conditions of incarceration and/or probation, whichever is greater.
11. (k) The Executive Director shall accept, reject, or modify the debarment recommendation by the Committee and shall provide written notice to the Responsible Party of his determination, and an explanation of his determination if different than the Committee's recommendation, including the period of debarment, if any. Not later than the twentieth (20th) day after the date the Responsible Party receives the notice, the Responsible Party may appeal the debarment determination in writing to the Board.
12. (l) The debarment recommendation will be brought to the next Board meeting for which the matter can be properly posted. The Board reserves discretion to impose longer or shorter debarment periods than those recommended by staff based on its finding that such longer or shorter periods are appropriate when considering all factors and/or for the purposes of equity or other good cause. An action on a proposed debarment of an eligible entity under the CSBG Act will not become final until and unless proceedings to terminate eligible entity status have occurred, resulting in such termination and all rights of appeal or review have run or eligible entity status has been voluntarily relinquished.
13. (m) Any person who has been debarred is prohibited from participation in programs administered by the Department for the term of their debarment unless by its terms the order of debarment permits continuing activity in one or more specified programs. The Board will not consider modifying the terms of the debarment after the issuance of a final order of debarment.

Source Note:The provisions of this §2.401 adopted to be effective November 19, 2014, 39 TexReg 8976.