Section 10.605 - Elections under IRC Section 42(g)(a) Under the Code, HTC Development Owners elect a minimum set-aside requirement of 20/50 (20% of the Units restricted at the 50% income and rent limits), 40/60 (40% of the Units restricted at the 60% income and rent limits), or the average income test.(b) HTC projects must meet the required election under IRC §42(g) no later than the end of the first year of the Credit Period.(c) An Owner that elects the average income test under IRC §42(g) must disperse 20%, 30%, 40%, 50%, 60%, 70%, and 80% Unit designations across all Unit Types to the greatest extent feasible, and in a manner that does not violate fair housing laws.(d) Until and unless the Internal Revenue Service or the Treasury Department issues conflicting or additional guidance, the Department will examine the actual gross rent and income of all households to determine if a Project that elected the average income test is at or below the federal minimum average of 60% AMI.(e) Under Section 1.42-19T(c)(4) of the Treasury regulations, the Department has broad authority to grant, on a case-by-case basis, written relief of a taxpayer's failure to properly designate a group of units that meets the requirements of a qualified group under Section 1.42-19(b)(2) of the Treasury regulations. Under the Treasury regulations, the Department must grant such relief in writing within 180 days of the discovery of the failure by the taxpayer or the Department.10 Tex. Admin. Code § 10.605
The provisions of this §10.605 adopted to be effective November 28, 2013, 38 TexReg 8410; Adopted by Texas Register, Volume 44, Number 06, February 8, 2019, TexReg 0560, eff. 2/11/2019; Amended by Texas Register, Volume 45, Number 19, May 8, 2020, TexReg 3036, eff. 5/17/2020; Adopted by Texas Register, Volume 49, Number 52, December 27, 2024, TexReg 10513, eff. 1/2/2025