[Code of Federal Regulations]
[Title 24, Volume 4]
[Revised as of April 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 24CFR811.105]

[Page 39-40]
 
                 TITLE 24--HOUSING AND URBAN DEVELOPMENT
 
  CHAPTER VIII--OFFICE OF THE ASSISTANT SECRETARY FOR HOUSING-FEDERAL 
 
PART 811--TAX EXEMPTION OF OBLIGATIONS OF PUBLIC HOUSING AGENCIES AND RELATED AMENDMENTS--Table of Contents
 
Sec. 811.105  Approval of agency or instrumentality PHA.

    (a) An application to the field office for approval as an agency or 
instrumentality PHA for purposes of this subpart shall:
    (1) Identify the parent entity PHA.
    (2) Establish by evidence satisfactory to HUD that:
    (i) The parent entity PHA meets the requirements of Sec. 811.104.
    (ii) The applicant was properly created pursuant to state law as a 
not-for-profit entity; is an agency or instrumentality PHA, as defined 
in this subpart; has the legal authority to meet the requirements of 
this subpart and applicable Section 8 regulations, as described in its 
application; and the actions required to establish the legal 
relationship with the parent entity PHA prescribed by paragraph (c) of 
this section have been taken and are not prohibited by State law. This 
evidence shall be supported by the opinion of counsel for the applicant 
and counsel for the parent entity PHA.
    (iii) The applicant has, or will have, the administrative capability 
to carry out the responsibilities described in its application.
    (b) The charter or other organic document establishing the applicant 
shall limit the activities to be performed by the applicant, and funds 
and assets connected therewith, to carrying out or assisting in carrying 
out Section 8 projects and other low-income housing projects approved by 
the Secretary. Such organic documents shall provide that the applicant 
shall receive no compensation in connection with the financing of a 
project, except for its expenses. Such expenses shall be subject to 
approval by HUD in determining the development cost, cost of issuance 
and servicing fee, as appropriate. Should the applicant receive any 
compensation in excess of such expenses, the excess is to be placed in 
the debt service reserve.
    (c) The documents submitted by the applicant shall include the 
following with respect to the relationship between the parent entity PHA 
and the agency or instrumentality PHA:
    (1) Provisions requiring approval by the parent entity PHA of the 
charter or other organic instrument and of the bylaws of the applicant, 
which organic instrument and bylaws shall specify that any amendments 
are subject to approval by the parent entity PHA and by HUD.
    (2) Provisions requiring approval by the parent entity PHA of each 
project and of the program and expenditures of the applicant.
    (3) Provisions requiring approval by the parent entity PHA of each 
issue of obligations by the applicant not more than 60 days prior to the 
date of issue and approval of any substantive changes to the terms and 
conditions of the issuance prior to date of issue.
    (4) Provisions requiring the applicant to furnish an audit of all 
its books and records by an independent public accountant to the parent 
entity PHA within 90 days after execution of the contract or final 
endorsement and at

[[Page 40]]

least bennially thereafter; and provisions requiring the parent entity 
PHA to perform an annual review of the applicant's performance and to 
provide HUD with a copy of such review together with any audits 
performed during the reporting period.
    (5) Provisions giving the parent entity PHA right of access at any 
time to all books and records of the applicant.
    (6) Provisions that upon dissolution of the applicant, title to or 
other interest in any real or personal property that is owned by such 
applicant at the time of dissolution shall be transferred to the parent 
entity PHA or to another PHA or to another not-for-profit entity as 
determined by the parent entity PHA and approved by HUD, to be used only 
for purposes approved by HUD.
    (7) Evidence of agreement by the parent entity PHA, or other entity 
as may be provided for in alternative contractual arrangements pursuant 
to Sec. 811.103(b), to accept title to any real or personal property 
pursuant to paragraph (c)(6) of this section.
    (d) Any subsequent amendments to the documents submitted to HUD 
pursuant to this section must be approved by HUD.
    (e) Members, officers, or employees of the parent entity PHA may be 
directors or officers of the applicant unless this is contrary to state 
law.

[44 FR 12360, Mar. 6, 1979, as amended at 61 FR 14461, Apr. 1, 1996]