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Presentation, discussion, and possible action on an order adopting the repeal of 10 TAC §2.302 Administrative Penalty Process; an order adopting a replacement version of the rule; and directing publication in the Texas Register
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RECOMMENDED ACTION
recommendation
WHEREAS, pursuant to Tex. Gov’t Code §2306.053, the Texas Department of Housing and Community Affairs (the Department) is authorized to adopt rules governing the administration of the Department and its programs;
WHEREAS, pursuant to Tex. Gov’t Code §2306.041, the Department is authorized to impose an administrative penalty on a person who violates the statute, or a rule or order adopted under the statute;
WHEREAS, pursuant to Tex. Gov’t Code §2306.042, the amount of an administrative penalty may not exceed $1,000.00 per violation per day, and the Department is required to adopt an administrative penalty schedule;
WHEREAS, the current administrative penalty schedule adopted by the Department at Figure 2 of 10 TAC §2.302(k) did not account for circumstances in which extended elevator outage periods would result in an affected building failing to have an accessible route due to owners failing to repair nonfunctional elevator(s) outside of a periodic TDHCA inspection;
WHEREAS, the Department proposed adding a maximum potential administrative penalty of $1,000.00 plus $2,500.00 per week, beginning on the corrective action deadline, if all elevators in a building are non-operational, reflecting the seriousness of this violation;
WHEREAS, the proposed repeal and replacement of 10 TAC §2.302 was published in the Texas Register for public comment from October 24, 2025, through November 24, 2025, two comments were received, and responses to those comments are addressed in the attached preamble; and
WHEREAS, staff recommends adoption of the rule with no changes from the draft approved by the Board.
NOW, therefore, it is hereby
RESOLVED, that the Executive Director and his designees be and each of them hereby are authorized, empowered, and directed, for and on behalf of the Department, to cause the actions to publish the adopted rules in the Texas Register, and in connection therewith, make such non-substantive technical corrections as they may deem necessary to effectuate the foregoing, including the preparation of the subchapter specific preambles.
Tex. Gov’t Code §2306.053 provides for the Department to administer federal housing, community affairs, and community development programs, and it authorizes the development of rules governing the administration of those programs. Tex. Gov’t Code §§2306.041 - 2306.042 provide authority and limits for administrative penalty assessments for violations of the statute, Department rules, and/or orders. 10 TAC Chapter 2 governs how enforcement of programmatic requirements are handled.
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BACKGROUND
During 2025, the Department has received multiple complaints relating to broken elevators, with extended outage periods during which the affected buildings did not have an accessible route. Two notable examples that were referred for enforcement are The Life at Sterling Woods (HTC 04478 / CMTS 4176) and Jubilee at Texas Parkway (HTC 17317 / CMTS 5333), both of which are elderly developments that had extended elevator outages. The Board approved an Agreed Final Order for an administrative penalty assessment for The Life at Sterling Woods on March 6, 2025, and it approved an administrative penalty assessment for Jubilee at Texas Parkway on October 9, 2025.
The current administrative penalty schedule at Figure 2 of 10 TAC §2.302(k) did not account for circumstances in which extended elevator outage periods would result in an affected building failing to have an accessible route. Department staff had anticipated administrative penalty referrals for multiple violations of National Standards for the Physical Inspection of Real Estate (NSPIRE) being referred together after a regularly scheduled TDHCA inspection, and for the resulting administrative penalties to be stacked for each said violation, rather than seeing stand-alone NSPIRE and accessibility violations for an elevator that breaks outside of the typical TDHCA inspection schedule. HUD’s NSPIRE protocol classifies an inoperable elevator as a violation of moderate seriousness. The maximum potential administrative penalty under the schedule is therefore currently $1,250.00, including $250.00 for a moderate NSPIRE violation and $1,000.00 for an accessibility violation. Refusal to correct an NSPIRE violation would also cause mandatory debarment under 10 TAC §2.401(d)(4). In a separate Board item, the Department has also recommended changes to the debarment rule at 10 TAC §2.401, adding a line for non-functional elevators.
It is appropriate to consider a larger administrative penalty in the event that a building that is serviced by an elevator has no operable elevators. Accordingly, the Department added a row to 10 TAC §2.302(k), with a maximum potential administrative penalty of $1,000.00 plus $2,500.00 per week, beginning on the corrective action deadline, if all elevators in a building are down, reflecting the seriousness of this violation. A weekly multiplier was recommended rather than a daily penalty because elevator repairs can be complex, requiring specialized parts that cannot be sourced locally and, in the case of an obsolete elevator, may need to be custom-made. There is also a limited number of qualified elevator service companies. Despite these difficulties, a larger potential maximum administrative penalty is appropriate to reflect the seriousness of the violation, incentivize proactive maintenance and timely correction, and to deter future violations. This amount reflects the maximum potential administrative penalty, but it can be reduced by the Enforcement Committee if appropriate when considering the statutory factors at Tex. Gov’t Code §2306.042.
Behind the preamble, the rule is provided in blackline form reflecting the changes being adopted.
At the Board meeting on October 9, 2025, the Board approved the proposed repeal and replacement of the rule for publication for public comment. Public comment was accepted October 24, 2025, through November 24, 2025. Two comments were received, and responses to those comments are addressed in the attached preamble. Staff recommends adoption of the rules with no changes from the draft released for public comment as approved by the Board.
Attachment 1: Preamble, including required analysis, for adoption of the repeal of 10 TAC Chapter 2, Subchapter C, Administrative Penalties, §2.302 Administrative Penalty Process
The Texas Department of Housing and Community Affairs (the Department) adopts, without changes, the repeal of 10 TAC Chapter 2, Subchapter C, Administrative Penalties, §2.302 Administrative Penalty Process. The purpose of the repeal is to eliminate the outdated rule and replace it simultaneously with a new rule that addresses elevator noncompliance.
Tex. Gov’t Code §2001.0045(b) does not apply because there are no costs associated with the repeal.
The Department has analyzed this proposed rulemaking, and the analysis is described below for each category of analysis performed.
a. GOVERNMENT GROWTH IMPACT STATEMENT REQUIRED BY TEX. GOV’T CODE §2001.0221.
Mr. Bobby Wilkinson has determined that, for the first five years the repeal would be in effect:
1. The repeal does not create or eliminate a government program but relates to changes to an existing activity: the enforcement of the Department’s program rules.
2. The repeal does not require a change in work that creates new employee positions.
3. The repeal does not require additional future legislative appropriations.
4. The repeal will not result in an increase in fees paid to the Department, nor in a decrease in fees paid to the Department.
5. The repeal is not creating a new regulation, except that it is being replaced by a new rule simultaneously to provide for revisions.
6. The repeal is not considered to expand an existing regulation.
7. The repeal does not increase the number of individuals subject to the rule’s applicability.
8. The repeal will not negatively or positively affect the state’s economy.
b. ADVERSE ECONOMIC IMPACT ON SMALL OR MICRO-BUSINESSES OR RURAL COMMUNITIES AND REGULATORY FLEXIBILITY REQUIRED BY TEX. GOV’T CODE §2006.002.
The Department has evaluated the repeal and determined that the repeal will not create an economic effect on small or micro-businesses or rural communities.
c. TAKINGS IMPACT ASSESSMENT REQUIRED BY TEX. GOV’T CODE §2007.043. The repeal does not contemplate or authorize a taking by the Department; therefore, no Takings Impact Assessment is required.
d. LOCAL EMPLOYMENT IMPACT STATEMENTS REQUIRED BY TEX. GOV’T CODE §2001.024(a)(6).
The Department has evaluated the repeal as to its possible effects on local economies and has determined that for the first five years the repeal would be in effect there would be no economic effect on local employment; therefore, no local employment impact statement is required to be prepared for the rule.
e. PUBLIC BENEFIT/COST NOTE REQUIRED BY TEX. GOV’T CODE §2001.024(a)(5). Mr. Wilkinson has determined that, for each year of the first five years the repeal is in effect, the public benefit anticipated as a result of the changed sections would be an updated and more germane rule. There will not be economic costs to individuals required to comply with the repealed section.
f. FISCAL NOTE REQUIRED BY TEX. GOV’T CODE §2001.024(a)(4). Mr. Wilkinson also has determined that for each year of the first five years the repeal is in effect, enforcing or administering the repeal does not have any foreseeable implications related to costs or revenues of the state or local governments.
SUMMARY OF PUBLIC COMMENT. The public comment period was held October 24, 2025 to November 24, 2025, to receive input on the proposed repealed section. No comments were received relating to the repeal.
STATUTORY AUTHORITY. The repeal is made pursuant to Tex. Gov't Code §2306.053, which authorizes the Department to adopt rules. Except as described herein the repeal affects no other code, article, or statute.
Attachment 2: Preamble, including required analysis, for adopting new 10 TAC Chapter 2, Subchapter C, Administrative Penalties, §2.302 Administrative Penalty Process
The Texas Department of Housing and Community Affairs (the Department) adopts, with no changes, new 10 TAC Chapter 2, Subchapter C, Administrative Penalties, §2.302 Administrative Penalty Process. The purpose is to eliminate the outdated rule and replace it simultaneously with a new rule that addresses the enforcement of elevator noncompliance.
Tex. Gov’t Code §2001.0045(b) does not apply because there are no additional costs associated with this action. Sufficient existing state and/or federal administrative funds associated with the applicable programs are available to offset costs. No additional funds will be needed to implement this rule.
The Department has analyzed this rulemaking, and the analysis is described below for each category of analysis performed.
a. GOVERNMENT GROWTH IMPACT STATEMENT REQUIRED BY TEX. GOV’T CODE §2001.0221.
Mr. Bobby Wilkinson has determined that, for the first five years the new sections would be in effect:
1. The rule does not create or eliminate a government program but relates to changes to an existing activity: the enforcement of the Department’s program rules.
2. The rule does not require a change in work that creates new employee positions.
3. The new section will not require additional future legislative appropriations.
4. The new section will not result in an increase in fees paid to the Department, nor in a decrease in fees paid to the Department.
5. The new section is not creating a new regulation.
6. The new section does expand on an existing regulation.
7. The new section does not increase the number of individuals subject to the rule’s applicability.
8. The new section will not negatively or positively affect the state’s economy.
b. ADVERSE ECONOMIC IMPACT ON SMALL OR MICRO-BUSINESSES OR RURAL COMMUNITIES AND REGULATORY FLEXIBILITY REQUIRED BY TEX. GOV’T CODE §2006.002.
The Department has evaluated the new section and determined that it will not create an economic effect on small or micro-businesses or rural communities.
c. TAKINGS IMPACT ASSESSMENT REQUIRED BY TEX. GOV’T CODE §2007.043. The new section does not contemplate or authorize a taking by the Department; therefore, no Takings Impact Assessment is required.
d. LOCAL EMPLOYMENT IMPACT STATEMENTS REQUIRED BY TEX. GOV’T CODE §2001.024(a)(6).
The Department has evaluated the new section as to its possible effects on local economies and has determined that for the first five years the new section would be in effect there would be no economic effect on local employment; therefore, no local employment impact statement is required to be prepared for the rule.
e. PUBLIC BENEFIT/COST NOTE REQUIRED BY TEX. GOV’T CODE §2001.024(a)(5). Mr. Wilkinson has determined that, for each year of the first five years the new section is in effect, the public benefit anticipated as a result of the new section would be improvement in the Department’s ability to enforce elevator noncompliance. The rule does provide for administrative costs to properties that have no operational elevators. There will not be economic costs to individuals required to comply with the new section.
f. FISCAL NOTE REQUIRED BY TEX. GOV’T CODE §2001.024(a)(4). Mr. Wilkinson also has determined that for each year of the first five years the new section is in effect, enforcing or administering the sections may have some costs to the state to implement the verification process and to the Department’s subrecipients in administering the rule changes. However, sufficient state or federal administrative funds associated with the applicable programs are already available to offset costs. No additional funds will be required.
SUMMARY OF PUBLIC COMMENT. The public comment period was held October 24, 2025 to November 24, 2025, to receive input on the proposed repealed section. Two comments were received from Disability Rights Texas and Texas Housers; comment is summarized below.
10 TAC §2.302(k). Penalty schedule for Multifamily Rental Findings of Noncompliance - Elevators.
Comment Summary: Commenter 1 supports the increased penalties for inoperable elevators, stating that elevators are a critical component of safe, accessible housing, and providing examples of cases where inoperable elevators were dangerous for tenants. Commenter 2 also strongly supports the addition.
Staff Response: Staff appreciates the support. No revisions are recommended.
10 TAC §2.302(k). Penalty schedule for Multifamily Rental Findings of Noncompliance - Noncompliance with the required accessibility requirements
Comment Summary: Commenters 1 and 2 both requested implementation of a mandatory minimum daily administrative penalty for Section 504 accessibility and Fair Housing Act violations. Commenter 1 referred to a specific case presented to the Department’s Board in September 2023, in which a property took more than two years to install a ramp on an accessible route. They expressed an opinion that the administrative penalty assessed was too low ($10,000.00, of which $7,500.00 was forgivable with full corrections), and that harsher administrative penalties would hold properties accountable. Commenter 1 also referenced a tax credit property currently for sale that it alleges has major accessibility problems.
Both commenters specifically request that under the Finding related to Noncompliance with required accessibility requirements, that the maximum first time administrative penalty be revised from “Up to $1,000 per violation, plus an optional $100 per day for each accessibility deficiency that remains uncorrected 6 months from the corrective action deadline” to “Up to $1,000 per violation, plus: a mandatory minimum $100 per day per violation for each accessibility deficiency that remains uncorrected between 6 and 9 months from the corrective action deadline; a mandatory minimum $125 per day per violation for each accessibility deficiency that remains uncorrected between 9 and 12 months from the corrective action deadline; and a mandatory minimum $150 per day per violation for each accessibility deficiency that remains uncorrected more than 12 months from the corrective action deadline.”
Staff Response: Staff has referred the concerns regarding the property for sale to the Asset Management and Compliance Divisions. Staff understands the concerns relating to administrative penalty amounts, however, Tex. Gov’t. Code §2306.042 requires TDHCA to consider the following factors for all administrative penalty assessments: seriousness of the violation, the history of previous violations, the amount necessary to deter future violations, efforts made to correct the violation, and any other matter that justice may require. The Department has a standardized penalty schedule for the maximum potential penalty amount, but individual factors must also be considered as they are not conducive to standardization. A mandatory minimum administrative penalty amount would result in a penalty being assessed without regard to the statutorily required consideration of the enumerated factors. No changes are recommended to the rule.
General Comment
Comment Summary: Commenter 2 commented generally on the availability of information relating to enforcement. Though records of enforcement actions are included in board materials, those documents are hundreds of pages long and are not easily accessible for everyday Texans. The commenter recommends that TDHCA make records on informal conferences, penalties, and debarment more publicly available, such as including this information on TDHCA’s website.
Staff Response: Enforcement actions are considered by the Board during open meetings, supporting background information is posted online in the board books maintained at https://tdhca.legistar.com/Calendar.aspx, including a board action request summarizing the matter and all factors considered, and copies of Board decisions are posted online at https://www.tdhca.texas.gov/tdhca-orders. Staff perceives no need to create further summaries of that activity, and recommends no further revision to the rule.
STATUTORY AUTHORITY. The new section is made pursuant to Tex. Gov't Code §2306.053, which authorizes the Department to adopt rules. Except as described herein, the new section affects no other code, article, or statute. The rule, as proposed for adoption, has been reviewed by legal counsel and found to be a valid exercise of the Department’s legal authority.