Adopted Rules Title 10

TITLE 10. COMMUNITY DEVELOPMENT

PART 1. TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS

CHAPTER 5. COMMUNITY SERVICES PROGRAMS

SUBCHAPTER A. COMMUNITY SERVICES BLOCK GRANT (CSBG)

10 TAC §§5.1 - 5.15

The Texas Department of Housing and Community Affairs adopts the repeal of 10 TAC Chapter 5, Subchapter A, §§5.1 - 5.15, concerning the Community Services Block Grant, without changes to the proposal as published in the September 19, 2008, issue of the Texas Register (33 TexReg 7818) and will not be republished.

The repeal is adopted in order to allow adoption of new rules governing the Community Affairs Division Program, to consolidate the Comprehensive Energy Assistance Program rules under the Chapter 5 Community Affairs Programs rules with new rules being adopted as part of the 2009 rule cycle.

Public hearings on the repeal were held in El Paso, Lubbock, Brownsville, Houston, Fort Worth, and Austin. No comments were received regarding the adoption of this repeal.

The Board approved the final order adopting this repeal on December 18, 2008.

The repeal is adopted pursuant to the authority of the Texas Government Code, Chapter 2306, which provides the Department with the authority to adopt rules governing the administration of the Department and its programs.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on February 20, 2009.

TRD-200900751

Michael Gerber

Executive Director

Texas Department of Housing and Community Affairs

Effective date: March 12, 2009

Proposal publication date: September 19, 2008

For further information, please call: (512) 475-3916

SUBCHAPTER C. EMERGENCY SHELTER GRANTS PROGRAM

10 TAC §§5.200 - 5.211

The Texas Department of Housing and Community Affairs adopts the repeal of 10 TAC Chapter 5, Subchapter C, §§5.200 - 5.211, concerning the Emergency Shelter Grants Program without changes to the proposal as published in the September 19, 2008, issue of the Texas Register (33 TexReg 7819) and will not be republished.

Public hearings on the repeal were held in El Paso, Lubbock, Brownsville, Houston, Fort Worth and Austin. No comments were received regarding the adoption of this repeal.

The Board approved the final order adopting this repeal on December 18, 2008.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on February 20, 2009.

TRD-200900752

Michael Gerber

Executive Director

Texas Department of Housing and Community Affairs

Effective date: March 12, 2009

Proposal publication date: September 19, 2008

For further information, please call: (512) 475-3916

CHAPTER 5. COMMUNITY AFFAIRS PROGRAMS

SUBCHAPTER A. GENERAL PROVISIONS

10 TAC §§5.1 - 5.20

The Texas Department of Housing and Community Affairs (the Department) adopts new 10 TAC Chapter 5, Subchapter A, §§5.1 - 5.20 concerning Community Affairs Programs, General Provisions Rules. Sections 5.3 - 5.5, 5.10, 5.11, 5.13, 5.14, 5.16, 5.17, and 5.20 are adopted with changes to the proposed text as published in the September 19, 2008, issue of the Texas Register (33 TexReg 7819). Sections 5.1, 5.2, 5.6 - 5.9, 5.12, 5.15, 5.18 and 5.19 are adopted without changes and will not be republished.

The purpose of the new chapter is to consolidate, clarify and simplify the rules formerly contained in Chapters 5, 6 and 8.

Public hearings on the new subchapter were held in El Paso, Lubbock, Brownsville, Houston, Fort Worth, and Austin. Additionally, written comments were accepted by mail, e-mail, and facsimile through October 20, 2008.

Public comments and the Department's responses are presented in the order in which the subchapters and sections appear in the new chapter. Following the section number is the title of the section as it appears in the rule. Following the comment is a parenthetical containing a number or series of numbers. Each number corresponds to a person who commented on the particular rule section. Following the identification of the section and related commenters is a summary of the comment and staff's response, including the reasons why the agency agreed or disagreed with the comment and a statement of the factual basis for the new section.

Public comments on the proposed rule were received by Texas Association of Community Action Agencies, Inc.

§5.3(b)(7). Definitions. Community Action Agencies.

COMMENT: Comment received about adding revised language to the definition.

DEPARTMENT RESPONSE: Staff concurred and revised the second sentence portion within quotes as follows: "...of at least "one-third elected..." to be consistent with the CSBG Act.

§5.3(b)(20). Definitions. Eligible Entity.

COMMENT: Comment received about revising the language for clarification.

DEPARTMENT RESPONSE: Staff concurred and revised the last sentence by adding the date of the Act after the word "organization" and, before the word "entity." Staff also added the following language: "that was an eligible" for clarification.

§5.3(b)(24). Definitions. Families with Young Children.

ADMINISTRATIVE CHANGE.

Staff added clarifying language to the definition of Families with Young Children. Staff revised this for clarification and consistency that a family with young children is a family that includes a child age 5 or younger.

§5.3(b)(25). Definitions. USDHHS.

COMMENT: Comment received that the agency name acronym was incomplete.

DEPARTMENT RESPONSE: Staff revised this acronym by adding the "D.".

§5.3(b)(41)(A). Definitions. Persons with Disabilities.

ADMINISTRATIVE CHANGE.

Staff revised the reference from §7(6) to the correct reference of §7(9).

§5.3(b)(44). Definitions. Private Nonprofit Organization.

COMMENT: Commenter suggested a private nonprofit organization only being an organization which has status as a 501(c)(3) tax-exempt entity. Also, the paragraph reference (3) was omitted from text.

DEPARTMENT RESPONSE: The CSBG Act only specifies private nonprofit organization and does not specify §501(c)(3). Staff amended the §501(c) reference by adding the paragraph reference "(3)."

§5.3(b)(64). Definitions. U.S.C.--United States Code.

COMMENT: Comment received about amending definition, to remove "of Regulations."

DEPARTMENT RESPONSE: Staff concurred and amended definition as suggested.

§5.4. Prohibitions.

COMMENT: Comment received regarding needed revisions to be consistent with federal law.

DEPARTMENT RESPONSE: Staff revised as follows: subsection (a) was revised, new subsection (b) was added, subsection (b) became subsection (c), and subsection (c) became subsection (d). Language was modified to reflect federal prohibitions pursuant to OMB Circular A-122. CAAs are not prohibited from lobbying. The CSBG Act does not prohibit or mention lobbying. And, OMB Circular A-122 only restricts the use of federal funds for lobbying, it does not prohibit a federal grantee from using other funds to do so; there are a number of exceptions. State law is more restrictive than federal law and lobbying is prohibited by Texas Government Code.

§5.5(b) and (c). Certificate and Disclosure Regarding Certain Lobbying Activities.

COMMENT: Comment received suggesting clarification in accordance with federal law. For §5.5(b), the reference in the first sentence regarding finding the necessary form was amended from the Office of Management (OMB) website to the U.S. Department of Health and Human Services (USDHHS) website. In the second sentence of subsection (c), the referenced form was amended from the "Department's" website to the "USDHHS" website. In the third sentence of subsection (c), the following language was added after "Congress:" "in connection with the awarding or modifying of a federal contract, loan, cooperative agreement or grant."

DEPARTMENT RESPONSE: Staff does not concur with the comment to qualify lobbying activities by inserting the word "certain". Minor revisions were made to §5.5(b) and (c) for clarification purposes.

§5.10(b). Procurement Standard.

COMMENT: Comment received suggesting that this section needed clarifying language.

DEPARTMENT RESPONSE: Staff concurred with this comment and revised language. For clarification purposes, the second sentence of this section was revised by adding language as follows: ...between the OMB Circulars "or federal laws" and state...federal funds, the "federal law or" OMB Circulars will prevail.

§5.11. Procurement/Cooperative Purchasing Program.

ADMINISTRATIVE CHANGE.

Staff amended this section to correct the contact information for the program to: State of Texas Co-Op Purchasing Program, Texas Comptroller of Public Accounts, Web address: http://www.window.state.tx.us/procurement/prog/coop/; e-mail: coop@cpa.state.tx.us; phone number: (512) 463-3368.

§5.16(a)(1), (a)(3), (a)(4), (a)(4)(A), (a)(4)(B), (b) and (d). Monitoring of Subrecipients.

COMMENTS: Commenter requested definition for "high risk" in subsection (a)(1). In some instances the term has implied a subrecipient with severe management and/or fiscal deficiencies and in other instances the term has implied a subrecipient with multiple and high dollar contracts with the Department.

Commenter suggested that the rule should state that the Department will notify a subrecipient when it is declared "high risk" and an explanation for the designation should be provided.

Commenter suggested that the rule should state what the subrecipient needs to do to lift the designation, if the designation is based on deficiencies.

Commenter suggested that the rule should state consequences other than being subject to unannounced visits, e.g. cost reimbursement rather than advances.

COMMENT Subsection (a)(3): Commenter suggested posting the monitoring instrument on the Department's website to be used to perform monitoring reviews. Disclosure of the 'monitoring instrument' via the Department's website will allow transparency and the Department's expectations of the subrecipients.

COMMENT Subsection (a)(4): Commenter encouraged timely resolutions following the onsite monitoring review, a monitoring report should be prepared and submitted to the subrecipients within "ninety (90)" days. Comment was also made that an appeals process regarding monitoring of programs should be established in this section.

COMMENT: Subsection (a)(4)(A). Finding--Commenter suggested the clarification language for the first sentence should include "clearly" as follows: The written description of a "clearly" deficient condition which is significantly substandard according to the monitoring standards.

COMMENT Subsection (a)(4)(B): Commenter suggested best practice(s) to enhance program, operational, financial or administrative practices. Commenter also suggested that the Department clarify and simplify language to avoid misinterpretation between a 'recommended' improvement and 'corrective action' as required under a "finding."

COMMENT Subsection (b): Commenter suggested clarifying language to be added as follows: Subrecipients "not exempt from the single audit requirements" are responsible for... The rationale for this was that subrecipients exempt from the single audit requirements will not have such an audit to submit.

COMMENT Subsection (d): Commenter suggested that for clarification purposes, the Department should add the following language: ...the following sanctions "assuring due process, unless otherwise required:"

DEPARTMENT RESPONSE: Staff revised subsection (a)(1) to separate the assessment of risk. Unannounced monitoring review was also moved to subsection (a)(2).

Staff concurred with comment and revised as follows:

Subsection (a): The Department's Community Affairs Division (CAD) is responsible for ensuring that the Community Services Block Grant (CSBG), Comprehensive Energy Assistance Program (CEAP), Weatherization Assistance Program (WAP), and Emergency Shelter Grant Program (ESGP) program activities are completed and that the funds are expended in accordance with the contract provisions and applicable state and federal rules, regulations, policies, and related statutes. In order to ensure such, the Department will conduct monitoring reviews of the subrecipients to evaluate the effectiveness of subrecipient's performance and program compliance through on-site and desk monitoring as described in §5.15 of this chapter (relating to Federal Funding Accountability and Transparency Act (FFATA)) following the requirements of §678B of PL 105-285 Subtitle B, §2605(B)(10) of PL 97-35, as amended, 10 CFR §440.23(d), and 24 CFR §576.61 and §576.57(f) and (g), respectively.

Subsection (a)(1) was revised to read as follows: "CAD employs a subrecipient monitoring procedure that is based upon an assessment of associated risks. The factors may include but are not limited to the status of the most recent monitoring report, timeliness of grant reporting, results of the last on-site monitoring review, number and funding amount of Department funded contracts, final expenditure rate, and single audit status or other factors. Ranking of subrecipients will determine whether an on-site review or a desk review is completed unless Department management determines an on-site review is needed." The following was deleted: "CAD may conduct...on-site monitoring review."

Subsection (a)(2) was a previously a part of subsection (a)(1) and became subsection (a)(2). CAD may conduct unannounced on-site monitoring reviews of subrecipients identified as at risk for contract termination, if deficiencies identified from prior monitoring activities persist or remain unresolved for an unreasonable period of time. In the event of reports of fraud and abuse or other extenuating circumstances, the Department may make an unannounced on-site monitoring review. The word "high" was removed from the first sentence from between "identified as" and "at risk.."

Subsection (a)(2) became subsection (a)(3).

Subsection (a)(4) was added as follows: "Technical assistance and training will be provided to the subrecipient to address program deficiencies."

Subsection (a)(3) became subsection (a)(5).

Subsection (a)(4) became subsection (a)(6): Staff concurs with adding "onsite" to the language. However, monitoring reports should be submitted to subrecipients within forty-five (45) days. Subrecipients must provide a response to the deficiencies noted and state any concerns at this time.

Subsection (a)(4)(A) became subsection (a)(6)(A): Staff did not concur with comment. Deficient correlates to substandard which does not have a range within its definition.

Subsection (a)(4)(B) became subsection (a)(6)(B): Staff concurred with comment and revised the language to read: "Recommended Improvement--Suggested best practice(s) to enhance program, operational, financial, or administrative practices."

Subsection (a)(5) became subsection (a)(7).

Subsection (b) became subsection (a)(7)(Z)(a): Staff concurred with comment and revised language as follows: "not exempt from the single audit requirements" between "Subrecipients" and "are responsible for submitting..."

Subsection (c) became subsection (a)(7)(Z)(b).

§5.17(a), (c) - (f), and (g)(3). Corrective Action and Contract Termination.

ADMINISTRATIVE CHANGE: Staff made an administrative change to the heading of this section from "Corrective Action and Contract Termination" to "Sanctions and Contract Close Out."

COMMENT: Commenter suggested that subsection (a) needed clarification.

DEPARTMENT RESPONSE: Staff revised as follows: ...state and federal "laws and" regulations and...

COMMENT: Commenter suggested that subsections (c) - (f) needed clarification for consistency.

DEPARTMENT RESPONSE: The revised version was changed to subsection (c)(1) - (5), which also amended subsection (g) to subsection (d). Subsection (g)(3) is now subsection (d)(3).

COMMENT: Comment received regarding a possible typo and clarification that was needed for who would be the one to do the physical inventory of client files, etc.

DEPARTMENT RESPONSE: Staff concurred and amended the language from "Department" to "Subrecipient." Language was amended to: ... "the Subrecipient will take a physical inventory of client files,..."

§5.20(a). Determining Income Eligibility.

COMMENT: Comment received suggesting correction to a typo for the acronym of the U.S. Department of Health and Human Services (USDHHS).

DEPARTMENT RESPONSE: Staff concurred and made correction.

The Board approved the final order adopting the new subchapter with recommended changes, on November 13, 2008.

The new sections are adopted pursuant to the authority of the Texas Government Code, Chapter 2306 which provides the Department with the authority to adopt rules governing the administration of the Department and its programs.

§5.3.Definitions.

(a) To ensure a clear understanding of the terminology used in the context of the Community Affairs Programs, a list of terms and definitions has been compiled as a reference.

(b) The following words and terms in this chapter shall have the following meaning unless the context clearly indicates otherwise.

(1) CAA--Community Action Agency.

(2) CFR--Code of Federal Regulations.

(3) Children--Household dependents not exceeding eighteen (18) years of age.

(4) Collaborative Application--An application from two or more organizations which will use Emergency Shelter Grants Program (ESGP) funds to provide services to the target population as part of a local continuum of care. If a unit of general local government applies for only one organization, this will not be considered a collaborative application. Partners in the collaborative application must coordinate services and prevent duplication of services.

(5) Community Action Plan--A plan required by the Community Services Block Grant (CSBG) Act which describes the local (subrecipient) service delivery system, how coordination will be developed to fill identified gaps in services, how funds will be coordinated with other public and private resources and how the local entity will use the funds to support innovative community and neighborhood based initiatives related to the grant.

(6) Cooling--Modifications including, but not limited to, the repair or replacement of air conditioning units, evaporative coolers, and refrigerators.

(7) Community Action Agencies (CAAs)--Local private and public non-profit organizations that carry out the Community Action Program (CAP), which was founded by the 1964 Economic Opportunity Act to fight poverty by empowering the poor in the United States. Each CAA must have a board consisting of at least one-third elected public officials, not fewer than one-third representatives of low-income individuals and families, chosen in accordance with democratic selection procedures, and the remainder are members of business, industry, labor, religious, law enforcement, education, or other major groups and interests in the community.

(8) Community Affairs Division (CAD)--The Division at the Texas Department of Housing and Community Affairs which administers the CSBG, ESGP, Comprehensive Energy Assistance Program (CEAP), Weatherization Assistance Program (WAP), and Section 8 Housing Choice Voucher Programs.

(9) The Community Services Block Grant (CSBG)--A grant which provides U.S. federal funding for Community Action Agencies (CAAs) and other eligible entities that seek to address poverty at the community level. Like other block grants, CSBG funds are allocated to the states and other jurisdictions through a formula.

(10) Community Services Block Grant (CSBG) Act--The CSBG Act is a law passed by Congress authorizing the Community Services Block Grant. The CSBG Act was amended by the Community Services Block Grant Amendments of 1994 and the Coats Human Services Reauthorization Act of 1998 under 42 U.S.C. §§9901, et seq. The act authorized establishing a community services block grant program to make grants available through the program to states to ameliorate the causes of poverty in communities within the states.

(11) CSBG Subrecipient--Includes CSBG eligible entities and other organizations that are awarded CSBG funds.

(12) Department--The Texas Department of Housing and Community Affairs.

(13) Discretionary Funds--Those CSBG funds maintained in reserve by a State, at its discretion, for CSBG allowable uses as authorized by §675C of the CSBG Act, and not designated for distribution on a statewide basis to CSBG eligible entities and not held in reserve for state administrative purposes.

(14) DOE--The United States Department of Energy.

(15) DOE WAP Rules--10 CFR Part 440 of the Code of Federal Regulations describing the Weatherization Assistance for Low Income Persons as administered through the Department of Energy.

(16) Dwelling Unit--A house, including a stationary mobile home, an apartment, a group of rooms, or a single room occupied as separate living quarters.

(17) Equipment--A tangible non-expendable personal property including exempt property, charged directly to the award, having a useful life of more than one year, and an acquisition cost of $5,000 or more per unit. For CSBG, CEAP, and WAP, if the unit acquisition cost exceeds $5,000, approval from the TDHCA Community Affairs Division must be obtained before the purchase takes place. For ESGP, if the unit acquisition cost exceeds $500, approval from TDHCA Community Affairs Division must be obtained before the purchase is made.

(18) Elderly Person--A person who is sixty (60) years of age or older.

(19) Electric Base-Load Measure--Weatherization measures which address the energy efficiency and energy usage of lighting and appliances.

(20) Eligible Entity--Those local organizations in existence and designated by the federal government to administer programs created under the federal Economic Opportunity Act of 1964. This includes community action agencies, limited-purpose agencies, and units of local government. The CSBG Act defines an eligible entity as an organization that was an eligible entity on the day before the enactment of the Coats Human Services Reauthorization Act of 1998, (October 27, 1998), or is designated by the Governor to serve a given area of the State and that has a tripartite board or other mechanism for local governance.

(21) Emergency--Defined by the LIHEAP Act of 1981 (Title XXVI of the Omnibus Budget Reconciliation Act of 1981, 42 U.S.C. §8622):

(A) natural disaster;

(B) a significant home energy supply shortage or disruption;

(D) a significant increase in home energy disconnections reported by a utility, a State regulatory agency, or another agency with necessary data;

(E) a significant increase in participation in a public benefit program such as the food stamp program carried out under the Food Stamp Act of 1977 (7 U.S.C. §§2011, et seq.), the national program to provide supplemental security income carried out under title XVI of the Social Security Act (42 U.S.C. §§1381, et seq.) or the State temporary assistance for needy families program carried out under Part A of Title IV of the Social Security Act (42 U.S.C. §§601, et seq.), as determined by the head of the appropriate federal agency;

(F) a significant increase in unemployment, layoffs, or the number of households with an individual applying for unemployment benefits, as determined by the Secretary of Labor; or

(G) an event meeting such criteria as the Secretary, at the discretion of the Secretary, may determine to be appropriate.

(22) Energy Repairs--Weatherization related repairs necessary to protect or complete regular weatherization energy efficiency measures.

(23) Energy Audit--The energy audit software and procedures used to determine the cost effectiveness of weatherization measures to be installed in a dwelling unit.

(24) Families with Young Children--A family that includes a child age five (5) or younger.

(25) USDHHS--U.S. Department of Health and Human Services.

(26) High Energy Burden--Determined by dividing a household's annual home energy costs by the household's annual gross income. The percentage at which energy burden is considered high is defined by data gathered from the State Data Center.

(27) High Energy Consumption--Household energy expenditures exceeding the median of low-income home energy expenditures expressed in the data collected from the State Data Center.

(28) Homeless or homeless individual--An individual who:

(A) lacks a fixed, regular, and adequate nighttime residence; or

(B) has a primary nighttime residence that is:

(i) a supervised publicly or privately operated shelter designed to provide temporary living accommodations (including welfare hotels, congregate shelters, and transitional housing for the mentally ill);

(ii) an institution that provides a temporary residence for individuals intended to be institutionalized; or

(iii) a public or private place not designed for, or ordinarily used as, a regular sleeping accommodation for human beings. (Exclusion: The term "homeless" or "homeless individual" does not include any individual imprisoned or otherwise detained pursuant to an Act of Congress or a State law.)

(29) Household--Any individual or group of individuals who are living together in a dwelling unit as one economic unit. For energy programs, these persons customarily purchase residential energy in common or make undesignated payments for energy.

(30) Inverse Ratio of Population Density Factor--The number of square miles of a county divided by the number of poverty households of that county.

(31) Local Units of Government--City, county, or council of governments.

(32) Low Income--Income in relation to family size which:

(A) For CEAP, WAP, and CSBG is at or below 125% of the Federal Income guidelines;

(B) For ESGP is at or below 100% of the poverty level, determined in accordance with criteria established by the Director of the Office of Management and Budget;

(C) Is the basis on which cash assistance payments have been paid during the preceding twelve (12) month-period under titles IV and XVI of the Social Security Act or applicable state or local law; or

(D) If a State elects, is the basis for eligibility for assistance under the Low Income Home Energy Assistance Act of 1981, provided that such basis is at least 125% of the poverty level determined in accordance with criteria established by the Director of the Office of Management and Budget.

(33) Low Income Home Energy Assistance Program (LIHEAP)--A federally funded block grant program that is implemented to serve low income households who seek assistance for their home energy bills and/or weatherization services.

(34) Migrant Farm worker--An individual or family that is employed in agricultural labor or related industry and is required to be absent overnight from their permanent place of residence.

(35) Multifamily Dwelling Unit--A structure containing more than one dwelling unit.

(36) National Performance Indicator--An individual measure of performance within the Department's reporting system for measuring performance and results of subrecipients of funds. There are currently twelve indicators of performance which measure self-sufficiency, family stability, and community revitalization.

(37) Needs Assessment--An assessment of community needs in the areas to be served with CSBG funds. The assessment is a required part of the Community Action Plan per Assurance 11 of the CSBG Act.

(38) OMB--Office of Management and Budget, a federal agency.

(39) Outreach--The method that attempts to identify clients who are in need of services, alerts these clients to service provisions and benefits, and helps them use the services that are available. Outreach is utilized to locate, contact and engage potential clients.

(40) Performance Statement--A document which identifies the services to be provided by a CSBG subrecipient. The document is an attachment to the CSBG contract entered into by the Department and the CSBG subrecipient.

(41) Persons with Disabilities--Any individual who is:

(A) a handicapped individual as defined in §7(9) of the Rehabilitation Act of 1973;

(B) under a disability as defined in §1614(a)(3)(A) or §223(d)(1) of the Social Security Act or in §102(7) of the Developmental Disabilities Services and Facilities Construction Act; or

(42) Population Density--The number of persons residing within a given geographic area of the state.

(43) Poverty Income Guidelines--The official poverty income guidelines as issued by the U.S. Department of Health and Human Services annually.

(44) Private Nonprofit Organization--An organization which has status as a §501(c)(3) tax-exempt entity. Private nonprofit organizations applying for ESGP funds must be established for charitable purposes and have activities that include, but are not limited to, the promotion of social welfare and the prevention or elimination of homelessness. The entity's net earnings may not inure to the benefit of any individual(s).

(45) Public Organization--A unit of local government, as established by the Legislature of the State of Texas. Includes, but may not be limited to, cities, counties, and councils of governments.

(46) Referral--The process of providing information to a client household about an agency, program, or professional person that can provide the service(s) needed by the client.

(47) Rental Unit--A dwelling unit occupied by a person who pays rent for the use of the dwelling unit.

(48) Renter--A person who pays rent for the use of the dwelling unit.

(49) Seasonal Farm Worker--An individual or family that is employed in seasonal or temporary agricultural labor or related industry and is not required to be absent overnight from their permanent place of residence. In addition, at least 20% of the household annualized income must be derived from the agricultural labor or related industry.

(50) Secretary--Chief Executive of the U.S. Department of Health and Human Services.

(51) Service--The provision of work or labor that does not produce a tangible commodity.

(52) Shelter--Defined by the Department as a dwelling unit or units whose principal purpose is to house on a temporary basis individuals who may or may not be related to one another and who are not living in nursing homes, prisons, or similar institutional care facilities.

(53) Single Family Dwelling Unit--A structure containing no more than one dwelling unit.

(54) Social Security Act--42 U.S.C. §§601, et seq., CSBG works with activities carried out under Title IV Part A to assist families to transition off of state programs.

(55) State--The State of Texas or the Texas Department of Housing and Community Affairs.

(56) Subcontractor--An organization with whom the subrecipient contracts with to administer programs.

(57) Subrecipient--According to each program subchapter, subrecipient may be defined as organizations with whom the Department contracts with and provides CSBG funds; ESGP funds; DOE funds or, LIHEAP funds.

(58) Supplies--All personal property excluding equipment, intangible property, and debt instruments, and inventions of a contractor conceived or first actually reduced to practice in the performance of work under a funding agreement ("subject inventions"), as defined in 37 CFR Part 401, "Rights to Inventions Made by Non-profit Organizations and Small Business Firms Under Government Grants, Contracts, and Cooperative Agreements."

(59) TAC--Texas Administrative Code.

(60) Targeting--Focusing assistance to households with the highest program applicable needs.

(61) Terms and Conditions--Binding provisions provided by a funding organization to grantees accepting a grant award for a specified amount of time.

(62) Treatment as a State or Local Agency--For purposes of 5 U.S.C. Chapter 15 any entity that assumes responsibility for planning, developing, and coordinating activities under the CSBG Act and receives assistance under CSBG Act shall be deemed to be a State or local agency.

(63) Units of General Local Government--A unit of local government which has, among other responsibilities, the authority to assess and collect local taxes and to provide general governmental services.

(64) U.S.C.--United States Code.

(65) Vendor Agreement--An agreement between the subrecipient and energy vendors that contains assurance as to fair billing practices, delivery procedures, and pricing for business transactions involving LIHEAP beneficiaries.

(66) WAP--Weatherization Assistance Program.

(67) WAP PAC--Weatherization Assistance Program Policy Advisory Council. The WAP PAC was established by the Department in accordance with 10 CFR §440.17 to provide advisory services in regards to the WAP program.

(68) Weatherization Material--The material listed in Appendix A of 10 CFR Part 440.

(69) Weatherization Project--A project conducted in a single geographical area which undertakes to reduce heating and cooling demand of dwelling units that are energy inefficient.

§5.4.Prohibitions.

(a) Pursuant to the Office of Management and Budget Circular A-122, "Cost Principles for Non-Profit Organizations," specifically §25 titled "Lobbying," costs associated with lobbying are unallowable.

(b) Section 678(F)(b)(2) of the CSBG Act prohibits the use of program funds for political activity, voter registration activity or voter registration. The Hatch Act, 5 U.S.C., Chapter 15 and the amendments to the Hatch Act and the repeal of §675(e) and §675(C)(6) of the Community Services Block Grant (CSBG) Act do not affect the prohibition of §678(F)(b)(2).

(d) Discrimination is prohibited.

(1) Civil Rights Act of 1964, (42 U.S.C. §§2000, et seq.) Age Discrimination Act of 1975 (42 U.S.C. §§6101, et seq.). Rehabilitation Act of 1973 (29 U.S.C. §794), and Title II of the Americans with Disabilities Act of 1990 (42 U.S.C. §§12131, et seq.) shall apply to all programs or activities administered by subrecipients including the nondiscrimination provisions of the CSBG (42 U.S.C. §§9901, et seq.).

(2) All subrecipients receiving federal funds must be equal opportunity employers and render services without regard to race, color, religion, sex, national origin, age, handicap, political affiliation or belief. Information on equal opportunity and nondiscrimination shall be made available to participants, employees, subcontractors, and interested parties.

§5.5.Certificate and Disclosure Regarding Lobbying Activities.

(a) Subrecipients of federal funding, including those who receive federal funds through the Department, are subject to the anti-lobbying provisions commonly referred to as "the Byrd Amendments" (31 U.S.C. §1352). The legislation imposes certain requirements for disclosure and certification on recipients of federal contracts, grants, cooperative agreements, and loans, including the requirement that each recipient of a federal contract in excess of $100,000 must complete the Standard Form-LLL "Disclosure of Lobbying Activities" form.

(b) A §501(c)(3) nonprofit organization which pays any person funds from any source (even non-federal funds) to lobby Congress or which pays an employee of any federal agency in connection with this grant, must complete the "Disclosure of Lobbying Activities" form available on the U.S. Department of Health and Human Services (USDHHS) website. A completed form must be submitted to the Department prior to engaging in lobbying activities. The subrecipient must also file quarterly updates about its employment of lobbyists if material changes occur in the organization's use of lobbyists.

(c) For each contract, grant, cooperative agreement, or loan in excess of $100,000, the subrecipient must complete the "Certification Regarding Lobbying" form and return it to the Department. This form is located on the USDHHS website. By completing the certification, the subrecipient verifies that no federally appropriated funds have been used to lobby the United States Congress in connection with the awarding or modifying of a federal contract, loan, cooperative agreement or grant.

(d) Pursuant to the 1996 Simpson-Craig Amendment to the Lobbying Disclosure Act, 2 U.S.C. §1611, §501(c)(4) non-profit organizations, typically civic leagues or employee associations, may not receive any federal funding if such organizations engage in lobbying. The law establishes civil penalties for noncompliance, with possible penalties ranging from $10,000 to $100,000.

§5.10.Procurement Standards.

(a) Procurement procedures must meet minimum guidelines, according to Office of Management and Budget (OMB) Circulars A-87, A-102, A-110, A-122 (as applicable), the Uniform Grant Management Common Rule, Texas Government Code, Chapter 783, and 10 CFR Part 600 (Financial Assistance Rule).

(b) All subrecipients including non-profits must comply with all of the referenced statutes and regulations listed in subsection (a) of this section. In case of any conflict between the OMB Circulars or federal laws and state laws involving federal funds, the federal law or OMB Circulars will prevail.

(1) Small purchase procedures:

(A) This procedure may be used only on those services, supplies, or equipment costing in the aggregate of $25,000 or less. For Emergency Shelter Grant Program (ESGP), the threshold is $500 and more per unit;

(B) Subrecipient must establish a clear, accurate description of the specifications for the technical requirements of the material, equipment, or services to be procured; and

(C) Subrecipient must obtain a written price or documented rate quotation from an adequate number of qualified sources. An adequate number is, at a minimum, three different sources.

(2) Sealed bids:

(A) Subrecipient must formally advertise, for a minimum of three (3) days, in newspapers or through notices posted in public buildings throughout the service area. Advertising beyond the subrecipient's service area is allowable and recommended by the Department. The advertisement should include, at a minimum, a response time of fourteen (14) days prior to the closing date of the bid request. Cities and counties must comply with the statutorily imposed publication requirements in addition to those requirements stated herein; and

(B) When advertising for material or labor services, subrecipient shall indicate a period for which the materials or services are sought (e.g. for a one-year contract with an option to renew for an additional four (4) years). This advertised time period shall determine the length of time which may elapse before re-advertising for material or labor services, except that advertising for labor services must occur at least every five (5) years.

(3) Competitive proposals:

(A) The Request for Proposal (RFP) must be publicized. The preferred method of advertising is the local service area newspapers. This advertisement should, at a minimum, allow fourteen (14) days before the RFP is due. The due date must be stated in the advertisement; and

(B) The time period for services shall be one year, plus four (4) additional years at a maximum.

(4) Non-competitive proposals:

(A) The service, supply, or equipment is available only from a single source;

(B) A public emergency exists preventing the time required for competitive solicitation; and

(5) Required contract provisions shall include the following contract provisions or conditions in procurement contracts or subcontracts:

(A) Contracts in excess of $25,000 shall include contractual provisions or conditions that allow for administrative, contractual, or legal remedies in instances where subcontractors violate or breach the contract terms, and provide for such remedial actions as may be appropriate;

(B) All contracts in excess of $25,000 shall include suitable provisions for termination by the recipient, including the manner by which termination shall be effected and the basis for settlement. In addition, such contracts shall describe conditions under which the contract may be terminated for default as well as conditions where the contract may be terminated because of circumstances beyond the control of the subrecipient;

(C) Contracts shall include a provision with regard to independent subcontractor status to hold harmless and indemnify subrecipient from and against any and all claims, demands and course of action asserted by any third party arising out of or in connection with the services to be performed under contract;

(D) Contracts shall include a provision regarding conflict of interest. Subrecipient's employees, officers, and/or agents shall neither solicit nor accept gratuities, favors, or anything of monetary value from subcontractors, or potential subcontractors; and

(E) Contracts shall include a provision to prevent fraud and abuse.

(i) Subrecipient shall establish, maintain, and utilize internal control systems and procedures sufficient to prevent, detect, and correct incidents of waste, fraud, and abuse in all Department funded programs and to provide for the proper and effective management of all program and fiscal activities funded by this contract. Subrecipient's internal control systems and all transactions and other significant events must be clearly documented and the documentation made readily available for review by Department.

(ii) Subrecipient shall give Department complete access to all of its records, employees, and agents for the purpose of monitoring or investigating the program. Subrecipient shall fully cooperate with Department's efforts to detect, investigate, and prevent waste, fraud, and abuse. Subrecipient shall immediately notify the Department of any identified instances of waste, fraud, or abuse.

(iii) Department will notify the funding source upon identification of possible instances of waste, fraud, and abuse or other serious deficiencies.

(iv) Subrecipient may not discriminate against any employee or other person who reports a violation of the terms of this contract or of any law or regulation to Department or to any appropriate law enforcement authority, if the report is made in good faith.

(F) Contracts shall include a provision to the effect that any alterations, additions, or deletions to the terms of the contract which are required by changes in federal law and regulations or state statute are automatically incorporated into the contract without written and administrative code amendment hereto, and shall become effective on the date designated by such law and or regulation; and any alterations, additions, or deletions to the terms of the contract shall be amended hereto in writing and executed by both parties to the contract.

(G) Contracts shall include the following provision assuring legal authority to sign the contract.

(i) Subcontractor represents that it possesses the practical ability and the legal authority to enter into the contract, receive and manage the funds authorized by the contract, and to perform the services subcontractor has obligated itself to perform under the contract.

(ii) The person signing the contract on behalf of the subcontractor warrants that he/she has been authorized by the subcontractor to execute the contract on behalf of the subcontractor and to bind the subcontractor to all terms set forth in the contract.

(iii) Department shall have the right to suspend or terminate the contract if there is a dispute as the legal authority of either the subcontractor or the person signing the contract to enter into the contract or to render performances thereunder. Should such suspension or termination occur, the subcontractor is liable to the subrecipient for any money it has received for performance of provisions of the contract.

§5.11.Procurement/Cooperative Purchasing Program.

The State of Texas conducts procurement for many materials, goods, and appliances. The State of Texas procurement process complies with the required procurement provisions. For more detail about how to purchase from the State contract, please contact: State of Texas Co-Op Purchasing Program, Texas Comptroller of Public Accounts, Web address: http://www.window.state.tx.us/procurement/prog/coop/; e-mail: coop@cpa.state.tx.us; phone number: (512) 463-3368. If subrecipients choose to use the Cooperative Purchasing Program, they will need documentation of annual fee payment.

§5.13.Bonding Requirements.

(a) The following requirements relate only to construction or facility improvements.

(1) For contracts exceeding $100,000 the Department may accept the bonding policy and requirements of the subrecipient, provided the Department has made a written finding that the Department is adequately protected.

(2) For contracts in excess of $100,000, and for which the subrecipient cannot make a determination that the Department's interest is adequately protected, a "bid guarantee" from each bidder equivalent to five (5) of the bid price shall be requested. The "bid guarantee" shall consist of a firm commitment such as a bid bond, certified check, or other negotiable instrument accompanying a bid as assurance that the bidder will, upon acceptance of his bid, execute such contractual documents as may be required within the time specified. A bid bond in the form of all of the following may represent a "bid guarantee."

(A) A performance bond on the part of the subrecipient for 100% of the contract price. A "performance bond" is one executed in connection with a contract, to secure fulfillment of all subcontractors' obligations under such contract.

(B) A payment bond on the part of the subcontractor for 100% of the contract price. A "payment bond" is one executed in connection with a contract to assure payment as required by statute of all persons supplying labor and material in the execution of the work provided for in the contract.

(C) Where bonds are required, in the situations described herein, the bonds shall be obtained from companies holding certificates of authority as acceptable sureties pursuant to 31 CFR Part 223, "Surety Companies Doing Business with the United States."

(b) Cities and counties must comply with the bond requirements of Texas Civil Statutes, Articles 2252 and 5160, and Local Government Code §252.044 and §262.032, as applicable.

§5.14.Subrecipient Contract.

(a) Upon Board approval, the Department's Executive Director and subrecipients shall enter into and execute an agreement for the receipt of funds. The Department, acting by and through its Executive Director or his/her designee, may authorize, execute, and deliver modifications and/or amendments to the contract.

(b) Within sixty (60) days following the conclusion of a contract issued by the Department, the subrecipient shall provide a full accounting of funds expended under the terms of the contract.

(c) Failure of a subrecipient to provide an accounting of funds expended under the terms of the contract may be sufficient reason for the Department to deny any future contract to the subrecipient.

§5.16.Monitoring of Subrecipients.

(a) The Department's Community Affairs Division (CAD) is responsible for ensuring that the Community Services Block Grant (CSBG), Comprehensive Energy Assistance Program (CEAP), Weatherization Assistance Program (WAP), and Emergency Shelter Grant Program (ESGP) program activities are completed and that the funds are expended in accordance with the contract provisions and applicable State and Federal rules, regulations, policies, and related statutes. In order to ensure such, the Department will conduct monitoring reviews of the subrecipients to evaluate the effectiveness of subrecipient's performance and program compliance through on-site and desk monitoring as described in §5.15 of this chapter (relating to Federal Funding Accountability and Transparency Act (FFATA)) following the requirements of §678B of PL 105-285 Subtitle B, §2605(B)(10) of PL 97-35, as amended, 10 CFR §440.23(d), and 24 CFR §576.61 and §576.57(f) and (g), respectively.

(1) CAD employs a subrecipient monitoring procedure that is based upon an assessment of associated risks. The factors may include but are not limited to the status of the most recent monitoring report, timeliness of grant reporting, results of the last on-site monitoring review, number and funding amount of Department funded contracts, final expenditure rate, and single audit status or other factors. Ranking of subrecipients will determine whether an on-site review or a desk review is completed unless Department management determines an on-site review is needed.

(2) CAD may conduct unannounced on-site monitoring reviews of subrecipients identified as at risk for contract termination, if deficiencies identified from prior monitoring activities persist or remain unresolved for an unreasonable period of time. In the event of reports of fraud and abuse or other extenuating circumstances the Department may make an unannounced on-site monitoring review.

(3) Follow-up reviews may be performed to ensure implementation of corrective action of subrecipients that failed to meet the goals, standards, and requirements established by the Department.

(4) Technical assistance and training will be provided to the subrecipient to address program deficiencies.

(5) A monitoring instrument is used to perform monitoring reviews. Support documentation is retained by the Department to verify: the achievement of performance goals; conduct of eligible activities; and compliance with other contractual regulatory provisions and financial accountability. Monitoring reviews of subrecipients also include reviewing annual financial reports and any related management letters and financial documents.

(6) Following the onsite monitoring review, a monitoring report is prepared and submitted to the subrecipients outlining any administrative, program, and financial deficiencies. The monitoring report also includes notes, recommend improvements, corrective actions or a corrective action plan.

(A) Finding--The written description of a deficient condition which is significantly substandard according to the monitoring standards. Findings may also be deficiencies found with regard to compliance with program rules, required cost principles, federal, state and/or local laws, and generally accepted accounting procedures or Generally Accepted Accounting Principles. In general, findings require corrective action to create an acceptable level of risk for disbursement of funds. The description of a finding might include the cause and effect of the deficient condition.

(B) Recommended Improvement--Suggested best practice(s) to enhance program, operational, financial, or administrative practices.

(C) Note--An explanatory tool to further describe and clarify findings or recommended improvements. A note may also be used to include additional information related to the monitoring review but not related to a finding or recommended improvement.

(7) Subrecipients are required to have at a minimum the following documents available, and any other requested documents, for the monitoring review:

(A) Roster of staff (name, title, salary and status)--All Community Affairs programs;

(B) Current agency organization chart;

(C) List of Board of Directors to include: names, addresses and telephone numbers, tenure on the board, section represented by the board member, list of committees--CSBG and ESGP;

(D) Board election/selection materials--CSBG;

(E) Board minutes (previous six meetings) and attendance roster--CSBG and ESGP;

(F) List of neighborhood centers with names of staff--CSBG and CEAP;

(G) Personnel policies;

(H) Bylaws--CSBG and ESGP;

(I) Travel policies and records;

(J) Chart of accounts;

(K) Accounting records (journals/ledgers) and support documentation;

(L) Amount of Cash on Hand (at time of monitoring);

(M) Bank reconciliation records;

(N) Agency's proof of fidelity bond coverage;

(O) Documentation of match requirements--ESGP;

(P) Closeout data for prior program year--CEAP and WAP;

(Q) Access to client files and documentation of performance--All Community Affairs programs;

(R) Declaration of Income Statement (DIS) Policy/Procedure--All Community Affairs programs;

(S) Appeals Procedures--CEAP and WAP;

(T) Subcontract agreements with appropriate procurement packages (if applicable)--All Community Affairs programs;

(U) Procurement policy;

(V) Documentation of current contract inventory--All Community Affairs programs;

(W) Documentation of coordination with other local programs (including contact person and phone numbers)--CSBG;

(X) Copies of most recent monitoring reports and/or performance reviews of all programs administered by the organization;

(Y) Copy of the most recent Single Audit Report--Organizations that expend more than $500,000 in federal funds during a fiscal year must have a single audit conducted for that year (A-133 Subpart B.200). Organizations that do not exceed the $500,000 federal fund expenditure threshold are exempt from the single audit requirements. If an organization is not required to have a single audit performed, the organization must provide the end-of-the-year financial statements (balance sheet, income statement, and statement of cash flow); and

(Z) If applicable, documentation of the most recent Head Start Onsite Monitoring Document review, including results, responses, and current status--CSBG.

(b) Subrecipients not exempt from the single audit requirements are responsible for submitting their Single Audit Report within thirty (30) days of completion of their audit and no later than nine (9) months after the end of the audit period (fiscal year end) to the Department's Portfolio Management and Compliance Division as well as to the CA Division. Refer to 31 U.S.C. §7502.

(c) Monitoring reviews of subrecipients will include a review of the subrecipients annual financial reports and any related management letters and financial documents.

§5.17.Sanctions and Contract Close Out.

(a) Subrecipients that have entered into contract with the Department to administer programs are required to follow state and federal laws and regulations and rules governing these programs.

(b) Except as expressly modified by law or the terms of a subrecipient's contract, the subrecipient shall comply with the cost principles and uniform administrative requirements set forth in the Uniform Grant and Contract Management Standards (UGMS), 1 TAC §§5.141, et seq.

(c) If a subrecipient fails to comply with the requirements, rules, and regulations of the CSBG, CEAP, WAP, or ESGP programs, and in the event monitoring or other reliable sources reveal material deficiencies in performance, or if the subrecipient fails to correct any deficiency within the time allowed by federal or state law, the Department will apply one or more of the following sanctions:

(1) Deny the subrecipient's requests for advances and place it on a cost reimbursement method of payment until proof of compliance with the rules and regulations are received by the Department;

(2) Withhold all payments from the subrecipient (both reimbursements and advances) until proof of compliance with the rules and regulations are received by the Department, reduce the allocation of funds (with the exception of Community Services Block Grant (CSBG) funds to eligible entities) or impose sanctions as deemed appropriate by the Department Executive Director, at any time, if the Department identifies possible instances of fraud, abuse, fiscal mismanagement, or other serious deficiencies in the subrecipients' performance;

(3) Suspend performance of the contract or reduce funds until proof of compliance with the rules and regulations are received by the Department or a decision is made by the Department to initiate proceedings for contract termination;

(4) Elect not to provide future grant funds to the subrecipient until appropriate actions are taken to ensure compliance; or

(5) Terminate the contract. Adhering to the requirements governing each specific program administered by the Department, as needed, the Department may determine to proceed with the termination of a contract, in whole or in part, at any time the Department establishes there is good cause for termination. Such cause may include, but is not limited to, fraud, abuse, fiscal mismanagement, or other serious deficiencies in the subrecipient's performance. For CSBG contract termination procedures, please refer to §5.206 of this chapter (relating to Termination and Reduction of Funding).

(d) Contract Close-out. When the Department moves to terminate a contract, the following procedures will be implemented.

(1) The Department will issue a termination letter to the subrecipient no less than thirty (30) days prior to terminating the contract. The Department may determine to take one of the following actions: suspend funds immediately; establish a cost reimbursement plan for closeout proceedings; or provide instructions to the subrecipient to prepare a proposed budget and written plan of action that supports the closeout of the contract. The plan must identify the name and current job titles of staff that will perform the close-out and an estimated dollar amount to be incurred. The Department will respond within ten (10) working days from receipt of the plan.

(2) If the Department determines that cost reimbursement is an appropriate method of providing funds to accomplish closeout, the subrecipient will submit backup documentation for all current expenditures associated with the closeout. The required documentation will include, but not be limited to, the chart of accounts, detailed general ledger, revenue and expenditure statements, time sheets, payment vouchers and/or receipts, and bank reconciliations.

(3) No later than thirty (30) days after the contract is terminated, the Subrecipient will take a physical inventory of client files, including case management files, and will submit to the Department an inventory of equipment with a unit acquisition cost of $5,000 or greater for Comprehensive Energy Assistance Program (CEAP), Weatherization Assistance Program (WAP) and CSBG or a unit acquisition cost of $500 or greater for ESGP.

(4) The terminated subrecipient will have thirty (30) days from the date of the physical inventory to copy all current client files. Client files must be boxed by county of origin. Current and active case management files also must be copied, inventoried, and boxed by county of origin.

(5) Within thirty (30) days following the subrecipient's due date for copying and boxing client files, Department staff will retrieve copied client files.

(6) The terminated subrecipient will prepare and submit no later than sixty (60) days from the date the contract is terminated, a final report (TDHCA Form 85) containing a full accounting of all funds expended under the contract.

(7) A final Monthly Financial Funding Programmatic Report for all remaining expenditures incurred during the close-out period must be received by the Department no later than sixty (60) days from the date the Department determines that the closeout of the program and the period of transition are complete.

(8) The subrecipient will submit to the Department no later than sixty (60) days after the termination of the contract, an inventory (TDHCA Form 27) of the non-expendable personal property (as defined in Attachment N of the Uniform Grant Management Standards) acquired in whole or in part with funds received under the contract.

(9) The Department will transfer title to equipment having a unit acquisition cost (the net invoice unit price of an item of equipment) of:

(A) $5,000 or greater for CEAP, WAP, and CSBG; or

(B) $500 or greater for ESGP to the Department or to any other entity receiving funds under the program in question. The Department will make arrangements to remove equipment covered by this paragraph within ninety (90) days following termination of the contract.

(10) Upon selection of a new service provider, the Department will transfer to the new provider client files and, as appropriate, equipment.

(11) As required by OMB Circular A-133, a current year Single Audit must be performed for all agencies that have exceeded the federal expenditure threshold of $500,000. The Department will allow a proportionate share of program funds to pay for accrued audit costs, when an audit is required, for a Single Audit that covers the date up to the closeout of the contract. The terminated subrecipient must have a binding contract with a CPA firm on or before the termination date of the contract. The actual costs of the Single Audit and accrued audit costs including support documentation must be submitted to the Department no later than sixty (60) days from the date the Department determines the close-out is complete.

(12) Subrecipients shall submit within sixty (60) days after the date of the close-out process all financial, performance, and other applicable reports to the Department. The Department may approve extensions when requested by the subrecipient. However, unless the Department authorizes an extension, the subrecipient must abide by the sixty (60) day contractual requirement of submitting all referenced reports and documentation to the Department.

§5.20.Determining Income Eligibility.

(a) The U.S. Department of Health and Human Services (USDHHS) annually provides poverty income guidelines for use in determining client eligibility. Community Affairs Division programs are required to follow these guidelines.

(b) The subrecipients shall establish the client eligibility level at 125% of the federal poverty level in effect at the time the client makes an application for services.

(c) To determine income eligibility for program services, subrecipients must base annualized eligibility determinations on household income from thirty (30) days prior to the date of application for assistance. Each subrecipient must maintain documentation of income from all sources for all household members for the entire thirty (30) day period prior to the date of application and multiply the monthly amount by twelve (12) to annualize income. Income documentation must be collected from all income sources for all household members eighteen (18) years and older for the entire thirty (30) day period.

(d) If proof of income is unavailable, the applicant must complete and sign a Department approved Declaration of Income Statement.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on February 20, 2009.

TRD-200900757

Michael Gerber

Executive Director

Texas Department of Housing and Community Affairs

Effective date: March 12, 2009

Proposal publication date: September 19, 2008

For further information, please call: (512) 475-3916

SUBCHAPTER B. COMMUNITY SERVICES BLOCK GRANT (CSBG)

10 TAC §§5.201 - 5.217

The Texas Department of Housing and Community Affairs (the Department) adopts new 10 TAC Chapter 5, Subchapter B, §§5.201 - 5.217 concerning the Community Services Block Grant (CSBG). Sections 5.201, 5.203, 5.206, 5.207, 5.209, 5.211, 5.213 - 5.215 and 5.217 are adopted with changes to the proposed text as published in the September 19, 2008, issue of the Texas Register (33 TexReg 7829). Sections 5.202, 5.204, 5.205, 5.208, 5.210, 5.212 and 5.216 are adopted without changes and will not be republished.

The purpose of the new chapter is to consolidate, clarify and simplify the rules formerly contained in Chapters 5, 6 and 8.

Public comments on the proposed rule were received by: (1) Texas Association of Community Action Agencies, Inc. and (4) Community Services, Inc.

§5.201(a). Background.

COMMENT (1): Commenter suggested additional language to ensure consistency with and avoid violation of the CSBG Act.

DEPARTMENT RESPONSE: Staff concurred with the commenter and made minor revisions to subsection (a) as well as §5.17(c)(4) of this chapter in order to provide further clarification.

§5.203(a). Distribution of CSBG Funds.

COMMENT (1): Commenter made recommendation to remove the date of the U.S. Census to prevent from having to change the TAC each time a new Census is released.

DEPARTMENT RESPONSE: Staff concurred and removed the date of the U.S. Census to prevent from having to change the TAC each time a new Census is released.

§5.206(a)(6)(B) and (a)(6)(C). Termination and Reduction of Funding.

COMMENT (1): Commenter recommended adding clarification in accordance with federal law to these sections.

DEPARTMENT RESPONSE: Subsection (a)(6)(B). For clarification in accordance with federal law, the Department added: "The ALJ will issue a proposal for decision based on the facts and a recommendation will be presented to the Department's Governing Board for final review."

Subsection (a)(6)(C). Staff concurred and added further clarification in accordance with federal law regarding termination or reduction of funding.

§5.207(b)(1). Subrecipient Performance.

ADMINISTRATIVE CHANGE: Staff added clarifying language to the third sentence. The word "funds" was added between the words "and" and "must."

§5.207(b) and (b)(2). Subrecipient Performance.

COMMENT (1): Commenter suggested the deobligation of funds was inconsistent with the right of the agency to carry over funds into the next year and the due process accorded for reduction or termination of funds. Commenter recommended that all recaptured funds should be distributed to all eligible entities by using the approved formula; it was changed to: "Unexpended Funds. The Department reserves the right to deobligate funds." In addition, commenter suggested correcting the federal agency name.

DEPARTMENT RESPONSE: Subsection (b). Staff does not concur with this comment. The CSBG Act does not require the unexpended balances to be reallocated by formula. Staff removed 20% from the unexpended funds.

Subsection (b)(2). Staff corrected the federal agency name of U.S. Department of and Human Services by adding "Department of."

§5.211(a). Subrecipient Reporting Requirements.

ADMINISTRATIVE CHANGE: Staff corrected names and acronyms of the reports mentioned in this section.

§5.213(a). Board Structure.

COMMENT (1) and (4):

Subsection (a). Comment received regarding removing the word "only" from the first sentence because it was unnecessary. Commenter also requested clarification to reflect process.

DEPARTMENT RESPONSE: Staff concurred and the word "only" was removed from the first sentence after "Private nonprofit entities,...." Staff added additional words to the second sentence for clarification to reflect actual process which is consistent with subsection (a)(2) of this section. A portion of the second sentence was revised for clarification purposes as follows: "Some of the members of the board shall be selected by the private nonprofit entity and others through a democratic process;..."

§5.213(d)(2)(A). Board Structure.

COMMENT (4): Commenter suggested that in the second sentence of this section there was a typo: the word "are" between "...members shall be" and "representatives of..."

DEPARTMENT RESPONSE: Staff concurred and made the correction.

§5.215(a). Board Size.

COMMENT (1): Commenter suggested that the board size does not have to be divisible by three.

DEPARTMENT RESPONSE: Staff concurred and removed subsection (a) "divisible by three" from the board size requirement; subsection (b) was changed to subsection (a); and subsection (c) was changed to subsection (b). In accordance with §676B, Tripartite Boards of the CSBG Act, the board does not need to be divisible by three. Rather, the board shall be comprised of three sectors.

§5.217(a). Board Meeting Requirements.

COMMENT (1): Commenter suggested that the Board must follow the Texas Open Meetings Act, meeting at least every ten (10) weeks, once per calendar quarter and at minimum five (5) times per year and, must give each member a notice of meeting five (5) days in advance of the meeting.

DEPARTMENT RESPONSE: Staff concurred with this comment and revised the language to include that the Board must meet at least once per calendar quarter and at a minimum of five (5) times per year.

The Board approved the final order adopting the new subchapter with recommended changes, on November 13, 2008.

§5.201.Background.

(a) In addition to the following rules for the Community Services Block Grant (CSBG) program, the rules established in Subchapter A of this chapter also apply to the CSBG program, except those that relate to the suspension, reduction, withholding or termination of funding. The CSBG Act was amended by the "Community Services Block Grant Amendments of 1994" and the Coats Human Services Reauthorization Act of 1998. The Secretary is authorized to establish a community services block grant program and make grants available through the program to states to ameliorate the causes of poverty in communities within the states.

(b) The Texas Legislature designated the Department as the lead agency for the administration of the CSBG program pursuant to Texas Government Code, §2306.092. CSBG funds will be made available to eligible entities to carry out the purposes of the CSBG program.

§5.203.Distribution of CSBG Funds.

(a) The CSBG Act requires that no less than 90% of the state's allocation be allocated to eligible entities. The Department currently utilizes a multi-factor fund distribution formula to equitably provide CSBG funds throughout the state's 254 counties to the CSBG eligible entities. The formula incorporates the most current decennial U.S. Census figures at 125% of poverty; a $50,000 base; a $150,000 floor (the minimum funding level); a 98% weighted factor for poverty population; and, a 2% weighted factor for the inverse ratio of population density.

(1) Each eligible entity receives a base amount of $50,000;

(2) The weighted factors of poverty population and population density are applied to the funds remaining after the base award funds have been distributed to each eligible entity;

(3) The Department then determines if any eligible entity is below the $150,000 floor after the base amount and weighted factors (poverty population and population density) have been applied, then the minimum floor amount is reserved for those entities below $150,000;

(4) The remaining funds are distributed to the remaining eligible entities. As was done with the initial run of the formula, each of the remaining eligible entities receives the base amount of $50,000 and then the weighted factors (poverty population and population density) are applied to determine the allocation amounts for eligible entities funded above the $150,000.

(b) Five percent (5%) of the Department's annual allocation of CSBG funds and any funds not spent as identified in subsection (c) of this section, may be expended for activities as per 42 U.S.C. §9907(b)(A) - (H) and activities that may include:

(1) the provision of training and technical assistance to CSBG eligible entities;

(2) services to low-income migrant seasonal farm worker and Native American populations;

(3) assisting CSBG eligible entities in responding to natural or man-made disasters;

(4) funding for innovative and demonstration projects that assist CSBG target population groups to overcome at least one of the barriers to attaining self-sufficiency; and

(5) other projects/initiatives, including state conference expenses. The Department may provide monetary awards to subrecipients for outstanding performance. To ensure consistent and comparable results, the process for monetary awards to CSBG subrecipients will be standardized.

(c) Up to five percent (5%) of the Department's annual allocation of CSBG funds will be used for administrative purposes consistent with state and federal law.

§5.206.Termination and Reduction of Funding.

(a) If the Department determines, on the basis of a final decision in a review pursuant to the CSBG Act, that an eligible entity fails to comply with the terms of an agreement or the state plan, to provide services under the CSBG Act or to meet appropriate standards, goals, and other requirements established by the Department (including performance objectives), the Department shall:

(1) inform the entity of the deficiency to be corrected;

(2) require the entity to correct the deficiency;

(3) offer training and technical assistance, if appropriate, to help correct the deficiency, and, as appropriate, prepare and submit to the Secretary a report describing the training and technical assistance offered; or if the Department determines that such training and technical assistance are not appropriate, prepare and submit to the Secretary a report stating the reasons for the determination and the reasons for proceeding with termination proceedings;

(4) At the discretion of the Department (taking into account the seriousness of the deficiency and the time reasonably required to correct the deficiency), the Department shall allow the entity to develop and implement, within sixty (60) days after being informed of the deficiency, a Quality Improvement Plan (QIP) to correct such deficiency within a reasonable period of time, as determined by the Department. No later than thirty (30) days after receiving from an eligible entity a proposed QIP, the Department shall either approve such proposed plan or specify the reasons why the proposed plan cannot be approved;

(5) If the Department does not accept the QIP, the Department, after providing adequate notice of impending termination proceedings and an opportunity for a hearing, may initiate proceedings to terminate or reduce the funding of a subrecipient; and

(6) If the Department has implemented sanctions against a subrecipient and the subrecipient has failed to comply with the QIP or a corrective action plan, the Department may request of the subrecipient's Board of Directors the voluntary relinquishment of the CSBG program and their designation as a CSBG eligible entity. If the subrecipient accepts to voluntarily relinquish the CSBG program, the Department will commence contract termination proceedings. If the subrecipient rejects voluntarily relinquishment of the CSBG program or the Department does not accept the subrecipient's QIP, the Department will initiate procedures for a hearing.

(A) Pursuant to the CSBG Act, the Department will provide notice and an opportunity for a hearing.

(B) The Department will select an Administrative Law Judge (ALJ) to oversee the proceedings of the hearing. The Department will coordinate establishing a date, time and hearing location with the ALJ and will provide adequate notice to the subrecipient. The ALJ will determine whether there is cause, as defined by the CSBG Act, U.S.C. §9908(c), to terminate or reduce funding the subrecipient. The ALJ will issue a proposal for decision on the facts and a recommendation will be presented to the Department's Governing Board for final review.

(C) If the ALJ determines that there is cause to terminate or reduce funding, pursuant to 42 U.S.C. §9915, the Department will notify the subrecipient that it has the right under 42 U.S.C. §9915 to seek review of the decision by the USDHHS. If the USDHHS does not overturn the decision, or if the subrecipient does not seek USDHHS review, the Department will initiate proceedings to terminate and close-out the contract.

(b) Any right or remedy given to the Department by this chapter does not preclude the existence of any other right or remedy, nor shall any action or lack of action by the Department in the exercise of any right or remedy be deemed a waiver of any other right or remedy.

§5.207.Subrecipient Performance.

(a) Budgets. CSBG eligible entities and any other funded organizations shall submit a budget to facilitate the contract execution process. A certification of board approval of CSBG budget form issued by the Department must also be submitted with planned budgets.

(b) Unexpended Funds. The Department reserves the right to deobligate funds.

(1) The U.S. Department of Health and Human Services Administration for Children and Families issues terms and conditions for receipt of funds under the CSBG. Subrecipients of CSBG funds will comply with the requirements of the terms and conditions of the CSBG award. Services must be provided on or before September 30th of the subsequent year and funds must be fully expended.

(2) The Coats Human Services Reauthorization Act of 1998, allows states to recapture unexpended CSBG funds in excess of 20% of the CSBG funds obligated to an eligible entity. This may be superseded by Congressional action in the appropriation process or by the terms and conditions issued by U.S. Department of Health and Human Services in the CSBG award letter.

§5.209.State Application and Plan.

(a) The Department submits to the Secretary every two years a state plan and a CSBG application. The Department holds public hearings in different areas of the state to solicit public comment on the intended use of CSBG funds. The Department will provide notice of the public hearings regarding the state plan no later than the 15th day before the date of the hearing and publish the draft state plan on the Department's web site at least ten (10) days before the first public hearing.

(b) Every two (2) years in conjunction with the development of the state plan, the Department submits the CSBG budget to the Texas State Legislature for review during the legislative hearings, as part of the Legislative Appropriations Request (LAR) process.

§5.211.Subrecipient Reporting Requirements.

(a) Monthly Performance and Expenditure Report. CSBG subrecipients must submit a monthly performance and expenditure report. Subrecipients shall submit the Monthly Expenditure Report and Monthly Performance Report no later than the twentieth (20th) day of the month after each month of the contract period. Even if a fund reimbursement is not being requested, an Expenditure Report must be submitted electronically on or before the twentieth (20th) day of each month of the grant period. A final Expenditure Report must be submitted within sixty (60) days after the CSBG contract ends. The "Community Affairs Contract User Guide System" may be accessed through the TDHCA website, www.tdhca.state.tx.us.

(b) Reporting. Federal requirements mandate all states to participate in the preparation of an annual performance measurement report (also referred to as the CSBG National Survey). To comply with the requirements of §678E of the CSBG Act, all CSBG eligible entities and other organizations receiving CSBG funds are required to participate.

§5.213.Board Structure.

(a) Private nonprofit entities, shall administer the CSBG program through a tripartite board that fully participates in the development, planning, implementation, and evaluation of the program to serve low-income communities. Some of the members of the board shall be selected by the private nonprofit entity and others through a democratic process; the board shall be composed so as to assure that the requirements of §676B(a)(2) of the CSBG Act are followed and are composed as follows:

(1) One-third of the members of the board shall be elected public officials, holding office on the date of the selection, or their representatives. In the event that there are not enough elected public officials reasonably available and willing to serve on the board, the entity may select appointive public officials to serve on the board. The entity may allow governing officials of the political jurisdiction to select and/or recommend an elected or appointive official to serve on the board. The public officials selected to serve on the board may each choose one permanent representative or designate an alternate to serve on the board. Appointive public officials or their representatives or alternates may be counted in meeting the 1/3 requirement. Refer to subsection (d)(1)(B) of this section entitled "Permanent Representatives and Alternates" for related information;

(2) not fewer than 1/3 of the members are persons chosen in accordance with democratic selection procedures adequate to assure that these members are representative of low-income individuals and families in the neighborhood served; and each representative of low-income individuals and families selected to represent a specific neighborhood within a community under subsection (b)(1)(B) of this section, resides in the neighborhood represented by the member;

(3) the remainder are members of business, industry, labor, religious, law enforcement, education, or other major groups and interests in the community served.

(b) For public organizations to be considered to be an eligible entity for purposes of the CSBG Act, §676B(b), the entity shall administer the CSBG grant through tripartite boards as follows:

(1) A tripartite board, which shall have members selected by the organization and shall be composed so as to assure that not fewer than 1/3 of the members are persons chosen in accordance with democratic selection procedures adequate to assure that these members:

(A) are representative of low-income individuals and families in the neighborhood served;

(B) reside in the neighborhood served; and

(C) are able to participate actively in the development, planning, implementation, and evaluation of programs funded under this chapter; or

(D) If conditions in subparagraphs (A) - (C) of this paragraph are not utilized, then another mechanism specified by the state which meets the tripartite requirements may be used. Public organizations that choose to utilize another mechanism must submit to the Department, for review and approval, a description of the mechanism to be utilized to select low-income representatives. The mechanism must assure decision-making and participation by low-income individuals in the development, planning, implementation, and evaluation of programs funded under this chapter.

(2) One-third of the members of the board shall be elected public officials, holding office on the date of the selection, or their representatives. In the event that there are not enough elected public officials reasonably available and willing to serve on the board, the entity may select appointive public officials to serve on the board. The entity may allow governing officials of the political jurisdiction to select and/or recommend an elected or appointive official to serve on the board. The public officials selected to serve on the board may each choose one permanent representative or designate an alternate to serve on the board. Refer to subsection (d)(1)(B) of this section, entitled "Permanent Representatives and Alternates" for related information.

(3) The remainder of the members are officials or members of business, industry, labor, religious, law enforcement, education, or other major groups and interests in the community served.

(c) Eligible entities administering the Head Start Program must comply with, the Head Start Act (42 U.S.C. §9837) that requires the governing body membership to comply with the requirements of §642(c)(1) of the Head Start Act. Exceptions shall be made to the requirements of clauses (i) - (iv) of §642(c)(1) of the Head Start Act for members of a governing body when those members oversee a public entity and are selected to their positions with the public entity by public election or political appointment.

(d) Selection. As per §676B of the CSBG Act, Private nonprofit entities and public organizations have the responsibility for selection and composition of the board.

(1) Public Officials:

(A) Elected public officials or appointed public officials, selected to serve on the board, shall have either general governmental responsibilities or responsibilities which require them to deal with poverty-related issues. They may not be officials with only limited, specialized, or administrative responsibilities; and

(B) Permanent Representatives and Alternates. The public officials selected to serve on the board may each choose one permanent representative or designate an alternate to serve on the board.

(i) Permanent Representatives. The public officials selected by a private nonprofit entity or public organization to serve on the board may each choose one permanent representative to serve on the board in a full-time capacity. The public officials of the public organization may choose a representative to serve on the board or other governmental body. The representative need not be a public official but shall have full authority to act for the public official at meetings of the board. Permanent representatives may hold an officer position on the board. If a permanent representative is not chosen, then an alternate may be designated by the public official selected to serve on the board. Alternates may not hold an officer position on the board.

(ii) Alternate Representatives. If the private nonprofit entity or public organization board chooses to allow alternates, the alternates for low-income representatives shall be elected at the same time and in the same manner as the board representative is elected to serve on the board. Alternates for representatives of private sector organizations may be designated to serve on the board and should be selected at the same time the board representative is selected. In the event that the board member or alternate ceases to be a member of the organization represented, he/she shall no longer be eligible to serve on the board. Alternates may not hold an officer position on the board.

(2) Low-Income Representatives:

(A) An essential objective of community action is participation by low-income individuals in the programs which affect their lives; therefore, the CSBG Act and its amendments require representation of low-income individuals on boards or state-specified governing bodies. The CSBG statute requires that not fewer than one-third of the members shall be representatives of low-income individuals and families and that they shall be chosen in accordance with democratic selection procedures adequate to assure that these members are representative of low-income individuals and families in the neighborhoods served; and that each representative of low-income individuals and families selected to represent a specific neighborhood within a community resides in the neighborhood represented by the member; or

(B) Board members representing low-income individuals and families must be selected in accordance with a democratic procedure. This procedure, as detailed in subparagraph (D) of this paragraph, may be either directly through election, public forum, or, if not possible, through a similar democratic process such as election to a position of responsibility in another significant service or community organization such as a school PTA, a faith-based organization leadership group; or an advisory board/governing council to another low-income service provider;

(C) Every effort should be made by the nonprofit entity or public organization to assure that low-income representatives are truly representative of current residents of the geographic area to be served, including racial and ethnic composition, as determined by periodic selection or reselection by the community. "Current" should be defined by the recent or annual demographic changes as documented in the needs/community assessment. This does not preclude extended service of low-income community representatives on boards, but it does suggest that continued board participation of longer term members be revalidated and kept current through some form of democratic process; and

(D) The procedure used to select the low-income representative must be documented to demonstrate that a democratic selection process was used. Among the selection processes that may be utilized, either alone or in combination, are:

(i) Selection and elections, either within neighborhoods or within the community as a whole; at a meeting or conference, to which all neighborhood residents, and especially those who are poor, are openly invited;

(ii) Selection of representatives to a community-wide board by members of neighborhood or sub-area boards who are themselves selected by neighborhood or area residents;

(iii) Selection, on a small area basis (such as a city block); or

(iv) Selection of representatives by existing organizations whose membership is predominately composed of poor persons.

(3) Representatives of Private Groups and Interests:

(A) The private nonprofit entity or public organization shall select the remainder of persons to represent the private sector on the board or it may select private sector organizations from which representatives of the private sector organization would be chosen to serve on the board; and

(B) The individuals and/or organizations representing the private sector shall be selected in such a manner as to assure that the board will benefit from broad community involvement. The board composition for the private sector shall draw from officials or members of business, industry, labor, religious, law enforcement, education, school districts, representatives of education districts and other major groups and interests in the community served.

§5.214.Board Administrative Requirements.

(a) Powers of the Board for Private Nonprofit Entities. The board is responsible for abiding by the terms of contracts and shall determine the policies of the agency to assure accountability for public funding. The board shall function as the organization's governing body with the same legal powers and responsibilities as the board of directors of any nonprofit corporation.

(b) Powers of the Board for Public Organizations. The powers, duties, and responsibilities of the board shall be determined by the governing officials of the public organization. The governing officials may establish:

(1) an advisory board, in which case the authority given to the advisory board depends on the powers delegated to it by the governing officials of the political subdivision; or

(2) a governing board, empowering the board of directors with substantive decision-making authority and delegating the powers, duties, and responsibilities to carry out its CSBG-supported contract and functions.

(c) Compensation. Board members are not entitled to compensation for their service on the board. Reimbursement of reasonable and necessary expenses incurred by a board member in carrying out his/her duties is allowed.

(d) Conflict of Interest. No board member may participate in the selection, award, or administration of a subcontract supported by CSBG funds if:

(1) the board member;

(2) any member of his/her immediate family (as defined in the CSBG contract);

(3) the board member's partner; or

(4) any organization which employs or is about to employ any of the above, has a financial interest in the firm or person selected to perform a subcontract. No employee of the local CSBG subrecipient or of the Texas Department of Housing and Community Affairs may serve on the board.

§5.215.Board Size.

(a) Board Service Limitations for Private Nonprofit Entities and Public Organizations Subrecipients boards may establish bylaws which allow for term limits and/or procedures for the removal of board members.

(b) Vacancies/Removal of Board Members.

(1) Vacancies. In no event shall the board allow 25% or more of either the public, private, or poverty sector board positions to remain vacant for more than ninety (90) days. CSBG subrecipients shall report the number of board vacancies by sector in their monthly performance reports. Compliance with the CSBG Act requirements for board membership is a condition for eligible entities to receive CSBG funding. There is no provision in the Act for a waiver or exception to these requirements.

(2) Removal of Board Members/Private Nonprofit Entities. Public officials or their representatives, may be removed from the board either by the board or by the entity that appointed them to serve on the board. Other members of the board may be removed by the board or pursuant to any procedure provided in the private nonprofit's by-laws.

(3) Removal of Board Members/Public Organizations. Board members may be removed from the board by the public organization or by the board if the board is so empowered by the public organization. The board may petition the public organization to remove a board member or the public organization may delegate the power of removal to the board.

§5.217.Board Meeting Requirements.

(a) The Board must follow the Texas Open Meetings Act, meet at least once per calendar quarter and at a minimum five (5) times per year and, must give each member a notice of meeting five (5) days in advance of the meeting.

(b) Open Meetings Training.

(1) Effective January 1, 2006, the 79th Texas Legislature established a state law §551.005 of the Texas Government Code requiring elected and appointed officials to receive training in Texas Open Government laws. The state law is in accordance to Texas Government Code, Title 5, §551.005 and §552.012. This mandate applies to the board of directors for CSBG eligible entities and requires that training is received within ninety (90) days of becoming a board member. As part of this requirement, the Office of the Attorney General has established and made available formal training to ensure government officials have a good command of open records and open meeting laws. To fulfill this requirement, the Office of the Attorney General offers free training videos which may be requested by accessing their website at www.oag.state.tx.us/opinopen/og_training.shtml or by calling 1-800-252-8011.

(2) Legislation requires open meetings training for public sector local officials; however, the Department recommends this training for all board members. Boards shall ensure that all members serving on the Board of Directors shall receive this training according to the deadlines described in this subsection.

(3) The organization shall maintain a copy of the board training certificate issued to participants upon completion of the training.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on February 20, 2009.

TRD-200900758

Michael Gerber

Executive Director

Texas Department of Housing and Community Affairs

Effective date: March 12, 2009

Proposal publication date: September 19, 2008

For further information, please call: (512) 475-3916

SUBCHAPTER C. EMERGENCY SHELTER GRANTS PROGRAM (ESGP)

10 TAC §§5.301 - 5.311

The Texas Department of Housing and Community Affairs (the Department) adopts new 10 TAC Chapter 5, Subchapter C, §§5.301 - 5.311 concerning the Emergency Shelter Grants Program (ESGP). Sections 5.302, 5.304, 5.306, and 5.311 are adopted with changes to the proposed text as published in the September 19, 2008, issue of the Texas Register (33 TexReg 7834). Sections 5.301, 5.303, 5.305, 5.307 - 5.310 are adopted without changes and will not be republished.

The purpose of the new chapter is to consolidate, clarify and simplify the rules formerly contained in Chapters 5, 6 and 8.

No public comments were received concerning the proposed new subchapter.

ADMINISTRATIVE CHANGES:

Section 5.302(a)(3). Purpose and Goals. Staff made a correction by changing the word "homeless" to "homelessness."

Section 5.304(c)(1)(A)(i) - (vi) is re-lettered to (c)(1)(A) - (G) and in subsection (d)(2)(C) changing the reference from "title" to "chapter."

Section 5.306(a). Eligible Entities. Staff added language to clarify eligible applicants for this specific program by inserting "(excluding Councils of Government)" between the words "government" and "and."

Section 5.311(a) and (b) Reports. Staff made clarification changes to the names and acronyms of the reports mentioned in this section.

The Board approved the final order adopting the new subchapter with recommended changes, on November 13, 2008.

§5.302.Purpose and Goals.

(a) The ESGP funds are available for:

(1) the rehabilitation or conversion of buildings for use as emergency shelter for the homeless;

(2) the payment of certain operating expenses and essential services in connection with emergency shelters for the homeless; and

(3) homelessness prevention activities.

(b) The program goal is to be the first step in a continuum of assistance to enable homeless individuals and families to move toward independent living as well as to prevent homelessness.

(1) Help improve the quality of emergency shelters for the homeless;

(2) Help meet the costs of operating and maintaining emergency shelters;

(3) Provide essential services so that homeless individuals have access to the assistance they need to improve their situation; and

(4) Provide emergency intervention assistance to prevent homelessness.

§5.304.Use of Funds.

(a) Eligible Activities. ESGP funds are designed to address the immediate needs of homeless persons to assist their movement to permanent housing:

(1) ESGP funds may be utilized to assist individuals and families who would actually become or remain homeless without ESGP homelessness prevention assistance;

(2) ESGP funds cannot be utilized to care for or assist children in state custody; and

(3) The Department encourages that applications include an innovative approach to providing emergency shelter and/or transitional housing to homeless individuals and families. Transitional housing projects should be designed to provide housing and appropriate essential services to homeless persons in order to facilitate the movement of individuals or families to permanent housing within no more than 24 months. ESGP grant amounts may be used for one or more of the following activities in subsections (b) - (f) of this section:

(b) Operation administration may not exceed more than 10% of an applicant's ESGP budget (42 U.S.C. §11374(a)(3)) and may be requested for administrative salaries (including fringe benefits).

(1) Appropriate staff which may be charged as administrative staff are the executive director, program director, supervisors, administrative support staff, etc.

(2) Job descriptions for these positions are not required to be included in the ESGP application.

(c) Essential Services. ESGP legislation limits essential services to 30% of the total state allocation (24 CFR §576.3 and 42 U.S.C. §11374(a)(2)(b)).

(1) Essential services activities address the immediate needs of homeless individuals and enable homeless persons to become more independent and/or to secure permanent housing. Essential services may include direct client services concerned with employment, health, drug abuse prevention, and education, including but not limited to:

(A) assistance in obtaining permanent housing; medical and psychological counseling and supervision; employment counseling, job placement, and job training (including tuition and books);

(B) nutritional counseling and the salary of food preparers (cooks);

(D) assistance in obtaining other federal, state, and local assistance including mental health benefits, medical assistance, veteran's benefits, and income support assistance such as Supplemental Security Income, Temporary Assistance for Needy Families, and Food Stamps;

(E) other services such as childcare, food vouchers, client clothing, or medical assistance (doctor visits, prescriptions, eye glasses or other prostheses, etc.);

(F) transportation costs directly associated with ESGP service delivery, such as bus tokens, bus fare, cab fare, airfare, salary of van driver, etc.; and

(G) salary for staff whose sole duty is to work directly with clients to provide the above services.

(2) Staff salaries may include wages and fringe benefits; however, no administrative or supervisory salaries may be paid with essential services funds.

(3) ESGP funds may be used to provide essential services, if the agency received local funds (locally generated tax revenue) from a unit of local government in the past 12 months, only if the ESGP application includes a request for funds to provide essential services for a new service (24 CFR §576.21(b)).

(d) Maintenance, operation, and furnishings. ESGP funds may be used for maintenance, operation, furnishings, and equipment costs (24 CFR §576.21(3)).

(1) Maintenance costs include contract services for copier or security system maintenance, pest control, lawn care, contracted janitorial service, etc.

(2) Operation costs include administration, equipment, facility rent, utilities, internet service, and telephone; building maintenance and non-deferred repairs; food for shelter residents; vehicle maintenance, registration, repairs, and fuel; building or equipment insurance; fidelity bond coverage; office and maintenance supplies; single audit expenses (if required), staff mileage reimbursement (for travel relating to ESGP service delivery), and pre-award travel expenses (for successful applicants to attend an orientation workshop).

(A) Non-deferred repairs are items that break during the contract period, such as:

(i) repairing a window that is broken;

(ii) repairs due to water damage;

(iii) repairing a broken furnace; or

(iv) repairing an air conditioning unit.

(B) Deferred repairs, classified as rehabilitation activities, are items which are inoperable or broken and in need of replacement prior to the application period.

(C) Equipment may include computers, printers, software, refrigerator, stove, tools, vehicles, etc. All equipment with a useful life of more than one year and an acquisition cost of $500 or more must be included in a cumulative inventory report submitted to the Department each contract year. (Refer to Subchapter A, General Provisions §5.8 of this chapter (relating to Inventory Report).

(D) Subrecipients who participate in a local continuum of care may use ESGP funds to facilitate the required Homeless Management Information System (HMIS) which may include the purchase of software and/or annual access fees to facilitate data collection and reporting of client-level information.

(3) Furnishings may include beds, mattresses, linens, desks, tables, chairs, etc.

(e) Homelessness Prevention. ESGP legislation limits homelessness prevention to 30% of the total state allocation (42 U.S.C. §11374(a)).

(1) Homelessness prevention funds may be used to provide direct monetary assistance on behalf of individuals whose annual income is at or below the federal poverty guideline when the conditions referenced in 24 CFR §576.3 are met.

(A) The individual or family is unable to make the required payments due to a sudden reduction in income or a sudden increase in expenses, i.e. sudden reduction in income may result from an event that occurs no more than ninety (90) days prior to the date of application for ESGP services. Documentation should support the risk of becoming homeless such as an eviction notice or termination of utility service notice;

(B) The assistance is necessary to avoid the foreclosure, eviction, or termination of utility services (excluding telephone service); utility and rent deposit refunds from vendors must be reimbursed to the subrecipient and not the client. Funds should be treated as program income;

(C) There is reasonable prospect that the individual or family will be able to resume the payments within a reasonable period of time (determined by the applicant organization and used consistently among all clients); and

(D) The assistance does not replace funding for pre-existing homelessness prevention activities from any other sources.

(2) Homelessness prevention funds must be used to assist those individuals and families that would actually become or remain homeless without ESGP homelessness prevention assistance (24 CFR §576.3) and include:

(A) Short-term subsidies to help defray rent and utility arrearages for families that have received a notice of eviction, termination of utility services, or payments to prevent the transfers;

(B) Security deposits or first month's rent to enable a homeless family (or individuals in emergency/transitional housing) to acquire permanent housing;

(D) Programs to provide legal services for the representation of indigent tenants in eviction proceedings;

(E) Payments to prevent foreclosure on a home; and

(F) Other innovative programs and activities designed to prevent the incidence of homelessness.

(3) Subrecipients are required to use the ESGP homelessness prevention application to determine the eligibility of individuals and families applying for ESGP homelessness prevention assistance. (Refer to the Department's website, www.tdhca.state.tx.us, for the homelessness prevention application.)

(f) Rehabilitation. Rehabilitation is defined as the labor, materials, tools, and other costs of improving buildings.

(1) Examples of allowable rehabilitation projects include, but are not limited to:

(A) accumulated deferred maintenance (replacing flooring);

(B) replacement of principle fixtures and components;

(D) structural changes necessary to make the facility accessible for persons with physical disabilities.

(2) Rehabilitation projects include deferred repairs for items that are inoperable or broken and in need of replacement prior to the submission of the ESGP application. Rehabilitation does not include non-deferred repairs.

(3) All rehabilitation activity funded through ESGP must occur within the existing structure, must not increase the square footage of the structure involved, and must comply with local government safety and sanitation requirements. (Refer to §504 of the Rehabilitation Act of 1973, as amended, as provided in 24 CFR §8.23(a) or (b)). Types of rehabilitation projects include conversion, major rehabilitation and renovation (24 CFR §576.3).

§5.306.Eligible Entities.

(a) Eligible applicants are units of general local government (excluding Councils of Government) and private nonprofit organizations (24 CFR §576.1 of the ESGP Act).

(b) The Department will accept collaborative applications. To be considered as a collaborative, the application must include two or more organizations that will use ESGP funds to provide services to the target population as part of a local continuum of care.

(c) If a unit of general local government applies for only one organization, this will not be considered a collaborative application.

§5.311.Reports.

(a) The ESGP contract requires subrecipients to submit the Monthly Expenditure Report and Monthly Performance Report no later than the twentieth (20th) day of the month after each month of the contract period.

(b) Even if a fund reimbursement is not being requested, an Expenditure Report must be submitted electronically on or before the twentieth (20th) day of each month of the grant period. A final Expenditure Report must be submitted within sixty (60) days after the ESGP contract ends.

(c) A user name and password are needed to access the reporting system to submit monthly reports. The "Community Affairs Contract User Guide System" may be accessed through the TDHCA website, www.tdhca.state.tx.us, under "Interactive" "Contractor Tools".

(d) Subrecipients shall submit, by the thirtieth (30th) day of the month, a Monthly Service Summary Report of ESGP clients reported during the prior month in the Homeless Management Information Systems (HMIS) database.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on February 20, 2009.

TRD-200900759

Michael Gerber

Executive Director

Texas Department of Housing and Community Affairs

Effective date: March 12, 2009

Proposal publication date: September 19, 2008

For further information, please call: (512) 475-3916

SUBCHAPTER D. COMPREHENSIVE ENERGY ASSISTANCE PROGRAM

10 TAC §§5.401 - 5.408, 5.421 - 5.426, 5.430 - 5.432

The Texas Department of Housing and Community Affairs (the Department) adopts new 10 TAC, Chapter 5, Subchapter D, §§5.401 - 5.408, 5.421 - 5.426, and 5.430 - 5.432, concerning Comprehensive Energy Assistance Program, as published in the September 19, 2008, issue of the Texas Register (33 TexReg 7838). Sections 5.402, 5.403, 5.405 - 5.407, and 5.422 - 5.426 are adopted with changes to the proposed text. Sections 5.401, 5.404, 5.408, 5.421 and 5.430 - 5.432 are adopted without changes and will not be republished.

The purpose of the new chapter is to consolidate, clarify and simplify the rules formerly contained in Chapters 5, 6 and 8.

Public hearings on the new chapter were held in El Paso, Lubbock, Brownsville, Houston, Fort Worth, and Austin. Additionally, written comments were accepted by mail, e-mail, and facsimile through October 20, 2008.

Public comments on the proposed rule were received by (1) Texas Association of Community Action Agencies, (2) Fort Worth Community Action Partners, (3) City of Lubbock, Community Development Department, (4) Community Services, Inc., and (69) Hidalgo County Community Services Agency.

§5.402. Purpose and Goals.

COMMENT (69). Commenter suggested that a definition of "young child" was needed.

DEPARTMENT RESPONSE: Staff amended for clarification purposes. Additional wording was added to the second sentence to describe young child as "age 5 and younger."

§5.403(b)(5)(C) and (D). Distribution of CEAP Funds.

ADMINISTRATIVE CHANGE: Subsection (c) was revised to subparagraph (C) and subsection (d) was revised to subparagraph (D).

§5.406(a) and (b). Subrecipient Reporting Requirements.

ADMINISTRATIVE CHANGE: Staff corrected the names of the reports mentioned in this section.

§5.422(d)(2)(D). General Assistance and Benefit Levels.

COMMENT (1) and (2): Comments received suggesting raising the Heating and Cooling System Replacement, Repair, and/or Retrofit Component maximum household benefit limit from $4,000 to $5,000.

DEPARTMENT RESPONSE: Staff concurred and increased the limit to $5,000.

§5.422(f). General Assistance and Benefit Levels.

ADMINISTRATIVE CHANGE: The total maximum possible annual household benefit was raised from $7,600 to $8,600 to account for the $1,000 increase made in subsection (d)(2)(D).

§5.422(h)(1). General Assistance and Benefit Levels.

COMMENT (1): Commenter suggested adding additional wording for clarification purposes.

DEPARTMENT RESPONSE: Staff concurred and added: "...such as electrical wiring, butane tanks and lines, etc...."

§5.423(a). Energy Crisis Component.

COMMENT (2): Commenter suggested adding to the causes of a bona fide energy crisis the following: ...shortages "or a terrorist attack have..."

DEPARTMENT RESPONSE: Staff concurred and added the additional language.

§5.423(a). Energy Crisis Component.

COMMENT (69): Commenter suggested definition of "young child" was needed.

DEPARTMENT RESPONSE: Staff concurred. Additional language was added to describe "very young child" as "age 5 and younger."

§5.423(d)(5). Energy Crisis Component.

COMMENT (2): Comment received regarding the difficulty of getting doctor statements during life threatening situations in a reasonable amount of time.

DEPARTMENT RESPONSE: Staff concurred and added language to clarify this section. An additional sentence was added as follows: "A doctor's statement or prior written approval from the Department is required."

§5.425(a). Elderly and Disabled Component.

COMMENT (3): The commenter stated that there should not be an age requirement for the household member living with a disability.

DEPARTMENT RESPONSE: Staff concurred with this comment and added the word "at" as follows: "Disabled households include at least one member living with a disability."

§5.426(a). Heating and Cooling Component.

COMMENT (69): Commenter suggested definition of "young child" was also needed for §5.402 and §5.423 to be consistent with this section.

DEPARTMENT RESPONSE: Staff concurred and made changes for clarification and consistency purposes.

§5.426(g). Heating and Cooling Component.

COMMENT (1) and (4): Comments received regarding increasing the cost for performing proper assessments of heating and cooling system components.

DEPARTMENT RESPONSE: Staff concurred and increased the limit to $5,000 to be consistent with the revision in §5.422(d)(2)(D).

The Board approved the final order adopting the new chapter with recommended changes, on November 13, 2008.

§5.402.Purpose and Goals.

The purpose of CEAP is to assist low-income households, particularly those with the lowest incomes, that pay a high proportion of household income for home energy, primarily in meeting their immediate home energy needs. The program encourages priority be given to those with the highest home energy needs, meaning low income households with a high energy burden and/or the presence of a "vulnerable" individual in the household, such as a young child age 5 and younger, disabled person, or frail older individual. CEAP services include: energy education, needs assessment, budget counseling (as it pertains to energy needs), utility payment assistance and heating and cooling system replacement, repair or retrofit.

§5.403.Distribution of CEAP Funds.

(a) The Department distributes funds to subrecipients by an allocation formula.

(b) The formula allocates funds based on the number of low-income households in a service area and takes into account the special needs of individual service areas. The need for energy assistance in an area is addressed through a weather factor (based on heating and cooling degree days). The extra expense in delivering services in sparsely populated areas is addressed by an inverse population density factor. The lack of additional services available in very poor counties is addressed by a county median income factor. Finally, the elderly are given priority by giving greater weight to this population. The five factors used in the formula are calculated as follows:

(1) County Non-elderly Poverty Household Factor (weight of 40%) is defined by the Department as the number of Non-elderly Poverty Households in the County divided by the number of Non-elderly Poverty Households in the State;

(2) County Elderly Poverty Household Factor (weight of 40%) is defined by the Department as the number of Elderly Poverty Households in the County divided by the number of Elderly Poverty Households in the State; and

(3) County Inverse Poverty Household Density Factor (weight of 5%) is defined by the Department as:

(A) The number of Square Miles of the County divided by the number of Poverty Households of the County (equals the Inverse Poverty Household Density of the County); and

(B) Inverse Poverty Household Density of the County divided by the Sum of Inverse Household Densities.

(4) County Median Income Variance Factor (weight of 5%) is defined by the Department as:

(A) State Median Income minus the County Median Income (equals County Variance); and

(B) County Variance divided by sum of the State County Variances.

(5) County Weather Factor (weight of 10%) is defined by the Department as:

(A) County Heating Degree Days plus the County Cooling Degree Days, multiplied by the Poverty Households, divided by the sum of County Heating & Cooling Degree Days of Counties (equals County Weather); and

(B) County Weather divided by the total sum of the State County Weather.

(D) Total sum of subsection (b)(1) - (5) of this section multiplied by total funds allocation equals the County's allocation of funds. The sum of the county allocations within each subrecipient service area equals the subrecipient's total allocation of funds.

§5.405.Subrecipient Requirements for Appeals Process for Applicants.

(a) Subrecipients shall provide a written denial of assistance notice to applicant within ten (10) days of the adverse determination. This notification shall include written instructions of the appeals process and specific reasons for the denial by component. The applicant wishing to appeal a decision must provide written notice to subrecipient within ten (10) days of receipt of the denial notice.

(b) The subrecipient who receives an appeal shall establish an appeals committee composed of at least three persons. Subrecipient shall maintain documentation of appeals in their client files.

(c) The subrecipient shall hold the appeal hearing within ten business days after the subrecipient received the appeal request from the applicant.

(d) The subrecipient shall record the hearing.

(e) The hearing shall allow time for a statement by subrecipient staff with knowledge of the case.

(f) The hearing shall allow the applicant at least equal time, if requested, to present relevant information contesting the decision.

(g) Subrecipient shall notify applicant of the decision in writing. The subrecipient shall mail the notification by close of business on the business day following the decision (1 day turn-around).

(h) If the applicant is not satisfied, they may further appeal the decision in writing to the Department within ten (10) days of notification of an adverse decision.

(i) If client appeals to the Department, the funds should remain encumbered until the Department completes its decision.

(j) The Department may review the recording of the hearing, the committee's decision, and any other relevant information necessary.

(k) The Department appeals committee shall decide the case and forward their recommendation to the Division Director for final concurrence.

(l) The Department will notify all parties in writing of its decision within thirty (30) days of receipt of the appeal.

§5.406.Subrecipient Reporting Requirements.

(a) The subrecipient shall electronically submit to the Department a Monthly Expenditure Report of all expenditure of funds, request for advance or reimbursement, and a Monthly Performance Report no later than fifteen (15) days after the end of each month.

(b) The subrecipient shall electronically submit to the Department no later than sixty (60) days after the end of the subrecipient contract term a final expenditure or reimbursement and programmatic report utilizing the Expenditure Report and the Performance Report.

(c) The subrecipient shall submit to the Department no later than sixty (60) days after the end of the contract term an inventory of all vehicles, tools, and equipment with a unit acquisition cost of $5,000 or more and a useful life of more than one year, if purchased in whole or in part with CEAP funds.

(d) The subrecipient shall submit other reports, data, and information on the performance of the CEAP program activities as required by the Department.

§5.407.Subrecipient Requirements for Establishing Priority for Eligible Households and Client Eligibility Criteria.

(a) The subrecipients shall set the client income eligibility level at or below 125% of the federal poverty level in effect at the time the client makes an application for services.

(b) Subrecipient shall determine client income. The Department will provide definition of income lists to determine total household income. The lists contain income inclusions and exclusions and are located in §5.19 of this chapter (relating to Client Income Guidelines).

(c) Subrecipients shall base annualized eligibility determinations on household income from the 30 day period prior to the date of application for assistance. Each subrecipient shall document and retain proof of income from all sources for all household members eighteen (18) years and older for the entire thirty (30) day period prior to the date of application and multiply by twelve (12) to annualize income.

(d) In the case of migrant, or seasonal workers, or similarly situated workers, a longer period than thirty (30) days may be used for annualizing income.

(e) If proof of income is unavailable, the applicant must complete and sign a Declaration of Income Statement (DIS). In order to use the DIS form, each subrecipient shall develop and implement a written policy and procedure on the use of the DIS form. In developing the policy and procedure, subrecipients shall give consideration to limiting the use of the DIS form to cases where there are serious extenuating circumstances that justify the use of the form. Such circumstances might include crisis situations such as applicants that are affected by natural disaster which prevents the applicant from obtaining income documentation, applicants that flee a home due to physical abuse, applicants who are unable to locate income documentation of a recently deceased spouse, or whose work is migratory, part-time, temporary, self-employed or seasonal in nature. To ensure limited use, the Department will review the written policy and its use during on-site monitoring visits.

(f) Social security numbers are not required for applicants for CEAP.

(g) Proof of citizenship is not required for CEAP.

(h) The subrecipients shall establish priority criteria to serve persons in households who are particularly vulnerable such as the elderly, persons with disabilities, families with young children, high residential energy users, and households with high energy burden. High residential energy users and households with high energy burden are defined as follows:

(1) Households with Energy Burden which exceeds the median energy burden of income-eligible households characterized by the Department as experiencing high energy burden. The Department calculates energy burden by dividing home energy costs by the household's gross income.

(2) Households with annual energy expenditures which exceed the median home expenditures for income-eligible households are characterized by the Department as high energy consumers.

(i) Homeowners and renters will be treated equitably under all programs funded in whole or in part from LIHEAP funds. For those renters who pay heating and/or cooling bills as part of their rent, the subrecipient shall make special efforts to determine the portion of the rent that constitutes the fuel heating and/or cooling payment. If "sub metering" is not available, the subrecipient shall exercise care when negotiating with the landlords so the cost of utilities quoted is in line with the consumption for similar residents of the community. If the subrecipient pays the landlord, then the landlord shall furnish evidence that he/she has paid the bill and the amount of assistance must be deducted from the rent, if the utility payment is not stated separately from the rent. An agreement stating the terms of the payment negotiations must be signed by the landlord.

(j) A household unit cannot be served, if the meter is utilized by another household.

§5.422.General Assistance and Benefit Levels.

(a) Subrecipients shall not discourage anyone from applying for CEAP assistance. Subrecipients shall provide all potential clients with opportunity to apply for LIHEAP programs.

(b) CEAP provides assistance to targeted beneficiaries being households with low incomes at or below 125% of the Federal Poverty Level, with priority given to the elderly, persons with disabilities, families with young children; households with the highest energy costs or needs in relation to income, and households with high energy consumption.

(c) CEAP includes activities, as defined in Assurances 1-16 in Title XXVI of the Omnibus Budget Reconciliation Act of 1981 (Public Law 97-35), as amended; such as education; and financial assistance to help very low- and extremely low-income consumers reduce their utility bills to an affordable level. CEAP services include utility payment assistance; heating and cooling system replacement, repair, and/or retrofit; energy education; and budget counseling.

(d) Sliding scale benefit for all CEAP components:

(1) Benefit determinations are based on the household's income, the household size, the energy cost and/or the need of the household, and the availability of funds.

(2) Energy assistance benefit determinations will use the following sliding scale (Except Heating and Cooling System Replacement, Repair and/or Retrofit Component):

(A) Households with Incomes of 0 to 50% of Federal Poverty Guidelines may receive an amount needed to address their energy payment shortfall not to exceed $1,200.

(B) Households with Incomes of 51% to 75% of Federal Poverty Guidelines may receive an amount needed to address their energy payment shortfall not to exceed $1,100.

(C) Households with Incomes of 76% to 125% of Federal Poverty Guidelines may receive an amount needed to address their energy payment shortfall not to exceed $1,000.

(D) The Heating and Cooling System Replacement, Repair, and/or Retrofit Component maximum household benefit limit is $5,000.

(e) Subrecipient shall not establish lower local limits of assistance for any component.

(f) Total maximum possible annual household benefit (all components combined) equals $8,600.

(g) Subrecipient shall determine client eligibility for utility payments and/or retrofit based on the agency's household priority rating system and household's income as a percent of poverty.

(h) Subrecipients shall provide only the following types of assistance with funds from CEAP:

(1) Payment to vendors and suppliers of fuel/utilities, goods, and other services, such as electrical wiring, butane tanks, and lines, etc. for past due or current bills related to the procurement of energy for heating and cooling needs of the residence, not to include security lights and other items unrelated to energy assistance;

(2) Payment to vendors--only one energy bill payment per month as required by component;

(3) Needs assessment and energy conservation tips, coordination of resources, and referrals to other programs;

(4) Energy assistance to low-income elderly and disabled individuals most vulnerable to high cost of energy for heating and cooling needs of the residence;

(5) Payment of water bills only when such costs include expenses from operating an evaporative water cooler unit or when the water bill is an inseparable part of a utility bill. As a part of the intake process, outreach, and coordination, the subrecipient shall confirm that a client owns an operational evaporative cooler and has used it to cool the dwelling within sixty (60) days prior to application. Payment of other utility charges such as wastewater and waste removal are allowable only if these charges are an inseparable part of a utility bill. Documentation from vendor is required. Whenever possible, subrecipient shall negotiate with the utility providers to pay only the "home energy"--heating and cooling--portion of the bill;

(6) Energy bills already paid by householders may not be reimbursed by the program;

(7) Payment of reconnection fees in line with the registered tariff filed with the Public Utility Commission and/or Texas Railroad Commission. Payment cannot exceed that stated tariff cost. Subrecipient shall negotiate to reduce the costs to cover the actual labor and material and to ensure that the utility does not assess a penalty for delinquency in payments;

(8) Payment of security deposits only when state law requires such a payment, or if the Public Utility Commission or Texas Railroad Commission has listed such a payment as an approved cost, and where required by law, tariff, regulation, or a deferred payment agreement includes such a payment. Subrecipients shall not pay such security deposits that the energy provider will eventually return to the client;

(9) While rates and repair charges may vary from vendor to vendor, Subrecipient shall negotiate for the lowest possible payment. Prior to making any payments to an energy vendor a Subrecipient shall have a signed vendor agreement on file from the energy vendor receiving direct LIHEAP payments from the Subrecipient;

(10) Subrecipient may make payments to landlords on behalf of eligible renters who pay their utility and/or fuel bills indirectly. Subrecipient shall notify each participating household of the amount of assistance paid on its behalf. Subrecipient shall document this notification. Subrecipient shall maintain proof of utility or fuel bill payment. Subrecipient shall ensure that amount of assistance paid on behalf of client is deducted from client's rent; and

(11) In lieu of deposit required by an energy vendor, Subrecipient may make advance payments. The Department does not allow LIHEAP expenditures to pay deposits, except as noted in paragraph (7) of this subsection. Advance payments may not exceed an estimated two months' billings. Funds for the Texas CEAP shall not be used to weatherize dwelling units, for medicine, food, transportation assistance (i.e., vehicle fuel), income assistance, or to pay for penalties or fines assessed to clients.

§5.423.Energy Crisis Component.

(a) A bona fide energy crisis exists when extraordinary events or situations resulting from extreme weather conditions and/or fuel supply shortages or a terrorist attack have depleted or will deplete household financial resources and/or have created problems in meeting basic household expenses, particularly bills for energy so as to constitute a threat to the well-being of the household, particularly the elderly, the disabled, or children age 5 and younger.

(b) A utility disconnection notice may constitute an energy crisis, if client demonstrates a history of good faith in paying prior utility bills.

(c) Energy Crisis assistance for one household cannot exceed the maximum allowable benefit level in one year. Crisis assistance payments cannot exceed the minimum amount needed to resolve the crisis. If the client's crisis requires more than the household limit to resolve, it exceeds the scope of this program. If crisis exceeds the household limit, subrecipient may pay up to the household limit but the rest of the bill will have to be paid from other funds to resolve the crisis. Payments may not exceed client's actual utility bill. The assistance must result in resolution of the crisis.

(d) Where necessary to prevent undue hardships from a qualified energy crisis, subrecipients may directly issue vouchers to provide:

(1) Temporary shelter not to exceed the annual household expenditure limit for the duration of the contract period in the limited instances that inoperable heating/cooling appliances or supply of power to the dwelling is disrupted--causing temporary evacuation;

(2) Emergency deliveries of fuel up to 100 gallons per crisis per household, at the prevailing price. This benefit may include coverage for safety precautions--up to the maximum household benefit;

(3) Purchase of portable heating/cooling units (portable electric heaters are allowable only as a last resort) not to exceed household benefit limit during the contract period. Portable air conditioning and heating units may be purchased only in situations that threaten the life of the client;

(4) Subrecipient shall meet local energy crisis criteria prior to purchasing portable units for clients;

(5) Subrecipient shall maintain in the client file documentation of any special situation affecting client eligibility. For a client to qualify to receive a portable air conditioner or heater to protect life of household occupants, the subrecipient's client file must contain documentation from a medical professional, stating that a health condition of household occupant requires such climate control. A doctor's statement or prior written approval from the Department is required.

(6) Portable heating/cooling units must meet Energy Star® or International Residential Code (IRC) compliant.

(e) Crisis funds, whether for emergency fuel deliveries, purchase of portable heating/cooling units, or temporary shelter, shall be considered part of the total maximum household allowable assistance.

(f) When natural disasters result in energy supply shortages or other energy-related emergencies, LIHEAP will allow home energy related expenditures for the following:

(1) Costs to temporarily shelter or house individuals in hotels, apartments or other living situations in which homes have been destroyed or damaged, i.e., placing people in settings to preserve health and safety and to move them away from the crisis situation;

(2) Costs for transportation (such as cars, shuttles, buses) to move individuals away from the crisis area to shelters, when health and safety is endangered by loss of access to heating or cooling;

(3) Utility reconnection costs;

(4) Repair or replacement costs for furnaces and air conditioners;

(5) Insulation repair;

(6) Coats and blankets, as tangible benefits to keep individuals warm;

(7) Crisis payments for utilities and utility deposits; and

(8) Purchase of fans, air conditioners and generators.

(g) Time Limits for Assistance--Subrecipients ensure that for clients who have already lost service or are in immediate danger of losing service, some form of assistance to resolve the energy crisis shall be provided within a 48 hour time limit (18 hours in life-threatening situations). The time limit commences upon completion of the application process. The application process is considered to be complete when an agency representative accepts an application and completes the eligibility process.

(h) Subrecipients maintain written documentation in client files showing crises resolved within appropriate timeframes. The Department disallows improperly documented expenditures.

§5.424.Co-Payment Component.

(a) Subrecipients use home energy payments, energy conservation tips, participation by utilities, and coordination with other services to assist low-income households to reduce their home energy needs.

(b) Subrecipients make payments directly to vendors on behalf of participating households. Participating households make co-payments while participating in the program.

(d) First payment of co-payment plan may include 100% of a utility bill--including arrears--or an appropriate percentage determined by the subrecipient as detailed in the Service Delivery Plan.

(e) A household's participation in the program may last from three (3) to twelve (12) months. Early termination may result if client fails to meet the provisions of the client service agreement.

(f) If a co-payment client's assistance period extends beyond the end of a program year, that client must re-apply for eligibility certification to continue receiving assistance.

(g) Subrecipient shall provide energy conservation education and referrals.

§5.425.Elderly and Disabled Component.

(a) Elderly households include at least one member age sixty (60) or above. Disabled households include at least one member living with a disability. Documentation of disability, (i.e. Social Security, Supplemental Security Income statement, doctor's letter) kept in client file will validate eligibility.

(b) Subrecipients make utility payments on behalf of elderly and disabled persons based on the previous twelve (12) month's home energy consumption history, including allowances for cost inflation. In the absence of an available home energy consumption history, subrecipient may base payments on current program year's bill. Subrecipients note such exceptions in client files. Benefit amounts exceeding the actual bill shall be treated as a credit with the utility company for the client.

(c) Elderly and/or disabled clients may receive benefits to cover up to 100% of the four highest remaining bills within the contract year as long as the cost does not exceed the maximum annual benefit.

(d) The Department requires Subrecipients to expend a minimum of 10% of their Direct Service funds in the Elderly/Disabled Component.

§5.426.Heating and Cooling Component.

(a) The priority factors other than income eligibility for heating/cooling assistance include the degree of energy burden and household needs. Equipment replacement or repair under this component must reduce energy consumption and energy burden. "Household energy need" takes into account the unique situation of such household that results from having members of vulnerable populations, including children age 5 and younger, disabled individuals, and older individuals. The Department defines the household's energy need as the requirement for energy used to heat and/or cool the dwelling unit, as well as energy required to heat water and refrigerate food.

(b) Equipment repair and replacement targets households with high energy burden, or equipment unsafe or inadequate to protect occupants from extreme temperatures. This component reduces clients' energy burden by reducing excess demand from inefficient heating and cooling appliances. Questionably high energy bills during the heating or cooling season may indicate the need for an assessment of the condition of all major heating and cooling appliances in the client's home. An energy assessment of the home demonstrates whether or not the expected savings from repair or replacement of equipment will exceed the cost and will reduce energy consumption. Appliances consuming the most energy receive highest priority. Estimated repair cost exceeding 60% of estimated replacement cost justifies replacement.

(c) Subrecipients must conduct whole house assessments on all eligible heating and cooling appliances. Subrecipients must incorporate the appliance replacement protocols and tools available on the Department website, for window units, water heaters, and refrigerators on all applicable appliances in the household. Printed results from the use of these tools must be placed in the client files and be available for review.

(d) Household appliances assessed for condition (health and safety) and efficiency may include any home heating or cooling appliances and propane tanks. The Program allows replacement of evaporative coolers with refrigerated air only for substantiated medical reasons. Subrecipients shall replace appliances with Energy Star® rated equipment or IRC compliant appliances.

(e) Acceptable assessments for appliances under consideration for repair, replacement or retrofit with CEAP funds may be considered valid for one (1) year from the date of assessment. While subrecipients must re-certify income eligibility, the previously obtained assessment would remain valid. Should it appear that appliances previously assessed that did not require repair, replacement, or retrofit at the time of the assessment had deteriorated, a new assessment could be performed on only the applicable appliances.

(f) Households that contain both evaporative coolers and refrigerated air must be assessed in order to make the household most energy efficient. When both units need replacement consideration must be based on what is most energy efficient. Special consideration may be given to climate area and medical need. Without medical documentation a waiver may be granted by the Department.

(g) Heating and cooling assessments may be charged to the Heating and Cooling Component on a per household basis. If the assessment cost is charged to the Heating and Cooling Component, the cost must be counted toward the household benefit of $5,000.

(h) All replacement units must meet Energy Star or IRC compliant and must result in energy savings for the client. Heating and cooling funds may pay for zoning off a room in which the client spends a majority of time at home, incidental to the above improvements, if necessary to conserve conditioned air. In order to use heating and cooling funds for a room zone-off, the household must also be receiving a repair, replacement, or retrofit of a space heating or cooling unit.

(i) This component may be used to purchase, lease, or repair butane or propane tanks as well as the residential lines associated with the tanks or natural gas lines of the dwelling not to exceed the household's maximum allowable assistance and only if such service ensures the flow of energy necessary for heating and or cooling the household.

(j) This component may be used to purchase or repair of residential electric lines, not to exceed household's maximum allowable assistance and only if such service ensures the flow of energy necessary for heating and cooling the household.

(k) The Department requires Subrecipients to expend a minimum of 10% of their Direct Service funds in the Heating and Cooling Component.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on February 20, 2009.

TRD-200900760

Michael Gerber

Executive Director

Texas Department of Housing and Community Affairs

Effective date: March 12, 2009

Proposal publication date: September 19, 2008

For further information, please call: (512) 475-3916

SUBCHAPTER E. WEATHERIZATION ASSISTANCE PROGRAM GENERAL

10 TAC §§5.501 - 5.508, 5.521 - 5.532

The Texas Department of Housing and Community Affairs (the Department) adopts new 10 TAC Chapter 5, Subchapter E, §§5.501 - 5.508 and 5.521 - 5.532 concerning Weatherization Assistance Program General Rules. Sections 5.503, 5.505 - 5.507, 5.524, 5.527, 5.528, and 5.532 are adopted with changes to the proposed text as published in the September 19, 2008, issue of the Texas Register (33 TexReg 7844). Sections 5.501, 5.502, 5.504, 5.508, 5.521 - 5.523, 5.525, 5.526, and 5.529 - 5.531 are adopted without changes and will not be republished.

The purpose of the new chapter is to consolidate, clarify and simplify the rules formerly contained in Chapters 5, 6 and 8.

Public comments on the proposed rule were received by (1) Texas Association of Community Action Agencies, Inc. and (4) Community Services, Inc.

§5.503(5)(C). Distribution of WAP Funds.

COMMENT (1): Commenter suggested that the department delete the reference to the "2000" U.S. Census and insert reference to the "most recent decennial" U.S. Census.

DEPARTMENT RESPONSE: Staff concurred and amended the language.

§5.506(a) - (b). Subrecipient Reporting Requirements.

ADMINISTRATIVE CHANGE: Staff corrected the names of the reports mentioned in this section.

§5.524. Lead Safe Work Practices.

COMMENT (1): Comment received regarding the requirement for subrecipients to provide a one-day Lead Safe Weatherization (LSW) training to their subcontractors. Commenter stated that they did not have the credentials or available funds to fulfill this requirement.

DEPARTMENT RESPONSE: Staff does not concur with this comment; however, minor revisions were made for clarification. The training is still required; however, the one-day training requirement has been removed.

§5.528(a). Health and Safety.

COMMENT (1) and (4): Comment received suggesting that the Health and Safety 10% budget limit should be removed because the requirement for use of vented heaters is three times more expensive than unvented space heaters.

DEPARTMENT RESPONSE: Department concurred and in consideration of the International Residential Code and the recent Department of Energy "Space Heater Policy", staff raised the Health and Safety budget to 20% of the Materials, Labor, and Program Support budget.

§5.532. Training Funds for Conferences.

COMMENT (1): Commenter proposed a revision to allow more flexibility to attend other training sessions which address WAP topics.

DEPARTMENT RESPONSE: The Department concurred and revised the language to allow more flexibility to attend other relevant workshops and conferences.

The Board approved the final order adopting the new subchapter with recommended changes, on November 13, 2008.

§5.503.Distribution of WAP Funds.

(a) The Department distributes funds to subrecipients by an allocation formula.

(b) The allocation formula allocates funds based on the number of low-income households in a service area and takes into account the special needs of individual service areas. The need for energy assistance in an area is addressed through a weather factor (based on heating and cooling degree days). The extra expense in delivering services in sparsely populated areas is addressed by an inverse population density factor. The lack of additional services available in very poor counties is addressed by a county median income factor. Finally, the elderly are given priority by giving greater weight to this population. The five factors used in the formula are calculated as follows:

(1) County Non-elderly Poverty Household Factor is defined as the number of Non-elderly Poverty Households in the County divided by the number of Non-elderly Poverty Households in the State;

(2) County Elderly Poverty Household Factor is defined as the number of Elderly Poverty Households in the County divided by the number of Elderly Poverty Households in the State;

(3) County Inverse Poverty Household Density Factor is defined as:

(A) The number of Square Miles of the County divided by the number of Poverty Households of the County (equals the Inverse Poverty Household Density of the County); and

(B) Inverse Poverty Household Density of the County divided by the Sum of Inverse Household Densities.

(4) County Median Income Variance Factor is defined as:

(A) State Median Income minus the County Median Income (equals County Variance); and

(B) County Variance divided by sum of the State County Variances;

(5) County Weather Factor is defined as:

(B) County Weather divided by the total sum of the State County Weather.

(C) The five factors carry the following weights in the allocation formula: number of non-elderly poverty households (40%), number of poverty households with at least one member who is sixty-five (65) years of age or older (40%), household density as an inverse ratio (5%), the median income of the county (5%), and a weather factor based on Heating Degree Days and Cooling Degree Days (10%). All demographic factors are based on the most current decennial U.S. Census. The formula is as follows:

(i) County Non-elderly Poverty Household Factor (0.40) plus;

(ii) County Elderly Poverty Household Factor (0.40) plus;

(iii) County Inverse Poverty Household Density Factor (0.05) plus;

(iv) County Median Income Variance Factor (0.05) plus;

(v) County Weather Factor (0.10);

(vi) Total sum of clauses (i) - (v) of this subparagraph multiplied by total funds allocation equals the County's allocation of funds.

(vii) The sum of the county allocation within each subrecipient service area equals the subrecipient's total allocation of funds.

§5.505.Subrecipient Requirements for Appeals Process for Applicants.

(a) Subrecipients shall provide a written denial of assistance notice to applicant within ten (10) days of the adverse determination. If the denial is for any reason other than DOE reweatherization, as specified in 10 CFR Part 440, the subrecipient will notify the applicant of the adverse determination. This notification shall include written instructions of the appeals process and specific reasons for the denial. The applicants wishing to appeal a decision must provide written notice to subrecipient within ten (10) days of receipt of the denial notice.

(b) The subrecipient who receives an appeal shall establish an appeals committee composed of at least three persons. Subrecipient shall maintain documentation of appeals in their client files.

(c) The subrecipient shall hold the appeal hearing within ten (10) business days after the subrecipient received the appeal request from the applicant.

(d) The subrecipient shall record the hearing.

(e) The hearing shall allow time for a statement by subrecipient staff with knowledge of the case.

(f) The hearing shall allow the applicant at least equal time, if requested, to present relevant information contesting the decision.

(g) Subrecipient shall notify applicant of the decision in writing. The subrecipient shall mail the notification by close of business on the business day following the decision (one (1) day turn-around).

(h) If the applicant is not satisfied, they may further appeal the decision in writing to the Department within ten (10) days of notification of an adverse decision.

(i) If client appeals to the Department, the subrecipient must retain the maximum allowable cost per unit until the Department renders a decision.

(j) The Department may review the recording of the hearing, the committee's decision, and any other relevant information necessary.

(k) The Department appeals committee shall decide the case and forward their recommendation to the Division Director for final concurrence.

(l) The Department will notify all parties in writing of its decision within thirty (30) days of receipt of the appeal.

§5.506.Subrecipient Reporting Requirements.

(c) The subrecipient shall submit to the Department no later than sixty (60) days after the end of the contract term an inventory of all vehicles, tools, and equipment with a unit acquisition cost of $5,000 or more and a useful life of more than one (1) year, if purchased in whole or in part with DOE and LIHEAP-WAP funds.

(d) The subrecipient shall submit other reports, data, and information on the performance of the DOE and LIHEAP-WAP program activities as required by DOE pursuant to 10 CFR §440.25 or by the Department.

§5.507.Subrecipient Requirements for Establishing Priority for Eligible Households and Client Eligibility Criteria.

(a) Dwelling units that contain household members who receive Social Security Disability Insurance (SSDI) only are not automatically eligible.

(b) The subrecipients shall establish eligibility and priorities criteria to increase the energy efficiency of dwellings owned or occupied by low-income persons who are particularly vulnerable such as the elderly, persons with disabilities, families with young children, high residential energy users, and households with high energy burden. High residential energy users and households with high energy burden are defined as follows:

(1) Households with energy burden which exceeds 11% of gross income are characterized by the Department as high energy burden households. The Department calculates energy burden by dividing home energy costs by the household's gross income.

(2) Households with energy expenditures which exceed $1000 of energy expenditures per year are characterized by the Department as high energy consumers.

(c) The subrecipients shall follow the Department rules and established state and federal guidelines for determining eligibility for multifamily dwelling units as referenced in §5.527 of this subchapter (relating to Energy Audit Procedures).

(d) To determine income eligibility for program services, subrecipients must base annualized eligibility determinations on household income from thirty (30) days prior to the date of application for assistance. Each subrecipient must document income from all sources for all household members for the entire thirty (30) day period prior to the date of application and multiply by twelve (12) to annualize income. Income documentation must be collected from all income sources for all household members eighteen (18) years and older for the entire thirty (30) day period.

(e) In the case of migrant, seasonal, part-time, temporary, or self-employed workers a longer period than thirty (30) days may be used for annualizing income. However, the same method must be used for all similarly situated workers.

(f) If proof of income is unavailable, the applicant must complete and sign a Declaration of Income Statement (DIS). In order to use the DIS form, each subrecipient shall develop and implement a written policy and procedure on the use of the DIS form. In developing the policy and procedure, subrecipients shall give consideration to limiting the use of the DIS form to cases where there are serious extenuating circumstances that justify the use of the form. Such circumstances might include crisis situations such as applicants that are affected by natural disaster which prevents the applicant from obtaining income documentation, applicants that flee a home due to physical abuse, applicants who are unable to locate income documentation of a recently deceased spouse, or whose work is migratory or seasonal in nature. The Department will review the written policy and its use during on-site monitoring visits.

(g) Subrecipient shall determine applicant income. The Department will provide definition of income lists to determine total household income. The lists contain income inclusions and exclusions and are located in §5.19 of this chapter (relating to Client Income Guidelines).

(h) Social Security numbers are not required for applicants.

§5.524.Lead Safe Work Practices.

Subrecipients will require and document that their subcontractors have received Lead Safe Weatherization (LSW) training, an LSW Manual, and an LSW Jobsite Handbook prior to commencement of weatherization work. Subrecipients must obtain a signed Worker Verification of LSW Training form from the subcontractor indicating that the subcontractor received the LSW training, manual, and jobsite handbook. Subcontractors must follow LSW Work Practices as outlined by the U.S. Department of Energy.

§5.527.Energy Audit Procedures.

(a) Savings-to-Investment Ratio (SIR) for the Energy Audit procedures will determine the installation of allowable weatherization measures. The weatherization measures must result in energy cost savings over the lifetime of the measure(s), discounted to present value, that equal or exceed the cost of materials, and installation.

(b) The Energy Audit has not been approved for multi-family buildings containing 25 or more units. Since Texas subrecipients rarely propose to weatherize a building with 25 or more units, the Department will acquire a DOE approved energy audit for use in auditing multi-family buildings containing 25 or more units.

(c) Energy Auditors must use the established R-values for existing measures provided in the International Energy Conservation Code (IECC) when entering data into the Energy Audit. Subrecipients must follow minimum requirements set in the State of Texas adopted International Residential Code (IRC) or jurisdictions authorized by State law to adopt later editions.

(d) All materials and labor measures must be entered into the Energy Audit.

§5.528.Health and Safety.

(a) Health and Safety funds will have a maximum of 20% of the Materials, Labor and Program Support budgets.

(b) Subrecipients shall provide weatherization services with the primary goal of energy efficiency. The Department considers establishing a healthy and safe home environment to be important to ensuring that energy savings result from weatherization work.

(c) If health and safety issues identified on an individual unit (which would be exacerbated by any weatherization work performed) cannot be abated within the allowable WAP limits, the unit exceeds the scope of this program.

(d) Subrecipients must test for high carbon monoxide (CO) levels and bring CO levels to acceptable levels before weatherization work can start. The Department has defined maximum acceptable CO readings as follows:

(1) 25 parts per million for cook stove burners and unvented space heaters;

(2) 100 parts per million for vented combustion appliance; and

(3) 150 parts per million for cook stove ovens.

§5.532.Training Funds for Conferences.

The Department provides financial assistance to subrecipients for training and technical activities for State sponsored, DOE sponsored, and other relevant workshops and conferences. Subrecipients may use WAP training funds to attend conferences provided the conference agenda includes topics directly related to administering WAP. Costs to attend the conference must be prorated by program for the appropriate portion. Only staff actually working on the WAP program may charge any of their travel costs to the program.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on February 20, 2009.

TRD-200900761

Michael Gerber

Executive Director

Texas Department of Housing and Community Affairs

Effective date: March 12, 2009

Proposal publication date: September 19, 2008

For further information, please call: (512) 475-3915

SUBCHAPTER F. WEATHERIZATION ASSISTANCE PROGRAM DEPARTMENT OF ENERGY

10 TAC §§5.601 - 5.609

The Texas Department of Housing and Community Affairs (the Department) adopts new 10 TAC Chapter 5, Subchapter F, §§5.601 - 5.609, concerning Weatherization Assistance Program Department of Energy without changes to the proposed text as published in the September 19, 2008, issue of the Texas Register (33 TexReg 7848) and will not be republished.

The purpose of the new chapter is to consolidate, clarify and simplify the rules formerly contained in Chapters 5, 6 and 8.

No public comments were received concerning the proposed new subchapter.

The Board approved the final order adopting the new subchapter on November 13, 2008.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on February 20, 2009.

TRD-200900762

Michael Gerber

Executive Director

Texas Department of Housing and Community Affairs

Effective date: March 12, 2009

Proposal publication date: September 19, 2008

For further information, please call: (512) 475-3916

SUBCHAPTER G. WEATHERIZATION ASSISTANCE PROGRAM LOW INCOME HOME ENERGY ASSISTANCE PROGRAM

10 TAC §§5.701 - 5.705

The Texas Department of Housing and Community Affairs (the Department) adopts new 10 TAC Chapter 5, Subchapter G, §§5.701 - 5.705, concerning Weatherization Assistance Program Low Income Home Energy Assistance Program without changes to the proposed text as published in the September 19, 2008, issue of the Texas Register (33 TexReg 7849) and will not be republished.

The purpose of the new chapter is to consolidate, clarify and simplify the rules formerly contained in Chapters 5, 6 and 8.

No public comments were received concerning the proposed new subchapter.

The Board approved the final order adopting the new subchapter on November 13, 2008.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on February 20, 2009.

TRD-200900763

Michael Gerber

Executive Director

Texas Department of Housing and Community Affairs

Effective date: March 12, 2009

Proposal publication date: September 19, 2008

For further information, please call: (512) 475-3916

SUBCHAPTER H. SECTION 8 HOUSING CHOICE VOUCHER PROGRAM

10 TAC §5.801

The Texas Department of Housing and Community Affairs (the Department) adopts new 10 TAC Chapter 5, Subchapter H, §5.801, concerning Section 8 Housing Choice Voucher Program without changes to proposed text as published in the September 19, 2008, issue of the Texas Register (33 TexReg 7850) and will not be republished.

The purpose of the new chapter is to consolidate, clarify and simplify the rules formerly contained in Chapters 5, 6 and 8.

No public comments were received concerning the proposed new subchapter.

The Board approved the final order adopting the new subchapter on November 13, 2008.

The new section is adopted pursuant to the authority of the Texas Government Code, Chapter 2306 which provides the Department with the authority to adopt rules governing the administration of the Department and its programs.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on February 20, 2009.

TRD-200900764

Michael Gerber

Executive Director

Texas Department of Housing and Community Affairs

Effective date: March 12, 2009

Proposal publication date: September 19, 2008

For further information, please call: (512) 475-3916

CHAPTER 6. ENERGY ASSISTANCE PROGRAMS

SUBCHAPTER A. DEPARTMENT OF ENERGY WEATHERIZATION ASSISTANCE PROGRAM (DOE-WAP)

10 TAC §§6.1 - 6.21

The Texas Department of Housing and Community Affairs adopts the repeal of 10 TAC Chapter 6, Subchapter A, §§6.1 - 6.21, concerning the Department of Energy Weatherization Assistance Program, without changes to the proposal as published in the September 19, 2008, issue of the Texas Register (33 TexReg 7851) and will not be republished.

The repeal is adopted in order to allow adoption of new rules governing the Community Affairs Division Program, to consolidate the Department of Energy Weatherization Assistance Program rules under the Chapter 5 Community Affairs Programs rules with new rules being adopted as part of the 2009 rule cycle.

Public hearings on the repeal were held in El Paso, Lubbock, Brownsville, Houston, Fort Worth and Austin. No comments were received regarding the adoption of this repeal.

The Board approved the final order adopting this repeal on December 18, 2008.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on February 20, 2009.

TRD-200900753

Michael Gerber

Executive Director

Texas Department of Housing and Community Affairs

Effective date: March 12, 2009

Proposal publication date: September 19, 2008

For further information, please call: (512) 475-3916

SUBCHAPTER B. LOW INCOME HOME ENERGY ASSISTANCE PROGRAM WEATHERIZATION ASSISTANCE PROGRAM (LIHEAP-WAP)

10 TAC §§6.101 - 6.121

The Texas Department of Housing and Community Affairs adopts the repeal of 10 TAC Chapter 6, Subchapter B, §§6.101 - 6.121, concerning the Low Income Home Energy Assistance Program Weatherization Assistance Program, without changes to the proposal as published in the September 19, 2008, issue of the Texas Register (33 TexReg 7852) and will not be republished.

The repeal is adopted in order to allow adoption of new rules governing the Community Affairs Division Program, to consolidate the Low Income Home Energy Assistance Program Weatherization Assistance Program rules under the Chapter 5 Community Affairs Programs rules with new rules being adopted as part of the 2009 rule cycle.

Public hearings on the repeal were held in El Paso, Lubbock, Brownsville, Houston, Fort Worth and Austin. No comments were received regarding the adoption of this repeal.

The Board approved the final order adopting this repeal on December 18, 2008.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on February 20, 2009.

TRD-200900754

Michael Gerber

Executive Director

Texas Department of Housing and Community Affairs

Effective date: March 12, 2009

Proposal publication date: September 19, 2008

For further information, please call: (512) 475-3916

SUBCHAPTER C. COMPREHENSIVE ENERGY ASSISTANCE PROGRAM (CEAP)

10 TAC §§6.201 - 6.214

The Texas Department of Housing and Community Affairs adopts the repeal of 10 TAC Chapter 6, Subchapter C, §§6.201 - 6.214, concerning the Comprehensive Energy Assistance Program, without changes to the proposal as published in the September 19, 2008, issue of the Texas Register (33 TexReg 7852) and will not be republished.

Public hearings on the repeal were held in El Paso, Lubbock, Brownsville, Houston, Fort Worth and Austin. No comments were received regarding the adoption of this repeal.

The Board approved the final order adopting this repeal on December 18, 2008.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on February 20, 2009.

TRD-200900755

Michael Gerber

Executive Director

Texas Department of Housing and Community Affairs

Effective date: March 12, 2009

Proposal publication date: September 19, 2008

For further information, please call: (512) 475-3916

CHAPTER 8. PROJECT ACCESS PROGRAM RULES

10 TAC §8.1

The Texas Department of Housing and Community Affairs adopts the repeal of 10 TAC Chapter 8, §8.1, concerning the Project Access Program Rules, without changes to the proposal as published in the September 19, 2008, issue of the Texas Register (33 TexReg 7854) and will not be republished.

The repeal is adopted in order to allow adoption of new rules governing the Community Affairs Division Program, to consolidate the Project Access Program rules under the Chapter 5 Community Affairs Programs rules with new rules being adopted as part of the 2009 rule cycle.

Public hearings on the repeal were held in El Paso, Lubbock, Brownsville, Houston, Fort Worth and Austin. No comments were received regarding the adoption of this repeal.

The Board approved the final order adopting this repeal on December 18, 2008.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on February 20, 2009.

TRD-200900756

Michael Gerber

Executive Director

Texas Department of Housing and Community Affairs

Effective date: March 12, 2009

Proposal publication date: September 19, 2008

For further information, please call: (512) 475-3916