1. (a) Purpose. It is the policy of the Department to take prudent measures to ensure that, when funds are provided to recipients for assistance, they are timely and lawfully utilized and that, if they cannot be timely and lawfully utilized by the initial recipient, there are mechanisms in place to reallocate those funds to other recipients in order to ensure their full utilization while maximizing assistance to beneficiaries.

2. (b) Consistent with Texas Government Code, §2306.111(h), this rule establishes the policy of the Department for the reallocation of federal or state financial assistance administered by the Department when:

   1. (1) an administrator or contractor returns contracted funds;
   2. (2) reserved funds are not fully utilized at completion of an activity;
   3. (3) balances on contracts remain unused;
   4. (4) funds in a contract or reservation are partially or fully recaptured or terminated; or
   5. (5) in instances where the Department recaptures funds because a party to a contract with the Department has been unable to meet required benchmarks or expend funds within the time frames agreed, despite notices and opportunities to cure as provided in the related rule, contract and/or written correspondence (if any) from the Department.

3. (c) Reallocation of financial assistance for specific federal or state funding sources or programs administered by the Department may already be governed by or provided for in:

   1. (1) federal regulations and requirements;
   2. (2) state rules adopted in other Sections of this Part;
   3. (3) in funding plans approved by the Board governing federal or state resources; or
   4. (4) written agreements relating to the administration of such funds.
4. (d) To the extent that programs or funding sources are governed by any of the items provided for in subsection (c) of this section, further Board approval is not required. Those funding uses not governed by subsection (c) of this section will require Board approval.
5. (e) To the extent that certain programs are required to regionally allocate their annual allocations of funds, funds reallocated under this section do not require subsequent regional allocation.
6. (f) At least one million dollars of HOME funds made available under this section, or other HOME program funds including program income, will be set-aside by the Department annually for the purposes of disaster relief.
7. (g) Funds made available under this section may be aggregated over a period of time prior to being reallocated.
8. (h) Consistent with the requirements of Texas Government Code, §2306.111(h), if the Department's obligation of financial assistance related to bonds is terminated prior to issuance, the assistance will be reallocated among other activities permitted by that bond issuance and any indenture associated with those bonds, as approved by the Board.
9. (i) Any portion of this rule may be waived for good cause by the Governing Board of the Department.

Source Note:The provisions of this §1.19 adopted to be effective January 2, 2014, 38 TexReg 9491.