1. (a) Revisions to this Subchapter reflect updates to 2 CFR Part 180 and 2 CFR Part 200, which are generally effective for Contracts executed on or after October 1, 2024. This rule also reflects conformance with the Texas Grant Management Standards Version (TxGMS) 2.0 and 2.1 published by the Texas Comptroller of Public Accounts in October 2024 and October 2025, respectively. TxGMS 2.0 may be incorporated into Contracts executed on or after October 1, 2024 or Contracts with nonprofit organizations that administer state funds where funds are added on or after October 1, 2024. TxGMS 2.1 is effective for Contracts with local governments and block grants subject to Chapter 2105 of the Tex. Gov't Code executed on or after October 1, 2025 or where funds are added on or after October 1, 2025. TxGMS 2.1 will be incorporated into Contracts with nonprofit organizations that administer state funds, that are executed after the effective date of this rule, and may be incorporated into Contracts where funds are added after the effective date of this rule. Previous versions of these rules as memorialized in Contracts will continue to be effective unless the Contract is amended to reflect TxGMS 2.1.

2. (b) Definitions. The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise. Capitalized words used herein have the meaning assigned in the specific Chapters and Rules of this title that govern the program associated with the request, or assigned by federal or state law.

   1. (1) Affiliate--Shall have the meaning assigned by the specific program or programs described in this part.
   2. (2) Department--The Texas Department of Housing and Community Affairs.
   3. (3) Equipment--Tangible personal property having a useful life of more than one year or a per-unit acquisition cost which equals or exceeds the lesser of the capitalization level established by entity for financial statement purposes, or $10,000.

   4. (4) Professional services--For a unit of government is as defined by state law. For Private Nonprofit Organizations it means services:

      1. (A) within the scope of the practice, as defined by state law, of:

         1. (i) accounting;
         2. (ii) architecture;
         3. (iii) landscape architecture;
         4. (iv) land surveying;
         5. (v) medicine;
         6. (vi) optometry;
         7. (vii) professional engineering;
         8. (viii) real estate appraising;
         9. (ix) professional nursing; or
         10. (x) legal services; or

      2. (B) provided in connection with the professional employment or practice of a person who is licensed or registered as:

         1. (i) a certified public accountant;
         2. (ii) an architect;
         3. (iii) a landscape architect;
         4. (iv) a land surveyor;
         5. (v) a physician, including a surgeon;
         6. (vi) an optometrist;
         7. (vii) a professional engineer;
         8. (viii) a state certified or state licensed real estate appraiser;
         9. (ix) attorney; or
         10. (x) a registered nurse.
   5. (5) Single Audit--The audit required by Office of Management and Budget (OMB), 2 CFR Part 200, Subpart F, or Tex. Gov't Code, chapter 783, Uniform Grant and Contract Management, as reflected in an audit report.
   6. (6) Single Audit Certification Form--A form that lists the source(s) and amount(s) of Federal funds and/or State funds expended by the Subrecipient during their fiscal year along with the outstanding balance of any loans made with federal or state funds if there are continuing compliance requirements other than repayment of the loan.
   7. (7) Subrecipient--Includes an entity receiving or applying for federal or state funds from the Department under Chapters 6, 7, 20, 23, 24, 25, or 26 as identified by Contract or in this subchapter. Except as otherwise noted in this subchapter or by Contract, the definition does not include Applicants/Owners who have applied for and/or received funds for rental development, except for CHDO Operating funds, NCO Nonprofit Capacity Building, NCO Operating Assistance, a grant made to a unit of government or nonprofit organization, or Affiliate with state funds, or TCAP-RF grants or loans when made to a unit of government or nonprofit organization or Affiliate. Except as otherwise noted in this subchapter or by Contract, this definition does not include vendors having been procured by the Department for goods or services. A Subrecipient may also be referred to as Administrator.
   8. (8) Supplies--Means tangible personal property other than "Equipment" in this section.
   9. (9) Texas Grant Management Standards (TxGMS)--The standardized set of financial management procedures and definitions established by Tex. Gov't Code, chapter 783 regarding Uniform Grant and Contract Management to promote the efficient use of public funds by requiring consistency among grantor agencies in their dealings with grantees, and by ensuring accountability for the expenditure of public funds. This includes TxGMS Version 2.1 published by the Texas Comptroller of Public Accounts in October 2025. State agencies are required to adhere to these standards when administering grants and other financial assistance agreements with cities, counties and other political subdivisions of the state. This includes all Public Organizations including public housing and housing finance agencies. In addition, Tex. Gov't Code Chapter 2105, regarding Administration of Block Grants, subjects Subrecipients of federal block grants (as defined therein) to TXGMS.
   10. (10) Uniform Grant Management Standards (UGMS)--The standardized set of financial management procedures used by the Department in Contracts that began before January 1, 2022.

Source Note:The provisions of this §1.401 adopted to be effective February 4, 2026, 51 TexReg 548.