1. (a) The Department may determine to Deobligate funds from all budget categories from Subrecipients whose combined Expenditures and customer Obligations are less than 45% as of the May 15 report, unless an exception is approved by the Department in writing for extenuating circumstances. Subrecipients that request training and/or technical assistance may avoid Deobligation at this phase if they request such assistance on or before the filing of the May 15 report. Once such assistance has been delivered, as determined by the Department, the Subrecipient must submit a clear specific plan for improving utility obligations and that plan must be approved by the Department in writing.
2. (b) The Department may Deobligate funds from all budget categories from a Subrecipient whose combined Expenditures and customer Obligations are less than 70% as of the July 15 report, unless an exception is approved by the Department in writing for extenuating circumstances.
3. (c) The cumulative amount of Deobligated funds will be allocated proportionally by formula amongst all Subrecipients that did not have any funds Deobligated.
4. (d) A Subrecipient which has had funds Deobligated under subsection (a) or (b) of this section that fully expends the reduced amount of its Contract, will have access to the full amount of the following Program Year CEAP allocation. A Subrecipient which has had funds Deobligated under subsection (a) or (b) of this section that fail to fully expend the reduced amount of its Contract will automatically have the following Program Year CEAP allocation Deobligated by the lesser of 24.99%, or the proportional amount that had been Deobligated in the prior year.
5. (e) The cumulative balance of the funds made available through subsection (d) of this section will be allocated proportionally by formula to the Subrecipients not having funds reduced under that subsection.
6. (f) In no event will involuntary Deobligations that occur through any of the clauses above exceed 24.99% of the Subrecipient's Program Year CEAP Contracted Funds, without an opportunity for a hearing as required by Tex. Gov't Code, Chapter 2105.

Source Note:The provisions of this §6.304 adopted to be effective November 4, 2018, 43 TexReg 7122.