1. (a) Allocation Methodology. To the extent that funds are appropriated for the Program specifically to offer grants to eligible students who established eligibility for an initial grant under §22.228(a)(6)(D) of this subchapter (relating to Eligible Students), an institution's share of funds appropriated for that purpose will equal:

   1. (1) The number of students who were reported in the Prior-Prior Year as:

      1. (A) enrolled as undergraduate students;
      2. (B) Residents of Texas, as defined in §22.1 of this chapter (relating to Definitions);
      3. (C) enrolled at least three-quarter-time;
      4. (D) meeting the criteria described in §22.228(a)(6)(D) of this subchapter; and
      5. (E) having a Student Aid Index at or below the Priority Student Aid Index Level, as defined in §22.226 of this subchapter (relating to Definitions); divided by
   2. (2) The sum of all participating institutions' reported students described by paragraph (1) of this subsection.

2. (b) Funds Restricted.

   1. (1) Any funds allocated under this section may be used only to offer Initial Year TEXAS Grants to students who established eligibility for the program under §22.228(a)(6)(D) of this subchapter.
   2. (2) The provisions of §22.11 of this chapter (relating to Authority to Transfer Funds) do not apply to funds allocated under this section.
3. (c) Two-Year Allocation. Beginning with Fiscal Year 2028, allocations for both years of the state appropriations' biennium will be completed at the same time. The three most recent certified Financial Aid Database submissions will be utilized to forecast the data used in the calculation of the allocation for the second year of the biennium. Institutions will receive notification of their allocations for both years of the biennium at the same time.
4. (d) Data Source. For the purposes of subsection (a) of this section, the Coordinating Board shall use each institution's certified Financial Aid Database submissions for the applicable year(s) as the data source for its calculations.
5. (e) Notice and Data Review. The Coordinating Board will conduct a preliminary data review, the results of which will be shared with all participating institutions for comment and verification prior to the publication of final allocations. Institutions will be given ten working days, beginning the day of the data review notice's distribution and excluding State holidays, to confirm that the data review report accurately reflects the data they submitted or to advise the Coordinating Board of any inaccuracies.

6. (f) Reductions in Funding.

   1. (1) If annual funding for the program is reduced after the start of a fiscal year, the Coordinating Board may take steps to help distribute the impact of reduced funding across all participating institutions by an across-the-board percentage decrease in all institutions' allocations.
   2. (2) If annual funding is reduced prior to the start of a fiscal year, the Coordinating Board may recalculate the allocations according to the allocation methodology outlined in this rule for the affected fiscal year based on available dollars.

Source Note:The provisions of this §22.235 adopted to be effective May 13, 2026, 51 TexReg 3108.