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Presentation, discussion, and possible action on proposing the repeal and proposed adoption of new 10 TAC Chapter 7 Subchapter A, General Policies and Procedures; 10 TAC Chapter 7 Subchapter C, Emergency Solutions Grants (ESG), §§7.31-7.43 and directing their publication in the Texas Register for public comment.
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RECOMMENDED ACTION
recommendation
WHEREAS, pursuant to Tex. Gov’t Code §2306.053, the Texas Department of Housing and Community Affairs (Department) is authorized to adopt rules governing the administration of the Department and its programs;
WHEREAS, staff has assessed 10 TAC Chapter 7, Subchapter C, Emergency Solutions Grants (ESG), specifically §§7.31-7.43, and recommends amendments to better align the rules with funding requirements, update program terminology, improve clarity, and ensure consistency across program operations;
WHEREAS, staff also assessed 10 TAC Chapter 7 Subchapter A, General Policies and Procedures and confirms that the reasons for the initial adoption of this rule continue to exist, which is to have a rule in effect that specifies the general administrative requirements, responsibilities, and procedural standards that govern the Department’s program operations;
WHEREAS, staff has evaluated these rules and recommends to the Board that there is a need for these rule sections to be revised, and adopted as new rules, in order to assist in the administration of their grants; and
WHEREAS, upon Board approval, these actions will be published in the Texas Register for public comment, which will be accepted from January 30, 2026, through March 3, 2026, and subsequently returned to the Board for final adoption;
NOW, therefore, it is hereby
RESOLVED, that the Executive Director and his designees be and each of them hereby are authorized, empowered, and directed, for and on behalf of the Department, to cause the proposed action herein in the form presented to this meeting, to be published in the Texas Register for public comment, and in connection therewith, make such non-substantive technical corrections as they may deem necessary to effectuate the foregoing including any requested revisions to the preambles.
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BACKGROUND
The Department last amended 10 TAC Chapter 7 Subchapter A, General Policies and Procedures in February 2024. These rules set forth the overarching administrative framework governing Chapter 7 programs, including general requirements for eligibility, application procedures, documentation, monitoring standards, and compliance obligations. In reviewing 10 TAC Chapter 7 Subchapter A, staff identified several areas requiring refinement to enhance clarity, remove outdated language, and better align with current federal and state funding requirements.
Staff is proposing the repeal and replacement of the rule with new 10 TAC Chapter 7, Subchapter A, General Policies and Procedures with amendments to specific sections noted below:
§7.1 Purpose and Goals
The proposed updates standardize terminology related to Homelessness to ensure consistency across programs.
§7.2 Definitions
The proposed updates clarify definitions, align terminology with current federal and state program standards, and add needed terms for newer funding sources. These changes improve consistency and support clearer program administration.
§7.3 Construction Activities
The proposed updates to clarify LURA requirements and funding restrictions to ensure consistent oversight of construction, rehabilitation, and conversion activities.
§7.4 Subrecipient Contract
Staff is recommending updates to terminology related to Homelessness and contract closeout procedures for standardization.
§7.5 Subrecipient Reporting
The proposed update clarifies reporting requirements that align with current funding regulations.
§7.6 Subrecipient Data Collection
The proposed updates standardize terminology related to homelessness to ensure consistency across programs.
§7.7 Subrecipient Contact Information
The proposed updates standardize terminology related to homelessness to ensure consistency across programs.
§7.8 Records Retention
The proposed update clarifies requirements that align with current state regulations.
§7.9 Contract Termination and Deobligation
Staff is not recommending updates to this subsection.
§7.10 Program Marketing
The proposed updates align terminology with current federal and state program requirements.
§7.11 Compliance Monitoring
The proposed updates added VAWA and clarified outreach requirements to persons with Limited English Proficiency.
§7.12 Waivers
The proposed updates standardize terminology related to Homelessness to ensure consistency across programs.
The Department last amended the majority of 10 TAC Chapter 7, Subchapter C, Emergency Solutions Grants (ESG) in July 2022, with subsequent updates to individual sections in March 2023 and May 2025. These rules govern the ESG program, including the allocation and use of funds, program eligibility, reporting requirements, and compliance standards for Subrecipients. Staff has identified the need for further revisions to update terminology, improve clarity, ensure consistency across related rules within Chapter 7, and remove outdated references, thereby maintaining alignment with current regulatory and programmatic standards.
Staff is proposing the repeal and replacement of the rule with new 10 TAC Chapter 7, Subchapter C, Emergency Solutions Grants (ESG) with amendments to specific sections noted below:
§7.31 Purpose
The proposed updates replace references to ESG CARES with the broader term “Federally funded Special Allocation” to reflect current funding structures and ensure the rule accurately captures all federally-funded special allocations that generally have to follow the ESG statute and regulations. The revisions also clarify which state program requirements apply to these Special Allocations.
§7.32 Use of ESG Funds
The proposed changes add a provision clarifying that federally funded Special Allocation funds to cover additional activities and costs as permitted by federal guidelines and standardize terminology related to Homelessness.
§7.33 Apportionment of ESG Funds
The proposed updates clarify exemptions for federally funded Special Allocations in fund distribution.
§7.34 Continuing Awards
The proposed updates replace references to ESG CARES with the broader term “federally funded Allocation” to reflect current funding structures and ensure the rule accurately captures all federally funded special allocations.
§7.35 Eligible Applicants
The proposed updates clarify the type of Subrecipients eligible to receive Special Allocation funds.
§7.36 General Threshold Criteria
The proposed updates which program requirements apply to federally funded Special Allocations.
§7.37 Application Review and Administrative Deficiency Process
Staff is not recommending updates to this subsection.
§7.38 Competitive Award and Funding Process
The proposed updates standardize terminology related to Homelessness to ensure consistency across programs.
§7.39 Uniform Selection Criteria
The proposed updates replace references to ESG CARES with the broader term “federally funded Special Allocation” to reflect current funding structures and ensure the rule accurately captures all federally funded special allocations.
§7.40 Competitive Program Participant Services Selection Criteria
The proposed updates standardize terminology related to Homelessness to ensure consistency across programs.
§7.41 Contract Term, Expenditure Benchmark, Return of Funds, and Performance Targets
The proposed updates replace references to ESG CARES with the broader term “federally funded Special Allocation” to reflect current funding structures and ensures the rule accurately captures the flexibility ESG-funded special allocations may have.
§7.42 General Administrative Requirements
Staff is not recommending updates to this subsection.
§7.43 Program Income
The proposed updates revise the rule to align with current federal and state regulations and ensure the requirements accurately reflect existing oversight standards.