(a) All applications shall be reviewed in the order they are received.     
      (b) Initial Review.      
        (1) Each application shall go through an initial review process when the Qualifying Application is received.                  (A) If an Applicant submits a Qualifying Application with all required materials, the Texas Film Commission (Commission) shall notify the Applicant by e-mail that the Commission has received the Applicant's complete application, and the preliminary eligibility determination process shall begin.                   (B) If an Applicant submits a Qualifying Application without all required materials, the Commission shall notify the Applicant by e-mail that the Applicant's application requires additional materials or documentation, and that not receiving them by the fifth Business Day prior to the project's Principle Start Date may result in disqualification of the application.         
        (2) Applicants may amend information on their application. The Commission shall determine whether an Applicant's amendment(s) require the Applicant to reapply.       
      (c) Preliminary Eligibility Determination.      
        (1) During the preliminary eligibility determination process, the Commission shall review the project's Qualifying Application and budget to identify eligible expenditures and to determine if the Applicant meets the minimum program requirements for in-state spending, Texas Filming Days, and Texas Residency.       
        (2) The Commission shall also review the Content Document, as defined in §121.8(a)(1)(C) of this Chapter, to determine if the content is appropriate.       
        (3) The Commission shall examine the Qualifying Application in light of the following criteria to assess, in the aggregate, the potential magnitude of the economic impact of the project in the State of Texas:                  (A) the financial viability of the Applicant and the likelihood of successful project execution and planned spending in the State of Texas;                   (B) proposed spending on existing state production infrastructure, including soundstages and industry vendors;                   (C) the number of Texas jobs estimated to be created by the project;                   (D) the ability to promote Texas as a tourist destination through the conduct of the project and planned expenditure of funds;                   (E) the magnitude of estimated expenditures in Texas; and                   (F) whether the project will be directed or produced by an individual who is a Texas Resident, with the term "produced by" meaning a non-honorary producer who has direct involvement in the day-to-day production of the project above the level of line producer.         
        (4) The Commission shall notify the Applicant by e-mail that the Qualifying Application is approved if:                  (A) the Qualifying Application meets all minimum program requirements for in-state spending, Texas Filming Days, and Texas Residency, as determined by the Commission;                   (B) the Commission determines there will be sufficient economic impact of the project in the State of Texas based on the criteria specified in paragraph (3) of this Subsection;                   (C) the Commission determines the content, as described in the Content Document, is appropriate;                   (D) appropriated funds are available at such time of determination; and                   (E) the Commission, in its sole discretion, elects to approve the Qualifying Application based on the totality of the circumstances.         
        (5) If the Commission denies a Qualifying Application, the Commission shall notify the Applicant by e-mail that the Qualifying Application is denied. The notice shall inform the Applicant whether the denial is based on failure to meet the minimum program requirements, insufficient economic impact, inappropriate content, or some other reason. Qualifying Applications shall be assessed in the order in which they are received.       
        (6) All funding decisions made by the Commission are final and are not subject to appeal.       
      (d) Grant Agreement.      
        (1) Upon Commission approval of the Qualifying Application, the Commission shall issue a conditional award letter, which shall be contingent upon execution of a grant agreement between the Office of the Governor and the Applicant. The estimated grant amount shall be based upon the Applicant's estimated in-state spending.       
        (2) The grant agreement must be returned to the Commission with original signatures. The Commission may disqualify a project for the Applicant's failure to return the grant agreement with original signatures.       
      (e) Periodic Tracking and Review. After the grant agreement has been executed by both parties, the Commission may periodically review production activity including, but not limited to, requesting quarterly reports that describe in-state spending, production locations, and number of Texas Residents hired, and may require documentation for all of the above.     
      (f) Encumbrance of Funds.      
        (1) The Office of the Governor will not encumber funds until an Applicant provides a completed W-9 and a Texas Application for Payee Identification Number Form.       
        (2) The amount encumbered for a project shall be equal to the estimated grant amount in the grant agreement.       
        (3) Provided sufficient funds are available, the Commission, in its sole discretion, may adjust the amount encumbered, but only if an Applicant amends the estimated Texas spending amount on their Qualifying Application in writing, prior to submitting their Expended Budget as described in §121.11 of this Chapter.       
      (g) Verifying Texas Residency.      
        (1) In order to verify Texas Residency, the Applicant shall provide the Commission with completed Declaration of Texas Residency Forms for each Texas Resident Crew and Cast member.       
        (2) Declaration of Texas Residency Forms are available on the Commission's web site or by request to the Commission via telephone, Internet, or other means if additional special needs facilitation is required.       
        (3) In the event that a Crew or Cast member possesses one of the documents specified in the Declaration of Texas Residency Form, but not for the required 120 days, Texas Residency may also be verified if:                  (A) the project consists of at least 30 Filming Days; and                   (B) the Applicant provides one of the following documents naming said Crew or Cast member and dated at least 120 days and no more than 13 months prior to the project's Principal Start Date:                      (i) an executed HUD-1 settlement statement showing the purchase of residential real property located in Texas; or                       (ii) a notice of appraised value or bill assessing property tax on residential real property located in Texas.           
        (4) If a Crew of Cast member does not possess any of the documents specified in the Declaration of Texas Residency Form, Texas Residency may also be verified by attaching to the Declaration a copy of their military ID card and their military orders that:                  (A) name said Crew or Cast member, or their spouse, parent, or legal guardian, as applicable;                   (B) show a permanent change of station to a military station in Texas; and                   (C) are dated at least 120 days prior to the project's Principal Start Date.         
      (h) Texas Film Commission Logo. The Commission may require as a condition of the grant agreement that the Applicant must include the Texas Film Commission logo in the closing credits of a Feature Film, Reality Series or Television Production, or in the credits of a Digital Interactive Media Production.     
     Source Note:        The provisions of this §121.9 adopted to be effective March 10, 2008, 33 TexReg 2019; amended to be effective November 22, 2009, 34 TexReg 8029; amended to be effective August 28, 2011, 36 TexReg 5201; amended to be effective January 1, 2012, 36 TexReg 8818; amended to be effective September 5, 2013, 38 TexReg 5714; amended to be effective January 8, 2014, 39 TexReg 78; amended to be effective May 21, 2023, 48 TexReg 2484