(a) Eligibility.
  (1) Prospective sponsoring organizations of day care homes, participating sponsoring organizations of child care centers or outside-school-hours care centers, independent centers, and participating sponsoring organizations of less than 50 homes may apply once for start-up payments to develop or expand successful CACFP operations in day care homes.
  (2) Participating sponsoring organizations of day care homes may apply for expansion payments to initiate or expand CACFP operations in day care homes in low-income or rural areas.
  (3) Participating sponsoring organizations of day care homes may apply for expansion funds more than once provided 12 months or more have elapsed since satisfactorily completing a start-up or expansion payment agreement with TDA and the contractor proposes to expand into an area or areas different from those identified in previous start-up or expansion payment agreements.
(b) Application.
  (1) A contractor must submit a completed application to TDA to be considered for start-up or expansion payments. TDA approves or denies applications for start-up and expansion payments according to 7 CFR §226.12(b), and this chapter.
  (2) A contractor must contact TDA to request an application for start-up and expansion payments.
  (3) TDA will notify an applicant of the application's approval or denial, in writing, no later than 30 days of TDA's receipt of a complete application.
  (4) If an applicant submits an incomplete application, TDA will notify the applicant within 15 days of receipt of the application and provide technical assistance, as needed, to assist with completion of the application.
  (5) Denial of an application for start-up or expansion payments may be appealed. All appeals shall be conducted in accordance with §§1.1000 - 1.1004 of this title (relating to Appeal Procedures for the CACFP).
  (6) A contractor approved for start-up or expansion payments shall enter into a written agreement with TDA.
  (7) A contractor that breaches the written agreement with TDA may be required to repay all or part of the start-up or expansion funds.
(c) Issuance of Start-Up and Expansion Payments.
  (1) TDA issues start-up and expansion payments according to 7 CFR §§226.2, 226.6, 226.7, 225.12, and written guidance from USDA.
  (2) The amount of start-up or expansion payments issued to an eligible contractor shall be determined by the anticipated level of start-up or expansion costs incurred by the contractor and any alternate sources of income, as identified in the contractor's application. However, a payment shall not be issued for less than the determined anticipated administrative reimbursement for one month nor be greater than the determined anticipated reimbursement for two months. Any issued payment shall not exceed the following:
    (A) Shall not be calculated for more than 50 day care homes;
    (B) Start-up payments to a contractor with less than 50 day care homes under their jurisdiction may not exceed 50 day care homes including those homes under the contractor's jurisdiction at the time of application; or
    (C) Expansion payments may not exceed the product of 50 times the dollar amount identified in 7 CFR §226.12(a)(i).
(d) Use of Start-Up and Expansion Funds.
  (1) Start-up and expansion payments must be used according to 7 CFR §226.2 and §226.12, written guidance from USDA and the written agreement with TDA.
  (2) Start-up and expansion payments may not be used to recruit day care homes that are already participating in CACFP under an approved sponsor.
(e) Review and Monitoring Requirements.
  (1) Upon expiration of the written agreement the contractor must provide TDA documentation of activities performed and costs incurred under the terms of the written agreement. If the contractor has not made every reasonable effort to carry out the activities specified in the written agreement, the contractor must repay all or part of the payments, as determined by TDA.
  (2) TDA may monitor the contractor's start-up or expansion activities during or after the expiration of the written agreement and may do so by announced or unannounced visits.

Source Note: The provisions of this §25.101 adopted to be effective January 11, 2011, 36 TexReg 37; amended to be effective March 29, 2012, 37 TexReg 2070