(a) Statement of Purpose and Authority. In accordance with the Texas Agriculture Code (Code), Chapter 74, Subchapter E, the department is authorized to contract with the Texas Boll Weevil Eradication Foundation (foundation) to carry out boll weevil eradication to obtain boll weevil eradication services for the state of Texas as part of a cost-sharing program. This section sets forth requirements and procedures for the implementation of the cost-sharing program.     
      (b) Eradication zone eligibility.      
        (1) The department may spend money under the cost-sharing program only in a boll weevil eradication zone in which:                  (A) a boll weevil eradication project authorized under the Code, Chapter 74, Subchapter D is active; or                   (B) boll weevil eradication has been declared complete by the United States Department of Agriculture or its designee.         
        (2) An eradication zone meets the requirement set forth in subparagraph (1)(A) of this section if a referendum of cotton growers has been held in the zone in accordance with the Code, Chapter 74, Subchapter D, and both the establishment of an eradication program and a maximum assessment have been approved by growers for that zone.       
      (c) Request for funding.      
        (1) The foundation may request funding under this section by submission to the department of a proposal to provide boll weevil eradication services which meets the requirements specified by the department.       
        (2) A proposal to provide boll weevil eradication services shall include:                  (A) a statement that the foundation meets eligibility requirements;                   (B) a statement verifying that the foundation will comply with the Texas Grant Management Standards promulgated by the Texas Comptroller of Public Accounts, under the Texas Government Code, Chapter 783;                   (C) verification that funds provided will be used for boll weevil eradication services in eligible zones; and                   (D) the specific amount of funding requested and how the funds will be used, broken down by zone, period of time covered, specific category of expenditure, and nature of activity.         
        (3) Additional information may be requested, if needed.       
      (d) Disbursement of funds.      
        (1) Disbursement of funds will be made after review and acceptance of the foundation's proposal by the department and execution of a written contract for services between the department and the foundation.       
        (2) Disbursement shall be made only in accordance with the contract.       
        (3) Disbursement of funds may be made in a lump sum or installments, as set forth in the contract.       
      (e) Reporting/Accounting Requirements.      
        (1) After funds have been disbursed, the foundation shall provide a written report of expenditures on a quarterly basis according to the State of Texas fiscal year, or more often, as requested by the department.       
        (2) Quarterly reports shall be submitted to the department within 30 days after the end of each quarter.       
        (3) The foundation shall establish an accounting system which identifies source of funds for cost-sharing programs, with separate accounting, in a manner that will enable the department and others to audit funds and verify source of funds and how they are used, for:                  (A) grower assessments;                   (B) state funds; and                   (C) federal funds.         
        (4) The foundation shall comply with all applicable state requirements regarding use of state funds.       
        (5) The department may suspend disbursement of funds to the foundation, if:                  (A) the department determines, or has reason to believe, that appropriated funds are not being used for purposes stated in the contract or the foundation is not complying with the terms of the contract, including reporting requirements, or these rules;                   (B) the department determines, or has reason to believe, that the use of the appropriated funds by the foundation is not consistent with state law; or                   (C) the department determines or has reason to believe that the foundation's use of the appropriated funds is not in the best interest of the state, cotton growers, or the eradication program.         
     Source Note:        The provisions of this §3.203 adopted to be effective February 27, 2000, 25 TexReg 1308; amended to be effective June 26, 2023, 48 TexReg 3405