TITLE 10. COMMUNITY DEVELOPMENT

PART 9. TEXAS ADVANCED NUCLEAR ENERGY OFFICE

CHAPTER 331. GRANTS

The Office of the Governor, the Texas Advanced Nuclear Energy Office (TANEO) proposes rulemaking to 10 TAC §§331.1 - 331.32.

EXPLANATION AND JUSTIFICATION OF THE RULES

The Texas Advanced Nuclear Energy Office (TANEO) proposes new 10 Texas Administrative Code (TAC) §§331.1 - 331.32 relating to the Texas Advanced Nuclear Development Fund, the Project Development and Supply Chain Reimbursement Program, and the Advanced Nuclear Construction Reimbursement Program. This proposed rulemaking will implement Texas Government Code Chapter 483 as enacted by House Bill (HB) 14 during the Texas 89th Regular Legislative Session. The proposed rulemaking establishes the policies and procedures governing the reimbursement programs, including the application process, eligibility requirements, and details related to the program's grant agreements. The proposed rules also establish the framework TANEO will use to award grants, enter grant agreements, and distribute the proceeds of a grant award on a rolling basis, as required by Section 483.204(g), Texas Government Code.

SECTION BY SECTION SUMMARY

Proposed rulemaking to Title 10, Texas Administrative Code, provide the rules for the Texas Advanced Nuclear Energy Office, including but not limited to, the application process and review process for the Texas Advanced Nuclear Development Fund. Subchapter A explains and provides the rules for the project development and supply chain reimbursement program.

The following rulemaking covers 10 TAC §§331.1 - 331.32.

TANEO proposes new 10 TAC §§331.1 - 331.32, relating to Grants, including §331.1, concerning Definitions, §331.2, concerning Eligible Recipients; Eligible Expenses, §331.3, concerning Application Process and Requirements Generally, §331.4, concerning Application Requirements, §331.5, concerning Grant Evaluation and Review Process, §331.6, concerning Amount of Grant Award Recommendations and Decisions, §331.7, concerning Grant Decision Notification Process, §331.8, concerning Grant Agreement, §331.9, concerning Waiver of Rules, §331.20, concerning Eligible Projects, §331.21, concerning Limitations on Maximum Grant Amount, §331.30, concerning Eligible Projects, §331.31, concerning Limitations on Maximum Grant Amount; Prerequisites to Grant Funding, §331.32, concerning Grant Agreement.

House Bill 14 (89-R) directed the Texas Advanced Nuclear Energy Office to adopt rules regarding the procedure for awarding grants to an applicant under Chapter 483, Texas Government Code.

Proposed new §331.1 establishes definitions TANEO will utilize in its grant making process.

Proposed new §331.2 establishes eligibility requirements related to eligible recipients and eligible activities.

Proposed new §331.3 describes the application process and explains how TANEO will maintain a formal application available online and may, at any time, change the terms of the formal application document. The rule also establishes process requirements for grant applications, including electronic submission.

Proposed new §331.4 establishes requirements for grant applications.

Proposed new §331.5 establishes the grant review process for TANEO to consider an application, as well as minimum grant-review standards.

Proposed new §331.6 establishes grant funding decisions. The rule specifies that grants will be allocated on a competitive basis and will be awarded based on the efficient and effective use of public funds.

Proposed new §331.7 establishes the grant decision notification process, including notifying an applicant in writing of the decision regarding a grant award. The rule further specifies that TANEO will make conditional awards of grant funds; an award may only become final after a grantee enters a grant agreement with TANEO.

Proposed new §331.8 describes the grant agreement between a grant recipient and TANEO that is a prerequisite for receiving a grant.

Proposed new §331.9 explains that TANEO may waive any provision of the rules of this subchapter if it would further the public interest and is consistent with applicable statutory law.

Proposed new §331.20 describes the projects that are eligible for a Project Development and Supply Chain Reimbursement Program reimbursement grant.

Proposed new §331.21 establishes the maximum amount of funds permitted to be awarded to applicants under the Project Development and Supply Chain Reimbursement Program.

Proposed new §331.30 describes the projects that are eligible for an Advanced Nuclear Construction Reimbursement Program reimbursement grant.

Proposed new §331.31 establishes funding levels and prerequisites to eligibility to receive grant funds. The rule specifies the maximum amount of funds permitted to be awarded to applicants under the Advanced Nuclear Construction Reimbursement Program.

Proposed new §331.32 describes the milestone-based plan TANEO will use in grant agreements to distribute grant funds on a rolling basis to grantees under the Advanced Nuclear Construction Reimbursement Program. The rule specifies that, even if a grantee submits potentially-eligible expenses to TANEO, TANEO will not reimburse any such expenses until a grantee can demonstrate it has reached specified milestones.

FISCAL NOTE

Jarred Shaffer, Director of the Texas Advanced Nuclear Energy Office, Office of the Governor, has determined that for the first five-year period the proposed rules are in effect, there will be no additional estimated cost, reduction of cost, or loss or increase in revenue to the state or local governments due to the enforcement or administration of the rules. Additionally, because the programs' administrative expenses will be paid through the Texas Advanced Nuclear Development Fund, TANEO has determined that enforcing or administering the rules does not have foreseeable implications related to the costs or revenues of state or local government.

PUBLIC BENEFIT

Mr. Shaffer has determined for the first five-year period the proposed rules are in effect there will be a benefit to applicants and the public because the proposed rules provide a framework for the Texas Advanced Nuclear Development Fund as well as transparency and governance for the administration of the Project Development and Supply Chain Reimbursement Program and the Advanced Nuclear Construction Reimbursement Program. The public will also benefit from the programs established by these rules, as the programs will further incentivize capital investments for advanced nuclear energy projects, thereby growing opportunities for small businesses, workforce development, and additional generation capacity for the electrical grid in Texas. Mr. Shaffer has also determined that for each year of the first five years the rules are in effect, the public benefit anticipated due to the enforcement of the rules will be to provide clarity to applicants, grant awardees, and the public and to ensure the efficient operation of the Texas Advanced Nuclear Development Fund's programs.

PROBABLE ECONOMIC COSTS

Mr. Shaffer has determined for the first five-year period the proposed rules are in effect, there will be no additional economic costs to persons required to comply with the proposed rules.

REGULATORY FLEXIBILITY ANALYSIS FOR SMALL AND MICRO-BUSINESS AND RURAL COMMUNITIES

Mr. Shaffer has determined that the proposed rules will have no adverse economic effect on small businesses, micro-businesses, or rural communities. Therefore, TANEO is not required to prepare a regulatory flexibility analysis pursuant to §2006.002 of the Texas Government Code.

LOCAL IMPACT STATEMENT

Mr. Shaffer has determined that the proposed rules will have a positive impact on local employment and local economies across the State of Texas. In a recent study published by the University of Texas at Austin, there will be more than 10,000 advanced nuclear jobs tied to announced advanced nuclear power projects in Texas over the next 3-5 years. Further, according to an IC²'s Bureau of Business Research report, with the development of advanced nuclear reactor projects in Texas, Texas could stand to benefit over $50 billion in new economic output and over $27 billion in income for Texas workers by 2055.

GOVERNMENT GROWTH IMPACT STATEMENT

Mr. Shaffer has determined that during each year of the first five years in which the proposed rules are in effect, the rules:

1) will not create or eliminate government programs;

2) will not require the creation of new employee positions;

3) will not require an increase or decrease in future legislative appropriations to TANEO;

4) will not require an increase or decrease in fees paid to TANEO;

5) will create new regulations;

6) will not expand certain existing regulations, limit certain existing regulations, or repeal existing regulations;

7) will increase the number of individuals subject to the applicability of the rules; and

8) will positively affect the Texas economy.

TAKINGS IMPACT ASSESSMENT

Mr. Shaffer has determined that there are no private real property interests affected by the proposed amendments. Thus, TANEO is not required to prepare a takings impact assessment pursuant to Section 2007.043, Texas Government Code.

REQUEST FOR PUBLIC COMMENTS

Comments on the proposed rules may be submitted to Margaux Fox, Office of the Governor, Texas Advanced Nuclear Energy Office, P.O. Box 12428, Austin, Texas 78711, or by email to taneo@gov.texas.gov with the subject line "2025 TANEO Rule Proposal." The deadline for receipt of comments is 5:00 p.m., Central Time, on February 2, 2026, which is at least 30 days from the date of publication in the Texas Register. Comments should be organized in a manner consistent with the proposed rules. Each set of comments should include a bulleted list on the last page of the filing that covers each substantive recommendation made in the comments. The bulleted list must be clearly labeled with the submitting entity's name.

SUBCHAPTER A. GENERAL PROVISIONS

10 TAC §§331.1 - 331.9

STATUTORY AUTHORITY

Section 483.101, Texas Government Code, authorizes TANEO to adopt and enforce rules necessary to carry out the programs established in Chapter 483, Texas Government Code. Section 483.203, Texas Government Code, authorizes TANEO to establish by rule procedures for the application for and provision of a grant under the Project Development and Supply Chain Reimbursement Program. Section 483.204, Texas Government Code, authorizes TANEO to establish by rule procedures for the application for and provision of a grant under the Advanced Nuclear Construction Reimbursement Program.

§331.1. Definitions.

All definitions found in section 483.001, Texas Government Code, are adopted by reference for this chapter. Additionally, the following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Director--The director of the Texas Advanced Nuclear Energy Office.

(2) Fund--The Texas Advanced Nuclear Development Fund as established under Subchapter C, Chapter 483 Texas Government Code.

(3) Grant agreement--A written agreement executed by the Office of the Governor and a grantee that establishes the terms, duties, reporting requirements, and other responsibilities of each party in relation to a grant awarded by the Office of the Governor.

(4) Grant funds--Funds selected applicants may be awarded to carry out the purpose of the grant as established under the grant agreement.

(5) Grant recipient or Grantee--An applicant named as the recipient of the award in the grant agreement.

(6) License--A license issued by the United States Nuclear Regulatory Commission that authorizes the license holder to construct and operate a nuclear power facility, such as a nuclear plant at a specific site, with specified conditions.

(7) OOG--The Office of the Governor.

(8) TANEO--The Texas Advanced Nuclear Energy Office established under Subchapter B, Chapter 483, Texas Government Code.

(9) Regulatory Commission--The United States Nuclear Regulatory Commission.

§331.2. Eligible Recipients; Eligible Expenses.

(a) TANEO may only provide grants to eligible businesses, nonprofit organizations, and governmental entities, including institutions of higher education.

(b) To be eligible for reimbursement of expenses, an applicant must provide sufficient documentation to support incurred expenses. The OOG, in its sole discretion, determines when an applicant has submitted sufficient documentation.

(c) An applicant for a grant under this chapter may receive financial assistance or incentives from a local, state, or federal source, but TANEO may not expend grant funds to reimburse expenses paid by a grant recipient or the grant recipient's project partner using financial assistance or incentives from the local, state, or federal source. TANEO, in its sole discretion, may terminate a grant agreement and a grantee must, at a minimum, return to the OOG the amount equal to the amount of funds the grantee received under the grant agreement.

§331.3. Application Process and Requirements Generally.

(a) TANEO will maintain a formal application available electronically at the TANEO website.

(b) TANEO will post notice of the application schedule of the grant programs described in this chapter at the TANEO website.

(c) Applicants must submit an application in the form and manner prescribed by TANEO on or before the deadlines specified in the posted notice. TANEO may require that applicants submit applications electronically.

(d) TANEO may change the requirements set forth in the formal application at any time. An applicant may be required to provide supplemental information if TANEO makes a change to the notice.

(e) TANEO may reject an application that is not submitted in accordance with the requirements established by TANEO.

(f) TANEO may reject and take no further action on an application that TANEO determines does not comply with applicable program requirements.

§331.4. Application Requirements.

(a) As set forth in greater detail in the instructions prescribed by TANEO in formal applications, each application response must include:

(1) the grant applicant's exact name;

(2) a description of the project, projected milestone dates, and proposed services;

(3) information relating to funding priority or funding consideration;

(4) proof of funding availability;

(5) project area and location to be served;

(6) proposed grant budget;

(7) the project's potential benefit to this state;

(8) information required by the application; and

(9) any other information or documentation TANEO may require.

(b) Prior to an applicant's submission of an application, TANEO may require a potential applicant to submit a Notice of Intent to apply to determine an applicant's eligibility to submit a full application for a project under this chapter.

§331.5. Grant Evaluation and Review Process.

(a) TANEO may establish and specify any selection criteria it considers relevant to the grant.

(b) TANEO shall evaluate each application for a grant based on, at a minimum:

(1) the grant applicant's:

(A) quality of services and management;

(B) efficiency of operations;

(C) access to resources essential for operating the project for which the grant is requested, such as land, water, and reliable infrastructure, as applicable;

(D) application for or docketing of a permit or license with the regulatory commission; and

(E) ability to repay the grant if project benchmarks are not met; and

(2) the project's potential benefit to this state.

(1) An application is complete when an applicant has submitted all required documentation to TANEO, including any supplemental documentation TANEO requests from the applicant.

(2) If TANEO specifies an application deadline, an applicant must submit all required documentation to TANEO on or before that deadline.

(d) TANEO will initially screen each completed application for eligibility. TANEO will not consider ineligible applications.

(e) Notwithstanding Subsection (c)(2), TANEO may request additional information from an applicant regarding its application after the application deadline. If an applicant does not provide requested information on or before the date specified by TANEO in its request for additional information, TANEO may reject the application as incomplete.

(f) TANEO may reject an application at any point during the review and evaluation process.

(g) TANEO's approval of an award shall not obligate TANEO to make any additional, supplemental, or other awards.

(h) TANEO may only issue the grant after the grant agreement is fully executed by the grant recipient and TANEO.

(i) Providing false information, knowingly or unknowingly, on a grant application may result in TANEO denying an application or, if a grant has been awarded, terminating the grant agreement and, at a minimum, recouping any grant funds distributed to a grantee.

§331.6. Amount of Grant Award Recommendations and Decisions.

(a) TANEO will award grant funds on a competitive basis.

(b) TANEO, in its sole discretion and based on the efficient and effective use of public funds, shall make all determinations regarding grant award recommendations and decisions, including, but not limited to, actions relating to an applicant's eligibility, evaluation, award, and funding amount.

(c) TANEO is not obligated to fund a grant at the amount requested by the grant applicant. All grant funding is contingent upon the availability of funds, upon approval of a grant application by TANEO, and a grantee's adherence to the terms of the grant agreement. Neither this chapter nor a grant agreement creates any entitlement or right to grant funds by a grant applicant.

§331.7. Grant Decision Notification Process.

(a) TANEO shall notify an applicant in writing of TANEO's decision regarding a grant award. If TANEO determines an applicant satisfies grant criteria, TANEO may provide a conditional grant award to the applicant.

(b) For applicants that receive notice of a conditional grant award, TANEO may establish a deadline by which the applicant must execute a grant agreement. If an applicant fails to execute a grant agreement on or before the deadline specified under chapter, TANEO may withdraw the grant award.

§331.8. Grant Agreement.

An applicant may not receive a grant under this chapter until it has entered a grant agreement with TANEO. A written agreement under this chapter must:

(1) specify benchmarks and milestones for the completion of the project for which the grant is provided;

(2) require the grant recipient to repay to the state money received from that grant if the recipient fails to reach the specified benchmarks; and

(3) include any additional terms or requirements set forth in subchapter B or C of this chapter.

§331.9. Waiver of Rules.

The director or designee, may, in the director's sole discretion, waive any provision of this chapter upon a finding that the public interest would be furthered by granting a waiver. Any such waiver must be consistent with applicable statutory law.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on December 15, 2025.

TRD-202504647

Jarred Shaffer

Director, Texas Advanced Nuclear Energy Office

Texas Advanced Nuclear Energy Office

Earliest possible date of adoption: February 1, 2026

For further information, please call: (512) 463-2000

SUBCHAPTER B. PROJECT DEVELOPMENT AND SUPPLY CHAIN REIMBURSEMENT PROGRAM

10 TAC §331.20, §331.21

STATUTORY AUTHORITY

§331.20. Eligible Projects.

TANEO may provide a reimbursement grant from the Fund under this subchapter for the expenses associated with or required for initial development of an advanced nuclear project in this state.

§331.21. Limitations on Maximum Grant Amount.

A grant provided under this subchapter may not exceed the lesser of:

(1) 50 percent of the amount of qualifying expenses associated with the project; or

(2) $12.5 million.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on December 18, 2025.

TRD-202504715

Jarred Shaffer

Director, Texas Advanced Nuclear Energy Office

Texas Advanced Nuclear Energy Office

Earliest possible date of adoption: February 1, 2026

For further information, please call: (512) 463-2000

SUBCHAPTER C. ADVANCED NUCLEAR CONSTRUCTION REIMBURSEMENT PROGRAM

10 TAC §§331.30 - 331.32

STATUTORY AUTHORITY

§331.30. Eligible Projects.

(a) TANEO may provide a reimbursement grant from the Fund under this subchapter for the expenses associated the construction of an advanced nuclear project in this state.

(b) An applicant that has received state-appropriated money for an advanced nuclear reactor is not eligible to receive a grant under this subchapter.

§331.31. Limitations on Maximum Grant Amount; Prerequisites to Grant Funding.

(a) A grant provided under this subchapter may not exceed the lesser of:

(1) 50 percent of the amount of qualifying expenses associated with the project; or

(2) $120 million.

(b) TANEO may not provide a reimbursement grant for a project under this subchapter until the regulatory commission has docketed a construction permit or license application for the project.

§331.32. Grant Agreement.

(a) Before entering a grant agreement for a grant under this subchapter, TANEO will establish a milestone-based plan to distribute grant funds on a rolling basis in accordance with:

(1) a project's respective regulatory commission license or permit regulatory pathway; and

(2) the grant recipient's financial investment decisions as it relates to the project.

(b) To determine the milestones included in a grant agreement, TANEO may consider, but is not limited to, the following considerations:

(1) the applicant's progress and completion of the regulatory commission's regulatory stages and other requirements related to a license or permit, including the:

(A) application schedule and resource letter published;

(B) application safety review;

(D) issuance of license or permit; and

(2) the recipient's financial investment decisions related to a project, including:

(A) a comprehensive description of the entire project management process;

(B) anticipated timing of decisions and associated prerequisites for a project to proceed through a gating process; and

(C) a comprehensive financing and capital expenditure plan for the project, including details relating to sources of funding and project-specific investment decisions and timelines.

(c) Notwithstanding subsection (b)(1), TANEO may, in its sole discretion, accept approvals that applicants receive from other federal agencies.

(d) TANEO may withhold reimbursements of grant funds based on an applicant's completion, or failure to complete, specified milestones described in the grant agreement.

(e) TANEO may require a grant recipient to submit any documentation or information TANEO determines is necessary to assess whether a grantee has met a milestone in whole or in part for the purpose of distributing grant funds.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on December 18, 2025.

TRD-202504716

Jarred Shaffer

Director, Texas Advanced Nuclear Energy Office

Texas Advanced Nuclear Energy Office

Earliest possible date of adoption: February 1, 2026

For further information, please call: (512) 463-2000