TITLE 25. HEALTH SERVICES

PART 1. DEPARTMENT OF STATE HEALTH SERVICES

CHAPTER 227. MINIMUM GUIDELINES FOR HUMAN DONOR MILK BANKS

The executive commissioner of the Texas Health and Human Services Commission (HHSC), on behalf of the Department of State Health Services (DSHS), proposes an amendment to §227.1, concerning Minimum Guidelines for Human Donor Milk Banks.

BACKGROUND AND PURPOSE

The proposal is necessary to comply with Texas Health and Safety Code (HSC) §161.071, which requires DSHS to establish minimum guidelines for the procurement, processing, distribution, or use of human milk by donor milk banks. DSHS uses Human Milk Banking Association of North America (HMBANA) standards to determine minimum Texas donor human milk bank guidelines. The proposed rule amendment updates outdated HMBANA guidelines.

SECTION-BY-SECTION SUMMARY

The proposed amendment to §227.1 updates the publication used to establish standards for milk banking, updates how guidelines are publicly accessed, and adds language that human donor milk banks must ensure donated milk is safe and properly labeled in accordance with HMBANA guidelines.

FISCAL NOTE

Christy Havel Burton, Chief Financial Officer, determined for each year of the first five years the rule will be in effect, enforcing or administering the rule does not have foreseeable implications relating to costs or revenues of state or local governments.

GOVERNMENT GROWTH IMPACT STATEMENT

DSHS determined during the first five years the rule will be in effect:

(1) the proposed rule will not create or eliminate a government program;

(2) implementation of the proposed rule will not affect the number of DSHS employee positions;

(3) implementation of the proposed rule will result in no assumed change in future legislative appropriations;

(4) the proposed rule will not affect fees paid to DSHS;

(5) the proposed rule will not create a new regulation;

(6) the proposed rule will not expand, limit, or repeal existing regulation;

(7) the proposed rule will not change the number of individuals subject to the rule; and

(8) the proposed rule will not affect the state's economy.

SMALL BUSINESS, MICRO-BUSINESS, AND RURAL COMMUNITY IMPACT ANALYSIS

Christy Havel Burton also determined there will be no adverse economic effect on small businesses, micro-businesses, or rural communities. The rule does not impose any additional costs on small businesses, micro-businesses, or rural communities required to comply with the rule.

LOCAL EMPLOYMENT IMPACT

The proposed rule will not affect a local economy.

COSTS TO REGULATED PERSONS

Texas Government Code §2001.0045 does not apply to this rule because the rule does not impose a cost on regulated persons and the rule is necessary to implement legislation that does not specifically state §2001.0045 applies to the rule.

PUBLIC BENEFIT AND COSTS

Manda Hall, M.D., Deputy Commissioner, Community Health Improvement Division, determined for each year of the first five years the rule is in effect, the public benefits by having access to up-to-date information and resources establishing the minimum guidelines for human donor milk banks.

Christy Havel Burton also determined for the first five years the rule is in effect, there are no anticipated economic costs to persons required to comply with the proposed rule because the rule amendment does not establish a cost to meet the guidelines.

TAKINGS IMPACT ASSESSMENT

DSHS determined the proposal does not restrict or limit an owner's right to the owner's property that would otherwise exist in the absence of government action and, therefore, does not constitute a taking under Texas Government Code §2007.043.

PUBLIC COMMENT

Written comments on the proposal, including information related to the cost, benefit, or effect of the proposed rule, as well as any applicable data, research, or analysis, may be submitted to Rules Coordination Office, P.O. Box 13247, Mail Code 4102, Austin, Texas 78711-3247, or street address 4601 West Guadalupe Street, Austin, Texas 78751; or emailed to HHSRulesCoordinationOffice@hhs.texas.gov.

To be considered, comments must be submitted no later than 31 days after the date of this issue of the Texas Register. Comments must be (1) postmarked or shipped before the last day of the comment period; (2) hand-delivered before 5:00 p.m. on the last working day of the comment period; or (3) emailed before midnight on the last day of the comment period. If the last day to submit comments falls on a holiday, comments must be postmarked, shipped, or emailed before midnight on the following business day to be accepted. When emailing comments, please indicate "Comments on Proposed Rule 26R027" in the subject line.

STATUTORY AUTHORITY

The amendment is authorized by Texas Government Code §524.0151 and Texas Health and Safety Code (HSC) §1001.075, which authorize the executive commissioner of HHSC to adopt rules and policies for the operation and provision of health and human services by DSHS and for the administration of HSC Chapter 1001.

The amendment implements Texas Government Code §524.0151, and HSC §161.071 and Chapter 1001.

§227.1. Minimum Guidelines.

The Texas Department of State Health Services (DSHS) has reviewed and [(department)] adopts by reference the standards found in the publication, "HMBANA Standards for Donor Human Milk Banking: An Overview, January 2024," [entitled "Guidelines for the Establishment and Operation of a Donor Human Milk Bank", Ninth Edition, 2000, as amended,] written by the Human Milk Banking Association of North America (HMBANA), Inc., as minimum guidelines.

(1) Guidelines [A copy of the guidelines] are available for download on the HMBANA.org website [file at the Texas Department of Health, Bureau of Food and Drug Safety, 1100 West 49th Street, Austin, Texas 78756, and may be viewed during normal working hours].

(2) DSHS does not license human donor milk banks in Texas. Human donor milk banks are responsible and must ensure donated milk is safe and properly labeled in accordance with HMBANA guidelines [The guidelines may be viewed on the Texas Department of Health's Bureau of Food and Drug Safety website at www.tdh.state.tx.us/bfds].

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 May 19, 2026.

TRD-202602124

Cynthia Hernandez

General Counsel

Department of State Health Services

Earliest possible date of adoption: July 5, 2026

For further information, please call: (512) 239-8263

PART 11. CANCER PREVENTION AND RESEARCH INSTITUTE OF TEXAS

CHAPTER 703. GRANTS FOR CANCER PREVENTION AND RESEARCH

The Cancer Prevention & Research Institute of Texas ("CPRIT" or the "Institute") proposes amendments to Title 25, Part 11, Chapter 703, §703.23, concerning Disbursement of Grant Award Funds.

BACKGROUND INFORMATION AND JUSTIFICATION

CPRIT may withhold the last ten percent (10%) of the total Grant Award funds from a Grant Recipient that receives Grant Award funds via advance payment. Pursuant to §703.23(a), the Grant Recipient must successfully complete all close out reports required by the Institute to receive the withheld funds. This functions to ensure the Grant Recipient's required compliance with all Grant Award close out documents.

Grant Recipients under the Product Development Research Program have sought and received advance Grant Award funds. As a result, CPRIT does not disburse the last ten percent (10%) of Grant Award funds for most Product Development Research Grant Recipients until the Grant Recipients have submitted close out documents.

Some Product Development Research Grant Recipients that initially received Grant Award funds paid in advance voluntarily elected to receive Grant Award funds via reimbursement-based disbursement during their Grant Contract term. Rule §703.23 does not provide clear guidance regarding the Institute's ability to withhold the final ten percent (10%) of Grant Award funds when the Grant Recipient has received advanced payment of Grant Award funds in the past but has later shifted to receiving payment of Grant Award funds on a reimbursement basis. The proposed rule change to §703.23 clarifies that all Product Development Research Grant Recipients are subject to the ten percent (10%) holdback regardless of whether they receive Grant Award funds in advance or on a reimbursement basis. All other Grant Recipients may be subject to the ten percent (10%) holdback if the Institute determines it is necessary and provides notice no later than the first day of the final Financial Status Report period for the Grant Award.

The proposed rule change permits the Grant Recipient subject to the ten percent (10%) holdback to submit a written request to CPRIT's Chief Executive Officer to reduce or eliminate the amount of Grant Award funds otherwise withheld by the Institute. A Grant Recipient's request must include a reasonable justification of the circumstances supporting a reduced holdback. Because this rule revision codifies the most common practice and applies it to all circumstances easily, it will avoid ambiguity and complexity in the application of the rule with little to no change to current practices.

SECTION-BY-SECTION SUMMARY

Proposed §703.23(a) ensures the consistent use of defined terms and removes text related to the withholding of final Grant Award funds. The Institute proposes moving the requirement to §703.23(c) and providing more explanation of how and when the Institute will withhold final Grant Award fund payment.

Proposed §703.23(c) explains when the Institute will withhold the final ten percent (10%) of Grant Funds from a Grant Recipient, when the Institute will release final Grant Award funds to a Grant Recipient, how a Grant Recipient may request the Institute withhold less than ten percent (10%), and that the Chief Executive Officer makes the final determination and notifies the Oversight Committee.

FISCAL NOTE

Mr. John Ellis, General Counsel for CPRIT, has determined that for each year of the first five years that the proposed amendments will be in effect, there will be no fiscal implications for state or local governments as a result of enforcing or administering the proposed rules. In addition, CPRIT does not anticipate that enforcing or administering the proposed rules will result in any reductions in costs or in any additional costs to the Institute, the state, or local governments. CPRIT also does not anticipate that there will be any loss or increase in revenue to the Institute, the state, or local governments as a result of enforcing or administering the proposed rules.

PUBLIC BENEFIT

Mr. Ellis has determined that for each year of the first five years that the proposed amendments will be in effect, the public benefit expected as a result of adopting the proposed rule amendments will be timelier payment to Grant Recipients and more transparency when there is a delay in CPRIT's review and payment of an FSR.

ECONOMIC COSTS TO PERSONS AND IMPACT ON LOCAL ECONOMY

There are no anticipated economic costs to persons required to comply with the proposed amendments. There is no effect on local economy for the first five years that the proposed amendments will be in effect; therefore, no local employment impact statement is required under Texas Government Code §§2001.022 and 2001.024(a)(6).

FISCAL IMPACT ON SMALL BUSINESSES, MICRO-BUSINESSES, AND RURAL COMMUNITIES

The proposed rule amendments will have no direct adverse economic impact on small businesses, micro-businesses, or rural communities. Accordingly, the preparation of an economic impact statement and a regulatory flexibility analysis, as specified in Texas Government Code §2006.002, is not required.

GOVERNMENT GROWTH IMPACT STATEMENT

Pursuant to Texas Government Code §2001.0221, CPRIT provides the following government growth impact statement for the proposed rules. For each year of the first five years that the proposed amendments will be in effect, CPRIT has determined the following:

(1) the proposed rules will not create or eliminate a government program;

(2) implementation of the proposed rules will not require the creation of new employee positions or the elimination of existing employee positions;

(3) implementation of the proposed rules will not require an increase or decrease in future legislative appropriations to the agency;

(4) the proposed rules will not require an increase or decrease in fees paid to the agency;

(5) the proposed rules do not create new regulations;

(6) the proposed rules will not expand, limit, or repeal an existing regulation;

(7) the proposed rules will not increase or decrease the number of individuals subject to the rules' applicability; and

(8) the proposed rules will not positively or adversely affect the state's economy.

REQUEST FOR PUBLIC COMMENTS

Comments or questions on the proposed amendments may be submitted in writing and directed to Mr. John Ellis, General Counsel, Cancer Prevention and Research Institute of Texas, P.O. Box 12097, Austin, Texas 78711, or by e-mail to jellis@cprit.texas.gov. Comments will be accepted no later than July 6, 2026. Comments should be organized in a manner consistent with the organization of the proposed amendments.

STATUTORY AUTHORITY

The proposed rule amendments are authorized by Texas Health & Safety Code § 102.108, which provides the Institute with broad rule-making authority to administer the Chapter.

CROSS REFERENCE TO STATUTE

The proposed rule amendments implement Chapter 102 of the Texas Health & Safety Code. No other statute, code, or article is affected by the proposed rules.

§703.23. Disbursement of Grant Award Funds.

(a) The Institute disburses Grant Award funds by reimbursing the Grant Recipient for allowable costs already expended; however, the nature and circumstances of the Grant Mechanism or a particular Grant Award may justify advance payment of funds by the Institute pursuant to the Grant Contract.

(1) The Chief Executive Officer shall seek authorization from the Oversight Committee to disburse Grant Award funds by advance payment.

(A) A simple majority of Oversight Committee Members present and voting must approve the Chief Executive Officer's advance payment recommendation for the Grant Award.

(B) Unless specifically stated at the time of the Oversight Committee's vote, the Oversight Committee's approval to disburse Grant Award funds by advance payment is effective for the term of the Grant Award.

(2) Unless otherwise specified in the Grant Contract, the amount of Grant Award funds advanced in any particular Tranche may not exceed the budget amount for the corresponding Project Year.

(3) The Grant Recipient receiving advance payment of Grant Award funds must maintain or demonstrate the willingness and ability to maintain procedures to minimize the time elapsing between the transfer of the Grant Award funds and disbursement by the Grant Recipient.

(4) The Grant Recipient must comply with all financial reporting requirements regarding use of Grant Award funds, including timely submission of quarterly Financial Status Reports.

(5) The Grant Recipient must expend at least 90% of the Grant Award funds in a Tranche before Institute will advance additional Grant Award [grant] funds or reimburse additional costs. To the extent possible, the Institute will work with the Grant Recipient to coordinate the advancement of Grant Award fund Tranches in such a way as to avoid affecting work in progress or project planning.

(6) Nothing herein creates an entitlement to advance payment of Grant Award funds; the Institute may determine in its sole discretion that circumstances justify limiting the amount of Grant Award funds eligible for advance payment, may restrict the period for the advance payment of Grant Award funds, or may revert to payment on a reimbursement-basis. [Unless specifically stated in the Grant Contract, the Institute will disburse the last ten percent (10%) of the total Grant Award funds using the reimbursement method of funding, and will withhold payment until the Grant Recipient has closed its Grant Contract and the Institute has approved the Grant Recipient's final reports pursuant to §703.14 of this chapter relating to Termination, Extension, Close Out of Grant Contracts, and De-Obligation of Grant Award funds.]

(b) The Institute will disburse Grant Award funds for actual cash expenditures reported on the Grant Recipient's quarterly Financial Status Report.

(1) Only expenses that are allowable and supported by adequate documentation are eligible to be paid with Grant Award funds.

(2) A Grant Recipient must pay their vendors and subcontractors prior to requesting reimbursement from CPRIT.

(c) The Institute may withhold disbursing Grant Award funds if the Grant Recipient has not submitted required reports, including quarterly Financial Status Reports, Grant Progress Reports, Matching Fund Reports, audits and other financial reports. Unless otherwise specified for the particular Grant Award, Institute approval of the required report(s) is necessary for disbursement of Grant Award funds.

(d) All Grant Award funds are disbursed pursuant to a fully executed Grant Contract. Grant Award funds shall not be disbursed prior to the effective date of the Grant Contract.

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 May 22, 2026.

TRD-202602157

Heidi McConnell

Deputy Executive Officer / Chief Operating Officer

Cancer Prevention and Research Institute of Texas

Earliest possible date of adoption: July 5, 2026

For further information, please call: (512) 463-3190