TITLE 4. AGRICULTURE

PART 1. TEXAS DEPARTMENT OF AGRICULTURE

CHAPTER 17. MARKETING AND PROMOTION

SUBCHAPTER K. GO TEXAN - MARKETING ENHANCEMENT GRANT ASSISTANCE PROGRAM

4 TAC §§17.700 - 17.706

The Texas Department of Agriculture (the Department) adopts new Title 4, Part 1, Chapter 17, Marketing and Promotion, Subchapter K, §§17.700 - 17.706 to the Texas Administrative Code, providing rules related to the establishment, implementation, and administration of the GO TEXAN - Marketing Enhancement Grant Assistance Program (Program), including eligibility, use of funds, application process, and reporting requirements. Section 17.705, concerning Filing Requirements; Consideration of Project Requests; Grant Awards; and §17.706, concerning Reporting Requirements, of Subchapter K, are adopted without changes to the proposed text as published in the March 18, 2022, issue of the Texas Register (47 TexReg 1357). These rules will not be republished. Section 17.700, concerning Statement of Purpose; §17.701, concerning Definitions; §17.702, concerning Administration; §17.703, concerning Eligibility; and §17.704, concerning Use of Grant, of Subchapter K, are adopted with changes to the proposed text as published in the March 18, 2022, issue of the Texas Register (47 TexReg 1357). These rules will be republished. Changes in the adopted text of the new rules respond to public comments by clarifying the Department's intent to use information required by the application form as selection criteria or otherwise reflect non-substantive variations from the proposed text. The revisions result in no change to the nature or scope of the proposed text of the rules, affect no new individuals other than those given notice, and impose no additional requirements for compliance than the proposed text.

The adopted rules establish a new grant program designed for the purposes of assisting the Department with its marketing and promotion functions related to the GO TEXAN program and raising awareness of GO TEXAN participants and products as authorized by Chapter 12 of the Texas Agriculture Code. The adopted rules relate to the purpose of the Program, define relevant terms and phrases, and provide rules for Program administration, grant eligibility, use of grant funds, application requirements, grant project requests, and reporting requirements.

PUBLIC COMMENTS

The 30-day public comment period ended April 18, 2022. During this period, the Department received written comments from a sole entity, the Farm and Ranch Freedom Alliance (FARFA), as well as fifteen members of the public, eleven of whom expressed direct support for FARFA's comments (in whole or in part) and four individuals whose comments restated those also submitted by FARFA. FARFA commented against the proposed rules relating to grant administration, eligibility, and disbursement of grant funds on a cost-reimbursement basis. FARFA also commented on subject matter involving the Department that falls outside the scope of the proposed rules in Subchapter K.

COMMENT: FARFA and other commenters expressed concern that selection criteria was not proposed in rule and despite acknowledging the need for flexibility, urged the Department to address grant selection criteria through rulemaking.

RESPONSE: The Department declines to amend the proposed text in §17.702 and §17.703. The Department complies with the Texas Grant Management Standards (TxGMS) promulgated by the Office of the Texas Comptroller of Public Accounts (CPA), which are designed to ensure transparency, objectivity, and integrity in the grantee selection process. The Department follows the customary practice of Texas state agencies, as noted by CPA in the TxGMS, namely announcing grant opportunities on the Department's public website and publishing a complete Request for Grant Applications (RFGA) for each available grant opportunity related to programs administered by the Department. Each RFGA includes specific information related to grant eligibility, grant application requirements, selection criteria, application submission instructions, eligible and ineligible costs, and reporting requirements. The Department also complies with state law requirements to post certain grant awards on its public website, to implement internal controls to ensure grant evaluation and award procedures are consistently followed, and to retain records associated with grant programs.

COMMENT: FARFA and multiple commenters expressed further concern that the MEGA Program will give greatest benefit to large entities.

RESPONSE: The Department disagrees and declines to amend the proposed text in §17.703. Eligibility to participate in grant opportunities offered under the MEGA Program is not based on the size of an applicant's business entity and such information is not sought as part of the grant application. Marketing and promotional activities that raise awareness of the GO TEXAN Program, participating businesses or products result in an overall benefit to all GO TEXAN participants.

COMMENT: FARFA and other commenters assert the Department should include, as a key selection criterion, preference to products based on the percentage of ingredients that are Texas grown.

RESPONSE: The Department disagrees and declines to amend the proposed text. As stated in new §17.701, the purpose of the Program is to assist the Department with its marketing and promotion functions related to the entire GO TEXAN program and to raise awareness of GO TEXAN participants and products. The MEGA Program is intended to benefit multiple GO TEXAN categories including Associate partners who would be eligible for event grants to bring awareness to the GO TEXAN Program as a whole and product promotion grants to assist GO TEXAN participants to sample, sell, and promote their products to new audiences. To the extent these comments seek to address or modify the GO TEXAN Program, the comments relate to subject matter outside the scope of the proposed rules.

COMMENT: FARFA and other commenters also expressed concern about the reimbursement process and how delayed payments create an additional burden for very small businesses. FARFA and other commenters further proposed that the Department advance funds to small businesses or expedite processing within 10 days of receiving reimbursement requests from small businesses.

RESPONSE: The Department disagrees and declines to amend the proposed text of §17.704. Distribution of grant funds on a cost-reimbursement basis is required by Article IX, §4.02 of the General Appropriations Act and the TxGMS except when statute provides otherwise or if an agency determines an alternative method of distribution is necessary. In addition, this method of distribution complies with TxGMS requirements that all state agencies, including the Department, implement sufficient controls associated with grant transactions to ensure the public purpose is carried out.

COMMENT: One commenter who restated FARFA's comments further raised concern that §17.703 did not contain standard eligibility criteria and outlined possible consequences due to uncertainty.

RESPONSE: The Department disagrees and declines to revise the proposed text in §17.703 to include standard eligibility criteria. The Department anticipates offering more than one grant opportunity under the MEGA Program and therefore requires flexibility in establishing eligibility. The Department complies with TxGMS and will include specific eligibility requirements in published Requests for Grant Applications.

COMMENT: FARFA and several individuals offered comments against various aspects of the GO TEXAN Program.

RESPONSE: The Department declines to revise the proposed rules in Subchapter K based on these comments as they relate to subject matter outside the scope of the proposed rules.

COMMENT: One commenter requested information on previous grant recipients and asked if the health and wellness of the community improved.

RESPONSE: The Department declines to revise the proposed text based on this comment. Information on previous grant recipients and grant programs administered by the Department is available by submitting a written request to the Department pursuant to the Texas Public Information Act, Texas Government Code, Chapter 552. The inquiry concerning the impacts of grants on community health and wellness is outside the stated purpose of the MEGA Program, as stated in §17.700, which is to assist with marketing and promotional activities to raise awareness of the GO TEXAN Program, its participants, and products.

The rules are adopted pursuant to §12.016 of the Texas Agriculture Code (Code), which authorizes the Department to adopt rules as necessary for the administration of its powers and duties under the Code.

§17.700.Statement of Purpose.

The GO TEXAN-Marketing Enhancement Grant Assistance Program is designed to provide grant funds to GO TEXAN partners to assist with the marketing and promotion of certified Texas agricultural products, including those that have been produced, processed, or otherwise had value added to the product in Texas; certified Texas non-agricultural products; Associate GO TEXAN Registrants; or the GO TEXAN Program.

§17.701.Definitions.

General definitions applicable to Title 4, Part 1, including this subchapter, are located in Chapter 1, Rule 1.1. The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise:

(1) Associate GO TEXAN Registrants--Persons who apply and are granted limited use of the mark by the department for assistance in the promotion and implementation of the GO TEXAN Program.

(2) Good standing--Means that an applicant's GO TEXAN registration is in full compliance with all of the provisions of the GO TEXAN Program, including applicant's GO TEXAN registration has been approved by the Department and is not currently suspended or terminated, all registration fees have been paid, and the Registrant's account has no outstanding issues.

(3) GO TEXAN Program--Texas Department of Agriculture's promotion of Texas-made, grown, manufactured or processed products, as well as services and communities.

(4) MEGA Program--GO TEXAN-Marketing Enhancement Grant Assistance Program.

(5) Registrant--A person in good standing with the Department who is authorized to use the GO TEXAN certification mark for the purpose of verifying their product or service is grown, manufactured or provided in Texas.

§17.702.Administration.

(a) The Department shall administer the MEGA Program, subject to the availability of funds.

(b) The Department may create multiple grant opportunities under the MEGA Program to benefit products or Associate GO TEXAN Registrants by bringing awareness to the businesses and the GO TEXAN Program as a whole.

(c) The Department shall approve a standard grant application for each MEGA Program grant cycle. The request for grant applications, standard application form, or related guidance materials for each MEGA Program grant cycle shall state the purpose of the grant program, eligibility criteria, required information, selection criteria, due date for submission of applications, and estimated award date.

(d) Information required by the application form for each type of grant opportunity offered under the MEGA Program will serve as the selection criteria used by the Department to determine grant awards. The Department shall publish an application form and provide additional information concerning each type of grant opportunity in its Request for Grant Applications, which shall be made available to the public on the Department's website.

(e) The Department shall review submitted applications according to the published selection criteria and make funding recommendations to the Commissioner.

§17.703.Eligibility.

(a) An eligible applicant must be a current GO TEXAN Program Registrant in good standing, as defined in this subchapter. Selected applicants must maintain an appropriate level of GO TEXAN participation throughout the term of the MEGA Program grant, based on grant eligibility criteria published in the request for grant application for each MEGA Program grant cycle.

(b) Eligibility to participate in the MEGA Program is determined upon the deadline to submit applications.

(c) An applicant that has a family, employment or business relationship with an executive, officer or employee of the Department is not eligible for a grant and may not participate in the MEGA Program. A family relationship is defined as a relationship within the third degree of consanguinity or second degree of affinity, as established pursuant to Chapter 573 of the Texas Government Code.

§17.704.Use of Grant.

(a) Funds received under this subchapter may only be used for activities related to the specified purpose of the grant opportunity offered as part of the MEGA Program namely, marketing and promotion of certified GO TEXAN agricultural and non-agricultural products, Associate GO TEXAN Registrants, or the GO TEXAN Program. The published request for grant applications will clearly identify the purpose of the grant and include information related to eligible and ineligible expenditures.

(b) Funds shall be distributed to selected applicants on a cost reimbursement basis in accordance with the grant agreement.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on May 11, 2022.

TRD-202201845

Skyler Shafer

Assistant General Counsel

Texas Department of Agriculture

Effective date: May 31, 2022

Proposal publication date: March 18, 2022

For further information, please call: (512) 936-9360