TITLE 40. SOCIAL SERVICES AND ASSISTANCE

PART 5. TEXAS VETERANS LAND BOARD

CHAPTER 175. GENERAL RULES OF THE VETERANS LAND BOARD

SUBCHAPTER A. GENERAL RULES OF CONTRACT FOR DEED AND [ CONTRACTING ] FINANCING FOR LAND

The Texas Veterans Land Board (Board) proposes amendments to Texas Administrative Code, Title 40, Part 5, Chapter 175, Subchapter A, §§175.1, 175.2, 175.4 - 175.15, 175.17 - 175.19, 175.21 and 175.22.

The Board identified the need for the proposed amendments during its review of this subchapter's rules, conducted pursuant to Section 2001.039 of the Texas Government Code, the adoption of which can be found in the Review of Agency Rules section of this issue. At its May 13, 2025 meeting, the Board unanimously approved the readoption of this subchapter with amendments.

The proposed amendments to §175.2. remove definitions for the Board and Veterans Land Program because they are provided for in Section 161.001 of the Texas Natural Resources Code (Code), specify that a veteran can hold only one loan originated for that veteran, update a reference to the definition of "missing/missing in action," update citations to the definition for "surviving spouse," relocate provisions on the determination of evidence of service in the Armed Forces of Vietnam to improve the rule's readability, and change provision pertaining to discharge status to limit eligibility for the loan benefits of the Veterans Land Program and other Board loan programs to those who received discharge types of honorable, general, or medical.

The proposed amendments to §175.3 make grammatical changes to improve the rule's readability.

The proposed amendments to §175.5 separate the provisions in a subsection into two subsection to improve the rule's readability.

The proposed amendments §175.8 remove outdated language.

The proposed amendments to §175.11 clarify provisions on interest rates pertaining to transferred contracts for sale and purchase.

The proposed amendments to §175.12 remove a subsection and relocated it to §175.13, which is the more appropriate rule because it contains all provisions on land improvements. The proposed amendments also update a reference to §175.4.

As mentioned, the proposed amendments to §175.13 add a subsection of §175.12 to bring all provisions in the chapter involving land improvements into one subsection and make references to the Chairman consistent with how the term is used throughout this chapter.

The proposed amendments to §175.15 update a reference to the Texas Department of Transportation.

The proposed amendments to §175.17 add a fee that the Board may charge for the costs of a credit report for processing a loan.

The proposed amendments to §175.18 update a reference to §175.2 of this chapter, update a reference to Chapter 161 of the Texas Natural Resources Code, makes references to the Chairman consistent with how the term is used throughout this chapter.

The proposed amendments to §175.22 remove three subsections because their provisions are located in Sections 161.013 and 161.062 of the Texas Natural Resources Code and Section 49-b(b) of the Texas Constitution and is thus superfluous, and updates a reference to the chairman.

In addition, the title of this subchapter is changed to "General Rules of Contract for Deed and Financing for Land" to specify the rules' subject matter.

Also, throughout this chapter, references to the Board are made lower-case to align with their occurrences throughout Chapters 161, 162, and 164 of the Code, references to this chapter are changed from "title" to "chapter," as the former is generally used throughout the Texas Administrative Code, citations are updated, language is updated, and grammatical and editorial changes to language are made to improve the rule's readability.

FISCAL IMPACT ON STATE AND LOCAL GOVERNMENT: Mr. John Barton, the Board's Director of Bond Funds Management, has determined that for the first five-year period the proposal is in effect, there will be no fiscal implications for the state or local governments as a result of the proposed amendments.

PUBLIC BENEFITS AND PROBABLE ECONOMIC COSTS: Mr. Barton has determined that for each year of the first five years the proposal is in effect, there will be no economic effect on businesses or individuals.

LOCAL EMPLOYMENT IMPACT STATEMENT: Mr. Barton has determined that the proposal will not affect a local economy, so the Board is not required to prepare a local employment impact statement under Texas Government Code, §2001.022.

FISCAL IMPACT ON SMALL BUSINESSES, MICRO-BUSINESSES, AND RURAL COMMUNITIES: The Board has determined there will be no adverse economic effect on small businesses, micro-businesses, or rural communities as a result of the proposal, therefore preparation of an economic impact statement and a regulatory flexibility analysis, as detailed under Texas Government Code, §2006.002, is not required.

GOVERNMENT GROWTH IMPACT STATEMENT: Pursuant to Texas Government Code, §2001.0221, Mr. Barton provides the following Government Growth Impact Statement for the proposal. For each year of the first five years the proposal will be in effect, the Board has determined the following:

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

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

(3) implementation of the proposal will not require an increase or decrease in future legislative appropriations to the Board;

(4) the proposal will not require an increase or decrease in fees paid to the Board;

(5) the proposal does not create a new regulation;

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

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

(8) the proposal will not affect this state's economy.

Written comments on the proposed amendments may be submitted by mail to Mr. Walter Talley, Legal Assistant, Texas General Land Office, 1700 Congress Avenue, Austin, Texas 78701, or by email to walter.talley@glo.texas.gov. Comments must be received no later than 30 days from the date of publication of the proposed amendments in the Texas Register .

The amendments are proposed pursuant to:

Section 161.001 of the Natural Resources Code (Code), which allows the Board to change its definition of "veteran" in Chapter 161 to protect the best interests of the Veterans Land Program.

Section 161.063 of the Code, which allows the Board to adopt rules and procedures it considers necessary to ensure the integrity of the Program.

Section 161.232 of the Code, which requires the Board to adopt rules for land sales under the Program.

Section 161.236 of the Code, which allows the Board to set rules to determine the number of tracts of land a veteran may purchase under the Program.

Section 161.281 of the Code, which allows the Board to waive land inspection requirements by rule.

Section 161.284 of the Code, which allows the Board to require an on-site meeting between a land appraiser and a veteran purchaser by rule.

Section 161.362 of the Code, which allows the Board to adopt rules related to insurance requirements under the Program.

Section 161.504 of the Code, which allows the Board to set rules to determine the number of loans a veteran purchaser may receive under the Program.

Section 161.508 of the Code, which requires the Board to adopt rules relating to fees, charges, and interest rates that may be charged by Program-participating lending institutions

Section 161.512 of the Code, which allows the Board by rule to increase interest rates and accelerate repayments on loans.

Section 161.513 of the Code, which requires the Board to adopt rules setting land loan foreclosure proceedings.

The code affected by the proposed amendments is Chapter 161 of the Texas Natural Resources Code.

§ 175.1. Sale of Bonds.

Procedure for issuance and sale of bonds will be set by resolution of the board [ Veterans' Land Board (hereinafter called board) ]. The chairman of the board and the executive secretary of the board are authorized to work with the bond counsel selected by the board in ascertaining the elements of security permissible under the law, the maturities, option provisions, paying agency provisions, and any related elements [ etc. ], pertaining to the sale of bonds that are [ bonds, ] acceptable in the market to the end that such elements may be incorporated into the bonds and resolution. The chairman, executive secretary [ of the board, ] and bond counsel will prepare a draft of the official notice of sale of bonds for the approval of the Attorney General of Texas and subsequently by the board. After the notice of sale is approved, it will be published, either in full or abbreviated form, in the manner prescribed by law, and the board has the right to reject any and all bids received.

§ 175.2. Loan Eligibility Requirements.

(a) The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise:

(1) [ (2) ] Bona fide resident--An individual [ actually ] living within the State of Texas with the intention to remain.

(2) [ (3) ] Missing/Missing in Action--To have an official designation of "missing status" as provided by 37 USC §551 [ Title 37, Chapter 10 of the United States Code relating to Payments to Missing Persons. The term "missing status" means the status of members of a uniformed service who are officially carried or determined to be absent in a status of missing; missing in action; interned in a foreign country; captured; beleaguered, or besieged by a hostile force; or detained in a foreign country against their will ].

(3) [ (5) ] Surviving spouse--A person who satisfies the federal definition of "surviving spouse" contained in by 38 USC §101(3), [ Title 38 USC Sec. 101(3), ] as modified by the special provision in 38 USC §103, [ Title 38 USC Sec. 103, ] or any successor statutes, as amended from time to time. [ The board's intent is to match the eligibility requirements for a surviving spouse to qualify for a home loan guaranteed by the USDVA. ]

(4) [ (6) ] USDVA/VA--The United States Department of Veterans Affairs or any successor thereto.

(5) [ (7) ] Veteran--A person who satisfies the requirements of subsection (c)(1) of this section.

(b) The board [ Board ] shall be the final authority in defining and interpreting all eligibility requirements, and whether an applicant has actually satisfied those requirements. The board [ Board ] may by resolution prescribe the procedures and forms to be used by applicants to evidence eligibility, and may appoint a committee of qualified individuals to consider the evidence of eligibility and make recommendations to the board. [ Board. Evidence of service in the Armed Forces of the Republic of Vietnam consists of: ]

(c) To be eligible to participate in the program, an applicant must satisfy one of the following:

(1) be a person who:

(A) - (B) (No change.)

(C) satisfied one of the following service requirements after September 16, 1940, and [ 1940 ]:

(i) - (iv) (No change.)

(D) [ (E) ] satisfies one of the following:

(i) - (iii) (No change.)

(2) is the surviving spouse of a veteran who died:

(A) as a result of a service-connected cause, as determined by the board [ Board ] or certified by the USDVA, or who is identified as missing in action, if the spouse satisfies the requirements of paragraph (1)(A) and (B) of this subsection, and the veteran satisfied the requirements of paragraph (1)(C) and (D) of this subsection and either paragraph (1)(E)(i) of this subsection or the veteran [ Veteran ] was a legal resident of Texas at the time of his or her death; or

(B) after filing an application and contract of sale with the board [ Board ], but before the transaction was completed, if he or she meets all other qualification requirements of the board [ Board ].

(C) For purposes of this subsection relating to surviving spouses, an individual assigned to a military installation in Texas, who is killed in Texas as the result of a terrorist attack as defined by the board [ Board ], will be considered to be a Texas resident as of the day of death.

(d) A person may only have one land loan at a time as a veteran for which the person applied [ veteran ]. However, once that land loan is paid in full, he or she may apply for another land loan as a veteran. The foregoing notwithstanding, an individual who is currently participating in the land program as a veteran may also, as a non-veteran:

(1) - (3) (No change.)

(e) The applicant must sign applications and contracts. An attorney in fact may not sign these documents for an applicant, except under limited conditions approved by the board [ Board ].

(f) No application shall be approved to purchase land under the program:

(1) which provides for or recognizes a second or subordinate lien as a part of the original purchase price for any tract except as provided for in §175.54(b)(1) of this chapter (Protection of Security Interests) [ §175.54(b) (1) ];

(2) (No change.)

(3) where there exists any other good and sufficient reason to refuse approval, as determined by the chairman of the board [ Board ].

(g) If both spouses are individually eligible to participate in the program, nothing herein shall be construed to prohibit them from applying for a loan to jointly purchase the same tract of land. The board [ Board ] may make a loan for the purchase of the same tract of land by two veterans who are spouses, but only if both spouses together satisfy the loan qualification requirements of the program. The total amount of this loan shall not exceed the maximum amount allowable for this type of loan.

(h) Any requirement of this section, or of any section within this chapter, which is not otherwise required by the constitution or statutes of this state, may be waived on a case-by-case [ case by case ] basis by the board [ Veterans Land Board ]. Any waiver request must be in writing and must describe the circumstances surrounding the request, including all of the reasons why the waiver is requested.

§ 175.4. Land Description.

(a) Land selected to be purchased by the board must be described by a legally sufficient metes and bounds description. The property description must:

(1) contain a general description of the land, specifying the acreage contained, the original survey(s) or grant(s) with abstract number(s), survey number(s) and block designation, if applicable, and the county in which the tract is located. If [ located (if ] the tract is divided by a county line, the appropriate abstract numbers and acreage on each side of the county line will be shown [ shown) ]. The general description shall also contain the deed reference to the parent tract including grantor, grantee, date of instrument, and volume and page of recording. Additional references to other instruments in the chain of title may be referred to if appropriate;

(2) (No change.)

(3) be tied to a corner of an original grant or survey if such corner is locatable and if the tie is not impractical to obtain. If it is impossible or impractical to tie to a corner of an original grant or survey the tract should tie to a locatable corner of the parent tract or any of the adjoinders; and

(4) (No change.)

(b) If the tract selected is in a subdivision, a lot and block description of the tract may be substituted for the metes and bounds description. If a lot and block description is to be used, the board must be furnished a copy of the recorded subdivision plat. This plat must show the recording information and the required signatures of the governmental entity [ (commissioners court, city council, etc.) ] authorized to accept such subdivision plat. Easements as necessary for access to a public road from all tracts must be clearly shown on the subdivision plat together with appropriate language dedicating such easement to the public or to the owners of tracts in the subdivision. All the data required in subsection (a) of this section should be shown on the face of the plat, including courses and distances for all lot lines and areas for each lot. All plats accepted subsequent to the adoption of this section shall identify the size and type of monument set at each corner of every lot. If a lot is part of a subdivision already of record where monumentation is not shown, a survey plat shall be furnished indicating monuments set or found at all corners of the tract together with sufficient ties to locate the lot within the subdivision.

(c) All metes and bounds descriptions and survey plats shall bear the seal and signature of the surveyor preparing the same. Any field notes or survey plat prepared for and used in any board [ Veterans Land Board ] transaction includes a license from the surveyor to the board and the veteran purchaser to copy and use the field notes in that transaction and in any future transactions involving the surveyed property.

(d) - (g) (No change.)

(h) The surveyor should be instructed to do a proper boundary survey of the land to be conveyed according to the record boundaries of the tracts involved. Any encroachments by existing perimeter fences into the subject tract or into adjacent tracts should be shown together with the area of any lands lying between the record boundaries and the existing occupation. Any occupation on the ground not conforming to the record boundaries should be shown on a plat of survey and fully explained in an accompanying surveyor's [ surveyors ] report.

(i) (No change.)

§ 175.5. Appraisal of Land.

(a) Before property is purchased it shall be appraised for the board by an appraiser approved by the board. The exclusive purpose of the appraisal is to assist the board in determining that its investment will be sufficiently secured. Any improvement existing on the land may be considered by the board in making the appraisal. If improvements are considered in determining the value of the property, the board may in accordance with §175.6(d) of this chapter [ title ] (relating to Commitment by the Board) require the purchase of an insurance policy covering fire and hazard losses.

(b) (No change.)

(c) Upon the request of the veteran, the appraiser shall meet with the veteran for a physical inspection of the land to be purchased. Except as provided in subsection (d) of this section, the board may not require that veterans accompany the appraiser. The board [ Board ] may, by resolution, establish a procedure for veterans to certify they have personally inspected the tracts they are purchasing. This resolution may also provide a procedure for granting a request to permit the veteran's personal representative to inspect the tract for the veteran.

(d) - (e) (No change.)

§ 175.6. Commitment by the Board.

(a) After reviewing the appraisal, and any other relevant information, the board shall issue a commitment showing the amount it will invest in the land selected. The veteran and seller shall be notified of the commitment amount in writing. The board shall not invest more than the least of the following options:

(1) - (2) (No change.)

(3) the maximum loan amount as set by the board [ Board ] by resolution from time to time, as prescribed by law.

(b) Except for certain forfeited land sales [ Forfeited Land Sales ], the board requires the veteran to have at least a five percent (5.0%) [ (5.0%) ] equity investment in the land. The equity investment is the difference between the commitment amount and the purchase price. The amount of equity required shall be the combination of the initial payment and the down payment(s), as applicable.

(c) If the commitment amount is less than 95% of the purchase price, one of the following should be done:

(1) - (2) (No change.)

(3) The parties may amend the contract to increase the acreage to make up for the difference in value compared to price; or [ The veteran may cancel the loan application and purchase contract. ]

(d) - (f) (No change.)

(g) Each application will be considered as a wholly separate transaction, independent of any other agreement, transaction or contingency. The board will not consider an application which contains a provision making it contingent upon the success or completion of another agreement or transaction, except as provided for in §175.54(b)(1) of this chapter (relating to Protection of Security Interests) .

§ 175.7. Title Examination.

(a) The board will designate an attorney or title company in the county where the land is located to serve as its closing representative. The veteran or seller may submit the name of a closing representative for the board's consideration. The representative will be paid $25 for closing the transaction. The board will also pay up to $30 to cover recording costs. The board will not pay a representative for preparing and filing application papers, drafting instruments, or for rendering services of a similar nature. If an attorney provides such services the attorney shall [ he is to ] be paid directly by the veteran or seller.

(b) The seller shall [ It is the seller's responsibility to ] obtain a commitment for title insurance and to provide copies of it to the closing representative and the board.

(c) The seller shall also provide the following, as applicable:

(1) - (5) (No change.)

(6) fees for recording all instruments other than the deed from the seller to the board and the contract of sale and purchase between the board and the veteran.

(d) The [ Among other things, the ] veteran shall [ will ] be required:

(1) (No change.)

(2) to execute an affidavit showing that the veteran [ he ] has taken possession of the land, has inspected the land, and has found no one in adverse possession and that the taxes have been prorated to the veteran's [ his ] satisfaction.

(e) The staff of the board will prepare a deed sufficient to convey title to the land from the seller to the board. If the seller wishes to have a deed prepared and furnishes it to the board, this deed must:

(1) - (3) (No change.)

(4) specify all easements, leases, or [ and/or ] other exceptions which might affect the property; and

(5) (No change.)

(f) (No change.)

(g) When the title insurance commitment has been completed and submitted, the closing representative shall forward it, along with the original and one copy of the proposed deed, if any, to the board. The board must also be provided copies of all reservations and exceptions listed in the title insurance commitment or proposed deed. The staff of the board [ board's attorneys ] will examine the closing papers (and draft a warranty deed if needed). If all is in order, the board will request the state comptroller to issue a treasury warrant in the amount of the purchase price. When the warrant is received by the board, it will be forwarded with the other closing materials to the representative so that the transaction can be completed.

(h) When the closing representative is satisfied that all closing requirements have been met, the closing representative [ he ] shall require the seller to execute and tender the deed, and shall, on behalf of the board, tender the consideration to the seller. The closing representative shall also require the veteran to execute the contract of sale and purchase. The veteran must execute this personally, no other person is authorized to execute it for him.

(i) - (j) (No change.)

§ 175.8. Contract of Sale and Purchase.

(a) - (d) (No change.)

(e) Installment payments on a [ veteran-purchaser's ] contract of sale and purchase shall be made on a monthly basis with the dates specified in the contract. [ due and payable in the following manner: ]

(f) Advance payments may be made at any time. When making an advance payment the veteran should provide the board with written instructions as to the nature of the payment (i.e., whether it is an additional payment against principal or an advance installment payment). Making an additional payment against principal will not relieve the veteran of the [ his ] obligation to make each installment payment as it becomes due.

(g) All taxes [ (state, school, water district, city, or any other tax) ] shall be kept current. Evidence of their payment shall be submitted to the board by May 1 of each year.

(h) If there are any material errors in the contract, the chairman may execute a correction contract. This instrument will then be provided to the veteran for signing [ his signature ].

§ 175.9. Death of a Purchaser.

(a) Upon the death of the purchaser, if the account is insured under a [ the ] group life insurance plan, the board should be immediately notified [ at once ] and furnished with a certified copy of the death certificate and a deed fee, which is not paid under the group insurance plan.

(b) If the account is not insured at the time of the purchaser's death, the board should be furnished with :

(1) - (2) (No change.)

(c) - (d) (No change.)

§ 175.10. Insurance Losses.

(a) (No change.)

(b) In the event a check jointly payable to the board and purchaser by the insurance company, the veteran shall [ Normally, when there has been a loss the insurance company will issue a check jointly payable to the veteran and the board. The veteran should ] endorse the check and forward it to the board. The proceeds will be held in a special account until the damaged or destroyed improvement has been repaired or replaced, or until it has been determined that the proceeds are to be applied to the principal balance of the veteran's account.

(c) If there has been a partial loss, repairs shall be made in order to prevent further deterioration. If the loss is total, the veteran will have the option of rebuilding the improvement or applying the proceeds to the principal balance of the veteran's [ his ] account. If applying the proceeds to the principal balance of the account pays it in full, any unused funds will be refunded to the veteran, or his or her designee, as soon thereafter as practicable.

(d) - (e) (No change.)

(f) Reimbursement from the insurance proceeds may be made directly to the veteran or the veteran's [ his ] creditors. If reimbursement is to be made to the veteran, the itemized statements mentioned in subsections (d)(1) and (e)(1) of this section must show that payment has already been made by the veteran. If reimbursement is to be made to the creditors, the veteran must authorize the board in writing to pay the creditors.

(g) - (h) (No change.)

(i) The application of insurance proceeds to the principal balance of the veteran's account shall not relieve the veteran [ him ] of the obligation to make the regular installment payments.

§ 175.11. Transfer of Contract of Sale and Purchase.

(a) After the original veteran-purchaser has been in possession of the tract for at least three years from the date of closing, the contract of sale and purchase may be transferred in one of the following ways:

(1) it [ the contract ] may be assigned to an eligible veteran without any increase in the interest rate; or

(2) it [ the contract ] may be assigned to a non-veteran, a veteran who is currently participating [ has previously participated ] in the program or a firm or corporation with an increase in the interest rate. The new rate of interest shall be set by the board.

(b) The contract may be transferred before the expiration of the three-year [ three year ] period only if the veteran dies, becomes financially incapacitated, or in the event of an involuntary transfer by court order or proceedings, such as bankruptcy, sheriff's sale, or divorce. Affidavits, certified copies of proceedings , and other documentation may be requested by the board in connection with this exception.

(c) If the veteran attempts to transfer, sell, or convey the property before the three-year [ three year ] period has elapsed, the board may forfeit the account and order the property to be sold. In the alternative, the board may require that the account be paid in full and a penalty paid, or approve the unauthorized transfer upon the payment of the penalty and receipt of such other documentation as may be required. The penalty shall be the difference between the account's interest rate and the interest rate charged to non-veterans at the time the unacceptable transfer or conveyance is discovered.

(d) (No change.)

(e) Upon request, the board will furnish to the assignor, or to one designated by the assignor [ him ], the forms and information necessary to complete a transfer.

(f) - (g) (No change.)

(h) If the assignor wishes to reserve any interest in the property, the assignor [ he ] must obtain the approval of the board prior to the assignment. An assignment will not be approved if the assignor attempts to reserve any interest in the contract of sale and purchase.

(i) The assignee, not the board, [ board ] is not responsible for the condition of title subsequent to the execution of the contract of sale and purchase with the original veteran-purchaser. [ The assignee should satisfy himself as to condition of title before accepting an assignment. ]

§ 175.12. Severances.

(a) A veteran may obtain a severance deed from the board for a portion of land the veteran purchases and for which the veteran wishes to have clear title as follows [ If a veteran wishes to have clear title to a portion of the land he is purchasing, he may obtain a severance deed from the board for that portion. To accomplish this the following steps should be taken ]:

(1) A current ground survey of the portion to be severed must be made by a qualified surveyor. The survey requirements of §175.4 of this chapter [ title ] (relating to Land Description [ Descriptions ]) must be met. The field notes and plat prepared from the ground survey must be submitted to the board.

(2) Both the tract to be severed and the remaining tract must have access to a public road. If the severed tract includes all of the road frontage, a 60-foot [ 60 foot ] access easement to the portion remaining under contract must be conveyed to the board.

(3) (No change.)

(b) - (c) (No change.)

§ 175.13. Sale of a Material Asset, and Improvements.

(a) Material Assets.

(1) - (2) (No change.)

(3) At least one-half [ 1/2 ] of the proceeds from the sale of a material asset shall be paid to the board. This amount will be applied toward the principal balance of the veteran's account.

(b) Improvements.

(1) Before any improvements may be removed from the property the veteran must obtain written permission to do so from the chairman [ chairman of the board ].

(2) The veteran's request should be in writing and addressed to the chairman [ chairman of the board ], and advise the amount to be paid, if any, and the reasons for removal.

§ 175.14. Mineral Leases.

(a) When applicable, a veteran may execute mineral leases covering the land being purchased through the board. The following conditions must be met:

(1) - (3) (No change.)

(4) At least one-half [ 1/2 ] of all proceeds, including bonus, rentals and royalties received under the terms of such leases, shall be paid to the board and applied toward the principal balance of the account. If an account is delinquent, the board will require that additional payments of bonus, rental and royalty be paid until the delinquency is satisfied. Payments made in this manner will not relieve the veteran of the veteran's [ his ] obligation to make the regular installment payments.

(5) - (6) (No change.)

(b) - (d) (No change.)

§ 175.15. Approval of Easements.

(a) A contract holder may, with the approval of the board, grant easements or rights of way [ way. These are of four general types ]:

(1) A right of way granted to the state or county for roads, channels, and similar projects [ etc ]. The forms to be used in granting such an easement may be obtained from the board or the Texas [ State Highway ] Department of [ Highways and Public ] Transportation.

(2) Utility easements for pipelines, electric lines, and similar projects [ etc ]. The board requires use of its form when granting such an easement, except when an easement for a waterline is to be granted. In that case the Federal Housing Administration (FHA) [ FHA ] form may be used. If an FHA form is used, a course and distance description of the waterline must be attached.

(3) - (4) (No change.)

(b) If a board [ VLB ] form is not used, the following paragraph must be inserted into the grant of easement. This paragraph more fully explains the conditions of ownership of the tract of land: "The land herein described is under Contract of Sale and Purchase to grantor herein who will receive a deed to said lands from the Veterans Land Board when all the terms of said contract have been complied with. Grantor executes this instrument with the approval of the Veterans Land Board in accordance with the regulations of said board, which approval is signified by the signature hereon of its chairman." A signature block must be provided at the conclusion of the instrument, as follows: Approved this __________ day of __________, 20__ Veterans Land Board of the State of Texas by: ___________________________Chairman, Veterans Land Board.

(c) - (g) (No change.)

(h) If payment is made for permanent damage to or depletion of the land, such as the cutting of timber [ land (such as the cutting of timber) ], one half of that amount must be paid to the board. This amount is to be applied to the principal of the veteran's account.

(i) If the easement is to be donated, the grant of easement should so state [ state ].

§ 175.17. Fees and Deposits.

(a) Notwithstanding any other references to fees in this chapter to the contrary, the only fees collected by the board shall be those described in this section.

(1) The board shall from time-to-time adopt by resolution a schedule describing the services for which it charges fees. The board's resolution adopting a schedule shall set the specific fee for each service described in the schedule, provided that no fee shall exceed the maximum amounts described in this section. The schedule will be made available to any person upon request and will be published on the board's website [ Internet site. ].

(2) - (3) (No change.)

(b) The board shall collect the following fees when they are applicable:

(1) - (2) (No change.)

(3) a $2 per acre fee for a subdivision pre-appraisal and consultation [ consultation fee -- $2 per acre ], calculated on the gross acreage in the subdivision, with a minimum of $250; and

(4) a fee not to exceed $25 for a returned check for non-sufficient funds; [ (NSF); ]

(5) [ The board shall collect ] a fee not to exceed $150 for the preparation, review, or approval of any document, including but not limited to the following:

(A) - (C) (No change.)

(D) transfer of contract and sale and purchase; and

(E) deed issued when a portion of a tract is severed prior to the full payment of its loan;

(6) a fee for a deed issued when a loan is paid in full, not to exceed:

(A) $150 if the contract incorporates this chapter by reference, or includes a general reference to the rules or [ and/or ] regulations of the board; or

(B) the amount of the fee that was in effect on the date the contract was executed if the contract contains no reference to the rules or [ and/or ] regulations of the board.

(c) The board may collect a fee to cover the cost of a credit report. Any fee for this purpose cannot exceed the actual cost of obtaining such a report from a third-party vendor. [ No fee may be charged in connection with the program to a loan applicant by a third party that has not been approved by the board. ]

§ 175.18. Resale of Forfeited Land.

(a) - (b) (No change.)

(c) Sale of forfeited tracts.

(1) Qualified purchasers.

(A) Type I tracts shall be first offered for sale or lease only to veterans who meet the eligibility requirements of §175.2 of this chapter [ title ] (relating to Definitions and Loan Eligibility Requirements [ Application/Eligibility ]). Bids on Type I tracts shall be submitted to the board on or before the bid deadline set by the board. These bids shall be reviewed by the board and the board may, in its discretion, award any Type I tract to the highest bidder.

(B) Any Type I tract not awarded by the board on the bid deadline date shall be immediately reclassified as Type II land. Type II tracts may be offered for sale or lease to both non-veterans [ nonveterans ] and eligible veterans. Bids on Type II tracts may be reviewed by the chairman who may, in his or her sole discretion, award any Type II tract to the highest bidder.

(2) - (4) (No change.)

(5) Additional terms and conditions. Each contract of sale and purchase or note and deed of trust shall conform to the provisions of the Texas Natural Resources Code, Chapter 161, and shall be in such form, and contain such terms and conditions, as the chairman of the board may prescribe.

(6) Bid rejection. The board may reject any and all bids on Type I tracts. The chairman [ of the board ] may reject any and all bids on Type II tracts.

(7) Forfeiture. If a successful bidder refuses to execute a contract of sale and purchase or a note and deed of trust, the money submitted with the [ his ] bid may be forfeited and shall be deposited in the state treasury and credited to the fund.

(d) Bids.

(1) (No change.)

(2) Bid deadline.

(A) (No change.)

(B) The board may elect to set no specific time and date on which bids pertaining to any tract must be submitted. In such event, the chairman [ of the board ] shall be authorized to review bids when and as received, and accept the first acceptable bid on any such tract.

§ 175.19. Subdivision Loan Processing.

(a) - (b) (No change.)

(c) Those sellers who qualify for subdivision loan processing may request the board to perform a preliminary appraisal of the subdivision. This preliminary appraisal process will include:

(1) Establishing high and low per acre values for the subdivision. The board will use these valuations in determining how much it will loan for the purchase of tracts in the subdivision; [ subdivision. ]

(2) Advising the seller, when appropriate, of the best subdivision plan, so as to maximize land values of the gross acreage for sale; and [ sale. ]

(3) (No change.)

(d) (No change.)

(e) After the preliminary appraisal has been completed and the seller indicates that tracts within a subdivision are ready for sale to veterans, the seller may make arrangements with the board for appraisals of specific tracts. The board will commit itself to a loan value based upon these appraisals even though a specific veteran purchaser has not yet been identified. To obtain these appraisals, the seller must:

(1) Supply a ground survey of each tract of land by a registered surveyor; [ surveyor. ]

(2) Submit to the board a certified copy of a recorded subdivision plat, if the tracts are to be sold by lot and block numbers. This plat must contain evidence that it has been approved and accepted by the county commissioners; [ commissioners. ]

(3) (No change.)

(4) Request a field appraisal of each tract by the board. A fee is charged in advance for each appraisal. This fee will be refunded to the seller if the tract is sold to a veteran through the program [ Veterans Land Program ]; and

(5) (No change.)

(f) (No change.)

(g) - (i) (No change.)

(j) Due to the nature and purpose of the subdivision loan processing program, it is the seller's responsibility to work with the veteran and the board to expedite the processing of the loan. For this reason it is suggested that the seller designate one individual to serve as a contact person with the board. This person should be familiar with the board's forms, rules, procedures, and any other requirements necessary for successful processing of the loan. In this regard it is also suggested that the contact person [ familiarize himself and ] maintain regular contacts with the board's field staff, local veterans' service officers, and the title company providing insurance.

§ 175.21. Prizes and Inducements.

(a) So that a veteran has [ The Texas Natural Resources Code, §161.222(a) requires veterans to make an initial payment in an amount set by the board's rules. Sections 161.233(a) and 161.283(b) require that Veterans make additional down payment(s) under certain circumstances. In order to carry out the intent of the requirement that veterans have ] equity in a [ any ] tract purchased through the program, the board shall not [ it is the policy of the board Veterans Land Board to ] approve a [ no ] transaction, the net effect of which involves the seller, realtor, or any party to the transaction other than the veteran directly or indirectly paying the initial payment or down payment(s). This includes inducements such as zero coupon bonds and [ bonds, ] savings bonds [ bonds, etc ].

(b) (No change.)

(c) Subsection (a) of this section shall not be construed to prohibit privileges incidental to the ownership of land and available to all purchasers in the same subdivision and/or joint ownership of recreational areas such as parks and lakes [ parks, lakes, etc ].

§ 175.22. Duties and Responsibilities of Chairman, Executive Secretary, and Assistant Executive Secretary.

(a) [ (1) ] The chairman of the board may delegate any of the chairman's [ his ] nondiscretionary responsibilities to the executive secretary and the assistant executive secretary, including the execution of veterans' purchase contracts, easements, and deeds when loans are paid in full.

(b) [ (2) ] The assistant executive secretary may perform any of the duties of the executive secretary, when and as requested by the chairman or executive secretary.

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 18, 2025.

TRD-202501693

Jennifer Jones

Chief Clerk and Deputy Land Commissioner

Texas Veterans Land Board

Earliest possible date of adoption: June 29, 2025

For further information, please call: (512) 475-1859

SUBCHAPTER B. LAND MORTGAGE FINANCING

The Texas Veterans Land Board (Board) proposes amendments to Texas Administrative Code, Title 40, Part 5, Chapter 175, Subchapter B, §§175.51 - 175.56, 175.58, 175.59, 175.61, and 175.62

The Board identified the need for the proposed amendments during its review of this chapter's rules, conducted pursuant to Section 2001.039 of the Texas Government Code, the adoption of which can be found in the Review of Agency Rules section of this issue. At its May 13, 2025 meeting, the Board unanimously approved the readoption of this subchapter with the proposed amendments.

The proposed amendments to §175.51 remove definitions for "lending institution" and "loan" or "mortgage" loans because these terms are provided for near verbatim in Section 161.502 of the Texas Natural Resources Code and update the name of Subchapter A of this chapter.

The proposed amendments to §175.54 remove language from a subsection requiring that certain interests secure approved loans because this requirement is provided for in Section 161.505 of the Code.

The proposed amendments to §175.56 remove language from a subsection giving the Board authority to approve third party loan fees and a subsection giving the Board authority to set loan interest rates because they are provided for in Section 161.508 of the Code.

In addition, the title of this subchapter is changed to "Land Mortgage Financing" to specify the type of mortgage financing under this chapter.

Also, throughout this chapter, references to the Board are made lower-case to align with their occurrences throughout Chapters 161, 162, and 164 of the Texas Natural Resources Code, and references to this chapter are changed from "title" to "chapter," as the former is generally used throughout the Texas Administrative Code.

Furthermore, editorial changes are made throughout this chapter to correct grammar, update and correct citations, remove superfluous or outdated language, and improve the rules' readability.

FISCAL IMPACT ON STATE AND LOCAL GOVERNMENT: Mr. Raul Gonzales, the Board's Director of Land and Housing, has determined that for the first five-year period the proposed amendments are in effect, there will be no fiscal implications for the state or local governments as a result of the proposed amendments.

PUBLIC BENEFITS AND PROBABLE ECONOMIC COSTS: Mr. Gonzales has determined that for each year of the first five years the proposed amendments are in effect, there will be no economic effect on businesses or individuals.

LOCAL EMPLOYMENT IMPACT STATEMENT: Mr. Gonzales has determined that the proposed amendments will not affect a local economy, so the Board is not required to prepare a local employment impact statement under Texas Government Code, §2001.022.

FISCAL IMPACT ON SMALL BUSINESSES, MICRO-BUSINESSES, AND RURAL COMMUNITIES: The Board has determined there will be no adverse economic effect on small businesses, micro-businesses, or rural communities as a result of the proposed amendments, therefore preparation of an economic impact statement and a regulatory flexibility analysis, as detailed under Texas Government Code, §2006.002, is not required.

GOVERNMENT GROWTH IMPACT STATEMENT: Pursuant to Texas Government Code, §2001.0221, Mr. Gonzales provides the following Government Growth Impact Statement for the proposed amendments. For each year of the first five years the proposed amendments will be in effect, the Board has determined the following:

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

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

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

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

(5) the proposed amendments do not create a new regulation;

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

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

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

Written comments on the proposed amendments may be submitted by mail to Mr. Walter Talley, Legal Assistant, Texas General Land Office, 1700 Congress Avenue, Austin, Texas 78701, or by email to walter.talley@glo.texas.gov. Comments must be received no later than 30 days from the date of publication of the proposed amendments in the Texas Register .

The amendments are proposed pursuant to:

Section 161.063 of the Texas Natural Resources Code (Code), which gives the Board broad rulemaking authority under Chapter 161 of the Code, i.e., the Board's enabling statute that also provides for the Veterans Land Program (Program);

Section 161.503 of the Code, which requires the Board to adopt rules necessary to implement Chapter 161, Subchapter K, which pertains to loans issued under the Program;

Section 161.504, which allows the Board to determine the number of loans a person may receive under Subchapter K by rule; and

Section 161.508 of the Code, which requires the Board to adopt rules relating to and limiting fees, charges, and interest rates collected or charged by a lending institution in connection with financing land related to the Program.

The Code affected by the proposed amendments is Texas Natural Resources Code, Chapter 161.

§ 175.51. Construction of Subchapter B.

(a) The purpose of this subchapter is to implement the authority granted to the board by the Texas Natural Resources Code, Chapter 161, Subchapter K. The board shall only make loans under this subchapter that are secured by mortgages, deeds of trust, or other liens.

(b) The rules of the board set forth in Subchapter A of this chapter (relating to General Rules of Contract for Deed and Financing for Land) [ Unless otherwise provided in this subchapter, the rules of the Veterans Land Board set forth in TAC, Title 40, Part 5, Chapter 175, Subchapter A, relating to General Rules and Contract Financing, ] shall apply to all loan transactions made by the board that are secured by a mortgage, deed of trust, or other lien on the land to be purchased unless otherwise provided by this subchapter . When applying any provision of Subchapter A to a mortgage loan transaction, those provisions shall be construed as necessary and appropriate for a mortgage loan transaction rather than a contract of sale transaction. The board may, by resolution, clarify the construction of any provision of Subchapter A in its application to a mortgage loan transaction.

(c) (No change.)

(d) Definitions.

(1) "Borrower" means a person presently obligated to make payments to the board:

(A) (No change.)

(B) For a purchase of land from the board under a contract of sale as provided by Subchapter A [ , relating to General Rules and Contract Financing, ] of this chapter; or

(C) For a loan or contract of sale that the person assumed from the original borrower with board approval [ the written consent of the board. ].

(2) "Contract of sale" means those transactions described in Subchapter A of this chapter , [ relating to General Rules and Contract Financing, ] in which the board takes fee title to property as security and sells to the borrower on a contract of sale and purchase. Title is conveyed to the borrower when all terms and conditions of the contract of sale have been satisfied.

§ 175.52. Borrower's Eligibility and Number of Loans.

(a) The board [ Board ] shall be the final authority in defining and interpreting all eligibility requirements, and whether a prospective borrower has actually satisfied those requirements. The board [ Board ] may by resolution prescribe the procedures and forms to be used in mortgage loan transactions.

(b) A person is eligible to apply for a loan under the provisions of this subchapter if he or she satisfies the requirements of §175.2(c) of this chapter (relating to Loan Eligibility Requirements). [ §175.2(c), relating to Loan Eligibility Requirements. ]

(c) A person may only have one land loan at a time as a veteran. However, once that land loan is paid in full he or she may apply for an additional land loan as a veteran. The foregoing notwithstanding, an individual who is currently participating in the program as a veteran may assume a land loan, or take an assignment of a contract of sale as a non-veteran , and may bid on a tract or tracts at a forfeited land sale as a non-veteran.

(d) Notwithstanding anything to the contrary in this chapter, a purchaser under an executory board contract of sale and purchase [ Veterans Land Board Contract of Sale and Purchase ] may refinance the obligation represented by the contract of sale and purchase [ Contract of Sale and Purchase ] by substituting a purchase money board [ Veterans Land Board ] mortgage loan. No additional funds may be advanced except for expenses incident to the transaction, as provided in the Texas Natural Resources Code, [ Tex. Nat. Res. Code ] §161.508(b). The chairman may establish procedures, documents, and policies to accomplish transactions authorized by this section. To the maximum extent possible, the substitute loans must retain the terms of the original contracts of sale and purchase [ Contracts of Sale and Purchase ] and must comply with the requirements for new board [ Veterans Land Board ] mortgage loans. All liens securing the substitute loans relate back to the date of the original contracts of sale and purchase. [ Contracts of Sale and Purchase. ]

§ 175.53. Eligibility and Description of Land.

(a) The board shall only make, or purchase, loans under this subchapter that are secured by tracts of land that meet all the requirements of §175.3 of this chapter (relating to Land Selection). [ §175.3, relating to Land Selection, of this chapter. ]

(b) For every loan made under this subchapter, the board must be furnished a survey and legal description for its review that satisfies all the requirements set forth in §175.4 of this chapter (relating to Land Description). [ §175.4 relating to Land Description, of this chapter. ]

(c) For every loan made under this subchapter, the board must be furnished an appraisal that conforms to the requirements of §175.5 of this chapter (relating to Appraisal of Land). [ §175.5, relating to Appraisal of Land, of this chapter. ]

(d) (No change.)

§ 175.54. Protection of Security Interests.

(a) [ An approved loan must be secured by a mortgage, deed of trust, or other lien on the land prior to any disbursement of funds. ] All paperwork associated with the note and lien shall be deposited for safekeeping with the board, or as the board may direct.

(b) - (c) (No change.)

§ 175.55. Loan Approval.

(a) - (c) (No change.)

(d) The board may, by resolution, establish general exceptions to the provisions of §175.6(g) of this chapter (relating to Commitment by the Board), [ §175.6(g), relating to Commitment by the Board, of this chapter ] pertaining to contingent transactions. These exceptions shall be limited to those transactions described in the Texas Natural Resources Code, Chapter 161, Subchapter K [ , relating to Land Loans ].

§ 175.56. Fees, Loan Amount, Interest Rate, and Down Payment.

(a) In addition to the fees described in §175.17 of this chapter (relating to Fees and Deposits), [ §175.17. relating to Fees and Deposits, of this chapter, ] the board shall collect a fee for the preparation, review, or approval of any document relating to a loan made under this subchapter, including but not limited to the following:

(1) - (5) (No change.)

(b) [ No fee may be charged in connection with a loan made under this subchapter to a borrower by a third party that has not been approved by the board. ] Fees and expenses approved by the board may be made a part of the borrower's loan installment payments.

(c) (No change.)

(d) [ (e) ] Each loan shall not exceed 30 years in duration.

(e) [ (f) ] The chairman, in compliance with §175.6 and §175.55 of this chapter, (relating to Commitment by the Board and Loan Approval), shall set the amount of the down payment required of borrowers. This down payment shall be paid to the closing agent at or before closing.

§ 175.58. Removal of Material Assets, Releases, and Payment in Full.

(a) (No change.)

(b) If a borrower wishes to obtain a partial release of lien to clear title to a portion of the land, the borrower shall submit a request in writing to the board. The procedures for granting a partial release are identical to those for obtaining a severance as provided in §175.12 of this chapter (relating to Severances), [ §175.12, relating to Severances, of this chapter, ] except that the board will issue a partial release of lien, instead of a deed, for a portion of the tract.

(c) (No change.)

§ 175.59. Easements and Mineral Leases.

A borrower may grant easements or rights of way, or execute mineral leases over or covering the land being purchased with a loan from the board. The borrower [ Borrower ] is liable to the board for any decrease in value of the land due to any grant of easement or lease of minerals by the borrower.

§ 175.61. Delinquencies, Acceleration and Foreclosures.

(a) (No change.)

(b) The terms of each note and deed of [ for ] trust or any other lien document shall determine acceleration and foreclosure requirements and procedures, unless modified under section (a) of this section.

(c) (No change.)

§ 175.62. Trustee's Sale.

(a) The chairman may bid for the land at any trustee's sale for any amount that the chairman deems to be in the best interest of the program. All land purchased by the board [ Board ] at a foreclosure sale shall be resold by private sale according to the practices prevalent in the mortgage industry, or, in the same manner as forfeited land under §175.18 of this chapter (relating to Resale of Forfeited Land). [ title. ]

(b) - (c) (No change.)

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 18, 2025.

TRD-202501694

Jennifer Jones

Chief Clerk and Deputy Land Commissioner

Texas Veterans Land Board

Earliest possible date of adoption: June 29, 2025

For further information, please call: (512) 475-1859

SUBCHAPTER C. PROCEDURES FOR ALTERNATIVE DISPUTE RESOLUTION

The Texas Veterans Land Board proposes amendments to Texas Administrative Code, Part 5, Chapter 175, Subchapter C, §§175.100 - 175.108, 175.110, and 175.111.

The Board identified the need for the proposal during its review of this chapter's rules, conducted pursuant to Section 2001.039 of the Texas Government Code, the adoption of which can be found in the Review of Agency Rules section of this issue. At its May 13, 2025 meeting, the Board unanimously approved the readoption of this subchapter with amendments.

The proposed amendments to §175.100 update citations to the Administrative Procedures Act and the Texas Civil Practice and Remedies Code and make references to the Governmental Disputes Resolution Act and Alternative Disputes Resolutions Act consistent with §175.101.

The proposed amendments to §175.101 remove unnecessary definitions for the Board, the Commissioner, and the Executive Secretary, as those terms are defined in Chapter 161 of the Texas Natural Resources Code (Code); remove a redundant section for the definition of Alternative Dispute Resolution in Section 2009.005 of the Texas Government Code; add a definition for "ADR Coordinator" to account for its frequency in this subchapter; update a definition for the Commissioner to reflect the position's responsibilities; and update citations.

The proposed amendments to §175.103 make qualifications for selection as an ADR Coordinator or Impartial Third Party disjunctive to reflect the rule's meaning.

The proposed amendments to §175.104 correct a reference to ADR Coordinator training requirements.

The proposed amendments to §175.105 revise a citation to Governmental Dispute Resolution Act, Texas Government Code, Chapter 2009, change references to the Board from "agency" to "board," and remove three responsibilities of the ADR Coordinator that are already provided for in the ADR Coordinator's responsibilities under Section 161.036 of the Texas Natural Resources Code.

The proposed amendments to §175.107 revise a citation to the Governmental Dispute Resolution Act, Texas Government Code, Chapter 2009.

The proposed amendment to §175.108 removes a reference to a nonexistent form used to request use of the alternative dispute resolution process to replace it with a request to the Board's ADR coordinator.

The proposed amendments to §175.111 specify a reference to the Public Information Act.

In addition, throughout this chapter, references to the General Land Office and Commissioner are changed to the Board and chairman, respectively, as these rules pertain to the Board.

Also, throughout this chapter, references to the Board, the Commissioner, and the Executive Secretary are made lower-case to align with their occurrences throughout Chapters 161, 162, and 164 of the Code. Also, editorial changes are made throughout this chapter to correct grammar, remove superfluous or outdated language, and improve the rules' readability.

FISCAL IMPACT ON STATE AND LOCAL GOVERNMENT: Mr. Anthony Dale, the Board's Executive Secretary, has determined that for the first five-year period the proposed amendments are in effect, there will be no fiscal implications for the state or local governments as a result of the proposed amendments.

PUBLIC BENEFITS AND PROBABLE ECONOMIC COSTS: Mr. Dale has determined that for each year of the first five years the proposed amendments are in effect, there will be no economic effect on businesses or individuals.

LOCAL EMPLOYMENT IMPACT STATEMENT: Mr. Dale has determined that the proposed amendments will not affect a local economy, so the Board is not required to prepare a local employment impact statement under Texas Government Code, §2001.022.

FISCAL IMPACT ON SMALL BUSINESSES, MICRO-BUSINESSES, AND RURAL COMMUNITIES: The Board has determined there will be no adverse economic effect on small businesses, micro-businesses, or rural communities as a result of the proposed amendments, therefore preparation of an economic impact statement and a regulatory flexibility analysis, as detailed under Texas Government Code, §2006.002, is not required.

GOVERNMENT GROWTH IMPACT STATEMENT: Pursuant to Texas Government Code, §2001.0221, Mr. Dale provides the following Government Growth Impact Statement for the proposed amendments. For each year of the first five years the proposed amendments will be in effect, the Board has determined the following:

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

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

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

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

(5) the proposed amendments do not create a new regulation;

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

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

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

Written comments on the proposed amendments may be submitted by mail to Mr. Walter Talley, Legal Assistant, Texas General Land Office, 1700 Congress Avenue, Austin, Texas 78701, or by email to walter.talley@glo.texas.gov. Comments must be received no later than 30 days from the date of publication of the proposed amendments in the Texas Register.

The amendments are proposed under:

Section 161.036 of the Texas Natural Resources Code (Code), which requires the Board to develop a policy to encourage the use of ADR procedures under Chapter 2009 of the Texas Government Code and in accordance with to any guidelines issued by the State Office of Administrative Hearings;

Section 161.063 of the Code, which gives the Board general rulemaking authority for Chapter 161; and

Section 2009.051 of the Texas Government Code, which allows state agencies subject to Chapter 2001 of the Code to develop ADR procedures by rule.

The codes affected by the proposal are Chapter 161 of the Texas Natural Resources Code and Chapter 2009 of the Texas Government Code, Chapter 2009.

§ 175.100. Applicability.

(a) This subchapter applies to internal and external disputes before the board, [ Texas Veterans Land Board (VLB), ] including those that may be referred by the State Office of Administrative Hearings. [ Hearings (SOAH), which is subject to the Administrative Procedures Act (APA), Chapter 2001, Texas Government Code. ]

(b) This [ Sections 175.100 - 175.111 of this ] subchapter supplements [ supplement ] the procedures required by the Administrative Procedure Act (APA), [ APA, ] Chapter 2001 of the [ 2001, ] Texas Government Code.

(c) In accordance with the Government Dispute Resolution Act, Chapter 2009 of the Texas Government Code, [ Code ] and it is the board's [ VLB's ] policy that disputes with the board [ VLB ] be resolved as fairly and expeditiously as possible. To encourage this policy, the board [ VLB ] has adopted the use of ADR. [ Alternative Dispute Resolution (ADR). ]

(d) All Alternative Dispute Resolution [ ADR ] procedures shall be consistent with the APA and GDRA [ Chapters 2001 and 2009 of the Texas Government Code ] and Chapter 154 of the Texas Civil Practice and Remedies Code. [ Chapter 2009 of the Texas Government Code is referred to as the Governmental Dispute Resolution Act or "GDRA". ]

(e) ADR procedures developed and used by the board [ VLB ] do not limit other dispute resolution procedures available for the board. [ VLB. ]

(f) Consistent with this ADR policy, the board [ VLB ] shall endeavor to educate its staff and persons who are subject to the board's [ VLB's ] jurisdiction concerning the availability of ADR to resolve disputes.

(g) The use of ADR may not be applied in a manner that denies a person a right granted under other state or federal law including a right to an administrative or judicial hearing that is allowed or mandated by the board [ VLB ] or by laws of more general application.

(h) Any resolution reached as a result of the ADR procedure should be [ achieved ] through the voluntary agreement of the parties.

§ 175.101. Definitions.

The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Alternative Dispute Resolution (ADR)--A procedure or combination of procedures that uses an impartial third party to assist individuals in voluntarily resolving disputes, including procedures described in [ §§154.023 - 154.027, ] Civil Practice and Remedies [ Code ] Code, §§154.023 - 154.027. [ The GDRA does not grant the GLO authority to engage in binding arbitration. ]

(3) [ (4) ] Contested case--Shall have the same meaning as such term is defined in the Administrative Procedure Act (APA), Chapter 2001 of the Texas Government Code. [ (Texas Government Code, Chapter 2001). ]

(4) [ (6) ] GDRA--The Governmental Dispute Resolution Act, Chapter 2009 of the Texas Government Code. [ Code, Chapter 2009. ]

(5) [ (7) ] Impartial Third Party (ITP)--A person who meets the qualifications and conditions of the GDRA, §2009.053. [ Texas Government Code §2009.053, GDRA. ]

(6) [ (8) ] Party--Shall have the same meaning as such term is defined in the APA. [ Administrative Procedure Act (Texas Government Code, Chapter 2001). ]

(7) [ (9) ] Person--Shall have the same meaning as such term is defined in the APA. [ Administrative Procedure Act (Texas Government Code, Chapter 2001). ]

(8) [ (10) ] Rule--Shall have the same meaning as such term is defined in the APA. [ Administrative Procedure Act (Texas Government Code, Chapter 2001). ]

(9) [ (11) ] State Agency--Shall have the same meaning as such term is defined in the APA. [ Administrative Procedure Act (Texas Government Code, Chapter 2001). ]

§ 175.102. Referral of Pending Disputes for ADR.

The chairman, [ Commissioner, ] the ADR Coordinator, or a beneficiary of a board program [ a Texas veteran or an assignee of VLB land ] may seek to resolve an internal or external dispute through any ADR procedure. Such procedures may include, but are not limited to, those applied to resolve matters pending in the state's district courts.

§ 175.103. Required Training for ADR Coordinator and Impartial Third Party.

Eligibility for designation as an ADR Coordinator or appointment as an ITP depends upon the following qualifications being met:

(1) completion of a minimum of 40 classroom hours of training in dispute resolution techniques in a course conducted by an alternative dispute resolution system or other dispute resolution approved by the board or; [ VLB; and ]

(2) in appropriate circumstances the board [ VLB ] may waive the training required in this section if a person has professional training or experience in dispute resolution processes related to a particular matter.

§ 175.104. Appointment of ADR Coordinator.

(a) In the absence of [ The Commissioner shall appoint ] an ADR [ Coordinator ] Coordinator, the chairman shall appoint one as soon as practicable. [ practicable following: ]

(b) The ADR Coordinator shall, as soon as practicable after appointment, complete the minimum training standards set forth in the Texas Civil Practice and Remedies Code, §154.052. [ §154.052 of the GDRA. ]

§ 175.105. Responsibilities of ADR Coordinator.

The ADR Coordinator shall have the following responsibilities:

(1) Establish a method of choosing ITPs who possess the minimum qualifications described in the GDRA, §154.052; [ §154.052 of the GDRA; ]

(2) (No change.)

(3) [ (4) ] Provide information about available ADR processes to board [ agency ] employees, and to both potential and current users of the ADR program; and

(4) [ (7) ] Maintain necessary board [ agency ] records while maintaining the confidentiality of participants.

§ 175.106. Selection and Payment of Impartial Third Parties.

(a) For each matter referred for ADR procedures, the ADR Coordinator shall assign an ITP selected by the parties from the board's [ GLO's ] list of potential ITPs unless the parties agree upon the use of a private ITP.

(b) A private ITP may be hired for commission of ADR procedures provided that:

(1) (No change.)

(2) the private ITP agrees to be subject to the direction of the board's [ GLO's ] ADR Coordinator and to all time limits imposed by the chairman, [ Commissioner, ] the ADR Coordinator, the judge, or by statute or agency rule.

(c) - (d) (No change.)

§ 175.107. Responsibilities of Impartial Third Parties.

(a) The ITP shall complete the minimum training standards set forth in the GDPRA, §154.052, [ §154.052 of the GDRA, ] prior to starting any ADR procedure for the board [ VLB ] through programs approved by the ADR Coordinator, unless the required training is waived by the ADR Coordinator.

(b) (No change.)

§ 175.108. Commencement of the ADR Process and ADR Procedures.

(a) To initiate the ADR process, a party to a contested matter must submit a written ADR request [ proposal form ] to the ADR Coordinator. The request must [ ADR proposal form can be found on the VLB's website at www.glo.state.tx.us/vlb/. Upon completion of the form, it should ] be submitted to the ADR Coordinator [ at the website address or fax number listed ] with copies sent to any other parties to the dispute.

(b) ADR procedures under this subchapter may begin, at the discretion of the ADR Coordinator, at any time [ anytime ] after a party to a contested matter submits a written ADR proposal requesting the use of ADR procedures to resolve a dispute with the board. [ VLB. ]

(c) The ADR Coordinator shall provide the chairman [ Commissioner ] a copy of the ADR proposal for review, discuss it with the interested parties, as appropriate, and assess whether ADR would assist in fairly and expeditiously resolving the dispute.

(d) If the parties, [ including ] the chairman, [ Commissioner ] and the ADR Coordinator, cannot agree on whether the ADR procedure should be used or on the particulars of the ADR procedure, the ADR Coordinator will notify the affected parties of that outcome and the proposal will be dismissed without opportunity for resubmission to the ADR Coordinator. [ Coordinator in the future. ]

(e) (No change.)

§ 175.110. Complete Settlement Agreements through ADR.

(a) - (b) (No change.)

(c) The chairman [ Commissioner ] will abide by an agreed upon resolution to the dispute and either approve the agreement or offer the recommendation to the board, [ VLB, ] if board [ Board ] authorization is needed.

(d) (No change.)

(e) Each party to a resolution resulting from ADR must execute a written agreement reflecting the resolution. The agreement is enforceable in the same manner as any other written agreement of the same nature with the state. [ State. ]

(f) The chairman [ Commissioner ] must approve a written agreement, to which the board's executive secretary [ VLB Executive Secretary ] or [ the VLB Board ] members are signatories resulting from the ADR procedure and it is subject to the Public Information Act, Chapter 552 of the [ 552, ] Texas Government Code.

§ 175.111. Confidentiality of Communications in ADR Procedures.

(a) - (d) (No change.)

(e) The ITP may not, directly or indirectly, communicate with anyone on any aspect of ADR negotiations made confidential by this section unless all the parties consent to the disclosure, or upon issuance of an opinion from the Office of the Attorney General that the evidence is subject to the Public Information Act, Chapter 552 of the Texas Government Code. [ Act. ]

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 18, 2025.

TRD-202501695

Jennifer Jones

Chief Clerk and Deputy Land Commissioner

Texas Veterans Land Board

Earliest possible date of adoption: June 29, 2025

For further information, please call: (512) 475-1859

CHAPTER 176. STATE VETERANS HOMES

The Texas Veterans Land Board ("Board") proposes amendments to Texas Administrative Code, Title 40, Part 5, Chapter 176, §§176.1, 176.3 - 176.7, and 176.9, and the repeals of §§176.2, 176.8, 176.10, and 176.11 (collectively, "the proposal").

The Board identified the need for the proposal during its review of this chapter's rules, conducted pursuant to Section 2001.039 of the Texas Government Code, the adoption of which can be found in the Review of Agency Rules section of this issue. At its May 13, 2025 meeting, the Board unanimously approved the readoption of this chapter with the proposal.

The proposed amendments to §176.1 remove definitions for the Board and "chairman," as these terms are already defined in the Chapter 161 of the Texas Natural Resources Code, i.e., the Board's enabling statute; remove a definition for "bona fide resident" to facilitate access for out-of-state veterans to Veterans Homes so that they might be closer to in-state relatives; remove a definition for the non-existent Texas Department of Aging and Disability Services; and changes a definition for "surviving spouse" to align with its federal definition pertaining to the U.S. Department of Veterans Affairs. In addition, the proposed amendments revise the definition of State Veterans Home to i) align with that in Section 164.002 of the Code, ii) incorporate licensure requirements in §176.8 to allow for that rule's repeal, and iii) to incorporate the State Veterans Homes Program requirements.

The proposed amendments to §176.5 update a reference to the Texas Department of Health and Human Services and add language to account for any State or federal agency that may require access to a Veterans Home's records and related documentation for auditing or review purposes and add language on certification and licensure requirements to account for any future Veterans Homes dedicated exclusively to Alzheimer's/dementia care.

The proposed amendments to §176.7 revise the admissions requirements to State Veterans Homes by removing a section outlining requirements that pertain to eligibility for per diem payments under 38 C.F.R. §51.50- not requirements- and remove unnecessary language provided for in 38 C.F.R. § 51.120. The proposed amendments further remove requirements that spouses and surviving spouses are bona fide residents to align with the removal of the term, as addressed above. In addition they change the requirements for parent eligibility to reflect current Gold Star qualifications

The repeal of §176.2 is proposed because its provisions are provided for in Section 164.004 and 164.005 of the Code.

The repeal of §176.8 is proposed because its provisions are unnecessary. Chapter 164 of the Code and related federal regulations for the construction and acquisition of SVHs under 38 C.F.R. Part 59 indicate any would-be State Veterans Homes would be newly constructed or located in an existing structure. Also, that State Veterans Homes must adhere to any applicable laws, regulations, and requirements is evident. In addition, the Board's authority to adopt requirements related to State Veterans Homes is provided for in Section 164.005 of the Code. As stated above, provisions related to licensure requirements are relocated to the definition of State Veterans Home in §176.001.

The repeal of §176.10 is proposed because its provision is unnecessary: the Board sets its rules; it is the final authority on their interpretation and application.

The repeal of §176.11 is proposed because its provisions are obsolete. They were proposed in 1997 as a framework for procedures for awarding contracts related to SVHs. Current procurement and contracting laws in the Texas Government Code- to include, but not limited to those in Chapters 2155, 2156, and 2269- more adequately provide for these procedures; the Board follows these laws in its State Veterans Home-related procurements.

In addition, the title of this chapter is changed to "State Veterans Homes" to more accurately reflect its subject matter.

Also, throughout the chapter, references to the Board are made lower-case to align with their occurrences throughout Chapters 161, 162, and 164 of the Code, citations are updated, and editorial and grammatical changes are made to improve the rules' readability.

FISCAL IMPACT ON STATE AND LOCAL GOVERNMENT: Mr. Bobby Breeden, the Board's Director of Texas State Veterans Homes, has determined that for the first five-year period the proposal is in effect, there will be no fiscal implications for the state or local governments as a result of the proposed amendments.

PUBLIC BENEFITS AND PROBABLE ECONOMIC COSTS: Mr. Breeden has determined that for each year of the first five years the proposal is in effect, there will be no economic effect on businesses or individuals.

LOCAL EMPLOYMENT IMPACT STATEMENT: Mr. Breeden has determined that the proposal will not affect a local economy, so the Board is not required to prepare a local employment impact statement under Texas Government Code, §2001.022.

FISCAL IMPACT ON SMALL BUSINESSES, MICRO-BUSINESSES, AND RURAL COMMUNITIES: The Board has determined there will be no adverse economic effect on small businesses, micro-businesses, or rural communities as a result of the proposal, therefore preparation of an economic impact statement and a regulatory flexibility analysis, as detailed under Texas Government Code, §2006.002, is not required.

GOVERNMENT GROWTH IMPACT STATEMENT: Pursuant to Texas Government Code, §2001.0221, Mr. Breeden provides the following Government Growth Impact Statement for the proposal. For each year of the first five years the proposal will be in effect, the Board has determined the following:

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

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

(3) implementation of the proposal will not require an increase or decrease in future legislative appropriations to the Board;

(4) the proposal will not require an increase or decrease in fees paid to the Board;

(5) the proposal does not create a new regulation;

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

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

(8) the proposal will not affect this state's economy.

Written comments on the proposed amendments may be submitted by mail to Mr. Walter Talley, Legal Assistant, Texas General Land Office, 1700 Congress Avenue, Austin, Texas 78701, or by email to walter.talley@glo.texas.gov. Comments must be received no later than 30 days from the date of publication of the proposed amendments in the Texas Register.

The amendments are proposed pursuant to Section 164.004 of the Texas Natural Resources Code, which allows the Board to adopt rules concerning the construction, acquisition, ownership, operation, maintenance, enlargement, improvement, furnishing, and equipping Veterans Homes.

The code affected by the proposed amendments is Chapter 164 of the Texas Natural Resources Code.

§ 176.1. Definitions.

The following words and terms when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise:

(1) [ (4) ] Covenants--The bond covenants undertaken by the board [ Veterans Land Board ] in association with the sale of bonds.

(2) [ (5) ] Fund--The State Veterans Home Fund, which is comprised of the proceeds from the sale of bonds issued for the purpose of acquisition, construction, operation , and maintenance of SVHs [ a state veterans home or homes ], revenues derived from the operation of one or more SVH, [ state veterans homes, ] and the proceeds from other sources which are used for the acquisition, construction, operation and maintenance of a SVH. [ state veterans home or homes. ]

(3) [ (6) ] Operator--The entity under contract with the board [ Board ] to manage a SVH. [ State Veterans Home or Homes. ]

(4) [ (7) ] Spouse --Means a person of the opposite sex who is a wife or husband.

(5) [ (8) ] Surviving spouse-- A person who satisfies the federal definition of "surviving spouse" contained in by 38 USC §101(3), as modified by the special provision in 38 USC §103, or any successor statutes, as amended from time to time. [ of the opposite sex who was the spouse of a veteran at the time of the veteran's death, and who lived with the veteran continuously from the date of marriage to the date of the veteran's death (except where there was a separation which was due to the misconduct of, or procured by, the veteran without fault of the spouse) and who has not remarried or (in cases not involving remarriage) has not since the death of the veteran, and after September 19, 1962, lived with another person and held himself or herself out openly to the public to be the spouse of such other person. ]

(6) [ (9) ] State Veterans Home (SVH)-- A veterans home as defined under the Texas Natural Resources Code, §164.002, that is licensed as a nursing home, and may be licensed as a long term or acute care facility, and falls under the State Veterans Homes Program. [ Retirement home, retirement village, home for the aging, or other facility that furnishes shelter, food, medical attention, nursing services, medical services, social activities, or other personal services or attention to veterans. ]

(7) [ (11) ] USDVA--The United States Department of Veterans Affairs or any successor thereto.

§ 176.3. Sale of Bonds.

The procedure for the issuance and sale of bonds will be set by resolution of the board. [ Board. ] The chairman and the executive secretary of the board [ Board ] are authorized to work with the bond counsel and financial advisor selected by the board [ Board ] in ascertaining the elements of security permissible under the law, maturities, option provisions, paying agency provisions, and all other matters pertaining to the bonds which affect the bonds' acceptability in the market, to the end that such elements may be incorporated into the bonds and resolution. The chairman, executive secretary of the board, [ Board, ] and bond counsel will prepare a draft of the official notice of sale of bonds. After the notice of sale is approved, it will be published, either in full or abbreviated form, in the manner prescribed by law. The board [ Board ] has the right to reject any and all bids received.

§ 176.4. Administration of the State Veterans Home Fund.

(a) The proceeds from each bond sale shall be part of the fund [ State Veterans Home Fund ] and shall first be used for the following purposes:

(1) - (2) (No change.)

(b) After the requirements of subsection (a) of this section have been satisfied, the board [ Board ] shall monitor the cash flow requirements of the program and shall administer the fund to:

(1) (No change.)

(2) make money available as needed to construct, equip and/or maintain state veterans homes as provided by Chapter 164 of the Texas Natural Resources Code[ , Chapter 164.00 et seq, ] and this chapter.

(c) The board [ Board ] may use money in the fund attributable to bonds issued and sold to pay:

(1) expenses incidental and necessary to the sale and delivery of the bonds, including, but not limited to, the following:

(A) - (C) (No change.)

(D) the expense of delivering the bonds, including the costs of travel, lodging, and meals of officers or employees of the board, [ Board, ] the state comptroller, and the attorney general, that are necessary in the opinion of the board [ Board ] to effectuate the delivery of bonds;

(E) remuneration to any agent employed by the board [ Board ] to pay the principal and interest on the bonds; and

(F) any other expenses deemed by the board [ Board ] to be reasonable and necessary;

(2) capital expenditures by the operator which involve items not described in the board's [ Board's ] contract with the operator and which are not part of the operator's standard services. These additional expenses must not be in conflict with any existing covenants or any board [ Board ] resolutions affecting the sale of bonds or administration of the fund. All such additional expenditures must also be authorized and requested by a resolution of the board. [ Board. ]

(d) Any money in the fund not immediately needed for the purposes described in subsections (b) and (c) of this section nor immediately committed to paying principal of and interest on the bonds, nor the payment of expenses, may be invested in bonds or obligations as determined by the board. [ Board. ]

(e) The board [ Board ] may, by resolution, make provisions for the administration of the fund. [ Fund. ]

§ 176.5. Appointment of Operator.

(a) The board [ Board ] will appoint an operator who will be responsible for maintenance and operation of a TSVH. [ veterans home or homes built under the provisions of this chapter. ] An operator may be an individual, partnership, corporation , or other business entity, as well as a state or federal agency.

(b) The board [ Board ] will set qualifications, requirements, terms and conditions, and all contract specifications to be met by the operator. No appointment of an operator shall be effective until a contract has been awarded and duly executed by the board [ Board ] and the operator. The functions of the operator will be provided for in the [ their ] contract. These functions shall include, but are not limited to, the following:

(1) to manage and operate [ management and operation of ] the TSVH [ Texas state veterans home(s) ] in compliance with all applicable federal, state and local laws, rules, regulations, standards, and policies; [ standards and policies. ]

(2) to develop, implement, and maintain policies and procedures for all aspects of the management and operation of the TSVH. [ state veterans home(s). ] All such policies and procedures shall be reviewed and approved by the board. [ Board. ] All such policies and procedures shall remain the property of the board [ Board ] in the event of cancellation or termination of the contract for any reason; [ reason. ]

(3) to secure and retain all licenses and certifications required to operate the TSVH [ state veterans home ] as a skilled nursing care facility with an Alzheimer's/dementia care unit or a skilled nursing care facility dedicated exclusively to Alzheimer's/dementia care . The operator shall ensure [ Ensure ] that all personnel employed at the TSVH [ state veterans home(s) ] are properly licensed or certified for the work they are performing. The operator shall secure [ Secure ] and retain such other licenses and certifications as may be required by the board; [ Veterans Land Board. ]

(4) to be fully responsible for the management and supervision of the daily operations of the home, including the development, implementation , and operation of all necessary administrative systems, including, but not limited to, accounting, personnel, reporting, administrative records, medical records, and purchasing; [ purchasing. ]

(5) to provide [ providing ] annual operating statements and budget estimates to the board; [ Board. ]

(6) to make [ making ] available at reasonable times and for reasonable periods books, records, and supporting documents kept current by the operator pertaining to the TSVH [ state veterans home ] for purposes of inspecting, monitoring, auditing, or evaluating by the board [ Board ] and its representatives, and representatives of the Texas Department of Health and Human Services, [ TDHS, ] USDVA, the state auditor, [ and ] the comptroller of public [ accounts. ] accounts, and other applicable agencies; and

(7) to notify the board, [ Veterans Land Board, ] immediately following notifications required by law, of any abuse or suspected abuse of a resident, any unexpected or unexplained injury or death of a resident, or any immediate threat to the health or safety of a resident.

(c) The contract between the operator and the board [ Board ] shall contain guidelines and standards for assessing the performance of the operator. The contract will also describe the circumstances and conditions under which the board [ Board ] may dismiss the operator. The operator's performance may be subject to an annual review by the board's [ Board's ] staff.

§ 176.6. Operator Qualifications.

An operator:

(1) [ (a) An operator ] may be a person, partnership, corporation, or other business or governmental entity; [ entity. ]

(2) [ (b) The operator ] must be duly organized, validly existing, and in good standing under the laws governing its creation and existence, and must be duly authorized and qualified to transact all business contemplated by these rules , and any contract with the board; [ Board. ]

(3) [ (c) ] must [ Must ] be in compliance with the nondiscrimination provision of the Civil Rights Act of 1964 and the regulations pursuant to it [ such act ], and the Americans with Disabilities Act; and [ Act (ADA). ]

(4) [ (d) ] shall [ Shall ] satisfy any other qualification requirements which the board [ Board ] may adopt by resolution. [ resolution from time to time. ]

§ 176.7. Admissions Requirements.

(a) [ (b) ] For purposes of this section, the term "veteran" means a person who satisfies the requirements of [ Title 40, Part 5, Chapter 175, ] §175.2(c)(1) of this title (relating to Loan Eligibility Requirements), [ the Texas Administrative Code relating to Loan Eligibility Requirements, ] as amended from time-to-time.

(b) [ (c) ] To be eligible for admission to a SVH, an applicant must satisfy one of the following:

(1) be a veteran who satisfies the USDVA guidelines and regulations relating to the need for nursing home care; [ who: ]

(2) is a spouse, or surviving spouse, of a veteran if the spouse is at least eighteen (18) years of age; [ age and has been a bona fide resident of Texas continuously for at least one (1) year immediately before applying for admission; or ]

(3) is a parent, whose child [ all of whose children ] died while serving in the armed forces of the United States, and who has resided in Texas continuously for at least one year immediately before applying for admission; or [ admission. ]

(4) (No change.)

(c) [ (d) ] The board [ Board ] may establish, by resolution from time-to-time, procedures for processing applications for admission to each SVH. Based on the availability of space, the board [ Board ] may also establish a priority system for admitting applicants according to one or more factors, including, but not limited to:

(1) the priority of a veteran over the spouse or parent of a veteran;

(2) the necessity to comply with USDVA regulations governing a SVH; [ SVH, including, but not limited to, the requirement that 75 percent (75%) of a SVH's residents be veterans. However, if the facility was constructed or renovated solely with State funds, only 50 percent (50%) of the residents must be veterans; ]

(3) whether an applicant meets the eligibility criteria in [ 40 TAC, Part 5, Chapter 175, ] §175.2 , [ relating to Loan Eligibility Requirements, ] and is thereby eligible for other Board benefits;

(4) - (8) (No change.)

(9) such other criteria as the board [ Board ] may determine are in the best interest of the program.

§ 176.9. Fees and Expenses.

(a) All fees, expenses and charges to be paid by a resident of a SVH [ state veterans home ] must be approved by the board. [ Board. ] The imposition and amount of any fee or charge shall be consistent with or lower than industry standards.

(b) Within a reasonable period of time, the board [ Board ] shall either approve or disapprove all fees and expenses to be charged. The operator shall incorporate in its guidelines the maximum fees and expenses which may be charged.

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 18, 2025.

TRD-202501696

Jennifer Jones

Chief Clerk and Deputy Land Commissioner

Texas Veterans Land Board

Earliest possible date of adoption: June 29, 2025

For further information, please call: (512) 475-1859

The repeals are proposed pursuant to Section 164.004 of the Texas Natural Resources Code, which allows the Board to adopt rules concerning the construction, acquisition, ownership, operation, maintenance, enlargement, improvement, furnishing, and equipping Veterans Homes.

The code affected by the proposed repeals is Chapter 164 of the Texas Natural Resources Code.

§ 176.2. Authority.

§ 176.8. Qualifying Homes.

§ 176.10. Rights of Board.

§ 176.11. Construction Requirements.

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 18, 2025.

TRD-202501697

Jennifer Jones

Chief Clerk and Deputy Land Commissioner

Texas Veterans Land Board

Earliest possible date of adoption: June 29, 2025

For further information, please call: (512) 475-1859

CHAPTER 177. VETERANS HOUSING ASSISTANCE PROGRAM AND VETERANS HOME IMPROVEMENT PROGRAM

The Texas Veterans Land Board ("Board") proposes amendments to Texas Administrative Code, Title 40, Part 5, Chapter 177, §§177.1, 177.3 - 177.5, 177.7, 177.8, 177.10, 177.12 and 177.13, and the repeal of §177.14 (collectively, "the proposal").

The Board identified the need for the proposal during its review of this chapter's rules, conducted pursuant to Section 2001.039 of the Texas Government Code, the adoption of which can be found in the Review of Agency Rules section of this issue. At its May 13, 2025 meeting, the Board unanimously approved the readoption of this chapter with the proposal.

The proposed amendments to §177.1 remove definitions for the Board, the veterans housing assistance fund, and the Veterans Housing Assistance Program ("Program") as these terms are already defined in Section 162.001 of the Texas Natural Resources Code, ("Code"); remove definitions for "bona fide resident" and "missing/missing in action" as the terms are not used in this chapter; and update the definition for "VA guaranty" to reflect the current entity guaranteeing mortgage loans for the U.S. Department of Veterans Affairs.

The proposed amendments to §177.3 change a reference to the State to align with how it is referred to in those chapters of the Code pertaining directly to the Board, i.e., Chapters 161, 162, and 164, and update a reference to the Texas Constitution.

The proposed amendments to §177.4 update a reference to the Texas State Auditor's Office.

The proposed amendments to §177.5 update references to 40 Tex. Admin. Code §175.2 and change a reference to the Veterans Land Program to reflect its usage in Chapter 161 of the Code.

The proposed amendments to §177.8 update references to Section 1201.003 of the Texas Occupations Code and relocate a provision requiring the Board to set loan amounts for home improvement loans from §177.14.

The repeal of §177.14 is proposed because its provisions on home loans are accounted for in Section 162.011 of the Texas Natural Resources Code.

In addition, the title of the chapter is changed to "Veterans Housing Assistance Program and Veterans Home Improvement Program" to reflect the types of loans to which the chapter pertains.

Also, throughout this chapter, references to Chapter 162 of the Code are updated, references to the Board are made lower-case to align with their occurrences throughout Chapters 161, 162, and 164 of the Code, and references to this chapter are changed from "title" to "chapter," as the former is generally used throughout the Texas Administrative Code. Furthermore, editorial changes are made throughout this chapter to correct grammar, remove superfluous or outdated language, and improve the rules' readability.

FISCAL IMPACT ON STATE AND LOCAL GOVERNMENT: Mr. Raul Gonzales, the Board's Director of Land and Housing, has determined that for the first five-year period the proposal is in effect, there will be no fiscal implications for the state or local governments as a result of the proposed amendments.

PUBLIC BENEFITS AND PROBABLE ECONOMIC COSTS: Mr. Gonzales has determined that for each year of the first five years the proposal is in effect, there will be no economic effect on businesses or individuals.

LOCAL EMPLOYMENT IMPACT STATEMENT: Mr. Gonzales has determined that the proposal will not affect a local economy, so the Board is not required to prepare a local employment impact statement under Texas Government Code, §2001.022.

FISCAL IMPACT ON SMALL BUSINESSES, MICRO-BUSINESSES, AND RURAL COMMUNITIES: The Board has determined there will be no adverse economic effect on small businesses, micro-businesses, or rural communities as a result of the proposal, therefore preparation of an economic impact statement and a regulatory flexibility analysis, as detailed under Texas Government Code, §2006.002, is not required.

GOVERNMENT GROWTH IMPACT STATEMENT: Pursuant to Texas Government Code, §2001.0221, Mr. Gonzales provides the following Government Growth Impact Statement for the proposal. For each year of the first five years the proposal will be in effect, the Board has determined the following:

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

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

(3) implementation of the proposal will not require an increase or decrease in future legislative appropriations to the Board;

(4) the proposal will not require an increase or decrease in fees paid to the Board;

(5) the proposal does not create a new regulation;

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

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

(8) the proposal will not affect this state's economy.

Written comments on the proposed amendments may be submitted by mail to Mr. Walter Talley, Legal Assistant, Texas General Land Office, 1700 Congress Avenue, Austin, Texas 78701, or by email to walter.talley@glo.texas.gov. Comments must be received no later than 30 days from the date of publication of the proposed amendments in the Texas Register.

The amendments are proposed pursuant to:

Section 162.003 of the Texas Natural Resources Code (Code), which requires the Board to adopt rules governing the administration of the veterans housing assistance fund and the Veterans' Housing Assistance Program, the creation of Program-related loans, the criteria for approving lending institutions, the use of insurance on these loans and homes financed under the Program, the verification of occupancy of such homes, and the terms and conditions of any contracts made with lending institutions related to such loans;

Section 162.011 of the Code, which allows the Board to determine the number of loans a veteran may receive through the Program;

Section 162.013 of the Code, which requires the Board to set interest rates for Program loans and to adopt rules regarding fees, charges, and interest rates charged by lending institutions on financing homes through the Program with money other than from the fund;

Section 162.016 of the Code, which allows the Board to create rules for the escalation of interest rates on loans and the acceleration of principal and interest on loans, or other appropriate remedies if a home secured by lien under the Program is transferred, leased, sold, or conveyed within three years of purchase; and

Section 162.017 of the Code requires the Board to adopt rules related to the foreclosure and resale of homes financed with a loan under the Program.

The Code affected by the proposed amendments is Chapter 162 of the Texas Natural Resources Code.

§ 177.1. Definitions.

The following words and terms when used in this section, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Administrator--The entity appointed by the board to assist the board in administering the processing of loan applications under these sections.

(2) [ (4) ] Chairman--The commissioner of the General Land Office who is also chairman of the board. [ Veterans Land Board. ]

(3) [ (5) ] Covenants--The bond covenants undertaken by the board [ Veterans Land Board ] in association with the sale of bonds.

(4) [ (6) ] FHA--The Federal Housing Administration of the Department of Housing and Urban Development of the United States of America or any successor thereto.

(5) [ (7) ] FHLMC--Federal Home Loan Mortgage Corporation or any successor thereto.

(6) [ (8) ] FNMA--Federal National Mortgage Association or any successor thereto.

(7) [ (9) ] FSLIC--The Federal Savings and Loan Insurance Corporation.

(8) [ (12) ] Participating lending institution--Any bank, trust company, savings bank, national banking association, savings and loan association, building and loan association, mortgage banker, mortgage company, credit union, life insurance company, or other financial institution that customarily provides services or aids in the financing of mortgages on single-family residential housing, including a holding company for any of the foregoing, which has sought and received approval to participate in the [ Veterans Housing Assistance ] Program.

(9) [ (14) ] VA--The United States Department of Veterans Affairs or any successor thereto.

(10) [ (15) ] VA guaranty--A guaranty of a mortgage loan under [ by ] the VA Home Loan Guaranty Program. [ under the Serviceman's Readjustment Act of 1944 as amended. ]

§ 177.3. Administration of Fund.

(a) [ (b) ] The proceeds from each bond sale shall be part of the fund and shall first be used for the following purposes:

(1) to satisfy the reserve requirements of the particular covenants associated with each [ the ] sale; and

(2) to set up the initial debt repayment associated with each sale.

(b) [ (c) ] After the requirements of subsection (a) [ (b) ] of this section have been satisfied, the board, with the assistance of the administrator, shall monitor the cash flow requirements of the program and shall administer the fund to:

(1) meet all bond repayment requirements; [ and ]

(2) make money available as needed by the program to make or acquire home loans as provided by the Texas Natural Resources Code, (Code) Chapter 162, and this chapter [ Chapter ]; and

(3) make money available as needed by the program to make home improvement loans as provided by § 177.8 of this chapter [ title ] (relating to Qualifying Homes).

(c) [ (d) ] Any money in the fund not immediately needed for the purposes described in subsections (a) [ (b) ] and (b) [ (c) ] of this section, nor immediately committed to paying principal of and interest on the bonds, nor the payment of expenses as provided in the [ Natural Resources ] Code, Chapter 162, or this chapter, may be invested in bonds or obligations of the United States or in any other way not in conflict with the covenants or the Texas Constitution and laws of the state [ State of Texas ] until needed for these purposes.

(d) [ (e) ] The board may use money in the fund attributable to bonds issued and sold to pay:

(1) expenses incidental and necessary to the sale and delivery of the bonds, including but not limited to the following:

(A) fees for legal and financial advice;

(B) the expense of publishing notice of sale of an installment of bonds;

(C) the expense of printing the bonds;

(D) the expense of delivering the bonds, including the costs of travel, lodging, and meals of officers or employees of the board, the state comptroller, the state treasurer, and the attorney general, that are necessary in the opinion of the board to effectuate the delivery of bonds;

(E) remuneration to any agent employed by the board to pay the principal and interest on the bonds; and

(F) any other expenses deemed by the board to be reasonable and necessary.

(2) expenses and fees of the administrator for any additional services requested by the board which are not described in the board's contract with the administrator as part of the administrator's standard services. These additional services must not be in conflict with any existing covenants or any board resolutions affecting the sale of bonds or administration of the fund. All such additional services must be authorized and requested by a resolution of the board.

(e) [ (f) ] Money in the fund that is not spent for the purposes provided in the [ Natural Resources ] Code, Chapter 162, or this chapter, shall remain in the fund until there is sufficient money to retire fully bonds issued and sold by the board.

(f) [ (g) ] The board may by resolution make provisions for the administration of the fund. In the event of any conflict between these rules and the provisions of a resolution of the board pertaining to the administration of the fund, the provisions of the board's resolution shall control.

§ 177.4. Appointment of Administrator.

(a) The board will set qualifications and requirements, terms, and conditions, and all contract specifications to be met by the administrator. No appointment of an administrator shall be effective until a contract has been awarded by sealed bid and duly executed by the board and the administrator. The functions of the administrator may include, but are not limited to, the following:

(1) - (3) (No change.)

(4) maintaining a list of all approved participating lending institutions and updating this list by the first day of each quarter [ January, April, July, and October ] of each year and making this list available upon request to any interested party for the actual cost of reproducing and mailing said list;

(5) - (12) (No change.)

(13) making available at reasonable times and for reasonable periods books, records, and supporting document kept current by the administrator pertaining to the program for purposes of inspecting, monitoring, auditing, or evaluating by the board, its representatives, and representatives of the Texas State Auditor's Office. [ of the State Auditor. ]

(b) The contract between the administrator and the board shall contain guidelines and standards for assessing the performance of the administrator. The contract shall also describe [ described ] the circumstances and conditions under which the board may dismiss the administrator. The administrator's performance may be subject to an annual review by the board's staff.

§ 177.5. Loan Eligibility Requirements.

(a) The board [ Board ] shall be the final authority in defining and interpreting all eligibility requirements, and whether an applicant has [ actually ] satisfied those requirements. The board [ Board ] may by resolution prescribe the procedures and forms to be used by applicants.

(b) For purposes of this program a veteran is a person who satisfies the requirements of [ Title 40, Part 5, Chapter 175, ] §175.2(c)(1) of this title (relating to Loan Eligibility Requirements). [ the Texas Administrative Code relating to Loan Eligibility Requirements, as amended from time-to-time. ] The unmarried surviving spouse of a veteran shall be eligible to participate in this program if he or she satisfies the requirements of [ Title 40, Part 5, Chapter 175, ] §175.2(c)(2) of this title. [ relating to Loan Eligibility Requirements, as amended from time-to-time. ]

(c) A veteran may be able to obtain more than one housing assistance loan under this chapter, provided that all previous program [ Veterans Housing Assistance Program ] loans have been repaid in full and that only one home may be financed by a veteran at any time through the program. However, for purposes of this chapter, an eligible veteran may obtain both a purchase money loan and a home improvement loan under the program. [ Veterans Housing Assistance Program. ] An eligible veteran may also receive a loan under the Veterans Land Program. [ land program. ]

(d) If both spouses [ a husband and wife ] are individually eligible to participate in the program, nothing herein shall be construed to prohibit them from applying for a loan to jointly purchase the same home. The board [ Board ] may make a loan for the purchase of the same home by two veterans who are spouses, [ husband and wife, ] but only in the event that both spouses together satisfy the loan qualification requirements of the participating lending institution. The total amount of this loan shall not exceed the maximum amount allowable for a home mortgage loan through the VA. [ United States Department of Veterans Affairs or any successor agency. ]

§ 177.7. Qualifying Lending Institutions.

(a) (No change.)

(b) No application shall be approved unless the applicant:

(1) is duly organized, validly existing, and in good standing under the laws governing its creation and existence and is duly authorized and qualified to originate and service residential housing loans in the State of Texas and transact all business contemplated by this chapter [ Chapter 177 of this title ] and the Texas Natural Resources Code, Chapter 162;

(2) is, at the time of the origination of any conventional mortgage loan, an FNMA or FHLMC-approved [ FHLMC approved ] seller and servicer of conventional mortgages, or an institution, the deposits of which are insured by FDIC or FSLIC, and will continue to be so approved at all times thereafter, so long as the applicant shall continue to serve in the capacity contemplated by the program;

(3) is, at the time of origination of any mortgage loan which has FHA insurance, an FHA-approved mortgagee and an FNMA or FHLMC-approved [ FHLMC approved ] seller and servicer of FHA-insured [ FHA insured ] mortgages, and will continue to be so approved at all times thereafter, so long as the applicant shall continue to serve in the capacity contemplated by the program;

(4) is, at the time of origination of any mortgage loan which has a VA guaranty, an eligible lender for mortgages guaranteed by the VA and an FNMA or FHLMC-approved [ FHLMC approved ] seller and servicer of VA guaranteed mortgages, and will continue to be so approved at all times thereafter, so long as the applicant shall continue to serve in the capacity contemplated by the program;

(5) - (7) (No change.)

(c) - (d) (No change.)

§ 177.8. Qualifying Homes.

(a) (No change.)

(b) In addition to other qualification requirements, the home must be occupied by the veteran within 60 days of closing and must be maintained as the veteran's principal residence for three consecutive years from date of purchase. [ purchase, except as hereinafter provided. ] The administrator and the participating lending institution servicing the veteran's loan will verify that the three-years [ three years ] residency requirement is satisfied and report any violation to the board. In the event of a violation, the board may increase the interest rate on its loan to a higher rate or may accelerate all principal and interest on its loan. The board may, in its discretion, adopt any other remedy it deems appropriate.

(c) (No change.)

(d) In addition to any requirements or specifications placed on the type and quality of home by the participating lending institution, the home must be on a permanent foundation that is part of the real estate. "HUD-code manufactured homes," as defined by the Texas Occupations Code (Code), §1201.003, [ Texas Civil Statutes, Article 5221f, §3, ] are eligible under the program if they meet FNMA or FHLMC guidelines; however, "mobile homes," as defined by that same section of the Code, [ Texas Civil Statutes, Article 5221f, §3, ] are not eligible. Any other type of home will be considered on a case-by-base [ case by case ] basis by the administrator under guidelines approved by the board.

(e) The home in which a veteran actually resides may be eligible for a home improvement loan [ (as such loans are commonly defined in the real estate lending industry) ] if the home and the veteran meet the qualification requirements established by the board for a home improvement loan. The board will adopt guidelines setting forth the requirements for obtaining a home improvement loan through the program, whether FHA Title I or other. The guidelines will be provided to all participating lending institutions. The board shall establish the maximum loan amounts for home improvement loans by resolution.

§ 177.10. Loan Security.

(a) (No change.)

(b) The security for the board's loan will be provided by:

(1) (No change.)

(2) mortgage insurance providing for repayment of at least 50% of the total outstanding principal balances of all loans, or repayment of at least 50% of all anticipated losses, based upon the administrator's analysis and forecast of potential losses shown by the actual experience of the mortgage lending industry on similar types of loans. The board may contract with a mortgage insurance company for pooled coverage or with individual companies for insurance on each loan, or the board may elect to be self-insured [ self insured ] in part or in whole in order to meet the requirements of the Texas Natural Resources Code, §162.011(d); and

(3) (No change.)

(c) - (d) (No change.)

§ 177.12. Assumptions.

(a) A loan under this program may be assumed after obtaining approval of the board and the participating lending institution in writing and by complying with the following requirements: [ requirements. ]

(1) The original veteran borrower must have occupied the home as a principal residence for at least three years from the date of purchase ; [ . ]

(2) All mature interest, principal, and taxes must have been paid ; [ . ]

(3) The party wishing to assume the loan must meet the qualification requirements of the participating lending institution ; and [ . ]

(4) The assumption agreement must be on forms approved by the administrator and the board and must be executed by the chairman [ of the board ].

(b) The board may in its discretion waive the requirement that the original veteran occupy the home as a principal residence for three consecutive years if it deems a waiver to be in the best interests of the program or upon receiving and approving evidence of one of the following circumstances:

(1) - (3) (No change.)

(4) forced sale of the home due to:

(A) (No change.)

(B) move required by change in the employment of the veteran or veteran's spouse; or

(C) (No change.)

(c) (No change.)

(d) The veteran shall not make any other attempt to sell, convey, rent, or lease the property purchased under this program except in the manner prescribed in this chapter [ these rules ] and the Texas Natural Resources Code (Code) , Chapter 162. Any attempt to sell, assign, transfer, convey, rent, or lease the property purchased under this program without the express written approval of the board shall be deemed a violation of this chapter and Chapter 162 of the Code [ these rules and the Veterans Housing Assistance Act ] and will be subject to the provisions of the [ Natural Resources ] Code, §162.016(d).

§ 177.13. Rights of Board.

The board may reject any veteran's loan application and shall not be liable for any loss resulting from such rejection. [ The board is the final authority is determining the interpretation and application of these rules on a case by case basis. ]

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 18, 2025.

TRD-202501698

Jennifer Jones

Chief Clerk and Deputy Land Commissioner

Texas Veterans Land Board

Earliest possible date of adoption: June 29, 2025

For further information, please call: (512) 475-1859

The repeal is proposed pursuant to Section 162.003 of the Texas Natural Resources Code (Code), which requires the Board to adopt rules governing the administration of the veterans housing assistance fund and the Veterans' Housing Assistance Program, the creation of Program-related loans, the criteria for approving lending institutions, the use of insurance on these loans and homes financed under the Program, the verification of occupancy of such homes, and the terms and conditions of any contracts made with lending institutions related to such loans;

The Code affected by the proposed repeal is Chapter 162 of the Texas Natural Resources Code.

§ 177.14. Loan Amounts.

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 18, 2025.

TRD-202501699

Jennifer Jones

Chief Clerk and Deputy Land Commissioner

Texas Veterans Land Board

Earliest possible date of adoption: June 29, 2025

For further information, please call: (512) 475-1859

CHAPTER 178. TEXAS STATE VETERANS CEMETERIES

The Texas Veterans Land Board ("Board") proposes amendments to Texas Administrative Code, Title 40, Part 5, Chapter 178, §§178.1, 178.5, and 178.6, and the repeals of §§178.2 - 178.4 (collectively, "the proposal").

The Board identified the need for the proposal during its review of this chapter's rules, conducted pursuant to Section 2001.039 of the Texas Government Code, the adoption of which can be found in the Review of Agency Rules section of this issue. At its May 13, 2025 meeting, the Board unanimously approved the readoption of this chapter with the proposal.

The proposed amendments to §178.1 remove a definition for the Board because it is already defined in Section 164.002 of the Texas Natural Resources Code (Code), revise a definition for Veterans Cemeteries to align with Section 164.002 of the Code and to incorporate the Veterans Cemetery Grants Program ("Program") requirements, remove definitions for Chairman of the Board and the Veterans Cemetery Committee because the terms are not used in this chapter, update citations to rules for the Program in Title 38, Chapter 39 of the Code of Federal Regulations outlining eligible relatives for interment related to the Program, and update the definition of veteran to include members of the Space Force, as provided for in 38 U.S.C. §101(2).

The proposed amendments to §178.6 limit those interred in TSVCs for whom the Board will seek plot allowance reimbursements to those meeting USDVA eligibility requirements.

The repeal of §178.2 is proposed because it outlines the Board's authorities related to TSVCs provided for in Chapter 164 of the Code.

The repeal of §178.3 is proposed because its provisions are similar to Section 164.004 of the Texas Natural Resources Code.

The repeal of §178.4 is proposed because its provisions are unnecessary. Chapter 164 of the Code and related federal regulations for TSVCs under 38 C.F.R. Part 39 indicate that any would-be TSVCs must be newly constructed. Also, that TSVCs must adhere to any applicable laws, regulations, and requirements pertaining to their establishment, operations, and funding is evident.

In addition, throughout the chapter, references to the Board are made lower-case to align with their occurrences throughout Chapters 161, 162, and 164 of the Code and editorial and grammatical changes are made to improve the rules' readability.

FISCAL IMPACT ON STATE AND LOCAL GOVERNMENT: Dr. John Kelley, the Board's Director of Veterans Cemeteries, has determined that for the first five-year period the proposal is in effect, there will be no fiscal implications for the state or local governments as a result of the proposed amendments.

PUBLIC BENEFITS AND PROBABLE ECONOMIC COSTS: Dr. Kelley has determined that for each year of the first five years the proposal is in effect, there will be no economic effect on businesses or individuals.

LOCAL EMPLOYMENT IMPACT STATEMENT: Dr. Kelley has determined that the proposal will not affect a local economy, so the Board is not required to prepare a local employment impact statement under Texas Government Code, §2001.022.

FISCAL IMPACT ON SMALL BUSINESSES, MICRO-BUSINESSES, AND RURAL COMMUNITIES: The Board has determined there will be no adverse economic effect on small businesses, micro-businesses, or rural communities as a result of the proposal, therefore preparation of an economic impact statement and a regulatory flexibility analysis, as detailed under Texas Government Code, §2006.002, is not required.

GOVERNMENT GROWTH IMPACT STATEMENT: Pursuant to Texas Government Code, §2001.0221, Dr. Kelley provides the following Government Growth Impact Statement for the proposal. For each year of the first five years the proposal will be in effect, the Board has determined the following:

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

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

(3) implementation of the proposal will not require an increase or decrease in future legislative appropriations to the Board;

(4) the proposal will not require an increase or decrease in fees paid to the Board;

(5) the proposal does not create a new regulation;

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

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

(8) the proposal will not affect this state's economy.

Written comments on the proposed amendments may be submitted by mail to Mr. Walter Talley, Legal Assistant, Texas General Land Office, 1700 Congress Avenue, Austin, Texas 78701, or by email to walter.talley@glo.texas.gov. Comments must be received no later than 30 days from the date of publication of the proposed amendments in the Texas Register .

The amendments are proposed pursuant to Section 164.004 of the Texas Natural Resources Code, which allows the Board to adopt rules concerning the construction, acquisition, ownership, operation, maintenance, enlargement, improvement, furnishing, and equipping Veterans Cemeteries.

The code affected by the proposed amendments is Chapter 164 of the Texas Natural Resources Code.

§ 178.1. Definitions.

The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise:

(1) [ (4) ] Eligible Relative--As defined by the USDVA rules governing the Veterans [ State ] Cemetery Grants Program [ Grants ], 38 C.F.R §39.10, [ §39.2(a) ] to include a veteran's spouse [ wife, husband ], surviving spouse, minor children, and unmarried adult children who were physically or mentally disabled and incapable of self-support.

(2) [ (5) ] TSVC--A veterans cemetery, as defined under the Texas Natural Resources Code, §164.002 that falls under the Veterans Cemetery Grants Program [ Texas State Veterans Cemetery, a burial ground operated solely for the burial of veterans and the eligible relatives ].

(3) [ (6) ] USDVA--The United States Department of Veterans Affairs or any successor thereto.

(4) [ (7) ] Veteran--As defined by [ defined ] 38 U.S.C. §101(2) and [ the USDVA rules governing State Cemetery Grants, ] 38 C.F.R. §39.2, [ §39.1(h) ] meaning a person who served in the active military, naval, [ or air ] air, or space service and who died while in service or was discharged or released therefrom under conditions other than dishonorable.

§ 178.5. Burial Eligibility Criteria.

For each TSVC, the board [ Board ] will allow for the interment of veterans and eligible relatives as defined by the USDVA laws and regulations. In addition, the board [ Board ] will allow for the interment of Texas military forces members killed on state active duty or during state training and other duty, as defined in Chapter 437 of the Texas Government Code.

§ 178.6. Fees.

(a) The board [ Board ] must approve all fees, expenses and charges for interment, disinterment, and related services for a [ the ] TSVC.

(b) (No change.)

(c) Each TSVC shall seek reimbursement from the USDVA of the plot allowance for interment of veterans meeting USDVA eligibility requirements [ veterans ]. A TSVC shall apply no additional charges for interment, disinterment, or related services for veterans.

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 18, 2025.

TRD-202501700

Jennifer Jones

Chief Clerk and Deputy Land Commissioner

Texas Veterans Land Board

Earliest possible date of adoption: June 29, 2025

For further information, please call: (512) 475-1859

The repeals are proposed pursuant to Section 164.004 of the Texas Natural Resources Code, which allows the Board to adopt rules concerning the construction, acquisition, ownership, operation, maintenance, enlargement, improvement, furnishing, and equipping Veterans Cemeteries.

The code affected by the proposed repeals Chapter 164 of the Texas Natural Resources Code.

§ 178.2. Authority.

§ 178.3. Funding.

§ 178.4. Requirements.

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 18, 2025.

TRD-202501701

Jennifer Jones

Chief Clerk and Deputy Land Commissioner

Texas Veterans Land Board

Earliest possible date of adoption: June 29, 2025

For further information, please call: (512) 475-1859