TITLE 40. SOCIAL SERVICES AND ASSISTANCE

PART 17. STATE PENSION REVIEW BOARD

CHAPTER 610. FUNDING SOUNDNESS RESTORATION PLANS

The Texas Pension Review Board (Board) proposes amendments to 40 Texas Administrative Code (TAC) §§610.13 - 610.15, 610.20, 610.21 and 610.30 - 610.32, regarding the Funding Soundness Restoration Plans for public retirement systems and their associated governmental entities.

The purpose of the proposed amendments is to improve the clarity of the rules, increase compliance with the statutory funding soundness restoration plan (FSRP) requirement, and update program requirements following the passage of the initial statutory deadline of September 1, 2025.

EXPLANATION OF AND JUSTIFICATION FOR THE RULES

In 2015, the legislature passed House Bill 3310, creating the FSRP requirement for public retirement systems with a funding period greater than 40 years. In 2021, the legislature passed House Bill 3898, which updated the FSRP provisions, reducing the triggering funding period to greater than 30 years and adding additional requirements for public retirement systems and their associated governmental entities to formally adopt plans to improve their funding. The Board adopted 40 Texas Administrative Code Chapter 610 in 2022 to implement the updated statutory requirements. The Board recently completed its first quadrennial review of Chapter 610 and now proposes amendments to §§610.13 - 610.15, 610.20, 610.21 and 610.30 - 610.32 to clarify and improve compliance with the FSRP requirement.

SECTION-BY-SECTION SUMMARY

The proposed rules amend 40 TAC §610.13. The proposed rules make a minor grammatical correction.

The proposed rules amend 40 TAC §610.14. The proposed rules would modify the applicability for the rules to specify that the rules apply to systems that submitted a voluntary FSRP only if the system did so before September 1, 2025.

The proposed rules amend 40 TAC §610.15. The proposed rules would require that public retirement systems required by statute to provide a notice of inadequate financing to its members provide a copy of the notice to the Board.

The proposed rules amend 40 TAC §610.20. The proposed rules would modify the applicability for the rules to specify that the rules apply to systems that submitted a legacy FSRP only if the system did so before September 1, 2025. The proposed rules would amend rule language pertaining to the allowable degree of variation from corridors to remove any appearance of subjectivity. The proposed amendments also make minor technical corrections.

The proposed rules amend 40 TAC §610.21. The proposed rules would make a minor technical correction.

The proposed rules amend 40 TAC §610.30. The proposed rules would specify that a system may submit an FSRP before the deadline so long as the Board reviews and determines the plan is sufficient to amortize the unfunded liability within the statutorily required timeframe.

The proposed rules amend 40 TAC §610.31. The proposed rules would clarify that systems and sponsors must submit statutorily required progress updates and that the progress update must be submitted using a form prescribed by the Board. The proposed amendments also strike outdated references.

The proposed rules amend 40 TAC §610.32. The proposed rules would amend rule language pertaining to the allowable degree of variation from corridors to remove any appearance of subjectivity and would reflect that voluntary FSRPs were previously authorized.

FISCAL IMPACT ON STATE AND LOCAL GOVERNMENT

David Fee, Chief Actuary, has determined that for each year of the first five years the proposed rules are in effect, there are no additional costs or reduction in costs to state or local government as a result of enforcing or administering the proposed rules.

LOCAL EMPLOYMENT IMPACT STATEMENT

Because Mr. Fee has determined that the proposed rules will not affect a local economy, the agency is not required to prepare a local employment impact statement under Texas Government Code Section 2001.022.

PUBLIC BENEFITS

Mr. Fee has determined that for each year of the first five-year period the proposed rules are in effect, the public benefit is to improve efficiency of and compliance with the Funding Soundness Restoration Plan requirement and other related requirements, helping to ensure the long-term financial health of Texas public retirement systems.

PROBABLE ECONOMIC COSTS TO PERSONS REQUIRED TO COMPLY WITH PROPOSAL

Mr. Fee has determined that for each year of the first five-year period the proposed rules are in effect, there are no anticipated economic costs to persons who are required to comply with the proposed rules.

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

There will be no adverse economic effect on small businesses, micro-businesses, or rural communities as a result of the proposed rules. Because the agency has determined that the proposed rule will have no adverse economic effect on small businesses, micro-businesses, or rural communities, preparation of an Economic Impact Statement and a Regulatory Flexibility Analysis, as detailed under Texas Government Code Section 2006.002, is not required.

ONE-FOR-ONE REQUIREMENT FOR RULES WITH A FISCAL IMPACT

The proposed rules do not have a fiscal note that imposes a cost on regulated persons, including another state agency, a special district, or a local government. Therefore, the agency is not required to take any further action under Texas Government Code Section 2001.0045.

GOVERNMENT GROWTH IMPACT STATEMENT

Pursuant to Texas Government Code Section 2001.0221, the agency provides the following Government Growth Impact Statement for the proposed rules. For each year of the first five years the proposed rules will be in effect, the agency has determined the following:

(1) The proposed rules do not create or eliminate a government program.

(2) Implementation of the proposed rules does not require the creation of new employee positions or the elimination of existing employee positions.

(3) Implementation of the proposed rules does not require an increase or decrease in future legislative appropriations to the agency.

(4) The proposed rules do not require an increase or decrease in fees paid to the Board.

(5) The proposed rules do not create a new regulation.

(6) The proposed rules do not expand, limit, or repeal an existing regulation.

(7) The proposed rules do not increase or decrease the number of individuals subject to the rules' applicability.

(8) The proposed rules do not positively or adversely affect the state economy.

TAKINGS IMPACT ASSESSMENT

The Pension Review Board has determined that no private real property interests are affected by the proposed rules, and the proposed rules do not restrict, limit, or impose a burden on an owner's rights to his or her private real property that would otherwise exist in the absence of government action. As a result, the proposed rules do not constitute a taking or require a takings impact assessment under Texas Government Code Section 2007.043.

PUBLIC COMMENTS AND INFORMATION RELATED TO THE COST, BENEFIT, OR EFFECT OF THE PROPOSED RULES

The Pension Review Board is requesting public comments on the proposed rules and information related to the cost, benefit, or effect of the proposed rules, including any applicable data, research, or analysis. Any information that is submitted in response to this request must include an explanation of how and why the submitted information is specific to the proposed rules. Please do not submit copyrighted, confidential, or proprietary information.

Comments on the proposed rules and responses to the request for information may be submitted by email to rules@prb.texas.gov or by mail to Tamara Aronstein, General Counsel, Texas Pension Review Board, P.O. Box 13498, Austin, Texas 78711-3498. The deadline for comments is 30 days after publication in the Texas Register.

STATUTORY AUTHORITY

The proposed rules are proposed under Texas Government Code Sections 802.2015(h) and 802.2016(h), which authorize the Pension Review Board to adopt rules as necessary to implement the Funding Soundness Restoration Plan requirement.

The statutory provisions affected by the proposed rules are those set forth in Texas Government Code Sections 802.106, 802.2015, and 802.2016.

§610.13. Definitions.

When used in this chapter, the terms listed below shall have the following meanings:

(1) "Board" means State Pension Review Board.

(2) "Compliance corridor" means the acceptable range of variation from a system's baseline for the system's funding period or funded ratio, as further described in board rules that concern a system's adherence to a funding soundness restoration plan, and related figures.

(3) "Formulated" means finalized and approved by the appropriate decision-making bodies.

(4) "Funded ratio" has the meaning assigned by Texas Government Code §802.2011.

(5) "Funding period" means the length of time it would take to fully fund the unfunded actuarial accrued liability under the current actuarial assumption based on the greater of the actuarial value of assets or the market value of assets.

(6) "Governmental entity" has the meaning assigned by §802.1012, Texas Government Code.

(7) "Legacy funding soundness restoration plan" or "L-FSRP" means a funding soundness restoration plan formulated prior to September 1, 2021, accepted by the board, and governed by the law as it existed immediately before that date.

(8) "Public retirement system" has a meaning as defined by §801.001(2) and §802.001(3), Texas Government Code but shall not include defined contribution plans as defined by §802.001(1-a), Texas Government Code or retirement systems consisting exclusively of volunteers organized under the Texas Local Fire Fighters' Retirement Act as defined by §802.002(d), Texas Government Code.

(9) "Revised funding soundness restoration plan" or "R-FSRP" means a funding soundness restoration plan prepared under §802.2015(e-1) or §802.2016(e-1), Texas Government Code, which includes additional components compared to a funding soundness restoration plan prepared under §802.2015(e) or §802.2016(e), Texas Government Code.

(10) "Revised funding soundness restoration plan exemption" or "revision exemption" means the applicable section of either Texas Government Code §§802.2015(d-1) or 802.2016(d-1) under which qualifying systems prepare a funding soundness restoration plan under Texas Government Code §§802.2015(e) or 802.2016(e) rather than a revised funding soundness restoration plan.

(11) "Target date" means the 10th anniversary of the date on which the final version of a legacy funding soundness restoration plan was agreed to as required by law as it existed immediately before September 1, 2021.

(12) "Valuation date" means the date as of which the actuarial accrued liability and the actuarial value of assets are determined, often the first or last day of the plan year as specified in the valuation.

(13) "Voluntary funding soundness restoration plan" or "V-FSRP" means a funding soundness restoration plan formulated, submitted, and completed under either Texas Government Code §802.2015 or §802.2016 as it stands after September 1, 2021, without the system or associated governmental entity first becoming subject to the requirement.

§610.14. Applicability.

This chapter applies to every public retirement system and its associated governmental entity that is subject to Texas Government Code §802.2015 or §802.2016 and to a system or associated governmental entity that chose [choose] to submit a voluntary funding soundness restoration plan prior to September 1, 2025.

§610.15. Required Disclosure of Inadequate Financing Arrangement to Plan Members.

(a) A notification to the associated governmental entity under Texas Government Code §802.2015(c) or §802.2016(c) regarding an actuarial valuation that indicates the public retirement system's actual contributions are not sufficient to amortize the unfunded liability within 30 years, means that the financing of the system is inadequate for the purposes of §802.106(d), Texas Government Code.

(b) The disclosure to members of an actuarial determination of an inadequate financing arrangement required under Texas Government Code §802.106(d) shall be accompanied by a notice that the system is subject to the funding soundness restoration plan requirement under Texas Government Code §802.2015(c) or §802.2016(c) when a system becomes subject to the requirement.

§610.20. Criteria for Determining Adherence to a Legacy Funding Soundness Restoration Plan.

(a) A public retirement system is adhering to a legacy funding soundness restoration plan if the system's actuarial valuation shows:

(1) the funding period is expected to fall within 40 years by the target date, [and] so long as the system's funding period continues to shorten while the system's funding period is above 40 years and does not increase to a length of time greater than 40 years after falling below 40 years; or

(2) an increase in funding period compared to the previous valuation, and the system's actuarial valuation shows that, between the valuation date and the system's target date, the system's funding period or funded ratio remains within the compliance corridor adopted in board rule. If the system's funding period is infinite, only the funded ratio will be evaluated to determine compliance for the purposes of this paragraph.

(b) A public retirement system with a legacy funding soundness restoration plan may submit a projection to serve as the baseline for the purpose of this subsection prior to September 1, 2025. This projection must show the projected funded ratio and funding period for each year beginning with the current date until the target date. For any years the system's funding period is projected to be above 40 years, the corridor will be based on the baseline. For any years the system's funding period is projected to be below 40 years, the compliance corridor will be based on a minimum of 40 years. If the system does not submit such a projection to the board for this purpose, the board will determine adherence to the legacy funding soundness restoration plan using a baseline in which a system's funding period must decrease by one year every consecutive year as measured on the anniversary of the date on which the final version of the funding soundness restoration plan was agreed to as required by law.

(c) The allowable degree of variation from the baseline will begin at five percent for a funded ratio corridor or ten years for a funding period corridor and will decrease over the period between the current date and the target date as described by Figure: 40 TAC §610.20(c). A system would be considered compliant if the funded ratio exceeds the minimum threshold or funding period falls below the maximum threshold [plan experience exceeds a corridor in a favorable way]. The board will use each system's baseline to provide a compliance corridor unique to that system based on their funding period and funded ratio, using the corridor sizes specified in these rules.

Figure: 40 TAC §610.20(c) (No change.)

§610.21. Completion of a Legacy Funding Soundness Restoration Plan.

(a) A public retirement system adhering to a legacy funding soundness restoration plan may continue following that plan until the earlier of:

(1) the target date; or,

(2) the date of an actuarial valuation that indicates the system's funding period is at or below 30 years.

(b) Actuarial [actuarial] valuations with valuation dates during a time that a system is adhering to a legacy funding soundness restoration plan shall not be counted towards triggering a funding soundness restoration plan under Texas Government Code §802.2015(c) or §802.2016(c) as it stands after September 1, 2021, until after the applicable date described in subsection (a) of this section when the system completes the legacy funding soundness restoration plan.

§610.30. Submission and Completion Criteria for the Funding Soundness Restoration Plan Requirement.

(a) The board will consider a retirement system to have submitted a funding soundness restoration plan when the board receives:

(1) a completed form approved by the board for this purpose;

(2) any supplementary or explanatory documents necessary to illustrate how the system's funding period will be within the maximum by the prescribed date, including a revised funding policy; and

(3) documentation of the date the plan was adopted by both the governing body of the system and of the governmental entity. Documentation may include the minutes or other record of an open meeting when each adoption occurred.

(b) The board will consider a retirement system to have completed the funding soundness restoration plan requirement when the board receives an actuarial valuation or separate analysis under Texas Government Code §§802.2015(e-2) or 802.2016(e-2) and the staff actuary or board actuary determines the actuarial valuation or separate analysis complies with actuarial standards of practice. An actuarial valuation and separate analysis are equivalent for the purposes of Texas Government Code §§802.2015(e-2) or 802.2016(e-2) and either may be submitted in lieu of the other during the respective submission periods, provided it includes the components required by the applicable subsection.

(c) For a system submitting a revised funding soundness restoration plan with specific changes required by statute, "automatic risk-sharing mechanisms" means changes to plan provisions, including adjustments to benefit levels or contribution amounts, upon meeting or exceeding certain criteria established beforehand without needing additional approval at the time of the change. The plan shall specify how the changes to the contribution amounts are split between the employer and members. At least one of the automatic risk-sharing mechanisms included in the plan must be an adjustable benefit or contribution mechanism.

(d) A system or associated governmental entity shall submit to the board the materials related to a funding soundness restoration plan that adequately fulfill the analysis and documentation requirements in statute and rules to be considered compliant. If the board determines the materials are inadequate, the board will notify the system of the determination with an explanation of the reason and may request additional information. The system shall submit additional materials consistent with the board's instructions. The board would consider a system noncompliant if the board does not receive the system's funding soundness restoration plan; if the system fails to comply with an approved funding soundness restoration plan, revised funding soundness restoration plan, or other type of funding soundness restoration plan; or if the system fails to submit to the board the funding soundness restoration plan materials that adequately satisfy the requirements in statute and board rules within the appropriate time periods for those materials.

§610.31. Compliance with Progress Updates.

(a) A system adhering to a legacy funding soundness restoration plan shall continue providing progress updates every two years rather than submitting progress updates in accordance with this section.

(b) The first draft of a plan submitted as a part of a progress update under Texas Government Code §§802.2015(f) or 802.2016(f) must, at minimum, include a projected timeline for enactment of the plan, and identify the action that various entities must take to approve or enact the plan, such as votes that may be necessary in accordance with the system's governing statute. Each subsequent progress update should include a draft plan that contains updated information and that demonstrates movement toward a complete and finalized plan.

(c) A description of changes submitted as part of a progress update to fulfill the requirements of Texas Government Code §§802.2015(f) or 802.2016(f) must include the projected actuarial impact of each change under consideration on the retirement system's funding period and funded ratio.

(d) [(e)] A system and the [or] associated governmental entity that receives an actuarial valuation [dated after September 1, 2021,] that triggers a funding soundness restoration plan, including a revised funding soundness restoration plan, must submit updates to the board beginning not later than the first anniversary of the valuation date of the actuarial valuation that required formulation of the plan and every subsequent six-month period until the plan is submitted as described in Texas Government Code §§802.2015(f) or 802.2016(f).

§610.32. Revised Funding Soundness Restoration Plan Exemption.

(a) A public retirement system is adhering to a funding soundness restoration plan formulated between September 1, 2021, and September 1, 2025, if, during the period between the date the funding soundness restoration plan is adopted by the system and governmental entity and the 10th anniversary of the applicable date for the funding soundness restoration plan to be formulated and the system to be within the maximum funding period prescribed by Texas Government Code §§802.2015(e)(2) or 802.2016(e)(2), the system's actuarial valuation shows the system's funding period or funded ratio remain within the applicable compliance corridors established in this section. If the system's funding period is infinite, only the funded ratio will be evaluated to determine compliance for the purposes of this subsection.

(b) The baseline for a system's funding period compliance corridor will be 30 years, and the baseline for the funded ratio corridor will be the actuarial projection of the system's expected future actuarial value of assets and liabilities submitted as part of an actuarial valuation or separate analysis in accordance with either Texas Government Code §§802.2015(e-2)(1) or 802.2016(e-2)(1).

(c) The allowable degree of variation from the baseline will begin at five percent for a funded ratio corridor or ten years for a funding period corridor and will decrease over the 10-year period as described by Figure: 40 TAC §610.32(c). A system would be considered compliant if the funded ratio exceeds the minimum threshold or funding period falls below the maximum threshold [plan experience exceeds the corridor in a favorable way]. The board will use each system's baseline to provide a compliance corridor unique to that system based on their amortization period and funded ratio, using the corridor sizes specified in these rules.

Figure: 40 TAC §610.32(c) (No change.)

(d) A system may submit a voluntary funding soundness restoration plan prior to September 1, 2025 without first becoming subject to the requirement, for the purposes of qualifying for the revision exemption, provided the V-FSRP is consistent with all applicable submission requirements in statute and rules.

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 July 24, 2026.

TRD-202603141

Tamara Aronstein

General Counsel

State Pension Review Board

Earliest possible date of adoption: September 6, 2026

For further information, please call: (512) 463-1736

PART 20. TEXAS WORKFORCE COMMISSION

CHAPTER 800. GENERAL ADMINISTRATION

The Texas Workforce Commission (TWC) proposes amendments to the following sections of Chapter 800, relating to General Administration:

Subchapter A. General Provisions, §800.2

Subchapter B. Allocations, §§800.57, 800.58, and 800.68

Subchapter F. Interagency Matters, §800.201 and §800.205

Subchapter G. Petition for Adoption of Rules, §§800.251 - 800.255

Subchapter H. Vendor Protests, §800.301

Subchapter I. Enhanced Contract Monitoring, §§800.350 - 800.352

Subchapter L. Workforce Diploma Pilot Program, §800.502

TWC proposes the repeal of the following sections of Chapter 800, relating to General Administration:

Subchapter B. Allocations, §800.69

Subchapter F. Interagency Matters, §§800.202 - 800.204

PART I. PURPOSE, BACKGROUND, AND AUTHORITY

The purpose of the proposed Chapter 800 rule change is to make technical, clarifying, and conforming updates throughout the chapter. These revisions modernize the text by repealing obsolete rules, updating references, and ensuring consistency across TWC's rules.

PART II. EXPLANATION OF INDIVIDUAL PROVISIONS

(Note: Minor editorial changes are made that do not change the meaning of the rules and, therefore, are not discussed in the Explanation of Individual Provisions.)

SUBCHAPTER A. GENERAL PROVISIONS

TWC proposes the following amendments to Subchapter A:

§800.2. Definitions

Section 800.2 is amended to update a reference to federal regulation in the definition of "Board," rearrange the order of the definitions of "Trade Act Services" and "Texas Workforce Investment Council," and make minor stylistic changes.

SUBCHAPTER B. ALLOCATIONS

TWC proposes the following amendments to Subchapter B:

§800.57. Employment Services

Section 800.57 is amended to better align Employment Services allocations with the flexibility TWC is granted by both federal and state laws, including Texas Labor Code, §302.062.

§800.58. Child Care

Section 800.58 is amended to refine the rule and require that the child care allocation must be sufficient to ensure that children eligible for the first priority group described in 40 TAC §809.43 are assured child care services. This section is also amended to align with Texas Government Code, §2308.317, regarding the minimum 2 percent of each Board child care allocation that must be used for quality child care initiatives.

§800.68. Adult Education and Literacy

Section 800.68 is amended to require grant funds be awarded to entities with demonstrated effectiveness through a competitive procurement process. This section is also amended to align with Texas Labor Code, §315.002(b-1), which states that the Commission will establish performance requirements that grant recipients must satisfy to qualify for a continuing award of funds based on achievement of enrollment targets and performance benchmarks as well as prioritizing funds to grant recipients who consistently satisfy those enrollment targets and performance benchmarks. Separately, Texas Labor Code, §315.007, requires that the Commission also establish criteria that support additional performance incentive funding for grant recipients who meet specific criteria annually.

§800.69. Integrated English Literacy and Civics Education Program

Section 800.69 is repealed because Adult Education and Literacy Integrated English Literacy and Civics Education grants are awarded based on procurement only, and no factor data allocations are performed. Grantees continue to be awarded the same proportional allocation each year of the contract grant based on available funds per Workforce Innovation and Opportunity Act, Section 243.

SUBCHAPTER F. INTERAGENCY MATTERS

TWC proposes the following amendments to Subchapter F:

§800.201. Title and Purpose

Section 800.201 is amended to more accurately describe the subchapter's purpose.

§800.202. Memorandum of Understanding with Texas Commission for the Deaf and Hard of Hearing

Section 800.202 is repealed because it is no longer statutorily required and, therefore, unnecessary. Texas Human Resources Code, §81.017(a), requires TWC and other state agencies to adopt an MOU to coordinate the delivery of services to people who are deaf or hard of hearing and reduce duplication of services. While the original statute, enacted by House Bill (HB) 550, 70th Texas Legislature, 1987, required the agencies to adopt the MOU by rule, HB 1401, 76th Texas Legislature, Regular Session, 1999, removed that requirement.

§800.203. Memorandum of Understanding with Texas Education Agency

Section 800.203 is repealed because it is outdated and no longer statutorily required. HB 2823, 78th Texas Legislature, Regular Session, 2003, amended Texas Education Code, §29.011(a), to remove the requirement for an interagency MOU concerning transition planning for students enrolled in special education. Furthermore, the rule's reference to 19 TAC §89.1110 is obsolete, as that section has been repealed by the Texas Education Agency.

§800.204. Memorandum of Understanding with Texas Department of Economic Development

Section 800.204 is repealed because it is outdated and no longer statutorily required.

Senate Bill 275 (SB 275), 78th Texas Legislature, Regular Session, 2003, repealed Texas Government Code, §481.028, which had directed the Texas Department of Economic Development (TDED) to enter into memoranda of understanding with TWC.

SB 275 also abolished TDED and transferred its powers to the Office of the Governor (OOG).

Subsequently, OOG repealed its corresponding administrative rule, 10 TAC §195.2 (Memorandum of Understanding with the Texas Workforce Commission).

§800.205. Memoranda of Understanding with a Governmental Entity Pursuant to Texas Government Code §497.0596(a)(4)

Section 800.205 is amended to update the mailing address for requesting a copy of an MOU, make minor style and clarifying changes to the rule language, and replace "Memoranda" with "Memorandum" in the section title.

SUBCHAPTER G. PETITION FOR ADOPTION OF RULES

TWC proposes the following amendments to Subchapter G:

§800.251. Title and Purpose

Section 800.251 is renamed "Purpose" and amended to more accurately describe the subchapter's purpose.

§800.252. Definitions

Section 800.252 is amended to define "petition" and remove the definition for "Commission," because it is defined in §800.2(7).

§800.253. Submission and Petition Requirements

Section 800.253 is amended to clarify the minimum required contents of a petition.

§800.254. Review of Petition

Section 800.254 is amended to clarify that "days" means calendar days.

§800.255. Commission Decision and Action

Section 800.255 is amended to clarify when the Commission shall issue its final decision in response to a petition.

SUBCHAPTER H. VENDOR PROTESTS

TWC proposes the following amendments to Subchapter H:

§800.301. Vendor Protest Procedures

Section 800.301 is amended to add a designated email address as an acceptable way for a vendor to submit a formal protest to TWC.

SUBCHAPTER I. ENHANCED CONTRACT MONITORING

TWC proposes the following amendments to Subchapter I:

§800.350. Purpose and Scope

Section 800.350 is amended to add two more specific types of state agency contracts exempt from the enhanced monitoring provisions under Texas Government Code, §2261.253(c).

§800.351. Enhanced Contract Monitoring Policy

Section 800.351 is amended to change the name of the Regulatory Integrity Division to "Fraud Deterrence and Compliance Monitoring."

§800.352. Reporting of Enhanced Contract Monitoring

Section 800.352 is renamed "Reporting on Enhanced Contract Monitoring."

Section 800.352 is amended to refine TWC's enhanced contract monitoring reporting process, including the reporting of any contract with a total contract value exceeding $1 million, as required under Texas Government Code, §2261.254.

SUBCHAPTER L. WORKFORCE DIPLOMA PILOT PROGRAM

TWC proposes the following amendments to Subchapter L:

§800.502. Request for Qualifications and List of Qualified Providers

Section 800.502 is amended to add new §800.502(d) to specify that an approved provider does not need to reapply to participate in the Workforce Diploma Pilot program unless the provider has been removed from the list for not meeting the minimum performance standards for two consecutive calendar years.

PART III. IMPACT STATEMENTS

Chris Nelson, Chief Financial Officer, has determined that for each year of the first five years the proposed rules will be in effect, the following statements will apply:

There are no additional estimated costs to the state and to local governments expected as a result of enforcing or administering the proposed rules.

There are no estimated cost reductions to the state and to local governments as a result of enforcing or administering the proposed rules.

There are no estimated losses or increases in revenue to the state or to local governments as a result of enforcing or administering the proposed rules.

There are no foreseeable implications relating to costs or revenue of the state or local governments as a result of enforcing or administering the proposed rules.

There are no anticipated economic costs to individuals required to comply with the proposed rules.

There is no anticipated adverse economic impact on small businesses, microbusinesses, or rural communities as a result of enforcing or administering the proposed rules.

Based on the analyses required by Texas Government Code, §2001.024, TWC has determined that the requirement to repeal or amend a rule, as required by Texas Government Code, §2001.0045, does not apply to this rulemaking.

Takings Impact Assessment

Under Texas Government Code, §2007.002(5), "taking" means a governmental action that affects private real property, in whole or in part or temporarily or permanently, in a manner that requires the governmental entity to compensate the private real property owner as provided by the Fifth and Fourteenth Amendments to the US Constitution or the Texas Constitution, §17 or §19, Article I, or restricts or limits the owner's right to the property that would otherwise exist in the absence of the governmental action, and is the producing cause of a reduction of at least 25 percent in the market value of the affected private real property, determined by comparing the market value of the property as if the governmental action is not in effect and the market value of the property determined as if the governmental action is in effect. TWC completed a Takings Impact Assessment for the proposed rulemaking under Texas Government Code, §2007.043. The primary purpose of this proposed rulemaking, as discussed elsewhere in this preamble, is to amend rules that were identified as requiring revision during the review of Chapter 800.

The proposed rulemaking action will not create any additional burden on private real property or affect private real property in a manner that would require compensation to private real property owners under the US Constitution or the Texas Constitution. The proposal also will not affect private real property in a manner that restricts or limits an owner's right to the property that would otherwise exist in the absence of the governmental action. Therefore, the proposed rulemaking will not cause a taking under Texas Government Code, Chapter 2007.

Government Growth Impact Statement

TWC has determined that during the first five years the proposed rules are in effect, the rules:

--will not create or eliminate a government program;

--will not require the creation or elimination of employee positions;

--will not require an increase or decrease in future legislative appropriations to TWC;

--will not require an increase or decrease in fees paid to TWC;

--will not create a new regulation;

--will not expand, limit, or eliminate an existing regulation;

--will not change the number of individuals subject to the rules; and

--will not positively or adversely affect the state's economy.

Economic Impact Statement and Regulatory Flexibility Analysis

TWC has determined that the proposed rules will not have an adverse economic impact on small businesses or rural communities, as the proposed rules place no requirements on small businesses or rural communities.

Mariana Vega, Director, Labor Market Information, has determined that there is not a significant negative impact upon employment conditions in the state as a result of the proposed rules.

Les Trobman, General Counsel, has determined that the anticipated public benefit of the proposed rules will be updated rules that align with current statutory requirements and TWC practices and removal of obsolete rules from the Texas Administrative Code.

PART IV. REQUEST FOR IMPACT INFORMATION

TWC requests, from any person required to comply with the proposed rules or any other interested person, information related to the cost, benefit, or effect of the proposed rules, including any applicable data, research, or analysis. Please submit the requested information to TWCPolicyComments@twc.texas.gov no later than September 7, 2026.

PART V. PUBLIC COMMENTS

Comments on the proposed rules may be submitted to TWCPolicyComments@twc.texas.gov and must be received no later than September 7, 2026.

SUBCHAPTER A. GENERAL PROVISIONS

PART VI. STATUTORY AUTHORITY

The rule is proposed under the following statutory authority:

Texas Labor Code, §301.0015(a)(6), which provides TWC with the authority to adopt, amend, or repeal such rules necessary for the effective administration of TWC services and activities.

The proposed rule relates to Texas Labor Code, Chapter 301.

§800.2. Definitions.

The following words and terms, when used in this part, relating to the Texas Workforce Commission, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Adult Education and Literacy (AEL)--Academic instruction and education services below the postsecondary level that increase an individual's ability to:

(A) read, write, and speak in English and perform mathematics or other activities necessary for the attainment of a secondary school diploma or its recognized equivalent;

(B) participate in job training and retraining programs or transition to postsecondary education and training; and

(C) obtain and retain employment.

(2) Agency--The unit of state government established under Texas Labor Code, Chapter 301, that is presided over by the Commission and administered by the executive director to operate the integrated workforce development system and administer the unemployment compensation insurance program in this state as established under the Texas Unemployment Compensation Act, Texas Labor Code, Title 4, Subtitle A, as amended. The definition of "Agency" shall apply to all uses of the term in rules contained in this part, unless otherwise defined, relating to the Texas Workforce Commission.

(3) Allocation--The amount approved by the Commission for expenditures to a local workforce development area during a specified program year, according to specific state and federal requirements.

(4) Board--A Local Workforce Development Board created pursuant to Texas Government Code, §2308.253, and certified by the governor pursuant to Texas Government Code, §2308.261. This includes such a Board when functioning as the Local Workforce Investment Board as described in the Workforce Innovation and Opportunity Act (WIOA) §107 (29 USC §3122), including those functions required of a youth standing committee, as provided for under WIOA §107(i). The definition of Board shall apply to all uses of the term in the rules contained in this part, or unless otherwise defined, relating to the Texas Workforce Commission. Boards are subrecipients as defined in the Uniform Guidance under 2 Code of Federal Regulations (CFR) Part 200 [OMB Circular A-133].

(5) Child Care--Child care services funded through the Commission, which may include services funded under the Child Care and Development Fund, WIOA, and other funds available to the Commission or a Board to provide quality child care to assist families seeking to become independent from, or who are at risk of becoming dependent on, public assistance while parents are either working or participating in educational or training activities in accordance with state and federal statutes and regulations.

(6) Choices--The employment and training activities created under Texas Human Resources Code, §31.0126, [of the Texas Human Resources Code] and funded under Temporary Assistance for Needy Families (TANF) (42 USC 601 et seq. [et.seq.]) to assist individuals who are receiving temporary cash assistance, transitioning off, or at risk of becoming dependent on temporary cash assistance or other public assistance in obtaining and retaining employment.

(7) Commission--The body of governance of the Texas Workforce Commission composed of three members appointed by the governor as established under Texas Labor Code, §301.002, that includes one representative of labor, one representative of employers, and one representative of the public. The definition of Commission shall apply to all uses of the term in rules contained in this part, unless otherwise defined, relating to the Texas Workforce Commission.

(8) Formal Measures--Workforce development services performance measures adopted by the governor and developed and recommended through the Texas Workforce Investment Council [(TWIC)].

(9) Employment Service--A program to match qualified job seekers with employers through a statewide network of one-stop career centers. (Wagner-Peyser Act of 1933 (Title 29 USC, Chapter 4B) as amended by WIOA (PL 113-128)).

(10) Executive Director--The individual appointed by the Commission to administer the daily operations of the Agency, which may include an individual delegated by the Executive Director to perform a specific function on behalf of the Executive Director.

(11) Historically Underutilized Business (HUB)--A business entity as defined in 34 Texas Administrative Code (TAC) §20.282 that is certified by the State of Texas, has not exceeded the standards for size established by 34 TAC §20.294, and has established Texas as its principal place of business.

(12) Local Workforce Development Area (workforce area)--Workforce areas designated by the governor pursuant to Texas Government Code, §2308.252, and functioning as a Local Workforce Investment Area, as provided for under WIOA §106 and §189(i)(1) (29 USC §3121 and §3249).

(13) One-Stop Service Delivery Network--A one-stop--based network under which entities responsible for administering separate workforce investment, educational, and other human resources programs and funding streams collaborate to create a seamless network of service delivery that shall enhance the availability of services through the use of all available access and coordination methods, including telephonic and electronic methods--also known as Texas Workforce Solutions.

(14) Performance Measure--An expected performance outcome or result.

(15) Performance Target--A contracted numerical value setting the acceptable and expected performance outcome or result to be achieved for a performance measure, including Core Outcome Formal Measures. Achievement between 95 and 105 percent of the established target is considered meeting the target.

(16) Program Year--The twelve-month period applicable to the following as specified:

(A) Child Care: October 1 - September 30;

(B) Choices: October 1 - September 30;

(C) Employment Service: October 1 - September 30;

(D) Supplemental Nutrition Assistance Program Employment and Training: October 1 - September 30;

(E) Workforce Innovation and Opportunity Act (WIOA) Vocational Rehabilitation: October 1 - September 30;

(F) Trade Act services: October 1 - September 30;

(G) WIOA Adult, Dislocated Worker, and Youth formula funds: July 1 - June 30;

(H) WIOA Alternative Funding for Statewide Activities: October 1 - September 30;

(I) WIOA Alternative Funding for One-Stop Enhancements: October 1 - September 30; and

(J) WIOA, Adult Education and Literacy: July 1 - June 30.

(17) Supplemental Nutrition Assistance Program Employment and Training (SNAP E&T)--A program to assist SNAP recipients to become self-supporting through participation in activities that include employment, job readiness, education, and training, activities authorized and engaged in as specified by federal statutes and regulations (7 USC §2011), and Chapter 813 of this title [relating to Supplemental Nutrition Assistance Program Employment and Training].

(18) TANF--Temporary Assistance for Needy Families, which may include temporary cash assistance and other temporary assistance for eligible individuals, as defined in the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, as amended (7 USC §2011 et seq.) and the TANF statutes and regulations (42 USC §601 et seq.[)], and 45 CFR [Code of Federal Regulations (CFR)] Parts 260 - 265). TANF may also include the TANF State Program (TANF SP), relating to two-parent families, which is codified in Texas Human Resources Code, Chapter 34.

(19) [(20)] Texas Workforce Investment Council (TWIC)--Appointed [Texas Workforce Investment Council, appointed] by the governor pursuant to Texas Government Code, §2308.052, and functioning as the State Workforce Investment Board, as provided for under WIOA §101(e) (29 USC §3111(e). Additionally [In addition], pursuant to WIOA §193(a)(5) (29 USC §3253(a)(5)), TWIC maintains the duties, responsibilities, powers, and limitations as provided in Texas Government Code, §§2308.101 - 2308.105.

(21) WIOA--Workforce Innovation and Opportunity Act--(PL 113 - 128, 29 USC §3101 et seq.). References to WIOA include references to WIOA formula-allocated funds unless specifically stated otherwise.

(22) WIOA Formula-Allocated Funds--Funds allocated by formula to workforce areas for each of the following separate categories of services: WIOA adult, dislocated worker, and youth (excluding the secretary's and governor's reserve funds and rapid response funds).

(23) Workforce Solutions Offices Partner--An entity that carries out a workforce investment, educational, or other human resources program or activity, and that participates in the operation of the One-Stop Service Delivery Network in a workforce area consistent with the terms of a memorandum of understanding entered into between the entity and the Board.

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 July 27, 2026.

TRD-202603160

Les Trobman

General Counsel

Texas Workforce Commission

Earliest possible date of adoption: September 6, 2026

For further information, please call: (737) 301-9662

SUBCHAPTER B. ALLOCATIONS

The rules are proposed under the following statutory authority:

--Texas Labor Code, §301.0015(a)(6), which provides TWC with the authority to adopt, amend, or repeal such rules necessary for the effective administration of TWC services and activities.

--Texas Labor Code, §302.002(d), which requires TWC to adopt rules as necessary for the administration of workforce programs.

--Texas Labor Code, §315.002(d), which allows TWC to adopt rules for the administration of adult education and literacy (AEL) programs.

--Texas Labor Code, §315.007(a), which requires TWC to adopt rules establishing a performance-based process for awarding funds for the provision of AEL services.

The proposed rules relate to Texas Labor Code, Chapters 302 and 315.

§800.57. Employment Services.

(a) Employment Services funds available to the Commission to provide Employment Services under §7(a) of the Wagner-Peyser Act (29 USCA [U.S.C.A.] Chapter 4B) will be utilized by the Commission as set forth in subsection (b) of this section.

(b) At least 80 percent [80%] of the Employment Services funds available to local workforce areas under §7(a) of the Wagner-Peyser Act (29 USCA [U.S.C.A.] Chapter 4B, including §49(c)) will be utilized by the Commission within the workforce areas according to the established federal formula, as follows:

(1) Two-thirds will be based on the relative proportion of the total civilian labor force residing within the workforce area to the statewide total civilian labor force[.];

(2) One-third will be based on the relative proportion of the total number of unemployed individuals residing within the workforce area to the statewide total number of unemployed individuals; and

(3) the application of a hold harmless/stop gain procedure.

(c) No more than 10 percent [10%] of the funds expended as part of a workforce area's allocation shall be used for administrative costs, as defined by appropriate federal regulations and Commission policy.

§800.58. Child Care.

(a) Funds available to the Commission for child care services will be allocated to the workforce areas using need-based formulas, as set forth in this section.

(b) Child Care and Development Fund (CCDF) Mandatory Funds authorized under the Social Security Act, §418(a)(1), as amended, together with state general revenue Maintenance of Effort (MOE) Funds, Social Services Block Grant funds, TANF funds, and other funds designated by the Commission for child care (excluding any amounts withheld for state-level responsibilities) will be allocated on the following basis:

(1) 50 percent will be based on the relative proportion of the total number of children under the age of five years old residing within the workforce area to the statewide total number of children under the age of five years old; [,] and

(2) 50 percent will be based on the relative proportion of the total number of people residing within the workforce area whose income does not exceed 100 percent of the poverty level to the statewide total number of people whose income does not exceed 100 percent of the poverty level.

(c) CCDF Matching Funds authorized under the Social Security Act, §418(a)(2), as amended, together with state general revenue matching funds and estimated appropriated receipts of donated funds, will be allocated according to the relative proportion of children under the age of 13 years old residing within the workforce area to the statewide total number of children under the age of 13 years old.

(d) CCDF Discretionary Funds authorized under the Child Care and Development Block Grant Act of 1990 §658B, as amended, will be allocated according to the relative proportion of the total number of children under the age of 13 years old in families whose income does not exceed 150 percent of the poverty level residing within the workforce area to the statewide total number of children under the age of 13 years old in families whose income does not exceed 150 percent of the poverty level.

(e) The following provisions apply to the funds allocated in subsections (b) - (d) of this section:

(1) Sufficient funds must be used for direct child care services to ensure Commission-approved performance targets are met.

(3) No more than 5 percent of the total expenditure of funds may be used for administrative expenditures as defined in federal regulations contained in 45 CFR Part 98 [C.F.R. §98.52], as may be amended unless the total expenditures for a workforce area are less than $5,000,000. If a workforce area has total expenditures of less than $5,000,000, then no more than $250,000 may be used for administrative expenditures.

(5) The Board shall comply with any additional requirements adopted by the Commission or contained in the Board contract.

(6) Allocations of child care funds will include applications of hold harmless/stop gain procedures.

§800.68. Adult Education and Literacy.

(a) AEL funds available to the Commission to provide services under the federal Adult Education and Family Literacy Act (AEFLA), WIOA Title II, together with associated state general revenue matching funds and federal TANF funds--together with any state general revenue funds appropriated as TANF maintenance-of-effort--will be used by the Commission, as set forth in subsections (b) - (e) [(b) - (d)] of this section. Prior to any grant recipient receiving notice of an award, the Commission shall review and approve the award of grant funds to be issued under this program. The Commission shall give priority in continuing to award [awarding] funds through contracted grant renewal periods to entities that consistently satisfy annual enrollment targets and performance benchmarks established by the Commission that align to Texas Labor Code, §315.002(b-1) [requirements comparable to subsection (e) of this section].

(b) At least 82.5 percent of the AEFLA §231 federal funds constituting the total state award of AEFLA state grants--including amounts allotted to the eligible agency having a state plan, as provided by AEFLA §211(c)--will be awarded annually to entities with demonstrated effectiveness as determined through a statewide competitive procurement and [allocated by the Commission to the workforce areas. From the amount allotted to the eligible agency having a state plan, as provided by AEFLA §211(c), the Commission will allocate amounts to the workforce areas according to the established federal formula, as follows]:

(1) [100 percent] will be based on:

(A) the relative proportion of individuals residing within each county [workforce area] who are at least 18 years of age, do not have a secondary school diploma or its recognized equivalent, and are not enrolled in secondary school, during the most recent period for which statistics are available;

(B) an equal base amount; and

(C) the application of a hold-harmless/stop-gain procedure.

(3) [(2)] No more than 5 percent of the funds (29 USC 3323(a)(2)) expended as part of this [workforce area] allocation shall be used for administrative costs, [as defined by AEFLA,] provided, however, that the Special Rule outlined in AEFLA §233(b) shall apply with effective justification, as appropriate.

(c) At least 80 percent of the state general revenue matching funds associated with the allotment of federal funds to the eligible agency having a state plan, as provided by AEFLA §211(c), will be awarded to entities with demonstrated effectiveness as determined through a statewide competitive procurement, and [allocated by the Commission to the workforce areas according to the established federal formula, as follows]:

(1) [100 percent] will be based on:

(A) the relative proportion of individuals residing within each county [workforce area] who are at least 18 years of age, do not have a secondary school diploma or its recognized equivalent, and are not enrolled in secondary school, during the most recent period for which statistics are available;

(B) an equal base amount; and

(C) the application of a hold-harmless/stop-gain procedure.

(3) [(2)] No more than 15 percent of the funds expended as part of this [workforce area] allocation shall be used for administrative costs, as defined by Commission policy.

(d) At least 80 percent of federal TANF funds associated with the AEL program--together with any state general revenue funds appropriated as TANF maintenance-of-effort--will be awarded to entities with demonstrated effectiveness as determined through a statewide competitive procurement [allocated by the Commission to the workforce areas according to a need-based formula], as follows:

(1) 100 percent will be based on:

(A) the relative proportion of the unduplicated number of TANF adult recipients with educational attainment of less than a secondary diploma during the most recently completed calendar year;

(B) an equal base amount; and

(C) the application of a hold-harmless/stop-gain procedure.

(3) [(2)] No more than 15 percent of the funds (45 CFR §263.13) expended as part of this [workforce area] allocation shall be used for administrative costs[, as defined by federal regulations and Commission policy].

(e) [(f)] Texas Labor Code, §315.007(c), requires that performance incentive funding criteria shall include measures that require [Performance accountability benchmarks shall]:

(1) [(A)] at least 25 percent of all participants served in the program year to be enrolled in a high school equivalency or postsecondary ability-to-benefit program; [and]

(2) [(B)] at least 70 percent of participants who were in a high school equivalency or postsecondary ability-to-benefit program during the program year and exited during the program year to achieve either a high school equivalency or a recognized postsecondary credential; and

(3) performance incentive funding amounts to be approved by the Commission each program year contingent upon the availability of funds. Only grant recipients who have successfully satisfied the criteria established in paragraphs (1) and (2) of this subsection will be awarded additional funding as approved by the Commission [for milestones toward meeting high school equivalency program or postsecondary ability-to-benefit program enrollment and achievement as outlined in paragraph (2) of this subsection].

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 July 27, 2026.

TRD-202603161

Les Trobman

General Counsel

Texas Workforce Commission

Earliest possible date of adoption: September 6, 2026

For further information, please call: (737) 301-9662

The repeal is proposed under the following statutory authority:

--Texas Labor Code, §301.0015(a)(6), which provides TWC with the authority to adopt, amend, or repeal such rules necessary for the effective administration of TWC services and activities.

--Texas Labor Code, §302.002(d), which requires TWC to adopt rules as necessary for the administration of workforce programs.

--Texas Labor Code, §315.002(d), which allows TWC to adopt rules for the administration of adult education and literacy (AEL) programs.

--Texas Labor Code, §315.007(a), which requires TWC to adopt rules establishing a performance-based process for awarding funds for the provision of AEL services.

The proposed repeal relates to Texas Labor Code, Chapters 302 and 315.

§800.69. Integrated English Literacy and Civics Education Program.

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 July 27, 2026.

TRD-202603162

Les Trobman

General Counsel

Texas Workforce Commission

Earliest possible date of adoption: September 6, 2026

For further information, please call: (737) 301-9662

SUBCHAPTER F. INTERAGENCY MATTERS

The rules are proposed under the following statutory authority:

Texas Labor Code, §301.0015(a)(6), which provides TWC with the authority to adopt, amend, or repeal such rules necessary for the effective administration of TWC services and activities.

The proposed rules relate to Texas Labor Code, Chapter 301.

§800.201. [Title and] Purpose.

§800.205. Memorandum [Memoranda] of Understanding with a Governmental Entity Pursuant to Texas Government Code §497.0596(a)(4).

(a) The Texas Workforce Commission [hereby] adopts by reference the terms of any memorandum of understanding (MOU) relating to identifying potentially affected employers under a proposed private sector prison industries program and providing such information to the appropriate governmental entity to meet its notification requirements. Information provided to a governmental entity shall comply with the requirements of Texas Labor Code §301.085 and 40 TAC, Chapter 815, Subchapter E, of this title.

(b) Any MOU [memorandum of understanding] under subsection (a) of this section shall stipulate that:

(1) only publicly available data sources shall be used;

(2) costs incurred for producing the data shall be reimbursed to the Agency; and

(3) the information provided by the Agency is solely for the limited purpose of allowing the governmental entity to meet its notice requirements under Texas Government Code, §497.0596, and is separate and apart from any certification described in Texas Government Code, §497.059.

(c) Copies of any MOU established under the terms of this section [the memoranda of understanding] are available at the Texas Workforce Commission, Office of General Counsel, 101 East 15th Street, [Room 614,] Austin, Texas 78778.

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 July 27, 2026.

TRD-202603164

Les Trobman

General Counsel

Texas Workforce Commission

Earliest possible date of adoption: September 6, 2026

For further information, please call: (737) 301-9662

The repeals are proposed under the following statutory authority:

Texas Labor Code, §301.0015(a)(6), which provides TWC with the authority to adopt, amend, or repeal such rules necessary for the effective administration of TWC services and activities.

The proposed repeals relate to Texas Labor Code, Chapter 301.

§800.202. Memorandum of Understanding with Texas Commission for the Deaf and Hard of Hearing.

§800.203. Memorandum of Understanding with Texas Education Agency.

§800.204. Memorandum of Understanding with Texas Department of Economic Development.

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 July 27, 2026.

TRD-202603165

Les Trobman

General Counsel

Texas Workforce Commission

Earliest possible date of adoption: September 6, 2026

For further information, please call: (737) 301-9662

SUBCHAPTER G. PETITION FOR ADOPTION OF RULES

The rules are proposed under the following statutory authority:

--Texas Labor Code, §301.0015(a)(6), which provides TWC with the authority to adopt, amend, or repeal such rules necessary for the effective administration of TWC services and activities.

--Texas Government Code, §2001.021, which requires state agencies to adopt rules establishing procedures for a petition for rulemaking.

The proposed rules relate to Texas Government Code, Chapter 2001.

§800.251. [Title and] Purpose.

§800.252. Definitions.

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

(1) [(2)] Interested person--An interested person is defined as:

(A) a resident of this state;

(B) a business entity located in this state;

(C) a governmental subdivision located in this state; or

(D) a public or private organization located in this state that is not a state agency.

§800.253. Submission and Petition Requirements.

Any interested person may petition the [Texas Workforce Commission (]Commission[)] for [requesting] the adoption of a rule. Petitioners must [should] submit petitions in writing to the Office of General Counsel [General Counsel of the Commission]. The petition may be in any legible form and [but] must contain at least the following information: [.]

(1) [Petitioner's Name and Address.] The petitioner's first and last [petitioners'] name and [,] complete mailing address; [, and signature should appear in the request.]

(2) An explanation of and justification for the proposed rule, including [Explanation and Justification. A petitioner should include an explanation and justification of the proposed rule. The explanation should include] a concise statement of the relevant background information necessary to understand the need for the proposed rule, the existing problem that the proposed rule is intended to correct, and the foreseeable effects of the requested rule change; [.]

(3) The full [Text. A petitioner should include the] text of the proposed rule, including, if applicable, all changes to any existing rule and a [reflecting added or deleted words. A] reference to the [any] existing rule including its [the] title, chapter, and section number; and [, if applicable, should appear on the request.]

(4) [Authority.] A statement of the statutory or other authority for making the proposed rule [taking the requested action should also appear on the request].

§800.254. Review of Petition.

Upon receipt of a [substantially complete] petition, as described in §800.253 of this subchapter, the general counsel will forward a copy of the petition to the appropriate division director for a response.

(1) Division Response. Within 20 calendar days of [after] receiving the petition from the general counsel, the division director shall respond in writing to the general counsel [General Counsel] recommending either denying the request or initiating the rulemaking process. The division director's response shall contain the reasons for the recommendation.

(2) General Counsel Recommendation. Within 20 calendar days of [after] receiving the division director's response, the general counsel shall submit to the Commission [commissioners] the petition, the division director's response, and a written recommendation by the general counsel specifying the reasons for the recommendation.

§800.255. Commission Decision and Action.

(a) Not later than the 60th day after receipt of a petition, the Commission [The Commissioners] shall issue the final decision [regarding the petition within 60 days after receipt of the petition from the petitioner] to either:

(1) deny the petition in writing, stating the reasons for the denial; or

(2) initiate rulemaking proceedings in accordance with Texas Government Code, Chapter 2001, [Administrative Procedure,] Subchapter B, Rulemaking[, as it may be amended].

(b) The Commission may modify any proposed rule to ensure that it conforms to the format of Commission [commission] rules, adequately addresses the perceived problem, and conforms to the filing requirements of the Texas Register.

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 July 29, 2026.

TRD-202603209

Les Trobman

General Counsel

Texas Workforce Commission

Earliest possible date of adoption: September 6, 2026

For further information, please call: (737) 301-9662

SUBCHAPTER H. VENDOR PROTESTS

The rule is proposed under the following statutory authority:

--Texas Labor Code, §301.0015(a)(6), which provides TWC with the authority to adopt, amend, or repeal such rules necessary for the effective administration of TWC services and activities.

--Texas Government Code, §2155.076, which requires state agencies to adopt rules for resolving vendor protests relating to purchasing issues.

The proposed rule relates to Texas Government Code, Chapter 2155.

§800.301. Vendor Protest Procedures.

(a) Any Respondent who is allegedly aggrieved in connection with the Solicitation, evaluation, or award of a contract by the Agency may formally protest to the Agency's director of business operations.

(1) Such protests must be made in writing and timely received by the Agency's director of business operations.

(2) The protest must be received by the Agency's director of business operations within 10 working days after the Protestant knows, or should have known, of the occurrence of the action that is protested.

(3) The Protestant shall email the protest to twcvendor@twc.texas.gov or mail or deliver copies of the protest to: Director of Business Operations, 101 E. 15th Street, Room 316T, Austin, Texas 78778. The Protestant must also mail or deliver copies of the protest to Interested Parties known to the Protestant.

(b) A protest that is not filed timely shall not be considered unless the director of business operations determines that the protest raises issues that are significant to the Agency's procurement practices or procedures.

(c) The protest must be in writing and contain:

(1) the identifying name and number of the Solicitation being protested;

(2) identification of the specific statute or regulation that the Protestant alleges has been violated;

(3) a specific description of each act or omission alleged to have violated the statutory or regulatory provision identified above in paragraph (2) of this section;

(4) a precise statement of the relevant facts including:

(A) sufficient documentation to establish that the protest has been timely filed; and

(B) a description of the resulting adverse impact to the Protestant;

(5) a statement of the argument and authorities that the Protestant offers in support of the protest;

(6) an explanation of the action the Protestant is requesting from the Agency; and

(7) a statement confirming that copies of the protest have been mailed or delivered to any other Interested Party known to the Protestant.

(d) The protest must be signed by an authorized representative for the Protestant and the signature notarized.

(e) The Protestant may appeal determination of a protest to the Agency's deputy executive director.

(1) The appeal filed under these procedures must be in writing, addressed to the Agency's deputy executive director; and

(2) The protest must be received by the deputy executive director no later than 10 business days after the date of receipt of the written determination issued by the director of business operations.

(f) The Agency may move forward with a Solicitation or contract award without delay, in spite of a timely filed protest, to protect the best interests of the Agency or the state.

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 July 27, 2026.

TRD-202603166

Les Trobman

General Counsel

Texas Workforce Commission

Earliest possible date of adoption: September 6, 2026

For further information, please call: (737) 301-9662

SUBCHAPTER I. ENHANCED CONTRACT MONITORING

The rules are proposed under the following statutory authority:

--Texas Labor Code, §301.0015(a)(6), which provides TWC with the authority to adopt, amend, or repeal such rules necessary for the effective administration of TWC services and activities.

--Texas Government Code, §2261.253(c), which requires state agencies to adopt rules establishing a procedure to identify each contract that requires enhanced contract or performance monitoring.

The proposed rules relate to Texas Government Code, Chapter 2261.

§800.350. Purpose and Scope.

(a) Purpose. The purpose of this subchapter is to implement the requirements of Texas Government Code, §2261.253(c), requiring state agencies to establish, by rule, a procedure to identify each contract that requires enhanced contract or performance monitoring.

(b) Scope. Pursuant to Texas Government Code, §2261.253(d) and (g), this subchapter does not apply to:

(1) memoranda of understanding;

(2) interagency contracts;

(3) interlocal agreements; [or]

(4) contracts for which there is not a cost; [.]

§800.351. Enhanced Contract Monitoring Policy.

(a) The Agency shall identify which contracts for goods and services require enhanced monitoring by evaluating the risk factors, which include:

(1) the complexity of the goods and services to be provided;

(2) the contract amount;

(3) the length and scope of the project supported by the contract;

(4) whether the services are new or have changed significantly since the last procurement of the same services;

(5) whether the Agency has experience with the contractor;

(6) whether the project affects external stakeholders or is of particular interest to third parties;

(7) whether Agency data is accessed by the contractor; and

(8) any other factors the Agency determines in a particular circumstance will create a level of risk to the state or Agency such that enhanced monitoring is required.

(b) For contracts requiring enhanced monitoring, the contractor shall report to the assigned Agency contract manager on progress toward goals or performance measure achievements, and the status of deliverables, if any, and on any issues of which the contractor is aware that may create an impediment to meeting the project timeline or goals.

(c) Enhanced monitoring may also include site visits, additional meetings with contractor staff, and inspection of documentation required by the Agency to assess progress toward achievement of performance requirements.

(d) Projects deemed medium or high risk shall be monitored by the assigned contract manager and may involve additional team members such as an assigned project manager and staff from the Office of General Counsel or the Finance, Information Technology, or Fraud Deterrence and Compliance Monitoring divisions [Regulatory Integrity Divisions], if warranted.

§800.352. Reporting on [of] Enhanced Contract Monitoring.

(a) Pursuant to [the] Texas Government Code, §2261.253, the Agency shall submit information on each contract identified for enhanced contract monitoring to the Commission.

(b) The Agency's director of procurement and contract services [Procurement and Contract Services] (PCS [director]) shall immediately notify the Commission, executive director, deputy executive director, and the director of business operations of any serious issue or risk that is identified with respect to a contract identified for enhanced contract monitoring.

(c) The contract manager shall report on the status of all contracts subject to enhanced monitoring to the PCS director quarterly.

(d) If any serious issues or risks are identified about a contract subject to enhanced monitoring, the PCS director will immediately notify the director of business operations, [and] the executive director, and the Commission.

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 July 27, 2026.

TRD-202603167

Les Trobman

General Counsel

Texas Workforce Commission

Earliest possible date of adoption: September 6, 2026

For further information, please call: (737) 301-9662

SUBCHAPTER L. WORKFORCE DIPLOMA PILOT PROGRAM

The rule is proposed under the following statutory authority:

--Texas Labor Code, §301.0015(a)(6), which provides TWC with the authority to adopt, amend, or repeal such rules necessary for the effective administration of TWC services and activities.

--Texas Labor Code, §302.002(d)

--Texas Labor Code, §317.008(a), which requires TWC to adopt rules establishing minimum performance standards for providers participating in the Workforce Diploma Pilot Program.

The proposed rule relates to Texas Labor Code, Chapters 302 and 317.

§800.502. Request for Qualifications and List of Qualified Providers.

(a) The Agency will identify qualified providers to participate in the Program through a statewide Request for Qualifications (RFQ) process conducted in accordance with state requirements. The Agency will publish an RFQ no later than October 15th of each year to identify Program providers.

(b) Potential providers will apply directly to the Agency using the RFQ process, and, once identified as a qualified provider, must meet all deadlines, requirements, and guidelines set forth in the published RFQ.

(c) The Agency will publish a list of qualified providers no later than November 15th of each year to participate in the Program the next calendar year.

(e) [(d)] Each provider on the qualified provider list will be eligible to receive monthly reimbursements for this Program based on monthly invoices submitted to the Agency, as prescribed in the RFQ's terms.

(f) [(e)] Each year, the Agency shall review and update the list of qualified providers. Qualified providers that do not meet the minimum performance standards outlined in §800.503 of this subchapter will be placed on probation for the remainder of the calendar year. Failure to meet both minimum performance standards for two consecutive years will result in disqualification from the Program.

(g) [(f)] The Agency's determinations in the RFQ process will be based on the affirmation of the qualified provider to effectively perform all services and activities outlined in Texas Labor Code, Chapter 317.

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 July 27, 2026.

TRD-202603168

Les Trobman

General Counsel

Texas Workforce Commission

Earliest possible date of adoption: September 6, 2026

For further information, please call: (737) 301-9662

CHAPTER 815. UNEMPLOYMENT INSURANCE

Texas Workforce Commission (TWC) proposes amendments to the following sections of Chapter 815, relating to Unemployment Insurance:

Subchapter A. General Provisions, §815.1 and §815.3

Subchapter B. Benefits, Claims and Appeals, §815.21 and §815.25

Subchapter C. Tax Provisions, §815.113 and §815.115

Subchapter E. Confidentiality and Disclosure of State Unemployment Compensation Information, §815.165

PART I. PURPOSE, BACKGROUND, AND AUTHORITY

The purpose of the proposed Chapter 815 rulemaking is to implement clarifying changes to definitions and terminology, specify requirements for address notifications and the delivery of TWC notices, establish consistent procedures for Commission hearings, provide clearer guidelines for approved training, and update references to federal law and regulation.

PART II. EXPLANATION OF INDIVIDUAL PROVISIONS

(Note: Minor editorial changes are made that do not change the meaning of the rules and, therefore, are not discussed in the Explanation of Individual Provisions.)

SUBCHAPTER A. GENERAL PROVISIONS

TWC proposes the following amendments to Subchapter A:

§815.1. Definitions

Section 815.1 is amended to relocate the definition of "agent state" from §815.21 to this section, so that it is with the other definitions that apply to more than one section. The definition of "Board" is amended to assign it the same meaning as defined in §800.2 of this title. A definition for "mailing date" is added pertaining to correspondence sent by TWC.

§815.3. Addresses

Section 815.3 is amended to further specify which individuals under employment must promptly notify TWC of any change of address and to detail which recorded claimant or employer address should be used when delivering a notice of initial claim versus other TWC notices.

SUBCHAPTER B. BENEFITS, CLAIMS, AND APPEALS

TWC proposes the following amendments to Subchapter B:

§815.21. Interstate Claims

Section 815.21 is amended to remove the definition of "agent state" and relocate it under §815.1 with the other definitions for Chapter 815.

§815.25. Approval of Training

Section 815.25 is amended to update terminology and clarify which types of training shall be considered approved by TWC.

SUBCHAPTER C. TAX PROVISIONS

TWC proposes the following amendments to Subchapter C:

§815.113. Commission Hearings Involving Coverage and Contributions or Reimbursements

Section 815.113 is amended to establish consistent procedures, including: a reopening process for employers that miss a hearing, clearer guidelines for granting in-person hearings, criteria for granting a motion for reconsideration without further hearing, provisions for a rehearing while affirming a prior decision, and a distinction between motions for reconsideration and rehearing.

§815.115. Contribution and Wage Reports Covering Seamen and Seamen's Wages Paid under Shipping Articles

Section 815.115 is amended to update a reference to federal law.

SUBCHAPTER E. CONFIDENTIALITY AND DISCLOSURE OF STATE UNEMPLOYMENT COMPENSATION INFORMATION

TWC proposes the following amendments to Subchapter E:

§815.165. Exceptions to Confidentiality Requirements

Section 815.165 is amended to update a reference to federal regulation.

PART III. IMPACT STATEMENTS

Chris Nelson, Chief Financial Officer, has determined that for each year of the first five years the proposed rules will be in effect, the following statements will apply:

There are no additional estimated costs to the state and to local governments expected as a result of enforcing or administering the proposed rules.

There are no estimated cost reductions to the state and to local governments as a result of enforcing or administering the proposed rules.

There are no estimated losses or increases in revenue to the state or to local governments as a result of enforcing or administering the proposed rules.

There are no foreseeable implications relating to costs or revenue of the state or local governments as a result of enforcing or administering the proposed rules.

There are no anticipated economic costs to individuals required to comply with the proposed rules.

There is no anticipated adverse economic impact on small businesses, microbusinesses, or rural communities as a result of enforcing or administering the proposed rules.

Based on the analyses required by Texas Government Code, §2001.024, TWC has determined that the requirement to repeal or amend a rule, as required by Texas Government Code, §2001.0045, does not apply to this rulemaking.

Takings Impact Assessment

Under Texas Government Code, §2007.002(5), "taking" means a governmental action that affects private real property, in whole or in part or temporarily or permanently, in a manner that requires the governmental entity to compensate the private real property owner as provided by the Fifth and Fourteenth Amendments to the US Constitution or the Texas Constitution, §17 or §19, Article I, or restricts or limits the owner's right to the property that would otherwise exist in the absence of the governmental action, and is the producing cause of a reduction of at least 25 percent in the market value of the affected private real property, determined by comparing the market value of the property as if the governmental action is not in effect and the market value of the property determined as if the governmental action is in effect. TWC completed a Takings Impact Assessment for the proposed rulemaking under Texas Government Code, §2007.043. The primary purpose of this proposed rulemaking, as discussed elsewhere in this preamble, is to clarify definitions and terminology, specify requirements for address notifications and the delivery of TWC notices, establish consistent procedures for Commission hearings, provide clearer guidelines for approved training, and update references to federal law and regulation.

The proposed rulemaking action will not create any additional burden on private real property or affect private real property in a manner that would require compensation to private real property owners under the US Constitution or the Texas Constitution. The proposal also will not affect private real property in a manner that restricts or limits an owner's right to the property that would otherwise exist in the absence of the governmental action. Therefore, the proposed rulemaking will not cause a taking under Texas Government Code, Chapter 2007.

Government Growth Impact Statement

TWC has determined that during the first five years the proposed rules will be in effect, they:

--will not create or eliminate a government program;

--will not require the creation or elimination of employee positions;

--will not require an increase or decrease in future legislative appropriations to TWC;

--will not require an increase or decrease in fees paid to TWC;

--will not create a new regulation;

--will not expand, limit, or eliminate an existing regulation;

--will not change the number of individuals subject to the rules; and

--will not positively or adversely affect the state's economy.

Economic Impact Statement and Regulatory Flexibility Analysis

TWC has determined that the proposed rules will not have an adverse economic impact on small businesses or rural communities, as the proposed rules place no requirements on small businesses or rural communities.

Mariana Vega, Director, Labor Market Information, has determined that there is not a significant negative impact upon employment conditions in the state as a result of the proposed rules.

Lowell Keig, Director, Unemployment Insurance Division, has determined that for each year of the first five years the proposed rules are in effect, the public benefit anticipated as a result of enforcing the proposed rules will be to provide clarity and improve understanding for those who must comply with the rules.

PART IV. REQUEST FOR IMPACT INFORMATION

TWC requests, from any person required to comply with the proposed rule or any other interested person, information related to the cost, benefit, or effect of the proposed rule, including any applicable data, research, or analysis. Please submit the requested information to TWCPolicyComments@twc.texas.gov no later than September 7, 2026.

PART V. PUBLIC COMMENTS

Comments on the proposed rules may be submitted to TWCPolicyComments@twc.texas.gov and must be received no later than September 7, 2026.

SUBCHAPTER A. GENERAL PROVISIONS

PART VI. STATUTORY AUTHORITY

The rules are proposed under Texas Labor Code, §301.0015(a)(6), which provides TWC with the authority to adopt, amend, or repeal such rules as it deems necessary for the effective administration of TWC services and activities.

The proposed rules relate to Texas Labor Code, Title 4, Subtitle A, The Texas Unemployment Compensation Act.

§815.1. Definitions.

The following words and terms, when used in this chapter, shall have the following meanings, unless the statute or context in which the word or phrase is used clearly indicates otherwise.

(1) Act--The Texas Unemployment Compensation Act, Texas Labor Code Annotated, Title 4, Subtitle A, as amended.

(2) Additional claim--A notice of new unemployment filed at the beginning of a second or subsequent series of claims within a benefit year or within a period of eligibility when a break of one week or more has occurred in the claim series with intervening employment. The employer named on an additional claim will have 14 days from the date notice of the claim is mailed to reply to the notice. The additional claim reopens a claim series and is not a payable claim since it is not a claim for seven days of compensable unemployment.

(3) Adequate notification--A notification of adverse facts, including any subsequent notification, affecting a claim for benefits, as provided in the Act, Chapter 208.

(A) Notification to the Commission is adequate as long as the employer or its agent gives a reason, supported by facts, directly related to the allegation raised regarding the claimant's right to benefits.

(B) The employer or its agent may demonstrate good cause for failing to provide adequate notice. Good cause is established solely by showing that the employer or its agent was prevented from providing adequate notification due to compelling circumstances beyond the control of the employer or its agent.

(C) Examples of adequate notification of adverse facts include, but are not limited to, the following:

(i) The claimant was discharged for misconduct connected with his work because he was fighting on the job in violation of written company policy.

(ii) The claimant abandoned her job when she failed to contact her supervisor in violation of written company policy and previous warnings.

(D) A notification is not adequate if it provides only a general conclusion without substantiating facts. A general statement that a worker has been discharged for misconduct connected with the work is inadequate. The allegation may be supported by a summary of the events, which may include facts documenting the specific reason for the worker's discharge, such as, but not limited to:

(i) policies or procedures;

(ii) warnings;

(iii) performance reviews;

(iv) attendance records;

(v) complaints; and

(vi) witness statements.

(4) Agency--The unit of state government that is presided over by the Commission and under the direction of the executive director, which operates the integrated workforce development system and administers the unemployment compensation insurance program in this state as established under Texas Labor Code, Chapter 301. It may also be referred to as the Texas Workforce Commission.

(6) [(5)] Appeal--A submission by a party requesting the Agency or the Commission to review a determination or decision that is adverse to that party. The determination or decision must be appealable and pertain to entitlement to unemployment benefits; chargeback as provided in the Act, Chapter 204, Chapter 208, and Chapter 212; fraud as provided in the Act, Chapter 214; tax coverage or contributions or reimbursements. This definition does not grant rights to a party.

(7) [(6)] Base period with respect to an individual--The first four consecutive completed calendar quarters within the last five completed calendar quarters immediately preceding the first day of the individual's benefit year, or any other alternate base period as allowed by the Act.

(8) [(7)] Benefit period--The period of seven consecutive calendar days, ending at midnight on Saturday, with respect to which entitlement to benefits is claimed, measured, computed, or determined.

(9) [(8)] Benefit wage credits--Wages used to determine an individual's monetary eligibility for benefits. Benefit wage credits consist of those wages an individual received for employment from an employer during the individual's base period as well as any wages ordered to be paid to an individual by a final Commission order, pursuant to its authority under Texas Labor Code, Chapter 61. Benefit wage credits awarded by a final Commission order that were due to be paid to the individual by an employer during the individual's base period shall be credited to the quarter in which the wages were originally due to be paid.

(10) [(9)] Board--A Local Workforce Development Board. In this chapter, "Board" has the same meaning as defined in §800.2 of this title. [created pursuant to Texas Government Code §2308.253 and certified by the Governor pursuant to Texas Government Code §2308.261. This includes a Board when functioning as the Local Workforce Investment Board as described in the Workforce Investment Act §117 (29 U.S.C.A. §2832), including those functions required of a Youth Council, as provided for under the Workforce Investment Act §117(i) (also referred to as an LWDB).]

(11) [(10)] Commission--The three-member body of governance composed of Governor-appointed members in which there is one representative of labor, one representative of employers, and one representative of the public as established in Texas Labor Code, §301.002, which includes the three-member governing body acting under the Act, Chapter 212, Subchapter D, and in Agency hearings involving unemployment insurance issues regarding tax coverage, contributions, or reimbursements.

(12) [(11)] Day--A calendar day.

(13) [(12)] Landman--An individual who is qualified to do field work in the purchasing of right-of-way and leases of mineral interests, record searches, and related real property title determinations, and who is primarily engaged in performing the field work.

(15) [(13)] Person--May include a corporation, organization, government or governmental subdivision or agency, business trust, estate, trust, partnership, association, and any other legal entity.

(16) [(14)] Places accessible--Locations in which an employer shall provide required notices to an employee as provided in the Act, Chapter 208. Required notices include the following [This includes]:

(A) notices [Notices] providing general information about filing a claim for unemployment benefits shall be displayed in a manner reasonably calculated to be encountered by all employees; and

(B) upon [Upon] separation from employment, an employer shall provide an employee individual notice of general information about filing a claim for unemployment benefits as set out in the printed notice referenced in §208.001(b) of the Act. As the notice is provided directly to the individual, the employer has significant flexibility in how this information may be made known. Such information may be provided:

(i) in a paper format, including by mail or with separation paperwork;

(ii) by email;

(iii) by text; or

(iv) by other means reasonably calculated to ensure the individual receives the required notification.

(17) [(15)] Reopened claim--The first claim filed following a break in claim series during a benefit year which was caused by other than intervening employment, that is [i.e.,] illness, disqualification, unavailability, or failure to report for any reason other than job attachment. The reopened claim reopens a claim series and is not a payable claim since it is not a claim for seven days of compensable unemployment.

(18) [(16)] Week--A period of seven consecutive calendar days ending at midnight on Saturday.

§815.3. Addresses.

(a) In this chapter, the following shall promptly notify the Agency of any change of address and provide the correct address to the Agency:

(1) Each [each] employing unit, which has or had individuals in "employment," as [so] defined in the Act; and [shall notify the Agency of its correct address and of any change in its correct address, and each employing unit shall promptly notify the Agency of any change of address.]

(2) Each individual who is a claimant for benefits, who is liable to the Agency for an overpayment pursuant to the Act, Chapter 212 or 214, [or] who is registered for work at an Agency office[,] or public employment office, including a Texas Workforce Center, or who otherwise has pending business before the Agency [workforce center shall promptly notify the Agency of any change of address].

(b) In this chapter, a group account, as referred to in §205.021 of the Act, [§205.021,] shall be treated as a single employing unit for the purposes of this section and the Agency shall use the address of the group representative as the official address of the group. The group representative shall notify the Agency of the correct address and shall promptly notify the Agency of any change of address.

(c) In all transactions in which notice is required by the Act or this chapter, the Agency shall send the notice to [notify] the parties to [at] the last known physical or electronic address as reflected in the Agency records. However, when the Agency delivers [mails] a notice of an initial claim to the employer via the United States Postal Service, the Agency shall use the physical address of the employer for whom the claimant last worked, or if the employer has more than one branch or division at different locations, the location of the branch or division at [for] which the claimant last worked, or a mailing address designated by the employer in §208.003 of the Act[, §208.003].

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 July 21, 2026.

TRD-202602956

Les Trobman

General Counsel

Texas Workforce Commission

Earliest possible date of adoption: September 6, 2026

For further information, please call: (737) 301-9662

SUBCHAPTER B. BENEFITS, CLAIMS, AND APPEALS

The rules are proposed under Texas Labor Code, §301.0015(a)(6), which provides TWC with the authority to adopt, amend, or repeal such rules as it deems necessary for the effective administration of TWC services and activities.

The proposed rules relate to Texas Labor Code, Title 4, Subtitle A, The Texas Unemployment Compensation Act.

§815.21. Interstate Claims.

This section shall govern the Agency in its administrative cooperation with other states adopting a similar rule or regulation for the payment of benefits to interstate claimants, any provision of any other rule to the contrary notwithstanding.

(1) Definitions. As used in this section, the following words and terms shall have the following meanings, unless the context clearly indicates otherwise.

(A) [(B)] Benefits--The compensation payable to an individual with respect to the individual's unemployment, under the unemployment insurance law of any state.

(B) [(C)] Interstate benefit payment plan--The plan approved by the Interstate Conference of Employment Security Agencies under which benefits shall be payable to unemployed individuals absent from the state (or states) in which benefit credits have been accumulated.

(C) [(D)] Interstate claimant--An individual who claims benefits under the unemployment insurance law of one or more liable states through the facilities of an agent state, or directly with the liable state. The term "interstate claimant" shall not include any individual who customarily commutes from a residence in an agent state to work in a liable state unless the Agency finds that this exclusion would create undue hardship on the claimants in specified areas.

(D) [(E)] Liable state--Any state against which an individual files, through another state, a claim for benefits.

(E) [(F)] State--Includes the District of Columbia, Puerto Rico, and the Virgin Islands.

(F) [(G)] Week of unemployment--Includes any week of unemployment as defined in the law of the liable state from which benefits with respect to the week are claimed.

(2) Registration for work.

(A) The agent state shall register for work each claimant who files through the agent state, or upon notification of a claim filed directly with the liable state, as required by the laws [law], regulations, and procedures of the agent state. The registration shall be accepted as meeting the registration requirements of the liable state.

(B) Each agent state shall duly report[,] to the liable state in question, each interstate claimant who fails to meet the registration/re-employment assistance reporting requirements of the agent state.

(3) Benefit rights of interstate claimants.

(A) If a claimant files a claim against any state, and it is determined by the state that the claimant has available benefit credits in the state, then claims shall be filed only against the state as long as benefit credits are available in that state. Thereafter, the claimant may file claims against any other state in which there are available benefit credits.

(B) For the purposes of this section, benefit credits shall be deemed to be unavailable whenever benefits have been exhausted, terminated, or postponed for an indefinite period or for the entire period in which benefits would otherwise be payable, or whenever benefits are affected by the applications of a seasonal restriction.

(4) Claims for benefits.

(A) Claims for benefits or waiting-period credit filed by an interstate claimant directly with the liable state shall be filed in accordance with the liable state's procedures. Claims shall be filed in accordance with the type of week in use in the agent state. Any adjustments required to fit the type of week used by the liable state shall be made by the liable state on the basis of consecutive claims filed.

(B) Claims shall be filed in accordance with the agent state's regulations for intrastate claims in the local employment offices, affiliated sites, one-stop centers, or at an itinerant service point or by the United States Postal Service [mail], common carrier, or by other means, including telephonic or electronic means, as the Agency may approve.

(i) With respect to claims for weeks of unemployment in which an individual was not working for the individual's regular employer, the liable state shall, under circumstances that [which] it considers good cause, accept a continued claim filed up to one week or one reporting period late. If a claimant files more than one reporting period late, an initial interstate claim shall be used to begin a claim series, and no continued claim for a past period shall be accepted.

(ii) With respect to weeks of unemployment during which an individual is attached to the individual's regular employer, the liable state shall accept any claim that [which] is filed within the time limit applicable to the claims under the law of the agent state.

(5) Determination of claims.

(A) The agent state shall, in connection with each claim filed by an interstate claimant, ascertain and report to the liable state in question the facts relating to the claimant's availability for work and eligibility for benefits as are readily determinable in and by the agent state.

(B) The agent state's responsibility and authority in connection with the determination of interstate claims shall be limited to investigation and reporting of relevant facts and the reporting of relevant facts pertaining to each claimant's failure to register for work or report for re-employment assistance as required by the agent state. The agent state shall not refuse to take an interstate claim.

(6) Appellate procedure.

(A) The agent state shall afford all reasonable cooperation in the taking of evidence and the holding of hearings in connection with appealed interstate benefit claims.

(B) With respect to the time limits imposed by the law of a liable state other than Texas, upon the filing of an appeal in connection with a disputed claim, whether or not the appeal is timely shall be determined by the liable state by reference to that state's laws [law], regulations, or policies and practices. In interstate appeals in which Texas is the liable state, whether or not the appeal is timely shall be determined by reference to relevant provisions of the [Texas Unemployment Compensation] Act and current Agency policies and precedent decisions applicable to intrastate appeals.

(C) The liable state shall conduct hearings in connection with appealed interstate benefit claims. The liable state may contact the agent state for assistance in special circumstances.

(7) Canadian claims. This section shall apply in all its provisions to claims taken in and for Canada.

(8) Notification of interstate claim. The liable state shall notify the agent state of each initial claim, reopened file, claim transferred to interstate status, and each weekly [week] claim filed from the agent state using uniform procedures and record format pursuant to the Interstate Benefit Payment Plan.

§815.25. Approval of Training.

(a) The Agency shall approve training[,] if:

(1) there is no longer substantial and recurring demand for the individual's skills, [and] the lack of employment opportunities in occupations requiring those skills is expected to continue for an extended period of time, and the individual has no other skill for which there is an expectation of reemployment in a reasonable period; and

(2) the training will enhance the individual's ability to secure stable employment and earning potential in an occupation for which there is substantial and recurring demand.

(b) An individual shall be in approved training if the Agency approves the training for the individual and the individual is attending the training as shown by the following:

(1) The individual and/or the training facility agrees to furnish evidence upon the Agency's request [request of the Agency] that the individual is regularly attending the training course and is satisfactorily performing assignments as a trainee; and

(2) The individual affirms at the time of the claim certification that the individual has attended the training course during the given training week or had good cause for the individual's failure to do so.

(c) Training provided by or [The funding source of the training shall not affect the approval of the training except that training] under the auspices of the Workforce Innovation and Opportunity Act, TWC's Vocational Rehabilitation Services Program, [Workforce Investment Act; the Texas Department of Assistive and Rehabilitative Services; the Texas Department of Aging and Disability Services;] federal or state veterans' services programs, or any other program specifically designated by the Agency, shall be considered approved for the purposes of §207.022 of the Act [§207.022].

(d) The Agency shall not deny approval of training solely because the individual resides outside of the state. Agency staff may rely upon the recommendation of the agent state regarding whether the training is approved.

(e) The Commission shall develop procedural guidelines for use by Agency staff and the Boards that are consistent with the requirements of this section. Procedures may include, but are not limited to:

(1) using a statewide or Board-level demand or targeted occupations list to determine whether there is substantial and recurring demand for an occupation or industry; and

(2) using the Agency's job-matching system to assess the individual's existing skills when determining the individual's likelihood to return to an occupation or industry requiring those skills.

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 July 21, 2026.

TRD-202602957

Les Trobman

General Counsel

Texas Workforce Commission

Earliest possible date of adoption: September 6, 2026

For further information, please call: (737) 301-9662

SUBCHAPTER C. TAX PROVISIONS

The rules are proposed under Texas Labor Code, §301.0015(a)(6), which provides TWC with the authority to adopt, amend, or repeal such rules as it deems necessary for the effective administration of TWC services and activities.

The proposed rules relate to Texas Labor Code, Title 4, Subtitle A, The Texas Unemployment Compensation Act.

§815.113. Commission Hearings Involving Coverage and Contributions or Reimbursements.

(a) In all situations not specifically provided for in the Act or in the rules of the Agency, a hearing may, at the discretion of the Commission, be afforded an employing unit upon its written request, in any case involving tax liability or any question relating to contributions or reimbursements. Hearings under this section shall continue to be termed Rule 13 Hearings. The written request for hearing may be filed by hand delivery, the United States Postal Service [mail], common carrier, facsimile (fax) transmission, or other method approved by the Agency in writing, at a local tax office or at the Texas Workforce Commission, 101 East 15th Street, Austin, Texas 78778-0001.

(b) The Commission may on its own motion set a hearing to secure the facts to establish the status of any individual or employing unit under any section of the Act.

(c) The Commission may designate a representative to preside over the hearing. Hearings shall be conducted by telephone conference call unless the supervisor of the hearing officers or the supervisor's designee determines that an in-person or video-conference hearing is necessary, most commonly to accommodate a disability [hearing is necessary]. The hearings will be scheduled at the time and [and, if an in-person hearing, held at a] place and in the manner designated by the supervisor [of the hearings officers] or the supervisor's designee in accordance with the applicable provisions [paragraphs (1) - (3)] of this subsection and [the applicable provisions in] this chapter.

(1) Written notice of the date and time of the hearings shall be given to the parties, and the location if it is an in-person hearing, at least 10 days before the date of the hearing; but if a setting at an earlier date is requested by an individual or employing unit, the supervisor of the hearings officers or the supervisor's designee may at the supervisor's discretion grant that request[,] if granting [the granting of] the request will not prejudice the rights of any other party to the proceedings, including the Agency itself. The notice shall be mailed to the parties at their last-known addresses.

(2) In these proceedings before a hearings officer, all parties shall be given an opportunity for full, fair, and impartial hearing. The hearings shall be conducted in the manner deemed most suitable to ascertain the facts and to determine the rights of the parties. All testimony taken shall be under oath and subject to the right of cross-examination by any adverse party, and it shall be recorded. When necessary, the hearing officer may order the taking of depositions. The submission of written briefs, affidavits, and other written memoranda may be required.

(3) A witness, whose attendance at a hearing is required, may be allowed a fee and mileage on the same basis and to the same extent as is provided for witnesses under §815.18 of this chapter [(relating to General Rules for Both Appeal Stages)].

(d) The Commission, following each hearing, shall issue a decision, which shall resolve the questions involving tax liability or any question relating to contributions or reimbursements that [which] arose at the hearing. Copies of the Commission's written decisions [of the Commission] shall be provided to [furnished] the parties to the hearings.

(e) A decision of the Commission shall become final 30 days after the date of mailing unless, within the 30-day period, a party files a petition to reopen the hearing, the proceeding is [either] reopened by a Commission order, or [by] a party to the proceeding files [filing] a written motion for reconsideration in accordance with the provisions of §815.17(f) of this chapter [(relating to General Rules for Both Appeal Stages)]. A party filing a motion for reconsideration must file the motion in writing at the address stated in the Commission's decision. The Commission may deny the motion without further hearing. If the Commission determines that additional evidence or argument is necessary, then the Commission may order a rehearing and schedule the rehearing in accordance with subsection (c) of this section. [The motion for reconsideration is sent to the address listed in the decision.] A decision is not binding on a person who was not a party to a proceeding conducted under this section.

§815.115. Contribution and Wage Reports Covering Seamen and Seamen's Wages Paid under Shipping Articles.

This section shall govern contribution and wage reports covering seamen and seamen's wages paid under shipping articles.

(1) Pay period. For the purpose of this section, the term "pay period" established by "shipping articles" means the period of the voyage or engagement of the crew under "articles of agreement" pursuant to 46 USCA §10302 [46 U.S.C.A. §564].

(2) Current reports.

(A) Contribution reports and wage reports with respect to wages, including advances, allotments, and payment in kind, such as board and lodging, earned in any pay period established by "shipping articles" shall be submitted as of the calendar quarter in which any of the wages in cash were actually paid or any of the wages in kind were furnished.

(B) Reports on wages falling within the purview of this section need not be filed prior to the time reports regarding wages paid at the termination of the period shall be filed. However, separate reports shall in that event be filed for each calendar quarter involved during which wages in cash were paid and wages in kind were furnished.

(3) Special reports. The employer shall, upon request of the Agency, promptly furnish a statement of the wages of a seaman, whenever the statement is necessary in order to determine a seaman's eligibility for and rate of benefits. The statement shall be prepared and submitted in the manner the Agency may prescribe in each case.

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 July 21, 2026.

TRD-202602958

Les Trobman

General Counsel

Texas Workforce Commission

Earliest possible date of adoption: September 6, 2026

For further information, please call: (737) 301-9662

The Texas Workforce Commission (TWC) proposes amendments to the following section of Chapter 815, relating to Unemployment Insurance:

Subchapter C. Tax Provisions, §815.107

PART I. PURPOSE, BACKGROUND, AND AUTHORITY

The purpose of the proposed amendments to Chapter 815 is to implement provisions of Senate Bill (SB) 1786, House Bill (HB) 2, and HB 120, enacted by the 89th Texas Legislature, Regular Session, 2025, which enhance TWC's ability to collect, analyze, and utilize workforce data.

The statutory changes amended Texas Labor Code, §204.0025 and added Texas Labor Code, §302.0205. Amended Texas Labor Code, §204.0025 directs TWC to work collaboratively with employers to enhance the reporting of employment and earnings data as part of employers' routine wage filings. The amended §204.0025 also specifies that enhanced wage filings must at a minimum include information related to wage, industry, occupational field, full-time and part-time status, county of primary employment, and remote work status.

New Texas Labor Code, §302.0205 requires TWC to produce a biennial Regional Labor Demand Assessment using the best available data to evaluate workforce needs across the state. Additionally, amended Texas Labor Code, §204.0025 permits TWC to collect other important employment information necessary to conduct the biennial Labor Demand Assessment.

The proposed rule amendments modernize workforce data collection by clarifying employer reporting requirements and ensuring TWC has the information necessary to fulfill its statutory responsibilities. Enhanced data collection will enable TWC to produce more accurate and timely labor market information to support economic development, strengthen education and workforce planning, and inform state and local policymaking. Additionally, TWC will leverage this additional data to combat fraud, providing further benefit to employers and taxpayers statewide.

The amendments provide TWC the flexibility to request additional information, as necessary, through existing reporting mechanisms, while minimizing administrative burden on employers by incorporating such requests into established quarterly wage reporting processes. TWC remains committed to engaging employers and stakeholders to support implementation and address any challenges associated with these enhanced reporting requirements.

Coordination Activities

TWC, as directed by Texas Labor Code, §204.0025, actively engaged representatives of employer organizations to ensure the implementation of enhanced wage record reporting is both practical for businesses and effective for data collection. To achieve this engagement, TWC collaborated with national employer groups for this dialogue, including surveying their members on technical feasibility. Additionally, TWC collaborated with industry groups and local chambers of commerce to host stakeholder feedback sessions, ensuring the voices of small and large employers were heard.

PART II. EXPLANATION OF INDIVIDUAL PROVISIONS

(Note: Minor editorial changes are made that do not change the meaning of the rule and, therefore, are not discussed in the Explanation of Individual Provisions.)

SUBCHAPTER C. TAX PROVISIONS

TWC proposes the following amendments to Subchapter C:

§815.107. Reports Required and Their Due Dates

Section 815.107(d) is amended to add new paragraphs (5) and (6) to the list of information that employers are directed to provide in their Quarterly Reports from Taxed Employers. New §815.107(d)(6) requires employers to provide any information requested to comply with the Additional Workforce Data Reporting necessary to conduct the Labor Demand Assessment under Texas Labor Code, §302.0205.

Additionally, §815.107 is amended to add new (e), which states that failure to provide the information requested pursuant to Texas Labor Code, §204.0025 may be considered as one of several factors in TWC's risk-based approach to employer compliance reviews.

PART III. IMPACT STATEMENTS

Chris Nelson, Chief Financial Officer, has determined that for each year of the first five years the proposed rule will be in effect, the following statements will apply:

There are no additional estimated costs to the state and to local governments expected as a result of enforcing or administering the proposed rule.

There are no estimated cost reductions to the state and to local governments as a result of enforcing or administering the proposed rule.

There are no estimated losses or increases in revenue to the state or to local governments as a result of enforcing or administering the rule.

There are no foreseeable implications relating to costs or revenue of the state or local governments as a result of enforcing or administering the proposed rule.

There are no significant anticipated economic costs to individuals required to comply with the proposed rule. While there could be minimal initial costs for employers to comply with the proposed rule, primarily associated with incorporating additional data elements into existing reporting processes, these costs are expected to decrease or phase out as employers integrate the requirements into routine quarterly wage reporting.

There is no anticipated adverse economic impact on small businesses, microbusinesses, or rural communities as a result of enforcing or administering the proposed rule.

Based on the analyses required by Texas Government Code, §2001.024, TWC has determined that the requirement to repeal or amend a rule, as required by Texas Government Code, §2001.0045, does not apply to this rulemaking.

Takings Impact Assessment

Under Texas Government Code, §2007.002(5), "taking" means a governmental action that affects private real property, in whole or in part or temporarily or permanently, in a manner that requires the governmental entity to compensate the private real property owner as provided by the Fifth and Fourteenth Amendments to the US Constitution or the Texas Constitution, §17 or §19, Article I, or restricts or limits the owner's right to the property that would otherwise exist in the absence of the governmental action, and is the producing cause of a reduction of at least 25 percent in the market value of the affected private real property, determined by comparing the market value of the property as if the governmental action is not in effect and the market value of the property determined as if the governmental action is in effect. TWC completed a Takings Impact Assessment for the proposed rulemaking action under Texas Government Code, §2007.043. The primary purpose of this proposed rulemaking is to implement statutory requirements for enhancing the collection of employment and workforce data through employer wage reporting to support workforce, education, and economic planning, and ensure program integrity.

The proposed rulemaking action will not create any additional burden on private real property or affect private real property in a manner that would require compensation to private real property owners under the US Constitution or the Texas Constitution. The proposal also will not affect private real property in a manner that restricts or limits an owner's right to the property that would otherwise exist in the absence of the governmental action. Therefore, the proposed rulemaking will not cause a taking under Texas Government Code, Chapter 2007.

Government Growth Impact Statement

TWC has determined that during the first five years the proposed rule will be in effect, it:

--will not create or eliminate a government program;

--will not require the creation or elimination of employee positions;

--will not require an increase or decrease in future legislative appropriations to TWC;

--will not require an increase or decrease in fees paid to TWC;

--will not create a new regulation;

--will not expand, limit, or eliminate an existing regulation;

--will not change the number of individuals subject to the rule; and

--will not positively or adversely affect the state's economy.

Economic Impact Statement and Regulatory Flexibility Analysis

TWC has determined that the proposed rule will not have an adverse economic impact on small businesses or rural communities, as the proposed rule places no requirements on small businesses or rural communities. As noted above in this preamble, while there may be minimal initial costs for employers to comply with the proposed rule, primarily from adding data elements into existing reporting processes, these costs are expected to decrease or phase out as the requirements become part of routine quarterly wage reporting.

Mariana Vega, Director, Labor Market Information, has determined that there is not a significant negative impact upon employment conditions in the state as a result of the proposed rule.

Lowell Keig, Director, Unemployment Insurance Division, has determined that for each year of the first five years the proposed rule is in effect, the public benefit anticipated as a result of enforcing the proposed rule will be improved accuracy and completeness of workforce data, thereby enabling more effective economic planning, better alignment of workforce development programs with employer needs, improved educational planning, enhanced transparency in available labor market information, and strengthened fraud detection and prevention efforts.

PART IV. REQUEST FOR IMPACT INFORMATION

TWC requests, from any person required to comply with the proposed rule or any other interested person, information related to the cost, benefit, or effect of the proposed rule, including any applicable data, research, or analysis. Please submit the requested information to TWCPolicyComments@twc.texas.gov no later than September 7, 2026.

PART V. PUBLIC COMMENTS

Comments on the proposed rule may be submitted to TWCPolicyComments@twc.texas.gov and must be received no later than September 7, 2026.

PART VI. STATUTORY AUTHORITY

The rule is proposed under Texas Labor Code, §301.0015 and §302.002(d), which provide TWC with the authority to adopt, amend, or repeal such rules as it deems necessary for the effective administration of TWC services and activities.

The proposed rule relates to Texas Labor Code, Title 4, particularly Chapters 204 and 302.

§815.107. Reports Required and Their Due Dates.

(a) All reports and forms required by the Agency or the Act shall be filed with the Agency in one of the following formats unless a different format is approved in writing by the Agency, a hardship exemption is requested from and granted by the Agency, or as specified in this chapter.

(1) General Format of Reports and Forms and Methods of Submission. The reports and forms referenced in this section shall be filed using:

(A) forms printed by the Agency;

(B) electronic media in a format prescribed by the Agency; or

(C) any other manner approved and prescribed by the Agency in writing.

(2) Content. The reports and forms shall contain all facts and information necessary to a determination of the amounts due by the employing unit. The Agency may require the furnishing of additional information as it deems necessary for the proper administration of the Act.

(3) Electronic Media Reporting.

(A) Required Electronic Media. All employers and their agents shall file employers' reports, including both summary and detail wage information, as described in §207.004 of the Act, on electronic media using a format prescribed by the Agency.

(B) An electronic media transmission of an employer's report may contain information from more than one employer.

(C) An employer's report filed in an approved medium shall contain both a wage credit report and a summary report.

(b) General Deadlines for Filing Reports and Forms.

(1) Unless otherwise provided in this subchapter, any report or form shall be completed and filed with the Agency within 10 calendar days after the requested report or form is:

(A) mailed to the individual or employing unit at the address on record with the Agency; or

(B) personally delivered to the individual or employing unit by an Agency representative.

(2) Failure to receive notice regarding the reports shall not relieve the individual or employing unit of the responsibility of filing the reports by the date the reports are due.

(3) Good Cause for Extending Deadlines. When good cause is shown, the Agency may extend the due date for filing of a report required under this section; however, the extension shall be effective only if authorized in writing by an Agency representative.

(c) Status Reports.

(1) Status Reports in General. Each employing unit shall file with the Agency a status report within 10 calendar days from the date upon which the employing unit becomes subject to the Act.

(2) Status Reports for New Acquisitions. Any employing unit in the state of Texas that acquires another business or substantially all of the assets of another business shall file a new status report with the Agency within 10 calendar days of the date on which the employing unit made the acquisition.

(3) Status Reports for Additional Information. Each employing unit shall file additional status reports at any time upon the request of the Agency.

(4) Evidence in Support of Status Reports. Employing units filing status reports with the Agency shall:

(A) file with the Agency all facts necessary to a determination of the taxable status of the employing unit; and

(B) if requested, file with the Agency evidence to establish the correctness of information contained in the employing unit's status reports.

(d) Quarterly Reports from Taxed Employers. Each taxed employer, other than a domestic employer who has elected to report and pay annually under §201.027(b) of the Act, shall file with the Agency, within the month during which contributions for any period become due, and not later than the date on which contributions are required to be paid to the Agency, an employer's quarterly report showing for the preceding calendar quarter:

(1) the total amount of remuneration paid for employment (or showing that no remuneration was paid during the quarter);

(2) the total amount of wages paid for employment (as defined in the Act, §201.081 and §201.082);

(3) the amount of wages for benefit wage credits (as defined in the Act, §207.004) paid to each individual employee;

(4) the name and Social Security number of each individual to whom the wages were paid; [and]

(7) [(5)] any other information requested on the employer's quarterly report, including all facts and information necessary to make a determination of the amount of contributions due.

(f) [(e)] Quarterly Reports from Reimbursing Employers and Group Representatives of a Group Account. Each reimbursing employer and the group representative of a group account shall file an employer's quarterly report, by the end of the month following each calendar quarter, that furnishes the following information for the preceding calendar quarter, information specified in subsection (d)(1) - (6) [paragraphs (1) - (4) of subsection (d)] of this section, and any other information necessary to make a determination of the amount of reimbursements due.

(g) [(f)] Benefits Financed by the Federal Government. Each employer that has employees whose benefits are to be financed by the federal government shall file a separate quarterly report furnishing the names of the employees, their Social Security numbers, and the wages paid to each. The report shall be filed by the end of the month following each calendar quarter.

(h) [(g)] Annual Reports from Domestic Employers.

(1) Making the Election. An election to report wages paid and pay contributions on an annual basis must be made in a format or on a form authorized by the Agency by the deadline specified in §201.027 of the Act.

(2) Each domestic employer that qualifies under the Act, and who has made an election as referenced in paragraph (1) of this subsection, shall file with the Agency, by January 31 of the year after the wages were paid, in a format consistent with subsection (a) of this section, a domestic employer's annual report showing the following for the preceding calendar year in which wages were paid.

(A) The information specified in subsection (d)(1) - (6) [paragraphs (1) - (4) of subsection (d)] of this section subtotaled for each quarter; and

(B) Other information called for on the domestic employer's annual report including all facts and information necessary to make a determination of the amount of contributions due.

(3) Penalties and interest incurred under this section shall be the same as applicable to other employer reporting requirements as provided in Chapter 213 of the Act and this subchapter.

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 July 21, 2026.

TRD-202602960

Les Trobman

General Counsel

Texas Workforce Commission

Earliest possible date of adoption: September 6, 2026

For further information, please call: (737) 301-9662

SUBCHAPTER E. CONFIDENTIALITY AND DISCLOSURE OF STATE UNEMPLOYMENT COMPENSATION INFORMATION

The rule is proposed under Texas Labor Code, §301.0015(a)(6), which provides TWC with the authority to adopt, amend, or repeal such rules as it deems necessary for the effective administration of TWC services and activities.

The proposed rule relates to Texas Labor Code, Title 4, Subtitle A, The Texas Unemployment Compensation Act.

§815.165. Exceptions to Confidentiality Requirements.

(a) The Agency may disclose public domain information. For purposes of this section, public domain information includes directory information about the organization of the state, the Commission, and appellate authorities, as well as the names and positions of officials and employees; information about the state unemployment compensation law (and applicable federal law), provisions, rules, regulations, and interpretations, including statements of general policy and interpretations of general applicability; and any agreement relating to the administration of the state unemployment compensation law. Commission-designated precedent case digests from which all individually identifiable information has been removed constitute public domain information. Public domain information does not include information historically excepted from disclosure under the Public Information Act, Chapter 552, Texas Government Code, including, but not limited to, attorney/client privileged information; interagency memoranda containing advice, opinion, or recommendation to policy makers or decision makers; or other items historically excepted from disclosure under the Public Information Act.

(b) The Agency may disclose confidential unemployment compensation information about an individual or employer to that individual or employer, respectively, but in no event does this restrict the Agency from withholding information historically excepted from disclosure, including, but not limited to, confidential informant or attorney-client privileged information, or tax audit techniques.

(c) The Agency may disclose confidential unemployment compensation information if the requestor provides a written release signed by the individual or the employer whose records are requested, and if the written release demonstrates informed consent.

(d) The Agency may disclose confidential unemployment compensation information, based on informed consent, to the following:

(1) An agent acting for or in the place of an individual or an employer by the authority of that individual or employer if the agent presents a written release signed by the party to be represented. If a written release is impossible or impracticable to obtain, the Agency may accept other documentation sufficient to establish informed consent.

(2) An elected official performing constituent services provided the official presents reasonable evidence of authorization to obtain the information, such as a letter from the individual or employer requesting the elected official's assistance or a written record of a telephone request from the individual or employer that the individual or employer has authorized such disclosure.

(3) A licensed attorney retained for purposes unrelated to the state's unemployment compensation law; if the attorney provides a written statement declaring that they have [he or she has] been retained to represent the individual or employer, the requirements of a written release will have been met. An attorney retained for purposes related to the state's unemployment compensation law may assert that they are [he or she is] representing the individual or employer, and such assertion need not be in writing.

(4) A third party that is not acting as an agent, only if that entity provides the Commission with a copy of an informed consent release consistent with the requirements of §815.166 of this subchapter.

(5) A third party seeking confidential information on an ongoing basis, only if that entity submits an informed consent release consistent with the requirements of §815.166 of this subchapter. This requirement applies even if the third party is an agent seeking information on an ongoing basis.

(e) The Agency may disclose confidential unemployment compensation information to a public official for use in the performance of their [his or her] official duties, including the administration or enforcement of law or execution of the official responsibilities of a federal, state, or local elected official. Administration of law includes research related to the law administered by the public official. Execution of official responsibilities does not include solicitation of contributions or expenditures to or on behalf of a candidate for public or political office or a political party.

(f) The Agency may disclose confidential unemployment compensation information to a public official's agent or contractor if such disclosure is permissible under 20 CFR §603.5(e) [20 C.F.R. §603.5(e)] and only after evaluating the following factors:

(1) The potential threat to the employer's or individual's privacy posed by an entity's collection, storage, maintenance, use, and possible misuse of confidential unemployment compensation information;

(2) The costs associated with such disclosure;

(3) The agent or contractor's ability to comply with the requirements in 20 CFR §603.9 [20 C.F.R. §603.9] regarding safeguards and security of confidential unemployment compensation information;

(4) The costs of enforcement, including investigation and assessment of penalties for misuse of data;

(5) The costs to develop, monitor, and maintain systems sufficient to allow audit of the information;

(6) The personnel, travel, and equipment expenses associated with periodic monitoring and on-site audits required by 20 CFR §603.10 [20 C.F.R. §603.10]; and

(7) Whether the disclosure is for purposes of solicitation of contributions or expenditures to or on behalf of a candidate for public or political office or a political party.

(g) The Agency may disclose confidential unemployment compensation information to parties for purposes of claims adjudications, hearings, and appeals, consistent with this chapter.

(h) The Agency may disclose confidential unemployment compensation information to a federal official for purposes of UC program oversight and audits, including disclosures under 20 CFR Part 603 [20 C.F.R. Parts 29 and 601, as well as under C.F.R. Parts 96 and 97].

(i) The confidentiality requirements of this chapter do not apply to information collected exclusively for statistical purposes under a cooperative agreement with the Bureau of Labor Statistics (BLS). Further, this chapter's requirements do not restrict or impose any condition on the transfer of any other information to BLS under an agreement, or the disclosure or use of such information by BLS.

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 July 21, 2026.

TRD-202602959

Les Trobman

General Counsel

Texas Workforce Commission

Earliest possible date of adoption: September 6, 2026

For further information, please call: (737) 301-9662