|(a) Eligibility. (1) Institutions and private or independent institutions of higher education are eligible to participate in the TEXAS Grant program. (2) No institution may, on the grounds of race, color, national origin, gender, religion, age, or disability exclude an individual from participation in, or deny the benefits of the program described in this subchapter. (3) Each institution must follow the Civil Rights Act of 1964, Title VI (Public Law 88-353) in avoiding discrimination in admissions. (b) Approval. (1) Agreement. Each approved institution must enter into an agreement with the Board, the terms of which shall be prescribed by the Commissioner. (2) Approval Deadline. An institution must be approved by April 1 in order for qualified students enrolled in that institution to be eligible to receive grants in the following fiscal year. (c) Responsibilities. (1) Probation Notice. If the institution is placed on public probation by its accrediting agency, it must immediately advise the Board and grant recipients of this condition and maintain evidence in each student's file to demonstrate that the student was so informed. (2) Disbursements to Students. (A) Documentation. The institution must maintain records to prove the receipt of program funds by the student or the crediting of such funds to the student's school account. (B) Procedures in Case of Illegal Disbursements. If the Commissioner has reason for concern that an institution has disbursed funds for unauthorized purposes, the Board will notify the Program Officer and financial aid officer and offer an opportunity for a hearing pursuant to the procedures outlined in Chapter 1 of this title (relating to Agency Administration). Thereafter, if the Board determines that funds have been improperly disbursed, the institution shall become primarily responsible for restoring the funds to the Board. No further disbursements of grants or scholarships shall be permitted to students at that institution until the funds have been repaid. (3) Reporting and Refunds. (A) Requirements/Deadlines. All institutions must meet Board reporting requirements in a timely fashion. Such reporting requirements shall include reports specific to allocation and reallocation of grant funds (including the Financial Aid Database Report) as well as progress and year-end reports of program activities. (B) Penalties for Late Reports or Refunds. (i) An institution that postmarks or electronically submits a report a week or more after its due date will be ineligible to receive additional funding through the reallocation occurring at that time. (ii) The Commissioner may penalize an institution by reducing its allocation of funds in the following year by up to 10% for each report that is postmarked or submitted electronically more than a week late. The penalty may also be invoked if the report is timely, but refunds owed to the Program by the institution are not made to the Board or the State Comptroller's Office within one week after due. (iii) The Commissioner may assess more severe penalties against an institution if any report or refund is received by the Board more than one month after its due date. (iv) The maximum penalty for a single year is 30 percent of the school's allocation. If penalties are invoked in two consecutive years the institution may be penalized an additional 20 percent. (C) Appeal of Penalty. If the Commissioner determines that a penalty is appropriate, the institution will be notified by certified mail, addressed to the Program Officer with a copy sent to the financial aid officer. Within 21 days from the time that the Program Officer receives the written notice, the institution must submit a written response appealing the Board's decision, or the penalty shall become final and no longer subject to an appeal. An appeal under this section will be conducted in accordance with the rules provided in Chapter 1 of this title (relating to Agency Administration). (4) Program Reviews. If selected for such by the Board, participating institutions must submit to program reviews of activities related to the TEXAS Grant Program.