Relating to the construction, expansion, and operation of certain inpatient mental health facilities and the designation of residential treatment facilities for certain juveniles.
ModeratePlan for compliance
Low Cost
Effective:2025-06-20
Enforcing Agencies
Health and Human Services Commission (HHSC) • Department of State Health Services (DSHS) • Department of Family and Protective Services (DFPS)
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Compliance Analysis
Key implementation requirements and action items for compliance with this legislation
Implementation Timeline
Effective Date: June 20, 2025 (Immediately effective).
Compliance Deadline: Immediate. Facilities seeking designation or funding must prepare now; School districts must implement approval protocols immediately before enrolling new non-resident students.
Agency Rulemaking: High probability of emergency rulemaking or guidance from HHSC within 60-90 days to define eligibility criteria for "certain" facilities and grant application procedures.
Immediate Action Plan
1.Audit "Shovel-Readiness": Developers and operators must finalize architectural plans and feasibility studies immediately. HHSC will favor projects that can deploy capital quickly.
2.Monitor Procurement: Direct government relations teams to track HHSC announcements daily for the grant RFA release.
3.Update Enrollment Protocols: ISDs near potential designated facilities must draft the Superintendent Approval Form today to prevent enrollment delays.
4.Review Insurance Limits: Operators seeking construction grants must verify that Builder’s Risk and Professional Liability policies cover state-funded projects and associated indemnities.
Operational Changes Required
Contracts
Grant Agreements: Operators awarded funds must execute binding Grant Agreements with HHSC. Legal counsel must review these for "claw-back" provisions regarding construction deadlines and operational deliverables.
Vendor Flow-Downs: Construction contracts funded by these grants must incorporate state-mandated clauses (e.g., prevailing wage, indemnification). Update Master Service Agreements (MSAs) for architects and general contractors immediately.
Hiring/Training
Grant Management: Assign internal resources or retain external consultants to monitor the *Texas Register* and HHSC procurement portals for the Request for Applications (RFA).
Admissions Staff: Train admissions personnel at juvenile facilities to identify which placements require the new Superintendent Approval prior to educational enrollment.
Reporting & Record-Keeping
Segregated Ledgers: Establish separate accounting codes for grant funds. These are "one-time grants," and commingling these funds with general operating revenue will trigger audit failures.
Superintendent Approvals: School districts (ISDs) must create and archive a "Superintendent Approval Form" for non-resident students from designated facilities. Verbal consent is insufficient for state reimbursement compliance.
Fees & Costs
No New Fees: The bill does not impose new regulatory fees.
Capital Injection: This is a revenue opportunity. The law creates a funding stream for capital improvements, but costs associated with grant compliance and reporting must be absorbed by the operator.
Strategic Ambiguities & Considerations
"Certain" Facilities: The statute authorizes grants for "certain" inpatient mental health facilities but leaves the definition to HHSC discretion. We anticipate the agency will prioritize facilities increasing bed capacity in underserved rural areas, but this criteria is not yet codified.
Designation Standards: The shift from the specific "Waco Center for Youth" to broadly "designated state facilities" implies new clinical and security standards will be established. Operators should watch for DSHS rules defining the specific requirements to obtain this designation.
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The bill's author has informed the committee that the Department of Family and Protective Services (DFPS) lacks appropriate placement options for a small number of youth with significant behavioral health needs. Children without kinship or licensed placement often become Children Without Placement (CWOP). During a CWOP event, a child or youth is without placement for at least two consecutive, uninterrupted nights in the care and custody of DFPS or Community-Based Care caseworkers. These caseworkers may work shifts in addition to carrying a full caseload, and the youth are typically housed in hotel rooms while waiting for placement, an environment that is both inconsistent and nontherapeutic. While DFPS has made significant improvements in reducing the number of CWOP events, such youth need a stronger safety net solution. C.S.H.B. 109 seeks to address this issue by providing for the authority to operate a residential treatment center for youth beyond the existing authority to operate the Waco Center for Youth, thus expanding residential treatment capacity and using vacant dedicated spaces on other campuses, as appropriate, to provide safety net placements for youth in state conservatorship.
CRIMINAL JUSTICE IMPACT
It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.
RULEMAKING AUTHORITY
It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.
ANALYSIS
C.S.H.B. 109 amends the Health and Safety Code to replace the requirement that the Department of State Health Services (DSHS) use the Waco Center for Youth as a residential treatment facility for emotionally disturbed juveniles who have been admitted to a DSHS facility under the Texas Mental Health Code or who are under the managing conservatorship of the Department of Family and Protective Services (DFPS) and have been admitted under that law to the Waco Center for Youth with a requirement that DSHS designate state facilities for use as residential treatment facilities for emotionally disturbed juveniles who have been admitted to a DSHS facility under that law or who are under the managing conservatorship of DFPS and have been admitted under that law to such a state facility designated by DSHS. Accordingly, the bill replaces references to the Waco Center for Youth with references to state facilities designated by DSHS in provisions that do the following:
·specify the state facilities at which DSHS is required to provide appropriate education services without charge to resident clients; and
·require DSHS to pay for the services from funds appropriated for that purpose.
The bill also replaces the authorization for a client of the center who is not a resident of the Waco Independent School District to receive education services from the district with prior approval from the district's superintendent with an authorization for a client of such a state facility designated by DSHS who is not a resident of the school district that serves the geographical area in which the facility is located to receive those services from the district with the applicable superintendent's prior approval.
EFFECTIVE DATE
September 1, 2025.
COMPARISON OF INTRODUCED AND SUBSTITUTE
While C.S.H.B. 109 may differ from the introduced in minor or nonsubstantive ways, the following summarizes the substantial differences between the introduced and committee substitute versions of the bill.
With respect to the requirement that DSHS designate facilities for use as residential treatment facilities for emotionally disturbed juveniles who have been admitted to a DSHS facility or who are under the managing conservatorship of DFPS and have been admitted to such a designated facility, the substitute replaces references in the introduced to designated facilities with references to designated state facilities or a state facility designated by DSHS, as applicable.
The substitute removes the introduced version's provision replacing the prohibition against the admission of an emotionally disturbed juvenile who has been found to have engaged in delinquent conduct or certain conduct indicating a need for supervision to the Waco Center for Youth with a prohibition against the admission of such a juvenile to the designated facilities.
With respect to the requirement that DSHS provide without charge appropriate education services for all clients residing at the designated facilities, the substitute replaces references in the introduced to designated facilities with state facilities designated by DSHS. Whereas the introduced replaced the existing authorization for a client of the center who is not a resident of the Waco Independent School District to receive education services from the district with prior approval of the district's superintendent with an authorization for a client of the center who is not a resident of the local school district to receive education services from the local school district with approval of the district's superintendent, the substitute instead replaces that existing authorization with an authorization for a client of a state facility designated by DSHS who is not a resident of the school district that serves the geographical area in which the facility is located to receive education services from the district with the prior approval of the district's superintendent.
The substitute changes the bill's effective date to take effect September 1, 2025, with no possibility for immediate effect, whereas the introduced provided for its possible immediate effect, contingent on receiving the requisite constitutional vote.
HB109 immediately authorizes the Health and Human Services Commission (HHSC) to issue one-time capital grants for the construction and expansion of inpatient mental health facilities and decentralizes the designation of juvenile residential treatment centers. This legislation shifts the landscape from a single-center model (Waco) to a broader designation system, creating immediate procurement opportunities for facility operators and new administrative protocols for associated school districts. Implementation Timeline Effective Date: June 20, 2025 (Immediately effective).
Q
Who authored HB109?
HB109 was authored by Texas Representative Toni Rose during the Regular Session.
Q
When was HB109 signed into law?
HB109 was signed into law by Governor Greg Abbott on June 20, 2025.
Q
Which agencies enforce HB109?
HB109 is enforced by Health and Human Services Commission (HHSC), Department of State Health Services (DSHS) and Department of Family and Protective Services (DFPS).
Q
How urgent is compliance with HB109?
The compliance urgency for HB109 is rated as "moderate". Businesses and organizations should review the requirements and timeline to ensure timely compliance.
Q
What is the cost impact of HB109?
The cost impact of HB109 is estimated as "low". This may vary based on industry and implementation requirements.
Q
What topics does HB109 address?
HB109 addresses topics including family, family--juvenile delinquency, mental health & substance abuse, minors and minors--juvenile justice.
Legislative data provided by LegiScanLast updated: November 25, 2025
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