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Signed Into Law
Signed May 29, 2025Effective 2025-05-29
HB11

Regular Session

Relating to licensing reciprocity agreements entered into by the Texas Department of Licensing and Regulation.

Government Affairs & Regulatory Compliance Analysis

HB11: Government Affairs Overview

HB11 is effective immediately, mandating the Texas Department of Licensing and Regulation (TDLR) to execute reciprocity agreements with other states to alleviate labor shortages. This legislation expands the eligible labor pool for skilled trades and health professions but shifts the burden of credential verification and liability management directly onto employers. You must immediately adjust hiring protocols to validate out-of-state licenses rather than automatically rejecting them.

Rep. Dade Phelan·House Bill·Regular Session

Moderate
Low Cost
Effective:2025-05-29
Business Impact

Who HB11 Affects

This legislation has regulatory implications for the following Texas businesses and organizations:

Regulatory Priority: moderate

Notable regulatory updates (effective 2025-05-29). Consider how these changes may affect your operations.

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Healthcare

Affected business types:

  • Hospitals
  • Healthcare systems
  • Medical practices
  • Health insurance providers
View all healthcare legislation

Key Operational Considerations

  • 1Master Service Agreements (MSAs): Standard clauses requiring personnel to be "Licensed by the State of Texas" are now restrictive and potentially inaccurate.
  • 2Job Descriptions: Remove "Must hold current Texas License" as a hard filter. Replace with "Must hold current Texas License or eligible equivalent from a reciprocal state."

Estimated Cost Impact

lowMinimal cost impact anticipated.

Enforcing Agencies

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HB11
Relating to licensing reciprocity agreements entered into by the Texas Department of Licensing and Regulation.
Moderate Urgency
Unanimous Passage
House Vote141 - 0
YEA
100% in favor141 voting
Senate Vote31 - 0
YEA
100% in favor31 voting
Cost Impact
Low
Effective
2025-05-29
Enforcing Agencies
TCLRTDLR
Primary Author: Rep. Dade Phelan
89th Texas Legislature
jdkey.com
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Compliance Analysis

Key implementation requirements and action items for compliance with this legislation

Implementation Timeline

  • Effective Date: May 29, 2025 (Immediate). TDLR is now legally authorized to recognize out-of-state licenses under reciprocity.
  • Compliance Deadline: Immediate. You must update hiring and contracting workflows now to accommodate potential reciprocal candidates.
  • Agency Rulemaking: January 1, 2026. The Texas Commission of Licensing and Regulation (TCLR) must adopt formal rules defining "substantial equivalence" for training and testing.
  • *Regulatory Gray Zone:* Between now and Jan 1, 2026, TDLR may operate under existing or ad-hoc agreements. Proceed with caution until formal rules are published.

Immediate Action Plan

  • 1. Audit MSAs: Immediately revise subcontractor warranty clauses to include reciprocity language to avoid technical breach of contract.
  • 2. Update Hiring SOPs: Instruct HR to flag out-of-state applicants for "Reciprocity Review" rather than automatic rejection.
  • 3. Establish Verification Channels: Identify the license verification portals for neighboring states (OK, LA, NM, AR) in anticipation of early agreements.
  • 4. Monitor Rulemaking: Assign compliance staff to watch the *Texas Register* for TCLR’s proposed rules on "substantial equivalence" in Q3 2025 and submit comments regarding safety standards.

Operational Changes Required

Contracts

  • Master Service Agreements (MSAs): Standard clauses requiring personnel to be "Licensed by the State of Texas" are now restrictive and potentially inaccurate.
  • *Required Amendment:* Change warranty language to: *"Personnel must be licensed by the State of Texas or authorized to practice in Texas under a valid reciprocity agreement pursuant to Ch. 51, Subchapter K, Texas Occupations Code."*
  • Employment Contracts: Insert a contingency clause for reciprocal hires stating that employment is void if the originating state’s license lapses or if the reciprocity agreement between Texas and that state is terminated.

Hiring/Training

  • Job Descriptions: Remove "Must hold current Texas License" as a hard filter. Replace with "Must hold current Texas License or eligible equivalent from a reciprocal state."
  • Gap Training: Implement a "Scope Gap" onboarding module. If a reciprocal hire comes from a state with different code adoption years (e.g., NEC or building codes), you must document that they have been trained on Texas-specific amendments to mitigate negligence claims.
  • Insurance Review: Confirm with your professional liability carrier that coverage extends to employees working under reciprocal privileges, not just physical Texas licenses.

Reporting & Record-Keeping

  • Verification Protocol: Do not rely solely on the TDLR database. You must create a compliance file for reciprocal hires containing:
  • 1. Proof of the out-of-state license.
  • 2. Direct verification of "Good Standing" (no active complaints) from the originating state board.
  • 3. A copy of the active reciprocity agreement.

Fees & Costs

  • Administrative Burden: No new state fees are levied on businesses, but internal administrative costs will increase due to the complexity of multi-state verification.
  • IT Updates: Expect potential delays in TDLR’s online portal as they integrate data from other states (Fiscal Note indicates IT upgrades are required).

Strategic Ambiguities & Considerations

  • "Substantially Equivalent" Standards: The law requires reciprocity only when standards are "substantially equivalent," but does not define the percentage of overlap required (e.g., is a 90% match in training hours sufficient?).
  • *Risk:* If TCLR rules are too loose, you risk hiring under-qualified staff. If too strict, the labor pool remains closed.
  • Scope of Practice Mismatches: Job titles may match across state lines (e.g., "Journeyman"), but authorized duties often do not. The law is vague on how specific task prohibitions will be communicated to employers.

Need Compliance Guidance on This Legislation?

JD Key Consulting specializes in Texas regulatory compliance strategy. Work directly with James Dickey—former Chairman of the Republican Party of Texas—to understand this bill's impact on your operations and develop an actionable compliance plan.

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Information presented is for general knowledge only and is provided without warranty, express or implied. Consult qualified government affairs professionals and legal counsel before making compliance decisions.

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Legislative Timeline

This bill's path through the Texas Legislature

Filed
Feb 27, 2025
Passed House
Apr 24, 2025
Passed Senate
May 16, 2025
Signed
May 29, 2025
Effective
May 29, 2025
TopicsIntergovernmental RelationsOccupational RegulationOccupational Regulation--health OccupationsOccupational Regulation--other Trades & ProfessionsLicensing & Regulation, Texas Commission ofLicensing & Regulation, Texas Department of
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House Authors

Rep. Dade PhelanRepublican · Primary Author

Senate Sponsor

Sen. Mayes MiddletonRepublican · Primary Sponsor

Bill Text(with markup)

View bill text in multiple formats on Texas Legislature website

Fiscal NoteView Original

Related Legislation

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More from Rep. Dade Phelan

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Related by Topic

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Quick Reference

Frequently Asked Questions

Common questions about HB11

Q

What does Texas HB11 do?

HB11 is effective immediately, mandating the Texas Department of Licensing and Regulation (TDLR) to execute reciprocity agreements with other states to alleviate labor shortages. This legislation expands the eligible labor pool for skilled trades and health professions but shifts the burden of credential verification and liability management directly onto employers. You must immediately adjust hiring protocols to validate out-of-state licenses rather than automatically rejecting them.

Q

Who authored HB11?

HB11 was authored by Texas Representative Dade Phelan during the Regular Session.

Q

When was HB11 signed into law?

HB11 was signed into law by Governor Greg Abbott on May 29, 2025.

Q

Which agencies enforce HB11?

HB11 is enforced by Texas Commission of Licensing and Regulation (TCLR) and Texas Department of Licensing and Regulation (TDLR).

Q

How significant are the changes in HB11?

The regulatory priority for HB11 is rated as "moderate". Businesses and organizations should review the legislation to understand potential impacts.

Q

What is the cost impact of HB11?

The cost impact of HB11 is estimated as "low". This may vary based on industry and implementation requirements.

Q

What topics does HB11 address?

HB11 addresses topics including intergovernmental relations, occupational regulation, occupational regulation--health occupations, occupational regulation--other trades & professions and licensing & regulation, texas commission of.

Q

What are the key dates for HB11?

Key dates for HB11: Effective date is 2025-05-29. Rulemaking: Adopt rules establishing procedures to determine if other states' licensing requirements are 'substantially equivalent' to Texas standards (covering training, testing, and scope of practice) and to implement reciprocity agreements. (2026-01-01). Consult with legal counsel regarding applicability.

Q

Which Texas businesses are affected by HB11?

HB11 primarily affects healthcare providers and medical facilities. These businesses should review the legislation with their legal and compliance teams to understand potential impacts.

Need Strategic Guidance on This Legislation?

JD Key Consulting is an Austin, Texas-based government affairs firm led by James Dickey, former Chairman of the Republican Party of Texas. We specialize in Texas regulatory compliance and legislative strategy for data centers, energy, banking, and manufacturing.

Legislative data provided by LegiScanLast updated: January 11, 2026