Regular Session
Texas Workforce Commission (TWC) • Local Workforce Development Boards
Key implementation requirements and action items for compliance with this legislation
Provider Agreements (CCAs) require amendment.
Most current agreements contain a clause limiting reimbursement to the "lesser of" the Board’s maximum rate or the provider’s published rate. You must initiate a contract amendment or addendum with your Local Board to activate the authority granted by HB2294. Do not wait for the Board to send this to you.
No impact on staffing ratios or credentials.
Administrative staff responsible for billing must be retrained to audit remittance advice. Ensure they verify that payments reflect the TRS Maximum Rate rather than the private rate once the Board adopts the policy.
Maintain dual rate structures.
You must continue to publish your private-pay rates and file them with TWC as per existing rules. Do not artificially inflate private rates to trigger higher reimbursement; this law renders that strategy obsolete *if* your Board opts in. Keep written records of any Board denial citing "performance measures" for future appeals or association advocacy.
Revenue Opportunity.
There are no new compliance fees. This is a revenue-positive change. Providers with a significant gap between their private rate and the TRS subsidy rate stand to see an immediate increase in monthly revenue upon Board adoption.
The "Performance Measure" Loophole.
The law grants Boards the authority to pay the higher rate *only if* it does not reduce the Board's ability to meet TWC's "target performance measure" (total number of children served).
Our government affairs experts can walk you through this bill's specific impact on your operations.
Schedule ConsultationInformation 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.
This bill's path through the Texas Legislature
BILL ANALYSIS |
| H.B. 2294 |
| By: Thompson |
| Trade, Workforce & Economic Development |
| Committee Report (Unamended) |
| BACKGROUND AND PURPOSE The bill author has informed the committee that all child-care programs serving children in the Texas Workforce Commission's (TWC) Child Care Services scholarship program must participate in the Texas Rising Star Program, which offers three levels of quality certification to encourage child-care and early learning programs to attain progressively higher levels of quality, which are tied to graduated reimbursement rates for children receiving child-care scholarships. The bill author has also informed the committee that although the program is supposed to offer higher reimbursement rates for child-care providers based on their quality rating, providers in low-income areas must keep their rates affordable for their communities but cannot be reimbursed by TWC beyond their published rates, even if they provide high-quality childcare. This leads to these providers receiving low reimbursements and having to eventually close down. H.B. 2294 seeks to address this issue by providing for increased flexibility in reimbursing program providers.
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| 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.
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| 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.
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| ANALYSIS H.B. 2294 amends the Government Code to authorize each local workforce development board to reimburse a Texas Rising Star Program provider in the board's area at the board's maximum rate of reimbursement for the provider's Texas Rising Star Program rating level regardless of the provider's published rate only if paying the higher reimbursement rate does not reduce the Texas Workforce Commission's target performance measure for the average number of children served each day for children receiving subsidized child care in the workforce development area served by the board.
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| EFFECTIVE DATE September 1, 2025.
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| H.B. No. 2294 | ||
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| relating to reimbursement rates for child-care providers | ||
| participating in the Texas Rising Star Program. | ||
| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
| SECTION 1. Section 2308.3151, Government Code, is amended | ||
| by adding Subsection (e) to read as follows: | ||
| (e) Each board may reimburse a Texas Rising Star Program | ||
| provider in the board's area at the board's maximum rate of | ||
| reimbursement for the provider's Texas Rising Star Program rating | ||
| level regardless of the provider's published rate only if paying | ||
| the higher reimbursement rate does not reduce the commission's | ||
| target performance measure for the average number of children | ||
| served each day for children receiving subsidized child care in the | ||
| workforce development area served by the board. | ||
| SECTION 2. This Act takes effect September 1, 2025. | ||
| TO: | Honorable Angie Chen Button, Chair, House Committee on Trade, Workforce & Economic Development |
| FROM: | Jerry McGinty, Director, Legislative Budget Board |
| IN RE: | HB2294 by Thompson (Relating to reimbursement rates for child-care providers participating in the Texas Rising Star Program.), As Introduced |
| Source Agencies: | 320 Texas Workforce Commission, 529 Health and Human Services Commission |
| LBB Staff: | JMc, RStu, JBel |
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Common questions about HB2294
HB2294 authorizes Local Workforce Development Boards to reimburse Texas Rising Star (TRS) providers at the maximum contracted rate, even if that rate exceeds the provider’s published private-pay rate. This legislation removes the "lesser of" penalty for high-quality providers who maintain affordable private rates, subject to the Local Board's ability to meet enrollment targets. Implementation Timeline Effective Date: June 20, 2025 Compliance Deadline: Immediate.
HB2294 was authored by Texas Representative Senfronia Thompson during the Regular Session.
HB2294 was signed into law by Governor Greg Abbott on June 20, 2025.
HB2294 is enforced by Texas Workforce Commission (TWC) and Local Workforce Development Boards.
The compliance urgency for HB2294 is rated as "moderate". Businesses and organizations should review the requirements and timeline to ensure timely compliance.
The cost impact of HB2294 is estimated as "low". This may vary based on industry and implementation requirements.
HB2294 addresses topics including day care and workforce commission, texas.
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