Regular Session
Government Affairs & Regulatory Compliance Analysis
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.
Rep. Senfronia Thompson·House Bill·Regular Session
Local Workforce Development Boards • Texas Workforce Commission (TWC)
This legislation has regulatory implications for the following Texas businesses and organizations:
Notable regulatory updates (effective 2025-06-20). Consider how these changes may affect your operations.
Affected business types:
lowMinimal cost impact anticipated.
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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).
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.
Schedule a 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
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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.
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 Local Workforce Development Boards and Texas Workforce Commission (TWC).
The regulatory priority for HB2294 is rated as "moderate". Businesses and organizations should review the legislation to understand potential impacts.
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.
Key dates for HB2294: Effective date is 2025-06-20. Consult with legal counsel regarding applicability.
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.
