SB1589

Regular Session

Relating to the contract requirements for a contract between a single source continuum contractor and the Department of Family and Protective Services.

CriticalImmediate action required

High Cost

Effective:2025-09-01

Enforcing Agencies

Department of Family and Protective Services (DFPS)

Compliance Analysis

Key implementation requirements and action items for compliance with this legislation

Implementation Timeline

Effective Date: September 1, 2025
Compliance Deadline: Immediate upon the execution of any contract entered into, amended, modified, renewed, or extended on or after September 1, 2025.
Agency Rulemaking: While no statutory deadline for rulemaking exists, DFPS is expected to update internal policy manuals to operationalize "case reclamation" protocols. Watch for contract amendments rather than public rulemaking.

Immediate Action Plan

1. Audit Subcontracts: Review all downstream provider agreements to ensure they mirror the new statutory liability for court order compliance.
2. Negotiate Cure Periods: In upcoming contract discussions, aggressively negotiate for a defined "cure period" or dispute resolution process before DFPS can exercise "sole discretion" to reclaim cases.
3. Stress-Test Data Transfer: Conduct a "Reclamation Drill" to ensure your IT systems can transfer case authority back to DFPS within 24-48 hours to mitigate damages.
4. Establish Intake Protocol: Create a rapid-response workflow for court orders to ensure they are operationalized immediately upon receipt.

Operational Changes Required

Contracts

Master Services Agreement (MSA): Expect DFPS to insert non-negotiable language regarding "sole discretion" transfers and court order compliance in your next renewal or amendment.

Subcontracts: You must immediately amend agreements with Child Placing Agencies (CPAs) and network providers. Flow-down clauses are mandatory: if a subcontractor ignores a court order, it puts the SSCC in breach. Strengthen indemnification clauses to protect the SSCC from subcontractor non-compliance.

Hiring/Training

Judicial Compliance Officer: Designate a specific role responsible for the immediate intake, interpretation, and dissemination of court orders.

Staff Training: Case managers must be trained that a court order supersedes standard DFPS policy or internal SOPs. Non-compliance is no longer just a legal issue; it is a contract retention issue.

Reporting & Record-Keeping

Judicial Order Log: Implement a centralized tracking system for every court order received. You must document the date received, the specific requirement, and the operational action taken. This log will be your primary defense against breach of contract allegations.

Transfer Readiness: Maintain case files in "audit-ready" status to facilitate immediate transfer back to DFPS or a competitor if the state exercises its reclamation authority.

Fees & Costs

Revenue Volatility: Financial forecasting must account for the risk of sudden partial or total contract loss without a standard cure period.

Insurance: Review Errors & Omissions (E&O) policies. Ensure coverage extends to liabilities arising from "contractual reclamation" or alleged failure to comply with judicial mandates.

Strategic Ambiguities & Considerations

"Sole Discretion": The statute does not define the performance metrics or thresholds that trigger DFPS's right to reclaim cases. This lacks due process protections. There is currently no statutory requirement for a "Notice and Cure" period before the Department removes revenue-generating cases.

"Orders Imposing a Requirement on the Department": This language is dangerously broad. It implies that systemic court mandates against DFPS (e.g., federal class-action remedies) automatically flow down to the SSCC. It is unclear if DFPS will provide additional funding to meet these systemic judicial requirements.

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Legislative Timeline

This bill's path through the Texas Legislature

TopicsFamily Family--child Protection Family & Protective Services, Department of Contractors & Subcontractors

Official Analysis

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BILL ANALYSIS

Senate Research Center	S.B. 1589
89R9200 DNC-F	By: Hancock
	Health & Human Services
	3/24/2025
	As Filed

AUTHOR'S / SPONSOR'S STATEMENT OF INTENT

There are concerns the Department of Family and Protective Services (DFPS) cannot reclaim case management functions in part or whole from a single source continuum contractor (SSCC) after the case management function has been transitioned to the SSCC, unless there is a full contract turnover or termination, either on the part of the SSCC or DFPS. This is intended to ensure continuous quality of care and service provision to children and families. However, there is a need for DFPS to respond to and expeditiously address concerns with case management performance without a full contract turnover being initiated.

S.B. 1589 amends language in the Texas Family Code allowing DFPS to assume case management responsibilities of a SSCC, in part or incrementally, as opposed to full contract termination, if consistent issues are present.

As proposed, S.B. 1589 amends current law relating to the contract requirements for a contract between a single source continuum contractor and the Department of Family and Protective Services.

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 264.155(a), Family Code, as follows:

(a) Requires that a contract with a single source continuum contractor to provide community-based care services in a catchment area include certain provisions, including provisions that allow the Department of Family and Protective Services (DFPS), at DFPS's sole discretion, to reclaim the case management authority over any or all of the cases in a catchment area from the single source continuum contractor or transfer the case management authority over any or all of the cases in a catchment area from the single source continuum contractor to another single source continuum contractor. Makes nonsubstantive changes.

SECTION 2. Makes application of this Act prospective.

SECTION 3. Effective date: September 1, 2025.

Senate Authors

Sen. Kelly HancockRepublican · Primary Author

Coauthors (2)

House Sponsor

Rep. Angelia OrrRepublican · Primary Sponsor

Bill Text(with markup)

S.B. No. 1589

View bill text in multiple formats on Texas Legislature website

Fiscal NoteView Original

	AN ACT
	relating to the contract requirements for a contract between a
	single source continuum contractor and the Department of Family and
	Protective Services.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1. Section 264.155(a), Family Code, is amended to
	read as follows:
	(a) A contract with a single source continuum contractor to
	provide community-based care services in a catchment area must
	include provisions that:
	(1) establish a timeline for the implementation of
	community-based care in the catchment area, including a timeline
	for implementing:
	(A) case management services for children,
	families, and relative and kinship caregivers receiving services in
	the catchment area; and
	(B) family reunification support services to be
	provided after a child receiving services from the contractor is
	returned to the child's family;
	(2) establish conditions for the single source
	continuum contractor's access to relevant department data and
	require the participation of the contractor in the data access and
	standards governance council created under Section 264.159;
	(3) require the single source continuum contractor to
	create a single process for the training and use of alternative
	caregivers for all child-placing agencies in the catchment area to
	facilitate reciprocity of licenses for alternative caregivers
	between agencies, including respite and overnight care providers,
	as those terms are defined by department rule;
	(4) require the single source continuum contractor to
	maintain a diverse network of service providers that offer a range
	of foster capacity options and that can accommodate children from
	diverse cultural backgrounds;
	(5) allow the department to conduct a performance
	review of the contractor beginning 18 months after the contractor
	has begun providing case management and family reunification
	support services to all children and families in the catchment area
	and determine if the contractor has achieved any performance
	outcomes specified in the contract;
	(6) following the review under Subdivision (5), allow
	the department to:
	(A) impose financial penalties on the contractor
	for failing to meet any specified performance outcomes; or
	(B) award financial incentives to the contractor
	for exceeding any specified performance outcomes;
	(7) require the contractor to give preference for
	employment to employees of the department:
	(A) whose position at the department is impacted
	by the implementation of community-based care; and
	(B) who are considered by the department to be
	employees in good standing;
	(8) require the contractor to provide preliminary and
	ongoing community engagement plans to ensure communication and
	collaboration with local stakeholders in the catchment area,
	including any of the following:
	(A) community faith-based entities;
	(B) the judiciary;
	(C) court-appointed special advocates;
	(D) child advocacy centers;
	(E) service providers;
	(F) foster families;
	(G) biological parents;
	(H) foster youth and former foster youth;
	(I) relative or kinship caregivers;
	(J) child welfare boards, if applicable;
	(K) attorneys ad litem;
	(L) attorneys that represent parents involved in
	suits filed by the department; and
	(M) any other stakeholders, as determined by the
	contractor; [~~and~~]
	(9) require that the contractor comply with any
	applicable court order issued by a court of competent jurisdiction
	in the case of a child for whom the contractor has assumed case
	management responsibilities or an order imposing a requirement on
	the department that relates to functions assumed by the contractor;
	and
	(10) allow the department, at the department's sole
	discretion, to:
	(A) reclaim the case management authority over
	any or all of the cases in a catchment area from the single source
	continuum contractor; or
	(B) transfer the case management authority over
	any or all of the cases in a catchment area from the single source
	continuum contractor to another single source continuum
	contractor.
	SECTION 2. The change in law made by this Act applies only
	to a contract entered into or amended, modified, renewed, or
	extended on after the effective date of this Act. A contract
	entered into or amended, modified, renewed, or extended before the
	effective date of this Act is governed by the law in effect on the
	date the contract was entered into or amended, modified, renewed,
	or extended, and the former law is continued in effect for that
	purpose.
	SECTION 3. This Act takes effect September 1, 2025.

LEGISLATIVE BUDGET BOARD
Austin, Texas

FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION


March 22, 2025

TO:	Honorable Lois W. Kolkhorst, Chair, Senate Committee on Health & Human Services

FROM:	Jerry McGinty, Director, Legislative Budget Board

IN RE:	SB1589 by Hancock (Relating to the contract requirements for a contract between a single source continuum contractor and the Department of Family and Protective Services.), As Introduced

No significant fiscal implication to the State is anticipated.

The bill would allow the Department of Family and Protective Services to reclaim case management authority from the single source continuum contractor or transfer the authority to another single source continuum contractor.

It is assumed any costs to the Department of Family and Protective Services could be absorbed within existing resources.

Local Government Impact

No fiscal implication to units of local government is anticipated.

Source Agencies:

530 Family and Protective Services, Department of

LBB Staff:

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Frequently Asked Questions

Common questions about SB1589

What does Texas SB1589 do?

SB 1589 fundamentally alters the risk profile for Community-Based Care (CBC) by granting the Department of Family and Protective Services (DFPS) unilateral "sole discretion" to reclaim case management authority from Single Source Continuum Contractors (SSCCs). Furthermore, it codifies judicial orders regarding children or departmental requirements as strict contractual obligations, meaning a failure to follow a court order is now a material breach of your Master Services Agreement. Implementation Timeline Effective Date: September 1, 2025 Compliance Deadline: Immediate upon the execution of any contract entered into, amended, modified, renewed, or extended on or after September 1, 2025.

Who authored SB1589?

SB1589 was authored by Texas Senator Kelly Hancock during the Regular Session.

When was SB1589 signed into law?

SB1589 was signed into law by Governor Greg Abbott on June 20, 2025.

Which agencies enforce SB1589?

SB1589 is enforced by Department of Family and Protective Services (DFPS).

How urgent is compliance with SB1589?

The compliance urgency for SB1589 is rated as "critical". Businesses and organizations should review the requirements and timeline to ensure timely compliance.

What is the cost impact of SB1589?

The cost impact of SB1589 is estimated as "high". This may vary based on industry and implementation requirements.

What topics does SB1589 address?

SB1589 addresses topics including family, family--child protection, family & protective services, department of and contractors & subcontractors.

Legislative data provided by LegiScanLast updated: November 25, 2025

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