SB2032

Regular Session

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

CriticalImmediate action required

Medium Cost

Effective:2025-09-01

Enforcing Agencies

Department of Family and Protective Services (DFPS) • Health and Human Services Commission (HHSC)

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 renewal, amendment, modification, or extension on or after September 1, 2025.
Agency Rulemaking: While no specific rulemaking deadline is set, DFPS and HHSC must update their *Uniform Terms and Conditions* (UTC) and procurement manuals prior to Q3 2025 to reflect the no-bid replacement process and new notice periods.

Immediate Action Plan

1. Audit Subcontracts: Immediately review all downstream vendor contracts to identify termination clauses shorter than 180 days.
2. Strategic Renewal: If your SSCC contract is up for renewal or requires amendment near August 2025, accelerate negotiations to finalize *before* September 1, 2025, to lock in the 60-day notice rule for one more term.
3. Update Notice Templates: Revise legal templates to include HHSC as a mandatory recipient for termination notices.
4. Business Development: Direct capture teams to cultivate relationships with DFPS for potential "emergency" no-bid takeover opportunities of failing competitor regions.

Operational Changes Required

Contracts

Upstream (State): Any modification to your existing SSCC contract after September 1, 2025, retroactively applies the 180-day notice requirement.
Downstream (Subcontractors): You must amend Master Service Agreements (MSAs) with Child Placing Agencies (CPAs) and other providers. Currently, most allow for 30-60 day termination. This creates a liability gap. You must extend subcontractor notice periods to 180 days to ensure you maintain a provider network during the mandatory six-month wind-down.

Hiring/Training

Retention Strategy: HR must develop "stay bonuses" or retention plans for the 180-day transition period. Maintaining staff morale and preventing mass exodus after a termination notice is served is now a contractual performance requirement.

Reporting & Record-Keeping

Dual Notice Protocol: Legal notice templates must be updated immediately. The law requires notice of intent to terminate be sent to both the Department of Family and Protective Services (DFPS) and the Health and Human Services Commission (HHSC). Failure to notify HHSC specifically may render the notice defective.

Fees & Costs

Liquidity Reserves: Finance departments must adjust risk models to account for six months of full operating costs (payroll, vendor payments, insurance) post-termination notice.
Insurance Tails: Professional Liability and D&O policies must be reviewed to ensure coverage extends through the full 180-day transition period, particularly if termination is for cause.

Strategic Ambiguities & Considerations

Definition of "Modification": The statute applies to any contract "modified" after the effective date. It is unclear if minor administrative changes or zero-dollar change orders trigger the new 180-day rule. Assume they do.
Scope of "Assumption": The law allows a no-bid contract for the "sole purpose of assuming" the terminated contract. It is undefined whether the replacement contractor must accept the *exact* rates and terms of the failed vendor, or if they can negotiate new terms under the guise of assumption.

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Legislative Timeline

This bill's path through the Texas Legislature

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

Official Analysis

View HRO Analysis View All Bill Documents

BILL ANALYSIS

Senate Research Center	S.B. 2032
89R9873 DNC-F	By: Paxton
	Health & Human Services
	4/11/2025
	As Filed

AUTHOR'S / SPONSOR'S STATEMENT OF INTENT

Single-source continuum contractors (SSCCs) provide the community-based care (CBC) case management model for children and families referred for services following a Department of Family and Protective Services (DFPS) investigation and subsequent removal. Currently, an SSCC that decides to prematurely end its contract with the DFPS may do so with a 60-day notice. Similarly, DFPS may opt to terminate a contract with an SSCC with a 30-day notice. However, based on current implementation practices, transitioning resources to an SSCC takes approximately three to six months.

S.B. 2032 increases the required notice period for contract termination between DFPS and SSCCs to 180 days. It also extends DFPS's authority to utilize emergency procurement processes to contract with another SSCC, ensuring continuity of care for children in the catchment area.

As proposed, S.B. 2032 amends current law relating to certain requirements regarding 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 264.165, Family Code, as follows:

Sec. 264.165. NOTICE REQUIRED FOR EARLY TERMINATION OF CONTRACT. (a) Authorizes a single source continuum contractor to terminate a contract entered into under Subchapter B-1 (Community-Based Care) by providing notice to the Department of Family and Protective Services (DFPS) and the Health and Human Services Commission of the contractor's intent to terminate the contract not later than the 180th, rather than 60th, day before the date of the termination.

(b) Authorizes DFPS to terminate a contract entered into with a single source continuum contractor under this subchapter by providing notice to the contractor of DFPS' intent to terminate the contract not later than the 180th, rather than 30th, day before the date of termination.

SECTION 2. Amends Section 264.166, Family Code, by amending Subsection (c) and adding Subsection (d), as follows:

(c) Authorizes DFPS, if a single source continuum contractor gives notice to DFPS of an early contract termination or DFPS gives notice to the contractor of DFPS' intent to terminate the contract, to enter into a contract with a different contractor for the sole purpose of assuming the contract that is being terminated.

(d) Authorizes DFPS, notwithstanding any other law, to enter into a contract with a different single source continuum contractor under Subsection (c) without following competitive bidding, advertising, or proposal evaluation requirements, including requirements under certain provisions of the Government Code or Section 40.058 (Contracts and Agreements), Human Resources Code.

SECTION 3. Makes application of this Act prospective.

SECTION 4. Effective date: September 1, 2025.

Senate Authors

Sen. Angela PaxtonRepublican · Primary Author

House Sponsor

Rep. Aicha DavisDemocrat · Primary Sponsor

Bill Text(with markup)

S.B. No. 2032

View bill text in multiple formats on Texas Legislature website

Fiscal NoteView Original

	AN ACT
	relating to certain requirements regarding 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 264.165, Family Code, is amended to read
	as follows:
	Sec. 264.165. NOTICE REQUIRED FOR EARLY TERMINATION OF
	CONTRACT. (a) A single source continuum contractor may terminate a
	contract entered into under this subchapter by providing notice to
	the department and the commission of the contractor's intent to
	terminate the contract not later than the 180th [~~60th~~] day before
	the date of the termination.
	(b) The department may terminate a contract entered into
	with a single source continuum contractor under this subchapter by
	providing notice to the contractor of the department's intent to
	terminate the contract not later than the 180th [~~30th~~] day before
	the date of termination.
	SECTION 2. Section 264.166, Family Code, is amended by
	amending Subsection (c) and adding Subsection (d) to read as
	follows:
	(c) If a single source continuum contractor gives notice to
	the department of an early contract termination or the department
	gives notice to the contractor of the department's intent to
	terminate the contract, the department may enter into a contract
	with a different contractor for the sole purpose of assuming the
	contract that is being terminated.
	(d) Notwithstanding any other law, the department may enter
	into a contract with a different single source continuum contractor
	under Subsection (c) without following competitive bidding,
	advertising, or proposal evaluation requirements, including
	requirements under Section 2155.083, 2155.132, or 2155.144,
	Government Code, or Section 40.058, Human Resources Code.
	SECTION 3. The change in law made by this Act applies only
	to a contract entered into or amended, modified, renewed, or
	extended on or 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 4. This Act takes effect September 1, 2025.

LEGISLATIVE BUDGET BOARD
Austin, Texas

FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION


April 13, 2025

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

FROM:	Jerry McGinty, Director, Legislative Budget Board

IN RE:	SB2032 by Paxton (Relating to certain requirements regarding 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 require 180 day notice prior to the Department of Family and Protective Services (DFPS) or the Single Source Continuum Contractor (SSCC) terminating their contract. The bill would also allow DFPS, following the termination of an SSCC contract, to contract with a different SSCC without competitive bidding, advertising, or evaluation requirements.

It is assumed that any costs to DFPS 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:

JMc, NPe, ER, AN

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Frequently Asked Questions

Common questions about SB2032

What does Texas SB2032 do?

SB2032 fundamentally alters the risk profile for Single Source Continuum Contractors (SSCCs) by tripling the mandatory contract termination notice period from 60 days to 180 days, effective September 1, 2025. This creates a six-month mandatory operational tail, requiring SSCCs to maintain full liquidity and staffing levels during market exit, while simultaneously granting DFPS authority to bypass competitive bidding for replacement contractors. Implementation Timeline Effective Date: September 1, 2025.

Who authored SB2032?

SB2032 was authored by Texas Senator Angela Paxton during the Regular Session.

When was SB2032 signed into law?

SB2032 was signed into law by Governor Greg Abbott on May 19, 2025.

Which agencies enforce SB2032?

SB2032 is enforced by Department of Family and Protective Services (DFPS) and Health and Human Services Commission (HHSC).

How urgent is compliance with SB2032?

The compliance urgency for SB2032 is rated as "critical". Businesses and organizations should review the requirements and timeline to ensure timely compliance.

What is the cost impact of SB2032?

The cost impact of SB2032 is estimated as "medium". This may vary based on industry and implementation requirements.

What topics does SB2032 address?

SB2032 addresses topics including family, family--child protection, purchasing, purchasing--state and contractors & subcontractors.

Legislative data provided by LegiScanLast updated: November 25, 2025

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