HB 5086

relating to establishing a pilot program to increase the supply of
child-care services and encourage employer partnerships to meet
strategic workforce needs in certain regions of the state.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  Subtitle B, Title 4, Labor Code, is amended by
adding Chapter 320 to read as follows:
CHAPTER 320.  CHILD-CARE INNOVATION PILOT PROGRAM
Sec. 320.001.  DEFINITIONS.  In this chapter:
(1)  "Board" means a local workforce development board
created under Subchapter F, Chapter 2308, Government Code.
(2)  "Program" means the child-care innovation pilot
program established under this chapter.
(3)  "Provider" means a child-care provider who is
engaging with the program established under this chapter.
Sec. 320.002.  ESTABLISHMENT.  (a)  The commission shall
establish and administer the child-care innovation pilot program to
address strategic workforce needs of designated pilot regions
across the state by increasing the supply of quality, affordable
child care and encouraging child-care partnerships with employers.
(b)  The program shall enable boards designated by the
commission to partner with local employers and high-quality
providers to provide grants that will fund innovative child-care
expansion projects and employer partnerships that directly impact
strategic local workforce needs.
Sec. 320.003.  ADMINISTRATION.  The commission shall by rule
adopt a process for selecting each pilot region in which the program
will be administered by the local board, including a competitive
Sec. 320.004.  APPLICATION; STRATEGIC PLAN.  (a)  A board
applying to participate in the program shall submit:
(1)  a strategic plan proposing:
(A)  measurable performance goals and progress
measures related to increasing the supply and accessibility of
quality, affordable child-care services;
(B)  plans for engaging regional stakeholders,
including local employers, business associations, and
organizations that provide services to children and families, to
develop and meet regional performance goals that are based on
(C)  the number of providers to whom the board
(D)  staffing structures to support the effective
implementation of the program, including technical assistance for
(E)  plans to maximize the results of the program
and support the future sustainability of child-care providers
participating in the program if state funding is not continued; and
(2)  the total amount of money requested to implement
(b)  A board may apply for the program under more than one
population category described by Section 320.005(a) but may only be
approved for participation based on one category.
Sec. 320.005.  SELECTION; CRITERIA.  (a)  The commission
shall select not more than six boards to participate in the program
and ensure that the program is implemented in communities that
represent at least one of each of the following population sizes:
(1)  a region with a population of more than 50,000;
(2)  a region with a population of more than 10,000 and
(3)  a region with a population of less than 10,000.
(b)  In selecting the boards to participate in the program,
(1)  the board's ability to demonstrate an unmet, local
(A)  child-care services in specific geographic
(B)  child-care services for specific
populations, including infant care, toddler care, nontraditional
hours care, or care for students with disabilities; or
(C)  child-care services described by Paragraphs
(2)  whether the board has broad regional support from
diverse stakeholders, including private sector employers,
child-care providers, local governments, and parents to
(3)  the board's ability to leverage local funding or
partnerships to supplement state resources; and
(4)  the strength of the board's proposed strategic
plan, as described by Section 320.004.
Sec. 320.006.  AGREEMENTS WITH PARTICIPATING BOARDS.  The
commission shall develop and enter into a performance agreement
with each board selected to participate in the program. Each board
shall comply with the terms of the performance agreement during its
participation in the program. The performance agreement must:
(1)  include measurable performance goals and progress
(A)  related to increasing the supply and
accessibility of quality, affordable child-care services in the
(B)  aligned to the board's strategic plan; and
(2)  allocate responsibilities for accessing and
reporting progress and outcome information.
Sec. 320.007.  ALLOCATION OF FUNDS.  From the funds
appropriated to the commission for the program, the commission
shall award an amount of money to each board participating in the
program. In determining the allocation of money, the commission
(1)  the size and population of the pilot region;
(2)  the unmet child-care needs in the region and the
proposed funding required to address the needs;
(3)  the proposed number of eligible providers in each
region to whom the board intends to award grants;
(4)  the budget requested in the board's proposed
strategic plan under Section 320.004(a)(2); and
(5)  other factors determined by the commission.
Sec. 320.008.  GRANTS.  (a)  From funds awarded to a board
participating in the program, the board, after conducting a
competitive selection process, shall award grants to eligible
providers that enter into a grant contract with the board to expand
quality, affordable child-care services in accordance with the
region's strategic workforce needs and the board's approved
(b)  In awarding a grant under the program, a board shall
give preference to an eligible provider that demonstrates capacity
(1)  provide high-demand child-care services
(2)  partner with one or more local employers.
Sec. 320.009.  PROVIDER ELIGIBILITY.  (a)  To be eligible to
receive a grant under the program, a child-care provider must:
(1)  be a Texas Rising Star Program provider with a
(2)  be accredited by the National Association for the
(3)  have an accreditation from a Montessori
(4)  meet an alternative quality criterion or waiver
(b)  In consultation with local employers and other regional
stakeholders, the board shall develop a competitive application and
scoring process for eligible providers to apply for a grant under
the program to meet the goals in the board's approved strategic plan
(c)  A board shall develop and enter into a grant contract
with each eligible provider awarded a grant under the program. Each
eligible provider awarded a grant shall comply with the terms of the
grant contract. At a minimum, grant contracts must require eligible
(1)  maintain the ability to enroll the required number
of children within each designated service area outlined in the
(2)  ensure all educators employed by the provider earn
a minimum wage that is equal to or above the self-sufficient wage
required by Section 2308A.012, Government Code, in the county in
(3)  maintain participation in the child-care services
program administered by the commission and accept participating
students as openings become available;
(4)  maintain tuition rates at the provider's posted
rate or at a rate lower than the posted rate for families who do not
receive subsidized child-care services;
(5)  maintain all eligibility requirements of the
(6)  provide regular reports demonstrating compliance
with the board's grant contract; and
(7)  provide any additional data requested by the
Sec. 320.010.  SUBCONTRACTING.  (a)  In accordance with
Section 2308.264(e), Government Code, a board may subcontract with
a coordinating entity to administer the program.
(b)  The commission may adopt rules establishing
requirements for a coordinating entity with which a board
subcontracts under this section.
Sec. 320.011.  USE OF FUNDS.  (a)  From money appropriated by
the legislature to implement the program, the commission may use
(1)  15 percent of the total amount appropriated to pay
costs related to administering the program, including technical
assistance provided to providers under the program; and
(2)  2 percent of the total amount appropriated to pay
costs related to research and evaluation of the program.
(b)  The commission shall use at least 83 percent of the
total amount appropriated for grants administered under the
(c)  The commission shall adopt rules relating to the award
of grants under the program that are designed to maximize the impact
of the program and ensure the funding is sufficient to execute on
the terms of the grant contract.
(d)  In awarding a grant under the program, the commission or
boards may adjust reimbursement rates as necessary to account for
the costs of providing care to specialized populations, including
students with disabilities, infants, toddlers, and students
(e)  Each board participating in the program shall ensure
that all grant money has been allocated not later than December 31,
(f)  In addition to funds appropriated by the legislature, to
administer and expand the impact of the program, the commission or
(1)  seek and apply for any available federal or local
(2)  solicit and accept gifts, grants, and donations
from any other public or private source.
Sec. 320.012.  QUARTERLY REPORT TO THE COMMISSION.  (a)  Each
board participating in the program shall submit a quarterly report
to the commission, detailing the use of grant money received under
the program and related outcomes, including:
(1)  a list of providers receiving grant money and the
provider's monthly grant awards;
(2)  each provider's compliance with performance goals
outlined in the provider's grant contract with the board; and
(3)  the board's progress toward outcomes identified in
the approved strategic plan under Section 320.004.
(b)  A board shall submit the first report required by this
section not later than the 120th day after the date the board awards
its first grant under the program and submit subsequent reports
Sec. 320.013.  REPORT.  Not later than December 1, 2028, the
commission shall review the effectiveness of the program and submit
to the governor, the lieutenant governor, the speaker of the house
of representatives, and the members of each legislative standing
committee with primary jurisdiction over economic development a
written report regarding the outcomes, challenges, and
Sec. 320.014.  RULES.  The commission shall adopt rules
necessary to implement this chapter.
Sec. 320.015.  EXPIRATION.  This chapter expires September
SECTION 2.  This Act takes effect September 1, 2025.