SB1398

SB1398 changes how Texas oversees regional foster-care contractors and transfers family-preservation work to them. It also limits temporary emergency supervision of children without placements. Signed June 20, 2025, it took effect September 1, 2025. Several contract changes apply only when a regional contract is entered into or amended on or after that date; an older, unchanged contract remains under its former rules. Official history; enacted law, sections 1–21.

Children without placements. The Department of Family and Protective Services (DFPS), its regional contractor and the court cannot use temporary emergency supervision when an appropriate placement is available. A child’s refusal to stay cannot be considered in deciding whether a placement is appropriate. Before ordering emergency supervision, the court must receive a report describing each attempted placement, its location and type, when it was contacted and why it was unsuitable. Existing safeguards remain: supervising employees need background checks, cannot provide this care in their own homes, and must notify the court by the next business day. The new placement-review rule applies regardless of when DFPS became the child’s managing conservator. Sections 4–5 and 20.

Services and payment. Family-preservation services are time-limited, family-focused services for foster-care candidates, pregnant or parenting foster youth, and children in households subject to a court order under Family Code 264.203. The definition expressly includes services under the federal Family First law and approved Title IV-E state plan. Case management expressly includes coordinating and monitoring pre- and post-adoption assistance, services for transition to independent living and reunification support, including monitored returns. In two provider-choice provisions, the act removes parents from the express rule making people pay for services they select themselves; that rule remains for nonparent conservators, guardians and other nonparent household members. It does not enact the proposed reimbursement formula or guarantee that every chosen service is free. Sections 1–3, 7 and 16–17.

Federal limits still matter. The state definition does not make every service or household eligible for federal matching money. Federal law separately requires eligible children, prevention plans, qualifying evidence-based services and other safeguards. As checked November 3, 2026, the Children’s Bureau lists Texas’s current approved plan for federal fiscal years 2026–2030 and nine approved services, including Functional Family Therapy and Parents as Teachers. Its plan describes court-supervised Texas Family First eligibility and service limits; it is not proof that all SB1398 services are reimbursable or available statewide. Federal requirements, section 471(e); foster-care-candidate definition, section 475(13); approved-plan status; Texas plan, service and eligibility sections.

Regional contracts. Contracts must set a sequence for family preservation, case management and reunification support, based on community needs, readiness and contractor capacity. They must adopt a capitated funding method—payment organized around people served rather than separate charges for every service—by the contract’s third anniversary. The law adds preservation services to readiness reviews and service-transfer provisions. In areas where a contractor had not implemented services before September 2023, starting with preservation services requires an external readiness review, specific performance outcomes and achievement of those outcomes before continued service or expansion. Sections 12–14.

Oversight and public information. Annual contractor reviews begin at the first contract anniversary. They examine reunification, reentry into care, children reaching adulthood in care, placement moves and preservation-service completion; sample service-authorization reviews occur at least every two years. Reviews also address conflicts, financial disclosures, provider networks and service delivery. Contract terms must require published reviews, financial remedies for specified failures or court-order noncompliance, incentives for exceeding outcomes, and corrective plans with escalating interventions. Quality measures are mandatory, not merely optional. DFPS must publish contractor corporate structures, performance and improvement information, and a monitoring schedule. Community advisory committees meet at least quarterly, have a majority not employed by or contracted with the contractor, and feed recommendations into oversight. Sections 8–12 and 15.

The act also permits faith-based foster-parent recruitment provisions in regional contracts while repealing the separate DFPS recruitment/OneStar provisions in 264.113(a)–(c); subsection (d)’s hearing-impaired-child recruitment provision remains. Oversight is not uniformly expanded: the implementation plan’s evaluation no longer must be described as independent, and the state auditor’s contract review moves from annual to every two years. Sections 8, 12 and 18–19.