TITLE 26. HEALTH AND HUMAN SERVICES

PART 1. HEALTH AND HUMAN SERVICES COMMISSION

CHAPTER 3. MEMORANDUM OF UNDERSTANDING WITH OTHER STATE AGENCIES

SUBCHAPTER E. MOU--COORDINATION OF SPECIAL EDUCATION SERVICES TO STUDENTS WITH DISABILITIES IN RESIDENTIAL FACILITIES

26 TAC §3.251

The executive commissioner of the Texas Health and Human Services Commission (HHSC) proposes the repeal of Texas Administrative Code (TAC), Title 26, Chapter 3, Subchapter E, which consists of §3.251, concerning Interagency Coordination of Special Education Services to Students with Disabilities in Residential Facilities.

BACKGROUND AND PURPOSE

The purpose of the proposal is to remove an unnecessary rule from the TAC. Texas Education Code §29.012(d) requires the Texas Education Agency (TEA), HHSC, the Department of Family and Protective Services, and the Texas Juvenile Justice Department to have a memorandum of understanding (MOU) for the provision of public education in residential facilities as required by the Individuals with Disabilities Education Act. House Bill 2 and Senate Bill 568, 89th Legislature, Regular Session, 2025, amended Texas Education Code §29.012(d) by removing the requirement to have the MOU in rule. Section 3.251 adopts by reference a TEA rule, 19 TAC §89.1115, that provides the terms of the MOU in rule. While the MOU is still required by statute and is in place, since the MOU is no longer required to be in rule, HHSC is repealing §3.251.

The proposal also supports regulatory reform by removing unnecessary rules in the TAC making the TAC easier to use and understand.

FISCAL NOTE

Victoria Grady, Deputy Chief, Finance, has determined that for each year of the first five years that the rule will be in effect, enforcing or administering the rule does not have foreseeable implications relating to costs or revenues of state or local governments.

GOVERNMENT GROWTH IMPACT STATEMENT

HHSC has determined that during the first five years that the rule will be in effect:

(1) the proposed rule will not create or eliminate a government program;

(2) implementation of the proposed rule will not affect the number of HHSC employee positions;

(3) implementation of the proposed rule will result in no assumed change in future legislative appropriations;

(4) the proposed rule will not affect fees paid to HHSC;

(5) the proposed rule will not create a new regulation;

(6) the proposed rule will repeal an existing regulation;

(7) the proposed rule will not change the number of individuals subject to the rule; and

(8) the proposed rule will not affect the state's economy.

SMALL BUSINESS, MICRO-BUSINESS, AND RURAL COMMUNITY IMPACT ANALYSIS

Victoria Grady, Deputy Chief, Finance, has also determined that there will be no adverse economic effect on small businesses, micro-businesses, or rural communities because the rule does not apply to small businesses, micro-businesses, or rural businesses.

LOCAL EMPLOYMENT IMPACT

The proposed rule will not affect a local economy.

COSTS TO REGULATED PERSONS

Texas Government Code §2001.0045 does not apply to this rule because the rule does not impose a cost on regulated persons.

PUBLIC BENEFIT AND COSTS

Laura Cazabon, State Supported Living Centers Associate Commissioner, has determined that for each year of the first five years the rule is in effect, the public benefit will be the removal of an unnecessary rule in TAC, which will reduce the number of rules with similar information and streamline the TAC for easier navigation and improve clarity.

Victoria Grady has also determined that for the first five years the rule is in effect, there are no anticipated economic costs to persons who are required to comply with the proposed rule because the rule does not include costs to persons required to comply.

TAKINGS IMPACT ASSESSMENT

HHSC has determined that the proposal does not restrict or limit an owner's right to the owner's property that would otherwise exist in the absence of government action and, therefore, does not constitute a taking under Texas Government Code §2007.043.

PUBLIC COMMENT

Written comments on the proposal, including information related to the cost, benefit, or effect of the proposed rule, as well as any applicable data, research, or analysis, may be submitted to Rules Coordination Office, P.O. Box 13247, Mail Code 4102, Austin, Texas 78711-3247, or street address 4601 West Guadalupe Street, Austin, Texas 78751; or emailed to HHSRulesCoordinationOffice@hhs.texas.gov.

To be considered, comments must be submitted no later than 31 days after the date of this issue of the Texas Register. Comments must be (1) postmarked or shipped before the last day of the comment period; (2) hand-delivered before 5:00 p.m. on the last working day of the comment period; or (3) emailed before midnight on the last day of the comment period. If the last day to submit comments falls on a holiday, comments must be postmarked, shipped, or emailed before midnight on the following business day to be accepted. When emailing comments, please indicate "Comments on Proposed Rule 26R044" in the subject line.

STATUTORY AUTHORITY

The rule repeal is authorized by Texas Government Code §524.0151, which provides that the executive commissioner of HHSC shall adopt rules for the operation and provision of services by the health and human services system and Texas Education Code §29.012(d) which allows the adoption of a memorandum of understanding without incorporating that agreement in rule.

The rule repeal affects Texas Government Code §524.0151 and Texas Education Code §29.012(d).

§3.251. Interagency Coordination of Special Education Services to Students with Disabilities in Residential Facilities.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on August 3, 2026.

TRD-202603268

Karen Ray

Chief Counsel

Health and Human Services Commission

Earliest possible date of adoption: September 13, 2026

For further information, please call: (512) 438-3049

CHAPTER 300. STATE AUTHORITY RESPONSIBILITIES

SUBCHAPTER B. INTERAGENCY AGREEMENTS

26 TAC §300.101

The executive commissioner of the Texas Health and Human Services Commission (HHSC) proposes the repeal of Texas Administrative Code (TAC), Title 26, Chapter 300, Subchapter B, which consists of §300.101, concerning Interagency Coordination of Special Education Services to Students with Disabilities in Residential Facilities.

BACKGROUND AND PURPOSE

The purpose of the proposal is to remove an unnecessary rule from the TAC. Texas Education Code §29.012(d) requires the Texas Education Agency (TEA), HHSC, the Department of Family and Protective Services, and the Texas Juvenile Justice Department to have a memorandum of understanding (MOU) for the provision of public education in residential facilities as required by the Individuals with Disabilities Education Act. House Bill 2 and Senate Bill 568, 89th Legislature, Regular Session, 2025, amended Texas Education Code §29.012(d) by removing the requirement to have the MOU in rule. Section 300.101 adopts by reference a TEA rule, 19 TAC §89.1115, that provides the terms of the MOU in rule. While the MOU is still required by statute and is in place, since the MOU is no longer required to be in rule, HHSC is repealing §300.101.

The proposal also supports regulatory reform by removing unnecessary rules in the TAC making the TAC easier to use and understand.

FISCAL NOTE

GOVERNMENT GROWTH IMPACT STATEMENT

HHSC has determined that during the first five years that the rule will be in effect:

(1) the proposed rule will not create or eliminate a government program;

(2) implementation of the proposed rule will not affect the number of HHSC employee positions;

(3) implementation of the proposed rule will result in no assumed change in future legislative appropriations;

(4) the proposed rule will not affect fees paid to HHSC;

(5) the proposed rule will not create a new regulation;

(6) the proposed rule will repeal an existing regulation;

(7) the proposed rule will not change the number of individuals subject to the rule; and

(8) the proposed rule will not affect the state's economy.

SMALL BUSINESS, MICRO-BUSINESS, AND RURAL COMMUNITY IMPACT ANALYSIS

LOCAL EMPLOYMENT IMPACT

The proposed rule will not affect a local economy.

COSTS TO REGULATED PERSONS

Texas Government Code §2001.0045 does not apply to this rule because the rule does not impose a cost on regulated persons.

PUBLIC BENEFIT AND COSTS

TAKINGS IMPACT ASSESSMENT

PUBLIC COMMENT

STATUTORY AUTHORITY

The rule repeal affects Texas Government Code §524.0151 and Texas Education Code §29.012(d).

§300.101. Interagency Coordination of Special Education Services to Students with Disabilities in Residential Facilities.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on August 3, 2026.

TRD-202603269

Karen Ray

Chief Counsel

Health and Human Services Commission

Earliest possible date of adoption: September 13, 2026

For further information, please call: (512) 438-3049

CHAPTER 554. NURSING FACILITY REQUIREMENTS FOR LICENSURE AND MEDICAID CERTIFICATION

The executive commissioner of the Texas Health and Human Services Commission (HHSC) proposes amendments to §554.2403, concerning Medical Necessity Determination; §554.2407, concerning Denied Medical Necessity; §554.2413, concerning Determination of Payment Rate Based on the MDS Assessment Submission; §554.2601, concerning Vendor Payment (Items and Services Included); and §554.2611, concerning Retroactive Vendor Payment.

BACKGROUND AND PURPOSE

This proposal is necessary to align Medicaid program rules with the fiscal rules that implement House Bill (H.B.) 1, 88th Legislature, Regular Session, 2023 (Article II, Health and Human Services Commission (HHSC), Rider 25), which require HHSC to implement a Texas version of the Patient Driven Payment Model for Long-Term Care (PDPM LTC) methodology for the reimbursement of long-term stay nursing facility (NF) services in the Medicaid program.

Under Title 42 Code of Federal Regulations §441.302(e) and (f), changing the NF reimbursement methodology from the Resource Utilization Group (RUG) to the PDPM LTC requires HHSC to incorporate the PDPM LTC methodology into the individual cost limit methodologies and related cost limit methodology. This proposal updates references to the former RUG reimbursement methodology with the term "reimbursement rate" in the Texas Administrative Code (TAC) for the state's two NF waiver programs, the STAR+PLUS Home and Community-Based Services Program and the Medically Dependent Children Program.

SECTION-BY-SECTION SUMMARY

The proposed amendment to §554.2403 replaces a reference to the former RUG reimbursement methodology with the term "reimbursement rate" and specifies this term has the meaning defined in §554.2413, updates citations to reflect the current statute and TAC references, corrects outdated agency acronyms, and makes other minimal changes to grammar and rule structure for clarity.

The proposed amendment to §554.2407 replaces a reference to the former RUG reimbursement methodology with the term "reimbursement rate" and specifies this term has the meaning defined in §554.2413, clarifies language, updates citations to reflect the current TAC references, and corrects outdated agency acronyms.

The proposed amendment to §554.2413 updates citations to reflect the current TAC references, corrects outdated agency acronyms, adds a definition of "Reimbursement Rate" that provides a reference to the HHSC reimbursement rules in 1 TAC §355.318, replaces references to the former RUG reimbursement methodology with the term "reimbursement rate" and makes other minimal changes to grammar and rule structure for clarity.

The proposed amendment to §554.2601 clarifies language, updates citations to reflect the current TAC references; corrects outdated agency acronyms; clarifies the requirements for items included in the NF daily vendor rate; and makes other minimal changes to grammar and rule structure for clarity.

The proposed amendment to §554.2611 updates citations to reflect the current TAC references; corrects outdated agency acronyms; replaces a reference to the former RUG reimbursement methodology with the term "reimbursement rate" and specifies this term has the meaning defined in §554.2413; and makes other minimal changes to grammar and rule structure for clarity.

FISCAL NOTE

Victoria Grady, Deputy Chief, Finance, has determined that for each year of the first five years that the rules will be in effect, enforcing or administering the rules does not have foreseeable implications relating to costs or revenues of state or local governments.

GOVERNMENT GROWTH IMPACT STATEMENT

HHSC has determined that during the first five years that the rules will be in effect:

(1) the proposed rules will not create or eliminate a government program;

(2) implementation of the proposed rules will not affect the number of HHSC employee positions;

(3) implementation of the proposed rules will result in no assumed change in future legislative appropriations;

(4) the proposed rules will not affect fees paid to HHSC;

(5) the proposed rules will not create a new regulation;

(6) the proposed rules will not expand, limit, or repeal existing regulations;

(7) the proposed rules will not change the number of individuals subject to the rules; and

(8) the proposed rules will not affect the state's economy.

SMALL BUSINESS, MICRO-BUSINESS, AND RURAL COMMUNITY IMPACT ANALYSIS

Victoria Grady has also determined that there will be no adverse economic effect on small businesses, micro-businesses, or rural communities. The rule does not have a cost to small businesses, micro-businesses, or rural communities because the rules are codifying current processes and MCO capitation rates were addressed in rule project 24R019.

LOCAL EMPLOYMENT IMPACT

The proposed rules will not affect a local economy.

COSTS TO REGULATED PERSONS

Texas Government Code §2001.0045 does not apply to these rules because the rules do not impose a cost on regulated persons; are necessary to receive a source of federal funds or comply with federal law; and are necessary to implement legislation that does not specifically state that §2001.0045 applies to the rules.

PUBLIC BENEFIT AND COSTS

Emily Zalkovsky, Chief Medicaid and CHIP Services Officer, has determined that for each year of the first five years the rules are in effect, the public will benefit from having these rules use terminology consistent with the new PDPM LTC reimbursement methodology being implemented in 26 TAC Chapter 554.

Victoria Grady has also determined that for the first five years the rules are in effect, there are no anticipated economic costs to persons who are required to comply with the proposed rules because the proposed rules don't require affected persons to alter current business practices and MCO capitation rates were addressed in rule project 24R019.

TAKINGS IMPACT ASSESSMENT

PUBLIC COMMENT

SUBCHAPTER Y. MEDICAL NECESSITY DETERMINATIONS

26 TAC §§554.2403, 554.2407, 554.2413

STATUTORY AUTHORITY

The amendments are authorized by Texas Government Code §524.0151, which provides that the executive commissioner of HHSC shall adopt rules for the operation and provision of services by the health and human services system; and Texas Human Resources Code §32.021, which provides HHSC with the authority to administer the federal medical assistance program in Texas and to adopt rules and standards for program administration.

The amendments affect Texas Government Code §524.0151 and Texas Human Resources Code §32.021.

§554.2403. Medical Necessity Determination.

(a) Purpose. A recipient must have a determination of medical necessity for nursing facility care to participate in the Texas Medicaid Nursing Facility Program.

(1) The state Medicaid claims administrator makes a medical necessity determination by evaluating a recipient's medical and nursing needs. This determination is based on the admissions MDS assessment that is required by HHSC [~~DADS~~].

(2) A recipient must have a determination of medical necessity for nursing facility care before the nursing facility can be paid for services. Exceptions to this requirement are [~~, except as~~] provided in §554.2413 [~~§19.2413~~] of this subchapter (relating to Determination of Payment Rate Based on the MDS Assessment Submission) and §554.2611 [~~§19.2611~~] of this chapter (relating to Retroactive Vendor Payment).

(b) Admission MDS assessment review.

(1) The admission MDS assessment review process begins [~~is initiated~~] when the state Medicaid claims administrator receives an admission MDS assessment and the Long-Term Care Medicaid Information Section, in accordance with §554.2413 [~~§19.2413~~] of this subchapter, indicating that a Medicaid applicant or recipient is asking for [~~requesting~~] vendor payment for care in a contracted nursing facility. A registered nurse must sign and certify that the MDS assessment is completed in accordance with §554.801 [~~§19.801~~] of this chapter (relating to Resident Assessment).

(2) The review of the admission MDS assessment [~~review~~] determines medical necessity and authorizes [~~establishes the authorization for~~] payment of a reimbursement [~~calculated RUG~~] rate. Reimbursement rate as used in this paragraph has the meaning defined in §554.2413 of this subchapter.

(c) Role of the state Medicaid claims administrator. The state Medicaid claims administrator reviews all MDS assessments, including significant change in status assessments, modifications, and significant corrections, and approves or denies medical necessity in accordance with §554.2401 [~~§19.2401~~] of this subchapter (relating to General Qualifications for Medical Necessity Determinations).

(d) Effective period.

(1) A determination of medical necessity based on the admission MDS assessment review remains in effect for the time period determined by the federal MDS submission schedule.

(2) If a nursing facility submits a recipient's MDS assessment after the due date established by the federal MDS submission schedule, the recipient's medical necessity remains in effect for the period between the due date and the date the state Medicaid claims administrator received the MDS assessment.

(3) If a nursing facility submits a recipient's MDS assessment after the due date established by the federal MDS submission schedule and, after reviewing the MDS assessment, the state Medicaid claims administrator determines that the recipient does not meet the criteria for medical necessity, the effective date of the denial of medical necessity is the date the state Medicaid claims administrator received the MDS assessment. A denial of medical necessity is conducted in accordance with §554.2407 [~~§19.2407~~] of this subchapter (relating to Denied Medical Necessity).

(e) Permanent medical necessity.

(1) A recipient's permanent medical necessity status is established on the completion date of any MDS assessment approved for medical necessity no less than 184 calendar days after the recipient's admission to the Texas Medicaid Nursing Facility Program.

(2) A nursing facility must submit a recipient's MDS assessment in compliance with the federal MDS submission schedule even after the recipient achieves permanent medical necessity status.

(3) A recipient's permanent medical necessity status moves with the recipient, unless the recipient is discharged to home for more than 30 days.

(4) If a recipient who has permanent medical necessity status transfers to another Medicaid-certified nursing facility, the nursing facility to which the recipient transfers must complete a new MDS assessment in compliance with the federal MDS submission schedule.

(f) Insufficient information. If an MDS assessment does not have sufficient information for the state Medicaid claims administrator to make a medical necessity determination, the MDS assessment is put in suspense for 21 days with a message from the state Medicaid claims administrator informing the nursing facility that the MDS assessment has been put in suspense for 21 days. Unless the nursing facility provides sufficient information on the MDS assessment to determine medical necessity within 21 days, medical necessity is denied.

§554.2407. Denied Medical Necessity.

(a) If the state Medicaid claims administrator determines that a Medicaid applicant or a Medicaid recipient does not meet the criteria for medical necessity described in §554.2401 [~~§19.2401~~] of this subchapter (relating to General Qualifications for Medical Necessity Determinations), the state Medicaid claims administrator notifies the attending physician and the nursing facility in writing. The state Medicaid claims administrator gives the attending physician and the nursing facility [~~and provides them~~] an opportunity to present additional information about the applicant's or recipient's medical need for nursing facility care.

(1) If the attending physician or a nursing facility physician does not respond or contest the findings of the state Medicaid claims administrator within 10 working days after receipt of the written notice about the decision, the findings are final.

(2) If the attending physician or a nursing facility physician contests the findings of the state Medicaid claims administrator, at least one physician with the state Medicaid claims administrator must review the case. If the state Medicaid claims administrator's physician determines that the applicant's or recipient's admission or stay is not medically necessary, the determination becomes final.

(3) The state Medicaid claims administrator sends a written notice [~~notification~~] of the final determination of denied medical necessity to:

(A) the attending physician; [,]

(B) the nursing facility; [,] and

(b) After an applicant receives written notice of a determination of denied medical necessity, the applicant or responsible party must request a fair hearing within 90 days after the date of denied medical necessity, or the applicant loses the right to a fair hearing.

(c) After a recipient receives written notice of a determination of denied medical necessity, the recipient or responsible party must request a fair hearing within 10 days after the date of the written notice in order to have nursing facility services paid for during the appeal.

(1) If the recipient requests a fair hearing within 10 days after the date of the written notice and the determination of denied medical necessity is upheld, the effective date of the denial is 10 days after the hearing officer's written decision.

(2) If the recipient does not request a fair hearing within 10 days after the date of the written notice, HHSC [~~DADS~~] makes vendor payments to the nursing facility at the previously established reimbursement [~~RUG~~] rate for 15 days or until the recipient is discharged, whichever happens [~~occurs~~] first. Reimbursement rate as used in this paragraph has the meaning defined in §554.2413 of this subchapter (relating to Determination of Payment Rate Based on the MDS Assessment Submission).

(3) If the recipient does not request a fair hearing within 10 days after the date of the written notice, the recipient must request a fair hearing within 90 days after the date of denied medical necessity, or the recipient loses the right to a fair hearing.

(d) Fair hearings are conducted by HHSC [~~the Texas Health and Human Services Commission (HHSC)~~] in accordance with HHSC rules at 1 TAC Chapter 357 (relating to Hearings).

§554.2413. Determination of Payment Rate Based on the MDS Assessment Submission.

(a) Definitions. In this section, the following words and terms have the following meanings unless the context clearly indicates otherwise.

(1) All conditions of eligibility--A recipient meets all conditions of eligibility when the state Medicaid claims administrator approves the recipient for medical necessity and the recipient meets financial eligibility for Medicaid.

(2) On-time MDS assessment--An MDS assessment that is submitted in accordance with the federal MDS submission schedule and is received by the state Medicaid claims administrator within 31 days after the completion date.

(3) Missed MDS assessment--An MDS assessment that is received by the state Medicaid claims administrator outside the time period that the MDS assessment covers.

(4) Reimbursement rate--The reimbursement rate is described by the Patient Driven Payment Model for Long-Term Care located in 1 TAC §355.318 (relating to Reimbursement Setting Methodology for Nursing Facilities on or after September 1, 2025).

(b) MDS submission requirement. A nursing facility must:

(1) complete all MDS assessments according to CMS' instructions;

(2) submit a recipient's MDS assessment, including an admission MDS assessment, a quarterly MDS assessment, and a significant change in status assessment, to the state MDS database in compliance with the federal MDS submission schedule;

(3) submit the Long-Term Care Medicaid Information Section to the state Medicaid claims administrator; and

(4) submit the recipient's MDS assessment in compliance with the federal MDS submission schedule even after the recipient has permanent medical necessity as described in §554.2403(e) [~~§19.2403(e)~~] of this subchapter (relating to Medical Necessity Determination).

(1) If a nursing facility discharges a recipient who is not expected to return [~~with a status of return not anticipated~~], and the recipient does return [~~returns~~] to the facility, the nursing facility must complete an admission MDS assessment to determine [~~for a determination of~~] medical necessity and to establish [~~establishment of~~] a reimbursement [~~RUG~~] rate. The facility must complete an admission MDS assessment [,] regardless of the amount of time between the recipient's discharge and return.

(2) A nursing facility must complete and submit an admission MDS assessment to receive payment for a recipient's period of stay in the nursing facility, even if the recipient leaves the nursing facility before the MDS assessment is completed and never returns long enough for the MDS assessment to be completed. See subsection (i) of this section for completion of an admission MDS assessment in the event of a recipient's death.

(3) HHSC [~~DADS~~] pays a reimbursement [~~calculated RUG~~] rate for an admission MDS assessment starting from the date the recipient was admitted to the nursing facility, except as provided in §554.2611 [~~§19.2611~~] of this chapter (relating to Retroactive Vendor Payments).

(d) Payment of a reimbursement [~~calculated RUG~~] rate. If a recipient meets all conditions of eligibility, HHSC [~~DADS~~] pays a reimbursement [~~calculated RUG~~] rate for an MDS assessment if the assessment [it] is received by the state Medicaid claims administrator during the [~~time~~] period that is covered on the MDS assessment [~~covers~~].

(e) On-time MDS assessment. If a recipient meets all conditions of eligibility, HHSC [~~DADS~~] pays a reimbursement [~~calculated RUG~~] rate starting from the completion date of the required MDS assessment, except for an admission MDS assessment as described in subsection (c)(3) of this section.

(f) MDS assessments that are not on time. The state Medicaid claims administrator stops payment for services if the state Medicaid claims administrator does not receive an on-time MDS assessment. Payment for services resumes when the state Medicaid claims administrator receives all the MDS assessments that are due as required by the federal MDS submission schedule.

(g) Missed MDS assessments. Except as described in paragraph (2) of this subsection, if the recipient meets financial eligibility for Medicaid, and [~~When~~] the state Medicaid claims administrator receives a missed MDS assessment, HHSC [~~DADS~~] pays the nursing facility a default reimbursement [~~RUG~~] rate for the entire period of the missed MDS assessment. [~~if the recipient meets financial eligibility for Medicaid, except as provided in paragraph (2) of this subsection.~~]

(1) If an MDS assessment is missed for the purpose of calculating a reimbursement [~~RUG~~] rate, the nursing facility must still submit the MDS assessment to comply with §554.801 [~~§19.801~~] of this chapter (relating to Resident Assessment).

(2) For a newly contracted nursing facility and a nursing facility that undergoes a change of ownership, HHSC [~~DADS~~] pays the reimbursement [~~calculated RUG~~] rate for any missed MDS assessments that occur while the nursing facility is unable to submit MDS assessments to the state MDS database.

(h) Significant change in status assessment, modification, or significant correction. If a recipient meets all conditions of eligibility, HHSC [~~DADS~~] pays the reimbursement [~~calculated RUG~~] rate from the completion date of a significant change in status assessment, modification, or significant correction.

(i) Incomplete or erroneous MDS assessments. If a Medicaid [an] applicant meets all conditions of eligibility, HHSC [~~DADS~~] pays a default reimbursement rate for an MDS assessment that is incomplete or has errors.

(j) Prohibition against recourse. A nursing facility must not charge and must not take any other recourse against a recipient, the recipient's family members, the recipient's estate or the recipient's representative for a claim that is reduced because the facility did not meet the requirements of an HHSC [~~failed to comply with a DADS~~] rule or procedure pertaining to reimbursement.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on August 3, 2026.

TRD-202603264

Karen Ray

Chief Counsel

Health and Human Services Commission

Earliest possible date of adoption: September 13, 2026

For further information, please call: (512) 438-2910

SUBCHAPTER AA. VENDOR PAYMENT

26 TAC §554.2601, §554.2611

STATUTORY AUTHORITY

The amendments affect Texas Government Code §524.0151 and Texas Human Resources Code §32.021.

§554.2601. Vendor Payment (Items and Services Included).

(a) A facility provides, under the terms of the contract, for the total medical, nursing, and psychosocial needs of each recipient.

(b) The daily rate is compatible with reasonable charges consistent with efficiency, economy, and quality of total care. The facility must provide care that addresses the unique health needs and well-being of every recipient [~~ensure that care meets the health needs and promotes the maximum well-being of recipients~~]. The payment rate that HHSC makes to the facility includes the following items and services, which [~~are included in the payment rate made to the facility by the Department of Aging and Disability Services (DADS) and, therefore,~~] the facility must provide:

(1) nursing care;

(2) social services;

(3) regular, special, and supplemental diets, including tube feedings;

(4) non-legend [~~nonlegend~~] drugs, with the exception of insulin; [~~, and~~]

(5) alcoholic beverages that are [~~unless~~] prescribed for medicinal purposes if the prescription includes the dosage and frequency of the alcohol; [~~. Alcoholic beverages:~~]

~~[(A) prescribed for medicinal purposes must include the dosage and frequency of the alcohol; and]~~

~~[(B) not prescribed for medicinal purposes are at the expense of the recipient or family;]~~

(6) [~~(5)~~] for a recipient who is not eligible for Medicare Part D benefits, legend drugs that are not covered by the Medicaid Vendor Drug Program;

(7) [~~(6)~~] for a recipient who is eligible for Medicare Part D benefits, legend drugs in a category that is not covered by Medicare Part D and that are not covered by the Medicaid Vendor Drug Program;

(8) [~~(7)~~] regular laundry services, except dry cleaning;

(9) [~~(8)~~] medical accessories, such as cannulas [~~canulas~~], tubes, masks, catheters, ostomy bags and supplies, IV fluids, IV equipment, and equipment that can be used by more than one person, such as wheelchairs, adjustable chairs, crutches, canes, mattresses, hospital-type beds, enteral pumps, trapeze bars, walkers, and oxygen equipment, such as tanks, concentrators, tubing, masks, valves, and regulators, and in addition: [.]

(A) the facility is [~~Facilities are~~] required to maintain, in good repair, equipment necessary to meet the needs of the recipient; [.]

(B) if [If] a recipient wants [~~desires~~] equipment for the recipient's exclusive use: [~~, its~~]

(i) the recipient is responsible for purchasing the desired equipment [~~purchase is the responsibility of the recipient~~]; [:]

(ii) [~~(i)~~] only [~~Only~~] the recipient can use the equipment[,] and the equipment [it] must be identified as the personal property of the recipient; [.]

(iii) [~~(ii)~~] upon [~~Upon~~] discharge from the facility, the recipient keeps [~~retains~~] the equipment the recipient [he] purchased; [~~. If~~]

(iv) if the recipient dies, the facility follows the requirements in §554.416 of this chapter (relating to Personal Property); [purchased equipment must be transferred to the estate. If it is donated or sold to the facility by the recipient or the estate, the transaction must be documented. (See §19.416 of this title (relating to Personal Property)).]

(v) [~~(C)~~] the facility must maintain and repair a piece of equipment [If] a recipient owns [~~a piece of equipment~~] that is medically necessary; and [~~, the facility must maintain and repair the equipment.~~]

(vi) [~~(D)~~] when the recipient's [~~When~~] Part B Medicare benefits are used [~~accessed~~] to pay for equipment and accessories, the facility or supply company may not charge the recipient or family [~~may not be charged by the facility or supply company~~] for any portion of these items;

(10) [~~(9)~~] medical supplies, including[~~, but not limited to~~] tongue depressors, swabs, band-aids [~~bandaids~~], cotton balls, and alcohol; and

(11) [~~(10)~~] routine [~~basic~~] personal hygiene items and services to meet the needs of the recipients, as described in §554.405 of this chapter (relating to Additional Requirements for Trust Funds in Medicaid-certified Facilities), and in addition: [~~residents (See §19.405(h) of this title (relating to Additional Requirements for Trust Funds in Medicaid-Certified Facilities) for a list of such items and services).~~]

(A) the facility must tell the recipient the [~~The~~] specific type or brand of personal hygiene items [~~used by~~] the facility uses [~~must be disclosed to the recipient~~];

(B) [~~then,~~] if a recipient prefers to use a specific type or brand of a personal hygiene item [~~item(s)~~] rather than the item [~~item(s)~~] furnished by the facility, the recipient [he] may use [~~his~~] personal funds to purchase the item; [~~item(s).~~]

(C) [~~(A)~~] before the facility purchases or charges [~~Before purchasing or charging~~] for the preferred item: [~~item(s),~~]

(i) the facility must get [~~secure~~] written authorization from the recipient or family indicating the recipient's [~~his~~] desired preference; [,]

(ii) the written authorization must include the date[,] and signature of the person requesting the preferred item; and [~~item(s). The~~]

(iii) the signature may not be from [~~that of~~] an employee of the facility; [.]

(D) [~~(B)~~] if [If] the recipient's personal funds are used to purchase an item: [~~an item(s), the item(s) is for his sole use.~~]

(i) the item is for the recipient's sole use; and

(ii) the facility must ensure that the item is in an individual container or package that is labeled with the recipient's name; and

(E) [~~(C)~~] the [When the facility purchases personal hygiene item(s) with the recipient's personal funds, the facility must ensure that the item(s) is in an individual container or package that is labeled with the recipient's name. The] facility is not [~~held~~] responsible for labeling personal hygiene items brought into the facility if the items are [~~and~~] not reported to the management.

(c) Facilities may [~~are not required to~~] provide any [~~particular~~] brand of non-legend drug, medical accessory, equipment, or supply[~~, but only those items~~] necessary to ensure appropriate recipient care unless the physician orders a specific brand or the recipient or family prefers a specific brand of item rather than the one the facility provides. Before purchasing or charging for an item the recipient or family prefers, rather than one furnished by the facility, the facility must:

(1) get written authorization from the recipient or family indicating the recipient's desired preference;

(2) the written authorization must include the date and signature of the person requesting the preferred item; and

(3) the signature may not be from an employee of the facility.

~~[(1) Unless the physician orders a specific type or brand, the facility may choose the type or brand.]~~

[(2) If the recipient or family prefers a specific type or brand of item rather than the one furnished by the facility, the recipient, responsible party, or family may be billed for the item, or the recipient's personal funds may be used to purchase the item, or both.]

[(3) Before purchasing or charging for the preferred item, the facility must secure written authorization from the recipient or family indicating his desired preference, the date, and signature of the person requesting the preferred item. The signature may not be that of an employee of the facility.]

(d) If a recipient or family requests [~~resident has requested~~] and freely chooses [~~chosen~~] to participate in an activity, or to have an item or service provided that is not included, or is different than that provided, in the daily vendor rate, then the resident may be charged for the activity, item, or service.

(1) When there is documentation [~~is present~~] that supports the [~~above~~] criteria in subsection (d) of this section [,] and that is required by §554.405(d)(5) of this chapter (relating to Additional Requirements for Trust Funds in Medicaid-certified Facilities) [~~§19.405(d)(5) of this title~~], the amount may be paid from the recipient's [~~resident's~~] trust fund.

(2) When the facility collects payment [~~acts as a collection agent~~] for any item, service, or activity that is not included in the daily rate, the facility must be able to provide clear documentation indicating [~~that clearly indicates~~] that any charges made to the recipient or the recipient's [~~his~~] trust fund are pass-through costs only. The facility may not charge any fees, including handling fees, for these types of transactions.

(e) Except as described in paragraphs (1) and (2) of this subsection, HHSC [~~DADS~~] makes vendor payments to nursing facilities [~~Nursing Facilities~~] for the day a recipient enters a nursing facility, but not for the day a recipient leaves a facility. The two exceptions are as follows.

(1) If entrance and departure are on the same day, and the recipient does not enter another Title XIX facility on that day, HHSC [~~DADS~~] pays for the entire day.

(2) If departure is because of the recipient's death and the deceased recipient is not sent to another Title XIX facility for legal procedures necessary upon the death of the recipient, HHSC [~~DADS~~] pays for the entire day.

(f) Vendor payments are made to Medicaid nursing facilities [~~Nursing Facilities~~] that comply with the PASARR requirements.

§554.2611. Retroactive Vendor Payment.

(a) In this section, retroactive vendor payment is payment HHSC [~~DADS~~] makes retroactively to a nursing facility for services the nursing facility provided to an individual who was eligible for, but had not yet applied for, Medicaid. A nursing facility is eligible for up to three months retroactive vendor payment for services it provided, if:

(1) the individual resided in a Medicaid-certified nursing facility, or a distinct part, during the time services were provided;

(2) the individual did not receive Supplemental Security Income cash benefits;

(3) the individual met Medicaid financial eligibility requirements;

(4) the state Medicaid claims administrator has a current MDS assessment for the individual that the facility submitted in compliance with the federal MDS submission requirements; and

(5) the nursing facility met physician certification and plan of care requirements during the time services were provided.

(b) After receipt of an application for Medicaid, HHSC [~~Texas Health and Human Services Commission (HHSC)~~] Medicaid eligibility staff notify the applicant whether the applicant meets financial eligibility. The state Medicaid claims administrator uses the applicant's current MDS assessment to make the MN determination and determine the effective date of the MN determination. For the purpose of establishing three months prior eligibility, the effective date of the MN determination for a new recipient is the first day of the month in which the recipient qualified for MN.

(c) If the requirements in subsection (a) of this section are met, HHSC [~~DADS~~] makes a retroactive vendor payment using the reimbursement [~~based on the recipient's calculated RUG~~] rate for the period that is covered by the retroactive vendor payment. Reimbursement rate as used in this subsection has the meaning defined in §554.2413 of this chapter (relating to Determination of Payment Rate Based on the MDS Assessment Submission).

(d) [~~DADS or~~] HHSC may verify that the recipient's record includes the required physician's certification, recertification, and plans of care, and that the plans were reviewed as required during the applicable periods.

(e) If a recipient paid the nursing facility for services for which the facility later receives retroactive vendor payment, the facility must reimburse the recipient the full amount the recipient paid, beginning with the effective date of Medicaid eligibility, minus any applied income or co-payment as determined by HHSC Medicaid eligibility staff.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on August 3, 2026.

TRD-202603265

Karen Ray

Chief Counsel

Health and Human Services Commission

Earliest possible date of adoption: September 13, 2026

For further information, please call: (512) 438-2910

CHAPTER 562. LICENSED CHEMICAL DEPENDENCY COUNSELORS

26 TAC §562.19

The executive commissioner of the Texas Health and Human Services Commission (HHSC) proposes the repeal of §562.19, concerning Inactive Status, and an amendment to §562.21, concerning Standards for the Training and Supervision of Counselor Interns.

BACKGROUND AND PURPOSE

The purpose of the proposal is to reduce potential costs and confusion regarding the license status for licensed chemical dependency counselors (LCDCs) by repealing §562.19 and to improve clarity and remove outdated information in the rule for LCDC counselor interns at §562.21.

The proposed repeal of §562.19 eliminates potential costs to LCDCs by removing the rule that allows an LCDC to apply for inactive status. An LCDC with an inactive license must pay an inactive status fee and maintain continuing education requirements while the license is inactive. An LCDC with a license on inactive status may miss the license renewal deadline and become ineligible for license renewal. The former LCDC would then need to reapply to be licensed as an LCDC again. Repealing §562.19 will reduce the frequency of late fees and new license fees for individuals who would have been able to renew their license if it hadn't expired while on inactive status.

The proposed amendment of §562.21 simplifies the standards for supervising counselor interns (CIs) by removing references to the CTI and CCS Assessment Form, which HHSC no longer requires. CIs who want to file a complaint about their supervisor will now file a complaint through the HHSC complaint process and not through the CTI and CCS Assessment Form. Requiring CIs to file a complaint through the HHSC complaint process ensures consistency in complaint processes across Health Care Regulation rulesets.

This proposal supports regulatory reform by reducing unnecessary regulatory burden, lowering potential compliance costs, and improving the clarity and accuracy of the rules.

SECTION-BY-SECTION SUMMARY

The proposed repeal of §562.19 removes the rule section.

The proposed amendment to §562.21 simplifies the CI supervisor assessment process by removing references to the CTI and CCS Assessment Form.

The proposed amendment requires the Clinical Training Institution or Certified Clinical Supervisor to instead give the CI information about how to file a complaint with HHSC during the orientation process.

The proposed amendment corrects the spelling of several defined terms, consistently uses "CI" instead of sometimes using "counselor intern," updates a reference to "HHSC", and updates rule references.

FISCAL NOTE

Victoria Grady, Deputy Chief, Finance, has determined that for each year of the first five years that the rules will be in effect, there will be an estimated loss of revenue to state government as a result of enforcing and administering the rules as proposed. Enforcing or administering the rules does not have foreseeable implications relating to costs or revenues of state government.

The effect on state government for each of the first five years the proposed repeal is in effect is an estimated loss of revenue because LCDCs may no longer request an inactive status, or request to reactivate the license, each requiring a fee. However, HHSC is unable to estimate the loss of revenue because it is unknown how many providers would apply for an inactive status and pay the $50 inactive status fee and how many would return to active status and pay the applicable fees.

GOVERNMENT GROWTH IMPACT STATEMENT

HHSC has determined that during the first five years that the rules will be in effect:

(1) the proposed rules will not create or eliminate a government program;

(2) implementation of the proposed rules will not affect the number of HHSC employee positions;

(3) implementation of the proposed rules will result in no assumed change in future legislative appropriations;

(4) the proposed rules will require a decrease in fees paid to HHSC;

(5) the proposed rules will not create a new regulation;

(6) the proposed rules will repeal an existing regulation;

(7) the proposed rules will not change the number of individuals subject to the rule; and

(8) HHSC has insufficient information to determine the proposed rules' effect on the state's economy.

SMALL BUSINESS, MICRO-BUSINESS, AND RURAL COMMUNITY IMPACT ANALYSIS

Victoria Grady has also determined that there will be no adverse economic effect on small businesses, micro-businesses, or rural communities because there is no requirement to alter current business practices, and there are no new fees imposed.

LOCAL EMPLOYMENT IMPACT

The proposed rule will not affect a local economy.

COSTS TO REGULATED PERSONS

Texas Government Code §2001.0045 does not apply to this rule because the rule does not impose a cost on regulated persons and is amended to reduce the burden or responsibilities imposed on regulated persons by the rule.

PUBLIC BENEFIT AND COSTS

David Kostroun, Chief Regulatory Services Officer, has determined that for each year of the first five years the rules are in effect, the public benefit will be removing potential costs and burdens on license holders and reducing the administrative burden on the counselor intern training and supervision process.

Victoria Grady has also determined that for the first five years the rules are in effect, there are no anticipated economic costs to persons who are required to comply with the proposed rules because there are no requirements to alter current business practices and there are no new fees or costs imposed on those required to comply.

TAKINGS IMPACT ASSESSMENT

PUBLIC COMMENT

To be considered, comments must be submitted no later than 31 days after the date of this issue of the Texas Register. Comments must be (1) postmarked or shipped before the last day of the comment period; (2) hand-delivered before 5:00 p.m. on the last working day of the comment period; or (3) emailed before midnight on the last day of the comment period. If the last day to submit comments falls on a holiday, comments must be postmarked, shipped, or emailed before midnight on the following business day to be accepted. When emailing comments, please indicate "Comments on Proposed Rule 26R029" in the subject line.

STATUTORY AUTHORITY

The repeal is authorized by Texas Government Code §524.0151, which provides that the executive commissioner of HHSC shall adopt rules for the operation and provision of services by the health and human services system, and Texas Occupations Code §504.051, which authorizes the executive commissioner to adopt rules governing the performance, conduct, and ethics for persons licensed as LCDCs.

The repeal implements Texas Government Code §524.0151 and Texas Occupations Code §504.051.

§562.19. Inactive Status.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on August 3, 2026.

TRD-202603266

Karen Ray

Chief Counsel

Health and Human Services Commission

Earliest possible date of adoption: September 13, 2026

For further information, please call: (512) 834-4591

26 TAC §562.21

STATUTORY AUTHORITY

The amendment is authorized by Texas Government Code §524.0151, which provides that the executive commissioner of HHSC shall adopt rules for the operation and provision of services by the health and human services system, and Texas Occupations Code §504.051, which authorizes the executive commissioner to adopt rules governing the performance, conduct, and ethics for persons licensed as LCDCs.

The amendment implements Texas Government Code §524.0151 and Texas Occupations Code §504.051.

§562.21. Standards for the Training and Supervision of Counselor Interns.

(a) A Clinical Training Institution (CTI) [~~CTI~~] shall appoint a single training coordinator who is a Qualified Credentialed Counselor (QCC). The CTI coordinator or a Certified Clinical Supervisor (CCS) [~~CCS~~] shall oversee all training activities of a counselor intern (CI) and ensure compliance with the Texas Health and Human Services Commission (HHSC) [~~department~~] requirements and rules relating to the training and supervision of a CI [~~CIs~~].

(b) The CTI or CCS shall not accept an applicant for training and [~~establish acceptance criteria for CIs. No applicant shall be accepted to a CTI or accepted for CCS~~] supervision without:

(1) documentation that the applicant is registered as a CI [~~counselor intern~~] with HHSC [~~the department~~]; and

(2) a signed ethics agreement that is consistent with the standards in §562.23 [~~§140.423~~] of this chapter [~~title~~] (relating to Professional and Ethical Standards for all License Holders).

(c) The CTI or CCS shall [~~establish the following level system to~~] classify a CI [~~counselor interns~~] according to the CI's hours of supervised work experience using the following level system:

(1) Level I: 0-1,000 hours of work experience;

(2) Level II: 1,001-2000 hours of work experience;

(3) Level III: 2,001-4,000 hours of work experience; and

(4) Graduate Status: over 4,000 hours of work experience.

(d) [~~The CTI or CCS shall have a supervision structure that includes all intern levels.~~] The CTI or CCS shall designate each CI's [~~intern's~~] level in writing and provide the CI [~~intern~~] with a copy of the documentation.

(e) The CCS, or the CTI coordinator or intern's supervising QCC at a CTI, shall supervise a CI as outlined in §562.22 of this chapter (relating to Direct Supervision of Interns). [All counselor interns at a CTI must be under the direct supervision of a QCC as described in §140.422 of this title (relating to Direct Supervision of Interns). A CCS must directly supervise a counselor intern under the CCS's supervision, as described in §140.422 of this title.]

(f) The CTI or CCS shall provide each CI designated as Level I, II, or [~~and~~] III, [~~intern~~] with reading assignments and training activities for the supervised work experience that includes material in each Knowledge, Skills, and Attitudes (KSA) [~~KSA~~] dimension.

(g) [~~The CTI or CCS shall use the department's counselor intern evaluation forms to structure the intern's 4,000 hours of supervised work experience.~~] The CCS or the CI's supervising QCC, under the oversight and monitoring of the CTI coordinator, shall perform the CCS' or CTI's responsibilities as follows [~~in the following paragraphs of this subsection~~].

(1) The CCS or CTI shall set weekly objectives with the CI based on areas targeted for improvement.

(2) The CCS or CTI shall provide the CI reading, computer, or [~~and/or~~] video assignments that address areas needing improvement. The CTI or CCS shall allow the CI [~~intern~~] two hours per month to complete these assignments.

(3) The CCS or CTI shall monitor the CI's [~~intern's~~] progress and provide verbal and written feedback during weekly supervision meetings.

(4) The CCS or CTI shall require the CI to complete [~~intern shall complete~~] a written KSA self-evaluation during the first 50 hours of work experience.

(5) The CCS or [~~the~~] CTI, and the CI, [~~intern~~] shall complete and discuss a written KSA evaluation at the completion of each level listed in subsection (c)(1) - (3) of this section [~~of experience~~] (after 1,000 hours, 2,000 hours, and 4,000 hours).

(h) The CTI or CCS shall not allow a CI designated as Level I, II, or III [~~intern~~] to accrue more than 40 hours of work experience per week.

(i) A CI with Graduate Status (over 4,000 hours) [~~graduate intern~~] may continue to provide chemical dependency counseling services at a registered CTI [~~clinical training institution~~] or with a CCS for as long as the CI's registration is valid [~~during that individual's maximum CI registration period~~].

(j) The CTI coordinator or CCS shall send the following documents [~~directly~~] to HHSC [~~the department~~] and provide the CI[~~intern~~] with copies within ten working days after [~~from~~] the date the CI [~~intern~~] completes the required 4,000 hours or after the date the CI leaves the CTI or the CCS. [~~agency:~~]

(1) The HHSC Intern Supervised Work Experience Documentation [~~the department's supervised work experience documentation~~] form, fully completed and signed by the CCS or the CI's supervising QCC and the CTI Coordinator. [~~; and~~]

(2) A [a] copy of the CI's [~~intern's~~] job description showing job responsibilities within the KSAs.

(k) The CTI or CCS shall ensure all training [~~All~~] activities counted towards the CI's [~~intern's~~] supervised work experience are [~~shall be~~] within the scope of chemical dependency counseling services as defined by the KSAs.

(l) The CTI or CCS shall not approve hours of work experience for which the CI [~~intern~~] fails to substantially complete reading assignments and training activities for the supervised work experience [~~related activities and supervision assignments~~]. The CTI or CCS shall document any [~~Any~~] failure by the CI to complete assignments [~~shall be documented~~] on the Intern Supervised Work Experience Documentation [~~weekly supervision~~] form located on the HHSC website.

(m) After the CTI or CCS accepts an applicant as a CI, the CTI or CCS, as part of the orientation process, shall give each CI information in writing on how to file a complaint with HHSC about the CTI, CCS, or other LCDC or CI. [~~The CTI or CCS shall give each CI the department's CTI and CCS Assessment Form with instructions to complete the assessment and mail it directly to the department.~~]

~~[(n) The CTI or CCS shall use current department forms for all training and supervision documentation mandated by the department.]~~

(n) [~~(o)~~] The CTI shall ensure that each CTI coordinator and supervising QCC obtains three hours of continuing education in clinical supervision every two years.

(o) [~~(p)~~] The CTI or CCS shall inform a CI [~~interns~~] of licensure examination requirements and procedures, as well as examination schedules and information provided by HHSC [~~the department~~].

(p) [~~(q)~~] The CTI or CCS shall ensure that:

(1) a CI designates the CI's [~~interns designate their~~] status by using "counselor intern," "intern" or "CI" when signing client record entries; [,] and

(2) [~~that~~] only a registered CI uses one of these designations when signing client record entries [~~CIs use this designation~~].

(q) [~~(r)~~] The CTI or CCS shall maintain a complete file for each CI [~~counselor intern~~] for five years from the end of the CI's employment with a CTI or supervision by a CCS, as applicable, to include:

(1) letter of registration;

(2) ethics agreement signed by the CI [~~intern~~];

(3) copies of KSA evaluations;

(4) documentation of all supervision activities;

(5) documentation of CI [~~intern~~] levels and accumulated hours of work experience at each level; and

(6) copy of the HHSC Intern Supervised Work Experience Documentation [~~supervised work experience documentation~~] form.

(r) [~~(s)~~] The CTI or CCS shall give the CI [~~intern~~] a copy of all information contained in the CI's [~~intern~~] file when the CI [~~intern~~] completes the required supervised work experience or [~~and/or~~] leaves the CTI or the CCS [~~agency~~].

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on August 3, 2026.

TRD-202603267

Karen Ray

Chief Counsel

Health and Human Services Commission

Earliest possible date of adoption: September 13, 2026

For further information, please call: (512) 834-4591

CHAPTER 746. MINIMUM STANDARDS FOR CHILD-CARE CENTERS

The executive commissioner of the Texas Health and Human Services Commission (HHSC) proposes amendments to §§746.1107, 746.1317, and 746.4301; the repeal of §§746.201, 746.301, 746.303, 746.607, 746.609, 746.611, 746.625, 746.705, 746.709, 746.805, 746.1021, 746.1045, 746.1057, 746.1309, 746.1311, 746.1313, 746.1329, 746.3605, 746.3607, 746.4201, 746.4203, 746.4205, 746.4207, 746.4401, 746.4403, 746.4405, and 746.4407; and new §§746.201, 746.301, 746.303, 746.609, 746.705, 746.1021, 746.1045, 746.1309, 746.1313, 746.1329, 746.3605, 746.4201, 746.4401, and 746.4407, in Texas Administrative Code, Chapter 746, concerning Minimum Standards for Child-Care Centers.

BACKGROUND AND PURPOSE

The purpose of the proposal is to implement changes due to an accelerated review of Chapter 746, Minimum Standards for Licensed Child-Care Centers, conducted by Child Care Regulation (CCR). The project involved reviewing low-weighted minimum standards to identify rules that could be amended, simplified, or removed to streamline requirements necessary to protect the health, safety, and well-being of children in the care of licensed child care centers.

HHSC conducted a review of existing child care rules related to record keeping and reporting to determine if any rules needed to be revised to ensure accountability of child care providers receiving Texas Workforce Commission Child Care Services (CCS) subsidies or improve the accuracy of the information reported. The proposal includes a provision requiring compliance with CCS program rules and requirements and amends rules to make non-substantive changes which remove the hyphen between "child" and "care."

SECTION-BY-SECTION SUMMARY

Proposed new §746.201 uses the standard format for the title rather than the question-and-answer format. The rule outlines permit holder responsibilities and requires compliance with CCS program requirements if receiving CCS subsidies.

The proposed repeal of §746.201 deletes the rule. The content of the rule is added to proposed new §746.201 with substantive changes.

Proposed new §746.301 uses the standard format for the title rather than the question-and-answer format. The rule outlines situations that must be reported to CCR in writing and situations that require notification and approval by CCR before changes are made to the child care center.

Proposed new §746.303 uses the standard format for the title rather than the question-and-answer format. The rule describes situations in which the child care center must notify CCR of changes concerning certain employees or controlling persons.

The proposed repeal of §746.301 deletes the rule. The content of the rule is added to proposed new §746.301 with substantive changes.

The proposed repeal of §746.303 deletes the rule. The content of the rule is added to proposed new §746.303 with substantive changes.

Proposed new §746.609 uses the standard format for the title rather than the question-and-answer format. The rule provides that the child's records must be updated with the child's parent annually, that the parent must sign and date updates and that the records must be maintained in the child's file.

The proposed repeal of §746.607 deletes the rule requiring a parent's signature on the enrollment form as no longer necessary because parents enrolling children in child care centers must already sign other specific authorizations that make this requirement duplicative.

The proposed repeal of §746.609 deletes the rule. The content of the rule is added to proposed new §746.609 with substantive changes.

The proposed repeal of §746.611 deletes the rule as no longer necessary because there is no statutory authority for the requirement of parents to provide health statements for their children to attend care.

The proposed repeal of §746.625 deletes the rule as no longer necessary and to comply with Texas Human Resources Code §42.043(e). This rule allowed for an exception to operations maintaining immunization records for children enrolled in preschool or school at another location provided the child's parent signed a statement that the records were on file at the school.

The title of Subchapter C, Division 2, is amended.

Proposed new §746.705 uses the standard format for the title rather than the question-and-answer format. The rule requires the child care center director or another employe designated by the director to review incident and illness reports and requires the reports to be signed by the director or designated employee.

The proposed repeal of §746.705 deletes the rule. The content of the rule is added to proposed new §746.705 with substantive changes.

The proposed repeal of §746.709 deletes the rule as no longer necessary because §746.603(a)(7) already outlines that incident and illness reports must be kept in the child's file and §746.803(a) already outlines records retention periods for all records at the licensed child care center.

The proposed repeal of §746.805 deletes the rule as no longer necessary. The rule was adopted in 2010 to notify centers that the centers are permitted to keep electronic records, which is no longer a new practice. The rule indicates children's records must be accessible to caregivers which is already established in §746.601 and it indicates that records must be available for review by CCR upon request which is already established in §746.601, §746.801, and §746.901.

Proposed new §746.1021 uses the standard format for the title rather than the question-and-answer format. The rule describes child care experience that may qualify a person to work as a child care center director.

Proposed new rule §746.1045 uses the standard format for the title rather than the question-and-answer format. The rule provides the requirements for submission and review of transcripts for foreign education.

The proposed repeal of §746.1021 deletes the rule. The content of the rule is added to proposed new §746.1021 with substantive changes.

The proposed repeal of §746.1045 deletes the rule. The content of the rule is added to proposed new §746.1045 with substantive changes.

The proposed repeal of §746.1057 deletes the rule as no longer necessary because it is duplicative of §746.201(4) which outlines the requirement for a qualified director.

The proposed amendment of §746.1107 uses the standard format for the title rather than the question-and-answer format. The amendment consolidates acceptable documentation of high school equivalency completion into one section and updates language to improve readability and understanding.

Proposed new §746.1309 uses the standard format for the title rather than the question-and-answer format. The rule outlines the required annual training for directors and caregivers in child care centers; includes required topics, number of training hours required, and statutory citations for reference; prohibits certain training hours from counting toward a caregiver's annual training; and prohibits a director from earning training hours by presenting training to others.

Proposed new §746.1313 uses the standard format for the title rather than the question-and-answer format. It provides the requirement for caregiver and director annual training to occur within a 12-month period, outlines that the operation may choose to establish their training year in one of two ways, and outlines that the option selected for how the child care center will determine annual training years must be consistent for all operation staff.

The proposed amendment to §746.1317 uses the standard format for the title rather than the question-and-answer format, includes statutory citations for reference, eliminates the requirement for operations to maintain records related to instructor led and self-instructional training, and updates language to improve readability and understanding.

Proposed new §746.1329 uses the standard format for the title rather than the question-and-answer format. The rule outlines documentation requirements for annual training for employees of a child care center.

The proposed repeal of §746.1309 deletes the rule. The content of the rule is added to proposed new §746.1309 with substantive changes.

The proposed repeal of §746.1311 deletes the rule. The content of the rule is added to proposed new §746.1309 with substantive changes.

The proposed repeal of §746.1313 deletes the rule. The content of the rule is added to proposed new §746.1313 with substantive changes.

The proposed repeal of §746.1329 deletes the rule. The content of the rule is added to proposed new §746.1329 with substantive changes.

Proposed new §746.3605 uses the standard format for the title rather than the question-and-answer format. The rule outlines how operations should respond to illnesses and injuries to children in care.

The proposed repeal of §746.3605 deletes the rule. The content of the rule is added to proposed new §746.3605 with substantive changes.

The proposed repeal of §746.3607 deletes the rule. The content of the rule is added to proposed new §746.3605.

Proposed new §746.4201 uses the standard format for the title rather than the question-and-answer format. The rule outlines the indoor activity space requirements and restrictions.

The proposed repeal of §746.4201 deletes the rule. The content of the rule is added to proposed new §746.4201 with substantive changes.

The proposed repeal of §746.4203 deletes the rule. The content of the rule is added to proposed new §746.4201 with substantive changes.

The proposed repeal of §746.4205 deletes the rule. The content of the rule is added to proposed new §746.4201 with substantive changes.

The proposed repeal of §746.4207 deletes the rule. The content of the rule is added to proposed new §746.4201.

The proposed amendment of §746.4301 uses the standard format for the title rather than the question-and-answer format. The amendment reduces the outdoor square footage requirement per child and updates language to improve readability and understanding.

Proposed new §746.4401 uses the standard format for the title rather than the question-and-answer format. The new rule outlines hand-washing sink requirements for child care centers.

Proposed new §746.4407 uses the standard format for the title rather than the question-and-answer format. The rule outlines toilet requirements for child care centers.

The proposed repeal of §746.4401 deletes the rule. The content of the rule is added to proposed new §746.4401 with substantive changes.

The proposed repeal of §746.4403 deletes the rule. The content of the rule is added to proposed new §746.4401 with substantive changes.

The proposed repeal of §746.4405 deletes the rule. The content of the rule is added to proposed new §746.4401.

The proposed repeal of §746.4407 deletes the rule. The content of the rule is added to proposed new §746.4407 with substantive changes.

FISCAL NOTE

GOVERNMENT GROWTH IMPACT STATEMENT

HHSC has determined that during the first five years that the rules will be in effect:

(1) the proposed rules will not create or eliminate a government program;

(2) implementation of the proposed rules will not affect the number of HHSC employee positions;

(3) implementation of the proposed rules will result in no assumed change in future legislative appropriations;

(4) the proposed rules will not affect fees paid to HHSC;

(5) the proposed rules will create a new regulation;

(6) the proposed rules will expand, limit, and repeal existing regulations;

(7) the proposed rules will not change the number of individuals subject to the rules; and

(8) the proposed rules will not affect the state's economy.

SMALL BUSINESS, MICRO-BUSINESS, AND RURAL COMMUNITY IMPACT ANALYSIS

Victoria Grady has also determined that there will be no adverse economic effect on small businesses, micro-businesses, or rural communities. The rules do not impose any additional costs on small businesses, micro-businesses, or rural communities required to comply with the rules.

LOCAL EMPLOYMENT IMPACT

The proposed rules will not affect the local economy.

COSTS TO REGULATED PERSONS

Texas Government Code §2001.0045 does not apply to these rules because the rules are necessary to protect the health, safety, and welfare of the residents of Texas; do not impose a cost on regulated persons; and reduce the burden or responsibilities imposed on regulated persons by the rules.

PUBLIC BENEFIT AND COSTS

Rachel Ashworth-Mazerolle, Deputy Executive Commissioner for Child Care Regulation, has determined that for each year of the first five years the rules are in effect the public benefit will be reduced administrative burdens in licensed child care centers by easing or eliminating certain regulations, and streamlining requirements necessary to protect the health, safety, and well-being of children in child care centers.

Victoria Grady has also determined that for the first five years the rules are in effect, there are no anticipated economic costs to persons who are required to comply with the proposed rules because the rules do not require any significant updates to training that would result in a cost or require any additional resources to comply.

TAKINGS IMPACT ASSESSMENT

PUBLIC COMMENT

SUBCHAPTER B. ADMINISTRATION AND COMMUNICATION

DIVISION 1. PERMIT HOLDER RESPONSIBILITIES

26 TAC §746.201

STATUTORY AUTHORITY

The repealed rule is authorized by Texas Government Code §524.0151, which provides that the executive commissioner of HHSC shall adopt rules for the operation and provision of services by the health and human services agencies, Texas Government Code §524.0005, which provides the executive commissioner of HHSC with broad rule-making authority, and Texas Human Resources Code §42.042, which requires the executive commissioner to adopt minimum standards related to the health, safety, and welfare of children attending child care centers.

The rule repeal implements Texas Government Code §524.0151, §524.0005, and Texas Human Resources Code §42.042.

§746.201. What are my responsibilities as the permit holder?

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on July 27, 2026.

TRD-202603177

Karen Ray

Chief Counsel

Health and Human Services Commission

Earliest possible date of adoption: September 13, 2026

For further information, please call: (512) 438-3269

DIVISION 2. REQUIRED NOTIFICATION

26 TAC §746.301, §746.303

STATUTORY AUTHORITY

The repealed rules are authorized by Texas Government Code §524.0151, which provides that the executive commissioner of HHSC shall adopt rules for the operation and provision of services by the health and human services agencies, Texas Government Code §524.0005, which provides the executive commissioner of HHSC with broad rule-making authority, and Texas Human Resources Code §42.042, which requires the executive commissioner to adopt minimum standards related to the health, safety, and welfare of children attending child care centers.

The rule repeals implement Texas Government Code §524.0151, §524.0005, and Texas Human Resources Code §42.042.

§746.301. What changes regarding my child-care center must I notify Licensing about before making the change?

§746.303. What changes must I notify Licensing of regarding the child-care center's designee, governing body, director, and employees?

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on July 27, 2026.

TRD-202603179

Karen Ray

Chief Counsel

Health and Human Services Commission

Earliest possible date of adoption: September 13, 2026

For further information, please call: (512) 438-3269

SUBCHAPTER C. RECORD KEEPING

DIVISION 1. RECORDS OF CHILDREN

26 TAC §§746.607, 746.609, 746.611, 746.625

STATUTORY AUTHORITY

The rule repeals implement Texas Government Code §524.0151, §524.0005, and Texas Human Resources Code §42.042.

§746.607. Must the child's parent sign the admission information?

§746.609. Must I update the admission information?

§746.611. Must I have a health statement for children in my care?

§746.625. If a child's immunization record is already on file at a pre-kindergarten program or school away from the child-care center, must I also have a copy of the child's immunization record in my files?

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on July 27, 2026.

TRD-202603181

Karen Ray

Chief Counsel

Health and Human Services Commission

Earliest possible date of adoption: September 13, 2026

For further information, please call: (512) 438-3269

DIVISION 2. RECORDS OF ACCIDENTS AND INCIDENTS

26 TAC §746.705, §746.709

STATUTORY AUTHORITY

The rule repeals implement Texas Government Code §524.0151, §524.0005, and Texas Human Resources Code §42.042.

§746.705. Must someone from my child-care center sign the Incident/Illness Report form?

§746.709. Where must I file the Incident/Illness Report form and how long must I keep it?

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on July 27, 2026.

TRD-202603183

Karen Ray

Chief Counsel

Health and Human Services Commission

Earliest possible date of adoption: September 13, 2026

For further information, please call: (512) 438-3269

DIVISION 3. RECORDS THAT MUST BE KEPT ON FILE AT THE CHILD-CARE CENTER

26 TAC §746.805

STATUTORY AUTHORITY

The rule repeal implements Texas Government Code §524.0151, §524.0005, and Texas Human Resources Code §42.042.

§746.805. May I keep electronic records or a combination of paper and electronic records?

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on July 27, 2026.

TRD-202603184

Karen Ray

Chief Counsel

Health and Human Services Commission

Earliest possible date of adoption: September 13, 2026

For further information, please call: (512) 438-3269

SUBCHAPTER D. PERSONNEL

DIVISION 1. CHILD-CARE CENTER DIRECTOR

26 TAC §§746.1021, 746.1045, 746.1057

STATUTORY AUTHORITY

The rule repeals implement Texas Government Code §524.0151, §524.0005, and Texas Human Resources Code §42.042.

§746.1021. What constitutes experience in a licensed child-care center, or in a licensed or registered child-care home?

§746.1045. Does education received outside of the United States substitute for the education requirements for a child-care director?

§746.1057. What happens if my Child-Care Center Director's Certificate expires?

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on July 27, 2026.

TRD-202603186

Karen Ray

Chief Counsel

Health and Human Services Commission

Earliest possible date of adoption: September 13, 2026

For further information, please call: (512) 438-3269

DIVISION 4. PROFESSIONAL DEVELOPMENT

26 TAC §§746.1309, 746.1311, 746.1313, 746.1329

STATUTORY AUTHORITY

The rule repeals implement Texas Government Code §524.0151, §524.0005, and Texas Human Resources Code §42.042.

§746.1309. What areas of training must the annual training for caregivers cover?

§746.1311. What areas of training must the annual training for my child-care center director cover?

§746.1313. When must annual training for my caregivers and director be obtained?

§746.1329. What documentation must I provide to Licensing to verify that employees have met training requirements?

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on July 27, 2026.

TRD-202603189

Karen Ray

Chief Counsel

Health and Human Services Commission

Earliest possible date of adoption: September 13, 2026

For further information, please call: (512) 438-3269

SUBCHAPTER R. HEALTH PRACTICES

DIVISION 3. ILLNESS AND INJURY

26 TAC §746.3605, §746.3607

STATUTORY AUTHORITY

The rule repeals implement Texas Government Code §524.0151, §524.0005, and Texas Human Resources Code §42.042.

§746.3605. How must caregivers respond when a child becomes ill?

§746.3607. How must caregivers respond when a child is injured and requires immediate treatment by a health-care professional?

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on July 27, 2026.

TRD-202603191

Karen Ray

Chief Counsel

Health and Human Services Commission

Earliest possible date of adoption: September 13, 2026

For further information, please call: (512) 438-3269

SUBCHAPTER T. PHYSICAL FACILITIES

DIVISION 1. INDOOR SPACE REQUIREMENTS

26 TAC §§746.4201, 746.4203, 746.4205, 746.4207

STATUTORY AUTHORITY

The rule repeals implement Texas Government Code §524.0151, §524.0005, and Texas Human Resources Code §42.042.

§746.4201. How many square feet of indoor activity space must I have for children?

§746.4203. Am I required to care for children younger than 18 months separately from older children?

§746.4205. Must I limit the number of children in each room based on the indoor activity space measurements for that room?

§746.4207. Do these indoor activity space requirements apply to my child-care center if it was licensed before September 1, 2003?

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on July 27, 2026.

TRD-202603193

Karen Ray

Chief Counsel

Health and Human Services Commission

Earliest possible date of adoption: September 13, 2026

For further information, please call: (512) 438-3269

DIVISION 3. TOILETS AND SINKS

26 TAC §§746.4401, 746.4403, 746.4405, 746.4407

STATUTORY AUTHORITY

The rule repeals implement Texas Government Code §524.0151, §524.0005, and Texas Human Resources Code §42.042.

§746.4401. How many hand-washing sinks must I have in my child-care center for children's use?

§746.4403. Must I have a hand-washing sink in the diaper-changing area?

§746.4405. Where must I locate the hand-washing sinks for children's use?

§746.4407. How many toilets am I required to have in my child-care center?

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on July 27, 2026.

TRD-202603196

Karen Ray

Chief Counsel

Health and Human Services Commission

Earliest possible date of adoption: September 13, 2026

For further information, please call: (512) 438-3269

CHAPTER 746. MINIMUM STANDARDS FOR CHILD CARE CENTERS

SUBCHAPTER B. ADMINISTRATION AND COMMUNICATION

DIVISION 1. PERMIT HOLDER RESPONSIBILITIES

26 TAC §746.201

STATUTORY AUTHORITY

The new rule is authorized by Texas Government Code §524.0151, which provides that the executive commissioner of HHSC shall adopt rules for the operation and provision of services by the health and human services agencies, Texas Government Code §524.0005, which provides the executive commissioner of HHSC with broad rule-making authority, and Texas Human Resources Code §42.042, which requires the executive commissioner to adopt minimum standards related to the health, safety, and welfare of children attending child care centers.

The new section implements Texas Government Code §524.0151, §524.0005, and Texas Human Resources Code §42.042.

§746.201. Permit Holder Responsibilities.

The permit holder must:

(1) develop and follow operational policies that comply with the minimum standards specified in this chapter;

(2) establish written personnel policies, including detailed job descriptions, responsibilities, and requirements;

(3) ensure training requirements in this chapter are met;

(4) appoint a qualified director who is present at the child care center to oversee daily operations;

(5) require employees, contract service providers, and volunteers report suspected abuse, neglect, or exploitation to the Texas Abuse and Neglect Hotline as required by Texas Family Code §261.101 and ensure:

(A) this duty is not delegated to another person; and

(B) any person reporting abuse, neglect, or exploitation is not required by the child care center to seek permission or notify the child care center before making a report;

(6) keep all information about background checks confidential and protect background check information from disclosure to unauthorized persons, as required by law;

(7) allow a parent to visit the child care center any time during operating hours without prior approval;

(8) follow the liability insurance requirements in this division;

(9) ensure the number of children in care, both at the child care center and away from the child care center, such as during a field trip, does not exceed the licensed capacity;

(10) comply with Texas Human Resources Code Chapter 42, all minimum standards, and any other Texas Administrative Code rules that apply;

(11) report Department of Justice substantiated complaints from Title III of the Americans with Disabilities Act to Child Care Regulation; and

(12) comply with all Texas Workforce Commission Child Care Services (CCS) requirements when receiving CCS subsidies. Failure to follow the CCS requirements, including knowingly or negligently failing to meet any provider requirements or responsibilities outlined in Title 40, Texas Administrative Code, Chapter 809 (relating to Child Care Services), is considered a violation of the Texas Health and Human Services Commission minimum standards.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on July 27, 2026.

TRD-202603176

Karen Ray

Chief Counsel

Health and Human Services Commission

Earliest possible date of adoption: September 13, 2026

For further information, please call: (512) 438-3269

DIVISION 2. REQUIRED NOTIFICATION

26 TAC §746.301, §746.303

STATUTORY AUTHORITY

The new rules are authorized by Texas Government Code §524.0151, which provides that the executive commissioner of HHSC shall adopt rules for the operation and provision of services by the health and human services agencies, Texas Government Code §524.0005, which provides the executive commissioner of HHSC with broad rule-making authority, and Texas Human Resources Code §42.042, which requires the executive commissioner to adopt minimum standards related to the health, safety, and welfare of children attending child care centers.

The new sections implement Texas Government Code §524.0151, §524.0005, and Texas Human Resources Code §42.042.

§746.301. Child Care Regulation (CCR) Notification Requirements.

(a) A child care center must notify Child Care Regulation (CCR) in writing before:

(1) changing hours, days, or months when care is provided;

(2) closing for five consecutive days or more when the closure is planned or, when there is an unplanned closure, as soon as possible;

(3) closing permanently; or

(4) completing a change of ownership. Ensuring a completed application for a new permit is submitted by the intended new owner at least 60 days before the change of ownership is completed may make it possible for the intended new owner to operate under the new permit without a break in service.

(b) A child care center must notify CCR in writing and receive CCR approval before changing:

(1) the address or location of the child care center, as specified in Texas Human Resources Code §42.048(e-3) and Chapter 745, Subchapter D, Division 10 of this title (relating to Relocation of Operation);

(2) indoor or outdoor facilities, equipment, or space; or

(3) any of the services offered by the child care center in a manner that would require CCR to amend the permit.

§746.303. Controlling Persons or Employee Change Notification Requirements.

(a) A child care center must notify Child Care Regulation (CCR) in writing within five days after any person that is a child care center director, designee, governing body board member, or other executive officer departs from the person's role or changes a mailing address.

(b) If a person at the child care center newly becomes a controlling person, the child care center must submit controlling person information within two days after the person becomes a controlling person.

(c) A child care center must report how many employees left the center's employment during the previous calendar year. The information must be submitted through the provider portal account no later than January 15 of each year.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on July 27, 2026.

TRD-202603178

Karen Ray

Chief Counsel

Health and Human Services Commission

Earliest possible date of adoption: September 13, 2026

For further information, please call: (512) 438-3269

SUBCHAPTER C. RECORD KEEPING

DIVISION 1. RECORDS OF CHILDREN

26 TAC §746.609

STATUTORY AUTHORITY

The new section implements Texas Government Code §524.0151, §524.0005, and Texas Human Resources Code §42.042.

§746.609. Child Record Requirements.

(a) At least once every year, a child care center must review each child's record, whether maintained in physical or electronic form, with the child's parent to confirm that all information is current and accurate.

(b) As part of the annual review of each child's record, the parent must sign and date any changes to the information. A child care center must keep the updated information in the child's record.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on July 27, 2026.

TRD-202603180

Karen Ray

Chief Counsel

Health and Human Services Commission

Earliest possible date of adoption: September 13, 2026

For further information, please call: (512) 438-3269

DIVISION 2. INCIDENT AND ILLNESS RECORD KEEPING

26 TAC §746.705

STATUTORY AUTHORITY

The new section implements Texas Government Code §524.0151, §524.0005, and Texas Human Resources Code §42.042.

§746.705. Incident and Illness Report Requirements.

A director or another employee designated by the director of a child care center must review incident and illness reports within 24 hours of the incident or illness. Once reviewed, the director or another employee designated by the director must sign and date all reports to indicate the reports are complete. The completed reports must be maintained in the child's record.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on July 27, 2026.

TRD-202603182

Karen Ray

Chief Counsel

Health and Human Services Commission

Earliest possible date of adoption: September 13, 2026

For further information, please call: (512) 438-3269

SUBCHAPTER D. PERSONNEL

DIVISION 1. CHILD CARE CENTER DIRECTOR

26 TAC §746.1021, §746.1045

STATUTORY AUTHORITY

The new sections implement Texas Government Code §524.0151, §524.0005, and Texas Human Resources Code §42.042.

§746.1021. Director Experience Requirements.

(a) Child care center experience means providing direct care to children in a licensed or certified center. A position qualifies only if it involved providing direct care in the child care center setting. Positions such as director, assistant director, or caregiver may qualify.

(b) Child care home experience means providing direct care to children in a licensed or registered child care home. A position qualifies only if it involved providing direct care in the child care home setting. Positions such as primary caregiver, assistant caregiver, or substitute caregiver may qualify.

(c) Child Care Regulation calculates experience requirements on a full-time 30-hour work week. Part-time experience may be credited on an hour-by-hour basis toward the full-time requirement.

§ 746.1045. Director International Education Requirements.

Official transcripts must be provided to Child Care Regulation to verify course work completion and equivalency. All documents must be translated into English for review.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on July 27, 2026.

TRD-202603185

Karen Ray

Chief Counsel

Health and Human Services Commission

Earliest possible date of adoption: September 13, 2026

For further information, please call: (512) 438-3269

DIVISION 2. CHILD CARE [~~CHILD-CARE~~] CENTER EMPLOYEES AND CAREGIVERS

26 TAC §746.1107

STATUTORY AUTHORITY

The amended rule is authorized by Texas Government Code §524.0151, which provides that the executive commissioner of HHSC shall adopt rules for the operation and provision of services by the health and human services agencies, Texas Government Code §524.0005, which provides the executive commissioner of HHSC with broad rule-making authority, and Texas Human Resources Code §42.042, which requires the executive commissioner to adopt minimum standards related to the health, safety, and welfare of children attending child care centers.

The amendment implements Texas Government Code §524.0151, §524.0005, and Texas Human Resources Code §42.042.

§ 746.1107. Minimum Caregiver Age and Education Requirements. [~~What additional minimum qualifications must each of my caregivers meet?~~]

Except as otherwise provided in this division, each caregiver who works directly with children [~~must comply with minimum standards for employees and~~] must:

(1) be [Be] at least 18 years of age; and

(2) have a high school diploma, high school equivalent, or high school certificate of coursework completion as defined in Texas Education Code §28.025(d). [~~Have a:~~]

~~[(A) High school diploma;]~~

~~[(B) High school equivalent; or]~~

~~[(C) High school certificate of coursework completion as defined in Texas Education Code, §28.025(d).]~~

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on July 27, 2026.

TRD-202603187

Karen Ray

Chief Counsel

Health and Human Services Commission

Earliest possible date of adoption: September 13, 2026

For further information, please call: (512) 438-3269

DIVISION 4. PROFESSIONAL DEVELOPMENT

26 TAC §§746.1309, 746.1313, 746.1317, 746.1329

STATUTORY AUTHORITY

The amendment and new rules are authorized by Texas Government Code §524.0151, which provides that the executive commissioner of HHSC shall adopt rules for the operation and provision of services by the health and human services agencies, Texas Government Code §524.0005, which provides the executive commissioner of HHSC with broad rule-making authority, and Texas Human Resources Code §42.042, which requires the executive commissioner to adopt minimum standards related to the health, safety, and welfare of children attending child care centers.

The amendment and new sections implement Texas Government Code §524.0151, §524.0005, and Texas Human Resources Code §42.042.

§746.1309. Director, Caregiver, and Other Employee Required Annual Training.

(a) Director annual training must be relevant to the ages of the children cared for by the child care center. Caregiver annual training must be relevant to the ages of the children cared for by the caregiver.

(b) At least six hours of the annual training for caregivers must be in one or more of the following topics:

(1) child growth and development;

(2) guidance and discipline;

(3) age-appropriate curriculum; and

(4) caregiver-child interaction.

(c) At least two hours of the annual training for any employee at the child care center must be about preventing, recognizing, and reporting child abuse, neglect, or exploitation, in accordance with the Texas Human Resources Code §42.04261(b), including:

(1) factors indicating a child is at risk for abuse, neglect, or exploitation;

(2) warning signs indicating a child may be a victim of abuse, neglect, or exploitation;

(3) the procedures that mandatory reporters must use to report child abuse, neglect, or exploitation; and

(4) a list of community organizations that have training programs on preventing, recognizing, and reporting child abuse, neglect or exploitation that are available to employees, children, and parents.

(d) If the child care center provides care for children younger than 24 months of age, the director and caregivers responsible for those children's care must complete one hour of annual training, in accordance with the Texas Human Resources Code §42.0421(b), that includes the following topics:

(1) recognizing and preventing shaken baby syndrome;

(2) preventing sudden infant death syndrome; and

(3) understanding early childhood brain development.

(e) Directors and caregivers must complete training in the following topics annually:

(1) emergency preparedness;

(2) preventing and controlling the spread of communicable diseases and immunization requirements;

(3) administering medication;

(4) preventing and responding to emergencies caused by allergic reactions to food or other allergens;

(5) understanding physical premises safety, including identifying and preventing injuries from common hazards; and

(6) handling, storing, and disposing of hazardous materials and biological contaminants.

(f) The remaining annual training hours for directors and caregivers must be in one or more of the following topics:

(1) caring for children with special needs;

(2) promoting child health;

(3) safety practices;

(4) risk management;

(5) recognizing and caring for children who are ill;

(6) professional development topics;

(7) planning developmentally appropriate learning activities;

(8) observation and assessment;

(9) attachment and responsive caregiving; and

(10) minimum standards and how they apply to the caregiver.

(g) Instructor-led training must make up at least six hours of the director's and five hours of a caregiver's required annual training.

(h) Training hours related to orientation, pre-service training, pediatric first aid and pediatric cardiopulmonary resuscitation do not count toward the director and caregiver annual training hours required in this section.

(i) A director may not earn training hours by presenting training to others.

§746.1313. Annual Training Timeframes.

(a) Each caregiver and director must complete annual training hours within 12 months of the date of employment and during each subsequent 12-month period. Training hours must be counted in the year in which they are completed and may not be carried over into the next training year.

(b) A child care center may designate a single start date for the annual training year for all employees that corresponds with the school or calendar year rather than each employee's date of employment. For staff hired after the designated date, the child care center must:

(1) prorate the staff member's required training hours from the date of employment to the end of the designated annual training year; and

(2) require the staff member to begin a new 12-month period aligned with the designated school or calendar year.

(c) A child care center may use either subsection (a) or (b) of this section to determine annual training requirements. The child care center must apply the selected option consistently to all staff.

§746.1317. Approved Training Sources. [~~Must the training for my caregivers and the director meet certain criteria?~~]

[(a)] All training [~~Training~~] may include clock hours or Continuing Education Units (CEUs) [~~CEUs~~] provided by the following in accordance with Texas Human Resources Code §42.0421(f):

(1) a [A] training provider registered with the Texas Early Childhood Professional Development System Training Registry, maintained by the Texas Head Start State Collaboration Office;

(2) an [An] instructor who teaches early childhood development or another relevant course at a secondary school or institution of higher education accredited by a recognized accrediting agency;

(3) an [An] employee of a state agency with relevant expertise;

(4) a [A] physician, psychologist, licensed professional counselor, social worker, or registered nurse;

(5) a [A] person who holds a generally recognized credential or possesses documented knowledge relevant to the training the person will provide;

(6) the designated [A] director at the child care [~~your child-care~~] center if:

(A) the [~~The~~] director has demonstrated core knowledge in child development and caregiving;

(B) HHSC has not placed the child care [~~your~~] center on probation or suspended, revoked, or refused to renew the [~~your~~] permit in the two years preceding the training;

(C) HHSC has not assessed an administrative penalty against the child care [~~your~~] center during the previous two years while the [~~your~~] director was serving in that role; and

(D) the [~~The~~] only caregivers receiving the training are employees at the director's [~~of your~~] center; or[.]

(7) a [A] person who has at least two years of experience working in child development, a child development program, early childhood education, a childhood education program, or a Head Start or Early Head Start program and:

(A) has [~~Has~~] a current Child Development Associate [~~(CDA)~~] credential; or

(B) holds [~~Holds~~] at least an associate degree in child development, early childhood education, or a related field.

[(b) Training may include clock hours or CEUs obtained through self-instructional materials, if the materials were developed by a person who meets one of the qualifications in subsection (a) of this section.]

[(c) Instructor-led and self-instructional training, but not self-study training, must include:]

[(1) Specifically stated learning objectives;]

[(2) A curriculum, which includes experiential or applied activities;]

[(3) An evaluation/assessment tool to determine whether the person has obtained the information necessary to meet the stated objectives; and]

[(4) A certificate of successful completion from the training source.]

§746.1329. Required Training Documentation.

(a) A child care center must keep records showing that each employee completed annual training. These records must be maintained in the employee's personnel file.

(b) All certificates or letters documenting completion of training must include:

(1) participant's name;

(2) date of the training;

(3) title or subject of the training;

(4) the trainer's name, or the source of the training for self-instructional training;

(5) how the trainer qualifies as a training provider, in accordance with Texas Human Resources Code §42.0421(f); and

(6) length of the training specified in hours, CEUs, or college credit hours, as appropriate.

(c) Documentation of pediatric first aid and pediatric cardiopulmonary resuscitation training must also include the date the certification expires or the renewal due date. The training organization determines the expiration or renewal date.

(d) For orientation and pre-service training, a child care center can maintain letters or certificates showing completion or the employee and person who provided the training can execute a signed and dated statement verifying completion.

(e) Documentation of any completed training on preventing, recognizing, and reporting child abuse, neglect, or exploitation, in accordance with Texas Human Resources Code §42.0426(a-1), must include the signature of the employee who completed the training.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on July 27, 2026.

TRD-202603188

Karen Ray

Chief Counsel

Health and Human Services Commission

Earliest possible date of adoption: September 13, 2026

For further information, please call: (512) 438-3269

SUBCHAPTER R. HEALTH PRACTICES

DIVISION 3. ILLNESS AND INJURY

26 TAC §746.3605

STATUTORY AUTHORITY

The new section implements Texas Government Code §524.0151, §524.0005, and Texas Human Resources Code §42.042.

§746.3605. Illness and Injury Response Requirements.

(a) If a child becomes ill or injured and needs urgent care from a health-care professional or hospital admission, a child care center's employee or caregiver must:

(1) call emergency medical services or take the child to the closest emergency room;

(2) provide first aid or cardiopulmonary resuscitation when needed; and

(3) notify the child's parent.

(b) If a child becomes ill or injured and does not need urgent care from a health-care professional or hospital admission, a child care center's employee or caregiver must:

(1) contact the child's parent to pick up the child who is ill or to notify the parent of the minor injury;

(2) provide first-aid treatment, when needed;

(3) care for the child who is ill and separate the child from other children, as needed; and

(4) follow proper health and sanitation practices to prevent the spread of illness.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on July 27, 2026.

TRD-202603190

Karen Ray

Chief Counsel

Health and Human Services Commission

Earliest possible date of adoption: September 13, 2026

For further information, please call: (512) 438-3269

SUBCHAPTER T. PHYSICAL FACILITIES

DIVISION 1. INDOOR SPACE REQUIREMENTS

26 TAC §746.4201

STATUTORY AUTHORITY

The new section implements Texas Government Code §524.0151, §524.0005, and Texas Human Resources Code §42.042.

§746.4201. Indoor Activity Space Requirements.

(a) A child care center must have at least 30 square feet of activity space for each child counted in the capacity of the child care center.

(b) Children less than 18 months old must be cared for separately from children over 18 months, unless there are fewer than 12 children in care.

(c) A child care center must not exceed room capacity unless children over 18 months old are taking part in a shared activity in the same space.

(d) Kindergarten and nursery schools, as well as schools with kindergarten or higher grades, licensed before September 1, 2003, are required to provide at least 20 square feet of space for each child. This reduced space requirement is allowed only while the permit issued before September 1, 2003, remains valid.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on July 27, 2026.

TRD-202603192

Karen Ray

Chief Counsel

Health and Human Services Commission

Earliest possible date of adoption: September 13, 2026

For further information, please call: (512) 438-3269

DIVISION 2. OUTDOOR SPACE REQUIREMENTS

26 TAC §746.4301

STATUTORY AUTHORITY

The amendment is authorized by Texas Government Code §524.0151, which provides that the executive commissioner of HHSC shall adopt rules for the operation and provision of services by the health and human services agencies, Texas Government Code §524.0005, which provides the executive commissioner of HHSC with broad rule-making authority, and Texas Human Resources Code §42.042, which requires the executive commissioner to adopt minimum standards related to the health, safety, and welfare of children attending child care centers.

The amendment implements Texas Government Code §524.0151, §524.0005, and Texas Human Resources Code §42.042.

§ 746.4301. Outdoor Space Requirements. [~~How many square feet of outdoor activity space must I have?~~]

(a) A child care center [~~You~~] must have 75 [80] square feet of [~~outdoor~~] activity space per [~~for each~~] child in [~~using~~] the outdoor activity area at one time unless a child care center is licensed to provide only alternate or get-well care.[~~, unless you are licensed to provide only:~~]

~~[(1) An alternate care program; or]~~

~~[(2) A get-well care program.]~~

(b) A child care center's [~~You must have enough square footage in the~~] outdoor activity space must be large enough to accommodate [~~to equal~~] at least 25 percent [~~25%~~] of the [~~your~~] licensed [~~indoor~~] capacity.

(c) A child care center [~~If you were~~] licensed before September 1, 2003, does not have to comply with subsection (b) of this section if the permit remains valid [~~you do not have to comply with the outdoor activity space requirements specified in subsection (b) of this section unless the permit issued prior to September 1, 2003, is no longer valid~~].

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on July 27, 2026.

TRD-202603194

Karen Ray

Chief Counsel

Health and Human Services Commission

Earliest possible date of adoption: September 13, 2026

For further information, please call: (512) 438-3269

DIVISION 3. TOILETS AND SINKS

26 TAC §746.4401, §746.4407

STATUTORY AUTHORITY

The new sections implement Texas Government Code §524.0151, §524.0005, and Texas Human Resources Code §42.042.

§746.4401. Hand-washing Sink Requirements.

(a) A child care center must have at least one hand-washing sink for every 17 children who are 18 months old and older, except:

(1) a child care center licensed before September 1, 2003, as a kindergarten and nursery school or school grades kindergarten and above, must have at least one hand-washing sink for every 20 children, if the permit issued before that date remains valid; and

(2) a drop-in child care center licensed before September 1, 2003, must have at least one hand-washing sink for every 25 children, if the permit issued before that date remains valid.

(b) A child care center must have one hand-washing sink in each diaper changing area. A child care center licensed before September 1, 2003, as a day care center, group day care home, or drop-in child care center, that is unable to provide a hand-washing sink in the diaper changing area is exempt from this requirement if the permit issued before that date remains valid.

(c) A hand-washing sink must be easy for a child 18 months old or older to reach. Each sink must have soap, running water, and either single-use disposable towels or a hot-air hand dryer that children can use.

§746.4407. Toilet Requirements.

(a) A child care center must have at least one flush toilet for every 17 children who are 18 months old and older, except for:

(1) a child care center licensed before September 1, 2003, as a kindergarten and nursery school or school grades kindergarten and above, must have at least one flush toilet for every 20 children; and

(2) a drop-in child care center licensed before September 1, 2003, must have at least one flush toilet for every 25 children.

(b) The exceptions in this section are allowed only if the permit issued before September 1, 2003 remains valid.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on July 27, 2026.

TRD-202603195

Karen Ray

Chief Counsel

Health and Human Services Commission

Earliest possible date of adoption: September 13, 2026

For further information, please call: (512) 438-3269