According to the Legislative Budget Board (LBB), HB 5394 is not expected to have a significant fiscal impact on the state. The bill's primary function is regulatory in nature—it prohibits single source continuum contractors (SSCCs) and child-placing agencies from imposing unauthorized requirements or policies on relative and designated caregivers unless such actions are expressly permitted by law or rule.

 The Department of Family and Protective Services (DFPS), which oversees contracts and policy for these agencies, is expected to absorb any administrative costs associated with enforcing or monitoring this statutory restriction within its existing resources. This suggests that the bill does not mandate any new programs, significant staffing increases, or major operational shifts that would require additional appropriations.

Furthermore, there is no fiscal impact anticipated at the local government level. Since the bill targets contractors and agencies operating under the state’s foster care framework, and does not impose mandates on counties or municipalities, local entities will not incur additional costs or responsibilities due to its implementation.

Overall, the fiscal assessment reinforces that the bill is primarily a clarification and limitation on administrative authority rather than a driver of new state expenditures. Its implementation is expected to be straightforward and cost-neutral within current agency capacities.

Texas Policy Research recommends that lawmakers vote YES on HB 5394 based on its alignment with core liberty principles, fiscal neutrality, and its role in limiting—rather than expanding—government and regulatory reach. The bill prevents single source continuum contractors (SSCCs) and child-placing agencies from imposing any requirements or policies on relative and designated caregivers unless those are explicitly authorized by state law or official rules from the Department of Family and Protective Services (DFPS) or the Health and Human Services Commission (HHSC).

This legislative approach does not grow the size or scope of government. Rather, it imposes a meaningful check on the informal regulatory power that private contractors have been exercising under broad state contracts. By reinforcing the primacy of legally adopted standards over ad hoc agency or contractor requirements, the bill ensures that oversight is rooted in accountable, rule-based governance. It also avoids creating new agencies, expanding state authority, or adding compliance costs to government or industry.

Importantly, HB 5394 does not increase the burden on taxpayers. The Legislative Budget Board has determined that there are no significant fiscal implications for the state or local governments, and any minor administrative adjustments can be handled within existing DFPS resources. Nor does it create a new regulatory burden on individuals or businesses—instead, it removes unauthorized layers of regulation that were complicating the ability of relatives and kinship caregivers to participate in the child welfare system.

In sum, this bill constrains unelected or contracted actors from setting their own rules, protects families from regulatory overreach, upholds individual liberty, and does so without adding costs or bureaucracy. It is a clear example of limited government in practice and a sound policy improvement for the foster care system. Texas Policy Research recommends that lawmakers vote YES on HB 5394.

• Individual Liberty: The bill protects the freedom of relatives and designated caregivers by ensuring they are not subjected to arbitrary or unofficial requirements from private agencies or contractors. These caregivers, often family members stepping in during a crisis, retain greater control over their lives and homes without being burdened by rules that haven’t gone through legal or public processes.
• Personal Responsibility: By removing unnecessary regulatory barriers, the bill encourages and respects the personal responsibility of families who voluntarily take on caregiving roles. It acknowledges their capacity to care for children without interference from third parties who may not fully understand their circumstances.
• Free Enterprise: The bill promotes a fair and limited role for businesses (like child-placing agencies) by requiring them to operate within the bounds of law—not through self-created rules. This levels the playing field and avoids allowing state contractors to act with unchecked power, which can distort the foster care marketplace.
• Private Property Rights: Relative caregivers often care for children in their own homes. By stopping agencies from imposing unauthorized rules (which can affect home environments, routines, or housing conditions), the bill upholds their property rights and autonomy over their household decisions.
• Limited Government: Rather than expanding state authority, this bill reins in delegated power that had been exercised without clear accountability. It reinforces that only laws and properly adopted rules—not private contracts—can govern people’s lives. This helps ensure that government and its contractors remain within their defined roles.

• SB 224 (Same As)