Merit Institute Merit

The Texas Merit-Based Credentialing Act (TX-ACSA)

Texas state companion to ACSA. Extends Texas Workforce Commission industry-certification infrastructure, HB 5580 universal licensure recognition, and Tex. Tax Code Ch. 171 franchise-tax credits into a Texas Recognized Merit Credentials regime.

THE TEXAS MERIT-BASED CREDENTIALING ACT (TX-ACSA)

A Texas Bill to Route Texas Workers Into Licensure and State Employment Through Measured Competency

Vehicle: State passage. Texas Legislature, regular session. Primary referral to the House Higher Education Committee and Senate Education K-16 Committee; tax provisions additionally referred to House Ways & Means and Senate Finance; occupational-licensure provisions to House Licensing & Administrative Procedures and Senate Business & Commerce.

Relationship to federal ACSA: This Act operates as the Texas companion to the federal Alternative Credentialing & Skills Act. Where federal ACSA Title IV conditions WIOA Title I funding on State action under 29 U.S.C. Sec. 3161 et seq., this Act supplies that State action. Where federal ACSA creates Federally Recognized Alternative Credentials (FRACs), this Act recognizes FRACs in Texas and extends the Texas Workforce Commission (“TWC”) industry-certification infrastructure to meet the federal standard.

SECTION 1. SHORT TITLE

This Act may be cited as the “Texas Merit-Based Credentialing Act (TX-ACSA).”

SECTION 2. LEGISLATIVE FINDINGS AND INTENT

The Legislature finds that Texas operates one of the most developed workforce-credential and occupational-recognition systems in the United States: the Texas Workforce Commission under Tex. Lab. Code Title 4; industry-aligned credentials identified by TWC and the Texas Higher Education Coordinating Board (“THECB”) under Tex. Educ. Code Ch. 61; military and military-spouse licensure recognition under Tex. Occ. Code Ch. 55; universal occupational-licensure reciprocity enacted by the 87th and 88th Legislatures (including Tex. Occ. Code Ch. 55 Subch. C and Ch. 58); the Texas franchise-tax regime under Tex. Tax Code Ch. 171; and the TEXAS Grant and TEOG student-aid programs under Tex. Educ. Code Ch. 56. This Act extends, rather than replaces, those authorities so that Texas workers and employers can rely on measurable proof of merit rather than degree requirements.

TITLE I — DEFINITIONS & COORDINATION WITH TEXAS LAW

Vehicle (Texas): Definitional. Interpretive only.

Sec. 101. Definitions

For purposes of this Act:

  1. (a) “Texas Recognized Merit Credential” or “TRMC” means a competency-based credential designated by the Commissioner of Higher Education under Sec. 201.
  2. (b) “Federal FRAC” means a Federally Recognized Alternative Credential designated under Section 202 of the federal Alternative Credentialing & Skills Act.
  3. (c) “TWC industry-aligned credential” means a credential recognized by the Texas Workforce Commission as industry-aligned for workforce-training purposes under Tex. Lab. Code Ch. 302.
  4. (d) “Covered State licensing authority” means an agency issuing an occupational license under Tex. Occ. Code, Tex. Educ. Code, Tex. Health & Safety Code, or comparable Texas chapter, and receiving Federal workforce funds directly or indirectly.

Sec. 102. Coordination with Existing Texas Law

  1. (a) Nothing in this Act shall be construed to duplicate, supersede, or conflict with:
  • Tex. Educ. Code Ch. 61 (Texas Higher Education Coordinating Board).
  • Tex. Educ. Code Ch. 56 (TEXAS Grant and TEOG student financial assistance).
  • Tex. Occ. Code Ch. 55 (military and military-spouse licensure recognition).
  • Tex. Occ. Code Ch. 58 (licensure by reciprocity and endorsement).
  • Tex. Lab. Code Title 4 (Texas Workforce Commission) and Ch. 302 (workforce training programs).
  • Tex. Tax Code Ch. 171 (franchise tax) and Subch. M (Sec. 171.651 et seq., research and development credit).
  • Tex. Gov’t Code Ch. 656 (state employment eligibility).
  1. (b) This Act extends, rather than replaces, the above authorities.

TITLE II — TEXAS RECOGNIZED MERIT CREDENTIALS

Vehicle (Texas): Regular order. Establishes a new Texas registry using existing THECB and TWC authorities; no new agency.

Sec. 201. Designation Authority

  1. (a) The Commissioner of Higher Education, in coordination with the Three-Member Texas Workforce Commission, shall maintain a Texas Recognized Merit Credentials registry (the “TRMC Registry”).
  2. (b) A credential shall be included on the TRMC Registry if it is (i) a TWC industry-aligned credential under Tex. Lab. Code Ch. 302, (ii) a Federal FRAC, or (iii) satisfies industry-validation standards adopted by THECB in coordination with TWC.
  3. (c) The Commissioner shall publish the TRMC Registry in machine-readable form not later than 12 months after the effective date of this Act and shall update the Registry at least annually.
  4. (d) The Commissioner shall establish a crosswalk between the TRMC Registry and the Federal FRAC list so that credentials earned in Texas retain their federal portability.

Sec. 202. Degree-Optional State Employment

  1. (a) Tex. Gov’t Code Ch. 656 and any State-agency hiring rule adopted thereunder shall be applied so that a TRMC-holder satisfies any position qualification stated in terms of a college degree, unless the degree is expressly required by Texas statute.
  2. (b) Each State agency shall submit annual reporting under Tex. Gov’t Code Ch. 2101 identifying, by position series, the count of hires satisfying Sec. 202(a).

TITLE III — FRANCHISE-TAX INCENTIVE FOR SKILLS-BASED HIRING

Vehicle (Texas): Regular order with tax provisions. Tax referral to House Ways & Means and Senate Finance. Structured as a franchise-tax credit because Texas imposes no personal or corporate income tax.

Sec. 301. Texas Skills-Based Hiring Franchise-Tax Credit

  1. (a) A new subchapter is added to Tex. Tax Code Ch. 171 providing a credit against the franchise tax imposed under Sec. 171.002 equal to a percentage of qualified first-year wages paid to a Texas-domiciled employee whose qualifying pathway is a TRMC or a Federal FRAC.
  2. (b) The credit shall be coordinated with the federal IRC Sec. 45AA credit under the federal ACSA; a Texas taxpayer claiming the federal credit may also claim this Texas credit, subject to a combined cap set biennially in the General Appropriations Act.
  3. (c) The Comptroller of Public Accounts shall adopt implementing rules under Tex. Gov’t Code Ch. 2001 (Administrative Procedure Act) consistent with existing Ch. 171 credit mechanics including the R&D credit under Tex. Tax Code Subch. M.

TITLE IV — OCCUPATIONAL LICENSURE PORTABILITY

Vehicle (Texas): Regular order. Extends the universal-recognition framework already established under Tex. Occ. Code Ch. 55 and Ch. 58.

Sec. 401. Licensure by Demonstrated Competency

  1. (a) A covered State licensing authority shall provide a demonstrated-competency pathway to licensure in any occupation for which no specific degree is required by Texas statute.
  2. (b) The demonstrated-competency pathway shall accept, without further requirement, a TRMC in the relevant domain, a Federal FRAC in the relevant domain, or a combination of examination and supervised experience satisfying the competency standards adopted by the authority.

Sec. 402. Interstate Recognition for Federal-Fund Recipients

  1. (a) A covered State licensing authority receiving Federal workforce funds (including pass-through WIOA Title I Adult, Dislocated Worker, and Youth program funds under 29 U.S.C. Sec. 3161 et seq.) shall recognize an out-of-state holder of a TRMC or a Federal FRAC as meeting the competency requirement for licensure, consistent with Section 401 of the federal Alternative Credentialing & Skills Act.
  2. (b) The Texas Department of Licensing and Regulation shall publish an annual compliance report listing, by authority, compliance status under this Section.

TITLE V — IMPLEMENTATION & GENERAL PROVISIONS

Vehicle (Texas): Structural.

Sec. 501. Severability

If any provision of this Act, or its application to any person or circumstance, is held invalid, the invalidity shall not affect the remainder of this Act.

Sec. 502. Effective Date

This Act shall take effect September 1 of the year following enactment, except that Sec. 301 (franchise-tax credit) shall apply to reports originally due on or after January 1 of that year, and Sec. 402 shall take effect concurrent with the effective date of Section 401 of the federal Alternative Credentialing & Skills Act.

Canonical federal version: ACSA. Other Texas bills: TX-MEWRA, TX-GT&P, TX-AI-Workforce.