(a) A contract with a single source continuum contractor to provide community-based care services in a catchment area must include provisions that:
(1) establish a timeline for the implementation of community-based care in the catchment area, including a timeline for implementing:
(A) case management services for children, families, and relative and kinship caregivers receiving services in the catchment area; and
(B) family reunification support services to be provided after a child receiving services from the contractor is returned to the child’s family;
(2) establish conditions for the single source continuum contractor’s access to relevant department data and require the participation of the contractor in the data access and standards governance council created under § 264.159;
(3) require the single source continuum contractor to create a single process for the training and use of alternative caregivers for all child-placing agencies in the catchment area to facilitate reciprocity of licenses for alternative caregivers between agencies, including respite and overnight care providers, as those terms are defined by department rule;
(4) require the single source continuum contractor to maintain a diverse network of service providers that offer a range of foster capacity options and that can accommodate children from diverse cultural backgrounds;
(5) allow the department to conduct a performance review of the contractor beginning 18 months after the contractor has begun providing case management and family reunification support services to all children and families in the catchment area and determine if the contractor has achieved any performance outcomes specified in the contract;
(6) following the review under Subdivision (5), allow the department to:
(A) impose financial penalties on the contractor for failing to meet any specified performance outcomes; or
(B) award financial incentives to the contractor for exceeding any specified performance outcomes;
(7) require the contractor to give preference for employment to employees of the department:
(A) whose position at the department is impacted by the implementation of community-based care; and
(B) who are considered by the department to be employees in good standing;
(8) require the contractor to provide preliminary and ongoing community engagement plans to ensure communication and collaboration with local stakeholders in the catchment area, including any of the following:
(A) community faith-based entities;
(B) the judiciary;
(C) court-appointed special advocates;
(D) child advocacy centers;
(E) service providers;
(F) foster families;
(G) biological parents;
(H) foster youth and former foster youth;
(I) relative or kinship caregivers;
(J) child welfare boards, if applicable;
(K) attorneys ad litem;
(L) attorneys that represent parents involved in suits filed by the department; and
(M) any other stakeholders, as determined by the contractor; and
(9) require that the contractor comply with any applicable court order issued by a court of competent jurisdiction in the case of a child for whom the contractor has assumed case management responsibilities or an order imposing a requirement on the department that relates to functions assumed by the contractor.
(b) A contract with a single source continuum contractor under this subchapter must be consistent with the requirements of applicable law and may only include terms authorized by the laws or rules of this state.

(c) In regions identified for implementing community-based care and in regions where community-based care has been implemented, a contractor may apply to the department for a waiver from any statutory and regulatory requirement to increase innovation and flexibility for achieving contractual performance outcomes.