Austin, Texas
                    FISCAL NOTE, 76th Regular Session
                               May 21, 1999
          TO:  Honorable Paul Sadler, Chair, House Committee on Public
        FROM:  John Keel, Director, Legislative Budget Board
       IN RE:  SB955  by Bivins (relating to pre-reading instruction and
               the provision of scholarships, bonuses, wage
               supplementation, and student loan repayment assistance
               for certain professional child-care workers), Committee
               Report 2nd House, Substituted
*  Estimated Two-year Net Impact to General Revenue Related Funds for    *
*  SB955, Committee Report 2nd House, Substituted:  negative impact      *
*  of $(2,000,000) through the biennium ending August 31, 2001.          *
*                                                                        *
*  House Bill 1, the General Appropriations Act for 2000-2001, as        *
*  currently marked-up by the Conference Committee, contains a general   *
*  revenue appropriation of $2 million to implement the provisions of    *
*  the Ready to Read element of Senate Bill 955.                         *
*                                                                        *
*  The bill would make no appropriation but could this legislation       *
*  could provide the legal basis for an appropriation of funds to        *
*  implement the provisions of the bill.                                 *
General Revenue-Related Funds, Five-Year Impact:
          *  Fiscal Year  Probable Net Positive/(Negative)   *
          *               Impact to General Revenue Related  *
          *                             Funds                *
          *       2000                         $(1,000,000)  *
          *       2001                          (1,000,000)  *
          *       2002                          (1,544,355)  *
          *       2003                          (1,636,965)  *
          *       2004                          (1,674,730)  *
All Funds, Five-Year Impact:
*Fiscal        Probable             Probable        Change in Number of  *
* Year    Savings/(Cost) from  Savings/(Cost) from State Employees from  *
*        General Revenue Fund Workforce Commission        FY 1999        *
*                0001           Federal Account -                        *
*                                    Federal                             *
*                                     5026                               *
*  2000           $(1,000,000)         $(1,255,500)                  0.5 *
*  2001            (1,000,000)          (1,420,875)                  1.0 *
*  2002            (1,544,355)          (1,000,000)                  1.0 *
*  2003            (1,636,965)          (1,000,000)                  1.0 *
*  2004            (1,674,730)          (1,000,000)                  1.0 *
Technology Impact
The Coordinating Board would need to design and develop an automated
system for tracking loan repayment and for tracking the completion of
service credit.
Fiscal Analysis
The bill would create a grant program to support pre-reading instruction.
Grants would range between $50,000 and $150,000, and would be awarded
through a competitive process.  The Commissioner of Education would be
instructed to distribute at least 95 percent of appropriated funds,
establish rules for administration of the grant program, certify the
percentage of low-income enrollment in pre-reading programs, determine
necessary matching funds from local sources, and evaluate the
effectiveness of grants.

The bill would require an educational component for Head Start programs.

The bill would require the Texas Workforce Commission to administer a
professional child care training scholarship program for individuals who
are seeking certain child development and child-care professional
credentials as well as wage supplementation for scholarship recipients
who provide care for children under six years of age. The scholarship
program and wage supplementation could be supported by federal funds or
other funding sources available to the commission.  The total funding
could not exceed $2 million per state biennium.

The bill would allow a person who holds a degree in early childhood
development or the equivalent to receive assistance to repay any loan
that was used for education costs while attending an institution of
higher education.  The person must agree to serve two years as an early
child-care worker at a child-care facility.  The person could receive
loan repayment assistance for additional years of service.  For each
year the person receives the loan repayment assistance, the assistance
could not exceed 15 percent of the person's outstanding student loans.
The Texas Higher Education Coordinating Board could enter loan repayment
agreements only to the extent that funds are available for that purpose.
The Ready to Read grant program would require $1 million in general
revenue each year for the 2000-2001 biennium and each year thereafter.

The Texas Workforce Commission estimates that it would cost $1,000,000
per year of Child Care and Development Fund (CCDF) funding or other
federal funds which allow expenditures for scholarships and wage
supplementation for child care workers.  It is assumed that CCDF
expenditures would be limited to CCDF funds allocated by the federal
government to the state for quality initiatives in child care.

This analysis presumes that there will be a rider in the appropriation
bill that funds the loan repayment program for the forthcoming biennium
from sources other than general revenue and that in the absence of riders
in future appropriation bills, necessary program funding would come from
general revenue.

It is assumed that 100 early child-care workers would participate in the
first year and an additional 100 participants each year thereafter.  The
repayment assistance limit of 15 percent of a participant's outstanding
students loans would reduce the amount of annual assistance a participant
would receive in future years of the program.  Assumptions were made
about the number of participants who would not complete the service

The Coordinating Board indicates that administration of the loan
repayment program would cost $35,000 each year in fiscal years 2000 and
2001.  This estimate includes start-up costs for an automated system and
the cost associated with one-half of an FTE in 2000 and 1 FTE
thereafter.  The Coordinating Board indicates that administrative costs
will drop to 5 percent of total repayment assistance for subsequent
Local Government Impact
No significant fiscal implication to units of local government is
anticipated.  Districts that choose to apply for grants may incur
administrative and program costs. Districts would be eligible to apply
for grants if they provide preschool instruction, have a program with at
least 75 percent low-income enrollment, and are able to raise local
matching funds.  The amount of matching funds would be contingent on
local economic capacity, and would be determined by the Commissioner of
Source Agencies:   701   Texas Education Agency - Administration
LBB Staff:         JK, CT, RN, CW, PF