| TO: | Honorable Troy Fraser, Chair, Senate Committee on Business & Commerce |
| FROM: | John S. O'Brien, Director, Legislative Budget Board |
| IN RE: | HB4065 by Otto (Relating to the establishment by the Texas Workforce Commission of a pilot program to provide grants for the construction of certain facilities for job training and employment services.), As Engrossed |
| Fiscal Year | Probable Net Positive/(Negative) Impact to General Revenue Related Funds |
|---|---|
| 2008 | ($2,985,150) |
| 2009 | ($14,850) |
| 2010 | $0 |
| 2011 | $0 |
| 2012 | $0 |
| Fiscal Year | Probable (Cost) from GENERAL REVENUE FUND 1 |
|---|---|
| 2008 | ($2,985,150) |
| 2009 | ($14,850) |
| 2010 | $0 |
| 2011 | $0 |
| 2012 | $0 |
The bill would amend the Labor Code to require the Texas Workforce Commission (TWC) to establish a pilot program to provide grants for the construction of certain facilities for job training and employment services.
The bill would require TWC to establish a pilot program under which the TWC would contract with the Texas Association of Goodwills to administer grants to reimburse qualified workforce training centers identified by the Texas Association of Goodwills for costs associated with the construction of new facilities that provide job training or employment services. The bill would require that the contract entered into must provide that TWC receive an administrative overhead fee of one percent of the amount of each grant awarded under the program; and each grant awarded under the program is funded only on the completion of the facility for which the grant is awarded; and notification from the TWC that the contract terms relating to the award of the grant have been satisfied. Under the provisions of the bill, the total amount of grants awarded under this section may not exceed $3 million. The bill would allow TWC to adopt rules necessary for the administration of this legislation.
The bill would require that no later than January 1, 2009, the TWC would be required to report to the legislature regarding TWC's assessment of the effectiveness of the pilot program in creating and fostering economic development; and to make a recommendation regarding the continuation of the program.
The bill would take effect immediately upon receiving a two-thirds majority vote in each house. If the bill does not receive a two-thirds vote in each house, the bill would take effect September 1, 2007.
Based on information provided by TWC, this analysis assumes costs totaling $3,000,000 for fiscal years 2008-09, which would include $2,970,300 for 4 grants and $29,700 for TWC administrative overhead costs. TWC estimates administrative costs would be realized to monitor the 4 grants for 192 hours of work (48 hours per grant) which would include risk assessment, desk reviews, test data, completing reports, and resolution and final reporting. TWC also estimates that adminstrative costs would include workload expenses related to managing 4 necessary contracts for 200 hours of work (50 hours per contract) which would be for contract development and processing, contract management, and contract closeout.
Also based on information provided by TWC, this analysis assumes program staff salary costs would be $9,500 per year for FY 2008 and FY 2009 and that costs for other operating expenses would be $762 per year for FY 2008 and FY 2009; indirect and administrative support costs would be $1,900 per year for FY 2008 and FY 2009; and employee benefits would be $2,688 per year for FY 2008 and FY 2009.
| Source Agencies: | 320 Texas Workforce Commission
|
| LBB Staff: | JOB, JRO, MW, NV
|