| TO: | Honorable Patrick M. Rose, Chair, House Committee on Human Services |
| FROM: | John S. O'Brien, Director, Legislative Budget Board |
| IN RE: | SB206 by Nelson (Relating to certain providers of subsidized child care.), Committee Report 2nd House, Substituted |
| Fiscal Year | Probable Net Positive/(Negative) Impact to General Revenue Related Funds |
|---|---|
| 2008 | $234,653 |
| 2009 | $177,113 |
| 2010 | $177,113 |
| 2011 | $173,006 |
| 2012 | $173,006 |
| Fiscal Year | Probable Revenue Gain/(Loss) from GENERAL REVENUE FUND 1 |
Probable (Cost) from GENERAL REVENUE FUND - DPS 1 |
Probable (Cost) from WRKFORCE COMMISSION FED 5026 |
Change in Number of State Employees from FY 2007 |
|---|---|---|---|---|
| 2008 | $877,500 | ($642,847) | ($336,183) | 9.0 |
| 2009 | $585,000 | ($407,887) | ($2,488,785) | 9.0 |
| 2010 | $585,000 | ($407,887) | ($1,908,708) | 8.0 |
| 2011 | $585,000 | ($411,994) | ($1,908,708) | 8.0 |
| 2012 | $585,000 | ($411,994) | ($1,908,708) | 8.0 |
The bill would amend the Labor Code by adding Chapter 312, which would require that the Department of Family and Protective Services (DFPS) conduct both background and criminal history checks and checks of their Central Registry of Abuse and Neglect on providers of unregulated self-arranged child care. The bill would require that the Texas Workforce Commission (TWC) pay for the costs incurred in conducting the checks. The bill would also require that TWC be reimbursed by the local workforce development boards, who would withhold the cost of the background check from the first child-care payment made to the provider. Providers would be required to submit information for additional checks to be conducted every three years. The bill would require that, if feasible, TWC use an electronic validation system to verify that child-care services are being provided as indicated by the provider. The bill requires TWC to ensure that payments made on or after November 1, 2007 to providers of unregulated self-arranged child care be made only to a provider on whom a background and criminal history check has been conducted.
The bill would take effect immediately if it receives a vote of two-thirds of all members elected to each house; otherwise it takes effect September 1, 2007.
Calculations assume that by November 1 of fiscal year 2008, 10,000 background and criminal history checks would be conducted on individuals currently providing unregulated self-arranged child care and that an additional 1,250 new providers per month would require checks for the remainder of 2008 through 2012. Calculations also assume that, per year, 15 percent of providers would be precluded from providing child care after background checks were conducted.
Fees assessed by the Department of Public Safety (DPS) would result in a total increase in revenue of $877,500 in fiscal year 2008 and $585,000 in fiscal years 2009 through 2012 for fingerprint checks. However, a portion of the fee revenue (approproximately $0.5 million in fiscal year 2008 and $0.3 million in fiscal years 2009-2012) would be returned to the FBI for professional services as required by federal statute. DPS costs listed below are assumed to be offset by the revenue increase.
The Department of Public Safety indicates that two additional FTEs are needed to implement the bill, due to the increase in fingerprint submissions. FTE costs are estimated to be $54,366, including $15,380 in associated employee benefits for fiscal year 2008, $55,787 per year in fiscal years 2009 and 2010, including employee benefits of $15,782 per year, and $58,988 in fiscal years 2011 and 2012, including employee benefits of $16,688 per year. DPS indicates that other related expenses (professional services, equipment, and other operating expense) for the bill are estimated to be $573,101 in fiscal year 2008 and $336,318 in fiscal year 2009 and each year thereafter.
The Department of Family and Protective Services (DFPS) indicates that six additional FTEs are needed to implement the bill, due to the increase in new background checks and central registry checks conducted and resulting increase in matches to be processed. FTE costs are estimated to be $192,115 for fiscal years 2008 through 2012, including $54,349 per year in associated employee benefits. DFPS indicates that other related expenses (professional services, equipment, and other operating expense) for the bill are estimated to be $335,906 in fiscal year 2008 and $49,101 in fiscal year 2009 and each year thereafter. The total for fiscal year 2008 includes the use of temporary staff for background checks on the 10,000 existing providers to be completed by November 1.
As required by the bill, a Memorandum of Understanding would be adopted by the Texas Workforce Commission (TWC) and DFPS, and TWC would reimburse DFPS for the costs incurred by DFPS in conducting the checks, therefore no costs to DFPS are reflected in the tables above.
TWC would receive reimbursement for the cost of the checks from the local workforce development boards, who would withhold the cost from the first child-care payment to the provider. Based on their analysis, the Texas Workforce Commission would incur costs of $256,106 in fiscal year 2008 and $156,835 in fiscal year 2009 and each year thereafter for those individuals to whom no child-care payment is made because the results of the background check preclude them from providing care.
TWC would require one additional FTE (project manager) to plan and implement the electronic validation system in fiscal years 2008 and 2009. FTE costs are estimated to be $80,077, including $15,277 in associated employee benefits and $10,800 in indirect administrative support costs for each fiscal year. Other operating expenses related to the electronic validation system would total $2,331,950 in fiscal year 2009 (development and implementation)and $1,751,873 in fiscal years 2010 through 2012 (implementation). Calculations of the implementation costs by TWC assume an estimated 10,990 parents per day are using unregulated self-arranged child-care.
DFPS estimates a Technology Impact of $156,994 in fiscal year 2008 for system modifications and $5,506 each year thereafter for equipment. DPS estimates a Technology Impact of $5,462 in fiscal year 2008 for equipment and enterprise agreement fees and $298 each year thereafter for fees only. TWC estimates a Technology Impact of $80,077 in fiscal year 2008, $2,331,950 in fiscal year 2009, and $1751,873 each year thereafter for the electronic validation system. These amounts are included in the total for other expenses in the Methodology section above.
| Source Agencies: | 405 Department of Public Safety, 530 Family and Protective Services, Department of, 320 Texas Workforce Commission
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| LBB Staff: | JOB, CL, PP, VJC
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