HBA-MPM H.B. 1689 76(R)BILL ANALYSIS Office of House Bill AnalysisH.B. 1689 By: Greenberg Higher Education 6/25/1999 Enrolled BACKGROUND AND PURPOSE According to a survey conducted by the National Council of State Educators, child-care providers reported that 31 percent of their staff left their positions within one year. One of the reasons listed for the high turnover rate is low wages. These low wages may deter those staff members who must pay back student loans from remaining in the field. H.B. 1689 creates the Early Childhood ChildCare Worker Student Loan Repayment Program, and authorizes the Texas Higher Education Coordinating Board to provide loan repayment assistance to qualified applicants. Furthermore, this bill sets forth eligibility criteria for applicants and the terms of the loan repayment assistance, and provides for funding for the program. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the Texas Higher Education Coordinating Board in SECTION 1 (Section 61.877, Education Code) of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Chapter 61, Education Code, by adding Subchapter T, as follows: SUBCHAPTER T. EARLY CHILDHOOD CHILD-CARE WORKER STUDENT LOAN REPAYMENT PROGRAM Sec. 61.871. DEFINITIONS. Defines "child care facility" with the meaning assigned by Section 42.002, Human Resources Code, which defines this term as a facility licensed, certified, or registered by the Department of Protective and Regulatory Services to provide assessment, care, training, education, custody, treatment, or supervision for a child who is not related by blood, marriage, or adoption to the owner or operator of the facility, for all or part of the 24-hour day, whether or not the facility is operated for profit or charges for the services it offers. Defines "early childhood child-care worker" as a person who works more than 30 hours a week in a child-care facility, whether as an employee, owner, or volunteer, and whose duties consist primarily of providing child care or education to children younger than four years old. Sec. 61.872. LOAN REPAYMENT ASSISTANCE AUTHORIZED. Authorizes the Texas Higher Education Coordinating Board (board) to provide, in accordance with this subchapter and by board rules, assistance in the repayment of eligible student loans for persons applying and qualifying for assistance. Sec. 61.873. ELIGIBILITY FOR ASSISTANCE. Sets forth criteria for a person to be eligible to receive loan repayment assistance. Sec. 61.874. ELIGIBLE LOANS. Authorizes a person to receive loan repayment assistance for the repayment of any student loan for education at any public or private institution of higher education through any lender. Provides that if the loan is not a state or federal guaranteed student loan, the note or other writing governing the terms of the loan must require the loan proceeds to be used for expenses incurred by a person attending the institution. Prohibits the board from providing repayment assistance for a loan that is in default at the time of the application. Sec. 61.875. AGREEMENT. (a) Provides that in order to qualify for loan repayment assistance, a person must enter into a written agreement with the board specifying the conditions the person must satisfy to receive assistance. (b) Provides that the agreement must require the person to serve two years as an early childhood child-care worker in this state no later than the third anniversary of the date the person enters into the agreement. Additionally, the agreement must specify the number of additional years of service as an early child-care worker in this state for which the person may receive payment assistance and the period within which the person must complete the additional service. Specifies that only service as an early childhood childcare worker after the date the person enters into the agreement may be used to satisfy the service requirement. (c) Specifies that the agreement must provide that the repayment assistance the person receives prior to serving the first two full years as an early childhood child-care worker or any repayment assistance the person receives after the first two years of service but before completing each additional full year of service constitutes a loan until the person completes that two years or additional year of service, as applicable, and satisfies any other condition of the agreement. Provides that the agreement require the person to sign a promissory note acknowledging the conditional nature of the repayment assistance received and promising to repay the loan, plus applicable interest and reasonable collection costs if the person does not satisfy the applicable conditions. Requires the board to determine the terms of the promissory note, which, to the extent practicable, must be the same as those applicable to state or federally guaranteed student loans made at the same time. Requires that all amounts collected in repayment of a loan, including interest, but excluding collection costs paid by the board to another person to collect or assist in collecting the amount, be deposited to the credit of the trust fund established under Section 61.878. Sec. 61.876. AMOUNT OF REPAYMENT ASSISTANCE; LIMITATIONS. (a) Authorizes a person, when entering into an agreement, to receive loan repayment assistance in an amount not to exceed 15 percent of the total amount of the person's outstanding student loans, including scheduled interest payments that would be due if the loan is not prepaid, for each year that a qualified person serves as an early childhood child-care worker in this state. Prohibits the amount of repayment assistance paid for a year from exceeding the lesser of: _the actual amount of the loan payments the person receiving assistance is required to make for that year; or _an amount set by the board equal to the maximum amount of resident tuition and required fees paid by a person enrolled as a full-time student at a general academic teaching institution for the most recent academic year, excluding summer sessions. (b) Authorizes the board to enter into an agreement to provide loan repayment assistance only to the extent money in the trust fund established by Section 61.878 or money appropriated to the trust fund for future deposit to the trust fund will be sufficient to provide the assistance as it becomes payable. Requires the board to select persons to receive repayment assistance from the eligible applicants according to financial need or on basis the board considers reasonable if money in or appropriated to the trust fund will not be sufficient to provide assistance to each applicant. (c) Authorizes the board to determine how the loan repayment assistance is to be paid. Requires the board to include provisions governing the manner of repayment in the agreement. Authorizes the board to provide for the payment of a portion of the repayment assistance in one or more installments before the person completes a full year of service as an early childhood care worker and for the payment of the remainder of the repayment assistance for that year after the completion of the full year of service. Sec. 61.877. ADMINISTRATION; RULES. Requires the board to adopt rules necessary for the administration of this subchapter and to distribute the rules, as well as pertinent information in this subchapter, to each public or private institution of higher education in this state that offers a degree program in early childhood development or the equivalent. Sec. 61.878. FUNDING. Specifies that the loan repayment assistance program is funded from the child-care worker student loan assistance trust fund, which is established outside the treasury and administered by the comptroller of public accounts. Authorizes money in the trust fund to be spent without appropriation and only to fund the program. Requires interest and income from the assets of the trust fund to be credited and deposited to the trust fund. Authorizes the board to solicit and accept gifts, grants, and donations from any public or private source and requires the board to deposit this money to the credit of the trust fund. Authorizes the legislature to appropriate money to the trust fund. SECTION 2. Makes this Act applicable beginning with the 1999 fall semester. SECTION 3.Emergency clause. Effective date: upon passage.