NOTE:  As provided in LFC policy, this report is intended only for use by the standing finance committees of the legislature.  The Legislative Finance Committee does not assume responsibility for the accuracy of the information in this report when used for other purposes.

 

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F I S C A L   I M P A C T   R E P O R T

 

 

 

SPONSOR:

Garcia, M.P.

 

DATE TYPED:

02/19/03

 

HB

367

 

SHORT TITLE:

Payment of Student Loans for Some Teachers

 

SB

 

 

 

ANALYST:

Williams

 

APPROPRIATION

 

Appropriation Contained

Estimated Additional Impact

Recurring

or Non-Rec

Fund

Affected

FY03

FY04

FY03

FY04

 

 

 

$642.0

 

 

Recurring

General Fund

 

 

 

 

 

 

(Parenthesis ( ) Indicate Expenditure Decreases)

 

REVENUE

 

Estimated Revenue

Subsequent

Years Impact

Recurring

or Non-Rec

Fund

Affected

FY03

FY04

 

 

 

 

$642.0

 

Recurring

Teacher Loan

 Payment Fund

 

 

 

 

 

(Parenthesis ( ) Indicate Revenue Decreases)

 

Relates to:

HB 177:  School Differential Pay Act

HB 366:  Income Tax Credit for Certain Teachers

HJR 5:    Loans for Teacher Preparation Programs, CA

HJR 6:    Loan Repayment for Teacher Education, CA

 

SOURCES OF INFORMATION

 

LFC Files

Commission on Higher Education (CHE)

State Department of Education (SDE)

 

 

 

 

 

SUMMARY

 

     Synopsis of Bill

 

House Bill 367 appropriates $642.0 from the General Fund to a new, non-reverting fund, the teacher loan payment fund, for the purpose of providing payments for student loans of up to $6,000 for a qualifying teacher. Eligibility criteria for teachers would include receipt of a Master's degree and teaching for a minimum of four consecutive years at a school in which at least ninety percent of the students receive free or reduced-fee lunches. The CHE would administer the program.

 

     Significant Issues

 

CHE notes the extent of teacher shortages in the state.

 

If maximum loan payments of $6,000 were made, this appropriation would assist 107 qualifying teachers. SDE reports a total of 107 National Board Certified Teachers across the state.

 

Two SDE lists of qualifying schools for HB 177 and HB 367 differ significantly in the elementary schools component of qualifying schools. HB 367 also includes junior high and high schools as eligible schools. The number of qualifying schools is not clear from SDE data.

 

CHE notes current statute authorizes establishment and administration of the Teacher Loan-for- Service program to address the state's teacher shortage. As a condition of obtaining a loan, a student must declare their intent to serve as a full-time, public school teacher in a designated teacher shortage area of the state. Shortage areas may be geographic or subject specific. Generally, the service obligation period is equal to the period of the loan; however, three or more years of loans would require three years of service.

 

FISCAL IMPLICATIONS

 

The appropriation of $642.0 contained in this bill is a recurring expense to the general fund. Any unexpended or unencumbered balance remaining at the end of the fiscal year would not revert.

 

This bill creates a new fund and provides for continuing appropriations. The LFC objects to in- cluding continuing appropriation language in the statutory provisions for newly created funds. Earmarking reduces the ability of the legislature to establish spending priorities.

 

TECHNICAL ISSUES

 

SDE notes the text of the bill does not address National Board Certification as a qualification and notes inconsistency with title, see page 1, line 18.

 

OTHER SUBSTANTIVE ISSUES

 

SDE notes this legislation is consistent with the agency's Strategic Plan.

 

SDE notes concerns regarding the use of state funds to make awards to private citizens for per- sonal expenses.

 

CHE notes the intent might be more appropriately addressed in a loan repayment program.

 

POSSIBLE QUESTIONS

 

1.                  What are the costs/benefits of the incentive proposed in this bill?

2.                  Is the incentive designed to achieve the sponsor’s intent?

 

AW/prr:yr