CHILDREN AT RISK, a nonprofit and nonpartisan research organization, undertook a year-long effort to study the subsidized child care system in Texas. This included an in-depth analysis of the system's local and state partners, as well as the promotion of the study's findings and key recommendations. This report is one of the products of this effort. The purpose of this report is twofold. One purpose is to educate parents, policy makers, and the public about the subsidized child care system in Texas. This report describes the system and challenges confronted by child care providers and those parents who need quality child care. The second purpose is to offer policy recommendations to improve the effectiveness and efficiency of the subsidized child care system on behalf of parents, taxpayers, and--most importantly--children. The recommendations emphasize coordination and cooperation among state agencies so that they can avoid duplication and maximize state investments while they serve the large population of children in the subsidized child care system. (author abstract)