MINUTES SENATE COMMITTEE ON FINANCE Tuesday, October 19, 1999 10:00 a.m. Capitol Extension, Room E1.036 ***** Pursuant to a notice posted in accordance with Senate Rule 11.18, a public hearing of the Senate Committee on Finance was held on Tuesday, October 19, 1999, in the Capitol Extension, Room E1.036, at Austin, Texas. ***** MEMBERS PRESENT: MEMBERS ABSENT: Senator Bill Ratliff Senator Mario Gallegos, Jr. Senator Carlos Truan Senator Royce West Senator Gonzalo Barrientos Senator John Carona Senator Robert Duncan Senator Troy Fraser Senator Jon Lindsay Senator Mike Moncrief Senator Steve Ogden ***** Senator Ratliff called the meeting to order at 10:00 a.m. There being a quorum present, the following business was transacted: The chair laid out the proposed interim committee rules and recognized Senator Truan for a motion. Senator Truan moved to adopt the interim committee rules as written; without objection, it was so ordered. The chair laid out the interim committee charges and appointed subcommittees to address each of the charges. Subcommittee assignments were made as follows: Subcommittee on Charge #1: Examine the policies and practices used to invest major state funds including cash balances, and evaluate state investment goals and the funds' performance in reaching those goals. Subcommittee members: Senator Robert Duncan, Chairman Senator Carlos Truan Senator Gonzalo Barrientos Senator Troy Fraser Senator Steve Ogden Subcommittee on Charge #2: Review employee benefit issues facing the Employees Retirement System and Teacher Retirement System. Subcommittee members: Senator Steve Ogden, Chairman Senator Gonzalo Barrientos Senator John Carona Senator Mario Gallegos Senator Jon Lindsay Subcommittee on Charge #3: Review the expenditure by agencies and institutions that received appropriations from tobacco settlement proceeds to ensure the efficient and effective use of those funds, and identify priorities for the use of future tobacco settlement proceeds. Subcommittee members: Senator Royce West, Chairman Senator Mike Moncrief Senator Troy Fraser Senator Steve Ogden Senator Robert Duncan Subcommittee on Charge #4: Evaluate the financial viability and educational effectiveness of graduate medical education in light of changes in Medicaid, managed care, and other cost factors, including the impact of uncompensated care. Subcommittee members: Senator Mike Moncrief, Chairman Senator Carlos Truan Senator John Carona Senator Jon Lindsay Senator Royce West Charge #5: Consult and coordinate with the Committee on State Affairs in their charge related to the study of the effects of federal devolution on state agencies. Member: Senator Mario Gallegos, Liaison Charge #6: Monitor the implementation of SB 1547, enacted during the 76th Legislature, Regular Session relating to motor fuel tax collection improvements, especially the impact of the bill on state motor fuel tax revenue. Member: Senator Jon Lindsay, Liaison The chair recognized Senator Ogden for an introduction. Senator Ogden introduced Mr. Howard Graves, Chancellor of Texas A&M University System. The chair recognized Mr. Graves for remarks. Mr. Graves said that he looked forward to bringing useful information to the committee. The chair asked subcommittee chairmen to work with assigned staff on drafting a committee work plan. He asked that the work plan be prepared by November 15, 1999. The Chair also told members to be prepared to submit their subcommittee reports to the full committee no later than July 1, 2000 in order to allow the full committee to meet the Lieutenant Governor's reporting deadline. The chair recognized the following invited witnesses to provide background information on the interim committee charges: Charge #4 Dr. John D. Stobo, President of The University of Texas Medical Branch at Galveston, provided an overview of some of the issues facing graduate medical education. He specifically spoke about the impact indigent health care has on graduate medical education. Charge #1 Roger Ferris, representing the State Auditor's Office, provided a summary of the state's major investment practices. Charge #2 Sheila Beckett, representing the Employees Retirement System, provided an overview of ERS retirement and insurance benefits. She discussed some of the challenges facing the agency, and spoke specifically about the challenge of bridging the gap between expenditures and revenues. Charles Dunlap, representing the Teacher Retirement System, provided an overview of the retirement system and spoke specifically about some major challenges facing TRS-Care, which provides health coverage for retired public school employees. Charge #3 John O'Brien, representing the Legislative Budget Board, provided an update on tobacco settlement proceeds. Charge #6 Karey Barton, representing the Office of the Comptroller, provided an overview of the implementation of SB 1547, which provides for improvements in the collection of motor fuel taxes. Senator Ratliff asked Mr. Barton to keep Senator Lindsay apprized of the status of implementing this legislation. The chair told members that Patricia Hicks and Amber Martin would be available to assist with subcommittee hearings. He asked the chairmen to inform him of any subcommittee activities as he would be interested in participating in some of the discussions. Senator Moncrief suggested that all subcommittee chairmen coordinate their meeting schedules in order to accommodate those members who are assigned to more than one subcommittee. There being no further business, at 12:30 p.m. Senator Moncrief moved that the Committee stand recessed subject to the call of the chair. Without objection, it was so ordered. ______________________ Senator Bill Ratliff, Chair ______________________ Patricia Hicks, Clerk