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,  
         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  
         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  
              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  
              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  
              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  
         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  
         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