MINUTES SENATE COMMITTEE ON FINANCE Monday, January 22, 2001 8:00 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 Monday, January 22, 2001, in the Capitol Extension, Room E1.036, at Austin, Texas. ***** MEMBERS PRESENT: MEMBERS ABSENT: Senator Rodney Ellis Senator Chris Harris Senator Troy Fraser Senator Mike Jackson Senator Eddie Lucio, Jr. Senator Steve Ogden Senator Carlos Truan Senator Judith Zaffirini ***** The chair called the meeting to order at 8:04 a.m. There being a quorum present, the following business was transacted: The following members arrived after the roll was called: Senator Gonzalo Barrientos Senator Robert Duncan Senator Tom Haywood Senator Jon Lindsay Senator John Whitmire The Chair recognized the following witnesses to provide testimony regarding Budget Board (LBB) recommendations: Texas Workers' Compensation Commission Kymberley Maddox, LBB Budget Analyst Joe "Burt" Terrill, Chairman Gave a brief overview and introduced the Executive Director. Answered questions from the Committee. Len Riley, Executive Director Gave presentation on the progress of the agency and the problems with their information services data system. Answered questions from the Committee. Research and Oversight Council on Workers Compensation Kymberley Maddox, LBB Budget Analyst Scott Mc Anally, Executive Director Gave presentation and overview of Council's proposed budget request. Answered questions from Committee. State Office of Risk Management Jess Calvert, LBB Budget Analyst Gerald M. Lavey, Chairman of the Board Gave an overview of what the State Office of Risk Management's duties included. Answered questions from the Committee. Ron Josselet, Executive Director Spoke to the exceptional items in proposed budget. Gave very detailed report on some of the problems and needs of the state office. Answered questions. Stuart B. Cargile, Fund Accounting Manager Answered questions from the Committee. Registering but not testifying: Jonathan D. Bow, General Counsel Texas Department of Insurance Daniel Estrada, LBB Budget Analyst Jose Montemayor, Commissioner Gave an overview of the department. He highlighted several items of their proposed budget. They are not requesting any exceptional items in proposed budget. Answered questions. Karen Phillips, CFO (Chief Financial Officer) Answered questions from the Committee. The Chair called Bob Brewer, Board Member of the Texas Department of Housing and Community Affairs out of order. This was to accommodate Mr. Brewer's flight schedule. The Texas Department of Housing and Community Affairs will be called later in the day for their testimony. Credit Union Department Daniel Estrada, LBB Budget Analyst Hal Thomas, Board Member Gave an overview of the Credit Union Department. Spoke about the high rate of employee turnover. Spoke to the exceptional item in proposed budget. Answered questions from the Committee. Harold E. Feeney, Commissioner Answered questions from the Committee Registering but not testifying: Anne Boatright, CEO/President Capitol Credit Union, Texas Credit Union League Ken Condry, President, Texas Credit Union League Richard Ensweiler, Texas Credit Union League (Letter attached) Kay Rankin, President, Ward County Teachers Credit Union, Texas Credit Union League Finance Commission Daniel Estrada, LBB Budget Analyst John Snider, Board Member Gave an overview of what has happened to the Commission. Answered questions from Committee. Jenny Makay, Sunset Review Answered questions from the Committee. At 11:50 a.m., Senator Ellis moved that the committee stand recessed until 30 minutes after adjournment of the Senate; without objection, it was so ordered. The Chair reconvened the Committee at 1:35 Department of Banking Daniel Estrada, LBB Budget Analyst Randall S. James, Banking Commissioner Gave an overview of the department. He spoke to the high employee turnover rate in the past three years and to the other needs expressed in their proposed budget. Answered questions from the Committee. Vernon Bryant, Commission Member & President /CEO Texas Bank, Weatherford, TX. Spoke to several of the issues being faced by the Commission. John Snider, Commission Member & President, State Savings Bank Spoke to the employee shortage and high turnover rate. Public Testimony: Rick Smith, President of Texas Bankers Association Spoke briefly to the Texas Bankers Associations concerns. Answered questions from Committee. Written testimony only: Karen M. Neely, General Counsel, Independent Bankers Association of Texas Office of Consumer Credit Commissioner Daniel Estrada, LBB Budget Analyst Leslie L. Pettijohn, Commissioner Overview of duties, proposed budget and exceptional item. Answered questions from Committee. Texas Savings and Loan Commission Daniel Estrada, LBB Budget Analyst Jim Pledger, Commissioner Gave an overview of the Commission and the continued need for employees. Spoke to the exceptional item in proposed budget. Supports salary increases Commissioner James, Banking Commissioner spoke of. The Chair recognized the following testimony out of order: Carole Keeton Rylander, Comptroller of Public Accounts. Comptroller Rylander spoke to the Performance Review of the Texas Department of Transportation (Paving the Way) that the Comptroller's office performed. Answered questions from the Committee. Clint Winters, Policy Analyst Answered questions from the Committee. Augustin Redwine, Research Analyst Answered questions from the Committee. Chair recognized Senator Brown who had come to be available during testimony from the Texas Aerospace Commission. Texas Aerospace Commission Rick Travis, LBB Budget Analyst Ed Robertson, LBB Budget Analyst Walter Cunningham, Chairman Answered questions from the Committee. Introduced the new Executive Director and spoke to the exceptional items in proposed budget. Talked about the potential development of a Spaceport in Texas. William F. Looke, Executive Director Gave an overview of the duties of the Commission and spoke to proposed budget. Answered questions from the Committee. Ray Covey, President, South Texas Spaceport Consortium Talked about what the Consortium has been doing and supports what the Texas Aerospace Commission is trying to do with regard to the Spaceport. The Chair recognized Senator Brown who talked about the potential for Texas if we get the Spaceport project. Registering but not testifying: Ford Welch, Gulf Coast Regional Spaceport (Written testimony attached) Fred Johnson, AA to Executive Director, Texas Aerospace Commission Tom Moser, Space Access, LLC Senator Zaffirini in the Chair. Texas Department of Housing and Community Affairs Ed Robertson, LBB Budget Analyst John Hawkins, Sunset Commission Nicole J. Merridth-Marrero, Project Manager, SAO (Office of the State Auditor) Valerie D. Hill, Audit Manager, SAO (Office of the State Auditor) Joey Longley, Director, Sunset Commission Answered specific questions asked by the Committee Daisy Stiner, Executive Director Spoke to some of the findings by the Office of the State Auditor. Explained some of the requests in their proposed budget. Answered questions asked by Committee. Ruth Cedillo, Deputy Executive Director Explained some of the findings by the SAO. Answered questions from Committee. Registering but not testifying: Peggy Colvin, Social Worker Senator Ellis resumes the Chair. Texas Lottery Commission Rick Travis, LBB Budget Analyst C. Tom Clowe, Jr., Chairman Brief overview of Commission and budget requests. Linda Cloud, Executive Director Overview of budget request and what requests they are withdrawing. Gave information about plans for an upgraded security system, re-introduction of games and other future plans. Answered questions. Billy Atkins, Director, Charitable Bingo Division Answered specific questions from Committee. Bart Sanchez, Financial Director Answered specific questions from Committee Registering but not testifying: Patsy Henry, Deputy Executive Director Texas Department of Transportation Mark Wiles, LBB Budget Analyst Wes Heald, Executive Director Answered questions from the Committee. Spoke to the requests in the proposed budget. Gave the departments view on the cuts recommended by LBB. John W. Johnson, Chairman Answered questions from the Committee. Gave a general overview of the department and the proposed budget requests. James Bass, Director, Finance Division Answered questions from the Committee dealing with bonds. Gave information dealing with the spending process of the department. Spoke to questions on State Highway Fund No. 006. Texas Department of Economic Development Ed Robertson, LBB Budget Analyst Jennifer Jones, Sunset Commission Nick Villalpando, SOA (Office of the State Auditor) Jeff Moseley, Executive Director Gave an overview of the budget request. Answered questions from the Committee. Tracye McDaniel, Deputy Executive Director Answered question from the Committee. Registering but not testifying: Robin Abbott, General Counsel Rance G. "Randy" Sweeton Lesley C. Wade, Director, Internal Audit Daniel E. Martin, Division Director, Smart Jobs Fund Program Aaron Demerson, Admin. Director Gene Richards, Division Director There being no further business, Senator Ellis moved that the Committee stand recessed subject to the call of the chair. Without objection, it was so ordered. ______________________ Senator Rodney Ellis, Chair ______________________ Myra J. Schmitt, Clerk