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