SENATE COMMITTEE ON FINANCE 
                              Thursday, February 1, 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 Thursday, February  
     1, 2001, in the Capitol Extension, Room E1.036, at Austin, Texas. 
     MEMBERS PRESENT:                            MEMBERS ABSENT: 
     Senator Rodney Ellis                         Senator Troy Fraser 
     Senator Chris Harris 
     Senator Gonzalo Barrientos                   
     Senator Robert Duncan 
     Senator Tom Haywood 
     Senator Mike Jackson                         
     Senator Jon Lindsay 
     Senator Eddie Lucio 
     Senator Steve Ogden                          
     Senator Carlos Truan                         
     Senator John Whitmire                        
     Senator Judith Zaffirini 
     The chair called the meeting to order at 8:00 a.m.  There being a quorum  
     present, the following business was transacted:   
     The Chair recognized the following witnesses to testify on the Legislative  
     Budget Board (LBB) recommendations: 
          Baylor College of Medicine 
          Daniel C. Arnold, Chairman, Board of Trustees 
              Introduction of Dr. Feigin and Dr. DeBakey.  Spoke of the mission  
              of Baylor College of Medicine. 
          Dr. Ralph Feigin, President/CEO, Baylor College of Medicine 
              Gave an overview of Baylor College of Medicine; the progress,  
              programs and leadership role in Texas and the nation.  Spoke to  
              the exceptional items in proposed budget. 
          Dr, Michael E. DeBakey, Chancellor Emeritus 
              Spoke to the achievements of the school since 1969 and the  
              objectives for the future.  Appreciates the role the Legislature  
              has played.  
          Texas Education Agency 
          Patrick Francis, LBB Budget Analyst      
          Ursula Parks, LBB Budget Analyst 
          John McGeady, LBB Performance Analyst 
          Paige Buechly, SAO 
          Carol Smith, SAO 
          Bill Wood,  Project Manager, SAO    
     Senator Ellis suspended the hearing at 9:43 a.m. on TEA until members or  
     Chairman of the Board for the State Board of Education can be in  
          Texas School for the Blind and Visually Impaired 
          Ursula Parks, LBB Budget Analyst 
          Phil Hatlen, Superintendent 
              Introduced members of the board and staff in attendance.   
              Overview of the school, it's Legislative mandate, it's mission,   
              programs and progress in the last biennium.  Spoke to the  
              exceptional items in proposed budget. 
          Barney Schulz, Business Administrator 
               Spoke to the riders in proposed budget. 
               Registering, but not testifying: 
               Gloria Bennett, Program Specialist, TX School for the Blind 
               Roseanna Davidson, Assoc. Professor at Texas Tech University 
               Kerry Goodwin, Goodwill Industries of Dallas, Board of Trustees 
               Susan Houghtline, Executive Asst., TX School for the Blind 
               Debra Nesbutt, Director, Human Resources, TX School for the  
     Testimony continues on Texas Education Agency (TEA) with above witnesses,  
     now that members of the State Board of Education are in attendance.  
          State Board of Education 
          Grace Shore, Chair 
              Spoke to the SAO report, and the policy statement.  Spoke to the  
              Permanent School Fund and asked the Committee to give them time  
              to change the problems on the Board. Answered questions. 
          Jim Nelson, Commissioner 
               Answered questions. 
          Chase Untermayer, Board Member 
              Despite the SAO report the Fund is in good hands and good shape.   
              Disputed the statement that "the Board did not have good  
              financial advice".  
     At 10:45 a.m. Senator Ellis moved that the committee stand recessed until  
     12:00 p.m.  The Committee would continue with the State Board of Education  
     at 1:30 p.m.; without objection, it was so ordered.     
     At 12:01 p.m. the committee reconvened.  
     Senator Ellis announced that the Committee would  take up several other  
     agencies until 1:30 p.m., at which time  the testimony of the State Board  
     of Education would continue. 
          Texas  School  for  the Deaf 
          Ursula Parks, LBB Budget Analyst 
          Beatrice Maestas Burke, President of the Board 
              Spoke to  following exceptional items requested in proposed  
              budget;  the completion of the master plan building program, a  
              visual communication and alert system and the salary increase for  
              the Executive Director.  Answered questions. 
          Claire Bugen, Superintendent 
              Gave an overview of the goals, programs, and progress in the last  
              biennium.  Spoke to all the exceptional items requested in  
              proposed budget.  Answered questions. 
               Registering, but not testifying: 
               Jim Smith, Business Manager 
          Telecommunications Infrastructure  Fund Board 
          John McGeady, LBB Budget & Performance Analyst 
          Carole Smith, SAO  
          Robert J. "Sam" Tessen, Executive Director 
              Introduced board members and staff.  Gave an overview of the new  
              TIF and the Board's positive attitude in looking at the SAO  
              report.  Spoke to the two items that the Board disagreed within  
              the LBB's recommendations.  Answered questions. 
          Gwen Stafford, Vice-Chair 
              Spoke to her pride at serving on the Board and some of the plans  
              for the future.  Answered questions. 
          Blair Fitzsimons, Board Member 
               Spoke to the excitement of  having Sam Tessen as the new  
     Executive Director. 
               Registering, but not testifying: 
               Frank Pennington, Director, Finance and Administration 
               Martin V. Poucl, Finance Manager 
               Eileen Shocket, St. Edward's University, TIF Library 
          State Board for Educator Certification 
          Robert Norris, LBB Budget Analyst   
          Pamela Tacket, Executive Director 
               Introduced Chair.  Spoke to the need for more master teachers in  
         James D. Harris, Chairman 
              Spoke to the following exceptional items in proposed budget; test  
              development that will update certification exams for alignment  
              with current public school curriculum, expand beginning teacher  
              induction program,  national criminal background check on  
              certification applicants along with several  others. Answered  
          Jayme Cox, SBEC, Specialist: ESC-20 
               Spoke to increased funding. 
          Edward A. Vera, ATPE 
               Spoke to increased funding for a statewide health insurance  
          Xavier Rodriguez, Vice-Chair 
               Supports the agencies requests and priorities.          
               Registering, but not testifying: 
               Barry Alaimo, SBEC, Financial staff 
               William M. Franz, SBEC, Director, Professional Discipline Unit 
               Dan Junell, SBEC, Legal Counsel 
               Cynthia Phillips, SBEC, Board Member 
               Patricia Porter, SBEC, 
     Chair recognized Senator Teel Bivins and Lt. Governor Bill Ratliff who  
     were in attendance.  
     Continued with testimony from State Board of Education: 
          Grace Shore, Chairman of the Board 
              Continued answering questions from the Committee. 
          Paul Ballard, Executive Administrator, Permanent School Fund 
               Answered questions from the Committee. 
          Carole Smith, SAO 
               Answered questions. 
          Jim Nelson, Executive Director, TEA 
               Answered questions. 
          Chase Untermayer, Board Member 
               Answered questions. 
     At 3:00 p.m. the testimony of  the Texas Education Agency continued with  
     the following: 
     Senator Truan assumed chair. 
          Jim Nelson, Commissioner of Education 
              Spoke to the exceptional items in proposed budget. Gave a brief  
              overview of where Texas stands nationally.  Answered questions. 
               Public Testimony: 
               James Jones, Self 
               Melissa Fonseca, Self 
               William R. Hurt, Communities In Schools (CIS) 
               Lonnie Hollingsworth, Director of Legal Services, Texas  
     Classroom Teachers Association 
               Joel Romo, Association of Texas Professional Educators 
               Registering, but not testifying: 
               Ed Flathouse, Associate Commissioner, TEA 
               Don Loving, Communities in Schools 
               Robert E. Merrill, self   
               Brian S. Rawson, Managing Director, Information System, TEA 
               Ann Smisko, Administrator, TEA 
          Windham School District 
          Ursula Parks, LBB Analyst 
          Mike Morrow, Windham School District 
               Spoke to exceptional items requested in the budget for Windham  
                        School District. Answered questions on treatment  
                        programs offered at Windham     
          Charles E. Faulkner, Director of Administration Services 
               Answered questions regarding Windham School District. 
          Teacher Retirement System of Texas 
          Stephanie Coates, LBB Analyst 
          Bill Wood, State Auditor's Office 
          Charles Dunlap, Executive Director 
              Introduced board members present.  Answered questions regarding  
              exceptional items for TRS.  Gave an overview of the issues  
              surrounding their budget requests.   
          Jim Simms, Vice President of Amarillo National Bank 
              Spoke of his pride for the board he represents.  Spoke of  
              managing the moneys for TRS.  Answered questions. 
          Ronnie Jung, Chief Financial Officer 
               Answered questions on methods of finance and discussed funding  
               Registering, but not testifying: 
               Richard L. Elan, Texas Community College Teachers Association 
            Optional Retirement Program 
            Stephanie Coates, LBB Analyst 
               Public Testimony: 
          Chuck Hempstead, Texas Association of College Teachers 
          Dr. Charles Zucker, Executive Director, Texas Faculty Association  
            Higher Education Coordinating Board 
            Kim Carson, LBB Analyst 
            Pamela P. Willeford, Chair 
              Made several comments on the new ly adopted coordinating plan.   
              Spoke of new program and facility requests.  Answered questions. 
            Don W. Brown, Commissioner 
              Described the responsibilities bestowed on the agency by the last  
              legislature.  Addressed exceptional items requested by the  
              agency.  Answered questions. 
            Jodie L. Jiles, Texas Higher Education Coordinating Board 
               Answered questions. 
               Public Testimony: 
               Major General Daniel James III, Adjutant Generals Dept. 
                    Answered questions regarding public and private university  
     governing boards. 
               Registering, but not testimony: 
               Carol L. McDonald, Independent Colleges & Universities of Texas,  
            Higher Education Employees Group Insurance Contributions 
            John Wilmaker, LBB Analyst 
               Public testimony: 
               Tom Scott, Vice Chancellor 
               Dan Stewart, Director of Group Insurance.     
     There being no further business, at 7:06 p.m. Senator Ellis moved that the  
     Committee stand recessed until 8:00 a.m., Monday, February 5, 2001.   
     Without objection, it was so ordered.   
     Senator Rodney Ellis, Chair 
     Myra  J. Schmitt, Clerk