MINUTES 
                                           
                      SENATE COMMITTEE ON ECONOMIC DEVELOPMENT 
                              Monday, November 1, 1999 
                                     10:00 a.m. 
                                   Senate Chamber 
                                           
                                       ***** 
                                           
         Pursuant to a notice posted in accordance with Senate Rule  
         11.18, a public hearing of the Senate Committee on Economic  
         Development was held on Monday, November 1, 1999, in the Senate  
         Chamber at Austin, Texas. 
          
                                       ***** 
                                           
         MEMBERS PRESENT:                        MEMBERS ABSENT: 
         Senator David Sibley, Chairman          Senator John Whitmire 
         Senator Kenneth Armbrister, Vice Chairman 
         Senator John Carona 
         Senator Troy Fraser 
         Senator Mike Jackson 
         Senator Frank Madla 
                                           
                                       ***** 
                                           
         The Chairman called the meeting to order at 10:10 a.m.  There  
         being a quorum present, the following business was transacted. 
          
         Chairman Sibley advised that Interim Charge #4,  
         Telecommunications, would be the first item on the agenda and  
         testimony would relate to the various charges on telephone  
         bills.  Senate Bill 560, 76th Legislature, directed the Public  
         Utility Commission to provide guidance on how telephone bills  
         could be more easily understood by the public.  The Chairman  
         called Pat Wood, Chairman of the Public Utility Commission  
         (PUC), and Judy Walsh, Commissioner of the Public Utility  
         Commission, to explain individual charges on telephone bills.   
         PUC Commissioner, Brett Perlman, and PUC Director for the Office  
         of Policy Development, Stephen Davis, were introduced and joined  
         Pat Wood and Judy Walsh at the witness table. 
          
         Following testimony and questions by Committee members, Chairman  
         Sibley called Al Van Allen, representing the Comptroller's  
         Office, to respond to members' questions concerning the items on  
         telephone bills which are taxable. 
          
         Chairman Sibley announced the creation of a subcommittee on  
         9-1-1 Emergency Communications, which is the Economic  
         Development Committee's Interim Charge #2.  Senator Madla will  
         serve as Chair of the subcommittee, with Senators Fraser and  
         Whitmire serving as members. 
         Upon completion of testimony and questions on the  
  
         Telecommunications issue, the Chairman advised that the  
         Committee would consider Financial Modernization, Interim Charge  
         #3, and called Panel 1 on Industry Perspective.  The following  
         panelists testified in the order listed: 
          
              Will Davis, Texas Association of Life and Health Insurers 
              John Heasley, Texas Bankers Association 
              Chris Williston, Independent Bankers Association of Texas 
              Ernie Stromberger, Texas Association of Insurance Agents 
          
         Following testimony by the panelists and response to members'  
         questions, Chairman Sibley announced the formation of a  
         subcommittee on Private Sector Financing, Economic Development  
         Committee Interim Charge #1, to be chaired by Senator Carona,  
         with Senators Fraser and Sibley as members. 
          
         The Chairman then called Panel 2 to testify on Regulatory  
         Perspective.  The panelists are shown below and testified in the  
         order listed: 
          
              Jose Montemayor, Commissioner, Texas Department of  
         Insurance 
              Randall James, Texas Department of Banking 
              John Morgan, Texas State Securities Board 
              James Pledger, Texas Department of Savings and Loan 
              Sealy Hutchings, Office of Consumer Credit Commissioner 
          
         Upon completion of the panel's testimony and response to members'  
         questions, Chairman Sibley advised the appointment of two  
         additional subcommittees: 
          
              Subcommittee on Consumer Credit Laws; Senator Carona,  
              Chair; Senators Fraser and Sibley, members.  The  
              subcommittee will: 
          
                   Review Article 16, Sec. 11 of the Texas Constitution,  
                   relating to the maximum rates of interest for  
                   contracts entered into in the State. 
          
                   Study the effect of usury limits on the various  
                   consumer lending entities in the State. 
          
                   Evaluate the effect of the pending federal Financial  
                   Services Modernization Act on consumer credit laws in  
                   Texas. 
          
              Subcommittee on the Effect of Government Regulations on  
              Economic Development; Senator Jackson, Chair; Senators  
              Armbrister and Carona, members.  The subcommittee will  
              study the impact of local, state and federal government  
              regulations on economic development efforts in Texas. 
          
         There being no further business, at 12:25 p.m. Chairman Sibley  
  
         moved that the Committee stand recessed subject to the call of  
         the chair.  Without objection, it was so ordered.   
          
         __________________________ 
         Senator David Sibley, Chairman 
          
         __________________________ 
         Barbara Henderson, Clerk