SENATE COMMITTEE ON NOMINATIONS 
                               Monday, March 21, 2005 
                           2:00 p.m. or upon adjournment 
                           Capitol Extension, Room E1.016 
         Pursuant to a notice posted in accordance with Senate Rule  
         11.18, a public hearing of the Senate Committee on Nominations  
         was held on Monday, March 21, 2005, in the Capitol Extension,  
         Room E1.016, at Austin, Texas. 
         MEMBERS PRESENT:                        MEMBERS ABSENT: 
         Senator Jon Lindsay                     Senator Gonzalo  
         Senator Bob Deuell 
         Senator Kevin Eltife 
         Senator Mike Jackson 
         Senator Eddie Lucio, Jr. 
         Senator Jane Nelson 
         The chair called the meeting to order at 3:45 p.m. There being a  
         quorum present, the following business was transacted:   
         The following member arrived after the roll was called: Senator  
         Nelson at 4:00 p.m. 
         At 3:46 p.m., Senator Eltife moved adoption of the minutes from  
         the previous hearing; without objection, it was so ordered.  
         Chairman Lindsay announced that Senator Troy Fraser was unable  
         to attend today's hearing to introduce his constituent, John  
         Graham, Jr., a nominee to the Teacher Retirement System of Texas  
         Board of Trustees. Chairman Lindsay gave a brief introduction of  
         Graham saying that Senator Fraser urged the committee to pass  
         Mr. Graham. 
         The Chair recognized Vice-chairman Deuell to introduce John Mark  
         Henry, Ed.D. Henry recently became a constituent of Senator John  
         Whitmire, who was unable to attend the meeting. Whitmire asked  
         Deuell to perform the honors since Henry used to live in  
         Deuell's district. 
         Deuell also introduced Dory Wiley for Senator Carona who was  
         also unable to attend because of other duties. 
         Chairman Lindsay asked the nominees how long they had served on  
         the board; one a little less than a year , the other two had  
         served slightly over a year. Chairman Lindsay asked, first, if  
         they regarded the TRS as a healthy system and second, to give a  
         general overview. Henry said the TRS is in great shape, it is  
         91% funded-there is a projected shortfall in the future but  
         plenty of time left to correct. He added that they have an  
         excellent and very diverse staff and that, although he  
         personally did not have the same money background and experience  
         as the other two, he felt he provided the educational expertise  
         Wiley echoed the sentiments about the excellent staff and added  
         that he felt like there was nothing broke in the system, but  
         recognized that there are things that needed tweaking every now  
         and then. 
         Graham said that since he joined the Board, there has been a 9  
         and 1/2% annual rate of growth, and the system was expanding  
         into real estate. He did mention one big issue which is the cost  
         of healthcare. 
         The chair recognized Senator Lucio who referenced a letter  
         written to the editor of his hometown newspaper by Sylvia  
         Suarez, the legislative chair of TRS- Brownsville saying that  
         the TRS is short by $230 million in appropriations from the  
         state and if the state does not contribute more, retirees can  
         anticipate a 28.5% increase on September 1. Lucio asked for  
         comments from the nominees concerning the letter. Henry agreed  
         with the figures and described some ways to lessen the blow to  
         retirees by giving them an increase of 7% instead of 28%. Wiley  
         explained that when he said things were not broken, he was  
         referring to the investment side. He added that healthcare was  
         beyond the scope of the TRS and the legislature would have to  
         Chairman Lindsay asked about the real estate investments,  
         basically if there would be any more in land acquisitions.  
         Graham answered that they had hired consultants to develop a  
         plan that would be similar to private equity placements.  
         Chairman Lindsay asked what they were looking for, the answer  
         was diversification. The board felt that real estate was a good  
         way to diversify since it was countercyclical to the  
         Chairman Lindsay recognized Deuell who asked the nominees if  
         they anticipated involvement in addressing the problem of  
         dramatically rising healthcare costs. Wiley said that they could  
         make a difference in how they administered healthcare costs,  
         adding that the TRS is a big system with big numbers. Deuell  
         asked if they had heard any complaints about the pharmacy  
         system, the nominees said not at the board level or school  
         level. Deuell said the prescription costs were responsible for  
         driving up most of the costs and gave an example of how MRI's  
         were being purchased by individual doctors to put in offices  
         instead of one MRI being used for an entire group or region.  
         Henry said that the biggest concern of this staff was  
         The chair recognized Senator Lucio who agreed with Deuell saying  
         that he took the issue at heart. Lucio stressed that health and  
         safety were the two main concerns of people in his district and  
         that there were people in his district that were dying because  
         they could not afford to live. 
         Chairman Lindsay recognized Senator Nelson who thanked the  
         nominees for their service, then asked if they saw any long term  
         solutions to the problems. Henry said healthcare was a national  
         problem that was much greater than the three of them but that  
         perhaps finding a way to combine retirees with active  
         participants would help. Wiley offered his two cents- he said  
         throwing money at the problem is not a good solution, the  
         situation is messed up and needs to be fixed. Graham added that  
         the problem of costly healthcare translates to all small  
         businesses as well, citing the example of his wife's  
         Fredericksburg business. 
         Chairman Lindsay asked for a motion to vote, Lucio so moved. At  
         4:08 p.m., by a vote of 6 ayes, 0 nays, and 1 absent, the  
         nominees to the Teacher Retirement System Board of Trustees  
         passed to the full Senate for confirmation. 
         Chairman Lindsay asked for a motion to vote on the non-appearing  
         nominees, Eltife so moved. At 4:09 p.m., by a vote of 6 ayes, 0  
         nays and 1 absent, nominees from the following entities were  
         recommended to the full Senate for confirmation: Texas Animal  
         Health Commission, Texas Credit Union Commission, Upper  
         Guadalupe River Authority, Guadalupe-Blanco River Authority  
         Board of Directors, Department of Information Resources, Texas  
         Board of Professional Land Surveyors, Texas Commission of  
         Licensing and Regulation, Upper Neches River Municipal Water  
         Authority Board of Directors, Texas Board of Physical Therapy  
         Examiners, Texas Real Estate Commission, Sabine River Authority  
         of Texas, Sulphur River Basin Authority Board of Directors,  
         Board of Tax Professional Examiners, and Texas Private Security  
         There being no further business, at 4:19 p.m. Senator Lindsay  
         moved that the Committee stand recessed subject to the call of  
         the chair. Without objection, it was so ordered.   
         Senator Jon Lindsay, Chair 
         Jazen Wood, Clerk