MINUTES

 

SENATE COMMITTEE ON NOMINATIONS

Wednesday, February 25, 2009

12:00 p.m. or upon adjournment

Senate Chamber

 

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Pursuant to a notice posted in accordance with Senate Rule 11.18, a public hearing of the Senate Committee on Nominations was held on Wednesday, February 25, 2009, in the Senate Chamber.

 

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MEMBERS PRESENT:		MEMBERS ABSENT:
Senator Mike Jackson Senator Kevin Eltife Senator Glenn Hegar Senator Jane Nelson Senator Robert Nichols Senator Eliot Shapleigh Senator Kirk Watson		None

 

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The chair called the meeting to order at 1:00 p.m.  There being a quorum present, the following business was transacted: 

 

The following member arrived after the roll was called:  Senator Nelson. 

 

Senator Hegar moved adoption of the minutes from the previous hearing held on February 18, 2009.  Senator Shapleigh seconded the motion; without objection, it was so ordered. 

 

Chairman Jackson recognized Senator Watson to introduce Public Utility Counsel Don Ballard.  Senator Watson briefly detailed the career and accomplishments of Don Ballard, and recommended him to the committee.

 

Chairman Jackson recognized Senator Carona to introduce Kenneth Anderson and Thomas Pauken.  Senator Carona briefly detailed each individuals' careers and accomplishments, and recommended both to the committee with enthusiasm.

 

Chairman Jackson recognized Don Ballard to share his comments with the committee.

 

Ballard gave a brief account of the history of the Office of the Public Utility Counsel, and emphasized his office's role in providing a voice for consumers on energy issues.  

 

Chairman Jackson offered a comment concerning the importance of Ballard's role in representing consumers on energy issues.

 

Senator Watson moved that the committee vote to approve the nomination of Don Ballard as Public Utility Counsel.  At 1:14 p.m., by a vote of 7 ayes and 0 nays, the committee voted to recommend Don Ballard to the full Senate for confirmation.

 

Chairman Jackson recognized Senator Davis to introduce Deeia Beck.  Senator Davis briefly detailed Deeia Beck's career and professional accomplishments, and recommended her to the committee.

 

Chairman Jackson recognized Deeia Beck to share her comments with the committee.

 

Beck gave a brief account of the scope of issues handled by the Public Counsel for the Office of Public Insurance Council.  Beck outlined the urgent issues facing insurance consumers; including the increase in the complexity of insurance products and the insurance-rate determinations process.

 

Chairman Jackson asked Beck to comment on windstorm and homeowner's insurance, noting that Texas has one of the highest homeowner's insurance rates in the country.  Beck emphasized the importance of oversight.  She also proposed a stronger role for OPIC in rate proceedings to ensure that consumers are represented when rate changes are proposed.

 

The chair recognized Senator Shapleigh to ask a question.  Senator Shapleigh inquired about possible changes in the law to the file-and-use system that would allow consumers to have funds returned, in a reasonable amount of time, after a determination has been made that an insurance company has over-charged.

 

Beck expressed her desire to see the appeals process expedited.  She also proposed that disputed funds be set aside in Escrow until a final determination is made.  Senator Shapleigh requested of Beck a list of recommendations be submitted to the committee concerning the file-and-use system.

 

Senator Shapleigh further questioned Beck on OPIC's role in monitoring Health Insurance issues.  Beck explained her role as it relates to health insurance, and shared her concerns with the committee.

 

Senator Shapleigh moved that the committee vote to approve the nomination of Deeia Beck as Public Counsel for the Office of Public Insurance Council.  At 1:34 p.m., by a vote of 7 ayes and 0 nays, the committee voted to recommend Deeia Beck to the full Senate for confirmation.

 

Chairman Jackson recognized Norman Darwin, reappointed to serve as the Injured Employee Public Counsel, to share his comments with the committee.

 

Darwin gave a brief account of the agency's history, composition, and procedures.

 

Chairman Jackson confirmed with Darwin that the agency's Legislative Action Request included no requests for additional funds for the coming two years.

 

Senator Nichols moved that the committee vote to approve the nomination of Norman Darwin as Injured Employee Public Counsel.  At 1:48 p.m., by a vote of 7 ayes and 0 nays, the committee voted to recommend Norman Darwin to the full Senate for confirmation.

 

Chairman Jackson recognized Senator Watson to introduce Rod Bordelon as Commissioner of Workers' Compensation.  Senator Watson briefly detailed the career and accomplishments of Bordelon, and recommended him to the committee.

 

The chair recognized Bordelon to address the committee.

 

Bordelon gave an account of his brief time in the position, and outlined the current status of the Commission as it deals with workers' compensation issues.

 

Chairman Jackson questioned Bordelon on the issue of mandatory Workers' Compensation Insurance.  Bordelon indicated that Texas is the only state without some form of mandatory Workers' Compensation Insurance, and he detailed some of the positives and negatives of the issue.

 

Senator Watson moved that the committee vote to approve the nomination of Rod Bordelon as Commissioner of Workers' Compensation.  At 1:59 p.m., by a vote of 6 ayes and 0 nays, the committee voted to recommend Rod Bordelon to the full Senate for confirmation.

 

Chairman Jackson called Kenneth Anderson, Donna Nelson, and Barry Smitherman of the Public Utilities Commission to the table.  Chairman Jackson introduced Nelson at the request of Senator Ogden.  The chair also recognized Senator Watson to introduce Smitherman.  Senator Watson briefly summarized the career of Smitherman and recommended him to the committee.

 

Chairman Jackson invited each member of the PUC to share their comments with the committee.

 

Smitherman, Nelson and Anderson addressed the committee.  Smitherman detailed the mission of the PUC.  He provided the committee with details of the pressing issues currently facing the PUC, including amending the commission's rules concerning customer treatment when a regulated energy provider goes out of business.  Smitherman also mentioned the development of renewable energy plans as a priority for the PUC.

 

Chairman Jackson questioned the nominees on renewable energy, and asked for details of the progress that has been made on that issue.  Smitherman responded that the plan for the required infrastructure has been approved, and he detailed the general areas where transmission line designations have been made. 

 

Chairman Jackson inquired about the burden of costs associated with the construction of new transmission lines.  The nominees detailed the financing process for new lines.

 

The chair recognized Senator Hegar for questions.  Senator Hegar inquired about the CREZ wind initiative project.  He asked how costs are determined before a project is begun, and how the escalation of costs is prevented once a project is underway.  

 

Smitherman responded that the PUC plans to appoint a CREZ czar to oversee the entirety of the process.  He also detailed the determination process for projects, and outlined the requisite steps for a project to proceed.

 

Senator Hegar proceeded to inquire about the status of the Texas Nodal Project. 

 

Smitherman expressed his continued hope that the project would yield positive results despite its delayed and over-budget status.  Anderson expressed his displeasure with the current status of the Nodal Project, and detailed the steps the PUC is taking to improve the project and ensure it is completed in a timely manner.

 

Senator Hegar noted that the due diligence in the Nodal Project was lacking, and requested of the commission that future projects avoid the same mistake.

 

Senator Hegar questioned the nominees further for their thoughts on improvements that can be made to deregulation rules for the benefit of consumers.

 

Nelson mentioned the PUC's goals of improved consumer awareness and tightened rules as two ways to improve the current system.  She emphasized the relative youth of the deregulated energy marketplace, and expressed confidence in it. 

 

The chair recognized Senator Nichols to offer a comment concerning renewable energy.

 

Senator Nichols expressed his concern with a recent ruling the PUC issued concerning meters and the outflow of  energy generated from sources such as solar panels.  Nichols requested that the commission review the issue to ensure maximum incentive for those willing to pursue renewable energy alternative for their homes.

 

Smitherman responded that they believe the ruling followed the current statute.  He also expressed his desire to work with Senator Nichols.  Nelson mentioned that the PUC made a recommendation to the Legislature to review the issue.

 

The chair recognized Senator Eltife for a comment.

 

The chair recognized Senator Shapleigh to ask a question.

 

Senator Shapleigh asked Anderson to comment on any changes that would be necessary to allow Texas to compete in a carbon tax environment.  Anderson responded that there is little that could be done on a state level; that the most effective changes would need to be enacted federally.  Senator Shapleigh requested that the PUC work to ensure that the state take advantage of all opportunities to move to a modern energy structure.

 

Senator Shapleigh questioned Smitherman on the Systems Benefit Fund, and how to restore it to its intended purpose.  Smitherman detailed the process by which the PUC uses the Systems Benefit Fund, and described the benefits of it.

 

Senator Shapleigh concluded by asking the nominees their recommendations for improving conservation efforts in the state.  Smitherman lauded the current conservation policy and recommended that the Legislature seriously consider expanding it.  

 

Senator Shapleigh asked if the nominees would support a policy that would prevent a rate increase if an energy provider does not meet their conservation goals.   Smitherman confirmed that the conservation factor is something currently considered when a provider asks for approval of a rate increase.  

 

The chair recognized Senator Hegar for a comment.

 

Chairman Jackson asked for continued explanation of necessity of the Nodal Project, given its over-budget status.  Smitherman responded that both ERCOT and the consumer organizations supported the project.

 

Senator Nelson moved that the committee vote to approve the nominations of Ken Anderson, Donna Nelson, and Barry Smitherman to the Public Utilities Commission.  At 3:05 p.m., by a vote of 7 ayes and 0 nays, the committee voted to recommend all of the nominees to the full Senate for confirmation.

 

Chairman Jackson recognized Senator Watson to introduce Andres Alcantar, nominated to the Texas Workforce Commission.  Senator Watson gave a brief account of Alcantar's career.

 

The chair recognized the nominees for opening comments. 

 

Pauken and Alcantar addressed the committee and detailed some of the challenges facing the Texas Work Commission.

 

Chairman Jackson asked Pauken for his thoughts on skills education. Pauken emphasized the job opportunities and potential economic reward that would come with greater investment in skilled-labor education.

 

The chair recognized Senator Watson for questions.

 

Senator Watson asked the nominees to offer their thoughts on the current economic situation and its affect on unemployment rates in Texas. 

 

Pauken responded that unemployment in Texas began to rise in November and December of last year.  He confirmed that they expect to see a continuing rise in unemployment in the first part of this year.

 

Senator Watson asked the nominees what their expectations are for unemployment benefit claims.  Alcantar responded that the amount of claims is 120% as compared to this time last year.

 

Senator Watson requested statistics detailing the number of people who have exhausted their state benefits.  Pauken acknowledged that exhaustion rates were about 35% during very low unemployment times.  He expects that the exhaustion rate will increase with the unemployment rate.

 

Senator Watson asked the nominees for their comments on unemployment insurance.  Pauken responded that he believes the purpose of unemployment insurance is to help people who have lost their jobs through no fault of their own.

 

Senator Watson inquired about the trust fund that pays unemployment insurance.  Alcantar and Pauken expressed the risk that the fund could be depleted by September or October of this year, depending upon the unemployment rate.  Pauken offered the options of a seven year bond, interest-free federal loans, or a type of tax on employers as possible solutions to the funds potential depletion.

 

Senator Watson expressed his concern for the solvency of the unemployment compensation trust fund, and asked the nominees to share their opinions of using federal stimulus money to address the situation. 

 

Pauken responded that he believes the money should be accepted provided that there is no continued burden placed on the state after the money has been expended.  He continued by expressing his desire to see a bi-partisan agreement that allocates the funds specifically, and with minimal strings attached.

 

Alcantar answered that he believes his role is to represent the interests of the general public, and to serve as a resource for the Legislature.  He expressed his desire to serve the will of the Legislature in the implementation of any stipulations associated with federal stimulus funds.

 

Senator Watson commented that he believes it is Alcantar's role not only to serve as a resource, but also to advise as to how to best serve the public through the Texas Workforce Commission.  He continued by again asking Alcantar his opinion of Texas using the federal stimulus money relative to unemployment insurance.

 

Alcantar stated that he believes it is the Legislature's role to decide how and under what conditions the federal stimulus money is accepted.

 

Senator Watson commented on the law changes required to accept stimulus funds, and how they can serve as a type of pilot program for potentially permanent changes in the law. 

 

Pauken agreed with the Senator's assessment.  He concluded by speaking briefly of the need of a bipartisan agreement acceptable to the Secretary of Labor.

 

The chair recognized Senator Eltife for a comment. 

 

The chair recognized Senator Nichols for a comment.

 

The chair recognized Senator Nelson for a comment.

 

The chair recognized Senator Shapleigh for questions.  Senator Shapleigh asked Pauken to explain how and at whose discretion the federal stimulus money would be allocated.

 

Pauken replied that additional funds for existing programs are mandated by the federal government.  However, the Texas Workforce Commission does have some discretion regarding job-training sphere. 

 

Senator Shapleigh inquired as to the amount of funds the Commission would potentially receive.  Pauken listed estimates detailing the allocation of funds throughout the various branches of the Commission.

 

Senator Shapleigh asked Pauken his opinion on extending the length of unemployment insurance if it is funded by the federal government.  Pauken replied that the state should take the extended unemployment insurance funder under those circumstances.

 

Senator Shapleigh cited statistics showing improved adult education as one way Texas can dramatically improve its economic competitiveness.  He asked Pauken to comment.

 

Pauken stated that he believes adult basic education is important in improving the workforce.  He continued to say that the Workforce Commission would be a logical place for programs related to this issue. 

 

Chairman Pauken and Commissioner Alcantar were left pending before the committee. 

 

Senator Nelson moved that the committee vote on the non-appearing nominees to the following entities: Texas Agricultural Finance Authority Board of Directors, Texas Animal Health Commission, Texas Commission on the Arts, Texas State Board of Examiners of Dietitians, Commission on State Emergency Communications, Texas Emergency Services Retirement System, Texas Board of Professional Engineers, Evergreen Underground Water Conservation District, Texas Farm and Ranch Lands Conservation Council, Fire Fighters' Pension Commissioner, Commission on Law Enforcement Officer Standards and Education, Board for Lease of Texas Department of Criminal Justice Lands, Board for Lease of Texas Parks and Wildlife Lands, Texas State Library Archives Commission, Texas Mutual Insurance Company Board of Directors, State Bar of Texas Board of Directors Supreme Court Appointees.  At 4:10 p.m., by a vote of 7 ayes and 0 nays the nominees were sent to the full Senate for confirmation.

 

There being no further business, at 4:11 p.m. Chairman Jackson moved that the Committee stand recessed subject to the call of the chair.  Without objection, it was so ordered.

 

 

 

 

 

 

 

 

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Senator Mike Jackson, Chair

 

 

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Brian Carey, Clerk