Wednesday, April 2, 1997 
                                     1:30 pm 
                                 Senate Chamber 
         Pursuant to a notice posted in accordance with Senate Rule  
         11.11, a public hearing of the Senate Committee on Senate  
         Select Committee on Tax Reform & Public School Finance was  
         held on Wednesday, April 2, 1997 in the Senate Chamber at  
         Austin, Texas.   
         MEMBERS PRESENT:                        MEMBERS ABSENT: 
         Senator Kenneth Armbrister              Senator John Carona 
         Senator Teel Bivins                     Senator Gregory Luna 
         Senator Gonzalo Barrientos 
         Senator Robert Duncan 
         Senator Rodney Ellis 
         Senator Troy Fraser 
         Senator Chris Harris 
         Senator Drew Nixon 
         Senator Florence Shapiro 
         The Chair called the meeting to order at 2:50 pm.  There being  
         a quorum present, the following business was transacted.   
         The following members arrived after the roll was called:   
         The Committee invited the Lottery Commission to address the  
         Committee regarding the possible change of vendors and how it  
         would affect the revenue flow.  Those testifying and answering  
         questions were Chairwoman Harriet Miers; James Rinn, Director  
         of Financial Administrator;  Kim Kiplin, Acting Executive  
         Director; Commissioner Anthony Sadberry; and Ridgely C.  
         Bennett, Attorney. 
         Testifying and answering questions from the present vendor,  
         GTECH Corporation was James E. Hosker, General Manager.  Also  
         present was Alan Eland, Assistant General Manager. 
         Present as resource witnesses from the Comptroller's Office  
         were Teresa Comer, Tax Policy Specialist; Karey W. Barton,  
         Manager, Tax Policy; James Archer, Property Tax Division; and  
         Mona Ezell Shoemate, Senior Policy Analyst. 
         The Committee began receiving public testimony on tax policy  
         options regarding the possibility of extending franchise tax  
         to noncorporate businesses; increasing tax rate on cigarettes  
         and tobacco products; imposing tax on aviation fuels; adopting  
         a state property tax; imposing severance tax on lignite; and  
         extending gas, electric and water utility tax to  
         unincorporated areas.  Those testifying or registering are  
         listed on the attached list. 
         At various times during the meeting, Senators Armbrister and  
         Nixon were in the chair. 
         There being no further business, at 7:05 pm Senator Armbrister  
         moved that the Committee stand recessed subject to the call of  
         the Chair.  Without objection, it was so ordered.   
         Senator Kenneth Armbrister, Chair 
         Jerry Sander, Clerk