Tuesday, October 17, 2000 
                                     9:00 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 Tuesday, October 17, 2000, in the Senate  
         Chamber at Austin, Texas. 
         MEMBERS PRESENT:                        MEMBERS ABSENT: 
         Senator David Sibley                    Senator Troy Fraser 
         Senator Kenneth Armbrister 
         Senator John Carona 
         Senator Mike Jackson 
         Senator Frank Madla 
         Senator John Whitmire 
         Chairman Sibley called the meeting to order at 9:10 a.m.  There  
         being a quorum present, the following business was transacted. 
         The Chairman announced that the hearing would begin by receiving  
         the subcommittee reports and called Senator Carona.  Senator  
         Carona presented the Subcommittee on Consumer Credit Laws  
         Report.  He explained that the Subcommittee held two hearings in  
         order to study the effects of the State's usury laws as they  
         affect consumer lending in Texas.  Senator Carona presented the  
         Subcommittee's recommendations and moved that the report be  
         adopted by the full Committee.  Without objection, the report  
         was adopted. 
         Senator Carona then presented the Subcommittee on Private Sector  
         Business Financing Report.  The recommendations in the report  
         reflect the need to find creative means to provide business  
         capital without committing significant new public dollars.   
         Senator Carona explained the recommendations contained in the  
         report and moved that the report  be adopted by the full  
         Committee.  Without objection, the report was adopted. 
         Chairman Sibley then called Senator Madla to present the report  
         on the Subcommittee on 9-1-1 Emergency Communications.  The  
         Subcommittee was charged to study any needed changes to create a  
         more efficient, cost effective emergency communication system,  
         including the development and implementation of wireless 9-1-1.   
         The Subcommittee held three meetings throughout the state and  
         basically looked at three areas dealing with the 9-1-1 system.   
         The first area related to the 9-1-1 fee on telephone bills and  
         its uses; the second issue was the question of whether the State  
         is prepared to meet 9-1-1 future needs; and finally, whether  
         communities or cities should be allowed to opt out of the 9-1-1  
         system.  Senator Madla explained the recommendations made by the  
         Subcommittee, and moved that the report be adopted by the full  
         Committee.  Without objection, the report was adopted. 
         The Chairman then called Senator Jackson, who chaired the  
         Subcommittee on the Effect of Government Regulations on Economic  
         Development.  The Subcommittee was requested to study the impact  
         of local, state and federal government regulations on economic  
         development efforts in Texas.  Senator Jackson presented an oral  
         report on the Subcommittee meeting held in Clear Lake on  
         December 1, 1999, where testimony was heard from State agencies,  
         local governments, business organizations, and private citizens.   
         Testimony and discussions focused primarily on the effect that  
         the proposed State Implementation Plan (SIP) would have on  
         economic development efforts in Texas, especially in those areas  
         designated as non-attainment areas.  The SIP may be completed by  
         the end of the year for submission to the EPA for approval.   
         Many of the rules will make dramatic changes in business  
         operations, and will have an effect on future growth and  
         economic development.  For these reasons, the Subcommittee  
         recommends that the Committee continue to closely monitor the  
         SIP implementation as it evolves.  Senator Jackson moved that  
         the report be adopted by the full Committee.  Without objection,  
         the report was adopted. 
         Chairman Sibley advised that the Committee would consider  
         Interim Charge #3 - monitoring trends affecting the convergence  
         of the banking, securities and insurance industries, including  
         market forces and federal government activity.  The Chairman  
         called Rhonda Myron, Special Assistant on Insurance and Banking,  
         Senate Economic Development Committee, to explain the proposals  
         for the interim report.  Ms. Myron explained three proposals for  
         legislation to conform state laws to requirements of the federal  
         Gramm-Leach-Bliley Act of 1999 (GLBA); and two proposals which  
         relate to legislation on GLBA privacy requirements and  
         confidentiality of agency  information.  Chairman Sibley advised  
         that consideration had been given to several ideas surrounding  
         these issues, not only privacy, but conforming to GLBA.  One of  
         the issues considered was the current agents licensing laws  
         since there is a possibility of federal preemption if the laws  
         are not changed.. The GLBA also calls for state action on  
         privacy requirements for the insurance industry.  The question  
         is whether Texas will go beyond the requirements of the GLBA.   
         The Chairman suggested that a watchful, waiting approach be  
         taken at this time, and that the State adopt legislation based  
         on the GLBA and the NAIC model regulation. 
         Following Ms. Myron's response to members' questions, Senator  
         Carona moved adoption of the proposals for the interim report.   
         Without objection, the proposals were adopted. 
         The Chairman announced that the final issue for consideration  
         was Interim Charge #4 - monitoring the implementation of SB 560.   
         David Featherston, Director of Telecommunications Division at  
         the Public Utility Commission (PUC), was called to present an  
         overview of the implementation of  SB 560 as set out in a binder  
         of information provided to the Committee members by the PUC.   
         During Mr. Featherston's testimony, Carey Spence, Deputy  
         Director of the Commission on State Emergency Communications,  
         was called to answer a member's question concerning the 9-1-1  
         fee charge on telephone bills.  Pat Wood, Chairman of the Public  
         Utility Commission, was called to testify and respond to  
         questions concerning various charges on telephone bills.  In  
         response to questions concerning state and local tax on fees and  
         surcharges on telephone bills, the Chairman called David  
         Somerville, Tax Policy Specialist at the Comptroller's Office. 
         Following testimony and members' questions on the  
         telecommunications charge, Chairman Sibley proposed a  
         recommendation that the State not levy taxes on the public  
         utility gross receipts tax, municipal franchise tax and the TIF  
         assessment, and that the Universal Service Charges, both federal  
         and state, should be studied further to determine whether  
         taxation of those charges is appropriate.  Senator Jackson moved  
         adoption of the recommendation.  Without objection, it was so  
         There being no further business, at 10:35 a.m. Senator 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