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The Senate Committee on Finance met on March 11, 2019, to take up SB 65 (Nelson et al) and SB 500 (Nelson et al).

This report is intended to give you an overview and highlight of the discussions on the various topics the committee took up. It is not a verbatim transcript of the hearing but is based upon what was audible or understandable to the observer and the desire to get details out as quickly as possible with few errors or omissions.

 

SB 500 (Nelson et al.) (Committee sub) – Relating to making supplemental appropriations and reductions in appropriations and prescribing limitations regarding appropriations.

Nelson opening comments

  • Includes funding for Harvey recovery, Medicaid shortfall, school safety, state hospitals, and pension liability for TRS.
  • Committee sub includes $1.7b from GR and $4.3b from ESF to address critical needs for the state.
    • Cost of Harvey is a significant part of this.
    • Even with these large numbers, budget is still under spending limit.
  • Agencies continue to submit supplemental needs to LBB, this process is not over.

 

Amy Borgstedte, LBB

  • Review LBB infographic outlining SB 500.
  • $6.1b in combined GR and ESF
  • Nelson – Assuming SB 500 passes, how much ESF will be left in the fund?
    • John McGeady, LBB – Around $11b will be left.
    • Nelson – We are looking at one-tenth of 1% increase in GR spending from last session?
    • McGeady – Correct, it is a 0.1% increase, which is virtually flat.
  • Watson – A $300m infusion that was in the initial SB 500 is not in the committee sub, why is that?
    • Nelson – We were told it did not move the needle much at all, so we decided to focus $500m on pension liability in the TRS, which would move the needle a lot.
    • Huffman – Yes, it is hard to believe that $300m would not move the needle, but it did not. Funding we are giving to TRS will significantly improve the situation. We will work on ERS another session.
  • Kolkhorst – Question about funding for Harvey recovery, SB 7
    • McGeady – Current incarnation of SB 7 creates sub-accounts in the resiliency funds, so funds from FEMA, other places would be put into those sub-accounts and used right away.
    • Kolkhorst – Thanks to Nelson for efforts in funding Harvey recovery.
  • Taylor – On higher ed, why is Lone Star College the only Community College that is included in ESF funding?
    • Borgstedte – They had $13.1m in facilities damage during Harvey.
    • Taylor – Why are there $13.1m in uninsured damages at Lone Star?
    • McGeady – That number does not necessarily reflect what the total amount of uninsured damages will be, a significant portion of that could be covered by FEMA.
    • Taylor – How much of that do they expect to get paid by FEMA?
    • McGeady – Up to 90%.
    • Taylor – There are many institutions who lost contact hours due to the storm, which is not insured because it is not necessarily facility damages. I would like a break down on how much of this is insured, it is not good that we keep having to “pony-up” for damages that should be insured.
  • Bettencourt – In the case of Lone Star it is in the rider that they must repay it. There are people in situations where they can’t wait for FEMA money and need the funds up front.
  • Bettencourt – Is the around $1,000 per inmate correct for the correctional managed care costs?
    • McGeady – That is the correct on average for correctional managed. Some are much more expensive and some cheaper since that is just the average.

 

Nim Kidd, Chief of Texas Division of Emergency Management

  • Nelson – Do you have any suggestions for us to make clear that the state will not pay for every disaster recovery effort in the future?
    • Kidd – Two instances where legislature has put money towards recovery were for the Bastrop fires and the West plant explosion. But every session there is money put forward for response.
    • Nelson – CBDBG-DR, what percentage of projects could be covered by that?
    • Kidd – HMPG are grants to improve inventory not damaged by the storm. That is 75/25 federal/non-federal split. That number is capped for Texas. Hazard mitigation money with a 406 designation does not have a cap, which has a 90/10 cost share, the same as public assistance. Notice of intent total was just under $10b, actual application was just over $4b for the HMPG program. Those numbers have not yet been vetted by state or federal agencies.
  • Taylor – Does school safety funding require unexpended balance authority if they can’t spend it by August of this year?
    • Borgstedte – No it would be effective until June 2021.
  • Bettencourt – Are schools security equipment covered, or do we have to have specific line item authority
    • Kidd – If they were damaged by Harvey we should look at using damage mitigation money.
  • Kolkhorst – Explain the 406 grants
    • Kidd – If a courthouse is damaged, FEMA under the public assistance program will pay for raising a generator from the basement out of the basement to prevent it from getting damaged again.
    • Kolkhorst – Would Lone Star College qualify for 406?
    • Kidd – The 406 mitigation could be used if they have their non-federal share and they work with FEMA and Texas Emergency Management.
    • Kolkhorst – What did we learn from Ike?
    • Kidd – When the money is put up out front it is sometimes very difficult to close off the grant.
  • Taylor – Back to Bettencourt’s question, some of the damages are not from Harvey, and these safety requirements are not directly related to Harvey?
    • McGeady – Correct, these are school safety and hardening, not Harvey related. Could expand the language.
    • Taylor – I do not want to limit ourselves to just these 4 or 5 choices.
    • Nelson – We are planning on voting this out of committee today due to timing with the House.
    • Taylor – Could we amend it on the floor?
    • Nelson – Yes.
    • Bettencourt – Agree with Taylor, we want to have all available best uses, otherwise we will end up paying for it twice.

 

Public testimony

Brock Greg, Texas Retired Teachers Association – For

  • Thank you for additional dollars put in from ESF.
  • Reaching actuarial soundness is number one priority.
  • TRS pensioners want an increase in their pensions.

 

Jim Barron, Yoakum County Judge, Texas County Judge and Commissioners Association of Texas – For

  • Impact of trucks from oil and gas industry have massive impact on roads.
  • Impact of drilling one well is equivalent of 50 million passenger vehicles in terms of road damages and impact.
  • Funding for county roads will be beneficial to counties.

 

John Petrila, Meadows Mental Health Policy Institute – For

  • In order to meet needs within psychiatric hospitals it will take campus redesign.
  • Watson – Last session we put in seed money to start a 3-biennium approach. Part of that seed money being referenced by the witness is to do planning. ASH and SASH have completed planning, and it is good to see the $300m in the supplemental.

 

Gary Anderson, Texas Public Employees Association – For

  • Despite shifting of ERS funding, appreciate Nelson and the committee’s dedication to the issue.

 

David Evans, Integral Care – For

  • Eliminate waiting lists, increase outreach services.
  • ASH redesign includes important element, including 46-b restoration competency.
  • ASH redesign project is shovel-ready.

 

Dennis Wilson, Sheriffs Association of Texas – For

  • Support redesign team for ASH.
  • Mental health is an issue for Sheriffs and county jails.
  • Use of tele-psychiatry would be beneficial.
  • Watson – Sheriff brought a unique perspective on local law enforcement. Helping with mental hospitals would help alleviate one of the unfunded mandates for local law enforcement.
  • Flores – The development of ASH and SASH covers 92 counties. There is a lot of work being done in order to get these hospitals completed.

 

Michael Lozano, Permian Basin Petroleum Association – For

  • Focused on $500m appropriation for county roads, infrastructure is one of the main focuses of oil and gas industry.

 

Cyrus Reed, Sierra Club – For

  • Support any funding for repairing of damages to natural areas damaged by Harvey.
  • Mobile monitoring would be beneficial to add.
  • Hinojosa – Mobile monitoring was added in the work group.

 

Todd Staples, Texas Oil and Gas Association – For

  • Support the transfer of $500m for county roads and infrastructure.

 

Dr. James Baker, Dell Medical School – For

  • Support funding for mental health services.

 

Katherine Jones, Design Institute for Health at Dell Medical School

  • Brain disorders are among the most misunderstood and stigmatized conditions.
  • ASH must be replaced.

 

Nelson closing comments

  • Important to remember that even with these dollar amounts there is less than one-tenth of 1% of a spending increase.

 

CSSB 500 passed 12-0.

 

SB 65 (Nelson et al.) (Committee sub)– Relating to state contracting and procurement.

Nelson opening comments

  • Serious contracting problems persist
  • Committee sub requires use of checklist to ensure each procurement has sufficient documentation.
  • Necessary for agencies to receive required feedback prior to awarding additional contracts to the same vendor.
  • SB 65 will ensure any future contract involving serious and confidential data will require review by LBB and sign-off by QAT.

 

CSSB 65 passed 12-0.

 

Committee adjourned.