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Senate Finance met on March 2 to discuss articles VII and VIII in SB 1, the senate’s base budget bill. This report covers LBB and agency presentations from: the DMV, TWC, TDHCA, Lottery Commission, TxDOT, TDLR, Board of Plumbing Examiners, Board of Dental Examiners, TMB, Board of Pharmacy, BHEC, TDI, PUC, and the Racing Commission among others. The committee also heard public testimony. A video of the hearing can be found here.

This report is intended to give you an overview and highlight of the discussions on the various topics taken up. It is not a verbatim transcript of the discussions 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.

Department of Motor Vehicles

LBB

Whitney Brewster, Executive Director TxDOT

  • Department is requesting 9 exceptional items totaling $36.6 million; 6 can be funded through the TxDMV fund
  • $3.1 million for restoration of automation to extend e-titling capabilities and have an impact on capturing fraud within the system
  • $6.2 million for planning for headquarter facilities in Austin in 2022
  • Additional funds are for accounts receivable and two new substations
  • Buckingham – Asks about complaint system
    • Sunset recommendations included changes to the complaint system; requesting additional funding to combine two complaint systems to increase functionality
  • Nichols – Thanks their office for personal work with him
  • Bettencourt – Considered with the backlog on assessing titles; estimates on how bad the backlog is? What was the spike in registrations after online registration?
    • Estimate have about 1.4 million registrations that are backlogged across the state; working with the tax assessor collectors on that
    • People are complying with Governor’s waivers, so registration revenues are down 4% and titled revenues are down 11%; estimating $32 million will be deferred to FY 2021
    • Governor’s waiver will expire on April 15, so will see what happens after that
    • Saw it spike from high teens up to 55%
  • Bettencourt – Have less than a month; need to urge community tax centers to open to deal with the flood
    • County offices are currently open to in-person transactions
  • West – Selling data is a big issue, not an issue with me, have gotten complaints from constituents? Is there an opt-out provision in statute?
    • Yes $2.6 million was collected in the release of information last fiscal year; money collected is deposited to the TxDMV fund
    • There is an opt-out from marketing; the selling to marketing companies after the initial sale is permitted under state law
    • Worked with Kolkhorst to limit the types of data we can sell; the agency is willing to work with the legislature on this issue
  • West – Continue to get questions why persons in Dallas need to travel far for title problems?
    • In exceptional items, asking to put a substation in that area; could start as soon as we receive funding and will outgrow current facility by 2028
    • West – State owns land in that area, need to figure out why we are not taking advantage; want to expedite this session
    • Certainly, could do that
  • Nelson – Did you receive the LBB survey concerning privacy issues? $2.6 million; what happened with that recent data breach?
    • Yes, and yes all deposited in the TxDMV fund
    • We did not have a contract for data with Vertafore, but had a contract with a company they acquired; info included name, address, and vehicle information
    • Working with the AG’s office and the FBI on this issue; have been told there is no evidence of misuse of this data
    • Have legislative recommendations on how to prevent this happening in the future
  • Perry – Contracting in the state needs to change; need to know when there is an assignment, needs to be due diligence, and needs to be a remedy to penalize and punish
  • Nichols – Found a series for statues instructing the DMV to share data, SB 15 strikes those

Tommy Hanson, Chairman of the Motor Vehicle Crime Prevention

  • $8.6 million to restore funds that were in the LAR
  • $7.4 million to allow expansion of service areas and address additional areas of fraud; in ports
  • 3 FTEs to allow set up of a unit in the office to generate another $2.9 million a year
  • Are seeing dramatic increases of vehicle theft and decreases in recapture
  • Lucio – Want to talk to you to ensure agencies have the necessary grant to prevent auto theft
  • Nichols – Asked for $6 million for planning in that facility, the facility commission could help with this?
    • Are working with them, but an issue we are working through are bonds
    • Nichols – Will you have that put together in a couple weeks? Time is of the essence
    • Linda Flores, CFO – Facilities commission has referred us to the Public Financing Authority
  • Bettencourt – Dramatic increase in violent vehicle thefts and decrease in recoveries?
    • Are a lot of people moving to Texas, and this trend started before COVID; any form of criminal activities needs transportation
    • Under proposed bill last session, shows we would get 20% of the around $100 million a year; would allow expansion to the boarder and increase enforcement
  • Nelson – Jugging is what?
    • Explains jugging

Workforce Commission

LBB

Ed Serna, Executive Director TWC

  • Not asking for any additional funds or the restoration of the 5%
  • Provides an overview of the agency’s response to COVID-19
  • Unemployment insurance, have processed over 47 million claims; 948% more claims and 2,000 more payments than the same period last year
  • Are replacing old system with a cloud-based system; entire UI system will be updated
  • Have seen an increase in fraud activity; of the $4.26 billion dispensed, only a small percentage has gone towards fraud
  • Perry – Considering the pressures, TWC has done well; borrowed $6.7 billion? How long to pay this back?
    • Interest payments due in September, is interest free through this month; are provisions in the draft stimulus bill that would put off interest until September
    • In the past, have paid 10 year bonds back in 7
  • Perry – How long will this take to pay? Would be GR debt?
    • Will provide that information; need to run through various tax rate structures; is UI, so is self-supporting
  • Perry – How much UI fraud?
    • $506 million to suspicious claims; $90 million are the state’s dollars; soon will do a physical verification through a third-party
  • Perry – Are a data rich environment, what are you doing to ensure data is protected?
    • Have not had a data breach; only exchange data with other governmental entities, require encrypting standards, and out of state needs to meet federal standards
  • Lucio – What is the commission’s
    • Legislature transferred vocational rehabilitation and adult blind and visually impaired; have integrated those into local development boards
    • Have rewards for those who hire individuals with disabilities
  • Lucio – What types of entities are eligible for the TAP program?
    • Was expanded to community colleges, ISDs, non-profits and libraires
  • Kolkhorst – Fraud is the tip of the iceberg, what actions can we take to go and find these people?
    • Finding it is not local; is organized crime outside the country/in other states
    • Find a domain suspected of fraud and block that; look for anomalies in banking patterns
  • Kolkhorst and Serna discuss changes the could be made to change the UI system
  • Campbell – What about the Foreign Labor Application System, why do you need to create a certificate? What is the maximum length of “temporary?”
    • Country Arbour, Workforce Management – Role is to partner with the DOL, in Texas we say 4,000 applications and posted 1,200 jobs from that
    • Country Arbour, Workforce Management – Are often temporary jobs in agriculture, landscaping or hospitality; do not post them if we do not agree with minimal qualifications
    • Country Arbour, Workforce Management – Maximum length is one year
    • Country Arbour, Workforce Management – Is our role to vet those applications, system would track anomalies in applications
  • Campbell – Does this program cover nursing jobs?
    • Not in this program, would be in a different program
  • West – Bill being considered by congress, some will be coming into Texas, do you know how much will go to TWC? This is not included in your budget request?
    • Have not looked at it that way, they will usually allocate funding to the state
    • Normally, get about 10-15% of federal funds coming in; $371 million, $1.1 billion, set to receive an additional $2 billion for the childcare program
    • Not included, a majority of funds coming in could be covering childcare, etc.; have received some monies for administrative services, but cannot count on them
    • Federal funds are specific on where those monies need to be spent
  • Bettencourt – A lot of businesses have been on PPP, could we have federal dollars pay for those expenses, 10-year bonds, you discussed?
    • Have thought about that, would be great if the federal government just wrote those funds off
  • Bettencourt – How does work search work? Graduates are underemployed?
    • Did suspend work search until November, since then the minimum is 3; is a local board decision
  • Taylor – How many individual claims are fraudulent? They have set up a local bank to perpetrate the crimes?
    • About 300,000 are suspicious, are still investigating those claims; about half have been confirmed fraud
    • Set up a series of bank accounts; will use automated systems to submit claims requests
  • Taylor – How do they set up an account, is it one particular bank or internet banks? Need to investigate this further if there are patterns
    • Not a single bank, but there are certain banks we are reluctant to do business with because of how easy it is to commit fraud
  • Whitmire – 50% of applicants were fraudulent?
    • No, but are 300,000 suspicious and 50% of those have been proven fraudulent
  • Whitmire – Asks what his background is; what do we pay you?
    • Have worked on DIR, TCEQ, DMV, and other; $180,500 a year
    • Whitmire – That is a bargain
  • Nelson – New adult education enrollments is down 60%? What is strategy to address that? This is very important in today’s workforce
    • Knew it was coming because of COVID, still served over 70,000 last year; providers shifted to virtual services and safe distance
    • Participants faced virtual challenges such as reliable internet/equipment issues
    • Providers have lent equipment, and local boards “cranked up” their WIFI
  • Nelson – Seeing a shortage of teachers?
    • No, a vast majority are certified and degreed
  • Huffman – Thanks TWC staff members

Reimbursements to the Unemployment Compensation Benefit Account

LBB

Department of Housing and Community Affairs

LBB

Bobby Wilkinson, Executive Director of DHCA

  • Update on the $1.3 billion federal rental assistance program; money got to Treasury in January and started program up February 15
  • As of this morning 49,000 requests totaling $168.4 million and average request is $3,400
    • Is also for utility assistance
  • Will probably get another billion in congress; includes a mortgage assistance program
  • Received $382 million from the CARES Act
  • Requesting $801 million in All Funds; $42.4 million in appropriated receipts and $26 million in GR
  • Exceptional items include capital budget authority, update compliance tracking system, and upgrade to Office 365
  • West – Department sent a proposal to the Governor concerning persons convicted of a range of offenses to live in state housing, update?
    • Proposed rules would vet those individuals based on taxes, scaled program way back after homeless advocates and stakeholders
  • West – Rent relief program, if they live in the areas that receive federal money, can they still get the state’s funding?
    • Are statewide even though there are local programs; working to ensure there are no duplication of benefits
  • West – Asks about how you can qualify, looks forward to working with you
  • Lucio – Looking at Texas, how much of that need is budget addressing? Want that information
    • Housing programs are not an entitlement, serve a small percentage of those who qualify
  • Lucio – Federal funds, are there matching funds from the state?
    • No, is in addition
  • Schwertner – Eviction moratoriums, how has that affected the agency?
    • Expiration has been extended through March, is not something that can be enforced
    • Wanted to get the program out as soon as possible to be ahead of the moratorium

Lottery Commission

LBB

Mark Franz, Texas Lottery Commission

  • Lottery achieved record breaking sales in FY 2020; $6.7 billion in revenue, $1.66 billion to the Foundation School Program
  • Commission headquarters will be moving near the Capitol
  • Commission believes exceptional items requests will provide additional revenue to the state
  • Lucio – Lottery only takes up 16% of the education budget; veterans have their own gains?
    • Correct, is a direct benefit
  • West – Break down HUB numbers?
    • Do not have exact numbers, but are exemplary; can get those to you
  • Nelson – Are in a revenue crunch, when stimulus checks arrived, lottery sales went up; why spending so much advertising the lottery? When were these done? How much to advertise?
    • Studies indicates for every additional dollar spent there is an additional $7 generated to the state; at least two years ago
    • $35 million over the biennium; is a reduction, and is for billboards and digital advertising
  • Nelson – Is not a single-session issue for me, even though a reduction in advertising spending, people are still buying lottery tickets
  • Lucio – Notes advertising is important for sales, but will support Nelson’s idea to spend money elsewhere

Department of Transportation
LBB

  • Walks through LBB document
  • Kolkhorst – Federal funds being removed are mostly from the CARES Act?
    • Majority is from regular highway apportionments, does not reflect any coronavirus funds
  • Kolkhorst – Nonurbanized reflected?
    • Yes, and SB 1 does not reflect coronavirus funds for TxDOT; believes commission has authorized all CARES Act funds
  • Nichols – TERP, have a triangulation where some is going to the Texas Mobility Fund for an older bond, and then some is paid of the Highway Fund to go out of the treasury
  • Nichols – Are drilling out the unconstitutional funds for funds outside of the treasury, what programs do those monies go to?
    • Do not classify constitutionally versus unconstitutionally dedicated funds; on page 31, has recommendations for traditional funding sources
  • Nichols – Cannot use constitutionally dedicated to reimburse environmental; have miscellaneous programs that are reimbursed with unconstitutional funds, but are over spending there; filed SB 868 stops that transfer out of SHF
  • West – TERP funds held outside of the treasury, what was the original purpose of this fund? If they are outside of the treasury, they would be able to use the funds as they could
    • Are currently appropriated to the TCEQ, and have been subject to appropriations; statutory authorization for the uses of the fund did not change, but are subject to go outside of the treasury in FY 2022
    • West – Not sure why that bill was approved to facilitate this in the 86th

James Bass, Executive Director TxDOT

  • Majority of funding goes to project funding and delivery
  • Unfunded priorities (could be funded by the SHF): additional FTEs, construction of aging buildings, and a number of IT projects
  • 281 FTEs and estimate for biennial cost savings; a number of which would go towards having in-house IT
  • Revenue forecast pre pandemic $1 billion, CARES Act where the state is receiving $967 million that will almost completely offset that; Notes Prop 1 is volatile
  • Supporters of ERS
  • West – Houston, $7.5 billion to rebuild I-45, constituents and city officials are distressed the projects would displace minority communities
    • Project was approved in 2005, and the 2018; a majority of the region board voted for the project; more than willing to refine, not redo, the project
    • West – Why is construction like this always through minority communities?
    • Dedicated SHF is to highways; 3% eligible pt, half goes to TERP; exceptions come out of the Texas
  • West – Reminds of the Dallas to Houston rail discussions on the displacement of minority communities
  • Lucio – Those displaced should be given assurance of who is going to help them relocate,
    • Working with housing authorities with that help
  • West – Public Transit program?
    • Grant funding for small and rural transit providers that expands time of service and additional days
  • Nichols – Mobility Fund continuously “borrows up” and is a perpetual debt; how much debt?
    • Is a backstop; outstanding debt $5.943 billion
  • Nichols – Have been having discussions of having a one-year window to open up and reduce some of those debts
  • Nichols – Discretionary fund, how can you commit funds for the next ten years?
    • Did not update revenue forecast; saw a $2 billion shortfall, but next UTP is going to be $100-$200 million higher
    • Most of the remaining unallocated has been allocated for the next ten year
  • Nichols – HB 20 put in language that TxDOT cannot commit funds for more than a two-year period
    • Cannot commit more than 10% of the budget, depends on your definition of “commit”
    • Nichols – Thinks that is a violation of statute, when you take away everyone’s discretion
    • The UTP is a plan, not a “commitment”
    • Nichols – What happens is that projects will not get cancelled, but will get letters that projects have been bumped
  • Nichols – Is interesting we spent $27 million on condemnation of billboards, but appraisal boards to not put them on the books; is a taxation issue
    • Before 2015, billboards were personal property and paid to have it moved; court case in 2015-2016 said we must acquire them which led to high costs
  • Nichols – Last year $277,000 per billboard, and that money is not going to local tax collections
    • Appraised value is not always what we pay, some goes through eminent domain, depreciate value due to condition of the sign
    • Nichols – Want to have a conversation with whoever understands the appraisal method
    • Can get you together with them
  • Bettencourt – Echoes Nichols’ sentiments about the legislative intent of HB 20; NE Houston Highway project, project has ROD approval, and is important for the entire community
    • Would be years before we started acquiring properties and awarding all contracts
  • Campbell – MPOs across the state decide where road projects will be? Building up roadways can help build up the economic “privilege” of that community
    • Yes; can be correct, and depends on the physical shape of the project
  • Kolkhorst – When you put a rail up, the economic value of that community goes down
  • Kolkhorst – Is there any money in the UTP for highspeed rail?
    • Only thing that might be in there is in the rail planning strategy as TxDOT plays a role in the Fed’s environmental study
    • But there is no money in there currently for HSR
  • Kolkhorst – Discretionary funding, what is the financial impact? It is rolling?
    • $16 billion; is always a ten-year period
  • Kolkhorst – CARES Act, non-urbanized area formula, has been spent?
    • Have been allocated through grant awards, but not all have been spent
  • Kolkhorst – You said you received enough CARES Act to have no funding shortage?
    • Projecting a $1 billion shortfall from traditional revenues and CARES Act provided $967 million in Federal funds; those two almost offset each other
  • Kolkhorst – Dip in revenue is from non-traditional from Prop 1 and Prop 7?
    • Correct

Article VIII – Regulatory

Department of Licensing and Regulation

LBB

Brian Francis, Executive Director TDLR

  • Overview funding provided last session:
    • Anti-trafficking unit is training and has engaged in a number of investigations
    • Texas licensing system is moving forward and are on time; cosmetology and barber programs moved to Phase 2 as they will be merged
  • Exceptional item is the most important; continue funding for the Texas licensing system, as will migrate all licensees into the new system
    • Will help incorporate Sunset recommendations of implementing a risk-based system
  • Created a new web system that meets veterans where they are to find which licenses, they are eligible for
  • Aim to provide grants to Texas Engineering to figure out how to reduce them
  • Nelson – Getting a good response on the veterans webpage?
    • Had 24,000 hits last year
  • Nelson – Selling people’s personal data? To whom? Possible to ask people if they want to release that data?
    • Not being sold, do provide their name and address, but only with public information act
    • Removed licensee’s addresses off the webpage
    • Continuing education providers who are looking to send out notices for those whose licenses are going to expire
    • Information is available the website for people to see if their professional is actually licensed
  • Bettencourt – Getting complaints about backlogs, brought teams back into the office?
    • Created strategic work allocation teams to help process applications and modified batch review process; issued emergency licenses for current licensees whose application is being processed slowly
    • Down to 0 days on processing of renewal and new license application checks; were at one time two weeks behind
  • Bettencourt – Are still people who have been left behind, who do we get them put back in?
    • Will get that information to you, but the emergency license intends to cover them

Board of Plumbing Examiners

LBB

Lisa Hill, Executive Director Plumbing Board

  • Have worked on implementing Sunset recommendations
  • IT items asking for needed to implement changes in computer-based systems to cover third-party exams; one time funding of $23,000
  • Need $60,000 for two replacement vehicles
  • One additional customer service representative is needed; will be a first response person
  • Asking for additional monies to help compensate those who have worked hard recently, and to obtain new staff; $50,000
  • Buckingham – TDLR went out of their way to expedite licenses, was most disappointing to not see action from your board after Harvey; what have you done since then?
    • Asked for exceptions to renew those who retired from the profession, launched a webpage for people to find an expert in their area
  • Nichols – Last session the Sunset bill did not pass, Governor extended until when? If we do not pass a plumbing bill, technically the board will expire?
    • May 31 and yes

Health Related Agencies – Article VIII

LBB

  • Walks through LBB document
  • Schwertner – $5 million of the capital complex relocation
    • Medical Board submitted a request $6.5 million
  • Schwertner – PNP thought it was a one-time expenditure?
    • Part of the request was one-time fees to set up infrastructure, request this time is the continued costs for the three different program’s software systems
    • Schwertner – Costs for these programs was reflected in the licensee’s increased fees?
  • Kolkhorst – Moving to the building are having to purchase their own furniture?
    • Yes, facilities commission recommended this to them
    • Kolkhorst – Is odd that we are making them buy their own furniture, need to do an inventory of existing furniture or buy in bulk; would be a lot cheaper
    • Nelson – This discussion came up, facilities commission would reimburse a certain amount?
    • Working with them and compiling in a working document you can see in a couple of days
  • Perry – BHAC, had a big uproar on consolidating all these behavioral health groups; millions increase in operations costs
    • 2020 had $0.6 million for startup costs, then had a full year of operations funding
    • Perry – Prior to consolidation, what was the cost of them separately? Need to ensure what we were sold is happening
    • 2021 funding is a direct transfer from the agencies

Board of Dental Examiners

LBB

Casey Nichols, Executive Director

  • Highest is partial restoration of base budget; agency lost 7 positions, and request three of those are returned
  • Asking for merit salary increases; lose high quality staff to agencies; 3% for all eligible employees
  • Moving to the George H Bush building, requesting funds for new office furniture; $70,054
  • Kolkhorst – 5% reduction, what did that do for your investigations? Who are you replacing?
    • Lost director of enforcement plus two investigators
    • Want to replace director of enforcement, anesthesia inspector, and one regular investigators
    • Kolkhorst – Is important we stay on top of the anesthesia issue

Texas Medical Board

LBB

Stephen Brint Carlton, Executive Director of the TMB

  • Licensee population is growing, board needs to keep up with complaints
  • Request the legislature keeps in mind the discrepancy between what licensees pay and what the board can provide
  • $6.5 million in additional funding for capital projects on the move to the George H. W. Bush building; are significant IT costs associated with the move
  • Have frozen hiring under COVID-19; medical board staff have been rapidly processing emergency licenses in addition to regular work
  • Eventual goal for the restoration of funds for staff
  • Perry – Several orders from TMB were not helpful during the pandemic, do you recognize you were wrong on some level? How are you going to remedy it? There will be a bill clarifying what elective surgeries are, TMB was way out of line
    • Elective procedure ban, TMB worked with the Governor’s office to come out with an emergency rule; both discussed it had to be something in that physician’s discretion
  • Perry – What about doctors being penalized for prescribing Hydroxychloroquine
    • No disciplinary action except for one prescribed to himself and family members for
  • Nichols – Orders were severe and also said they had to report any wrongdoings they saw; order shut down many hospitals in the area
  • Kolkhorst – Reiterates the issues Perry and Nichols brought up; have a pandemic preparedness bill, asks TMB to be a part of that conversation

Board of Pharmacy

LBB

Allison Benz, Executive Director

  • Requests $450,309 for the move to the George H. W. building
  • Requesting additional funds for the peer assistance program in $106,396
  • Requesting approximately $5 million to maintain enhancements to the Prescription Monitoring Program system
  • Requesting additional LAR request to the health professions council
  • Kolkhorst – $5 million is ongoing? Would like to learn more about that
    • Is an ongoing subscription cost $2.5 million per year; is funded through the ESF
  • Kolkhorst – Were difficult moments, had to put a stop to Hydroxychloroquine, should not limit knowledge
  • Nichols – PMP, how well is it working?
    • Have gotten good feedback from prescribers and pharmacies
    • Buckingham notes the PMP is not good

Texas Behavioral Health Executive Council

LBB

Gloria Canseco, Council Member BHEC

  • Newest agency; need for mental health providers is more than ever
  • More residents, there is a higher unmet need in providers in the state; still rank 49 in the country in the ratio of mental health providers per population
  • Nelson – Would like to verify that statistic

Darrel Spinks, Executive Director BHEC

  • Most important item is the 4 additional FTEs to address the backlogs in the social work and other programs; were understaffed at HHSC and understaffed now
  • Requesting additional funds for the move to the George H. W. Bush building
  • $12,000 to cover moving part-time accountant to full time because moving to the CAPS financial program

Department of Insurance

LBB

Doug Slape, Chief Deputy Commissioner TDI

  • Total request is $236.7 million for the biennium and 1,250 FTEs
  • Cuts in TDI’s appropriations do not create funds for GR
  • Have been tackling a backlog of 20,000 complaints; are keeping pace and resolving complaints in 25 days
  • Exceptional item request a technical adjustment to reallocate reductions
  • Exceptional item includes a request of $4.97 million to partially restore funding cut from TDI’s request to continue modifications
  • Restore regulatory response rider allowed TDI to add $2.2 million a year and a number of FTEs to aid during declared emergencies
  • Request a change in rider, roll over licensee fees over to biennium
  • Nelson – Starting to see winter storm claims; processed in a timely manner?
    • Too early to see, but have submitted two data calls that aims to speed things up
  • Hancock – Later in the session for this data? When can we get it? Keep us in the loop
    • Will depend; at the latest will be before the end of the session
  • Hancock – See any delays in the March 12 date?
    • Not seeing that, will give the data we have

Cassie Brown, TDI

  • Workers compensation system has been stable since reforms in 2005
  • Key operational changes allowed TDI to continue aid
  • Exceptional item request includes a partial restore funding level to baseline to be used to modernize TDI operations including a system overhaul
  • Lucio – People are returning to work, do we see action taking place at the courthouse?
    • Administrative dispute system within the company, then can go to district court; does not have information on that
  • Taylor – Is the agency selling people’s data?
    • Do not sell for marketing purposes; is a part of the data sharing process for claims, have eliminated the fee due to COVID-19
  • Nichols – Request shows data collection agent? Would be outside the agency? Concerned about that
    • Aim to move as many functions out of COMPASS as we can, looking to contract out with a stat agent and would be a charge to insurance carriers not through the agency/state

Office of Public Insurance Counsel

LBB

  • Walks thorough LBB document

Melissa Hamilton, General Counsel OPIC

  • Agency represents the interests of insurance consumers
  • A portion of funding comes from maintenance taxes through TDI
  • Funding currently is at $1,092,000 for
  • Have no exceptional item requests
  • Lucio – Over the last FY, how many disputes came across your desk? How many were in favor of the consumer?
    • Looked 1,800 rates, forms, and rules; do not have the answer for that

Public Utility Commission

LBB

Arthur D’Andrea, Commission at PUC

  • Says he is heartbroken and upset any role they played but this is the right team moving forward

Thomas Gleeson, Executive Director of PUC

  • Down between 40-50 FTEs
  • Need restoration of cuts
  • Nelson – asked committee to focus on budget aspect of PUC
  • Nelson – asked for more details on cuts, when do you approve the ERCOT budget, any more details on weatherization
    • One area they cut with 5% was individuals going out to talk to ERCOT, cut infrastructure division, etc.
    • PUC will be approving ERCOT budget around September/October
    • D’Andrea – Double digit billions to weatherize and stated several ways they could raise funds
  • Perry – Wholesale water was included in your LAR request, not asking for the money correct?
    • No longer going to pursue internally or externally
  • Hancock – Will be making sure we are able to solve these
  • Schwertner – $1.7 million is PUC’s new exceptional item that includes attorneys, government relation specialists, and information specialists; glad this is put in, but need pronounced reform of regulatory utility
  • Bettencourt – Reliability monitors terminated; what size of contracts and how
    • Hancock – Have discussed this in a previous meeting, were paying for a lot of miscellaneous things
    • Had a standalone enforcement division, with 5% cut moved attorneys back into the legal division, only FTE reduced was the director of that group
    • Bettencourt – Were market monitors cut?
    • One was moved from ERCOT to the PUC and are still in talks with how to proceed if it belongs in house
    • Bettencourt – Was that an FTE position?
    • No, was a three-party contract; position was reporting to the director of the enforcement division
    • Cost was about $300,000
  • Nelson – New exceptional item request aim to fill those holes?
    • Yes, aim to look at emergency operations plans, looking into weatherization of all plants, need similar staff to ERCOT; ERCOT staff make a lot, so it is hard for the PUC to compete
  • Creighton – Restate how you would deploy the $1.7 million?
    • 5 mid-level attorney positions in enforcement, 2 administrative law judges, an engineer 5, 3 economist 4s, government outreach/information specialist; to address new regulations/oversight
  • Creighton – Appreciates the extent of this answer; if not $1 of this request is approved, do you feel with current FTEs you can communicate effectively with ERCOT?
    • Regardless of how we are resourced, we have to do that; that is an operational/communication issue with ERCOT
  • West – Investigation and enforcement, are you resourced enough to provide oversight in the event you need to do conduct oversight over ERCOT? Is a need?
    • With the two exceptional items we will be; budget has only grown 4% in twenty years, is apparent the PUC is not meeting expectation
  • West – Had you had these resources would it have made a difference?
    • I believe so, but also other things need to change like standardization of winterization; for the purposes of Senate Finance, need this to accomplish this goal
  • West – What oversight do you have over supply? Is it necessary?
    • None over natural gas suppliers, and am not sure what oversight the RRC has over that
    • Have enforcement over transmission system, get emergency operations reports; enforcement authority is $25,000 per event per day
    • Sunset previously recommended that to be raised to $100,000; Feds to $1 million a day
    • Have enforcement authority over TDUs; need to look about changes to ensure equitable energy dispersal during an emergency
    • West – Enough money in the budget to look at that?
    • Yes, have opened up 5 projects to do so
  • Lucio – Is the agency’s responsibility to use funds to protect the citizens of this state; the PUC’s budget is going to be one of the most important things we do this session
  • Lucio – PUC budget will very important this session, appreciated D’Andrea speaking from the heart in his opening comments
  • Kolkhorst – Thanks D’Andrea opening remarks, compares ERCOTs budget to PUC as well as number of employees, followed up on emergency plans
  • Perry – asks about fox in chicken house scenario regarding oversight, cautious them to re-think next position and ERCOT not pay the third party who watches over them
    • A selection committee of three made the hire, but ERCOT provided funded
    • Perry – would you tell the agency that hired you how they are wrong, doesn’t think that is good policy going forward
  • Bettencourt – inquired on staffing positions and what role they would play, how much is market monitor contract
    • Don’t know but will get back
    • Agrees it was a little over 5
  • Bettencourt – what does ALJ do? Continued to ask about various positions and roles they fulfill
    • Anything that runs through the agency will go across their desk, right now have 4 with over 500 open cases
    • Attorney V is management enforcement attorney

Office of Public Utility Counsel

LBB

Lori Cobos, Chief Executive and Public Counsel for Office of Public Utility Counsel

  • Reviews role of agency, helps consumers save million of dollars in electric and water bills
  • Total request reflects 5% cut, about $213k
  • Requesting UB authority for additional budget flexibility
  • Requesting 2 exceptional items: reimbursements for IT related expenses and for restoration of 5% budget driven by increased workload
  • Campbell – didn’t know much about agency but during the storm they still took consumer calls and increased social media communication to help inform community; argues their transition to IT allowed them to do that
  • Bettencourt – have you been receiving calls, what type?
    • People without electricity and water, also a high volume of calls from people working with Griddy
    • Welcome residential consumers who have billing issues to call them

Racing Commission

LBB

  • Walks thorough LBB document
  • Taylor – asked about $50 million in escrow account
    • On sales and taxes on horse feed, etc
  • Taylor – how many tracks do we still have
    • Defers to the agency

Chuck Trout, Executive Director of Racing Commission

  • Details role, current issue is watching to combat organized crime on race track, etc.
  • Have 4 tracks currently

Gerald Dube, CFO of Racing Commission

  • Undergoing Sunset
  • Attachment A contains budget reduction detail and contains all cost savings
  • Commission is 100% self-funded
  • Moves through budget request, exceptional items incl: request to expand veterinarian pilot, information security officer, more oversight at racetracks, IT equipment, horse escrow account to help manage grants

Special Provisions Relating to All Regulatory Agencies

LBB

  • Walks thorough LBB document
  • Recommendations update the amounts that agencies will transfer to the PMP; total amount ties to the GR program amount at Board of Pharmacy

Cyrus Reed, Sierra Club Lone Star Chapter

  • Need to weatherize homes; believes THDCA could play a larger role in this
  • Missed importance for on demand response in the PUC; they do not have enough staff, should get them more enforcement discretion and increase PUC’s $25,000 a day cap
  • OPAC plays a key role in ERCOT, need more resources to them

John Hryhorchuk, Texas 2036

  • Federal stimulus funds can help the state’s long-term workforce needs; Like Sen. Nelson has said before, we need to align workforce and education systems
  • TEA and TWC have been working together, but more can be done with federal funds to ensure their data centers can communicate with each other; have data gaps because of antiquated systems particularly at TWC
  • Aim Hire Texas has been founded with industry partners to pick up from the momentum of HB 3 to postsecondary and higher education