LT. GOVERNOR DAVID DEWHURST: Members, if I could have your attention. We have four bills on the intent calendar for this afternoon. It's my intention to take up Senate Bill 7 and Senate Bill 6 this afternoon. They were time stamped earlier than our current time. We have two more bills on the intent calendar which are Senate Bills 1 and 2, they're time stamped on being printed 6:23 and 6:35 respectfully -- each one. And there may be, I expect, a break between take up the first two bills Senate Bill 7 and Senate Bill 6 and when we can take up Senate Bill 1 and Senate Bill 2. Since the Senate redistricting committee has finished their public testimony, I've asked Senator Seliger to talk to the members and see if during that break that he wants to go back into committee and pass a committee substitute. So that's your schedule. I don't expect that we'll be in session tomorrow, so I am advising you that we will not be in session tomorrow, we will not be in session on Sunday but we will be on session Monday. And my intent is to make it as easy as possible and therefore not have you come back into session until -- I'd be interested in feedback on the time, either 12:00 noon or 1:00 clock so it'd be easier for people to get back. Senator Fraser moves 1:00 clock? All right. 1:00 o'clock. 5:00? Thank you, Senator Eltife. So it's my intent to call us back in at 1:00 o'clock. We have two bills we need to take up and consider on the floor and then Senator Carona may need to have a committee hearing on either Monday or Tuesday but I'll leave that up to him. Senator Duncan, for what purpose do you rise, sir?

SENATOR ROBERT DUNCAN: For an announcement.

LT. GOVERNOR DAVID DEWHURST: You're recognized.

SENATOR ROBERT DUNCAN: Thank you, Mr. President and members. I would request as well that the -- there's a floor amendment to Senate Bill 1 and I explained this yesterday when we laid out Senate Bill 1 in committee. Senate Bill 1 as filed is the conference committee report, I think, with one minor technical correction that we made and filed it and heard it yesterday. I announced at the time that we had been reviewing bills that were covering the same subject matter that part contained in Senate Bill 1 and were contained in the conference committee report that you considered on 1811. What we have done in order to preserve the bills that members have worked hard to pass with their names on it, we have put in the floor substitute, we have either eliminated measures that have gone all the way to the governor's office and have been signed or we have placed a superceding clause in there that says if the bill in the specific bill that covers the matter that's covered in Senate Bill 1 goes into law, then it would supercede what is in Senate Bill 1. We're not trying to be duplicative, we're trying to be clear. And I think you find that is the difference between the floor amendment and the bill that was actually introduced that has been distributed. So if we could get the floor amendment distributed early so you could look at it, that would be helpful.

LT. GOVERNOR DAVID DEWHURST: Members, the Senate will come to order. A quorum is present. Senator Gallegos, for what purpose do you rise, sir?

SENATOR MARIO GALLEGOS: To ask a question on the -- technical correction, is that what it is?

LT. GOVERNOR DAVID DEWHURST: Senator Duncan.

SENATOR ROBERT DUNCAN: Senator Gallegos, I announced earlier that this is Senate Bill 1 which was the conference committee report for Senate Bill 1811. We filed as Senate Bill 1 the conference committee report for 1811. Once we had a little time, we were able to go back and review bills that contained the same language or similar language that were in 1811 and now Senate Bill 1 that has passed, and so out of respect for the members who passed those bills, if they are pending on the governor's desk and not yet signed, we have said that if the governor signs those bills, then those bills would supercede what is in this article or in this bill. There are a couple of -- one or two bills that have actually been signed by the governor, we've removed them from the floor substitute, those are the differences. You'll look in there and you see there's specifically referred to the House or Senate Bill and says this House or Senate Bill takes effect in this article, then this bill does not take effect.

SENATOR MARIO GALLEGOS: Thank you, Senator Duncan. And this is the same Senate Bill for your resolution to go outside the bounds, right, the other day?

SENATOR ROBERT DUNCAN: It is the exact same -- you know, I guess other than these changes, maybe there's one or two minor technical changes that we made. I think there was one on the back to work and homeless money going from the enterprise fund, we made that permissive as opposed to mandatory. Other than that this is a -- this is the bill with those superceding clauses in them.

SENATOR MARIO GALLEGOS: Thank you, Senator Duncan, for that clarification. Thank you.

LT. GOVERNOR DAVID DEWHURST: Thank you, Senators. Members, the Chair lays out -- that concludes the morning call. The Chair lays out on second reading Senate Bill 7. The secretary will read the caption.

PATSY SPAW: Senate Bill 7 relating to the administration, quality, efficiency and funding of health care, health and human services and health benefit programs in this state.

LT. GOVERNOR DAVID DEWHURST: The Chair recognizes Senator Nelson to explain Senate Bill 7.

SENATOR JANE NELSON: Thank you, Mr. President and members. Senate Bill 7 reflects the work of the Medicaid subcommittee, the Senate health and human services committee and the Senate finance committee over the last several months to reduce costs and improve efficiencies within our health care system. The savings in this bill amount to $467 million and are already assumed in the budget. This bill, including the language from the conference committee report from both Senate Bill 23 and Senate Bill 8, but removes amendments not aligned with the original intent of the bill. Specifically Senate Bill 7 carves prescription drug benefits into Medicaid managed care while preserving existing patient protections and access. It implements an electronic visit verification system to detect and deter fraud and community care programs, it creates an independent client assessment process to reduce over utilization of services in our Medicaid program, it repeals the prohibition against managed care in south Texas, it implements copayments for nonemergency visits to hospital emergency rooms. It aligns Medicaid CHP payments -- or reimbursement with patient outcome rather than quantity of services, it authorizes incentives for Medicaid and CHP providers to achieve savings through high quality efficient care. It creates the health care collaborative certificate to provide safe harbor from state and federal anti-trust laws for providers who join together to provide care that promotes quality, patient engagement and coordination of services. It implements public reporting of hospital rates of preventable readmissions and complications and it converts the existing health care policy council into the Texas Institute of Health Care Quality and Efficiency which will serve as a forum for health care provides, payers and consumers to study and make recommendations on improving health care transparency, quality, and efficiency in Texas. Members, this bill passed our Senate finance committee unanimously yesterday. And Mr. President, I move passage of Senate Bill 7 to engrossment.

LT. GOVERNOR DAVID DEWHURST: Thank you, Senator Nelson. Now, just out of curiosity are both -- this bill contains --

SENATOR JANE NELSON: Seven, eight, and 23.

LT. GOVERNOR DAVID DEWHURST: And is it my memory that 23 passed out of here 31 to zero?

SENATOR JANE NELSON: That is correct, I think.

LT. GOVERNOR DAVID DEWHURST: Senator Van de Putte, for what reason do you rise, ma'am?

SENATOR LETICIA VAN DE PUTTE: Will the Senator yield?

LT. GOVERNOR DAVID DEWHURST: Will Senator Nelson yield?

SENATOR JANE NELSON: Absolutely.

SENATOR LETICIA VAN DE PUTTE: Thank you. Thank you, Senator Nelson, and your entire team. I've reviewed the Senate Bill 7 and I want to thank you for ensuring the pharmacy provisions that we discussed in the regular session when it was Senate Bill a few weeks ago remained in this bill. And I wanted to make sure I reiterated that many members talked about the pharmacy provisions. One of them is the any willing pharmacy to participate in the network if they agree to accept that reimbursement rate, that language that's currently available in the ERS as well.

SENATOR JANE NELSON: Yes. And we are allowing for any willing pharmacy to participate in managed care.

SENATOR LETICIA VAN DE PUTTE: I very much appreciate the House's amendments staying in about prompt payment because pharmacy systems are all adjudicated at the point of service. No mandatory mail order and the PBM transparency. So I want to thank you for these core provisions. As I see it looking at this very, very important bill that I think has a tremendous opportunity to help us save money but also a patient (inaudible) approach where there's a medical team so providers can work together, I know that as these managed care organizations will use financial incentives that are paid providers again working as a team through these patient center homes to improve patient outcomes. And when we improve patient outcomes not only are we increasing Texans productivity but we're reducing the cost both to our state and to the federal government. So I have to tell you I see a tremendous opportunity for my profession as a pharmacy to be a part of those teams in improving patient adherence, to making sure their medication, therapies, their immunizations and other things that will help keep patients healthy and out of emergency rooms. So I want to just focus on one part. Since pharmacies are going to be able to be part of the networks and qualify to participate in these financial incentives, even though they may not directly contract with the managed care organization, they contract through pharmacy benefit managers; is that correct?

SENATOR JANE NELSON: Correct.

SENATOR LETICIA VAN DE PUTTE: And there was one amendment though that I think was proposed in the House by Representative Brown that did not stand, and it was a prohibition, I think, as it was worded, the prohibition that the state do not contract with managed care organizations or subcontracted pharmacy benefit management when they participate in Medicaid if they've already been convicted of Medicaid fraud but merely -- I think what has happened now is there's a requirement that the Health and Human Services has to consider fraud when contracting, but they are not prohibited; is that correct.

SENATOR JANE NELSON: Right. And Senator, first of all, let me thank you because you did point out when we heard this many moons ago on the floor for the first time some of the concerns by some of our pharmacies. And my pledge to you was I would work with the House sponsor on this issue and we did spend a long time talking about many issues, some of which you mentioned, that some of the pharmacies were concerned about and specifically the issue that you just brought up, we came up with some what we call compromise language, but I think language that we all can agree on that would require the Health and Human Services Commission to consider certain factors when they award a managed care contract including if a pharmacy benefit manager has been convicted of violating state or federal laws, they have committed breach of contract or assessed a final or penalty of $500,000 or more in the previous three years. And I think that was the compromise language that we felt most comfortable with. You mentioned the Brown amendment, and there were some concerns with the Brown amendment that there would be some unintended consequences. So we tried to work with the same goal in mind but just coming up with language that I think people felt more comfortable with.

SENATOR LETICIA VAN DE PUTTE: Well, thank you, Senator, I appreciate that. But in the time frame -- and everything moves so quickly, we do know that a pharmacy benefit manager and retail pharmacy operator have not only faced allegations but now that they are having to pay back the federal government about $17 million in a settlement. And I want to read this into the record because I think that it is very important for us to understand that Health and Human Services actually needs to look very seriously at the issue of fraud and where other managed care organizations or pharmacy benefit managers have been convicted in other states. And so I want to talk a little bit. Right now CVS's Care Mart prescription is in an over billing settlement with the Department of Justice and the case behind this settlement alleges that CVS used a computer program named RS2000 to automatically over bill Medicaid when certain types of patients ordered prescriptions. The pharmacy -- the system was able to do this, both as a dispensing pharmacy and a prescription benefit manager that negotiated with private health care insurers because it knew how much private insurers would be reimbursed for prescriptions while Medicaid did not know. The company allegedly gambled it because Medicaid did not have access to private insured's pricing data, that it would not find out. What happened, Senator, and I know that you may have read on this case, is it was a whistle blower and the whistle blower found out that this prescription program took advantage every time a dual eligible Medicaid patient asked for a prescription, and they overcharged. And many of you know some of these systems where they overcharge maybe a dollar or $1.10 but what has happened in at least the CVS Care Mart with their RX2000 prescription program it was discovered that this stem had serious policy consequences. Both from overpricing and payments to the federal government and to the state Medicaid program. The way that this is worked out, it is in several states and at the end of just last April in Alabama, California, Florida, Indiana, Massachusetts, Michigan, Minnesota, New Hampshire, Nevada and Rhode Island were subject to this settlement. And so I think it's very important for this legislature to know and for -- particularly for Commissioner Seeds, as he undergoes what is new for us which is a pharmacy benefit management program that we really do look at those providers, those PDMs who have committed Medicaid fraud, who are in the settlement now with other states because if they were -- it took a whistle blower internally to expose this to the federal government and to the state government. And we want to make sure that Texas doesn't get hoodwinked in the same manner. So I want to thank you for that. I just want to make sure that we send a clear, clear message that we cannot be contracting with entities that have a track record not only of being stewards of state dollars but actual committing fraud.

SENATOR JANE NELSON: Yes. And I was familiar with that situation. I appreciate you bringing that to our attention and I think the compromised language that I just talked about addresses that. It would allow the commissioner to address the exact situation that you just described and I think this will help us.

SENATOR LETICIA VAN DE PUTTE: Thank you, Senator, for your leadership and for acknowledging this and particularly working -- it's a big change for all of our pharmacy providers particularly those in the smaller communities and the rural communities. I appreciate your leadership on this.

SENATOR JANE NELSON: And, Senator, before you put the mic down, you mentioned several protections that we did agree to put in place and I want to mention you did mention allowing any willing pharmacy to participate in managed care, we also keep the statewide preferred drug list, the formulary in place and we prohibit HMOs from creating individual pharmacies, we require prior authorization to be consistent with current policy that would prohibit the fail first -- what do we call them fail first --

SENATOR LETICIA VAN DE PUTTE: Fail first medication managed therapy.

SENATOR JANE NELSON: Thank you. We prohibit an HMO -- I think you mentioned this -- from requiring mail ordered prescriptions, we require HMOs to meet prompt pay requirements. So we tried to address all the issues that the pharmacies expressed concern about and I greatly appreciate you bringing that to our attention as it went out of here and I hope we did what we promised we were going to do.

SENATOR LETICIA VAN DE PUTTE: Thank you very much. This is an excellent piece of legislation.

SENATOR JANE NELSON: Thank you.

SENATOR LETICIA VAN DE PUTTE: Thank you, Senator.

LT. GOVERNOR DAVID DEWHURST: Senator Hinojosa, for what purpose do you rise, sir?

SENATOR JUAN HINOJOSA: To ask the author a question.

LT. GOVERNOR DAVID DEWHURST: Will Senator Nelson yield?

SENATOR JANE NELSON: Absolutely.

SENATOR JUAN HINOJOSA: Senator Nelson, I know you worked very hard on this piece of legislation, I think it's a very good piece of legislation and this bill is really the conference committee report as agreed to by the House and the Senate?

SENATOR JANE NELSON: That's right. Well, it represents three conference committee reports: Senate Bill 7, 8, and 23.

SENATOR JUAN HINOJOSA: And I pointed out a while ago that there may inadvertently be some language not intended, not there --

SENATOR JANE NELSON: Right.

SENATOR JUAN HINOJOSA: I think page 16 line 52 that if possible that that language was added, if possible and of course if that is the case, we can always correct that to a technical correction or resolution in the event that's the case, it was not there in the original --

SENATOR JANE NELSON: Yes, Senator. And you just pointed that out to me, I'm not familiar with why those two words are in there, I'm going to find out and certainly it's my intent to look at that.

SENATOR JUAN HINOJOSA: Thank you very much.

SENATOR JANE NELSON: You bet.

LT. GOVERNOR DAVID DEWHURST: Chair recognizes Senator Nelson for a motion.

SENATOR JANE NELSON: Well, Mr. President, I move passage to engrossment.

LT. GOVERNOR DAVID DEWHURST: Members, you have heard the motion by Senator Nelson. Is there objection from any member? The Chair hears no objection from any member, and Senate Bill 7 passes to engrossment. The Chair recognizes Senator Nelson for a motion to suspend the constitutional rule that bills be read on three several days.

SENATOR JANE NELSON: Thank you, Mr. President. I do move to suspend the constitutional -- suspend the constitutional rule that a bill be read on three several days.

LT. GOVERNOR DAVID DEWHURST: Thank you, Senator. Members, you've heard the motion by Senator Nelson. The secretary will call the roll.

PATSY SPAW: Birdwell, Carona, Davis, Deuell, Duncan, Ellis, Eltife, Estes, Fraser, Gallegos, Harris, Hegar, Hinojosa, Huffman, Jackson, Lucio, Nelson, Nichols, Ogden, Patrick, Rodriguez, Seliger, Shapiro, Uresti, Van de Putte, Watson, Wentworth, West, Whitmire, Williams, Zaffirini.

LT. GOVERNOR DAVID DEWHURST: There being ayes, zero nays, the rule is suspended. The Chair lays out on third reading and final passage Senate Bill 7. The secretary will read the caption.

PATSY SPAW: Senate Bill 7 relating to the administration, quality, efficiency and funding of halted care, health and human services and health benefit programs in this state.

LT. GOVERNOR DAVID DEWHURST: Chair recognizes Senator Nelson for a motion.

SENATOR JANE NELSON: Mr. President, before I make this motion, I want to thank staff of all of our members who worked so hard on this, these three pieces of legislation over months including your own, Mr. President, the committee that worked for months, the Senate Bill committee of finance, just -- it was a massive undertaking, I believe it is going to be so good for Texas and Texans. And I most grateful to all the senators for their support on this bill. Mr. President, I move final passage of Senate Bill 7.

LT. GOVERNOR DAVID DEWHURST: Thank you, Senator Nelson. Very proud of you. Members, you've heard the motion by Senator Nelson. The secretary will call the roll.

PATSY SPAW: Birdwell, Carona, Davis, Deuell, Duncan, Ellis, Eltife, Estes, Fraser, Gallegos, Harris, Hegar, Hinojosa, Huffman, Jackson, Lucio, Nelson, Nichols, Ogden, Patrick, Rodriguez, Seliger, Shapiro, Uresti, Van de Putte, Watson, Wentworth, West, Whitmire, Williams, Zaffirini.

LT. GOVERNOR DAVID DEWHURST: There being ayes, zero nays, Senate Bill 7 is finally passed.

SENATOR JANE NELSON: Thank you, Mr. President and thank you members.

LT. GOVERNOR DAVID DEWHURST: Members, the Chair lays out Senate Bill 6. The secretary will read the caption.

PATSY SPAW: Senate Bill 6 relating to foundation curriculum and the establishment of the instructional materials allotment and adoption and review of instructional materials and technological equipment for public schools.

LT. GOVERNOR DAVID DEWHURST: The Chair fist recognizes Senator Shapiro to explain the bill.

SENATOR FLORENCE SHAPIRO: Thank you very much, Mr. President and members. Senate Bill 6 is actually a bill that establishes the instructional materials allotment and contains the same language as the conference committee report for House Bill 6 which we have already adopted. This bill establishes an instructional materials allotment for Texas students and it has the following major provisions in it. First, it sets aside in this biennium 40 percent of the distribution from the permanent school fund to the available school fund and in the next biennium to follow 50 percent. This fund will be utilized to provide instructional materials, and it was called the instructional materials allotment. This also maintains the SCOE review of instructional materials and allows the board to adopt proclamation cycles to match available funding. It requires districts to certify that they cover appropriate standards in the Texas essential skills knowledge and skills and since districts have increased flexibility and at this time I move also ensures that students have access to the content needed to successfully learn the curriculum. I would be happy to answer any questions. I do have one floor amendment.

LT. GOVERNOR DAVID DEWHURST: Senator Van de Putte, for what reason do you rise, ma'am?

SENATOR LETICIA VAN DE PUTTE: To ask some questions of the author and sponsor of the bill.

LT. GOVERNOR DAVID DEWHURST: Will Senator Shapiro yield?

SENATOR FLORENCE SHAPIRO: I will. Thank you.

SENATOR LETICIA VAN DE PUTTE: Thank you, Senator Shapiro. Thank you so much. I know there has been a lot of information and speculation on this because it is a bell weather changer for us. But tell us a little bit -- as we have been discussing this in the committee and certainly for the last several years, when we take the word "textbook" and we now use the words "instructional materials," that really does mean content whether delivered in a book form or an electronic form but still the core of this is content materials that children will use and teachers will use to learn rather than I know some folks get confused with the technology part and think this is all about laptops and iPads and smart boards or whatever those beautiful blackboards, they think it's just about the technology. Tell us the difference in that and how much the emphasis is really on the content no matter what methodology and technology is used to deliver it.

SENATOR FLORENCE SHAPIRO: Thank you, Senator Van de Putte. And I am glad you brought it up because I think there may be some misinformation out there. With two different pieces of instructional materials, they're very clear in most of our minds. There's content and then there's distribution of that content. Currently instructional materials, when you use that terminology, people just think that it's interchangeable with the textbooks. For generations we have called the content textbook. That's actually the distribution of the content. What we're hopeful of is that first and foremost what will be used in the allotment the first things the school district will look for is content. What we put in proclamation 2011 just like we have talked about, and I think it's important to note that that means that they would first purchase the materials, the content that was necessary for implementing the 2011 STAAR and end of course exams and that would include English language arts, grades through 12th, Spanish, English language arts grades two through five, spelling three through five and science supplemental materials grades five through 12. Once they have declared that they have given all this content and they have acquired the content, then and only then are they allowed to actually go out and utilize what I call the distribution methodology, the smart board, utilize extra money later on for things like an iPad, an iPhone, any of those things. But this allotment is included in the technology allotment. We used to have $30 per student for technology allotment. So that's been incorporated into this proposal. So it's very important particularly in proclamation 2011 because we're just starting our end of course exam, we're just staring to use our STAAR program, that that be -- proclamation 2011 be the first run at those dollars before they are using what I call the distribution of those materials. And I real appreciate your asking that. I think that's a very important part. The only other piece that I'd suggest, and it's in the law and I'd like to reference it. It's actually on page four line 58 in the bill and it specifically gives the definition of instructional materials, allowing for electronic materials and technological equipment but it says the first requirement, the first requirement in consideration, when you look at instructional materials entails and I quote "content that conveys the essential knowledge and skills of a subject in the public school curriculum." So legislative intent from what you and I have just been talking about says content comes first and then comes the distribution materials or the technological equipment.

SENATOR LETICIA VAN DE PUTTE: Thank you, Senator Shapiro. Thank you for the explanation.

SENATOR FLORENCE SHAPIRO: Thank you. I do appreciate that and I hope that will show legislative intent which I think you and I have been very concerned about. Thank you.

SENATOR KEL SELIGER: Senator Rodriguez, for what purpose does the Senator from El Paso county rise?

SENATOR JOSE RODRIGUEZ: To ask the Senator a question.

SENATOR KEL SELIGER: Senator, will you yield?

SENATOR FLORENCE SHAPIRO: I will.

SENATOR KEL SELIGER: Senator yields.

SENATOR JOSE RODRIGUEZ: Thank you, Senator Shapiro. First of all, I want to thank you for all your work on this bill again, and I want to see if you will allow me to ask you a few questions like we did last time, although much shorter this time.

SENATOR FLORENCE SHAPIRO: Yes, sir.

SENATOR JOSE RODRIGUEZ: To establish some legislative intent.

SENATOR FLORENCE SHAPIRO: Of course.

SENATOR JOSE RODRIGUEZ: At yesterday's committee hearing, did you say that any school district could use their instructional allotment to use it for English as a second language books?

SENATOR FLORENCE SHAPIRO: That's absolutely correct, Senator.

SENATOR JOSE RODRIGUEZ: Thank you. Will school districts be directed to use their allotment for instruction materials to include all subjects under proclamation 2011 including the ESL materials for grades K through eight?

SENATOR FLORENCE SHAPIRO: They will be instructed to make sure that the first priority will be for the end of the course and STAAR programs and everything after that which is proclamation 2011 will be a priority following those two proposals.

SENATOR JOSE RODRIGUEZ: All right. Thank you. Would you agree that the common proficiency in English is crucial for understanding the words on a state test given in English from grades 6th through 12?

SENATOR FLORENCE SHAPIRO: I would.

SENATOR JOSE RODRIGUEZ: Would you also agree that the ESL materials for K through 12 -- through 8th, are a priority and necessary to ensure our children are able to meet state standards?

SENATOR FLORENCE SHAPIRO: Yes, sir.

SENATOR JOSE RODRIGUEZ: Thank you, Senator. Mr. President, I move that the exchange between Chairwoman Shapiro and myself be printed in the journal.

LT. GOVERNOR DAVID DEWHURST: Senator Rodriguez, excuse me, I was visiting with Senator Uresti, could you reask your question.

SENATOR JOSE RODRIGUEZ: Yes, Mr. President. I move that the exchange between Chairwoman Shapiro and myself be printed in the journal.

LT. GOVERNOR DAVID DEWHURST: Thank you. Members, you heard the motion by Senator Rodriguez. Is there objection from any member? The Chair hears no objection from any member, and the motion is adopted.

SENATOR FLORENCE SHAPIRO: Thank you, Mr. President. May I also do the same and ask that the exchange between Senator Van de Putte and myself all be in the journal.

LT. GOVERNOR DAVID DEWHURST: Members, you've heard the motion by Senator Shapiro. Is there objection from any member? The Chair hears no objection from any member, and the motion is adopted. Both exchanges will be included in the journal.

SENATOR FLORENCE SHAPIRO: Thank you.

LT. GOVERNOR DAVID DEWHURST: The Chair lays out the following floor amendment. Floor amendment No. 1 by Senator Shapiro. The secretary will read the amendment.

PATSY SPAW: Floor amendment No. 1 by Shapiro.

LT. GOVERNOR DAVID DEWHURST: Chair recognizes Senator Shapiro to explain floor amendment one.

SENATOR FLORENCE SHAPIRO: Thank you, Mr. President. Mr. President and members, this is very similar to what Senator Duncan stood up earlier to talk about on Senate Bill 1. This actually revises any language in the bill that changed due to other bills passing during the regular session. The three bills in here are bill by Senator West which is legislative counsel cleanup of education code, a bill by Senator Watson which was the financial literacy bill, and a bill by Senator Patrick which was an electronic sample bill. Each of these bills within the amendment, page one through seven, would pull out any bills that have either passed in the regular session or are waiting for the governor's signature. The second part is only on page eight and it very clearly adds a contingency clause that devotes textbook funding in the supplemental appropriations bill which was House Bill 4 to the instructional materials allotment only if Senate Bill 6 gets immediate effect. The contingency rider and the supplemental appropriations bill expired because HB6 and Senate Bill did not pass during the regular session. If this bill gets two-thirds vote for immediate effect, the supplemental appropriation for HB4 which is science, preK and continuing contracts will be funded with this allotment. I move adoption of amendment No. 1.

LT. GOVERNOR DAVID DEWHURST: Senator Wentworth, for what purpose do you rise? Members, you heard the motion by Senator Shapiro. Is there objection from any member? The Chair hears no objection from any member, and floor amendment No. 1 is adopted. Chair recognizes Senator Shapiro for a motion.

SENATOR FLORENCE SHAPIRO: Thank you, Mr. President. Members, I move passage to engrossment of Senate Bill 6 as amended.

LT. GOVERNOR DAVID DEWHURST: Members, you heard the motion by Senator Shapiro. Is there objection from any member? The Chair hears no objection from any member, and Senate Bill 6 as amended passes to engrossment. The Chair recognizes Senator Shapiro for a motion to suspend the constitutional rule that bills be read on three several days.

SENATOR FLORENCE SHAPIRO: So moved.

LT. GOVERNOR DAVID DEWHURST: Members, you heard the motion by Senator Shapiro. The secretary will call the roll.

PATSY SPAW: Birdwell, Carona, Davis, Deuell, Duncan, Ellis, Eltife, Estes, Fraser, Gallegos, Harris, Hegar, Hinojosa, Huffman, Jackson, Lucio, Nelson, Nichols, Ogden, Patrick, Rodriguez, Seliger, Shapiro, Uresti, Van de Putte, Watson, Wentworth, West, Whitmire, Williams, Zaffirini.

LT. GOVERNOR DAVID DEWHURST: There being ayes, zero nays, the rule is suspended. The Chair lays out on third reading and final passage Senate Bill 6 as amended. The secretary will read the caption.

PATSY SPAW: Senate Bill 6 relating to foundation curriculum, the establishment of the instructional materials allotment and the adoption, review and purchase of instructional materials and technological equipment for public schools.

LT. GOVERNOR DAVID DEWHURST: Chair recognizes Senator Shapiro for a motion.

SENATOR FLORENCE SHAPIRO: Thank you, Mr. President and members. I move final passage of Senate Bill 6 at this time.

LT. GOVERNOR DAVID DEWHURST: Thank you, Senator. Members, you've heard the motion by Senator Shapiro. The secretary will call the roll.

PATSY SPAW: Birdwell, Carona, Davis, Deuell, Duncan, Ellis, Eltife, Estes, Fraser, Gallegos, Harris, Hegar, Hinojosa, Huffman, Jackson, Lucio, Nelson, Nichols, Ogden, Patrick, Rodriguez, Seliger, Shapiro, Uresti, Van de Putte, Watson, Wentworth, West, Whitmire, Williams, Zaffirini.

LT. GOVERNOR DAVID DEWHURST: There being ayes, zero nays, Senate Bill 6 as amended is finally passed. Congratulations.

SENATOR FLORENCE SHAPIRO: Thank you very much, Mr. President.

LT. GOVERNOR DAVID DEWHURST: Members, the following message from the governor. Secretary will read the message.

PATSY SPAW: To the Senate and the House of 82nd Texas legislature first called session, whereas the people of Texas through their state constitution have placed the power to call the legislature into special session in the hands of chief executive officer to the State and whereas the members of the 82nd Texas legislature first called session have now convened to consider items presented to them by the governor. Now, therefore I, Rick Perry, governor of the Texas by the authority vested in me by article four section eight and article three section 40 of the Texas constitution do hereby present the following subject matter to the 82nd Texas legislature first called session for consideration. Legislation relating to the operation of the Texas Windstorm Insurance Association. In testimony whereof I have signed my name officially and called the seal of the state to be affixed hereto at Austin, the 3rd day of June 2011. Rick Perry, governor of Texas.

LT. GOVERNOR DAVID DEWHURST: Senator Zaffirini, for what purpose do you rise?

SENATOR JUDITH ZAFFIRINI: Parliamentary inquiry, Mr. President.

LT. GOVERNOR DAVID DEWHURST: State your inquiry.

SENATOR JUDITH ZAFFIRINI: Thank you, Mr. President. Mr. President, if I recall correctly we convened today after having recessed during our last legislative day or the same legislative day. So my question for you today is since we reconvened after having stood in recess, if we address a bill that does not have the 25 votes to suspend the constitutional rule that bills be heard on three several days, is it the intent of the Chair and of this membership that we adjourn and then reconvene in a new legislative day to avoid the constitutional rule that bills be heard on three several days?

LT. GOVERNOR DAVID DEWHURST: Senator Zaffirini, it's my intent subject to the will of the body.

SENATOR JUDITH ZAFFIRINI: Thank you.

LT. GOVERNOR DAVID DEWHURST: Members, after visiting with Senator West, Senator Watson, Senator Whitmire and others, I am going to recognize Senator Duncan for a motion to suspend Senate Rule 7.12.

SENATOR ROBERT DUNCAN: Thank you, Mr. President --

LT. GOVERNOR DAVID DEWHURST: To take up and consider Senate Bill 1.

SENATOR ROBERT DUNCAN: Thank you, Mr. President and members. I move that we suspend Senate rule 7.12 to take up and consider Senate Bill 1.

LT. GOVERNOR DAVID DEWHURST: Members, you heard the motion by Senator Duncan, is there objection? Senator Zaffirini. Is there objection from any member? The Chair -- I hear one objection. The secretary will call the roll.

PATSY SPAW: Birdwell, Carona, Davis, Deuell, Duncan, Ellis, Eltife, Estes, Fraser, Gallegos, Harris, Hegar, Hinojosa, Huffman, Jackson, Lucio, Nelson, Nichols, Ogden, Patrick, Rodriguez, Seliger, Shapiro, Uresti, Van de Putte, Watson, Wentworth, West, Whitmire, Williams, Zaffirini.

LT. GOVERNOR DAVID DEWHURST: Members, there being 25 ayes and six nays, the rule is suspended. The Chair lays out on second reading --

SENATOR JUDITH ZAFFIRINI: Mr. President.

LT. GOVERNOR DAVID DEWHURST: Senator Zaffirini, for what purpose?

SENATOR JUDITH ZAFFIRINI: Parliamentary inquiry.

LT. GOVERNOR DAVID DEWHURST: State your inquiry.

SENATOR JUDITH ZAFFIRINI: Thank you. Since we have suspended rule 7.12 by majority vote, that refers to the printing of bills, what document will we have before us when the bill is considered?

LT. GOVERNOR DAVID DEWHURST: Senator Zaffirini, the members are going to have the same bill before them that they would have had if we had not suspended rule 7.12 and we waited until 6:35, which is the printing date time.

SENATOR JUDITH ZAFFIRINI: Okay. Thank you.

LT. GOVERNOR DAVID DEWHURST: The Chair lays out on second reading Senate Bill 1. The secretary will read the caption.

PATSY SPAW: Senate Bill 1 relating to certain state fiscal matters.

LT. GOVERNOR DAVID DEWHURST: The Chair recognizes Senator Duncan to explain the bill.

SENATOR ROBERT DUNCAN: Thank you, members. This bill has been before you as Senate Bill 1811. It went to the House, we conferenced, there was a conference committee that did a lot of work, we talked about that the other night. We added school finance to this bill and we basically -- this is the same bill that was before you, I will have a floor amendment that will basically perfect the bill to ensure that it does not supercede any bills that have already passed the House. There will be another technical amendment that Senator Van de Putte will offer with regard to the schools that are federally funded for defense communities and that's all I am aware of at this point in time. With that, I would be happy to answer any questions.

LT. GOVERNOR DAVID DEWHURST: Senator Van de Putte, for what purpose do you rise?

SENATOR LETICIA VAN DE PUTTE: Will the gentleman yield for a question?

LT. GOVERNOR DAVID DEWHURST: Will the Senator yield?

SENATOR ROBERT DUNCAN: I yield.

SENATOR LETICIA VAN DE PUTTE: Thank you, Senator Duncan. I wanted to visit with you. I know this is an all encompassing bill, and I do appreciate the visit that you and I have had about the school districts that are impacted by a high number of military students. But my question refers to a program that I think we're very excited about called PARIS. I am not exactly sure what page of the floor amendment it is in but I did get a copy of --

SENATOR ROBERT DUNCAN: It's in article 33.

SENATOR LETICIA VAN DE PUTTE: Article 33, yes, article 33. The LBB recommended the use of federal data to help veteran -- our veterans access federal benefits thereby saving state funds on Medicaid. During the general appropriations bill, there were several riders that I know there were implemented of what we call the PARIS system which is Public Assistance Reporting Information System. So that's already in the budget bill; is that correct?

SENATOR ROBERT DUNCAN: It's my understanding that it is in a rider, I believe it may be in article two and apparently there's several places this program is mentioned. And as you know we have worked through the process to make sure that all of this language seeks up with what's in the appropriations bill.

SENATOR LETICIA VAN DE PUTTE: I knew that Senate Bill 1 amended section 34.017 of the government code to allow specifically money from the fund for veterans assistance to be used for the PARIS program and as I understand, this is a -- the fund for veteran assistance are the proceeds that are for this fund generated by that veteran's lotto ticket, the newest one being the great image of John Wayne --

SENATOR ROBERT DUNCAN: The one we passed last session, I believe.

SENATOR LETICIA VAN DE PUTTE: Absolutely. And what this does is has the Texas Veteran's Commission, Health and Human Services, the Department of Aging and Disability Services and the Veteran's Land Board to enter into an interagency contract to establish a staff workgroup to investigate and analyze the data. Senate Bill 1739 by Senator Wendy Davis passed unanimously out of both chambers and makes sure that the funds for veteran assistance that's listed in that government code limit the money in the fund to only make grants and address the means. And I know the language that you have now, what we had seen first really was problematic for that, but as I understand it now, your language would make sure that although money from this veteran's assistance fund going to be taken out for two SCEs that it will be put back into the veteran's assistance funds because when those savings are realized, the potential may be about $5 million in saving to the Medicaid program so that that cost for the two SCEs, I think it's 50,000 each year, will be basically put back to the funds so the intent of Senator Davis' bill will still remain with the wording in your floor amendment; is that correct?

SENATOR ROBERT DUNCAN: Senator, that is my intent as we have worked through this and I know there's been quite a bit of discussion to make sure that that is the effect of the language in now Senate Bill 1 and so that would be my intent.

SENATOR LETICIA VAN DE PUTTE: And the other bill that passed when we visited with the LBB about this PARIS program, which we hope to be very successful, really making sure that our veterans get to the system of care that is the most appropriate for them doesn't mean at all that they're going to be totally shoved out of Medicaid, my understanding is there are services which are more appropriately administered and paid for by the Veteran's Administration. But if that veteran qualifies for some of the Medicaid portions in another state where this has been implemented, it has worked Senate synergistically, so it has reduced cost significantly to the Medicaid program, used it more efficiently but still had a better continuum of care for our veterans; is that correct?

SENATOR ROBERT DUNCAN: That's my understanding, Senator. The way this would work and it would certainly be our intent that it would work this way.

SENATOR LETICIA VAN DE PUTTE: Rider nine in Article I established the PARIS program and House Bill 1784 by Representative Farrias, and which I sponsored here, also passed both chambers unanimously and is called for that memorandum of understanding for the PARIS program. Your new language in the floor substitute is in conjunction with those riders and would work with House Bill 1784 in addition to Senator Davis' Senate Bill 1739; isn't that correct?

SENATOR ROBERT DUNCAN: Senator, that would be correct and that would be certainly the intent of this provision in Senate Bill 1.

SENATOR LETICIA VAN DE PUTTE: Well, thank you very much. Thank you for working with our office and certainly the staff did a great job of making sure the real intent of this program which I think will be wonderful for our veterans and save us some money as well to make sure that it is workable and we did not have any unintended consequences from the great piece of legislation both of Representative Farrias and our colleague Senator Davis. Thank you.

SENATOR ROBERT DUNCAN: Senator, thank you and I appreciate you working with our staff. I think my staff porter Wilson who's worked hard on this bill can write an arguable article on how all these provisions work together with Senate Bill 1 to make this a better bill.

SENATOR LETICIA VAN DE PUTTE: Well, thank you, Senator. For a while I thought as much as we talked to Porter about PARIS he was thinking about some beautiful town in France, but this is not what we're talking about at all and we thank him for his work on this.

LT. GOVERNOR DAVID DEWHURST: Senator Davis, for what purpose do you rise?

SENATOR WENDY DAVIS: To ask some questions of the author.

LT. GOVERNOR DAVID DEWHURST: Will Senator Duncan yield?

SENATOR ROBERT DUNCAN: I yield.

SENATOR WENDY DAVIS: Thank you, Senator Duncan. I have a general question about the bill and then a couple more specific ones. Just generally we had talked about some time in the last few days, your original understanding that it would take two-thirds of us to approve this in order for it to take immediate effect and I think since that time you have had a conversation with ledge counsel and it's your understanding now that that's not required and I wonder if you could please explain that to us.

SENATOR ROBERT DUNCAN: Sure. On first review working with ledge counsel in getting the bill ready for a special session, we had to look at adjusting the effective dates of different provisions and as you know the constitution requires a 90-day implementation unless there is an immediate effect given by two-thirds of both bodies. At the time when I first visited with you and others about that, the concern had been raised that it would take immediate effect. Upon further review, we had determined that because of the day the foundation school program payments are due in September, as well as the fact that the appropriations bill that we'll pass later did take immediate effect because of the way the appropriation bill is worked, that the need for immediate effect is not necessary.

SENATOR WENDY DAVIS: So the only portion of it that really would have been tied to the immediate effect would have been the foundation school piece. The remainder of it would have been really appropriation in nature wouldn't have had that --

SENATOR ROBERT DUNCAN: Right.

SENATOR WENDY DAVIS: -- condition applied to it at all. Okay. More specific couple of questions, on your floor amendment, on page 119 of the amendment, line 27, and I saw that this was actually in Senate Bill 1811 that we considered on the last day of session as well as in your originally filed SB1, there is an exemption now from the margins tax for an unincorporated entity organized as a political committee under the election code or the provisions of the Federal Election Campaign Act and I wanted to see if you could explain to us the genesis for that and what purpose that will serve and the amount of money that we'll be talking about.

SENATOR ROBERT DUNCAN: Thank you. That was an issue that was brought to us during the conference committee and apparently there was a ruling or determination that these entities which are not subject to federal taxation, they're more or less like a nonprofit corporation where being -- there was a determination that they may be subject to the margins tax and because that would not be the type of entity that would necessarily be -- since it's not subject to any sort of federal taxation, we felt like in the conference committee it was an appropriate provision to include in this bill to clarify that issue and that was a recent issue, it wasn't something that had been pending out there for very long.

SENATOR WENDY DAVIS: Do you have any idea how much money we would be talking about in terms of no longer collecting the margins tax?

SENATOR ROBERT DUNCAN: Well, I don't think we have ever collected it before. I don't think -- it is my understanding that that was a new ruling, I think that this is -- we're not collecting it now, so this wouldn't be necessarily a loss that we would anticipate just a loss of revenue that we had anticipated even in the BRE would be my understanding of that.

SENATOR WENDY DAVIS: And then I have a question for you on --

SENATOR ROBERT DUNCAN: Let me also -- just -- the fiscal note I think provides that that provision would have no fiscal impact on the state.

SENATOR WENDY DAVIS: Okay. Thank you. And then on page 163 of the floor amendment section 71.16 and 71.17 have a new provision in them, I believe they were in SB1811 as well but they're also in your Senate Bill 1 and the floor amendment to Senate Bill 1, in the Senate Bill 1 as filed, they were sections 72.16 and 72.17, I believe in your floor amendment they're renumbered as sections 71.16 and 71.17. And I just want to make sure I understand the intention of what these will do. It's my understanding that under current law today proration provides for an economic downturn and allows the state to adjust payments to school districts in the second year of a biennium to help cover the shortfall clause by circumstances such as higher student growth or lower property value that made the projections of costs for biennium inaccurate and it's also my understanding that under current law the legislature is allowed to vote to use rainy day funds to immediately cover the shortfall and we actually did that this session when we voted to use some rainy day funds to go back and put money into the prior biennium obligation for public school funding. But it's also the case in current law that if the legislature decides not to use the rainy day fund, then the schools would actually be prorated in the second year of biennium with funding loss to be made up in the first year of the next biennium, which would make the districts whole again. So if there was a situation where there weren't sufficient funds in the rainy day fund to make up that obligation or the legislature simply chose not to do that, it would allow basically a settling up to occur so that in the first year of the next biennium, the school districts could be repaid on a pro rata basis for what they had pro rata not received in the last year of that prior biennium. It's my understanding that what this language is going to do is remove the state's obligation to do that, that it would till allow the legislature the ability to vote to use the rainy day fund for that purpose but if the legislature chose not to or if there were weren't rainy day moneys available that if the school district -- if the state were not able to make its obligation to a school district in the current biennium and had to prorate them in the second year of that biennium, we're not providing the opportunity any more. In fact, we're taking away the opportunity under law, then in the first year of the next biennium school districts would be made whole through the resources that the state had available to it.

SENATOR ROBERT DUNCAN: Well, let me respond --

SENATOR WENDY DAVIS: I'm sorry, I know it was a pretty long question. It's a complicated issue.

SENATOR ROBERT DUNCAN: I think I understand the goal of the question is to -- first of all, let me say this is that even under current law the rainy day fund or the economic stabilization fund is to be used only upon a three-fifths vote for the legislature for a past deficit, so that's not changed at all in this bill. So those provisions there were in the event there is proration and the -- I think it's the LBB is required under the law to make a recommendation that the legislature access the economic stabilization fund to cover those losses. We're not changing any of that. This does allow the legislature though to make those appropriations necessary to cover any of those shortfalls that would be necessary occurring as a result of misprojections or just revenue shortfall like we do for every other agency or entity. I think, again, what I am saying is the legislature did -- the appropriations process is placed with the responsibility of making these determinations with available revenue that could be general revenue generated from sales tax, general revenue held in a property tax relief fund or accessing the economic stabilization fund which we have done this session and have done in the past for different purposes.

SENATOR WENDY DAVIS: It's my understanding that this provision that's in law that is actually going to be changed by virtue of the floor amendment to Senate Bill 1, the provision came about because in the 80s there actually was no such requirement by the state, and I think it was 1987 where school districts had been prorated, they all of course were in the middle of their school year, they already obligated themselves to salaries and so on and to forth, there was an under funding that year because the state had miscalculated property value growth and student population growth and in the coming biennium, the first year of that next biennium, the state chose not to appropriate and go back and pay back to the school districts that obligation that it had not been able to meet and it caused actually quite a stir and that's where that provision in law originated. And my concern is -- and perhaps I am not reading this right -- but my concern is right now that it says that this language is being added on page 164 line 13, it says a school district is not entitled to reimbursement in a subsequent fiscal year in the amount resulting from the adjustment authorized by this subsection and of course the adjustment that's authorized by a subsection is one where the state has an inability to pay the school district because of miscalculations.

SENATOR ROBERT DUNCAN: Senator, I think what we were trying to do with this bill is place more responsibility and transparency in the way we do this particular type of appropriation for public schools and responsibility on the body to make sure that we take care of those obligations. One of the -- and so that was a fundamental decision made in Senate Bill 1 and 1811, and part of I think even Senate Bill 22 as it moved through the process. So we felt like the appropriations process needs to be flexible to meet the needs of our schools and be able to make adjustments, for example, target revenue hold harmless which is one of the reasons we designed Senate Bill 22 the way we did. As you know, target revenue hold harmless is more or less an entitlement that's included in the current school finance law that is inequitable in your school in Fort Worth. I know if I look at the numbers, they're significantly impacted by target revenue hold harmless in a negative way, many of the school districts are. So what we're trying to do is adjust that and Senate Bill and the provisions in this bill allow us to do that through the appropriations process, and that was part of our discussions in the conference committee when we reached an agreement with the House to be able to move forward with Senate Bill 22 as part of the compromise in the second year. So it allows the appropriations process. And I quite frankly have had confidence in that process, in the Senate there's 15 members on the committee and in the House there's like 29 and I believe very strongly that those committees and the body, both the legislature and both the House and the senate will make the appropriate decisions for funding our public schools.

SENATOR WENDY DAVIS: And I understand that and I have faith in the good will and the intent of this legislative body as well, but I am concerned when we're putting language here that says essentially that a school district can get into a proration situation, the state can prorate in the second year biennium because of economic downturns as happened in 1987 and that if the state doesn't -- if the legislature doesn't vote to use rainy day funds in order to go back and repay that or make some other appropriation for it, this is actually removing the only obligation and it's -- my understanding from the history of the way this law developed, after 1987 when the state did do that the state didn't -- I guess -- I don't even know if the rainy day moneys existed at that point --

SENATOR ROBERT DUNCAN: Because I don't think they even started around --

SENATOR WENDY DAVIS: But they did make an appropriation to go back and so school districts were left having been -- they had relied on the state's commitment to a certain amount of funding, that commitment was not realized because of financial conditions and in the first year of that next biennium because the state wasn't obligated to go back and fill that hole to each of the school districts that were in that hole, then they -- the legislature actually did not do that and that the follow up to that, the consequence of that was that put into law was a requirement that the legislature would do it. Not just that it could do it, if it chose to but in fact that it would. And it's my understanding that this is removing that obligation, that legal obligation, though I agree with you, I think we would certainly feel a moral obligation to do it and I use wanted to voice my concern about that change being made in the law and I think you answered my question. I appreciate it.

SENATOR ROBERT DUNCAN: Thank you.

LT. GOVERNOR DAVID DEWHURST: The Chair lays out floor amendment No. 1 by Senator Duncan. Secretary will read the amendment.

PATSY SPAW: Floor amendment No. 1 by Duncan.

LT. GOVERNOR DAVID DEWHURST: Chair recognizes Senator Duncan to explain floor amendment No. 1.

SENATOR ROBERT DUNCAN: Thank you, Mr. Chairman and members. You'll see that this -- and you've had this on your desk for a while, the changes we made in the floor amendment would be to remove the alcoholic beverage reporting because House Bill 11 has been recently signed by the Governor, it provides that bills on the governor's desk that are also in Senate Bill 1 will supercede the provisions of Senate Bill 1. They become law. It also adjusts the effective date on changes to the state or to the sales tax free holiday so they will not become effective until after this coming August. So for this August you have the current date but for other years you have this flex date that basically is indexed to the start day of school and I think our retailers like that much better. And then finally as Senator Van de Putte and I discussed made a change to the article to the PARIS program make conforming decisions in the General Appropriations Act exchanges made by Senate Bill 1739 on the same issue which I believe is a bill by Senator Davis. With that explanation, unless there's -- I would move the adoption of floor amendment No. 1.

LT. GOVERNOR DAVID DEWHURST: Members, we have some amendments to the amendment. The Chair lays out floor amendment No. 2 by Senator Van de Putte which is an amendment to floor amendment No. 1. The secretary will read the amendment.

PATSY SPAW: Floor amendment No. 2 amending floor amendment No. 1 by Van de Putte.

LT. GOVERNOR DAVID DEWHURST: The Chair recognizes Senator Van de Putte to explain floor amendment No. 2.

SENATOR LETICIA VAN DE PUTTE: Thank you, Mr. President. Mr. President and members, this is more of a technical amendment to the original bill. If you remember when we were discussing during the regular session our school finance bill, this was a concern by many members that certain districts that are -- that have a high number of military children, some of those districts are totally kind of located on base and others are right outside the base but have majority of their taxing authority is government property that is, of course, exempt from property taxes. In 1951, the federal government realized that there was a big, big difference in schools where you have a high number of military children and so they began -- from the Department of Education to have something called impact aid. Then in the 1990s the Department of Defense also used part of their budget to have impact aid to those schools where there really are no property taxes. The original purpose of my amendment during the regular session was to make sure that school districts that are -- that have either a high number Department of Defense students or military students to not get cut any more than any other school district. And if you look at the language it's 8 percent. However, I used the wrong term of art and the term of art we used in the amendment was Department of Defense when, in fact, the term of art if you see in line eight of the amendment is school districts receiving federal impact aid due to our presence of the military installation and this would particularly help those districts, for example, in Senator Fraser's district where the school district -- the school is actually outside the base but most of their taxable property is. And now with the global rebasing having the first division come home from Germany into Senator Rodriguez's district, members, El Paso will have a net gain of 51,000 new folks in his community. About 17,000 of them will be active military as the first division comes home from Germany right to Bliss. So this amendment is just a cleanup from what we had but the real difference is rather than Department of Defense school, we use the correct term which is school districts receiving federal impact aid because they are two sources of funds: One from the Department of Defense and one from the Department of Education. With that, members, I'll be happy to answer any questions, I've tried to explain exactly what this is. I know members are really touchy about amendments on this bill. But if there's no questions, I move adoption.

LT. GOVERNOR DAVID DEWHURST: The Chair recognizes Senator Duncan on floor amendment No. 2 which amends floor amendment No. 1.

SENATOR ROBERT DUNCAN: Thank you. And thank you for your explanation, Senator Van de Putte. We are very touchy about amending the bill and I've advised everybody on the floor we're not going to give a ride. You have brought this to us earlier, it is a technical amendment I don't have any objections and it would be -- because it's just simply technical renaming this program and it's been thoroughly bedded, have no objections to accepting the amendment.

LT. GOVERNOR DAVID DEWHURST: Members, Senator Van de Putte moves for the adoption of floor amendment No. 2 which amends floor amendment No. 1. It's acceptable to Senator Duncan. Is there objection from any member? The Chair hears no objection from any member, and floor amendment No. 2 is adopted.

SENATOR LETICIA VAN DE PUTTE: Thank you, Senator Duncan.

LT. GOVERNOR DAVID DEWHURST: Thank you, Senator. The Chair lays out the following amendment. Floor amendment No. 3 by Senator Rodriguez. The secretary will read the amendment.

PATSY SPAW: Floor amendment No. 3 amending floor amendment No. 1 by Rodriguez.

LT. GOVERNOR DAVID DEWHURST: The Chair recognizes Senator Rodriguez to explain floor amendment No. 3.

SENATOR JOSE RODRIGUEZ: Thank you, Mr. President and members. First of all, Chairman Duncan, thank you for your hard work on this bill. Mr. President and members, this floor amendment is identical to my floor amendment to SB1811. The amendment establishes judicial access and improvement account in the account of the general revenue fund for purposes of funding the basic civil legal service and indigent defense. Members, as we have discussed on several occasions now, legal aid organizations across the country are battling a severe funding crisis compounded by significant state and federal budget deficits, historic declines in legal aid funding to (inaudible) and increases the need for services. My amendment will generate about $32.6 million next biennium to be distributed among legal aid indigent defense and the legal aid E filing project which is less than half of what Senate Bill 726 would have been generated. You'll recall that that bill got to third reading and didn't make it out of third reading. I would like to remind you once again who legal aid assists. Veterans accessing their benefits. Seniors who have been wrongly denied Medicare privileges or benefits, families facing foreclosures and housing and shelter issues, people who need legal documents for medical treatment and related services and finally the victims of domestic abuse. Nearly half of all of those are served by legal aid. In closing I would like to quote Justice Jefferson and Justice Hicks which recently in a letter to Senator West said the following. "Conservative principles do not call for the recall of law to be denied to the most vulnerable member of our community. The civil justice system is where people can claim for themselves the benefits of the rule of law. It is where the promises of the rule of law become real. A society that denies access to the courts for the least among us denigrates the law for us all." Mr. President, I move adoption of the amendment.

LT. GOVERNOR DAVID DEWHURST: Thank you, Senator. Chair recognizes Senator Duncan on the amendment.

SENATOR ROBERT DUNCAN: I move to table.

LT. GOVERNOR DAVID DEWHURST: Chair recognizes Senator Rodriguez to oppose.

SENATOR JOSE RODRIGUEZ: Mr. President and members, I would urge you to not table this amendment, in fact, to vote the motion to table down and allow this important piece of legislation to be enacted so we can provide equal access to the courts. Thank you, Mr. President.

LT. GOVERNOR DAVID DEWHURST: Members, Senator Duncan moves to table floor amendment No. 3. Senator Rodriguez opposes. The secretary will call the roll.

PATSY SPAW: Birdwell, Carona, Davis, Deuell, Duncan, Ellis, Eltife, Estes, Fraser, Gallegos, Harris, Hegar, Hinojosa, Huffman, Jackson, Lucio, Nelson, Nichols, Ogden, Patrick, Rodriguez, Seliger, Shapiro, Uresti, Van de Putte, Watson, Wentworth, West, Whitmire, Williams, Zaffirini.

LT. GOVERNOR DAVID DEWHURST: Members, there being 19 ayes and 11 nays, the motion to table is sustained. The Chair lays out the following floor amendment floor amendment No. 4 by Senator Gallegos, Senator Lucio, Senator Ellis, Senator Davis, Senator Rodriguez, Senator Van de Putte. The secretary will read the amendment.

PATSY SPAW: Floor amendment No. 4 amending floor amendment No. 1 by Gallegos, et al.

LT. GOVERNOR DAVID DEWHURST: Chair recognizes Senator Gallegos to explain floor amendment No. 4.

SENATOR MARIO GALLEGOS: Thank you, Mr. President and members. Members, this is the amendment that I talked about the other day in my dialogue with Senator Duncan when he opened up the out of bounds resolution. What it does is it amends section 211 of the tax code to reinstate the inheritance tax which we stopped collecting on deceased person after December 31, 2004, and the current inheritance tax is imposed on the state with a gross value of more than $5 million, it only affects about 1,000 Texans, the amendment would line the tax with the federal parameters and while the legislative budget board hasn't had that time to fully assess, the last revenue that we generated from this was $236 million. So it only affected 1,000 Texans and I think it's safe to estimate we can expect a similar revenue by reinstating that today. The amendment reflects those revenues from the inheritance tax to the foundation school program, members. Senator Shapiro, it's $236 million. As we are all aware, the education system is facing drastic cuts next biennium and this would allow us to keep more schools open and more school district employees with the job. I think the budget process is about priorities to our schools. Members, I move for adoption of the amendment.

LT. GOVERNOR DAVID DEWHURST: The Chair recognizes Senator Duncan on floor amendment No. 4.

SENATOR ROBERT DUNCAN: I move to table floor amendment No. 4 to amendment No. 1.

LT. GOVERNOR DAVID DEWHURST: Chair recognizes Senator Gallegos to oppose.

SENATOR MARIO GALLEGOS: Thank you, Mr. President. Members, this only affects 1,000 Texans, $236 million. If this is not a corporate loophole, I don't know what is, and I think we need to start looking at issues like this especially when we start putting them at the structural deficit next biennium. I ask you to vote no on the motion to table.

REPRESENTATIVE DAVID DEWHURST: Members, you heard the motion by Senator Duncan, Senator Gallegos opposes. The secretary will call the roll.

PATSY SPAW: Birdwell, Carona, Davis, Deuell, Duncan, Ellis, Eltife, Estes, Fraser, Gallegos, Harris, Hegar, Hinojosa, Huffman, Jackson, Lucio, Nelson, Nichols, Ogden, Patrick, Rodriguez, Seliger, Shapiro, Uresti, Van de Putte, Watson, Wentworth, West, Whitmire, Williams, Zaffirini.

LT. GOVERNOR DAVID DEWHURST: Members, there being 19 ayes and 12 nays, the motion to table is sustained. The Chair lays out the following amendment, floor amendment No. 5 by Senator Davis, et al. Secretary will explain the amendment.

PATSY SPAW: Floor amendment No. 5 amending floor amendment number 1 by Davis, et al.

LT. GOVERNOR DAVID DEWHURST: Chair recognizes Senator Davis to explain floor amendment No. one.

SENATOR WENDY DAVIS: Thank you, Mr. President. This amendment seeks to add resources back so that we can add some funding to our public schools that will be under funded by $4 billion under the new formula that will be adopted in Senate Bill 1, Interestingly, I did a little research on the high cost gas well exemption, we talked about this a number of times during the regular session and of note is the fact that when that exemption was put into law, the title of the exemption actually says temporary exemption or tax reduction for certain high cost gas. Removing the exemption was estimated by the fiscal matters subcommittee advised by the LBB to realize about $1.2 billion over the next biennium. This high cost gas exemption was put into statute in 1989 that used a definition of high cost gas from the federal Natural Gas Policy Act of 1978 but of course technology has changed dramatically since 1978 and what was high cost then is not high cost now especially given some of the profits coming from that industry. To give a little bit of the history, it was created, as I said, in 1989. It was supposed to allow an exemption until 1996. It's been extended a couple of times first to allow the exemption to 2002. In 1999 it was amended to allow the exemption to 2010 and then in 2003 in a bill relating technical changes to taxes and fees, the 2010 completion date was struck without a conversation in committee or legislative floors here in this Capitol. And what was meant to terminate in 2010 now has an indefinite date in terms of how long it will continue to last. So starting in 1989, members, we adopted -- this legislature adopted the exemption under the title temporary exemption or tax reduction for certain high cost gas. And here we are in 2011 many, many years later with that exemption still in place. Members, I would move approval of floor amendment or adoption, excuse me, of floor amendment No. 5 so we can add $1.2 billion back to the $4 billion under funding that we are currently facing for our public schools in Texas. Of note, yesterday, last evening I had a telephonic town hall and members in my community and constituents in my community and at one point in time there were over 5,000 people on that call. As part of the call, we polled on a couple of issues asking about the cuts in public education and whether members of the district that I represent would like to see an end to some of these loopholes, and we specifically asked a question on this particular loophole. 90 percent of those over 5,000 people on the call expressed their desire that this loophole be ended, that the $1.2 billion be added to public school funding to help shore up the $4 billion shortfall. And with that I move adoption, Mr. President.

LT. GOVERNOR DAVID DEWHURST: Thank you, Senator Davis. Senator Ellis, for what purpose do you rise?

SENATOR RODNEY ELLIS: To ask the Senator a question if she'll yield.

LT. GOVERNOR DAVID DEWHURST: Senator Davis yield?

SENATOR WENDY DAVIS: Yes.

SENATOR RODNEY ELLIS: Senator, I was watching some of the activities in the presidential campaign on CSPAN last night and I was listening to Governor Palin give a speech and it prompted me to go on line and figure out what the natural gas severance tax rate is for Alaska, I am just curious if you know what it is.

SENATOR WENDY DAVIS: No, I don't.

SENATOR RODNEY ELLIS: For you and other members' edification, the natural gas severance tax rate in Alaska under Governor Palin's plan is 25 percent. In Texas it's between 1.1 percent and 1.9 percent. Alaska has one of the highest severance tax rates in the country, maybe the highest, I am not sure by comparison I couldn't figure that out at 2:00 o'clock in the morning. A sales tax is similar to a severance tax in that they make up approximately 60 percent of the total state revenues in a fiscal year. And that's just to, you know, some support out to the point you're trying to make. I think we can be wise in terms of helping our energy companies produce and find more natural resources for us, but I do think that the tax structure, the tax breaks that we give are very much out of line in reality by current standards. So I support your amendment.

SENATOR WENDY DAVIS: Thank you, Senator Ellis. And I think that raises a very good point. The severance tax amount here in the state of Texas by comparison to other states is extremely low, so by virtue of our severance tax alone, we have given an incredible incentive to oil and gas industry here in Texas. And no question, it forms a very important part of the backbone of our economy, certainly it does in the Barnett Shell area that I represent, in Fort Worth. I've been very supportive of making sure that we continue to allow those companies thrive. Having this temporary exemption, temporary, I use the word loosely, but as adopted in 1989 which of course was meant to consider high cost activities and to (inaudible) those activities forward in the state of Texas, it was never meant to be a permanent exemption from taxation here in Texas. And, unfortunately, as I said, in 2003 without the legislature even understanding that it had done it, the expiration date was struck and that exemption is now left open indefinitely. In conversations that I've had with my constituents, what they've said is in prioritizing what we're doing here as a legislature, why would we ask our school districts to give up $4 billion in state funding, why would we permanently remove the state's obligation to do that? And yet at the same time allow an exemption like this to take place so that the children of Texas, the school children of Texas, are feeling the burden of a difficult economic time that is changing state policy on how we fund public education and yet, we're not asking businesses like who currently enjoy an exemption that was never meant to be a forever exemption, we are going to continue to allow them to enjoy that exemption over and above the school children of Texas.

SENATOR RODNEY ELLIS: Senator, I might add that some people in the industry told me privately they expected to have some adjustment, whether it was eliminated or at the very least adjusted, so I think it's a good amendment. Thank you.

SENATOR WENDY DAVIS: Thank you, Senator Ellis.

LT. GOVERNOR DAVID DEWHURST: The Chair recognizes Senator Duncan on floor amendment No. 5 which amends floor amendment No. 1.

SENATOR ROBERT DUNCAN: Thank you, Mr. President and members. I do think that this is an area in the tax law that does need to be revisited. We did look at it some this session, I think hopefully in the interim and during next session we'll have an opportunity to thoroughly review this and make appropriate changes but this is not the bill or the time to do it. I would move to table floor amendment No. 5 to floor amendment 1.

LT. GOVERNOR DAVID DEWHURST: Chair recognizes Senator Davis in opposition.

SENATOR WENDY DAVIS: Thank you, Mr. President. Every Democratic member of the Senate has signed this amendment, and Senator Duncan referenced the opportunity to look at this for the interim. If ever there's an opportunity, we certainly looked at it plenty this session, I think we brought this amendment forward in either a standalone bill form or amendment form in a variety of ways. We have had many conversations both in committee and on the Senate floor about this. I think saying no to an amendment like this, we are saying to the communities of Texas, we're saying to the school children and the school teachers of Texas that our priorities are to continue to allow corporate exemptions. And this one is particularly distasteful because it was supposed to be temporary, we are going to prioritize creating and allowing and extending exemptions like this over the interest of funding public education in Texas. If ever there were a time at a $4 billion shortfall in public school funding, this is the time for us to end this exemption. And I would respectfully ask that members vote no on the motion to table floor amendment No. 5.

LT. GOVERNOR DAVID DEWHURST: Members, Senator Duncan moves to table floor amendment No. 5. Senator Davis opposed. The secretary will call the roll.

PATSY SPAW: Birdwell, Carona, Davis, Deuell, Duncan, Ellis, Eltife, Estes, Fraser, Gallegos, Harris, Hegar, Hinojosa, Huffman, Jackson, Lucio, Nelson, Nichols, Ogden, Patrick, Rodriguez, Seliger, Shapiro, Uresti, Van de Putte, Watson, Wentworth, West, Whitmire, Williams, Zaffirini.

LT. GOVERNOR DAVID DEWHURST: Members there being 18 ayes, 12 nays, one present not voting the motion to table is sustained. The Chair lays out the following floor amendment No. 6 by Senator Ellis and -- the secretary will read the amendment.

PATSY SPAW: Floor amendment No. 6 amending floor amendment No. 1 by Ellis, et al.

LT. GOVERNOR DAVID DEWHURST: Chair recognizes Senator Ellis to explain floor amendment No. 6.

SENATOR RODNEY ELLIS: I'll wait until I get it on my desk, Mr. President, to see which one it is.

LT. GOVERNOR DAVID DEWHURST: Senator, it's -- it is the long one that is four pages.

SENATOR RODNEY ELLIS: Okay.

LT. GOVERNOR DAVID DEWHURST: And on line nine reimbursement to taxpayer for tax collections.

SENATOR RODNEY ELLIS: Mr. President, this amendment contains two recommendations from the LBB that reform a couple of tax giveaways that we have. It creates a more sound fiscal policy for Texas that would provide $152 million in essential funds for our schools for health care of Texas. Members, I want to point out to you that I am not doing away with the early filer discount exemption, we discussed that before, but I did not point out, what this LBB recommendation does is simply amend the tax code by adjusting the prepaid discount to the lesser of 1.25 percent and reduces an annual rate of return equal to 4 percent over the prime rate. The prepayment discount was very annually based on the prime rate published in the Wall Street Journal on the first business day of each calendar year. Limiting retailers to a prepayment discount which yield returns significant (inaudible) higher than the prime interest rate. It would allow them to earn an above market return, capping the prepayment discount at 1.25 percent for Texas state from incurring increased costs (inaudible) the rate for traditional interest varying accounts which exceed the current prepayment rate. I want to point out to you that this amendment came straight out of one of the LBB recommendations in the government effectiveness and efficiency report for the 82nd legislature. The second part is the timely filer discount. It would create a fair and sensible policy by increasing the timely filer discount to .75 percent of the sales tax collections and instituting an annual cap of $3,750. Members, approximately 476,000 taxpayers would see an increase in their timely filer discount and 3,450 would be affected by the cap. Lastly I want to point out that because of the significant loss of revenue to disproportionately subsidize a fairly minimal cost, most businesses can easily absorb -- 26 states and the District of Columbia. No longer offer discounts at all. And of the 24 states that do, 13 of those limit the amount that one retailer may retain. The timely filer discount reforms would raise $81.2 million for the biennium. I know we discussed this once before when I offered it on this bill so I am not going to go into all of the details but I do want to stress I don't think I made it clear when it came up before Senator Duncan, I am not doing away with it, I am simply reforming it, which virtually every state in this country has done, and I hope members will favorably consider this.

LT. GOVERNOR DAVID DEWHURST: Chair recognizes Senator Duncan on floor amendment No. 6.

SENATOR ROBERT DUNCAN: Thank you, Mr. President and members. And, Senator Ellis, I think we did discuss this quite a bit when the HMO was on the floor and the concern is the cash management tools that the state uses may interfere with those and actually cost us more money, so I am not convinced and was not convinced when we looked at it during the regular session that it was on our list, but one that we bedded and felt like it was one that probably was not going to accomplish what at least it was apparently held out to in the beginning. So with that explanation, I'll move to table Senate Bill or -- table -- excuse me -- floor amendment No. 6 to floor amendment No. 1.

LT. GOVERNOR DAVID DEWHURST: Thank you, Senator. The Chair recognizes Senator Ellis to close.

SENATOR RODNEY ELLIS: Members, I want to encourage you to vote with the LBB. I think it was a well thought out recommendation. There's some tweaks that ought to come with the process -- we may think we're going to pack up next week and get out of here next week, but it looks like -- I certainly canceled my ticket to Africa so we're going to be here a while, I wish you'd put it on. And if it needs some tweaking, we can figure it out, the LBB did a pretty good job of bedding it. It does not eliminate the tax breaks, it simply reforms them which virtually every state in the country has done. So I would respectfully urge you against the motion to table. Thank you.

LT. GOVERNOR DAVID DEWHURST: Thank you, Senator Ellis. Members Senator Duncan moves to table floor amendment No. 6, opposed by Senator Ellis. The secretary will call the roll.

PATSY SPAW: Birdwell, Carona, Davis, Deuell, Duncan, Ellis, Eltife, Estes, Fraser, Gallegos, Harris, Hegar, Hinojosa, Huffman, Jackson, Lucio, Nelson, Nichols, Ogden, Patrick, Rodriguez, Seliger, Shapiro, Uresti, Van de Putte, Watson, Wentworth, West, Whitmire, Williams, Zaffirini.

LT. GOVERNOR DAVID DEWHURST: Members, there being 19 ayes and 12 nays, the motion to table is sustained. The Chair lays out to the following floor amendment number. Floor amendment No. 7 by Senator Ellis. Secretary will read the amendment.

PATSY SPAW: Floor amendment No. 7 amending floor amendment No. 1 by Ellis.

LT. GOVERNOR DAVID DEWHURST: Chair recognizes Senator Ellis to explain floor amendment 7.

SENATOR RODNEY ELLIS: I pull this one down, Mr. President. This one would be the one that would attempt to take $4 billion out of the rainy day fund so we wouldn't have to make these cuts to our public schools, but you all might have a smaller appetite so I am not going to ask you to vote for the billion. But after reflecting on this, I've become more conservative and I am trying to work with you all.

LT. GOVERNOR DAVID DEWHURST: Members, Senator Ellis pulls down floor amendment No. 7. Senator Ellis, do you wish us to lay out the other amendment which you have?

SENATOR RODNEY ELLIS: Yes, sir.

LT. GOVERNOR DAVID DEWHURST: All right. The Chair lays out floor amendment No. 8 by Senator Ellis. Secretary will read the amendment.

PATSY SPAW: Floor amendment No. 8 amending floor amendment No. 1 by Ellis.

LT. GOVERNOR DAVID DEWHURST: Chair recognizes Senator Ellis to explain floor amendment 8.

SENATOR RODNEY ELLIS: Members, this will be my last amendment, I believe, so I am hoping that you all will vote with me on this one. Members, this is the amendment that I offered before and I have 16 votes on it and I hope that you all will closely consider it again. This amendment would reform the high cost gas loophole allowing to potentially dedicate billions funding to our school children. As a compromise suggested by some of the members on the floor, this amendment would only take effect when the price of gas averages $6.50 per thousand cubic feet for a three month stretch. This amendment dedicates any additional gas revenue when gas is above 6.50 to the foundation school program. If the Railroad Commission certifies that the average closing price of gas for the previous three months was over 6.50, then the commission may not certify that the gas is high cost for the exemption of any month of the three-month period when gas was over 6.50. Further if the price dips back below 6.50 and

(inaudible) cost incurred during the month when the price exceeds $6 are excluded from the calculation on the wells value for the purpose of the exemption. The point is if the gas goes above 6.50 NCS for an extended period of time, the high cost gas exemption would not be in effect. Keep in mind that the 2010 average price was around $4 and these companies recorded record profits in the billions. The price of gas hasn't been above $5 since '08, the last five months the price has been 3.76, 3.9, 3.96, 4.08, and 4.23. We're a long ways off from the 6.50. It is a modest step to make a reform. A very conservative way of saying that we value the education of our children over a tax break for some of our very successful industries. When the high cost loophole took effect, as Senator Davis pointed out, the price of gas, average price was 1.60 that year, 1989. I think this makes sense and, members, we got a choice, we can prioritize the gas industry by supporting an antiquated gas incentive that no longer serves its purpose or we can choose to prioritize our children. I respectfully move adoption.

LT. GOVERNOR DAVID DEWHURST: Chair recognizes Senator Duncan on floor amendment No. 1.

SENATOR ROBERT DUNCAN: Thank you, Mr. President and members. Again as was Senator Davis' amendment, I think this is an issue we need to look at closely, but not at this time. We've debated this issue and just haven't reached a consensus with the others and I would move to table at this time.

LT. GOVERNOR DAVID DEWHURST: The Chair recognizes Senator Ellis to close.

SENATOR RODNEY ELLIS: Thank you, members. I respectfully disagree with my colleague and desk mate. This amendment -- this tax break went into effect on a temporary basis. In the dark of night or at least the darkness of nobody knew was becoming permanent, this tax break became permanent. We had 16 votes on this floor, that was a consensus, clearly a consensus by the rules in which we are going to operate during this 30-day special session. So I want to encourage you to put this on. If you need time to think about it as it goes through the process, you can pull it up, the reason it didn't get on with 16 before was because I waited until we would get to a vote where I needed a higher number to get this amendment on. So I hope I'll have the 16 people that I have before and I would encourage you to vote against my colleague's motion to table. Thank you.

LT. GOVERNOR DAVID DEWHURST: Members, you heard the motion by Senator Duncan, opposed by Senator Ellis the secretary will call the roll.

PATSY SPAW: Birdwell, Carona, Davis, Deuell, Duncan, Ellis, Eltife, Estes, Fraser, Gallegos, Harris, Hegar, Hinojosa, Huffman, Jackson, Lucio, Nelson, Nichols, Ogden, Patrick, Rodriguez, Seliger, Shapiro, Uresti, Van de Putte, Watson, Wentworth, West, Whitmire, Williams, Zaffirini.

LT. GOVERNOR DAVID DEWHURST: There being ayes and 12 nays, one present not voting the motion to table is sustained. Chair lays out floor amendment No. 9 by Senator Hinojosa. The secretary will read the amendment.

PATSY SPAW: Floor amendment No. 9 amending floor amendment No. 1 by Hinojosa.

LT. GOVERNOR DAVID DEWHURST: Chair recognizes Senator Hinojosa to explain floor amendment No. 9.

SENATOR JUAN HINOJOSA: Thank you, Mr. President and members. This is really a technical correction -- well, not quite. What this amendment does, it does not appropriate any new money, what it does is it allows the governor the discretion to transfer money from the enterprise fund which is in the millions to fund the jobs in education for Texans program. What does this program do? In December of 2010 Comptroller Combs released the Texas works, a report detailing the widening gap in the skills required in today's job market and the number of graduates trained with those skills. December reports showed that the Texas businesses had a hard time finding skilled technical workers. The surveys of the employers showed the decline in technical training programs has had a very substantive impact on the businesses. Last session we appropriated 25 million for jobs in education for Texas called the CHET program. This CHET program is divided with three categories, one is job building fund which helps finance equipment purchases for new career technology education programs throughout the state and these funds require matching local funds that are awarded on the competitive basis. It also has a set component which is a launch pad fund and what it does it provides funds for a program proven track record of good performance and mostly (inaudible) organization that the low income students with careers in demand occupations. The third aspect to this fund is the career technical scholarship fund approved for high demand occupations. And with that I will tell you that it doesn't appropriate any money, it gives the governor discretion to be able to transfer moneys to the comptroller's office and this filing of $400 million and the enterprise moneys that used for the purpose of attracting new businesses to locate here in Texas but that also goes hand in hand with trying to provide the skilled labor that a lot of these businesses have and if it's not acceptable, I will pull it down.

LT. GOVERNOR DAVID DEWHURST: The Chair recognizes Senator Duncan on floor amendment No. 9.

SENATOR ROBERT DUNCAN: Thank you, Mr. President. This amendment is something I think we need to continue to work on. I am not willing to accept this at this point in time, but I have told Senator Hinojosa that I will work with him so we can see this thing get accomplished at some point in time. My whole goal right now is to move this bill without any additional programs and then if we can talk to our House colleagues over in conference, I'd like to work with you to get this done at some point in time.

SENATOR JUAN HINOJOSA: That would be fine, Senator Duncan, at some point I think it would be good to give this type of discretion to the governor to use those moneys that we appropriate in millions of dollars to also be a partnership because it doesn't do any good for us to attract new businesses to Texas when we cannot provide the skilled labor for them to do the jobs that are required by the new businesses. With that I will go ahead and work with you, but I'll pull my amendment down.

SENATOR ROBERT DUNCAN: Thank you.

LT. GOVERNOR DAVID DEWHURST: Members, Senator Hinojosa pulls down floor amendment No. 9. Members, the Chair recognizes Senator Duncan.

SENATOR ROBERT DUNCAN: Thank you. I move adoption of floor amendment No. 1.

REPRESENTATIVE DAVID DEWHURST: Members, the question before us is the adoption of floor amendment No. 1. The secretary will call the roll.

PATSY SPAW: Birdwell, Carona, Davis, Deuell, Duncan, Ellis, Eltife, Estes, Fraser, Gallegos, Harris, Hegar, Hinojosa, Huffman, Jackson, Lucio, Nelson, Nichols, Ogden, Patrick, Rodriguez, Seliger, Shapiro, Uresti, Van de Putte, Watson, Wentworth, West, Whitmire, Williams, Zaffirini.

LT. GOVERNOR DAVID DEWHURST: Members, there being 18 ayes and 13 nays, floor amendment No. 1 as amended is adopted. The Chair recognizes Senator Duncan for a motion.

SENATOR ROBERT DUNCAN: I move passage to engrossment.

LT. GOVERNOR DAVID DEWHURST: Members, you have heard the motion by Senator Duncan, is there objection from any member? Hearing no objection from any member, Senate Bill 1 as amended is passed to engrossment. Excuse me, I did not hear your objection. Hearing objection, the secretary will call the roll.

PATSY SPAW: Birdwell, Carona, Davis, Deuell, Duncan, Ellis, Eltife, Estes, Fraser, Gallegos, Harris, Hegar, Hinojosa, Huffman, Jackson, Lucio, Nelson, Nichols, Ogden, Patrick, Rodriguez, Seliger, Shapiro, Uresti, Van de Putte, Watson, Wentworth, West, Whitmire, Williams, Zaffirini.

LT. GOVERNOR DAVID DEWHURST: Members, there being 19 ayes and 12 nays, Senate Bill 1 as amended passes to engrossment. Members, the Chair recognizes Senator Ogden for a motion to suspend Senate rule 7.12 -- that's right. In order to take up and consider Senate Bill 2 which without the suspension is eligible at 6:23 and it looks to me as if it's 6:12.

SENATOR STEVE OGDEN: Members, I move --

LT. GOVERNOR DAVID DEWHURST: Senator Uresti wants strict enforcement.

SENATOR STEVE OGDEN: Members, I move to suspend Senate rule 7.12 the 24-hour layout rule for Senate Bill 2 so we can pass Senate Bill 2 to engrossment.

LT. GOVERNOR DAVID DEWHURST: Thank you, Senator. Members, you've heard the motion by Senator Ogden. Is there objection from any member? There's no objection? Hearing no objection from any member the rule is suspended. The Chair lays out on second reading Senate Bill 2. The secretary will read the caption.

PATSY SPAW: Senate Bill 2 relating to appropriating money for the support of state government for the period beginning September 1, 2011, and ending August 31, 2012.

LT. GOVERNOR DAVID DEWHURST: Thank you, Madam Secretary. The Chair lays out floor amendment No. 1 by Senator Ogden. Secretary will read the amendment.

PATSY SPAW: Floor amendment No. 1 by Ogden.

REPRESENTATIVE DAVID DEWHURST: Chair recognizes Senator Ogden to explain floor amendment No. 1.

SENATOR STEVE OGDEN: Members, floor amendment No. 1 is a perfecting amendment to Senate Bill which is a general appropriations bill. In House Bill one which we passed during the regular session, there were several provisions s contingent upon the passage of Senate Bill 7, 8, 23 and 1811. When those bills died, the contingent appropriations also died. The most significant example is the entire foundation school program appropriation. Senate Bill 2 is intended to catch all those pieces that we already intended to fund and put them back into effect contingent upon us passing the statutory changes of this special session such as Senate Bill 1. The most significant appropriation to this bill is found in section five. Here 38 and a half billion is appropriated for the foundation school program. This program remains contingent upon the passage of Senate Bill 1. The statutory changes that adjust the education code chapter 42 state aid payments. Section five also includes the contingency for the August 2013 deferral finance for $2.3 billion. This amendment that's before you makes several changes to Senate Bill 2. One of the most significant was an issue that was pointed out by Senator Watson and that is that the emergency clause that was in Senate Bill 2 is no longer operative or necessary so the first part of this floor amendment does is it amends the committee substitute to Senate Bill 2 by section 14 of the emergency clause. It also amends the cut -- the committee substitute to Senate Bill 2 by adding the following new sections. This is something that many members have been concerned about and I am pleased to add this to the bill, it says basic civil legal services and indigent defense. This amendment will appropriate $17 million to basic civil legal services and another $7 million for indigent defense at the office of court administration and strategy A21. With this general revenue appropriation the funding for basic civil legal services and indigent defense for civil legal services will be the same as is in the current biennium. Section of the amendment takes care of basically a problem that we had with UB'ing funds in the governor's office that are being used for emergency and natural disasters and it also allows money that we receive from FEMA to be redeposited in the governor's trustees program to be reused for additional natural disasters. The total amount of money involved is an estimated $39 million of UB authority. I am not sure how much FEMA money will be sent to the state during the current biennium, but if it is, it will go to the governor's trustee program for the use of future disasters. Section 15 the commission on state emergency communications allows appropriations above the biennially revenue estimate to be used in an additional way for operations of the state emergency program. Section 16 and 17 of the bill address a flaw that occurred in House Bill 4 when House Bill 4 did not receive a hundred votes, and we had an appropriation of $2 million to the Texas State Technical College to repair a building that had been improperly built, but because the constitution says you have to have a two-thirds vote for capital improvement, section 16 of the bill says that if House Bill 4 provisions are not operative because of the lack of the two-thirds vote, then we'll use appropriate $2 million to Texas State Technical College Waco for their use. And it does the same thing for Lamar Institute of Technology. I move adoption of floor amendment No. 1.

LT. GOVERNOR DAVID DEWHURST: Senator West, for what purpose do you rise, sir?

SENATOR ROYCE WEST: Just a question of Senator Ogden.

LT. GOVERNOR DAVID DEWHURST: Bless your heart. You need some water?

SENATOR STEVE OGDEN: Yes, Senator West.

SENATOR ROYCE WEST: First of all in Section 13 I am glad to see that the issue raised by Senator Rodriguez and also in response to the letter I received from Chief Justice Jefferson and Justice Hicks that we've been able to deal with that issue concerning making certain that we appropriate some money for the basic civil legal services for Texans, so I appreciate that and hopefully we can maintain that as the bill travels over to the House and secondly --

SENATOR STEVE OGDEN: Before we go forward, I want to thank you for your advocacy for that program. You brought this up in finance the other day and because frankly the state's economy is improving, I agreed with you and was able to add some general revenue at one time we didn't think we would have in order to fund this important service.

SENATOR ROYCE WEST: And Senator Rodriguez brought this to our attention, we probably wouldn't be here today so I wanted to thank Chief Justice Jefferson and also Justice Hicks in terms of being involved and convincing the legislative branch of government to get involved and do something about this. Section 16 I recall specifically as it relates to Lamar Institute, I guess that's 17, I recall that during the appropriation process that Senator Williams or either the president brought to our attention the deplorable conditions down at Lamar Institute. Are these the dollars that are going to be used in order to ameliorate the problems down there?

SENATOR STEVE OGDEN: That's the intent although in this appropriation it doesn't specify it, but Senator Williams has talked to Lamar and I've been assured if we'll appropriate this money, they will be able to address those repairs.

SENATOR ROYCE WEST: As I recall during the budget process, we were told there were buildings on that campus that didn't have air-conditioning nor did they have rest rooms in order for the kids to utilize them. Do you recall that testimony?

SENATOR STEVE OGDEN: I recall that testimony very well.

SENATOR ROYCE WEST: And I am glad to see we are addressing that particular issue. Thank you.

SENATOR STEVE OGDEN: Thank you for your help, Senator West.

LT. GOVERNOR DAVID DEWHURST: Members, the question before us is the adoption of floor amendment No. 1 by Senator Ogden. Is there objection from any member? The Chair hears no objection from any member, and floor amendment No. 1 is adopted. The Chair lays out floor amendment No. 2 by Senator West, et al. The secretary will read the amendment.

PATSY SPAW: Floor amendment No. 2 by West.

LT. GOVERNOR DAVID DEWHURST: Chair recognizes Senator West to explain floor amendment No. 2.

SENATOR ROYCE WEST: Members, if I had my voice, I'd probably go on and on forever and ever. This particular amendment has been signed by several members of the Senate and this floor amendment is the question once again as to whether or not we want to use the rainy day fund in order to offset some of the cuts that our public schools are going to be occasioned by the billion that has been targeted as it relates to cuts. And I think we should rethink this for purposes of providing forth to our public schools and making certain when we vote either to table, table being we don't want to talk about it, that we think about the kids that are the subject of the moneys that we appropriate. I think that as we look at this particular amendment we also need to think about our neighbors and our school teachers, our church members that are school teachers that are being laid off because public school system did not have the necessary resources in order to educate or to provide for their particular budget. So Mr. President, I move adoption of this floor amendment, floor amendment No. 2.

LT. GOVERNOR DAVID DEWHURST: Senator Davis, for what purpose do you rise?

SENATOR WENDY DAVIS: Just a question of the author, please.

REPRESENTATIVE DAVID DEWHURST: Will Senator West yield?

SENATOR ROYCE WEST: Yes, I will.

SENATOR WENDY DAVIS: Senator West, I know your voice is failing you, I'll just ask you a brief question. It's my understanding from talking to a number of school districts across the state of Texas that it's their intention if they do receive a $4 billion cut in public school funding that they will seek tax raise elections in order to increase property taxes to try to cover some of that shortfall. Many of them have indicated to me even if they tax all the way up to that 1.17, they wouldn't be able to cover the shortfall in the $4 billion funding cut that's being advanced in this legislature. Would your amendment taking money from the rainy day fund ease the amount that they would need to request in terms of local property tax increases?

SENATOR ROYCE WEST: Without question it would. The reality is that the basic allotment would go up a couple of hundred dollars.

SENATOR WENDY DAVIS: Thank you. Thank you, Senator.

LT. GOVERNOR DAVID DEWHURST: The Chair recognizes Senator Ogden on floor amendment No. 2.

SENATOR STEVE OGDEN: Members, I move to table floor amendment No. 2.

LT. GOVERNOR DAVID DEWHURST: Chair recognizes Senator West to close.

SENATOR ROYCE WEST: Members, I know we have been here before and if we get another chance, we'll be here again as it relates to this particular amendment. Tabling means we don't want to discuss it, we want to avoid it. If you want to avoid it, then you obviously go ahead and table it. But the reality that our school districts can't avoid our actions. If our action is to cut $4 billion, needless to say that their reaction is to cut their budget and lay off teachers that we need in our classrooms. I understand the issues of the rainy day fund and I understand we have a Medicaid bill that's going to be payable in 2013. If indeed our economy is getting better and they'll be additional moneys in the rainy day fund surely, surely we can spend an additional $1.1 billion in order to address the needs of our school districts. I would ask you not to table -- not to avoid going on and discussing this particular amendment.

LT. GOVERNOR DAVID DEWHURST: Thank you, Senator West. Members, the question before us is the motion to table floor amendment No. 2, opposed by Senator West. The secretary will call the roll.

PATSY SPAW: Birdwell, Carona, Davis, Deuell, Duncan, Ellis, Eltife, Estes, Fraser, Gallegos, Harris, Hegar, Hinojosa, Huffman, Jackson, Lucio, Nelson, Nichols, Ogden, Patrick, Rodriguez, Seliger, Shapiro, Uresti, Van de Putte, Watson, Wentworth, West, Whitmire, Williams, Zaffirini.

LT. GOVERNOR DAVID DEWHURST: Members, there being 17 ayes and four nays, the motion to table prevails. The Chair recognizes Senator Ogden for a motion.

SENATOR STEVE OGDEN: Members, I move passage to engrossment of committee substitute to Senate Bill 2. I would like to say something about the ongoing repetition of what I think is an inaccurate comment about this bill and the $4 billion cut. If you move -- if you vote for this bill, we'll actually adding $3.8 billion in general revenue to the foundation school program over and above what we appropriated 2010 and '11. It fully covers growth. If you say that the federal stimulus money was also general revenue, which it was never supposed to be, it was just a one time appropriation, this bill appropriates more money in general revenue than all the general revenue and all the federal stimulus money that we had last session for the foundation school program. We are not cutting funding for the schools, we're actually increasing it. And I urge you to vote for passage of committee substitute to Senate Bill 2.

LT. GOVERNOR DAVID DEWHURST: Thank you, Senator Ogden. Members, you heard the motion by Senator Ogden. The secretary will call the roll.

PATSY SPAW: Birdwell, Carona, Davis, Deuell, Duncan, Ellis, Eltife, Estes, Fraser, Gallegos, Harris, Hegar, Hinojosa, Huffman, Jackson, Lucio, Nelson, Nichols, Ogden, Patrick, Rodriguez, Seliger, Shapiro, Uresti, Van de Putte, Watson, Wentworth, West, Whitmire, Williams, Zaffirini.

LT. GOVERNOR DAVID DEWHURST: Members, there being 20 ayes and 11 nays, Senate Bill 2 passes to engrossment. The Chair is going to recognize Senator Whitmire for a motion that the Senate adjourn until 6:35 p.m. this evening. Adjourn -- and we'll adjourn at -- and we will --

SENATOR JOHN WHITMIRE: Mr. President, parliamentary inquiry. What time did you want to adjourn to?

LT. GOVERNOR DAVID DEWHURST: 6:35.

SENATOR JOHN WHITMIRE: And before I do that, may I yield to Senator Zaffirini who would like to make a --

LT. GOVERNOR DAVID DEWHURST: Of course. Chair recognizes Senator Zaffirini.

SENATOR JUDITH ZAFFIRINI: Thank you, Mr. President. Mr. President and members, I request that we adjourn today in memory of Clifford A. Estes from New Braunfells fells who passed away on May 25th and whose service is tonight and funeral is tomorrow. Clifford Estes served our country bravely in the United States Army and the Texas National Guard. Known as the community leader but more important as a devoted husband and grandfather, he is survived by his wife Jan Mill Estes and his children James Estes and Karen Makiah who was my district office director. Mr. President and members, I move that the Senate adjourn today in memory of Clifford A. Estes, a great Texan.

LT. GOVERNOR DAVID DEWHURST: The Chair recognizes Senator Whitmire.

SENATOR JOHN WHITMIRE: Thank you, Mr. President. I move that we stand adjourned until 6:35 in memory of Clifford A. Estes.

LT. GOVERNOR DAVID DEWHURST: Thank you, Senator. Members, you heard the motion by the dean. Is there objection from any member? The Chair hears no objection and the Senate will stand adjourned until 6:35.

(Recess.)

LT. GOVERNOR DAVID DEWHURST: Members, the Senate will come to order and the secretary will call the roll.

PATSY SPAW: Birdwell, Carona, Davis, Deuell, Duncan, Ellis, Eltife, Estes, Fraser, Gallegos, Harris, Hegar, Hinojosa, Huffman, Jackson, Lucio, Nelson, Nichols, Ogden, Patrick, Rodriguez, Seliger, Shapiro, Uresti, Van de Putte, Watson, Wentworth, West, Whitmire, Williams, Zaffirini.

LT. GOVERNOR DAVID DEWHURST: Thank you, Madam Secretary. Members, a quorum is present. Would all those on the floor please rise and in the gallery please rise for the invocation to be delivered by Senator Craig Estes.

SENATOR CRAIG ESTES: First, a quote from the father of our country president George Washington. No people can be bound to acknowledge and adore the invisible hand which conducts the affairs of men more than those of the United States. Every step by which they have advanced to the character of an independent nation seems to have been distinguished by some token of providential agency. Please bow with me. Oh, God, of all creation, this wonderful world of Yours can so often be a terribly unfriendly place. The warm beauty, magnificence and awesome splendor of this world can so easily be blanketed over with the coldness of injustice, hatred and selfishness. So I turn to You this day in petition, praying for a world where love and kindness might abound abundantly. I pray for a world where mothers and fathers who truly love each other might bring into this world children who will never be deprived of love and affection. I also pray the children will never go hungry and are adequately clothed ted. And never lacking a strong roof over the heads and will be offered in education, satisfactory to their talents and their abilities. I pray for a world where all people may be gainfully employed, where no person is a slave to another where all forms of exploitation are never again practiced and where no person is subjected to any type of prejudice or discrimination. I pray for a world where the elderly are honored, respected and adequately cared for during their final years. Oh, God, of all creation, I pray for a world where the strong and the powerful reach out to the weak and humble as together they work to build a more civilized and peace filled world. I pray for a world where fear, terror and cruelty no longer exist. I pray for a world of love and kindness. And lastly I pray that we might see such a world before we pass into the one of everlasting love and kindness. Amen.

LT. GOVERNOR DAVID DEWHURST: Amen. Thank you. Please be seated. Thank you ladies and gentlemen. Thank you, Senator Estes. Members, Senator Whitmire moves to dispense with the reading of yesterday's journal. Is there objection from any member? The Chair hears no objection from any member, so ordered. Members, if there's no objections, I'd like to postpone the reading and referral of bills until the end of today's session. Is there objection from any member? The Chair hears no objection from any member, so ordered. Members, that concludes the morning call. Members, the Chair lays out on third reading and final passage Senate Bill 1. The secretary will read the caption.

PATSY SPAW: Senate Bill 1 relating to certain state fiscal matters.

LT. GOVERNOR DAVID DEWHURST: Chair recognizes Senator Duncan for a motion.

SENATOR ROBERT DUNCAN: Thank you, Mr. President and members. I move final passage of mat Bill 1.

LT. GOVERNOR DAVID DEWHURST: Thank you, Senator Duncan. Members, you've heard the motion by Senator Duncan. The secretary will call the roll.

PATSY SPAW: Birdwell, Carona, Davis, Deuell, Duncan, Ellis, Eltife, Estes, Fraser, Gallegos, Harris, Hegar, Hinojosa, Huffman, Jackson, Lucio, Nelson, Nichols, Ogden, Patrick, Rodriguez, Seliger, Shapiro, Uresti, Van de Putte, Watson, Wentworth, West, Whitmire, Williams, Zaffirini.

LT. GOVERNOR DAVID DEWHURST: Members, there being 19 ayes and 12 nays, Senate Bill 1 as amended is finally passed. Congratulations, Senator. Chair recognizes Senator -- the Chair lays out on third reading and final passage Senate Bill 2 as amended. The secretary will read the caption.

PATSY SPAW: Senate Bill 2 relating appropriating money for the support of state government for the period beginning September 1, 2011, and ending August 31, 2013.

LT. GOVERNOR DAVID DEWHURST: The Chair recognizes Senator Ogden for a motion.

SENATOR STEVE OGDEN: Mr. President and members, I move final passage of committee substitute to Senate Bill 2.

LT. GOVERNOR DAVID DEWHURST: Thank you, Senator Ogden. Members, you heard the motion by Senator Ogden. The secretary will call the roll.

PATSY SPAW: Birdwell, Carona, Davis, Deuell, Duncan, Ellis, Eltife, Estes, Fraser, Gallegos, Harris, Hegar, Hinojosa, Huffman, Jackson, Lucio, Nelson, Nichols, Ogden, Patrick, Rodriguez, Seliger, Shapiro, Uresti, Van de Putte, Watson, Wentworth, West, Whitmire, Williams, Zaffirini.

LT. GOVERNOR DAVID DEWHURST: Members, there being 20 ayes and 11 nays, Senate Bill 2 as amended is finally passed. Congratulations, Senator Ogden. Members, the president's desk is clear. I am going to -- are there any announcements? Chair recognizes Senator Seliger for an announcement.

SENATOR KEL SELIGER: Mr. President and members, the Senate select committee on redistricting will resume 15 minutes upon recess of this session in E1.016 in the extension.

LT. GOVERNOR DAVID DEWHURST: And I'm assuming that you need a quorum there.

SENATOR KEL SELIGER: Yes, sir, we do need a quorum to take up Senate Bill 4.

LT. GOVERNOR DAVID DEWHURST: Are there any additional announcements? Any additional announcements? If not, the Chair recognizes Senator Eltife for a highly privileged motion.

SENATOR KEVIN ELTIFE: Thank you, Mr. President. I move that the Senate recess until 3:00 p.m., 3:00 p.m. Monday June 6th pending the reading and referral of bills, the receipt of messages, and the receipt of committee reports.

LT. GOVERNOR DAVID DEWHURST: Thank you, Senator Eltife. Members, you've heard the motion by Senator Eltife. The Chair hears no objection from any member and the Senate will stand in recess until 3:00 clock Monday June 6th pending the reading and referral of bills, the receipt of messages and the receipt of committee reports.

(Adjourned.)