REPRESENTATIVE JAMES WHITE: Thank you, Mr. Speaker. Good morning. All heads bow. Father, in the name of Jesus thank you so much for this great morning in this great day. We come humbly before you to ask you for forgiveness for our shortcomings, and even more importantly, Lord Almighty, we come before you to humbly ask and thank you for the opportunity to lead your most noble and greatest invention, mankind. And with that, Father, we could come and ask you of many things, for passages of bills, better economy; but in a humble spirit we just ask for wisdom to do that which is right, and to ensure that we work toward your will. Lord, we ask of these things in the name of your son, Jesus Christ. Amen.

JOE STRAUS: Chair recognizes Representative Deshotel to lead us in the pledge.

REPRESENTATIVE JOE DESHOTEL: Members and guests, I will lead us in the following of the pledge of allegiance to our flag.

(Pledge of Allegiance to the United States flag. Pledge of Allegiance to the Texas flag.)

JOE STRAUS: Representative Deshotel moves that the bills of the first reading and referral to the end of today's calendar. Is there any objection? Chair hears none so ordered. Members we have a memorial resolution. Please, take your seats. Chair recognizes Representative Schwertner for a motion.

REPRESENTATIVE CHARLES SCHWERTNER: Members , I move to suspend all necessary rules to take up and consider HR49 memorial resolution.

JOE STRAUS: Members, you heard the motion. Is there objection? Chair hears none. So ordered. The following resolution, the clerk will read the resolution.

CLERK: HR49 by Schwertner. WHEREAS, Family and friends are mourning the loss of Graham Charles Holloway of Cedar Park, who passed away on June 1, 2011, at the age of 64; and. WHEREAS, Born in Hamilton, New Zealand, on January 14, 1947 Mr. Holloway was the son of June and Charles Holloway; his father's insurance business took the family to many different places and he attended a number of schools before earning his bachelor of laws degree from the University of Otago; in 1969, he set out for the United States, and he won a Rotary Club scholarship to the University of Georgia, where he served as head coach of the Georgia Bulldogs Rugby team while completing his MBA; he met the love of his life at a rugby tournament at Colorado State University, and a few years later, Colleen and Graham Holloway were married on July 5, 1975, near her hometown of Chicago, Illinois; and. WHEREAS, The couple moved to Cedar Park in 1981, and they later became the parents of three children, Thomas Charles, Sean, Michael, and Ryan Matthew; Mr. Holloway was the proprietor of Tex-Andwiches, a popular restaurant in Round Rock, and in his free time he enjoyed sailing on Lake Travis and enthusiastically followed politics and sports; he became a proud United States citizen in 2007; and. WHEREAS, The death of Graham Holloway brings immeasurable sorrow to his family and friends; he will be deeply missed, but those who held him dear may forever treasure their memories of the happy time spent in his company; now, therefore, be it. RESOLVED, That the House of Representatives of the 82nd Texas Legislature, 1st Called Session, hereby pay tribute to the life of. Graham Charles Holloway and extend sincere condolences to the members of his family: to his wife, Colleen; to his sons, Tom, Sean and Ryan; to his brother, Jeff; to his sisters, Sharon and Cheryl; and to his many other relatives and friends; and, be it further. RESOLVED, That an official copy of this resolution be prepared for his family and that when the Texas House of Representatives adjourns this day, it do so in memory of Graham Charles Holloway.

JOE STRAUS: Chair recognizes Representative Schwertner.

REPRESENTATIVE CHARLES SCHWERTNER: Thank you, members. Thank you for your indulgence today for honoring this fine gentleman. A constituent, a businessman, a community leader, a family man. Like myself, he has three sons. He is survived by his wife, Colleen. His sons, Tom, Sean and Ryan. Tom is a dear friend. He is also my chief of staff he has worked here at the Capitol for many years. He has also worked for Representative Fred Brown and Representative Murphy behind me. They might want to say a few words.

JOE STRAUS: Chair recognizes Representative Murphy.

REPRESENTATIVE JIM MURPHY: Thank you, Mr. Speaker. Members, at this time we're remembering Tom's dad. But what a great memory he brought and his good work, and I know it will be continuous inspiration to you and your family. And we give you our condolences and tell you what a great honor it is to continue his legacy of achievement, coming to the United States and really showing what a imgrant can do. And we're very proud to honor him today.

JOE STRAUS: Chair recognizes Representative Brown.

REPRESENTATIVE FRED BROWN: Tom, I know you're here somewhere, but just I wanted you to know that our hearts and prayers go out to you and your family. And it's an honor us to be able to honor your father today. Thank you.

JOE STRAUS: Chair recognizes Representative Schwertner.

REPRESENTATIVE CHARLES SCHWERTNER: Members , I move passage.

JOE STRAUS: Members, this is a memorial resolutions. All those in favor please rise. The resolution is unanimously adopted. Representatives Murphy and Brown move to add all members' names. Is there objection? Chair hears none. So ordered. Chair recognizes Representative Howard.

REPRESENTATIVE CHARLIE HOWARD: Members, if I could have your attention? Representative Bohac's wife is still in the hospital. He's asked me to ask us for our prayers for her health, that she would be healed and be able to get out of the hospital. He's tending to her. Thank you.

JOE STRAUS: Chair recognizes Representative Farias.

REPRESENTATIVE JOE FARIAS: Mr. Speaker, members, I want to recognize my wife and my son. My daughter-in-law, Alisha, my son, and my favorite little grandson. But don't tell my other ones in San Antonio, Elisha Matthews. Welcome.

JOE STRAUS: Chair recognizes Representative Hunter for a motion.

REPRESENTATIVE TODD HUNTER: Thank you Mr. Speaker. Members, I'm going to be moving calendar rule on Tuesday. We will be taking up congressional redistricting. The calendar rule will be that amendments are to be turned in by 5:00 p.m. on Monday, June 13th. So, Mr. Speaker, I move, pursuant to House Rule 3, Section 52, and House Rule 6, Section 16 F, the following rule governing for consideration of SB4. Section 1. During second and third reading consideration of the bill no proposed amendment or amendment to the amendment or substitute amendment changing any district is eligible for consideration, unless five copies of the amendment packet prepared by the Texas Legislative Counsel has been submitted to the Chief Clerk. The amendment packet is not required to contain the textual description of the amendments and must include maps as prepared by the Texas Legislative Counsel indicating the change made by the amendment and standard reports for the amendment prepared by the Texas Legislative Counsel that indicate population photodata and incumbent locations for the district affected by the amendment. No prior amendment, amendment to the amendments or substitute amendment is eligible for consideration if any district in the amendment contains parts that are not contiguous, or adoption of the amendment would result in any oversight of the overlapping geography, overall redistricting plan under consideration. An amendment packet for each original amendment that will be offered during second reading of the consideration of the bill must be filed with the Chief Clerk by 5:00 p.m. on Monday, June 13th, 2011. Mr. Speaker, members, I move to suspend all necessary rules to make this motion for a calendar rule.

JOE STRAUS: Members, you heard the motion. This requires a record vote. Calendar rule. Clerk will ring the bell. Have all voted? Being 146 eyes, 0 nays, motion is adopted. Excuse Representative Bohac because of important business in the district, on the motion of Representative Howard. Is there objection? Chair hears none. So ordered. Chair recognizes Representative Gooden.

REPRESENTATIVE GOODEN: Mr. Speaker, members, I would like to introduce Ms. Henson and her family. Ms. Henson is one of my former high school teachers and she is in town with her family visiting the Capitol. Would you all please stand up and be recognized? Thank you, welcome to your Capitol.

JOE STRAUS: Excuse Representative Burnham because of death in the family, on the motion of Representative Gooden. Is there objection? Chair hears none. So ordered. Chair recognizes Representative Kolkhorst.

REPRESENTATIVE LOIS KOLKHORST: Thank you Mr. Speaker and members. I want to say congratulations to (inaudible) and the Wichita Riders baseball team. Yesterday they beat Brenham in the semifinals in the state championship tournament. Brenham was going for their back to back title in baseball. But I do want to complement Brenham High School. They set the record for most appearance in the state baseball tournament. Real proud of the Cubs, but they fell short three to one. So Wichita Riders faces (inaudible) today, so good luck to both of those teams and congratulations to the Brenham Cubs for another appearance at the state baseball tournament up in Round Rock.

JOE STRAUS: Chair recognizes Representative Schwertner.

REPRESENTATIVE CHARLES SCHWERTNER: Thank you, members. I can't let Representative Kolkhorst get way with that. Cameron won their state championship yesterday in the 2A division, so I congratulate them on their win. State Championship.

JOE STRAUS: Chair recognizes Representative Kuempel.

REPRESENTATIVE JOHN KUEMPEL: And along with Representative Lyons, Representative Connie Scott has Corpus Christi, Cal Allen playing Wichita Riders. We'll get them in a wrestling match here in a little while and see who is going to win.

JOE STRAUS: Chair recognizes Representative Isaacs.

REPRESENTATIVE JASON ISAAC: Thank you Mr. Speaker and members. I am recognizing a trend here and I want to start out by mentioning that the LBJ Eagles from Johnson City yesterday got things started off by winning their state championship in the class A division, so hopefully they'll be here at the Capitol soon to celebrate. Thank you.

JOE STRAUS: Chair lays out on third reading Senate Bill 2. Clerk will read the bill.

CLERK: Senate Bill 2 by Ogden. Appropriating money for the support of state government for the period beginning September 1, 2011 and ending August 31, 2013; and authorizing and prescribing conditions, limitations, rules, and procedures for allocating and expending the appropriated funds; and declaring an emergency.

JOE STRAUS: Chair recognizes Representative Pitts.

REPRESENTATIVE PITTS: Mr. Speaker, members, this is Senate Bill 2, the technical correction on appropriations. I move passage.

JOE STRAUS: Following amendment, clerk will read the amendment.

CLERK: Amendment by Isaac.

JOE STRAUS: Chair recognizes Representative Isaac.

REPRESENTATIVE JASON ISAAC: Thank you, Mr. Speaker. Members, this is an amendment that is required for the deferral that Representative Hochberg and I worked on for several hours yesterday, and he helped me clear this up a little bit. Should the comptroller find sufficient funds available to avoid the school funding deferral, this clearly states that the she would have the authority to appropriate that money. And I believe it's acceptable to the author. Move adoption.

JOE STRAUS: Representative Isaacs sends up an amendment. It is acceptable to the author. Is there objection? The Chair hears none. Amendment is adopted. Following amendment, clerk will read the amendment.

CLERK: Amendment by Morrison.

JOE STRAUS: Chair recognizes Representative Morrison.

REPRESENTATIVE GEANIE W. MORRISON: Thank you Mr. Speaker and members. This is an amendment about the specialty license plates currently available for purchase from the Department of Motor Vehicles. And these funds derived from the specialty plates to go to numerous agencies and nonprofits. And based on the bill this session, there are only charities and state agencies that were only appropriate 50 percent, even though these people are contributing and want to the money to go there. And so this will give the money to the charities and to the state agencies that they were designated to. And I move passage. And I hope it's acceptable to the author. Thank you.

JOE STRAUS: Representative Morrison sends up an amendment. It is acceptable to the author. Is there objection? Chair hears none. Amendment is adopted. Following amendment, the clerk will read the amendment.

CLERK: Amendment by King of Parker.

JOE STRAUS: Chair recognizes Representative King.

REPRESENTATIVE PHIL KING: Mr. Speaker, members, you may kind of want to listen up on this one. A heads up. Last night there was an amendment added by Representative Howard that was very, very well intended, and it was an effort to try to get some additional funds for our schools; which all of us certainly want to do. But it had the effect of violating a commitment that a lot of us here had made, to not draw down any additional monies or not commit any additional monies out of the economic stabilization fund, the Rainy Day Fund. As you know, the budget finally worked out with our economic stabilization fund. It's probably only about, even if it was to get up to eight -- the comptroller said it may get up as high as 6.5 billion by the time the next biennium ends. Even if it were to get up to 8 billion, which I think is exceptionally unlikely, that is only about a 4 percent reserve account for the State of Texas. And there's none of us that in our homes or in our businesses would ever think that a 4 percent reserve is a really sufficient amount for us to do our planning on and have reliance on. And so what this amendment simply does, it takes us back to where we were before Representative Howard's amendment, and says that is we're not going commit the next legislature ahead of time because, in reality, probably by the time Representative Howard's amendment would have even gone into effect we would be in the next legislative session, and we would already be doing a supplemental. And so what this amendment would have done is, frankly, commit the next legislature; when we would already be in the supplemental process. And, frankly, as all of us know, that Rainy Day Fund is probably already spent because of the medicaid commitments and the other things we'll be running into with public education. So that's what my amendment does, it takes us back to where we were before Representative Howard's very well intended amendment.

REPRESENTATIVE VAN TAYLOR: Mr. Speaker?

JOE STRAUS: Mr. Taylor, for what purpose?

REPRESENTATIVE VAN TAYLOR: Will the gentleman yield for a question?

JOE STRAUS: Mr. King, do you yield?

REPRESENTATIVE PHIL KING: I yield.

REPRESENTATIVE VAN TAYLOR: Representative King, taking us back a little further in time to March 15th. The governor said I remain steadfastly committed to protecting the remaining balance of the Rainy Day Fund, and will not sign a 2012-2013 state budget that uses the Rainy Day Fund. Is it possible if the amendment stays in, that the governer might veto this bill?

REPRESENTATIVE PHIL KING: Well, my impression of Governor Perry is that he usually does what he says that he's going to do. And so that's another concern that I and others had as joint authors of this amendment, that this could lead to veto issues, which none of us want to come back and do this again.

REPRESENTATIVE VAN TAYLOR: Sure. Actually, in the same question, Speaker Straus said the same thing and even reiterated that just two days ago in an editorial published in the Dallas Morning News.

REPRESENTATIVE PHIL KING: But I think the House leadership, as a whole, has had very strong commitment to protecting that small 4 percent reserve account that the State of Texas operates on.

REPRESENTATIVE VAN TAYLOR: And haven't we voted perhaps a half dozen times during the course of the regular session to protect the remainder of the Rainy Day Fund?

REPRESENTATIVE PHIL KING: We absolutely have. And I think this is just continuing that commitment.

REPRESENTATIVE VAN TAYLOR: And you know the speaker said, and I quote, yet it is wise and responsible for the legislature to preserve the fund balance. And I assume that your amendment is in that same vein of the speaker of being wise and responsible.

REPRESENTATIVE PHIL KING: I hope it is. I think that we need to not commit a future legislature. And again, by the time those monies have been drawn down we'd be back in next session anyway, already dealing with this very issue on a supplemental.

REPRESENTATIVE VAN TAYLOR: And wouldn't in fact this amendment sort of tie the hands of future legislatures, which is something we really shouldn't do?

REPRESENTATIVE PHIL KING: That's a practice we often get in to, and it is a bad practice to commit future legislatures.

REPRESENTATIVE VAN TAYLOR: Let's assume other priorities came up, let's say there was a very bad hurricane this summer or two very bad hurricanes, and we really needed that money for something important or maybe next summer. Wouldn't we then be obligating ourselves to one strategy to be using those funds when we're in fact we need to focus on something else that we can't even see?

REPRESENTATIVE PHIL KING: So many things can come over to a flush-year period. But the bottom line is that 4 percent account is a very, very nominal savings account and that's what we're already taking it down to.

REPRESENTATIVE VAN TAYLOR: Well, I think this is an excellent amendment. I think this continues our commitment to preserve the funds that the taxpayers have entrusted to us in this legislature.

REPRESENTATIVE PHIL KING: Thank you, Representative.

REPRESENTATIVE JOE DESHOTEL: Mr. Speaker?

JOE STRAUS: Mr. Deshotel, for what purpose?

REPRESENTATIVE JOE DESHOTEL: I have a question.

JOE STRAUS: Mr. King, do you yield?

REPRESENTATIVE PHIL KING: Absolutely.

REPRESENTATIVE JOE DESHOTEL: Yeah, Phil, I just want to know when we're going to stop playing games with the people. You know as well as I do for this amendment to be effective it would take a two thirds vote on this third reading. It's barely going to pass. So why are we putting on a show trying to appease a certain group out there sitting in the gallery?

REPRESENTATIVE PHIL KING: I'm concerned the it would get a two thirds vote and go into -- just hate to drain down that small reserve account and we already are doing.

REPRESENTATIVE DESHOTEL: What makes you think you're going to get a two thirds vote when we're only got 81 on second reading and 62 against?

REPRESENTATIVE PHIL KING: Well, I can't predict what the members will vote and predict, who is here today. But I think the prudent thing to do, at least from my perspective, is for us to try to remove the amendment before it goes to vote.

REPRESENTATIVE JOE DESHOTEL: Well, I think the prudent thing is to be honest with people.

REPRESENTATIVE VERONICA GONZALES: Mr. Spe aker?

JOE STRAUS: Mrs. Gonzalez, for what purpose?

REPRESENTATIVE VERONICA GONZALES: Yes, will Mr. King yield?

REPRESENTATIVE PHIL KING: Certainly.

REPRESENTATIVE VERONICA GONZALES: Mr. King , I heard you mention awhile ago that we don't want to tie the hands of future legislatures. But, let's be honest here, we've done that many times in the past; have we not?

REPRESENTATIVE PHIL KING: We have. And it's always a bad practice.

REPRESENTATIVE VERONICA GONZALES: In fact, I imagine you voted for the bills that said that any monies that came in had to go towards property tax, that back in 2005 when we cut property taxes and we were looking at putting on additional taxes, and said any monies have to go for property tax relief, did it not?

REPRESENTATIVE PHIL KING: I did.

REPRESENTATIVE VERONICA GONZALES: To go to that? So it wouldn't be unprecedented to do at this time?

REPRESENTATIVE PHIL KING: No, it wouldn't be unprecedented. And we all learn with time. And one of the things that I have learned is don't obligate a future legislature if you can avoid it.

REPRESENTATIVE VERONICA GONZALES: And I think that if we're ever going obligate people to do it, to preserve the education of children, that would be a good purpose. Thank you.

REPRESENTATIVE SCOTT HOCHBERG: Mr. Speaker ?

JOE STRAUS: Mr. Hochberg, for what?

REPRESENTATIVE SCOTT HOCHBERG: Will the gentleman yield?

REPRESENTATIVE PHIL KING: Sure. I will just give a running yield.

REPRESENTATIVE SCOTT HOCHBERG: Phil, I just -- I understand your concern, but I'm a little confused. Just before you got up to do this reconsideration or this third reading amendment, rather there was a third reading amendment put on by Mr. Isaac that essentially says that the deferral will be changed if we have enough money to pay off medicaid; which I assume comes from the Rainy Day Fund, and have more left over, instead of leaving the deferral there for the decision of a future legislature, when to bring it back or how much to defer. I don't remember you raising any objections to that. Can you tell me why that's different from this? Isn't it the same thing?

REPRESENTATIVE PHIL KING: Well, it kind of is for me right now one at a time. I'm trying to deal with this. And, I'll be honest with you, I have significant concerns about that amendment as well. But I think you would probably be suggesting that that is correcting an account issue.

REPRESENTATIVE SCOTT HOCHBERG: No, sir --

REPRESENTATIVE PHIL KING: I'm not defending that amendment. I have some issues with it and I've considered registering to vote against it.

REPRESENTATIVE SCOTT HOCHBERG: Well, maybe we should reconsider that one and take it back down if this one comes down. We essentially have the same issue.

REPRESENTATIVE PHIL KING: I haven't even read the amendment yet and I can't really speak to it. But I would really like to speak to this amendment and I think the prudent thing on this one is to follow good policy and remove it.

REPRESENTATIVE SCOTT HOCHBERG: Well, tell me why you didn't look at the other one. It went on without objection last night and the corresponding piece went on without objection to third reading.

REPRESENTATIVE PHIL KING: To be honest, I didn't read this one until this morning. You know, we went 16 hours on the floor and there were a lot of amendments to the amendments. We didn't even vote on Representative Howard's amendment. I think none of us -- I think at least me and some others didn't really realize what the impact of that was and as the night went on and the morning, we kind of realized what had occurred. So I came in -- As you know, Representative, it's common for us to try to make some corrective amendments on the second day.

REPRESENTATIVE SCOTT HOCHBERG: Right. On the second day we just did what you're objecting to having done on the first day.

REPRESENTATIVE PHIL KING: And again, I haven't looked at that amendment yet. And I do have some concerns about it. But I want to focus on this one that is before us right now.

JOE STRAUS: Mrs. Farrar, for what purpose?

REPRESENTATIVE JESSICA FARRAR: Mr. Speaker , will this gentleman yield?

JOE STRAUS: Mr. King, do you yield?

REPRESENTATIVE PHIL KING: Certainly yield.

REPRESENTATIVE JESSICA FARRAR: Mr. King, didn't -- You voted for this budget for the coming biennium, correct?

REPRESENTATIVE PHIL KING: I did.

REPRESENTATIVE JESSICA FARRAR: And in that budget it's presumed that we will be spending Rainy Day Funds in the supplemental bill next session to cover medicaid, correct?

REPRESENTATIVE PHIL KING: I think that it's a reasonable -- or not a reasonable, I think it's a legitimate possibly. I think that's where all the Rainy Day Fund is going, on medicaid.

REPRESENTATIVE JESSICA FARRAR: Isn't it a

(inaudible) when you say that you -- that this body doesn't vote for Rainy Day Funds, when we all know that we come back here in two years, we look backwards and a supplement bill spends the Rainy Day Funds for things like we didn't want to say we voted for what two years before, correct?

REPRESENTATIVE PHIL KING: Well, I think when we come back we will have the flexibility to take that money and use it for medicaid, or whatever other urgent matters have risen in the biennium; including education. But -- Or we may determine at that time the more prudent thing is to protect that reserve fund for another two years, because there is other funding mechanisms. I think the key is I don't know what it's going look like two years down the line, and so the prudent thing to do is to protect that small reserve account, 4 or 5 percent reserve account, protect it and make sure we got it to work in the most prudent matter in the interim, and in the next legislative session.

REPRESENTATIVE JESSICA FARRAR: I agree with you, except that you are aware that we've already calculated in the money that is we have today, the money to cover -- the medicaid money we know we're going need two years. Hold on. Let me finish.

REPRESENTATIVE PHIL KING: I'm sorry.

REPRESENTATIVE JESSICA FARRAR: Mrs. Howard s amendment and mine, all it says -- And, by the way, we have covered medicaid and there's still a couple billion available. So what Mrs. Howard's and mine amendment says even beyond that, even beyond what we leave in surplus there, we would spend for the schools. And it's only $2 billion, when they need 4 billion just for status quo. And it doesn't include growth. So all we're saying is that. And so are you saying that schools aren't important enough, you would rather have money sitting in the bank? I don't think about you but, you know, you're talking, your language is living within our means.

REPRESENTATIVE PHIL KING: I'm sorry, what's your question?

REPRESENTATIVE JESSICA FARRAR: Well, if you're talking about living within our means, you've got money in the savings account, you wouldn't spend that on the schools?

REPRESENTATIVE PHIL KING: I'm saying that a 4 percent savings account, reserve account for a state with 25 million people, where hurricanes often cost us 1 to $2 billion, where we just spent 80 plus million on a short run of wildfires; that in a state of this size we need to have that emergency fund available, the economic stabilization fund. But you know what, if this really pools, when we come back next session the legislature will look at how to use those funds in a responsible manner.

REPRESENTATIVE JESSICA FARRAR: In the meantime the cost --

REPRESENTATIVE PHIL KING: You don't know what's going happen two years from now, and I don't either.

REPRESENTATIVE JESSICA FARRAR: The cost of those cuts to schools is incalculable. And you can't go back in time. When you cut a reading teacher -- Pasadena Independent School district is cutting 15 to 5 reading teachers. What happens to that dyslexic kid in two years?

JOE STRAUS: Representative Sheffield raises a point of order, the gentleman time is expired.

REPRESENTATIVE PHIL KING: Members, I would move adoption of the amendment.

JOE STRAUS: Chair recognizes Representative Howard to speak in opposition.

REPRESENTATIVE DONNA HOWARD: Thank you Mr. Speaker. Members, I want to clarify what this amendment does. I want to go over it again and I, please, ask to you pay attention to this. I know that you have been getting calls and messages and whatever to go back on what this House did yesterday, which was to take a common sense, practical, reasonable, rational approach to dealing with what's going on in our budget. It was a good safe effort at compromise. This is not about just taking sides, digging our heels in and not looking at what's best for Texas. What we're trying to do here is look at what is the money that is available, what other services are needed and how can we responsibly address those needs with the money that is available. This is not some far out thing, this is talking about a contingency. Only funds that come in to the Rainy Day Fund above what's currently there, that I know some of you have pledged not to touch. I understand that. I'm offering something that allows you to remain faithful to what you've committed, to not touch the current Rainy Day Fund. This is above and beyond. And it would go to fund enrollment growth projected by the LBB to be $2.3 billion. Half, essentially, of the shortfall. We're talking about funding for all of those new students who are going to be coming into our classrooms. So it does not touch the current Rainy Day Fund amount, and it only funds enrollment growth and it's capped at that. This is a very responsible compromise, I think. And to vote for the current amendment, to strip that from this bill is to say that we're not even willing to look at future surplus funds to help cover what we all claim is one of the most important things we do in this state, and that's to pay for public education to help provide an educated workforce.

REPRESENTATIVE SCOTT HOCHBERG: Mr. Speaker ?

JOE STRAUS: Mr. Hochberg, for what purpose?

REPRESENTATIVE SCOTT HOCHBERG: Will the lady yield?

REPRESENTATIVE DONNA HOWARD: I yield.

REPRESENTATIVE SCOTT HOCHBERG: Mrs. Howard , you just made a very good point that I have I haven't thought about, as I was listening to Mr. King. Mr. King was saying that it's very important to maintain this 4 percent reserve, that that's prudent. But your amendment wouldn't cut into the 4 percent reserve at all, would it?

REPRESENTATIVE DONNA HOWARD: It would not.

REPRESENTATIVE SCOTT HOCHBERG: It would in fact maintain that floor exactly as Mr. King asked.

REPRESENTATIVE DONNA HOWARD: It would.

REPRESENTATIVE SCOTT HOCHBERG: So your amendment does exactly what Mr. King said we ought to do, which is to maintain that 4 percent reserve.

REPRESENTATIVE DONNA HOWARD: That is correct.

REPRESENTATIVE SCOTT HOCHBERG: So he should be for your amendment.

REPRESENTATIVE DONNA HOWARD: One would think.

REPRESENTATIVE SCOTT HOCHBERG: Thank you.

REPRESENTATIVE DONNA HOWARD: If you have attended appropriations committee hearings for payday -- and heard some of the comments made by our comptroller, you also would know that we do not have to maintain X percentage in the Rainy Day Fund.

REPRESENTATIVE BURT R. SOLOMONS: Mr. Spea ker, will the gentle lady yield?

JOE STRAUS: Mrs. Howard, do you yield?

REPRESENTATIVE DONNA HOWARD: I yield.

REPRESENTATIVE BURT R. SOLOMONS: Mrs. How ard, thank you for yielding. And this is the amendment that we dealt with yesterday where a number of us were very yes impressed with the fact that we weren't using the Rainy Day Fund as we said we wouldn't use. But for so many of us that are in fast growth school districts throughout the state and in the urban areas, this was a very important amendment for this bill, for us. We were very concerned about enrollment growth, we are very concerned about using and trying to help our school districts in that context. Most of us who are in this body, we have a number of rural members, we have a number of urban city school districts, and there is enormous, fast growth in those that we are needing to deal with in some form or fashion. And your amendment basically, with some compromise, say we will not touch the Rainy Day Fund, but we need some help in the fast growth school districts with the enrollment problem, and we shouldn't shortchange our own school districts; is that correct?

REPRESENTATIVE DONNA HOWARD: Absolutely correct.

REPRESENTATIVE BURT R. SOLOMONS: From the standpoint of this amendment comes off this bill, then we're going to have -- a lot of us are going to have a problem with this bill, because this is one -- since we passed other amendments to send a message, we would expect this amendment to stay on and go to conference and try to make that case that that is an important issue to many of us in the urban areas.

REPRESENTATIVE DONNA HOWARD: I would hope so. And I think it's important to many districts that our constituents -- our colleagues --

REPRESENTATIVE BURT R. SOLOMONS: Well, I can tell you in Carrollton Farmers Branch in Lewisville, the enormous amount of enrollment growth and the problem we have with trying to pay those costs for those, we ought to at least try too help them where we can. And if we're not willing to do that then we've got a problem with this entire process.

REPRESENTATIVE DONNA HOWARD: Thank you Representative Solomon. Appreciate it.

REPRESENTATIVE ELLIOTT NAISHTAT: Mr. Spea ker?

JOE STRAUS: Mr. Naishtat, for what purpose?

REPRESENTATIVE ELLIOTT NAISHTAT: Will the gentle lady yield?

REPRESENTATIVE DONNA HOWARD: I yield.

REPRESENTATIVE ELLIOTT NAISHTAT: Thank you. Donna, don't you think that every public schoolteacher, every public school staff member, every public school principal and the members of every school board in Texas would be most appreciative if this amendment stays on?

REPRESENTATIVE DONNA HOWARD: I think that's a very fair statement. Thank you.

REPRESENTATIVE LANHAM LYNE: Mr. Speaker?

JOE STRAUS: Mr. Lyne, for what purpose?

REPRESENTATIVE LANHAM LYNE: To ask a question of the lady.

JOE STRAUS: Mrs. Howard, do you yield?

REPRESENTATIVE DONNA HOWARD: I yield.

REPRESENTATIVE LANHAM LYNE: Mrs. Howard, you probably heard me talk before that I'm not overly impressed with how things came out for education and a lot of other things in this budget. Are you aware all of us that are not in a high growth district, and none of our towns are high growth. I believe that this amendment that you did was a great idea. Money will not solve all the issues that education has. There's a lot of other problems that we got to deal with. But I think this was a great effort on your part. I hate to think that we're going turn around and do something like this and take this back off because of a pledge that we weren't going to do X, Y or Z and that's why I don't make pledges because you don't know what the system is. Have we used the Rainy Day Fund, the economic stabilization fund for what I would call unusual things in the past?

REPRESENTATIVE DONNA HOWARD: Oh, well, certainly its been used for a variety of things. And I think in regard to the statement you just made, too, the whole point of this is to not have anybody go back on their pledge, because it's not asking anybody to use any of the current Rainy Day Fund. It would only be beyond.

REPRESENTATIVE LANHAM LYNE: Are you aware that I have read several people's comments that, you know, the school district can raise taxes. Are you aware of that?

REPRESENTATIVE DONNA HOWARD: Absolutely. I'm a former school board member.

REPRESENTATIVE LANHAM LYNE: I spoke to my local constituents a while back, a month and a half ago, and I said this legislature for the last however long, ten years, has prided itself upon not raising taxes.

REPRESENTATIVE DONNA HOWARD: Absolutely.

REPRESENTATIVE LANHAM LYNE: And I said that's a lie. Because this legislature didn't pass taxes, they forced the local people to raise taxes. And counties, the cities and the school districts. And that's disingenuous. That's one of the things that irritates the heck out of me is how often we do this these games. And I'm tired of it. And I support your amendment because it's ha right thing to do for the people of Texas.

REPRESENTATIVE DONNA HOWARD: Thank you, Representative. I appreciate that. And I would also suggest that the games we're talking about here, we certainly pledged the Rainy Day Funds to cover the anticipated shortfall of the services that is we will be providing this biennium for medicaid. We pledged the Rainy Day Fund to cover the end of the referral of the foundation of the public school program payment. We pledged that money, so we've essentially used it. REPRESENTATIVE ARMANDO "MANDO" MARTINEZ: W ill the lady yield?

JOE STRAUS: Mrs. Howard, would you yield?

REPRESENTATIVE DONNA HOWARD: I yield. REPRESENTATIVE ARMANDO "MANDO" MARTINEZ: M rs. Howard, earlier we heard of our colleagues talking about quotes from our governor. But I don't know if you remember this one, I cannot let $2 billion sit in a bank account when it can go directly into the classroom. Do you know who said that?

REPRESENTATIVE DONNA HOWARD: I believe that was Governor Rick Perry. REPRESENTATIVE ARMANDO "MANDO" MARTINEZ: T hat sure was. And that was back in June 2005, when he called a special session, because he left 2 billion dollars in a bank account that could have been used for teachers and students in the classroom.

REPRESENTATIVE DONNA HOWARD: I recall that. REPRESENTATIVE ARMANDO "MANDO" MARTINEZ: A nd he also vetoed that TA budget and called the special session, because he said there was more, not less, for the children. More money for teachers, more money directed into the classrooms for results in their schools, because if we could add $2 billion that would be the result of that. Do you agree?

REPRESENTATIVE DONNA HOWARD: I agree. REPRESENTATIVE ARMANDO "MANDO" MARTINEZ: O kay. So when we're talking about quotes, let's go back to 2005 when our governor did not want to leave $2 billion in a bank account, that now we have 4 billion for public education.

REPRESENTATIVE DONNA HOWARD: And we're not even talking about using the money that's currently there. That is not -- That's off the table. That is not a part of this amendment. It's only surplus, above and beyond what is currently in the Rainy Day Fund. Appropriations committee hearing recently I asked Dr. Zerwas the other day to corroborate, saying yes, indeed, at the last hearing that were held in last week, when he was asked whether or not he would support funding schools with any additional money coming into the Rainy Day Funds. He said yes. This is somebody that we rely upon to study what's going on. He concurred that this is something that we need to be doing. Texas Association of Business said that they support using additional dollars even from the current Rainy Day Fund to pay for education, to make sure we have an educated work force, the workforce pipe line we need to have in place to have economic development in this state. It is not tapping in to what currently exists, it's only above -- Members, please let's look at this in a reasonable, rational way. We do not have to be fighting each other on everything and just go into corners. We can actually come together in a way that meets the needs of Texans, that accommodates all of us in the promise that all of us are making to our constituents. This is a reasonable compromise. I ask you to vote against this amendment. Thank you.

JOE STRAUS: Chair recognizes Representative King to close.

REPRESENTATIVE PHIL KING: Thank you members. Just three sentences. If what this really comes down to is this simple. If you vote against this amendment -- if you vote for this amendment you're voting to preserve the Rainy Day Fund. And I know that's what a lot of us -- a lot of people have different attitudes for that. But that's really all this vote is. If you vote for this amendment you're voting to preserve our reserve account, the Rainy Day Funds. And if you vote against the amendment you're voting to commit in a sense, to spend Rainy Day Fund dollars.

REPRESENTATIVE BURT R. SOLOMONS: Mr. Spea ker?

JOE STRAUS: Mr. Solomons?

REPRESENTATIVE BURT R. SOLOMONS: Would the gentleman yield?

JOE STRAUS: Mr. King, will you yield?

REPRESENTATIVE PHIL KING: I do.

REPRESENTATIVE BURT R. SOLOMONS: Phil, I appreciate that. When you talk about preserving The Rainy Day Fund, she is not touching a penny that's in the existing Rainy Day Fund; is that correct? Not a penny.

REPRESENTATIVE PHIL KING: What she's saying is if it gets above about 4.2 billion that all that money will be peeled off and it will come out of the Rainy Day Fund. I'm suggesting that even if it got to be an 8 billion dollars Rainy Day Fund, it's still only about 4 percent. We can't predict what's going to happen over the next two years and we need to reserve that money for the next legislature because they are going to need it deeply. Otherwise, we're going to be looking at tax increases next time.

REPRESENTATIVE BURT R. SOLOMONS: Well, if want to put it that way that's one thing. For you to stand up there and say that this vote is to preserve the Rainy Day Fund. We are preserving the Rainy Day Fund as is. We are not using Rainy Day money. We're talking about future Rainy Day money that comes in to help our school districts.

REPRESENTATIVE PHIL KING: That is not a correct statement.

REPRESENTATIVE BURT R. SOLOMONS: Why isn't it?

REPRESENTATIVE PHIL KING: This money wouldn't even be used until we got back into next session, because nobody thinks it would get above that before. What you're doing by this vote is telling the next legislature, when they're in the supplement budget process, that whatever money got above 6.2 can't be used for whatever is prudent at that time, but has to go back to the --

REPRESENTATIVE BURT R. SOLOMONS: Based on what -- what we're -- based on what we're doing with education and what we have to work within this budget cycle, I think that works pretty well. And we spent 60 percent of it. But anyway, I'm going to ask the members to vote against your amendment, because I think in our urban areas we need to have something to helps that enrollment growth that we've got. And this is one of the best ideas I have seen so far, without reneging on any promises to use existing Rainy Day money in this budget cycle.

UNIDENTIFIED MAN SPEAKER: Yes, let me just clarify, if I could, Mr. King. You made the comment that this was on preserving and you had all had the decision and the disagreement. The disagreement seems to be we will keep the current amount of money but Donna Howard's approach was to spend only new funds that flow into the Rainy Day Funds.

REPRESENTATIVE PHIL KING: Well, I think, if I understand her amendment, it says if the comptroller had projected in the January projection, which I think at that time was about 6.2 at the end of 2013; that if any money that went beyond there, if the oil tax price more that the -- monies above 6.2 would be committed by the next legislature to be spent in a particular topic. And --

UNIDENTIFIED MAN SPEAKER: I said if we were in a supplemental, right, if we were in a supplemental our hands might be tied and we would have to spent spend a hundred percent on the FHC, the foundation school programs. And my point is that if facts are right now that we spend about 60 percent of our state funds on education.

REPRESENTATIVE PHIL KING: Yes, we do.

UNIDENTIFIED MAN SPEAKER: Right. So we're only really talking about less than half of the remaining dollars.

REPRESENTATIVE PHIL KING: Which is 25.

UNIDENTIFIED MAN SPEAKER: Since we've under funded education.

REPRESENTATIVE PHIL KING: National average for what a state spends on a percentage of education.

UNIDENTIFIED MAN SPEAKER: Right. Since we've under funded education already, we're not tying our hands very much, that would be my point.

REPRESENTATIVE PHIL KING: I understand that. Members --

REPRESENTATIVE JASON ISAAC: Mr. Speaker?

JOE STRAUS: Mr. Isaac, for what purpose?

REPRESENTATIVE JASON ISAAC: Will the gentleman yield?

JOE STRAUS: Mr. King, do you yield?

REPRESENTATIVE PHIL KING: Oh yes, of course.

REPRESENTATIVE JASON ISAAC: If your amendment does not pass we're going to put more money into the foundation school program if the Rainy Day Fund does exceptionally well, it does not avoid a deferral. It does not avoid any of these deferrals.

REPRESENTATIVE PHIL KING: I sorry, ask that differently.

REPRESENTATIVE JASON ISAAC: So if your amendment does not go into effect we're not going to avoid the deferral, are we?

REPRESENTATIVE PHIL KING: At some point someone is going to have to pay the deferral back, no matter what happens. That is correct.

REPRESENTATIVE JASON ISAAC: So we're putting more money into the school program as possibly --

REPRESENTATIVE PHIL KING: I see what you're saying.

REPRESENTATIVE JASON ISAAC: So we're just going to put more money into education if your amendment does not go on?

REPRESENTATIVE PHIL KING: Well, I don't know if that's true or not. It depends on what the fund gets to. One of my concerns is that this legislature is possible to obligate the spending of the Rainy Day Fund by the next legislature, by the vote today. And I'm suggesting we're all going to be back here in 18 months, and we need the flexibility. I think medicaid is probably going to gobble up all of that. We don't know what the feds are going to do. But the bottom line is I just think a lot of us have made a strong commitment to our constituents that we would not draw anymore down out of the Rainy Day Funds, out of the 3.2 billion that we did, and we would not commit any more of it. And I think Mrs. Howard's well intended amendment went against that commitment that a lot of us have made. So I'm trying to stay with my commitment to my constituents, to not spend or commit any more of the Rainy Day Funds. And with that, again, I would move passage. And thank you for this opportunity.

REPRESENTATIVE JASON ISAAC: I think over the last ten years we've doubled our school foundation, our school funding per student, and the results have stayed the same. I support your amendment.

JOE STRAUS: Representative King sends up an amendment. A record vote has been requested. A record vote has been granted. Clerk will ring the bell. Showing Representative King voting aye. Showing Representative Howard voting no. Showing Representative Lucio voting no. Showing Representative Torres voting no. Have all voted? There being 79 ayes and 65 nays, the amendment failed to adopt.

REPRESENTATIVE CRAIG EILAND: Mr. Speaker?

JOE STRAUS: Mr. Eiland, for what purpose?

REPRESENTATIVE CRAIG EILAND: Parliamentary inquiry.

JOE STRAUS: State your inquiry.

REPRESENTATIVE CRAIG EILAND: So Mrs. Howard's amendment will eventually require -- with this bill and Mrs. Howard's amendment will require two thirds vote, correct?

JOE STRAUS: Mr. Eiland, the spending for the Rainy Day Fund will require a two thirds vote.

REPRESENTATIVE CRAIG EILAND: Correct. And so and it's not --

JOE STRAUS: The bill does not require --

REPRESENTATIVE CRAIG EILAND: Right. The bill does not require. But for Mrs. Howard's amendment to go into effect, on final passage it requires a two thirds vote for her amendment to be effective, correct?

JOE STRAUS: Of both chambers.

REPRESENTATIVE CRAIG EILAND: Right. And so it doesn't matter if the bill today does not get a hundred votes, but it comes back from conference and gets a hundred votes; that is the vote that counts when it comes back from conference, correct?

JOE STRAUS: That's correct. Following amendment clerk will read the amendment.

REPRESENTATIVE LANHAM LYNE: Mr. Chairman?

JOE STRAUS: Mr. Lyne, for what purpose?

REPRESENTATIVE LANHAM LYNE: Parliamentary inquiry.

JOE STRAUS: State your inquiry.

REPRESENTATIVE LANHAM LYNE: What was the vote on that one again, this amendment that just passed?

JOE STRAUS: We'll check that for you.

REPRESENTATIVE LANHAM LYNE: 79-65, though. And the amendment, they said it failed. Okay. Never mind. I will withdraw that. Thank you.

JOE STRAUS: Mr. Madden, for what purpose?

REPRESENTATIVE JERRY MADDEN: Just one quick parliamentary question, which is probably irrelevant but I'll ask it anyway.

JOE STRAUS: State your inquiry.

REPRESENTATIVE JERRY MADDEN: If the bill went to the Senate and the Senate took our amendments and it did nothing with it, would this vote then count as the hundred vote?

JOE STRAUS: Mr. Madden, it's not the final passage of the bill.

REPRESENTATIVE JERRY MADDEN: Okay. Thank you.

JOE STRAUS: Following amendment, clerk will read the amendment.

CLERK: Amendment by Truitt.

JOE STRAUS: Chair recognizes Representative Truitt.

REPRESENTATIVE VICKI TRUITT: Thank you Mr. Speaker. Members, this is the all American apple pie and motherhood amendment that simply uses, in proposing to use a small portion of the proceeds from an amendment that we passed yesterday to continue to fund the Texas Armed Services Scholarship Program, a program where the governor, lieutenant governor have a couple of appointments each year and each state representative and each state senator gets to appoint someone for a scholarship, if they -- a four-year scholarship, if they commit to four years of military service. And a lot of you have signed onto the amendment and I appreciate that. And I think it might be acceptable to the author.

JOE STRAUS: Mr. Turner, for what purpose?

REPRESENTATIVE SYLVESTER TURNER: Yeah, just a quick question if she'll yield.

JOE STRAUS: Do you yield?

REPRESENTATIVE VICKI TRUITT: Certainly.

REPRESENTATIVE SYLVESTER TURNER: Represen tative Truitt, where is the money coming from?

REPRESENTATIVE VICKI TRUITT: You may recall yesterday that Representative Otto passed an amendment to deal with Amazon, and there was like $16 million proceeds from that. This would use a very small portion from that.

REPRESENTATIVE SYLVESTER TURNER: How much are we using from that?

REPRESENTATIVE VICKI TRUITT: It's about a little over 2 million per year to fund -- to fund scholarships for our students.

JOE STRAUS: Representative Truitt sends up an amendment. It's acceptable to the author. Is there objection? Chair hears none. The amendment is adopted. Following amendment, the clerk will read the amendment.

CLERK: Amendment by Larson.

JOE STRAUS: Chair recognizes Representative Larson.

REPRESENTATIVE LYLE LARSON: Mr. Speaker, members, I wanted to bring up an issue that has a profound impact on counties throughout the state. Primarily the ones that is provide level one trauma. We've got 13 level one trauma centers across the state. In 1997 the legislature set up a fund, the trauma and EMS fund, that the first year $4 million was given. This net is imperative of the whole safety net that we have got across the state, because if you look at Bexar County, for example, and all of the other communities that provide trauma care; we've got 22 counties that feed into our trauma network, except only the Bexar County taxpayers pay for the university health system. We're building a $300 million trauma tower to accommodate all the growth in south Texas for folks that flow in, so the state, in its wisdom, set up this fund. Well, the funds started growing based on DPS tickets. It's a progressive sanction, there's a point system and if any of y'all have had more than one ticket, you've seen that you've paid exponentially for those tickets. That money flows into the trauma fund, and it allows these counties that have one of the 13 trauma level one trauma centers to have physicians on staff 24/7, 365 days for everybody in these regions. The problem I have is, if you look at what the -- what the fund balance is, it's 210 million now and it's forecast to grow to 382 million. But we've reduced the funding going to these trauma centers from 145 million in this present biennium, down to a 118 million. And what -- it is critically important if we're going to continue to grow these trauma centers, we need to use the dedicated funding stream that was set up in 1997. We told people that their tickets were going to go up with DPS, but we're not spending the money the way it was intended to be spent. I sat down with Dr. Zerwas yesterday and he indicated that he would have an interim study to sit down and look at this matter. He agreed that if you've got a dedicated funding stream dealing with trauma care, that that's what it should be used for. But we're self imposing a restricted use of these funds. Either we need stop collecting the funds, that's one alternative. Or we need to start spending the money to prop up these trauma centers. It also includes another 247 hospitals that have not level one trauma, but level two and level three trauma being provided to folks. So my focus is, with this amendment, is to go back and reassess what we're doing with this fund.

REPRESENTATIVE SYLVESTER TURNER: Mr. Spea ker?

JOE STRAUS: Mr. Turner, for what purpose?

REPRESENTATIVE SYLVESTER TURNER: Would the Representative yield?

JOE STRAUS: Mr. Larson, would you yield?

REPRESENTATIVE LYLE LARSON: Absolutely.

REPRESENTATIVE SYLVESTER TURNER: Mr. Lars on, we're expected -- if the amendment -- if the amendment taking 25 -- roughly $25 million from the trauma dedicated fund, and it is spending the money where? Is it on trauma centers?

REPRESENTATIVE LYLE LARSON: It's on trauma centers. And there's a formula right now that the money is spent -- spread out across the state to different trauma centers. Obviously, the level one trauma centers get a lion's share of the money. And then all of the other centers that are providing this essential service to folks across the state are getting the balance of it.

REPRESENTATIVE SYLVESTER TURNER: I will fully acknowledge to you that I am somewhat conflicted on this. I share your sentiment. I do share your sentiment. There is no question that there is a significant fund balance in the trauma center fund account. The GR dedicated fund account. The problem is until we address this matter with our GR dedicated accounts, the 25 -- are you aware that the $25 million will serve as a cost to the bill itself. It will work against us on certification.

REPRESENTATIVE LYLE LARSON: Right. And that's what Dr. Zerwas said. I wanted to talk about this and illuminate folks about the problem that we got. And he's agreed to do an interim study. This is, Representative Turner, this is not the only issue when you talk about truth in budgeting.

REPRESENTATIVE SYLVESTER TURNER: I am with you a hundred percent. I think Chairman Pitts will tell you I am with you a hundred percent. And I think we do need to -- we do need look at it closely over the interim, not only from our accounts but the other dedicated fund balances. And there's no question we need to use the money for its intended purposes. The only problem with it right now is that to do it now will serve as a cost on the bill. So I'm -- Are you going to pull this one down?

REPRESENTATIVE LYLE LARSON: Well, with the understanding that Dr. Zerwas is going to do that interim study, and we're going to try to figure out how we can legislatively deal with this issue and start -- and start helping these trauma centers.

REPRESENTATIVE SYLVESTER TURNER: And I would love to join you-all on that.

REPRESENTATIVE LYLE LARSON: That will be great. I will pull this amendment down.

REPRESENTATIVE SYLVESTER TURNER: Thank you.

JOE STRAUS: Amendment is withdrawn. Members, that's all the amendments. Are there any members that want to speak for or against the bill? Chair recognizes Representative Eiland to speak on the bill.

REPRESENTATIVE CRAIG EILAND: Mr. Speaker, members, just real briefly; as part of the parliamentary inquiry, Mr. Speaker, was Mrs. Howard's amendment on here for schools, the bill will eventually require a hundred votes. I want to make sure everybody, including the senate, knows that when the bill came out of the House appropriations committee, all democrats voted for the bill. It was 20 to 0 with 7 absences. So I don't believe that anybody has a problem with the bill. I believe Mrs. Howard's amendment made it better yesterday. However, it passed last night by 98 to 47. The key to that being that there were numerous extraneous, they may be germane, but they were not a core part of this bill, which I believe the senate may consider. And if they take that off I think this bill gets over a hundred votes easily, so that Mrs. Howard's amendment can take effect. So that even though some of us may vote no today, we voted yes on the original bill and could easily vote for this bill if it comes back cleaner than it currently is.

JOE STRAUS: Chair recognizes Representative Pitts to close.

REPRESENTATIVE JIM PITTS: Mr. Speaker, members, let me talk to you a little bit about Senate Bill 2. Senate Bill 2 is a technical correction that there were -- that we needed to make for HB1. When HB1 was passed on in this chamber, there were some references to Senate Bill 1811. There were other similar legislation passed in regular session. And so the intent of this bill is to make those technical corrections for bills that were passed in the special session. And I move passage.

JOE STRAUS: Question occurs on final passage of Senate Bill 2. The clerk will ring the bell. Showing Representative Torres voting aye. Showing Representative Johnson voting aye. Have all voted? Being 101 ayes and 42 nays, Senate Bill 2 is finally passed. Chair lays out on third reading Senate Bill 1. The clerk will read the bill.

CLERK: SB1 by Duncan. Relating to certain state fiscal matters; providing penalties.

JOE STRAUS: Chair recognizes Representative Pitts.

REPRESENTATIVE JIM PITTS: Mr. Speaker, members, this is Senate Bill 1. It's the former Senate Bill 1811 that we passed on this floor during regular session, and we passed the regular conference committee report in regular session. And it is funded by budget and funds our public schools. I move passage.

JOE STRAUS: Following amendment, the clerk will read the amendment.

CLERK: Amendment by Chisum.

JOE STRAUS: Chair recognizes Representative Chisum.

REPRESENTATIVE WARREN CHISUM: Mr. Speaker , members, this is a program that I want to put on third reading. It's a bill that passed by Otto on 1811. And what it does, it allows for our agencies to go into a managed fleet operation, and it's not vendor specific. In fact, there's six different vendors that do this. And the only way they get paid is out of the savings that they can actually quantify in the program. It's worked very well for the Department of Agriculture. They've saved more than 5 percent and qualifies there. So we have about -- about 25,000 vehicles in the State of Texas and we can manage some of those fleets. And some of them are too small to do it, but there is a lot of fleets that is we can save money, and that's what this does. I move passage.

JOE STRAUS: Representative Chisum sends up an amendment. It's acceptable to author. Is there objection? Chair hears none. Amendment is adopted. Following amendment, clerk will read the amendment.

CLERK: Amendment by Sarah Davis of Harris.

JOE STRAUS: Chair recognizes Representative Davis.

REPRESENTATIVE SARAH DAVIS: Thank you Mr. Speaker and members. This is an amendment we spoke about last night but it got a little confusing because of the subject of lizards came up. What this amendment does is allows for the development of hike and bike trails on public utility easements, just like in 36 other states. It's acceptable to the author and I move passage.

JOE STRAUS: Representative Davis sends up an amendment. It's acceptable to the author. Is there objection? Mr. Howard?

REPRESENTATIVE CHARLIE HOWARD: Parliament ary inquiry. Can we have a look at that amendment on the screen, please?

JOE STRAUS: It's on the screen now. Mr. Coleman?

REPRESENTATIVE GARNET F. COLEMAN: Oh, I'm just standing here.

JOE STRAUS: Representative Davis sends up an amendment. It's acceptable to the author. Is there objection? Members, is there objection? There is objection. Vote aye, vote nay on the amendment. Showing Representative Davis voting aye. Showing Representative Pitts voting aye. Have all voted? There being 89 ayes, 51 nays, the amendment fails. Following amendment, the clerk will read the amendment.

CLERK: Amendment by Taylor of Collin.

JOE STRAUS: Following amendment, the clerk will read the amendment.

CLERK: Amendment by Taylor of Collin.

JOE STRAUS: Chair recognizes Representative Taylor.

REPRESENTATIVE VAN TAYLOR: Mr. Speaker, members, this is clarifying language for the fingerprint, thumbprint amendment that we passed yesterday. It does not change the intent of the bill, it just more clearly spells out under what circumstances a police officer can compel a motorist who does not have any identification to provide a fingerprint on scene. Move passage. It is acceptable to the author.

JOE STRAUS: Mr. Eiland, for what purpose?

REPRESENTATIVE CRAIG EILAND: So without going back to the original amendment and plugging this in, tell us what the effect of the amendment is and with this clarification.

REPRESENTATIVE VAN TAYLOR: The effect of the original amendment, that amendment that we put on last night.

REPRESENTATIVE CRAIG EILAND: The clarification amendment.

REPRESENTATIVE VAN TAYLOR: The clarification, as it was drafted, said that if the police officer -- if the requirements for section B had been met, then the police officer could compel the motorist to provide a fingerprint or thumbprint. It's unclear for a lot of people reading that particular piece of language. And I want to thank Representative Simpson for bringing this to my attention, that what the requirement being met means. So we have now gone in and very clearly spelled out that if the motorist has no identification as defined in section B of the amendment, which is a driver's license or any kind of government issued photo ID, that then, in turn, if the motorist has no photo ID then the police officer can compel.

REPRESENTATIVE CRAIG EILAND: So if I go -- if I'm going to go jog and I don't take my wallet with me.

REPRESENTATIVE VAN TAYLOR: No, only for motorists. Drivers.

REPRESENTATIVE CRAIG EILAND: I get in my car, I'm going drive to the seawall to go jog. I don't want to take my wallet with me because I'm only going ten blocks. I get pulled over. The cop says let me see your ID I say I don't have it I'm going jogging. He says okay, I'm going to let you go but I'm going to take your fingerprints.

REPRESENTATIVE VAN TAYLOR: Correct.

REPRESENTATIVE CRAIG EILAND: And he doesn't charge me with an offense, just they now have my fingerprints?

REPRESENTATIVE VAN TAYLOR: Okay. Under the amendment that we passed last night the police officer cannot keep the print if you're not charged with anything. If it's only a cash fine. There's several provisions to prevent the law enforcement from creating a database under the circumstance that you just described.

REPRESENTATIVE LYLE LARSON: Mr. Speaker, gentleman yield? Yeah Representative Taylor --

REPRESENTATIVE VAN TAYLOR: Gladly.

REPRESENTATIVE LYLE LARSON: You're making an improvement on the amendment that you made last night.

REPRESENTATIVE VAN TAYLOR: Correct.

REPRESENTATIVE LYLE LARSON: So if we vote with you on this, will you support the bill overall? I saw you voted against it last night.

REPRESENTATIVE VAN TAYLOR: I still have some problems with this bill and no, I do not plan to vote for it.

REPRESENTATIVE LYLE LARSON: Thanks.

REPRESENTATIVE VAN TAYLOR: Sure.

REPRESENTATIVE CAROL ALVARADO: Mr. Speaker ?

JOE STRAUS: Mrs. Alvarado, for what purpose?

REPRESENTATIVE CAROL ALVARADO: I'm just trying to get some clarification.

REPRESENTATIVE VAN TAYLOR: Gladly.

REPRESENTATIVE CAROL ALVARADO: So police officers have their own discretion as to whether or not to fingerprint people who cannot produce identification?

REPRESENTATIVE VAN TAYLOR: In your city right now, in Houston, police officers are conducting a pilot program where they are requesting that motorists provide fingerprints or thumbprints during a traffic stop where they do not have any kind of identification. What my amendment does, it clarifies the only time they can compel a motorist to provide that is if they have no photograph -- government issued photo ID of any kind. And also protects citizens from having the law enforcement collect the fingerprints to be used in some kind of database.

REPRESENTATIVE CAROL ALVARADO: So we're requiring our law enforcement agencies, who already short staff, under budget, to do more?

REPRESENTATIVE VAN TAYLOR: No. This is a permissive language. Other way around, actually. Law enforcement has asked for and supports this legislation because it would help them become more efficient and lower costs. As a result of the fact that they can now -- police officers already have the ability to compel a motorist who is violating a law to provide fingerprints, but they've got to arrest them, take them down the to the station and then, you know, book them. So it's a lot cheaper and a lot more efficient. And again, your police department in the city of Houston is very excited for this piece of legislation, because it will make them more efficient.

REPRESENTATIVE CAROL ALVARADO: Well, I haven't heard that from the department. We're in talks with them on sanctuary cities and certainly about adding more responsibilities, more regulations to our law enforcement officers, again, who are already under budgeted and under staffed. So we're adding another layer of bureaucracy?

REPRESENTATIVE VAN TAYLOR: No. You completely misunderstand what I'm trying to do. This allows the police department, if they want to use this. They don't have to.

REPRESENTATIVE CAROL ALVARADO: So why do we need this? If we just let each department decide on their own, why is your amendment necessary?

REPRESENTATIVE VAN TAYLOR: Well, they can decide on their own whether or not they want to use -- whether or not they want toe compel someone to use a fingerprint or thumbprint in the field at a traffic stop, if the motorist has no ID of any kind. There is a problem in your city and in the city of Dallas, the Dallas police chief is actually the person that I first heard this issue from.

REPRESENTATIVE CAROL ALVARADO: This is actually the first time I hear of this in my city. I think I know my city better than you --

REPRESENTATIVE VAN TAYLOR: Of course.

JOE STRAUS: Mr. Sheffield has called a point of order, that the gentleman time has expired. The point of order well taken and sustained.

REPRESENTATIVE VAN TAYLOR: This is just a clarifying amendment we've already passed this part of the bill during last session --

JOE STRAUS: Is there anyone wishing to speak for or against the amendment? Representative Taylor sends up the amendment, it is acceptable to the author. Is there objection? There are objections. The question occurs on the adoption of the Taylor amendment. Vote aye, vote nay. Clerk will ring the bell. Showing Representative Madden voting aye. Have all voted? There being 95 ayes and 48 nays, the amendment fails. Following amendment, the clerk will read the amendment.

CLERK: Amendment by Alonzo.

JOE STRAUS: Chair recognizes Representative Alonzo.

REPRESENTATIVE ROBERTO R. ALONZO: Thank you Mr. Speaker. Member,s this is an amendment that was put on yesterday and we had it pass to third reading. But it says if a person who provides proof of compliance with registration requirements of the United States selective service, under the military selected service act, is eligible to apply for a driver's license under this chapter. It's acceptable to the author.

JOE STRAUS: Representative Alonzo sends up an amendment. It's acceptable to the author. Is there objection? Chair hears -- There is objection. The question occurs on the adoption of the Alonzo amendment. Clerk will ring the bell. Have all voted? There being 46 ayes and 90 nays, the amendment fails. Following amendment, the clerk will read the amendment.

CLERK: Amendment by Hildebrand.

JOE STRAUS: Chair recognizes Representative Hildebrand.

REPRESENTATIVE HARVEY HILDERBRAN: Thank you Mr. Speaker, members. Members, this is a local bill that deals with funds in the 198th district.

REPRESENTATIVE MARISA MARQUEZ: Mr. Speaker , I would like to call a point of order on this amendment.

JOE STRAUS: Bring your point of order down front. Point of order is well taken and sustained. Following amendment, the clerk will read the amendment.

CLERK: Amendment by Madden.

JOE STRAUS: Chair recognizes Representative Madden.

REPRESENTATIVE JERRY MADDEN: Mr. Speaker, members, last night on amendment one Representative Pitts changed the make up to some degree on the personal managed health care board. We've been working very hard this morning with the Governors office, with the Speakers office, with Representative Turner and others to bring it back in line with what we had in the conference committee. I believe the amendment is acceptable to the author and I move adoption.

JOE STRAUS: Representative Madden sends up an amendment. It is acceptable to the author. Is there objection? Chair hears none. So ordered. Following amendment, clerk will read the amendment.

CLERK: Amendment by Garza.

JOE STRAUS: Chair recognizes Representative Garza.

REPRESENTATIVE JOHN V. GARZA: Members, this was a amendment that we had to tighten up last night, and it deals with -- an amendment that generates 500,000 for our school districts by reducing the percentage that UIL may collect for play off games. Gross receipts by 2 percent, across the board, goes back to the school district and expands the eligibility of nonpublic schools to participate in UIL. And I believe it's acceptable to the author.

JOE STRAUS: Chair recognizes Representative Turner to speak in opposition.

REPRESENTATIVE SYLVESTER TURNER: Can we get a little order, Mr. Speaker? Thank you, Mr. Speaker. I know we discussed this at 2:00 o'clock last night, but Representative Riddle, I didn't get it all out my system. So I was able to sleep a little bit and so I'm back. But just for a few minutes. And this afternoon let me -- let me -- let me primarily speak on this, on this bill. As a representative of my district, and I will tell you if there had been some study done, if we had done some study and the study came back and said that we were spending $4 billion more on our public schools and, consequently, to bring about greater efficiency and make things to work better, to improve school excellence, cut $4 billion away and then we cut $4 billion away; that would be one thing. But the way we have approached this matter is that we decided that we were going to cut 4 billion away without tying it to anything, and now we're telling the local school districts now you go and make the best out of what we are prepared to give you. One of the reasons -- one of the reasons I chose to speak against this bill is when I go back to my local school district -- Mr. Speaker, I'm sorry, I know it's Friday. When I go back to my local school district, and I'm going to speak primarily for my district, because they are the ones that will hold me accountable, I sat down with the school board members before this session started, in December, with Aldean Independent School District, and they were telling me about where they were in the district and about the fact that they were going have to cut back. They were anticipating some cuts. And, Representative Ritter, if I'm not mistaken, one of your staff members was also at that meeting, in that meeting, breakfast meeting; they outlined the fact that they were going to be reducing, cutting away some of those magnet schools. They were looking at hopefully trying to avoid to closing schools. And since December, based on the budgetary situation, they have also notified me that they might have to close schools or consolidate a couple of schools in my district. And they were pleading us to do what we could to provide funding for the local school district, because of their budgetary problems with respect to the independent school district. And, Representative Dutton, you and I can attest to this. We have been fighting, Representative Allen, we have been fighting with HISD to keep them from closing and consolidating schools. And in this bill, based on the cuts that we are making, the Houston Independent School District will have to deal with $200 million in cuts. Aldean Independent School District will have to deal with about $32 million in cuts. Now I know money is not everything, I fully understand that. I know money is not the total answer. But I will tell you when you're cutting $32 million from one school district, cutting $200 million from another school district, they will have to make decisions based on choices that we are making. And I am the one, as representative of my area, I'm speaking for me. I'm the one that will have to leave here, whenever this special session is over, and sit down with the parents of those schools and tell them and explain to them why the legislature chose to cut $4 billion away from their local school districts. That is a tough sell. That is a tough sell for me, especially when we are saying that education is the number 1 priority. That is a tough sell for me. And that's why I have elected to vote no against this bill. I know we all have different school districts, we all have different concerns, but we are making choices. Now one of the things, and I talk about the success of about what's happening in the public school system, the graduation rate in the State of Texas, we are 43rd. When it comes to people in the State of Texas 25 and older with high school diplomas do you know where we are? If you're 25 and older in the State of Texas with a high school diploma, do you know where we fall on the chart as it relates to other states? We are not 1, we are not 25, we are not 40, we are not 49. We are 50. We are 50. And what we are doing today is not going to advance us up the chart at all. So for me --

REPRESENTATIVE DEBBIE RIDDLE: Mr. Speaker?

JOE STRAUS: Mrs. Riddle, for what purpose?

REPRESENTATIVE DEBBIE RIDDLE: I hate to interrupt this, I hate to interrupt him. So eloquent. But would he yield?

REPRESENTATIVE SYLVESTER TURNER: I would be more than happy to yield.

REPRESENTATIVE DEBBIE RIDDLE: Sylvester, thank you so much. I always enjoy listening to you. You're so extraordinarily eloquent. And you're talking about Aldean school district. You and all share parts of Aldean school district. And I think we would both agree that there are going to be cuts regardless of what we can do right now.

REPRESENTATIVE SYLVESTER TURNER: Yes.

REPRESENTATIVE DEBBIE RIDDLE: Have you visited with Aldean, with the teachers and with the parents and with all the folks not only in Aldean, but you and I also share parts of the Klein school district.

REPRESENTATIVE SYLVESTER TURNER: Yes, we do.

REPRESENTATIVE DEBBIE RIDDLE: That maybe those cuts should not be from the bottom up, maybe some of these cuts should be made from the top down. Have you visited with the superintendents, with the administrators, regarding where those cuts are going to be made; that possibly those magnet schools don't need to be -- that possibly those teachers don't need to be furloughed or let go? That possibly there's other answers? There's more than one way to solve a problem. Have you visited with them about -- Let's look at how we can transact from the top down, not the bottom up?

REPRESENTATIVE SYLVESTER TURNER: Represen tative Riddle, that's it. I will tell you it's a two way deal. I will agree with you. Just like I have indicated to the local school districts and the local school board members, do not expect me to come up here to fight for money for you-all if you-all are going spend it any kind of way. I will not do that. I have insisted that there be greater efficiency on their end, that the administrative cost be restricted, be limited. That the money go to the actual classrooms themselves, that the money should be spent on the classrooms. I have insisted on that. And what I'm saying, I want to make sure, and this is what's important I think to all of us. But let me speak for me on today. I want to make sure that I have done my part in representing the parents and the students in my district.

REPRESENTATIVE DEBBIE RIDDLE: And most of all the children.

REPRESENTATIVE SYLVESTER TURNER: The children.

REPRESENTATIVE DEBBIE RIDDLE: Because I'm a grandmother of ten and they're all in KISD. And our focus is, in fact, the children. But the money going in those classrooms I think is absolutely mandatory, and so would you be willing to work with me and with the parents --

REPRESENTATIVE SYLVESTER TURNER: Absolute ly.

REPRESENTATIVE DEBBIE RIDDLE: Are you aware that there are 40 school districts across the state, including Austin, Klein, Spring, for parents to come together. And there's Spring United and there's Klein United, and those parents are looking at how the money is being spent. And believe it or not they are finding areas of waste, profound waste that needs to be going not to waste. And back in the classrooms would you commit to working with me?

REPRESENTATIVE SYLVESTER TURNER: I would be happy to commit.

REPRESENTATIVE DEBBIE RIDDLE: But when we go home we can make that difference.

REPRESENTATIVE SYLVESTER TURNER: I agree with you.

REPRESENTATIVE DEBBIE RIDDLE: Thank you.

REPRESENTATIVE SYLVESTER TURNER: Members, this is will be the education session I think it will go down as the education session. And it will be the first time in Texas history with the exception of a short stop, I think in 1993, 91 and 93 where we have failed to fully fund the foundation school program the first time in Texas history.

JOE STRAUS: Mr. Dutton, for what purpose?

REPRESENTATIVE HAROLD V. DUTTON JR.: Mr. Speaker, I was going to ask a question but I think the gentleman's time has expired; is that right?

JOE STRAUS: Yes.

REPRESENTATIVE HAROLD V. DUTTON JR.: That 's what I thought.

JOE STRAUS: Chair recognizes Representative Isaac to speak in support of the bill.

REPRESENTATIVE JASON ISAAC: Thank you Mr. Speaker and members. I stand up here today in support of this particular bill. We've seen over the last ten years that our school funding per child has nearly doubled, yet our results in our rankings compared to our other states have remained consistent. It's relatively low. We've also seen during those ten years school administrators and nonteaching positions earn more money than the ones that are actually in the classroom spending time with our children. And that is appalling to me. And we have not addressed that issue. The teachers are not being rewarded as they should, but administrators and other nonteaching staff have far out paced teachers in earnings. I was proud and I was glad to see the Gonzalez amendment last night get added, that if TRS does well that retired teachers will get an additional payment in their retirement funding. So I hope that we seriously look over the interim to see what we can do to affect the teachers. But this is a tough vote. These are tough times. That's why there are 30 plus new faces here this session, and we have worked together and this is the hand that we have dealt. Representative Eissler said it very well yesterday, it is a smaller pie but we are giving a larger piece to public education. 60 percent, over 60 percent going to public education. That is a commitment.

REPRESENTATIVE HAROLD V. DUTTON JR.: Mr. Speaker?

JOE STRAUS: Mr. Isaac, would you yield?

REPRESENTATIVE HAROLD V. DUTTON JR.: Mr. Speaker, would the gentleman yield?

REPRESENTATIVE JASON ISAAC: Yes.

REPRESENTATIVE HAROLD V. DUTTON JR.: Than k you, Mr. Isaac. I suppose that the way I sort of looked at this debate is there really two schools of thought on this floor. One of them says that the pain of attracting additional revenue is not as bad as the pain of making the cuts. And the other point of view is just the flip of that, that the pain of the cuts is far more significant than the pain of additional revenue. And I suppose since you're voting for this bill that you believe that the pain of additional revenue is far more significant than the pain of the cuts.

REPRESENTATIVE JASON ISAAC: I would agree with that comment. Over the last decade we have significantly increased the funding to public education and they have become dependent on that funding. And now we're having to scale back that funding on a per student basis.

REPRESENTATIVE HAROLD V. DUTTON JR.: Well, let me ask you.

REPRESENTATIVE JASON ISAAC: That money has been used irresponsibly.

REPRESENTATIVE HAROLD V. DUTTON JR.: Right . Why do you say we have increased funding to education significantly?

REPRESENTATIVE JASON ISAAC: If you look, I believe it was over 30 percent increase just a few sessions ago. When you look over the last ten years we have more than doubled per student, or almost doubled excuse me, per student, and we're still getting the same results. I don't think you can throe money at this problem and expect better results.

REPRESENTATIVE HAROLD V. DUTTON JR.: Well, I'm not sure the money is the problem. I mean I guess what you're saying is that you believe that somehow or another money, or more money is the problem in public schools. But let me ask you this way, what's your idea about fixing it?

REPRESENTATIVE JASON ISAAC: I think you made a good point, that more money is not the issue. It's how we spend that money.

REPRESENTATIVE HAROLD V. DUTTON JR.: Well, how would you suggest that school districts are spending it improperly now?

REPRESENTATIVE JASON ISAAC: I think that's evident over the last ten years. We've seen significant growth in the amount of funds and it's not making it into the classrooms. We're lucky if we see 50 percent of the funds go into the classrooms.

REPRESENTATIVE HAROLD V. DUTTON JR.: And you have some statistic that says that's true?

REPRESENTATIVE JASON ISAAC: I have several.

REPRESENTATIVE HAROLD V. DUTTON JR.: So how much -- how much does your statistic indicate that we spend in a classroom than on a per capita basis?

REPRESENTATIVE JASON ISAAC: I believe it's around 50 percent. I also believe it was in 2005, 2007 the governor came out and requested that 65 percent of the funds be spent in the classrooms. And there are some schools that are doing that and there are others that are not. And, for the most part, I believe the statewide average is less than 65 percent. And those funds are being spent in the classroom, and some of them have children in the classroom. I'd rather see that money being spent there on education, not on administration.

REPRESENTATIVE HAROLD V. DUTTON JR.: Woul d you support consolidating school districts?

REPRESENTATIVE JASON ISAAC: I'm not advised.

REPRESENTATIVE HAROLD V. DUTTON JR.: Well, that's one way to eliminate cost that you're complaining about.

REPRESENTATIVE JASON ISAAC: Yeah, I will tell you that if you put 50 states in a similar position, that Texas would come out on top. We are the most resilient, we are the toughest, and we will be the best and we will come out with this situation stronger and more prosperous than we were in the past. And I am proud to represent the House district. I am proud to represent Texas, and I know we will come out better because of this.

REPRESENTATIVE HAROLD V. DUTTON JR.: Well, I think one of the things you will learn if you stay here awhile is one of the things that makes us better is the difference of opinion and having to sort of sort out the differing of opinions, so that we arrive at a conclusion that is better for Texas, and that is not just one sided. And that's why I guess many of us are complaining about the idea that people got elected to come here and just simply slash and cut the budget. But if I understand you correctly, your argument is that it's not necessarily cutting the budget, because even when you cut the budget you don't have any way to deal with the administrative cost or the things that you're complaining about in this budget. It still remains the same; is that right? I mean do you understand that? That nothing is changed in this budget, based on the conclusions that you've made as to why we ought to cut the budget.

REPRESENTATIVE JASON ISAAC: You lost me there, I'm sorry.

REPRESENTATIVE HAROLD V. DUTTON JR.: It is a little early. Let me try it this way. Let me try it this way. Your argument is that we spend too much money on public ed that's outside the classroom, correct?

REPRESENTATIVE JASON ISAAC: Say that one more time.

REPRESENTATIVE HAROLD V. DUTTON JR.: Your argument is that we (inaudible) outside the classroom.

REPRESENTATIVE JASON ISAAC: That is correct.

REPRESENTATIVE HAROLD V. DUTTON JR.: Tell me how that's fixed in Senate Bill 1.

REPRESENTATIVE JASON ISAAC: We're reducing the expenditures, we're reducing mandates on schools. And I can only hope because it will be more local involvement and more local control, that the school administrators will hear loud and clear that they need to spend more of the money in the school districts, in the classrooms.

REPRESENTATIVE HAROLD V. DUTTON JR.: And you believe that's the solution?

REPRESENTATIVE JASON ISAAC: Yes, I do.

REPRESENTATIVE HAROLD V. DUTTON JR.: God help Texas.

REPRESENTATIVE JASON ISAAC: Thank you. We'll be fine.

JOE STRAUS: Chair recognizes Representative Strama in opposition.

REPRESENTATIVE MARK STRAMA: Mr. Speaker and members, I just wanted to respond to a few of those points. First of all, you can't argue that we need a law that says 55 percent of the money should be spent in the classroom and then say that more local control is the way we're going to make that happen. Those are two completely contributory ideas. But, more importantly, this notion that you can increase money without increasing outcomes in education does not mean that the converse is true, that cutting funds won't reduce the quality of education. There are lost of reasons why the challenges in public education have grown in a way that have caused inflation in the cost of education. The student population is different, the labor market is different. The standards and expectations that we've have of students, and the body of knowledge they have to master are different. The challenges in public education are immense. I don't know all the things that we need to do. I asked specifically this session to be put on the public education committee so that I could study what the things we need to do to get our public education system to where it needs to be. There are all kinds of different research reports and studies and academic arguments about it. There is none, not one that says spending less money correlates to improved outcomes in public education. The bottom line is the decision to reduce expenditures on public education is a decision to dis-invest, to reduce our commitment to excellence in public education. It's the one decision that I cannot imagine how we can justify to our constituents or to our consciouses at a time when we know education is our most important competitive advantage. Now does money mean unequivocally you're going to get better outcomes? No, not if the challenges are growing, labor market costs are growing and standards are increasing. At the same time it doesn't necessarily mean you're going to get better outcome, but reducing spending ensures you're going to get inferior outcomes. If you want to look at an example, and we are often told in debates about public education, look to the private marketplace for examples of how to run schools better. Well, we should do that when it comes to public education. Look to the private marketplace. But don't look to the market for manufacturing widgets, look to the private marketplace that is most like our public schools. That marketplace is called the private education system. And if you look at the private education system as a model to what we want to do in the public schools, you'll find a couple of things. The first thing you'll find is that money matters. The most expensive public schools, the ones that spend the most money per pupil, are the ones with the best outcomes for their students. And, remember, they're not dealing with the same challenges in the student population that we're dealing with in our public school system. But money correlates to quality, not because of its independent causal effect, but because it -- of the things you can do with money when you spend it well in education, money correlates to quality in the private education system just as it does in the public education system. When we reduce our commitment to funding public education we take a step backwards in terms of our national and international competitiveness in the economy. It's the wrong decision for the State of Texas. And if you look at that private education marketplace, and look at what money is buying, it's buying the things we're reducing and retrenching from in the legislation that we're considering today. What do you get when you pay more to go to a high quality private school? You get smaller class sizes, you get higher paid teachers. You get the things that we're taking away from the public education system in today's legislative proposal. That's why I rise against this bill.

REPRESENTATIVE RENE O. OLIVEIRA: Mr. Spea ker, will the gentleman yield?

JOE STRAUS: Mr. Strama, do you yield?

REPRESENTATIVE MARK STRAMA: I do.

REPRESENTATIVE RENE O. OLIVEIRA: Mr. Stra ma, you have not been here as many terms as I have, but would you degree with me that the wealthy school districts who spend more per child, and have more resources per child, have not been coming forward in any of your terms to say we got plenty of money, can we send it to your poor school districts? Have you heard that from any of our wealthier school districts?

REPRESENTATIVE MARK STRAMA: No, I haven't.

REPRESENTATIVE RENE O. OLIVEIRA: And have you also seen that the equity gap on what we spend per child continues to grow and grow and grow, and that some children in this state are getting more of a quality education and others are getting a lesser quality education?

REPRESENTATIVE MARK STRAMA: There are -- there are lots of equity gaps. There is inequity in property values and property wealth, there's inequity in target revenue. And what's the biggest inequity there is, Representative Olivera, is where you're born and whose household you're born into --

REPRESENTATIVE RENE O. OLIVEIRA: The last thing I wanted to talk to you about is we keep using this figure of $4 billion, but that's not accurate. It's really $4.3 billion, according to Representative Hochberg, when we talked about it yesterday. And Representative Turner so eloquently said this morning, at about 2:00 o'clock and earlier in the day, that it's another 1.3 billion. So we're not talking about $4 billion. We're talking about $5.6 billion that is being cut from public education. And you know, some of those programs that TEA is going, or zeroed out, as we say it, or were cut; were very important programs for teachers. Incentive pay. Were very important programs in pre-kinder and deal with the problems of the ninth grade spike and the drop out problem of our great state. Those programs were cut too, were you aware of that?

REPRESENTATIVE MARK STRAMA: I am aware of that.

REPRESENTATIVE RENE O. OLIVEIRA: So when we start talking about it's just $4 billion, I'm sure my good friend, Representative Huberty is going to come up and say we can do with less, I have to respectfully disagree. You have to represent a poor school district. Some of our school districts have a laptop per child. Most of our school districts are lucky to have one computer in the classroom. So tell me how we have equity, as we are required to have in our Texas constitution. Tell me how that would come about when you cut as much as 5.6 billion or more.

REPRESENTATIVE MARK STRAMA: I would say this: The greatest inequity is not the inequity between school districts, the greatest inequity is the inequity between individuals; some of whom are born into families that come from educated backgrounds, that have the means to feed them adequately and nutritiously, to have the means to help them learn; that have the means to instill in them a love of learning, a value of learning. And some of whom do not. And whether -- I'm sorry, if I can just finish that point. And whether the parents who lack the ability to provide their children adequate nutrition, help with their homework, a love of learning; whether those parents did anything to deserve the circumstances they're in in life, their children didn't.

REPRESENTATIVE RENE O. OLIVEIRA: Well, if you have a big school district with a half billion dollar budget, or a $400 million budget, they can absorb and somehow deal with that cut. A lot of them are still going to suffer. But if you have a smaller district, like many rural republicans and many of us in south Texas, and you have districts that need the money and are already operating in a very scarce source -- basis for resources, how do we how do we tell the nearly 5 million children of our great state that are going to be in our public schools this next year, we cut you and somehow you're still going to get a quality education because there's a few to many administrators in your school. How does that correlate, when you're talking about those massive amounts of money and those massive cuts to certain school districts?

REPRESENTATIVE MARK STRAMA: And I'm -- And my point is, for those children who don't start out with the advantages in life that I was blessed to start out with, having parents who were able to provide me a lot of a foundation for an education before I ever walked into a schoolhouse door, for those children who don't start with that, the cost of educating them is high and we're not meeting that obligation.

REPRESENTATIVE RENE O. OLIVEIRA: I agree.

JOE STRAUS: Mr. Sheffield raises a point of order, that the gentleman's time has expired. Chair recognizes Representative Huberty to speak in favor of the bill.

REPRESENTATIVE DAN HUBERTY: Thank you Mr. Speaker. Members, I won't take a lot of your time. We have before us today I think what we're talking about is how are we going to divvy up the pie. You know we baked the pie last week, and we're talking about how we're going to divvy the pie up. We're spending 44 percent of all of our general revenue on public education. Total amount we're spending on education is 60 percent, including higher ed. We all know that we have responsibilities to go back to our districts and talk to our communities. I have a different perspective, serving in a school board and running a school board and coming here and asking to be put on public education so I could try and fix what I believe to be worse inequities in the education process. I talked about this last week and I really, truly believe that this plan that we are talking about is a blueprint for the future for us. It lays the foundation for us to be able to create equity in education to satisfy what Chairman Olivera was talking about. This bill does that. This bill absolutely does that. I know that being fiscally responsible and being responsible with our dollars is important. I know that people will expect us to do that, our people back home and our constituents expect us to do that. When I ran for office the one thing I was criticized highly about was that on the school board I stood up and supported a tax increase. I know that's probably bad karma and all the people that give us our scorecards in the end are going to go back and look at that. But, you know what, I did that because I did it for my kids. I didn't care what people thought about it. And they beat me up pretty badly about it, election day, and talking about it. But I stood up for what I thought was right for my community at that particular time. And -- Not at this time. And I have -- I understand the fact that we have to be responsible with the dollars that we have. You know, look, unemployment rates at 8 percent in the State of Texas and unemployment rates at 9.1 percent in the country today. Gasoline is going above $4. Diesel is above $4 right now. We clearly have not come out of our recession and we are seeing the impact of that relative to our sales tax. I want to share some information that I think is some very factual information. You know, we sometimes here have the tendency to take to what we believe to be facts and skew them to our own perspective. There are 1,029 school districts in the State of Texas, 62 have a MNO rate below a dollar, 691 have an MNO rate of a dollar to a dollar four. 56 have a rate between a dollar five and a dollars sixteen and 218 have a rate of a dollar seventeen and above. There are districts out there that can go out and help themselves. This legislature gave them that ability to do that in 2006. Some of them chose not to. I was on a school board that made the decision to do that. In 2007 there was $7.5 billion in school districts fund balances. This is TEA's information. You can go look it up. $7.5 billion. 2011, today, there is $10.5 billion in their fund balances. School district have more money in their fund balances than the State of Texas did. That is an alarming statistic. Of that $10.57 billion, $7 billion is undesignated. The TEA has developed rules, and I know they are going to relax, that has caused that to go up. So while we're pouring money into the system, they're taking the money and sticking those tax dollars into their bank accounts. They have an obligation, and I know our school district has done that as well, and we've looked at that. I will say to you -- Let me just finish up with one other thing and I'd be happy to yield. Every school districts have been planning, or should have been planning, for these reductions. It's not by accident that these fund balances have grown in numbers. This plan that we're talking about, we're talking about creating an equity system in this plan. And I believe that we do have this plan and I ask you to vote yes.

REPRESENTATIVE LEO BERMAN: Mr. Speaker, would the gentleman yield?

JOE STRAUS: Mr. Huberty, do you yield?

REPRESENTATIVE DAN HUBERTY: I yield. representative leo: I'm supporting the bill, I want you to know that. But with your background and experience I just want to ask you some questions about the outcomes from our public schools. Are you aware of the fact that half the kids that are coming out of our high schools today need remediation in math and English for at least a year in most colleges throughout the State of Texas?

REPRESENTATIVE DAN HUBERTY: I don't quite think that number is correct. In fact, there is statistics that are showing that our dropout rates are decreasing, that our preparedness college readiness is increasing, over year over year statistical data. Our scorse are increasing and part of our reason to going to intercourse surveys and start that testing is the fact that these scores have continued to increase on tasks. And that's why we're rolling into the new Star Program. And if you look at specifically there is a standard, the NAEP, which is the National Association for Education Processing I believe I got that wrong, Mr. Hochberg, but it's pretty close to that. What they do is they measure our -- our particular result as compared to same scores across the country. And we are above average in how we test and how we perform.

REPRESENTATIVE LEO BERMAN: Do you believe, as I do, that our superintendents, all superintendents, are actually running multimillion dollar corporations. And most of them, I shouldn't say most, perhaps many don't know how to do it; so what I'm suggesting to you is do you think that superintendents need additional qualifications, perhaps an MBA or a Masters' degree in finance, or some way to give them the knowledge to run a multimillion dollar corporation, because that's what they're all doing?

REPRESENTATIVE DAN HUBERTY: I can only speak with the experience that I have with these school superintendents that I deal with. And all of them are doctors. All of them have a doctoral education. And they obviously get their additional training above and beyond that. But that's the purpose of the school board. And we talk about local control. The point of fact is there is an elected body of representatives that are there that are making these business decisions on a day in and day out basis. And yes, they, as superintendents, do have responsibilities to make sure that their businesses are being run correctly. But that is the goal of what a school district is.

REPRESENTATIVE LEO BERMAN: And were you as shocked as I was last year when I went to a school that had a sign that said recognized, and found out that only 40 percent of the kids in the school had to pass the TACKS test to get that recognized sign? Were you as surprised --

REPRESENTATIVE DAN HUBERTY: Well, I can only speak from the schools that I know. And we earned ours. So we became a recognized district, and we earned that. And, by the way, with a low target revenue. So the fact that people are saying that we're talking about -- Thank you.

REPRESENTATIVE LEO BERMAN: Thank you.

JOE STRAUS: Chair recognizes Representative Pitts.

REPRESENTATIVE JIM PITTS: Move passage.

JOE STRAUS: Question occurs on passage to third reading of Senate Bill 1. Clerk will ring the bell. Have all voted? Have all members voted? There being 83 ayes and 62 nays, Senate Bill 1 finally passes. Chair recognizes Representative Eissler for a motion.

REPRESENTATIVE ROB EISSLER: Thank you Mr. Speaker, members -- Mr. Speaker, members, I move to recommit House Bill 19 to the public education committee.

JOE STRAUS: Members, you heard the motion. Is there objection? Chair hears none. So ordered. Mr. Dutton, for what purpose?

REPRESENTATIVE HAROLD V. DUTTON JR.: Woul d Mr. Eissler yield for a question?

JOE STRAUS: Mr. Eissler, do you yield?

REPRESENTATIVE ROB EISSLER: Yes, I will.

REPRESENTATIVE HAROLD V. DUTTON JR.: I just wanted to correct one thing, the impression that school districts have a huge reserve sitting over there someplace that -- cash in the bank. Are you aware, I guess, that TEA requires them to have a 107 percent of two months --

REPRESENTATIVE ROB EISSLER: Two months, that's correct. They recommend it, it's not a requirement.

REPRESENTATIVE HAROLD V. DUTTON JR.: It's not a requirement?

REPRESENTATIVE ROB EISSLER: Right.

REPRESENTATIVE HAROLD V. DUTTON JR.: But if they don't have, what happens, Rob?

REPRESENTATIVE ROB EISSLER: What happens to them?

REPRESENTATIVE HAROLD V. DUTTON JR.: What happens to them if you don't have 107 percent, I mean TEA --

REPRESENTATIVE ROB EISSLER: I mean there are school districts that I think, like Wimberly, that's got like $409 per student. It can affect their credit, their bond rating.

REPRESENTATIVE HAROLD V. DUTTON JR.: Yes. Okay. And they can actually be downgraded in terms of their financial audit from TEA, correct?

REPRESENTATIVE ROB EISSLER: That's right.

REPRESENTATIVE HAROLD V. DUTTON JR.: Okay . I just wanted -- I just thought I would throw that in.

REPRESENTATIVE LARRY GONZALES: Mr. Speaker ?

JOE STRAUS: Mr. Gonzalez, for what purpose?

REPRESENTATIVE LARRY GONZALES: Would the gentleman yield?

JOE STRAUS: Mr. Gonzalez, could you wait, please? Following announcement, clerk will read the announcement.

CLERK: The Committee on Public Education will meet upon adjournment on June the 10th, 2011. This will be a formal meeting to consider HB19. This meeting will be held at desk 56 on the House floor.

JOE STRAUS: Chair lays out on second reading House Bill 13. Clerk will read the bill.

CLERK: HB13 by Kolkhorst. Relating to the Medicaid program and alternate methods of providing health services to low-income persons in this state.

JOE STRAUS: Chair recognizes Representative Kolkhorst.

REPRESENTATIVE LOIS KOLKHORST: Thank you Mr. Speaker and members. HB13 is the waiver that we passed during the regular session. It's an 1115 global waiver requesting permission from CMS to give us some flexibility in the medicaid program. Yes, I yield.

JOE STRAUS: Mr. Coleman, for what purpose?

REPRESENTATIVE GARNET F. COLEMAN: Thank you, Mr. Speaker. Chairwoman Kolkhorst, there is a couple of things in this bill, or at least in the concept of HB13, and one is the co-pay changes in -- Could you explain those for --

REPRESENTATIVE LOIS KOLKHORST: Sure. You know the federal government, of course, has prohibited the use of co-pays except for special populations. We saw one of those bills come through our committee, Chairman Coleman. And so this would request -- and again, a conversation, the potential for using co-pays. You know, of course, as you know, we will do a lot of give and take with CMS. This is a request for permission that we could maybe utilize that, or not, in certain populations.

REPRESENTATIVE GARNET F. COLEMAN: Okay. Also explain the ideas of vouchers in the medicaid program, and how a voucher given to the medicaid recipient would be enough to pay for care in the private sector if they were to take that voucher to -- under your plan to a provider who doesn't normally take medicaid or medicare, if you look at the national plan.

REPRESENTATIVE LOIS KOLKHORST: If you're talking about the long-term care portion of this, it would be that the money would follow the individual. As you know, we've had different waivers. The 1915 waivers that have requested that we not send more people to the nursing homes, but we utilize it in the home and community based settings. And so part of the idea would be that people would make more choices with their long-term care. If you're looking at medicaid, and I notice there's a lot of plans floating out there that would propose that essentially we use a voucher, too. And that's been discussed on the federal level, that we use a voucher to purchase private insurance. One of my concerns would be obviously we would have to look at does that cover the cost of the health insurance? But the part that I like most about this waiver is that it would maybe give us flexibility to tailor make some of the -- the health insurances to certain populations where we see --

REPRESENTATIVE GARNET F. COLEMAN: I want to make sure, at least, Representative Turner some time to ask questions. One of the challenges that I see with this concept is that insurance, up to now, is not purchased that way. Insurance is purchased through groups. And the way this is laid out, it's like they have these little insurance companies on the corner, you just walk up and hey, give me my insurance. Which that is not how insurance is purchased. And that's something that we had a talk about.

REPRESENTATIVE KOLKHORST: Certainly. And I talk to Blue Cross, Blue Shield, their president, about the ability to potentially write children's health care. And you would have to take the entire population and look at it as, you know, could we meld these with other populations that we already cover with our state insurance? Could we get better rates? Could we do some innovation? As you and I have talked, my goal is to not to throw people off the rolls, it would be a potentially that we could offer some products that would bring people to the rolls potentially.

REPRESENTATIVE GARNET F. COLEMAN: Well, you know you worked hard on this. And it's a lot deterrent than House Bill 5. There's still some issues there. Thank you.

REPRESENTATIVE LOIS KOLKHORST: Sure. Thank you, Mr. Chairman.

REPRESENTATIVE SYLVESTER TURNER: Mr. Spea ker?

JOE STRAUS: Mr. Turner, for what purpose?

REPRESENTATIVE SYLVESTER TURNER: Will the Chair lady yield?

REPRESENTATIVE LOIS KOLKHORST: I do.

REPRESENTATIVE SYLVESTER TURNER: Thanks. And Representative Kolkhorst, and we spoke about the bill some in appropriations. I just want to read --

REPRESENTATIVE LOIS KOLKHORST: We had a pretty good lay out there. And I know that Chairman Pitts and others, we took a little more time. But I thought it was a very high level discussion, a very good discussion.

REPRESENTATIVE SYLVESTER TURNER: Okay. Now in this bill, this is the medicaid acceptability waiver.

REPRESENTATIVE LOIS KOLKHORST: This is an 1115 global waiver, that we request from CMS. You know, we have three types of waivers. And what waivers are, as you know, the Social Security act. We asked to waive certain stipulations. So currently, and I think I laid this out, currently Texas has 51915 and DUA waivers and 13, 1915C waivers. And then we have 1115 demonstration waiver for the womens health program, which is a global waiver.

REPRESENTATIVE SYLVESTER TURNER: Right. And to some agree we are relying on $700 million coming from this, from this waiver request, are we not?

REPRESENTATIVE LOIS KOLKHORST: Well, and I want to complement the public health committee in some of the work that we did, some of the language that we did from House Bill 13 ended up in conference committee that was placed in Article 2. And you were the one that brought that up that night, and I was pleased to scramble and see that it's kind of the frame work for HB13 that was inserted there. And I do believe that -- I don't know how they scored it, that it would save some money.

REPRESENTATIVE SYLVESTER TURNER: Right. Is this a vehicle for the $700 million that is somewhere in HB1?

REPRESENTATIVE LOIS KOLKHORST: Well, it was not a contingency rider. It was actually instructions to health and human services to go seek a global waiver. And I think it took, I think, four or five of the points of HB13 and inserted it there. They are not contingent upon the passage of the other. This is a little bit more expensive, if you will, of the directions to CMS.

REPRESENTATIVE SYLVESTER TURNER: The reason that I raise the point is that LBB and, I think others have indicated, that the 700 million coming, whether it's this vehicle or something else, but that amount is highly problematic. It is uncertain.

REPRESENTATIVE LOIS KOLKHORST: Yeah. Though I don't serve on the appropriations committee I do watch it very closely. And I think your points are well made, but we're going to have to make some request to CMS. There will be a dialogue, if this bill passes, and I have inserted it in Senate Bill 7 that passed two days ago. If this bill passes there will be instructions to HHSC, which actually they already have in the government code from SB10 in 2005, I believe it was. But this is a lot a lot more extensive of what we direct them to do. HHSC doesn't usually just send up an 1115 global waiver. Those are pretty big waivers.

REPRESENTATIVE SYLVESTER TURNER: Right. But the point that we should not miss, though, is that even with regards to this waiver, the probability of us receiving $700 million from this global waiver is very, very small. And to the extent that we are budgeting on this, any money coming from this global waiver, I call it funny money myself, because I would not go and -- I don't think anybody would give us a loan based on any dollars that we might be getting from HB13.

REPRESENTATIVE LOIS KOLKHORST: Sylvester, I have to tell you that there are more global waivers being suggested by lots of states right now. The state of Washington just requested, and theirs is really a block grant.

REPRESENTATIVE SYLVESTER TURNER: Under the Bush administration -- under the Bush administration.

REPRESENTATIVE LOIS KOLKHORST: Only Rhode Island got one.

REPRESENTATIVE SYLVESTER TURNER: Well, the Bush administration said no.

REPRESENTATIVE LOIS KOLKHORST: To us, they did. But to Rhode Island they said yes.

REPRESENTATIVE SYLVESTER TURNER: But do you really, do you really think that -- do you really think that the President Barack Obama's administration is going to say yes to this global waiver being sought by the State of Texas, when -- when -- when we have not -- I mean there are a lot of people who have not getting care.

REPRESENTATIVE LOIS KOLKHORST: Okay. So let me -- can I answer that for one second? Because I want to complement President Obama for his administration in his prediction in the affordable care act they have there is innovative waivers.

REPRESENTATIVE SYLVESTER TURNER: I see that --

REPRESENTATIVE LOIS KOLKHORST: And we have that up to 2014, they have moved that up to 2014. This could be the beginning. And I would like to say that I would love to go with Garnett Coleman to Washington DC, and with her administration act about what we could do to improve things down here. And when she was last at Seaton Hospital she did reach out and say Texas was willing to begin a dialogue. And I think Garnett has done a great job in helping us be able to work on (inaudible).

REPRESENTATIVE SYLVESTER TURNER: And I want to (inaudible).

REPRESENTATIVE LOIS KOLKHORST: And I'm not giving up hope.

REPRESENTATIVE SYLVESTER TURNER: Well, I want to applaud Representative Coleman as well as yourself. Now the last thing that I want to make is that we are talking about people paying more of their health care premium.

REPRESENTATIVE LOIS KOLKHORST: Not necessarily.

REPRESENTATIVE SYLVESTER TURNER: This is not the state version of Congressman Ryan's plan?

REPRESENTATIVE LOIS KOLKHORST: No. No. This is not. I know you brought that up in committee.

REPRESENTATIVE SYLVESTER TURNER: Well, somebody said what's wrong with it. But, you know, I leave that for them to answer themselves. But the point is, are we asking seniors, for example, in this bill to pay more of their health care cost?

REPRESENTATIVE LOIS KOLKHORST: No, sir.

REPRESENTATIVE SYLVESTER TURNER: Which would be -- which -- would be a state version in large part of Congressman Ryan's plan.

REPRESENTATIVE LOIS KOLKHORST: The only seniors that are covered in the medicaid and those who are dual eligible, are those on SSI. Mainly in long-term care for the Social Security that are covered in this bill. This is strictly the medicaid program.

REPRESENTATIVE SYLVESTER TURNER: Would this allow us -- would this allow us to deny coverage to more people if we so chose?

REPRESENTATIVE LOIS KOLKHORST: I do not believe so. I don't know what we're going deny coverage --

REPRESENTATIVE SYLVESTER TURNER: Are you sure? By raising eligibility requirements, for example? Could we raise eligibility requirements.

REPRESENTATIVE LOIS KOLKHORST: Raise them?

REPRESENTATIVE SYLVESTER TURNER: Make it harder for people to qualify.

REPRESENTATIVE LOIS KOLKHORST: Right now, the state protection affordable care act takes the snapshot at 133 percent at of federal poverty level, which is our maintenance of efforts. So actually, no. But obviously we'll have a give and take conversation with CMS about that.

REPRESENTATIVE CHARLES SCHWERTNER: Mr. Sp eaker?

JOE STRAUS: Dr. Schwertner, for what purpose?

REPRESENTATIVE CHARLES SCHWERTNER: Will the gentle lady yield?

JOE STRAUS: Ms. Kolkhorst, do you yield?

REPRESENTATIVE LOIS KOLKHORST: Yes, I do.

REPRESENTATIVE CHARLES SCHWERTNER: Madam Chair, will this waiver, if granted, improve flexibility in our medicaid program here in Texas?

REPRESENTATIVE LOIS KOLKHORST: Yes. That's what it seeks to do. And again, you know, let me reiterate something about how, you know, medicaid works. And I think you've seen this in Article 2, is that CMS, you know, in Washington DC, no matter who the administration is, sets the rules that far and away with what we work with, part of our problem this session has been a lack of flexibility and the flexibility that we have is actually cutting reimbursement rates. So in Article 2 you dealt a great deal with reimbursement rates being cut, and nursing homes by 34 percent; reimbursement rates to physicians and hospitals being cut, and that was the only flexibility we had. So we're seeking different ways to do that now.

REPRESENTATIVE CHARLES SCHWERTNER: Would this waiver also potentially improve innovation in the medicaid program here in Texas?

REPRESENTATIVE LOIS KOLKHORST: Yeah, I think so.

REPRESENTATIVE CHARLES SCHWERTNER: Cost containment as well?

REPRESENTATIVE LOIS KOLKHORST: Pardon me, say that again.

REPRESENTATIVE CHARLES SCHWERTNER: Cost containment, potentially. Because of innovation because of the (inaudible) to manage our medicaid program.

REPRESENTATIVE LOIS KOLKHORST: Simply.

REPRESENTATIVE CHARLES SCHWERTNER: As we have here in the State of Texas.

REPRESENTATIVE LOIS KOLKHORST: I think democrats and republicans alike are, across the nation, looking at, you know, where the cost drivers are. I read a great article this week, Bob Gates did some departing speeches. And, of course, we all know Robert Gates as president of Texas A and M. We saw him go serve under the Bush administration and the Obama administration, and he warned that our entitlement programs by the year 2020 to are going to take up nearly 11 percent of our GDP, while spending on our -- on the security of our nation is expected to drop 2.5 percent. But the statistic was in 1990 those medicare medicaid, and Social Security was at about 7 percent of our GDP. And our security spending was also at 6 percent. And then in the 90s is when the gap really began to spread like that. So we're all wrestling with the cost, the medical inflation. And I have to say something, you know, Dr. Schwartner, you're a rare physician who can look at me in the eye and say health care has gotten too expensive. And you understand that. Because so many times in the industry they don't like to talk about medical inflation. When we talk about bending the cost curve, it's not about throwing people off the rolls, it's really looking at why is medical inflation -- why has it out paced all other inflation -- inflationary measures? And so we've talked in great length, we've seen the efforts in Senate Bill 7 during the regular session, Senate Bill 8 that they're trying to work on different payment systems and how we can wrestle in the cost of health care.

REPRESENTATIVE CHARLES SCHWERTNER: All right. And on a federal level these law makers and the administration, even the Obama administration, understand that health care costs are driving the ship here as the future of our country and our state. Is it not likely, because of that, that they would be more willing to grant these waivers to allow for some certainty to how much they budget from a federal level to the states?

REPRESENTATIVE LOIS KOLKHORST: Well, the current administration actually has given more waivers than any other administration in, you know, in the history of --

REPRESENTATIVE CHARLES SCHWERTNER: Do you agree it's important that this bill pass, that we have this tool in case --

REPRESENTATIVE LOIS KOLKHORST: I think it's an important step. It may be rejected, but it may begin, you know, a dialogue of us reaching out. And there's other states, like I said, the State of Washington recently passed a waiver that was much different than ours, that basically said give us a block grant. You know, how I crafted this was certain measures in there. And the waiver, as Garnett and I have talked about, is a direction for HHSC to seek and begin those conversations. One of the things that Commissioner See said was that he didn't like, he had the oversight committee with lawmakers involved. And I kind of got a big hoot out of that because sometimes we'll get in the way. But we'll obviously be having a dialogue. I imagine that, that lawmakers get involved. So we will be having a dialogue with them and, in fact, this HB13 gives the power to the speaker to appoint the chairman, instead of the senate; which was a little different than Senate Bill 10. I think that -- I want to complement Jane Nelson for her work in Senate Bill 10 that really, you know, had some innovative ideas. It was written very specifically and what we learned from that was that it didn't give us enough ability to, at the time, work with the Bush administration who did not act on it, so --

REPRESENTATIVE CHARLES SCHWERTNER: I think you have a great bill. It speaks to innovation, flexibility, cost containment and sovereignty. Thank you.

JOE STRAUS: Representative Sheffield raises a point of order, the lady's time has expired. Point of order is well taken and sustained. Anyone wishing to speak for or against House bill 13? If not, the question occurs on passage to third reading of House bill 13. It's record vote. Clerk will ring the bell. Showing Representative King of Taylor voting aye. Showing Representative Branch voting aye. Have all voted? There being 97 ayes and 45 nays, House Bill 13 is passed to third reading. Chair lays out House Bill 18 on second reading. Clerk will read the bill.

CLERK: HB18 by Eissler. Relating to elementary class size limits in public schools.

JOE STRAUS: Chair recognizes Representative Eissler.

REPRESENTATIVE ROB EISSLER: Thank you Mr. Speaker. Members, this bill maintains the current class size limit of 22 to 1 for K-4. I have a floor amendment substitute which I would like to offer now.

JOE STRAUS: The following amendment, the clerk will read the amendment.

CLERK: Amendment by Eissler.

REPRESENTATIVE ROB EISSLER: Members, this floor amendment returns the original bill to current law with one exception, it authorizes the commissioner to consider reductions in funding when granting class size waiver. And I move adoption.

JOE STRAUS: Mr. Hochberg, for what purpose?

REPRESENTATIVE SCOTT HOCHBERG: Will the gentleman yield to clarify what you're doing?

REPRESENTATIVE ROB EISSLER: Yes, I will.

REPRESENTATIVE SCOTT HOCHBERG: Okay. So, Mr. Eissler, under what you've offered, the commissioner will still have discretionary authority to grant waivers, he will not have to, right? The public process remains in place.

REPRESENTATIVE ROB EISSLER: Parental notification, Mr. Strama.

REPRESENTATIVE SCOTT HOCHBERG: Remains in place. The board still has to request the waiver. They can't delegate it.

REPRESENTATIVE ROB EISSLER: Correct.

REPRESENTATIVE SCOTT HOCHBERG: And so the only thing you're doing different from current law is that you're saying that one of the reasons that the commissioner can choose to gave a waiver is if the money has been cut to the district, which is very similar to what they would have to show hardship.

REPRESENTATIVE ROB EISSLER: Correct.

REPRESENTATIVE SCOTT HOCHBERG: Okay. Thank you.

REPRESENTATIVE ROB EISSLER: Move passage.

JOE STRAUS: Representative Eissler sends up an amendment. It's acceptable to the author. Is there objection? Chair hears none. The amendment is adopted. Chair recognizes Representative Eissler.

REPRESENTATIVE ROB EISSLER: Move passage.

JOE STRAUS: Anyone wishing to speak for or against House Bill 18? If not, the question occurs on passage to engrossment of House Bill 18. It's a record vote. Clerk will ring the bell. Showing Representative Weber voting aye. Showing Representative Taylor voting aye. Have all voted? Being 94 ayes, 48 nays, House bill 18 is passed to engrossment. Members, are there any further announcements? If not, Representative Hamilton moves that the House stand adjourned until 10:00 a.m. Tuesday, June 14th. The House stands adjourned.