SENATOR KEVIN ELTIFE: The Senate will come to order. A quorum is present. The Chair recognizes Dean Whitmire.

SENATOR JOHN WHITMIRE: Mr. President, I would ask at this time that the Senate caucus as a whole for the purpose of going over some procedural matters, like right now.

SENATOR KEVIN ELTIFE: Dean Whitmire, did that motion include recessing until 2:40?

SENATOR JOHN WHITMIRE: Recess until when?

SENATOR KEVIN ELTIFE: 2:40.

SENATOR JOHN WHITMIRE: It will take longer than that.

SENATOR KEVIN ELTIFE: 2:45. Is your motion --

SENATOR JOHN WHITMIRE: 2:45. I move that we recess until 2:45 for the purposes of a caucus.

SENATOR KEVIN ELTIFE: You've heard the motion before we -- hold on one second, Dean Whitmire. You have heard the motion that we recess until 2:45, members, is there any objection? Chair hears none -- before we recess, Mr. Doorkeeper.

MR. DOORKEEPER: Mr. President, there's a message from the House.

SENATOR KEVIN ELTIFE: Admit the messenger.

MESSENGER: Thank you, Mr. President. Mr. President, I'm directed by the House to inform the Senate that the House has taken the following action --

SENATOR KEVIN ELTIFE: Thank you, Mr. Messenger. Members, we stand in recess until 2:45.

LT. GOVERNOR DAVID DEWHURST: Members, the Senate will come to order. Members, Senator Whitmire moves to dispense with the reading of yesterday's journal. Is there objection from any member? The Chair hears no objection from any member, so ordered. Members, if there's no objections I'd like to postpone the reading and referral of bills until the end of today's session. Is there objection from any member? The Chair hears no objection, so ordered. Members, the Chair lays out Senate Resolution No. 80 by Senator Birdwell. Secretary will read the resolution in full.

PATSY SPAW: Senate Resolution No. 80 whereas the Senate of the state of Texas is pleased to recognize the members of the Navarro College Bulldogs baseball team who won the 2011 national Junior College Athletic Association division one World Series championship title in Grand Junction, Colorado on June 4th; And whereas, the Navarro Bulldogs defeated the number one ranked Central Arizona College Rockeros by a score of six to four in the bottom of the 10th inning before a crowd of more than 11,000 to bring home Navarro College's first national baseball championship title and third national sports championship this school year; And whereas, the Bulldogs have developed exceptional proficiency in team work under the superior leadership and expertise of head coach Randall

(inaudible) Dill; And whereas, the Navarro Bulldogs are a source of tremendous pride for their families, their fellow students, and the city of Corsicana; and they are truly worthy of legislative recognition for their impressive talent, their fine sportsmanship, and exceptional achievement. Now, therefore be it resolved that the Senate of the state of Texas 82nd legislature first called session hereby commend the members of the Navarro College Bulldogs Baseball Team on their extraordinary season and congratulate them on winning the National Junior College Athletic Association division one world championship title. By Birdwell.

LT. GOVERNOR DAVID DEWHURST: Thank you, Madam Secretary. Chair recognizes Senator Birdwell to explain the resolution.

SENATOR BRIAN BIRDWELL: Thank you, Mr. President. Members, today I rise to honor a major athletic accomplishment that again comes from the state of Texas and originates out of Senate district 22. Joining us on the Senate floor today is Coach Randall

(inaudible) Dill, I need to explain that to you for just a moment. I've never had a coach in my lifetime use the word "whoa " but actually it's a term of endearment from his parents to get him to slow down and calm down. As a young man they were always screaming "whoa" at him and that ended up becoming his name and it's what he goes by now on all his documents. But coach Randall "Whoa" Dill is the head coach of Navarro baseball team, and on June 4th after a dominant regular season and six straight postseason wins, Coach Dill led the Bulldogs to a victory at the junior college world series. And joining Coach today to is his wife Candy and his mom and dad Randy and Joy and also joining us representing the national championship Bulldogs is the president of Navarro College, Dr. Richard Sanchez. Coach Dill and the Bulldog baseball team are the most recent stars of Navarro college athletics program. But as you heard our secretary read the entire resolution, this is an amazing program, that this is their third championship in the single year. They won the 2010 cheerleading squad championship, 2010 the football team won their division national championships and of course the basketball actually made the final four in the National Junior College Athletic Association in the final four. So, members, please join me in welcoming Coach Dill in celebrating both the national baseball team and outstanding Navarro. Mr. President, I move adoption of the resolution.

LT. GOVERNOR DAVID DEWHURST: Thank you, Senator Birdwell. Members, you heard the motion by Senator Birdwell. Is there objection from any member? The Chair hears no objection, and the resolution is adopted. Members, the Chair signs in the presence of the Senate the following.

PATSY SPAW: Senate Bill 4.

LT. GOVERNOR DAVID DEWHURST: Members, if I could have your attention for just a moment, we have a memorial resolution by Senator Rodriguez. Members, the Chair lays out Senate Resolution No. 84 by Senator Rodriguez. The secretary will read the resolution.

PATSY SPAW: Senate Resolution 84 in memory of Staff Sergeant Nicholas P. Balard by Rodriguez.

LT. GOVERNOR DAVID DEWHURST: The Chair recognizes Senator Rodriguez on the resolution.

SENATOR JOSE RODRIGUEZ: Thank you, Mr. President and members. Senate Resolution 84 is in memory of a fallen soldier Army Staff Sergeant Nicholas P. Balard who died on June the 13th in the (inaudible) province of Iraq as a result of wounds sustained in an improvised explosive device exploded near his unit. Staff Sergeant Balard who moved to El Paso with his mother and three brothers when he was 13 was on his second deployment to Iraq and was serving on his 6th squadron 9th battalion regiment third brigade combat team, first calvary division based at Fort Hood. He leaves behind his wife Veronica whom he met in El Paso and their 2-year-old daughter Eva. His first deployment was three days after his daughter Eva was born. He returned when she was almost 1-year-old only to be deployed again after Eva's second birthday. Today we honor Staff Sergeant Balard for his sacrifice, his courage and his commitment to serve and fight for our freedom. I extend my deepest and sincerest condolences to the family and ask that the Senate adjourn today in memory of Staff Sergeant Nicholas P. Balard. Thank you, Mr. President and members.

LT. GOVERNOR DAVID DEWHURST: Thank you, Senator Rodriguez. Members, you heard the motion by Senator Rodriguez. Chair recognizes Senator Van de Putte to speak on the resolution.

SENATOR LETICIA VAN DE PUTTE: Thank you, Mr. President. Mr. President and members, at the end of the regular session many of you joined all of our members in the legislature at a Memorial Day event in the House chamber. On June 15th of this year, as we recognize this soldier from Texas, new figures were released from the Department of Defense. As of June 15th, 6,061 American military personnel have died in the ongoing wars in Iraq and Afghanistan. Of those 540 were Texans. Members, that means nearly 9 percent of our Texas soldiers have sacrificed their lives for us in the ongoing conflict, our wars with global war in Iraq and Afghanistan, 97 of those families were represented on our Memorial Day ceremony. And as we continue to hope and pray for their safe return, we must remember that it is Texas that has the greatest burden. We are proud of our military installations and of the mission that they have, but it comes with a cost and that cost is a high fatality rate and those who have given their life in service to our country. I join Senator Rodriguez and am mindful that when the Department of Defense sends out numbers they are but numbers, but those Texans are your constituents and they have names and they have families. We must never forget their sacrifice.

SENATOR JOSE RODRIGUEZ: Thank you, Senator Van de Putte. Mr. President and members, I move adoption of Resolution 84.

LT. GOVERNOR DAVID DEWHURST: Thank you, Senator Rodriguez. Thank you, Senator Van de Putte. Members, you heard the motion by Senator Rodriguez. Would all those in favor please rise? It being unanimous, the resolution is adopted. Thank you. I'm going to recognize Senator Carona for a motion to suspend the regular order of business to take up and consider committee substitute to House Bill 3.

SENATOR JOHN CARONA: Thank you, Mr. President. Good afternoon, members. I move at this time to suspend both the regular order of business and the printing rule so that we can take up this bill at this time. Shall I go ahead and proceed? Okay. Members, I'm going to give you a quick background on TWIA and then I will review for you the various points that are in this bill. But the most compelling point I make is that what I present to you is substantially the same bill we passed out of this chamber a few weeks ago by a vote of 31 to zero. I'll go through some of these issues including what's been deleted as we try to move this bill forward today and take it into what will be a conference committee where we will work through the issues that are most important to this Senate. Recently several issues have arisen with regard to state wind and hail insurance and our provider of last resort the Texas Wind Storm Association has been the agency to deal with that. Issues that arose -- arisen, pardon me, as a result of Hurricane Ike and Dolly. And in those hurricanes several flaws were revealed in the governing statute including processes for claims and handling and really a general governance of the organization. There were also thousands of slab claims which involved claims where literally only a foundation remained after the storms. The committee substitute for House Bill 3 which you're looking at today represents a balanced approach to addressing the serious concerns that could potentially impact all Texans and it is a version of the TWIA bill that again this body passed out 31 to zero with one material exception, and that is the removal of the 18 percent penalty. Related to the governance of TWIA, the bill allows for better oversight of TWIA qualified property inspectors, streamlines the renewal process for TWIA policies, it allows insureds to receive a premium discount for building to a higher code than presently required, it establishes a standard of conduct for the TWIA board of directors and its employees, it allows the commissioner to conduct random claims audits of TWIA after the filing of the 1000th claim, gives the commissioner rule making authority to set agent commissions, it calls for a study of a single adjuster program, a study for the feasibility of TWIA writing policies directly and a study of other residual markets and TWIA's current structure, and it subjects TWIA to the Open Meetings and Open Records Acts. It also requires TWIA to publish salary information online for managers and contractors who make over $100,000 in a calendar year. It also makes a number of revisions to the current bond structure both for clarity and for functionality. The bill reforms the dispute resolution process. And candidly this is where most issues come into play in terms of disagreement from one interest group or another. Requires an insured to file a claim within one year of the date of the event in issue and requires the association to timely respond and make payment where appropriate. And, in fact, you've been provided a flow chart that will show you step by step what a claimant must do in the event of a loss and it shows you the time periods that are involved step by step as will be described by statute. Under the bill where there's a dispute concerning the amount of the association will be required to go through an appraisal process before an appeal to district court can be made. Where there is a dispute concerning coverage or as you hear, when we talk about this issue most often, causation, a claimant may bring an action in district court subject to only the association's right to require dispute resolution through mediation or moderate settlement conference beforehand. In the event there are six or more claimants bringing actions in a district court, the judicial panel, a multi-district litigation, will be required to appoint the presiding judge. The judge will be required to be an active judge in which the county the suit is filed. In any action in district court, damages recoverable will include actual damages which by definition include consequential damages, (inaudible) damages, prejudgment interest and finally court costs and attorney fees. Available damages, as I stated earlier, would not include the 18 percent late payments as was in the bill when it last was before the Senate, but this is a change made with the support of both of the primary interest groups that have weighed in on this issue. The Texas Trial Lawyers and the Texans for Lawsuit Reform. And so I present this bill to you today with the humble request, though certainly your right to do as you please, to share with me your concerns and issues that you wish to have added to the bill in conference committee but to avoid the temptation, if you will, to amend the bill on the floor today simply because we'd like to get it in conference committee. I made a commitment to each and every one of you that came to me that we would not change the Senate bill and to take one amendment really is to, in all fairness, tack amendments from any and everyone. We do though want your input and with all due respect will process the specific changes that you wish to see in conference committee when we get to that point. The hours are waning of the session, as I mentioned earlier today in a letter, I'm very grateful for the help and support you've given to this point and I think even after 20 years in the legislature you can learn some valuable lessons. And I think the lesson that I learned in this instance, which was most valuable to me, that when you're writing legislation, though you want to write legislation that appeals to the masses and you want to write legislation that meets with the approval of our executive branch and all of the area of facets of state government that are important to this process, the most single important thing you can do is write legislation for the right reasons and to satisfy your colleagues in the Senate. We take this process as a step by step process and so I present to you today a bill that is written with the intent of satisfying you, not satisfying the House, although certainly I hope to work to that point, not satisfying the executive branch because I can tell you the governor's office would still like to see other changes in this bill. So I present to you a bill that you're already familiar with because this is the bill that you know and you trust and you have proven that you support. Mr. President, with that I would be happy to take questions or refer back to my previous motion.

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

SENATOR MIKE JACKSON: Will the gentleman yield.

SENATOR JOHN CARONA: Certainly, yes, sir.

SENATOR MIKE JACKSON: Thank you, Senator Carona. I appreciate your dedication on trying to put a bill together that you know is very difficult to do to try to satisfy all of those things, and I was not able to be able to be here all of the times I wanted to this week and I had a couple of items that I wanted to discuss with you per your request in trying to abide by your request, but to talk about issues that may be considered in conference committee. And I have a list of about five or six things that I thought about maybe trying to instruct on the conference committee or make a motion but I'd rather not do that and just rather make that available to you and your staff as you go a little bit further on. But one of the issues in the Senate bill that hadn't been in House bills is we're requiring flood insurance for people to -- mandating that they purchase flood insurance if they're in a certain designed zone that's described in the bill. The House Bill doesn't have that. In the existing law we have made people who want to buy policies via TWIA if they are making alterations to their house, if they are buying a new -- some action by them have to be taken instead of using a blanket mandate. That's one of the issues we hope that you would look at.

SENATOR JOHN CARONA: Senator, I will -- well, I can't speak for all of the conferees because at this point we don't know who they will be for a meeting chamber. I know for me that's an issue of concern. I know you're concerned about the cost of this program in its entirety to your constituents and I can tell you that in various recent negotiated versions of this bill, that language has been deleted.

SENATOR MIKE JACKSON: Okay, but I think it may be -- well, it's --

SENATOR JOHN CARONA: It's in the Senate bill right now but that's only because we did not want to bring the bill back to the floor with any changes we had made before.

SENATOR MIKE JACKSON: Okay. Thank you. Another item we had hoped you would consider was moving the effective date of the alternative certification and eligibility program up to the effective date of the bill instead of being a year later which means that someone that has a house now trying to get insurance under TWIA would not have to wait until January, and I think that's something that we probably discussed as well.

SENATOR JOHN CARONA: We have, Senator, and I support that.

SENATOR MIKE JACKSON: Okay. Instead of going through all of these items, Senator, I know you've been great and your staff has been great for us to work with, we'd like to give you a list of these issues that we have as we go forward and hopefully be able to take care of those but they're -- I agree with you, the portion of the bill that's taking all the time and all the effort has been the dispute resolution portion of the bill, and I've said all along a lot of my issues were with the structure of the bill itself and some of the inner workings here and you've been very kind in working with us on those and if we can continue to do that, I think we'll be -- we'll make a lot better bill.

SENATOR JOHN CARONA: Thank you, Senator. And just for the record, I've said this before, you are unquestionably one of the most knowledgeable members on the committee for TWIA given the fact that among other things that you're a coastal legislator. So we will absolutely listen to you and respect what you have and try to get those things into the final bill.

SENATOR MIKE JACKSON: Thank you, sir.

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

SENATOR TROY FRASER: Question of the author.

LT. GOVERNOR DAVID DEWHURST: Will Senator Carona yield?

SENATOR JOHN CARONA: Yes, certainly.

SENATOR TROY FRASER: Senator, I wanted to clarify that the bill that we're about to vote on today I understand is, you know, substantially the same as the bill that came out that we voted on 31, zero; is that correct?

SENATOR JOHN CARONA: That's correct.

SENATOR TROY FRASER: Could you outline -- there's a couple of changes that are different.

SENATOR JOHN CARONA: Yes, sir, I'll be glad to. Let me find my --

SENATOR TROY FRASER: And I think where I'm headed with this is the 18 percent that was in the original bill.

SENATOR JOHN CARONA: Yes, that's the primary change. There were three changes in all, Senator, two of which were simply conforming changes and they were not material. But the one material change was the 18 percent and that was the one issue when we were meeting in regular session that the governor felt -- Governor Perry felt so strongly about that he was not willing to support the bill unless that provision came out, and at that time that was the only provision he wanted out of the bill and we have negotiated with the parties and that's out of the bill.

SENATOR TROY FRASER: The other issue that's in the bill that I think was probably part of the original bill but is still like a subject of at least heartburn for me was the methodology that we did our bonding that we put in place two years ago. We had a system that was put in place for method of finance for the bonding, and we're undoing a lot of that in this bill. Is that not correct?

SENATOR JOHN CARONA: Yes, sir. What we've done, based on the recommendation of the various state agencies that have been directly involved in this, is provided a process that allows us to break the tiers down in issuance of bonds so that we don't necessarily have to sell all of one particular category if it can't be sold without being able to move on to the next category, then the category after that. And that's only done as a means of expediency because one of the things that got TWIA into so much trouble was its inability to meet various deadlines that were prescribed in law in terms of settling these claims, and because we all recognize that TWIA is not particularly well funded at this time, that language is in large part been added to make sure that we have sufficient time to go out and sell the bonds and that we have bonds that are, in fact, marketable.

SENATOR TROY FRASER: Well, and I guess I would say this is one of a multitude of problems that TWIA has, but this particular -- you know, the section subchapter M amendment is one that I've got pretty major heartburn over because this was something that we had put in place over the last two sessions, and as we move forward, I think we're probably in the discussion going forward. I would ask that we continue to massage this because it's -- I do plan to vote with you today, I'm going to vote with reservations because this particular amendment, I disagree with the direction we're going and hope there will be discussions in conference about this.

SENATOR JOHN CARONA: Did you say, Senator that, was section 50?

SENATOR TROY FRASER: 5-0, the subchapter M, that's on page 19 starting line 19 line 13.

SENATOR JOHN CARONA: Okay. It's duly noted and we will work with your staff on that section.

SENATOR TROY FRASER: Thank you.

SENATOR JOHN CARONA: Thank you, sir.

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

SENATOR STEVE OGDEN: To ask the author a question.

LT. GOVERNOR DAVID DEWHURST: Will Senator Carona yield?

SENATOR JOHN CARONA: Certainly.

SENATOR STEVE OGDEN: I wanted to follow up an exchange that you had with Senator Jackson about requiring purchasers of TWIA wind storm insurance to also have flood insurance and it's in the bill but you seem to imply it's coming out; is that right?

SENATOR JOHN CARONA: Well, it's coming out just by virtue, Senator, of not being popular among certain members in this body and also in the House. I actually support that measure, that's the reason we put it in there. The problem with settling these claims has always been wind versus water, and if you have got a flood policy in place, well, then it lessens the exposure that we as a state have and we can push some of that loss off on to those flood policies and not have to absorb as much through TWIA itself. I think it's good policy, but in terms of our colleagues in the House, there are some members, some I might say -- I might add influential members that we all know and respect who believe that could place an unfair pricing burden on their insureds and candidly on their constituents. And so I think as a part of overall interim study that we're going to do and this bill calls for a very substantial interim study will be looking at this sure. And we'll also be looking at the issue of whether or not TWIA is viable into the future because I believe if we're not going to make TWIA actuarial sound and because of the political influence we exerted regularly on TWIA, we're in that position where it's not actuarial sound, then I'm in the mind that we ought not have TWIA. And so, you know, that -- we're going to be looking at that carefully in the interim to see if we can A, make it actuarial sound and support built around the effort to do that or B, find a way to phase out of TWIA, put this burden back on the private insurers across the state so they write the coastal area proportionate to other amounts they write in other parts of the state.

SENATOR STEVE OGDEN: Well, that answer, which I understand, causes me some heartburn in the sense that if you're trying to write a bill that the senators support and you say this provision is something that the senators support, which I support --

SENATOR JOHN CARONA: Well, not all senators, Senator Jackson just a moment ago in opposition.

SENATOR STEVE OGDEN: Well, that's a fairly significant change, Senator, and the fact that TWIA is not actuarial sound, in fact it's broke. In fact, one of the reasons that the governor has cited for not wanting to touch the rainy day fund is because he thinks we may have to use the rainy day fund to cover the losses that you would normally expect TWIA to cover; is that not correct?

SENATOR JOHN CARONA: That is correct.

SENATOR STEVE OGDEN: And by your own admission, this program is not actuarially sound; is that correct?

SENATOR JOHN CARONA: That's correct, it is not.

SENATOR STEVE OGDEN: And the fact that you would exempt a wind storm coverage, people purchasing wind storm insurance from also having flood insurance means at least in my limited knowledge, make it even less actuarially sound.

SENATOR JOHN CARONA: Well, we don't have that requirement in law right now, Senator, so putting that flood insurance requirement in would be a first time, that would be something new in the law, so we're right now without it and our actuarial condition today presently assumes of course we don't have it. Our proposal after study from this last interim was to put it in because we thought it would improve the issue. But it's just like you preparing the budget, today we got to find the votes and this is -- this is an issue that, you know, because it's not just conservative versus liberal or Republican versus Democrat, our coastal legislators of both parties have, and understandably so, significant influence in the process. We're trying to find the right combination of votes to pass this. And so the first thing you'd want to do in my mind if you're forced to negotiate to any extent for passage is eliminate any provisions that would be new to the cause as opposed to taking away something that is foundational and already existing. But let me assure you, if we can convince during the conference committee process sufficient conferees to leave that provision in, my vote certainly and my preference is to leave it in.

SENATOR STEVE OGDEN: Well, and what I'm saying is that unless there's a more compelling argument than what you offered, if you strip it out, I'm not sure I'm going to vote for it coming back.

SENATOR JOHN CARONA: I know, and I've got a hundred different members with a hundred different reasons why they would like to not vote for it, so my hope is that you, like anyone else, would look at the totality of the bill when it comes back and judge --

SENATOR STEVE OGDEN: The totality of my concern and I think by your own admission is that this is an interim step. We're basically passing a bill that improves TWIA but we're really kicking the can down the road because the major issues are going to be resolved in a study. And here's what I'm concerned about. Last time I checked on TWIA, they had like 70 million bucks; is that right?

SENATOR JOHN CARONA: Yes, sir, between 70 and 100, a grossly insufficient amount. Let's put it that way.

SENATOR STEVE OGDEN: And during Hurricane Ike, what's the value of the claim?

SENATOR JOHN CARONA: All in, Senator, I'm not sure. If you take the two, if you take Ike and Dolly together, I'm not sure what the total is. But frankly there's (inaudible) process. We still have cases being filed right now.

SENATOR STEVE OGDEN: In the billions.

SENATOR JOHN CARONA: Oh, yeah, above two.

SENATOR STEVE OGDEN: And so by passing this bill, we're basically putting the risk for another period of time on the backs of the tax payers of the state of Texas, it sounds to me like.

SENATOR JOHN CARONA: No, not entirely. Let me tell you why. This bill authorizes for the first time the issuance of preevent bonds and preevent bonds which are going to be paid for by the coastal insureds give us a first and additional step of coverage, but ultimately, and I think this is where you're headed, ultimately if this program were to go bust, it does place the state in a position of having to cover at least the short-term shortfall while ultimately insurance companies would come back through tax credits and cover the bill. So it's an extensive proposition that endangers the state's position regardless.

SENATOR STEVE OGDEN: I will stop by just saying that I know that there are billions of dollars of unfunded liabilities that are going to come due two years from now. This didn't need to be another one.

SENATOR JOHN CARONA: You and I are in complete agreement. Complete agreement. Thank you, Senator.

LT. GOVERNOR DAVID DEWHURST: Members, the parliamentarian reminds me that we have not moved to excuse two of our members who are not here today. Senator Whitmire moves to excuse Senator Uresti and Senator Duncan on matters of important business. Are there objections from any member? Chair hears no objection, and the members are excused. Senator Hinojosa, for what purpose do you rise, sir?

SENATOR JUAN HINOJOSA: Just to see if Senator Carona will yield for a quick question.

LT. GOVERNOR DAVID DEWHURST: Senator Carona yield?

SENATOR JOHN CARONA: Certainly, yes, sir.

SENATOR JUAN HINOJOSA: Senator Carona, I think I asked you before on page 14 --

SENATOR JOHN CARONA: I'm sorry, what page did you say?

SENATOR JUAN HINOJOSA: Page 14 of the bill.

SENATOR JOHN CARONA: Okay.

SENATOR JUAN HINOJOSA: If you look at -- and you look at line 34D.

SENATOR JOHN CARONA: We're looking at different -- we're looking at different bills. You have got a line 34.

SENATOR JUAN HINOJOSA: That's the claimant for (inaudible) to file a claim within 60 days, otherwise the claimant would waive that right. Could you elaborate on that because I was concerned about a shorter time period.

SENATOR JOHN CARONA: Well, the reason, the reason that is in there it's 60 days is because we had two competing interests throughout this process, those who felt that the time needed to be substantially shorter for this process reflecting I guess what one would say current law is and those that felt that the process should be longer. And in doing so give more of an opportunity at settlement as opposed to litigation. Now, while it's true that there are 60 days to file under that appraisal side, you do get from -- the way this bill is drafted, you do get to go from that point into court. So if you do miss that opportunity to go by appraisal, you don't forfeit the opportunity to settle it in court. And so I think the answer to respond to your question I'm not certain 60 days is the ideal or best number. It was just a compromised number in the process so that we didn't make the entire process too long. At one point the entire process from the moment you first filed your claim to your resorted (inaudible) remedies short of the courthouse was about a year and members, particularly coastal members, believed that was entirely too long and so in shortening it, we shortened a number of spots along the way from 60 to 90 days all the way down to 30 and we felt like 60 was all we could go at that particular juncture to accommodate the overall request that we shorten the time.

SENATOR JUAN HINOJOSA: I guess if a claimant missed the 60 day deadline, they would not -- the claimants rights to recover.

SENATOR JOHN CARONA: It would limit it or let me not say limit it, I would say make it more challenging, they would have to go to another route at that point, yes, sir. And it's the same language, by the way, that was in the version last time. But one of the things we're doing is taking notes as this process is going on and we'll bring that up in conference to see if there's some means to adjust that if that's a concern to you. We want it to be a fair process. Fortunately the good part about the appraisal disputes, once they become an appraisal dispute it means that the association has accepted responsibility for the claim, it's just a matter of the dollars that are going to be paid out to settle the claim. It's not the overall question of causation and whether or not coverage even exists.

SENATOR JUAN HINOJOSA: So I guess all that would be required for the claimant to go ahead and file for the claim even though there still may be loss for the whole house.

SENATOR JOHN CARONA: Well, they would want to file the claim. You have got up to one year to file it initially from the beginning of the storm, the beginning of the whole process and then you have got -- you know, on the flow chart you have got a period of time in for TWIA to accept the claim and then for the claim to go into a dispute resolution process of one type or another. But if that 60 days is one of concern to you, it certainly sounds like it is, we'll -- as we reexamine this and as we work in conference committee we'll take another look at that to see what more can be done.

SENATOR JUAN HINOJOSA: Thank you very much.

SENATOR JOHN CARONA: Yes, sir. And let me mention to all of you and, Senator Ogden, it goes back on your comments as well. It is my intent to go in there and fight for every piece of this Senate bill. I want to make sure you all recognize I intend to fight for this tougher than I've ever fought for anything because I understand how important this bill is to so many of you, particularly our coastal legislators. I don't want to leave anyone with the impression that we're going to go in and acquiesce to the House, we're going to win every point and be won in a fair and reasonable fashion so we produce a product that's good for the state and good for the insurers, the policy holders.

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

SENATOR JUDITH ZAFFIRINI: Thank you, Mr. President. I had turned on my light to make an introduction, if I may do so at this point with Senator Carona's permission.

LT. GOVERNOR DAVID DEWHURST: You're recognized.

SENATOR JUDITH ZAFFIRINI: Thank you. Well, as I rose to ask that permission, I was just handed a note that students had to leave to keep on schedule. So, Senator Carona, thank you for your courtesy and thank you for your hard work. But I do want to make a comment that as a Senator who represents counties in the Coastal Bend area that my constituents certainly are in support of the your bill and I intend to vote for it.

SENATOR JOHN CARONA: Thank you, Senator.

SENATOR JUDITH ZAFFIRINI: Thank you.

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

SENATOR TOMMY WILLIAMS: Question of the author.

LT. GOVERNOR DAVID DEWHURST: Will Senator Carona yield?

SENATOR JOHN CARONA: Yes, certainly.

SENATOR TOMMY WILLIAMS: Senator Carona, I'm looking at the TWIA L1 dispute resolution process under the committee substitute to House Bill 381S1169. It's the flow chart that you referred to a couple of times, and so I just want to walk through that and be sure that I understand what we're talking about here. So you said first of all somebody has a year to file a claim, and that first box you have off the to the side on the right, that means that the insurer could be granted 120 day extension, is that what that box means?

SENATOR JOHN CARONA: Yes.

SENATOR TOMMY WILLIAMS: Okay. So they could actually slightly over a year to file a claim under certain circumstances. And then the association has to acknowledge the receipt of the claim and begin an investigation and that has to happen in a 30 day period, correct?

SENATOR JOHN CARONA: Yes, sir. And you might recall, Senator, when we presented this bill that actually request that process again under certain circumstances and it was 60 days. It was at your recommendation, in fact, that we shortened it back to 30.

SENATOR TOMMY WILLIAMS: So it's from -- you have changed that piece of it from 60 days to 30 days?

SENATOR JOHN CARONA: Yes, sir.

SENATOR TOMMY WILLIAMS: Okay. Now, after all the information is received on the claim, the association would then have another 30 days to process the claim; is that correct?

SENATOR JOHN CARONA: That's correct, and notify a rejection or acceptance.

SENATOR TOMMY WILLIAMS: Now, there's some conditions on that notice too. If it's rejected, they have to state why; and then secondly if additional time's need to determine whether to accept or reject a claim and the reasons they can get still another 30-day extension; is that correct?

SENATOR JOHN CARONA: Yes, that's correct, under No. --

SENATOR TOMMY WILLIAMS: And my question is, I don't have the original chart, we just take the 60 days that we had up here and then split it and move another 30 days in down here or is that another --

SENATOR JOHN CARONA: No, sir, we actually had that additional provision in there anyway. Now, remember this all goes back to the filing of the first bill, the Senate bill that went through here. This is not -- though we recently had discussions on another version of the bill that was not successful before the committee just a few days back, this just mirrors what was originally filed in Senate Bill 3.

SENATOR TOMMY WILLIAMS: Well, and I think you know where I am going with this --

SENATOR JOHN CARONA: No, I'm sorry House Bill 272, I'm sorry.

SENATOR TOMMY WILLIAMS: Right. And then after you have got 90 days that this whole claim process can go on; is that correct?

SENATOR JOHN CARONA: Yes.

SENATOR TOMMY WILLIAMS: Thirty plus 30 plus 30 and then if the association doesn't have sufficient funds to pay the funds, they're going to have to go out and issue that post event bond issue that you talked about earlier in your remarks; then there would be another 120 days that could be granted, so we could have the folks, my constituents, Senator Jackson's constituents, someone who has been paying their claims -- I mean, paying their premiums year after year and it could be 210 days before the clock runs out on whether there's a contract violation or not; is that correct?

SENATOR JOHN CARONA: Yes, sir. And let me say the reason for that, just as Senator Ogden pointed out, the financial condition of TWIA. I mean, that's -- you know, if TWIA were -- if TWIA were actuarially sound, you wouldn't need that language in there for that 120 days. What that 120 days is intended for is to be able to go out and market -- find an investment banking fund to handle the issuance of bonds.

SENATOR TOMMY WILLIAMS: And I understand that. And I think that 120 days is appropriate if they're going to have to issue the post event bond, that would be a very difficult thing to do in that amount of time. But my concern is the guy who owns the convenience shop on Bolivar Peninsula or in Chambers County, any of the coastal areas that I represent, he's probably not going to be able to stay in business if he's got to weight 210 days before he gets a nickel on his insurance claim and that's a great concern to me. I know that there's a whole piece that isn't being addressed and that's the financial operations of TWIA and the financial soundness of it, and I appreciate the work that you have done. And so then even after that 120 days is over, you still got a whole other dispute resolution process that could take another 60 to 120 days; is that correct?

SENATOR JOHN CARONA: Another 60 days actually.

SENATOR TOMMY WILLIAMS: Well, I see coverage and causation disputes can go up to 120 days; is that right?

SENATOR JOHN CARONA: Well, they could extend by mutual consent beyond the 60 but the -- remember the important thing is the very first large box at the very top of the chart, even under the worst of the conditions which is undoubtedly are handling the Ike and Dolly work through TWIA, 94 percent of all claims are settled at that point. So the very first big box you see on that flow chart, it's only the remaining percent of the claims that you see go below that all the way potentially to the very bottom which could end up in a court action. Now, the industry standard for private insurers is 1 percent. We fell short by about percent, the 94 percent, the difference between percent and 100 percent satisfactory of all claims. If we can bring TWIA's claim resolution process to such a point where only one to 2 percent of all claims taking us at our near industry standard, then even that many fewer claimants end up having to resort to any of this flow chart.

SENATOR TOMMY WILLIAMS: Well, it would be all of our objective that that never happen, but unfortunately that wasn't the case and there are really three hurricanes that were a big effect on this and the forgotten hurricane was Hurricane Rita which went in on the eastern portions of the Texas coast and western, southwestern Louisiana and actually we had as much devastation in that in areas of my district as we did from Ike. So, you know, that was also a situation where they weren't able to process the claims in a timely fashion on Hurricane Rita, so this has really happened three times during the last three years. So I appreciate what you have done already, and I just want to keep pressing because I think it's important that we keep the heat on the association to engage in financially sound practices. And I think there have been some problems that you mentioned in the past with respect to inadequate premiums. But what I would also point out is that we have 30 years that we didn't have a major event. We had only my minor and premiums were collected for much of that time and I think that unsound business practices and bad decisions on the part of TWIA about how to do that money, when to purchase reinsurance, all those sorts of things contributed to the fund not being -- the association not being adequately funded when we did have that major event. And I just want to say again how much I appreciate the way you have handled this, you have been very open in the entire process. I did file an amendment to take out that last 30 days and I'm going to pull that amendment down when it comes up, but I wanted to bring the issue to everybody's attention that 210 days is a long time for somebody to wait to have their issue resolved even in the event if you have a financial contingency where, you know, they don't have the money to process the claim and I understand. I don't want to make it so that while they're still trying to process and receive claims that they're already going into a contract default so that you have got all these other penalties or all these other legal matters that would accrue. No one wins when they go to a courthouse. But I think that we could benefit from shortening this by about 30 days so that we ended up with a maximum time frame of 180 days, the 120 plus the 60 and that would be my goal and I just wanted to get that in as a matter of record and I appreciate what you've done.

SENATOR JOHN CARONA: Senator, I'll make it my goal as well, and it's also one of the reasons why the inclusion of consequential damages has been such a hard fought issue of various parties of this. And the longer it takes to resolve a claim, the greater the possibility that there are going to be consequential damages. And so that protection has been argued heavily by numerous groups and it's why we in the Senate have fought to keep that protection in there as well. Thank you.

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

SENATOR MIKE JACKSON: Will the gentleman yield?

LT. GOVERNOR DAVID DEWHURST: Will Senator Carona yield?

SENATOR JOHN CARONA: Yes, certainly.

SENATOR MIKE JACKSON: Thank you, Senator Carona. I just want to for clarification for Monday go over one or two more points in here. In the discussion with Senator Ogden you said that TWIA was down to about $70 million in the bank and --

SENATOR JOHN CARONA: I think it's a little higher than that but it certainly insufficient in terms of where we are right now in the middle of hurricane season. I think most people would agree with that.

SENATOR MIKE JACKSON: Okay. Was there not a purchase made by TWIA for reinsurance for this year?

SENATOR JOHN CARONA: There is one underway, yes, that's correct.

SENATOR MIKE JACKSON: Okay. Is that the -- do you know the cost for the reinsurance that they're going to pay? It's over $100 million, I think.

SENATOR JOHN CARONA: It was $100 million, Senator, for $660 million for reinsurance coverage.

SENATOR MIKE JACKSON: Okay. And that 100-dollar -- $100 million was spent prior to the balance that y'all were talking about in the TWIA account of 75 million?

SENATOR JOHN CARONA: I can't say that for certain. You know, my guess is that it's been spent as additional premiums have come into this system and so I can't attest to that. In other words, I don't believe we had 70 million minus 100 million or a net of a negative 30 million. There have been other dollars flowing into the system. So I wouldn't know what the current overall balance would be. But I do know the 100 million was the cost for the reinsurance.

SENATOR MIKE JACKSON: Okay. But I was thing along the lines that there was 170 million in the account and 100 was spent out to buy reinsurance. Would that be --

SENATOR JOHN CARONA: It's 100 million out of this year's premiums dollars, Senator, and so that may be the difference in balancing out those numbers.

SENATOR MIKE JACKSON: So what we're saying is we don't really know how much money they have.

SENATOR JOHN CARONA: Well, I mean, I don't have their bank balance today, but I can tell you because it's been repeated to me over and over, whatever we have it's insufficient to meet the potential obligation. If we don't get hit with major hurricanes this season, we'll be in satisfactory or at least we will have money in the bank. I don't want to say satisfactory condition, but I will say money in the bank.

SENATOR MIKE JACKSON: Right. And you and Senator Williams discussed the proper management of the funds at TWIA and how that has -- and I think all of our objection been a problem that has got us into the situation we're in.

SENATOR JOHN CARONA: I think absolutely that is a contribution to the problem, yes, sir.

SENATOR MIKE JACKSON: And purchasing reinsurance and taking that hundred million dollars in premiums that goes, in the event we have no hurricanes at all or no -- you know, very large catastrophic storms this year in the event, those -- no claims were made really that fall into that category of level of funding, we'll just be out of -- those funds will be just be gone to the insurance company forever, so --

SENATOR JOHN CARONA: And that's just a risk management decision and it's the same decision you and I make every time we decide to buy homeowner coverage for our homes, and so I buy insurance this year. I may not have a loss but it was still in most cases favorable at least to the premium I paid to have covered my house with insurance rather than self-insuring agent. That's the very same question but on a larger scale that TWIA deals with every year and there have been times along the way where reinsurance was so substantial, it's expensive right now, by the way as well, but so substantial that we made the decision not to purchase reinsurance. And as long as you don't have a major calamity, it's a great decision. But in the event you have a major hurricane come through and you got a million dollars or more in losses, I think -- I can't even imagine the public's outcry why we didn't manage that as a legislature. So it's always the flip of the coin for whether or not it's the right thing to do. But most businesses I can only speak to that, most businesses when faced with that decision will opt for insurance in order to mitigate their risk.

SENATOR MIKE JACKSON: Well, and that's one of the reasons that we have worked in the finance package of this association as the ability for them to buy bonds as an alternative to buying reinsurance and, you know, I think that was in the intention was for that to be another tool in their tool box to help make a decision that they could look at the price of each one and maybe do a combination of each one.

SENATOR JOHN CARONA: Yes, sir.

SENATOR MIKE JACKSON: And in this bill, Senator, the -- there is an issue that concerns me and I hope it's one that maybe we can talk about more as we go forward but I think it's feasible right now for the head of the TWIA group over there, their executive director or whatever his title is going to be, his or her, to sell preevent bonds and then take the proceeds from those bonds and go and buy reinsurance with the proceeds of those bonds, that kind of concerns me. That may be a little far fetched but I think that -- I think that we at a minimum ought to say that the commissioner of insurance should have to okay that decision if some circumstance came up where that needed to be done, but --

SENATOR JOHN CARONA: Senator, I agree with you. It appears it's a remote possibility, but nonetheless a possibility, and it's one of the things we intend to address in conference committee to plug that hole.

SENATOR MIKE JACKSON: Okay. Thank you.

SENATOR JOHN CARONA: You're welcome.

LT. GOVERNOR DAVID DEWHURST: Members, Senator Carona moves to suspend the regular order of business and to suspend the Senate rule 7.12. Is there objection from any member? Chair hears no objection from any member and Senate rule 7.12 and the Senate's regular order of business are suspended. Chair lays out on second reading committee substitute to House Bill 3. The secretary will read the caption.

PATSY SPAW: Committee substitute to House Bill 3 relating to operation of the Texas Wind Storm Association and to the resolution of certain disputes of concerning claims made to that association.

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

PATSY SPAW: Floor amendment No. 1 by Williams.

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

SENATOR TOMMY WILLIAMS: Thank you, Mr. President. Members, in the committee substitute to House Bill 3 the association has the ability to request an additional 30 days in determining whether to accept or reject a claim for a potential total of 90 days from a point when the claim is first filed to accept or reject and then after that if there's a financial contingency, they can get another 120 days, as I mentioned earlier, for a total of 120 days. Out of respect for the hard work that Senator Carona has done, I'm going to withdraw my amendment but I want to get this issue before the body because I think 210 days is too long for someone to wait before their claim's paid and before there can be a contract violation. There's clearly damages that have accrued as a consequence of that claim not being paid and we have to have some reasonable period of time, and I'd argue that 180 days or six months is a lot better than seven months if you're the guy whose claim is not getting paid. And so with that, Mr. President, I'm going to withdraw floor amendment No. 1.

SENATOR JOHN CARONA: Senator Williams, I will work to get your language in there. I think that's a very good recommendation, and we'll strive to do that.

LT. GOVERNOR DAVID DEWHURST: Members, Senator Williams pulls down floor amendment No. 1. The Chair lays out floor amendment No. 2 by Senator Jackson. Secretary will read the amendment.

PATSY SPAW: Floor amendment No. 2 by Jackson.

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

SENATOR MIKE JACKSON: Thank you, Mr. President and members. I talked to Chairman Carona about this amendment. I think it's an issue that we ought to really look at, and obviously why I brought it up, but it would set up an ombudsman program that TDI would put together to help people navigate after a storm through all of these deadlines, all of these steps and goals that they need to reach and to be able to stay in compliance with all of the new rules that we're having right here and it would help spread information, give out toll free telephone numbers, have public meetings on this, have some outreach centers and help people in the aftermath after a large storm. He said he thought it was a great amendment and he'd love it even more if I pulled it down and I am going to withdraw the amendment. I did want to bring it to the attention of the members here in the event that an amendment went on during conference committee, it would have been explained to you.

SENATOR JOHN CARONA: Yes, sir, I think it's a good amendment, I support it. But out of respect for the other members who chose to withhold amendments -- and I appreciate your acceptance of this. We won't ask the body to vote on it now, but to the extent we can get it into the conference committee report or to the extent that we're required to go outside the bounds for some other technical reason and can then get approval for it, we will certainly not forget it.

LT. GOVERNOR DAVID DEWHURST: Members, Senator Jackson pulls down floor amendment No. 2. The Chair lays out hoar amendment No. 3 by Senator Fraser. Secretary will read the amendment.

PATSY SPAW: Floor amendment No. 3 by Fraser.

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

SENATOR TROY FRASER: Members, I think most of you are aware that late one evening last week when we were working on another bill I came around the floor and I think I was able to talk to every member of this body and the bill that I filed was Senate Bill 44. It was a bill that I had 19 other co-sponsors, so it's a bill that we had 20 members in this body that signed on to the bill. Unfortunately because of the deadlines in filing it, getting it referred, getting it referred to committee, we have not -- time wise not been able to have a hearing on this bill, but the bill is one that takes a different direction on what we're discussing today, in the bill of -- the amendments that I'm laying out today would abolish the Texas Wind Storm Association, as Senate Bill 44 would have done. It would require the commissioner of insurance to implement a transition plan for the cessation of all operations of the association. Members, this is an issue I as chairman of the business and commerce, I'd worked on three sessions before this one, so this is a fourth session and, John, I'll have to say it's almost like there's an echo in this chamber because we're discussing the same thing today that we were discussing eight years ago. You know, that we got an agency that is out of control and dysfunctional, eight years ago they had a huge liability that the state has recognized and we have that there's no money in the bank, we tried to address it, they told us, well, in two years if we don't have a hurricane we'll have some more money in the bank. If you remember last year when we -- or two years ago when we did this, we set in place a system that said if we don't have a hurricane in this two year period that we'll have money in the bank. Well, we don't have money in the bank. We're back to the same place we were before. We got an agency that is absolutely broken. It is dysfunctional. And I think it -- the very fact that the state is allowing TWIA to operate differently than every other private insurer in the state because we do not require TWIA to be actuarially sound, and by doing that obviously we're subsidizing that. The TWIA, as we know, is set up to be the provider of last resort and because of the unfair competitive advantage they have now, they are the primary insurer writing coverage. The amendment that I'm laying out would order the cessation of operation of TWIA by the Texas Department of Insurance, it would implement a cessation plan that would be put in place January 1, 2012, it would provide to the repayment of any TWIA lawful obligations, it would permit them to operate until it fulfills its duties. Third, it would provide that some exceptions for mutual insurance companies, nonaffiliated county mutual fire insurance companies; fourth which is the most important part, is that the insurance offered is a market share model. Each insurer must insure wind storm and hail policies in tier in proportion with the insurance in the statewide market share. The Texas commissioner shall review the market share during the phase in and adjust an insured's obligation to take into account the insurers risk based capital score ability to bear risk and related factors. And then the last thing is that the rates charged they would be set by the Department of Insurance would be provided by chapter 2251 which is the regular rate making statute for property and casualty insurers of Texas. That is what this floor amendment would do. In keeping with the request of Senator Carona asking that we not amend this bill, and that we not change it so that we can send it to conference, Senator Carona, I'm asking that this is an issue that we have 20 members of this body that signed on to. We got an agency that I tried for six years prior and you're trying this year to fix, I think it's time to recognize that this agency is broken, is dysfunctional, it's time for the state of Texas to get out of the insurance business and leave this to the regular market in the state. I would now respectfully pull down the amendment, I believe it's No. 3, but also ask that this amendment be respectfully considered in conference committee.

SENATOR JOHN CARONA: Senator, I would have signed on with you if I wasn't carrying my own bill. I actually agree with the notion that we may well be better off without a TWIA. In all fairness to the process and just to make sure that the committee does -- you know, does its due diligence and does the right thing, we're going to include this in the interim studies but very seriously so because I think the points you make are correct points. I don't disagree. I'm afraid because it is -- TWIA has become a political body, if you will, being able to ever get it to a point where it's actuarially sound may be impossible. But in fairness to my colleagues, including my coastal colleagues, I want to make sure that No. 1, they see the world that way and if they don't I want to better understand and respect their viewpoints, an interim process, an interim study will allow us to do that. But one thing for sure whether it's your version or whether it's the version we're voting on today or another reform measure at later date, something substantial has to happen. And the one area that as one of my colleagues pointed out earlier that we're not addressing in this bill is the financial side of things, and yet that's a glaring admission. And so my commitment to you is yes, I will work on this issue during the interim, I will ask you to join us in the interim as we look at it because the history on this issue and we'll report back to you presumably sometime before next legislative session.

SENATOR TROY FRASER: And I think my request to you is a little bit different than that, I appreciate the fact that we've got to look at it over the interim but we have a bill before us that -- you know, I think my theory is the snake is there and we have the axe in our hand, maybe it's time to kill the snake. That we have the opportunity with the legislation that we're considering is that we could put a cessation plan in place that we still could do the corrections you're talking about but move forward over the next two, four six years to slowly remove the state's obligation from TWIA by doing away with it.

SENATOR JOHN CARONA: Senator, this time of the day I have a hard time hearing that west Texas drawl, but I appreciate your comments.

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

SENATOR STEVE OGDEN: Ask the author a question about the bill.

LT. GOVERNOR DAVID DEWHURST: Will Senator yield?

SENATOR JOHN CARONA: Certainly.

SENATOR STEVE OGDEN: : Senator, I am trying to understand your bill and will you briefly explain to me this class one, class two, class three secured regiment and what that means.

SENATOR JOHN CARONA: Yeah, it does. There are -- I'm sure, Senator, I have all of those notes on the floor with me. But the short answer is we in previous legislative sessions we've broken out how we're going to sell those bonds and who will pay for the bonds. Class one bonds being paid for by policy holders, class two bonds being paid for I believe it's a 70/30 split between all policy holders in the state, not just coastal, our insureds but all policy holders and industry players. And I believe the third here is actually one that's paid for at least in part the insurance industry but that's why when the -- the history on this, when this was first proposed, and I'm not sure if that was the proposal of two years ago that Senator Fraser was talking about or whether it was in the appraisal, but it was to make sure that the coastal members, while they would bear the first level of responsibility, did not end up having to foot the entire bill in the event of catastrophic losses. It's the age old battle between is this a coastal problem or is this a statewide problem, no difference than hail or wind or whatever the other risks might be in other parts of the state. Obviously if you're a coastal legislator, I think it's fair to say that your position is, look, we shouldn't be treated any differently because we're by the coast, what about you folks in north Texas with the hail storms or -- national occurrences in other parts of the state, the tornadoes and so forth. So that's why it was designed to take the total potential loss and slice it up into pieces so that everybody potentially, depending upon the severity of the loss, and share in that. And the problem with doing that is we worked with the various state agencies including the comptroller's office on this. The problem is the way the bill had been written previously, and no one believes it was intentional it was just the way it was written or interpreted by the investment banking firms is that you have to sell out all of your first tier in the event of a loss. Plus I might add we didn't have the ability to issue any preevent bonds, all of these are post event bonds, but you'd have to sell out all of your first tiers, your first class before you could go into the other. And as you know, the bond market, experts in the bond market made clear, you can't guarantee that type one bond will be successful in the market but yet you need to raise money. So at some point you say, okay, we have done all we could do there, we need to collapse that and we need to start raising out of this second bucket, if you will. And then third depending upon whether you're successful there in selling all of it or you're frozen out in selling all of it and you need to go -- but at the end of the day you need to go collect that sum of money and the likelihood that you're having to go to the bond market means that you've got something greater than two or $300 million of losses and you've got something that probably approaches a billion dollars or more.

SENATOR STEVE OGDEN: And the idea is if we sell an adequate amount of class one, class two, class three and I suppose the way those bonds are paid for is with some sort of premium surcharge on everybody's -- how do you pay for those bonds?

SENATOR JOHN CARONA: Well, the bonds are paid for by the purchasers obviously, and I'm sorry, they're not paid for -- let me go back again. Those bonds are paid for ultimately through I think based on current law -- okay, yeah, that's right. It's the same thing I said earlier. Class one will be paid for by the coastal residents, they get an assessment on their insurance, class two will be paid for all insurance in the state and insurance companies and then class three is by the insurance companies itself.

SENATOR STEVE OGDEN: And the idea is that with this regimen here that you wouldn't have some sort of tax payer bailout.

SENATOR JOHN CARONA: That's right. You hope you wouldn't, there's a lot of theoretical conditions, Senator, that you know well, that wouldn't be good for the state. Particularly being forced to become a short term financier for all of that.

SENATOR STEVE OGDEN: The other thing I wanted to understand is the concept under this dispute or claimant resolution and I don't understand this, six or more claimants file a civil action against the association as a result of a weather related event.

SENATOR JOHN CARONA: Well, what we're trying to do is make sure the courts are well prepared, well educated and prepare on these issues. I think everybody wants that or at least everybody claims to want that. But if you have got a single individual who's got a claim that has to be disputed, the notion that you have to go to San Antonio and appear before the MDL panel to get an appointment of a judge to come back and take care of that case is very cumbersome. So again the whole idea of the MDL panel is to make sure we got judges that are as fair and impartial as possible and I don't mean that in any way, disrespect to judges that serve in any part of the state. But that's been the process and voice of concern by insurance groups. So were unless you got a six or more, the decision that is made would mean that maybe you got a large class of cases being brought by one law firm or a select limited number of law firms. If you really just have the one and the two at a time, then the notion of having to go through the extra effort to get the MDL assignment or appointment of a judge is just unnecessary. Again, you wouldn't even use the MDL process but for the effort to make sure that you have these fair and impartial judges on these concentrations of claims.

SENATOR STEVE OGDEN: MDL stands for what.

SENATOR JOHN CARONA: Multi-district litigation. You know, we did this when we dealt with the asbestos issue.

SENATOR STEVE OGDEN: But here's the angle I am looking at it, not so much the idea of improving the quality of jurisprudence and making sure that you know you have your day in court and you got somebody that knows what they're doing and that kind of thing. It looks to me that this process is just a way to basically say that we're always going to have big class action lawsuits because it only takes six or more members, at least it appears to me, to certify a class well, he can, that's pretty easy, just go out there and start signing people up and what I'm worried about is, is this a way to make sure that TWIA is always in being giant class action cases in the future.

SENATOR JOHN CARONA: No, no, just the opposite. It really doesn't impact the class action issue per se, it impacts the bundling as it's sometimes referred to, of cases by a single or group of law firms. It's just to make sure, as I can best describe it to you, that a law firm that specializes in these kind of cases, don't want to mix words, concerns been brought to us that plaintiff's lawyers that have favorable relationships with the courts can bundle these case up, large quantities and go to an individual friendly judge. And so the MDL process is intended to guard against that to the extent there are abuses and I'm not saying there are or aren't, just -- the MDL panel would pick its own judge rather than someone attempting to shop or to steer cases to this particular court, the MDL panel would pick someone presumably impartial that all sides could agree is a good judge.

SENATOR STEVE OGDEN: Okay. So and that's why I ask you. So what you're telling me is that issue of whether TWIA claimants can get certified as a class.

SENATOR JOHN CARONA: That's a separate issue all together.

SENATOR STEVE OGDEN: Has nothing to do with this provision.

SENATOR JOHN CARONA: That's right, has nothing to do with it.

SENATOR STEVE OGDEN: And the last question, I couldn't tell by reading your bill, is the alternative dispute resolution mandatory or optional or sometimes is it optional or --

SENATOR JOHN CARONA: No, it's always -- it's mandatory if you have an issue of causation, not of the actual amount of damages but whether or not the association believes that even OSHA coverage at all. A causation sure or other coverage issue of that nature, then you -- going through the process you can either elect mediation or you can elect the mediated -- I forget exactly what term we use now but the mediated conference settlement. Neither one of which are binding. They're both -- it's required that you go through one or the other but it's not binding that you reach a conclusion, so they're not mandatory. And just as you go through the typical lawsuit, today most courts order the parties to mediation, it's not binding, but they do order you to go to settle, and frankly it's a pretty successful means to settle the cases, this is the very same thing. Those two processes, though they differ slightly, neither has a requires an agreement or mandated outcome. After you have gone through that process, then you're free to file your suit, but there's a 60 day cooling off period in which you go through the mediation in which you hope of avoiding the actual court.

SENATOR STEVE OGDEN: Actual causation, how about for monetary loss?

SENATOR JOHN CARONA: Pardon?

SENATOR STEVE OGDEN: That's for causation, right?

SENATOR JOHN CARONA: Well, causation -- what in fact though that would include, that's causation and whatever your damages would be, so it would be all rolled into one.

SENATOR STEVE OGDEN: Whether it's causation or monetary damages, you have to go to nonbinding alternative resolution and then if you don't like the outcome, you still can go to court.

SENATOR JOHN CARONA: You can still go to court without any prejudice of the evidence, you got a free novo trial that you can participate in.

SENATOR STEVE OGDEN: What other types of casualty insurance. Is that standard or -- is this the way it is for other type of casualty insurance?

SENATOR JOHN CARONA: Yes, except for types of law relative to the settlement process but yeah, any type of insurance for your home or otherwise, considering you're not part of the (inaudible) program, if you're not free with the insurance companies, you're free to file lawsuit at any time along the way. You could file a lawsuit, you know, literally the first thing we could do is file a lawsuit before you file the claim, but frankly speaking, you're going to file a claim, you're going to file a lawsuit, it could be a month later, it could be two years later under present law. This just sets forth a process that you have to go through ultimately before you file that case in the hopes that you exercise your best ability to settle a case.

SENATOR STEVE OGDEN: And how do you get double damages, how do you win double damages?

SENATOR JOHN CARONA: They're -- let me see if I can find that provision for you, Senator. You have to show intentional conduct, it's under 541, I believe, if you're showing intentional conduct and with clear and convincing evidence, Senator.

SENATOR STEVE OGDEN: And what's the current law? Triple?

SENATOR JOHN CARONA: Yeah, Senator, current law is triple damages at a standard, not as high as that. So.

SENATOR STEVE OGDEN: Okay, thank you.

SENATOR JOHN CARONA: You're welcome.

LT. GOVERNOR DAVID DEWHURST: Senator Whitmire, did you wish to speak or did you just want to walk around the floor and talk? Would you like to come up here on the podium and keep me company? No, I always enjoy your company, I really do. That's fine, as long as I can make one too. All right. Members, Senator -- all kidding aside, senator Carona moves the passage to third reading of committee substitute to House Bill 3. Is there objection from any member? Chair hears no objection from any member and committee substitute to House Bill 3 passes to third reading. The Chair recognizes Senator Carona for a motion to suspend the constitutional rule that bills be read on three several days.

SENATOR JOHN CARONA: So moved, Mr. President.

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

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

LT. GOVERNOR DAVID DEWHURST: There being ayes, no nays, the rule is suspended. The Chair lays out on third reading and final passage committee substitute to House Bill 3. The secretary will read the caption.

PATSY SPAW: Committee substitute to House Bill 3 relating to operation -- relating to the operation of the Texas Wind Storm Insurance Association.

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

SENATOR EDDIE LUCIO: To speak on the bill before final passage, Mr. President.

LT. GOVERNOR DAVID DEWHURST: You're recognized.

SENATOR EDDIE LUCIO: Thank you, Mr. President. Members, I have the distinct honor, pleasure of representing Texas where the coast and the border meet at that point. Perhaps that gives me a more immediate understanding of how and why coastal security is also Homeland Security. Homeland Security is ultimately about securing our way of life through safeguarding our critical infrastructure, the coast is the primary economic engine of Texas. It is home to much of our critical infrastructure in our great state. If you are a Texan living away from the coast, you can thank the coast for making your way of life really possible. Texas handles the second most amount of foreign and domestic cargo in the United States generating nearly 1 million jobs to Texans and other $48 billion in personal income for Texans. Annually, ports bring in almost $5 billion in local and state tax revenue. Most of our imports pass through the coastal ports and much of our exports pass out of them. So when you stand up for the coast, members, you stand up for Texas. When you stand up for the people who live and work on the coast, for those who have to deal with TWIA, you are standing up for those who make Texas possible day in and day out. In my opinion, the current version of this bill ultimately says to coastal policy holders, it doesn't matter that TWIA is increasing your rates so that they will be actuarially sound, it doesn't matter that this bill will increase the money coming out of the your pocket by requiring flood insurance, you still don't deserve the same level of protections and rights as a statewide policy holder. I don't support that message, and I don't think you do either which is why I voted against the bill in committee this morning. I am, however, going to support this bill, Senator Carona, on the Senate floor and I'm going to explain why. My floor vote represents in my opinion a strategic consideration. I believe that the Senate version of the bill better serves s coastal policy holders than the house version. There's no doubt about that by sending this legislation to conference with the full weight of the Senate behind it, it is my belief and hope that Senate conferees will fight for the Senate's version of the bill or better. This legislation was formed through months of negotiation, and the Senate needs to stand by its work product in conference. And I commend you, Senator Carona, you and your staff, our staffs who worked diligently beside you. I will say one final thing. When we went to conference during the regular session, not a single Senate conferee was from a coastal district of our state. I sincerely hope this time we'll be different. So I'm asking you at this point, Senator Carona, if you would consider recommending a couple of coastal senators to the conference committee, and the reason I say a couple is this, just like issues are different when you talk about the border of Texas compared to west Texas from north Texas, issues could be different and are different when you talk about issues dealing with the Texas coast and the southern part of it as compared to the north. So I'm asking you for your consideration to that. And by the way, before you answer that, I would be remiss if I didn't also say that the amendments that were presented earlier are good amendments and I hope that they're considered in the conference committee as well.

SENATOR JOHN CARONA: Senator, I will, in fact, make that recommendation to our -- to the executive branch and our leader. And I also want to commit to Senator Fraser that I will also work to make certain that his views and his amendment are clearly expressed in the workings of the conference committee. And in my final comment would simply be to all of you, I intend to give this my very best shot and bring you back the very best bill that reflects the Senate's interest and the interests of our residents along the Texas coast.

SENATOR EDDIE LUCIO: Thank you very much, Senator. Thank you Mr. President, thank you members.

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

SENATOR KIRK WATSON: Mr. President, I would move that the comments of Senator Lucio be reduced to writing and recorded in the journal.

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

SENATOR JOHN CARONA: Mr. President, I move final passage of committee substitute to House Bill 3.

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

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

LT. GOVERNOR DAVID DEWHURST: Members, there being 29 ayes and zero nays, committee substitute to House Bill 3 is finally passed. Good job, John. Members, the Chair lays out the following resolution. Secretary will read the resolution.

PATSY SPAW: Senate Resolution 36 urging the government of Turkey to uphold and safeguard and religion of human rights of all its citizens without compromise. By Whitmire.

LT. GOVERNOR DAVID DEWHURST: The Chair recognizes Senator Whitmire to explain the resolution and to make a motion.

SENATOR JOHN WHITMIRE: Senate Resolution 36, as was mentioned, urges the Turkish government to uphold the religious and human rights of all its citizens and respect the property rights of the church. This resolution is very important to the families of my district who feel strongly that the Turkish government should recognize the families' church and faith. Introduced in 35 state legislatures, Texas House of Representatives has passed it and the U.S. Senate is considering it. I move adoption at this time. Thank you.

LT. GOVERNOR DAVID DEWHURST: Members, you have heard the motion by Senator Whitmire. Senator Williams, for what purpose do you rise?

SENATOR TOMMY WILLIAMS: Just a question of --

LT. GOVERNOR DAVID DEWHURST: Will Senator Whitmire yield?

SENATOR JOHN WHITMIRE: Yes, sir.

SENATOR TOMMY WILLIAMS: Senator Whitmire, thank you for bringing this matter before us and I guess my question was did we have similar legislation during the -- or similar resolution during the regular session that you brought forward?

SENATOR JOHN WHITMIRE: I don't believe it made it to the floor, Senator Williams.

SENATOR TOMMY WILLIAMS: Okay. I want to thank you for persisting on this some. It's a very important matter. My hat's off to you.

SENATOR JOHN WHITMIRE: Thank you, partner. I mean, Senator.

LT. GOVERNOR DAVID DEWHURST: Members, the question is on the adoption of the resolution. The secretary will call the roll.

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

LT. GOVERNOR DAVID DEWHURST: There being ayes and no nays, the resolution is adopted. Members, the Chair lays out on second reading Senate Bill 22 by Senator Wentworth. The secretary will read the caption.

PATSY SPAW: Senate Bill 22 relating to the proportion of congressional districts and congressional functions and of the Texas congressional redistricting commission.

LT. GOVERNOR DAVID DEWHURST: The Chair recognizes Senator Wentworth to explain the bill and to make a motion.

SENATOR JEFF WENTWORTH: Thank you, Mr. President. Mr. President, Senate Bill 22 was passed out of the redistricting committee. This is the one that relates to the reapportionment of congressional districts and the creation, function and duties of the Texas Congressional Redistricting Commission. Senate Bill 22 would put congressional redistricting into the hands of an independent bipartisan Senate Redistricting Commission. Consisting of eight members and one nonvoting presiding officer. Eight members would be appointed by Republicans in the House and Senate and Democrats in the House and Senate, two each, for a total of eight. Those eight members would then appoint a ninth nonvoting member who would preside. A person is not eligible to be a member of the commission if they have or have been in the two years prior either an elected public official, a political party official other than a precinct committee member or a registered lobbyist. In addition, a member of the commission may not campaign for office or participate or contribute to a campaign for state or federal elective office. The commission would convene in February of each year ending in one and they have until August 31st of that year to adopt a plan. It will take a majority vote obviously to adopt a plan. If the commission doesn't adopt a plan by August 31st, current law would control jurisdiction challenges to an existing plan and draw a new plan would lie with federal courts. This creates an incentive for those eight members as a consensus to reach a decision and adopt a plan. If they do not, it will be taken out of their hands. Mr. President and members, as you well know, congressional redistricting, redistricting of any kind for that matter is a partisan contentious divisive process. Thirteen other states have already picked some alternative way to draw these lines and it works to their advantage because at the end of the drawing of those lines and half of them nobody files suit in federal court. The experience in this state is every time we draw a map, not only does somebody file a suit, several people file suits in federal and state court and it takes years to settle those dispute, costs hundreds of thousands of dollars. Mr. President, I move passage to engrossment of Senate Bill 22.

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

SENATOR CRAIG ESTES: To speak against the bill.

LT. GOVERNOR DAVID DEWHURST: You're recognized.

SENATOR CRAIG ESTES: Thank you, Mr. President and members. Members, today I rise to speak against Senate Bill 22. My reason has nothing to do with partisanship. It has nothing to do with which party controls the majority of the legislature. I rise against this bill for one simple reason, I oppose this bill for one simple reason. It is unconstitutional under the Texas constitution. Members, the United States supreme court held in 1932 that congressional redistricting which is delegated to the states under article one section two of the United States Constitution is to be carried out under the general law making authority of each state. That case was Semle vs. Holmes. Section 30 article three of the Texas constitution clearly states that no law shall be passed except by bill. So while the Texas constitution did not specifically describe how redistricting should be done, the combination of the supreme court's holding in Semle vs. Holmes, in section three -- I mean, article three section 30 makes it clear that congressional redistricting must be accomplished by a bill. This reasoning is supported by our precedent. The legislature has consistently used bills to redistrict state Senate, state House, congressional, and state board of education seats. Some of you might be wondering what about the legislative redistricting board. Now, is it able to redistrict state House and state Senate seats without passing a bill? The answer is that the Texas constitution specifically authorizes the LRB to do so. The constitution gives the LRB limited law making authority to pass redistricting maps for state House and state Senate when the legislature fails to do so during the regular session. The constitution contains no such authorization for anyone other than the legislature to redistrict congressional seats. Therefore under article three of section 30, congressional redistricting must be done by a bill. Accordingly I believe that Senate Bill 22 creates an unconstitutional delegation of legislative authority in its current form. Without a constitutional amendment granting law making authority to the proposed Texas congressional redistricting commission, I do not believe it will withstand judicial scrunty. Members, I respectfully urge all of you to join me in voting against this bill. And Mr. President, I move to have my comments reduced to writing and placed in the journal.

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

SENATOR JEFF WENTWORTH: Mr. President, I move passage to engrossment of Senate Bill 22.

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

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

LT. GOVERNOR DAVID DEWHURST: Members, there being 17 ayes and 12 nays, Senate Bill 22 passes to engrossment.

SENATOR JEFF WENTWORTH: Thank you, Mr. President and members.

LT. GOVERNOR DAVID DEWHURST: Members, the president's desk is clear. Members, the president's desk is clear. Members, members, if I may get your attention just for a moment. Senator Watson actually reminded me just a moment on this whole issue and a number of you have asked about the schedule over the next several days, and if we're going to conclude all of our business before the special session ends at midnight next Wednesday night, we're going to need the time to allow our conferees to meet. Senator Carona, I would very much like if -- and I know you haven't had a chance to name your conferees or suggest them, but let's talk about that because I would very much like to get your conferees to start to meet with Representative Smithee on a possible conference committee report on House Bill and we can't appoint the conferees until the House does, which they'll do on Friday. It looks like most of our remaining conference committee reports will be ready for adoption on Monday, I hope. I am hoping that our -- that all the rest of the conference committee reports will be ready for adoption on Monday. So we'll have a very busy day on Monday and also the House may send us -- I talked to the speaker earlier and with the -- we're going to meet on Friday all day, Senator Eltife and Senator Whitmire to be with me here, but the House may send us bills for referral and we need all the help we can. So the house may send us their House Bill 41, the TSA bill, on Monday which we'd refer on Monday. Senator Ogden. Members, the following bills and resolutions on first reading in reference to committee. The secretary will read the bills and resolutions.

PATSY SPAW: House Bill 79 to jurisprudence, Senate Bill 43 buy Lucio relating to authorizing the Department of Public Safety of the state of Texas to operate one or more southbound checkpoints near the international border of this state for the purpose of preventing certain criminal offenses, to transportation and homeland security.

LT. GOVERNOR DAVID DEWHURST: Members, the Chair recognizes the Dean of the senate for a highly privileged motion to adjourn until 4:50.

SENATOR JOHN WHITMIRE: Could I yield and ask attention, Senator Wentworth would like to make some remarks concerning --

LT. GOVERNOR DAVID DEWHURST: Of course. The Chair recognizes Senator Wentworth.

SENATOR JEFF WENTWORTH: Mr. President and members, I want us to adjourn in memory of three -- three outstanding people from San Antonio. I'm very saddened to announce Charles Orsinger who was a leading citizen in San Antonio, ran Orsinger Buick for many decades in San Antonio, was one of the outstanding community leaders, chairman of the Greater San Antonio Chamber of commerce and many other things. He was one of the handful of businessmen who his entire life, if you called Charles Orsinger on the telephone, he never screened his phone calls. If you asked to talk to Charlie, his secretary would put you right through, his secretary never asked who you were, he passed away at age 80 -- I'm sorry, close to 90 actually. The person is Francis Herd Phillips who is one of the leading ladies of San Antonio. She was born in 1928. Died at the age of 82. The widow of former Brigadier General Billups, there are a handful of women in San Antonio who lead the community in terms of social good and she is clearly in that very small number. The third is particularly sad and tragic for me, Sam Dibbril, who was only 22 years of age who was the outstanding receiver on the state champion Alamo Heights champion football team on which team my son Matthew played, died in a daylight one car accident in Duval county where he'd been working on a summer job as a petroleum land man. He was only 22. So Mr. President, I move that we adjourn in -- well I'll leave that to the dean but Charles Orsinger, Francis Billups and Sam Dibbril. Thank you, Mr. President.

LT. GOVERNOR DAVID DEWHURST: The Chair recognizes the dean.

SENATOR JOHN WHITMIRE: Mr. President, I would move that the Senate adjourn until 4:53 and do so in memory of Bradley Samuel Dibbril, Francis Billups and Charles G. Orsinger.

LT. GOVERNOR DAVID DEWHURST: Thank you, dean. Members, you heard the motion. Is there objection from any member? The Chair hears none and the senate will stand adjourned until 4:53.

(Recess.)

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

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

LT. GOVERNOR DAVID DEWHURST: Members, a quorum is present. Would all those on the floor please rise and in the gallery please rise for the invocation this afternoon to be delivered by the Honorable Brian Birdwell.

SENATOR BRIAN BIRDWELL: Please pray with me. Father, we come before You humbly knowing that the fear of you is beginning knowledge as You tell us in Your word. We ask You to bless our states with wisdom and grace, courage to make tough decisions, we ask You to bless us with rain to heal our dry land and most of all we ask Your hand of security and safety of our military deployed and service to our state and service to our nation overseas. I pray these in Your name, amen.

LT. GOVERNOR DAVID DEWHURST: Amen. Thank you. Ladies and gentlemen, please be seated. Senator Birdwell, you got part of your prayer this morning, I got rained on, almost drowned in Houston, so keep praying, ladies and gentlemen. Members, the Chair will hear excuses for absent members. Senator Whitmire moves to excuse Senators Duncan and Uresti on matters of important business. Is there objection from any member? The Chair hears no objection, so ordered. Members, Senator Whitmire moves to dispense with the reading of yesterday's journal. Is there objection from any member? The Chair hears no objection from any member, so ordered. Members, if there's no objection I'd like to postpone the reading and referral of bills until the end of today's session. Is there objection from any member? The Chair hears no objection, so ordered. Members, that concludes the morning call. Chair lays out on third reading and final passage Senate Bill 22. The secretary will read the caption.

PATSY SPAW: Senate Bill 22 relating to the reapportionment of congressional districts.

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

SENATOR JEFF WENTWORTH: Thank you, Mr. President. I move final passage of Senate Bill 22.

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

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

LT. GOVERNOR DAVID DEWHURST: Members, there being 16 ayes and 13 nays, Senate Bill 22 is finally passed.

SENATOR JEFF WENTWORTH: Thank you, Mr. President and members.

LT. GOVERNOR DAVID DEWHURST: Thank you, Senator. Members, the president's desk is clear. Are there any announcements? Chair -- the Chair recognizes Senator Williams for a motion.

SENATOR TOMMY WILLIAMS: Thank you, Mr. President and members. I move to suspend Senate rule 11.10 and 11.18 so that the Senate me on transportation and homeland security can hear Senate Bill 43 by Senator Lucio who plans to vote the bill out at my desk. Members, this is the southbound checkpoints bill that came out of the Senate, I believe it was 31 to nothing out of the Senate. So --

LT. GOVERNOR DAVID DEWHURST: Thank you, Senator Williams. Members, Senator Williams moves to suspend the Senate rules 11.10 and 11.18 to take up and consider legislation at his desk by Senator Lucio. Is there objection from any member? The Chair hears no objection, so ordered. Are there any additional announcements? Hearing no announcements, the Chair recognizes the dean of the Senate for a highly privileged motion.

SENATOR JOHN WHITMIRE: Mr. President, I move that the Senate recess until 1:30 p.m. Friday June 24th pending the reading and referral of bills, the receipt of messages and the receipt of committee reports.

LT. GOVERNOR DAVID DEWHURST: Thank you, Senator Whitmire. Members, you heard the motion by Senator Whitmire. Is there objection from any member? The Chair hears no objection and the Senate will stand in recess until 1:30 Friday June 24th, pending the reading and referral of bills, the receipt of messages, and the receipt of committee reports.

(Adjourned.)