Pickett: House, Senate Negotiators Agree on Road Funding Deal

Updated, July 27:

Lead negotiators from the House and Senate came to an agreement on a transportation funding deal Saturday afternoon, according to state Rep. Joe Pickett, D-El Paso.

If two-thirds of the membership of both chambers support the proposal this week, lawmakers will likely be able to sidestep Gov. Rick Perry's threat of a third special session. The plan would ask voters in 2014 to approve a constitutional amendment that would divert half of the oil and gas production tax revenue currently earmarked for the Rainy Day Fund into the state highway fund.

Negotiations hinged on whether the plan should include a so-called floor on the Rainy Day Fund.

Some Republicans have called for including language in the state Constitution that sets a minimum balance for the fund, whereby no oil and gas production taxes earmarked for the fund could go to road construction if the Rainy Day Fund's balance fell below that level. Many Democrats, and some Republicans, have expressed opposition to this concept, worried that it will make it more difficult to tap the Rainy Day Fund in the future to address the state's needs.

Under the deal approved by leaders from both chambers Saturday, the Legislative Budget Board would be required to periodically set that minimum balance for the Rainy Day Fund, Pickett said. That's a change from a House proposal put forth Friday, in which the LBB would have had the option to set a Rainy Day Fund minimum balance, according to people involved in the negotiations. 

Pickett said both critics and supporters of the "floor concept" will have issues with the deal. Some Republicans will be unhappy that a minimum balance for the fund isn't being placed in the Constitutuion, he said. Some Democrats will be concerned that the LBB, where Republicans currently hold a majority of the seats, will be deciding the fund's "floor."

"There are people that are against this because it doesn’t have a floor and people against this because it does have a floor, so you figure that out," Pickett said. "My big problem was putting a number in the Constitution."

The deal also includes launching a study of how the state currently funds transportation, including TxDOT's budgeting practices, Pickett said. 

Updated, 9:45 p.m.:

Negotiators from the House and Senate ended the evening without a deal on a transportation funding bill in place but with plans to keep working on it over the weekend. Both chambers are scheduled to convene Monday at 2 p.m.

The details of a so-called "floor" on the Rainy Day Fund continue to be the main sticking point, according to people involved in the negotiations.

"We have a deal in principle, now we just have to reduce it to writing," said Sen. Kevin Eltife, R-Tyler.

Original story:

Leaders from the Texas Senate confirmed Friday that they had come to an agreement with key members of the House on the broad strokes of a transportation funding plan, though whether the plan can draw the requisite support from both chambers before the end of the current special session remained unclear.

“Good job conference committee and good job Texas senators,” Lt. Gov. David Dewhurst said as the Senate briefly convened Friday afternoon. He said that senators were going to meet again with negotiators from the House on Friday evening to finalize the details of a plan expected to boost transportation funding by more than $800 million a year. 

For more than a week, the two chambers have been promoting dueling proposals on how to take advantage of the current oil drilling boom to boost funding for the cash-strapped Texas Department of Transportation without raising taxes or fees. Gov. Rick Perry has threatened to call lawmakers back for a third special session if they are unable to come to an agreement.

After several days of talks appearing stalled, members of the House leadership made a new offer to senators on Friday, according to those involved with the negotiations.

“We’ve got a signed conference committee report,” Dewhurst told reporters hours later, referring to House Joint Resolution 2, one of two pieces of legislation lawmakers are hoping to pass before the special session must end on Tuesday. The other measure, House Bill 16, remains the subject of negotiations on some details, Dewhurst said.

The deal in place would largely mirror the simpler Senate plan, asking voters to approve a constitutional amendment that would divert half of the future oil and gas production taxes currently earmarked for the Rainy Day Fund into the state's highway fund, according to Senate Transportation Chairman Robert Nichols, R-Jacksonville.

Senators involved in the negotiations said the deal in the works also includes pushing back the constitutional amendment election on transportation by a year so that it doesn’t appear on the same ballot as a constitutional amendment for issuing $2 billion in bonds for water projects already set for the November 2013 ballot. Various lawmakers had expressed concern about having both amendments on the same ballot, worried that a campaign to defeat one could ultimately doom both.

“We recognized the concern that we heard expressed about that,” Nichols said.

A key sticking point between both chambers was whether the amendment needed language that would set a so-called floor on the Rainy Day Fund. The original Senate plan would have placed a provision in the state Constitution that would block the diversion whenever the fund's balance falls below $6 billion. House Democrats had opposed including that provision in the Constitution.

The proposal made by leaders in the House on Friday would give the 10-person Legislative Budget Board the option of setting a floor for the Rainy Day Fund, with the authority placed in state law rather than in the Constitution. Senate Finance Chairman Tommy Williams, R-The Woodlands, said details on that part of the deal were still being worked out. 

The LBB is chaired by the lieutenant governor, with the House speaker serving as vice chair. Four senators and four House members fill out the rest of the board.

House Democrats have been wary of placing any kind of provisions that could be seen as placing limits on the Rainy Day Fund. State Rep. Trey Martinez Fischer, D-San Antonio, said House Democrats held a caucus meeting on Thursday and appeared largely united in opposition to a deal that includes the Republican-controlled LBB controlling the implementation of a Rainy Day Fund floor. 

Two-thirds of both chambers must vote for HJR 2 for the measure to be sent to voters. House Democrats could block it from passing if most of them are united against it.

“I guess we’ll have to extend our leases for another month,” Martinez Fischer said, referring to the prospects of a third special session.