Rep. Tom Craddick (R-Midland) has refiled his legislation, dubbed the Generate Recurring Oil Wealth (GROW) Texas Fund. The two-part proposal works by creating an account where surplus revenue generated from the oil and gas industry would be deposited and then dispersed back to counties where the tax money is generated, largely in the Permian Basin, to help pay for increased costs and meet growing infrastructure and public service needs due to the energy boom.
This is the third attempt at getting the legislation across the finish line for Craddick, who has managed to pass previous versions twice through the House but not the Senate. He believes his legislation is now primed to become law this time, showing how the bill is supported by the state’s top oil and gas companies and energy industry associations.
Craddick’s neighboring lawmaker Rep. Brooks Landgraf (R-Odessa) has actively supported the GROW Texas legislation, emphasizing the importance for members of the West Texas delegation to work together on securing more funding. He has praised Craddick’s legislation and agrees that it stands a strong chance at passage.
“I’ll be fighting alongside my fellow West Texas legislators to make sure we get our fair share of that money for the people of West Texas and that we give as much of it back to the taxpayers as possible,” Landgraf told local media late last year, adding, “In addition to having support in the House, there is more support now for GROW Texas in the Senate.”
Landgraf reaffirmed his support for Craddick’s legislation during a panel discussion with Craddick and State Sen. Kevin Sparks (R-Midland) for the Midland/Odessa Legislative Days Conference on February 7, saying, “I want to echo 100 percent about what Speaker Craddick said about the GROW Texas Fund that it could be transformative for our region, and it actually allows us to generate more of that oil and gas severance tax so it is a win for everybody.”
Fast forward six days and Landgraf announced the filing of his own version of Craddick’s GROW legislation, the Texas Severance Tax Revenue and Oil and Natural Gas (STRONG) Defense Fund.
The STRONG Defense Fund legislation functions identically to Craddick’s proposal and only differs in the ways the law provides for the funds to be spent, in addition to allocating funds to other existing accounts.
In a statement to The Texan, Landgraf’s office acknowledged his previous support for the GROW Texas legislation, adding that he filed the STRONG Defense Fund legislation “to address a wide range of challenges faced in energy-producing regions of the state.”
His office also said that he will vote for the GROW Texas fund when it is up for a vote this session and that the “successful passage of either proposal would be positive to the state.”
Comparing The Legislation
The GROW Texas legislation is two parts.
House Joint Resolution (HJR) 27 proposes a constitutional amendment creating the GROW account that is funded by severance taxes, grants, gifts, and other appropriations of the legislature. The money can only be spent in significant oil and gas-generating counties on infrastructure needs, and will be administered by a seven-member commission with two being appointed by the speaker of the House, two appointed by the lieutenant governor, and three appointed by the governor.
The enabling legislation, House Bill (HB) 1392, then allows the GROW Texas commission to allocate the money via grants to “construct or maintain roads, schools, health care facilities, and other infrastructure in the areas of this state the commission determines to be significantly affected by oil and gas production.”
Law enforcement agencies, education needs, and broadband internet infrastructure are a few of the examples Craddick has given that would qualify as appropriations under the fund.
The Texas STRONG Defense Fund also has two parts: HJR 111 creates the STRONG account and is also funded by severance taxes, grants, gifts, and other appropriations; and uniquely, also provides for funds to be deposited into the Texas Emissions Reductions Fund Plan (TERP), the Oil and Gas Regulation Cleanup Fund (OGCF), and the Property Tax Relief Fund (PTRF).
The STRONG funds must also be spent in areas of the state significantly affected by oil and gas production, but can be spent on a broader variety of issues, including “state agencies, political subdivisions of the state, public institutions of higher education, and nonprofit organizations to address public health and safety concerns and supplement educational opportunities and workforce preparedness needs.”
According to the enabling legislation, HB 2207, STRONG Defense funds would be given to the governor as well as state agencies including the Department of Public Safety (DPS) and the Department of Transportation (TXDOT) to then disperse the funds via grants back to qualifying applicants.
TERP is an existing grant program administered by the Texas Commission on Environmental Quality (TCEQ), which has granted over $1 billion in public funds to businesses and individuals in the construction, agriculture, and trucking industries to subsidize the cost of purchasing new electric and natural gas fleet vehicles and heavy equipment, thereby replacing existing gasoline and diesel vehicles.
The OGCF was established under the Texas Railroad Commission (RRC) in 2011 to pay for “plugging abandoned oil and gas wells and clean-up abandoned oilfield sites.”
Lastly, the PTRF funds the legislative compression of local school property taxes.
Background On Past Attempts
In 2019, Craddick successfully passed the constitutional amendment HJR 82, out of the House of Representatives, while the enabling legislation carried by Landgraf, HB 2154, was altered multiple times by Landgraf.
The alterations prompted Craddick to call several points of order on Landgraf’s changes, killing the bill, with the speaker ruling Langraf’s changes violated the Texas Constitution’s requirements that legislation must pertain to a single subject and any amendments must be germane to the bill.
In the subsequent legislative session in 2021, Craddick passed the constitutional amendment out of the House for a second time, which was supported by Landgraf, but it failed to pass in the Senate.
88th Session Opportunity
Craddick revealed a laundry list of heavyweight energy industry organizations endorsing his legislation this session, with oil companies like Chevron, ConocoPhillips, DiamondBack Energy, Halliburton, and Exxon Mobil among those cited in a press release.
Some of the top transportation infrastructure and energy industry organizations in West Texas and statewide have also thrown their support behind the bill, including the Midland/Odessa Transportation Alliance (MOTRAN) and the Texas Oil and Gas Association.
While Craddick appears to have the momentum for a third opportunity to pass his GROW Texas proposal in the House, it remains to be seen how the Legislature will receive Landgraf’s alternative proposal.
From a historical perspective, the ultimate sticking point for either proposal will be getting a bill passed in the upper chamber. Previously, former Senator Kel Seliger, who represented Midland and Odessa, had a rocky relationship with Lt. Gov. Dan Patrick, whose support is instrumental in getting legislation through the Senate.
With the election of Patrick’s ally Sen. Kevin Sparks (R-Midland), the dynamic may change for West Texas-focused initiatives.
Senior Reporter Hayden Sparks contributed to this story.
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Matt Stringer is a reporter for The Texan who writes about all things government, politics, and public policy. He graduated from Odessa College with an Associate Degree in Paralegal Studies and a Bachelor’s Degree in Management and Leadership. In his free time, you will find him in the great outdoors, usually in the Davis Mountains and Big Bend region of Southwest Texas.