In the heart of Texas, specifically in the Permian Basin, the oil industry holds a significant position. A new and promising initiative has emerged, aiming to redirect a portion of severance tax revenue back to the energy-producing communities. Texas Representative Brooks Landgraf has introduced House Bill 188, known as the Texas Severance Tax Revenue and Oil and Natural Gas Defense Fund, or Texas STRONG. This bill is set to be considered in the next Legislative session.

Empowering Energy Communities with Severance Tax Redirection

Overview of the Oil Industry in the Permian Basin

It is no secret that oil plays a crucial role in the Permian Basin. This vast region has witnessed remarkable growth and development in the oil sector over the years. The industry's activities have a profound impact on the local economy and communities.Oil production in the Permian Basin has led to significant economic benefits. It has created numerous job opportunities, attracting workers from different parts of the state and even beyond. The boom in the oil industry has brought prosperity to the area, but it also comes with its own set of challenges.

Introducing the Texas STRONG Initiative

The Texas STRONG initiative is designed to address the critical needs of energy-producing places by changing the distribution of severance tax revenues. Since 2014, a substantial amount of severance taxes, approximately $40 billion dollars, has originated from 32 Texas counties mainly located in the Permian Basin.During boom times, the oil industry is a great place to work. However, it can also present challenges such as overcrowded schools, underpaid teachers, a lack of law enforcement, and torn-up roads. The Texas STRONG proposal aims to even out these disparities by redirecting funds.Currently, severance taxes are used to fund various essential services like Texas public education, highways, and a Rainy Day Fund. But Texas STRONG proposes to divert some of the funds that would otherwise go to the Rainy Day Fund and reinvest them back into the oil patch. This would provide long-term investments in infrastructure, public services, and environmental cleanup efforts.Landgraf emphasizes that it would be no more than 9% of all severance taxes that would be redirected. This targeted approach ensures that the essential services are still funded while addressing the specific needs of the energy-producing communities.

Benefits and Impact of the Texas STRONG Initiative

One of the key benefits of the Texas STRONG Initiative is the support it provides for long-term investments. By redirecting funds, energy-producing communities can improve their infrastructure, making them more sustainable and attractive for both residents and businesses.In terms of public services, the initiative aims to address the issue of underpaid teachers. With additional funds, teachers can receive better compensation, allowing them to afford to live in the Permian Basin. This, in turn, can lead to improved education quality and a more skilled workforce.For law enforcement officers and healthcare workers, the initiative offers much-needed support. Adequate funding can help recruit and retain these essential professionals, ensuring the safety and well-being of the community.Environmental cleanup efforts also receive a boost through the Texas STRONG Initiative. With redirected funds, communities can take proactive measures to address environmental issues and ensure a sustainable future.The Texas 89th Legislative Session is set to start on January 14, 2025. The bill has received overwhelming bipartisan support in the previous Legislative Session, passing the Texas house with a decisive 144 to 1 vote. If passed by the Texas Senate, it is expected to be implemented by Fall of 2025.This initiative holds great promise for the future of the Permian Basin and the energy-producing communities. It represents a collaborative effort to address the challenges and capitalize on the opportunities presented by the oil industry.