AUSTIN — State Representative Brooks Landgraf (R-Odessa) filed House Joint Resolution 111 and House Bill 2207 to establish the Texas Severance Tax Revenue and Oil and Natural Gas (STRONG) Defense Fund to address critical needs in major energy producing areas of the Lone Star State, including the Permian Basin.
“Oilfield communities produce abundant energy, but they’re not always the best place to raise a family,” Landgraf said. “My Texas STRONG plan will keep more of the state taxes generated in the oilpatch invested in the schools, colleges, health care institutions and first responders that serve our underserved energy-producing communities.”
Here’s how it works: The state of Texas taxes the production of oil and natural gas. These “severance tax” collections hit record levels in 2022, totaling $10.8 billion. Most of these tax dollars end up in the state’s “rainy day fund,” but that fund is projected to reach its capacity in 2025. Rather than adding to the overflowing rainy day fund, Landgraf’s Texas STRONG Fund would simply collect the excess revenue and use it to fund basic functions that improve the quality of life for the workers (and their families) who generate the money in the first place.
Landgraf’s legislation also dedicates portions of the severance taxes collected by the state to be used for property tax relief across Texas and accounts used to clean up Texas air and groundwater contamination.
In 2022, 32 out of 254 Texas counties generated 90% of the state’s severance tax revenue, sending more than $9 billion to the state coffers. These same 32 counties – most of which are located in the Permian Basin – have accounted for 80% of collections since 2014 for a total of just under $40 billion.
“American energy independence is so close we can almost taste it,” Landgraf said. “In recent years we have taken two steps forward and one step back: forward as new technologies and best practices have allowed Texas oil and natural gas production to become cleaner and more efficient than ever before; back as virtue signaling from coastal elites has resulted in a loss of private and public investment in reliable forms of energy. As Texans, we are deeply aware of the importance of oil and gas, not only as it relates to jobs in the Permian Basin, Houston and everywhere in between, but also when it comes to balancing our state’s budget. The Texas STRONG Defense Fund will ensure that Texas lives according to the maxim of ‘Dance with the one who brung ya.’ A way for Texas and the United States to forever be a global force for good and the advancement of freedom.”
House Joint Resolution 111 and House Bill 2207 would amend the Texas Constitution and state law to create the Texas Severance Tax Revenue and Oil and Natural Gas (STRONG) Defense Fund. According to the provisions of the legislation, the Texas STRONG Defense Fund would receive a portion of severance tax revenue for the purpose of supporting transportation infrastructure, workforce and economic development, public education, healthcare, and public safety needs in regions of the state with the highest oil and gas production.
HJR 111 must receive support from two-thirds of the House and Senate to pass, along with a majority of Texas voters in the November 2023 Constitutional amendment election. HB 2207 requires a simple majority vote in each chamber and the governor’s signature in order to pass into law. If successful, the measure would result in hundreds of millions of dollars being available for energy-producing communities as early as next year.
Landgraf and the other members of the Texas legislature convened at the Texas Capitol building for the 88th Texas Legislative Session on January 10, 2023. Members of the Texas House and Texas Senate meet for a 140-day regular session beginning the second Tuesday in January every odd-numbered year to vote on legislation and pass a balanced state budget.