Energy Impact Funding For The Permian Basin
This year’s legislative session saw the appropriation of $450 million to improve transportation infrastructure in energy impacted areas. $225 million was available to TXDOT for on-system state roadways, while the remaining $225 million is being administered by the department as grants for county roads.
At their July meeting, the Texas Transportation Commission awarded funding for on-system projects, including $58 million for projects here in the Permian Basin. Midland County Commissioner and MOTRAN board member Robin Donnelly noted that the funding was a notable improvement over the previous round of energy impacted funding, in which the Permian Basin received zero dollars, but added, “We still have a long way to go.”
73% of funding was directed toward the Eagle Ford Shale with only around 23% going to the Permian Basin. Local projects included $14.4 million for the rehab of 4 miles of SH 158 east of I-20, $17.1 million for rehab of SH 349 south of I-20, and $5.8 million for rehab of FM 307 from SR 1150 to FM 1379.
“Much of the success was attributed to cooperative efforts by elected officials like County Judge Mike Bradford and Commissioner Donnelly,” stated MOTRAN President James Beauchamp. “Our elected officials have worked hard to make sure that state and TXDOT officials are aware of our situation and that doing nothing is not an acceptable solution."
County Judge Mike Bradford added, “What made the testimony very effective is that James Beauchamp and MOTRAN compiled all the data. So when we got to testify, their hard work was something you couldn’t argue.”
MOTRAN Chairman J.D. Faircloth added, “The Permian Basin has and continues to make a significant contribution to this state. We are committed to working with state, regional, and local officials to finding the funding streams necessary to ensure that those of us in these energy producing areas can meet our needs, both for today and the future.”
Comparison of Texas Energy Plays
TXDOT Distribution of Energy Impact Funding
April 2012 - $40 million
July 2013 - $249 million
Additional Funding On The Horizon
While the overall budget included approximately $1.2 billion in additional funds over the previous biennial level, all of the difference came from federal highway funding resulting from MAP-21 (Federal Highway Reauthorization).
On the state level, TXDOT was appropriated an additional $450 million for use in energy impacted areas, however, $225 million or half of that amount was set aside for grants to counties for local roads. The legislation that made those funds available requires the creation of TRZ or Transportation Reinvestment Zones in which counties would designate parts or an entire county and capping current ad valorem revenues in the designated area, so that any additional or increased revenue generated from the affected properties would go into a fund for road projects. After approval of recommended projects by the Transportation Commission portions of that $225 million could be leveraged with local funds for approved projects.
Governor Perry added transportation funding to the call for both special sessions, with a constitutional amendment slated to allow a one-time diversion of dollars from the rainy day fund for transportation funding. The measure will appear on the November 2014 ballot.