Transportation Infrastructure Fund Grant Program

July 26, 2019

Legislative News

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The 86th Legislature allocated $250 million to provide grants to counties for transportation infrastructure projects in areas affected by oil and gas development and production.

The 83rd Legislature was the first to appropriate funds ($225 million) for transportation infrastructure grants to counties, when the Transportation Infrastructure Fund (TIF) grant program was established by Senate Bill 1747 in 2013. SB 1747 authorized the Texas Department of Transportation (TxDOT) to distribute grant funds to eligible counties based on the following allocation formula:

  • 20% according to weight tolerance permits;
  • 20% according to oil and gas production taxes;
  • 50% according to well completions; and
  • 10% according to the volume of oil and gas waste injected.

SB 1747 also required counties to provide matching funds, 10% for economically disadvantaged counties, and 20% for all other counties, and to establish a County Energy Transportation Reinvestment Zone (CETRZ).  Altogether 191 counties filed grant applications for projects which totaled more than $1.5 billion. TxDOT only awarded $224.5 million in grant funds to these counties, or approximately 15% of county-identified needs. A complete list of grant awards and matching amounts by county can be found here.

House Bill 4280, 86th Legislature, 2019, changes the TIF Grant Program by modifying the allocation formula, requiring counties to receive competitive bids for grant-funded construction or maintenance projects, and to expend grant funds within five years of the date the grant is awarded. The new allocation formula requires that funds be distributed as follows:

  • 10% according to weight tolerance permits;
  • 20% according to oil and gas production taxes;
  • 45% according to horizontal well completions;
  • 10% according to the volume of oil and gas waste injected; and
  • 15% according to vertical well completions.

Of the $250 million allocated for TIF grants by the 86th Legislature, $125 million is provided by SB 500, the supplemental appropriations bill for the 2018-19 two-year budget, and the remainder of funds by a rider1 in House Bill 1, the General Appropriations Act for the 2020-21 biennium, which directs TxDOT to allocate $125 million from any available revenue sources for TIF grants.

Garnett Coleman, Chair of the House Committee on County Affairs, recently asked for an Attorney General opinion regarding the allocation formula to be applied to the TIF funds appropriated by SB 500.  HB 4280, which provides for a new allocation formula, takes effect on Sept. 1, 2019 – unlike SB 500 which took effect on June 6, 2019.  Chairman Coleman questions which allocation formula should be applied to the TIF grant funds appropriated by SB 500 – the formula in statute when SB 500 took effect or the formula from HB 4280 that takes effect Sept. 1, 2019.

Meanwhile, TxDOT continues to prepare an implementation timeline for the new TIF grant program, with proposed rules and regulations expected to be available by fall 2019. It’s anticipated that all Texas counties would again be eligible to submit an application for funding due to the volume of weight tolerance permits issued for all 254 counties.

1 See Rider 47, page VII-31, HB 1.