County commissioners moved forward with a grant process that could capture hundreds of thousands of dollars to recoup road damages from oil and gas related activity.
In late December, commissioners approved action to seek at least $430,000 in state grant funding available to address road degradation caused by oil and gas activity.
During the most recent legislative session, legislators approved $450 million for the Texas Department of Transportation and counties to pay for road projects to address roadway damages caused by oil and gas equipment. Half the funding goes directly to TxDOT, while $225 million is being available to counties who apply. All 254 counties are eligible for funding. Smith County is eligible for money if it completes the application process before Feb. 7.
The county also would be required to match 20 percent of the grant amount. Grant money would be eligible for use outside the zone. The county would have to create a 10-year County Energy Reinvestment Zone to qualify for the money. The zone would collect tax revenues on a tax increment basis, which would go toward transportation projects in the county.
The county held a public meeting on Dec. 30 about the creation of the investment zone, and there is time remaining in the 30-day public comment period. The court also appointed an investment zone advisory board Tuesday made up of three oil-and-gas representatives and two county residents.
Road and Bridge Administrator Doug Nicholson said the county is on schedule to be eligible for the money. He said a consulting firm specializing in state grants was hired to steer the county through the process.
The county reduced the scope of its reinvestment zone Tuesday and would focus the area around County Road 2142 (in the southeastern portion of the county), which has been hit hard from drilling activity since the mid-2000s, he said. The three-mile road serves more than 2,000 vehicles a day and connects two Farm-to-Market roads, Nicholson said.
Other East Texas counties are eligible as well:
Cherokee County is eligible for $370,000; Anderson County is eligible for $314,000; Gregg County is eligible for $1 million, Henderson County is eligible for $286,000; Rusk County is eligible for $1 million; Upshur County is eligible for $630,000; Van Zandt County is eligible for $279,000; and Wood County is eligible for $680,000.
Eligibility is based on a TxDOT formula including well completions (50 percent), overweight truck permits issued in the county by TxDOT, (which includes other activity, such as lumber, 20 percent), oil and gas severance taxes paid (20 percent) and salt water injection activity (10 percent).
Texas Association of Counties spokesman Lonnie Hunt said the law was vague about possible dissolution of the zones and it would “require further interpretation from the state.”
Nicholson said the association is reaching out to state officials for a deadline extension because many counties have expressed interest but were not capable of meeting the deadline.