HB 265 – Grant Program from ESF

HB 265 is the enabling legislation for HJR 35. It proposes redirecting severance tax revenue away from the state’s Rainy Day Fund and into a new Grow Texas Fund for infrastructure, education and health spending in oil- and gas-producing regions, by providing grants to state agencies and local governments, up to $250 million per biennium. While proponents frame this as a reinvestment in energy-producing areas, the plan reduces the amount of money going into the ESF—Texas’s key financial safety net. From a fiscally conservative standpoint, this weakens long-term financial stability by carving out a new, politically directed spending mechanism with ongoing revenue redirection. It also sets up a new commission, introducing more bureaucracy and potential for regional favoritism. The resolution places no meaningful limits on the types of infrastructure that could be funded, leaving room for mission creep. At its core, this resolution grows government by establishing a new fund and advisory body rather than prioritizing taxpayer relief or fiscal restraint