Texas House Bill HB3717

Texas 2019 - 86th Regular

Caption

Relating to an oil and gas production tax credit for oil and gas producers that provide treated produced water to aquifer storage and recovery project operators.

Impact

The bill modifies the Tax Code to introduce Chapter 208, which outlines the specific conditions under which oil and gas producers can qualify for this tax credit. Producers must supply treated produced water with certain specifications to a registered project operator. This creates a framework that not only supports the reuse of produced water but also establishes regulatory oversight by the Texas Commission on Environmental Quality, ensuring that the treatment processes do not degrade native groundwater quality.

Summary

House Bill 3717 establishes a tax credit in relation to the provision of treated produced water from oil and gas production to operators involved in aquifer storage and recovery projects. This initiative is intended to incentivize oil and gas producers to treat and provide produced water that is otherwise a waste product from drilling activities. By facilitating the reuse of this water for aquifer storage, the bill seeks to promote water conservation and support environmental sustainability efforts, particularly in areas experiencing water scarcity.

Contention

Potential points of contention surrounding HB3717 include concerns over environmental impacts and regulatory burdens on producers. Critics may argue that while the tax credit promotes water reuse, it does not sufficiently address the environmental risks associated with water treatment processes and aquifer injections. Opponents could voice skepticism regarding the adequacy of oversight by the Texas Commission on Environmental Quality to prevent any negative consequences on local groundwater supplies. Additionally, some stakeholders might question the financial implications of the tax credit on state revenue, especially given the cap of $25 million on credits annually.