2021S0169-1 03/08/21
By: Raymond H.B. No. 4442
A BILL TO BE ENTITLED
AN ACT
relating to the regulation of oil and gas waste; creating a tax
exemption; imposing a fee.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 85.2021, Natural Resources Code, is
amended by adding Subsection (b-1) to read as follows:
(b-1) An applicant shall submit an additional nonrefundable
fee of $200 for any well utilizing a reserve pit for disposal of oil
field wastes on the well site.
SECTION 2. Section 91.110, Natural Resources Code, is
amended to read as follows:
Sec. 91.110. OIL AND GAS WASTE REDUCTION AND MINIMIZATION.
To encourage the reduction and minimization of oil and gas waste,
the commission shall implement a program to:
(1) provide operators with training and technical
assistance on oil and gas waste reduction and minimization;
(2) assist operators in developing oil and gas waste
reduction and minimization plans; and
(3) by rule establish and offer operators of oil and
gas wells incentives for oil and gas waste reduction and
minimization through the use of solids control equipment and
closed-loop drilling systems at the well site.
SECTION 3. Section 91.113(a), Natural Resources Code, is
amended to read as follows:
(a) For any [If] oil and gas wastes or other substances or
materials regulated by the commission under Section 91.101,
including those that are disposed of or stored on a well site using
a reserve pit, an aboveground tank, or other means, that are causing
or are likely to cause the pollution of surface or subsurface water,
the commission, through its employees or agents, may use money in
the oil and gas regulation and cleanup fund to conduct a site
investigation or environmental assessment or control or clean up
the oil and gas wastes or other substances or materials if:
(1) the responsible person has failed or refused to
control or clean up the oil and gas wastes or other substances or
materials after notice and opportunity for hearing;
(2) the responsible person is unknown, cannot be
found, or has no assets with which to control or clean up the oil and
gas wastes or other substances or materials; or
(3) the oil and gas wastes or other substances or
materials are causing the pollution of surface or subsurface water.
SECTION 4. Section 91.1132, Natural Resources Code, is
amended to read as follows:
Sec. 91.1132. PRIORITIZATION OF HIGH-RISK WELLS. The
commission by rule shall develop a system for:
(1) identifying abandoned wells that pose a high risk
of contaminating surface water or groundwater, including those with
on-site reserve pits;
(2) periodically testing high-risk wells by
conducting a fluid level test or, if necessary, a pressure test; and
(3) giving priority to plugging high-risk wells with
compromised casings.
SECTION 5. Subchapter D, Chapter 91, Natural Resources
Code, is amended by adding Section 91.118 to read as follows:
Sec. 91.118. DISCLOSURE OF LOCATION OF NONCOMMERCIAL
SURFACE DISPOSAL. (a) In this section, "noncommercial surface
disposal" means the disposal of oil field fluids or oil and gas
waste at a facility for which such disposal is:
(1) not a primary business purpose; or
(2) performed without compensation.
(b) The commission by rule shall require that a notice of
noncommercial surface disposal, including a legal description of
the exact location of the noncommercial surface disposal, be filed
with the county clerk in the county where the disposal occurs.
SECTION 6. Section 91.141(a), Natural Resources Code, is
amended to read as follows:
(a) Owners and operators of oil and gas wells shall keep
books and records that show accurately:
(1) the amount of sold and unsold stock;
(2) the amount of promotion money paid;
(3) the amount of oil and gas produced and disposed of
and the price for which the oil and gas was sold;
(4) the volume and type of oil and gas wastes generated
at the well site and the primary method of disposal for such wastes,
whether managed:
(A) on-site;
(B) by a third-party commercial surface disposal
facility, as defined by Section 91.116; or
(C) by a recycling facility;
(5) the receipts from the sale or transfer of leases or
other property; and
(6) [(5)] disbursements made in connection with or for
the benefit of the business.
SECTION 7. Section 91.753, Natural Resources Code, is
amended to read as follows:
Sec. 91.753. NOTICE REQUIRED. (a) Not later than the 15th
business day after the date the commission issues an oil or gas well
operator a permit to drill a new oil or gas well or to reenter a
plugged and abandoned oil or gas well, the operator shall give
[written notice of the issuance of the permit to] the surface owner
of the tract of land on which the well is located or is proposed to
be located written notice of:
(1) the issuance of the permit; and
(2) whether any on-site reserve pits will be used to
permanently dispose of oil and gas waste on the surface owner's
property, including the estimated volume and types of waste to be
disposed of at the well site, if any.
(b) An oil or gas well operator is not required to give
notice under this subchapter to a surface owner if:
(1) the operator and the surface owner have entered
into a written [an] agreement that contains alternative provisions
regarding the operator's obligation to give notice of oil and gas
operations; or
(2) the surface owner has waived in writing the owner's
right to notice under this subchapter.
SECTION 8. Section 151.355, Tax Code, is amended to read as
follows:
Sec. 151.355. WATER-RELATED EXEMPTIONS. The following are
exempted from taxes imposed by this chapter:
(1) rainwater harvesting equipment or supplies, water
recycling and reuse equipment or supplies, or other equipment,
services, or supplies used solely to reduce or eliminate water use;
(2) equipment, services, or supplies used solely for
desalination of surface water or groundwater;
(3) equipment, services, or supplies used solely for
brush control designed to enhance the availability of water;
(4) equipment, services, or supplies used solely for
precipitation enhancement;
(5) equipment, services, or supplies used solely to
construct or operate a water or wastewater system certified by the
Texas Commission on Environmental Quality as a regional system;
(6) equipment, services, or supplies used solely to
construct or operate a water supply or wastewater system by a
private entity as a public-private partnership as certified by the
political subdivision that is a party to the project; [and]
(7) tangible personal property specifically used to
process, reuse, or recycle wastewater that will be used in
fracturing work performed at an oil or gas well; and
(8) tangible personal property or equipment used to
process, reuse, or recycle oil and gas wastes, including solids
control equipment and closed-loop drilling systems.
SECTION 9. Section 85.2021(b-1), Natural Resources Code, as
added by this Act, applies only to an application or materially
amended application that is submitted to the Railroad Commission of
Texas on or after the effective date of this Act. An application or
materially amended application submitted to the commission before
the effective date of this Act is governed by the law in effect when
the application or materially amended application was submitted,
and the former law is continued in effect for that purpose.
SECTION 10. The changes in law made by this Act to Section
91.753, Natural Resources Code, apply only to a permit issued by the
Railroad Commission of Texas on or after the effective date of this
Act. A permit issued by the commission before the effective date of
this Act is governed by the law in effect when the permit was
issued, and the former law is continued in effect for that purpose.
SECTION 11. The change in law made by this Act to Section
151.355, Tax Code, does not affect taxes imposed before the
effective date of this Act, and the law in effect before the
effective date of this Act is continued in effect for purposes of
the liability for and collection of those taxes.
SECTION 12. This Act takes effect September 1, 2021.