87R1598 JXC-F
By: Hancock S.B. No. 450
A BILL TO BE ENTITLED
AN ACT
relating to the jurisdiction of the Railroad Commission of Texas
over the injection and geologic storage of carbon dioxide.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 382.501, Health and Safety Code, is
amended by adding Subdivisions (5) and (6) to read as follows:
(5) "Offshore" has the meaning assigned by Section
27.040, Water Code.
(6) "Railroad commission" means the Railroad
Commission of Texas.
SECTION 2. Section 382.502, Health and Safety Code, is
amended to read as follows:
Sec. 382.502. RULES; ENFORCEMENT. (a) The railroad
commission by rule may adopt standards for the location,
construction, maintenance, monitoring, and operation of a carbon
dioxide repository.
(b) If the United States Environmental Protection Agency
issues requirements regarding carbon dioxide sequestration, the
railroad commission shall ensure that the construction,
maintenance, monitoring, and operation of the carbon dioxide
repository under this subchapter comply with those requirements.
(c) Subchapter F, Chapter 27, Water Code, applies to the
civil, administrative, or criminal enforcement of a rule adopted by
the railroad commission under this section in the same manner as
Subchapter F, Chapter 27, Water Code, applies to the civil,
administrative, or criminal enforcement of a rule adopted by the
railroad commission under Chapter 27, Water Code.
(d) A penalty collected under this section shall be
deposited to the credit of the anthropogenic carbon dioxide storage
trust fund established under Section 121.003, Natural Resources
Code.
SECTION 3. Section 382.506(a), Health and Safety Code, is
amended to read as follows:
(a) The railroad commission by rule may establish standards
for the measurement, monitoring, and verification of the permanent
storage status of the carbon dioxide in the carbon dioxide
repository.
SECTION 4. Section 382.509, Health and Safety Code, is
amended to read as follows:
Sec. 382.509. RATES FOR TRANSPORTATION. Neither the
railroad commission nor the board may establish or regulate the
rates charged for the transportation of carbon dioxide to the
carbon dioxide repository.
SECTION 5. Section 121.003, Natural Resources Code, is
amended by amending Subsections (c) and (d) and adding Subsection
(c-1) to read as follows:
(c) Fees collected by the commission under Subchapter C-1,
Chapter 27, Water Code, [and] penalties imposed for violations of
that subchapter or rules adopted under that subchapter, and funds
received by the commission from financial responsibility
mechanisms under Section 27.073, Water Code, shall be deposited to
the credit of the anthropogenic carbon dioxide storage trust fund.
(c-1) Penalties imposed for violations of commission rules
adopted under Section 382.502, Health and Safety Code, shall be
deposited to the credit of the anthropogenic carbon dioxide storage
trust fund.
(d) The anthropogenic carbon dioxide storage trust fund may
be used by the commission only for:
(1) permitting, inspecting, monitoring,
investigating, recording, and reporting on geologic storage
facilities and associated anthropogenic carbon dioxide injection
wells;
(2) long-term monitoring of geologic storage
facilities and associated anthropogenic carbon dioxide injection
wells;
(3) remediation of mechanical problems associated
with geologic storage facilities and associated anthropogenic
carbon dioxide injection wells;
(4) repairing mechanical leaks at geologic storage
facilities;
(5) plugging abandoned anthropogenic carbon dioxide
injection wells used for geologic storage;
(6) training and technology transfer related to
anthropogenic carbon dioxide injection and geologic storage; and
(7) compliance and enforcement activities related to
geologic storage and associated anthropogenic carbon dioxide
injection wells.
SECTION 6. Sections 202.0545(c), (d), (f), and (h), Tax
Code, are amended to read as follows:
(c) To qualify for the tax rate reduction under this
section, the operator must:
(1) apply to the comptroller for the reduction and
include with the application any information and documentation that
the comptroller may require; and
(2) apply for a certification from[:
[(A)] the Railroad Commission of Texas[, if
carbon dioxide used in the project is to be sequestered in an oil or
natural gas reservoir;
[(B) the Texas Commission on Environmental
Quality, if carbon dioxide used in the project is to be sequestered
in a geological formation other than an oil or natural gas
reservoir; or
[(C) both the Railroad Commission of Texas and
the Texas Commission on Environmental Quality if both Paragraphs
(A) and (B) apply].
(d) The Railroad Commission of Texas [An agency to which an
operator applies for a certification under Subsection (c)(2)] may
issue a [the] certification under Subsection (c)(2) only if the
commission [agency] finds that, based on substantial evidence,
there is a reasonable expectation that:
(1) at least 99 percent of the carbon dioxide
sequestered as required by Subsection (a)(4) will remain
sequestered for at least 1,000 years; and
(2) the operator's planned sequestration program will
include appropriately designed monitoring and verification
measures that will be employed for a period sufficient to
demonstrate whether the sequestration program is performing as
expected.
(f) The comptroller shall approve the application if the
operator submits the certification [or certifications] required by
Subsection (c)(2) and if the comptroller determines that the oil is
otherwise eligible under this section.
(h) The comptroller and[,] the Railroad Commission of
Texas[, and the Texas Commission on Environmental Quality] may
adopt rules and establish procedures to implement and administer
this section.
SECTION 7. Subchapter C-1, Chapter 27, Water Code, is
amended by adding Section 27.040 to read as follows:
Sec. 27.040. DEFINITION. In this subchapter, "offshore"
means the area in the Gulf of Mexico seaward of the coast that is
within three marine leagues of the coast.
SECTION 8. Sections 27.041(a) and (c), Water Code, are
amended to read as follows:
(a) The [Except as provided by Subsection (b), the] railroad
commission has jurisdiction over the onshore and offshore injection
and geologic storage of carbon dioxide in this state[, and the
injection of carbon dioxide into, a reservoir that is initially or
may be productive of oil, gas, or geothermal resources or a saline
formation directly above or below that reservoir].
(c) The [Except as provided by Subsection (b), the] railroad
commission has jurisdiction over a well used for the purpose
provided by Subsection (a) regardless of whether the well was
initially completed for that purpose or was initially completed for
another purpose and is converted to the purpose provided by
Subsection (a).
SECTION 9. Section 27.047, Water Code, is amended to read as
follows:
Sec. 27.047. RULES. The railroad commission shall adopt
rules and procedures reasonably required for the performance of its
powers, duties, and functions under this subchapter, including
rules for:
(1) the geologic storage and associated injection of
anthropogenic carbon dioxide, including:
(A) geologic site characterization;
(B) area of review and corrective action;
(C) well construction;
(D) operation;
(E) mechanical integrity testing;
(F) monitoring;
(G) well plugging;
(H) postinjection site care;
(I) site closure; and
(J) long-term stewardship;
(2) the enforcement of this subchapter and rules
adopted by the railroad commission under this subchapter; and
(3) the collection and administration of:
(A) fees imposed under Section 27.045; [and]
(B) penalties imposed for a violation of this
subchapter or rules adopted by the railroad commission under this
subchapter; and
(C) funds received from financial responsibility
mechanisms under Section 27.073.
SECTION 10. Section 27.048(b), Water Code, is amended to
read as follows:
(b) If rules or regulations adopted to govern the geologic
storage and associated injection of anthropogenic carbon dioxide
under the federal Safe Drinking Water Act (42 U.S.C. Section 300f et
seq.) or another federal statute allow this state to seek primary
enforcement authority under the underground injection control
program,[:
[(1)] the railroad commission [shall seek primacy to
administer and enforce the program subject to the jurisdiction
granted under this subchapter; and
[(2) this state] shall seek primacy to administer and
enforce the program for the geologic storage and associated
injection of anthropogenic carbon dioxide in this state, including
onshore and offshore geologic storage and associated injection[,
and the injection of carbon dioxide into, a saline formation].
SECTION 11. Section 27.073(b-1), Water Code, is amended to
read as follows:
(b-1) The railroad commission is authorized to receive
funds as the beneficiary of a financial responsibility mechanism
established under this chapter for the proper management of an
anthropogenic carbon dioxide injection well or geologic storage
facility. The funds shall be deposited to the credit of the
anthropogenic carbon dioxide storage trust fund established under
Section 121.003, Natural Resources Code.
SECTION 12. Sections 27.022 and 27.041(b), Water Code, are
repealed.
SECTION 13. This Act takes effect immediately if it
receives a vote of two-thirds of all the members elected to each
house, as provided by Section 39, Article III, Texas Constitution.
If this Act does not receive the vote necessary for immediate
effect, this Act takes effect September 1, 2021.