89R9070 JAM-F
By: Darby H.B. No. 49
A BILL TO BE ENTITLED
AN ACT
relating to fluid oil and gas waste and products and byproducts of
that waste.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 122.001, Natural Resources Code, is
amended by adding Subdivision (3) to read as follows:
(3) "Treated product" means the product of a process
that treats, filters, refines, extracts, or otherwise alters any
portion or component of fluid oil and gas waste to render it
suitable for a beneficial use.
SECTION 2. Sections 122.002 and 122.003, Natural Resources
Code, are amended to read as follows:
Sec. 122.002. OWNERSHIP OF FLUID OIL AND GAS WASTE
TRANSFERRED FOR TREATMENT AND SUBSEQUENT BENEFICIAL USE. Unless
otherwise expressly provided by an oil or gas lease, a surface use
agreement, a contract, a bill of sale, or another legally binding
document:
(1) when fluid oil and gas waste is produced and used
by or transferred to a person who takes possession of that waste for
the purpose of generating treated product [treating the waste for a
subsequent beneficial use], the waste is considered to be the
property of the person who takes possession of it for the purpose of
generating the treated product [treating the waste for subsequent
beneficial use] until the person transfers the waste or treated
product [waste] to another person for disposal or use; and
(2) when a person who takes possession of fluid oil and
gas waste for the purpose of generating treated product [treating
the waste for a subsequent beneficial use] transfers possession of
the treated product or any [treatment] byproduct of the process
that generated the treated product to another person for the
purpose of subsequent disposal or beneficial use, the transferred
product or byproduct is considered to be the property of the person
to whom the material is transferred.
Sec. 122.003. RESPONSIBILITY IN TORT. (a) Except as
provided by Subsection (b), a person who takes possession of fluid
oil and gas waste, produces from that waste a treated product
[generally considered in the oil and gas industry to be suitable for
use in connection with the drilling for or production of oil or
gas], and either puts the treated product to a beneficial use or
transfers the treated product to another person with the
contractual understanding that the treated product will be put to a
beneficial use [used in connection with the drilling for or
production of oil or gas] is not liable in tort for a consequence of
the subsequent use of that treated product by any [the person to
whom the treated product is transferred or by another] person.
(a-1) Except as provided by Subsection (b), a person who
produces fluid oil and gas waste or who supplies or conveys fluid
oil and gas waste to a treatment facility for the purpose of
generating a treated product is not liable in tort for:
(1) a consequence of the subsequent treatment of that
fluid oil and gas waste to generate treated product;
(2) the subsequent use of that treated product by any
person; or
(3) exposure to a byproduct of the process used to
generate treated product.
(b) This section does not affect the liability of a person
[that treats fluid oil and gas waste for beneficial use] in an
action brought by a claimant [person] for damages for personal
injury, death, or property damage arising from exposure to fluid
oil and gas waste, a treated product, or a byproduct of a process
used to generate treated product if that exposure occurred as a
result of the person's:
(1) gross negligence or intentional, wrongful act or
omission; or
(2) negligence and the person did not treat, generate,
use, or dispose of the fluid oil and gas waste, treated product, or
byproduct in conformity with:
(A) rules adopted under Section 122.004; or
(B) a Texas Pollutant Discharge Elimination
System program permit issued by the Texas Commission on
Environmental Quality under Section 26.027 or 26.131, Water Code.
(c) A claimant awarded damages for a tort premised solely on
the person's negligence and regulatory nonconformity under
Subsection (b)(2) may not be awarded exemplary damages.
SECTION 3. Section 122.004(a), Natural Resources Code, is
amended to read as follows:
(a) The commission shall adopt rules to govern the treatment
and beneficial use of fluid oil and gas waste, treated product, and
any byproduct of a process used to generate treated product.
SECTION 4. Chapter 122, Natural Resources Code, as amended
by this Act, applies only to a cause of action that accrues on or
after the effective date of this Act. A cause of action that
accrues before the effective date of this Act is governed by the law
as it existed immediately before the effective date of this Act, and
that law is continued in effect for that purpose.
SECTION 5. This Act takes effect September 1, 2025.