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