BILL ANALYSIS

C.S.S.B. 514

By: Davis

Energy Resources

Committee Report (Substituted)

BACKGROUND AND PURPOSE

Interested parties note that hydraulic fracture drilling has revolutionized the oil and gas industry and led to a rapid and successful increase in energy production in Texas. The parties further note that overweight trucks are the primary source for removing oil and gas waste from these production sites and transporting it to disposal injection wells and that, at the current rate of hydraulic fracture drilling, thousands of heavy truck loads are needed to dispose of the waste. The interested parties contend that the use of these trucks causes increased truck emissions in urban nonattainment areas as well as increased noise pollution and the possibility of hazardous materials spills due to traffic accidents and that the truck trips cost the state, local governments, and the industry millions of dollars in related expenses and in road repair and maintenance. The interested parties contend that the expanded use of what are generally known as saltwater pipelines could alleviate these costs and minimize the need for overweight trucks. The interested parties note, however, that there is insufficient state regulation regarding saltwater pipelines to help guide the industry on the use and location of these pipelines. C.S.S.B. 514 seeks to address this issue by establishing provisions relating to the installation, maintenance, operation, and relocation of saltwater pipeline facilities.

RULEMAKING AUTHORITY

It is the committee's opinion that rulemaking authority is expressly granted to the Texas Transportation Commission in SECTION 1 of this bill.

ANALYSIS

C.S.S.B. 514 amends the Natural Resources Code to entitle a saltwater pipeline operator to install, maintain, and operate a saltwater pipeline facility through, under, along, across, or over a public road only under the following conditions: the pipeline facility complies with applicable rules adopted by the Texas Transportation Commission and applicable county and municipal regulations regarding the accommodation of utility facilities on a public road or right-of-way, including regulations relating to the horizontal or vertical placement of the pipeline facility; the saltwater pipeline operator ensures that the public road and associated facilities are promptly restored to their former condition of usefulness after the installation or maintenance of the pipeline facility is complete; and the saltwater pipeline operator leases the right-of-way or area in which the pipeline facility is installed and pays to the applicable governmental entity the fair market value of the operator's use of the right-of-way or area, unless the operator is authorized by other law to install, maintain, and operate the pipeline facility through, under, along, across, or over the public road. The bill defines "saltwater pipeline facility" as a pipeline facility that conducts water containing salt and other substances produced during drilling or operating an oil, gas, or other type of well and specifies that the term includes a pipeline facility that conducts flowback and produced water from an oil or gas well on which a hydraulic fracturing treatment has been performed to an oil and gas waste disposal well for disposal.  The bill defines "saltwater pipeline operator" as a person who owns, installs, manages, operates, leases, or controls a saltwater pipeline facility.

C.S.S.B. 514 authorizes the Texas Transportation Commission, the commissioners court of a county, or the governing body of a municipality, as applicable and except as provided by Transportation Code provisions relating to reimbursement by the state for a relocation of a utility facility, to require a saltwater pipeline operator to relocate a saltwater pipeline facility at the cost of the saltwater pipeline operator to accommodate construction or expansion of a public road or for any other public work unless the saltwater pipeline operator has a property interest in the land occupied by the facility to be relocated. The bill requires that 30 days' written notice of such a required relocation be given to the saltwater pipeline operator and sets out the requirements for this notice.

C.S.S.B. 514 prohibits its provisions from being construed to limit the authority of a saltwater pipeline facility to use a public right-of-way under any other law; from being construed to affect the authority of a municipality to regulate the use of a public right-of-way by a saltwater pipeline operator under any other law or to require payment of certain applicable charges under the Tax Code; or from being construed to require a county or municipality to grant a right to a saltwater pipeline operator that applies to a public road or right-of-way and that is broader than the county's or municipality's legal interest in the public road or right-of-way or to require a county or municipality to grant more than a surface right to a saltwater pipeline operator in a right-of-way acquired by prescription.

C.S.S.B. 514 makes a Local Government Code provision prohibiting a municipality from enforcing certain deed restrictions regarding a public utility and Transportation Code provisions relating to reimbursement by the state for a relocation of a utility facility, to utility relocation costs, and to certain use of money in a county road and bridge fund applicable to saltwater pipeline operators and saltwater pipeline facilities in the same manner as such provisions apply to utilities and utility facilities.

EFFECTIVE DATE

On passage, or, if the bill does not receive the necessary vote, September 1, 2013.

COMPARISON OF ORIGINAL AND SUBSTITUTE

While C.S.S.B. 514 may differ from the engrossed version in minor or nonsubstantive ways, the following comparison is organized and highlighted in a manner that indicates the substantial differences between the engrossed and committee substitute versions of the bill.