84R19407 JXC-F
  By: Darby, Keffer, King of Parker, H.B. No. 40
      Thompson of Harris, Oliveira, et al.
  Substitute the following for H.B. No. 40:
  By:  Darby C.S.H.B. No. 40
  relating to the exclusive jurisdiction of this state to regulate
  oil and gas operations in this state and the express preemption of
  local regulation of those operations.
         SECTION 1.  The legislature finds that the laws and policy of
  this state have fostered successful development of oil and gas
  resources in concert with the growth of healthy and economically
  vibrant communities for over 100 years. The legislature
  acknowledges this cooperative progress and that mutual benefit is
  derived from the statutes already in effect, which provide
  effective and environmentally sound regulation of oil and gas
  operations that is so comprehensive and pervasive that the
  regulation occupies the field, while facilitating the overriding
  policy objective of this state of fully and effectively exploiting
  oil and gas resources while protecting the environment and the
  public's health and safety. The legislature recognizes that in
  order to continue this prosperity and the efficient management of a
  key industry in this state, it is in the interest of this state to
  explicitly confirm the authority to regulate oil and gas operations
  in this state. The legislature intends that this Act expressly
  preempt the regulation of oil and gas operations by municipalities
  and other political subdivisions, which is impliedly preempted by
  the statutes already in effect.
         SECTION 2.  Subchapter C, Chapter 81, Natural Resources
  Code, is amended by adding Section 81.0523 to read as follows:
  PREEMPTION. (a) In this section:
               (1)  "Commercially reasonable" means a condition that
  would allow a reasonably prudent operator to fully, effectively,
  and economically exploit, develop, produce, process, and transport
  oil and gas, as determined based on the objective standard of a
  reasonably prudent operator and not on an individualized assessment
  of an actual operator's capacity to act.
               (2)  "Oil and gas operation" means an activity
  associated with the exploration, development, production,
  processing, and transportation of oil and gas, including drilling,
  hydraulic fracture stimulation, completion, maintenance,
  reworking, recompletion, disposal, plugging and abandonment,
  secondary and tertiary recovery, and remediation activities.
         (b)  An oil and gas operation is subject to the exclusive
  jurisdiction of this state. Except as provided by Subsection (c), a
  municipality or other political subdivision may not enact or
  enforce an ordinance or other measure, or an amendment or revision
  of an ordinance or other measure, that bans, limits, or otherwise
  regulates an oil and gas operation within the boundaries or
  extraterritorial jurisdiction of the municipality or political
         (c)  The authority of a municipality or other political
  subdivision to regulate an oil and gas operation is expressly
  preempted, except that a municipality may enact, amend, or enforce
  an ordinance or other measure that: 
               (1)  regulates only aboveground activity related to an
  oil and gas operation that occurs at or above the surface of the
  ground, including a regulation governing fire and emergency
  response, traffic, lights, or noise, or imposing notice or
  reasonable setback requirements;
               (2)  is commercially reasonable; 
               (3)  does not effectively prohibit an oil and gas
  operation conducted by a reasonably prudent operator; and
               (4)  is not otherwise preempted by state or federal
         (d)  An ordinance or other measure is considered prima facie
  to be commercially reasonable if the ordinance or other measure has
  been in effect for at least five years and has allowed the oil and
  gas operations at issue to continue during that period. 
         SECTION 3.  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, 2015.