By: Paddie (Senate Sponsor - Hancock) H.B. No. 1284
         (In the Senate - Received from the House April 20, 2021;
  May 13, 2021, read first time and referred to Committee on Natural
  Resources & Economic Development; May 19, 2021, reported favorably
  by the following vote:  Yeas 7, Nays 0; May 19, 2021, sent to
  printer.)
Click here to see the committee vote
 
 
A BILL TO BE ENTITLED
 
AN ACT
 
  relating to the regulation of the injection and geologic storage of
  carbon dioxide in this state.
         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, Health and Safety Code, is
  amended by amending Subsections (a) and (b) and adding Subsection
  (e) 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.
         (b)  The bureau shall review any [perform the] measurement,
  monitoring, and verification of the permanent storage status of
  carbon dioxide in the carbon dioxide repository performed by
  another person at the direction of the state.
         (e)  The board may use revenue from the fee authorized by
  Section 382.505 to contract with the bureau to perform the
  functions described by this section.
         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 27.043, Water Code, is amended to read as
  follows:
         Sec. 27.043.  PERMIT FROM RAILROAD COMMISSION. (a) A person
  may not begin drilling or operating an anthropogenic carbon dioxide
  injection well for geologic storage or constructing or operating a
  geologic storage facility regulated under this subchapter without
  first obtaining the necessary permits from the railroad commission.
         (b)  The railroad commission may not issue a permit under
  this subchapter for the conversion of a previously plugged and
  abandoned Class I injection well, including any associated waste
  plume, to a Class VI injection well. 
         SECTION 10.  The heading to Section 27.046, Water Code, is
  amended to read as follows:
         Sec. 27.046.  LETTER OF DETERMINATION FROM RAILROAD
  COMMISSION.
         SECTION 11.  Subchapter C-1, Chapter 27, Water Code, is
  amended by adding Section 27.0461 to read as follows:
         Sec. 27.0461.  LETTER OF DETERMINATION FROM COMMISSION. A
  person making an application to the railroad commission for a
  permit under this subchapter shall submit with the application a
  letter of determination from the commission concluding that
  drilling and operating an anthropogenic carbon dioxide injection
  well for geologic storage or constructing or operating a geologic
  storage facility will not impact or interfere with any previous or
  existing Class I injection well, including any associated waste
  plume, or any other injection well authorized or permitted by the
  commission.
         SECTION 12.  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 13.  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 14.  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 15.  Sections 27.022 and 27.041(b), Water Code, are
  repealed.
         SECTION 16.  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.
 
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