BILL ANALYSIS

C.S.H.B. 4426

By: Darby

Energy Resources

Committee Report (Substituted)

BACKGROUND AND PURPOSE

The bill author has informed the committee that commercial surface disposal facilities play a key role in the management of oil and gas waste in Texas and that these facilities deal with solid and fluid waste from oil and gas operations and dispose of them through methods such as land application. The bill author has also informed the committee that while the Railroad Commission of Texas oversees the permitting and regulation of these facilities, current law does not explicitly provide for a term limit on the permit for such a facility, which may result in inconsistent permit durations and state and industry resources spent on unnecessary shorter renewal timeframes for facilities in good standing. C.S.H.B. 4426 seeks to address this issue by establishing that, unless otherwise provided by law, a permit for a commercial surface disposal facility is valid for a maximum term of 10 years and carries with it the right of successive renewal on expiration for areas within the boundaries of the existing permit.

CRIMINAL JUSTICE IMPACT

It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.

ANALYSIS

C.S.H.B. 4426 amends the Natural Resources Code to establish that, unless otherwise provided by law, a permit issued by the Railroad Commission of Texas (RRC) for a commercial surface disposal facility, defined by reference to provisions relating to notice of an application for a permit for such a facility, is valid for a maximum term of 10 years and carries with it the right of successive renewal on expiration for areas within the boundaries of the existing permit. The bill authorizes the RRC, in determining the proper term of a new, amended, or renewal permit for a commercial surface disposal facility, to consider the applicant's history of compliance with RRC rules and permits issued by the RRC for the subject facility or similar waste management facilities, as applicable, based on previous inspections, quarterly reports, and other relevant evidence documented by the RRC. The bill requires an application for renewal of a permit to be made not later than the 120th day before the date the existing permit expires.

C.S.H.B. 4426 applies only to the issuance, amendment, or renewal of a permit by the RRC on or after the bill's effective date. The issuance, amendment, or renewal of a permit by the RRC before that date is governed by the law in effect on the date of issuance, amendment, or renewal, and that law is continued in effect for that purpose.

EFFECTIVE DATE

September 1, 2025.

COMPARISON OF INTRODUCED AND SUBSTITUTE

While C.S.H.B. 4426 may differ from the introduced in minor or nonsubstantive ways, the following summarizes the substantial differences between the introduced and committee substitute versions of the bill.

The substitute includes provisions that were not in the introduced that do the following:

· establish that, unless otherwise provided by law, a permit for a commercial surface disposal facility carries with it the right of successive renewal on expiration for areas within the boundaries of the existing permit;

· authorize the RRC, in determining the proper term of a new, amended, or renewal permit, to consider the applicant's history of compliance with RRC rules and permits issued by the RRC for the subject facility or similar waste management facilities, as applicable, based on previous inspections, quarterly reports, and other relevant evidence documented by the RRC; and

· require an application for renewal of a permit to be made not later than the 120th day before the date the existing permit expires.

Whereas the introduced applied to a permit issued by the RRC on or after the bill's effective date, the substitute applies to the issuance, amendment, or renewal of a permit by the RRC on or after such date.