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A BILL TO BE ENTITLED
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AN ACT
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relating to fluid oil and gas waste and products and byproducts of |
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that waste. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 122.001, Natural Resources Code, is |
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amended by adding Subdivision (3) to read as follows: |
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(3) "Treated product" means the product of a process |
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that treats, filters, refines, extracts, or otherwise alters any |
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portion or component of fluid oil and gas waste to render it |
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suitable for a beneficial use. |
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SECTION 2. Sections 122.002 and 122.003, Natural Resources |
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Code, are amended to read as follows: |
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Sec. 122.002. OWNERSHIP OF FLUID OIL AND GAS WASTE |
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TRANSFERRED FOR TREATMENT AND SUBSEQUENT BENEFICIAL USE. Unless |
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otherwise expressly provided by an oil or gas lease, a surface use |
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agreement, a contract, a bill of sale, or another legally binding |
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document: |
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(1) when fluid oil and gas waste is produced and used |
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by or transferred to a person who takes possession of that waste for |
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the purpose of generating treated product [treating the waste for a |
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subsequent beneficial use], the waste is considered to be the |
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property of the person who takes possession of it for the purpose of |
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generating the treated product [treating the waste for subsequent |
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beneficial use] until the person transfers the waste or treated |
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product [waste] to another person for disposal or use; and |
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(2) when a person who takes possession of fluid oil and |
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gas waste for the purpose of generating treated product [treating |
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the waste for a subsequent beneficial use] transfers possession of |
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the treated product or any [treatment] byproduct of the process |
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that generated the treated product to another person for the |
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purpose of subsequent disposal or beneficial use, the transferred |
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product or byproduct is considered to be the property of the person |
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to whom the material is transferred. |
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Sec. 122.003. RESPONSIBILITY IN TORT. (a) Except as |
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provided by Subsection (b), a person who takes possession of fluid |
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oil and gas waste, produces from that waste a treated product |
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[generally considered in the oil and gas industry to be suitable for |
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use in connection with the drilling for or production of oil or |
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gas], and either puts the treated product to a beneficial use or |
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transfers the treated product to another person with the |
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contractual understanding that the treated product will be put to a |
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beneficial use [used in connection with the drilling for or |
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production of oil or gas] is not liable in tort for a consequence of |
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the subsequent use of that treated product by any [the person to |
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whom the treated product is transferred or by another] person. |
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(a-1) Except as provided by Subsection (b), a person who |
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produces fluid oil and gas waste or who supplies or conveys fluid |
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oil and gas waste to a treatment facility for the purpose of |
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generating a treated product is not liable in tort for: |
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(1) a consequence of the subsequent treatment of that |
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fluid oil and gas waste to generate treated product; |
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(2) the subsequent use of that treated product by any |
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person; or |
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(3) exposure to a byproduct of the process used to |
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generate treated product. |
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(b) This section does not affect the liability of a person |
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[that treats fluid oil and gas waste for beneficial use] in an |
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action brought by a claimant [person] for damages for personal |
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injury, death, or property damage arising from exposure to fluid |
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oil and gas waste, a treated product, or a byproduct of a process |
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used to generate treated product if that exposure occurred as a |
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result of the person's: |
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(1) gross negligence or intentional, wrongful act or |
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omission; or |
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(2) negligence and the person did not treat, generate, |
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use, or dispose of the fluid oil and gas waste, treated product, or |
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byproduct in conformity with: |
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(A) rules adopted under Section 122.004; or |
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(B) a Texas Pollutant Discharge Elimination |
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System program permit issued by the Texas Commission on |
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Environmental Quality under Section 26.027 or 26.131, Water Code. |
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(c) A claimant awarded damages for a tort premised solely on |
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the person's negligence and regulatory nonconformity under |
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Subsection (b)(2) may not be awarded exemplary damages. |
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SECTION 3. Section 122.004(a), Natural Resources Code, is |
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amended to read as follows: |
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(a) The commission shall adopt rules to govern the treatment |
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and beneficial use of fluid oil and gas waste, treated product, and |
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any byproduct of a process used to generate treated product. |
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SECTION 4. Chapter 122, Natural Resources Code, as amended |
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by this Act, applies only to a cause of action that accrues on or |
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after the effective date of this Act. A cause of action that |
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accrues before the effective date of this Act is governed by the law |
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as it existed immediately before the effective date of this Act, and |
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that law is continued in effect for that purpose. |
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SECTION 5. This Act takes effect September 1, 2025. |