2021S0169-1 03/08/21     By: Raymond H.B. No. 4442     A BILL TO BE ENTITLED   AN ACT   relating to the regulation of oil and gas waste; creating a tax   exemption; imposing a fee.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Section 85.2021, Natural Resources Code, is   amended by adding Subsection (b-1) to read as follows:          (b-1)  An applicant shall submit an additional nonrefundable   fee of $200 for any well utilizing a reserve pit for disposal of oil   field wastes on the well site.          SECTION 2.  Section 91.110, Natural Resources Code, is   amended to read as follows:          Sec. 91.110.  OIL AND GAS WASTE REDUCTION AND MINIMIZATION.   To encourage the reduction and minimization of oil and gas waste,   the commission shall implement a program to:                (1)  provide operators with training and technical   assistance on oil and gas waste reduction and minimization;                (2)  assist operators in developing oil and gas waste   reduction and minimization plans; and                (3)  by rule establish and offer operators of oil and   gas wells incentives for oil and gas waste reduction and   minimization through the use of solids control equipment and   closed-loop drilling systems at the well site.          SECTION 3.  Section 91.113(a), Natural Resources Code, is   amended to read as follows:          (a)  For any [If] oil and gas wastes or other substances or   materials regulated by the commission under Section 91.101,   including those that are disposed of or stored on a well site using   a reserve pit, an aboveground tank, or other means, that are causing   or are likely to cause the pollution of surface or subsurface water,   the commission, through its employees or agents, may use money in   the oil and gas regulation and cleanup fund to conduct a site   investigation or environmental assessment or control or clean up   the oil and gas wastes or other substances or materials if:                (1)  the responsible person has failed or refused to   control or clean up the oil and gas wastes or other substances or   materials after notice and opportunity for hearing;                (2)  the responsible person is unknown, cannot be   found, or has no assets with which to control or clean up the oil and   gas wastes or other substances or materials; or                (3)  the oil and gas wastes or other substances or   materials are causing the pollution of surface or subsurface water.          SECTION 4.  Section 91.1132, Natural Resources Code, is   amended to read as follows:          Sec. 91.1132.  PRIORITIZATION OF HIGH-RISK WELLS. The   commission by rule shall develop a system for:                (1)  identifying abandoned wells that pose a high risk   of contaminating surface water or groundwater, including those with   on-site reserve pits;                (2)  periodically testing high-risk wells by   conducting a fluid level test or, if necessary, a pressure test; and                (3)  giving priority to plugging high-risk wells with   compromised casings.          SECTION 5.  Subchapter D, Chapter 91, Natural Resources   Code, is amended by adding Section 91.118 to read as follows:          Sec. 91.118.  DISCLOSURE OF LOCATION OF NONCOMMERCIAL   SURFACE DISPOSAL. (a) In this section, "noncommercial surface   disposal" means the disposal of oil field fluids or oil and gas   waste at a facility for which such disposal is:                (1)  not a primary business purpose; or                (2)  performed without compensation.          (b)  The commission by rule shall require that a notice of   noncommercial surface disposal, including a legal description of   the exact location of the noncommercial surface disposal, be filed   with the county clerk in the county where the disposal occurs.          SECTION 6.  Section 91.141(a), Natural Resources Code, is   amended to read as follows:          (a)  Owners and operators of oil and gas wells shall keep   books and records that show accurately:                (1)  the amount of sold and unsold stock;                (2)  the amount of promotion money paid;                (3)  the amount of oil and gas produced and disposed of   and the price for which the oil and gas was sold;                (4)  the volume and type of oil and gas wastes generated   at the well site and the primary method of disposal for such wastes,   whether managed:                      (A)  on-site;                      (B)  by a third-party commercial surface disposal   facility, as defined by Section 91.116; or                      (C)  by a recycling facility;                (5)  the receipts from the sale or transfer of leases or   other property; and                (6) [(5)]  disbursements made in connection with or for   the benefit of the business.          SECTION 7.  Section 91.753, Natural Resources Code, is   amended to read as follows:          Sec. 91.753.  NOTICE REQUIRED. (a) Not later than the 15th   business day after the date the commission issues an oil or gas well   operator a permit to drill a new oil or gas well or to reenter a   plugged and abandoned oil or gas well, the operator shall give   [written notice of the issuance of the permit to] the surface owner   of the tract of land on which the well is located or is proposed to   be located written notice of:                (1)  the issuance of the permit; and                (2)  whether any on-site reserve pits will be used to   permanently dispose of oil and gas waste on the surface owner's   property, including the estimated volume and types of waste to be   disposed of at the well site, if any.          (b)  An oil or gas well operator is not required to give   notice under this subchapter to a surface owner if:                (1)  the operator and the surface owner have entered   into a written [an] agreement that contains alternative provisions   regarding the operator's obligation to give notice of oil and gas   operations; or                (2)  the surface owner has waived in writing the owner's   right to notice under this subchapter.          SECTION 8.  Section 151.355, Tax Code, is amended to read as   follows:          Sec. 151.355.  WATER-RELATED EXEMPTIONS. The following are   exempted from taxes imposed by this chapter:                (1)  rainwater harvesting equipment or supplies, water   recycling and reuse equipment or supplies, or other equipment,   services, or supplies used solely to reduce or eliminate water use;                (2)  equipment, services, or supplies used solely for   desalination of surface water or groundwater;                (3)  equipment, services, or supplies used solely for   brush control designed to enhance the availability of water;                (4)  equipment, services, or supplies used solely for   precipitation enhancement;                (5)  equipment, services, or supplies used solely to   construct or operate a water or wastewater system certified by the   Texas Commission on Environmental Quality as a regional system;                (6)  equipment, services, or supplies used solely to   construct or operate a water supply or wastewater system by a   private entity as a public-private partnership as certified by the   political subdivision that is a party to the project; [and]                (7)  tangible personal property specifically used to   process, reuse, or recycle wastewater that will be used in   fracturing work performed at an oil or gas well; and                (8)  tangible personal property or equipment used to   process, reuse, or recycle oil and gas wastes, including solids   control equipment and closed-loop drilling systems.          SECTION 9.  Section 85.2021(b-1), Natural Resources Code, as   added by this Act, applies only to an application or materially   amended application that is submitted to the Railroad Commission of   Texas on or after the effective date of this Act. An application or   materially amended application submitted to the commission before   the effective date of this Act is governed by the law in effect when   the application or materially amended application was submitted,   and the former law is continued in effect for that purpose.          SECTION 10.  The changes in law made by this Act to Section   91.753, Natural Resources Code, apply only to a permit issued by the   Railroad Commission of Texas on or after the effective date of this   Act. A permit issued by the commission before the effective date of   this Act is governed by the law in effect when the permit was   issued, and the former law is continued in effect for that purpose.          SECTION 11.  The change in law made by this Act to Section   151.355, Tax Code, does not affect taxes imposed before the   effective date of this Act, and the law in effect before the   effective date of this Act is continued in effect for purposes of   the liability for and collection of those taxes.          SECTION 12.  This Act takes effect September 1, 2021.