Perry Bill Shields Oil Waste Producers And Haulers From Lawsuits

The text as introduced · 842 words

89R9070 JAM-F

By: Perry
S.B. No. 1399

A BILL TO BE ENTITLED

AN ACT

relating to fluid oil and gas waste and products and byproducts of

that waste.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 122.001, Natural Resources Code, is

amended by adding Subdivision (3) to read as follows:

(3) "Treated product" means the product of a process

that treats, filters, refines, extracts, or otherwise alters any

portion or component of fluid oil and gas waste to render it

suitable for a beneficial use.

SECTION 2. Sections 122.002 and 122.003, Natural Resources

Code, are amended to read as follows:

Sec. 122.002. OWNERSHIP OF FLUID OIL AND GAS WASTE

TRANSFERRED FOR TREATMENT AND SUBSEQUENT BENEFICIAL USE. Unless

otherwise expressly provided by an oil or gas lease, a surface use

agreement, a contract, a bill of sale, or another legally binding

document:

(1) when fluid oil and gas waste is produced and used

by or transferred to a person who takes possession of that waste for

the purpose of generating treated product [ treating the waste for a

subsequent beneficial use ], the waste is considered to be the

property of the person who takes possession of it for the purpose of

generating the treated product [ treating the waste for subsequent

beneficial use ] until the person transfers the waste or treated

product [ waste ] to another person for disposal or use; and

(2) when a person who takes possession of fluid oil and

gas waste for the purpose of generating treated product [ treating

the waste for a subsequent beneficial use ] transfers possession of

the treated product or any [ treatment ] byproduct of the process

that generated the treated product to another person for the

purpose of subsequent disposal or beneficial use, the transferred

product or byproduct is considered to be the property of the person

to whom the material is transferred.

Sec. 122.003. RESPONSIBILITY IN TORT. (a) Except as

provided by Subsection (b), a person who takes possession of fluid

oil and gas waste, produces from that waste a treated product

[ generally considered in the oil and gas industry to be suitable for

use in connection with the drilling for or production of oil or

gas ], and either puts the treated product to a beneficial use or

transfers the treated product to another person with the

contractual understanding that the treated product will be put to a

beneficial use [ used in connection with the drilling for or

production of oil or gas ] is not liable in tort for a consequence of

the subsequent use of that treated product by any [ the person to

whom the treated product is transferred or by another ] person.

(a-1) Except as provided by Subsection (b), a person who

produces fluid oil and gas waste or who supplies or conveys fluid

oil and gas waste to a treatment facility for the purpose of

generating a treated product is not liable in tort for:

(1) a consequence of the subsequent treatment of that

fluid oil and gas waste to generate treated product;

(2) the subsequent use of that treated product by any

person; or

(3) exposure to a byproduct of the process used to

generate treated product.

(b) This section does not affect the liability of a person

[ that treats fluid oil and gas waste for beneficial use ] in an

action brought by a claimant [ person ] for damages for personal

injury, death, or property damage arising from exposure to fluid

oil and gas waste , a treated product, or a byproduct of a process

used to generate treated product if that exposure occurred as a

result of the person's:

(1) gross negligence or intentional, wrongful act or

omission; or

(2) negligence and the person did not treat, generate,

use, or dispose of the fluid oil and gas waste, treated product, or

byproduct in conformity with:

(A) rules adopted under Section 122.004; or

(B) a Texas Pollutant Discharge Elimination

System program permit issued by the Texas Commission on

Environmental Quality under Section 26.027 or 26.131, Water Code .

(c) A claimant awarded damages for a tort premised solely on

the person's negligence and regulatory nonconformity under

Subsection (b)(2) may not be awarded exemplary damages.

SECTION 3. Section 122.004(a), Natural Resources Code, is

amended to read as follows:

(a) The commission shall adopt rules to govern the treatment

and beneficial use of fluid oil and gas waste , treated product, and

any byproduct of a process used to generate treated product .

SECTION 4. Chapter 122, Natural Resources Code, as amended

by this Act, applies only to a cause of action that accrues on or

after the effective date of this Act. A cause of action that

accrues before the effective date of this Act is governed by the law

as it existed immediately before the effective date of this Act, and

that law is continued in effect for that purpose.

SECTION 5. This Act takes effect September 1, 2025.