SB1145

Regular Session

Relating to the authority of the Texas Commission on Environmental Quality to issue permits for the land application of water produced from certain mining and oil and gas extraction operations.

ModeratePlan for compliance

Medium Cost

Effective:2025-09-01

Enforcing Agencies

Texas Commission on Environmental Quality (TCEQ) • Railroad Commission of Texas (RRC) (retains authority for non-treated/non-beneficial use waste)

Compliance Analysis

Key implementation requirements and action items for compliance with this legislation

Implementation Timeline

Effective Date: September 1, 2025.
Compliance Deadline: Strict Jurisdictional Cutoff. Applications filed before September 1, 2025, remain under RRC authority. Applications filed on or after this date fall under TCEQ jurisdiction.
Agency Rulemaking: High Risk of Delay. The Legislative Budget Board anticipates zero permits issued in Fiscal Year 2026 and only 10 in FY2027. This indicates a "Regulatory Dead Zone" of 12–18 months post-enactment while TCEQ hires staff and drafts standards.

Immediate Action Plan

1. File Early: If you have a viable land application project, file the permit application with the RRC before August 31, 2025, to lock in the current regulatory regime.
2. Audit Insurance: Review Pollution Legal Liability (PLL) policies. Ensure coverage extends to "permitted land application" under TCEQ jurisdiction, as this increases exposure to citizen suits.
3. Join the Rulemaking Working Group: Your organization must participate in the TCEQ public comment period in late 2025/early 2026 to influence the definition of "Beneficial Use."
4. Update Vendor Lists: Identify which environmental labs are committing to the new TCEQ accreditation fields for produced water constituents.

Operational Changes Required

Contracts

Surface Use Agreements (SUAs): Review all SUAs immediately. Clauses referencing RRC standards for surface application will be legally obsolete for new projects post-2025. You must amend agreements to indemnify against TCEQ-specific violations.
Master Service Agreements (MSAs): Water treatment vendors must contractually guarantee that their output meets forthcoming TCEQ "Beneficial Use" standards. Failure to meet these standards shifts liability for unpermitted waste disposal back to the operator.

Hiring/Training

Lab Vendor Audit: You must verify your third-party laboratories are preparing for new TCEQ accreditations. The state anticipates 175 labs will need to add 7–10 new fields of accreditation by FY2026 to test for produced water constituents.
Technical Staffing: Your regulatory team must transition from RRC Form H-11 workflows to complex TCEQ Texas Land Application Permit (TLAP) protocols.

Reporting & Record-Keeping

Proof of Beneficial Use: You must document the agronomic or industrial necessity of the water application. Under TCEQ rules, application without a proven beneficial use is classified as illegal disposal.
Discharge Monitoring: Prepare for monthly or quarterly Discharge Monitoring Reports (DMRs) tracking flow and pollutant loading, subject to public record.

Fees & Costs

Permit Application Fee: Anticipate a new fee of $1,250 per application (New/Amended) or $1,215 (Renewal).
Annual Water Quality Fee: Minimum $1,250/year per permit, scaling up based on volume and pollutant concentration.
Lab Costs: Expect increased vendor pricing to offset the cost of new state-mandated accreditations.

Strategic Ambiguities & Considerations

"Beneficial Use" Definition: The statute requires TCEQ to define this. If the agency adopts a narrow definition (e.g., strictly agricultural irrigation) versus a broad one (e.g., industrial dust suppression), commercial viability for water midstream companies could be severely impacted.
Pollutant Limits: The law requires standards to "prevent pollution." It is currently unclear if TCEQ will apply Drinking Water Standards (prohibitively expensive to treat) or Agricultural Standards (commercially viable). This will be determined during the FY2026 rulemaking process.

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Legislative Timeline

This bill's path through the Texas Legislature

TopicsEnvironment Environment--water Mines & Mineral Resources Oil & Gas Permits Environmental Quality, Texas Commission On Railroad Commission

Official Analysis

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BILL ANALYSIS

Senate Research Center	S.B. 1145
89R12141 CMO-D	By: Birdwell; Sparks
	Natural Resources
	2/28/2025
	As Filed

AUTHOR'S / SPONSOR'S STATEMENT OF INTENT

The Texas Commission on Environmental Quality (TCEQ) currently regulates the National Pollutant Discharge Elimination System (NPDES), which is a federally delegated program to control discharges of pollutants to surface waters, including treated produced water in the oil and gas space. Produced water is wastewater generated during oil and gas extraction. In Texas, an average of seven barrels of produced water is produced for every barrel of oil. However, technologies have been developing to effectively treat produced water for beneficial reuse.

Although TCEQ has regulatory authority for the discharge of treated produced water into surface waters, the Railroad Commission of Texas (RRC) currently has administrative authority for land application permits for produced water. S.B. 1145 transfers permitting authority from RRC to TCEQ, consolidating permitting for both the discharge of treated produced water to surface waters and land application. This will create regulatory certainty within the industry, and would put the authority under an agency that has more experience in land application permits, including an existing program known as Texas Land Application Permits (TLAPs). Importantly, the usage of treated produced water must meet water quality standards established by TCEQ.

As proposed, S.B. 1145 amends current law relating to the authority of the Texas Commission on Environmental Quality to issue permits for the land application of water produced from certain mining and oil and gas extraction operations.

[Note: While the statutory reference in this bill is to the Texas Natural Resource Conservation Commission (TNRCC), the following amendments affect the Texas Commission on Environmental Quality (TCEQ) as the successor agency to TNRCC.]

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 26.131, Water Code, as effective until delegation of authority under the Resource Conservation and Recovery Act of 1976 (42 U.S.C. Section 6901 et seq.) to the Railroad Commission of Texas, by amending Subsection (b) and adding Subsection (e), as follows:

(b)� Creates an exception under Subsection (e).

(e)� Authorizes the Texas Natural Resource Conservation Commission (TNRCC) to issue permits for the land application of produced water resulting from activities described by Subsection (a) (relating to the Railroad Commission of Texas (RRC) being solely responsible for the control and disposition of waste and the abatement and prevention of pollution of surface and subsurface water resulting from certain activities) that has been treated for beneficial use. Requires TNRCC to adopt standards for the land application of water under Section 26.131 (Duties of Railroad Commission), including standards that prevent the pollution of surface and subsurface water.

SECTION 2. Amends Section 26.131, Water Code, as effective on delegation of authority under the Resource Conservation and Recovery Act of 1976 (42 U.S.C. Section 6901 et seq.) to the Railroad Commission of Texas, by amending Subsection (b), and adding Subsection (d), as follows:

(b)� Creates an exception under Subsection (d).

(d)� Authorizes TNRCC to issue permits for the land application of produced water resulting from activities described by Subsection (a) that has been treated for beneficial use. Requires TNRCC to adopt standards for the land application of water under this section, including standards that prevent the pollution of surface and subsurface water.

SECTION 3. Makes application of this Act prospective.

SECTION 4. Effective date: September 1, 2025.

Senate Authors

Sen. Brian BirdwellRepublican · Primary Author

Joint Authors

Kevin Sparks (R)

Coauthors (2)

House Sponsors

Rep. Brooks LandgrafRepublican · Primary Sponsor

Joint Sponsors

Drew Darby (R)

Bill Text(with markup)

S.B. No. 1145

View bill text in multiple formats on Texas Legislature website

Fiscal NoteView Original

	AN ACT
	relating to the authority of the Texas Commission on Environmental
	Quality to issue permits for the land application of water produced
	from certain mining and oil and gas extraction operations.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1. Section 26.131, Water Code, as effective until
	delegation of authority under the Resource Conservation and
	Recovery Act of 1976 (42 U.S.C. Section 6901 et seq.) to the
	Railroad Commission of Texas, is amended by amending Subsection (b)
	and adding Subsection (e) to read as follows:
	(b) Except as provided by Subsections [~~Subsection~~] (d) and
	(e), the Railroad Commission of Texas may issue permits for the
	discharge of waste resulting from the activities described by
	Subsection (a), and the discharge of waste into water in this state
	resulting from those activities must meet the water quality
	standards established by the commission.
	(e) The commission may issue permits for the land
	application of produced water resulting from activities described
	by Subsection (a) that has been treated for beneficial use. The
	commission shall adopt standards for the land application of water
	under this section, including standards that prevent the pollution
	of surface and subsurface water.
	SECTION 2. Section 26.131, Water Code, as effective on
	delegation of authority under the Resource Conservation and
	Recovery Act of 1976 (42 U.S.C. Section 6901 et seq.) to the
	Railroad Commission of Texas, is amended by amending Subsection (b)
	and adding Subsection (d) to read as follows:
	(b) Except as provided by Subsections [~~Subsection~~] (c) and
	(d), the Railroad Commission of Texas may issue permits for the
	discharge of waste resulting from the activities described by
	Subsection (a), and the discharge of waste into water in this state
	resulting from those activities must meet the water quality
	standards established by the commission.
	(d) The commission may issue permits for the land
	application of produced water resulting from activities described
	by Subsection (a) that has been treated for beneficial use. The
	commission shall adopt standards for the land application of water
	under this section, including standards that prevent the pollution
	of surface and subsurface water.
	SECTION 3. The change in law made by this Act applies only
	to a permit, the application for which is filed on or after the
	effective date of this Act. A permit, the application for which is
	filed before the effective date of this Act, is subject to the law
	in effect on the date the application is filed, and that law is
	continued in effect for that purpose.
	SECTION 4. This Act takes effect September 1, 2025.

LEGISLATIVE BUDGET BOARD
Austin, Texas

FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION


March 5, 2025

TO:	Honorable Brian Birdwell, Chair, Senate Committee on Natural Resources

FROM:	Jerry McGinty, Director, Legislative Budget Board

IN RE:	SB1145 by Birdwell (Relating to the authority of the Texas Commission on Environmental Quality to issue permits for the land application of water produced from certain mining and oil and gas extraction operations.), As Introduced

Estimated Two-year Net Impact to General Revenue Related Funds for SB1145, As Introduced: an impact of $0 through the biennium ending August 31, 2027.

The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.

General Revenue-Related Funds, Five- Year Impact:

Fiscal Year	Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2026	$0
2027	$0
2028	$0
2029	$0
2030	$0

All Funds, Five-Year Impact:

Fiscal Year	Probable Revenue Gain from Water Resource Management 153	Probable Revenue Gain from Environmental Testing Lab Accred 5065	Probable (Cost) from Water Resource Management 153	Probable (Cost) from Environmental Testing Lab Accred 5065
2026	$0	$464,000	($1,261,666)	($95,452)
2027	$25,000	$464,000	($1,110,866)	($86,952)
2028	$87,500	$464,000	($1,110,866)	($86,952)
2029	$125,000	$464,000	($1,110,866)	($86,952)
2030	$162,500	$464,000	($1,110,866)	($86,952)

Fiscal Year	Change in Number of State Employees from FY 2025
2026	13.0
2027	13.0
2028	13.0
2029	13.0
2030	13.0

Fiscal Analysis

The bill would transfer permitting authority for land application permits of produced water that has been treated for beneficial use from the Railroad Commission of Texas (RRC) to the Texas Commission on Environmental Quality (TCEQ). The bill would also require TCEQ to adopt standards for the land application of treated produced water, including standards that prevent pollution of surface water and groundwater.

The changes required by the bill would only apply to a permit application filed on or after the effective date of bill. The bill would take effect September 1, 2025.

Methodology

This analysis and the tables above reflect the fiscal impact based on information provided by RRC and TCEQ.

The RRC assumes there would be no changes in application and filing fee revenue collections due to implementing the provisions of the bill. In addition, the RRC does not anticipate that it would incur any additional costs or realize any cost savings from implementing the provisions of the bill.

Based on information provided by TCEQ, this analysis assumes that TCEQ would need to establish a new permitting program specific to these applications with additional staff to manage the following: administering the program, providing technical and regulatory assistance, conducting investigations, responding to complaints, providing public participation opportunities, accrediting laboratories, conducting emergency response activities as necessary, and assisting with enforcement-related activities as necessary.

The anticipated revenue gain to General Revenue-Dedicated Water Resource Management Account No. 153 (Account No. 153) is based on the analysis of TCEQ and anticipates permit fees and water quality fees, which would be collected under existing authority in Texas Water Code Sections 5.701 and 26.0291. TCEQ assumes no Texas Land Application Permits (TLAPs) would be received in fiscal year 2026, ten in fiscal year 2027, and thirty per year from fiscal years 2028 to 2030. TCEQ anticipates the application fee rates for these state permits would be $1,250 to obtain a new or amended permit and $1,215 for a renewed permit. Additionally, it is assumed that an annual water quality fee for each permit would vary based on levels of discharge flow and pollutant concentrations, but that the minimum annual water quality fee for an industrial wastewater land application permit would be $1,250.

The anticipated revenue gain to General Revenue-Dedicated Environmental Testing Accreditation Account No. 5065 (Account No. 5065) is based on receiving fee revenue from laboratories that would choose to pursue accreditation or expand existing accreditation already maintained with TCEQ in Texas Water Code Chapter 5, Subchapter R. Since produced water may contain chemicals that are not currently regulated, TCEQ assumes new fields of accreditation would be developed and added to TCEQ's Laboratory Accreditation Program within TCEQ's Office of Air. The analysis assumes approximately 175 environmental laboratories currently accredited by TCEQ would add 7 to 10 new fields of accreditation to their existing accreditations set forth by Texas Administrative Code, Title 30, Chapter 25.

Based on information provided by TCEQ, it is assumed that 13.0 Full-Time Equivalent (FTE) positions would be needed to administer the program including: 3.0 Engineering Specialist III, 1.0 Engineer V, 1.0 Natural Resource Specialist III (Agronomist), 1.0 Geoscientist II, 1.0 Manager VI, 1.0 Attorney I, 1.0 Attorney II, 1.0 Attorney V, 1.0 Chemist IV, and 2.0 Environmental Investigator III.

Salary and wage costs for the 13.0 FTEs totals $1,096,946 per fiscal year from 2026 to 2030. Other administrative and staff costs totals $260,172 in fiscal year 2026 and $100,872 from fiscal year 2027 to 2030, with capital costs for licenses, furniture, equipment, and the purchase of one vehicle for the program being one-time costs in fiscal year 2026 and totaling $159,300.

TCEQ reports that it would utilize existing software systems to manage the new permitting program.

Local Government Impact

No significant fiscal implication to units of local government is anticipated.

Source Agencies:

455 Railroad Commission, 582 Commission on Environmental Quality

LBB Staff:

JMc, TUf, MW, AJL

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Frequently Asked Questions

Common questions about SB1145

What does Texas SB1145 do?

Effective September 1, 2025, jurisdiction for the permitting of land application of treated produced water transfers from the Railroad Commission of Texas (RRC) to the Texas Commission on Environmental Quality (TCEQ). This legislation moves surface water management from an extraction-friendly regulatory framework to a rigorous environmental discharge framework, subjecting operators to stricter public scrutiny, higher testing standards, and new liability exposures. Implementation Timeline Effective Date: September 1, 2025.

Who authored SB1145?

SB1145 was authored by Texas Senator Brian Birdwell during the Regular Session.

When was SB1145 signed into law?

SB1145 was signed into law by Governor Greg Abbott on May 13, 2025.

Which agencies enforce SB1145?

SB1145 is enforced by Texas Commission on Environmental Quality (TCEQ) and Railroad Commission of Texas (RRC) (retains authority for non-treated/non-beneficial use waste).

How urgent is compliance with SB1145?

The compliance urgency for SB1145 is rated as "moderate". Businesses and organizations should review the requirements and timeline to ensure timely compliance.

What is the cost impact of SB1145?

The cost impact of SB1145 is estimated as "medium". This may vary based on industry and implementation requirements.

What topics does SB1145 address?

SB1145 addresses topics including environment, environment--water, mines & mineral resources, oil & gas and permits.

Legislative data provided by LegiScanLast updated: November 25, 2025

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