The fiscal implications of SB 1145 indicate that while there will be no direct impact on General Revenue-related funds through the biennium ending August 31, 2027, the bill will necessitate the establishment of a new permitting program under the Texas Commission on Environmental Quality (TCEQ). This transition from the Railroad Commission of Texas (RRC) to TCEQ will require 13 new full-time equivalent (FTE) positions to manage permit applications, conduct investigations, ensure compliance, and support enforcement-related activities. The anticipated costs for this program include an annual expenditure of approximately $1.1 million for salaries and wages, along with additional administrative, operational, and capital costs. TCEQ will also incur expenses related to laboratory accreditation, with an estimated cost of $95,452 in fiscal year 2026, declining slightly in subsequent years. To offset these costs, revenue is expected from permit fees and environmental testing laboratory accreditation, with projected revenue gains starting at $25,000 in 2027 and increasing to $162,500 by 2030. Additionally, the environmental testing accreditation program is expected to generate $464,000 annually.

The bill does not impose significant financial burdens on local governments.

SB 1145 presents a regulatory shift by transferring permitting authority for the land application of treated produced water from the Railroad Commission of Texas (RRC) to the Texas Commission on Environmental Quality (TCEQ). This change aims to consolidate oversight under an agency with greater experience in land application permitting, ensuring regulatory consistency and efficiency. While the bill seeks to enhance the beneficial reuse of produced water, it raises concerns regarding private property rights, potential environmental risks, and government overreach.

The bill aligns with free enterprise by encouraging technological advancements in water treatment and reducing industry waste. However, amendments are recommended to strengthen property rights protections, clarify water quality standards, and establish accountability measures to ensure minimal environmental impact. While SB 1145 is a step toward streamlined regulation, additional safeguards are necessary to uphold individual liberty and property rights while maintaining limited government intervention. Thus, Texas Policy Research is opposed to SB 1145 unless it is amended.

Suggested Amendments for SB 1145

• Property Rights Protection Clause: Ensure that landowners have explicit legal recourse if treated produced water application affects their property, groundwater, or adjacent land. Require notification and consent from landowners before applying treated produced water near private property.
• Limited Government and Fiscal Responsibility: Introduce a sunset provision that requires legislative review of the permitting program after five years to assess effectiveness and potential regulatory overreach. Ensure that the permitting process does not impose excessive fees or regulatory burdens that could discourage investment in water treatment technology.

• HB 2584 (Same As)