HB 4382

relating to an exemption from sales and use taxes for certain
tangible personal property used in hydraulic fracturing.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  Section 151.355, Tax Code, is amended to read as
Sec. 151.355.  WATER-RELATED EXEMPTIONS.  (a)  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
(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 water, other than freshwater,
[wastewater] that will be used in fracturing work performed at an
(b)  For the purposes of this section, "freshwater" means
water containing less than 1,000 milligrams per liter of total
SECTION 2.  Section 151.355, Tax Code, as amended by this
Act, does not affect tax liability accruing before the effective
date of this Act. That liability continues in effect as if this Act
had not been enacted, and the former law is continued in effect for
the collection of taxes due and for civil and criminal enforcement
of the liability for those taxes.
SECTION 3.  This Act takes effect September 1, 2025.