(a) In this section:
(1) “Class B sludge” is sewage sludge that meets one of the pathogen reduction requirements of 30 T.A.C. 312.82(b).
(2) “Land application unit” means an area where wastes are applied onto or incorporated into the soil surface for agricultural purposes or for treatment and disposal. The term does not include manure spreading operations.
(3) “Responsible person” means the person with ultimate responsibility for the land application of the Class B sludge at a land application unit. The responsible person is:
(A) the owner of the land application unit if the sludge being land applied was generated outside this state; or
(B) the person who is land applying the sludge if the sludge being land applied was generated in this state.
(b) Except as provided by Subsection (m), a responsible person may not apply Class B sludge on a land application unit unless the responsible person has obtained a permit for that land application unit issued by the commission under this section on or after September 1, 2003.

(c) The notice and hearing provisions of Subchapter M, Chapter 5, Water Code, as added by Chapter 1350, Acts of the 76th Legislature, Regular Session, 1999, apply to an application under this section for a permit, a permit amendment, or a permit renewal. In addition, at the time published notice of intent to obtain a permit is required under § 5.552, Water Code, an applicant for a permit, permit amendment, or permit renewal under this section must notify by registered or certified mail each owner of land located within one-quarter mile of the proposed land application unit who lives on that land of the intent to obtain the permit, amendment, or renewal. Notice to landowners must include the information required by § 5.552(c), Water Code, and information regarding the anticipated date of the first application of the sludge to the proposed land application unit. An owner of land located within one-quarter mile of the proposed land application unit who lives on that land is an affected person for purposes of § 5.115, Water Code.
(d) In each permit, the commission shall prescribe the conditions under which it is issued, including:
(1) the duration of the permit;
(2) the location of the land application unit;
(3) the maximum quantity of Class B sludge that may be applied or disposed of under the permit;
(4) a requirement that the permit holder submit quarterly to the commission a computer-generated report that includes, at a minimum, information regarding:
(A) the source, quality, and quantity of sludge applied to the land application unit;
(B) the location of the land application unit, either in terms of longitude and latitude or by physical address, including the county;
(C) the date of delivery of Class B sludge;
(D) the date of application of Class B sludge;
(E) the cumulative amount of metals applied to the land application unit through the application of Class B sludge;
(F) crops grown at the land application unit site; and
(G) the suggested agronomic application rate for the Class B sludge;
(5) a requirement that the permit holder submit annually to the commission evidence that the permit holder is complying with the nutrient management plan and the practice standards described by Subsection (h)(4);
(6) a requirement that the permit holder post a sign that is visible from a road or sidewalk that is adjacent to the premises on which the land application unit is located stating that a beneficial application site is located on the premises;
(7) any other monitoring and reporting requirements prescribed by the commission for the permit holder; and
(8) a requirement that the permit holder must report to the commission any noncompliance by the permit holder with the permit conditions or applicable commission rules.
(e) A permit does not become a vested right in the permit holder.
(f) A permit may be issued under this section for a term set by the board not to exceed six years from the date of issuance.
(g) The commission shall charge a fee for the issuance of a permit under this section in an amount not less than $1,000 and not more than $5,000. In determining the fee under this subsection, the commission shall consider the amount of sludge to be applied under the permit.
(h) The commission by rule shall require an applicant for a permit under this section to submit with the application, at a minimum:
(1) information regarding:
(A) the applicant;
(B) the source, quality, and quantity of sludge to be applied; and
(C) the hydrologic characteristics of the surface water and groundwater at and within one-quarter of a mile of the land application unit;
(2) proof evidencing that the applicant has a commercial liability insurance policy that:
(A) is issued by an insurance company authorized to do business in this state that has a rating by the A. M. Best Company of A- or better;
(B) designates the commission as an additional insured; and
(C) is in an amount of not less than $3 million;
(3) proof evidencing that the applicant has an environmental impairment insurance policy or similar insurance policy that:
(A) is issued by an insurance company authorized to do business in this state that has a rating by the A. M. Best Company of A- or better;
(B) designates the commission as an additional insured; and
(C) is in an amount of not less than $3 million; and
(4) proof that the applicant has minimized the risk of water quality impairment caused by nitrogen applied to the land application unit through the application of Class B sludge by having had a nutrient management plan prepared by a certified nutrient management specialist in accordance with the practice standards of the Natural Resources Conservation Service of the United States Department of Agriculture.
(i) The commission may expand the definition of Class B sludge only by expanding the definition to include sludge that meets more stringent pathogen reduction requirements.
(j) A permit holder must maintain an insurance policy required by Subsection (h) in effect for the duration of the permit.
(k) The commission shall create and operate a tracking system for the land application of Class B sludge. The commission shall require a permit holder to report deliveries and applications of Class B sludge using the tracking system and shall post the reported information on its website. The tracking system must allow a permit holder to report electronically:
(1) the date of delivery of Class B sludge to a land application unit; and
(2) for each application of Class B sludge to a land application unit:
(A) the date of the application; and
(B) the source, quality, and quantity of the sludge applied.
(l) A permit holder may not accept Class B sludge unless the sludge has been transported to the land application unit in a covered container with the covering firmly secured at the front and back.
(m) A person who holds a registration for the application of Class B sludge for a beneficial use approved by the commission and who, on or before September 1, 2002, has submitted to the commission an administratively complete application for a permit under this section may apply Class B sludge in accordance with the terms of the registration until the commission issues a final decision to issue or deny the permit for which the person has applied.
(n) The insurance requirements under Subsections (h)(2) and (3) do not apply to an applicant that is a political subdivision.
(o) The commission may not issue a permit under this section for a land application unit that is located both:
(1) in a county that borders the Gulf of Mexico; and
(2) 500 feet or less from any water well or surface water.