S.B. No. 1461

	AN ACT
	relating to certain matters regarding a clean coal project,
	including contracting authority and indemnification requirements,
	liability, representation of a state agency by the attorney
	general, and monitoring of sequestered carbon dioxide.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Section 490.301, Government Code, as added by
	Chapter 1097, Acts of the 79th Legislature, Regular Session, 2005,
	is amended to read as follows:
	Sec. 490.301.  DEFINITION.  In this subchapter [section],
	"clean coal project" has the meaning assigned by Section 5.001,
	Water Code.
	SECTION 2.  Subchapter G, Chapter 490, Government Code, as
	added by Chapter 1097, Acts of the 79th Legislature, Regular
	Session, 2005, is amended by adding Section 490.304 to read as
	follows:
	Sec. 490.304.  CONTRACTING AUTHORITY; FRANCHISE TAX CREDIT.
	(a)  The governor may contract for the state with an organization
	exempt from federal income taxation under Section 501(a), Internal
	Revenue Code of 1986, by being listed as an exempt entity under
	Section 501(c)(3) of that code, including the FutureGen Industrial
	Alliance, Incorporated, for a purpose related to implementing a
	clean coal project, including an innovative energy demonstration
	program described by Section 2305.037.
	(b)  The governor and the comptroller jointly may adopt
	provisions for issuing to the entity with which the governor
	contracts under Subsection (a), including the FutureGen Industrial
	Alliance, Incorporated, franchise tax credits to promote research
	and development activities related to a clean coal project in this
	state. The governor and comptroller must act under this subsection
	not later than December 31, 2007. The franchise tax credits to be
	issued under this subsection in any year may not have a value that
	exceeds the amount a retail electric provider pays in that year to
	the entity for electricity generated for the clean coal project's
	research and development purposes. A franchise tax credit may be
	issued, in accordance with the governor's and comptroller's
	provisions, to the entity, irrespective of whether the entity owes
	or pays a franchise tax under Chapter 171, Tax Code. The entity may
	assign the tax credits to a taxable entity, as defined by Section
	171.0002, Tax Code, in accordance with the governor's and
	comptroller's provisions.
	(c)  This section expires on the date the FutureGen
	Industrial Alliance, Incorporated, loses its qualification as
	being exempt from federal taxation under Section 501(a), Internal
	Revenue Code of 1986, by being listed as an exempt entity under
	Section 501(c)(3) of that code.
	SECTION 3.  Chapter 119, Natural Resources Code, is amended
	by adding Section 119.0025 to read as follows:
	Sec. 119.0025.  MONITORING OF SEQUESTERED CARBON DIOXIDE.
	The Bureau of Economic Geology of The University of Texas at Austin
	shall monitor, measure, and verify the permanent status of
	sequestered carbon dioxide in which the commission has acquired the
	right, title, and interest under Section 119.002.
	SECTION 4.  Section 119.004, Natural Resources Code, is
	amended to read as follows:
	Sec. 119.004.  LIABILITY.  (a)  The transfer of title to the
	state under Section 119.002 does not relieve an owner or operator of
	a clean coal project of liability for any act or omission regarding
	the generation of carbon dioxide performed before the carbon
	dioxide was captured.
	(b)  On the date the commission acquires the right, title,
	and interest in carbon dioxide captured by a clean coal project
	under Section 119.002, the owner or operator of the clean coal
	project is relieved from liability for any act or omission
	regarding the carbon dioxide injection location, and the method or
	means of performing carbon dioxide injection, if the injection
	location and method or means of injection comply with the terms of a
	license or permit issued by the state and applicable state law and
	regulations.
	(c)  Notwithstanding Subsection (b), no owner, operator, or
	contractor of the clean coal project is immune from liability for
	personal injury or death that results from construction of the
	site, or drilling or operation of the injection wells.
	SECTION 5.  Section 119.006, Natural Resources Code, is
	amended to read as follows:
	Sec. 119.006.  INDEMNIFICATION.  The University of Texas
	System, [and] the permanent university fund, and the Texas Board of
	Criminal Justice may enter into a lease with the commission[,] or
	with an owner or operator of a clean coal project[,] for the use of
	lands owned or controlled by the system, the [or] fund, or the board
	for permanent storage of carbon dioxide captured by a clean coal
	project, provided that such lease adequately indemnifies the
	system, the [and] fund, the board, and the Texas Department of
	Criminal Justice against liability for personal injury or property
	damage incurred by the system, the [or] fund, the board, or the
	department as a result of the escape or migration of the carbon
	dioxide after it is injected into a zone or reservoir.  This section
	does not affect the application of Chapter 101, Civil Practice and
	Remedies Code, to any activity carried out by a governmental unit,
	as defined by that chapter.
	SECTION 6.  Chapter 119, Natural Resources Code, is amended
	by adding Section 119.007 to read as follows:
	Sec. 119.007.  REPRESENTATION BY ATTORNEY GENERAL.  (a)  In
	this section, "state agency" includes:
	(1)  a department, commission, board, office, or other
	agency in the legislative, executive, or judicial branch of state
	government; and
	(2)  a university system or institution of higher
	education as defined by Section 61.003, Education Code.
	(b)  A state agency may request the attorney general to
	represent the state agency in a legal proceeding that arises from an
	escape or migration of carbon dioxide captured or sequestered in
	connection with a clean coal project.
	(c)  If the attorney general declines to represent the state
	agency, the state agency may obtain outside counsel in accordance
	with Section 402.0212, Government Code, and for purposes of that
	section, the attorney general's declination to represent the agency
	constitutes the attorney general's approval of the outside counsel
	for the matter.
	SECTION 7.  This Act takes effect September 1, 2007.
	______________________________	______________________________
	President of the Senate	Speaker of the House
	I hereby certify that S.B. No. 1461 passed the Senate on
	April 26, 2007, by the following vote: Yeas 31, Nays 0; and that
	the Senate concurred in House amendment on May 21, 2007, by the
	following vote: Yeas 30, Nays 0.
	______________________________
	Secretary of the Senate
	I hereby certify that S.B. No. 1461 passed the House, with
	amendment, on May 4, 2007, by the following vote: Yeas 139,
	Nays 0, one present not voting.
	______________________________
	Chief Clerk of the House
	Approved:
	______________________________
	Date
	______________________________
	Governor