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  S.B. No. 785
 
 
 
 
AN ACT
  relating to the ownership of and certain insurance policy
  provisions regarding the geothermal energy and associated
  resources below the surface of land.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 2703.056, Insurance Code, is amended to
  read as follows:
         Sec. 2703.056.  EXCEPTIONS; MINERAL AND GEOTHERMAL ENERGY
  INTERESTS.  (a)  Subject to the underwriting standards of the title
  insurance company, a title insurance company may in a commitment
  for title insurance or a title insurance policy include a general
  exception or a special exception to except from coverage:
               (1)  a mineral estate or the geothermal energy and
  associated resources below the surface of the land; or
               (2)  an instrument that purports to reserve or transfer
  all or part of a mineral estate or the geothermal energy and
  associated resources below the surface of the land.
         (b)  A reduction to, or credit on a premium charge for, a
  policy of title insurance or other insuring form may not be directly
  or indirectly based on an exclusion of, or general or special
  exception to, a mineral estate or the geothermal energy and
  associated resources below the surface of the land in the title
  insurance policy.
         (c)  The inclusion in a title insurance policy of a general
  exception or a special exception described by Subsection (a) does
  not create title insurance coverage as to the condition or
  ownership of the mineral estate or the geothermal energy and
  associated resources below the surface of the land.
         SECTION 2.  Section 141.003(5), Natural Resources Code, is
  amended to read as follows:
               (5)  "By-product" means any other element found in a
  geothermal formation which is brought to the surface, whether or
  not it is used in geothermal heat or pressure inducing energy
  generation. The term does not include:
                     (A)  a mineral, as defined by Section 75.001,
  Property Code; or
                     (B)  oil, gas, or a product of oil or gas, as
  defined by Section 85.001.
         SECTION 3.  Subchapter A, Chapter 141, Natural Resources
  Code, is amended by adding Section 141.004 to read as follows:
         Sec. 141.004.  OWNERSHIP OF GEOTHERMAL ENERGY AND ASSOCIATED
  RESOURCES. (a) Except as otherwise expressly provided by a
  conveyance, contract, deed, reservation, exception, limitation,
  lease, or other binding obligation, the geothermal energy and
  associated resources below the surface of land are owned as real
  property by:
               (1)  the landowner; or
               (2)  if the surface estate and the mineral estate of the
  land have been severed, the owner of the surface estate of the land.
         (b)  Subject to the provisions of this chapter, the property
  rights described by this section entitle the owner of the
  geothermal energy and associated resources below the surface of
  land and the owner's lessee, heir, or assignee to drill for and
  produce the geothermal energy and associated resources.
         (c)  This section does not:
               (1)  apply to minerals dissolved or otherwise contained
  in groundwater, including in hot brines; or
               (2)  change existing law regarding:
                     (A)  oil, gas, or mineral extraction regardless of
  its heat or energy potential;
                     (B)  the rights of the dominant and servient
  estates; or
                     (C)  the ownership and use of groundwater.
         SECTION 4.  This Act takes effect immediately if it receives
  a vote of two-thirds of all the members elected to each house, as
  provided by Section 39, Article III, Texas Constitution.  If this
  Act does not receive the vote necessary for immediate effect, this
  Act takes effect September 1, 2023.
 
 
 
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
         I hereby certify that S.B. No. 785 passed the Senate on
  April 19, 2023, by the following vote: Yeas 30, Nays 1; and that
  the Senate concurred in House amendment on May 25, 2023, by the
  following vote: Yeas 29, Nays 1, one present not voting.
 
 
  ______________________________
  Secretary of the Senate    
 
         I hereby certify that S.B. No. 785 passed the House, with
  amendment, on May 23, 2023, by the following vote: Yeas 140,
  Nays 0, two present not voting.
 
 
  ______________________________
  Chief Clerk of the House   
 
 
 
  Approved:
 
  ______________________________ 
              Date
 
 
  ______________________________ 
            Governor