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