Bulletin: TX2023001

Dear Associates:

SB 785, passed during the 88th Texas Legislative Regular Session, amends Chapter 141 of the Texas Natural Resources Code and Section 2703.056 of the Texas insurance Code to address geothermal energy interests. This statute takes effect June 18, 2023.

The statute establishes that, 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 the following:

• the landowner; or
• if the surface estate and the mineral estate of the land have been severed, the owner of the surface estate of the land.

It contains specific exclusions from, and rights included in geothermal energy resources.

The bill also amends the insurance code to allow for a specific exception in title insurance policies to geothermal energy and associated resources below the surface of the land.

What You Should Do/Know:

In addition to any general or specific mineral exceptions, add the following exception in Schedule C of each Commitment or Binder, unless you secure underwriter approval to remove the exception: 

"All leases, grants, exceptions or reservations of the geothermal energy and associated resources below the surface of the land, together with all rights, privileges, and immunities relating thereto, appearing in the Public Records whether listed in Schedule B or not. There may be leases, grants, exceptions or reservations of the geothermal energy and associated resources below the surface of the land that are not listed."

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