Texas 2011 - 82nd Regular

Texas House Bill HB1355 Compare Versions

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1	1	By: Orr, Smithee, Vo (Senate Sponsor - Harris) H.B. No. 1355
2	2	(In the Senate - Received from the House May 12, 2011;
3	3	May 12, 2011, read first time and referred to Committee on Business
4	4	and Commerce; May 18, 2011, reported favorably by the following
5	5	vote: Yeas 8, Nays 0; May 18, 2011, sent to printer.)
6	6
7	7
8	8	A BILL TO BE ENTITLED
9	9	AN ACT
10	10	relating to title insurance coverage for minerals and surface
11	11	damage resulting from mineral extraction and development.
12	12	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
13	13	SECTION 1. Subchapter B, Chapter 2703, Insurance Code, is
14	14	amended by adding Section 2703.0515 to read as follows:
15	15	Sec. 2703.0515. CERTAIN REQUIREMENTS PROHIBITED. (a) A
16	16	title insurance company is not required to offer or provide in
17	17	connection with a title insurance policy an endorsement insuring a
18	18	loss from damage resulting from the use of the surface of the land
19	19	for the extraction or development of coal, lignite, oil, gas, or
20	20	another mineral if the policy includes a general exception or
21	21	exclusion from coverage a loss from damage resulting from the use of
22	22	the surface of the land for the extraction or development of coal,
23	23	lignite, oil, gas, or another mineral.
24	24	(b) In this section, "general exception or exclusion" means
25	25	a provision in a title insurance policy or other title insuring form
26	26	that provides that title insurance coverage under the policy or
27	27	form:
28	28	(1) is subject to, and the title insurer does not
29	29	insure title to, and excepts from the description of the covered
30	30	property, coal, lignite, oil, gas, and other minerals in and under
31	31	and that may be produced from the covered property, together with
32	32	related rights, privileges, and immunities; or
33	33	(2) does not cover a lease, grant, exception, or
34	34	reservation of coal, lignite, oil, gas, or other minerals, or
35	35	related rights, privileges, and immunities, appearing in the public
36	36	records.
37	37	(c) An additional premium or other amount may not be charged
38	38	for an endorsement to a loan policy of title insurance if the
39	39	endorsement:
40	40	(1) insures against loss from damage to improvements
41	41	or permanent buildings located on land that results from the future
42	42	exercise of any right existing on the date of the loan policy to use
43	43	the surface of the land for the extraction or development of coal,
44	44	lignite, oil, gas, or another mineral;
45	45	(2) expressly does not insure against loss resulting
46	46	from subsidence; and
47	47	(3) was promulgated by the commissioner in calendar
48	48	year 2009.
49	49	SECTION 2. Subchapter B, Chapter 2703, Insurance Code, is
50	50	amended by adding Sections 2703.055 and 2703.056 to read as
51	51	follows:
52	52	Sec. 2703.055. REQUIREMENT OF CERTAIN PROVISIONS
53	53	PROHIBITED. The commissioner may not require by rule or through
54	54	adoption of a title insurance policy or other insuring form that a
55	55	title insurance policy delivered or issued for delivery in this
56	56	state:
57	57	(1) insure against a loss that a person with an
58	58	interest in real property sustains from damage to the property by
59	59	reason of severance of minerals from the surface estate; or
60	60	(2) provide insurance as to ownership of minerals.
61	61	Sec. 2703.056. EXCEPTIONS; MINERAL INTERESTS. (a) Subject
62	62	to the underwriting standards of the title insurance company, a
63	63	title insurance company may in a commitment for title insurance or a
64	64	title insurance policy include a general exception or a special
65	65	exception to except from coverage a mineral estate or an instrument
66	66	which purports to reserve or transfer all or part of a mineral
67	67	estate.
68	68	(b) The inclusion in a title insurance policy of a general
69	69	exception or a special exception described by Subsection (a) does
70	70	not create title insurance coverage as to the condition or
71	71	ownership of the mineral estate.
72	72	SECTION 3. Sections 2703.055 and 2703.056, Insurance Code,
73	73	as added by this Act, apply only to a title insurance policy that is
74	74	delivered or issued for delivery on or after January 1, 2012. A
75	75	policy delivered or issued for delivery before January 1, 2012, is
76	76	governed by the law as it existed immediately before the effective
77	77	date of this Act, and that law is continued in effect for that
78	78	purpose.
79	79	SECTION 4. This Act applies only to a title insurance policy
80	80	that is delivered or issued for delivery on or after January 1,
81	81	2012. A policy delivered or issued for delivery before January 1,
82	82	2012, is governed by the law as it existed immediately before the
83	83	effective date of this Act, and that law is continued in effect for
84	84	that purpose.
85	85	SECTION 5. This Act takes effect September 1, 2011.
86	86	* * * * *