S.B. No. 604
AN ACT
relating to land services performed by a landman.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 954, Occupations Code, is amended to
read as follows:
CHAPTER 954. LAND SERVICES FOR PETROLEUM, [AND] MINERAL, AND OTHER
ENERGY SOURCES [LAND SERVICES]
Sec. 954.001. DEFINITIONS. In this chapter:
(1) "Land services":
(A) means the performance or supervision of one
or more of the following activities:
(i) negotiating the acquisition or
divestiture of mineral rights or rights associated with other
energy sources;
(ii) negotiating business agreements or
easements to provide for the exploration for or development of
minerals or other energy sources;
(iii) ascertaining ownership in mineral
rights or rights associated with other energy sources and related
real property through the research of public and private records;
(iv) reviewing the status of title, curing
title defects, providing title due diligence, and otherwise
reducing title risk associated with the ownership, acquisition, or
divestiture of mineral rights, property associated with minerals,
or rights associated with other energy sources, excluding:
(a) administrative functions;
(b) division order functions; and
(c) lease analyst functions;
(v) managing rights or obligations derived
from ownership of interests in minerals or rights associated with
other energy sources; or
(vi) using or pooling mineral interests or
rights associated with other energy sources; and
(B) does not include determining, examining, or
reviewing the status of title in connection with transactions that
are primarily for:
(i) the sale, purchase, or encumbrance of
the surface of the land unassociated with mineral rights or other
energy sources; or
(ii) the mortgage of real property used or
intended to be used primarily for residential purposes.
(2) "Mineral" has the meaning assigned by Section
75.001, Property Code. The term includes oil, gas, related
hydrocarbons, coal, lignite, uranium, and substances classified as
base, industrial, precious, or strategic minerals.
(3) "Other energy source" means a natural resource
other than a mineral that is necessary to produce energy, including
geothermal, hydroelectric, nuclear, solar, and wind energy.
Sec. 954.002. EXCEPTION TO PRACTICE OF LAW. For the
purposes of the definition in Section 81.101, Government Code, the
"practice of law" does not include engaging in land services [acts
relating to the lease, purchase, sale, or transfer of a mineral or
mining interest in real property or an easement or other interest
associated with a mineral or mining interest in real property] if:
(1) the acts are performed by a person who does not
hold the person out as an attorney licensed to practice law in this
state or in another jurisdiction; and
(2) the person is not a licensed attorney.
SECTION 2. Section 1702.324(a), Occupations Code, is
amended to read as follows:
(a) For the purposes of this section, "landman" means an
individual who, in the course and scope of the individual's
business:
(1) acquires, divests, or manages petroleum or mineral
interests; [or]
(2) performs title or contract functions related to
the exploration, exploitation, or disposition of petroleum or
mineral interests; or
(3) otherwise engages in land services as defined by
Section 954.001.
SECTION 3. Section 171.1011(g-11), Tax Code, is amended to
read as follows:
(g-11) A taxable entity that is primarily engaged in the
business of performing landman services shall exclude from its
total revenue, to the extent included under Subsection (c)(1)(A),
(c)(2)(A), or (c)(3), subcontracting payments made by the taxable
entity to nonemployees for the performance of landman services on
behalf of the taxable entity. In this subsection, "landman
services" means:
(1) performing title searches for the purpose of
determining ownership of or curing title defects related to oil,
gas, other energy sources, or other related mineral or petroleum
interests;
(2) negotiating the acquisition or divestiture of
mineral rights for the purpose of the exploration, development, or
production of oil, gas, other energy sources, or other related
mineral or petroleum interests; or
(3) negotiating or managing the negotiation of
contracts or other agreements related to the ownership of mineral
interests for the exploration, exploitation, disposition,
development, or production of oil, gas, other energy sources, or
other related mineral or petroleum interests.
SECTION 4. The change in law made by this Act to Section
171.1011(g-11), Tax Code, applies only to a report originally due
on or after January 1, 2024.
SECTION 5. (a) Except as provided by Subsection (b) of this
section, this Act takes effect:
(1) immediately if this Act receives a vote of
two-thirds of all the members elected to each house, as provided by
Section 39, Article III, Texas Constitution; or
(2) September 1, 2023, if this Act does not receive the
vote necessary for immediate effect.
(b) Section 171.1011(g-11), Tax Code, as amended by this
Act, takes effect January 1, 2024.
______________________________ ______________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 604 passed the Senate on
April 12, 2023, by the following vote: Yeas 31, Nays 0; and that
the Senate concurred in House amendment on May 11, 2023, by the
following vote: Yeas 30, Nays 0.
______________________________
Secretary of the Senate
I hereby certify that S.B. No. 604 passed the House, with
amendment, on May 8, 2023, by the following vote: Yeas 129,
Nays 13, one present not voting.
______________________________
Chief Clerk of the House
Approved:
______________________________
Date
______________________________
Governor