TREC Wind Leasing Requirements Legislative Update

A message to members from AAPL President Nancy C. McCaskell, CPL – Sept. 2024

As an update to our prior message, we want to update AAPL members on the status of our legislative fix addressing the recent legal opinion from Texas Attorney General Ken Paxton regarding wind leasing licensing requirements with the Texas Real Estate Commission (TREC).

AAPL is diligently moving forward to secure a legislative solution in the 89th Texas Legislative Session commencing in January 2025. We are crafting draft language to be submitted to potential bill sponsors to get the results we want. AAPL expects our draft legislation review process to begin as early as October. We will continue to keep members updated as the process moves forward. Stay tuned. 

As our prior message noted, Texas Attorney General Ken Paxton issued a legal opinion in June holding that “a person negotiating a lease for property of a wind power project on behalf of another, for compensation, is required to hold a license” issued by TREC. Our legislative solution seeks to exempt landmen from any such requirement, not only with wind leasing, but with all other energy sources and renewables to ensure landmen enjoy the same licensing exemptions they already have in the oil and gas industry.

As a reminder, with the successful passage of last year’s AAPL-sponsored bill, SB 604, Texas Rep. Darby sought to provide these protections in an amendment to our bill but those provisions were stricken from the final bill to ensure its passage. Had state lawmakers included that provision, it may have helped avoid the situation reflected in Paxton’s opinion. Still, historically, no licensing requirement for renewables leasing has been enforced by TREC or any other state regulator. Paxton’s opinion attempted to create new licensing requirements where none had previously existed and that’s why AAPL and many of our members disagreed with that opinion. 

For background, SB 604 provided benefits and protections for AAPL members performing landwork in Texas by adopting the official AAPL definitions and expanding the types of energy sources in which our members may work to include the broadly defined “other energy sources” that apply to renewables, geothermal, hydrogen and even currently unknown sources.

SB 604 covered three key areas: 

• Unauthorized practice of law protection: In Texas, landmen were already protected from unauthorized practice of law penalties, but our bill extended those protections to the full scope and breadth of work performed by landmen to include other energy sources. 
• Independent contractor status: In Texas, landmen who meet specified criteria may be recognized as independent contractors, which includes the full protections the law affords. Our bill also expanded those protections and ensures they apply to the full range of services performed in all energy sources.
• Landman carve out for the franchise/margin tax: In Texas, landmen receive a franchise/margin tax exemption. Our bill ensured the exemption applies to the full scope of work performed in other energy sources.

We look forward to our legislative efforts in the coming Texas legislative session to protect members’ right to work and avoid unnecessary licensing or regulatory burdens. 

For a deeper dive, please see our original AAPL President’s message that we shared with members in June on the Landnews Blog.