89R4312 JXC-D

By: Hall S.B. No. 1478

A BILL TO BE ENTITLED

AN ACT

relating to the removal of certain power facilities operated on leased property.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Chapter 301, Utilities Code, is transferred to Subtitle B, Title 5, Health and Safety Code, redesignated as Chapter 375, Health and Safety Code, and amended to read as follows:

CHAPTER 375 [301]. [WIND] POWER FACILITY AGREEMENTS AND FINANCIAL

ASSURANCE

Sec. 375.0001 [301.0001]. DEFINITIONS. In this chapter:

(1) "Commission" means the Texas Commission on Environmental Quality.

(2) "Electric energy storage facility agreement" means a lease agreement between a grantee and a landowner that authorizes the grantee to operate an electric energy storage facility on the leased property.

(3) "Grantee" means a person who[:

[(A)] leases property from a landowner[; and

[(B) operates a wind power facility on the property].

(4) "Renewable power facility" means a facility that:

(A) generates electric energy using a renewable energy technology, as defined by Section 39.916, Utilities Code, other than a technology that relies exclusively on wind or solar energy; and

(B) is not an electric energy storage facility.

(5) "Renewable power facility agreement" means a lease agreement between a grantee and a landowner that authorizes the grantee to operate a renewable power facility on the leased property.

(6) "Solar energy device" has the meaning assigned by Section 185.001, Utilities Code.

(7) "Solar power facility" includes:

(A) a solar energy device; and

(B) a facility or equipment, other than a facility or equipment owned by an electric utility, as defined by Section 31.002, Utilities Code, used to support the operation of a solar energy device, including an underground or aboveground electrical transmission or communications line, an electric transformer, a battery storage facility, an energy storage facility, telecommunications equipment, a road, a meteorological tower, or a maintenance yard.

(8) "Solar power facility agreement" means a lease agreement between a grantee and a landowner that authorizes the grantee to operate a solar power facility on the leased property.

(9) [(2)] "Wind power facility" includes:

(A) a wind turbine generator; and

(B) a facility or equipment used to support the operation of a wind turbine generator, including an underground or aboveground electrical transmission or communications line, an electric transformer, a battery storage facility, an energy storage facility, telecommunications equipment, a road, a meteorological tower with wind measurement equipment, or a maintenance yard.

(10) [(3)] "Wind power facility agreement" means a lease agreement between a grantee and a landowner that authorizes the grantee to operate a wind power facility on the leased property.

Sec. 375.0002. APPLICABILITY. This chapter applies only to an electric energy storage facility, a renewable power facility, a solar power facility, or a wind power facility that is intended to provide energy or ancillary services at wholesale for a power grid.

Sec. 375.0003 [301.0002]. WAIVER VOID; REMEDIES. (a) A provision of an electric energy storage facility agreement, a renewable power facility agreement, a solar power facility agreement, or a wind power facility agreement that purports to waive a right or exempt a grantee from a liability or duty established by this chapter is void.

(b) A person who is harmed by a violation of this chapter is entitled to appropriate injunctive relief to prevent further violation of this chapter.

(c) The provisions of this section are not exclusive. The remedies provided in this section are in addition to any other procedures or remedies provided by other law.

Sec. 375.0004 [301.0003]. REQUIRED AGREEMENT PROVISIONS ON WIND POWER FACILITY REMOVAL. (a) A wind power facility agreement must provide that the grantee is responsible for removing the grantee's wind power facilities from the landowner's property and that the grantee shall, in accordance with any other applicable laws or regulations, safely:

(1) clear, clean, and remove from the property:

(A) each wind turbine generator, including towers and pad-mount transformers;

(B) all liquids, greases, or similar substances contained in a wind turbine generator;

(C) each substation; and

(D) all liquids, greases, or similar substances contained in a substation;

(2) for each tower foundation and pad-mount transformer foundation installed in the ground:

(A) clear, clean, and remove the foundation from the ground to a depth of at least three feet below the surface grade of the land in which the foundation is installed; and

(B) ensure that each hole or cavity created in the ground by the removal is filled with topsoil of the same type or a similar type as the predominant topsoil found on the property;

(3) for each buried cable, including power, fiber-optic, and communications cables, installed in the ground:

(A) clear, clean, and remove the cable from the ground to a depth of at least three feet below the surface grade of the land in which the cable is installed; and

(B) ensure that each hole or cavity created in the ground by the removal is filled with topsoil of the same type or a similar type as the predominant topsoil found on the property; and

(4) clear, clean, and remove from the property each overhead power or communications line installed by the grantee on the property.

(b) The agreement must provide that, at the request of the landowner, the grantee shall:

(1) clear, clean, and remove each road constructed by the grantee on the property; and

(2) ensure that each hole or cavity created in the ground by the removal is filled with topsoil of the same type or a similar type as the predominant topsoil found on the property.

(c) The agreement must provide that, at the request of the landowner, if reasonable, the grantee shall:

(1) remove from the property all rocks over 12 inches in diameter excavated during the decommissioning or removal process;

(2) return the property to a tillable state using scarification, V-rip, or disc methods, as appropriate; and

(3) ensure that:

(A) each hole or cavity created in the ground by the removal is filled with topsoil of the same type or a similar type as the predominant topsoil found on the property; and

(B) the surface is returned as near as reasonably possible to the same condition as before the grantee dug holes or cavities, including by reseeding pastureland with native grasses prescribed by an appropriate governmental agency, if any.

(d) The landowner shall make a request under Subsection (b) or (c) not later than the 180th day after the later of:

(1) the date on which the wind power facility is no longer capable of generating electricity in commercial quantities; or

(2) the date the landowner receives written notice of intent to decommission the wind power facility from the grantee.

Sec. 375.0005. REQUIRED AGREEMENT PROVISIONS ON SOLAR POWER FACILITY REMOVAL. (a) A solar power facility agreement must provide that the grantee is responsible for removing the grantee's solar power facilities from the landowner's property and that the grantee shall, in accordance with any other applicable laws or regulations, safely:

(1) clear, clean, and remove from the property each solar energy device, transformer, and substation;

(2) for each foundation of a solar energy device, transformer, or substation installed in the ground:

(A) clear, clean, and remove the foundation from the ground to a depth of at least three feet below the surface grade of the land in which the foundation is installed; and

(B) ensure that each hole or cavity created in the ground by the removal is filled with soil of the same type or a similar type as the predominant soil found on the property;

(3) for each buried cable, including power, fiber-optic, and communications cables, installed in the ground:

(A) clear, clean, and remove the cable from the ground to a depth of at least three feet below the surface grade of the land in which the cable is installed; and

(B) ensure that each hole or cavity created in the ground by the removal is filled with soil of the same type or a similar type as the predominant soil found on the property; and

(4) clear, clean, and remove from the property each overhead power or communications line installed by the grantee on the property.

(b) The agreement must provide that, at the request of the landowner, the grantee shall:

(1) clear, clean, and remove each road constructed by the grantee on the property; and

(2) ensure that each hole or cavity created in the ground by the removal is filled with soil of the same type or a similar type as the predominant soil found on the property.

(c) The agreement must provide that, at the request of the landowner, if reasonable, the grantee shall:

(1) remove from the property all rocks over 12 inches in diameter excavated during the decommissioning or removal process;

(2) return the property to a tillable state using scarification, V-rip, or disc methods, as appropriate; and

(3) ensure that:

(A) each hole or cavity created in the ground by the removal is filled with soil of the same type or a similar type as the predominant soil found on the property; and

(B) the surface is returned as near as reasonably possible to the same condition as before the grantee dug holes or cavities, including by reseeding pastureland with native grasses prescribed by an appropriate governmental agency, if any.

(d) The landowner shall make a request under Subsection (b) or (c) not later than the 180th day after the later of:

(1) the date on which the solar power facility is no longer capable of generating electricity in commercial quantities; or

(2) the date the landowner receives written notice of intent to decommission the solar power facility from the grantee.

Sec. 375.0006. REQUIRED AGREEMENT PROVISIONS ON ELECTRIC ENERGY STORAGE OR RENEWABLE POWER FACILITY REMOVAL. An electric energy storage facility agreement or renewable power facility agreement must provide that the grantee is responsible for:

(1) removing the grantee's electric energy storage facilities or renewable power facilities, as applicable, from the landowner's property; and

(2) restoring the property to as near as reasonably possible the condition of the property as of the date the agreement begins.

Sec. 375.0007 [301.0004]. REQUIRED AGREEMENT PROVISIONS ON FINANCIAL ASSURANCE. (a) An electric energy storage facility agreement, a renewable power facility agreement, a solar power facility agreement, or a [A] wind power facility agreement must provide that the grantee shall obtain and deliver to the commission [landowner] evidence of financial assurance payable to the landowner that conforms to the requirements of this section to secure the performance of the grantee's obligation to remove the grantee's electric energy storage facilities, renewable power facilities, solar power facilities, or wind power facilities located on the landowner's property as required by this chapter [as described by Section 301.0003]. The [Acceptable forms of] financial assurance may be [include a parent company guaranty with a minimum investment grade credit rating for the parent company issued by a major domestic credit rating agency, a letter of credit,] a bond[,] or another form of financial assurance acceptable to the landowner.

(b) The amount of the financial assurance must be at least equal to the estimated amount by which the cost of removing the [wind power] facilities from the landowner's property and restoring the property to as near as reasonably possible the condition of the property as of the date the agreement begins exceeds the salvage value of the [wind power] facilities, less any portion of the value of the [wind power] facilities pledged to secure outstanding debt.

(c) The agreement must provide that:

(1) the estimated cost of removing the [wind power] facilities from the landowner's property and restoring the property to as near as reasonably possible the condition of the property as of the date the agreement begins and the estimated salvage value of the [wind power] facilities must be determined by an independent, third-party professional engineer licensed in this state;

(2) the grantee must deliver to the landowner and the commission an updated estimate, prepared by an independent, third-party professional engineer licensed in this state, of the cost of removal and the salvage value at least once every five years for the remainder of the term of the agreement; and

(3) the grantee is responsible for ensuring that the amount of the financial assurance remains sufficient to cover the amount required by Subsection (b), consistent with the estimates required by this subsection.

(d) The grantee is responsible for the costs of obtaining financial assurance described by this section and costs of determining the estimated removal costs and salvage value.

(e) The agreement must provide that the grantee shall deliver the financial assurance to the commission not later than the 30th day after [earlier of:

[(1)] the date the [wind power facility] agreement begins [is terminated; or

[(2) the 10th anniversary of the commercial operations date of the wind power facilities located on the landowner's leased property].

(f) [For purposes of this section, "commercial operations date" means the date on which the wind power facilities are approved for participation in market operations by a regional transmission organization and does not include the generation of electrical energy or other operations conducted before that date for purposes of maintenance and testing.

[(g)] The grantee may not cancel financial assurance before the date the grantee has completed the grantee's obligation to remove the grantee's [wind power] facilities located on the landowner's property as required [in the manner provided] by this chapter, unless the grantee provides the commission [landowner] with replacement financial assurance at the time of or before the cancellation. In the event of a transfer of ownership of the grantee's [wind power] facilities, the financial security provided by the grantee shall remain in place until the date evidence of financial security meeting the requirements of this chapter is provided to the commission [landowner].

Sec. 375.0008. RELEASE OF FINANCIAL ASSURANCE TO GRANTEE. (a) At any time, a grantee may file an application with the commission for the release of all or part of a bond or other financial assurance provided to the commission by the grantee for a landowner under this chapter.

(b) The application must be on a form prescribed by the commission and, in addition to other information the commission may require, must include the type and the approximate date of removal and restoration work performed and a description of the results achieved.

(c) The grantee shall provide a copy of the application to the landowner not later than the 30th day after the date the grantee files the application with the commission.

(d) Not later than the 45th day after the date the grantee files the application, the commission shall conduct an inspection and evaluation of the removal and restoration work performed.

(e) The commission may release all or part of the financial assurance if the commission determines that the grantee has completed all or part of the grantee's obligations under the agreement entered into under Section 375.0004, 375.0005, or 375.0006, as applicable.

(f) If the commission disapproves the application for release of the financial assurance, the commission shall notify the grantee in writing of the reasons for disapproval and recommend corrective actions necessary to secure the release of the financial assurance.

Sec. 375.0009. FORFEITURE OF FINANCIAL ASSURANCE TO LANDOWNER. (a) A landowner may file an application with the commission for the forfeiture of all or part of a bond or other financial assurance provided to the commission by a grantee for the landowner under this chapter if:

(1) the grantee has not completed the grantee's obligations under the agreement entered into under Section 375.0004, 375.0005, or 375.0006, as applicable; and

(2) the facility that is the subject of the agreement is no longer being used by the grantee to provide energy or ancillary services at wholesale for a power grid in the manner provided by the agreement.

(b) The application must be on a form prescribed by the commission.

(c) The landowner shall provide a copy of the application to the grantee not later than the 30th day after the date the landowner files the application with the commission.

(d) Not later than the 45th day after the date the landowner files the application, the commission shall conduct an inspection and evaluation of the property for which the financial assurance was provided.

(e) The commission may approve the forfeiture of all or part of the financial assurance if the commission determines that:

(1) the facility that is the subject of the agreement is no longer being used in the manner described by Subsection (a)(2); and

(2) the forfeiture is necessary to compensate the landowner for any remaining removal and restoration work the grantee was required to but did not complete under the agreement.

(f) If the commission disapproves the application for forfeiture of the financial assurance, the commission shall notify the landowner in writing of the reasons for disapproval.

Sec. 375.0010. COMMISSION AUTHORITY. (a) The commission shall notify the Public Utility Commission of Texas if the commission requires forfeiture of financial assurance under Section 375.0009. The commission and the Public Utility Commission of Texas may not issue to a grantee whose financial assurance was forfeited under Section 375.0009 any permit, certificate, or registration under other law that authorizes the grantee to operate a generation facility to which this chapter applies or renew any such permit, certificate, or registration.

(b) In a suit for receivership, garnishment, or bankruptcy, or in any other legal action affecting the assets of a grantee that is a party to an agreement subject to this chapter, the commission may:

(1) inform the appropriate court and parties of the commission's interest in obtaining notice of the proceedings; and

(2) within the time prescribed by the applicable statutes, rules, and court orders, intervene and participate in any proceedings that affect a landowner not joined in the suit who is a party to the agreement with the grantee.

SECTION 2. Section 5.013(a), Water Code, is amended to read as follows:

(a) The commission has general jurisdiction over:

(1) water and water rights including the issuance of water rights permits, water rights adjudication, cancellation of water rights, and enforcement of water rights;

(2) continuing supervision over districts created under Article III, Sections 52(b)(1) and (2), and Article XVI, Section 59, of the Texas Constitution;

(3) the state's water quality program including issuance of permits, enforcement of water quality rules, standards, orders, and permits, and water quality planning;

(4) the determination of the feasibility of certain federal projects;

(5) the adoption and enforcement of rules and performance of other acts relating to the safe construction, maintenance, and removal of dams;

(6) conduct of the state's hazardous spill prevention and control program;

(7) the administration of the state's program relating to inactive hazardous substance, pollutant, and contaminant disposal facilities;

(8) the administration of a portion of the state's injection well program;

(9) the administration of the state's programs involving underground water and water wells and drilled and mined shafts;

(10) the state's responsibilities relating to regional waste disposal;

(11) the responsibilities assigned to the commission by Chapters 361, 363, 375, 382, 401, 505, 506, and 507, Health and Safety Code; and

(12) any other areas assigned to the commission by this code and other laws of this state.

SECTION 3. (a) The heading to Title 6, Utilities Code, is repealed.

(b) Chapter 302, Utilities Code, is repealed.

SECTION 4. The changes in law made by this Act apply only to an electric energy storage facility agreement, a renewable power facility agreement, a solar power facility agreement, or a wind power facility agreement entered into on or after the effective date of this Act. An agreement entered into before the effective date of this Act is governed by the law applicable to the agreement on the date the agreement was entered into, and that law is continued in effect for that purpose.

SECTION 5. 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, 2025.