Gov. Abbott Signs AAPL Bill Expanding Landman Protections
This article will be featured in the September/October issue of the Landman magazine
by/ MARK DeVRIENT, RPL, AAPL CHAIRMAN GOVERNMENTAL AFFAIRS COMMITTEE
In response to ongoing changes within the energy industry, AAPL recently secured an amendment to the statutory language found at Section 954.001 of the Texas Occupations Code concerning the definition of “land services.” The original language in this statute only pertained to landmen who provided services within the traditional oil, gas, and mineral extraction industries. As such, landmen who provided services related to alternative or renewable sources of energy did not enjoy the protections afforded to traditional landmen.
Upon recognizing this gap in the statutory definition of “land services,” AAPL drafted proposed language that was introduced in the Texas Legislature as Senate Bill 604 during the most recent legislative session. AAPL’s sponsored landman bill successfully navigated the legislative process, and Gov. Greg Abbott, a Republican, signed SB 604 into law on May 24. The bill amends the existing state code to integrate AAPL’s definitions and descriptions of landman, landwork and land professional within the state code to better reflect the full breadth, scope and types of work performed by landmen in Texas.
Building on the existing protections for AAPL members working in oil and gas, these amendments ensure the same employment treatment, tax benefits and unauthorized practice of law protections for work performed in renewables and other energy sources. SB 604 took immediate effect except for the tax provision, which will become effective Jan. 1, 2024.
Specifically, SB 604 provides 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 applies to renewables, geothermal, hydrogen and even currently unknown sources.
SB 604 covers three key areas:
- Unauthorized practice of law protection: In Texas, landmen are already protected from unauthorized practice of law penalties, but our bill extends those protections to the full scope and breadth of work performed by landmen.
- 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 expands 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 are provided with a franchise/margin tax exemption. Our bill ensures the exemption applies to the full scope of work performed.
This Texas bill passage is even more impressive because ordinarily only a small number of introduced bills are ever signed into law. For perspective, during the prior Texas legislative session in 2021, only about 15% of bills introduced were ever enacted, so this is a huge victory for AAPL and its members!
The passage of this bill was the result of the hard work and dedication of several AAPL committee members, officers and staff. I would like to thank each of those people as this successful outcome would not have been possible without their involvement and input. Additionally, I would like to extend my gratitude on behalf of AAPL to Jay Howard of HillCo Partners, who guided our association’s bill through the halls of the Texas Legislature and to the desk of Gov. Abbott.
Finally, I would like to let each of you know that AAPL is in the process of reviewing the relevant statutes in other states and developing strategies to revise as needed. Our goal is to replicate the success we’ve had in Texas by extending the protections and exemptions enjoyed by oil and gas landmen to our members who are working on projects involving other energy sources.