Overall Vote Recommendation

Yes

Principle Criteria

Free Enterprise

Property Rights

Personal Responsibility

Limited Government

Individual Liberty

Digest

SB 1172 proposes targeted amendments to Chapter 1101 of the Texas Occupations Code to clarify and expand exemptions from regulation by the Texas Real Estate Commission (TREC). Specifically, the bill introduces two new definitions: "mineral," which mirrors the definition in the Property Code and includes substances like oil, gas, coal, uranium, and other industrial minerals; and "other energy source," which encompasses non-mineral energy-producing resources such as geothermal, nuclear, solar, and wind energy. These definitions establish a legal foundation for determining the scope of exempted transactions.

The bill then amends Section 1101.005 to exclude from TREC’s oversight real estate transactions involving the sale, lease, or transfer of property interests related to these defined energy resources. This includes both subsurface mineral rights and surface rights associated with alternative energy production. These changes are added to a list of existing exemptions, which already include attorneys, auctioneers, public officials, and other narrowly defined roles or circumstances where state licensure is deemed unnecessary.

The intent of SB 1172 is to streamline real estate dealings in the energy sector by lifting regulatory requirements that may otherwise restrict landowners, businesses, and investors from freely engaging in these transactions.

The originally filed version of SB 1172 and its committee substitute share the same core intent: to exempt certain real estate transactions from regulation by the Texas Real Estate Commission (TREC). However, several key differences between the two versions reflect refinements made during the legislative process.

First, the original bill includes a more expansive list of exempted transaction types in Section 1101.005. Specifically, it exempts real estate transactions involving standing timber, water rights, cemeteries, hotel leases, and sales under a deed of trust. These were removed in the Committee Substitute, narrowing the focus of the bill to only those transactions involving "minerals" and "other energy sources." The substitute version also avoids potentially duplicative or already exempted items found in existing law.

Second, the Committee Substitute omits the detailed exemptions for transactions by limited partnerships and limited liability companies—included as subsections (10) and (11) in the original bill. These provisions would have allowed general partners, LLC managers, and their employees to engage in real estate transactions on behalf of their entity without being subject to TREC regulation. By removing these, the substitute reduces the bill’s scope to strictly natural resource-related transactions, likely in response to concerns about overbroad deregulation.

Lastly, there is a subtle refinement in the definition of "other energy source." The original bill includes hydroelectric power, which was removed in the substitute. This change may reflect a policy choice to exclude water-related transactions—especially considering the complex regulatory environment surrounding Texas water law.

Overall, the Committee Substitute version tightens the bill’s focus, ensuring it more narrowly targets energy resource transactions and avoids broader real estate deregulation that could have raised practical or political concerns.

Author (1)

Charles Perry

Sponsor (1)

Drew Darby

Contact the Author

Sen. Charles Perry

Capitol Phone:

(512) 463-0128

Capitol Office:

EXT E1.806

E-Mail:

[email protected]

Visit Official Website

Fiscal Notes

According to the Legislative Budget Board (LBB), SB 1172 will have no significant fiscal implication to the State. This is largely because the Texas Real Estate Commission (TREC), the agency affected by the bill, operates as a self-directed, semi-independent agency. As such, TREC funds its own operations and does not rely on general appropriations from the state’s General Revenue Fund. Therefore, any reduction in workload or jurisdiction resulting from the exemption of certain transactions does not affect state budgeting or appropriations.

Furthermore, the bill is not expected to have a significant fiscal impact on local governments. Since the legislation does not impose new mandates, administrative burdens, or costs on municipalities or counties, there is no anticipated need for local tax increases, staffing changes, or regulatory adjustments at the local level.

Overall, the fiscal note underscores that the bill’s regulatory changes are policy-oriented rather than cost-intensive. It aims to remove certain transactions from TREC's oversight without introducing new financial obligations to the state or local governments. This aligns with the broader goal of reducing unnecessary regulation without expanding government expenditures.

Vote Recommendation Notes

Texas Policy Research recommends that lawmakers vote YES on SB 1172 due to its strong alignment with liberty principles—particularly individual liberty, free enterprise, private property rights, and limited government. The bill addresses regulatory inconsistencies in current law by clarifying that transactions involving various energy resources—including solar, wind, geothermal, and others—are exempt from oversight by the Texas Real Estate Commission (TREC). This mirrors existing exemptions already granted to transactions involving oil, gas, and other mineral interests, ensuring consistent treatment across energy sectors.

Importantly, the bill also confirms that limited partnerships (LPs) and limited liability companies (LLCs) may transact in their own real estate without being subject to licensure requirements. This change promotes efficiency and cost-savings for small and medium-sized businesses, removing the need to engage licensed brokers for transactions where the parties are acting on their own behalf.

Critically, while the bill extends regulatory relief to renewable energy sources like wind and solar, it does not provide preferential treatment or competitive advantages to those industries. Instead, it levels the regulatory playing field by granting the same exemptions already available to the fossil fuel sector. There are no subsidies, mandates, or financial incentives tied to this change—just equal access to streamlined transactions. This ensures that all forms of energy compete on merit within a free enterprise system, preserving market neutrality and respecting consumer choice.

Finally, the bill has no significant fiscal impact on state or local governments. TREC operates as a self-directed agency, so reduced oversight does not affect public budgets. The bill represents a principled, practical reform that advances economic freedom without expanding government cost or control.

Related Legislation

HB 2349 (Same As)

View Bill Text and Status