Relating to the inclusion of certain provisions in lease agreements for wind or solar power facilities.
CriticalImmediate action required
High Cost
Effective:2025-06-20
01
Compliance Analysis
Key implementation requirements and action items for compliance with this legislation
Implementation Timeline
Effective Date:June 20, 2025 (Immediate effect via supermajority vote).
Compliance Deadline:June 20, 2025. Any lease agreement entered into on or after this date must contain the new statutory covenants. There is no grace period.
Agency Rulemaking: None explicitly mandated. This statute amends the Utilities Code to regulate private contract terms. Enforcement will occur through civil litigation and contract disputes rather than proactive agency rulemaking, meaning judicial interpretation will set the precedents.
Immediate Action Plan
1.Freeze & Review Pipeline: Identify all leases currently in negotiation. If they cannot be signed before June 20, 2025, insert a "HB3228 Rider" immediately.
2.Update Templates: Instruct outside counsel to redline all standard wind, solar, and BESS lease templates to match the new Utilities Code requirements.
3.Secure PE Relationships: Contract with Texas-licensed engineering firms now to ensure availability for the required periodic cost estimates.
4.Revise Pro Formas: Adjust financial models for future projects to account for the premium cost of recycling bonding versus traditional removal bonding.
Operational Changes Required
Contracts
Immediate Redlining Required: Your standard Master Lease Agreements (MLAs) and Option Agreements must be updated to include:
Mandatory Recycling Covenant: A clause obligating the Grantee to collect and recycle all facility components (specifically wind turbine blades and PV modules) that are "practicably capable" of being reused or recycled.
Disposal Hierarchy: A clause stipulating that non-recyclable components must be cleared and delivered to an authorized solid waste or hazardous waste facility.
Battery Inclusion: Ensure these terms apply to any "battery energy storage facility" associated with the project, as the definition of "facility" has been expanded.
Hiring/Training
External Engineering Requirement: You can no longer use internal teams to calculate decommissioning costs for landowner reporting. You must retain an independent Professional Engineer (PE) licensed in Texas.
Procurement: Operations teams must identify and vet recycling vendors now to establish the "practicability" of recycling for future cost estimates.
Reporting & Record-Keeping
Wind Facilities: You must deliver an updated decommissioning cost estimate (prepared by the independent PE) to the landowner at least once every five years for the remainder of the lease.
Solar Facilities: You must deliver the independent PE estimate on or before the 10th anniversary of commercial operations, and every five years thereafter.
Financial Assurance True-Up: If the PE’s estimate indicates that removal/recycling costs have increased or salvage values have decreased, you must increase the posted security to match the new net cost.
Fees & Costs
Increased Bonding: Financial assurance models must now include the cost of recycling and disposal. Since recycling wind blades is currently more expensive than landfilling, expect your required bond amounts to rise significantly.
Administrative Costs: Budget for recurring third-party PE fees every five years per project.
Strategic Ambiguities & Considerations
"Practicably Capable": The statute requires recycling if components are "practicably capable" of it, but fails to define if this is a *technological* or *economic* standard.
*Risk:* Landowners may argue you must recycle regardless of cost.
*Mitigation:* Document the availability and cost of recycling facilities near your project. If you opt for disposal, you must be prepared to prove that recycling was not "practicable."
Salvage Value Volatility: The law allows the deduction of salvage value from the bond amount.
*Risk:* A crash in commodities (steel/copper) could trigger a massive cash call during a five-year true-up.
*Mitigation:* Instruct your PEs to use conservative salvage estimates to avoid volatility shocks.
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Information presented is for general knowledge only and is provided without warranty, express or implied. Consult qualified government affairs professionals and legal counsel before making compliance decisions.
The bill's author has informed the committee that a company that was engaged to recycle wind turbine blades left a 30-acre graveyard of wind turbine blades in Sweetwater, Texas. H.B. 3228 seeks to strengthen landowner rights by ensuring that the costs for recycling and disposing of the components that make up wind and solar power facilities are included in the financial assurance that a project owner must obtain and deliver to the landowner when agreeing to lease terms.
CRIMINAL JUSTICE IMPACT
It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.
RULEMAKING AUTHORITY
It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.
ANALYSIS
H.B. 3228 amends the Utilities Code to require a wind power facility agreement or solar power facility agreement, as applicable, to provide that the grantee under the applicable agreement is responsible for the following:
·collecting and reusing or recycling, or shipping for reuse or recycling, all components of the wind power facility or solar power facility practicably capable of being reused or recycled, including the wind turbine blades or photovoltaic modules, as applicable, in accordance with any other applicable laws or regulations; and
·disposing of all components of the wind power facility or solar power facility not practicably capable of being reused or recycled, as follows:
oat a facility authorized under state and federal law to dispose of hazardous substances for a component considered hazardous under those laws; or
ofor nonhazardous components, at a municipal solid waste landfill or other appropriate waste disposal facility authorized under state and federal law to dispose of that type of component.
The bill defines "recycle" for purposes of wind power facility agreements and solar power facility agreements as the processing of an item to recover a usable product. The bill specifies, for purposes of wind power facility agreements, that any related components of a wind turbine, including a nacelle, a rotor hub, blades, and a gearbox assembly constitute a wind power facility.
H.B. 3228 expands the obligations for which a wind power facility agreement or solar power facility agreement, as applicable, is required to provide that a grantee under the applicable agreement must obtain and deliver to a landowner evidence of financial assurance to secure the performance of the grantee's obligation by changing those obligations from the obligation to remove the grantee's wind power facilities or solar power facilities located on the landowner's property as described by provisions relating to required agreement provisions to all obligations under those provisions. The bill includes the cost of recycling or disposing of all the components of the wind power facilities or solar power facilities among the estimated costs to which the minimum amount of the requisite financial assurance must be equal.
H.B. 3228 applies only to a wind or solar power facility agreement entered into on or after the bill's effective date. A wind or solar power facility agreement entered into before the bill's effective date is governed by the law as it existed immediately before that date, and that law is continued in effect for that purpose.
Honorable Ken King, Chair, House Committee on State Affairs
FROM:
Jerry McGinty, Director, Legislative Budget Board
IN RE:
HB3228 by Lambert (Relating to the inclusion of recycling or disposal provisions in certain lease agreements of wind or solar power facilities.), As Introduced
No significant fiscal implication to the State is anticipated.
It is assumed that any costs associated with the bill could be absorbed using existing resources.
Local Government Impact
No significant fiscal implication to units of local government is anticipated.
Source Agencies: b > td >
473 Public Utility Commission of Texas
LBB Staff: b > td >
JMc, WP, GDZ, JBel
Related Legislation
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HB3228 fundamentally alters the financial and operational structure of renewable energy land leases by mandating "end-of-life" recycling obligations and stricter financial assurance formulas. Effective immediately for agreements signed on or after June 20, 2025, developers of wind, solar, and associated battery storage projects must contractually guarantee the recycling of turbine blades and PV modules where practicable, supported by cost estimates from independent Texas Professional Engineers. Implementation Timeline Effective Date: June 20, 2025 (Immediate effect via supermajority vote).
Q
Who authored HB3228?
HB3228 was authored by Texas Representative Stan Lambert during the Regular Session.
Q
When was HB3228 signed into law?
HB3228 was signed into law by Governor Greg Abbott on June 20, 2025.
Q
How urgent is compliance with HB3228?
The compliance urgency for HB3228 is rated as "critical". Businesses and organizations should review the requirements and timeline to ensure timely compliance.
Q
What is the cost impact of HB3228?
The cost impact of HB3228 is estimated as "high". This may vary based on industry and implementation requirements.
Q
What topics does HB3228 address?
HB3228 addresses topics including energy, energy--solar, energy--wind, environment and environment--recycling.
Legislative data provided by LegiScanLast updated: November 25, 2025
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