Office of the Attorney General (Program Administration) • Texas Department of Insurance (Rate-setting compliance)
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Compliance Analysis
Key implementation requirements and action items for compliance with this legislation
Implementation Timeline
Effective Date: September 1, 2025 (Applies to offenses/damages occurring on or after this date).
Compliance Deadline:
Claimants: September 1, 2025 (New documentation protocols required immediately).
Insurers: January 1, 2026 (Prohibition on using claims for rate-setting applies to policies issued/renewed after this date).
Agency Rulemaking: The Office of the Attorney General (OAG) must update program rules and application forms to include lessees and soil restoration. While no statutory deadline exists, expect interim guidance by August 2025 to meet the effective date.
Immediate Action Plan
1.Audit Leases: Identify all tenant-operated properties and execute notarized authorization addendums before September 1, 2025.
2.Update Incident Protocols: Instruct field staff to demand "Border Crime" or "Smuggling" notations on all police reports for property damage.
3.Adjust Insurance Algorithms: Insurers must code systems to flag and exclude Article 56C.003 claims from rating engines effective January 1, 2026.
4.Establish Vendor Codes: Create specific accounting codes for "Soil Restoration" to align internal expense tracking with OAG reimbursement categories.
Operational Changes Required
Contracts
Agricultural Leases: Landowners and tenants must amend active leases immediately. The law requires a notarized statement from the landowner authorizing a lessee to receive compensation.
*Required Clause:* Insert language specifying whether the Landowner grants this authorization or reserves the right to claim compensation for themselves.
Vendor MSAs: Contracts with remediation/cleanup crews must require invoices that explicitly itemize "soil restoration" and "pollutant cleanup," as these are now distinct, compensable line items under the expanded statute.
Hiring/Training
Incident Response Teams: Train security and ranch managers to request specific language in police reports. The report must explicitly cite "transnational criminal activity," "human smuggling," or "evading arrest." Generic "trespassing" or "vandalism" reports may result in claim denial.
Underwriting Staff (Insurers): Staff must be trained to identify claims verified under Article 56C.003 and manually or systematically exclude them from loss history reviews for renewals after January 1, 2026.
Reporting & Record-Keeping
Mandatory Police Reports: You cannot file a claim without a written report from a law enforcement agency. Agencies are statutorily required to provide this within 14 business days of your request; establish a tracking system to ensure this deadline is met.
Affidavit Management: Lessees must secure and file the notarized landowner authorization *at the time of application*. Retroactive authorizations may be rejected.
Confidentiality Elections: Government employees suffering property damage must execute a specific election form to shield their identity from public records.
Fees & Costs
Recovery Limits: The program caps recovery at $75,000 per incident.
Sub-Caps: Damages strictly to livestock, crops, or timber are capped at $10,000.
No Filing Fee: There is no fee to file, but costs for notarization and obtaining detailed remediation estimates must be absorbed by the applicant.
Strategic Ambiguities & Considerations
"Law Enforcement Response": The statute covers damage caused by police responding to a crime (e.g., a chase). It does not define the geographic proximity required. If a chase starts 10 miles away and ends on your fence, coverage is presumed but not guaranteed until OAG rulemaking clarifies "causation."
"Transnational" Nexus: The OAG has discretion to determine if a crime is "transnational." If local law enforcement fails to document the smuggling aspect of a trespass, the OAG may deny the claim.
Insurance "Phase-In" Gap: Claims filed between Sept 1, 2025, and Dec 31, 2025, are *not* protected from rate hikes if the policy renews before Jan 1, 2026.
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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 Landowner's Compensation Program, established by S.B. 1133 in the 88th Legislature (2023), compensates agricultural landowners for property damage caused by certain border crimes. Administered by the Office of the Attorney General, the program processes applications and conducts outreach to eligible landowners. Since the program's inception in May 2024, an interim charge analyzing its implementation�along with stakeholder feedback from across Texas�has led to recommendations for improvements.
In response to the feedback received, S.B. 2601 proposes key improvements to the program, including: adding the continuous smuggling of persons to the list of border crimes for which compensation can be awarded; allowing for compensation to be awarded for debris, pollutants, and contaminants damaging land; and allowing land lessees to directly receive compensation with the landowner's consent. Additionally, this bill prohibits insurance companies from raising rates on landowners for claims filed due to the eligibility requirements of the program. S.B. 2601 strengthens support for victims of property damage caused by border crimes, ensuring they receive fair and timely compensation while preserving Texas's agricultural integrity.
As proposed, S.B. 2601 amends current law relating to a program to compensate landowners for property damage.
RULEMAKING AUTHORITY
This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Article 56C.001(2), Code of Criminal Procedure, to redefine "border crime."
SECTION 2. Amends Article 56C.003, Code of Criminal Procedure, by amending Subsection (a) and adding Subsections (b-1) and (c-1), as follows:
(a) Requires the attorney general, from money appropriated for the purpose, to establish and administer a program to compensate landowners and lessees who suffer real property damage on agricultural land caused by certain persons or law enforcement responses.
(b-1) Provides that damage caused to agricultural land includes any debris, pollutants, or contaminants left on the land during the applicable incident, and authorizes compensation awarded under Article 56C.003 (Landowner Compensation Program), for purposes of Subsection (a), to include an amount necessary to restore the soil to its agricultural use.
(c-1) Prohibits the attorney general from awarding compensation under this article to a lessee for real property damage caused by a trespasser described by Subsection (a)(1) (relating to damage caused by a trespasser as a result of an offense committed as part of a border crime) unless the lessee provides a notarized statement from the landowner authorizing the lessee to directly receive compensation awarded under this article for the damage.
SECTION 3. Amends Section 2251.052, Insurance Code, by adding Subsection (a-1), to prohibit an insurer, in setting rates, from considering whether a claim has been made by or on behalf of a policyholder in relation to an event documented by a report described by Article 56C.003(c) (relating to prohibiting the attorney general from awarding compensation for real property damage caused by a trespasser unless certain requirements are met), Code of Criminal Procedure.
SECTION 4. Makes application of Section 2251.052(a-1), Insurance Code, as added by this Act, prospective.
SB2601 significantly expands the Landowner Compensation Program to include lessees and damages caused by law enforcement responses to border crimes, while simultaneously prohibiting insurers from using these claims to increase premiums. Agricultural operators, commercial property owners in border regions, and insurers must immediately update lease agreements and underwriting algorithms to accommodate new eligibility rules and statutory rate protections. Implementation Timeline Effective Date: September 1, 2025 (Applies to offenses/damages occurring on or after this date).
Q
Who authored SB2601?
SB2601 was authored by Texas Senator Cesar Blanco during the Regular Session.
Q
When was SB2601 signed into law?
SB2601 was signed into law by Governor Greg Abbott on June 20, 2025.
Q
Which agencies enforce SB2601?
SB2601 is enforced by Office of the Attorney General (Program Administration) and Texas Department of Insurance (Rate-setting compliance).
Q
How urgent is compliance with SB2601?
The compliance urgency for SB2601 is rated as "moderate". Businesses and organizations should review the requirements and timeline to ensure timely compliance.
Q
What is the cost impact of SB2601?
The cost impact of SB2601 is estimated as "low". This may vary based on industry and implementation requirements.
Q
What topics does SB2601 address?
SB2601 addresses topics including agriculture, crimes, crimes--against property, insurance and insurance--insurers & agents.
Legislative data provided by LegiScanLast updated: November 25, 2025
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