BILL ANALYSIS

C.S.H.B. 5328

By: Hunter

Transportation

Committee Report (Substituted)

BACKGROUND AND PURPOSE

Recent events in the Aransas County Navigation District and concerns raised by major development tenants show a need to extend the period within which the district can extend a lease without having to rebid the property. Current law requires the district to advertise for bids before making or extending a lease of property for more than 50 years. As a long-term lease moves toward its expiration, the lessee finds it increasingly difficult to justify financially, or obtain financing for, major upkeep or improvements, or for reconstruction after a hurricane or other catastrophe, where an extension of the lease cannot be made without rebidding the entire lease. Such problems occurred after Hurricane Harvey. This increases the risks that the district's properties may not be maintained or repaired. Also, the prospect that this situation might occur makes it more difficult to obtain long-term financing for initial major developments. C.S.H.B. 5328 seeks to address this issue by extending the current 50-year lease limitation to 90 years to give the district more flexibility in managing its leases.

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

C.S.H.B. 5328 amends the Special District Local Laws Code to authorize the Aransas County Navigation District to lease the surface of land, including submerged land, for not more than 90 years. The bill prohibits such a lease from being extended beyond the 90-year period by renewal, extension, or otherwise. The bill prohibits the district from entering into or extending a lease of property for use in the following:

· the conduct of gaming or wagering activities authorized under Occupations Code provisions relating to gaming and the Texas Racing Act;

· the conduct of gambling prohibited under the Penal Code; or

· the establishment of a casino or other similar gaming facility.

EFFECTIVE DATE

September 1, 2023.

COMPARISON OF INTRODUCED AND SUBSTITUTE

While C.S.H.B. 5328 may differ from the introduced in minor or nonsubstantive ways, the following summarizes the substantial differences between the introduced and committee substitute versions of the bill.

The substitute specifies that the surface of land that the district may lease for not more than 90 years includes submerged land, whereas the introduced did not include that specification.

The substitute includes a provision not in the introduced prohibiting the district from entering into or extending a lease of property for use in the following:

· the conduct of certain authorized gaming or wagering activities;

· the conduct of certain prohibited gambling; or

· the establishment of a casino or other similar gaming facility.