HBA-ALS H.B. 2618 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 2618
By: Gray
Land & Resource Management
4/5/1999
Introduced



BACKGROUND AND PURPOSE 

In 1965, the 59th Legislature granted the City of Galveston a 75-year right
of use of certain stateowned submerged lands which extend out into the Gulf
of Mexico.  At that time, the city issued bonds and sold them to a
developer who constructed the Flagship Hotel on that property.  The city
still owns the hotel, which is no longer a first-class facility, and has
made several attempts to sell the property for redevelopment as a resort
facility.  Developers have been reluctant to purchase the hotel due to the
fact that the original 75-year right of use has not been extended. The
purpose of this bill is to extend the city's right of use to the land to 99
years from the date of the sale of the property. 

H.B. 2618 allows the City of Galveston to grant to a purchaser a franchise
to operate property for 99 years instead of 75 years after the purchase,
and to sell the property as long as there is no outstanding bonded
indebtedness.  This bill also allows the General Land Office to grant to
the purchaser a franchise to operate the properties purchased for 99 years
after the purchase.  H.B. 2618 establishes that the right of use and
occupancy reverts back to the municipality when the 99-year period expires
or when the property is no longer used for the specified purpose. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 307.042, Local Government Code, by amending
Subsection (c) and adding Subsection (e), as follows: 

(c)  Authorizes a municipality, as additional security for issued bonds,
notes, or warrants to grant to a purchaser under sale or foreclosure a
franchise to operate properties purchased for a period of no more than 99
years, rather than 75 years, after the purchase.  Makes a conforming
change. 

(e)  Authorizes the municipality to sell the property used as additional
security for bonds, notes, or warrants if no bonded indebtedness remains
outstanding.  Authorizes the General Land Office, if the municipality sells
the property, to grant to the purchaser a franchise to operate the
properties purchased for a period of no more than 99 years after the
purchase. Provides that the purchaser and the purchaser's heirs,
successors, and assigns have the same right of use and occupancy to the
state-owned tideland, water, and bed as is granted to the municipality
under this chapter.  Provides that on termination of that period or on
cessation of use of the property for that purpose, the right of use and
occupancy reverts to the municipality.  

SECTION 2.  Emergency clause.
  Effective date: upon passage.