1-1                                   AN ACT
 1-2     relating to the disposition of certain real property owned by the
 1-3     state.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  Section 31.153, Natural Resources Code, is
 1-6     amended by adding Subsections (d) and (e) to read as follows:
 1-7           (d)  If a state agency intends to dispose of or change the
 1-8     use of real property possessed by the agency and determined by the
 1-9     division to be unused or underused, the agency must notify the
1-10     division not later than the 30th day before the date of the
1-11     proposed disposition or change, including before any proposed
1-12     improvement, development, lease, or sale of the property.
1-13           (e)  Not later than January 30 of each year, each state
1-14     agency shall report to the division about any unused or underused
1-15     real property possessed by the agency, as determined by the
1-16     division.  The report must include:
1-17                 (1)  a description of each item of property recommended
1-18     by the division for alternate use or for lease or sale;
1-19                 (2)  the status of each property; and
1-20                 (3)  any agency plans to dispose of or convert the use
1-21     of any of the property.
1-22           SECTION 2.  Subsections (a), (b), and (d), Section 31.155,
1-23     Natural Resources Code, are amended to read as follows:
1-24           (a)  The division is not responsible for maintaining the
1-25     inventory records of the real property administered by the Texas
 2-1     Department of Transportation, [the Texas National Research
 2-2     Laboratory Commission,] an institution of higher education, the
 2-3     Employees Retirement System of Texas, or the Teacher Retirement
 2-4     System of Texas.  The agencies administering the property shall
 2-5     maintain those records.
 2-6           (b)  The Texas Department of Transportation, [or the Texas
 2-7     National Research Laboratory Commission,] on the request of the
 2-8     division, shall submit its real property inventory records to the
 2-9     division.  The real property inventory records of an institution of
2-10     higher education, the Employees Retirement System of Texas, and the
2-11     Teacher Retirement System of Texas, on the request of the division,
2-12     but not more often than semiannually, shall be submitted to the
2-13     division for information purposes only.
2-14           (d)  The duty under this subchapter of the division to review
2-15     and verify real property records and to make recommendations
2-16     regarding real property and of the commissioner to prepare a report
2-17     involving real property does not apply to:
2-18                 (1)  the real property of an institution of higher
2-19     education;
2-20                 (2)  the real property that is part of a fund created
2-21     or specifically authorized by the constitution of this state and
2-22     that is administered by or with the assistance of the land office;
2-23                 (3)  the real property of the Employees Retirement
2-24     System of Texas; [or]
2-25                 (4)  the real property of the Teacher Retirement System
2-26     of Texas;
 3-1                 (5)  the real property administered by the Texas
 3-2     Historical Commission;
 3-3                 (6)  the real property administered by the State
 3-4     Preservation Board;
 3-5                 (7)  the real property comprising the Alamo; or
 3-6                 (8)  the real property comprising the French Legation.
 3-7           SECTION 3.  Subsections (a) and (b), Section 31.156, Natural
 3-8     Resources Code, are amended to read as follows:
 3-9           (a)  The division shall review and verify the accuracy of the
3-10     real property inventory of each state agency not less often than
3-11     every four years, and a review shall be made not later than one
3-12     year [during the calendar year] before the date the agency is
3-13     scheduled for abolition under the Texas Sunset Act (Chapter 325,
3-14     Government Code).  [The division may verify the accuracy of
3-15     inventory records provided by an agency.]
3-16           (b)  The division shall identify the real property not being
3-17     used or being substantially underused and make recommendations to
3-18     the commissioner regarding the use of the property or regarding a
3-19     real estate transaction involving the property.  The
3-20     recommendations shall include an analysis of the highest and best
3-21     use to which the property may legally be placed.  It shall include
3-22     recommendations for alternative uses of the property addressing
3-23     potential for commercial or agricultural lease of the property or
3-24     any other real estate transaction or use that the division may deem
3-25     to be in the best interest of the state.  The division shall
3-26     [solicit proposals and shall] accept any unsolicited proposals
 4-1     about real estate transactions involving the property that would be
 4-2     of significant benefit to the state.
 4-3           SECTION 4.  The heading of Section 31.157, Natural Resources
 4-4     Code, is amended to read as follows:
 4-5           Sec. 31.157.  EVALUATION REPORT.
 4-6           SECTION 5.  Subsections (b) and (c), Section 31.157, Natural
 4-7     Resources Code, are amended to read as follows:
 4-8           (b)  The draft report shall be submitted to the [State
 4-9     Purchasing and] General Services Commission, which shall further
4-10     evaluate the potential use of the property by another state agency
4-11     or department.  The draft report shall also be submitted for
4-12     review[, at the same time as it is furnished to the commission,] to
4-13     each agency that owns or holds in trust property that is the
4-14     subject of the draft report, and to the Texas Department of Housing
4-15     and Community Affairs, which shall evaluate the suitability of the
4-16     property for affordable housing.  Each agency [The commission] may
4-17     comment on any findings or recommendations made by the commissioner
4-18     and may make additional recommendations regarding the use of the
4-19     property.  Each agency [The commission] shall complete the review
4-20     of the draft report not later than the 60th day after the date
4-21     [within 60 days] of [the] receipt of the report and forward the
4-22     comments to the commissioner.  [The Texas Department of Housing and
4-23     Community Affairs may comment on any findings or recommendations
4-24     made by the commissioner and may make additional recommendations
4-25     regarding the suitability of the property for affordable housing.]
4-26           (c)  The commissioner shall prepare and issue a final report
 5-1     incorporating the recommendations of each agency [the commission]
 5-2     regarding use of the property [by another state agency and
 5-3     addressing all comments received from the commission].
 5-4           SECTION 6.  Section 31.1571, Natural Resources Code, is
 5-5     amended to read as follows:
 5-6           Sec. 31.1571.  RECOMMENDATION REGARDING DISPOSITION
 5-7     [DISPOSAL] OF UNUSED OR UNDERUSED PROPERTY.  (a)  If the
 5-8     commissioner reports under Section 31.157 that an item of real
 5-9     property is unused or underused, the commissioner may make a
5-10     written recommendation to the governor for disposition of the
5-11     property through a real estate transaction.
5-12           (b)  Not later than the 60th day after the date the governor
5-13     receives a written recommendation for a real estate transaction
5-14     under Subsection (a), the state agency that possesses the property
5-15     may submit to the governor and the division a comment regarding or
5-16     an objection to the recommendation.
5-17           (c)  Notwithstanding any other law, after the division has
5-18     reported a property unused or underused under Section 31.156 and
5-19     the commissioner has made a recommendation to the governor under
5-20     Section 31.157 for disposition of the property through a real
5-21     estate transaction [involving the property], the state agency that
5-22     possesses [owns or controls] the property may not develop, sell, or
5-23     otherwise dispose of the property before the earlier of:
5-24                 (1)  the date the governor rejects [a recommended real
5-25     estate transaction involving] the recommendation [property pursuant
5-26     to Subchapter I]; or
 6-1                 (2)  two years from the date the recommendation is
 6-2     approved by operation of law [under Subchapter I].
 6-3           (d)  The commissioner may conduct the recommended real estate
 6-4     transaction unless the governor gives the commissioner written
 6-5     notice of disapproval not later than the 90th day after the date
 6-6     the governor receives the recommendation.
 6-7           (e)  Not later than the 30th day after the governor approves
 6-8     or is considered to have approved a recommended real estate
 6-9     transaction for real property under this section, the division
6-10     shall provide the Texas Department of Housing and Community Affairs
6-11     with an appraisal of the property for evaluating the suitability of
6-12     the property for affordable housing.
6-13           [(b)  If a state agency that owns or controls property that
6-14     the division has reported as unused or underused intends to dispose
6-15     of or change the use of the property prior to the time provided by
6-16     Subsection (a), the state agency shall submit to the governor a
6-17     general development plan for future use of the property.  The plan
6-18     shall be submitted no later than 30 days prior to the time that the
6-19     real estate transaction would be approved by operation of law if
6-20     not disapproved by the governor pursuant to Subchapter I. The
6-21     governor may take such plan into consideration in determining
6-22     whether to reject the commissioner's recommendation.]
6-23           SECTION 7.  Subchapter E, Chapter 31, Natural Resources Code,
6-24     is amended by adding Section 31.1572 to read as follows:
6-25           Sec. 31.1572.  REAL ESTATE TRANSACTION AUTHORIZED OR
6-26     CONSIDERED TO BE AUTHORIZED BY GOVERNOR.  (a)  This section applies
 7-1     to a real estate transaction authorized under Section 31.1571.
 7-2     This section does not apply to a real estate transaction involving
 7-3     real property that the division is not required to review under
 7-4     Section 31.155(d).
 7-5           (b)  In conducting a real estate transaction, the division
 7-6     shall:
 7-7                 (1)  take charge and control of the real property; and
 7-8                 (2)  act on behalf of the state agency that had charge
 7-9     and control of the real property.
7-10           (c)  Any expenses incurred by the division in conducting a
7-11     real estate transaction, including the payment of reasonable
7-12     brokerage fees, may be deducted from the proceeds of the
7-13     transaction before the proceeds are deposited under Subsection (d).
7-14     The division may adopt rules relating to the payment of reasonable
7-15     brokerage fees.
7-16           (d)  Unless the proceeds of the real estate transaction are
7-17     dedicated by the constitution of this state, the proceeds shall be
7-18     deposited:
7-19                 (1)  to the credit of the Texas capital trust fund, if
7-20     the affected agency is eligible under Chapter 2201, Government
7-21     Code, to participate in that fund; or
7-22                 (2)  in the state treasury to the credit of a special
7-23     fund or account created by the comptroller for the affected agency,
7-24     if the agency is not eligible under Chapter 2201, Government Code,
7-25     to participate in the Texas capital trust fund.
7-26           (e)  Money deposited under Subsection (d)(2) may be
 8-1     appropriated only to the affected agency.
 8-2           SECTION 8.  Section 31.158, Natural Resources Code, is
 8-3     amended by adding Subsections (d) and (e) to read as follows:
 8-4           (d)  Notwithstanding Subsection (c), the commissioner may
 8-5     offer to a lessee of the state the first option for a real estate
 8-6     transaction involving real property under this section if:
 8-7                 (1)  the lessee leases real property adjacent to the
 8-8     property that is the subject of the transaction; and
 8-9                 (2)  the commissioner determines that the transaction
8-10     serves the best interest of the state.
8-11           (e)  If the commissioner determines that an exchange of real
8-12     property is in the best interest of the state, the division may
8-13     negotiate and complete an exchange transaction in the manner
8-14     provided for the trade of land dedicated to the permanent school
8-15     fund.
8-16           SECTION 9.  The following provisions are repealed:
8-17                 (1)  Subsection (e), Section 31.156, Natural Resources
8-18     Code;
8-19                 (2)  Subchapter I, Chapter 31, Natural Resources Code;
8-20     and
8-21                 (3)  Section 51.294, Natural Resources Code.
8-22           SECTION 10.  This Act takes effect September 1, 2001.
         _______________________________     _______________________________
             President of the Senate              Speaker of the House
               I hereby certify that S.B. No. 1672 passed the Senate on
         April 5, 2001, by the following vote:  Yeas 30, Nays 0, one
         present, not voting.
                                             _______________________________
                                                 Secretary of the Senate
               I hereby certify that S.B. No. 1672 passed the House on
         May 11, 2001, by a non-record vote.
                                             _______________________________
                                                Chief Clerk of the House
         Approved:
         _______________________________
                      Date
         _______________________________
                    Governor