1-1     By:  Jackson                                          S.B. No. 1672
 1-2           (In the Senate - Filed March 9, 2001; March 14, 2001, read
 1-3     first time and referred to Committee on Natural Resources;
 1-4     March 28, 2001, reported favorably by the following vote:  Yeas 6,
 1-5     Nays 0; March 28, 2001, sent to printer.)
 1-6                            A BILL TO BE ENTITLED
 1-7                                   AN ACT
 1-8     relating to the disposition of certain real property owned by the
 1-9     state.
1-10           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-11           SECTION 1.  Section 31.153, Natural Resources Code, is
1-12     amended by adding Subsections (d) and (e) to read as follows:
1-13           (d)  If a state agency intends to dispose of or change the
1-14     use of real property possessed by the agency and determined by the
1-15     division to be unused or underused, the agency must notify the
1-16     division not later than the 30th day before the date of the
1-17     proposed disposition or change, including before any proposed
1-18     improvement, development, lease, or sale of the property.
1-19           (e)  Not later than January 30 of each year, each state
1-20     agency shall report to the division about any unused or underused
1-21     real property possessed by the agency, as determined by the
1-22     division.  The report must include:
1-23                 (1)  a description of each item of property recommended
1-24     by the division for alternate use or for lease or sale;
1-25                 (2)  the status of each property; and
1-26                 (3)  any agency plans to dispose of or convert the use
1-27     of any of the property.
1-28           SECTION 2.  Subsections (a), (b), and (d), Section 31.155,
1-29     Natural Resources Code, are amended to read as follows:
1-30           (a)  The division is not responsible for maintaining the
1-31     inventory records of the real property administered by the Texas
1-32     Department of Transportation, [the Texas National Research
1-33     Laboratory Commission,] an institution of higher education, the
1-34     Employees Retirement System of Texas, or the Teacher Retirement
1-35     System of Texas.  The agencies administering the property shall
1-36     maintain those records.
1-37           (b)  The Texas Department of Transportation, [or the Texas
1-38     National Research Laboratory Commission,] on the request of the
1-39     division, shall submit its real property inventory records to the
1-40     division.  The real property inventory records of an institution of
1-41     higher education, the Employees Retirement System of Texas, and the
1-42     Teacher Retirement System of Texas, on the request of the division,
1-43     but not more often than semiannually, shall be submitted to the
1-44     division for information purposes only.
1-45           (d)  The duty under this subchapter of the division to review
1-46     and verify real property records and to make recommendations
1-47     regarding real property and of the commissioner to prepare a report
1-48     involving real property does not apply to:
1-49                 (1)  the real property of an institution of higher
1-50     education;
1-51                 (2)  the real property that is part of a fund created
1-52     or specifically authorized by the constitution of this state and
1-53     that is administered by or with the assistance of the land office;
1-54                 (3)  the real property of the Employees Retirement
1-55     System of Texas; [or]
1-56                 (4)  the real property of the Teacher Retirement System
1-57     of Texas;
1-58                 (5)  the real property administered by the Texas
1-59     Historical Commission;
1-60                 (6)  the real property administered by the State
1-61     Preservation Board;
1-62                 (7)  the real property comprising the Alamo; or
1-63                 (8)  the real property comprising the French Legation.
1-64           SECTION 3.  Subsections (a) and (b), Section 31.156, Natural
 2-1     Resources Code, are amended to read as follows:
 2-2           (a)  The division shall review and verify the accuracy of the
 2-3     real property inventory of each state agency not less often than
 2-4     every four years, and a review shall be made not later than one
 2-5     year [during the calendar year] before the date the agency is
 2-6     scheduled for abolition under the Texas Sunset Act (Chapter 325,
 2-7     Government Code).  [The division may verify the accuracy of
 2-8     inventory records provided by an agency.]
 2-9           (b)  The division shall identify the real property not being
2-10     used or being substantially underused and make recommendations to
2-11     the commissioner regarding the use of the property or regarding a
2-12     real estate transaction involving the property.  The
2-13     recommendations shall include an analysis of the highest and best
2-14     use to which the property may legally be placed.  It shall include
2-15     recommendations for alternative uses of the property addressing
2-16     potential for commercial or agricultural lease of the property or
2-17     any other real estate transaction or use that the division may deem
2-18     to be in the best interest of the state.  The division shall
2-19     [solicit proposals and shall] accept any unsolicited proposals
2-20     about real estate transactions involving the property that would be
2-21     of significant benefit to the state.
2-22           SECTION 4.  The heading of Section 31.157, Natural Resources
2-23     Code, is amended to read as follows:
2-24           Sec. 31.157.  EVALUATION REPORT.
2-25           SECTION 5.  Subsections (b) and (c), Section 31.157, Natural
2-26     Resources Code, are amended to read as follows:
2-27           (b)  The draft report shall be submitted to the [State
2-28     Purchasing and] General Services Commission, which shall further
2-29     evaluate the potential use of the property by another state agency
2-30     or department.  The draft report shall also be submitted for
2-31     review[, at the same time as it is furnished to the commission,] to
2-32     each agency that owns or holds in trust property that is the
2-33     subject of the draft report, and to the Texas Department of Housing
2-34     and Community Affairs, which shall evaluate the suitability of the
2-35     property for affordable housing.  Each agency [The commission] may
2-36     comment on any findings or recommendations made by the commissioner
2-37     and may make additional recommendations regarding the use of the
2-38     property.  Each agency [The commission] shall complete the review
2-39     of the draft report not later than the 60th day after the date
2-40     [within 60 days] of [the] receipt of the report and forward the
2-41     comments to the commissioner.  [The Texas Department of Housing and
2-42     Community Affairs may comment on any findings or recommendations
2-43     made by the commissioner and may make additional recommendations
2-44     regarding the suitability of the property for affordable housing.]
2-45           (c)  The commissioner shall prepare and issue a final report
2-46     incorporating the recommendations of each agency [the commission]
2-47     regarding use of the property [by another state agency and
2-48     addressing all comments received from the commission].
2-49           SECTION 6.  Section 31.1571, Natural Resources Code, is
2-50     amended to read as follows:
2-51           Sec. 31.1571.  RECOMMENDATION REGARDING DISPOSITION
2-52     [DISPOSAL] OF UNUSED OR UNDERUSED PROPERTY.  (a)  If the
2-53     commissioner reports under Section 31.157 that an item of real
2-54     property is unused or underused, the commissioner may make a
2-55     written recommendation to the governor for disposition of the
2-56     property through a real estate transaction.
2-57           (b)  Not later than the 60th day after the date the governor
2-58     receives a written recommendation for a real estate transaction
2-59     under Subsection (a), the state agency that possesses the property
2-60     may submit to the governor and the division a comment regarding or
2-61     an objection to the recommendation.
2-62           (c)  Notwithstanding any other law, after the division has
2-63     reported a property unused or underused under Section 31.156 and
2-64     the commissioner has made a recommendation to the governor under
2-65     Section 31.157 for disposition of the property through a real
2-66     estate transaction [involving the property], the state agency that
2-67     possesses [owns or controls] the property may not develop, sell, or
2-68     otherwise dispose of the property before the earlier of:
2-69                 (1)  the date the governor rejects [a recommended real
 3-1     estate transaction involving] the recommendation [property pursuant
 3-2     to Subchapter I]; or
 3-3                 (2)  two years from the date the recommendation is
 3-4     approved by operation of law [under Subchapter I].
 3-5           (d)  The commissioner may conduct the recommended real estate
 3-6     transaction unless the governor gives the commissioner written
 3-7     notice of disapproval not later than the 90th day after the date
 3-8     the governor receives the recommendation.
 3-9           (e)  Not later than the 30th day after the governor approves
3-10     or is considered to have approved a recommended real estate
3-11     transaction for real property under this section, the division
3-12     shall provide the Texas Department of Housing and Community Affairs
3-13     with an appraisal of the property for evaluating the suitability of
3-14     the property for affordable housing.
3-15           [(b)  If a state agency that owns or controls property that
3-16     the division has reported as unused or underused intends to dispose
3-17     of or change the use of the property prior to the time provided by
3-18     Subsection (a), the state agency shall submit to the governor a
3-19     general development plan for future use of the property.  The plan
3-20     shall be submitted no later than 30 days prior to the time that the
3-21     real estate transaction would be approved by operation of law if
3-22     not disapproved by the governor pursuant to Subchapter I. The
3-23     governor may take such plan into consideration in determining
3-24     whether to reject the commissioner's recommendation.]
3-25           SECTION 7.  Subchapter E, Chapter 31, Natural Resources Code,
3-26     is amended by adding Section 31.1572 to read as follows:
3-27           Sec. 31.1572.  REAL ESTATE TRANSACTION AUTHORIZED OR
3-28     CONSIDERED TO BE AUTHORIZED BY GOVERNOR.  (a)  This section applies
3-29     to a real estate transaction authorized under Section 31.1571.
3-30     This section does not apply to a real estate transaction involving
3-31     real property that the division is not required to review under
3-32     Section 31.155(d).
3-33           (b)  In conducting a real estate transaction, the division
3-34     shall:
3-35                 (1)  take charge and control of the real property; and
3-36                 (2)  act on behalf of the state agency that had charge
3-37     and control of the real property.
3-38           (c)  Any expenses incurred by the division in conducting a
3-39     real estate transaction, including the payment of reasonable
3-40     brokerage fees, may be deducted from the proceeds of the
3-41     transaction before the proceeds are deposited under Subsection (d).
3-42     The division may adopt rules relating to the payment of reasonable
3-43     brokerage fees.
3-44           (d)  Unless the proceeds of the real estate transaction are
3-45     dedicated by the constitution of this state, the proceeds shall be
3-46     deposited:
3-47                 (1)  to the credit of the Texas capital trust fund, if
3-48     the affected agency is eligible under Chapter 2201, Government
3-49     Code, to participate in that fund; or
3-50                 (2)  in the state treasury to the credit of a special
3-51     fund or account created by the comptroller for the affected agency,
3-52     if the agency is not eligible under Chapter 2201, Government Code,
3-53     to participate in the Texas capital trust fund.
3-54           (e)  Money deposited under Subsection (d)(2) may be
3-55     appropriated only to the affected agency.
3-56           SECTION 8.  Section 31.158, Natural Resources Code, is
3-57     amended by adding Subsections (d) and (e) to read as follows:
3-58           (d)  Notwithstanding Subsection (c), the commissioner may
3-59     offer to a lessee of the state the first option for a real estate
3-60     transaction involving real property under this section if:
3-61                 (1)  the lessee leases real property adjacent to the
3-62     property that is the subject of the transaction; and
3-63                 (2)  the commissioner determines that the transaction
3-64     serves the best interest of the state.
3-65           (e)  If the commissioner determines that an exchange of real
3-66     property is in the best interest of the state, the division may
3-67     negotiate and complete an exchange transaction in the manner
3-68     provided for the trade of land dedicated to the permanent school
3-69     fund.
 4-1           SECTION 9.  The following provisions are repealed:
 4-2                 (1)  Subsection (e), Section 31.156, Natural Resources
 4-3     Code;
 4-4                 (2)  Subchapter I, Chapter 31, Natural Resources Code;
 4-5     and
 4-6                 (3)  Section 51.294, Natural Resources Code.
 4-7           SECTION 10.  This Act takes effect September 1, 2001.
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