78(R) HB 2249 House committee report

H.B. 2249 78(R)    BILL ANALYSIS


H.B. 2249
By: Howard
Land & Resource Management
Committee Report (Unamended)



BACKGROUND AND PURPOSE 

Chapter 51, Natural Resources Code, provides the statutory basis for the
sale and lease of property owned by the Permanent School Fund (PSF). 

H.B. 2249 updates Chapter 51, Natural Resource Code, by changing the PSF's
handling of forfeitures of delinquent property contracts and gives the
School Land Board authority to use brokers to market land. 

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

SECTION 1.  Amends Section 51.001, Natural Resources Code, as follows:

   Deletes the obsolete definition of "Asylum land".  

Defines "appraiser" to mean a state certified or state licensed real
estate appraiser  who is employed by or contracts with the General Land
Office, etc. 

Defines "land" and "real property" to  mean any interest in the physical
land and appurtenances attached to the land, including improvements. 

Defines "market value" to mean the value of real property determined by
appraiser. 

SECTION 2. Amends Section 51.011, Natural Resources Code, by deleting the
reference to the obsolete "asylum land" and "asylum fund". 

SECTION 3. Amends Section 51.012, Natural Resources Code, by deleting the
reference to the obsolete "asylum". 

SECTION 4.  Amends Section 51.0125, Natural Resources Code, by changing
"fair market value" to "market value". 

SECTION 5.  Amends Section 51.013, Natural Resources Code, as follows:

Deletes a redundancy to "value or revalue land", which is contained in
another section of the code.  
 
   Deletes the reference to the obsolete "asylum land".

Deletes the archaic "appraisement" and replaces it with "determination of
market value." 

SECTION 6. Amends Section 51.018, Natural Resources Code, by deleting a
reference to  the obsolete "asylum". 

SECTION 7.  Amends Section 51.052, Natural Resources Code, as follows:

   Deletes  "subchapter" and replaces it with "chapter".  

   Deletes "appraisers for the land office" and replaces it with
"appraisers". 

   Replaces "fair market value" with "market value".

   Deletes "property" and replaces it with "land."  

   Deletes reference to the "asset management division".

   Replaces "value" with "market value".

Authorizes the School Land Board to bypass the bid process if it thinks
doing so is in the best interest of the PSF. Authorizes the School Land
Board to authorize the payment of broker's commissions. 

SECTION 8. Amends Subsection 51.054(c), Natural Resources Code, by
deleting a reference to the obsolete "asylum". 

SECTION 9. Amends Subsection 51.056(a), Natural Resources Code, by
deleting a reference to the obsolete "asylum". 

SECTION 10. Amends Subsection 51.057 (a), Natural Resources Code, by
deleting a reference to the obsolete "asylum". 

SECTION 11. Amends Subsection 51.064(a), Natural Resources Code, by
deleting a reference to the obsolete "asylum". 

SECTION 12. Amends Subsection 51.065(b), Natural Resources Code, by
deleting a reference to the obsolete "asylum". 

SECTION 13. Amends Section 51.070, Natural Resources Code, as follows:

   Amends the title to refer to "unpaid principal" as well as "unpaid
interest". 

States that unpaid and delinquent principal and interest on sales of
public school land shall bear interest and be payable as set by the School
Land Board. The existing provision only allows such action in regard to
unpaid and delinquent interest. 

Mandates a delinquency date for unpaid principal and interest (30th day
after it is due). 

   Prescribes the form of notice due to delinquent obligors.

SECTION 14. Amends Section 51.071, Natural Resources Code, as follows:

Deletes reference to "principal or interest" and replaces it with
"principal and interest". This prevents the holder of an award from
avoiding forfeiture by keeping interest only current and never paying
principal.  

SECTION 15. Amends Section 51.072, Natural Resources Code, by deleting a
reference to the recovery of penalties upon forfeiture and establishes
reinstatement fees. 

 SECTION 16.  Amends Section 51.073(a), Natural Resources Code, by
imposing upon the Commissioner the duty to determine the market value of
land to be sold in addition to his or her current duty to classify the
value of the land. 

SECTION 17. Amends Section 51.074, Natural Resources Code, as follows:

Clarifies that holder of an award whose claim has been forfeited for
nonpayment of interest and "principal" can have their claim reinstated.
Currently, the law implies that the holder of a claim who is behind on
principal payments can not reinstate. 

States that the time to reinstate a claim following forfeiture is reduced
from five years to six months. 

Deletes the provision authorizing the late reinstatement if an outstanding
grazing lease is on the property. 

SECTION 18. Amends Section 51.076, Natural Resources Code, by expanding
what can be collected through a legal proceeding (adds "principal" and
deletes "penalties"). 

SECTION 19. Amends Section 51.077, Natural Resources Code, by clarifying
that a lien on the sale of school land secures both principal and interest
and that the amount recoverable runs past the date of forfeiture to the
deadline for possible reinstatement. 

SECTION 20. Adds Section 51.0771, Natural Resources Code, to authorize the
General Land Office to charge a reinstatement fee of 1.5 % of all
delinquent amounts. Proceeds from the fee will go to the PSF. 

SECTION 21. Amends Subsection 51.079(a), Natural Resources Code, by
deleting a reference to the obsolete "asylum land". 

SECTION 22. Amends Section 51.121, Natural Resources Code, as follows:

    Deletes references to the obsolete "asylum".

   Replaces "fair market value" with "market value".

SECTION 23. Amends Subsection 51.174(c), Natural Resources Code, by
deleting "fair market value" and replacing it with "market value". 

SECTION 24. Amends Subsection 51.175(b), Natural Resources Code, by
replacing "property" with "real property". 

SECTION 25. Amends Subsection 51.246(b), Natural Resources Code, by
deleting "an appraisement of the land" and replacing it with
"determination of market value by an appraiser." 

SECTION 26. Amends Subsection 51.302(g), Natural Resources Code, by
replacing "property" with "real property". 

SECTION 27.  Amends Section 51.342, Natural Resources Code, to provide
that timber can be leased at market value. Current law authorizes only the
sale of timber at fair market value. 

SECTION 28. Amends Section 51.402, Natural Resources Code, to authorize
the School Land Board to pay the expenses of acquisitions and sales. 

 SECTION 29. Amends Section 51.403, Natural Resources Code, as follows:

Mandates that market value for real property bought by the School Land
Board is to be determined by an appraiser. 

   Replaces "subchapter" with "chapter".

Provides that the School Land Board may sell property for not less than
market value and under any terms or conditions the commissioner deems to
be in the best interest of the state. 

SECTION 30. Amends Subsections 51.404(a) and (b), Natural Resources Code,
by changing references from "property" to "real property." 

SECTION 31. Changes to Sections 51.070, 51.071, 51.074 and 51.076, Natural
Resources Code, are prospective. 

SECTION 32. Effective date.

EFFECTIVE DATE

September 1, 2003, or immediately if it receives the requisite number of
votes.