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78R5962 PAM-F
By: Howard H.B. No. 2249
A BILL TO BE ENTITLED
AN ACT
relating to sale and lease of public school land.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 51.001, Natural Resources Code, is
amended by amending Subdivision (7) and adding Subdivisions (10)
and (11) to read as follows:
(7) "Appraiser" means a state certified or state
licensed real estate appraiser who is employed by or contracts with
the land office and who performs professional valuation services
competently and in a manner that is independent, impartial, and
objective ["Asylum land" means all land of the state that is
dedicated to the various asylum funds].
(10) "Land" or "real property" means any interest in
the physical land and appurtenances attached to the land, including
improvements.
(11) "Market value" means the value of real property
determined by an appraisal performed by an appraiser.
SECTION 2. Section 51.011, Natural Resources Code, is
amended to read as follows:
Sec. 51.011. SALE AND LEASE OF PUBLIC SCHOOL [AND ASYLUM]
LAND. Any land that is set apart to the permanent school fund [and
the various asylum funds] under the constitution and laws of this
state together with the mineral estate in riverbeds, channels, and
the tidelands, including islands, shall be controlled, sold, and
leased by the school land board and the commissioner under the
provisions of this chapter.
SECTION 3. Section 51.012, Natural Resources Code, is
amended to read as follows:
Sec. 51.012. COMMISSIONER'S AUTHORITY. Subject to the
authority of the board and to exceptions and restrictions that may
be imposed by the constitution and laws of this state, the
commissioner is vested with the authority necessary to carry out
the provisions of this chapter relating to the sale and lease of
public school [and asylum] land and to the protection of this land
from free use and occupancy and from unlawful enclosure.
SECTION 4. Section 51.0125, Natural Resources Code, is
amended to read as follows:
Sec. 51.0125. LAND USED BY STATE AGENCY. Land that belongs
to the permanent school fund as a result of having been deeded or
given to the state and that has been used in the past by a state
agency shall be first offered for sale or lease to state agencies
before it can be sold or leased to any other party. No permanent
school fund land may be used by a state agency without [fair] market
value compensation to the permanent school fund.
SECTION 5. Section 51.013, Natural Resources Code, is
amended to read as follows:
Sec. 51.013. CLASSIFICATION AND VALUATION OF LAND. (a) As
the public interest may require, the commissioner shall classify or
reclassify [and value or revalue] all public school [and asylum]
land and shall include a designation of [designate] the land,
including a classification as agricultural, grazing, timber, or a
combination of these classifications based on the facts in the
particular case.
(b) After the classification and determination of market
value [appraisement] is entered on the records of the land office,
no further action needs to be taken by the commissioner and no
notice is required to be given to the county clerk for the
classification and determination of market value [appraisement] to
be effective.
SECTION 6. Section 51.018, Natural Resources Code, is
amended to read as follows:
Sec. 51.018. RECORDS AND ACCOUNTS. The commissioner shall
keep in his custody as records of his office each application,
affidavit, obligation, and paper relating to the sale and lease of
public school [and asylum] land and shall keep accurate accounts
with each purchaser or lessee.
SECTION 7. Section 51.052, Natural Resources Code, is
amended by amending Subsections (d), (g), (h), (i), and (j) and
adding Subsection (k) to read as follows:
(d) Before the land under this chapter [subchapter] is sold,
the appraiser [appraisers for the land office] must appraise the
land at its market value and file a copy of the appraisal with the
commissioner. No land covered by this chapter [subchapter] may be
sold for less than the market value that appears in the appraisal
made under this subsection.
(g) If land is located within the boundaries of or adjacent
to any state park, refuge, natural area, or historical site subject
to the management and control of the Parks and Wildlife Department,
the department has a preference right to purchase the land before it
is made available for sale to any other person. A sale to the
department under this section may not be for less than the [fair]
market value of the land, as determined by the board.
(h) The board may sell or exchange any interest in the
surface estate of public school land directly to any state agency,
board, commission, or political subdivision or other governmental
entity of this state without the necessity of a sealed bid sale.
All sales or exchanges made pursuant to this subsection shall be for
not less than [fair] market value as determined by the board and
under such other terms and conditions the board determines to be in
the best interest of the state.
(i) If no bid meeting minimum requirements is received for a
tract of land offered at a sealed bid sale under Subchapter D of
Chapter 32 of this code, the asset management division of the land
office may solicit proposals or negotiate a sale, exchange, or
lease of the land [property] to any person. The sale price may not
be less than the market [appraised] value [of the land as determined
by the asset management division]. The board must approve any
negotiated sale, exchange, or lease of any land under this section.
(j) The board, in its sole discretion and in the best
interests of the permanent school fund as determined by the board
and without regard to requirements of local governments as to the
necessity of any such dedication, may dedicate permanent school
fund land to any governmental unit for the benefit and use of the
public in exchange for nonmonetary consideration with a value
reasonably equivalent to or greater than the market value of the
dedicated land, if the board determines that such an exchange would
benefit the permanent school fund. The asset management division
of the land office shall determine the value of the nonmonetary
consideration and shall file a copy of its determination with the
commissioner. Examples of public purposes for which permanent
school fund land may be dedicated under this subsection include but
are not limited to: (1) rights-of-way for public roads, utilities,
or other infrastructure; (2) public schools; (3) public parks; (4)
government offices or facilities; (5) public recreation
facilities; and (6) residential neighborhood public amenities.
(k) When a bid sale would otherwise be required, the board
may authorize a tract of land to be sold through a negotiated sale
at not less than market value if the board determines a negotiated
sale is in the best interest of the permanent school fund. The
board may also authorize the payment of a commission to a licensed
real estate broker or salesperson in connection with the sale of
public school land if the board determines the payment is in the
best interest of the permanent school fund.
SECTION 8. Section 51.054(c), Natural Resources Code, is
amended to read as follows:
(c) The provisions of this section do not apply to oil and
gas sold from public school [and asylum] land covered by Subchapter
F, Chapter 52, of this code.
SECTION 9. Section 51.056(a), Natural Resources Code, is
amended to read as follows:
(a) A person who wants to purchase public school [or asylum]
land shall submit to the commissioner a separate written
application for each tract.
SECTION 10. Section 51.057(a), Natural Resources Code, is
amended to read as follows:
(a) An application for the purchase of public school [or
asylum] land shall be delivered to the land office in a sealed
envelope addressed to the commissioner with the words "application
to buy land" and the date the land is to be sold endorsed on the
envelope. Applications that do not have the required endorsements
are nevertheless valid.
SECTION 11. Section 51.064(a), Natural Resources Code, is
amended to read as follows:
(a) Any public school [or asylum] land offered for sale for
which no application is made under Section 51.056 of this code may
be sold to any person who files a proper application in the land
office in the manner provided by law.
SECTION 12. Section 51.065(b), Natural Resources Code, is
amended to read as follows:
(b) After being informed of any sale of public school [or
asylum] land, the county clerk shall enter in his books opposite the
description of the land sold, the name of the purchaser and the date
of the sale.
SECTION 13. Section 51.070, Natural Resources Code, is
amended to read as follows:
Sec. 51.070. UNPAID PRINCIPAL AND INTEREST ON PUBLIC SCHOOL
LAND SALES. (a) Unpaid and delinquent principal and interest on
sales of public school land shall bear interest at a rate set by the
board, which principal and interest shall be payable at the times
and on such terms as are established by the board by rule or by
contract.
(b) No patent may be issued for any public school land until
all unpaid principal and compounded interest is paid to the time of
issuing the patent.
(c) Any unpaid principal and interest is considered
delinquent on the 30th day after the date payment of the principal
and interest is due for the obligation.
(d) After the payment of principal and interest becomes
delinquent under the obligation, notice of delinquency and
subsequent potential forfeiture must be provided by certified mail,
return receipt requested, to the last known address of the obligee
and must be documented in the records of the land office.
SECTION 14. Section 51.071(a), Natural Resources Code, is
amended to read as follows:
(a) If principal and [or] interest on a sale of land is not
paid when due, the land is subject to forfeiture by the commissioner
by entry on the wrapper containing the papers "Land Forfeited" or
similar words, the date of the forfeiture, and the official
signature of the commissioner.
SECTION 15. Section 51.072, Natural Resources Code, is
amended to read as follows:
Sec. 51.072. EFFECT OF FORFEITURE. In cases of forfeiture,
the original obligations and reinstatement fees [penalties] are as
binding as if no forfeiture occurred.
SECTION 16. Section 51.073(a), Natural Resources Code, is
amended to read as follows:
(a) Before it is sold, the commissioner shall classify and
determine the market value of land on which leases have been
cancelled or have expired and land forfeited to the state.
SECTION 17. Section 51.074, Natural Resources Code, is
amended to read as follows:
Sec. 51.074. REINSTATEMENT OF LAND PURCHASES. (a) If no
rights of third persons have intervened, the purchasers or their
vendees, heirs, or legal representatives, who claim land that has
been forfeited for nonpayment of principal and interest, may have
the claim reinstated on written request by paying into the State
Treasury the amount of all principal and interest due on the claim
up to the date of reinstatement.
(b) The right to reinstate a claim under this section is
limited to the last purchaser from the state, or his vendees, heirs,
or legal representatives, and must be exercised within six months
[five years] from the date of the forfeiture.
[(c) If there is a valid outstanding grazing lease that
prevents reinstatement within the time provided in Subsection (b)
of this section, the claim may be reinstated within 60 days after
the grazing lease expires if the application for reinstatement
together with the payment for all past due interest has been filed
in the land office within five years from the date of forfeiture.]
SECTION 18. Section 51.076, Natural Resources Code, is
amended to read as follows:
Sec. 51.076. LEGAL PROCEEDINGS. None of the provisions of
Sections 51.071 through 51.072 and 51.074 through 51.075 of this
code shall prevent the state from instituting legal proceedings
necessary:
(1) to enforce a forfeiture;
(2) to recover the full amount of principal and
interest [and penalties] that may be owed to the state at the time
the forfeiture occurred; or
(3) to protect another right to the land.
SECTION 19. Section 51.077, Natural Resources Code, is
amended to read as follows:
Sec. 51.077. LIEN. To secure the payment of principal and
interest due on a sale of public school land and[,] university
land[, and asylum land,] the state has an express lien for the use
and benefit of the fund to which the land belongs. The lien is in
addition to any right and remedy that the state has for enforcement
of the payment of principal and [or] interest due and unpaid, up to
and including the period required to reinstate the land award and
obligation.
SECTION 20. Subchapter C, Chapter 51, Natural Resources
Code, is amended by adding Section 51.0771 to read as follows:
Sec. 51.0771. REINSTATEMENT FEE. (a) A reinstatement fee
is due when a forfeited award is reinstated. The reinstatement fee
is calculated at one and one-half percent of all amounts delinquent
at the time of the reinstatement.
(b) The comptroller must receive the reinstatement fee
before the forfeited award is reinstated.
(c) Amounts received in the form of a reinstatement fee are
considered proceeds from the sale of permanent school fund land and
shall be deposited in the permanent school fund.
SECTION 21. Section 51.079(a), Natural Resources Code, is
amended to read as follows:
(a) An owner of public school land [or asylum land]
purchased from the state may sell the land or a definite portion of
the land in any size tract.
SECTION 22. Sections 51.121(a), (d), and (e), Natural
Resources Code, are amended to read as follows:
(a) Unsold public school [and asylum] land may be leased for
agricultural, grazing, or commercial purposes under terms and
conditions set by the commissioner. Commercial improvements on
land under this subsection shall not become the property of the
state and shall be taxed in the same manner as other private
property.
(d) In leases granted under this subchapter that are for
terms of 20 years or more, the commissioner may grant the lessee a
preference right to purchase the leased premises. In order to grant
this preference right, the commissioner must include such a
provision in the lease. The provision may provide that the
preference right to purchase may be exercised at any time during the
term of the lease. If the commissioner does include the preference
right to purchase in the lease, the lessee shall have a preference
right to purchase the leased premises before the leased premises
are made available for sale to any other person. All sales under
this subsection must be for not less than [fair] market value as
determined by an appraiser [General Land Office appraisers] and
under any other terms and conditions that the commissioner deems to
be in the best interest of the state. The preference right to
purchase granted under this subsection is superior to any other
preference right to purchase granted under any other section of
this code or under any other law. Nothing in this subsection shall
be construed to allow the commissioner to grant a preference right
to purchase submerged land.
(e) Subject to the provisions of Title 2, Utilities Code,
any district created by Section 59, Article XVI, Texas
Constitution, that leases unsold public school [or asylum] land for
power generation through the use of renewable energy sources, such
as wind, solar, or geothermal energy and other sustainable sources,
or a district participating in a power generation project using
renewable energy sources which is located on unsold public school
[or asylum] lands may distribute and sell electric energy generated
on public school [or asylum] lands within or without the boundaries
of the district and may issue bonds to accomplish such purposes
pursuant to Chapter 1371, Government Code, or other applicable law.
For any such power generation project which is located on both
public lands and private lands, the district may sell outside its
boundaries only the pro rata portion of the total amount as is
generated on the public lands. All electric energy generated
pursuant to this section shall be sold for resale only to utilities
authorized to make retail sales under Title 2, Utilities Code, and
shall be subject to the solicitation process and integrated
resource planning process authorized by that title.
SECTION 23. Section 51.174(c), Natural Resources Code, is
amended to read as follows:
(c) The commissioner shall advise the board relating to the
[fair] market value of the surface and mineral estates of vacant
land.
SECTION 24. Section 51.175(b), Natural Resources Code, is
amended to read as follows:
(b) The board shall adopt rules governing the terms and
conditions for the sale and lease of a vacancy. The rules shall be
adopted and amended as necessary to be consistent with real
property law of this state and other applicable law.
SECTION 25. Section 51.246(b), Natural Resources Code, is
amended to read as follows:
(b) Any person who owns an interest in a titled or patented
survey or any portion of a titled or patented survey in which excess
acreage is located and who desires to pay for the excess acreage
shall file with the commissioner a request for a determination of
market value by an appraiser [an appraisement of the land] with
corrected field notes in the form provided by law, together with a
sworn statement of facts relating to his right to purchase and other
evidence of his right to purchase which may be required by the
commissioner. The corrected field notes shall describe the
patented tract, and if purchasing excess in a portion of a tract,
shall include a description of the portion in which the applicant is
making application to purchase excess.
SECTION 26. Section 51.302(g), Natural Resources Code, is
amended to read as follows:
(g) In lieu of seeking administrative penalties or removal
of the facility or structure under Section 51.3021 of this code, the
commissioner may elect to accept ownership of the facility or
structure as a fixture and may exercise the state's rights as owner
of the facility or structure by filing notice of such ownership in
the real property records of the county in which the facility or
structure is located. For facilities or structures located on
coastal public land, notice of ownership shall be filed in the
county adjacent to the real property on which the facility or
structure is located. A notice under this subsection shall contain
a legal description of the adjacent real property, the owner of real
property if known, and a description of the facility or structure.
A state agency fund or trust fund is not liable for the condition of
any facility or structure as a result of acquiring an interest in
the facility or structure under this section.
SECTION 27. Section 51.342, Natural Resources Code, is
amended to read as follows:
Sec. 51.342. SALE OR LEASE OF TIMBER. Timber located on
public land shall be sold or leased in full tracts for cash at its
[fair] market value.
SECTION 28. Section 51.402, Natural Resources Code, is
amended to read as follows:
Sec. 51.402. ACQUISITION OF INTEREST IN REAL PROPERTY. (a)
The board may use the money designated under Section 51.401 of this
subchapter to acquire real property and to pay the expenses of
acquisitions and sales for any of the following purposes:
(1) to add to a tract of public school land to form a
tract of sufficient size to be manageable;
(2) to add contiguous land to public school land;
(3) to acquire, as public school land, real property
of unique biological, commercial, geological, cultural, or
recreational value; or
(4) to acquire mineral and royalty interests for the
use and benefit of the permanent school fund.
(b) Before acquiring real property under Subsection (a) of
this section, the board must determine that the acquisition is in
the best interest of the permanent school fund.
SECTION 29. Section 51.403, Natural Resources Code, is
amended to read as follows:
Sec. 51.403. MARKET VALUE. (a) The board may not pay more
than market value, as determined by an appraiser, for any real
property acquired under this chapter [subchapter].
(b) A sale under this chapter must be for not less than
market value and under any other terms and conditions that the
commissioner determines are in the best interest of the state.
(c) Market value shall be determined by an appraisal of the
real property performed by an appraiser [appraisers employed by the
land office].
SECTION 30. Section 51.404, Natural Resources Code, is
amended to read as follows:
Sec. 51.404. TITLE SECURITY. (a) Real property [Property]
acquired under this chapter [subchapter] shall be conveyed to the
state by warranty deed.
(b) The board may purchase or acquire title insurance for
any real property purchased under this chapter [subchapter].
SECTION 31. The changes in law made by this Act to Sections
51.070, 51.071, 51.074, and 51.076, Natural Resources Code,
relating to unpaid principal on public school land sales, apply
only to unpaid principal that accrues on or after the effective date
of this Act. Unpaid principal that accrues before the effective
date of this Act is governed by the law in effect immediately before
the effective date of this Act, and the former law is continued in
effect for that purpose.
SECTION 32. This Act takes effect immediately if it
receives a vote of two-thirds of all the members elected to each
house, as provided by Section 39, Article III, Texas Constitution.
If this Act does not receive the vote necessary for immediate
effect, this Act takes effect September 1, 2003.