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79R6396 RMB-F
By: Staples S.B. No. 1646
A BILL TO BE ENTITLED
AN ACT
relating to the management of public school land and the permanent
school fund.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 32.254, Natural Resources Code, is
amended to read as follows:
Sec. 32.254. LAND TO BE TRADED FOR LAND OF EQUIVALENT [AT
LEAST EQUAL] VALUE. [(a)] A trade of land dedicated to the
permanent school fund may be made only on an equivalent market
[appraised] value basis. [The appraisal must be made by appraisers
of the land office, and the board must concur in the appraisal. The
appraisal is conclusive proof of the value of the land.
[(b) A trade of land dedicated to the permanent school fund
may be made only for land of at least equal value.]
SECTION 2. Section 51.001(11), Natural Resources Code, is
amended to read as follows:
(11) "Market value" means the value of real property
as determined by the board [an appraisal performed by an
appraiser].
SECTION 3. The heading to Subchapter B, Chapter 51, Natural
Resources Code, is amended to read as follows:
SUBCHAPTER B. PROVISIONS GENERALLY APPLICABLE
TO THE MANAGEMENT [SALE AND LEASE]
OF PUBLIC SCHOOL AND ASYLUM LAND
SECTION 4. The heading to Section 51.011, Natural Resources
Code, is amended to read as follows:
Sec. 51.011. MANAGEMENT [SALE AND LEASE] OF PUBLIC SCHOOL
LAND.
SECTION 5. Section 51.011, Natural Resources Code, is
amended by amending Subsection (a) and adding Subsection (a-1) to
read as follows:
(a) Any land that is set apart to the permanent school fund
under the constitution and laws of this state together with the
mineral estate in riverbeds, channels, and the tidelands, including
islands, shall be subject to the sole and exclusive management and
control of [controlled, sold, and leased by] the school land board
and the commissioner under the provisions of this chapter.
(a-1) The board may acquire, sell, lease, improve, or
otherwise manage, control, or use land that is set apart to the
permanent school fund in any manner, at such prices, and under such
terms and conditions as the board finds to be in the best interest
of the fund.
SECTION 6. Section 51.051, Natural Resources Code, is
amended to read as follows:
Sec. 51.051. SALE OF LAND. All [Subject to the provisions
of Section 32.109 of this code, all] sales of land described in
Section 51.011 [of this code] shall be made by or under the
direction of the school land board [to the applicant who submits the
highest bid for the land at a price that is not less than the price
set by the board for purchase of the land].
SECTION 7. Sections 51.052(d) and (i), Natural Resources
Code, are amended to read as follows:
(d) Before the land under this chapter is sold, the
appraiser must appraise the land [at its market value] and file a
copy of the appraisal with the commissioner. [No land covered by
this chapter may be sold for less than the market value that appears
in the appraisal made under this subsection.]
(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], or if the transaction involves
commercial real estate and the board determines that it is in the
best interest of the permanent school fund, the asset management
division of the land office may solicit proposals or negotiate a
sale, exchange, or lease of the land to any person. The asset
management division may [also] contract for the services of a real
estate broker or of a private brokerage or real estate firm to
assist in a [the real estate] transaction under this subsection.
The sale price may not be less than the market value. The board must
approve any negotiated sale, exchange, or lease of any land under
this section.
SECTION 8. Sections 51.401(a) and (c), Natural Resources
Code, are amended to read as follows:
(a) The board may designate funds received from the sale of
permanent school fund land under this chapter and the proceeds of
future mineral leases and royalties generated from existing and
future [active] leases of permanent school fund mineral interests
received under Chapters 52 and 53 [of this code] for deposit in a
special fund account of the permanent school fund in the State
Treasury to be used by the board [to acquire fee or lesser interests
in real property, including mineral and royalty interests, for the
use and benefit of the permanent school fund,] as provided by
[Section 51.402 of] this subchapter.
(c) Money received from the sale of a particular piece of
land [and designated for the acquisition of interests in real
property] under this subchapter must be used by the board as
provided by this subchapter not later than two years after the date
of the sale of land from which the money is derived. Money received
from the lease of minerals and royalties derived from [active]
leases and designated for use by the board as provided by [the
acquisition of interests in real property under] this subchapter
must be used by the board not later than two years after the date the
money is deposited in the special fund account.
SECTION 9. Section 51.402, Natural Resources Code, is
amended to read as follows:
Sec. 51.402. USE OF DESIGNATED FUNDS [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, interests in
real property for [of unique] biological, commercial, geological,
cultural, or recreational purposes [value]; [or]
(4) to acquire mineral and royalty interests for the
use and benefit of the permanent school fund;
(5) to maintain or enhance the value of public school
land;
(6) to acquire interests in real estate investments;
or
(7) to pay reasonable fees for professional services
related to a permanent school fund investment.
(b) Before using funds [acquiring real property] under
Subsection (a) [of this section], the board must determine, using
the prudent investor standard, that the use of the funds for the
intended purpose [acquisition] is in the best interest of the
permanent school fund.
SECTION 10. Subchapter I, Chapter 51, Natural Resources
Code, is amended by adding Section 51.4021 to read as follows:
Sec. 51.4021. APPOINTMENT OF SPECIAL FUND MANAGERS. (a)
The board may appoint investment managers to invest the money
designated under Section 51.401 by contracting for professional
investment management services with one or more organizations that
are in the business of managing real estate investments.
(b) To be eligible for appointment under this section, an
investment manager must be:
(1) registered under the Investment Advisors Act of
1940 (15 U.S.C. Section 80b-1 et seq.);
(2) a bank as defined by that Act; or
(3) an insurance company qualified to perform real
estate investment services under the laws of more than one state.
(c) In a contract under this section, the board shall
specify any policies, requirements, or restrictions, including
criteria for determining the quality of investments and for the use
of standard rating services, that the board adopts for real estate
investments of the permanent school fund.
SECTION 11. Sections 51.052(e) and (f) and 51.403, Natural
Resources Code, are repealed.
SECTION 12. 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, 2005.