82R759 MXM-F
 
  By: Estes S.B. No. 1570
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the sale of surplus leased land by a governmental entity
  to a private party.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subtitle F, Title 10, Government Code, is
  amended by adding Chapter 2267 to read as follows:
  CHAPTER 2267. SALE OF LEASED LAND BY GOVERNMENTAL ENTITIES
  SUBCHAPTER A. GENERAL PROVISIONS
         Sec. 2267.001.  DEFINITIONS. In this chapter:
               (1)  "Bulk purchaser" means any person, including
  successors in interest, heirs, or assigns, that acquires a leased
  tract, wholly or partly, from a governmental entity in accordance
  with Subchapter C. The term does not include a lessee who acquires
  an individual leased tract under Section 2267.051 or Subchapter D.
               (2)  "Closing date" means the date on which the
  governmental entity transfers its interest in the leased tract,
  wholly or partly, to a bulk purchaser.  There may be multiple
  closing dates if the leased tract is sold in portions.
               (3)  "Consumer price index" means the consumer price
  index for Housing, Dallas-Fort Worth, TX area, Series Id:
  CUURA316SAH, Base Period: 1982-84 = 100, as published by the Bureau
  of Labor Statistics of the United States Department of Labor, or its
  equivalent if the series is discontinued.
               (4)  "Leased tract" means all or any portion of
  government land that is:
                     (A)  leased by a governmental entity before
  application of this chapter; and
                     (B)  subject to this chapter under Section
  2267.003.
               (5)  "Lessee" means a person that leases a leased tract
  under a residential or commercial lease from a governmental entity.  
  The term includes the lessee's heirs, successors, and assigns.
         Sec. 2267.002.  APPLICABILITY TO ALL GOVERNMENTAL ENTITIES.
  This chapter applies to this state and each political subdivision
  of this state, including a municipality, a county, a river
  authority or other water district, a state agency, and any other
  governmental entity of this state.
         Sec. 2267.003.  APPLICABILITY ONLY TO SURPLUS PROPERTY.
  This chapter applies only to a leased tract that is:
               (1)  owned by, and designated as surplus property by, a
  governmental entity; and
               (2)  later sold or leased as provided by this chapter.
         Sec. 2267.004.   CONTINUING APPLICABILITY OF PROVISIONS. A
  provision of this chapter that applies to the lessee of a leased
  tract under this chapter applies to any subsequent owner of the
  leased tract.
         Sec. 2267.005.  PLATTING LAW INAPPLICABLE. A sale of the
  leased tract under this chapter is not subject to Chapter 212 or
  232, Local Government Code, or any other platting requirement.
         Sec. 2267.006.  NONAPPLICABILITY OF CERTAIN OTHER LAWS.  The
  following laws do not apply to the sale of an individual leased
  tract under this chapter:
               (1)  Chapter 180, Finance Code;
               (2)  Chapter 272, Local Government Code;
               (3)  Chapter 31, Natural Resources Code;
               (4)  Section 8502.013, Special District Local Laws
  Code; and
               (5)  Section 49.226, Water Code.
         Sec. 2267.007.  CONFLICT OF LAWS. To the extent of a
  conflict between this chapter and any other law, this chapter
  controls.
  [Sections 2267.008-2267.050 reserved for expansion]
  SUBCHAPTER B. SALE OF LEASED LAND BY GOVERNMENTAL ENTITY DIRECTLY
  TO INDIVIDUAL WHO IS LEASING LAND FROM GOVERNMENTAL ENTITY
         Sec. 2267.051.  SALE OF LEASED LAND TO PERSON LEASING LAND
  FOR FAIR MARKET VALUE. A governmental entity may, without notice or
  the solicitation of bids, sell land it owns to the lessee for the
  fair market value of the land as determined by a certified
  appraiser.
         Sec. 2267.052.  SALE TO OTHER PERSONS GENERALLY PROHIBITED.
  While land described by Section 2267.051 is under lease, the
  governmental entity that owns the land may not sell the land to any
  person other than the lessee, except as provided by Section
  2267.101.
         Sec. 2267.053.  NO WATER CODE PERMIT EXEMPTION. (a)  A
  leased tract sold by the governmental entity under this chapter is
  ineligible for, and the owner is not entitled to, the exemption
  provided by Section 11.142(a), Water Code.  The purpose of this
  section is to protect the public health, safety, or welfare and to
  ensure an adequate municipal, county, water district, river
  authority, or other governmental water supply.
         (b)  The instrument conveying the leased tract must include a
  provision stating that the exemption does not apply to the
  conveyance.
  [Sections 2267.054-2267.100 reserved for expansion]
  SUBCHAPTER C. SALE OF LEASED LAND BY GOVERNMENTAL ENTITY TO BULK
  PURCHASERS; LESSEE OPTIONS TO PURCHASE OR LEASE FROM BULK PURCHASER
         Sec. 2267.101.  SUSPENSION OF LESSEE'S RIGHT TO PURCHASE
  LEASED LAND.  (a)  A governmental entity may suspend a lessee's
  right to purchase land under Sections 2267.051 and 2267.052 by
  passing a resolution to pursue a bulk sale of all or part of the
  property leased to a lessee to a single purchaser under this
  subchapter.
         (b)  A lessee's right to purchase the land the lessee is
  leasing is suspended from the effective date indicated in the
  resolution until the date on which any resulting bulk purchase and
  sale agreement is declared terminated by the governmental entity.
         (c)  If the bulk sale of the leased property is completed and
  ownership of the land is transferred to the bulk purchaser, the
  lessee's right to purchase the land the lessee is leasing ends and
  the lessee's only purchase and lease options are those described by
  this subchapter and Subchapter D.
         Sec. 2267.102.  SALE OF LEASED LAND TO BULK PURCHASER. A
  governmental entity may sell a leased tract wholly or partly to a
  bulk purchaser in accordance with this subchapter.
         Sec. 2267.103.  OPPORTUNITY OF LESSEE TO BUY LEASED TRACT.
  Each lessee is entitled to buy the lessee's individual leased tract
  from the bulk purchaser or continue leasing the applicable leased
  tract from the bulk purchaser in accordance with the purchase or
  lease options described by Sections 2267.104 through 2267.107.
         Sec. 2267.104.  OPTION TO PURCHASE FOR CASH. (a)  The lessee
  may purchase the leased tract in cash or through lender financing
  for 100 percent of land only assessed value without any exemptions,
  as determined by the appraisal district, for the most current
  tax-assessed value.
         (b)  This option must be available on the closing date and
  until at least the first anniversary of the closing date.
         Sec. 2267.105.  OPTION TO PURCHASE FOR LOAN. (a)  The lessee
  may purchase the individual leased tract by seller financing for
  the percent of assessed value only as set forth in Section 2267.104,
  with a down payment of 10 percent and an interest rate of 6 percent,
  with a 30-year amortization.
         (b)  The lessee may not be charged any origination fees or
  points as a part of the closing costs involved in this option.
         (c)  This option must be available on the closing date and
  until at least the first anniversary of the closing date.
         Sec. 2267.106.  OPTION FOR 99-YEAR LEASE.  (a)  The lessee
  may enter into a new 99-year lease for the leased tract at a rental
  rate of six percent of the land only assessed value without any
  exemptions, as determined by the appraisal district, for the
  tax-assessed value that was used to determine the bulk purchaser's
  purchase price.
         (b)  The rental price is subject to annual consumer price
  index increases or decreases.
         (c)  The 99-year lease must include an option to purchase the
  applicable leased tract at the land only assessed value without any
  exemptions, as determined by the appraisal district, at the time of
  the lessee's purchase.  This value may not be less than the
  tax-assessed value that was used to determine the bulk purchaser's
  purchase price.
         (d)  This option must be available until at least the first
  anniversary of the closing date.
         Sec. 2267.107.  OPTION FOR 20-YEAR LEASE FOR SENIOR
  CITIZENS.  (a)  This section applies only to a lessee who is 65 years
  of age or older and who receives a property tax exemption under
  Section 11.13, Tax Code, for a structure on the lessee's individual
  leased tract.  The lessee must have received the property tax
  exemption for a structure on the lessee's individual leased tract
  by the first day of January before the bulk purchaser's closing
  date.
         (b)  The lessee may enter into a 20-year lease for the leased
  tract at a rental rate of six percent of the land only assessed
  value without any exemptions, as determined by the appraisal
  district, for the tax-assessed value that was used to determine the
  bulk purchaser's purchase price.
         (c)  The rental price is subject to annual consumer price
  index increases or decreases.  All annual consumer price index
  increases or decreases are deferred, and accrued and compounded for
  20 years at the six percent rate.
         (d)  The 20-year lease must include an option to purchase the
  applicable leased tract at the land only assessed value without any
  exemptions, as determined by the appraisal district, at the time of
  the lessee's purchase.  This value may not be less than the
  tax-assessed value that was used to determine the bulk purchaser's
  purchase price.
         (e)  This option must be available until at least the first
  anniversary of the closing date.
         Sec. 2267.108.  EXTENSION OF EXISTING LEASE IF OPTIONS NOT
  EXERCISED; EIGHT-YEAR OPTION TO PURCHASE.  (a)  The bulk purchaser
  shall extend the existing lease of any lessee who does not timely
  exercise one of the options in Sections 2267.104 through 2267.107.  
  The bulk purchaser shall extend the lease as necessary to allow for
  the full eight-year purchase option period provided by this
  section.
         (b)  Not later than the eighth anniversary of the closing
  date, the lessee may purchase the lessee's individual leased tract
  for the greater of:
               (1)  the land only assessed value without any
  exemptions, as determined by the appraisal district at the time of
  the lessee's purchase; or
               (2)  the tax-assessed value that was used to determine
  the bulk purchaser's purchase price.
         (c)  This section does not prevent the bulk purchaser from
  offering additional purchase or lease options to a lessee.
         Sec. 2267.109.  DETERMINATION OF LEASE RATE OR PURCHASE
  PRICE WHEN APPRAISAL DISTRICT VALUE UNAVAILABLE. (a)  This section
  applies when the appraisal district does not provide an assessed
  value for the applicable portion of the leased tract for the
  applicable year.
         (b)  To determine the purchase price or lease rate, the land
  only assessed value without any exemptions for the applicable
  portion of the leased tract must be calculated based on the assessed
  value per square foot of comparable tracts with similar physical
  characteristics in the applicable county or adjoining counties, as
  determined by the selling governmental entity.
         Sec. 2267.110.   LIEN ON LEASED TRACT; LESSEE DUTIES.  (a)  
  In this section, "lienholder" means any mortgagee under a mortgage,
  or a trustee or beneficiary under a deed of trust, holding a lien on
  any portion of the leased tract.
         (b)  On the date the sale of an individual leased tract
  closes, the lessee shall:
               (1)  pay any debt secured by a lien on the lessee's
  leasehold estate; or
               (2)  deliver the express written consent of each
  lienholder on the leasehold estate in the leased tract permitting
  the lessee to grant a purchase money lien on the fee simple estate
  in the leased tract.
         Sec. 2267.111.   ROADS. (a)  In this section:
               (1)  "Driveway" means a private gravel or paved
  driveway that connects a road or other street or thoroughfare to an
  individual leased tract or any improvements on the tract.  The term
  includes a shared or common driveway that serves more than one
  lessee or individual leased tract.
               (2)  "Road" means a paved or gravel road or other street
  or thoroughfare.
         (b)  This section applies only to a road owned and maintained
  by the selling governmental entity that provides access to and from
  the leased tract.
         (c)  This section does not apply to:
               (1)  a driveway;
               (2)  a paved or gravel road located wholly within the
  selling governmental entity's public-use areas; or
               (3)  a paved or gravel road located within a
  gated-operations area of the selling governmental entity.
         (d)  Except as provided by Subsection (e), the selling
  governmental entity and the bulk purchaser shall transfer the
  entity or the bulk purchaser's interest in any roads to the
  applicable county in which the roads, or any portion of the roads,
  are situated.
         (e)  The selling governmental entity or the bulk purchaser
  shall retain ownership of any portion of a road that is inaccessible
  to the public.  For purposes of this section, a portion of the road
  is considered inaccessible to the public if, on September 1, 2011,
  the public can only access the portion of the road by crossing
  property not owned by the selling governmental entity or the bulk
  purchaser and not subject to an easement or other ownership
  interest that allows the public to cross the leased tract without
  restriction.  If a retained portion of a road becomes accessible to
  the public, the selling governmental entity or the bulk purchaser
  shall transfer the retained portion, including any interest the
  entity or the bulk purchaser has in any additional road constructed
  or acquired by the entity or the bulk purchaser in order to make the
  retained portion of the road accessible to the public, to the
  applicable county in accordance with this subsection.
         Sec. 2267.112.  PROPERTY OWNERS' ASSOCIATION. The bulk
  purchaser may create a property owners' association with the power
  to assess property, impose a lien, and collect dues and assessments
  for the operation of the property owners' association.
         Sec. 2267.113.  DEED RESTRICTIONS. The selling governmental
  entity may impose a deed restriction on the leased tract conveyed to
  the bulk purchaser that was included in the individual leases
  conveyed.
  [Sections 2267.114-2267.150 reserved for expansion]
  SUBCHAPTER D. PROCEDURES FOR LESSEE PURCHASING LAND FROM BULK
  PURCHASER
         Sec. 2267.151.  LESSEE'S RIGHT TO PURCHASE LEASED TRACT WHEN
  BULK PURCHASER CLOSES.  (a)  In the manner provided by this
  subchapter, a lessee may buy the lessee's individual leased tract
  from the bulk purchaser under Section 2267.104 or 2267.105
  concurrently with the bulk purchaser making its purchase from the
  governmental entity on the closing date.
         (b)  The lessee shall notify the selling governmental entity
  and the bulk purchaser not later than the 90th day after the
  effective date of the purchase and sale agreement between the
  entity and the bulk purchaser of the lessee's intent to purchase the
  applicable leased tract using the format provided by the entity and
  the bulk purchaser.
         (c)  Not later than the closing date, the lessee and the bulk
  purchaser must enter into a purchase and sale agreement in
  substantially the form as agreed to between the selling
  governmental entity and the bulk purchaser.
         Sec. 2267.152.  PURCHASE PRICE REQUIRED IN AGREEMENT. The
  purchase and sale agreement must contain the purchase price for the
  individual leased tract in accordance with the applicable purchase
  option under Section 2267.104 or 2267.105.
         Sec. 2267.153.  SURVEY REQUIRED. (a)  The lessee shall
  deliver an accurate survey of the lessee's individual leased tract
  to the selling governmental entity and the bulk purchaser not later
  than the 45th day before the closing date, at the lessee's expense.
         (b)  The survey must be acceptable to the title company
  selected by the bulk purchaser and lessee and approved by the
  selling governmental entity for the purpose of issuing a policy of
  title insurance on the applicable portion of the leased tract.
         (c)  The survey must be prepared by a licensed state land
  surveyor or a registered professional land surveyor acceptable to
  the selling governmental entity and the bulk purchaser.
         (d)  The survey must include the boundaries of the lessee's
  leased tract. The boundaries must be consistent with any master
  survey prepared on behalf of the selling governmental entity in
  conjunction with the sale of the leased tract to the bulk purchaser.
         (e)  The survey must include all improvements on the leased
  tract and indicate any encroachments across the applicable boundary
  lines.
         (f)  The survey must be reviewed and approved by the selling
  governmental entity and the bulk purchaser.
         (g)  The selling governmental entity or the bulk purchaser
  may perform an inspection of the applicable leased tract to verify
  the accuracy of the survey and any encroachments.
         Sec. 2267.154.  TITLE COMMITMENT REQUIRED. The lessee shall
  provide a title commitment from the title company selected by the
  lessee and the bulk purchaser.  The lessee shall pay for the title
  commitment.
         Sec. 2267.155.  OBJECTIONS TO TITLE COMMITMENT OR SURVEY.  
  (a)  The lessee must notify the bulk purchaser of any objections to
  any items on the title commitment or survey not later than:
               (1)  the 15th day after the date the lessee receives the
  title commitment or survey, as applicable; and
               (2)  the 45th day before the proposed closing date.
         (b)  The bulk purchaser or the selling governmental entity is
  not required to cure any items described by Subsection (a) or to
  incur any expenses in curing the items, except that the bulk
  purchaser or the entity, as applicable, shall use good faith
  efforts to address or remove those requirements or exceptions shown
  on Schedule C of the title commitment that apply to or are created
  by the bulk purchaser or entity.  Despite this good faith exception,
  the bulk purchaser or entity is not required to cure any exceptions
  on the attached Schedule C regarding legal right of access to or
  from the applicable leased tract.
         Sec. 2267.156.  "AS-IS" PURCHASE; NO WARRANTIES.  (a)  The
  lessee purchases the applicable individual leased tract in its
  "as-is" condition.
         (b)  The bulk purchaser:
               (1)  is not required to make any improvements or
  modifications; and
               (2)  may not make any representations or warranties as
  to the condition or use of the applicable leased tract.
         Sec. 2267.157.  NO RESPONSIBILITY FOR BROKER FEES OR
  COMMISSIONS. The bulk purchaser is not responsible for any broker
  fees or commissions due to any broker or agent engaged or claiming
  to have been engaged by the lessee for the purchase and sale of the
  applicable leased tract.
         Sec. 2267.158.  COSTS FOR WHICH BULK PURCHASER IS
  RESPONSIBLE. The bulk purchaser is responsible for the following
  costs:
               (1)  one-half of any escrow fee;
               (2)  costs to release existing liens placed on the
  applicable portion of the leased tract by the bulk purchaser;
               (3)  prepayment penalties and recording fees;
               (4)  costs to release the bulk purchaser's loan
  liability to the extent applicable to the individual leased tract;
               (5)  costs related to tax statements or certificates;
  and
               (6)  costs to prepare the deed.
         Sec. 2267.159.  COSTS FOR WHICH LESSEE IS RESPONSIBLE. The
  lessee is responsible for the following costs:
               (1)  one-half of any escrow fee;
               (2)  costs associated with a loan or financing for the
  applicable portion of the leased tract, including:
                     (A)  loan origination, discount, buy-down, and
  commitment fees;
                     (B)  appraisal fees;
                     (C)  loan application fees;
                     (D)  credit reports costs;
                     (E)  costs to prepare loan documents;
                     (F)  loan-related inspection fees; and
                     (G)  interest on the loan from the date of
  disbursement to the date of the first monthly payment;
               (3)  the cost of the survey prepared under Section
  2267.153;
               (4)  recording fees;
               (5)  costs for copies of easements and restrictions;
               (6)  the cost of the mortgagee policy of title
  insurance, including any endorsements required by the lender;
               (7)  the cost of any prepaid items, including insurance
  premiums and reserves and taxes;
               (8)  underwriting fees; and
               (9)  the cost of any owner's policy of title insurance,
  including endorsements obtained by the lessee.
         Sec. 2267.160.  TAXES. Taxes are prorated as of the closing
  date. If the taxes are not paid as of the closing date, the lessee is
  responsible for paying the taxes.
         Sec. 2267.161.  PURCHASE AND SALE AGREEMENT CONTINGENT ON
  CLOSING.  The purchase and sale agreement between the lessee and the
  bulk purchaser is contingent on the closing date occurring within
  the periods provided by this subchapter.
         Sec. 2267.162.  TITLE COMPANY AND ESCROW AGENT. The title
  company and escrow agent must be acceptable to the selling
  governmental entity and agreed to by the lessee and the bulk
  purchaser in the purchase and sale agreement.
         Sec. 2267.163.  DELIVERY OF PURCHASE AND SALE AGREEMENT AND
  EARNEST MONEY. On or before the closing date, $1,000 in earnest
  money and the executed purchase and sale agreement between the
  lessee and the bulk purchaser must be timely delivered to the title
  company or escrow agent.
         Sec. 2267.164.  DELIVERY OF COMPLETED DOCUMENTS TO ESCROW
  AGENT. On or before the date of the sale to the lessee, the bulk
  purchaser and the lessee shall complete all documentation necessary
  to transfer the applicable leased tract from the bulk purchaser to
  the lessee and deliver the completed and executed documents to the
  applicable escrow agent.
         Sec. 2267.165.  RECORDING OF DOCUMENTS.  (a)  The special
  warranty deed or any other documents transferring the applicable
  portion of the leased tract to the lessee may not be recorded before
  the closing date.
         (b)  Promptly after the escrow agent receives written notice
  from the selling governmental entity or the title company or escrow
  agent facilitating the closing of the leased tract from the entity
  to the bulk purchaser that the closing has been completed, the agent
  shall file the special warranty deed and any other applicable
  documents to transfer the leased tract to the lessee in the real
  property records of the county in which the leased tract is located.
         SECTION 2.  This Act takes effect September 1, 2011.