83R591 PMO-F
 
  By: Estes S.B. No. 918
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the sale by the Brazos River Authority and regulation of
  certain residential and commercial real property in the immediate
  vicinity of Possum Kingdom Lake.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 8502.020, Special District Local Laws
  Code, is amended to read as follows:
         Sec. 8502.020.  SALE OF AUTHORITY PROPERTY. (a)
  Definitions.  In this section:
               (1)  "Authority Land" means the FERC Project Area and
  all other real property owned by the Authority at the Lake as of the
  date before Closing, save and except for the Leased Tract.
               (2)  "Buffer Zone" means that twenty-five or fifty foot
  strip of land measured landward horizontally from the 1000' contour
  line that is included in the FERC Project Area as defined in the
  FERC License.
               (3)  "Close" or "Closing" means the date on which the
  Authority transfers its interest in the Leased Tract, in whole or in
  part, to a Purchaser.  There may be multiple closing dates if the
  Leased Tract is sold in portions.
               (4)  "Commercial Leased Land" means all or any [that]
  portion of the Initial Commercial Leased Land and the Remaining
  Commercial Leased Land [Tract that is located wholly outside the
  FERC Project Area and that is leased for commercial purposes as of
  the date the Restrictions are placed of record].
               (5)  "Consumer Price Index" means the consumer price
  index for Housing, Dallas-Fort Worth, TX area, Series Id:
  CUURA316SAH, CUUSA316SAH, Base Period: 1982-84 = 100, as published
  by the Bureau of Labor Statistics of the United States Department of
  Labor, or its equivalent substitute should this series be
  discontinued.
               (6)  "Contract" means the Authority entering into a
  purchase and sale agreement with a Purchaser for the transfer of the
  Authority's interest in the Initial Leased Tract or the Remaining 
  Leased Tract, in whole or in part.
               (7)  "Driveways" means those certain private gravel
  and/or paved driveways that connect a Road or other street or
  thoroughfare to an individual Leased Tract or any improvements
  thereon; Driveways also includes those shared or common Driveways
  that serve more than one Leaseholder or individual Leased Tract.
               (8)  "Environmental Laws" means the Comprehensive
  Environmental Response, Compensation and Liability Act of 1980, the
  Toxic Substances Control Act, the Clean Water Act, the Resource
  Conservation and Recovery Act and any other similar federal, state
  or local law, rule or regulation respecting the environment or
  Hazardous Materials, together with all rules and regulations
  promulgated thereunder and all present or future amendments
  thereto.
               (9)  "FERC License" means the order of the Federal
  Energy Regulatory Commission issuing a license to the Authority for
  project number 1490-003-Texas on September 8, 1989, as such license
  has been renewed, extended, or amended and may be further renewed,
  extended, or amended at any time and from time to time, and also
  including the Amendment to the original FERC License, which
  amendment was issued on May 15, 1980, to the extent incorporated or
  referenced in the FERC License.
               (10)  "FERC Project Area" means that portion of
  Authority Land [property] that is subject to the FERC License
  before the Date of Decommissioning, as identified and defined in
  the FERC License, as may be amended at any time and from time to
  time, and which FERC Project Area may move or change over time due
  to natural forces.
               (11)  "Ground Lease" means each of those certain
  residential and/or commercial ground leases between the Authority
  and a Leaseholder, and the respective heirs, successors, and
  assigns.
               (12)  "Hazardous Materials" means underground storage
  tanks, petroleum and petroleum products, asbestos, PCB's,
  urea-formaldehyde and any hazardous or toxic substances,
  pollutants, contaminants, wastes, or materials as defined under any
  Environmental Laws.
               (13)  "Lake" means Possum Kingdom Lake located in
  Young, Palo Pinto, Stephens, and Jack Counties.  The boundary of
  the Lake is defined by the 1000' contour line, as that contour may
  meander and change over time with natural forces, including erosion
  and accretion.  The "1000' contour line" means the line running
  along the periphery of the Lake if the surface of the Lake is at an
  elevation of 1000 feet above mean sea level, as measured from the
  top of the spillway crest gates of the Morris Sheppard Dam, as such
  line may move and shift from time to time due to natural forces.
               (14)  "Leased Tract" or "Tract" means all or any
  portion of the Initial Leased Tract or the Remaining Leased Tract 
  [Commercial Leased Land, the Residential Leased Land, and
  Undeveloped Strips], whether owned by the Authority, Purchaser, or
  Owner and whether or not subject to a lease or Ground Lease or owned
  in fee simple.
               (15)  "Leaseholder" means a person or entity that has a
  residential lease or a commercial lease with the Authority,
  including the Leaseholder's heirs, successors, and assigns.
               (16)  "Lienholder" means any mortgagee under a
  mortgage, or a trustee or beneficiary under a deed of trust,
  constituting a lien on any portion of the Leased Tract.
               (17)  "Owner" means the record holder of fee simple
  title to any portion of the Leased Tract sold pursuant to this
  section, including its heirs, personal representatives,
  successors, and assigns.  This term does not include a Purchaser
  who acquires the Leased Tract from the Authority in accordance with
  Subsection (b).
               (18)  "Property" means the Leased Tract and the
  Authority Land.
               (19)  "Purchaser" means any person or entity, including
  its successors in interest, heirs, or assigns, that acquires the
  Leased Tract (or any portion thereof) from the Authority in
  accordance with Subsection (b).  This term does not include those
  Leaseholders that acquire individual Leased Tracts from the
  Purchaser in accordance with Subsection (b).
               (20)  "Ranch" means that certain subdivision of record
  in Palo Pinto County, Texas, according to the map or plat of record
  in Volume 7, Page 71, Plat Records of Palo Pinto County, Texas, as
  it may be amended or modified from time to time, which subdivision
  includes a portion of the Leased Tract and a portion of the
  Authority Land.
               (21)  "Ranch Agreement" means that certain agreement by
  and among the Authority, The Ranch on Possum Kingdom, L.P., and Hill
  Country Harbor Village, L.P., effective as of August 1, 1997, and
  dated December 12, 1997.
               (22)  "Ranch Declarations" means that certain
  Declaration of Covenants, Conditions and Restrictions for The Ranch
  on Possum Kingdom Palo Pinto County, Texas, dated December 8, 1997,
  as recorded in Volume 944, Page 403, Official Public Records of Palo
  Pinto County, Texas.
               (23)  "Residential Leased Land" means all or any [that]
  portion of the Initial Residential Leased Land and the Remaining
  Residential Leased Land [Leased Tract located outside the FERC
  Project Area that is leased for single-family residential purposes
  only as of the date the Restrictions are placed of record.     This
  term does not include land that is subject to a commercial lease,
  where such lessee is authorized to sublease for residential
  purposes].
               (24)  "Restrictions" means the easements, covenants,
  restrictions, liens, encumbrances, and requirements contained in
  the Declaration of Restrictive Covenants, Easements, and
  Conditions to be recorded by the Authority as set forth in
  Subsection (d), as amended from time to time.
               (25)  "Roads" means those paved or gravel streets,
  roads, and thoroughfares owned and maintained by the Authority that
  are located in Stephens, Jack, Young, or Palo Pinto County and that
  provide access, ingress, and egress to and from the Leased Tract,
  the Lake, and/or Authority Land; provided, however, that the
  definition of Roads, as used herein, does not include:
                     (A)  Driveways;
                     (B)  paved or gravel roads located wholly within
  Authority public use areas;
                     (C)  paved or gravel roads located within gated
  Authority operations areas; and
                     (D)  paved or gravel roads located wholly within
  an individual tract that is part of the Commercial Leased Land,
  which roads only serve that individual commercial Tract.
               (26)  "Shoreline Management Plan" means that certain
  Possum Kingdom Shoreline Management Plan and Customer Guide,
  adopted May 22, 2006, and amended July 31, 2006, and as may be
  revised and/or further amended by the Authority at any time and from
  time to time.
               (27)  "Undeveloped Strips" means all or any portion of
  the Initial Undeveloped Strips and the Remaining Undeveloped Strips 
  [small strips of unleased land located between individual lots
  within the Leased Tract and small parcels of land between the Leased
  Tract and Roads that the Authority determines in its sole
  discretion to include in any sale of all or any portion of the
  Leased Tract].
               (28)  "Amendments to the Restrictions" means the
  amendments to the Restrictions under Subsection (d).
               (29)  "Date of Decommissioning" means the effective
  date of the surrender of the FERC License for the Morris Sheppard
  Dam Project No. 1490-052 under the Order Accepting the Surrender of
  the License (issued December 23, 2011), 137 FERC 62,252.
               (30)  "Initial Commercial Leased Land" means the
  portion of the Initial Leased Tract located wholly outside the FERC
  Project Area that is leased for commercial purposes as of the date
  the Restrictions are recorded in the applicable county records.
               (31)  "Initial Leased Tract" means all or any portion
  of the Initial Commercial Leased Land, the Initial Residential
  Leased Land, and the Initial Undeveloped Strips, whether owned by
  the Authority, Purchaser, or Owner and whether or not subject to a
  lease or Ground Lease or owned in fee simple.
               (32)  "Initial Residential Leased Land" means the
  portion of the Initial Leased Tract located outside the FERC
  Project Area that is leased only for single-family residential
  purposes as of the date the Restrictions are recorded in the
  applicable county records.  The term does not include land that is
  subject to a commercial lease that may be subleased for residential
  purposes.
               (33)  "Initial Undeveloped Strips" means small strips
  of unleased land located between individual lots in the Initial
  Leased Tract and small parcels of land between the Initial Leased
  Tract and Roads that the Authority determines in its sole
  discretion to include in a sale of all or any portion of the Initial
  Leased Tract.
               (34)  "Remaining Commercial Leased Land" means the
  portion of the Remaining Leased Tract that is located wholly or
  partly within the FERC Project Area as of the date preceding the
  Date of Decommissioning and that is leased for commercial purposes
  as of the date the Amendments to the Restrictions are recorded in
  the applicable county records. The term does not include a special
  use lease, hangar lease, grass lease, hunting lease, or mineral
  lease, any other lease for noncommercial purposes, or any portion
  of the Initial Commercial Leased Land.
               (35)  "Remaining Leased Tract" means all or any portion
  of the Remaining Commercial Leased Land, the Remaining Residential
  Leased Land, and the Remaining Undeveloped Strips, whether owned by
  the Authority, Purchaser, or Owner and whether or not subject to a
  lease or Ground Lease or owned in fee simple.
               (36)  "Remaining Residential Leased Land" means the
  portion of the Remaining Leased Tract that is located wholly within
  the FERC Project Area as of the date preceding the Date of
  Decommissioning and that is leased only for single-family
  residential purposes as of the date the Amendments to the
  Restrictions are recorded in the applicable county records.  The
  term does not include land that is subject to a commercial lease
  that may be subleased for residential purposes. The term does not
  include a special use lease, hangar lease, grass lease, hunting
  lease, or mineral lease, any other lease for nonresidential
  purposes, or any portion of the Initial Residential Leased Land.
  The term does not include a lease of land in the Buffer Zone that is
  subject to a residual interest that will automatically vest on the
  Date of Decommissioning or other expiration or termination of the
  FERC License.
               (37)  "Remaining Undeveloped Strips" means small
  strips of unleased land located between individual lots in the
  Remaining Leased Tract and small parcels of land between the
  Remaining Leased Tract and Roads that the Authority determines in
  its sole discretion to include in a sale of all or any portion of the
  Remaining Leased Tract.
         (b)  Sale to Purchaser. Prior to January 1, 2011, the
  Authority may sell the Initial Leased Tract in whole or in part, to
  a Purchaser in accordance with applicable law, this subsection, and
  Subsections (d), (e), (f), (g), (h), and (i).  For a period of two
  years after the Date of Decommissioning, the Authority may sell the
  Remaining Leased Tract in whole or in part, to a Purchaser in
  accordance with applicable law, this subsection, and Subsections
  (d), (e), (f), (g), (h), and (i). Any sale of the Initial Leased
  Tract or the Remaining Leased Tract to a Purchaser under this
  subsection shall be subject to the following:
               (1)  Each Leaseholder shall have the opportunity to buy
  such Leaseholder's individual portion of the Leased Tract from the
  Purchaser or to continue leasing the applicable portion of the 
  Leased Tract from the Purchaser in accordance with the following
  purchase or lease options.  The Purchaser shall:
                     (A)  Permit the Leaseholder to purchase such
  Leaseholder's individual Leased Tract in cash or through lender
  financing for 90% of land only assessed value without any
  exemptions (as determined by the appraisal district) for the year
  2008 if the tract is part of the Initial Leased Tract, or for the
  year 2012 if the tract is part of the Remaining Leased Tract, such
  options [option] to be available at Closing as set forth in
  Subdivision (2) and for a period of at least one year from Closing.
                     (B)  Permit the Leaseholder to purchase for the
  percent of assessed value only as set forth in Paragraph (A) such
  Leaseholder's individual portion of the Leased Tract via seller
  financing, with a down payment of ten percent (10%) and an interest
  rate of six percent (6%), with a 30-year amortization, such option
  to be available at Closing as set forth in Subdivision (2) and for a
  period of at least one year from Closing.  The Leaseholder 
  [leaseholder] shall not be charged any origination fees or points
  by the Purchaser [purchaser] as a part of the closing costs involved
  in the seller financing option.
                     (C)  Offer a new 99-year lease at a rental rate of
  6% of the land only assessed value without any exemptions (as
  determined by the appraisal district) for the year 2008 if the tract
  is part of the Initial Leased Tract, or the 2012 land only assessed
  value without any exemptions if the tract is part of the Remaining
  Leased Tract, with annual Consumer Price Index increases or
  decreases, such options [option] to be available for a period of at
  least one year from Closing.  The 99-year lease will include an
  option for the Leaseholder to purchase the applicable portion of
  the Leased Tract at the land only assessed value without any
  exemptions (as determined by the appraisal district) at the time of
  purchase (but not less than the 2008 land only assessed value
  without any exemptions if the tract is part of the Initial Leased
  Tract, or the 2012 land only assessed value without any exemptions
  if the tract is part of the Remaining Leased Tract).
                     (D)  Offer a new 20-year lease with a rental rate
  as determined by the current Authority lease rate methodology or
  other lease rate structure as set forth in the Ground Lease as
  applicable (and including increases and adjustments to such rates)
  with annual Consumer Price Index increases or decreases, to
  Leaseholders who are over the age of 65 and who receive an ad
  valorem tax exemption under Section 11.13, Tax Code, for a
  structure on the Leaseholder's individual Leased Tract, such option
  to be available for a period of at least one year from the date of
  Closing.  The Leaseholder must have received the ad valorem tax
  exemption for a structure on the Leaseholder's individual Leased
  Tract by January 1, 2009, if the tract is part of the Initial Leased
  Tract or January 1, 2013, if the tract is part of the Remaining
  Leased Tract.  The 20-year lease will include an option for the
  Leaseholder to purchase the applicable portion of the Leased Tract
  at the land only assessed value without any exemptions (as
  determined by the appraisal district) at the time of purchase (but
  not less than the 2008 land only assessed value without any
  exemptions if the tract is part of the Initial Leased Tract or the
  2012 land only assessed value without any exemptions if the tract is
  part of the Remaining Leased Tract).
                     (E)  Ratify the existing Ground Lease of any
  Leaseholder who does not timely exercise one of the foregoing
  options, such ratification to include:
                           (i)  adoption of the current Authority lease
  rate methodology or other lease rate structure as set forth in the
  Ground Lease, as applicable (and including increases and
  adjustments to such rates) for a period of 8 years from Closing;
                           (ii)  an option permitting the Leaseholder
  to purchase such Leaseholder's individual portion of the Leased
  Tract for the land only assessed value without any exemptions (as
  determined by the appraisal district) at the time of purchase, or
  for the year 2008 if the tract is part of the Initial Leased Tract,
  or for the year 2012 if the tract is part of the Remaining Leased
  Tract, whichever is greater, for a period of 8 years from Closing;
  and
                           (iii)  an agreement to extend Ground Leases
  as necessary to allow for this full 8-year purchase option period.
  Nothing in this subsection shall preclude the Purchaser from
  offering additional purchase or lease options to the Leaseholders,
  provided any additional options are made available to all similarly
  situated Leaseholders on an equal basis.
               (2)  A Leaseholder who desires to buy such
  Leaseholder's individual Leased Tract from the Purchaser pursuant
  to the option set forth in either Subdivision (1)(A) or (B)
  concurrently with the Purchaser's Closing must exercise the desired
  option as follows:
                     (A)  notify the Authority and Purchaser in writing
  within 90 days after the effective date of the Contract between the
  Authority and Purchaser of Leaseholder's intent to purchase the
  applicable Leased Tract;
                     (B)  Leaseholder and Purchaser will enter into a
  purchase and sale agreement in substantially the form as agreed to
  between the Authority and Purchaser, which form will be attached to
  the Contract, and which individual purchase and sale agreements
  will be ratified by Purchaser at the Closing; the purchase and sale
  agreement shall contain, at a minimum, the following terms and
  conditions:
                           (i)  the purchase price for the individual
  Leased Tract in accordance with the applicable purchase option;
                           (ii)  earnest money in the amount of $1,000
  to be delivered to the title company agreed to by Leaseholder and
  Purchaser and approved by the Authority along with the executed
  purchase and sale agreement;
                           (iii)  the Leaseholder's obligation to
  provide a survey as set forth in this subsection and a title
  commitment from the agreed upon title company;
                           (iv)  a 60-day period commencing on the date
  of the purchase and sale agreement for the Leaseholder to obtain
  financing (if exercising its option pursuant to Subdivision (1)(A)
  above);
                           (v)  the Leaseholder must notify Purchaser
  of any objections to any items on the title commitment and/or survey
  within fifteen (15) days after receipt of same, but in no event less
  than 45 days prior to the anticipated date of Closing, provided
  however that neither the Purchaser nor the Authority shall have any
  obligation to cure any such items or to incur any expenses in curing
  any items, except that Purchaser and/or the Authority, as
  applicable, shall use good faith efforts to address and/or remove
  those requirements or exceptions shown on Schedule C of the title
  commitment that are applicable to or created by the Purchaser
  and/or Authority, as applicable, and, notwithstanding the
  foregoing, neither the Purchaser nor the Authority shall have any
  obligation to cure any exceptions on the attached Schedule C
  regarding legal right of access to or from the applicable Leased
  Tract;
                           (vi)  Leaseholder is purchasing the
  applicable individual Leased Tract in its "as-is" condition and
  Purchaser shall have no obligation to make any improvements or
  modifications thereto, nor will Purchaser make any representations
  or warranties as to the condition or use of the applicable Leased
  Tract;
                           (vii)  Purchaser shall not be responsible
  for any broker fees or commissions due to any broker or agent
  engaged or claiming to have been engaged by Leaseholder for the
  purchase and sale of the applicable Leased Tract;
                           (viii)  Purchaser shall be responsible for
  costs related to the release of any existing liens placed on the
  applicable portion of the Leased Tract by Purchaser, including
  prepayment penalties and recording fees, release of Purchaser's
  loan liability to the extent applicable to the individual Leased
  Tract, tax statements or certificates, preparation of the deed, and
  one-half of any escrow fee;
                           (ix)  Leaseholder shall be responsible for
  any costs associated with a loan or financing for the applicable
  portion of the Leased Tract, including, without limitation, loan
  origination, discount, buy-down, and commitment fees, appraisal
  fees, loan application fees, credit reports, preparation of loan
  documents, loan-related inspection fees, and interest on the notes
  from the date of disbursement to date of first monthly payment; the
  cost of the survey; recording fees; copies of easements and
  restrictions; mortgagee title policy with endorsements required by
  lender, if any; one-half of any escrow fee; any prepaid items,
  including without limitation, insurance premiums and reserves and
  taxes; underwriting fee; and any title policy (including
  endorsements) obtained by Leaseholder;
                           (x)  Taxes will be prorated as of the date of
  Closing; if taxes are not paid as of the date of Closing, then
  Leaseholder shall be responsible for the payment of taxes; and
                           (xi)  the agreement between Leaseholder and
  Purchaser shall be contingent on Closing occurring within the
  timeframes set forth in this subsection.
                     (C)  Leaseholder shall deliver to Authority and
  Purchaser no less than forty-five days prior to Closing, at the
  Leaseholder's expense, an accurate survey of the individual Leased
  Tract (including any Undeveloped Strips being included in such
  Leased Tract), which survey is acceptable to the Authority and
  Purchaser.  To be acceptable to the Authority and Purchaser, the
  survey must:
                           (i)  be acceptable to the title company
  selected by the Purchaser and Leaseholder and approved by the
  Authority for purposes of issuing any policy of title insurance on
  the applicable portion of the Leased Tract;
                           (ii)  be prepared by a licensed state land
  surveyor or a registered professional land surveyor acceptable to
  the Authority;
                           (iii)  include the boundary of the
  Leaseholder's Leased Tract and any Undeveloped Strips being
  conveyed, which boundaries must be consistent with the master
  survey prepared on behalf of the Authority in conjunction with the
  sale of the Leased Tract to the Purchaser;
                           (iv)  include all improvements on the Leased
  Tract and indicate any encroachments across the applicable boundary
  lines [or into the FERC Project Area or Buffer Zone]; Leaseholder
  must provide evidence that any such encroachments across boundary
  lines, including encroachments onto Authority Land, [or into the
  FERC Project Area or Buffer Zone] have been cured by the Leaseholder
  (either by removal of such encroachment or by written agreement
  between the affected parties permitting such encroachment to
  continue) prior to the survey being deemed acceptable; and
                           (v)  be reviewed and approved by the
  Authority and Purchaser; the Authority, Purchaser, and their
  representatives or agents may perform an inspection of the
  applicable Leased Tract to verify the accuracy of the survey 
  [Survey] and any encroachments thereon;
                     (D)  On or before Closing, the purchase and sale
  agreement between the Leaseholder and Purchaser and any earnest
  money that may be required pursuant to such agreement shall be
  timely delivered to a title company or escrow agent acceptable to
  the Authority and agreed to by Leaseholder and Purchaser in such
  agreement;
                     (E)  On or before Closing, Purchaser and
  Leaseholder shall complete all documentation necessary to
  effectuate transfer of the applicable Leased Tract from the
  Purchaser to the Leaseholder and deliver such completed and
  executed documents to the applicable escrow agent; and
                     (F)  Promptly after Closing, the deed and any
  other applicable documents effectuating transfer of such Leased
  Tract to the Leaseholder shall be recorded in the county records
  where the Leased Tract is located promptly after such escrow agent
  receives written notice from the Authority or title company or
  escrow agent facilitating the Closing of the Leased Tract from the
  Authority to Purchaser that such Closing has been completed and the
  necessary documents have been recorded pursuant to such Closing. In
  no event shall the deed or any other documents transferring the
  applicable portion of the Leased Tract to the Leaseholder be
  recorded prior to Closing.
               (3)  Closing shall occur no later than December 31,
  2010, for the Initial Leased Tract and not later than two years
  after the Date of Decommissioning for the Remaining Leased Tract.  
  The Authority shall post on its website no later than thirty days
  after entering into a Contract for sale with Purchaser the
  effective date of such Contract and the anticipated date of
  Closing, which date shall be at least six (6) months from the
  effective date of the Contract. Any changes to the anticipated date
  of Closing shall also be posted on the Authority's website.  These
  dates shall be used to establish the time periods provided in
  Subdivision (2).
         (c)  Sale to Leaseholders.  This subsection shall only apply
  to, and be effective for, those portions of the Remaining Leased
  Tract (if any) for which Closing has not occurred on or before the
  second anniversary of the Date of Decommissioning [December 31,
  2010], pursuant to Subsection (b), in which case the effective date
  of this subsection shall be the second anniversary of the Date of
  Decommissioning [January 1, 2011].  Upon the effective date of this
  subsection, the Authority shall suspend any applicable sale efforts
  under Subsection (b) for a period of two years beginning on the
  effective date of this subsection and initiate a tract by tract sale
  of the Remaining Leased Tract to the then-current Leaseholders as
  follows:
               (1)  For a period of two years beginning on the
  effective date of this subsection and in accordance with the
  procedures set forth in this subsection, and subject to Subsections
  (d), (e), (f), (g), (h), and (i), the Authority shall provide
  Leaseholders the opportunity to purchase their individual portion
  of the Remaining Leased Tract [Tracts] directly from the Authority.
  Leaseholders shall have until the expiration of such two-year
  period to submit a completed application of intent to purchase
  their individual Remaining Leased Tracts as provided by Subdivision
  (4).
               (2)  The Authority shall determine if, and how, any
  Remaining Undeveloped Strips will be divided between adjacent
  Leaseholders and incorporated into any individual Remaining Leased
  Tract; provided, however, Leaseholders shall not be required to
  accept any such Remaining Undeveloped Strips.
               (3)  On or before the effective date of this
  subsection, the Authority shall make available to the Leaseholders
  a form for an application of intent to purchase the Leaseholder's
  individual Remaining Leased Tract.  Such application shall be
  deemed a contract subject to the provisions set out herein.  The
  application of intent shall provide the Leaseholder a 30-day
  feasibility period beginning on the date such application is
  submitted in which the Leaseholder can determine the feasibility of
  purchasing the applicable individual Remaining Leased Tract,
  including the ability of such Leaseholder to obtain financing for
  such purchase.
               (4)  A Leaseholder who desires to purchase such
  Leaseholder's individual Remaining Leased Tract must submit a
  completed application to the Authority on or before the second
  anniversary of the effective date of this subsection [December 31,
  2012].  An application will be deemed "complete" upon the
  following:
                     (A)  Leaseholder delivers to the Authority an
  executed application of intent to purchase with all required
  information included in the application;
                     (B)  Leaseholder delivers an earnest money
  deposit, in good funds acceptable to the title company or escrow
  agent selected by the Authority, in the amount of $1,000 to such
  title company or escrow agent, which earnest money shall be
  nonrefundable after the expiration of the feasibility period except
  in the event closing does not occur due to the fault of the
  Authority;
                     (C)  any and all rent and other fees or amounts due
  to the Authority pursuant to such Leaseholder's Ground Lease have
  been paid and there are no amounts then outstanding which are past
  due;
                     (D)  Leaseholder has delivered to the Authority a
  survey that is acceptable to the Authority of the applicable
  Remaining Leased Tract (and any Remaining Undeveloped Strips being
  included in such Remaining Leased Tract). To be acceptable to the
  Authority, the survey must:
                           (i)  be acceptable to the title company
  selected by the Authority for purposes of issuing any policy of
  title insurance on the applicable portion of the Remaining Leased
  Tract;
                           (ii)  be prepared by a licensed state land
  surveyor or a registered professional land surveyor acceptable to
  the Authority;
                           (iii)  include the boundary of the
  Leaseholder's Remaining Leased Tract and any Remaining Undeveloped
  Strips being conveyed, which boundaries must be consistent with the
  master survey of the Remaining Leased Tract prepared on behalf of
  the Authority;
                           (iv)  include all improvements on the
  Remaining Leased Tract and indicate any encroachments across the
  applicable boundary lines, including encroachments onto Authority
  Land [or into the FERC Project Area or Buffer Zone]; Leaseholder
  must provide evidence that any such encroachments across boundary
  lines [or into the FERC Project Area or Buffer Zone] have been cured
  by the Leaseholder (either by removal of such encroachment or by
  written agreement between the affected parties permitting such
  encroachment to continue) prior to the survey being deemed
  acceptable; and
                           (v)  be reviewed and approved by the
  Authority; the Authority or its representatives or agents may
  perform an inspection of the individual Remaining Leased Tract to
  verify the accuracy of the survey [Survey] and any encroachments
  thereon.
                     (E)  Leaseholder has delivered to the Authority a
  title commitment and, if requested by the Authority, any exception
  documents referenced therein, prepared by the applicable title
  company or escrow agent selected by the Authority; and
                     (F)  Leaseholder has delivered to the Authority
  written evidence from Leaseholder's lender or financial
  institution that Leaseholder has the financing or funds available,
  as applicable, to complete the purchase of Leaseholder's Remaining
  Leased Tract.
               (5)  Completed applications that are timely delivered
  will be accepted and processed by the Authority in the order in
  which they are received; except that the Authority shall give
  preference in processing applications to Leaseholders who receive
  an ad valorem tax exemption under Section 11.13, Tax Code, for a
  structure on the Leaseholder's Remaining Leased Tract.
               (6)  An individual Remaining [A] Leased Tract sold
  under this subsection shall be sold for 90% of the land only
  assessed value without any exemptions, as determined by the
  appraisal district, for the year in which the Leaseholder's
  application of intent to purchase is submitted to the Authority, or
  for the year 2012 [2008], whichever is greater.
               (7)  The Leaseholder purchasing such Leaseholder's
  Remaining Leased Tract is responsible for:
                     (A)  timely paying all rent and other fees or
  amounts due to the Authority pursuant to such Leaseholder's Ground
  Lease through the date of closing on the Leaseholder's portion of
  the Remaining Leased Tract;
                     (B)  obtaining and delivering to the Authority a
  survey of the applicable Remaining Leased Tract in accordance with
  Subdivision (4)(D) and curing any encroachments shown thereon, all
  at Leaseholder's expense;
                     (C)  obtaining and delivering to the Authority, at
  such Leaseholder's expense, a title commitment in accordance with
  Subdivision (4)(E); the Authority may, but shall have no obligation
  to, cure any objections that Leaseholder may have to the
  exceptions, covenants, easements, reservations or any other items
  reflected on the title commitment; provided, however, that the
  Authority shall use good faith efforts to address and/or remove
  those requirements or exceptions shown on Schedule C of the title
  commitment that are applicable to or created by the Authority, and,
  notwithstanding the foregoing, the Authority shall have no
  obligation to cure any exceptions on the attached Schedule C
  regarding legal right of access to or from the applicable Remaining 
  Leased Tract;
                     (D)  delivering to the applicable title company or
  escrow agent on or before closing on the Leaseholder's Remaining 
  Leased Tract, in good funds, the purchase price and all reasonable,
  normal, customary, and documented costs associated with the
  transfer of the individual Remaining Leased Tract to the
  Leaseholder including, without limitation, all escrow fees,
  recording fees, taxes on the land after the date of such closing,
  document preparation fees, the cost of any Title Policy (including
  any endorsements thereon) obtained by Leaseholder, and any costs
  associated with removing any liens on the applicable Remaining
  Leased Tract; and
                     (E)  timely delivering to the escrow agent any
  notices, statements, affidavits, or other documents required by the
  application, escrow agent, or at law to effectuate the transfer of
  the applicable Remaining Leased Tract to the Leaseholder.
               (8)  For those completed applications of intent to
  purchase timely delivered to the Authority under this subsection,
  the purchase must be completed no later than the expiration of 30
  months after the effective date of this subsection [June 30, 2013].
  For any individual Remaining Leased Tract [Tracts] for which
  closing has not occurred by such date, the application shall be
  deemed terminated.  The Authority shall not accept any
  applications of intent to purchase after the second anniversary of
  the effective date of this subsection [December 31, 2012]; and any
  applications of intent to purchase that are delivered to the
  Authority prior to such date but that are not "complete" as of such
  date in accordance with Subdivision (4) shall be rejected by the
  Authority. Leaseholders submitting an application of intent to
  purchase their individual Remaining Leased Tracts are responsible
  for ensuring that such application is deemed "complete" on or
  before the second anniversary of the effective date of this
  subsection [December 31, 2012].
               (9)  Any Ground Lease that would otherwise expire shall
  be automatically extended as necessary for one year terms to permit
  such Leaseholder the full two-year period to deliver such
  application of intent to purchase such Leaseholder's individual
  Remaining Leased Tract and to complete such transaction no later
  than the expiration of 30 months after the effective date of this
  subsection [June 30, 2013].
               (10)  The Owner of a Remaining Leased Tract sold under
  this subsection shall pay the Authority any reasonable fees set by
  the Authority for any services the Owner accepts from the
  Authority. However, the Owner of a Remaining Leased Tract is under
  no obligation to accept services from the Authority.
               (11)  Any Remaining Leased Tract subject to the Ranch
  Agreement shall only be subject to sale under this subsection if the
  Authority is released from its obligations under the Ranch
  Agreement relating to such Remaining Leased Tract.
               (12)  The following laws do not apply to sale of an
  individual Remaining Leased Tract under this subsection:
                     (A)  Chapter 272, Local Government Code;
                     (B)  Section 49.226, Water Code; and
                     (C)  Section 8502.013 of this code.
               (13)  A provision that applies to the Leaseholder of an
  individual Remaining [a] Leased Tract under this section applies to
  any subsequent Owner of the individual Remaining Leased Tract.
               (14)  At closing on the individual Remaining Leased
  Tract, the Leaseholder shall pay any indebtedness secured by a lien
  on the Leaseholder's leasehold estate (including the applicable
  portion of the Buffer Zone that is[, whether or not included as]
  part of the leasehold estate [Leased Tract pursuant to Subsection
  (e)]) or deliver the express written consent of the Lienholder on
  the leasehold estate in the Remaining Leased Tract permitting the
  Leaseholder to grant a purchase money lien on the fee simple estate
  in the Remaining Leased Tract.
               (15)  At the closing of the applicable Remaining Leased
  Tract, the Authority will deliver a special warranty deed.
               (16)  For any portion of the Remaining Leased Tract
  that has not been sold pursuant to this subsection on or before the
  expiration of 30 months after the effective date of this subsection 
  [June 30, 2013], the Board shall sell any such remaining portion of
  the Remaining Leased Tract pursuant to terms and conditions
  determined by such Board.
         (d)  Restrictions on Property [Leased Tract].  The Property
  is [Leased Tract (or any portion thereof) sold in accordance with
  Subsection (b) or (c) shall be] subject to the [following]
  Restrictions recorded in Palo Pinto, Stephens, Young, and Jack
  Counties, as amended from time to time. After the Date of
  Decommissioning and before the date the Remaining Leased Tract is
  conveyed under Subsection (b) or (c), the Authority shall further
  amend the Restrictions and record the Amendments to the
  Restrictions in the records of each applicable county, which
  amendments must (i) add the Remaining Commercial Leased Land as
  part of the Commercial Leased Land in the Restrictions; (ii) add the
  Remaining Residential Leased Land as part of the Residential Leased
  Land in the Restrictions; (iii) add the Remaining Undeveloped
  Strips as part of the Undeveloped Strips in the Restrictions; (iv)
  add the Remaining Leased Tract as part of the Leased Tract; and (v)
  otherwise amend the Restrictions to be substantively in accordance
  with the following[, which shall be included, in substance, in a
  Declaration of Restrictive Covenants, Easements, and Conditions to
  be prepared by the Authority substantively in accordance with the
  following and recorded by the Authority, as declarant, in the
  applicable county records prior to any sale pursuant to Subsection
  (b) or (c)]:
               (1)  No [Subject to Subdivision (10), no] Owner,
  Purchaser, or Leaseholder may forbid, restrict, or take any action
  which effectively forbids or restricts the public from using the
  [FERC Project Area and the adjacent] areas adjacent to [of] the Lake
  [in accordance with the terms of the FERC License].
               (2)  Each Owner, Purchaser, and Leaseholder shall agree
  to not block, restrict, or otherwise prohibit access over, through,
  or across any Road and further agrees that such Roads or portion
  thereof shall remain open for use by the Authority, other Owners or
  Purchasers, lessees of any portion of the Property (including
  Leaseholders) and the general public. Except for (i) those portions
  of the Property that are accessible by water only as of the
  effective date of the Restrictions, and/or (ii) restrictions of
  access existing as of the effective date of the Restrictions (e.g.,
  access to and from public roads that requires traversing real
  property not owned by the Authority, Owners, or Purchasers
  hereunder), and/or (iii) the covenants and restrictions of the
  Ranch Declarations (to the extent applicable to the Roads) or other
  restrictive covenants existing prior to the date the Restrictions
  are recorded of record, no Owner, Purchaser, or Leaseholder shall
  be permitted to block, restrict, or otherwise prohibit access on,
  over, or across the Roads.
               (3)  The Driveways are not part of the Roads and shall
  be maintained by the Owner, Purchaser, or Leaseholder of the
  applicable Driveways. No Owner, Purchaser, or Leaseholder shall
  obstruct, prevent, or otherwise restrict access on, over or across
  any portion of a common Driveway by any such other Owner, Purchaser,
  or Leaseholder, or their guests or invitees, whose portion of the
  Property is served by such common Driveway. Owners, Purchasers,
  and/or Leaseholders whose portion of the Property is served by a
  common Driveway shall at all times have a nonexclusive right of
  ingress and egress over and across such common Driveway to access
  their portion of the Property.
               (4)  All grants and dedications of easements,
  rights-of-way, restrictions, and related rights affecting the
  Leased Tract, made prior to the Leased Tract becoming subject to the
  Restrictions and any Amendments to the Restrictions that are of
  record, or visible or apparent, shall be incorporated into such
  Restrictions by reference and made a part of the Restrictions for
  all purposes as if fully set forth therein and shall be construed as
  being adopted in each and every contract, deed, or conveyance
  executed or to be executed by or on behalf of the Authority
  conveying any part of the Leased Tract.  The foregoing adoption of
  such easements includes, without limitation, any and all written
  easements or agreements, whether or not recorded, between the
  Authority and any other party for the installation, maintenance,
  repair, or replacement of utility lines located on, above, over,
  under, or beneath the Property.
               (5)  The Authority shall reserve for itself and its
  successors, assigns, and designees the nonexclusive right and
  easement, but not the obligation, to enter upon the Property, the
  Lake and other bodies of water, if any, located within the Property
  (a) to install, keep, maintain, and replace pumps in order to obtain
  water for the irrigation of any portion of the Authority Land, (b)
  to construct, maintain, replace, and repair any wall, dam, or other
  structure retaining water therein, (c) to access, construct,
  maintain, replace, and repair any measurement stations, monuments,
  or other similar improvements, (d) to remove trash and other
  debris, and (e) to fulfill the Authority's obligations as a river
  authority and any obligations set forth in [the FERC License,]
  state water rights[,] or other governmental regulations.  The
  Authority and its designees shall have an access easement through,
  over, and across any portion of the Leased Tract to the extent
  reasonably necessary to exercise the rights and responsibilities
  under this subdivision; provided, however, that (i) the Authority
  shall provide written notice at least 48 hours in advance of such
  entry to the Purchaser or Owner of such portion of the Leased Tract
  (except in the event of an emergency, in which case advance notice
  shall not be required, but the Authority shall provide such written
  notice as soon as practicable thereafter); (ii) the Authority shall
  promptly repair any damage to the portion of the Leased Tract caused
  by the Authority's entrance onto such Owner's or Purchaser's portion
  of the Leased Tract; and (iii) the Authority shall use reasonable
  efforts to avoid interfering with the Owner's or Purchaser's use of
  the portion of the Leased Tract.
               (6)  The Authority shall reserve for itself and its
  successors, assigns, and designees a perpetual right, power,
  privilege, and easement to occasionally overflow, flood, and
  submerge that portion of the Property located at or below the
  elevation contour of 1015' above mean sea level in connection with
  the Authority's operation and maintenance of the Lake.  The
  Authority shall have no liability to any Owner, Purchaser,
  Leaseholder, or any other person for any damages, claims, costs,
  injuries, or liabilities to any person or the Property or any
  improvements thereon that are caused by or arise from any act or
  omission by the Authority in connection with the foregoing right
  and easement.
               (7)  Additional land may be included in the Property or
  Leased Tract at any time by the Authority, as long as the Authority
  owns any portion of the Property, by recording an amendment to these
  Restrictions in each of the counties in which the Property is
  located. Upon such additions, the Restrictions shall apply to the
  added land and the rights, privileges, duties, and liabilities of
  the Owners or Purchasers subject to the Restrictions shall be the
  same with respect to the added land as with respect to the Property
  originally covered by the Restrictions. As additional lands are
  added hereto, the Authority shall, with respect to said land,
  record amendments that may incorporate the Restrictions therein by
  reference and that may supplement or modify the Restrictions with
  such additional covenants, restrictions, and conditions that may be
  appropriate for those added lands.
               (8)  The Restrictions may not be modified in any
  respect whatsoever or terminated, in whole or in part, except with
  the consent of (i) the Owners or Purchasers of at least sixty
  percent (60%) of the individual lots that comprise the Residential
  Leased Land and Commercial Leased Land, and (ii) the Owners or
  Purchasers of at least sixty percent (60%) of the land area of the
  Authority Land, and (iii) the Authority, for so long as the
  Authority has any interest in the Property, whether as an Owner or
  [holder of the FERC License or] otherwise. Notwithstanding the
  foregoing, the Authority, without the joinder of any other party,
  shall have the absolute right to make minor changes or amendments to
  the Restrictions to correct or clarify errors, omissions, mistakes,
  or ambiguities contained therein. No amendment shall be effective
  until such amendment has been recorded in the Official Public
  Records of each of the counties in which the Property is located.
               (9)  No improvements (except as specifically set forth
  in Subdivision (11)) shall be constructed or located on the Leased
  Tract within twenty-five feet (25') landward measured horizontally
  from the 1000' contour line of the Lake, a meander line that changes
  over time due to natural forces, such as erosion and accretion;
  provided, however, this restriction shall not include improvements
  inside this setback that are existing at the time the Restrictions
  are filed that [(i)] have been approved in writing by the
  Authority[, and (ii) if such improvements are located within the
  FERC Project Area, have been approved by the Federal Energy
  Regulatory Commission (and to the extent not already approved by
  the Federal Energy Regulatory Commission, the Authority intends to
  file an application to obtain permission for the existing
  encroachments into the FERC Project Area to remain in place)]. In
  addition, no improvements on the Leased Tract (or any portion
  thereof) shall be constructed or located within five feet (5') of
  any other boundary line (i.e., the side and back boundary lines),
  other than fences; provided, however, this restriction shall not
  include improvements located within this 5' setback that are
  existing at the time the Restrictions are filed and that have been
  approved in writing by the Authority.
               (10)  [No Owner, Purchaser, or Leaseholder shall have
  any rights to construct any improvements or fencing that block or
  restrict access to the FERC Project Area, except with the written
  consent of the Authority, to be granted or withheld in its sole
  discretion, and except in compliance with the FERC License. This
  limitation does not apply to fences located within the Leased Tract
  and outside the FERC Project Area.]
               (11)  Erosion control improvements (such as retaining
  walls, rip rap, etc.) and landscape planting may not be constructed
  or located [within the FERC Project Area or] at or below the 1000'
  contour line without the prior written approval of the Authority.
  Such improvements shall be subject to the terms and conditions set
  forth in the Restrictions[, in the FERC License, in any other
  Federal Energy Regulatory Commission rules and regulations,] and in
  the Authority's regulations, including without limitation, the
  Shoreline Management Plan.
               (12)  No Owner, Purchaser, or Leaseholder shall have
  the right to place, or permit to be placed, any advertisements,
  private notices, signs, or billboards on the Leased Tract except
  that temporary signage customarily found on residential property
  may be placed on the Residential Leased Land at the reasonable
  discretion of the Owner, Purchaser, and/or Leaseholder of that
  portion of the Residential Leased Land.
               (13)  No activities shall be conducted on the Leased
  Tract and no improvements constructed on the Leased Tract that are
  or might be unsafe or hazardous to any person or property.
               (14)  No Owner, Purchaser, Leaseholder, or occupant of
  any portion of the Leased Tract shall use or permit the use,
  handling, generation, storage, release, disposal, or
  transportation of Hazardous Materials on, about, or under the
  Leased Tract except for such quantities that are routinely utilized
  in connection with residential use (for all portions of the Leased
  Tract except the Commercial Leased Land) or for commercial uses
  that are in compliance with the Restrictions (for the Commercial
  Leased Land), and that are stored, used, and disposed of in
  compliance with all Environmental Laws. Each Owner, Purchaser, and
  Leaseholder shall indemnify, defend, protect, and save the
  Authority, its successors and assigns, trustees, directors,
  employees, and officers and each other Owner, Purchaser, and
  Leaseholder, harmless from and against, and shall reimburse such
  indemnified parties for, all liabilities, obligations, losses,
  claims, damages, fines, penalties, costs, charges, judgments, and
  expenses, including, without limitation, reasonable attorneys'
  fees and expenses that may be imposed upon or incurred or paid by or
  asserted against such indemnified parties by reason of or in
  connection with such Owner's, Purchaser's, or Leaseholder's failure
  to comply with this subdivision.
               (15)  No Owner or Purchaser shall conduct, or permit to
  be conducted, any activity on the Leased Tract that is improper,
  immoral, noxious, annoying, creates a nuisance, or is otherwise
  objectionable to other Owners or Purchasers or incompatible with
  the recreational use of the Lake and the Authority Land [FERC
  Project Area].
               (16)  The Residential Leased Land (and any Undeveloped
  Strips that are conveyed to an Owner or Purchaser as part of the
  Residential Leased Land pursuant to Subsection (b) or (c)) shall be
  improved and used solely for single-family residential use,
  inclusive of a garage, fencing, and other such related improvements
  as are necessary or customarily incident to normal residential use
  and enjoyment and for no other use. Individual lots that are part of
  the Residential Leased Land (and any Undeveloped Strips that are
  conveyed to an Owner or Purchaser as part of the Residential Leased
  Land pursuant to Subsection (b) or (c)) may not be subdivided or
  used for more than one single-family residence unless otherwise
  permitted in the Restrictions. No portion of the Residential Leased
  Land (and any Undeveloped Strips that are conveyed to an Owner or
  Purchaser as part of the Residential Leased Land pursuant to
  Subsection (b) or (c)) shall be used for manufacturing, industrial,
  business, commercial, institutional, or other nonresidential
  purpose, save and except as set forth in Subdivision (17).
  Notwithstanding the foregoing, Owners, Purchasers, and/or
  Leaseholders shall be permitted to conduct a "garage sale" on their
  respective portion of the Residential Leased Land (and any
  Undeveloped Strips that are conveyed to an Owner or Purchaser as
  part of the Residential Leased Land pursuant to either Subsection
  (b) or (c)) not more than one time per calendar year.
               (17)  No professional, business, or commercial
  activity to which the general public is invited shall be conducted
  on the Residential Leased Land (and any Undeveloped Strips that are
  conveyed to an Owner or Purchaser as part of the Residential Leased
  Land pursuant to Subsection (b) or (c)); except an Owner,
  Purchaser, Leaseholder, or occupant of a residence may conduct
  business activities within a residence so long as: (a) the
  existence or operation of the business activity is not apparent or
  detectable by sight, sound, or smell from outside the residence;
  (b) the business activity conforms to all zoning requirements; (c)
  the business activity does not involve door-to-door solicitation of
  residents, lessees, Leaseholders, Owners, or Purchasers within the
  Property; (d) the business does not generate a level of vehicular or
  pedestrian traffic or a number of vehicles parked within the
  Property that is noticeably greater than that which is typical of
  residences in which no business activity is being conducted; and
  (e) the business activity is consistent with the residential
  character of the Residential Leased Land and does not constitute a
  nuisance, or a hazardous or offensive use, or threaten the security
  or safety of other residents, lessees, Owners, Purchasers, or
  Leaseholders of the Property.  The terms "business" and "trade", as
  used in this provision, shall be construed to have their ordinary,
  generally accepted meanings and shall include, without limitation,
  any occupation, work, or activity undertaken on an ongoing basis
  that involves the provision of goods or services to persons other
  than the provider's family and for which the provider receives a
  fee, compensation, or other form of consideration, regardless of
  whether: (x) such activity is engaged in full or part-time; (y) such
  activity is intended to or does generate a profit; or (z) a license
  is required. Leasing of a residence shall not be considered a
  business or trade within the meaning of this subsection. This
  subdivision shall not apply to any activity conducted by the
  Authority.
               (18)  Except as may be otherwise provided in the
  Restrictions and any Amendments to the Restrictions, Commercial
  Leased Land (and any Undeveloped Strips that are conveyed to an
  Owner or Purchaser as part of the Commercial Leased Land pursuant to
  Subsection (b) or (c)) may be improved and used for any lawful
  commercial purpose, including without limitation, nonprofit
  organizations or governmental or quasi-governmental agencies.
               (19)  No portion of the Leased Tract may be used for the
  commercial testing or development of wind power, or to produce,
  lease, store, and/or transmit electrical power generated thereby
  for commercial or resale purposes.
               (20)  Each Owner or Purchaser shall keep, or cause to be
  kept, all improvements located on its respective portion of the
  Leased Tract maintained in good condition and repair, clean and
  free of rubbish and other hazards, and otherwise in full accordance
  with the Restrictions and all governmental rules, regulations,
  codes, and zoning requirements. Such maintenance shall include, but
  not be limited to, the following: regular and timely removal of all
  litter, garbage, trash, and waste; regular lawn mowing; tree,
  shrub, and plant pruning and trimming; watering of landscaped
  areas; weed control; pest control; maintaining exterior lighting
  and mechanical facilities in good working order; keeping walks and
  driveways clean and in good repair; and the repairing and
  repainting of the exterior improvements visible to neighboring
  properties and/or public view.
               (21)  In the event of any damage to or destruction of
  any building or improvement on any portion of the Leased Tract from
  any cause whatsoever, the Owner, Purchaser, or Leaseholder upon
  whose portion of the Leased Tract the casualty occurred shall, at
  such Owner's, Purchaser's, or Leaseholder's sole option, either (i)
  repair, restore, or rebuild and complete the same with reasonable
  diligence, (ii) clear the affected area of all hazardous or
  dangerous debris and structures and lawfully dispose of same within
  one year from the date of casualty, or (iii) effectuate any
  combination of clauses (i) and (ii) of this subdivision as such
  Owner, Purchaser, or Leaseholder may deem reasonably
  appropriate.  Notwithstanding the foregoing, in the event the
  Owner, Purchaser, or Leaseholder elects to rebuild buildings or
  improvements that were located within [the FERC Project Area or
  within] twenty-five feet (25') landward measured horizontally from
  the 1000' contour line that were approved in accordance with
  Subdivision (9), such buildings or improvements shall be rebuilt in
  accordance with Subdivision (24).
               (22)  The Texas Commission on Environmental Quality has
  adopted rules governing on-site sewage facilities (also called
  septic systems).  The Authority is the commission's authorized
  agent for the septic system licensing program, including the
  enforcement of the commission's septic system rules and regulations
  for the Property.  The Authority, as the agent for the commission,
  shall have the authority to access the Property for the purpose of
  issuing such licenses, inspecting such septic systems, and
  enforcing any and all rules and regulations related thereto.  Each
  Owner, Purchaser, and Leaseholder agrees to comply with all
  sanitary regulations and the licensing process adopted by the
  commission and enforced by the Authority, as its agent, from time to
  time.
               (23)  The Owner or Purchaser shall be responsible, at
  such Owner's or Purchaser's expense, for providing for the
  collection, removal, and disposal of all solid waste on the Leased
  Tract; or the Owner or Purchaser of any portion of the Leased Tract
  shall be responsible for ensuring that the Leaseholders provide for
  such collection, removal, and disposal of all solid waste on the
  applicable portion of the Leased Tract. In the event the Ranch fails
  to provide for the collection, removal, and disposal of all solid
  waste related to the Ranch, the Owner or Purchaser shall be
  responsible for providing for the same.
               (24)  [(i) An Owner, Purchaser, or Leaseholder, subject
  to approval by the Federal Energy Regulatory Commission, may
  repair, alter, or rebuild improvements located within the FERC
  Project Area, which improvements were previously approved in
  accordance with Subdivision (9); provided, however, such repairs,
  alterations, and/or rebuilding shall not extend beyond the
  footprint of the existing or previously existing improvement.]
                           [(ii)]  An Owner, Purchaser, or Leaseholder
  may repair, alter, or rebuild improvements located above the 1000' 
  contour line [outside the FERC Project Area] but within 25'
  landward measured horizontally from the 1000' contour line, and/or
  improvements located within the 5' boundary setback, which
  improvements were previously approved in accordance with
  Subdivision (9). Such repairs, alterations, or rebuilding may
  extend such improvements outside the previously existing footprint
  towards the side boundaries and back boundary of the applicable
  Leased Tract, but such improvements may not be extended towards the
  shoreline or encroach closer to the 1000' contour line of the Lake
  than the existing or previously existing improvements.
               (25)  The Authority shall reserve its rights, title,
  and interest in all oil, gas, and other minerals in and under any
  and all Property, including the Leased Tract.
               (26)  No land located at or below the 1000' contour line 
  [within the FERC Project Area] shall be improved, used, or
  occupied, except in such manner as shall have been approved by the
  Authority [and, to the extent required, by the Federal Energy
  Regulatory Commission]. No docks, piers, on-water facilities,
  retaining walls, or any other structures or facilities shall be
  built, installed, or maintained in, on, or over the waters of the
  Lake [or within the FERC Project Area] except as authorized by the
  Authority. All such structures or facilities shall be subject to
  all rules and regulations applicable to the Lake [and the FERC
  Project Area], as the same may be adopted or amended from time to
  time. Owner, Purchaser, and/or the Leaseholder shall be responsible
  for any fees or annual charges assessed by the Authority [and/or the
  Federal Energy Regulatory Commission] for such permit or
  improvements and shall be responsible for ensuring that any such
  improvements are consistent with the [FERC License,] Shoreline
  Management Plan[,] and all other rules and regulations applicable
  to the Property [FERC Project Area]. Owner or Purchaser shall not,
  at any time, permit any liens to encumber the Authority Land [FERC
  Project Area].
               (27)  No use of the Lake or other bodies of water within
  the Property, if any, shall be made except in accordance with the
  [FERC License, the] Shoreline Management Plan, the Authority's
  regulations, and any other rules and regulations that may be
  promulgated by the [Federal Energy Regulatory Commission and/or
  the] Authority at any time and as amended from time to time. Any
  such use shall be subject to the Authority's [and the Federal Energy
  Regulatory Commission's] superior use rights.  The Authority shall
  not be responsible for any loss, damage, or injury to any person or
  property arising out of the authorized or unauthorized use of the
  Lake or other bodies of water within or adjacent to the Property.
               (28)  The Authority may use and regulate the Lake or
  other bodies of water within the Property for the irrigation of the
  Authority Land, or for any other purpose deemed appropriate by the
  Authority, subject to the rights and authority of any [the Federal
  Energy Regulatory Commission or] other governmental entity having
  jurisdiction of such areas, and subject to the water rights granted
  (or which may be granted) to the Authority by the State of
  Texas.  The Authority's rights under this subdivision shall be
  superior to any rights of any Owner, Purchaser, or
  Leaseholder.  This subdivision shall not be construed to limit or
  restrict the rights and authority of any [the Federal Energy
  Regulatory Commission or] other governmental entity having
  jurisdiction of the Property.
               (29)  Owners or Purchasers must obtain written
  permission from the Authority in accordance with the Authority's
  regulations to use or divert water from the Lake on any portion of
  the Leased Tract for domestic or commercial purposes.
               (30)  No Owner, Purchaser, or Leaseholder shall be
  permitted to divert or alter the natural drainage of the terrain or
  clear vegetation on any portion of the Property in such a manner
  that would cause unnatural erosion or silting of the Lake.
               (31)  Owners, Purchasers, and Leaseholders shall take
  all reasonable precautions to ensure that all use of and activities
  on the Leased Tract [and the FERC Project Area], including without
  limitation, the construction, operation, and maintenance of any
  improvements on the Leased Tract[, and/or FERC Project Area] occur
  in a manner that [is in compliance with the FERC License and that]
  will protect the scenic, recreational, and environmental values of
  the Lake.  The Authority[, as a licensee of the Federal Energy
  Regulatory Commission,] has specific approval authority on any
  proposed construction that impacts the [FERC Project Area or]
  lakebed, and Owner, Purchaser, and Leaseholder shall comply with
  the approval process as may be established by the Authority [and/or
  the Federal Energy Regulatory Commission] from time to time.
               (32)  [Structures in place within the FERC Project Area
  shall be subject to the FERC License, as the same may be amended
  and/or renewed from time to time. Any structures erected in the FERC
  Project Area after May 15, 1980 (the date of the amendment to the
  previous FERC License) may be required to be removed at the expense
  of the owner of the improvement, unless such improvements are
  approved in writing by the Authority in accordance with the FERC
  License.   In no event shall this subdivision grant any
  authorization for a violation of any rules or regulations of the
  Authority, the FERC License, or any state, federal, or local law.]
               (33)  The Owner, Purchaser, and Leaseholder of any
  portion of the Leased Tract shall comply with all of the following
  rules and regulations:
                     (A)  the Shoreline Management Plan and any
  amendments or revisions to that document to the extent such
  Shoreline Management Plan applies to the Owner's, Purchaser's,
  and/or Leaseholder's portion of the Leased Tract;
                     (B)  [the applicable rules, regulations, and
  order of the Federal Energy Regulatory Commission including,
  without limitation the FERC License;
                     [(C)]  the Authority's "Regulations for
  Governance for Brazos River Authority Lakes and Associated Lands,"
  as published on the Authority's Internet website; and
                     (C) [(D)]  other rules and regulations adopted by
  the Authority regarding conduct on and use of the Lake or the
  Property.
               (34)  By Texas statute, the Authority is empowered to
  adopt and has adopted certain regulations governing conduct on and
  use of the Property [within the FERC Project Area] and Lake.  
  Owners, Purchasers, Leaseholders, and persons using the Leased
  Tract with such Owners' or Purchasers' consent shall abide by all
  such rules and regulations adopted from time to time by the
  Authority and any future revisions and amendments thereto.
               (35)  Owners, Purchasers, and Leaseholders of that
  portion of the Leased Tract that is part of the Ranch shall comply
  with the terms and conditions of the Ranch Agreement and the
  covenants and restrictions set forth in the Ranch Declarations, to
  the extent applicable to such portion of the Leased Tract. As to
  that portion of the Property that is part of the Ranch, the Ranch
  Declarations shall control in the event of any conflict between the
  covenants, restrictions, and conditions set forth in the Ranch
  Declarations and the Restrictions.  Owners, Purchasers, and
  Leaseholders of a portion of the Leased Tract that is part of any
  other subdivision shall comply with the terms and conditions of the
  covenants and restrictions governing the subdivision that apply to
  the portion of the Leased Tract. Any portion of the Property that
  is part of the subdivision is governed by the restrictions and
  covenants governing the subdivision which shall control in the
  event of a conflict between the covenants, restrictions, and
  conditions governing the subdivision and the Restrictions and
  Amendments to the Restrictions.
               (36)  In order to maintain the quality of the Lake's
  water, the stability of the shoreline, and of the environment in the
  Lake's vicinity, each Owner, Purchaser, and Leaseholder of all or
  any portion of the Leased Tract agrees to:
                     (A)  comply with any local, state, or federal laws
  related to water quality or the environment, including laws
  governing toxic wastes and hazardous substances;
                     (B)  if the Owner's or Purchaser's private on-site
  sewerage facility is not licensed by the Texas Commission on
  Environmental Quality (or any successor to such Commission) then
  the Owner, Purchaser, or Leaseholder shall connect to and use, at
  the Owner's, Purchaser's, or Leaseholder's expense, as applicable,
  any wastewater treatment system or service that becomes available
  to the Owner's or Purchaser's portion of the Leased Tract, not later
  than twelve (12) months after the system or service becomes
  available to such portion of the Leased Tract and thereafter
  discontinue use of any private on-site sewerage facility; and if,
  at any time after a wastewater treatment system or service becomes
  available to the Owner's or Purchaser's portion of the Leased Tract,
  the Owner's or Purchaser's private on-site sewerage facility
  (whether licensed or not) requires either replacement or an
  alteration or change in the on-site sewerage facility resulting in
  (i) an increase in the volume of permitted flow, (ii) a change in
  the nature of permitted influent, (iii) a change from the planning
  materials approved by the permitting authority, (iv) a change in
  construction, and/or (v) an increase, lengthening, or expansion of
  the treatment or disposal system, then such Owner or Purchaser
  shall promptly connect to and use, at the Owner's, Purchaser's, or
  Leaseholder's expense, as applicable, such wastewater treatment
  system or service and thereafter discontinue use of any private
  on-site sewerage facility. Notwithstanding the foregoing, in the
  event a property owners association or municipality requires the
  Owners or Purchasers of the portion of the Leased Tract that is
  included in such association or municipality to connect to a
  wastewater system or service, then such association or municipality
  rules shall control;
                     (C)  obtain written consent of the Authority prior
  to diverting or pumping water from the Lake or any body of water
  within or adjacent to the Property, constructing or erecting any
  embankment or retaining wall, or commencing any dredging activity;
  and
                     (D)  pay to the Authority any reasonable fee
  related thereto (e.g., water usage, recreational user, dredging, or
  retaining wall fees) as may be adopted from time to time by the
  Authority.
               (37)  Each Owner or Purchaser of all or any portion of
  the Leased Tract agrees and acknowledges that the water level in the
  Lake varies and that the Authority is not responsible for
  maintaining the Lake at any certain level or above or below any
  certain level.
               (38)  The Authority is not responsible or liable for
  any personal injury or damage to any Owner, Purchaser, Leaseholder,
  the Leased Tract, the Property, or any improvements caused by any
  increase or decrease in the water level (even if such increase or
  decrease is due to modifications of the Morris Sheppard (Possum
  Kingdom) Dam or other actions or omissions of the Authority) or
  caused by natural flooding.
               (39)  The Authority shall reserve the right of ingress
  and egress for the Authority and any person authorized by the
  Authority, including an agent of the Authority or employees, over
  and across the Leased Tract and any and all on-water facilities
  whether located within the Leased Tract or Authority Land [FERC
  Project Area] for all reasonable purposes of the Authority,
  including, without limitation, the construction, maintenance,
  repair, and/or replacements of any roads, drainage facilities, and
  power, water, wastewater, and other utility mains and lines that
  the Authority considers necessary or beneficial and for public
  safety, health, and welfare purposes; provided however, that:
                     (A)  the Authority shall provide written notice at
  least 48 hours in advance of such entry to the Purchaser or Owner of
  such portion of the Leased Tract (except in the event of an
  emergency, in which case advance notice shall not be required, but
  the Authority shall provide such written notice as soon as
  practicable thereafter), which notice shall state with reasonable
  specificity the purpose for such entry;
                     (B)  the Authority shall promptly repair any
  damage to the portion of the Leased Tract caused by the Authority's
  entrance onto such Owner's or Purchaser's portion of the Leased
  Tract; and
                     (C)  the Authority shall use reasonable efforts to
  avoid interfering with the Owner's or Purchaser's use of the portion
  of the Leased Tract.
               (40)  Each Owner, Purchaser, and Leaseholder shall
  comply strictly with the Restrictions, as the same may be amended
  from time to time.  Failure to comply with the Restrictions shall
  constitute a violation of the Restrictions, and shall give rise to a
  cause of action to recover sums due for damages or injunctive relief
  or both, maintainable by the Authority or other Owners or
  Purchaser; provided however, no Owner, Purchaser, Leaseholder, or
  other person shall have any right of action against the Authority
  arising under the Restrictions.
               (41)  The Authority shall make no warranty or
  representation as to the present or future validity or
  enforceability of any such restrictive covenants, terms, or
  provisions.  Any Owner, Purchaser, or Leaseholder acquiring or
  leasing, as applicable, any portion of the Property in reliance on
  one or more of the Restrictions shall assume all risks of the
  validity and enforceability thereof and, by acquiring such portion
  of the Property, agrees to hold the Authority harmless therefrom.
               (42)  If the Owner, Purchaser, or Leaseholder of any
  portion of the Leased Tracts or on-water facilities related thereto
  (including retaining walls) shall fail to comply with the
  requirements of the Restrictions, then the Authority shall have the
  right, but not the obligation, following thirty (30) days prior
  written notice to such defaulting person [owner] to enter such
  defaulting person's [owner's] portion of the Leased Tract (but only
  if such failure to comply results in a public health, safety, or
  welfare concern) and/or such defaulting person's [owner's] on-water
  facility and cure such breach, the cost of which shall be reimbursed
  by such defaulting person [owner] to the Authority upon demand.  Any
  such unpaid amounts, together with interest thereon (at the rate of
  six percent (6%) per annum) and the costs of collection (if any),
  shall be charged as a continuing lien against such defaulting
  person's [owner's] portion of the Leased Tract, which lien shall be
  subordinate to the lien of any third-party deed of trust previously
  recorded against such defaulting person's [owner's] portion of the
  Leased Tract.
               (43)  A person shall be deemed to be in default of the
  Restrictions only upon the expiration of thirty (30) days (ten (10)
  days in the event of failure to pay money) from receipt of written
  notice from the Authority or other Owner or Purchaser specifying
  the particulars in which such person has failed to perform the
  obligations of the Restrictions unless such person, prior to the
  expiration of said thirty (30) days (ten (10) days in the event of
  failure to pay money), has rectified the particulars specified in
  said notice of default. However, such person shall not be deemed to
  be in default if such failure (except a failure to pay money) cannot
  be rectified within said thirty (30) day period and such person
  commences the cure of such default within such thirty (30) day
  period and thereafter is continuously using good faith and its best
  efforts to rectify the particulars specified in the notice of
  default.
               (44)  The Authority shall have the right, but not the
  obligation, to enforce all of the provisions of the Restrictions.
  Any Owner or Purchaser shall have the right to enforce all of the
  provisions of the Restrictions against any other Owner, Purchaser,
  or Leaseholder, but not against the Authority. Such right of
  enforcement shall include the right to sue for both damages for, and
  injunctive relief against, the breach of any such provision.
  Furthermore, the Authority shall have the right, when appropriate
  in its sole judgment and discretion, to claim or impose a lien upon
  any portion of the Leased Tract, or improvement constructed
  thereon, in order to enforce any right or effect compliance with the
  Restrictions.
               (45)  The failure of a person (including the Authority
  or any Owner or Purchaser) to insist upon strict performance of any
  of the Restrictions shall not be deemed a waiver of any rights or
  remedies that said person may have, and shall not be deemed a waiver
  of any subsequent breach or default in the performance of any of the
  Restrictions by the same or any other person.
               (46)  The Authority shall not be liable to any Owner,
  Purchaser, or Leaseholder, or to any other person for any loss,
  damage, or injury arising out of or in any way connected with the
  performance or nonperformance of the Authority's rights,
  obligations, or privileges under the Restrictions. Without
  limiting the foregoing, the Authority shall not be liable to any
  Owner, Purchaser, or Leaseholder due to the construction of any
  improvements within the Property.
               (47)  Each of the Restrictions on the Leased Tract
  shall be a burden on each portion of the Leased Tract, shall be
  appurtenant to and for the benefit of the other portions of the 
  Property, other portions of the Leased Tract, and each part
  thereof, and shall run with the land.
               (48)  The Restrictions shall inure to the benefit of
  and be binding upon the Owners or Purchasers, their heirs,
  successors, assigns, and personal representatives, and upon any
  person acquiring all or any portion of the Leased Tract, or any
  interest therein, whether by operation of law or otherwise.
  Notwithstanding the foregoing, if any Owner or Purchaser sells or
  transfers all or any portion of such Owner's or Purchaser's interest
  in all or any portion of the Leased Tract, such Owner or Purchaser
  shall, upon the sale and conveyance of title, be released and
  discharged from all of its obligations as Owner or Purchaser in
  connection with the property sold by it arising under the
  Restrictions after the sale and conveyance of title but shall
  remain liable for all obligations arising under the Restrictions
  prior to the sale and conveyance of title.  The new Owner or
  Purchaser of all or any such portion of the Leased Tract,
  (including, without limitation, any Owner (or Lienholder) who
  acquires its interest by foreclosure, trustee's sale or otherwise)
  shall be liable for all obligations arising under the Restrictions
  with respect to such portion of the Leased Tract on and/or after the
  date of sale and conveyance of title.  The Authority may assign, in
  whole or in part, any of its privileges, exemptions, rights, and
  obligations (if any) under the Restrictions to any other person and
  may permit the participation, in whole or in part, by any other
  person in any of its privileges, exemptions, rights, and
  obligations (if any) hereunder.
               (49)  Except as provided in this subsection, the term
  of the Restrictions shall be for a period of fifty (50) years from
  the date such Restrictions are executed by the
  Authority.  Notwithstanding the foregoing, upon the expiration of
  such period, the term of the Restrictions shall automatically renew
  for successive periods of five (5) years each unless, at least
  ninety (90) days prior to the date of expiration of any period then
  in effect, (i) the Owners or Purchasers of at least sixty percent
  (60%) of the individual lots that comprise the Residential Leased
  Land and the Commercial Leased Land, (ii) the Owners or Purchasers
  of at least sixty percent (60%) of the land area of the Authority
  Land, and (iii) the Authority, for so long as the Authority has any
  interest in the Property, whether as an Owner or [holder of the FERC
  License or] otherwise, duly execute, acknowledge and record in the
  office of the recorder of the counties in which the Property is
  located a written termination notice, in which event, the
  Restrictions shall automatically expire at the end of the period
  then in effect.
         (e)  Buffer Zone. Notwithstanding any provision in this
  subsection to the contrary, a sale under Subsection (b) or (c) shall
  be subject to the following:
               (1)  The remaining [If at the time Closing occurs under
  Subsection (b) or if at the time a Leaseholder completes the
  purchase of the applicable Leased Tract from the Authority pursuant
  to Subsection (c), as applicable, the Buffer Zone, or any portion
  thereof, has been removed from the FERC Project Area, the] Leased
  Tract being conveyed under Subsection (b) or (c) shall include the
  applicable [that] portion of the Buffer Zone [so removed];
  provided, however, the Purchaser and/or Owner, as applicable, shall
  grant the Authority access to the Buffer Zone [FERC Project Area]
  and Lake to allow the Authority to fulfill its obligations as a
  River Authority and any obligations set forth in [the FERC
  License,] state water rights[,] or other governmental regulations.
               (2)  At [If at] the time of Closing on the Initial
  Leased Tract [occurs] under Subsection (b), [or if at the time a
  Leaseholder closes on the purchase of the applicable Leased Tract
  from the Authority pursuant to Subsection (c), as applicable, the
  Buffer Zone, or any portion thereof, has not been removed from the
  FERC Project Area and] a portion of the Initial Leased Tract is
  located within the Buffer Zone and is a part of the FERC Project
  Area, and therefore the Authority shall provide such Purchaser
  and/or Owner, as applicable, a residual interest in that portion of
  the Buffer Zone adjacent to the Initial Leased Tract and covered by
  the applicable residential Ground Lease, such residual interest to
  automatically vest upon satisfaction of one [either] of the
  following conditions:
                     (A)  the Federal Energy Regulatory Commission
  approves an amendment to the FERC License removing the Buffer Zone
  from the boundaries prescribed by the FERC License such that the
  Buffer Zone is no longer subject to regulation by the Federal Energy
  Regulatory Commission; [or]
                     (B)  the FERC License expires (and is not renewed
  or extended) or is otherwise terminated and thus the Buffer Zone is
  no longer subject to regulation by the Federal Energy Regulatory
  Commission; or
                     (C)  the Date of Decommissioning occurs.
               (3)  Notwithstanding the foregoing, if such residual
  interest has not vested on or before August 31, 2040, then such
  residual interest shall be terminated and of no further force and
  effect.  Upon satisfaction of one [either] of the foregoing
  conditions prior to August 31, 2040, this conveyance shall be
  automatically effective without necessity of further
  documentation.  From and after the date such conveyance becomes
  effective, the Buffer Zone shall be considered to be a part of the
  Initial Leased Tract conveyed under Subsection (b) [or (c)] and the
  Purchaser or then current Owner of the applicable Initial Leased
  Tract shall be the beneficiary of the residual interest created
  herein, but only as to the portion of the Buffer Zone located
  adjacent to the Purchaser's or Owner's property and all right,
  title, and interest in such adjacent portion of the Buffer Zone as
  measured by extending the boundary lines on both sides of the
  applicable portion of the Initial Leased Tract in a straight line
  across the Buffer Zone to the then current 1000' contour line of the
  Lake, or, if such portion cannot reasonably be measured as set forth
  above, then as otherwise determined by the Purchaser and approved
  by the Authority.  Such residual interest shall immediately vest in
  the Purchaser or then-current Owner of such adjacent portion of the
  Initial Leased Tract without the necessity of any additional
  written conveyance.
               (4)  Until the residual interest in the Buffer Zone
  vests in the Purchaser or then-current Owner of the adjacent
  portion of the Initial Leased Tract as set forth in Subdivision (3), 
  [In the event a sale under Subsection (b) or (c) does not include
  the Buffer Zone or any portion thereof, or only includes a residual
  interest in the Buffer Zone or any portion thereof, then] such
  Buffer Zone shall remain subject to the terms and conditions of the
  residential Ground Lease in effect between the Leaseholder and the
  Authority at the time Closing occurs under Subsection (b) [or at the
  time the Leaseholder purchases the applicable Leased Tract under
  Subsection (c)]; provided, however, no rent shall be due the
  Authority under such Ground Lease for the Buffer Zone.  At such time
  as the applicable Ground Lease expires or is otherwise terminated,
  the Authority may, subject to approval of the Federal Energy
  Regulatory Commission, grant the Purchaser or the then-current
  Owner of the adjacent tract (as determined pursuant to the method
  set forth in Subdivision (2)(B)), an easement for use of such
  portion of the Buffer Zone, which easement shall be subject to the
  FERC License.  The Authority shall retain ownership of such portion
  of the Buffer Zone and exercise control over such portion of the
  Buffer Zone consistent with the FERC License and this subsection.  
  The easement granted to such Owner shall be limited to uses
  permitted under the terms of the FERC License and the Authority's
  Shoreline Management Plan, and any other Authority rules and
  regulations as may be adopted from time to time.
         (f)  Purchase Price.  For purposes of determining the
  purchase price and/or lease rate pursuant to the options set forth
  in Subsection (b)(1) or the purchase price in Subsection (c), in the
  event the appraisal district does not provide an assessed value for
  the applicable portion of the Leased Tract for the applicable year,
  then the land only assessed value without any exemptions for the
  applicable portion of the Leased Tract shall be calculated based on
  the assessed value per square foot of comparable lots with similar
  physical characteristics in the applicable county or adjoining
  counties, as determined by the Authority.
         (g)  Roads.  Authority or Purchaser, whichever is
  applicable, shall transfer its interest in the Roads to the
  applicable county in which the Roads, or any portion thereof, are
  situated as follows:
               (1)  All Roads located in Stephens County
  (approximately three miles of Roads) shall be transferred to
  Stephens County on or before December 31, 2011.
               (2)  All Roads located in Palo Pinto County
  (approximately forty-six miles of Roads) shall be transferred to
  Palo Pinto County in twenty percent increments of the total mileage
  per year for five consecutive years.  The first twenty percent
  increment shall be transferred on or before December 31, 2011, and
  each remaining twenty percent increment shall be transferred on or
  before December 31 of each subsequent year, but not before January 1
  of such year unless approved by an order or resolution of the Palo
  Pinto County Commissioners Court, with the final twenty percent
  increment being transferred on or before December 31, 2015, but not
  before January 1, 2015, unless approved by an order or resolution of
  the Palo Pinto County Commissioners Court.
               (3)  Authority or Purchaser, whichever is applicable,
  in consultation with the Palo Pinto County Commissioner or
  Commissioners who have jurisdiction over the Leased Tract, shall
  determine which Roads or portions thereof shall be transferred each
  year.
               (4)  The transfer of any portion of the Roads located
  within the FERC Project Area shall be in accordance with the FERC
  License and may be in the form of a grant of a right-of-way or
  easement, unless otherwise authorized by the Federal Energy
  Regulatory Commission.
               (5)  Beginning on the date of transfer, the Authority
  or Purchaser, whichever is applicable, shall no longer have any
  obligations regarding such Roads.  The Roads shall be transferred
  in their "as-is" condition and neither the Authority nor the
  Purchaser shall have any obligation to ensure that the Roads, or any
  portion thereof, comply with the standards in effect at the time of
  transfer in the applicable county for like roads currently
  maintained by that county.
               (6)  Concurrently with the transfer in each year of a
  portion of the Roads, the Authority or Purchaser, as applicable,
  shall transfer to Palo Pinto County the amount, rounded to the
  nearest dollar, computed by multiplying $200,000 by a fraction the
  numerator of which is the number of miles of Roads located in and
  transferred to Palo Pinto County in that year and the denominator of
  which is the total number of miles of Roads located in and
  transferred or to be transferred to Palo Pinto County.  For every
  other county in which a portion of the Roads is located, the
  Authority or Purchaser, as applicable, shall transfer an amount
  equal to (A) the per mile road payment (as defined below) multiplied
  by (B) the number of miles of the Roads located in such county.  As
  used in this subdivision, "per mile road payment" means the amount,
  rounded to the nearest dollar, computed by dividing $200,000 by the
  total number of miles of Roads located in and transferred or to be
  transferred to Palo Pinto County pursuant to this subsection.
               (7)  Notwithstanding any provision in this subsection
  to the contrary, the Authority or Purchaser, as applicable, shall
  retain ownership of any portion of a Road that is inaccessible to
  the public. For purposes of this subdivision, a portion of the Road
  is considered inaccessible to the public if, as of the effective
  date of the Act enacting this section, the public can only access
  such portion of the Road by crossing property not owned by the
  Authority or Purchaser, as applicable, and not subject to an
  easement or other ownership interest that allows the public to
  cross such property without restriction. If a retained portion of a
  Road subsequently becomes accessible to the public, the Authority
  or Purchaser, as applicable, shall transfer such retained portion,
  including any interest the Authority or Purchaser has in any
  additional Road constructed or acquired by the Authority or
  Purchaser in order to make the retained portion of the Road
  accessible to the public, to the applicable county in accordance
  with the process set forth in this subsection, or in the event such
  portion of the Road becomes accessible to the public after December
  31, 2015, within one (1) year of such retained portion of the Road
  becoming accessible.
         (h)  Platting. A sale of the Leased Tract under this section
  shall not be subject to Chapter 232, Local Government Code, or any
  other platting requirement.
         (i)  Mineral Interests.  The Authority shall reserve its
  interest in all oil, gas, and other minerals in and under the Leased
  Tract (or any portion thereof) sold under this section.
         (j)  Expiration of Requirement to Sell.  The requirement that
  the Authority conduct a sale of the Remaining Leased Tract under
  Subsection (b) or (c) expires on December 31, 2016, if the FERC
  License is not terminated by decommissioning or otherwise.
         SECTION 2.  If the provisions of Section 8502.020, Special
  District Local Laws Code, as amended by this Act, conflict with any
  other provision of Chapter 8502 of that code, then the provisions of
  Section 8502.020 prevail, notwithstanding all such conflicting
  provisions.
         SECTION 3.  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, 2013.