Office of House Bill Analysiss.B. 1672

BILL ANALYSIS

Office of House Bill AnalysisS.B. 1672

By: Jackson

Land & Resource Management

4/12/2001

Engrossed

BACKGROUND AND PURPOSE

The Texas Legislature created the asset management division of the General Land Office (division) in 1985 to promulgate a development plan on real property before it is offered for sale or lease. Since the creation of the division, the responsibilities of the division have been modified to reflect new state real property management practices. Senate Bill 1672 reorganizes and consolidates the responsibilities of the division.

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that rulemaking is expressly delegated to the asset management division of the General Land Office in SECTION 7 (Section 31.1572, Natural Resources Code) of this bill.

ANALYSIS

Senate Bill 1672 amends the Natural Resources Code to provide that if a state agency intends to dispose of or change the use of real property possessed by the agency and the property is determined to be unused or underused, an agency must notify the asset management division (division) of the General Land Office no later than the 30th day before the date of the proposed disposition or change, including before any proposed improvement, development, lease, or sale of the property. The bill also requires each state agency no later than January 30 of each year to provide a report with stipulated contents to the division about any unused or underused real property possessed by the agency, as determined by the division (Sec. 31.153).

The bill provides for the exclusion of real property administered by the Texas Historical Commission or the State Preservation Board or real property comprising the Alamo or the French Legation from the review and verification duties of the division (Sec. 31.155).

The bill requires, rather than authorizes, the division to verify the accuracy of the real property inventory of each state agency and provides that the required review be made not later than one year before the date the agency is scheduled for abolition under the Texas Sunset Act. The bill repeals provisions relating to the division furnishing the appraisal of properties identified as unused or underused to the Texas Department of Housing and Community Affairs (TDHCA). The bill also removes the requirement of the division to solicit proposals about real estate transactions involving property that would be of significant benefit to the state (Sec. 31.156 and SECTION 9).

The bill requires that the draft report of the commissioner of the General Land Office (commissioner) be submitted for review to applicable agencies and to the TDHCA which is required to evaluate the suitability of the property for affordable housing. The bill provides that each agency is authorized to comment on any findings or recommendations made by the commissioner and is required to complete the review of the draft report not later than the 60th day after the date of receipt of the report. The bill also repeals the authorization of TDHCA to comment on any findings or recommendations made by the commissioner and provide additional comments (Sec. 31.157).

The bill authorizes the commissioner to make a written recommendation to the governor for the disposition of the property through a real estate transaction if the commissioner reports that an item of real property is unused or underused. The bill authorizes the state agency that possesses the property in a real estate transaction to submit to the governor and the division a comment regarding or an objection to the recommendation not later than the 60th day after the date the governor receives the recommendation. The bill authorizes the commissioner to conduct the recommended real estate transaction unless the governor gives the commissioner written notice of disapproval not later than the 90th day after the date the governor receives the recommendation.

The bill requires the division to provide TDHCA with an appraisal of the property for evaluating the suitability of the property for affordable housing no later than the 30th day after the governor approves or is considered to have approved a recommended real estate transaction for real property. The bill repeals provisions relating to the general development plan for future use of real property that is reported as unused or underused (Sec. 31.1571).

In conducting certain real estate transactions, the division is required to take charge and control of the real property and act on behalf of the state agency that had charge and control of the real property. The bill authorizes deductions from the proceeds of certain real estate transactions, before the proceeds are deposited, of any expenses incurred by the division in conducting the real property transactions. The bill authorizes the division to adopt rules relating to the payment of reasonable brokerage fees in conducting certain real property transactions. The bill requires the proceeds to be deposited to stipulated accounts, unless the proceeds are previously dedicated by the Texas Constitution, and sets forth provisions relating to the appropriation of the deposited proceeds (Sec. 31.1572).

The bill authorizes the commissioner to offer to a lessee of the state the first option for a real estate transaction involving real property if the lessee leases real property adjacent to the applicable property and the commissioner determines that the transaction is in the best interest of the state. If the commissioner determines the transaction is in the best interest of the state, then the bill authorizes the division to negotiate and complete an exchange transaction in the manner provided for the trade of land dedicated to the permanent school fund (Sec. 31.158).

The bill repeals provisions relating to real estate transactions not authorized by the legislature and to forms for grants for land, timber, and surface resources (SECTION 9).

EFFECTIVE DATE

September 1, 2001.

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