LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 82ND LEGISLATIVE REGULAR SESSION May 6, 2011 TO: Honorable Byron Cook, Chair, House Committee on State Affairs FROM: John S O'Brien, Director, Legislative Budget Board IN RE:HB1729 by Keffer (Relating to the sale of surplus leased land by a governmental entity to a private party.), Committee Report 1st House, Substituted The fiscal implications of the bill cannot be determined at this time. The bill would authorize a governmental entity of the state to sell certain property it owns to a lessee for the fair market value of the property without public notice or solicitation of the bid. The bill would authorize the governmental entity to pursue a bulk sale of land to a bulk purchaser, instead of a lessee, through passage of a resolution. The bill sets an appraisal process for related land valuations. The bill would set options and processes for lessees to purchase or lease land from a bulk purchaser at or after the closing date of the purchase from the governmental entity. The bill would define the costs for which the bulk purchaser and the lessee are responsible. This analysis assumes that state governmental entities would choose to sell land only when the available purchase price exceeds the present value of future revenue streams from leasing the property. The exemption of related properties from existing statutes governing state land sales could reduce the realized value of the properties by removing the state's lead agency for property sales, the General Land Office, from the process. Based on the language of the bill the fiscal impact cannot be determined. This is due to an uncertainty in the number of potential transactions, the lack of detailed descriptions of affected properties, and unknown sales processes to be enacted by state agencies. The bill would take effect September 1, 2011. Local Government Impact According to Texas Association of Counties, El Paso County does not anticipate a direct fiscal impact associated with the bill. El Paso noted that there could be some fiscal impact if a county were forced to sell real property to lessees; however these costs would depend on the number, if any, of such cases and could not be estimated. Texas Municipal League reported that the fiscal impact of the bill would depend on how many properties would be sold under its terms and noted that the bill could have a positive fiscal impact on local governments that wish to sell surplus property. Source Agencies:303 Facilities Commission, 305 General Land Office and Veterans' Land Board LBB Staff: JOB, KY, KJG, JI, KKR
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 82ND LEGISLATIVE REGULAR SESSION
May 6, 2011
TO: Honorable Byron Cook, Chair, House Committee on State Affairs FROM: John S O'Brien, Director, Legislative Budget Board IN RE:HB1729 by Keffer (Relating to the sale of surplus leased land by a governmental entity to a private party.), Committee Report 1st House, Substituted
TO: Honorable Byron Cook, Chair, House Committee on State Affairs
FROM: John S O'Brien, Director, Legislative Budget Board
IN RE: HB1729 by Keffer (Relating to the sale of surplus leased land by a governmental entity to a private party.), Committee Report 1st House, Substituted
Honorable Byron Cook, Chair, House Committee on State Affairs
Honorable Byron Cook, Chair, House Committee on State Affairs
John S O'Brien, Director, Legislative Budget Board
John S O'Brien, Director, Legislative Budget Board
HB1729 by Keffer (Relating to the sale of surplus leased land by a governmental entity to a private party.), Committee Report 1st House, Substituted
HB1729 by Keffer (Relating to the sale of surplus leased land by a governmental entity to a private party.), Committee Report 1st House, Substituted
The fiscal implications of the bill cannot be determined at this time.
The fiscal implications of the bill cannot be determined at this time.
The bill would authorize a governmental entity of the state to sell certain property it owns to a lessee for the fair market value of the property without public notice or solicitation of the bid. The bill would authorize the governmental entity to pursue a bulk sale of land to a bulk purchaser, instead of a lessee, through passage of a resolution. The bill sets an appraisal process for related land valuations. The bill would set options and processes for lessees to purchase or lease land from a bulk purchaser at or after the closing date of the purchase from the governmental entity. The bill would define the costs for which the bulk purchaser and the lessee are responsible. This analysis assumes that state governmental entities would choose to sell land only when the available purchase price exceeds the present value of future revenue streams from leasing the property. The exemption of related properties from existing statutes governing state land sales could reduce the realized value of the properties by removing the state's lead agency for property sales, the General Land Office, from the process. Based on the language of the bill the fiscal impact cannot be determined. This is due to an uncertainty in the number of potential transactions, the lack of detailed descriptions of affected properties, and unknown sales processes to be enacted by state agencies. The bill would take effect September 1, 2011.
The bill would authorize a governmental entity of the state to sell certain property it owns to a lessee for the fair market value of the property without public notice or solicitation of the bid. The bill would authorize the governmental entity to pursue a bulk sale of land to a bulk purchaser, instead of a lessee, through passage of a resolution. The bill sets an appraisal process for related land valuations. The bill would set options and processes for lessees to purchase or lease land from a bulk purchaser at or after the closing date of the purchase from the governmental entity. The bill would define the costs for which the bulk purchaser and the lessee are responsible.
This analysis assumes that state governmental entities would choose to sell land only when the available purchase price exceeds the present value of future revenue streams from leasing the property. The exemption of related properties from existing statutes governing state land sales could reduce the realized value of the properties by removing the state's lead agency for property sales, the General Land Office, from the process.
Based on the language of the bill the fiscal impact cannot be determined. This is due to an uncertainty in the number of potential transactions, the lack of detailed descriptions of affected properties, and unknown sales processes to be enacted by state agencies.
The bill would take effect September 1, 2011.
Local Government Impact
According to Texas Association of Counties, El Paso County does not anticipate a direct fiscal impact associated with the bill. El Paso noted that there could be some fiscal impact if a county were forced to sell real property to lessees; however these costs would depend on the number, if any, of such cases and could not be estimated. Texas Municipal League reported that the fiscal impact of the bill would depend on how many properties would be sold under its terms and noted that the bill could have a positive fiscal impact on local governments that wish to sell surplus property.
According to Texas Association of Counties, El Paso County does not anticipate a direct fiscal impact associated with the bill. El Paso noted that there could be some fiscal impact if a county were forced to sell real property to lessees; however these costs would depend on the number, if any, of such cases and could not be estimated.
Texas Municipal League reported that the fiscal impact of the bill would depend on how many properties would be sold under its terms and noted that the bill could have a positive fiscal impact on local governments that wish to sell surplus property.
Source Agencies: 303 Facilities Commission, 305 General Land Office and Veterans' Land Board
303 Facilities Commission, 305 General Land Office and Veterans' Land Board
LBB Staff: JOB, KY, KJG, JI, KKR
JOB, KY, KJG, JI, KKR