By: Estes S.B. No. 917
(In the Senate - Filed February 27, 2013; March 5, 2013,
read first time and referred to Committee on Agriculture, Rural
Affairs, and Homeland Security; March 13, 2013, reported favorably
by the following vote: Yeas 5, Nays 0; March 13, 2013, sent to
printer.)
A BILL TO BE ENTITLED
AN ACT
relating to the sale by the Brazos River Authority of certain
property at Possum Kingdom Lake.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 8502, Special District Local Laws Code,
is amended by adding Section 8502.0133 to read as follows:
Sec. 8502.0133. SALE OF AUTHORITY PROPERTY ON AND
ASSOCIATED WITH COSTELLO ISLAND. (a) In this section:
(1) "Boat landing" means a 0.841 acre tract of land,
more or less, located above the 1000' contour line as defined in
Subdivision (8), described in authority records as Tract Costello
Island, situated in the A. J. Smith Survey, Abstract 393, Palo Pinto
County, Texas, and being a part of a tract of land purchased by the
Brazos River Conservation and Reclamation District from Mrs. Hugh
C. Thomas, as recorded in Volume 182, Page 142, Deed Records of Palo
Pinto County. The boat landing is located wholly within the FERC
Project Area.
(2) "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.
(3) "Costello Island" means a 260 acre tract of land,
more or less, located above the 1000' contour line as defined in
Subdivision (8), described in authority records as Tract Costello
Island, situated in the J.W. Bunton Survey, Abstract 52, Palo Pinto
County, Texas, and being a part of that parcel that is located
wholly within the boundary of the lake, and being a part of a tract
of land acquired by the Brazos River Conservation and Reclamation
District from E.P. Costello by Court Judgment dated July 21, 1943.
The portions of Costello Island owned by the authority are located
wholly within the FERC Project Area.
(4) "Costello Island Property" means Costello Island
and the boat landing, but does not include any portion of Costello
Island owned in fee simple by a person other than the authority.
(5) "Fair market value" means the price that the
Costello Island Property would bring in an arms-length transaction
when offered for sale by one who wishes, but is not obliged, to sell
and when bought by one who is under no necessity of buying it. This
value shall be determined as if the Costello Island Property were
not subject to the FERC License, were not located within the FERC
Project Area, were not subject to any lease agreement, were
available for immediate possession and use, and could be used for
any reasonable purpose, subject only to the restrictions in
Subsection (e).
(6) "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.
(7) "FERC Project Area" means that portion of
authority land that is subject to the FERC License before the date
of decommissioning, as the land is 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.
(8) "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.
(9) "Offeree" means the individuals or corporation,
other than the authority, owning a portion of Costello Island in fee
simple.
(b) After the date of decommissioning, the authority shall
offer for sale to the offeree the Costello Island Property. The
sale shall be:
(1) for not less than the fair market value as
determined under Subsection (c); and
(2) contingent upon the termination of any leases
encumbering all or any portion of the Costello Island Property at
the time of sale.
(c)(1) The fair market value of the Costello Island Property
shall be determined as described in this subsection.
(2) Not later than 45 days after the date the authority
receives the offeree's completed application of intent to purchase
and an acceptable survey as provided by Subsection (d)(1), the
authority shall provide the offeree with an appraisal of the fair
market value of the Costello Island Property. The authority may use
an existing appraisal if it is dated not more than one year before
the date the authority receives the application of intent to
purchase. The authority's appraiser must be certified under
Chapter 1103, Occupations Code. Not later than the 15th day after
the date the offeree receives the first appraisal, the offeree
shall notify the authority in writing as to whether the offeree
agrees with or disputes the fair market value provided in the first
appraisal. If the offeree does not dispute the fair market value as
determined by the first appraisal before the expiration of the
15-day period, the first appraisal is final and binding on all
parties and establishes the fair market value for the Costello
Island Property.
(3) If the offeree disputes the fair market value
determined by the first appraisal, the offeree may withdraw its
application to purchase the Costello Island Property or may employ
a disinterested appraiser certified under Chapter 1103,
Occupations Code, to conduct a second appraisal of the fair market
value of the Costello Island Property. The second appraisal must be
completed and sent to the authority not later than the 45th day
after the date the offeree notifies the authority that the offeree
disputes the first appraisal. If the authority does not receive the
second appraisal before the expiration of the 45-day period, the
offeree's application of intent to purchase will be deemed
withdrawn.
(4) Not later than the 15th day after the date of
receiving the second appraisal, the authority shall notify the
offeree in writing as to whether the authority agrees with or
disputes the fair market value determined by the second appraisal.
If the authority does not dispute the fair market value as
determined by the second appraisal before the expiration of the
15-day period, the second appraisal is final and binding on all
parties and establishes the purchase price for the Costello Island
Property. If the authority timely disputes the fair market value
determined by the second appraisal, the two appraisers, or their
designated agents, shall meet and attempt to reach an agreement on
the fair market value of the Costello Island Property. The meeting
shall occur not later than the 30th day after the date the authority
notifies the offeree that the authority disputes the second
appraisal.
(5) If the two appraisers reach an agreement on the
fair market value, they shall issue a report, not later than the
20th day after the date of their meeting, relating the agreed fair
market value to the authority and to the offeree, and this agreed
fair market value shall be final and binding on all parties and
establishes the purchase price. If the two appraisers fail to reach
an agreement on or before the 20th day after the date of the
meeting, then, not later than the 30th day after the date of the
meeting, the two appraisers shall appoint a disinterested third
appraiser certified under Chapter 1103, Occupations Code, to
reconcile the two previous appraisals in a third appraisal. The
third appraisal must be completed on or before the 30th day after
the date of the third appraiser's appointment, and the fair market
value determined by the third appraisal is final and binding on all
parties and establishes the purchase price; provided, however, that
the final purchase price may not be more than the fair market value
determined by the first appraisal or less than the fair market value
determined by the second appraisal.
(6) The appraisal costs shall be paid by the person who
requests the appraisal, except that the offeree and the authority
shall each pay one-half of the cost of the third appraisal if a
third appraisal is necessary. If the offeree fails to pay its share
of the third appraisal, the offeree's application of intent to
purchase will be deemed withdrawn.
(7) The timelines for the appraisal process under this
subsection may be extended upon joint agreement of the authority
and the offeree.
(d) To purchase the Costello Island Property, the offeree
must:
(1) provide to the authority a survey of the Costello
Island Property that is:
(A) prepared by a licensed state land surveyor or
a registered professional land surveyor;
(B) dated not earlier than one year before the
effective date of the Act enacting this section; and
(C) acceptable to the authority and any title
company providing title insurance for the offeree; and
(2) pay all closing costs associated with the sale of
the property.
(e) For any property sold under this section:
(1) the authority shall provide a special warranty
deed that encompasses and includes all interests in the Costello
Island Property held by the authority, subject only to:
(A) the restrictions, covenants, and
prohibitions contained in the deed of conveyance under which the
authority originally acquired title to the property, including
without limitation any releases of the authority for the
inundation, overflowing, or flooding of the lake;
(B) the restrictions, covenants, and
prohibitions described in Section 8502.020(d);
(C) all encumbrances and other matters filed of
record in the public records of the county in which the property is
located;
(D) any other matters or conditions that are
apparent on the ground or that would be reasonably disclosed or
discovered by an inspection of the property; and
(E) any other rules, regulations, or policies of
the authority in effect as of January 1, 2013, prohibiting or
limiting commercial, private, or other on-water facilities for new
development, and as such rules, regulations, or policies may be
amended, modified, or discontinued from time to time; and
(2) the offeree shall release and agree to hold the
authority harmless from, and the authority may not be held liable
for, damages, claims, costs, injuries, or any other harm to any
offeree or any other person or the Costello Island Property, or to
any improvements on the property, caused by or arising from any
temporary flooding of any portion of the Costello Island Property.
(f) Any sale of the Costello Island Property under this
section must allow the authority the right to enter onto the
Costello Island Property and the lake and other bodies of water, if
any, located within the Costello Island Property with essential
equipment for all purposes reasonably necessary for 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, or for any purpose that the authority
considers necessary for public safety, health, and welfare. Any
exercise by the authority of rights described by this subsection
may be conducted only after written notice is given to the offeree
at least 48 hours in advance of entry onto the property, except in
the event of an emergency, in which case advance notice is not
required, but the authority shall provide written notice as soon as
practicable. The authority shall use reasonable efforts to avoid
interfering with the offeree's use of the Costello Island Property
and shall promptly repair any damage to the property caused by the
authority's entrance. Any claim to governmental immunity on behalf
of the authority is waived with respect to the recovery of any
damage caused by the authority's breach of this subsection.
(g) Chapters 232 and 272, Local Government Code, Section
49.226, Water Code, and Section 8502.013 of this code do not apply
to a sale of property under this section.
(h) The authority may use proceeds from the sale of property
under this section for any authority purpose.
(i) The authority shall reserve its interest in all oil,
gas, and other minerals in and under the property to be sold, or any
portion thereof, to the extent the authority owns an interest in
those minerals.
(j) If the conveyance described by this section is not
completed before the second anniversary of the effective date of
this Act, this section shall no longer be effective and expires on
the date of the second anniversary.
(k) To the extent of any conflict with other laws of this
state, this section prevails.
SECTION 2. This Act takes effect September 1, 2013.
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