HBA-ALS H.B. 2618 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 2618 By: Gray Land & Resource Management 4/5/1999 Introduced BACKGROUND AND PURPOSE In 1965, the 59th Legislature granted the City of Galveston a 75-year right of use of certain stateowned submerged lands which extend out into the Gulf of Mexico. At that time, the city issued bonds and sold them to a developer who constructed the Flagship Hotel on that property. The city still owns the hotel, which is no longer a first-class facility, and has made several attempts to sell the property for redevelopment as a resort facility. Developers have been reluctant to purchase the hotel due to the fact that the original 75-year right of use has not been extended. The purpose of this bill is to extend the city's right of use to the land to 99 years from the date of the sale of the property. H.B. 2618 allows the City of Galveston to grant to a purchaser a franchise to operate property for 99 years instead of 75 years after the purchase, and to sell the property as long as there is no outstanding bonded indebtedness. This bill also allows the General Land Office to grant to the purchaser a franchise to operate the properties purchased for 99 years after the purchase. H.B. 2618 establishes that the right of use and occupancy reverts back to the municipality when the 99-year period expires or when the property is no longer used for the specified purpose. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 307.042, Local Government Code, by amending Subsection (c) and adding Subsection (e), as follows: (c) Authorizes a municipality, as additional security for issued bonds, notes, or warrants to grant to a purchaser under sale or foreclosure a franchise to operate properties purchased for a period of no more than 99 years, rather than 75 years, after the purchase. Makes a conforming change. (e) Authorizes the municipality to sell the property used as additional security for bonds, notes, or warrants if no bonded indebtedness remains outstanding. Authorizes the General Land Office, if the municipality sells the property, to grant to the purchaser a franchise to operate the properties purchased for a period of no more than 99 years after the purchase. Provides that the purchaser and the purchaser's heirs, successors, and assigns have the same right of use and occupancy to the state-owned tideland, water, and bed as is granted to the municipality under this chapter. Provides that on termination of that period or on cessation of use of the property for that purpose, the right of use and occupancy reverts to the municipality. SECTION 2. Emergency clause. Effective date: upon passage.