SALE OF DEPARTMENT REAL PROPERTY.

(a) The board may sell state-owned real property under the board's management and control at the real property's fair market value. The General Land Office shall negotiate and close a transaction under this section on behalf of the board using procedures under Section 31.158(c), Natural Resources Code. Proceeds from the transaction shall be deposited in the Texas capital trust fund.

(b) The board may authorize the sale of land directly to a local government at fair market value without the requirement of a sealed bid sale if the local government acquires the property for use as a local correctional facility.

(c) The board shall authorize the sale of land directly to a municipality at fair market value without the requirement of a sealed bid sale if:

(1) the municipality seeking to acquire the land notifies the department in writing of the municipality's desire to acquire the land for municipal airport expansion;

(2) the land is located next to an active runway of a municipally owned airport;

(3) the municipality is acquiring the land to expand municipal airport facilities or supporting commercial operations for the airport; and

(4) the department primarily uses the land for guard housing.

(d) After receiving the notice required by Subsection (c), the board shall:

(1) obtain an appraisal of the land to be sold to the municipality;

(2) request that the municipality provide the board with an appraisal of the land to be sold; and

(3) determine whether a third appraisal by an appraiser mutually selected by the department and municipality is necessary to determine fair market value of the land to be sold.

(e) Within 18 months of receiving the notice required by Subsection (c), the board shall finalize the sale of the land to the municipality at fair market value.

(f) In determining the fair market value of land to be sold under Subsection (c), the department shall consider the necessary remediation that must be completed before the land can be used for airport expansion. If a third appraisal is required under Subsection (d), the fair market value is considered to be the average of the three appraisals required under this section.