Texas Permanent School Fund Annual Financial Report: 2013 Page: 43
vii, 92 p.View a full description of this report.
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TEXAS PERMANENT SCHOOL FUND
NOTES TO THE FINANCIAL STATEMENTS
Dispositions for the fiscal year ended August 31, 2013, equaled 2,471.447 acres sold, for net
proceeds of approximately $14.54 million.
Typically, the Fund does not convey its mineral interests when land is sold. No value is
assigned to the estimated public domain acres. The fair value of the Fund's land surface value
is based on the estimated appraisal values or independently determined by the staff in the
Appraisal Division using the data from studies conducted by the Texas Chapter of the American
Society of Farm Managers and Rural Appraisers, Multiple Listing Services throughout the state
and CoStar commercial sales data in certain metropolitan areas.
The fair value of the Fund's interest in oil, gas and hard minerals is based on an estimate of the
present value of future royalty cash flows using a 10 percent discount rate. Future royalty cash
flow projections from oil and gas are based on 12-month average prices preceding the valuation
date and estimate of future production from existing wells. The estimate of future production is
based on Oil & Gas Industry submissions of such volumes for the 12-month period prior to
valuation and reduced to account for estimated depletion. Hard mineral future cash flows are
also estimated based on future royalty approximations and discounted. Nonproducing proven
reserves of oil, gas, and hard minerals are not included in the estimate.
4. Leases
The GLO manages several types of operating leases. The need for each specific lease
category is based upon the type of action proposed (e.g., pier, dock, agriculture, recreational
hunting, pipeline, etc.) and the statute under which it will be authorized. Lease categories
managed by the GLO are summarized as follows:
Commercial Leases and Easements (LC) are issued for projects that produce revenue from the
private use of state-owned property. LCs are issued pursuant to Chapters 33 and 51, Texas
Natural Resources Code (TNRC), and fees are based on the published School Land Board rate
schedule in effect at the time of contract issuance. The rate schedule allows calculation of fees
based upon the amount of state land encumbered, and the appraised value of the adjacent
littoral property. LCs cover activities and structures such as marinas, bait stands, fishing piers,
mooring dolphins, fuel docks, dredging activity, restaurants, and navigation signs. Contracts for
LCs grant the applicant exclusive use of the site for the purposes specified in the contract.
Coastal Easements (CE) are issued by the GLO pursuant to TNRC 33.103(a)(2), 33.111(a),
and 33.103 authorizing owners of private property abutting submerged state-owned lands to
place and maintain structures on coastal public land adjacent to their private property. CEs
typically cover structures such as piers, decks, docks, rip-rap, pilings, bulkheads, and boat lifts.
CEs can also be issued for activities such as dredging, filling, and material disposal. Contracts
for CEs grant the applicant exclusive use of the structure, but not use of the public land around
the structure.
Coastal Leases (CL) are issued by the GLO pursuant to TNRC 33.103(1) and 33.105. CLs are
issued to public entities, tax-exempt organizations, or scientific or educational entities to
authorize the use of state-owned land for public recreation, estuarine preserves, wildlife43
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Permanent School Fund (Texas). Texas Permanent School Fund Annual Financial Report: 2013, report, December 2013; Austin, Texas. (https://texashistory.unt.edu/ark:/67531/metapth639582/m1/51/: accessed July 17, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; crediting UNT Libraries Government Documents Department.