(a) Definitions.      
        (1) Surrounding land means all of the privately owned property having a common boundary with a particular tract of land approved for sale by the board.       
        (2) Preferential right refers to a right to purchase property before the property is offered for sale to any other party.       
        (3) Participating owner means an owner of all or part of the surrounding land exercising a preferential right granted by the School Land Board (board).       
        (4) Non-participating owner means an owner of all or part of the surrounding land not exercising a preferential right granted by the board.       
      (b) Board authority.      
        (1) The board may acquire, sell, lease, trade, improve, maintain, protect, or otherwise manage, control, or use land that is set apart to the permanent school fund in any manner, at such prices, and under such terms and conditions as the board finds to be in the best interest of the state.       
        (2) The board may not convey property for less than the market value.       
        (3) The board shall determine market value of land in accordance with §1.04 of the Texas Tax Code.       
      (c) Preferential right.      
        (1) If there is only one surrounding land owner, the board may grant a preferential right to that owner to purchase the tract, provided that the purchase price of the tract is not less than market value and the board finds that granting the preferential right is in the best interest of the state.       
        (2) If there is more than one surrounding land owner, the board may grant a preferential right to those surrounding land owners for purchase of the tract, provided that the purchase price of the tract is not less than market value and the board finds that granting the preferential right is in the best interest of the state.       
        (3) When a preferential right is requested or is considered by the board without a request, the board shall send a notice of intent to sell the tract by regular mail to the last known address of the surrounding land owner or owners, as identified by the county records.       
      (d) Partition agreement.      
        (1) When there exists more than one surrounding land owner and the board decides to grant a preferential right to those owners, the participating owners may be required to submit to the General Land Office a proposed partition agreement recommending an agreed division of the property.       
        (2) The participating owners may also be required to submit to the General Land Office an affidavit signed by all of the participating owners stating that all surrounding land owners have been identified and have agreed to the partition agreement or have submitted waivers of a preferential right granted by the board as described in paragraph (3) of this subsection.       
        (3) Any non-participating owner may waive a preferential right by filing a written waiver with the General Land Office. Once the waiver has been filed, the non-participating owner's signature will not be required on any partition agreement or accompanying affidavit.       
        (4) Notwithstanding the foregoing, the board may authorize a participating owner or owners to exercise a preferential right without the consent of all of the non-participating owners upon a showing by the participating owners that the non-participating owner(s) could not be located after a diligent search, are so numerous that waivers described in paragraph (3) of this subsection may not be obtained within a reasonable time frame, or are otherwise unwilling to participate in the purchase of the tract or to expressly waive the preferential right as described in paragraph (3) of this subsection. In such an instance, the board may require an affidavit signed by all of the participating owners that describes their efforts to locate the non-participating owners or the circumstances surrounding the non-participating owners' failure to participate in the purchase of the tract or to expressly waive the preferential right, as applicable. In the alternative, the board may deny the preference request and offer the tract for sale by sealed bid.       
        (5) The board may require purchasers to provide a survey, prepared by a licensed state land surveyor, which shall identify and describe all tracts to be divided pursuant to the sale of the property.       
      (e) Upon approval of the board, payment of the purchase price, payment of the special fee, and, if applicable, filing of the survey and the partition agreement, a land award or deed may be issued in accordance with the terms prescribed by the board. The board may waive the special fee on land sales to any state agency, board, commission, political subdivision, or other governmental entity.     
     Source Note:        The provisions of this §154.1 adopted to be effective April 2, 1986, 11 TexReg 1392; amended to be effective January 24, 2008, 33 TexReg 576; amended to be effective January 2, 2011, 35 TexReg 11706