LEASE OF REAL PROPERTY

(a) The board may lease state-owned real property under the board's management and control at the real property's fair market lease value. The initial period of a lease under this section may not exceed 20 years. The lease may contain terms and conditions determined by the board to be in the best interest of the department. Neither a member of the board nor a person related to a member within the second degree by affinity or within the third degree by consanguinity, as determined under Subchapter B, Chapter 573, may own an interest in an entity leasing real property under this section. (b) The department shall deposit in the general revenue fund to the credit of a special account the proceeds of a lease entered into under this section, after deducting expenses. The proceeds may be used only for the payment of operating expenses of the department. Sections 403.094 and 403.095 do not apply to the dedication of lease proceeds under this subsection. (c) The department shall notify taxing units authorized to impose property taxes on land leased under this section that the land has been leased. The department shall send a copy of the lease by first class mail, return receipt requested, to each taxing unit in which the land is located. The lessee is liable for property taxes imposed on land leased under this section.