(a) The commission may recommend to the governor the sale or transfer of any interest in real property, including a highway right-of-way, that:
(1) was acquired for a highway purpose; and
(2) as determined by the commission, is no longer needed for a state highway purpose.
(b) Except as provided by Subsection (c) and § 202.113(b), real property shall be transferred or sold with the following priorities:
(1) to a governmental entity with the authority to condemn the property; or
(2) to the general public.

(c) A highway right-of-way shall be transferred or sold with the following priorities:
(1) to a governmental entity with the authority to condemn the property;
(2) to abutting or adjoining landowners; or
(3) to the general public.
(d) The commission shall:
(1) determine the fair value of the state’s interest in the real property; and
(2) if the value is $100,000 or more, advise the governor of the value.
(e) The commission may waive payment for real property transferred to a governmental entity under this section if:
(1) the estimated cost of future maintenance on the property equals or exceeds the fair value of the property; or
(2) the property is a highway right-of-way and the governmental entity assumes or has assumed jurisdiction, control, and maintenance of the right-of-way for public road purposes.
(e-1) A grant transferring real property under Subsection (e)(2) must contain a reservation providing that if property described by that subsection ceases to be used for public road purposes, that real property shall immediately and automatically revert to this state.
(e-2) A municipality that received a grant of highway right-of-way from the department on June 12, 2013, that is subject to a reservation described by Subsection (e-1) and that is described by Section 2 of the Act enacting this subsection may, with the approval of its governing body after a public hearing, enter into an agreement with the department under which:
(1) the department agrees to:
(A) recommend to the governor that an instrument releasing the reservation be executed; and
(B) if executed, record the instrument in the deed records of the county in which the right-of-way is located; and
(2) the municipality, if the instrument releasing the reservation is executed, agrees to:
(A) transfer the right-of-way to one or more landowners in exchange for real property with a value that is equal to or greater than the value of the right-of-way and that is described by Section 2 of the Act enacting this subsection;
(B) use the acquired real property for public road purposes necessary to accomplish a portion of a transportation master plan adopted by the municipality’s governing body at a public meeting in February 2008; and
(C) execute and record in the deed records of the county in which the acquired real property is located a restrictive covenant that grants the real property to the state if the real property ceases to be used for public road purposes.
(f) Any revenue from the sale of property under this subchapter shall be deposited to the credit of the state highway fund.
(g) The governor may execute a deed conveying the state’s interest in the property.
(h) If the commission determines that the value of the real property is less than $100,000, it may authorize the executive director to execute a deed conveying the state’s interest in the property without a recommendation to the governor.
(i) Notwithstanding Subsection (b), Tract 11, Block 49, of the Ysleta Grant located in El Paso County shall be sold to a federally recognized Indian tribe:
(1) whose reservation is located within counties of this state bordering the United Mexican States; and
(2) that is not subject to the federal Indian Gaming Regulatory Act.
(j) The standard for determination of the fair value of the state’s interest in access rights to a highway right-of-way is the same legal standard that is applied by the commission in the:
(1) acquisition of access rights under Subchapter D, Chapter 203; and
(2) payment of damages in the exercise of the authority, under Subchapter C, Chapter 203, for impairment of highway access to or from real property where the real property adjoins the highway.