H.B. No. 2546

AN ACT

relating to the continuation and functions of the Texas Military Preparedness Commission.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 436.001, Government Code, is amended to read as follows:

Sec. 436.001. DEFINITIONS [DEFINITION]. In this chapter:

(1) "Commission"[, "commission"] means the Texas Military Preparedness Commission.

(2) "Office" means the Texas Economic Development and Tourism Office in the office of the governor.

SECTION 2. Section 436.002, Government Code, is amended to read as follows:

Sec. 436.002. COMMISSION. The commission is within the office [of the governor] and shall report to the executive director of the office [governor or the governor's designee].

SECTION 3. Section 436.051, Government Code, is amended by adding Subsection (d) to read as follows:

(d) A person may not be a public member of the commission if the person or the person's spouse:

(1) is employed by or participates in the management of a business entity or other organization regulated by or receiving money from the commission;

(2) owns or controls, directly or indirectly, more than a 10 percent interest in a business entity or other organization regulated by or receiving money from the commission; or

(3) uses or receives a substantial amount of tangible goods, services, or money from the commission other than compensation or reimbursement authorized by law for commission membership, attendance, or expenses.

SECTION 4. Section 436.056(a), Government Code, is amended to read as follows:

(a) It is a ground for removal from the commission that a public member:

(1) does not have at the time of taking office the qualifications required by Section 436.051(b);

(2) does not maintain during service on the commission the qualifications required by Section 436.051(b);

(3) is ineligible for membership under Section 436.051(d) or 436.055;

(4) cannot, because of illness or disability, discharge the member's duties for a substantial part of the member's term; or

(5) is absent from more than half of the regularly scheduled commission meetings that the member is eligible to attend during a calendar year without an excuse approved by a majority vote of the commission.

SECTION 5. Subchapter B, Chapter 436, Government Code, is amended by adding Section 436.0561 to read as follows:

Sec. 436.0561. TRAINING. (a) A person who is appointed to and qualifies for office as a member of the commission may not vote, deliberate, or be counted as a member in attendance at a meeting of the commission until the person completes a training program that complies with this section.

(b) The training program must provide the person with information regarding:

(1) the legislation that created the commission;

(2) the programs, functions, rules, and budget of the commission;

(3) the results of the most recent formal audit of the commission;

(4) the requirements of laws relating to open meetings, public information, administrative procedure, and conflicts of interest; and

(5) any applicable ethics policies adopted by the office, the commission, or the Texas Ethics Commission.

(c) A person appointed to the commission is entitled to reimbursement, as provided by the General Appropriations Act, for the travel expenses incurred in attending the training program regardless of whether the attendance at the program occurs before or after the person qualifies for office.

SECTION 6. The heading to Section 436.057, Government Code, is amended to read as follows:

Sec. 436.057. DIRECTOR; STAFF.

SECTION 7. Section 436.057(c), Government Code, is amended to read as follows:

(c) The governor shall determine the [director may hire] staff for [within guidelines established by] the commission.

SECTION 8. Section 436.101, Government Code, is amended to read as follows:

Sec. 436.101. POWERS AND DUTIES OF COMMISSION. The commission shall:

(1) advise the governor and the legislature on military issues and economic and industrial development related to military issues;

(2) make recommendations regarding:

(A) the development of policies and plans to support the long-term viability and prosperity of the military, active and civilian, in this state, including promoting strategic regional alliances that may extend over state lines; and

(B) the development of methods to assist defense-dependent communities in the design and execution of programs that enhance a community's relationship with military installations and defense-related businesses;

(3) provide information to communities, the legislature, the state's congressional delegation, and state agencies regarding federal actions affecting military installations and missions;

(4) serve as a clearinghouse for:

(A) defense economic adjustment and transition information and activities along with the Texas Business and Community Economic Development Clearinghouse; and

(B) information about:

(i) issues related to the operating costs, missions, and strategic value of federal military installations located in the state;

(ii) employment issues for communities that depend on defense bases and in defense-related businesses; and

(iii) defense strategies and incentive programs that other states are using to maintain, expand, and attract new defense contractors;

(5) provide assistance to communities that have experienced a defense-related closure or realignment;

(6) assist communities in the design and execution of programs that enhance a community's relationship with military installations and defense-related businesses, including regional alliances that may extend over state lines;

(7) assist communities in the retention and recruiting of defense-related businesses, including fostering strategic regional alliances that may extend over state lines; [and]

(8) encourage economic development in this state by fostering the development of industries related to defense affairs; and

(9) advocate for the preservation and expansion of missions of reservists at military installations in the state.

SECTION 9. Section 436.152(d), Government Code, is amended to read as follows:

(d) The commission shall refer the defense community to the appropriate state agency that has an existing program to provide financing for each project identified in the community's military value enhancement statement that adds military value to a military facility. If there is no existing program to finance a project, the office [commission] may provide a loan of financial assistance to the defense community for the project.

SECTION 10. Sections 436.153(a) through (g), Government Code, are amended to read as follows:

(a) The office [commission] may provide a loan of financial assistance to a defense community for a project that will enhance the military value of a military facility located in, near, or adjacent to the defense community. The loan shall be made from the Texas military value revolving loan account established under Section 436.156.

(b) On receiving an application for a loan under this section, the office [commission] shall confirm with the commission that the project adds military value to the military facility.

(c) If the commission determines that a project will enhance the military value of the military facility, the office [commission] shall, in accordance with the criteria adopted by the office [commission] under Section 436.154(a):

(1) analyze the creditworthiness of the defense community to determine the defense community's ability to repay the loan; and

(2) evaluate the feasibility of the project to be financed to ensure that the defense community has pledged a source of revenue or taxes sufficient to repay the loan for the project.

(d) If the commission confirms [determines] that the funds will be used to enhance the military value of the military facility based on the base realignment and closure criteria and the office determines that the project is financially feasible, the executive director of the office [commission] may award a loan to the defense community for the project. The office [commission] shall enter into a written agreement with a defense community that is awarded a loan. The agreement must contain the terms and conditions of the loan, including the loan repayment requirements.

(e) The office [commission] shall notify the Texas Public Finance Authority of the amount of the loan and the recipient of the loan and request the authority to issue general obligation bonds in an amount necessary to fund the loan. The office [commission] and the authority shall determine the amount and time of a bond issue to best provide funds for one or multiple loans.

(f) The office [commission] shall administer the loans to ensure full repayment of the general obligation bonds issued to finance the project.

(g) The office [commission] may provide a loan only for a project that is included in the political subdivision's statement under Section 397.002, Local Government Code, or to prepare a comprehensive defense installation and community strategic impact plan under Section 397.003, Local Government Code.

SECTION 11. Sections 436.1531(a), (c), (d), (e), and (f), Government Code, as added by Chapter 396 (S.B. 1481), Acts of the 79th Legislature, Regular Session, 2005, are amended to read as follows:

(a) The office [commission] may provide a loan of financial assistance to a defense community for an economic development project that minimizes the negative effects of a defense base reduction on the defense community as a result of a United States Department of Defense base realignment process that occurs during 2005 or later. The loan shall be made from the Texas military value revolving loan account established under Section 436.156.

(c) If the commission determines that a project will reduce the negative effects of a defense base reduction on the defense community, the office [commission] shall:

(1) analyze the creditworthiness of the defense community to determine the defense community's ability to repay the loan; and

(2) evaluate the feasibility of the project to be financed to ensure that the defense community has pledged a source of revenue or taxes sufficient to repay the loan for the project.

(d) If the office [commission] determines that the funds will be used to finance an economic development project that will reduce the negative effects of a defense base reduction on the defense community and that the project is financially feasible, the office [commission] may award a loan to the defense community for the project. The office [commission] shall enter into a written agreement with a defense community that is awarded a loan. The agreement must contain the terms and conditions of the loan, including the loan repayment requirements.

(e) The office [commission] shall notify the Texas Public Finance Authority of the amount of the loan and the recipient of the loan and request the authority to issue general obligation bonds in an amount necessary to fund the loan. The office [commission] and the authority shall determine the amount and time of a bond issue to best provide funds for one or multiple loans.

(f) The office [commission] shall administer the loans to ensure full repayment of the general obligation bonds issued to finance the project.

SECTION 12. Sections 436.1532(a), (c), (d), (e), and (f), Government Code, as added by Chapter 396 (S.B. 1481), Acts of the 79th Legislature, Regular Session, 2005, are amended to read as follows:

(a) The office [commission] may provide a loan of financial assistance to a defense community for an infrastructure project to accomodate new or expanded military missions assigned to a military facility located in, near, or adjacent to the defense community as a result of a United States Department of Defense base realignment process that occurs during 2005 or later. The loan shall be made from the Texas military value revolving loan account established under Section 436.156.

(c) If the commission determines that the project will assist the defense community in accommodating the new or expanded military missions that are assigned to the military facility, the office [commission] shall:

(1) analyze the creditworthiness of the defense community to determine the defense community's ability to repay the loan; and

(2) evaluate the feasibility of the project to be financed to ensure that the defense community has pledged a source of revenue or taxes sufficient to repay the loan for the project.

(d) If the commission determines that the funds will be used to finance an infrastructure project to accommodate new or expanded military missions assigned to the military facility located in, near, or adjacent to the defense community and the office determines that the project is financially feasible, the office [commission] may award a loan to the defense community for the project. The office [commission] shall enter into a written agreement with a defense community that is awarded a loan. The agreement must contain the terms and conditions of the loan, including the loan repayment requirements.

(e) The office [commission] shall notify the Texas Public Finance Authority of the amount of the loan and the recipient of the loan and request the authority to issue general obligation bonds in an amount necessary to fund the loan. The office [commission] and the authority shall determine the amount and time of a bond issue to best provide funds for one or multiple loans.

(f) The office [commission] shall administer the loans to ensure full repayment of the general obligation bonds issued to finance the project.

SECTION 13. Section 436.154, Government Code, is amended to read as follows:

Sec. 436.154. LOAN PROCESS. (a) The office [commission] shall adopt rules, in consultation with the Texas Public Finance Authority, that contain the criteria for evaluating the credit of a loan applicant and the financial feasibility of a project. The office [commission] shall also adopt a loan application form. The application form may include:

(1) the name of the defense community and its principal officers;

(2) the total cost of the project;

(3) the amount of state financial assistance requested;

(4) the plan for repaying the loan; and

(5) any other information the office [commission] requires to perform its duties and to protect the public interest.

(b) The office [commission] may not accept an application for a loan from the Texas military value revolving loan account unless the application is submitted in affidavit form by the officials of the defense community. The office [board] shall prescribe the affidavit form.

SECTION 14. Section 436.156(c), Government Code, is amended to read as follows:

(c) The office [commission] shall deposit to the credit of the account all loan payments made by a political subdivision for a loan under Section 436.153, 436.1531, or 436.1532. The loan payments shall be used to reimburse the general revenue fund for money appropriated to pay the principal, premium if any, and interest on the bonds issued under Section 436.158. If loan payments exceed the amounts required for reimbursement, the excess shall first be applied to reimburse the expenses of administering the program and secondly deposited to the credit of the Texas military value revolving loan account to fund subsequent loans.

SECTION 15. Section 436.158(b), Government Code, is amended to read as follows:

(b) The proceeds of the bonds and notes shall be deposited into the Texas military value revolving loan account or into other separate funds as may be required to provide for payment of issuance and administrative costs and may be used as authorized by Section 49-n, Article III, Texas Constitution, including:

(1) to fund loans approved [by the commission] under Section 436.153, 436.1531, or 436.1532;

(2) to pay the costs of issuing and selling bonds and notes; and

(3) to pay the costs of administering the bonds and notes and the loan program, including the payment of fees and expenses of advisors.

SECTION 16. Section 481.502(a), Government Code, is amended to read as follows:

(a) The office[, in coordination with the Texas Strategic Military Planning Commission,] shall assist defense communities in obtaining financing for economic development projects that seek to address future realignment or closure of a defense base that is in, adjacent to, or near the defense community. The office [and the commission] shall refer the defense community to:

(1) a local economic development corporation created under the Development Corporation Act (Subtitle C1, Title 12, Local Government Code) for possible financing; or

(2) an appropriate state agency that has an existing program to provide financing for the project, including:

(A) the Texas Water Development Board; or

(B) the Texas Department of Transportation.

SECTION 17. Section 486.001, Government Code, is amended by adding Subdivision (3-a) to read as follows:

(3-a) "Office" means the Texas Economic Development and Tourism Office in the office of the governor.

SECTION 18. Section 486.002(a), Government Code, is amended to read as follows:

(a) The commission shall administer this chapter, and the office shall monitor the implementation of this chapter.

SECTION 19. Section 486.003(a), Government Code, is amended to read as follows:

(a) A local governmental entity is eligible for a grant under this chapter if it is:

(1) a municipality or county that is a defense community;

(2) a regional planning commission that has a defense community within its boundaries;

(3) a public junior college district all or part of which is located in a defense community;

(4) a campus or extension center for education purposes of the Texas State Technical College System located in a defense community; [or]

(5) a defense base development authority created under Chapter 379B, Local Government Code; or

(6) a political subdivision having the power of a defense base development authority created under Chapter 379B, Local Government Code.

SECTION 20. Section 486.007, Government Code, is amended to read as follows:

Sec. 486.007. APPLICATION FOR GRANT. (a) A local governmental entity may apply for a grant under this chapter to the commission on a form prescribed by the commission. The commission shall establish periodic application cycles to enable the panel and commission to evaluate groups of applicants in relation to each other.

(b) The office may assist a local governmental entity in applying for a grant under this chapter.

SECTION 21. Section 486.008, Government Code, is amended to read as follows:

Sec. 486.008. EVALUATION OF APPLICATION. The panel shall evaluate each application and assign the applicant a score based on:

(1) the significance of the adverse or positive effect within the local governmental entity, including the number of jobs lost or gained in relation to the workforce in the local governmental entity's jurisdiction and the effect on the area's economy and tax revenue;

(2) the extent to which the local governmental entity has used its existing resources to promote local economic development;

(3) the amount of any grant that the local governmental entity has previously received under this chapter;

(4) the anticipated number of jobs to be created or retained in relation to the amount of the grant sought; and

(5) the extent to which the grant will affect the region in which the local governmental entity is located.

SECTION 22. The following laws are repealed:

(1) Section 436.003, Government Code;

(2) Section 436.057(b), Government Code;

(3) Section 436.1531, Government Code, as added by Chapter 1160 (H.B. 3302), Acts of the 79th Legislature, Regular Session, 2005;

(4) Section 436.1531, Government Code, as added by Chapter 1280 (H.B. 2340), Acts of the 79th Legislature, Regular Session, 2005;

(5) Section 436.1532, Government Code, as added by Chapter 1280 (H.B. 2340), Acts of the 79th Legislature, Regular Session, 2005; and

(6) Section 481.501(3), Government Code.

SECTION 23. Sections 436.051(d) and 436.0561, Government Code, as added by this Act, and the change in law made by this Act to Section 436.056(a)(3), Government Code, apply only to a person appointed or reappointed to the Texas Military Preparedness Commission on or after the effective date of this Act.

SECTION 24. A rule, policy, procedure, or decision of the Texas Military Preparedness Commission with respect to functions that are transferred to the Texas Economic Development and Tourism Office continues in effect as a rule, policy, procedure, or decision of the Texas Economic Development and Tourism Office until superseded by an act of that office.

SECTION 25. This Act takes effect September 1, 2009.

______________________________ ______________________________

President of the Senate Speaker of the House

I certify that H.B. No. 2546 was passed by the House on April 22, 2009, by the following vote: Yeas 146, Nays 0, 1 present, not voting.

______________________________ Chief Clerk of the House

I certify that H.B. No. 2546 was passed by the Senate on May 7, 2009, by the following vote: Yeas 31, Nays 0.

______________________________ Secretary of the Senate APPROVED: _____________________

Date

_____________________

Governor