1-1     By:  Madla                                            S.B. No. 1127

 1-2           (In the Senate - Filed March 11, 1997; March 13, 1997, read

 1-3     first time and referred to Committee on Veteran Affairs and

 1-4     Military Installations; April 9, 1997, reported adversely, with

 1-5     favorable Committee Substitute by the following vote:  Yeas 4, Nays

 1-6     0; April 9, 1997, sent to printer.)

 1-7     COMMITTEE SUBSTITUTE FOR S.B. No. 1127               By:  Shapleigh

 1-8                            A BILL TO BE ENTITLED

 1-9                                   AN ACT

1-10     relating to the operation of certain military installations as

1-11     businesses by development corporations.

1-12           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

1-13           SECTION 1.  Subdivision (10), Section 2, Development

1-14     Corporation Act of 1979 (Article 5190.6, Vernon's Texas Civil

1-15     Statutes), is amended to read as follows:

1-16                 (10)  "Project" shall mean the land, buildings,

1-17     equipment, facilities, and improvements (one or more) found by the

1-18     board of directors to be required or suitable for the promotion of

1-19     development and expansion of manufacturing and industrial

1-20     facilities, transportation facilities (including but not limited to

1-21     airports, ports, mass commuting facilities, and parking

1-22     facilities), sewage or solid waste disposal facilities, recycling

1-23     facilities, air or water pollution control facilities, facilities

1-24     for the furnishing of water to the general public, distribution

1-25     centers, and small warehouse facilities capable of serving as

1-26     decentralized storage and distribution centers, and for the

1-27     promotion of development or redevelopment and expansion, including

1-28     costs of administration and operation, of a military base closed or

1-29     realigned pursuant to recommendation of the Defense Closure and

1-30     Realignment Commission pursuant to the Defense Base Closure and

1-31     Realignment Act of 1990 (10 U.S.C. Section 2687 note) as amended,

1-32     and of facilities which are related to any of the foregoing, and in

1-33     furtherance of the public purposes of this Act, all as defined in

1-34     the rules of the department, irrespective of whether in existence

1-35     or required to be identified, acquired, or constructed thereafter.

1-36     As used in this Act, the term "development areas" shall mean any

1-37     area or areas of a city that the city finds and determines, after a

1-38     public hearing, should be developed in order to meet the

1-39     development objectives of the city.  In addition, in blighted or

1-40     economically depressed areas, development areas, federally

1-41     designated empowerment zones and enterprise communities designated

1-42     under Section 1391, Internal Revenue Code of 1986, or federally

1-43     assisted new communities located within a home-rule city or a

1-44     federally designated economically depressed county of less than

1-45     50,000 persons according to the last federal decennial census, a

1-46     project may include the land, buildings, equipment, facilities, and

1-47     improvements (one or more) found by the board of directors to be

1-48     required or suitable for the promotion of commercial development

1-49     and expansion and in furtherance of the public purposes of this

1-50     Act, or for use by commercial enterprises, all as defined in the

1-51     rules of the department, irrespective of whether in existence or

1-52     required to be acquired or constructed thereafter.  As used in this

1-53     Act, the term blighted or economically depressed areas shall mean

1-54     those areas and areas immediately adjacent thereto within a city

1-55     which by reason of the presence of a substantial number of

1-56     substandard, slum, deteriorated, or deteriorating structures, or

1-57     which suffer from a high relative rate of unemployment, or which

1-58     have been designated and included in a tax incremental district

1-59     created under Chapter 695, Acts of the 66th Legislature, Regular

1-60     Session, 1979 (Article 1066d, Vernon's Texas Civil Statutes), or

1-61     any combination of the foregoing, the city finds and determines,

1-62     after a hearing, substantially impair or arrest the sound growth of

1-63     the city, or constitute an economic or social liability and are a

1-64     menace to the public health, safety, or welfare in their present

 2-1     condition and use.  The department shall adopt guidelines that

 2-2     describe the kinds of areas that may be considered to be blighted

 2-3     or economically depressed.  The city shall consider these

 2-4     guidelines in making its findings and determinations.  Notice of

 2-5     the hearing at which the city considers establishment of a

 2-6     development area or an economically depressed or blighted area

 2-7     shall be posted at the city hall before the hearing.

 2-8           "Federally assisted new communities" shall mean those

 2-9     federally assisted areas which have received or will receive

2-10     assistance in the form of loan guarantees under Title X of the

2-11     National Housing Act and a portion of the federally assisted area

2-12     has received grants under Section 107(a)(1) of the Housing and

2-13     Community Development Act of 1974, as amended.

2-14           SECTION 2.  Subsection (b), Section 23, Development

2-15     Corporation Act of 1979 (Article 5190.6, Vernon's Texas Civil

2-16     Statutes), is amended to read as follows:

2-17           (b)  The corporation shall not have the power to own or

2-18     operate any project as a business other than as lessor, seller, or

2-19     lender or pursuant to the requirements of any trust agreement

2-20     securing the credit transaction.  Accordingly, the user pursuant to

2-21     any lease, sale, or loan agreement relating to a project shall be

2-22     considered to be the owner of the project for the purposes of the

2-23     application of any ad valorem, sales, and use taxes or any other

2-24     taxes levied or imposed by this state or any political subdivision

2-25     of this state.  The purchase and holding of mortgages, deeds of

2-26     trust, or other security interests and contracting for any

2-27     servicing thereof shall not be deemed the operation of a project.

2-28     The corporation shall, however, have all powers necessary to own

2-29     and operate a project as a business if the project is a military

2-30     installation or facility closed or realigned pursuant to the

2-31     Defense Base Closure and Realignment Act of 1990 (10 U.S.C. Section

2-32     2687 note) as amended.

2-33           SECTION 3.  This Act takes effect September 1, 1997.

2-34           SECTION 4.  The importance of this legislation and the

2-35     crowded condition of the calendars in both houses create an

2-36     emergency and an imperative public necessity that the

2-37     constitutional rule requiring bills to be read on three several

2-38     days in each house be suspended, and this rule is hereby suspended.

2-39                                  * * * * *