Senate Research CenterS.B. 655
By: Madla
Veterans Affairs


The Development Corporation Act of 1979  (DCA) requires state approval of
local actions of a nonprofit corporation which can result in substantial
administrative expenses and delays regarding a non-profit corporation's
efforts to save and expand job opportunities and engage in economic
development in an area threatened by defense base closures.  In addition,
confusion surrounds issues concerning authority to borrow money and board
membership under DCA.  S.B. 655 creates a defense base development
authority, effectively clarifying the legal powers related to DCA. 


As enrolled, S.B. 655 creates a defense base development authority, and
grants rulemaking authority for the establishment and administration of the


Rulemaking authority is granted to a defense base development authority in
SECTION 1 (Section 378.004(a), Local Government Code) and to the board of
directors of the authority in SECTION 1 (Sections 378.007(d) and (f), Local
Government Code) of this bill. 


SECTION 1.  Amends Title 12A, Local Government Code, by adding Chapter 378,
as follows: 


Sec.  378.001.  DEFINITIONS.  Defines "authority," "base property,"
"board," "bond," and "defense base." 

Sec.  378.002.  ESTABLISHMENT; SUCCESSOR.  Authorizes a municipality to
establish, by resolution, an authority.  Requires the resolution to include
a legal description of the base property.  Sets forth provisions of the
base property.  Authorizes the municipality to designate the successor in
interest to a certain nonprofit corporation.  Sets forth provisions for
dissolution and succession of the corporation and authority. 

Sec.  378.003.  PURPOSE AND NATURE OF AUTHORITY.  Provides that an
authority is created to have dealings with a lease from the United States
or any other person, and engage in certain economic development activities.
Provides that an authority exercises public and essential governmental

Sec.  378.004.  POWERS AND DUTIES OF AUTHORITY.  Authorizes an authority to
exercise certain powers to carry out purposes of this chapter, and sets
forth the powers. Requires an authority to take certain actions, including
establishing a registered office, and endeavoring to pay its debts. 

Sec.  378.005.  SUITS; INDEMNITY.  Authorizes an authority to sue and
provides that it may be sued.  Authorizes process to be served on certain
entities in a suit against an authority.  Prohibits an authority from being
required to give a bond in a case that involves the authority.  Authorizes
an authority to indemnify certain individuals for necessary  expenses
incurred by that individual in connection with a claim against that
individual, under certain conditions. 

Sec.  378.006.  UTILITIES.  Authorizes an authority to accept certain
utilities, but prohibits the authority from their operation.  Requires an
authority to convey certain utilities to the municipality which established
the authority.  Requires the municipality to pay the fair market value for
the conveyed utility.  Authorizes the municipality to convey the utility to
an entity if certain laws prohibit operation or ownership of the utility by
the municipality. Authorizes the municipality to charge fair market value
for the utility conveyance. 

Sec.  378.007.  BOARD OF DIRECTORS.  Provides that the board consists of 11
members who are charged with the responsibility of managing, operating, and
controlling the authority. Requires the authority establishing the
municipality to appoint board members to a maximum two year term, and sets
forth provisions for a board vacancy, and removal of a board member.
Requires and authorizes board members to elect certain officials, and
authorizes the board, by rule, to provide for the election of other
officers.  Provides that board members may be reimbursed for official
expenses.  Requires the board to adopt rules and authorizes it to hire
persons for the execution of the authority's duties. 

Sec.  378.008.  POWERS AND DUTIES OF BOARD.  Sets forth board requirements
relating to a defense base.  Sets forth board requirements relating to base
property and adjacent areas. 

Sec.  378.009.  REDEVELOPMENT PROJECTS.  Authorizes the board to designate
a certain project as a redevelopment project, and clarifies that such a
project is for a public purpose. 

Sec.  378.010.  BONDS.  Authorizes an authority to issue bonds under
certain conditions. Sets forth requirements of the bond. 

Sec.  378.011.  TAX EXEMPTIONS.  Provides that certain possessions
belonging to an authority are exempt from state or political subdivision
taxes.  Provides that Section 25.07(a), Tax Code, applies to a leasehold or
other possessory interest in real property granted by an authority for a
redevelopment project in the same manner as it applies to certain actions
described by the Development Corporation Act of 1979. 

Sec.  378.012.  DISSOLUTION.  Authorizes the entity which established the
authority, to dissolve the authority after certain conditions have been
satisfied.  Provides that property remaining after such a dissolution is
conveyed to the municipality. 
SECTION 2.  (a)  Describes a "defense base development corporation."

(b)  Provides that certain actions of a defense base development
corporation are validated and confirmed upon certain dates. 

 (c)  Sets forth certain actions to which this section does not apply.

SECTION 3.Emergency clause.
  Effective date:  upon passage.