By: Madla S.B. No. 655 A BILL TO BE ENTITLED AN ACT 1-1 relating to the creation of a defense base development authority; 1-2 validating certain acts of a defense base development corporation; 1-3 granting the right to issue bonds. 1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-5 SECTION 1. Subtitle A, Title 12, Local Government Code, is 1-6 amended by adding Chapter 378 to read as follows: 1-7 CHAPTER 378. DEFENSE BASE DEVELOPMENT AUTHORITIES 1-8 Sec. 378.001. DEFINITIONS. In this chapter: 1-9 (1) "Authority" means a defense base development 1-10 authority established under this chapter. 1-11 (2) "Base property" means land inside the boundaries 1-12 of the defense base for which the authority is established and 1-13 improvements and personal property on that land. 1-14 (3) "Board" means the board of directors of the 1-15 authority. 1-16 (4) "Bond" means an interest-bearing obligation issued 1-17 by an authority under this chapter, including a bond, certificate, 1-18 note, or other evidence of indebtedness. 1-19 (5) "Defense base" means a military installation or 1-20 facility closed or realigned under the Defense Base Closure and 1-21 Realignment Act of 1990 (10 U.S.C. Section 2687 note) and its 1-22 subsequent amendments. 1-23 Sec. 378.002. ESTABLISHMENT; SUCCESSOR. (a) A municipality 1-24 by resolution may establish an authority. The resolution must 2-1 include a legal description of the base property. On adoption of 2-2 the resolution, the authority is established as a special district 2-3 and political subdivision of this state, with a boundary 2-4 coterminous with the base property described in the resolution. 2-5 (b) When establishing an authority, the municipality may 2-6 designate the authority in the municipality's resolution to be the 2-7 successor in interest to a nonprofit corporation organized under 2-8 the Development Corporation Act of 1979 (Article 5190.6, Vernon's 2-9 Texas Civil Statutes). On adoption of the resolution, the 2-10 corporation is dissolved and the authority succeeds to all rights 2-11 and liabilities of that corporation. 2-12 Sec. 378.003. PURPOSE AND NATURE OF AUTHORITY. (a) An 2-13 authority is created to: 2-14 (1) accept title to or operate under a lease from the 2-15 United States or any other person all or a part of the base 2-16 property and areas around the base property; and 2-17 (2) engage in the economic development of the base 2-18 property and areas around the base property. 2-19 (b) An authority exercises public and essential governmental 2-20 functions. 2-21 Sec. 378.004. POWERS AND DUTIES OF AUTHORITY. (a) An 2-22 authority may exercise power necessary or convenient to carry out a 2-23 purpose of this chapter, including the power to: 2-24 (1) adopt an official seal, or alter it; 2-25 (2) adopt rules; 2-26 (3) enter into a contract or incur a liability; 3-1 (4) acquire and dispose of money; 3-2 (5) select a depository; 3-3 (6) establish a system of accounts for the authority; 3-4 (7) invest funds in accordance with Chapter 2256, 3-5 Government Code; 3-6 (8) set the fiscal year for the authority; 3-7 (9) adopt an annual operating budget for major 3-8 expenditures before the beginning of the fiscal year; 3-9 (10) borrow money or issue a bond in an amount that 3-10 does not exceed the maximum amount set by the governing body of the 3-11 municipality; 3-12 (11) loan money; 3-13 (12) acquire, lease, lease-purchase, convey, grant a 3-14 mortgage on, or otherwise dispose of a property right, including a 3-15 right regarding base property; 3-16 (13) lease property located on the base property to a 3-17 person to effect the purposes of this chapter; 3-18 (14) request and accept a donation, grant, guaranty, 3-19 or loan from any source permitted by law; 3-20 (15) operate and maintain an office; 3-21 (16) charge for a facility or service; and 3-22 (17) exercise a power granted to a municipality by 3-23 Chapter 380. 3-24 (b) An authority shall establish and maintain an office and 3-25 agent registered with the secretary of state. 3-26 (c) An authority shall endeavor to raise revenue sufficient 4-1 to pay its debts. 4-2 Sec. 378.005. SUITS; INDEMNITY. (a) An authority may sue 4-3 and be sued. 4-4 (b) In a suit against an authority, process may be served on 4-5 the president, vice president, or registered agent. 4-6 (c) An authority may not be required to give a bond on an 4-7 appeal or writ of error taken in a civil case that the authority is 4-8 prosecuting or defending. 4-9 (d) An authority may indemnify an authority employee or 4-10 board member or a former authority employee or board member for 4-11 necessary expenses and costs, including attorney's fees, incurred 4-12 by that person in connection with a claim asserted against that 4-13 person if: 4-14 (1) the claim relates to an act or omission of the 4-15 person when acting in the scope of the person's board membership or 4-16 authority employment; and 4-17 (2) the person has not been found liable or guilty on 4-18 the claim. 4-19 Sec. 378.006. UTILITIES. (a) An authority may accept an 4-20 electric, gas, potable water, or sanitary sewage utility conveyed 4-21 by the United States but may not operate it. 4-22 (b) An authority shall convey a utility received under 4-23 Subsection (a) to the municipality that established the authority. 4-24 The municipality shall pay the authority fair market value for the 4-25 utility. 4-26 (c) If state or federal law prohibits the operation or 5-1 ownership of the utility by the municipality, the municipality 5-2 shall convey the utility to an entity that may operate it. The 5-3 municipality may charge fair market value for the conveyance. 5-4 Sec. 378.007. BOARD OF DIRECTORS. (a) The board consists 5-5 of 11 members and is responsible for the management, operation, and 5-6 control of the authority. 5-7 (b) The governing body of the municipality that established 5-8 the authority shall appoint each board member to a term not 5-9 exceeding two years. A vacancy on the board is filled in the same 5-10 manner as the original appointment. 5-11 (c) The municipality may remove a board member by adopting a 5-12 resolution. 5-13 (d) The members of the board shall elect from its membership 5-14 a president, vice president, secretary, and treasurer. The board 5-15 by rule may provide for the election of other officers. 5-16 (e) A board member serves without compensation but may be 5-17 reimbursed for a reasonable and necessary expense incurred in the 5-18 performance of an official duty. 5-19 (f) The board shall adopt rules for its proceedings and may 5-20 employ and compensate persons to carry out the powers and duties of 5-21 the authority. 5-22 Sec. 378.008. POWERS AND DUTIES OF BOARD. (a) The board 5-23 shall: 5-24 (1) monitor the proposed closing of the defense base; 5-25 (2) manage and operate the defense base transition and 5-26 development on behalf of the municipality that established the 6-1 authority; 6-2 (3) review options related to the most appropriate use 6-3 of the defense base; 6-4 (4) conduct a study on issues related to the closure, 6-5 conversion, redevelopment, and future use of the defense base; 6-6 (5) formulate, adopt, and implement a plan to convert 6-7 and redevelop the defense base; and 6-8 (6) submit the plan to an appropriate agency or 6-9 agencies of the federal government. 6-10 (b) For the base property and areas adjacent to the base 6-11 property the board shall: 6-12 (1) promote economic development; 6-13 (2) attempt to reduce unemployment; 6-14 (3) encourage the development of new industry by 6-15 private businesses; and 6-16 (4) encourage financing of projects designated under 6-17 Section 378.009. 6-18 Sec. 378.009. REDEVELOPMENT PROJECTS. (a) The board may 6-19 designate as a redevelopment project, a project that relates to: 6-20 (1) the development of base property and the 6-21 surrounding areas; or 6-22 (2) the development of a defense base in the territory 6-23 of the municipality that established the authority and areas 6-24 surrounding that base. 6-25 (b) A project designated under Subsection (a) is for a 6-26 public purpose. 7-1 Sec. 378.010. BONDS. (a) An authority may issue bonds only 7-2 if the municipality that established the authority authorizes the 7-3 issuance by resolution. 7-4 (b) A bond issued under this chapter must: 7-5 (1) be payable solely from authority revenue; 7-6 (2) mature not later than 40 years after its date of 7-7 issuance; and 7-8 (3) state on its face that it is not an obligation of 7-9 this state or the municipality. 7-10 Sec. 378.011. TAX EXEMPTIONS. (a) An authority's property, 7-11 income, and operations are exempt from taxes imposed by the state 7-12 or a political subdivision of the state. 7-13 (b) Section 25.07(a), Tax Code, applies to a leasehold or 7-14 other possessory interest in real property granted by an authority 7-15 for a project designated under Section 378.009(a) in the same 7-16 manner as it applies to a leasehold or other possessory interest in 7-17 real property constituting a project described by Section 4B(k), 7-18 Development Corporation Act of 1979 (Article 5190.6, Vernon's Texas 7-19 Civil Statutes). 7-20 Sec. 378.012. DISSOLUTION. The governing body of a 7-21 municipality that established the authority by resolution may 7-22 dissolve the authority after all debts or obligations of the 7-23 authority have been satisfied. Property of the authority that 7-24 remains after dissolution is conveyed to the municipality. 7-25 SECTION 2. (a) For purposes of this section, a "defense 7-26 base development corporation" means a corporation established under 8-1 the Development Corporation Act of 1979 (Article 5190.6, Vernon's 8-2 Texas Civil Statutes) for the purpose of promoting projects 8-3 regarding a military base closure or realignment under the Defense 8-4 Base Closure and Realignment Act of 1990 (10 U.S.C. Section 2687 8-5 note) and its subsequent amendments. 8-6 (b) Each of the following acts of a defense base development 8-7 corporation is validated and confirmed as of the date it occurred: 8-8 (1) each act or proceeding of the corporation taken 8-9 before March 1, 1999; 8-10 (2) the election or appointment and each act of a 8-11 director or other official of the corporation who took office 8-12 before the effective date of this Act; 8-13 (3) each act or proceeding relating to a bond or other 8-14 obligation of the corporation authorized before the effective date 8-15 of this Act; and 8-16 (4) each act or proceeding relating to the entity's 8-17 incorporation under the Development Corporation Act of 1979 8-18 (Article 5190.6, Vernon's Texas Civil Statutes). 8-19 (c) This section does not apply to: 8-20 (1) an act, proceeding, bond, or obligation the 8-21 validity of which is the subject of litigation that is pending on 8-22 the effective date of this Act; 8-23 (2) an election or appointment of a director or 8-24 official the validity of which is the subject of litigation that is 8-25 pending on the effective date of this Act; 8-26 (3) an act or proceeding that was void or that, under 9-1 a statute of this state at the time the action or proceeding 9-2 occurred, was a misdemeanor or felony; or 9-3 (4) an act or proceeding that has been held invalid by 9-4 a final judgment of a court. 9-5 SECTION 3. The importance of this legislation and the 9-6 crowded condition of the calendars in both houses create an 9-7 emergency and an imperative public necessity that the 9-8 constitutional rule requiring bills to be read on three several 9-9 days in each house be suspended, and this rule is hereby suspended, 9-10 and that this Act take effect and be in force from and after its 9-11 passage, and it is so enacted.