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.
 1-5           SECTION 1.  Subtitle A, Title 12, Local Government Code, is
 1-6     amended by adding Chapter 378 to read as follows:
 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.
                                                                S.B. No. 655
         ________________________________   ________________________________
             President of the Senate              Speaker of the House
               I hereby certify that S.B. No. 655 passed the Senate on
         April 29, 1999, by the following vote:  Yeas 29, Nays 0;
         May 28, 1999, Senate refused to concur in House amendment and
         requested appointment of Conference Committee; May 28, 1999, House
         granted request of the Senate; May 30, 1999, Senate adopted
         Conference Committee Report by the following vote:  Yeas 30,
         Nays 0.
                                                 Secretary of the Senate
               I hereby certify that S.B. No. 655 passed the House, with
         amendment, on May 25, 1999, by the following vote:  Yeas 145,
         Nays 0, two present not voting; May 28, 1999, House granted request
         of the Senate for appointment of Conference Committee;
         May 30, 1999, House adopted Conference Committee Report by a
         non-record vote.
                                                 Chief Clerk of the House