By Madla                                               S.B. No. 655
         76R4155 MXM-F                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to the creation of a defense base development authority;
 1-3     validating certain acts of a defense base development corporation;
 1-4     granting the right to issue bonds.
 1-6           SECTION 1.  Subtitle A, Title 12, Local Government Code, is
 1-7     amended by adding Chapter 378 to read as follows:
 1-9           Sec. 378.001.  DEFINITIONS.  In this chapter:
1-10                 (1)  "Authority" means a defense base development
1-11     authority established under this chapter.
1-12                 (2)  "Base property" means land inside the boundaries
1-13     of the defense base for which the authority is established and
1-14     improvements and personal property on that land.
1-15                 (3)  "Board" means the board of directors of the
1-16     authority.
1-17                 (4)  "Bond" means an interest-bearing obligation issued
1-18     by an authority under this chapter, including a bond, certificate,
1-19     note, or other evidence of indebtedness.
1-20                 (5)  "Defense base" means a military installation or
1-21     facility closed or realigned under the Defense Base Closure and
1-22     Realignment Act of 1990 (10 U.S.C. Section 2687 note) and its
1-23     subsequent amendments.
1-24           Sec. 378.002.  ESTABLISHMENT; SUCCESSOR.  (a)  A municipality
 2-1     by resolution may establish an authority.  The resolution must
 2-2     include a legal description of the base property.  On adoption of
 2-3     the resolution, the authority is established as a special district
 2-4     and political subdivision of this state, with a boundary
 2-5     coterminous with the base property described in the resolution.
 2-6           (b)  When establishing an authority, the municipality may
 2-7     designate the authority in the municipality's resolution to be the
 2-8     successor in interest to a nonprofit corporation organized under
 2-9     the Development Corporation Act of 1979 (Article 5190.6, Vernon's
2-10     Texas Civil Statutes).  On adoption of the resolution, the
2-11     corporation is dissolved and the authority succeeds to all rights
2-12     and liabilities of that corporation.
2-13           Sec. 378.003.  PURPOSE AND NATURE OF AUTHORITY.  (a)  An
2-14     authority is created to:
2-15                 (1)  accept title to or operate under a lease from the
2-16     United States all or a part of 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;
2-27                 (4)  acquire and dispose of money;
 3-1                 (5)  select a depository;
 3-2                 (6)  establish a system of accounts for the authority;
 3-3                 (7)  invest funds in accordance with Chapter 2256,
 3-4     Government Code;
 3-5                 (8)  set the fiscal year for the authority;
 3-6                 (9)  adopt an annual operating budget for major
 3-7     expenditures before the beginning of the fiscal year;
 3-8                 (10)  borrow money or issue a bond in an amount that
 3-9     does not exceed the maximum amount set by the governing body of the
3-10     municipality;
3-11                 (11)  loan money;
3-12                 (12)  acquire, convey, grant a mortgage, or otherwise
3-13     dispose of a property right, including a right regarding base
3-14     property;
3-15                 (13)  lease property located on the base property to a
3-16     person to effect the purposes of this chapter;
3-17                 (14)  request and accept a donation, grant, guaranty,
3-18     or loan from a person, except for the municipality;
3-19                 (15)  operate and maintain an office;
3-20                 (16)  charge for a facility or service; and
3-21                 (17)  exercise a power granted to a municipality by
3-22     Chapter 380.
3-23           (b)  An authority shall establish and maintain an office and
3-24     agent registered with the secretary of state.
3-25           (c)  An authority shall endeavor to raise revenue sufficient
3-26     to pay its debts.
3-27           Sec. 378.005.  SUITS.  (a)  An authority may sue and be sued.
 4-1           (b)  In a suit against an authority, process may be served on
 4-2     the president, vice-president, or registered agent.
 4-3           (c)  An authority may not be required to give a bond on an
 4-4     appeal or writ of error taken in a civil case that the authority is
 4-5     prosecuting or defending.
 4-6           Sec. 378.006.  UTILITIES.  (a)  An authority may accept an
 4-7     electric, gas, potable water, or sanitary sewage utility conveyed
 4-8     by the United States, but may not operate it.
 4-9           (b)  An authority shall convey a utility received under
4-10     Subsection (a) to the municipality that established the authority.
4-11     The municipality shall pay the authority fair market value for the
4-12     utility.
4-13           (c)  If state or federal law prohibits the operation or
4-14     ownership of the utility by the municipality, the municipality
4-15     shall convey the utility to an entity that may operate it.  The
4-16     municipality may charge fair market value for the conveyance.
4-17           Sec. 378.007.  BOARD OF DIRECTORS.  (a)  The board consists
4-18     of 12 members and is responsible for the management, operation, and
4-19     control of the authority.
4-20           (b)  The governing body of the municipality that established
4-21     the authority shall appoint each board member to a term not
4-22     exceeding two years.  A vacancy on the board is filled in the same
4-23     manner as the original appointment.
4-24           (c)  The municipality may remove a board member by adopting a
4-25     resolution.
4-26           (d)  The members of the board shall elect from its membership
4-27     a president, vice-president, secretary, and treasurer.  The board
 5-1     by rule may provide for the election of other officers.
 5-2           (e)  A board member serves without compensation but may be
 5-3     reimbursed for a reasonable and necessary expense incurred in the
 5-4     performance of an official duty.
 5-5           (f)  The board shall adopt rules for its proceedings and may
 5-6     employ and compensate persons to carry out the powers and duties of
 5-7     the authority.
 5-8           Sec. 378.008.  POWERS AND DUTIES OF BOARD.  (a)  The board
 5-9     shall:
5-10                 (1)  monitor the proposed closing of the defense base;
5-11                 (2)  manage and operate the defense base transition and
5-12     development on behalf of the municipality that established the
5-13     authority;
5-14                 (3)  review options related to the most appropriate use
5-15     of the defense base;
5-16                 (4)  conduct a study on issues related to the closure,
5-17     conversion, redevelopment, and future use of the defense base;
5-18                 (5)  formulate, adopt, and implement a plan to convert
5-19     and redevelop the defense base; and
5-20                 (6)  submit the plan to an appropriate agency or
5-21     agencies of the federal government.
5-22           (b)  For the base property and areas adjacent to the base
5-23     property the board shall:
5-24                 (1)  promote economic development;
5-25                 (2)  attempt to reduce unemployment;
5-26                 (3)  encourage the development of new industry by
5-27     private businesses; and
 6-1                 (4)  encourage financing of projects designated under
 6-2     Section 378.009.
 6-3           Sec. 378.009.  REDEVELOPMENT PROJECTS.  (a)  The board may
 6-4     designate as a redevelopment project, a project that relates to:
 6-5                 (1)  the development of base property and the
 6-6     surrounding areas; or
 6-7                 (2)  the development of a defense base in the territory
 6-8     of the municipality that established the authority and areas
 6-9     surrounding that base.
6-10           (b)  A project designated under Subsection (a) is for a
6-11     public purpose.
6-12           Sec. 378.010.  BONDS.  (a)  An authority may issue bonds only
6-13     if the municipality that established the authority authorizes the
6-14     issuance by resolution.
6-15           (b)  A bond issued under this chapter must:
6-16                 (1)  be payable solely from authority revenue;
6-17                 (2)  mature not later than 40 years after its date of
6-18     issuance; and
6-19                 (3)  state on its face that it is not an obligation of
6-20     this state or the municipality.
6-21           Sec. 378.011.  TAX EXEMPTIONS.  (a)  An authority's property,
6-22     income, and operations are exempt from taxes imposed by the state
6-23     or a political subdivision of the state.
6-24           (b)  Section 25.07(a), Tax Code, does not apply to a
6-25     leasehold or other possessory interest granted by an authority for
6-26     a project designated under Section 378.009(a).
6-27           Sec. 378.012.  DISSOLUTION.  The governing body of a
 7-1     municipality that established the authority by resolution may
 7-2     dissolve the authority after all debts or obligations of the
 7-3     authority have been satisfied.  Property of the authority that
 7-4     remains after dissolution is conveyed to the municipality.
 7-5           SECTION 2.  (a)  For purposes of this section, a "defense
 7-6     base development corporation" means a corporation established under
 7-7     Section 4B, Development Corporation Act of 1979 (Article 5190.6,
 7-8     Vernon's Texas Civil Statutes), for the purpose of promoting
 7-9     projects regarding a military base closure or realignment under the
7-10     Defense Base Closure and Realignment Act of 1990 (10 U.S.C. Section
7-11     2687 note) and its subsequent amendments.
7-12           (b)  Each of the following acts of a defense base development
7-13     corporation is validated and confirmed as of the date it occurred:
7-14                 (1)  each act or proceeding of the corporation taken
7-15     before March 1, 1999;
7-16                 (2)  the election or appointment and each act of a
7-17     director or other official of the corporation who took office
7-18     before the effective date of this Act;
7-19                 (3)  each act or proceeding relating to a bond or other
7-20     obligation of the corporation authorized before the effective date
7-21     of this Act; and
7-22                 (4)  each act or proceeding relating to the entity's
7-23     incorporation under the Development Corporation Act of 1979
7-24     (Article 5190.6, Vernon's Texas Civil Statutes).
7-25           (c)  This section does not apply to:
7-26                 (1)  an act, proceeding, bond, or obligation the
7-27     validity of which is the subject of litigation that is pending on
 8-1     the effective date of this Act;
 8-2                 (2)  an election or appointment of a director or
 8-3     official the validity of which is the subject of litigation that is
 8-4     pending on the effective date of this Act;
 8-5                 (3)  an act or proceeding that was void or that, under
 8-6     a statute of this state at the time the action or proceeding
 8-7     occurred, was a misdemeanor or felony; or
 8-8                 (4)  an act or proceeding that has been held invalid by
 8-9     a final judgment of a court.
8-10           SECTION 3.  The importance of this legislation and the
8-11     crowded condition of the calendars in both houses create an
8-12     emergency and an imperative public necessity that the
8-13     constitutional rule requiring bills to be read on three several
8-14     days in each house be suspended, and this rule is hereby suspended,
8-15     and that this Act take effect and be in force from and after its
8-16     passage, and it is so enacted.