1-1     By:  Madla                                             S.B. No. 655
 1-2           (In the Senate - Filed February 23, 1999; February 24, 1999,
 1-3     read first time and referred to Committee on Veteran Affairs and
 1-4     Military Installations; April 22, 1999, reported adversely, with
 1-5     favorable Committee Substitute by the following vote:  Yeas 4, Nays
 1-6     0; April 22, 1999, sent to printer.)
 1-7     COMMITTEE SUBSTITUTE FOR S.B. No. 655                    By:  Ogden
 1-8                            A BILL TO BE ENTITLED
 1-9                                   AN ACT
1-10     relating to the creation of a defense base development authority;
1-11     validating certain acts of a defense base development corporation;
1-12     granting the right to issue bonds.
1-14           SECTION 1.  Subtitle A, Title 12, Local Government Code, is
1-15     amended by adding Chapter 378 to read as follows:
1-17           Sec. 378.001.  DEFINITIONS.  In this chapter:
1-18                 (1)  "Authority" means a defense base development
1-19     authority established under this chapter.
1-20                 (2)  "Base property" means land inside the boundaries
1-21     of the defense base for which the authority is established and
1-22     improvements and personal property on that land.
1-23                 (3)  "Board" means the board of directors of the
1-24     authority.
1-25                 (4)  "Bond" means an interest-bearing obligation issued
1-26     by an authority under this chapter, including a bond, certificate,
1-27     note, or other evidence of indebtedness.
1-28                 (5)  "Defense base" means a military installation or
1-29     facility closed or realigned under the Defense Base Closure and
1-30     Realignment Act of 1990 (10 U.S.C. Section 2687 note) and its
1-31     subsequent amendments.
1-32           Sec. 378.002.  ESTABLISHMENT; SUCCESSOR.  (a)  A municipality
1-33     by resolution may establish an authority.  The resolution must
1-34     include a legal description of the base property.  On adoption of
1-35     the resolution, the authority is established as a special district
1-36     and political subdivision of this state, with a boundary
1-37     coterminous with the base property described in the resolution.
1-38           (b)  When establishing an authority, the municipality may
1-39     designate the authority in the municipality's resolution to be the
1-40     successor in interest to a nonprofit corporation organized under
1-41     the Development Corporation Act of 1979 (Article 5190.6, Vernon's
1-42     Texas Civil Statutes).  On adoption of the resolution, the
1-43     corporation is dissolved and the authority succeeds to all rights
1-44     and liabilities of that corporation.
1-45           Sec. 378.003.  PURPOSE AND NATURE OF AUTHORITY.  (a)  An
1-46     authority is created to:
1-47                 (1)  accept title to or operate under a lease from the
1-48     United States or any other person all or a part of the base
1-49     property and areas around the base property; and
1-50                 (2)  engage in the economic development of the base
1-51     property and areas around the base property.
1-52           (b)  An authority exercises public and essential governmental
1-53     functions.
1-54           Sec. 378.004.  POWERS AND DUTIES OF AUTHORITY.  (a)  An
1-55     authority may exercise power necessary or convenient to carry out a
1-56     purpose of this chapter, including the power to:
1-57                 (1)  adopt an official seal, or alter it;
1-58                 (2)  adopt rules;
1-59                 (3)  enter into a contract or incur a liability;
1-60                 (4)  acquire and dispose of money;
1-61                 (5)  select a depository;
1-62                 (6)  establish a system of accounts for the authority;
1-63                 (7)  invest funds in accordance with Chapter 2256,
1-64     Government Code;
 2-1                 (8)  set the fiscal year for the authority;
 2-2                 (9)  adopt an annual operating budget for major
 2-3     expenditures before the beginning of the fiscal year;
 2-4                 (10)  borrow money or issue a bond in an amount that
 2-5     does not exceed the maximum amount set by the governing body of the
 2-6     municipality;
 2-7                 (11)  loan money;
 2-8                 (12)  acquire, lease, lease-purchase, convey, grant a
 2-9     mortgage on, or otherwise dispose of a property right, including a
2-10     right regarding base property;
2-11                 (13)  lease property located on the base property to a
2-12     person to effect the purposes of this chapter;
2-13                 (14)  request and accept a donation, grant, guaranty,
2-14     or loan from any source permitted by law;
2-15                 (15)  operate and maintain an office;
2-16                 (16)  charge for a facility or service; and
2-17                 (17)  exercise a power granted to a municipality by
2-18     Chapter 380.
2-19           (b)  An authority shall establish and maintain an office and
2-20     agent registered with the secretary of state.
2-21           (c)  An authority shall endeavor to raise revenue sufficient
2-22     to pay its debts.
2-23           Sec. 378.005.  SUITS; INDEMNITY.  (a)  An authority may sue
2-24     and be sued.
2-25           (b)  In a suit against an authority, process may be served on
2-26     the president, vice president, or registered agent.
2-27           (c)  An authority may not be required to give a bond on an
2-28     appeal or writ of error taken in a civil case that the authority is
2-29     prosecuting or defending.
2-30           (d)  An authority may indemnify an authority employee or
2-31     board member or a former authority employee or board member for
2-32     necessary expenses and costs, including attorney's fees, incurred
2-33     by that person in connection with a claim asserted against that
2-34     person if:
2-35                 (1)  the claim relates to an act or omission of the
2-36     person when acting in the scope of the person's board membership or
2-37     authority employment; and
2-38                 (2)  the person has not been found liable or guilty on
2-39     the claim.
2-40           Sec. 378.006.  UTILITIES.  (a)  An authority may accept an
2-41     electric, gas, potable water, or sanitary sewage utility conveyed
2-42     by the United States but may not operate it.
2-43           (b)  An authority shall convey a utility received under
2-44     Subsection (a) to the municipality that established the authority.
2-45     The municipality shall pay the authority fair market value for the
2-46     utility.
2-47           (c)  If state or federal law prohibits the operation or
2-48     ownership of the utility by the municipality, the municipality
2-49     shall convey the utility to an entity that may operate it.  The
2-50     municipality may charge fair market value for the conveyance.
2-51           Sec. 378.007.  BOARD OF DIRECTORS.  (a)  The board consists
2-52     of 11 members and is responsible for the management, operation, and
2-53     control of the authority.
2-54           (b)  The governing body of the municipality that established
2-55     the authority shall appoint each board member to a term not
2-56     exceeding two years.  A vacancy on the board is filled in the same
2-57     manner as the original appointment.
2-58           (c)  The municipality may remove a board member by adopting a
2-59     resolution.
2-60           (d)  The members of the board shall elect from its membership
2-61     a president, vice president, secretary, and treasurer.  The board
2-62     by rule may provide for the election of other officers.
2-63           (e)  A board member serves without compensation but may be
2-64     reimbursed for a reasonable and necessary expense incurred in the
2-65     performance of an official duty.
2-66           (f)  The board shall adopt rules for its proceedings and may
2-67     employ and compensate persons to carry out the powers and duties of
2-68     the authority.
2-69           Sec. 378.008.  POWERS AND DUTIES OF BOARD.  (a)  The board
 3-1     shall:
 3-2                 (1)  monitor the proposed closing of the defense base;
 3-3                 (2)  manage and operate the defense base transition and
 3-4     development on behalf of the municipality that established the
 3-5     authority;
 3-6                 (3)  review options related to the most appropriate use
 3-7     of the defense base;
 3-8                 (4)  conduct a study on issues related to the closure,
 3-9     conversion, redevelopment, and future use of the defense base;
3-10                 (5)  formulate, adopt, and implement a plan to convert
3-11     and redevelop the defense base; and
3-12                 (6)  submit the plan to an appropriate agency or
3-13     agencies of the federal government.
3-14           (b)  For the base property and areas adjacent to the base
3-15     property the board shall:
3-16                 (1)  promote economic development;
3-17                 (2)  attempt to reduce unemployment;
3-18                 (3)  encourage the development of new industry by
3-19     private businesses; and
3-20                 (4)  encourage financing of projects designated under
3-21     Section 378.009.
3-22           Sec. 378.009.  REDEVELOPMENT PROJECTS.  (a)  The board may
3-23     designate as a redevelopment project, a project that relates to:
3-24                 (1)  the development of base property and the
3-25     surrounding areas; or
3-26                 (2)  the development of a defense base in the territory
3-27     of the municipality that established the authority and areas
3-28     surrounding that base.
3-29           (b)  A project designated under Subsection (a) is for a
3-30     public purpose.
3-31           Sec. 378.010.  BONDS.  (a)  An authority may issue bonds only
3-32     if the municipality that established the authority authorizes the
3-33     issuance by resolution.
3-34           (b)  A bond issued under this chapter must:
3-35                 (1)  be payable solely from authority revenue;
3-36                 (2)  mature not later than 40 years after its date of
3-37     issuance; and
3-38                 (3)  state on its face that it is not an obligation of
3-39     this state or the municipality.
3-40           Sec. 378.011.  TAX EXEMPTIONS.  (a)  An authority's property,
3-41     income, and operations are exempt from taxes imposed by the state
3-42     or a political subdivision of the state.
3-43           (b)  Section 25.07(a), Tax Code, does not apply to a
3-44     leasehold or other possessory interest granted by an authority for
3-45     a project designated under Section 378.009(a).
3-46           Sec. 378.012.  DISSOLUTION.  The governing body of a
3-47     municipality that established the authority by resolution may
3-48     dissolve the authority after all debts or obligations of the
3-49     authority have been satisfied.  Property of the authority that
3-50     remains after dissolution is conveyed to the municipality.
3-51           SECTION 2.  (a)  For purposes of this section, a "defense
3-52     base development corporation" means a corporation established under
3-53     the Development Corporation Act of 1979 (Article 5190.6, Vernon's
3-54     Texas Civil Statutes) for the purpose of promoting projects
3-55     regarding a military base closure or realignment under the Defense
3-56     Base Closure and Realignment Act of 1990 (10 U.S.C. Section 2687
3-57     note) and its subsequent amendments.
3-58           (b)  Each of the following acts of a defense base development
3-59     corporation is validated and confirmed as of the date it occurred:
3-60                 (1)  each act or proceeding of the corporation taken
3-61     before March 1, 1999;
3-62                 (2)  the election or appointment and each act of a
3-63     director or other official of the corporation who took office
3-64     before the effective date of this Act;
3-65                 (3)  each act or proceeding relating to a bond or other
3-66     obligation of the corporation authorized before the effective date
3-67     of this Act; and
3-68                 (4)  each act or proceeding relating to the entity's
3-69     incorporation under the Development Corporation Act of 1979
 4-1     (Article 5190.6, Vernon's Texas Civil Statutes).
 4-2           (c)  This section does not apply to:
 4-3                 (1)  an act, proceeding, bond, or obligation the
 4-4     validity of which is the subject of litigation that is pending on
 4-5     the effective date of this Act;
 4-6                 (2)  an election or appointment of a director or
 4-7     official the validity of which is the subject of litigation that is
 4-8     pending on the effective date of this Act;
 4-9                 (3)  an act or proceeding that was void or that, under
4-10     a statute of this state at the time the action or proceeding
4-11     occurred, was a misdemeanor or felony; or
4-12                 (4)  an act or proceeding that has been held invalid by
4-13     a final judgment of a court.
4-14           SECTION 3.  The importance of this legislation and the
4-15     crowded condition of the calendars in both houses create an
4-16     emergency and an imperative public necessity that the
4-17     constitutional rule requiring bills to be read on three several
4-18     days in each house be suspended, and this rule is hereby suspended,
4-19     and that this Act take effect and be in force from and after its
4-20     passage, and it is so enacted.
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