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. 1-13 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-14 SECTION 1. Subtitle A, Title 12, Local Government Code, is 1-15 amended by adding Chapter 378 to read as follows: 1-16 CHAPTER 378. DEFENSE BASE DEVELOPMENT AUTHORITIES 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. 4-21 * * * * *