By Hawley                                             H.B. No. 2040
         77R522 MXM-D                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to defense base development authorities created by certain
 1-3     municipalities.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1. Section 378.006, Local Government Code, as added
 1-6     by Chapter 1221, Acts of the 76th Legislature, Regular Session,
 1-7     1999, is amended to read as follows:
 1-8           Sec. 378.006.  UTILITIES FOR AUTHORITIES CREATED IN POPULOUS
 1-9     MUNICIPALITY. (a)  This section applies only to an authority
1-10     created by  a municipality with a population of 50,000 or more.
1-11           (b)  An authority may accept an electric, gas, potable water,
1-12     or sanitary sewage utility conveyed by the United States but may
1-13     not operate it.
1-14           (c) [(b)]  An authority shall convey a utility received under
1-15     Subsection (a) to the municipality that established the authority.
1-16     The municipality shall pay the authority fair market value for the
1-17     utility.
1-18           (d) [(c)]  If state or federal law prohibits the operation or
1-19     ownership of the utility by the municipality, the municipality
1-20     shall convey the utility to an entity that may operate it.  The
1-21     municipality may charge fair market value for the conveyance.
1-22           SECTION 2. Chapter 378, Local Government Code, as added by
1-23     Chapter 1221, Acts of the 76th Legislature, Regular Session, 1999,
1-24     is amended by adding Section 378.0065 to read as follows:
 2-1           Sec. 378.0065.  UTILITIES FOR AUTHORITIES CREATED IN LESS
 2-2     POPULOUS MUNICIPALITY. (a)  This section applies only to an
 2-3     authority created by a municipality with a population of less than
 2-4     50,000.
 2-5           (b)  An authority may own an electric, sewer service, or
 2-6     water supply utility and may sell those utility services to a
 2-7     person who leases real property from the authority.
 2-8           SECTION 3. Section 378.007, Local Government Code, as added
 2-9     by Chapter 1221, Acts of the 76th Legislature, Regular Session,
2-10     1999, is amended to read as follows:
2-11           Sec. 378.007.  BOARD OF DIRECTORS. (a)  Except as provided by
2-12     Section 378.0075, the [The] board consists of 11 members.
2-13           (b)  The board [and] is responsible for the management,
2-14     operation, and control of the authority.
2-15           (c) [(b)]  The governing body of the municipality that
2-16     established the authority shall appoint each board member to a term
2-17     not exceeding two years.
2-18           (d)  A vacancy on the board is filled in the same manner as
2-19     the original appointment.
2-20           (e) [(c)]  The municipality may remove a board member by
2-21     adopting a resolution.
2-22           (f) [(d)]  The members of the board shall elect from its
2-23     membership a president, vice president, secretary, and treasurer.
2-24     The board by rule may provide for the election of other officers.
2-25           (g) [(e)]  A board member serves without compensation but may
2-26     be reimbursed for a reasonable and necessary expense incurred in
2-27     the performance of an official duty.
 3-1           (h) [(f)]  The board shall adopt rules for its proceedings
 3-2     and may employ and compensate persons to carry out the powers and
 3-3     duties of the authority.
 3-4           SECTION 4. Chapter 378, Local Government Code, as added by
 3-5     Chapter 1221, Acts of the 76th Legislature, Regular Session, 1999,
 3-6     is amended by adding Section 378.0075 to read as follows:
 3-7           Sec. 378.0075.  ADDITIONAL REQUIREMENTS FOR BOARD OF
 3-8     DIRECTORS CREATED IN LESS POPULOUS MUNICIPALITY. (a)  In this
 3-9     section, "county" means the county in which the majority of the
3-10     municipality that created the authority is located.
3-11           (b)  This section applies only to an authority created by a
3-12     municipality with a population of less than 50,000.
3-13           (c)  The board consists of nine members.  Each board member
3-14     serves a two-year term and is appointed as follows:
3-15                 (1)  the county shall appoint three members;
3-16                 (2)  junior colleges located in whole or in part in the
3-17     county, if any, jointly shall appoint three members; and
3-18                 (3)  the municipality that established the authority
3-19     shall appoint:
3-20                       (A)  three members, if the county in which the
3-21     authority is located contains a junior college; or
3-22                       (B)  six members, if the county in which the
3-23     authority is located does not contain a junior college.
3-24           (d)  The entity that appoints a board member may remove a
3-25     board member by adopting a resolution or order, as appropriate.
3-26           (e)  Sections 378.007(a), (c), and (e) do not apply to an
3-27     authority to which this section applies.
 4-1           SECTION 5. Section 378.010, Local Government Code, as added
 4-2     by Chapter 1221, Acts of the 76th Legislature, Regular Session,
 4-3     1999, is amended to read as follows:
 4-4           Sec. 378.010.  BONDS; CERTIFICATES OF OBLIGATION. (a)  An
 4-5     authority may issue bonds only if the municipality that established
 4-6     the authority:
 4-7                 (1)  has a population of 50,000 or more; and
 4-8                 (2)  authorizes the issuance by resolution.
 4-9           (b)  A bond issued under this chapter must:
4-10                 (1)  be payable solely from authority revenue;
4-11                 (2)  mature not later than 40 years after its date of
4-12     issuance; and
4-13                 (3)  state on its face that it is not an obligation of
4-14     this state or the municipality.
4-15           (c)  An authority may issue a certificate of obligation.
4-16           SECTION 6.  (a)  For purposes of this section, a "defense
4-17     base development corporation" means a corporation established under
4-18     the Development Corporation Act of 1979 (Article 5190.6, Vernon's
4-19     Texas Civil Statutes) for the purpose of promoting projects
4-20     regarding a military base closure or realignment under the Defense
4-21     Base Closure and Realignment Act of 1990 (10 U.S.C. Section 2687
4-22     note) and its subsequent amendments.
4-23           (b)  Each of the following acts of a defense base development
4-24     corporation is validated and confirmed as of the date it occurred:
4-25                 (1)  each act or proceeding of the corporation taken
4-26     before March 1, 2001;
4-27                 (2)  the election or appointment and each act of a
 5-1     director or other official of the corporation who took office
 5-2     before the effective date of this Act;
 5-3                 (3)  each act or proceeding relating to a bond or other
 5-4     obligation of the corporation authorized before the effective date
 5-5     of this Act;
 5-6                 (4)  the sale or transfer of real property; and
 5-7                 (5)  each act or proceeding relating to the entity's
 5-8     incorporation under the Development Corporation Act of 1979
 5-9     (Article 5190.6, Vernon's Texas Civil Statutes).
5-10           (c)  This section does not apply to:
5-11                 (1)  an act, proceeding, bond, or obligation the
5-12     validity of which is the subject of litigation that is pending on
5-13     the effective date of this Act;
5-14                 (2)  an election or appointment of a director or
5-15     official the validity of which is the subject of litigation that is
5-16     pending on the effective date of this Act;
5-17                 (3)  an act or proceeding that was void or that, under
5-18     a statute of this state at the time the action or proceeding
5-19     occurred, was a misdemeanor or felony; or
5-20                 (4)  an act or proceeding that has been held invalid by
5-21     a final judgment of a court.
5-22           SECTION 7.  This Act takes effect immediately if it receives
5-23     a vote of two-thirds of all the members elected to each house, as
5-24     provided by Section 39, Article III, Texas Constitution.  If this
5-25     Act does not receive the vote necessary for immediate effect, this
5-26     Act takes effect September 1, 2001.