84R4409 AAF-D

By: Miller of Fort Bend H.B. No. 787

A BILL TO BE ENTITLED

AN ACT

relating to the Texas Military Preparedness Commission.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 436.002, Government Code, is amended to read as follows:

Sec. 436.002. COMMISSION. The commission is within the office of the governor and shall report to the governor or the governor's designee [executive director of the office].

SECTION 2. Subchapter A, Chapter 436, Government Code, is amended by adding Section 436.003 to read as follows:

Sec. 436.003. SUNSET PROVISION. The commission is subject to Chapter 325 (Texas Sunset Act). Unless continued in existence as provided by that chapter, the commission is abolished and this chapter expires September 1, 2027.

SECTION 3. Section 436.0561(b), Government Code, is amended to read as follows:

(b) The training program must provide the person with information regarding:

(1) the legislation that created the commission;

(2) the programs, functions, rules, and budget of the commission;

(3) the results of the most recent formal audit of the commission;

(4) the requirements of laws relating to open meetings, public information, administrative procedure, and conflicts of interest; and

(5) any applicable ethics policies adopted by the [office, the] commission[,] or the Texas Ethics Commission.

SECTION 4. Section 436.057, Government Code, is amended by adding Subsection (b) to read as follows:

(b) The director serves at the will of the commission.

SECTION 5. Section 436.152(d), Government Code, is amended to read as follows:

(d) The commission shall refer the defense community to the appropriate state agency that has an existing program to provide financing for each project identified in the community's military base or defense facility value enhancement statement that adds military or defense value to a military base or defense facility. If there is no existing program to finance a project, the commission [office] may provide a loan of financial assistance to the defense community for the project.

SECTION 6. Sections 436.153(a) through (g), Government Code, are amended to read as follows:

(a) The commission [office] may provide a loan of financial assistance to a defense community for a project that will enhance the military or defense value of a military base or defense facility located in, near, or adjacent to the defense community. The loan shall be made from the Texas military value revolving loan account established under Section 436.156.

(b) On receiving an application for a loan under this section, the commission [office] shall confirm [with the commission] that the project adds military or defense value to the military base or defense facility.

(c) If the commission determines that a project will enhance the military or defense value of the military base or defense facility, the commission [office] shall, in accordance with the criteria adopted by the commission [office] under Section 436.154(a):

(1) analyze the creditworthiness of the defense community to determine the defense community's ability to repay the loan; and

(2) evaluate the feasibility of the project to be financed to ensure that the defense community has pledged a source of revenue or taxes sufficient to repay the loan for the project.

(d) If the commission determines [confirms] that the funds will be used to enhance the military or defense value of the military base or defense facility based on the base realignment and closure criteria, to overcome an action of the United States Department of Defense that will negatively impact the military base or defense facility, or for the recruitment or retention of a defense facility and [the office] determines that the project is financially feasible, the commission [executive director of the office] may award a loan to the defense community for the project. The commission [office] shall enter into a written agreement with a defense community that is awarded a loan. The agreement must contain the terms and conditions of the loan, including the loan repayment requirements.

(e) The commission [office] shall notify the Texas Public Finance Authority of the amount of the loan and of the recipient of the loan and shall request the authority to issue general obligation bonds in an amount necessary to fund the loan. The commission [office] and the authority shall determine the amount and time of a bond issue to best provide funds for one or multiple loans.

(f) The commission [office] shall administer the loans to ensure full repayment of the general obligation bonds issued to finance the project.

(g) The commission [office] may provide a loan only for a project that is included in the political subdivision's statement under Section 397.002, Local Government Code, or to prepare a comprehensive defense installation and community strategic impact plan under Section 397.003, Local Government Code.

SECTION 7. Sections 436.1531(a), (c), (d), (e), and (f), Government Code, are amended to read as follows:

(a) The commission [office] may provide a loan of financial assistance to a defense community for an economic development project that minimizes the negative effects of a defense base reduction on the defense community as a result of a United States Department of Defense base realignment process that occurs during 2005 or later. The loan shall be made from the Texas military value revolving loan account established under Section 436.156.

(c) If the commission determines that a project will reduce the negative effects of a defense base reduction on the defense community, the commission [office] shall:

(1) analyze the creditworthiness of the defense community to determine the defense community's ability to repay the loan; and

(2) evaluate the feasibility of the project to be financed to ensure that the defense community has pledged a source of revenue or taxes sufficient to repay the loan for the project.

(d) If the commission [office] determines that the funds will be used to finance an economic development project that will reduce the negative effects of a defense base reduction on the defense community and determines that the project is financially feasible, the commission [office] may award a loan to the defense community for the project. The commission [office] shall enter into a written agreement with a defense community that is awarded a loan. The agreement must contain the terms and conditions of the loan, including the loan repayment requirements.

(e) The commission [office] shall notify the Texas Public Finance Authority of the amount of the loan and of the recipient of the loan and request the authority to issue general obligation bonds in an amount necessary to fund the loan. The commission [office] and the authority shall determine the amount and time of a bond issue to best provide funds for one or multiple loans.

(f) The commission [office] shall administer the loans to ensure full repayment of the general obligation bonds issued to finance the project.

SECTION 8. Sections 436.1532(a), (c), (d), (e), and (f), Government Code, are amended to read as follows:

(a) The commission [office] may provide a loan of financial assistance to a defense community for an infrastructure project to accommodate new or expanded military missions assigned to a military base or defense facility located in, near, or adjacent to the defense community as a result of a United States Department of Defense base realignment process that occurs during 2005 or later. The loan shall be made from the Texas military value revolving loan account established under Section 436.156.

(c) If the commission determines that the project will assist the defense community in accommodating the new or expanded military missions that are assigned to the military facility, the commission [office] shall:

(1) analyze the creditworthiness of the defense community to determine the defense community's ability to repay the loan; and

(2) evaluate the feasibility of the project to be financed to ensure that the defense community has pledged a source of revenue or taxes sufficient to repay the loan for the project.

(d) If the commission determines that the funds will be used to finance an infrastructure project to accommodate new or expanded military missions assigned to the military facility located in, near, or adjacent to the defense community and [the office] determines that the project is financially feasible, the commission [office] may award a loan to the defense community for the project. The commission [office] shall enter into a written agreement with a defense community that is awarded a loan. The agreement must contain the terms and conditions of the loan, including the loan repayment requirements.

(e) The commission [office] shall notify the Texas Public Finance Authority of the amount of the loan and of the recipient of the loan and request the authority to issue general obligation bonds in an amount necessary to fund the loan. The commission [office] and the authority shall determine the amount and time of a bond issue to best provide funds for one or multiple loans.

(f) The commission [office] shall administer the loans to ensure full repayment of the general obligation bonds issued to finance the project.

SECTION 9. Section 436.154, Government Code, is amended to read as follows:

Sec. 436.154. LOAN PROCESS. (a) The commission [office] shall adopt rules, in consultation with the Texas Public Finance Authority, that contain the criteria for evaluating the credit of a loan applicant and the financial feasibility of a project. The commission [office] shall also adopt a loan application form. The application form may include:

(1) the name of the defense community and its principal officers;

(2) the total cost of the project;

(3) the amount of state financial assistance requested;

(4) the plan for repaying the loan; and

(5) any other information the commission [office] requires to perform its duties and to protect the public interest.

(b) The commission [office] may not accept an application for a loan from the Texas military value revolving loan account unless the application is submitted in affidavit form by the officials of the defense community. The commission [office] shall prescribe the affidavit form.

SECTION 10. Section 436.156(c), Government Code, is amended to read as follows:

(c) The commission [office] shall deposit to the credit of the account all loan payments made by a political subdivision for a loan under Section 436.153, 436.1531, or 436.1532. The loan payments shall be used to reimburse the general revenue fund for money appropriated to pay the principal, premium if any, and interest on the bonds issued under Section 436.158. If loan payments exceed the amounts required for reimbursement, the excess shall first be applied to reimburse the expenses of administering the program and secondly deposited to the credit of the Texas military value revolving loan account to fund subsequent loans.

SECTION 11. Section 436.204(b), Government Code, is amended to read as follows:

(b) The commission [office] may assist a local governmental entity in applying for a grant under this chapter.

SECTION 12. Subchapter DD, Chapter 481, Government Code, is transferred to Chapter 436, Government Code, redesignated as Subchapter F, Chapter 436, Government Code, and amended to read as follows:

SUBCHAPTER F [DD]. DEFENSE COMMUNITY ASSISTANCE

Sec. 436.251. DEFINITION [481.501. DEFINITIONS]. In this subchapter, "defense[:

[(1) "Defense] base" means a federally owned or operated military installation, facility, or mission that is functioning on June 1, 2003.

[(2) "Defense community" means a political subdivision, including a municipality, county, defense base development authority, or special district, that is adjacent to, is near, or encompasses any part of a defense base.]

Sec. 436.252 [481.502]. FINANCIAL ASSISTANCE. (a) The commission [office] shall assist defense communities in obtaining financing for economic development projects that seek to address future realignment or closure of a defense base that is in, adjacent to, or near the defense community. The commission [office] shall refer the defense community to:

(1) a local economic development corporation created under the Development Corporation Act (Subtitle C1, Title 12, Local Government Code) for possible financing; or

(2) an appropriate state agency that has an existing program to provide financing for the project, including:

(A) the Texas Water Development Board; or

(B) the Texas Department of Transportation.

(b) A state agency making a loan to a defense community under this section shall evaluate the project and determine whether the project may be financed through the agency's program. The state agency has sole discretion on whether to finance the project.

Sec. 436.253 [481.503]. MEMORANDUM OF UNDERSTANDING. The commission [office] shall enter into a memorandum of understanding with each state agency that has a program to fund economic development projects for defense communities. The memorandum of understanding shall include each agency's responsibilities in granting and administering a loan to a defense community.

Sec. 436.254 [481.504]. SECURITY FOR LOANS. In addition to any other security provided by law, if a defense community defaults on a loan, a state agency making a loan to the defense community for a project described by Section 436.252(a) [481.502(a)] may foreclose under a loan agreement in the manner provided by law for foreclosure and liquidate any collateral provided under the loan agreement to recover any outstanding debt.

SECTION 13. Section 436.001(5), Government Code, is repealed.

SECTION 14. A rule, policy, procedure, or decision of the Texas Economic Development and Tourism Office with respect to functions that are transferred by this Act to the Texas Military Preparedness Commission continues in effect as a rule, policy, procedure, or decision of the Texas Military Preparedness Commission until superseded by an act of that commission.

SECTION 15. This Act takes effect September 1, 2015.