SRC-AMY S.B. 1295 78(R)   BILL ANALYSIS


Senate Research Center   S.B. 1295
78R8170 MCK-DBy: Van de Putte
Subcommittee on Base Realignment and Closure
4/1/2003
As Filed


DIGEST AND PURPOSE 

The military represents a significant part of the Texas economy,
accounting for more than $49 billion in economic impact.  The Office of
Defense Affairs (ODA) is responsible for assisting defense communities to
develop infrastructure to minimize the possibility of, or the negative
effects of, a base closure.  However, the current revolving loan program
is unfunded.  As proposed, S.B. 1295 establishes a loan program to provide
financial assistance for economic development projects in defense
communities, and sets forth the criteria those projects are required to
meet.  This bill also creates a defense community assistance revolving
loan account and the structure for accepting gifts and grants to be
deposited therein.  S.B. 1295 also authorizes the issuance of general
obligation bonds to fund the defense community assistance revolving loan
account. 

RULEMAKING AUTHORITY

Rulemaking authority is expressly granted to the Office of Defense Affairs
in SECTION 1 (Section 489.002, Government Code) of this bill. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Title 4F, Government Code, by adding Chapter 489, as
follows: 

CHAPTER 489.  DEFENSE COMMUNITY ASSISTANCE LOANS

Sec. 489.001.  DEFINITIONS.  Defines "defense base," "defense community,"
and "office." 

Sec. 489.002.  LOAN PROGRAM.  (a) Requires the Office of Defense Affairs
(ODA) to administer a revolving loan program to assist defense communities
in developing economic development projects to maintain military bases
located in the community and to minimize the possibility of, or the
negative effects of, defense base reduction on the community.  Authorizes
ODA to provide a financial assistance loan to a defense community for
economic development projects that meet certain criteria. 

(b) Requires ODA to establish criteria and procedures, by rule, for
evaluating applications for loans under the program. 

(c) Requires ODA to establish categories of economic development projects
for which a defense community may apply for a loan, by rule. 

Sec. 489.003.  REVOLVING LOAN ACCOUNT.  (a) Provides that the defense
community assistance revolving loan account is an account in the general
revenue fund. 

(b) Authorizes the account to be used only for loans made under this
chapter. 

Sec. 489.004.  GIFTS AND GRANTS.  Authorizes ODA to accept gifts or grants
from any source for the purposes of this chapter and requires ODA to
deposit those gifts or grants to the credit of the defense community
assistance revolving loan account. 

 Sec. 489.005.  ISSUANCE OF GENERAL OBLIGATION BONDS FOR DEFENSE COMMUNITY
ASSISTANCE REVOLVING LOAN ACCOUNT.  (a) Requires the Texas Public Finance
Authority (TPFA) to issue and sell general obligation bonds of the state
as authorized by the Texas Constitution for the purpose of providing money
to establish the defense community assistance revolving loan account.
Authorizes TPFA to issue the bonds in one or several installments. 

(b) Requires proceeds of the bonds issued under this section to be
deposited in the defense community assistance revolving loan account. 

SECTION 2.  Provides that this Act takes effect only if the constitutional
amendment proposed by the 78th Texas Legislature, Regular Session, 2003,
authorizing the issuance of general obligation bonds for economic
development projects that benefit defense communities is approved by the
voters.  Provides that if that amendment is not approved by the voters,
this Act has no effect.