By:  Van de Putte, Hinojosa                                       S.B. No. 1295


A BILL TO BE ENTITLED

AN ACT

relating to providing financial assistance to defense communities.            
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Chapter 481, Government Code, is amended by 
adding Subchapter DD to read as follows:

SUBCHAPTER DD.  DEFENSE COMMUNITY ASSISTANCE
	Sec. 481.501.  DEFINITIONS.  In this subchapter:                        
		(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.
		(3)  "Office" means the Office of Defense Affairs.                     
	Sec. 481.502.  FINANCIAL ASSISTANCE.  (a)  The office, in 
coordination with the Texas Strategic Military Planning 
Commission, shall assist defense communities in obtaining 
financing for economic development projects that will improve the 
function of a defense base that is in, adjacent to, or near the 
defense community.  The office and the commission shall refer the 
defense community to:
		(1)  a local economic development corporation created 
under the Development Corporation Act of 1979 (Article 5190.6, 
Vernon's Texas Civil Statutes) 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.
	(c)  In reviewing applications for financing from defense 
communities, state agencies shall consider the office's priority 
for the project.  The office shall maintain a record of each loan 
granted to a defense community that includes the amount of the loan, 
the agency making the loan, and a description of the project.  The 
office shall submit to the state agencies a priority list of 
economic development projects under this subsection that totals up 
to $150 million.  This subsection expires December 31, 2006.
	Sec. 481.503.  MEMORANDUM OF UNDERSTANDING.  The 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. 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 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.
	Sec. 481.505.  GIFTS AND GRANTS.  The office may accept gifts 
and grants from any source for the purposes of this subchapter.
	SECTION 2.  This Act takes effect immediately if it receives 
a vote of two-thirds of all the members elected to each house, as 
provided by Section 39, Article III, Texas Constitution.  If this 
Act does not receive the vote necessary for immediate effect, this 
Act takes effect September 1, 2003.