H.B. No. 2340




AN ACT
relating to grants and loans for certain economic development projects to assist defense communities affected by the federal military base realignment and closure process. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: SECTION 1. Subchapter D, Chapter 436, Government Code, is amended by adding Sections 436.1531 and 436.1532 to read as follows: Sec. 436.1531. LOANS FOR COMMUNITIES ADVERSELY AFFECTED BY DEFENSE BASE REDUCTION. (a) The commission 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. 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 shall evaluate the economic development project to determine how the project will minimize the negative effects of a defense base reduction on the defense community, including the number of jobs that the project will create and the economic impact the project will have on the community. (c) If the commission determines that a project will reduce the negative effects of a defense base reduction on the defense community, the commission 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 economic development project that will reduce the negative effects of a defense base reduction on the defense community and that the project is financially feasible, the commission may award a loan to the defense community for the project. The commission 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 shall notify the Texas Public Finance Authority of the amount of the loan and the recipient of the loan and request the authority to issue general obligation bonds in an amount necessary to fund the loan. The commission 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 shall administer the loans to ensure full repayment of the general obligation bonds issued to finance the project. (g) A project financed with a loan under this section must be completed on or before the fifth anniversary of the date the loan is awarded. (h) The amount of a loan under this section may not exceed the total cost of the project. Sec. 436.1532. LOANS FOR COMMUNITIES POSITIVELY AFFECTED BY DEFENSE BASE RESTRUCTURING. (a) The commission 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 facility located in, near, or adjacent to the defense community as a result of the United States Department of Defense base realignment process. 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 shall evaluate the infrastructure project to determine how the project will assist the defense community in accommodating the new or expanded military missions that are assigned to the military facility. (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 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 that the project is financially feasible, the commission may award a loan to the defense community for the project. The commission 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 shall notify the Texas Public Finance Authority of the amount of the loan and the recipient of the loan and request the authority to issue general obligation bonds in an amount necessary to fund the loan. The commission 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 shall administer the loans to ensure full repayment of the general obligation bonds issued to finance the project. (g) A project financed with a loan under this section must be completed on or before the fifth anniversary of the date the loan is awarded. (h) The amount of a loan under this section may not exceed the total cost of the project. SECTION 2. The heading to Chapter 486, Government Code, is amended to read as follows:
CHAPTER 486. ASSISTANCE FOR LOCAL AREA AFFECTED BY DEFENSE RESTRUCTURING [REDUCTION]
SECTION 3. The heading to Subchapter A, Chapter 486, Government Code, is amended to read as follows:
SUBCHAPTER A. GRANTS TO LOCAL AREAS AFFECTED BY DEFENSE BASE RESTRUCTURING [REDUCTION]
SECTION 4. Section 486.002(b), Government Code, is amended to read as follows: (b) The department shall establish criteria and procedures for evaluations and awarding grants. The department shall award grants equitably based on evaluations so as to not disproportionally favor one [adversely affected] defense-dependent community over another. In awarding grants under this chapter, the department shall give a preference to adversely affected defense-dependent communities over positively affected defense-dependent communities. SECTION 5. Section 486.003, Government Code, is amended by amending Subsection (a) and adding Subsection (c) to read as follows: (a) A local governmental entity is eligible for a grant under this chapter if it is: (1) a municipality or county that is a [an adversely affected] defense-dependent community; (2) a regional planning commission that has a [an adversely affected] defense-dependent community within its boundaries; (3) a public junior college district all or part of which is located in a [an adversely affected] defense-dependent community; [or] (4) a campus or extension center for education purposes of the Texas State Technical College System located in a [an adversely affected] defense-dependent community; or (5) a defense base development authority created under Chapter 379B, Local Government Code. (c) A municipality or county is a positively affected defense-dependent community if the department determines that a military facility located in or near the local governmental entity receives new or expanded military missions as a result of the United States Department of Defense base realignment process. SECTION 6. Section 486.004(a), Government Code, is amended to read as follows: (a) From money appropriated for this purpose, the department may make a grant to an eligible local governmental entity to: (1) allow the entity to meet a matching money or investment requirement in order to receive from the United States assistance that is provided to allow the local governmental entity to respond to or recover from an event described by Section 486.003(b)(1); (2) [. In addition, a grant may be made to an eligible local governmental entity to] match the entity's contribution for a purpose described in Section 486.005 on a closed or realigned defense facility; or (3) construct infrastructure and other projects necessary to accommodate the new or expanded military missions at a military facility located in or near the local governmental entity. SECTION 7. Subchapter A, Chapter 486, Government Code, is amended by adding Section 486.010 to read as follows: Sec. 486.010. DEFENSE-DEPENDENT COMMUNITY WITH MORE THAN ONE MILITARY FACILITY. For purposes of the preference for adversely affected defense-dependent communities under Section 486.002(b), a defense-dependent community that contains or is near more than one military facility is considered an adversely affected defense-dependent community if the local governmental entity is applying for a grant under this subchapter for a project relating to the military facility that is closed or whose operations are significantly reduced. SECTION 8. Section 2.03, Chapter 1134, Acts of the 77th Legislature, Regular Session, 2001, is repealed. SECTION 9. 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, 2005. ______________________________ ______________________________ President of the Senate Speaker of the House I certify that H.B. No. 2340 was passed by the House on April 28, 2005, by a non-record vote. ______________________________ Chief Clerk of the House I certify that H.B. No. 2340 was passed by the Senate on May 19, 2005, by the following vote: Yeas 31, Nays 0. ______________________________ Secretary of the Senate APPROVED: _____________________ Date _____________________ Governor