HBA-EVB S.B. 1092 76(R) BILL ANALYSIS Office of House Bill AnalysisS.B. 1092 By: Brown Economic Development 5/18/1999 Engrossed BACKGROUND AND PURPOSE Currently, no state statute authorizes a county or combination of municipalities and counties to establish a development corporation for spaceport facilities (corporation). A corporation designs, constructs, and operates a commercial spaceport, and may encourage local economic development by creating a need for related industries. S.B. 1092 authorizes the establishment of a corporation, sets forth the guidelines for a board of directors of a corporation, and grants to the corporation the power of eminent domain and the right to issue bonds. S.B. 1092 also authorizes a board of directors to develop a plan for higher education courses and degree programs related to the purposes of this bill to be offered at or near a spaceport. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Article 5190.6, V.T.C.S. (Development Corporation Act of 1979), by adding Section 4D, as follows: Sec. 4D. DEVELOPMENT CORPORATION FOR SPACEPORT FACILITIES. (a) Defines "eligible entity," "project," "spacecraft," and "spaceport." (b) Provides that to the extent of a conflict between this section and another provision of this Act, this section prevails. (c) Authorizes an eligible entity to create a corporation under this Act governed by this section. Sets forth that the corporation has the powers granted by this section and by other sections of this Act and is subject to the limitations of a corporation created under other provisions of this Act. Provides that the articles of incorporation of a corporation under this section must state that the corporation is governed by this section and is authorized to include within its name any words and phrases specified by the eligible entity. (d) Provides that a corporation is governed by a board of seven directors. Requires the commissioners court of the county, for a corporation created by a single county, to appoint the directors. Provides that the board must be appointed by written agreement between the governing bodies of those political subdivisions if more than one political subdivision creates the corporation. Sets forth that each director serves a two-year term that expires June 1 of each odd-numbered year except that the terms of three or four of the initial directors are authorized to be for a one-year term so that the terms may be staggered for future two-year terms. Requires a board to elect a presiding officer from among its members. Authorizes a board, by rule, to provide for the election of other officers. Requires the board to meet at least once every three months and at the call of the presiding officer or a majority of the directors. (e) Authorizes a corporation to acquire, convey, mortgage, or otherwise dispose of property. Authorizes a corporation to exercise the power of eminent domain to acquire property for a spaceport, including the power to acquire fee title in land condemned; relocate or modify a railroad, utility line, pipeline, or other facility that may interfere with a spaceport; or impose a reasonable restriction on using the surface of the property for mineral development if the corporation does not own the mineral rights. (f) Prohibits a corporation from acquiring property or issuing a bond unless a site in the territory of the eligible entity that created the corporation has been designated as the site for a spaceport. (g) Provides that before exercising the power of eminent domain under this section, a corporation must obtain a resolution approving the proposed condemnation from the governing body of a county or municipality in which the property is located. Provides that for purposes of this section, territory in the extraterritorial jurisdiction of a municipality is considered to be in the jurisdiction of the municipality. Sets forth that the exercise of the power of eminent domain by the corporation is governed by Chapter 21 (Eminent Domain), Property Code. (h) Authorizes a corporation to make an agreement with or accept a donation, grant, or loan from any person. Authorizes a corporation to enter into an interlocal contract under Chapter 791 (Interlocal Cooperation Contracts), Government Code. Prohibits a corporation from contracting to operate a spaceport unless the agreement provides that the person contracting with the corporation assumes the corporation's liability for a cause of action arising from environmental damage. (i) Authorizes a corporation to sue and be sued. (j) Authorizes a board of directors, by rule, to develop a plan for higher education courses and degree programs to be offered at or near a spaceport. Sets forth that those courses and degree programs must be related to the purposes of this section. Requires the Texas Aerospace Commission and the Texas Higher Education Coordinating Board to cooperate with and advise a board of directors in carrying out this subsection. (k) Authorizes a corporation to impose a charge for using a spaceport or a service the corporation provides; issue a bond as provided by this section; borrow money; loan money to fund a spaceport; and invest money under its control in an investment permitted by Chapter 2256 (Public Funds Investment), Government Code. (l) Sets forth that a corporation's property, income, and operations are exempt from taxes imposed by the state or a political subdivision of the state. Requires a corporation, in lieu of taxes, to make a payment to each political subdivision of the state in which land owned by the corporation is located in an amount equal to the ad valorem taxes that would be paid on that land if the land were privately owned. Sets forth that tangible personal property, such as a spacecraft or other property necessary to launch the spacecraft, is not taxable under Section 11.01 (Real and Tangible Personal Property), Tax Code, if the property is located in the spaceport. Provides that Chapter 151 (Limited Sales, Excise, and Use Tax), Tax Code, does not apply to tangible personal property purchased by a person for use in a spaceport. (m) Authorizes a corporation to issue bonds. Provides that the bonds are not an obligation or a pledge of the faith and credit of the state, an eligible entity, or any other political subdivision of the state. Provides that a bond issued under this section must: _be payable solely from the revenue of a spaceport developed by the corporation issuing the bond; _mature not later than 50 years after its date of issuance; _state on its face that the bond is not an obligation of the State of Texas or a political subdivision of the state; and _be approved by the governing body of each entity that created the corporation. (n) Sets forth that Section 24 of this Act (Leases, Sales, and Loan Agreements; Approval of Bonds, Leases, Sales, or Loan Agreements; Permit for Offer and Sale of Securities; Fee Schedules and Bond Procedures; Rules and Regulations) does not apply to a corporation created under this section. (o) Sets forth that this section expires on September 1, 2003, unless the secretary of state has received articles of incorporation from a corporation created under this section before that date. SECTION 2. Emergency clause. Effective date: upon passage.