08/01/2024
VACANCIES - Board of Directors A/B Economic Development Corp
****Email [email protected] if you are interested in serving on A or B EDC Board. Please include resume.****Call/text Layla with any questions 281-772-8160.
ECONOMIC DEVELOPMENT CORPORATIONS
4A and 4B Boards
https://comptroller.texas.gov/economy/development/sales-tax/edc/
An Economic Development Corporation (EDC) is a nonprofit created to finance new and expanded business enterprises. Cities define projects for the EDC and adopt a sales tax to fund those projects. City voters must approve this sales tax.
Performance Agreements
EDCs cannot simply give sales tax proceeds to businesses. An EDC enters into a written performance agreement with any business it funds directly or that makes expenditures benefitting an eligible project. At a minimum, the performance agreement must contain:
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A schedule of additional payroll or jobs to be created or retained.
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The capital investment to be made by the business enterprise.
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The terms for repayment of the EDC's investment if the business fails to meet the performance requirements specified in the agreement.
Primary Jobs Requirement
The main requirement is that the businesses bring new money into the community. Certain projects are required to create or retain primary jobs. A primary job is one at a company that exports a majority of its products or services to markets outside the local region, infusing new dollars into the local economy. Primary jobs are further limited to specific industry sectors such as agriculture, mining, manufacturing and scientific research and development.
Allowable Costs
There are limitations on how sales tax revenues are used. Eligible expenditures include:
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Acquisition of land.
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Machinery and equipment.
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Construction costs.
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Planning and professional services related to the project.
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Financial transactions and reserve funds.
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Administrative and other necessary expenditures.
EDC types A and B
Type A EDCs — Developing Industries
Type A EDCs are created to fund industrial development projects such as business infrastructure, manufacturing and research and development. Type A EDCs can also fund military base realignment, job training classes and public transportation.
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manufacturing and industrial facilities, recycling facilities, distribution centers, and small warehouse facilities;
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research and development facilities, regional or national corporate headquarters facilities, primary job training facilities operated by higher education institutions, job training classes, telephone call centers and career centers not located within a junior college taxing district;
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certain infrastructure improvements that promote or develop new or expanded business enterprises;
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aviation facilities;
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commuter rail, light rail or commuter bus operations;
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port-related facilities, railports, rail switching facilities, marine ports, inland ports; and
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maintenance and operating costs associated with projects.
Type B EDCs — Developing Industries and Cultivating Communities
Type B EDCs can fund parks, museums, sports facilities and affordable housing, in addition to projects eligible for Type A. However, Type B EDCs are subject to more administrative restrictions than Type A.
The Type B sales tax may be used for any project eligible under Type A rules and several other project types, including quality of life improvements. Type B corporations may pay for land, buildings, equipment, facilities, targeted infrastructure and improvements for:
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professional and amateur sports and athletic facilities, tourism and entertainment facilities, convention facilities and public parks;
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related store, restaurant, concession, parking and transportation facilities;
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related street, water and sewer facilities; and
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affordable housing.
To promote and develop new and expanded business enterprises that create or retain primary jobs, a Type B EDC may fund:
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public safety facilities;
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recycling facilities;
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streets, roads, drainage and related improvements;
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demolition of existing structures;
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general municipally owned improvements; and
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maintenance and operating costs associated with projects.
Type B EDCs also may seek voter approval to spend Type B sales tax funds for a water supply, water conservation program or cleanup of contaminated property.
Type B EDCs created by cities with a population of 20,000 or less and those classified as landlocked communities may use sales tax proceeds to fund projects that promote new or expanded business development that do not create or retain primary jobs.
See complete Economic Development Handbook on the TML Texas Municipal League website:
https://www.tml.org/DocumentCenter/View/1471/2022-Economic-Dev-HDBK-_Final?bidId=
