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<br />Texas Economic Development Incentives 2003 <br /> <br />Page I of 29 <br /> <br />\\t\"l.tO\VO\ Snl1~ GO\1:RN~lE~T <br /> <br />C:\RClE Ki:;:r:J\ STlUYH(!R\ T.:-.\s (":,mr::cll.:-:' ,,-,:' )1.1',<:':\':': ....1:: b <br /> <br />SEARCH ... <br /> <br />Spedal <br /> <br /> <br />1~ep({Wt <br /> <br />'texas E..Q.Ql1Qmk 12~Y_ek>P1lLentJm::~Iltiy~s <br />March, 2003 <br /> <br />CHAPTER 3: Public Economic Development <br />Corporations <br /> <br />Since 1979, Texas law has allowed cities to form economic development corporations to <br />attract businesses and create job opportunities. The 1989 Legislature amended the <br />Development Corporation Act of 1979 to allow eligible cities the option of adopting a <br />dedicated sales and use tax to fund industrial development projects. Further legislation in <br />1991 provided cities with a second form of sales tax to improve their appeal as places to <br />reside, work and visit. <br /> <br />These local sales and use taxes are known as the economic development sales taxes <br />commonly referred to as the 4A and 4B taxes.LlJ <br /> <br />The ~4A Economic Development Sales Tax <br /> <br />The ~4A tax, authorized in 1989, is limited in use to industrial and manufacturing facilities, <br />recycling facilities, distribution centers, small warehouse facilities, closed or realigned <br />military bases and some commercial business development, business airport facilities and <br />port-related facilities. <br /> <br />The 1997 Legislature adopted H.B. 1525, which allows ~4A corporations to undertake <br />projects previously only eligible under ~4B. A city must first obtain voter approval to <br />become eligible for a ~4B type project without having to switch from a ~4A corporation to <br />a ~4B corporation. <br /> <br />At the end of fiscal 2001, 199 cities had adopted the ~4A economic development sales tax. <br />[2] The largest city to adopt this tax was Corpus Christi, with a population of more than <br />277,000. The smallest city is Westlake, with a population of207. The average population of <br />~4A cities is 13,627. <br /> <br />At least one city, Pampa, repealed its ~4A tax. Voters in Hollywood Park opted to reduce <br />their ~4A sales tax from 0.5 cents to 0.25 cents to adopt a street maintenance tax. <br /> <br />The ~4B Economic Development Sales Tax <br /> <br />The 1991 Legislature added ~4B to the act. It allows greater flexibility in the use of <br /> <br />http://www.window.state.tx.us/specialrpt/ ecodev03/06ch3.html <br /> <br />9/27/2004 <br />