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December21,2016 <br />HonorableLarryTaylor <br />6117 Broadway, Suite 122 <br />Pearland TX 77581 <br />Re:PassageofLegislation <br />DearSenatorTaylor: <br />TheCityofLaPorteseekspassageoflegislationthatwouldcorrectaflawintheTexasLocalGovernment <br />Code.Amunicipalitythatislocatedinacountywithapopulationof500,000ormoreisauthorizedto <br />createaTypeBeconomicdevelopmentcorporationinaccordancewithChapter505oftheTexasLocal <br />GovernmentCode.Ifapprovedbyvoters,themunicipalitymayadoptasalesandusetaxforthebenefit <br />ofthecorporation.Thisadditionaltaxmaybeusedonlyforthetypeofprojectsthatarespecifiedwithin <br />Chapter505. <br />s <br />TheLaPorteDevelopmentCorporationwasincorporatedin1999aftervotersauthorizedahalfcentsale <br />taxtopromoteneworexpandedbusinessenterprises,includingroadsandrelatedinfrastructure.Funds <br />canalsobeusedforpublicparks,museums,andfacilities.Sinceitsinception,theLaPorteDevelopment <br />Corporationhascompletedavarietyofprojects,rangingfromqualityoflifeimprovementslike <br />constructionofregionalbaseballcomplextoinfrastructureprojectslikeadditionaldowntownparkinglots <br />andCanadaRoadstreetconstructiontodevelopmentincentivesthatfacilitatedbothnewbusiness <br />recruitmentandbusinessexpansion/retention.TheCorporationhasenteredintodevelopment <br />agreementswithbusinessesforatotalofalmost$2.2millioninincentives,whichfacilitatedover$273 <br />millionincapitalinvestment,465additionaljobs,andanincreaseintaxablesalesofatleast$6.5million <br />overthelifeoftheagreements. <br />Section505.258oftheLocalGovernmentCodestatesthatasalesandusetaxforeconomicdevelopment <br />purposesmaynotbecollectedafterͻğƌƌbondsorotherobligationsoftheĭƚƩƦƚƩğƷźƚƓͼhavebeenpaidin <br />full.Ifadevelopmentcorporationcannotcollectitsonlysourceofrevenue,ithasnoreasontoexist. <br />WhileitwasnotlikelyintendedbytheLegislature,thislanguageincentivizestheissuanceofdebtevenif <br />itisnotneededtofundprojects,whichisthecasefortheLaPorteDevelopmentCorporation.Theprojects <br />identifiedabovewereallfundedwithouttheuseofCorporationissueddebt.Whilecorporationsarenot <br />requiredtoissuedebt,thosethatdomustcontinuetodosojusttomaintaintheirexistence. <br />TheCityofLaPorterequestslegislationthatmodifiesSection505.258toallowaTypeBcorporationto <br />continuetocollectsalestaxessolongasbonds,projects,andotherobligationsexistforthecorporation. <br />ceivesalmost$2.5millionperyearin <br />TheLaPorteEconomicDevelopmentCorporation,forexample,re <br />salestaxrevenuethatcouldcashfundmanyimportantprojectsthatwillspurthelocaleconomy.Without <br />achangetothecurrentcode,however,theLaPorteDevelopmentCorporationwouldceasetoexistafter <br /> <br />