Economic Development 4A & 4B Corporations

Traditional ED Funding

• Type A or Type B

– Create or Retain Primary Jobs

• Manufacturing

• Research & Development

• Warehousing

• Job Training

• Corporate Headquarters

– Retail – No cash incentives

Traditional ED Funding in Texas

• Sales Tax

– Allocate 1/8 - 1/2 to ED

– Maximum sales tax rate

• General Elections

– Lower the Sales Tax Rate

– Dedicate a portion to EDC

Sales Tax Revenue

4A & 4B Corporations

• Reinstate 4B

– Created - 1999

– Placed Dormant – 2003

• Advisory Committee

Staff Recommendation

• Utilize the City Council Subcommittee

– Develop the Program & Priorities

– Establish a 3 & 5 year plan

• City-wide Budget

– Explore funding options

– Economic Development Fund

cstx.gov

Reinstate 4B Corporation

• Cons

– 2% Sales Tax Rate

– General Election

– Separate Entity

– Funding Deficit

– State Reporting

– Mandatory Training

• Pros

– Dedicated Revenue

• Bonding Capacity

– Property Transfer

Create a Development Foundation

• Cons

– No Dedicated Sales Tax Revenue

– Separate Entity

– Funding

• Pros

– Property Transfer

Economic Development Committee

• Cons

– No Dedicated Sales Tax Revenue

– Funding

• Pros

– Established

– Not a Separate Entity

– Less “Red Tape”