Development Corporation Act of 1979
The Development Corporation Act of 1979 provides specific purposes for which Section 4A sales tax proceeds may be expended. During the 2003 Texas Legislative session, changes were made to the Development Corporation Act in the form of HB2912 to refocus the tax back on economic development and projects that create or retain primary jobs.
Tax Dollar Restrictions
HB 2912 also restricts the extent to which 4A and 4B dollars may be used to fund retail or commercial developments. Corporations may continue to provide retailers with infrastructure assistance but corporations may no longer provide retailers with free land, buildings, equipment, facilities cash grants for relocation costs, loans, or other direct financial incentives.
In accordance with HB 2912, the SEDCO must enact a “performance agreement” before providing direct incentives to a company. The performance agreement is a written document linking the payment of any financial incentive to the business fulfilling its commitment of the number of jobs created and capital investment.