For both Type A and Type B, the Development Corporation Act requires cities to establish a corporation to administer the sales and use tax funds. The corporation must file a certificate of formation with the Secretary of State. The articles of incorporation must state that the corporation is governed by the Development Corporation Act of 1979 found in Chapters 501-505 of the Local Government Code.
The boards of directors of both Type A and Type B EDCs serve at the pleasure of the city council and may be removed and replaced at any time and without cause. All funding agreements approved by an EDC must also be approved by the city council. The composition of a corporation's board of directors and the length of a member's term differ between Type A and Type B.
The city council must appoint a board of directors with at least five members to serve terms up to six years. The statute does not specify qualifications for Type A corporation board members.
This information should not be construed as, and is not a substitute for, legal advice.
Cities are urged to consult the Attorney General's Economic Development Handbook and their own legal counsel for any questions or interpretations of economic development laws.