Type A and Type B EDCs are authorized to pay the administrative expenses (including staff) to implement projects. These may include administrative expenses for the acquisition, construction, improvement, expansion and financing of projects. Cities that perform some of the administrative functions for Type A or Type B corporations may be reimbursed for administrative expenses for projects overseen by city staff. An EDC also may contract with a private corporation or other entity.
The EDC administrator, the city attorney and the city administrator or the city clerk of the municipalities creating Type A and Type B corporations are required to attend an economic development training seminar within 90 days of taking office. The seminar must be repeated every two years. Corporation funds may be used to pay the costs of attending the seminar. The Comptroller's office may impose a penalty of up to $1,000 for officials who fail to attend the required training seminar.
EDC training can be obtained from the Texas Economic Development Council.
Type A and Type B EDCs' boards of directors are subject to the Texas Open Meetings Act, found in Chapter 551 of the Government Code. A Type B EDC serving a city with fewer than 20,000 residents is exempt from holding public hearings for projects eligible under Type A rules. However, these small cities must give the resolution at least two separate readings if the funding agreement is for $10,000 or more.
All Type B corporations, regardless of city population, must hold public hearings on all other types of projects. In addition, all Type B corporations must wait 60 days from the first public notice of the nature of a project before providing funds.
Type A corporations are required to hold public hearings only when considering an election to authorize a Type B project.
Open Government training can be obtained from the Texas Office of the Attorney General.
The Development Corporation Act requires all Type A and Type B corporations to file an annual report with the Texas Comptroller of Public Accounts by Feb. 1 of each year. See specific requirements.
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.
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