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Study the effectiveness of Reinvestment Zones, Enterprise Zones,
and Enterprise Projects-including the number of businesses in
each, the relationship between investment required and benefits
received, and the impact of previous legislation.
Recently, tax abatements, which are used extensively in each program,
have come under criticism. Opponents say local and state tax
dollars are being given away to companies that would have come
to Texas anyway. Proponents say local communities must be able
to offer inducements in order to compete for new jobs with other
cities outside Texas.
Study the differences between 4A and 4B economic development corporations,
particularly whether each type should be allowed to invest in
projects currently exclusive to the other.
Section 4A of the Development Corporation Act allowed for economic
development corporations to be funded with dedicated local sales
tax revenue, if it was approved by the local voters. Section
4B allows certain economic corporations to spend dedicated sales
tax revenues on a wider variety of civic and commercial projects
than those available to a 4A corporation.
In the 1995 session of the Texas Legislature, many communities
proposed legislation allowing them to pursue 4B projects through
4A economic development corporations. The House Economic Development
Committee chose to request permission from the speaker to study
the issue during the interim.