History of the Economic Development Sales Tax
In 1979, the Texas Legislature passed the Development Corporation Act of 1979. The Development Corporation Act allows municipalities to create nonprofit corporations (called economic development corporations) that promote the creation of new and expanded industry and manufacturing activities within the municipality and its vicinity. The development corporations operate separately from the municipalities, with boards of directors that oversee their efforts. In 1987, The Texas Legislature passed laws that would allow state and local government funds to be used to promote economic development. Most notably, in 1989, the Legislature amended the Act by adding Section 4A, which allowed the creation of a new type of Development Corporation. The legislation provided that a Section 4Adevelopment corporation could be funded by the imposition of local sales and use tax dedicated to economic development. The voters of the city at an election could levy the tax only after its approval on the issue. Prosper held this Section A Development Corporation tax election in May 1998. This election allowed the tax to be adopted at a rate of ½ % (one-half of one percent) from city sales tax. In the May 1999 election, Prosper broadened the use of the ½ percent sales tax to include Section 4B taxes to be used to promote a wide range of civic and commercial projects. Prosper Economic Development Corporation Board Members are appointed by the City Council. The Board is currently composed of the following members: Ray Smith, Daniel Jones, Bob Luckock, Jim Campbell, Mike Wadsworth. The Economic Development Corporation Staff includes Dan Tolleson as the Executive Director, and Andrea Berry as the Executive Assitant. All “projects” of the PEDC are approved by the City Council.