What Is Your 4(B) Tax Money?

Simply and briefly put, and to the best of our ability (please consult the city for legal determinations), every non-exempt sales transaction in Conroe cost you 8.25 cents sales tax per dollar per transaction.   Of that amount, the state gets 6.25 cents and the city gets 2 cents.  Of those 2 cents the city keeps, .5 cent goes to Conroe by way of the Conroe Industrial Development Corporation (CIDC) and is considered 4(B) money by law as voted on by Conroe’s voters in 1994 (it first passed mainly for a much needed water and sewer system and other infrastructure to reduce property taxes, after being defeated two years earlier in ‘92).  The CIDC, along with city council, controls 4(B) tax expenditures.  With Conroe’s huge growth in sales tax over the last decade, we are talking about millions of dollars per year.

Below is only a partial list of projects available for 4(B) sales tax money as per the Economic Development Handbook of the DCA of 1979 (and amended many times by the state legislature).  There is a vast array of projects for which our 4(B) tax dollars can be used.  More variety in current usage of these tax dollars toward economic development would be a positive step.  The CIDC has funded some great things for Conroe.  However, more independence for the CIDC (as was the case historically) and less of the dominate influence of the city council members on it would be a very positive step, though that is easier said than done.  Sometimes a step back can be a step in the right direction. 

 “A Section 4B corporation may do the projects listed under Section 2(11) of the Development

Corporation Act of 1979, Article 5190.6, which encompasses the land, buildings, equipment,

facilities, expenditures, targeted infrastructure and improvements (one or more) that are for the

creation or retention of primary jobs that are found by the board of directors to be required or

suitable for any of the following projects:

155 Id. § 2(17) (to be codified at Tex. Loc. Gov’t Code Ann. § 501.002(12) (Vernon Supp. 2008), effective April 1,

2009).

• Public safety facilities.

• Streets and roads.

• Drainage and related improvements.

• Demolition of existing structures.

• General municipally owned improvements.

• Any improvements or facilities that are related to any of those projects and any other

projects that the board in its discretion determines promotes or develop new or

expanded business enterprises that create or retain primary jobs.

• Manufacturing and industrial facilities.

• Research and development facilities.

• Military facilities.

• Transportation facilities (including but not limited to airports, hangars, airport

maintenance and repair facilities, air cargo facilities, related infrastructure located on

or adjacent to an airport facility, ports, mass commuting facilities and parking

facilities).156

• Recycling facilities.

• Air or water pollution control facilities.

• Distribution centers.

• Small warehouse facilities.

• Primary job training facilities for use by institutions of higher education

• Regional or national corporate headquarters facilities

•Certain infrastructural improvements which promote or develop new or expanded

business enterprise.

•Career centers.

•Commuter Rail, Light Rail or Motor Buses.

•Professional and amateur sports and athletic facilities.

•Entertainment, tourist and convention facilities.

•Public parks and related open space improvements.

•Affordable housing.

•Water supply facilities (Edit – with approval of the majority of eligible voters in the city).

•Water conservation programs (Edit – with the approval of the majority of eligible voters in the city).

Obviously, there’s a wide variety of projects that citizens and taxpayers can benefit from through our 4(B) tax dollars. 

For more complete info, click on the link below for the Economic Development Handbook from the Attorney General’s website  

http://www.oag.state.tx.us/AG_Publications/pdfs/econdevhb2008.pdf