What Can Your Economic Development Corporation Do?

In Texas, we have the privilege of establishing entities commonly referred to as, “Economic Development Corporations” or abbreviated as “EDCs.” The entities are formed as part of your City government and designed to promote and preserve the economy of our community. The State of Texas classifies these organizations as one of two possible categories, “Type A” or “Type B.” The Floydada EDC was incorporated in the year 2000, by voter approval, as a “Type B” corporation. As regulated by the State of Texas, Type B corporations are designed to create or retain primary jobs. A primary job is defined as a job for which a majority of the products or services of that company are ultimately exported to a regional, statewide, national or international market infusing new dollars into the local economy. 

Jobs that are typically classified as “primary” include crop production, animal production, forestry and logging, commercial fishing, support activities for agriculture and forestry, mining, utilities, manufacturing, wholesale trade, transportation and warehousing and information. Also classified as “primary” are jobs related to securities, commodity contracts and other related financial investment activities. Scientific research and development, management of companies (headquarters) and correctional institutions also fit in this classification. Industries or projects that hire these positions and meet these criteria include manufacturing and industrial facilities, research and development facilities, military facilities (including closed units), transportation facilities, sewage or solid waste disposal facilities, recycling facilities, air or water pollution control facilities, distribution centers, small warehouse facilities, and primary job training facilities for use by institutions of higher education, regional or national corporate headquarters. Also included in this list are those projects which promote or develop new or expanded business enterprises including a project to provide public safety facilities, streets and roads, drainage and related improvements, demolition of existing structures, or general municipality owned improvements. 

Permissible Type B projects which need not create or retain primary jobs include: job training classes; certain targeted infrastructure which promotes or develops new or expanded enterprises; land, buildings, equipment, facilities improvements and expenditures required or suitable for a career center (if not in the taxing jurisdiction of a junior college); land, buildings, equipment, facilities, expenditures, targeted infrastructure, and improvements found by a board of directors to promote new or expanded business development. 

A common question asked is, “Can a Type B corporation assist retail businesses?” To answer the question, “Yes, with certain restrictions.” A Type B corporation is currently allowed to provide targeted infrastructure assistance or job training classes which promote or develop new or expanded enterprises. Targeted infrastructure is defined as improvements to streets and roads, rail spurs, water and sewer utilities, electric utilities, gas utilities, drainage and site improvements, and telecommunications and internet improvements that are needed to operate.

With this long list of descriptive words, one is left to ask the question, “What does all that mean?” At the heart of it all is the creation of jobs; not just any jobs, but those that can produce wealth for a given geographic area (in this case, the City of Floydada). Typically these jobs are manufacturing in nature as the products created in the manufacturing process are consumed by those outside the city, leaving the revenue generated by the process within the city by means of wages and taxes. The most effective economic development corporations are those supported by the community as a whole. Citizens that take an active part in working with their local EDCs make a lasting impact on the long term development of their city. Ultimately, we are all involved in economic development; as we live and work in Floydada, we represent the community. Together we accomplish more than any single organization. As a result, I want to encourage each of you to communicate with the Floydada EDC about those prospective job creation projects that you learn about. You can do so by calling our office at (806) 983-3318 or use our online suggestion box found .