Rural Assistance Programs
The Economic Development and Analysis Division (EDA) provides Texas’ rural communities with detailed economic data and analysis from internal and external sources, serving as a turnkey information source to assist rural communities in improving government efficiency and achieving economic growth. We specialize in subjects including:
- tax programs and incentive support;
- job creation initiatives;
- economic impact analysis;
- financial transparency;
- limiting financial exposure and
- budgeting and purchasing efficiencies.
EDA’s team of analysts provide technical assistance on a wide variety of issues related to state and local tax programs, financial management, and federal, state, and local economics.
Local Tax Programs
Type A and B Economic Development Corporations
The sales tax for economic development is one of the most popular and effective tools used by rural cities to promote economic development. Type A EDCs are typically created to fund industrial development projects, such as business infrastructure, manufacturing and research and development. Type B EDCs can fund all projects eligible for Type A, as well as parks, museums, sports facilities and affordable housing. Type A and B program details »
Municipal Development Districts
Municipal management districts (MDD) allow rural cities to impose a special dedicated sales tax to fund cultural, recreational and economic development projects similar to those authorized for Type B Economic Development Corporations.
One of the biggest advantages of an MDD is the flexibility for establishing the district’s boundaries. The MDD is the only municipal sales tax that can be imposed in a city’s extraterritorial jurisdiction (ETJ). A Type B tax applies only within municipal limits; an MDD may include some or all of the city, a combination of city and its ETJ, or all or part of only the ETJ. MDD program details »
Event Trust Fund
Texas’ event trust fund programs help its communities offset the costs of hosting sporting and non-athletic events. To qualify for these funds, an event must be competitively bid, and the community must be competing with cities outside Texas for the right to host it. Event Trust Fund program details »
Chapter 311 Tax Increment Financing
Tax increment financing is a tool that rural communities can use to publicly finance needed structural improvements and enhanced infrastructure within a defined area known as a reinvestment zone. Chapter 311 program details »
Chapter 312 Tax Abatements
Rural communities can use tax abatements to attract new industry and commercial enterprises and to encourage the retention and development of existing businesses. Tax abatement is an agreement between a taxpayer and a taxing unit that exempts all or part of the increase in the value of the real property and/or tangible personal property from taxation. Chapter 312 program details »
Chapter 313 Texas Economic Development Act
An appraised value limitation is an agreement in which a taxpayer agrees to build or install property and create jobs in exchange for an eight-year limitation on the taxable property value for school district maintenance and operations tax (M&O) purposes and a tax credit. Chapter 313 program details »
Chapter 380/381 Agreements
These agreements authorize rural municipalities and counties to offer incentives designed to promote economic development such as commercial and retail projects. Specifically, it provides for offering loans and grants of local government funds or services at little or no cost to promote state and local economic development and to stimulate business and commercial activity. Chapter 380/381 program details »
Hotel Occupancy Tax
Rural communities can utilize hotel occupancy tax as a way to encourage tourism and economic development. Hotel occupancy tax is a tax is imposed on a person who pays for a room or space in a hotel costing $15 or more each day. Local hotel taxes apply to sleeping rooms costing $2 or more each day. Hotel Tax details on Window on State Government website »
Designing an Effective Rural Development Strategy
Changes in technology and the globalization of the markets have reduced employment in farming and many rural-oriented industries. In order to strengthen the economic opportunities in rural Texas it is important to develop a rural development strategy. In many cases a more efficient use of resources is for rural cities to act regionally as opposed to individually. Successful economic development strategies recognize market trends when identifying economic niches where the locality can have a comparative advantage.
Incorporating economic diversification into the development strategy is a vital key to success. For some rural areas a focus on entrepreneurship and small business development can be helpful. A rural area should also build their economic strategy on a strong basis of community development. Community development could include improved housing, infrastructure and quality of life items that will contribute to the community's economic success and provide an incentive to prospective new business.
In summary, an effective rural development strategy should:
- build on local strengths,
- adjust for local weaknesses,
- recognize market realities,
- attempt to achieve development that can be sustained for the foreseeable future, and create local support.
Sources from U.S. Department of Agriculture: Economic Research Service:
“Designing an Effective Rural Development Strategy,” Amber Waves
“Rural Development Strategies: Designing an Effective Rural Development Strategy”
Jobs and Education for Texans (JET)
Equipment Grants for Community Colleges
The Comptroller’s Job Building Fund provides grants to community colleges to support building and equipment demands for high-growth industries throughout the state in an era of rapidly increasing enrollment.
Learn more about the JET Job Builidng Fund on the Every Chance, Every Texan website »
State Energy Conservation Office
Incentives and Grant Programs
SECO posts current state opportunities and federal programs that can offer your community incentives or financial assistance with energy conservation projects. Find more information on the opportunities available to your community »
Local Government Financial Management Resources
For additional guidance with finance topics including budgeting and purchasing for rural cities and counties, see our Local Government Financial Management Resources »
Leadership Circle Awards
Recognizing Financial Transparency
The Comptroller of Public Accounts launched the Texas Comptroller Leadership Circle program in December 2009 to recognize local governments across Texas that are striving to meet a high standard for financial transparency online. We are spotlighting those local governments that are:
- opening their books to the public,
- providing clear, consistent pictures of spending and
- sharing information in a user-friendly format that lets taxpayers easily drill down for more information.
For program details and awards, visit the Texas Transparency website »
Important Notice: New Exemption Requirement for Commercial Agriculture and Timber Operations
House Bill 268, passed during the 82nd Regular Legislative Session (2011), requires that a person claiming an exemption from sales tax on the purchase of certain items used in the production of agricultural and timber products must provide a registration number issued by the Comptroller of Public Accounts on the exemption certificate issued to the seller.
For more information, please visit Texas Taxes for Agriculture and Timber Industries.
Download Retailers’ Guide to the Sales Tax Exemption Registration Requirement (PDF)