Municipal Development Districts

Statute:

Governed by Chapter 377 of the Texas Local Government Code.

• A city can create an MDD inside the city, in the ETJ, or overlapping both…
• The purpose of an MDD is to undertake “development projects” beneficial to the District.
  • Created by election.
  • “Development Project” is defined:
    • by reference to the Type B Economic Development Corporation enabling statutes in TLGC Sects. 505.151-505.158. Interesting…, and includes
    • Convention center facilities and related improvements such as a “civic center,” a convention center, hotel, auditorium, and parking.
  • Funded by a voter approved sales and use tax.
• The District is a political subdivision of the state and of the municipality, is subject to the Open Meetings Act, and is governed by a Board of Directors appointed by City Council.
• Subchapter D of Chapter 377 governs the District’s general authority and how its funds can be managed.

Other Resources:

• The Texas Comptroller has a short explainer on Municipal Development Districts. Not super helpful, but not nothing.
• The Texas Municipal League‘s Economic Development Handbook has a good discussion of Municipal Development Districts starting on Page 196.

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