380 and 381 Agreements

Municipality Agreements

Chapter 380 of the Local Government Code authorizes municipalities to offer incentives designed to promote economic development such as commercial and retail projects.  Specifically, it provides for offering loans and grants of city funds or services at little or no cost to promote state and local economic development and to stimulate business and commercial activity.
In order to provide a grant or loan, a city must establish a program to implement the incentives.  Before proceeding, cities must review their city charters or local policies that may restrict a city’s ability provide a load or grant.
City of Houston – 380 Agreements

County Agreements

Chapter 381 of the Local Government Code allows counties to provide incentives encouraging developers to build in their jurisdictions. A county may administer and develop a program to make loans and grants of public money to promote state or local economic development and to stimulate, encourage and develop business location and commercial activity in the county.
Texas Comptroller of Public Accounts – Chapter 380/381 Agreements

Problem:

  • No formal approved Chapter 380 procedures
  • Inadequate or nonexistent documentation in the application, evaluation and project management areas of the Program
  • The City of Houston has used its tax breaks exclusively to subsidize luxury, high-end apartments and homes
  • Lack of adequate monitoring to ensure commitments are being met
  • Some projects were not in compliance with the terms contained in the agreement
  • Houston city council gave a local billionaire tax breaks [twice] without requiring raise-the-wage ordinances

Solutions:

  • Require future grocery stores that seek a tax break to include raise-the-wage ordinances with possible oversight by the health department
  • Pass raise the wage ordinance
  • 380 agreements for luxury apartments and condos divert funding away from public safety, water infrastructure and pension funds

 

Texas Constitution
Code – Local Government Code
Chapter(s) – 380 and 381

Texas Municipal League – Chapter 380 of the Texas Local Government Code

Real estate insiders on board approving $37 million in development tax breaks for downtown Houston

RUDH files suit over 380 agreements

Off the Kuff – Kroger gets its 380

Houston Chronicle – Kroger tax break request falls flat with some on Council

Houston-Galveston Area Council – Make It Local Finding Downtown Development Resources within Your Own Community

City of Houston Approves Funding for Westchase Area 380 Capital Improvement Plan

City Council debates the True Cost of 380 deals

Houston Chronicle – Mayor Parker defends incentives to lure development

Austin Monitor – Zimmerman seeks cut to Chapter 380 funding

Herald – City of New Braunfels rings up $1.5M for new HEB

City charged with misusing funds by nonprofit challenging the Heights Walmart: New Kroger 380 Agreement prompts suit

Audit raises questions about city’s economic development program

Houston Tomorrow – ‘380 agreement’

$19 million rebate from city may seal Galleria-area project