LGC and EDC (501-C6) Fact Sheet
After the Hurricane, the International Economic Development Council called to send help to our community to focus on economic recovery. This assistance was given to many communities across the hard hit areas up and down the coast. Through a grant, they were able to send a facilitator who spent a total of two weeks here helping generate community input. From those sessions, the direction received was to diversify our economy. In order to make this happen, the community leaders needed to form an Economic Development Corporation.
That formation has now come to fruition and the following fact statements help explain the setup.
- LGC is a public, non-profit corporation created to aid and act on behalf of one or more local governments to accomplish any governmental purpose of those local governments. Tex. Transp. Code Ann. § 431.101(a) used for funding transportation, water and sewer infrastructure, economic development ventures, and other projects that will benefit the public.
- The LGC is used in lieu of a 4A or 4B sales tax corporation
- LGC stands for Local Government Corporation. It will be a total of four people representing four Sponsoring entities.
- The LGC has been initially approved by all four sponsoring entities. The City of Rockport, Town of Fulton, and Navigation District have approved amendments to the forming documents. The County is currently processing the request and has set a Commissioners Court workshop on the item.
- The LGC is subject to the Public Information Act and the Open Meetings Act (Transp. Code §§ 431.003, 431.004, 431.005).On dissolution or liquidation of an LGC created by local government, all assets shall be transferred to the local government entities. Tex. Trans. Code Ann. § 431.186.
- The LGC can receive grants and charitable contributions.
- The LGC has No independent authority to tax.
- The LGC has No eminent domain power.
- The local governmental entities retain control and authority by:
- Approving the Articles of Incorporation, bylaws, and interlocal agreement
- Confirmation of all board nominees
- Approval of each annual budget
- Approval of project plans or amendments to project plans
- Entering into a service agreement with the EDC outlining goals, metrics, and services to be performed
- To grant tax incentives or other benefits, if any, through the LGC
- The EDC is a 501 c 6 entity recognized by the IRS as a private corporation.
- The EDC has been formed. It has an EIN number and a bank account. Its initial directors are the three incorporators: John Jackson, Brett Bohn and Blake McDavid.
- In order to establish an initial membership of the Corporation, the initial directors set a minimum dues requirement of $1,000. Persons who pay dues by the set deadline of January 22, 2020 prior to the annual meeting of January 31, 2020 will participate in the annual meeting. Each member will have only one vote.
- At this meeting, the following will occur:
- The EDC membership will elect four (4) directors;
- The EDC Board of Directors will elect two (2) directors;
- The EDC four (4) directors will be appointed by the governmental entities (These directors can be elected officials or private individuals) and the (2) directors appointed by the Chamber will draw lots to determine their staggered terms.
- The EDC Board of Directors will elect new officers.
- The EDC Board of Directors will discuss the program of work, the budget for 2020 and other business.
- The EDC will contract with the LGC for performance of services as directed by the LGC and receive related funding.
- The EDC will give quarterly reports to the LGC or local entities, if requested.
- The EDC will be setup as a “One Stop Shop” for all business development inquiries
- The EDC, at a later date may choose to form a tiered benefit investment program, to help supplement the budget.