Municipal Development District (MDD)
1. WHAT IS A MUNICIPAL DEVELOPMENT DISTRICT (MDD)?
A Municipal Development District is a special purpose district created for the purpose of generating economic development and growth opportunities within the boundaries of the district. The proposed Argyle MDD boundaries are generally one-half of one mile beyond the Town limits of Argyle [includes the Extra-Territorial Jurisdiction (ETJ) if not otherwise included in an adjacent city or another city’s ETJ].
Click on the boundary map below for visual representation of Town limits and ETJ boundaries:
2. WHAT ARE THE DIFFERENCES BETWEEN A TYPE B ECONOMIC DEVELOPMENT CORPORATION (EDC) AND A MUNICIPAL DEVELOPMENT DISTRICT (MDD)?
The Town currently has a Type B EDC. The MDD will be able to perform the EXACT SAME types of projects as are currently allowed by our Type B EDC, namely projects related to: retail; restaurant; concession; parking facilities; area transportation facilities; roads; streets; general municipally owned improvements; water and sewer facilities; drainage; demolition; entertainment; tourism; conventions; public parks: including stadiums, ball parks, amateur sports, athletics, auditoriums, amphitheaters, concert halls, parks and park facilities; municipal buildings; museums; exhibition facilities; and other related improvements that enhance any of those items. The major difference is that an MDD can impose a one-fourth of one percent (0.25%) sales tax in the ETJ of the Town. The EDC can only impose its sales tax within town limits.
3. WILL THERE BE AN INCREASED TAX BURDEN IF THE TYPE B EDC IS DISSOLVED AND THE MDD IS CREATED BY THE VOTERS?
There will be no additional taxes imposed on the citizens within the Town limits. Currently, the Type B EDC is funded by a sales tax of one-fourth of one percent (0.25%) of sales and use tax. If the ballot measures are approved by the voters, the EDC sales tax will be dissolved and the MDD will be funded by the same amount of sales tax of one-fourth of one percent (0.25%) in both the Town limits and the ETJ of the Town. The MDD sales tax will not increase over time without another election.
4. HOW IS THE DISTRICT CREATED?
To create an MDD, a municipality must call for an election and define the proposed boundaries of the district (in this case to include the Town limits and the ETJ of the Town). The ballot at this election must be printed to allow voting for or against the proposition(s). In calling the election, the municipality has allowed for creation of the MDD and abolition of the EDC. If the voters turn down creation of the district, the EDC will continue to exist and a subsequent election to establish an MDD may not be held until one year after the first election.
5. WHAT WILL THE BALLOT LOOK LIKE WHEN I GO TO THE VOTING BOOTH?
The Ballot for the voters within the Town limits will appear as follows:
Proposition A: Subject to the termination of the Argyle Economic Development Corporation, authorizing the creation of the Argyle Municipal Development District and the imposition of a sales and use tax at the rate of one-fourth of one percent (0.25%) for the purpose of financing development projects beneficial to the district within the incorporated Town limits and extraterritorial jurisdiction of the Town of Argyle, Texas, which boundaries shall automatically conform to any changes in the corporate boundaries and extraterritorial jurisdiction of the Town.
☐ FOR ☐ AGAINST
Proposition B: Subject to the creation of the Argyle Municipal Development District, the termination of the Argyle Economic Development Corporation.
☐ FOR ☐ AGAINST
ETJ voters will vote on Proposition A only and Town limit voters will vote on both Propositions A and B.
6. WHO WILL PAY FOR THE MDD?
Anyone making a purchase of taxable items inside the boundaries of the Argyle MDD will pay the sales tax including purchases made by individuals who live outside of the district but who are shopping and eating in the district. This is very similar to what occurs with the EDC within the Town limits.
7. WHAT WILL THE PROCEEDS FROM THE SALES TAX BE USED FOR?
State law authorizes expenditure of MDD funds for a variety of economic development activities including industrial and manufacturing projects, retail development projects, recreational and/or community facilities projects, housing projects and convention center facilities and related improvements.
8. WHO OVERSEES THE MDD?
A board of at least four directors would govern the District. The Argyle Town Council will decide on the actual quantity of board members and will appoint the board. In addition, the Town Council will adopt policies and guidelines that will govern the actions of the MDD Board, including requiring all actions of the board be subject to review by the Town Council.
9. WHO DETERMINES HOW THE FUNDS ARE SPENT?
The MDD Board of Directors must adopt a budget for each year at a public meeting. Once the MDD Board approves the budget, the budget will be presented to the Town Council for final approval.
10. CAN THE MDD SALES TAX BE REPEALED?
The sales tax can be repealed if a majority of the registered voters in the district vote to repeal the sales tax.
11. HOW DO WE KNOW THE FUNDS WERE SPENT FOR THEIR AUTHORIZED PURPOSES?
State law requires the District to have an annual audit conducted by an independent auditor. The audit and other District records are open to public inspection during normal business hours.
12. IF APPROVED, WHEN WOULD THE MDD BECOME EFFECTIVE?
If approved by vote in November, the MDD tax would become effective once the Texas State Comptroller has time to make the specific changes and notifications, which could take approximately six months.
13. HOW CAN I GET MORE INFORMATION ABOUT THE PROPOSED MDD?
The legislation governing MDDs can be found in Chapter 377 of the Local Government Code. Chapter 377 is available online at: https://statutes.capitol.texas.gov/Docs/LG/htm/LG.377.htm
You may also contact Argyle Town Hall at (940) 464-7273.