What is 4A and 4B sales tax funding?

During the Frisco Chamber of Commerce’s forum for City Council candidates in January, the moderators asked candidates several questions about their position on 4A and 4B funding.

According to the Texas Municipal League, the term refers to sections 4A and 4B of the state’s Development Corporation Act of 1979 that were amended in 1991. Section 4A allowed up to 0.5 percent of a city’s sales tax to be used for economic development projects, primarily for industrial and manufacturing projects. Section 4B allowed for a one-half cent sales tax to be used for a range of civic and commercial projects.

In 2007, the Texas Legislature added the Development Corporation Act of 1979 to the Local Government Code. As of 2009, 4A and 4B are now known as Type A and Type B.

In 1991, Frisco voters approved a 0.5 percent sales tax—or what was 4A funding at the time—for the Frisco Economic Development Corp. to promote economic growth in the city.