Derrick Freeman, mayor of Port Arthur, introduced the city to Municipal Development Districts nearly two weeks ago when he spoke at a community meeting about drainage and flooding issues with Port Acres residents on Feb. 6.

He said the city could create a MDD that would receive sales tax from petrochemical industries in the city’s extra territorial jurisdiction. Thus far, they are unable to do so without a Municipal Development District.

He cited the city of Baytown, which has their own MDD, as an example. Baytown has also budgeted several millions of dollars for their MDD. The MDD, however, is structured to only operate within the city limits and not their ETJ.

Patti Jett, public affairs coordinator with the city of Baytown, corresponded via email that the Baytown MDD functions as a political subdivision in accordance with Chapter 377 of the Texas Local Government Code and Section 3888.101 of the Texas Special District Local Laws Code for the purpose of financing development projects beneficial to the district.

“The boundaries of the Baytown MDD are the incorporated limits of the City of Baytown within Harris County, Texas,” she wrote.

Chapter 377 of the Local Government Code authorizes cities to hold an election in all or part of a city, including its extra territorial jurisdiction, to create a municipal development district and to adopt a sales tax to fund it.

Baytown’s election was held on May 5, 2001, to create an MDD and the imposition of a sales and use tax at the rate of one-half of one percent. The results of the election were 1,166 in favor and 1,161 opposed.

Jett wrote that the ability to establish an MDD boundary in the ETJ did not arise until 2005, when the Texas Legislature passed SB 466, four years after their election.