OFFICE OF THE ATTORNEY GENERAL . STATE OF TEXAS 

JOHN CORNYN 

April 152002 

The Honorable Rene 0. Oliveira 

Chair, Committee on Ways and Means 

Texas House of Representatives 

P.O. Box 2910 

Austin, Texas 787682910 

Opinion No. JC-0488 

Re: Whether the City of Lake Jackson’s sales and 

use tax election proposition allows expenditure of 

the taxes for an access road to service undeveloped 

commercially zoned property (RQ-0454-JC) 

Dear Representative Oliveira: 

Pursuant to section 4B of the Development Corporation Act of 1979 (the “Act”), the voters 

of the City of Lake Jackson (the “City”) approved the collection of a one-half cent sales and use tax 

to pay for the costs of, among other improvements, “infrastructure improvements for the 

development of new or expanded business enterprises.“* On behalf of the City, you ask whether the 

language approved by the voters allows the City to use the sales tax proceeds to build a proposed 

access road to service undeveloped commercially zoned property that fronts a state highway. See 

Request Letter, supra note 1. First, we conclude that under section 4B of the Act, the sales tax is 

levied for the benefit of the City’s section 4B development corporation, the Lake Jackson 

Development Corporation (the “Corporation”); and the Corporation, rather than the City, is 

authorized to expend the tax proceeds for authorized projects. We next conclude, based on the 

information provided to us, that the voter-approved election proposition language does not, as a 

matter of law, prohibit the Corporation from using the sales tax proceeds to build the access road if 

it will promote the development of new and expanded enterprises. 

To provide a legal context, we briefly review the Act’s provisions regarding approval and 

use of the section 4B sales taxes. The Development Corporation Act of 1979 authorizes a city, 

county, or district to create an industrial development corporation to finance the cost of authorized 

“projects” that generally promote economic development. See TEX. REV. CIV. STAT. ANN. art. 5 190.6 

(Vernon 1987 & Supp. 2002). In particular, section 4B of the Act authorizes an eligible city to 

create an industrial development corporation governed by that section, see id. 9 4B(b) (Vernon Supp. 

2002), and authorizes the city to levy a sales and use tax for the benefit of the corporation, see id. 

8 4B(d), but only if approved by a majority of the voters at an election called for that purpose, see 

id. Other than the rate of the tax and descriptions of particular projects, section 4B does not 

‘See Letter from Honorable RenC 0. Oliveira, Chair, Committee on Ways and Means, Texas House of 

Representatives, to Honorable John Cornyn, Texas Attorney General, at 1 (Oct. 17, 2001) (on file with Opinion 

Committee) [hereinafter Request Letter]. 
The Honorable Rene 0. Oliveira - Page 2 (JC-0488) 

generally specify the contents of the tax election proposition or ballot to be submitted to the voters. 

See id.; see also id. $8 4B(a-3)(2) ( re q uiring voter approval for specific venue projects “clearly 

described on the ballot”), (a-5) (requiring ballot proposition at election to adopt tax to clearly 

describe project if project involves water supply facilities or water conservation programs), (p) 

(requiring ballot to provide for voting for or against use of sales tax for “clean up of contaminated 

property”). Upon receipt of the sales tax proceeds from the Comptroller of Public Accounts, who 

administers the tax, the city must deliver the tax proceeds to the corporation. See id. 5 4B(g). The 

corporation may use the sales tax proceeds to finance costs of authorized “projects.” See id. 8 

4B(g)(l), (2). Those “projects” include “facilities and improvements” found by the board of 

directors of the corporation to: 

(A) be required or suitable for use for professional and 

amateur (including children’s) sports, athletic, entertainment, tourist, 

convention, and public park purposes and events, including stadiums, 

ball parks, auditoriums, amphitheaters, concert halls, learning centers, 

parks and park facilities, open space improvements, municipal 

buildings, museums, exhibition facilities, and related store, restaurant, 

concession, and automobile parking facilities, related area 

transportation facilities, and related roads, streets, and water and 

sewer facilities, and other related improvements that enhance any of 

those items; 

(B) promote or develop new or expanded business 

enterprises, including a project to provide public safety facilities, 

streets and roads, drainage and related improvements, demolition of 

existing structures, general municipally owned improvements, as well 

as any improvements or facilities that are related to any of those 

projects and any other project that the board in its discretion 

determines promotes or develops new or expanded business 

enterprises. 

Id* 8 w-wxfv~ (B) (V emon Supp. 2002) (emphasis added). 

With this statutory background, we turn to your question. You inform us that in May of 

1 995,2 the voters of the City approved the levy and collection of a one-half cent sales and use tax. 

See Request Letter, supra note 1, at 1. The proposition submitted to the voters provided as follows: 

The levy and collection of a [one-halfl cent sales and use tax within 

the City for the purposes authorized by Section 4B of Article 5 190.6, 

Vernon Texas Civil Statutes, as amended (the “Act”), but limited to 

*See Lake Jackson, Tex., Election Ordinance 95-1330 (May 6, 1995) (on file with Opinion Committee) 

[hereinafter Election Ordinance]. 
The Honorable Rene 0. Oliveira - Page 3 (JC-0488) 

provisions for payment of the costs of land, buildings, equipment, 

facilities, improvements and maintenance and operation costs for 

public park purposes, recreational facilities to be used for sports and 

entertainment, and for infrastructure improvements for development 

of new or expanded business enterprises. 

Election Ordinance, supra note 2, at 2 (emphasis added). 

You inform us that a private landowner owns commercially zoned undeveloped property that 

fronts, but is not accessible from, a public road. See Request Letter, supra note 1, at 1. We 

understand that this public road is State Highway 288. See id. (attached certified copy of excerpt 

from City minutes authorizing attorney general opinion request). The proposed road would provide 

access from the state highway to the private property. See id. We understand that the access road 

will be a public road. See id. (access road will be on public property). You ask: 

Does the ballot language that was approved by the voters authorize 

a funding of the proposed frontage access road to provide access to 

undeveloped land that is zoned cornrnercial or does the language limit 

the use of one-half cent money in a manner that would prohibit use 

of the money for the proposed access road? 

Id. at 1. While you do not elaborate, we presume that the City’s legal concern is whether the 

proposed access road expenditure falls within the scope of the purposes for which the voters 

authorized the sales and use tax.3 

Before addressing the City’s principal concern, we address its assumption that the City, 

rather than its section 4B development corporation, may expend the sales tax proceeds for the 

purposes authorized by the voters. This assumption is contrary to the Act. The sales tax is imposed 

and collected by an eligible city for the benefit of the city’s development corporation established 

under section 4B. See TEX. REV. CIV. STAT. ANN. art. 5 190.6,§ 4B(d) (Vernon Supp. 2002). Upon 

receipt of the sales tax proceeds, the city is required to deliver them to the development corporation. 

See id. 8 4B(g). And the corporation is authorized to expend the sales tax proceeds for authorized 

project costs. See id.; see also id. $0 2( 11) (defining “projects” to include facilities found by 

corporation’s board of directors to promote enumerated purposes), 4B(a)(2) (same). The city, of 

course, must ultimately “approve all programs and expenditures of the corporation.” See id. fj 2 1; 

see also id. 9 23(12) (p owers exercised by corporation subject at all times to control of city’s 

governing body). We understand that the City has established the Lake Jackson Development 

Corporation under section 4B. Accordingly, the sales tax proceeds must be delivered to the 

Corporation; and the Corporation is authorized to expend the tax proceeds for the purposes 

authorized by the Act and approved by the voters. 

3Neither the City nor the Corporation have provided any information. 
The Honorable Rene 0. Oliveira - Page 4 (JC-0488) 

We turn now to the City’s concern regarding the scope of the election proposition. Proceeds 

of the section 4B sales and use tax may be used only for the purposes expressly represented to and 

approved by the voters, i.e., the contract with the voters. See Tex. Att’y Gen. Op. No. JC-0400 

(2001) at 4-5 ( an d cases cited). The contract with the voters clearly includes the purposes stated in 

an election ordinance or order formally adopted by a governing body and the election proposition 

submitted to the voters. See id. at 5. It also may include representations made by the governing 

body outside the formal election proceedings, for example, such as statements made before the 

election by representatives of the governing body to the public regarding specific purposes for which 

the proceeds will or will not be used. See id. 

Assuming for the purposes of this opinion that neither the governing body of the City nor of 

the Corporation made any representations limiting the use of the sales and use tax proceeds beyond 

that in the election proposition approved by the City’s voters, we believe the proposed access road 

expenditure is not excluded, as a matter of law, from the scope of the purposes for which the voters 

approved the sales tax. 

The election proposition is sufficiently broad to embrace road and street projects authorized 

under section 4B of the Act. The proposition states that the tax proceeds may be used for three 

categories of the purposes authorized under section 4B: public park purposes and recreational 

facilities authorized by subsection (a)(2)(A) and “infrastructure improvements for development of 

new or expanded business enterprises” authorized under subsection (a)(2)(B). See Election 

Ordinance, supra note 2, at 2; TEX. REV. CIV. STAT. ANN. art. 5190.6, 0 4B(a)(2)(A), (B) (Vernon 

supp. 2002); see supra pp. l-2. “Infrastructure improvements” is a broad phrase. Black’s Law 

Dictionary defines “infrastructure” as “[tlhe underlying framework of a system; esp., public services 

and facilities (such as highways, schools, bridges, sewers, and water systems) needed to support 

commerce as well as economic and residential development.” BLACK’S LAW DICTIONARY 784 (7th 

ed. 1999). The term “improvements” is similarly broad: “An addition to real property, whether 

permanent or not; esp., one that increases its value or utility or that enhances its appearance.” Id. 

at 761. “Infrastructure improvements” may reasonably be used to describe the category of specific 

public-service-facilities-type improvements authorized by section 4B(a)(2)(B): projects to “promote 

or develop new or expanded business enterprises, including a project to provide public safety 

facilities, streets and roads, drainage and related improvements, demolition of existing structures, 

[and] general municipally owned improvements.‘, TEX. REV. CIV. STAT. ANN. art. 5 190.6, 5 

Wa)W(W w emon Supp. 2002) (emphasis added). This provision, we note, specifically 

authorizes, and did so at the time of the City’s election, “streets and roads” among those publicservice-type facilities. See id.; Act of May 22,1993,73d Leg., R. S., ch. 1022,§ 3,1993 Tex. Gen. 

Laws 4424,4426 (adding section 4B(a)(2)(B)). 

Additionally, section 4B does not require that a road and street project authorized under 

subsection (a)(2)(B) be specifically approved. Other than the rate of the tax and descriptions of 

particular projects, section 4B does not generally specify the contents of the tax election proposition 

or ballot to be submitted to the voters. After reviewing the statutory provisions, Attorney General 
The Honorable Rene 0. Oliveira - Page 5 (JC-0488) 

Opinion JC-0400, which dealt with whether sales tax proceeds could be expended for a park project 

that was not specifically approved by the voters, summarized section 4B’s provisions as follows: 

[Slection 4B requires that the sales and use tax be approved by the 

voters, but does not generally require that specific projects to be 

funded with the tax proceeds be approved by the voters. For most 

projects, voter approval is required only if the requisite number of 

voters submit a petition requesting such an election and the specific 

project or that specific type of project has not been approved 

previously. While there are particular types of projects that the 

legislature has indicated must always be approved by the voters at an 

election before a development corporation may undertake them, 

public parks and park facilities are not one of them. 

Tex. Att’y Gen. Op. No. JC-0400 (2001) at 3. Similarly, here, a road or street project is not one of 

the projects that must be specifically described and approved by the voters. Cf: TEX. REV. CIV. STAT. 

ANN. art. 5190.6, §§ 4B(a-3)(2) ( re q uiring voter approval for specific venue projects “clearly 

described on the ballot”), (a-5) (requiring ballot proposition at election to adopt tax to clearly 

describe project if project involves water supply facilities or water conservation programs), (p) 

(requiring ballot to provide for voting for or against use of sales tax for “clean up of contaminated 

property”). In sum, while the City’s election proposition could have been more precise, we cannot 

say, as a matter of law, that “infrastructure improvements” excludes an access road. 

That “infrastructure improvements” is broad enough to embrace the access road does not end 

our inquiry. The project must also promote the “development of new or expanded enterprises” under 

section 4B(a)(2)(B) and the City’s voter-approved proposition. See id. § 4B(a)(2)(B) (providing that 

“projects” include facilities, and improvements found by the board of directors to “promote or 

develop new or expanded business enterprises, including a project to provide public safety facilities, 

streets and roads”); Election Ordinance, supra note 2, at 2 (proposition authorizing levy of sales tax 

to pay “for infrastructure improvements for development of new or expanded business enterprises”). 

But the determination ofwhether a particular project will promote “development of new or expanded 

business enterprises” is, in general, a question of fact within the discretion ofthe Corporation’s board 

of directors in the first instance, subject to judicial review for abuse of discretion. See TEX. F&V. 

CIV. STAT. ANN. art. 5190.6,§ 4B(a)(2)(B) (V emon Supp. 2002); Tex. Att’y Gen. Op. No. JC-0362 

(2001) at 4 (and opinions cited). Thus, in order for the access road to come within the ambit of the 

Act and the proposition approved by the City’s voters, the Corporation’s board of directors must find 

that the access road will promote the development of new or expanded business enterprises. The 

board’s determination must, of course, be reasonably supported by the facts. See Tex. Att’y Gen. 

Op. No. JC-0362 (2001) at 5-6. In this instance, it is conceivable that a road providing access to the 

undeveloped commercially zoned land is necessary for the commercial development of that land or 

will result in its commercial development, for example, by the construction or expansion thereon of 

a business enterprise. Cf: Tex. Att’y Gen. LO-95-072, at 2 (stating that it is unlikely that 
The Honorable Rene 0. Oliveira - Page 6 (JC-0488) 

construction of sewer facilities in residential subdivision would “promote or develop new or 

expanded business enterprises”). 

We conclude, based on the information provided to us, that the sales tax election proposition 

language approved by the City voters does not, as a matter of law, prohibit the Corporation from 

using the sales tax proceeds to build the proposed access road to service undeveloped commercially 

zoned property if the expenditure will promote the development of new or expanded business 

enterprises. 
The Honorable Rene 0. Oliveira - Page 7 (JC-0488) 

SUMMARY 

Under section 4B of the Development Corporation Act of 

1979, the sales and use tax is levied for the benefit of the Lake 

Jackson Development Corporation established by the City of Lake 

Jackson under section 4B; and the Corporation, rather than the City, 

is authorized to expend the tax proceeds for authorized projects. 

The 1995 sales and use tax election proposition approved by 

the voters of the City of Lake Jackson pursuant to section 4B does not 

prohibit the Lake Jackson Development Corporation from using the 

sales tax proceeds to build an access road to service undeveloped 

commercially zoned property that fronts a state highway if the 

expenditure will promote development of new or expanded business 

enterprises. 

Attorney General of Texas 

HOWARD G. BALDWIN, JR. 

First Assistant Attorney General 

NANCY FULLER 

Deputy Attorney General - General Counsel 

SUSAN DENMON GUSKY 

Chair, Opinion Committee 

Sheela Rai 

Assistant Attorney General, Opinion Committee