THE SHORT ANSWER
A 380 agreement is a deal a Texas city makes to support economic development. Its name comes from Chapter 380 of the Texas Local Government Code, which allows cities to provide grants, loans, or city services to encourage business activity. Local rules can limit how that authority is used.
Some agreements return part of the city’s tax revenue to a business if it meets agreed conditions. The intended public benefit might be new jobs, private investment, or additional tax revenue. Whether taxpayers benefit depends on what the city gives, what it receives, and whether the business delivers.
WHY SHOULD I CARE?
Because public money is part of the deal.
Money paid to a business, or returned through a tax rebate, is money the city cannot use elsewhere. A worthwhile agreement should explain why that trade serves the community.
A project could bring jobs closer to home or produce revenue that helps pay for city services. But a business opening its doors does not automatically mean your property tax bill will fall.
The question is: After accounting for the public costs, are residents better off?
MAKE IT MAKE SENSE
Think of a 380 agreement as an investment the city makes on the public’s behalf.
Here is a simplified example, not an actual Pflugerville agreement:
A new business generates $100,000 in annual city tax revenue. The city agrees to return $40,000 to the business if it meets its commitments. The city keeps $60,000.
That sounds like a gain. But the calculation is unfinished.
What will the city spend on roads or other services for the project? Does the incentive help bring genuinely new business, or move spending from existing local businesses? Would the company have opened here without public help?
Those questions help distinguish new revenue from a real public return.
Before supporting a deal, taxpayers should be able to understand:
- The full public cost. How much support will the business receive, from all public sources, and for how long?
- The promised benefit. What investment or jobs must it deliver? What wages will those jobs pay?
- The protections. Are payments tied to verified results? Can payments stop, or money be recovered, if commitments are missed?
- The follow-through. Who checks performance, and where can residents see the results?
Cities can include repayment provisions, often called “clawbacks,” to recover incentives when specified conditions are not met. Residents should check the actual agreement for those protections.
Supporting economic development can be a responsible use of public resources. The agreement should make the public benefit clear enough to measure.
THE RECEIPTS
City of Rowlett: Economic Development — Explains performance monitoring and possible clawback provisions.`
Texas Local Government Code, Chapter 380 — The law authorizing city economic development programs.
Texas Comptroller: Chapter 380 and 381 Programs — Plain-language explanation and reporting requirements.
Search the Local Development Agreement Database — Look up agreements by city or business name.