By: Leach H.B. No. 4078
A BILL TO BE ENTITLED
AN ACT
relating to public improvement districts located in certain
municipalities.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 372, Local Government Code, is amended
by adding Subchapter E to read as follows:
SUBCHAPTER E. DOWNTOWN IMPROVEMENT DISTRICTS IN CERTAIN
MUNICIPALITIES
Sec. 372.201. APPLICABILITY; CONTINUED SERVICES. (a) This
subchapter applies to a municipality with a population between
900,000 and 2,000,000, according to the most recent decennial
census that as of January 1, 2025 had created a public improvement
district located in the municipality's downtown area or central
business district and to a county in which such municipality is
located.
(b) This subchapter applies only to the largest public
improvement district located in a municipality's downtown area or
central business district that existed as of January 1, 2025.
(c) This subchapter may not be interpreted to relieve any
municipality or county from providing services to an area included
in a district or to release the municipality or county from the
obligation it has to provide municipal or county services to that
area. A public improvement district recognized under this
subchapter is intended to supplement and not supplant municipal and
county services in the area of the district.
Sec. 372.202. PERPETUAL EXISTENCE. Notwithstanding any
other law, a public improvement district located in a
municipality's downtown area or central business district and
subject to this subchapter shall exist in perpetuity and shall not
terminate except by Act of the Legislature.
Sec. 372.203. CONTRACT WITH MANAGEMENT ORGANIZATION. (a)
In this subchapter, a "management organization" means a nonprofit
organization that is contracted to implement supplemental services
and improvements in a public improvement district subject to this
subchapter. A management organization shall be an eligible
management organization, as defined by section 372.204.
(b) A municipality subject to this subchapter shall
contract with a management organization to implemental
supplemental services and improvements in a public improvement
district subject to this subchapter.
(c) The municipality shall delegate full authority to the
management organization to oversee and manage the implementation of
supplemental services and improvements in the public improvement
district, including the receipt, handling, and use of funds
collected pursuant to this subchapter, exclusively for the
priorities defined in Section 372.006.
(d) A management organization shall be considered a
"governmental body" for purposes of Chapter 552, Government Code.
Sec. 372.204. ELIGIBLE MANAGEMENT ORGANIZATIONS (a) A
municipality may not contract with a management organization
pursuant to section 372.203 unless the management organization is
an eligible management organization, as defined by subsection (b).
(b) An "eligible management organization" means a nonprofit
organization that has provisions in its articles of incorporation,
certificate of formation, bylaws, or other governing documents
which provide for the following requirements:
(1) the organization's governing board is composed of
seven directors,
(2) directors serve staggered four year terms; however
three directors selected at random may be designated to serve an
initial two-year term in order to implement this provision,
(3) one director is appointed by the municipality in
which the public improvement district is located,
(4) one director is appointed by the county in which
the public improvement district is located,
(5) one director is appointed by the Governor of the
State of Texas,
(6) one director is appointed by the Lieutenant
Governor of the State of Texas,
(7) one director is appointed by the Speaker of the
Texas House of Representatives, and
(8) two directors are elected by the ten largest
owners of assessed property value, excluding exempt property,
located in the public improvement district, through means of
election specified by the organization's governing documents; such
elected directors shall be ineligible to serve consecutive terms.
Sec. 372.005. ADDITIONAL FUNDING REQUIREMENT. (a) A
municipality subject to this subchapter and the State of Texas
through a general appropriations act, shall each appropriate to a
management organization described by this subchapter an amount
equal to the revenue collected through an existing special
assessment of properties located in the district.
(b) A county subject to this subchapter shall appropriate to
a management organization described by this subchapter an amount
equal to one half of the revenue collected through an existing
special assement of properties located in the district.
(c) The funding requirements under subsection (a) and (b)
shall be appropriated in addition to the revenue collected through
existing special assessments imposed in the public improvement
district.
(d) A municipality or county subject to this subchapter
which imposes and collects a special assessment in a public
improvement district that is subject to this subchapter shall not
change the rate of the assessment that was assessed on January 1,
2025.
Sec. 372.006. PRIORITIES. (a) Under this section,
"vagrancy" means the habitual act of loitering, begging,
panhandling, scavenging, camping, sleeping, or otherwise remaining
idle for extended periods of time in a public place without a lawful
purpose.
(b) A management organization described by this subchapter
shall prioritize spending of assessed or appropriated funds on
supplemental services in order of priority of (i) eliminating
crime, (ii) eliminating vagrancy, (iii) improving cleanliness,
(iv) beautification, and (v) other projects to improve the
district.
(c) Appropriations to a management organization by the
State described by this subchapter and received under Section
372.005(a) shall be used exclusively for the purposes of
eliminating crime and vagrancy.
Sec. 372.007. ENFORCEMENT. (a) An owner of property
located in a public improvement district subject to this subchapter
shall have standing to sue a management organization described by
this subchapter to seek injunctive relief or specific performance
in a district court to enforce compliance with this subchapter,
other state law, or the management organization's governing
documents. A property owner shall not be entitled to money damages
in a suit under this section.
(b) A property owner who substantially prevails in a suit
brought pursuant to subsection (a) shall be entitled to costs of
court and reasonable attorney's fees.
(c) Sovereign and governmental immunity to suit and
liability is abolished and waived to the extent of liability under
this section.
SECTION 2. This Act takes effect September 1, 2025.