89R15003 MP-F
By: Middleton S.B. No. 2594
A BILL TO BE ENTITLED
AN ACT
relating to the provision of supplemental services by management
organizations in certain public improvement districts located in
certain municipalities.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 372.011, Local Government Code, is
amended to read as follows:
Sec. 372.011. DISSOLUTION. Except as provided by Section
372.203, a [A] public hearing may be called and held in the same
manner as a hearing under Section 372.009 for the purpose of
dissolving a district if a petition requesting dissolution is filed
and the petition contains the signatures of at least enough
property owners in the district to make a petition sufficient under
Section 372.005(b). If the district is dissolved, the district
nonetheless shall remain in effect for the purpose of meeting
obligations of indebtedness for improvements.
SECTION 2. 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. DEFINITIONS. In this subchapter:
(1) "Affected district" means a public improvement
district that is located in a municipality's central business
district and has the largest operating budget of any public
improvement district located in the central business district as of
January 1, 2025.
(2) "Management organization" means a nonprofit
organization that a municipality has entered into a contract with
to implement supplemental services and improvements in an affected
district.
(3) "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.
Sec. 372.202. APPLICABILITY OF SUBCHAPTER. This subchapter
applies only to a municipality that has a population of more than
900,000 and less than two million.
Sec. 372.203. PERPETUAL EXISTENCE. Notwithstanding any
other law, an affected district may not be dissolved under Section
372.011 or any other general law, but may be dissolved by special
law.
Sec. 372.204. CONTRACT WITH MANAGEMENT ORGANIZATION. (a)
Except as provided by Section 372.205, a municipality shall enter
into a contract with a management organization that:
(1) implements supplemental services and improvements
in an affected district created by the municipality; and
(2) is delegated full authority to oversee and manage
the implementation of supplemental services and improvements as
provided by Section 372.208, including the receipt, handling, and
use of money in accordance with this subchapter.
(b) A management organization that enters into a contract
under this section is considered a governmental body for purposes
of Chapter 552, Government Code.
Sec. 372.205. GOVERNING BODY OF MANAGEMENT ORGANIZATIONS.
(a) A municipality may not enter into a contract with a management
organization under this subchapter unless the governing body of the
management organization complies with this section.
(b) The governing body of a nonprofit organization that may
serve as a management organization under this subchapter must be
composed of seven directors that serve staggered, four-year terms.
Five of the directors must be appointed as provided by Subsection
(c) and two of the directors must be elected as provided by
Subsection (d).
(c) The appointed directors of the governing body of a
nonprofit organization that may serve as a management organization
under this subchapter must be appointed as follows:
(1) one director appointed by the municipality in
which the affected district is located;
(2) one director appointed by the commissioners court
of the county in which the affected district is located;
(3) one director appointed by the governor;
(4) one director appointed by the lieutenant governor;
and
(5) one director appointed by the speaker of the house
of representatives.
(d) The elected directors of the governing body of a
nonprofit organization that may serve as a management organization
under this subchapter must be elected by the 10 largest owners of
taxable real property liable for an assessment in the affected
district, as determined by the current roll of the appraisal
district in which the property is located. The governing documents
of the nonprofit organization must prescribe the means of electing
the directors under this subsection. An elected director may not
serve consecutive terms.
Sec. 372.206. LOCAL FUNDING. (a) A municipality shall
transfer annually to the management organization of an affected
district located in the municipality an amount of money equal to the
revenue collected through an existing special assessment on
properties located in the district over the previous municipal
fiscal year.
(b) A county shall transfer annually to the management
organization of an affected district located in the county an
amount of money equal to one half of the amount described by
Subsection (a).
(c) A municipality or county may not change the rate of an
assessment in response to a transfer of money under this section.
Sec. 372.207. STATE FUNDING. A management organization is
eligible to receive state funding for the purpose of implementing
supplemental services as described by Section 372.208.
Sec. 372.208. USE OF MONEY FOR SUPPLEMENTAL SERVICES. (a)
Except as provided by Subsection (b), a management organization may
only use money allocated to the management organization under this
subchapter for the following supplemental services, in order of
priority:
(1) eliminating crime;
(2) eliminating vagrancy;
(3) improving cleanliness;
(4) increasing beautification; and
(5) implementing other projects to improve the public
improvement district.
(b) An affected district may only use money appropriated to
the management organization under Section 372.207 for:
(1) eliminating crime; and
(2) eliminating vagrancy.
Sec. 372.209. ENFORCEMENT. (a) An owner of real property
located in an affected district may bring an action against a
management organization to seek injunctive relief or specific
performance in a district court to enforce compliance with any
applicable law or the governing documents of the management
organization. A property owner is not entitled to money damages in
an action under this section.
(b) A court shall award reasonable attorney's fees and court
costs incurred in bringing an action under this section to a
prevailing claimant.
SECTION 3. This Act takes effect September 1, 2025.