BILL ANALYSIS Senate Research Center S.B. 2594 89R15003 MP-F By: Middleton Local Government 4/25/2025 As Filed AUTHOR'S / SPONSOR'S STATEMENT OF INTENT Downtown areas in major Texas cities, such as Dallas, have experienced significant increases in crime, homelessness, and property value decline. From 2019 to 2023, violent crime in downtown Dallas rose by 42 percent, while overall crime in the city decreased. The economic impact has been substantial, with slowed development and businesses relocating to suburban areas. Public improvement districts (PIDs) have traditionally been managed under city control, but concerns about inefficiency and political influence have led to calls for reform. As proposed, S.B. 2594 amends current law relating to the provision of supplemental services by management organizations in certain public improvement districts located in certain municipalities. RULEMAKING AUTHORITY This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 372.011, Local Government Code, to create an exception under Section 372.203. SECTION 2. Amends Chapter 371, Local Government Code, by adding Subchapter E, as follows: SUBCHAPTER E. DOWNTOWN IMPROVEMENT DISTRICTS IN CERTAIN MUNICIPALITIES Sec. 372.201. DEFINITIONS. Defines "affected district," "management organization," and "vagrancy." Sec. 372.202. APPLICABILITY OF SUBCHAPTER. Provides that 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. Provides that an affected district, notwithstanding any other law, is prohibited from being dissolved under Section 372.011 or any other general law, but is authorized to be dissolved by special law. Sec. 372.204. CONTRACT WITH MANAGEMENT ORGANIZATION. (a) Requires a municipality, except as provided by Section 372.205, to enter into a contract with a management organization that implements supplemental services and improvements in an affected district created by the municipality and 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) Provides that a management organization that enters into a contract under this section is considered a governmental body for purposes of Chapter 552 (Public Information), Government Code. Sec. 372.205. GOVERNING BODY OF MANAGEMENT ORGANIZATIONS. (a) Prohibits a municipality from entering into contract with a management organization under this subchapter unless the governing body of the management organization complies with this section. (b) Provides that the governing body of a nonprofit organization that may serve as a management organization under this subchapter is required to be composed of seven directors that serve staggered, four-year terms. Requires that five of the directors be appointed as provided by Subsection (c) and that two of the directors be elected as provided by Subsection (d). (c) Provides that the appointed directors of the governing body of a nonprofit organization that may serve a management organization under this subchapter are required to be appointed as follows: one director appointed by the municipality in which the affected district is located, one director appointed by the commissioners court of the county in which the affected district is located, one director appointed by the governor, one director appointed by the lieutenant governor, and one director appointed by the speaker of the house of representatives. (d) Provides that the elected directors of the governing body of a nonprofit organization that may serve as a management organization under this subchapter are require to 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. Requires that the governing documents of the nonprofit organization prescribe the means of electing the directors under this subsection. Prohibits an elected director from serving consecutive terms. Sec. 372.206. LOCAL FUNDING. (a) Requires a municipality to 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) Requires a county to 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) Prohibits a municipality or county from changing the rate of an assessment in response to a transfer of money under this section. Sec. 372.207. STATE FUNDING. Provides that 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) Authorizes a management organization, except as provided by Subsection (b), to only use money allocated to the management organization under this subchapter for the following supplemental services, in order of priority: eliminating crime, eliminating vagrancy, improving cleanliness, increasing beautification, and implementing other projects to improve the public improvement district. (b) Authorizes an affected district to only use money appropriated to the management organization under Section 372.207 for eliminating crime and eliminating vagrancy. Sec. 372.209. ENFORCEMENT. (a) Authorizes an owner of real property located in an affected district to 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. Provides that a property owner is not entitled to money damages in an action under this section. (b) Requires a court to award reasonable attorney's fees and court costs incurred in bringing an action under this section to a prevailing claimant. SECTION 3. Effective date: September 1, 2025.
BILL ANALYSIS
Senate Research Center S.B. 2594
89R15003 MP-F By: Middleton
Local Government
4/25/2025
As Filed
Senate Research Center
S.B. 2594
89R15003 MP-F
By: Middleton
Local Government
4/25/2025
As Filed
AUTHOR'S / SPONSOR'S STATEMENT OF INTENT
Downtown areas in major Texas cities, such as Dallas, have experienced significant increases in crime, homelessness, and property value decline. From 2019 to 2023, violent crime in downtown Dallas rose by 42 percent, while overall crime in the city decreased. The economic impact has been substantial, with slowed development and businesses relocating to suburban areas. Public improvement districts (PIDs) have traditionally been managed under city control, but concerns about inefficiency and political influence have led to calls for reform.
As proposed, S.B. 2594 amends current law relating to the provision of supplemental services by management organizations in certain public improvement districts located in certain municipalities.
RULEMAKING AUTHORITY
This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Section 372.011, Local Government Code, to create an exception under Section 372.203.
SECTION 2. Amends Chapter 371, Local Government Code, by adding Subchapter E, as follows:
SUBCHAPTER E. DOWNTOWN IMPROVEMENT DISTRICTS IN CERTAIN MUNICIPALITIES
Sec. 372.201. DEFINITIONS. Defines "affected district," "management organization," and "vagrancy."
Sec. 372.202. APPLICABILITY OF SUBCHAPTER. Provides that 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. Provides that an affected district, notwithstanding any other law, is prohibited from being dissolved under Section 372.011 or any other general law, but is authorized to be dissolved by special law.
Sec. 372.204. CONTRACT WITH MANAGEMENT ORGANIZATION. (a) Requires a municipality, except as provided by Section 372.205, to enter into a contract with a management organization that implements supplemental services and improvements in an affected district created by the municipality and 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) Provides that a management organization that enters into a contract under this section is considered a governmental body for purposes of Chapter 552 (Public Information), Government Code.
Sec. 372.205. GOVERNING BODY OF MANAGEMENT ORGANIZATIONS. (a) Prohibits a municipality from entering into contract with a management organization under this subchapter unless the governing body of the management organization complies with this section.
(b) Provides that the governing body of a nonprofit organization that may serve as a management organization under this subchapter is required to be composed of seven directors that serve staggered, four-year terms. Requires that five of the directors be appointed as provided by Subsection (c) and that two of the directors be elected as provided by Subsection (d).
(c) Provides that the appointed directors of the governing body of a nonprofit organization that may serve a management organization under this subchapter are required to be appointed as follows: one director appointed by the municipality in which the affected district is located, one director appointed by the commissioners court of the county in which the affected district is located, one director appointed by the governor, one director appointed by the lieutenant governor, and one director appointed by the speaker of the house of representatives.
(d) Provides that the elected directors of the governing body of a nonprofit organization that may serve as a management organization under this subchapter are require to 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. Requires that the governing documents of the nonprofit organization prescribe the means of electing the directors under this subsection. Prohibits an elected director from serving consecutive terms.
Sec. 372.206. LOCAL FUNDING. (a) Requires a municipality to 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) Requires a county to 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) Prohibits a municipality or county from changing the rate of an assessment in response to a transfer of money under this section.
Sec. 372.207. STATE FUNDING. Provides that 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) Authorizes a management organization, except as provided by Subsection (b), to only use money allocated to the management organization under this subchapter for the following supplemental services, in order of priority: eliminating crime, eliminating vagrancy, improving cleanliness, increasing beautification, and implementing other projects to improve the public improvement district.
(b) Authorizes an affected district to only use money appropriated to the management organization under Section 372.207 for eliminating crime and eliminating vagrancy.
Sec. 372.209. ENFORCEMENT. (a) Authorizes an owner of real property located in an affected district to 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. Provides that a property owner is not entitled to money damages in an action under this section.
(b) Requires a court to award reasonable attorney's fees and court costs incurred in bringing an action under this section to a prevailing claimant.
SECTION 3. Effective date: September 1, 2025.