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.