Leach Bill Makes City, State And County Fund A Downtown Nonprofit

The text as introduced · 1,010 words

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.