SB2594 - Relating to the provision of supplemental services by management organizations in certain public improvement districts located in certain municipalities.

  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.