2015 Texas Legislative Summary for nonprofits – End-of-session final report

As the results of the 140-day 2015 legislative session are reviewed, winners and losers come into view—bills that passed, that almost passed, should have passed or died due to some parliamentary or procedural circumstance. It is equally important to consider groups of dead bills that reflect an issue, policy or advocacy group that will be back in 2017 for another try.

The complete June 25, 2015 SUMMARY OF ISSUES AFFECTING NONPROFIT ORGANIZATIONS is available here and reflects some of the 1,332 bills passed from the almost 6,300 filed. The governor vetoed only 42 bills. This indicates a 21% passage rate.

Access the text and legislative history of any bill at Texas Legislature Online, www.capitol.state.tx.us and get information about appropriated funds and the state’s two-year budget from the Legislative Budget Board at www.lbb.state.tx.us .

During the hot summer, there will be time to reflect on the effect of new laws on §501(c) nonprofit organizations, state associations, foundations and local volunteer leaders.

Items of interest from the 2015 regular session:

State agency fee collection check-offs will generate charitable donations for groups and causes favored by the legislature

Several bills passed show that there are other ways to raise funds for a charitable cause than simple grass-roots solicitation and hard work. These bills require various state agencies to provide a check-off box at the time a state fee is paid, with additional funds listed by a payer to become a donation to a specific charity or cause designated by legislative preference. Some examples:

  • SB 272: As part of registering a motor vehicle and paying fees, a revised DMV form permits a donation of additional funds to the Special Olympics.
  • HB 3710: When applying for a license to carry a concealed handgun, the state form will include space to donate additional funds to a veteran’s assistance fund managed by the state.

Special fundraising privileges for organizations that have friends in the legislature

HB 975 passed and, if approved by voters via a companion constitutional amendment in November, will permit major league sports league clubs in Texas—NFL, NBA, MLB, MLS—to conduct a “50-50” raffle at their venues at every home game to benefit the sports club’s charity or foundation. For all other nonprofits, yearly raffles will remain limited by law.

Disputes over regulation of “dark money” activities of nonprofits doom the omnibus ethics bill

Ethics reform legislation was a stated goal of Governor Abbott and the legislative leadership, and almost everyone thought that an omnibus ethics bill would pass. Senate Bill 19 became the lead ethics bill, but one lingering difference between the House and Senate versions was never resolved: additional statutory regulation of donations to nonprofit organizations (primarily §501(c)(4) tax-exempt entities) that might later be directed to public advocacy or political activities.

The House version of SB 19 was returned to the Senate with language from earlier bills, HB 37 and HB 38 (see legislative summary), requiring that names of some donors would have to be disclosed, and that the “persons or groups” receiving these funds could be characterized as a political committee, whether called that or not, and thus subject to filing and other regulations under the Texas Elections Code. On the 138th day of the session, House and Senate conference committee conferees could not agree on this point, and SB 19 was not returned to the floor of either house.

Expect news accounts and commentary in the coming weeks painting a picture of “dark money”, non-transparent nonprofit organizations that need reforming, but the issues run much deeper.

Unpaid interns get some employment law protection

Many organizations rely heavily on volunteers and unpaid interns—usually college students or community service assignments—to manage operational duties. These unpaid assistants or trainees often are the backbone of smaller organizations. It’s fair to ask, how much is too much dependence on well-intentioned unpaid interns. What results when there’s an unhappy ending to the relationship that sends an intern to an attorney’s office?

HB 1151 passed because there likely are more intern grievances filed against organizations than is commonly known. The bill adds provisions to the Texas Labor Code granting unpaid interns the same legal protection against on-the-job sexual harassment as paid employees. Most interesting of all, the bill provides a definition of what is an unpaid internship in new Labor Code §21.1065.

Familiar issues from past sessions didn’t generate much noise

Absent from this session were issues and causes that have generated a lot of attention and heat in past years, including bingo regulations and high-stakes charitable auction restrictions; significant changes or additions to the property tax exemptions enjoyed by charitable organizations and listed at Tax Code §11.18 et seq.; addressing “PILOT” fees or assessments imposed by local governments on nonprofits in lieu of taxes; and extending the state’s open records/open meetings laws to nonprofits performing governmental-type services.

Read the entire June 25, 2015 final legislative summary here.

© 2015 Richard W. Meyer, All Rights Reserved

SUBSCRIBE to BLOG via E-MAIL

Enter your email address to subscribe to this blog and receive notifications of new posts by email.