2015 Texas Legislative Summary for nonprofits – Mid-session report

With more than 6,200 bills filed by Texas legislators now in play, anyone attending or following long committee meetings or floor sessions at the Texas Capitol will test their patience, attention span, caffeine tolerance or lumbar endurance.

Nonprofit organizations, state associations and foundations are affected by dozens of proposed bills, directly or indirectly. The April 1, 2015 SUMMARY OF ISSUES AFFECTING NONPROFIT ORGANIZATIONS is available here and will be updated regularly through the June adjournment of the 84th regular session and after. Share it with your colleagues and friends and receive updates by clicking the Subscribe box on this page.

All eyes soon will be on the daily House and Senate calendars and the June 1 session adjournment. Bills that might pass must now be moving through committees.

Bills supporting volunteers, first-responders and good Samaritans advance 

See the SUMMARY section entitled Limiting Legal Immunity that lists bills that have received favorable committee hearings. Several bills provide that organizations sponsoring volunteer activities would also be covered by immunity under the law, and persons officiating athletic competitions or other youth competitions would have the same. The proposals generally extend the existing Texas volunteer immunity statute, Chapter 84 of the Civil Practices and Remedies Code, to some new group, situation or venue. Local community and civic leaders strongly support these kinds of bills.

“Dark money” legislation aired in midnight committee kerfuffle

Legislators and activist groups who wore themselves out in the 2013 legislative session debating so-called “dark money” legislation were hardly finished when Governor Perry vetoed SB 346. Now they are back.

Much of the earlier ground was covered again at 11:45 p.m. on March 25 and into the morning hours of the next day when the House State Affairs Committee conducted its first hearings on several “ethics reform” bills, including HB 37 and HB 38. The issue is the permissible limits of advocacy, fundraising and political activity of Section 501(c) organizations and whether state law can be crafted to treat certain groups as political committees subject to disclosure and reporting requirements of the Texas Elections Code.

“Opt-out” donors would not have names publicly disclosed under HB 38

Anyone involved with an activist nonprofit organization should take a closer look at HB 38, which, unfortunately, plants much of this proposed political activity regulation inside the Texas Nonprofit Corporation Law (Chapter 22 of the Business Organizations Code).

HB 38 would require many nonprofit organizations to include an “opt-out” format in written or online solicitations allowing the donor to specify that none of the funds contributed could be used for a political contribution or political expenditure. A name of the donor opting out would not be disclosed publicly in compliance reports required under the Texas Elections Code.

In considering these bills, the focus should be to ensure that community-based volunteer organizations are not inadvertently pulled into a regulatory realm of cumbersome political committee compliance and reporting or are subjected to the onerous criminal or civil penalties linked to technical violations of the Texas Elections Code.

Looming above these Texas controversies is a substantial body of federal constitutional issues unsettled since the U.S. Supreme Court’s Citizens United opinion, along with proposed I.R.S. rulemaking focused on 501(c)(4) organizations (rules withdrawn after a nationwide firestorm of objections), and Texas Ethics Commission rulemaking activity. Read about the 2013 “dark money” debates here.

Dogs that haven’t barked during this session

It’s equally important to note what bills and issues popular in the past have not re-appeared in the 2015 session:

  • Bills extending government agency open meetings and open records laws and related compliance regulations to more types of nonprofit organizations
  • Detailed regulatory and governance requirements aimed at property owner associations (POAs) or condominium owner associations (COAs) and their boards that inadvertently pull in all nonprofit organizations
  • Increased state oversight of charitable raffles, auctions and other regulated fundraising (bingo, poker runs)
  • “PILOT” legislation, directed to address payments-in-lieu-of-taxes, which are local public agency fees, assessments or charges imposed on tax-exempt entities without calling them taxes.

Read the entire April 1 mid-session legislative summary here.

© 2015 Richard W. Meyer, All Rights Reserved

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