2007 Texas Legislative Summary

80th Texas Legislature, 2007 Regular Session

End of session report as of 5-22-2007
Compiled for the Texas Association of Nonprofit Organizations
by Richard W. Meyer, Attorney at Law


In every session of the Texas Legislature, numerous bills are introduced that directly or indirectly affect nonprofit organizations. The following summary indicates bills of most interest and concern to leaders in the nonprofit sector in Texas during the 2007 regular session and takes into account the following factors: Whether a proposed bill strengthens nonprofit organization viability under Texas law or unduly burdens or threatens their status; whether the legal liability of nonprofit board members, officers, staff or volunteers is increased; whether current “charitable immunity” and “good faith” legal protections remain in place; whether laws governing nonprofits are necessary, understandable and based on reasonable public policy concerns; whether nonprofit advocacy is protected; whether ongoing nonprofit organization operations and finances are complicated by new governmental regulations; and whether nonprofit organization disclosure and accountability requirements remain reasonable and balanced.

Bills in the 2007 legislature affect nonprofits in the following areas:*

• Amendments to the Texas Non-Profit Corporation Law, Chap. 22, Bus. Org. Code:

House Bill (HB) 1737 (=Senate Bill (SB) 854) **: Large clean-up bill for the entire body of corporation and business entity law; includes minor changes to the Texas Nonprofit Corporation Law, Chapter 22, Business Organizations Code Passed

Note: Effective Jan. 1, 2006, all of former Article 1396 is found in Chapter 22, Business Organizations Code.

• Amendments to charitable immunity statutes in Chapter 84, Civil Practices and Remedies Code:

No bills at present regarding liability of volunteers

• Exemptions from state taxes now extended to nonprofit entities:

HB 36: A top-level commission would periodically review all state taxes, including tax exemptions enjoyed by nonprofit entities, and recommend changes

HB 3043: Property tax exemption would be expressly granted to fraternal or lodge nonprofit organizations holding IRS Sec. 50l(c)(8) tax exemption

HB 3012 and HB 1296: Bills would make it easier for qualified local charitable organizations to have property declared tax-exempt

HB 1701: Would subject all state tax exemptions enjoyed by nonprofit entities to the “sunset” process; every six years exemptions would expire unless re-authorized by the legislature

HB 365: Clarifies exemption of charitable organizations in fund-raising auction activities Passed

HB 1606: Extends the time that land intended for future church expansion can remain on the tax-exempt appraisal roll

HB 2496: Clarifies the period that real property a nonprofit is holding for future use can remain on the tax-exempt appraisal roll

SB 1087: Tax exemption for property owned by certain public radio stations

SB 1113: Tax exemption for property held by an organization for future low-income housing development

• Nonprofit board, officer, employee, volunteer and fundraising issues:

HB 1492: Would enhance (increase) the range of punishment for a person convicted of theft from a nonprofit organization

HB 860: Amendments to the Uniform Prudent Management of Institutional Funds Act, which affects management standards for endowment funds held for charitable purposes

HB 3254: Requiring or compelling an employee to make a charitable contribution would constitute an illegal labor practice by the employer; written authorization required to withhold wages or otherwise require the contribution

SB 1478: Nonprofit organizations currently qualified to sponsor bingo would be able to contract for charitable poker tournaments operated by licensed operators

SB 1214: Alcoholic beverage license holders of different license levels could cooperate in sponsoring charitable events by donations of products, services, money or other things of value; TABC agency rules would have to clarify the details

• Open meetings / open records issues:

HB 1630: Nonprofit property owners associations statewide would be subject to current state open meetings (Chap. 551, Gov. Code) and open records (Chap. 552) laws and practices, with penalties and liabilities for noncompliance

• Public advocacy / Ethics Commission (lobbying) issues:

HB 1753 (=SB 1944): Government entities would be limited in their use of public funds paid to join state associations that engage in advocacy or lobbying activities

HB 1607: A teacher or professional organization may not disseminate false, misleading or incomplete information in its advocacy; A.G. would enforce the law; penalties imposed

HB 1517: Local governments, school and special districts would have to report separately the lobbying activities of their elected officials or representatives

HB 602: A proposed two-year ban on lobbying by former legislators would not ban such legislator’s representation of a nonprofit organization if no compensation is paid

• Nonprofit social service organization issues:

HB 49, HB 193, HB 236, HB 262, HB 327, HB 451, HB 641, HB 936, SB 207, SB 980: Various bills to increase the state minimum wage beyond the federal minimum wage; some bills would permit individual cities to set the minimum wage or increase the wage with an inflation index

HB 289 (=SB 200): Expands participation by faith-based nonprofits in state funding and programs; each state agency would designate a compliance official to implement faith-based initiatives and opportunities within state government

HB 2396: Nonprofit consumer debt counseling services would be required to register with the state and post a bond as is currently required of for-profit businesses offering such services

Other bills:

HB 1130: Would protect persons who make good-faith formal complaints to government agencies or publicly protest the actions of another from frivolous suits intended to silence a critic in a public controversy


*Above list does not include bills introduced relating to the following:
Nonprofit hospitals, health care or nursing institutions and plans; credit unions; electric or rural cooperatives; condo/property owners associations; private and charter schools and colleges; cemetery corporations; insurance plans/HMOs; quasi-public nonprofit entities.

**Many bills have an identical “companion” bill in the other house, bearing a different bill number. Access bills, background information, and current status at Texas Legislature Online, www.capitol.state.tx.us

© 2007, Richard W Meyer, All Rights Reserved.