By Coleman                                            H.B. No. 2283
                                 A BILL TO BE ENTITLED
    1-1                                AN ACT
    1-2  relating to the registration of and financial reporting by
    1-3  charitable organizations and to the prohibition of deceptive
    1-4  practices in the solicitation of contributions.
    1-5        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-6        SECTION 1.  Subtitle C, Title 9, Property Code, is amended by
    1-7  adding Chapter 122 to read as follows:
    1-8  CHAPTER 122.  REGISTRATION, REPORTING AND SOLICITATION BY
    1-9  CHARITABLE ORGANIZATIONS
   1-10        Sec. 122.001.  SCOPE OF ACT; SHORT TITLE.  (a)  Except as
   1-11  provided by this chapter, this chapter applies to all charitable
   1-12  organizations and to all persons who are fiduciaries, trustees,
   1-13  directors, managers or officers for any charitable organization
   1-14  created, organized, or doing business in Texas.  Solicitation from
   1-15  the public in Texas shall be considered doing business in Texas.
   1-16        (b)  This chapter may be cited as the Charities Registration
   1-17  and Reporting Act.
   1-18        Sec. 122.002.  DEFINITIONS.  In this chapter and for purposes
   1-19  of this chapter only:
   1-20              (1)  "Charitable organization" means:
   1-21              (a)  an entity that is exempt or has applied for
   1-22  exemption from state or local taxation as an institution of purely
   1-23  public charity or from federal taxes pursuant to Section 501(c)(3)
    2-1  of the Internal Revenue Code of 1986;
    2-2              (b)  A civic league or other organization classified by
    2-3  the Internal Revenue Service under Section 501(c)(4) of the
    2-4  Internal Revenue Code of 1986 if the organization solicits
    2-5  contributions for charitable purposes from the public;
    2-6              (c)  a domestic fraternal society, order, or
    2-7  association operating under the lodge system classified by the
    2-8  Internal Revenue Service under Section 501(c)(10) of the Internal
    2-9  Revenue Code of 1986 if the organization solicits contributions for
   2-10  charitable purposes from the public;
   2-11              (d)  a veteran's organization classified by the
   2-12  Internal Revenue Service under Section 501(c)(19) of the Internal
   2-13  Revenue Code of 1986 if the organization solicits contributions for
   2-14  charitable purposes from the public;
   2-15              (e)  any corporation organized under the Texas
   2-16  Non-Profit Corporation Act (Article 1396-1.01 et seq., Vernon's
   2-17  Texas Civil Statutes) for public benefit, charitable or
   2-18  eleemosynary purposes and any not-for-profit foreign corporation
   2-19  soliciting charitable contributions, doing business or holding
   2-20  property in this state for public benefit, charitable, or
   2-21  eleemosynary purposes, but not including any foreign corporation
   2-22  engaged solely in the expenditure of funds in this state for
   2-23  charitable or public benefit purposes;
   2-24              (f)  any other organization which represents itself to
   2-25  be established for a charitable purpose; or
    3-1              (g)  any person who solicits contributions from the
    3-2  public with the representation that all or part of the contribution
    3-3  will be used for a charitable purpose, except any for-profit entity
    3-4  which, as part of a marketing program, advertises that a portion of
    3-5  the purchase price of any of its own goods or services will be
    3-6  contributed to a charitable organization if the for-profit entity,
    3-7  as part of the advertising or promotion discloses the following:
    3-8              (i)  the name of the charitable organization which will
    3-9  receive contributions; and
   3-10              (ii)  the total amount of money or percentage of
   3-11  purchase price which will be contributed;
   3-12              (2)  "Charitable purpose" means any charitable,
   3-13  benevolent, philanthropic, patriotic, religious, social service,
   3-14  welfare, educational, eleemosynary, cultural, artistic, or public
   3-15  interest purpose, whether actual or purported.
   3-16              (3)  "Commercial solicitor", means a person who, for
   3-17  compensation, solicits in this state or employs, engages or
   3-18  provides, directly or indirectly, another person who is paid to
   3-19  solicit in this state.  "Commercial solicitor" does not include an
   3-20  attorney, investment counselor or employee of a financial
   3-21  institution who advises a person to make a charitable contribution,
   3-22  a bona fide employee, volunteer, wholly owned subsidiary or
   3-23  salaried officer of a charitable organization, an employee of a
   3-24  temporary help agency who is placed with a charitable organization
   3-25  or a bona fide employee of a person who employs another person to
    4-1  solicit in this state.  "Commercial solicitor" does not include a
    4-2  person who, for compensation, plans, manages, advises, consults or
    4-3  prepares material for, or with respect to, solicitation in this
    4-4  state for a charitable organization, but who does not solicit, does
    4-5  not employ, engage or provide any person who is paid to solicit
    4-6  contributions and who does not at any time have custody or control
    4-7  of contributions from a solicitation for a charitable organization
    4-8  that is required to be registered under this chapter.
    4-9              (4)  "Contribution" means the promise or grant of any
   4-10  money or property of any kind or value, including the promise to
   4-11  pay, or payment for merchandise or rights of any other description
   4-12  when representation is made that the whole or any part of the price
   4-13  or donation will be applied to a charitable purpose.
   4-14              (5)  "Operating instrument" means any written
   4-15  instrument that establishes or governs the operations of a
   4-16  charitable organization.  The term includes the original and any
   4-17  amendment to:
   4-18                    (a)  articles of incorporation and dissolution;
   4-19                    (b)  bylaws;
   4-20                    (c)  trust indenture or other instrument that
   4-21  established a charitable organization.
   4-22              (6)  "Person" means an individual, partnership,
   4-23  corporation, association, or other group, however organized.
   4-24              (7)  "Solicit" means to request, directly or
   4-25  indirectly, a contribution and to state or imply that the
    5-1  contribution will be used in whole or in part for a charitable
    5-2  purpose or to benefit a charitable organization.
    5-3              (8)  "Solicitation" means the act or practice of
    5-4  soliciting, whether or not the person soliciting receives any
    5-5  contribution.  "Solicitation" includes any of the following methods
    5-6  of requesting or securing a contribution;
    5-7              (a)  an oral or written request;
    5-8              (b)  an announcement to the news media or by radio,
    5-9  television, telephone, telegraph or other transmission of images or
   5-10  information concerning the request for contributions by or for a
   5-11  charitable organization or charitable purpose;
   5-12              (c)  the distribution or posting of a handbill, written
   5-13  advertisement or other publication which directly or by implication
   5-14  seeks contributions;
   5-15              (d)  the sale of, or offer or attempt to sell, a
   5-16  membership or an advertisement, advertising space, book, card, tag,
   5-17  coupon, device, magazine, merchandise, subscription, flower,
   5-18  ticket, candy, cooky or other tangible item in connection with any
   5-19  of the following:
   5-20                    (i)  a request for financial support for a
   5-21  charitable organization or charitable purpose;
   5-22                    (ii)  the use of or reference to the name of a
   5-23  charitable organization as a reason for making a purchase; or
   5-24                    (iii)  a statement that all or a part of the
   5-25  proceeds from the sale will be used for a charitable purpose or
    6-1  will benefit a charitable organization.
    6-2              (9)  Solicitation "from the public" means a
    6-3  solicitation to persons regardless of their connection to the
    6-4  charitable organization.  Soliciting only those persons having some
    6-5  direct interest in the charitable organization such as members,
    6-6  alumni, persons who have used the services of the soliciting
    6-7  charitable organization or the direct beneficiaries or families of
    6-8  direct beneficiaries of the soliciting charitable organization
    6-9  shall not be considered solicitation from the public.  Soliciting
   6-10  prior donors who are not otherwise interested in the organization
   6-11  as described above shall constitute a solicitation "from the
   6-12  public".
   6-13              (10)  "Trustee" means any individual, group of
   6-14  individuals, corporation, or other legal entity that holds,
   6-15  manages, or administers the property or affairs of a charitable
   6-16  organization.
   6-17        Sec. 122.003.  EXEMPTIONS.  This subchapter does not apply
   6-18  to:
   6-19              (1)  governmental entities or any corporation chartered
   6-20  by the United States;
   6-21              (2)  churches or other religious societies which are
   6-22  exempt from filing a federal informational return pursuant to
   6-23  Sections 6033(a)(2)(A)(i) and (iii) and Section 6033 (a)(2)(B) of
   6-24  the Internal Revenue Code of 1986 and the regulations, revenue
   6-25  procedures and revenue rulings promulgated pursuant to those
    7-1  sections;
    7-2              (3)  a charitable organization that has gross receipts
    7-3  in each taxable year of less than $25,000;
    7-4        Sec. 122.004.  REGISTER OF CHARITABLE ORGANIZATIONS.  (a)
    7-5  The Attorney General shall establish and maintain a register of
    7-6  charitable organizations subject to this chapter that contains the
    7-7  operating instruments and annual returns filed under this chapter.
    7-8        (b)  All documents required to be regularly filed with the
    7-9  Attorney General under this chapter shall be available to the
   7-10  public for inspection and copying during regular business hours.
   7-11  The Attorney General may establish and charge a reasonable fee for
   7-12  providing and copying documents.
   7-13        Sec. 122.005.  REGISTRATION.  The trustees of each charitable
   7-14  organization shall register with the Attorney General in the
   7-15  following manner:
   7-16              (a)  The trustees shall file with the Attorney General
   7-17  a copy of the following documents:
   7-18              (1)  The current operating instruments of the
   7-19  charitable organization;
   7-20              (2)  Internal Revenue Service Forms 1023, 1024 or other
   7-21  documents and forms mailed to or filed with the Internal Revenue
   7-22  Service that are in furtherance of an application for exemption
   7-23  from federal taxation under Section 501(c) of the Internal Revenue
   7-24  Code of 1986;
   7-25              (3)  each Internal Revenue Service reporting form
    8-1  (including forms 990, 990PF and 990T) including all schedules and
    8-2  attachments, that the charitable organization has mailed to or
    8-3  filed with the Internal Revenue Service from calendar years 1990,
    8-4  1991 and 1992 or from the date the charitable organization was
    8-5  first required to file federal returns under the Internal Revenue
    8-6  Code, whichever is later.
    8-7              (4)  a statement, sworn to by one or more of the
    8-8  trustees, listing the documents filed with the Attorney General,
    8-9  stating that the information contained in the documents is true and
   8-10  correct and that the documents submitted are all of the documents
   8-11  required to be filed under this statute.
   8-12        (b)  The trustees of a charitable organization who are unable
   8-13  to produce each of the operating instruments for the charitable
   8-14  organization shall file, in lieu of the instrument or instruments,
   8-15  a sworn statement, signed by each trustee, setting forth the name,
   8-16  estimated organizational date, and purpose of the organization, the
   8-17  title, date of appointment, powers and duties of the trustees for
   8-18  the charitable organization within 180 days after the creation of
   8-19  the organization or September 1, 1993, whichever is later.
   8-20        (c)  Amendments to operating instruments that are made
   8-21  subsequent to the time limits provided by this section shall be
   8-22  filed by the trustees with the next annual return.
   8-23        (d)  TIME FOR FILING.  Before beginning any solicitation from
   8-24  the public and within 180 days of the latest of the following
   8-25  dates:
    9-1                    (i)  the date the charitable organization was
    9-2  created or became vested or irrevocable;
    9-3                    (ii)  the date the instrument creating the
    9-4  charitable organization was admitted to probate under the Texas
    9-5  Probate Code;
    9-6                    (iii)  the date of his/her appointment as
    9-7  trustee; or
    9-8                    (iv)  September 1, 1993.
    9-9        (e)  CLAIMING EXEMPTION.  A charitable organization that
   9-10  wishes to claim an exemption as provided under Section 122.003 of
   9-11  this chapter shall claim the exemption by filing a written notice
   9-12  of exemption with the Attorney General setting forth the specific
   9-13  basis for exemption.  The written notice shall be signed and
   9-14  verified.  The Attorney General shall file the written notice of
   9-15  exemption as submitted by each charitable organization.  The
   9-16  Attorney General may reject the claimed exemption only upon written
   9-17  notice to the charitable organization.
   9-18        Sec. 122.006.  FILING OF ANNUAL RETURNS.  The trustees of
   9-19  each charitable organization that is required by the Internal
   9-20  Revenue Code to file a federal annual information return shall mail
   9-21  or deliver a copy of its federal return to the Attorney General
   9-22  simultaneously with the mailing or delivery of the return to the
   9-23  Internal Revenue Service.  The charitable organization must submit
   9-24  a complete copy of its return to the Attorney General except that
   9-25  it shall not attach a list of contributors as may be required as
   10-1  part of the submission to the Internal Revenue Service.
   10-2        Sec. 122.007.  FILING FEE FOR REGISTRATION AND ANNUAL
   10-3  RETURNS.  The Attorney General shall charge and collect the
   10-4  following fees:
   10-5        (1)  For filing initial registration materials, as required
   10-6  by Section 122.005:
   10-7              (a)  $25.00 for organizations with gross revenue of
   10-8  less than $100,000 in the preceding fiscal year;
   10-9              (b)  $50.00 for organizations with gross revenue of
  10-10  $100,000.00 or more in the preceding fiscal year;
  10-11        (2)  For filing subsequent annual returns and amendments to
  10-12  registration documents, as required by Sections 122.005(d) and
  10-13  122.006, $25.00.
  10-14        (3)  The Attorney General shall not accept for filing any
  10-15  documents not accompanied by the appropriate filing fee.
  10-16        Sec. 122.008.  DISSOLUTION OF A CHARITABLE ORGANIZATION.  The
  10-17  trustees of a charitable organization required to register under
  10-18  this act shall file a copy of the articles of dissolution or other
  10-19  document evidencing dissolution of the charitable organization at
  10-20  the time of their filing with the Secretary of State or within 180
  10-21  days of the document's execution.  There shall be no filing fee for
  10-22  dissolution documents.
  10-23        Sec. 122.009  COMPLIANCE REQUIRED BEFORE CONDUCTING PUBLIC
  10-24  SOLICITATION.  No charitable organization subject to this act may
  10-25  solicit contributions from the public until it has filed the
   11-1  documents required by Section 122.005 and complied with the
   11-2  requirements of Sections 122.006 and 122.007.
   11-3        Sec. 122.010.  NOTIFICATION OF NONCOMPLIANCE.  The trustees
   11-4  of any charitable organization which is not in compliance with the
   11-5  provisions of this chapter shall be notified, by the Attorney
   11-6  General by first class mail at the organization's last reported
   11-7  address, of the noncompliance.  Noncompliance shall include failure
   11-8  to file any documents required by this chapter, the filing of
   11-9  incomplete documents or the filing of documents containing false,
  11-10  misleading or deceptive information.
  11-11        Sec. 122.011.  CONTINUED NONCOMPLIANCE (a)  After the
  11-12  expiration of thirty (30) days after the date on which the notice
  11-13  is mailed to a charitable organization and on the continued
  11-14  noncompliance of the charitable organization the failure to comply
  11-15  shall constitute a violation of this statute and:
  11-16              (1)  a breach of fiduciary duty by the trustees in any
  11-17  action brought by the Attorney General; and
  11-18              (2)  a violation which subjects the charitable
  11-19  organization to loss of state tax exemptions from state franchise,
  11-20  sales, and property taxes in accordance with Sections 11.29,
  11-21  151.310 and 171.084, Tax Code.
  11-22              (3)  a violation which subjects the charitable
  11-23  organization to action by the Attorney General pursuant to Section
  11-24  122.022 of this Act.
  11-25        Sec. 122.012.  FALSE, MISLEADING, OR DECEPTIVE ACTS IN
   12-1  SOLICITATION PROHIBITED AND REMEDIES PROVIDED.  (a)  False,
   12-2  misleading, or deceptive acts or practices in the conduct of any
   12-3  solicitation by or on behalf of any charitable organization,
   12-4  whether or not the organization is required to be registered under
   12-5  this Chapter, are hereby declared unlawful and are subject to
   12-6  public or private action as provided by the Texas Deceptive Trade
   12-7  Practices-Consumer Protection Act, Section 17.41 et seq., Business
   12-8  and Commerce Code."
   12-9        (b)  False, misleading, or deceptive acts or practices
  12-10  include, but are not limited to, the following acts:
  12-11              (1)  any act specifically enumerated in a subdivision
  12-12  of Subsection (b) of Section 17.46 of the Texas Deceptive Trade
  12-13  Practices-Consumer Protection Act;
  12-14              (2)  causing confusion or misunderstanding as to the
  12-15  sponsorship, approval or certification of any solicitation,
  12-16  including mentioning the name of a charitable organization as a
  12-17  beneficiary of the solicitation unless that organization has agreed
  12-18  in writing to accept benefits of the solicitation.
  12-19              (3)  causing confusion or misunderstanding as to the
  12-20  identity of the individual, entity or charitable organization
  12-21  conducting the solicitation;
  12-22              (4)  Falsely representing or implying that the
  12-23  solicitor is a volunteer;
  12-24              (5)  misrepresenting the purposes for which
  12-25  contributions will be used;
   13-1              (6)  Soliciting for a renewal, annual dues, annual
   13-2  contribution or otherwise implying that the consumer or prospective
   13-3  donor has previously made a contribution to the charitable
   13-4  organization unless that is the case;
   13-5              (7)  Sending a solicitation which is or appears to be
   13-6  an invoice or bill unless the consumer or prospective donor has
   13-7  specifically agreed to make a contribution;
   13-8              (8)  Exploiting or using the fact of filing with the
   13-9  Attorney General in such a manner as to lead any person to believe
  13-10  that the filing in any manner constitutes an endorsement or
  13-11  approval by the state.
  13-12        (c)  Filing incomplete, false or misleading information in
  13-13  any document required to be filed with the Attorney General under
  13-14  this section is unlawful and is subject to action by the Attorney
  13-15  General as provided in Section 122.014.
  13-16        Sec. 122.013.  AUDIT POWERS OF THE ATTORNEY GENERAL.  (a)
  13-17  All books and records of a charitable organization shall be made
  13-18  available to the Attorney General upon written request by the
  13-19  Attorney General.
  13-20        (b)  A charitable organization shall make available the
  13-21  information requested by the Attorney General at the organization's
  13-22  principal place of business or as otherwise agreed by the parties
  13-23  within ten (10) working days of the date of the Attorney General's
  13-24  request.
  13-25        (c)  This section is in addition to and does not limit any
   14-1  other common law or statutory audit or investigative authority of
   14-2  the Attorney General.
   14-3        Sec. 122.014.  REMEDIES.  (a)  The Attorney General may
   14-4  institute an action for failure to comply with any provision of
   14-5  this statute, seeking injunctive relief to restrain the person from
   14-6  continuing the violation or violations and for civil penalties not
   14-7  less than $1,000 and not more than $25,000 per violation.
   14-8        (b)  The remedies authorized by this chapter are not
   14-9  exclusive, but are in addition to any other procedure or remedies
  14-10  provided for by any other common or statutory law.  Action by the
  14-11  Attorney General or other governmental entities against charitable
  14-12  organizations under such other law and principles does not require
  14-13  prior notification as set forth in 122.008 of this Chapter.
  14-14        (c)  In any proceeding brought by the Attorney General under
  14-15  this chapter, the Attorney General may recover civil penalties and
  14-16  the reasonable expenses incurred in bringing the suit, including
  14-17  court costs, investigative costs, witness fees, deposition costs
  14-18  and reasonable attorney's fees.
  14-19        Sec. 122.015.  VENUE.  In any proceeding under this chapter,
  14-20  venue shall be in a court of competent jurisdiction in Travis
  14-21  County, in the county in which the charitable organization is
  14-22  located or in the county in which solicitation occurred.
  14-23        Sec. 122.016.  RULES.  The Attorney General may prescribe any
  14-24  rules, procedures and forms necessary for the proper administration
  14-25  of this chapter.
   15-1        Sec. 122.017.  CONTRARY PROVISIONS INVALID.  This chapter
   15-2  applies without regard to contrary provisions in any operating
   15-3  instrument or contract.
   15-4        Sec. 122.018.  SEVERABILITY.  If any provision of this
   15-5  chapter is or becomes invalid, illegal or unenforceable in any
   15-6  respect, the remaining provisions hereof shall not be in any way
   15-7  affected or impaired thereby.
   15-8        SECTION 2.  Section 151.310, Tax Code, is amended by amending
   15-9  Subsection (a) and by adding Subsection (e) to read as follows:
  15-10        (a)  Except as provided by Subsection (e) of this section, a
  15-11  (A) taxable item sold, leased, or rented to, or stored, used, or
  15-12  consumed by, any of the following organizations is exempted from
  15-13  the taxes imposed by this chapter:
  15-14              (1)  an organization created for religious,
  15-15  educational, or charitable purposes if no part of the net earnings
  15-16  of the organization benefits a private shareholder or individual
  15-17  and the items purchased are related to the purpose of the
  15-18  organization;
  15-19              (2)  an organization qualifying for an exemption from
  15-20  federal income taxes under Section 501(c)(3), (4), (8), (10), or
  15-21  (19), Internal Revenue code, if the item sold, leased, rented,
  15-22  stored, used, or consumed relates to the purpose of the exempted
  15-23  organization and the item is not used for the personal benefit of a
  15-24  private stockholder or individual;
  15-25              (3)  a nonprofit organization engaged exclusively in
   16-1  providing athletic competition among persons under 19 years old if
   16-2  no financial benefit goes to an individual or shareholder;
   16-3              (4)  a company, department, or association organized
   16-4  for the purpose of answering fire alarms and extinguishing fires,
   16-5  and providing emergency medical services, the members of which
   16-6  receive no compensation or only nominal compensation for their
   16-7  services rendered, if the taxable item is used exclusively by the
   16-8  company, department, or association; or
   16-9              (5)  a chamber of commerce or a convention and tourist
  16-10  promotional agency representing at least one Texas city or county
  16-11  if the chamber of commerce or the agency is not organized for
  16-12  profit and no part of its net earnings inures to a private
  16-13  shareholder or other individual.
  16-14        (e)  The Attorney General shall periodically certify to the
  16-15  Comptroller of Public Accounts the name of each charitable
  16-16  organization that has failed to file an annual report, to pay a
  16-17  registration fee, or to perform an act required under the Charities
  16-18  Registration Reporting Act (Chapter 122, Property Code).
  16-19  Certification of a charitable organization under this subsection
  16-20  may not be made before the 30th day after the date on which the
  16-21  Attorney General notifies the charitable organization of the
  16-22  noncompliance under Section 122.010, Property Code, and then only
  16-23  if the charitable organization has continued to fail to comply.  An
  16-24  exemption from taxes granted under Subsection (a) of this section
  16-25  shall be revoked or denied to any charitable organization for which
   17-1  certification has been given under this subsection.  The
   17-2  comptroller may revoke or deny an exemption to any charitable
   17-3  organization that has failed to comply with this act regardless of
   17-4  certification from the Attorney General, provided that thirty (30)
   17-5  days prior to such denial or revocation the Comptroller has
   17-6  notified the charitable organization of noncompliance and the
   17-7  organization has continued to fail to comply.  An exemption that
   17-8  has been revoked or denied may be reinstated on certification by
   17-9  the Attorney General to the Comptroller that the charitable
  17-10  organization has complied with the requirements of the Charities
  17-11  Registration and Reporting Act (Chapter 122, Property Code).
  17-12  However, the charitable organization must pay any taxes assessed in
  17-13  any year during which its exemption was revoked under this section.
  17-14  The Comptroller may prescribe any rules necessary to effectuate the
  17-15  purposes of this subsection.
  17-16        SECTION 3.  Section 171.063(B), Tax Code, is amended to read
  17-17  as follows:
  17-18        (b)  A corporation is entitled to an exemption under this
  17-19  section based on the corporation's exemption from the federal
  17-20  income tax if the corporation files with the comptroller:
  17-21              (1)  evidence establishing the corporation's federal
  17-22  income tax exemption; and
  17-23              (2)  for a nonprofit corporation exempted under Section
  17-24  501(c)(3), (c)(4), (c)(10) or (c)(19) Internal Revenue Code of
  17-25  1986, evidence that the corporation has complied with the Charities
   18-1  Registration and Reporting Act (Chapter 122, Property Code).
   18-2        SECTION 4.  Subchapter B, Chapter 171, Tax Code, is amended
   18-3  by adding Section 171.063(h) to read as follows:
   18-4        Sec. 171.063(h).  CHARITABLE CORPORATIONS; LOSS OF EXEMPTION
   18-5  ON CERTIFICATION OF NONCOMPLIANCE BY THE ATTORNEY GENERAL.
   18-6  (1)  The Attorney General shall periodically certify to the
   18-7  Comptroller the name of each charitable corporation that has failed
   18-8  to file an annual return, to pay a registration fee, or to perform
   18-9  an act required under the Charities Registration and Reporting Act
  18-10  (Chapter 122 Property code).  Certification of a charitable
  18-11  organization under this subsection may not be made before the 30th
  18-12  day after the date on which the Attorney General notifies the
  18-13  charitable corporation of the noncompliance under Section 122.010,
  18-14  Property Code and then only if the charitable organization has
  18-15  continued to fail to comply.
  18-16              (2)  An exemption from franchise taxes granted under
  18-17  this subchapter shall be revoked or denied to any charitable
  18-18  corporation that has been certified by the Attorney General under
  18-19  Subsection (a) of this section.  The Comptroller may revoke or deny
  18-20  an exemption to any charitable corporation that has failed to
  18-21  comply with this act regardless of certification from the Attorney
  18-22  General, provided that thirty (30) days prior to such denial or
  18-23  revocation the Comptroller has notified the corporation of
  18-24  noncompliance and the organization has continued to fail to comply.
  18-25              (3)  An exemption that has been revoked or denied under
   19-1  this section may be reinstated on certification by the Attorney
   19-2  General that the charitable corporation has complied with the
   19-3  requirements of the Charities Registration and Reporting Act
   19-4  (Chapter 122, Property Code).  However, the charitable corporation
   19-5  must pay the franchise tax assessed in accordance with Section
   19-6  171.001 of this code for any year during which its exemption was
   19-7  revoked under this section.
   19-8              (4)  The Comptroller may prescribe any rules necessary
   19-9  to effectuate the purposes of this section.
  19-10        SECTION 5.  This Act takes effect September 1, 1993.
  19-11        SECTION 6.  The importance of this legislation and the
  19-12  crowded condition of the calendars in both houses create an
  19-13  emergency and an imperative public necessity that the
  19-14  constitutional rule requiring bills to be read on three several
  19-15  days in each house be suspended, and this rule is hereby suspended.