By Eckels H.B. No. 2331 A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to voluntary payroll deductions for state employees for 1-3 charitable organizations; making an appropriation. 1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-5 SECTION 1. DEFINITIONS. In this Act: 1-6 (1) "Campaign manager" means a local campaign manager 1-7 or state campaign manager. 1-8 (2) "Charitable organization" means an organization 1-9 that: 1-10 (A) is organized for charitable purposes under 1-11 the Texas Non-Profit Corporation Act (Article 1396-1.01 et seq., 1-12 Vernon's Texas Civil Statutes) and its subsequent amendments or 1-13 holds a certificate of authority issued under that Act; 1-14 (B) is exempt from taxation under Section 501(a) 1-15 of the Internal Revenue Code of 1986 as an organization described 1-16 in Section 501(c)(3) of that code; 1-17 (C) fully complies with all applicable federal 1-18 nondiscrimination law, including Chapter 21, Title 42, United 1-19 States Code; 1-20 (D) fully complies with all state statutes and 1-21 rules relating to charitable organizations; and 1-22 (E) is not a private foundation. 1-23 (3) "Direct services" means providing funds or 2-1 programs for health and human services that directly benefit the 2-2 recipients. 2-3 (4) "Eligible charitable organization" means a 2-4 charitable organization that is determined to be eligible to 2-5 participate in the state employee charitable contribution campaign 2-6 as provided by Section 10 of this Act. 2-7 (5) "Federated community campaign organization" means 2-8 a federation or fund that: 2-9 (A) has demonstrated expertise in conducting 2-10 workplace charitable campaigns; and 2-11 (B) distributes funds raised through a 2-12 cooperative community campaign to at least five agencies that 2-13 provide direct services to residents of the campaign area. 2-14 (6) "Federation or fund" means an umbrella fundraising 2-15 entity that: 2-16 (A) is a charitable organization; 2-17 (B) acts as an agent for at least five 2-18 charitable organizations; 2-19 (C) is not organized exclusively to solicit 2-20 contributions from state employees; and 2-21 (D) is supported by voluntary contributions by 2-22 the public and is: 2-23 (i) incorporated in this state and has an 2-24 established physical presence in this state in the form of an 2-25 office or service facility that is staffed at least 20 hours a 3-1 week; or 3-2 (ii) incorporated outside this state, 3-3 includes at least 10 affiliated charitable organizations, has 3-4 existed at least three years, and participates in state employee 3-5 charitable campaigns in at least 10 other states. 3-6 (7) "Health and human services" means services 3-7 provided by a charitable organization that: 3-8 (A) benefit citizens of this state, including 3-9 children, youth, adults, elderly individuals, ill or infirm 3-10 individuals, or individuals with a mental or physical disability; 3-11 and 3-12 (B) consist of: 3-13 (i) human care, medical or other research, 3-14 education, legal precedence, legislative action, advocacy before 3-15 policy makers, or environmental protection or conservation in the 3-16 field of human health, social adjustment, or rehabilitation; 3-17 (ii) relief for victims of natural 3-18 disaster or other emergencies; or 3-19 (iii) assistance to impoverished 3-20 individuals in need of food, shelter, clothing, or other basic 3-21 needs. 3-22 (8) "Indirect services" means health and human 3-23 services that: 3-24 (A) are not direct services; and 3-25 (B) demonstrably benefit citizens of this state. 4-1 (9) "Institution of higher education" has the meaning 4-2 assigned by Section 61.003, Education Code. 4-3 (10) "International federation or fund" means a 4-4 federation or fund whose affiliated charities provide direct and 4-5 substantial charitable services to needy individuals of other 4-6 nations. 4-7 (11) "Local campaign area" means the county or 4-8 counties in which a local campaign manager conducts a state 4-9 employee charitable campaign. 4-10 (12) "Local campaign manager" means a federated 4-11 community campaign organization that is selected by the local 4-12 employee committee as provided by Section 7 of this Act. 4-13 (13) "Local charitable organization" means a 4-14 charitable organization that: 4-15 (A) provides direct or indirect health and human 4-16 services; and 4-17 (B) is accessible to state employees in the 4-18 local campaign area by maintaining: 4-19 (i) a publicly identified office with a 4-20 professional or volunteer staff within the local campaign area that 4-21 is open at least 20 hours a week during normal working hours; and 4-22 (ii) a locally listed telephone number. 4-23 (14) "Local employee committee" means a local state 4-24 employee charitable campaign committee selected as provided by 4-25 Section 6 of this Act. 5-1 (15) "State advisory committee" means the state 5-2 employee charitable campaign advisory committee appointed under 5-3 Section 5 of this Act. 5-4 (16) "State agency" means a department, commission, 5-5 board, office, institution of higher education, or other agency of 5-6 state government. 5-7 (17) "State campaign manager" means an eligible 5-8 federated community campaign organization that is selected by the 5-9 state policy committee to coordinate campaign operations with local 5-10 campaign managers. 5-11 (18) "State employee" means an employee of a state 5-12 agency. 5-13 (19) "State employee charitable campaign" means an 5-14 annual campaign conducted in communities or areas in which state 5-15 employees work to solicit contributions to eligible charitable 5-16 organizations. 5-17 (20) "State policy committee" means the state employee 5-18 charitable campaign policy committee appointed under Section 4 of 5-19 this Act. 5-20 (21) "Statewide charitable organization" means a 5-21 federation or fund and its affiliated agencies that: 5-22 (A) provides direct or indirect health and human 5-23 services to residents of two or more noncontiguous standard 5-24 metropolitan statistical areas of this state; and 5-25 (B) has demonstrated the federation or fund is 6-1 accessible to state employees by maintaining: 6-2 (i) a staff or volunteer representative 6-3 residing in this state who is accessible at least 20 hours a week 6-4 during normal working hours; and 6-5 (ii) a toll-free long distance telephone 6-6 number. 6-7 SECTION 2. DEDUCTION AUTHORIZED. (a) An employee of a 6-8 state agency may authorize a deduction each pay period from the 6-9 employee's salary or wage payment for a contribution. The 6-10 comptroller by rule may establish a reasonable minimum deduction 6-11 for each pay period. 6-12 (b) An authorization shall direct the comptroller to 6-13 distribute the deducted funds to participating federations or funds 6-14 and local campaign managers as prescribed by rule. 6-15 (c) An authorization may designate an eligible charitable 6-16 organization to receive the deductions. If an authorization does 6-17 not designate an eligible charitable organization, the employee's 6-18 deductions shall be distributed to each participating federation or 6-19 fund and eligible local charitable organization in the proportion 6-20 that the deductions designated for that charitable organization 6-21 bear to the total of designated deductions in the local state 6-22 employee charitable campaign. 6-23 (d) A deduction under this Act must be in the form 6-24 prescribed by the comptroller. 6-25 (e) A state agency other than an institution of higher 7-1 education is not required to permit employees to authorize a 7-2 deduction under this Act until the first full payroll period after 7-3 the agency is converted to a system in which uniform statewide 7-4 payroll procedures are followed. 7-5 SECTION 3. DURATION OF DEDUCTION. (a) A deduction under 7-6 this Act ends on: 7-7 (1) the first anniversary of the date it begins; or 7-8 (2) the effective date of a revocation of or change in 7-9 the authorization by the employee. 7-10 (b) A state employee may revoke or change an authorization 7-11 by giving notice to the employing state agency. The notice must be 7-12 in the form and manner prescribed by the comptroller. A revocation 7-13 or change takes effect when it is approved by the comptroller. 7-14 SECTION 4. STATE EMPLOYEE CHARITABLE CAMPAIGN POLICY 7-15 COMMITTEE. (a) The state employee charitable campaign policy 7-16 committee consists of not more than 10 members. 7-17 (b) The governor may appoint not more than four members. 7-18 The lieutenant governor and the comptroller may appoint not more 7-19 than three members each. 7-20 (c) Each member of the state policy committee must be a 7-21 state employee. The membership must represent employees at 7-22 different levels of employee classification. 7-23 (d) The state policy committee has the duties provided by 7-24 Section 9(c) of this Act. 7-25 SECTION 5. STATE EMPLOYEE CHARITABLE CAMPAIGN ADVISORY 8-1 COMMITTEE. (a) The state employee charitable campaign advisory 8-2 committee consists of eight members appointed by the governor. 8-3 (b) Four members must represent campaign managers. Four 8-4 members must represent federations or funds that are not campaign 8-5 managers. 8-6 (c) The state advisory committee has the duties provided by 8-7 Section 9(d) of this Act. 8-8 SECTION 6. LOCAL STATE EMPLOYEE CHARITABLE CAMPAIGN 8-9 COMMITTEE. (a) The state policy committee shall appoint the 8-10 presiding officer of a local state employee charitable campaign 8-11 committee in each local campaign area. 8-12 (b) The presiding officer of a local employee committee 8-13 shall recruit at least five but not more than 10 additional 8-14 members. The members must represent different levels of employee 8-15 classification. 8-16 (c) Each member of a local employee committee may vote on 8-17 matters before the committee. 8-18 (d) A local employee committee has the duties provided by 8-19 Section 9(e) of this Act. 8-20 SECTION 7. LOCAL CAMPAIGN MANAGER. (a) A local employee 8-21 committee shall select a local campaign manager to conduct the 8-22 state employee charitable campaign in the local campaign area. 8-23 (b) A local campaign manager must have demonstrated 8-24 expertise to: 8-25 (1) provide effective campaign counsel and management; 9-1 and 9-2 (2) serve as fiscal agent for the eligible local 9-3 charitable organizations. 9-4 (c) A local campaign manager has the duties provided by 9-5 Section 9(g) of this Act. 9-6 SECTION 8. TERMS OF COMMITTEE MEMBERS; COMPENSATION. (a) A 9-7 member of the state advisory committee, the state policy committee, 9-8 or a local employee committee serves a two-year term. 9-9 (b) A member of the state advisory committee, the state 9-10 policy committee, or a local employee committee may not receive 9-11 compensation for serving on the committee and is not entitled to 9-12 reimbursement for expenses incurred in performing functions as a 9-13 member of the committee. 9-14 SECTION 9. ADMINISTRATION OF STATE EMPLOYEE CHARITABLE 9-15 CAMPAIGN. (a) A state employee charitable campaign shall be 9-16 conducted each autumn. A state employee charitable campaign must 9-17 be managed fairly and equitably in accordance with this Act and the 9-18 policies and procedures established by the state policy committee. 9-19 (b) With the advice of the state advisory committee, the 9-20 comptroller shall adopt rules for the administration of this Act. 9-21 (c) The state policy committee shall: 9-22 (1) establish local campaign areas based on 9-23 recommendation by the state advisory committee; 9-24 (2) select the state campaign manager; 9-25 (3) determine the eligibility of federations or funds 10-1 and their affiliated agencies for statewide participation in the 10-2 state employee charitable campaign; 10-3 (4) approve the recommended campaign plan, budget, and 10-4 generic materials to be used by campaign managers; 10-5 (5) oversee the state employee charitable campaign to 10-6 ensure that all campaign activities are conducted fairly and 10-7 equitably to promote unified solicitation on behalf of all 10-8 participants; and 10-9 (6) perform other duties prescribed by the 10-10 comptroller's rules. 10-11 (d) The state advisory committee shall: 10-12 (1) advise the comptroller and state policy committee 10-13 in adopting rules and establishing procedures for the operation and 10-14 management of the state employee charitable campaign; 10-15 (2) recommend the number, not to exceed 50, and 10-16 geographic scope of local campaign areas to the state policy 10-17 committee; and 10-18 (3) review and submit the recommended campaign plan, 10-19 budget, and generic materials to be used by campaign managers. 10-20 (e) The local employee committee shall: 10-21 (1) contract with a federated community campaign 10-22 organization to serve as the local campaign manager; 10-23 (2) determine the eligibility of local charitable 10-24 organizations to participate in the state employee charitable 10-25 campaign; 11-1 (3) in consultation with the local campaign manager, 11-2 approve the recommended campaign plan, budget, and generic 11-3 materials to be used by campaign managers; 11-4 (4) oversee the local state employee charitable 11-5 campaign to ensure that all local campaign activities are conducted 11-6 fairly and equitably to promote unified solicitation on behalf of 11-7 all participants; and 11-8 (5) perform other duties prescribed by the 11-9 comptroller's rules. 11-10 (f) The state campaign manager shall: 11-11 (1) develop a campaign plan; 11-12 (2) prepare a statewide campaign budget in cooperation 11-13 with the local campaign managers; 11-14 (3) prepare generic materials to be used by campaign 11-15 managers; 11-16 (4) coordinate and facilitate campaign services to 11-17 state employees throughout the state; 11-18 (5) ensure that all state employee charitable campaign 11-19 activities are conducted fairly and equitably to promote unified 11-20 solicitation on behalf of all participants; and 11-21 (6) perform other duties prescribed by the 11-22 comptroller's rules. 11-23 (g) A local campaign manager shall: 11-24 (1) in consultation with the local employee committee, 11-25 develop a cooperative plan, budget, and local campaign materials 12-1 for the local state employee charitable campaign; 12-2 (2) manage the local state employee charitable 12-3 campaign and provide for the effective involvement of each 12-4 participating federation or fund; 12-5 (3) ensure that all local state employee charitable 12-6 campaign activities are conducted fairly and equitably to promote 12-7 unified solicitation on behalf of all participants; and 12-8 (4) perform other duties prescribed by the 12-9 comptroller's rules. 12-10 SECTION 10. ELIGIBILITY OF CHARITABLE ORGANIZATIONS IN 12-11 GENERAL. (a) To be eligible to participate in a state employee 12-12 charitable campaign, a charitable organization must: 12-13 (1) be governed by a voluntary board of citizens that 12-14 meets at least twice each year to set policy and manage the affairs 12-15 of the organization; 12-16 (2) if the organization's annual budget: 12-17 (A) does not exceed $100,000, provide a 12-18 completed Internal Revenue Service Form 990 and an accountant's 12-19 review that offers full and open disclosure of the organization's 12-20 internal operations; or 12-21 (B) exceeds $100,000, be audited annually in 12-22 accordance with generally accepted auditing standards of the 12-23 American Institute of Certified Public Accountants; and 12-24 (3) not spend more than 25 percent of its annual 12-25 revenue for administrative and fundraising expenses, unless the 13-1 state policy committee grants the organization an exemption under 13-2 Subsection (b) of this section. 13-3 (b) The state policy committee may grant a charitable 13-4 organization a temporary exemption from the requirement of 13-5 Subsection (a)(3) of this section if the committee finds that: 13-6 (1) the organization's administrative and fundraising 13-7 expenses are reasonable under the circumstances; and 13-8 (2) the organization has a practical plan to reduce 13-9 its administrative and fundraising expenses to 25 percent of its 13-10 annual revenue within the next three years. 13-11 SECTION 11. ELIGIBILITY FOR STATEWIDE PARTICIPATION. (a) A 13-12 federation or fund that seeks statewide participation in a state 13-13 employee charitable campaign must apply on behalf of itself and its 13-14 affiliated agencies to the state policy committee during the annual 13-15 eligibility determination period specified by the committee. The 13-16 state policy committee shall review each application and may 13-17 approve a federation or fund for statewide participation only if 13-18 the federation or fund qualifies as a statewide charitable 13-19 organization or as an international federation or fund. The state 13-20 policy committee may approve an affiliated charitable organization 13-21 for statewide participation only if the organization qualifies as a 13-22 statewide charitable organization or is an affiliated agency of an 13-23 international federation or fund. 13-24 (b) An affiliated organization of an eligible federation or 13-25 fund that does not qualify as a statewide charitable organization 14-1 because it does not provide services in two or more noncontiguous 14-2 standard metropolitan statistical areas may apply to a local 14-3 employee committee for participation in a local state employee 14-4 charitable campaign. 14-5 (c) The state policy committee may use outside expertise and 14-6 resources available to it to assess the eligibility of charitable 14-7 organizations that seek to participate in a state employee 14-8 charitable campaign. 14-9 (d) An appeal from a decision of the state policy committee 14-10 shall be conducted in the manner prescribed by the committee. The 14-11 appeals process must permit a charitable organization that is not 14-12 approved for statewide participation to apply for participation in 14-13 a local state employee charitable campaign. 14-14 SECTION 12. ELIGIBILITY FOR LOCAL PARTICIPATION. (a) A 14-15 charitable organization that seeks local participation in a state 14-16 employee charitable campaign must apply to the appropriate local 14-17 employee committee during the annual eligibility determination 14-18 period specified by the state policy committee. The local employee 14-19 committee shall review each application and may approve a 14-20 charitable organization for local participation only if the 14-21 organization qualifies as a local charitable organization, and is: 14-22 (1) an unaffiliated local organization; or 14-23 (2) a federation or fund or an affiliate of a 14-24 federation or fund that is not approved for statewide 14-25 participation. 15-1 (b) An appeal from a decision of a local employee committee 15-2 shall be conducted in the manner prescribed by the state policy 15-3 committee. 15-4 SECTION 13. FEES. (a) A campaign manager may not charge a 15-5 fee to the comptroller, a state agency, or a state employee for the 15-6 services the campaign manager provides in connection with a state 15-7 employee charitable campaign. 15-8 (b) A campaign manager may charge a reasonable and necessary 15-9 fee for actual campaign expenses to the participating charitable 15-10 organizations in the same proportion that the contributions to that 15-11 charitable organization bear to the total of contributions in the 15-12 state employee charitable campaign. 15-13 (c) A fee under Subsection (b) of this section must be based 15-14 on the combined expenses of the state campaign manager and each 15-15 local campaign manager and may not exceed 10 percent of the total 15-16 amount collected in the state employee charitable campaign unless 15-17 the state policy committee approves a higher amount to accommodate 15-18 reasonable documented costs. 15-19 (d) The comptroller shall charge an administrative fee to 15-20 cover costs incurred by the comptroller and employing state 15-21 agencies in the implementation of this Act to the charitable 15-22 organizations participating in the first state employee charitable 15-23 campaign conducted under this Act in the same proportion that the 15-24 contributions to that charitable organization bear to the total of 15-25 contributions in that campaign. The comptroller shall charge an 16-1 administrative fee to cover costs incurred by the comptroller and 16-2 employing state agencies in the administration of this Act to the 16-3 charitable organizations in each subsequent state employee 16-4 charitable campaign in the same proportion that the contributions 16-5 to that charitable organization bear to the total of contributions 16-6 in that campaign. The comptroller shall determine the most 16-7 efficient and effective method of collecting the administrative fee 16-8 and shall adopt rules for the implementation of this section. 16-9 SECTION 14. FUNDRAISING PRACTICES. The fundraising 16-10 practices of a participating charitable organization must: 16-11 (1) be truthful and consumer-oriented; 16-12 (2) clearly identify and distinguish community-based 16-13 organizations from statewide and international organizations; and 16-14 (3) assure protection against: 16-15 (A) unauthorized use of a list of contributors 16-16 to the organization; 16-17 (B) payment of commissions, kickbacks, finder 16-18 fees, percentages, bonuses, or overrides for fundraising; 16-19 (C) mailing unordered merchandise or tickets 16-20 with a request for money in return; and 16-21 (D) general telephone solicitation of the 16-22 public. 16-23 SECTION 15. MISAPPLICATION OF CONTRIBUTIONS. (a) If the 16-24 state policy committee has reason to believe that a participating 16-25 charitable organization, a campaign manager, or a local employee 17-1 committee has misapplied contributions under this Act, the state 17-2 policy committee may request the comptroller or state auditor to 17-3 audit the person. 17-4 (b) If an audit under this section reveals gross negligence 17-5 or intentional misconduct on the part of a campaign manager or a 17-6 local employee committee, the state policy committee shall remove 17-7 the campaign manager or local employee committee. A person removed 17-8 under this subsection is not eligible to serve in the capacity from 17-9 which the person was removed before the fifth anniversary of the 17-10 date the person was removed. 17-11 (c) If an audit under this section reveals intentional 17-12 misconduct on the part of a campaign manager or a local employee 17-13 committee, the state policy committee shall forward its findings to 17-14 the appropriate law enforcement agency for further action. 17-15 (d) The attorney general may bring an action in a court of 17-16 competent jurisdiction to recover misapplied contributions. 17-17 (e) If an investigation or lawsuit results in a recovery of 17-18 misapplied contributions and there is not a judgment distributing 17-19 the amounts recovered, the state policy committee shall instruct 17-20 the comptroller as to the manner of refunding contributions to the 17-21 appropriate state employees. 17-22 SECTION 16. VOLUNTARY PARTICIPATION. Participation by a 17-23 state employee in a state employee charitable campaign is 17-24 voluntary. Each campaign manager, local employee committee, 17-25 charitable organization, state employee, and state agency shall 18-1 inform state employees that deductions are voluntary. 18-2 SECTION 17. CONFIDENTIALITY. Except as necessary to 18-3 administer this Act or on written authorization of the employee, 18-4 the following information is confidential: 18-5 (1) whether a state employee has authorized a 18-6 deduction under this Act; 18-7 (2) the amount of a deduction authorized by a state 18-8 employee under this Act; and 18-9 (3) the name of a federation or fund or local 18-10 charitable organization that a state employee has designated to 18-11 receive contributions under this Act, unless the employee has 18-12 executed a written pledge card or other document indicating that 18-13 the employee wishes to receive an acknowledgement from the 18-14 designated charitable organization. 18-15 SECTION 18. EXEMPTION FOR INTERNATIONAL FEDERATION OR FUND. 18-16 An international federation or fund is exempt from the requirements 18-17 of this Act relating to: 18-18 (1) maintenance of an established physical presence in 18-19 this state; and 18-20 (2) the provision of health and human services to 18-21 citizens of this state. 18-22 SECTION 19. APPROPRIATION. In addition to other amounts 18-23 appropriated to the comptroller or an employing state agency for 18-24 the fiscal biennium beginning September 1, 1993, the administrative 18-25 fees authorized by Section 13 of this Act are appropriated to the 19-1 comptroller and the employing state agencies for the fiscal 19-2 biennium beginning September 1, 1993, to administer this Act. 19-3 SECTION 20. TRANSITION. An institution of higher education 19-4 is not required to permit employees to authorize a deduction under 19-5 this Act until the first full payroll period that occurs after six 19-6 months after the publication of rules adopted under this Act. 19-7 SECTION 21. EMERGENCY. The importance of this legislation 19-8 and the crowded condition of the calendars in both houses create an 19-9 emergency and an imperative public necessity that the 19-10 constitutional rule requiring bills to be read on three several 19-11 days in each house be suspended, and this rule is hereby suspended, 19-12 and that this Act take effect and be in force from and after its 19-13 passage, and it is so enacted.