By:  Carriker                                          S.B. No. 795
                                 A BILL TO BE ENTITLED
                                        AN ACT
    1-1  relating to voluntary payroll deductions for state employees for
    1-2  charitable organizations; making an appropriation.
    1-3        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-4        SECTION 1.  DEFINITIONS.  In this Act:
    1-5              (1)  "Campaign manager" means a local campaign manager
    1-6  or state campaign manager.
    1-7              (2)  "Charitable organization" means an organization
    1-8  that:
    1-9                    (A)  is organized for charitable purposes under
   1-10  the Texas Non-Profit Corporation Act (Article 1396-1.01 et seq.,
   1-11  Vernon's Texas Civil Statutes) and its subsequent amendments or
   1-12  holds a certificate of authority issued under that Act;
   1-13                    (B)  is exempt from taxation under Section 501(a)
   1-14  of the Internal Revenue Code of 1986 as an organization described
   1-15  in Section 501(c)(3) of that code;
   1-16                    (C)  fully complies with all applicable federal
   1-17  nondiscrimination law, including Chapter 21, Title 42, United
   1-18  States Code;
   1-19                    (D)  fully complies with all state statutes and
   1-20  rules relating to charitable organizations; and
   1-21                    (E)  is not a private foundation.
   1-22              (3)  "Direct services" means providing funds or
   1-23  programs for health and human services that directly benefit the
    2-1  recipients.
    2-2              (4)  "Eligible charitable organization" means a
    2-3  charitable organization that is determined to be eligible to
    2-4  participate in the state employee charitable contribution campaign
    2-5  as provided by Section 10 of this Act.
    2-6              (5)  "Federated community campaign organization" means
    2-7  a federation or fund that:
    2-8                    (A)  has demonstrated expertise in conducting
    2-9  workplace charitable campaigns; and
   2-10                    (B)  distributes funds raised through a
   2-11  cooperative community campaign to at least five agencies that
   2-12  provide direct services to residents of the campaign area.
   2-13              (6)  "Federation or fund" means an umbrella fundraising
   2-14  entity that:
   2-15                    (A)  is a charitable organization;
   2-16                    (B)  acts as an agent for at least five
   2-17  charitable organizations;
   2-18                    (C)  is not organized exclusively to solicit
   2-19  contributions from state employees; and
   2-20                    (D)  is supported by voluntary contributions by
   2-21  the public and is:
   2-22                          (i)  incorporated in this state and has an
   2-23  established physical presence in this state in the form of an
   2-24  office or service facility that is staffed at least 20 hours a
   2-25  week; or
    3-1                          (ii)  incorporated outside this state,
    3-2  includes at least 10 affiliated charitable organizations, has
    3-3  existed at least three years, and participates in state employee
    3-4  charitable campaigns in at least 10 other states.
    3-5              (7)  "Health and human services" means services
    3-6  provided by a charitable organization that:
    3-7                    (A)  benefit citizens of this state, including
    3-8  children, youth, adults, elderly individuals, ill or infirm
    3-9  individuals, or individuals with a mental or physical disability;
   3-10  and
   3-11                    (B)  consist of:
   3-12                          (i)  human care, medical or other research,
   3-13  education, legal precedence, legislative action, advocacy before
   3-14  policy makers, or environmental protection or conservation in the
   3-15  field of human health, social adjustment, or rehabilitation;
   3-16                          (ii)  relief for victims of natural
   3-17  disaster or other emergencies; or
   3-18                          (iii)  assistance to impoverished
   3-19  individuals in need of food, shelter, clothing, or other basic
   3-20  needs.
   3-21              (8)  "Indirect services" means health and human
   3-22  services that:
   3-23                    (A)  are not direct services; and
   3-24                    (B)  demonstrably benefit citizens of this state.
   3-25              (9)  "Institution of higher education" has the meaning
    4-1  assigned by Section 61.003, Education Code.
    4-2              (10)  "International federation or fund" means a
    4-3  federation or fund whose affiliated charities provide direct and
    4-4  substantial charitable services to needy individuals of other
    4-5  nations.
    4-6              (11)  "Local campaign area" means the county or
    4-7  counties in which a local campaign manager conducts a state
    4-8  employee charitable campaign.
    4-9              (12)  "Local campaign manager" means a federated
   4-10  community campaign organization that is selected by the local
   4-11  employee committee as provided by Section 7 of this Act.
   4-12              (13)  "Local charitable organization" means a
   4-13  charitable organization that:
   4-14                    (A)  provides direct or indirect health and human
   4-15  services; and
   4-16                    (B)  is accessible to state employees in the
   4-17  local campaign area by maintaining:
   4-18                          (i)  a publicly identified office with a
   4-19  professional or volunteer staff within the local campaign area that
   4-20  is open at least 20 hours a week during normal working hours; and
   4-21                          (ii)  a locally listed telephone number.
   4-22              (14)  "Local employee committee" means a local state
   4-23  employee charitable campaign committee selected as provided by
   4-24  Section 6 of this Act.
   4-25              (15)  "State advisory committee" means the state
    5-1  employee charitable campaign advisory committee appointed under
    5-2  Section 5 of this Act.
    5-3              (16)  "State agency" means a department, commission,
    5-4  board, office, institution of higher education, or other agency of
    5-5  state government.
    5-6              (17)  "State campaign manager" means an eligible
    5-7  federated community campaign organization that is selected by the
    5-8  state policy committee to coordinate campaign operations with local
    5-9  campaign managers.
   5-10              (18)  "State employee" means an employee of a state
   5-11  agency.
   5-12              (19)  "State employee charitable campaign" means an
   5-13  annual campaign conducted in communities or areas in which state
   5-14  employees work to solicit contributions to eligible charitable
   5-15  organizations.
   5-16              (20)  "State policy committee" means the state employee
   5-17  charitable campaign policy committee appointed under Section 4 of
   5-18  this Act.
   5-19              (21)  "Statewide charitable organization" means a
   5-20  federation or fund and its affiliated agencies that:
   5-21                    (A)  provides direct or indirect health and human
   5-22  services to residents of two or more noncontiguous standard
   5-23  metropolitan statistical areas of this state; and
   5-24                    (B)  has demonstrated the federation or fund is
   5-25  accessible to state employees by maintaining:
    6-1                          (i)  a staff or volunteer representative
    6-2  residing in this state who is accessible at least 20 hours a week
    6-3  during normal working hours; and
    6-4                          (ii)  a toll-free long distance telephone
    6-5  number.
    6-6        SECTION 2.  DEDUCTION AUTHORIZED.  (a)  An employee of a
    6-7  state agency may authorize a deduction each pay period from the
    6-8  employee's salary or wage payment for a contribution.  The
    6-9  comptroller by rule may establish a reasonable minimum deduction
   6-10  for each pay period.
   6-11        (b)  An authorization shall direct the comptroller to
   6-12  distribute the deducted funds to participating federations or funds
   6-13  and local campaign managers as prescribed by rule.
   6-14        (c)  An authorization may designate an eligible charitable
   6-15  organization to receive the deductions.  If an authorization does
   6-16  not designate an eligible charitable organization, the employee's
   6-17  deductions shall be distributed to each participating federation or
   6-18  fund and eligible local charitable organization in the proportion
   6-19  that the deductions designated for that charitable organization
   6-20  bear to the total of designated deductions in the local state
   6-21  employee charitable campaign.
   6-22        (d)  A deduction under this Act must be in the form
   6-23  prescribed by the comptroller.
   6-24        (e)  A state agency other than an institution of higher
   6-25  education is not required to permit employees to authorize a
    7-1  deduction under this Act until the first full payroll period after
    7-2  the agency is converted to a system in which uniform statewide
    7-3  payroll procedures are followed.
    7-4        SECTION 3.  DURATION OF DEDUCTION.  (a)  A deduction under
    7-5  this Act ends on:
    7-6              (1)  the first anniversary of the date it begins; or
    7-7              (2)  the effective date of a revocation of or change in
    7-8  the authorization by the employee.
    7-9        (b)  A state employee may revoke or change an authorization
   7-10  by giving notice to the employing state agency.  The notice must be
   7-11  in the form and manner prescribed by the comptroller.  A revocation
   7-12  or change takes effect when it is approved by the comptroller.
   7-13        SECTION 4.  STATE EMPLOYEE CHARITABLE CAMPAIGN POLICY
   7-14  COMMITTEE.  (a)  The state employee charitable campaign policy
   7-15  committee consists of not more than 10 members.
   7-16        (b)  The governor may appoint not more than four members.
   7-17  The lieutenant governor and the comptroller may appoint not more
   7-18  than three members each.
   7-19        (c)  Each member of the state policy committee must be a
   7-20  state employee.  The membership must represent employees at
   7-21  different levels of employee classification.
   7-22        (d)  The state policy committee has the duties provided by
   7-23  Section 9(c) of this Act.
   7-24        SECTION 5.  STATE EMPLOYEE CHARITABLE CAMPAIGN ADVISORY
   7-25  COMMITTEE.  (a)  The state employee charitable campaign advisory
    8-1  committee consists of eight members appointed by the governor.
    8-2        (b)  Four members must represent campaign managers.  Four
    8-3  members must represent federations or funds that are not campaign
    8-4  managers.
    8-5        (c)  The state advisory committee has the duties provided by
    8-6  Section 9(d) of this Act.
    8-7        SECTION 6.  LOCAL STATE EMPLOYEE CHARITABLE CAMPAIGN
    8-8  COMMITTEE.  (a)  The state policy committee shall appoint the
    8-9  presiding officer of a local state employee charitable campaign
   8-10  committee in each local campaign area.
   8-11        (b)  The presiding officer of a local employee committee
   8-12  shall recruit at least five but not more than 10 additional
   8-13  members.  The members must represent different levels of employee
   8-14  classification.
   8-15        (c)  Each member of a local employee committee may vote on
   8-16  matters before the committee.
   8-17        (d)  A local employee committee has the duties provided by
   8-18  Section 9(e) of this Act.
   8-19        SECTION 7.  LOCAL CAMPAIGN MANAGER.  (a)  A local employee
   8-20  committee shall select a local campaign manager to conduct the
   8-21  state employee charitable campaign in the local campaign area.
   8-22        (b)  A local campaign manager must have demonstrated
   8-23  expertise to:
   8-24              (1)  provide effective campaign counsel and management;
   8-25  and
    9-1              (2)  serve as fiscal agent for the eligible local
    9-2  charitable organizations.
    9-3        (c)  A local campaign manager has the duties provided by
    9-4  Section 9(g) of this Act.
    9-5        SECTION 8.  TERMS OF COMMITTEE MEMBERS; COMPENSATION.  (a)  A
    9-6  member of the state advisory committee, the state policy committee,
    9-7  or a local employee committee serves a two-year term.
    9-8        (b)  A member of the state advisory committee, the state
    9-9  policy committee, or a local employee committee may not receive
   9-10  compensation for serving on the committee and is not entitled to
   9-11  reimbursement for expenses incurred in performing functions as a
   9-12  member of the committee.
   9-13        SECTION 9.  ADMINISTRATION OF STATE EMPLOYEE CHARITABLE
   9-14  CAMPAIGN.  (a)  A state employee charitable campaign shall be
   9-15  conducted each autumn.  A state employee charitable campaign must
   9-16  be managed fairly and equitably in accordance with this Act and the
   9-17  policies and procedures established by the state policy committee.
   9-18        (b)  With the advice of the state advisory committee, the
   9-19  comptroller shall adopt rules for the administration of this Act.
   9-20        (c)  The state policy committee shall:
   9-21              (1)  establish local campaign areas based on
   9-22  recommendation by the state advisory committee;
   9-23              (2)  select the state campaign manager;
   9-24              (3)  determine the eligibility of federations or funds
   9-25  and their affiliated agencies for statewide participation in the
   10-1  state employee charitable campaign;
   10-2              (4)  approve the recommended campaign plan, budget, and
   10-3  generic materials to be used by campaign managers;
   10-4              (5)  oversee the state employee charitable campaign to
   10-5  ensure that all campaign activities are conducted fairly and
   10-6  equitably to promote unified solicitation on behalf of all
   10-7  participants; and
   10-8              (6)  perform other duties prescribed by the
   10-9  comptroller's rules.
  10-10        (d)  The state advisory committee shall:
  10-11              (1)  advise the comptroller and state policy committee
  10-12  in adopting rules and establishing procedures for the operation and
  10-13  management of the state employee charitable campaign;
  10-14              (2)  recommend the number, not to exceed 50, and
  10-15  geographic scope of local campaign areas to the state policy
  10-16  committee; and
  10-17              (3)  review and submit the recommended campaign plan,
  10-18  budget, and generic materials to be used by campaign managers.
  10-19        (e)  The local employee committee shall:
  10-20              (1)  contract with a federated community campaign
  10-21  organization to serve as the local campaign manager;
  10-22              (2)  determine the eligibility of local charitable
  10-23  organizations to participate in the state employee charitable
  10-24  campaign;
  10-25              (3)  in consultation with the local campaign manager,
   11-1  approve the recommended campaign plan, budget, and generic
   11-2  materials to be used by campaign managers;
   11-3              (4)  oversee the local state employee charitable
   11-4  campaign to ensure that all local campaign activities are conducted
   11-5  fairly and equitably to promote unified solicitation on behalf of
   11-6  all participants; and
   11-7              (5)  perform other duties prescribed by the
   11-8  comptroller's rules.
   11-9        (f)  The state campaign manager shall:
  11-10              (1)  develop a campaign plan;
  11-11              (2)  prepare a statewide campaign budget in cooperation
  11-12  with the local campaign managers;
  11-13              (3)  prepare generic materials to be used by campaign
  11-14  managers;
  11-15              (4)  coordinate and facilitate campaign services to
  11-16  state employees throughout the state;
  11-17              (5)  ensure that all state employee charitable campaign
  11-18  activities are conducted fairly and equitably to promote unified
  11-19  solicitation on behalf of all participants; and
  11-20              (6)  perform other duties prescribed by the
  11-21  comptroller's rules.
  11-22        (g)  A local campaign manager shall:
  11-23              (1)  in consultation with the local employee committee,
  11-24  develop a cooperative plan, budget, and local campaign materials
  11-25  for the local state employee charitable campaign;
   12-1              (2)  manage the local state employee charitable
   12-2  campaign and provide for the effective involvement of each
   12-3  participating federation or fund;
   12-4              (3)  ensure that all local state employee charitable
   12-5  campaign activities are conducted fairly and equitably to promote
   12-6  unified solicitation on behalf of all participants; and
   12-7              (4)  perform other duties prescribed by the
   12-8  comptroller's rules.
   12-9        SECTION 10.  ELIGIBILITY OF CHARITABLE ORGANIZATIONS IN
  12-10  GENERAL.  (a)  To be eligible to participate in a state employee
  12-11  charitable campaign, a charitable organization must:
  12-12              (1)  be governed by a voluntary board of citizens that
  12-13  meets at least twice each year to set policy and manage the affairs
  12-14  of the organization;
  12-15              (2)  if the organization's annual budget:
  12-16                    (A)  does not exceed $100,000, provide a
  12-17  completed Internal Revenue Service Form 990 and an accountant's
  12-18  review that offers full and open disclosure of the organization's
  12-19  internal operations; or
  12-20                    (B)  exceeds $100,000, be audited annually in
  12-21  accordance with generally accepted auditing standards of the
  12-22  American Institute of Certified Public Accountants; and
  12-23              (3)  not spend more than 25 percent of its annual
  12-24  revenue for administrative and fundraising expenses, unless the
  12-25  state policy committee grants the organization an exemption under
   13-1  Subsection (b) of this section.
   13-2        (b)  The state policy committee may grant a charitable
   13-3  organization a temporary exemption from the requirement of
   13-4  Subsection (a)(3) of this section if the committee finds that:
   13-5              (1)  the organization's administrative and fundraising
   13-6  expenses are reasonable under the circumstances; and
   13-7              (2)  the organization has a practical plan to reduce
   13-8  its administrative and fundraising expenses to 25 percent of its
   13-9  annual revenue within the next three years.
  13-10        SECTION 11.  ELIGIBILITY FOR STATEWIDE PARTICIPATION.  (a)  A
  13-11  federation or fund that seeks statewide participation in a state
  13-12  employee charitable campaign must apply on behalf of itself and its
  13-13  affiliated agencies to the state policy committee during the annual
  13-14  eligibility determination period specified by the committee.  The
  13-15  state policy committee shall review each application and may
  13-16  approve a federation or fund for statewide participation only if
  13-17  the federation or fund qualifies as a statewide charitable
  13-18  organization or as an international federation or fund.  The state
  13-19  policy committee may approve an affiliated charitable organization
  13-20  for statewide participation only if the organization qualifies as a
  13-21  statewide charitable organization or is an affiliated agency of an
  13-22  international federation or fund.
  13-23        (b)  An affiliated organization of an eligible federation or
  13-24  fund that does not qualify as a statewide charitable organization
  13-25  because it does not provide services in two or more noncontiguous
   14-1  standard metropolitan statistical areas may apply to a local
   14-2  employee committee for participation in a local state employee
   14-3  charitable campaign.
   14-4        (c)  The state policy committee may use outside expertise and
   14-5  resources available to it to assess the eligibility of charitable
   14-6  organizations that seek to participate in a state employee
   14-7  charitable campaign.
   14-8        (d)  An appeal from a decision of the state policy committee
   14-9  shall be conducted in the manner prescribed by the committee.  The
  14-10  appeals process must permit a charitable organization that is not
  14-11  approved for statewide participation to apply for participation in
  14-12  a local state employee charitable campaign.
  14-13        SECTION 12.  ELIGIBILITY FOR LOCAL PARTICIPATION.  (a)  A
  14-14  charitable organization that seeks local participation in a state
  14-15  employee charitable campaign must apply to the appropriate local
  14-16  employee committee during the annual eligibility determination
  14-17  period specified by the state policy committee.  The local employee
  14-18  committee shall review each application and may approve a
  14-19  charitable organization for local participation only if the
  14-20  organization qualifies as a local charitable organization, and is:
  14-21              (1)  an unaffiliated local organization; or
  14-22              (2)  a federation or fund or an affiliate of a
  14-23  federation or fund that is not approved for statewide
  14-24  participation.
  14-25        (b)  An appeal from a decision of a local employee committee
   15-1  shall be conducted in the manner prescribed by the state policy
   15-2  committee.
   15-3        SECTION 13.  FEES.  (a)  A campaign manager may not charge a
   15-4  fee to the comptroller, a state agency, or a state employee for the
   15-5  services the campaign manager provides in connection with a state
   15-6  employee charitable campaign.
   15-7        (b)  A campaign manager may charge a reasonable and necessary
   15-8  fee for actual campaign expenses to the participating charitable
   15-9  organizations in the same proportion that the contributions to that
  15-10  charitable organization bear to the total of contributions in the
  15-11  state employee charitable campaign.
  15-12        (c)  A fee under Subsection (b) of this section must be based
  15-13  on the combined expenses of the state campaign manager and each
  15-14  local campaign manager and may not exceed 10 percent of the total
  15-15  amount collected in the state employee charitable campaign unless
  15-16  the state policy committee approves a higher amount to accommodate
  15-17  reasonable documented costs.
  15-18        (d)  The comptroller shall charge an administrative fee to
  15-19  cover costs incurred by the comptroller and employing state
  15-20  agencies in the implementation of this Act to the charitable
  15-21  organizations participating in the first state employee charitable
  15-22  campaign conducted under this Act in the same proportion that the
  15-23  contributions to that charitable organization bear to the total of
  15-24  contributions in that campaign.  The comptroller shall charge an
  15-25  administrative fee to cover costs incurred by the comptroller and
   16-1  employing state agencies in the administration of this Act to the
   16-2  charitable organizations in each subsequent state employee
   16-3  charitable campaign in the same proportion that the contributions
   16-4  to that charitable organization bear to the total of contributions
   16-5  in that campaign.  The comptroller shall determine the most
   16-6  efficient and effective method of collecting the administrative fee
   16-7  and shall adopt rules for the implementation of this section.
   16-8        SECTION 14.  FUNDRAISING PRACTICES.  The fundraising
   16-9  practices of a participating charitable organization must:
  16-10              (1)  be truthful and consumer-oriented;
  16-11              (2)  clearly identify and distinguish community-based
  16-12  organizations from statewide and international organizations; and
  16-13              (3)  assure protection against:
  16-14                    (A)  unauthorized use of a list of contributors
  16-15  to the organization;
  16-16                    (B)  payment of commissions, kickbacks, finder
  16-17  fees, percentages, bonuses, or overrides for fundraising;
  16-18                    (C)  mailing unordered merchandise or tickets
  16-19  with a request for money in return; and
  16-20                    (D)  general telephone solicitation of the
  16-21  public.
  16-22        SECTION 15.  MISAPPLICATION OF CONTRIBUTIONS.  (a)  If the
  16-23  state policy committee has reason to believe that a participating
  16-24  charitable organization, a campaign manager, or a local employee
  16-25  committee has misapplied contributions under this Act, the state
   17-1  policy committee may request the comptroller or state auditor to
   17-2  audit the person.
   17-3        (b)  If an audit under this section reveals gross negligence
   17-4  or intentional misconduct on the part of a campaign manager or a
   17-5  local employee committee, the state policy committee shall remove
   17-6  the campaign manager or local employee committee.  A person removed
   17-7  under this subsection is not eligible to serve in the capacity from
   17-8  which the person was removed before the fifth anniversary of the
   17-9  date the person was removed.
  17-10        (c)  If an audit under this section reveals intentional
  17-11  misconduct on the part of a campaign manager or a local employee
  17-12  committee, the state policy committee shall forward its findings to
  17-13  the appropriate law enforcement agency for further action.
  17-14        (d)  The attorney general may bring an action in a court of
  17-15  competent jurisdiction to recover misapplied contributions.
  17-16        (e)  If an investigation or lawsuit results in a recovery of
  17-17  misapplied contributions and there is not a judgment distributing
  17-18  the amounts recovered, the state policy committee shall instruct
  17-19  the comptroller as to the manner of refunding contributions to the
  17-20  appropriate state employees.
  17-21        SECTION 16.  VOLUNTARY PARTICIPATION.  Participation by a
  17-22  state employee in a state employee charitable campaign is
  17-23  voluntary.  Each campaign manager, local employee committee,
  17-24  charitable organization, state employee, and state agency shall
  17-25  inform state employees that deductions are voluntary.
   18-1        SECTION 17.  CONFIDENTIALITY.  Except as necessary to
   18-2  administer this Act or on written authorization of the employee,
   18-3  the following information is confidential:
   18-4              (1)  whether a state employee has authorized a
   18-5  deduction under this Act;
   18-6              (2)  the amount of a deduction authorized by a state
   18-7  employee under this Act; and
   18-8              (3)  the name of a federation or fund or local
   18-9  charitable organization that a state employee has designated to
  18-10  receive contributions under this Act, unless the employee has
  18-11  executed a written pledge card or other document indicating that
  18-12  the employee wishes to receive an acknowledgment from the
  18-13  designated charitable organization.
  18-14        SECTION 18.  EXEMPTION FOR INTERNATIONAL FEDERATION OR FUND.
  18-15  An international federation or fund is exempt from the requirements
  18-16  of this Act relating to:
  18-17              (1)  maintenance of an established physical presence in
  18-18  this state; and
  18-19              (2)  the provision of health and human services to
  18-20  citizens of this state.
  18-21        SECTION 19.  APPROPRIATION.  In addition to other amounts
  18-22  appropriated to the comptroller or an employing state agency for
  18-23  the fiscal biennium beginning September 1, 1993, the administrative
  18-24  fees authorized by Section 13 of this Act are appropriated to the
  18-25  comptroller and the employing state agencies for the fiscal
   19-1  biennium beginning September 1, 1993, to administer this Act.
   19-2        SECTION 20.  TRANSITION.  An institution of higher education
   19-3  is not required to permit employees to authorize a deduction under
   19-4  this Act until the first full payroll period that occurs after six
   19-5  months after the publication of rules adopted under this Act.
   19-6        SECTION 21.  EMERGENCY.  The importance of this legislation
   19-7  and the crowded condition of the calendars in both houses create an
   19-8  emergency and an imperative public necessity that the
   19-9  constitutional rule requiring bills to be read on three several
  19-10  days in each house be suspended, and this rule is hereby suspended,
  19-11  and that this Act take effect and be in force from and after its
  19-12  passage, and it is so enacted.