By Uher                                          H.B. No. 539

      75R3431 DAK-D                           

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to the civil liability of charitable organizations that

 1-3     are chambers of commerce.

 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-5           SECTION 1.  Section 84.003(1), Civil Practice and Remedies

 1-6     Code, is amended to read as follows:

 1-7                 (1)  "Charitable organization" means:

 1-8                       (A)  any organization exempt from federal income

 1-9     tax under Section 501(a) of the Internal Revenue Code of 1986  by

1-10     being listed as an exempt organization in Section 501(c)(3) or

1-11     501(c)(4) of the code, if it is a nonprofit corporation,

1-12     foundation, community chest, or fund organized and operated

1-13     exclusively for charitable, religious, prevention of cruelty to

1-14     children or animals, youth sports and youth recreational, or

1-15     educational purposes, excluding private primary or secondary

1-16     schools, alumni associations and related on-campus organizations,

1-17     or is organized and operated exclusively for the promotion of

1-18     social welfare by being primarily engaged in promoting the common

1-19     good and general welfare of the people in a community;

1-20                       (B)  any bona fide charitable, religious,

1-21     prevention of cruelty to children or animals, youth sports and

1-22     youth recreational, or educational organization, excluding alumni

1-23     associations and related on-campus organizations, or other

1-24     organization organized and operated exclusively for the promotion

 2-1     of social welfare by being primarily engaged in promoting the

 2-2     common good and general welfare of the people in a community, and

 2-3     that:

 2-4                             (i)  is organized and operated exclusively

 2-5     for one or more of the above purposes;

 2-6                             (ii)  does not engage in activities which

 2-7     in themselves are not in furtherance of the purpose or purposes;

 2-8                             (iii)  does not directly or indirectly

 2-9     participate or intervene in any political campaign on behalf of or

2-10     in opposition to any candidate for public office;

2-11                             (iv)  dedicates its assets to achieving the

2-12     stated purpose or purposes of the organization;

2-13                             (v)  does not allow any part of its net

2-14     assets on dissolution of the organization to inure to the benefit

2-15     of any group, shareholder, or individual; and

2-16                             (vi)  normally receives more than one-third

2-17     of its support in any year from private or public gifts, grants,

2-18     contributions, or membership fees; [or]

2-19                       (C)  a homeowners association as defined by

2-20     Section 528(c) of the Internal Revenue Code of 1986; or

2-21                       (D)  a chamber of commerce exempt from federal

2-22     income tax under Section 501(a) of the Internal Revenue Code of

2-23     1986 by being listed as an exempt organization in Section 501(c)(6)

2-24     of the code.

2-25           SECTION 2.  This Act takes effect September 1, 1997, and

2-26     applies only to a cause of action that accrues on or after that

2-27     date.  An action that accrued before the effective date of this Act

 3-1     is governed by the law applicable to the action immediately before

 3-2     the effective date of this Act, and that law is continued in effect

 3-3     for that purpose.

 3-4           SECTION 3.  The importance of this legislation and the

 3-5     crowded condition of the calendars in both houses create an

 3-6     emergency and an imperative public necessity that the

 3-7     constitutional rule requiring bills to be read on three several

 3-8     days in each house be suspended, and this rule is hereby suspended.