1-1     By:  Haywood                                           S.B. No. 189

 1-2           (In the Senate - Filed January 9, 1997; January 15, 1997,

 1-3     read first time and referred to Committee on Economic Development;

 1-4     May 18, 1997, reported adversely, with favorable Committee

 1-5     Substitute by the following vote:  Yeas 10, Nays 0; May 18, 1997,

 1-6     sent to printer.)

 1-7     COMMITTEE SUBSTITUTE FOR S.B. No. 189                  By:  Haywood

 1-8                            A BILL TO BE ENTITLED

 1-9                                   AN ACT

1-10     relating to the civil liability of charitable organizations that

1-11     are chambers of commerce.

1-12           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

1-13           SECTION 1.  Subdivision (1), Section 84.003, Civil Practice

1-14     and Remedies Code, is amended to read as follows:

1-15                 (1)  "Charitable organization" means:

1-16                       (A)  any organization exempt from federal income

1-17     tax under Section 501(a) of the Internal Revenue Code of 1986  by

1-18     being listed as an exempt organization in Section 501(c)(3) or

1-19     501(c)(4) of the code, if it is a nonprofit corporation,

1-20     foundation, community chest, or fund organized and operated

1-21     exclusively for charitable, religious, prevention of cruelty to

1-22     children or animals, youth sports and youth recreational, or

1-23     educational purposes, excluding private primary or secondary

1-24     schools, alumni associations and related on-campus organizations,

1-25     or is organized and operated exclusively for the promotion of

1-26     social welfare by being primarily engaged in promoting the common

1-27     good and general welfare of the people in a community;

1-28                       (B)  any bona fide charitable, religious,

1-29     prevention of cruelty to children or animals, youth sports and

1-30     youth recreational, or educational organization, excluding alumni

1-31     associations and related on-campus organizations, or other

1-32     organization organized and operated exclusively for the promotion

1-33     of social welfare by being primarily engaged in promoting the

1-34     common good and general welfare of the people in a community, and

1-35     that:

1-36                             (i)  is organized and operated exclusively

1-37     for one or more of the above purposes;

1-38                             (ii)  does not engage in activities which

1-39     in themselves are not in furtherance of the purpose or purposes;

1-40                             (iii)  does not directly or indirectly

1-41     participate or intervene in any political campaign on behalf of or

1-42     in opposition to any candidate for public office;

1-43                             (iv)  dedicates its assets to achieving the

1-44     stated purpose or purposes of the organization;

1-45                             (v)  does not allow any part of its net

1-46     assets on dissolution of the organization to inure to the benefit

1-47     of any group, shareholder, or individual; and

1-48                             (vi)  normally receives more than one-third

1-49     of its support in any year from private or public gifts, grants,

1-50     contributions, or membership fees; [or]

1-51                       (C)  a homeowners association as defined by

1-52     Section 528(c) of the Internal Revenue Code of 1986; or

1-53                       (D)  a local chamber of commerce that is exempt

1-54     from federal income tax under Section 501(a) of the Internal

1-55     Revenue Code of 1986 by being listed as an exempt organization in

1-56     Section 501(c)(6) of the Internal Revenue Code of 1986, that does

1-57     not directly or indirectly participate or intervene in any

1-58     political campaign on behalf of or in opposition to any candidate

1-59     for public office, and that does not directly or indirectly

1-60     contribute to a political action committee that makes expenditures

1-61     to any candidates for public office.

1-62           SECTION 2.  Section 84.007, Civil Practice and Remedies Code,

1-63     is amended by adding Subsection (h) to read as follows:

1-64           (h)  This chapter does not apply to a cosponsor of an event

 2-1     or activity with a local chamber of commerce.

 2-2           SECTION 3.  This Act takes effect September 1, 1997, and

 2-3     applies only to a cause of action that accrues on or after that

 2-4     date.  An action that accrued before the effective date of this Act

 2-5     is governed by the law applicable to the action immediately before

 2-6     the effective date of this Act, and that law is continued in effect

 2-7     for that purpose.

 2-8           SECTION 4.  The importance of this legislation and the

 2-9     crowded condition of the calendars in both houses create an

2-10     emergency and an imperative public necessity that the

2-11     constitutional rule requiring bills to be read on three several

2-12     days in each house be suspended, and this rule is hereby suspended.

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