By Danburg                                            H.B. No. 1957
         76R7106 ESH-D                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to certain agreements between economic development
 1-3     corporations and persons engaged in certain political activities;
 1-4     providing civil and criminal penalties.
 1-5           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-6           SECTION 1.  The Development Corporation Act of 1979 (Article
 1-7     5190.6, Vernon's Texas Civil Statutes) is amended by adding Section
 1-8     32A to read as follows:
 1-9           Sec. 32A.  (a)  A corporation may not knowingly enter into an
1-10     agreement under which the corporation directly or indirectly
1-11     provides a benefit to a person who engages in political activities
1-12     for compensation, including a person who, in connection with a
1-13     campaign for elective office or on a measure, for compensation
1-14     provides:
1-15                 (1)  advice to candidates, political committees, or
1-16     organizations on political strategy, voter demographics, raising
1-17     political  contributions, or the content or distribution of
1-18     political advertising;
1-19                 (2)  assistance in obtaining the endorsement or support
1-20     of an individual or organization; or
1-21                 (3)  polling.
1-22           (b)  If a corporation enters into an agreement prohibited by
1-23     Subsection (a)  of this section:
1-24                 (1)  notwithstanding Section 4B(k) or 32 of this Act or
 2-1     Section 11.11, Tax Code, property owned by the corporation is not
 2-2     exempt  from ad valorem taxation;
 2-3                 (2)  notwithstanding Section 151.341, Tax Code, a
 2-4     taxable item sold, leased, rented to or stored, used, or consumed
 2-5     by a corporation is not exempt from sales and use taxes imposed by
 2-6     Chapter 151, Tax Code; and
 2-7                 (3)  notwithstanding Section 171.074, Tax Code, the
 2-8     corporation is not exempt from the franchise tax imposed under
 2-9     Chapter 171, Tax  Code.
2-10           (c)  A person other than a corporation who enters into an
2-11     agreement prohibited by Subsection (a) of this section commits an
2-12     offense.  An offense under this section is a Class A misdemeanor.
2-13           (d)  A person other than a corporation who enters into an
2-14     agreement prohibited by Subsection (a) of this section is liable to
2-15     the state for a civil penalty not to exceed $10,000.
2-16           (e)  In this section:
2-17                 (1)  "Benefit" has the meaning assigned by Section
2-18     1.07, Penal Code.
2-19                 (2)  "Measure," "political committee," and "political
2-20     contribution" have the meanings assigned by Section 251.001,
2-21     Election Code.
2-22           SECTION 2.  This Act takes effect September 1, 1999.
2-23           SECTION 3.  Section 32A, Development Corporation Act of 1979
2-24     (Article 5190.6, Vernon's Texas Civil Statutes), as added by this
2-25     Act, applies only to an agreement between a nonprofit corporation
2-26     organized under the Development Corporation Act of 1979 (Article
2-27     5190.6, Vernon's Texas Civil Statutes) and a person who engages in
 3-1     political activities for compensation that is entered on or after
 3-2     September 1, 1999.
 3-3           SECTION 4.  The importance of this legislation and the
 3-4     crowded condition of the calendars in both houses create an
 3-5     emergency and an imperative public necessity that the
 3-6     constitutional rule requiring bills to be read on three several
 3-7     days in each house be suspended, and this rule is hereby suspended.