By Shields, Madden, et al. H.B. No. 408 77R22 ESH-F A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to misrepresentation concerning political activity of a 1-3 tax-exempt organization; providing a criminal penalty. 1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-5 SECTION 1. Chapter 255, Election Code, is amended by adding 1-6 Section 255.009 to read as follows: 1-7 Sec. 255.009. MISREPRESENTATION OF POLITICAL ACTIVITY OF 1-8 TAX-EXEMPT ORGANIZATION. (a) In this section, "tax-exempt 1-9 organization" includes a parent organization of a tax-exempt 1-10 organization. 1-11 (b) A person commits an offense if, with intent to injure a 1-12 candidate or influence the result of an election and without the 1-13 written permission of the organization, the person knowingly 1-14 represents in a campaign communication that: 1-15 (1) the communication is from a tax-exempt 1-16 organization; or 1-17 (2) a tax-exempt organization supports or opposes a 1-18 candidate or political party. 1-19 (c) A person commits an offense if, with intent to injure a 1-20 candidate or influence the result of an election and without the 1-21 written permission of the officer, member, or employee, as 1-22 appropriate, the person knowingly represents in a campaign 1-23 communication that: 1-24 (1) the communication is from a former or current 2-1 officer, member, or employee of a tax-exempt organization; or 2-2 (2) a former or current officer, member, or employee 2-3 of a tax-exempt organization supports or opposes a candidate or 2-4 political party. 2-5 (d) A person commits an offense if: 2-6 (1) with intent to injure a candidate or influence the 2-7 result of an election, the person knowingly makes a 2-8 misrepresentation or fails to disclose facts relating to an 2-9 activity of a tax-exempt organization or a current or former 2-10 officer, member, or employee of a tax-exempt organization; and 2-11 (2) the misrepresentation or failure to disclose 2-12 endangers the tax-exempt status of the organization under: 2-13 (A) the Internal Revenue Code or regulations 2-14 adopted by the Internal Revenue Service; or 2-15 (B) the Tax Code or rules adopted by the 2-16 comptroller. 2-17 (e) An offense under this section is a Class A misdemeanor. 2-18 (f) A person injured by a violation of this section has a 2-19 cause of action under Chapter 73, Civil Practice and Remedies Code. 2-20 (g) A person is entitled to recover reasonable attorney's 2-21 fees if the person prevails in: 2-22 (1) an action under Chapter 73, Civil Practice and 2-23 Remedies Code, that arises from a violation of this section; or 2-24 (2) a judicial or administrative proceeding that 2-25 relates to the tax-exempt status of an organization and that arises 2-26 from a violation of Subsection (d). 2-27 SECTION 2. This Act takes effect September 1, 2001. 3-1 SECTION 3. Section 255.009, Election Code, as added by this 3-2 Act, applies only to a campaign communication, as defined by 3-3 Section 251.001, Election Code, that is first distributed on or 3-4 after September 1, 2001. 3-5 COMMITTEE AMENDMENT NO. 1 3-6 Amend H.B. No. 408 as follows: 3-7 (1) On page 1, strike lines 7-10 and substitute the 3-8 following: 3-9 Sec. 255.009. MISREPRESENTATION OF POLITICAL ACTIVITY OF 3-10 TAX-EXEMPT ORGANIZATION. (a) In this section, "tax-exempt 3-11 organization" means an organization that is exempt from income 3-12 taxation under Section 501(a), Internal Revenue Code, by being 3-13 listed under Section 501(c)(6), Internal Revenue Code, or such an 3-14 organization's affiliated organizations that are exempt from income 3-15 taxation by being listed under Section 501(c)(3), Internal Revenue 3-16 Code. The term includes the parent organization of a tax-exempt 3-17 organization. 3-18 (2) On page 1, line 11, strike "A person commits an offense 3-19 if" and substitute "A person may not". 3-20 (3) On page 1, lines 13 and 14, strike "the person knowingly 3-21 represents" and substitute "knowingly represent". 3-22 (4) On page 1, line 19, strike "A person commits an offense 3-23 if" and substitute "A person may not". 3-24 (5) On page 1, line 22, strike "the person knowingly 3-25 represents" and substitute "knowingly represent". 3-26 (6) On page 2, line 5, strike "A person commits an offense 3-27 if" and substitute "A person may not". 4-1 (7) On page 2, lines 7 and 8, strike "the person knowingly 4-2 makes a misrepresentation or fails" and substitute "knowingly make 4-3 a misrepresentation or fail". 4-4 (8) On page 2, strike line 17. 4-5 (9) On page 2, line 18, strike "(f)" and substitute "(e)". 4-6 (10) On page 2, line 20, strike "(g)" and substitute "(f)". 4-7 77R9395 ESH-D Denny