By Shields                                             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.