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                                                                  H.B. No. 1309




AN ACT

relating to the applicability of the Texas Non-Profit Corporation 
Act to nonprofit water supply or sewer service corporations.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Section B, Article 2.01, Texas Non-Profit 
Corporation Act (Article 1396-2.01, Vernon's Texas Civil 
Statutes), is amended to read as follows:
	B. This Act shall not apply to any corporation, nor may any 
corporation be organized under this Act or obtain authority to 
conduct its affairs in this State under this Act:
		(1)  If any one or more of its purposes for the conduct 
of its affairs in this State is expressly forbidden by any law of 
this State.
		(2)  If any one or more of its purposes for the conduct 
of its affairs in this State is to engage in any activity which 
cannot lawfully be engaged in without first obtaining a license 
under the authority of the laws of this State to engage in such 
activity and such license cannot lawfully be granted to a 
corporation, except as provided by Subsection C.
		(3)  If any one or more of its purposes for the conduct 
of its affairs in this State is to organize Group Hospital Service, 
Rural Credit Unions, Agricultural and Livestock Pools, Mutual Loan 
Corporations, Co-operative Credit Associations, Farmers' 
Co-operative Societies, Co-operative Marketing Act Corporations, 
Rural Electric Co-operative Corporations, Telephone Co-operative 
Corporations, or fraternal organizations operating under the lodge 
system and heretofore or hereafter incorporated under Articles 1399 
through 1407, both inclusive, of Revised Civil Statutes of Texas, 
1925.
		(4)  If any one or more of its purposes for the conduct 
of its affairs in this State is to operate a bank under the banking 
laws of this State or to operate an insurance company of any type or 
character that operates under the insurance laws of this State.
		[(5) If any one or more of its purposes for the conduct 
of its affairs in this State is to engage in water or sewer service 
and it has heretofore or is hereafter incorporated under the Acts of 
1933, Forty-third Legislature, First Called Session, Chapter 76, as 
amended, Acts of 1941, Forty-seventh Legislature, page 666, Chapter 
407, being presently identified as Article 1434(a), Revised Civil 
Statutes of Texas, 1925.]
	SECTION 2.  This Act takes effect immediately if it receives 
a vote of two-thirds of all the members elected to each house, as 
provided by Section 39, Article III, Texas Constitution.  If this 
Act does not receive the vote necessary for immediate effect, this 
Act takes effect September 1, 2003.




______________________________              ______________________________
 
   President of the Senate                               Speaker of the House      

	I certify that H.B. No. 1309 was passed by the House on April 
3, 2003, by the following vote:  Yeas 141, Nays 0, 2 present, not 
voting.

                                                  ______________________________
                                                     Chief Clerk of the House   

	I certify that H.B. No. 1309 was passed by the Senate on May 
27, 2003, by the following vote:  Yeas 31, Nays 0.

                                                  ______________________________
                                                     Secretary of the Senate    



APPROVED:  _____________________                                            
 
                   Date                                                      




 
          _____________________                                          
 
                 Governor