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79R6135 MSE-D


By:  Krusee                                                       H.B. No. 541

Substitute the following for H.B. No. 541:                                    

By:  Goolsby                                                  C.S.H.B. No. 541



A BILL TO BE ENTITLED

AN ACT

relating to the types of nonprofit organizations that may conduct 
raffles.  
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Section 2002.002, Occupations Code, is amended 
by adding Subdivision (1-a) to read as follows:
		(1-a)  "Money" means coins, paper currency, or a 
negotiable instrument that represents and is readily convertible to 
coins or paper currency.
	SECTION 2.  Sections 2002.003(a), (b), and (c), Occupations 
Code, are amended to read as follows:
	(a)  An organization incorporated or holding a certificate 
of authority under the Texas Non-Profit Corporation Act (Article 
1396-1.01 et seq., Vernon's Texas Civil Statutes) is a qualified 
nonprofit organization for the purposes of this chapter if the 
organization:
		(1)  does not distribute any of its income to its 
members, officers, or governing body, other than as reasonable 
compensation for services;
		(2)  has existed for the three preceding years [and 
during those years has had a governing body or officers elected by a 
vote of its members or by a vote of delegates elected by its 
members];
		(3)  does not devote a substantial part of its 
activities to attempting to influence legislation and does not 
participate or intervene in any political campaign on behalf of any 
candidate for public office in any manner, including by publishing 
or distributing statements or making campaign contributions;
		(4)  qualifies for and has obtained an exemption from 
federal income tax from the Internal Revenue Service under Section 
501(c), Internal Revenue Code of 1986; and
		(5)  does not have or recognize any local chapter, 
affiliate, unit, or subsidiary organization in this state.
	(b)  An organization that is formally recognized as and that 
operates as a local chapter, affiliate, unit, or subsidiary 
organization of a parent organization incorporated or holding a 
certificate of authority under the Texas Non-Profit Corporation Act 
(Article 1396-1.01 et seq., Vernon's Texas Civil Statutes) is a 
qualified nonprofit organization if:
		(1)  neither the local organization nor the parent 
organization distributes any of its income to its members, 
officers, or governing body, other than as reasonable compensation 
for services;
		(2)  the local organization has existed for the three 
preceding years and during those years[:
			[(A)  has had a governing body or officers elected 
by a vote of its members or by a vote of delegates elected by its 
members;  or
			[(B)]  has been formally recognized as a local 
chapter, affiliate, unit, or subsidiary organization of the parent 
organization;
		(3)  neither the local organization nor the parent 
organization:            
			(A)  devotes a substantial part of its activities 
to attempting to influence legislation;  or
			(B)  participates or intervenes in any political 
campaign on behalf of any candidate for public office in any manner, 
including by publishing or distributing statements or making 
campaign contributions; and
		(4)  either the local organization or the parent 
organization qualifies for and has obtained an exemption from 
federal income tax from the Internal Revenue Service under Section 
501(c), Internal Revenue Code of 1986.
	(c)  An unincorporated organization, association, or society 
is a qualified nonprofit organization if it:
		(1)  does not distribute any of its income to its 
members, officers, or governing body, other than as reasonable 
compensation for services;
		(2)  for the three preceding years[:                         
			[(A)  has had a governing body or officers elected 
by a vote of members or by a vote of delegates elected by the 
members; or
			[(B)]  has been affiliated with a state or 
national organization organized to perform the same purposes as the 
unincorporated organization, association, or society;
		(3)  does not devote a substantial part of its 
activities to attempting to influence legislation and does not 
participate or intervene in any political campaign on behalf of any 
candidate for public office in any manner, including by publishing 
or distributing statements or making campaign contributions; and
		(4)  qualifies for and has obtained an exemption from 
federal income tax from the Internal Revenue Service under Section 
501(c), Internal Revenue Code of 1986.
	SECTION 3.  Section 2002.053, Occupations Code, is amended 
to read as follows:
	Sec. 2002.053.  USE OF RAFFLE PROCEEDS.  All proceeds from 
the sale of tickets for a raffle must be spent for the charitable 
purposes of the qualified organization.
	SECTION 4.  Section 2002.054(c), Occupations Code, is 
amended to read as follows:
	(c)  The organization may not permit a person who is not [a 
member of the organization or who is not] authorized by the 
organization to sell or offer to sell raffle tickets.
	SECTION 5.  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, 2005.