2007S0583-1 03/01/07
 
  By: Hegar S.B. No. 1128
 
 
A BILL TO BE ENTITLED
AN ACT
relating to the Texas Rural Foundation.
       BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
       SECTION 1.  Chapter 110, Health and Safety Code, is
transferred to Chapter 487, Government Code, is redesignated as
Subchapter P, Chapter 487, Government Code, and is amended to read
as follows:
SUBCHAPTER P.  TEXAS [CHAPTER 110.]  RURAL FOUNDATION
       Sec. 487.701 [110.001].  CREATION OF FOUNDATION.  (a)  The
Office of Rural Community Affairs shall establish the Texas Rural
Foundation as a nonprofit corporation that complies with the Texas
Non-Profit Corporation Act (Article 1396-1.01 et seq., Vernon's
Texas Civil Statutes), except as otherwise provided by this
chapter, and qualifies as an organization exempt from federal
income tax under Section 501(c)(3), Internal Revenue Code of 1986,
as amended.
       (b)  The Office of Rural Community Affairs shall ensure that
the Texas Rural Foundation operates independently of any state
agency or political subdivision of the state.
       Sec. 487.702 [110.002].  POWERS AND DUTIES.  (a)  The Texas
Rural Foundation shall raise money from foundations, governmental
entities, and other sources to finance health, community, and
economic development programs in the rural areas of the state.
       (b)  The Texas Rural Foundation shall have the powers that
are necessary and convenient to carry out its duties.
       (c)  The Texas Rural Foundation shall develop and implement
policies and procedures that clearly separate the responsibilities
and activities of the foundation from the Office of Rural Community
Affairs.
       Sec. 487.703 [110.003].  BOARD OF DIRECTORS.  (a)  The Texas 
Rural Foundation is governed by a board of an odd number of at least
nine and not more than 15 [five] directors appointed by the
executive committee of the Office of Rural Community Affairs [from
individuals recommended by the executive director of the Office of
Rural Community Affairs].
       (b)  Members of the board of directors of the Texas Rural
Foundation serve for staggered terms of six years, with as near as
possible to one-third of the members' terms expiring February 1 of
each odd-numbered year.
       (c)  Appointments to the board of directors of the Texas 
Rural Foundation shall be made without regard to the race, color,
disability, sex, religion, age, or national origin of the
appointees.
       (d)  The board of directors of the Texas Rural Foundation
shall ensure that the foundation remains eligible for an exemption
from federal income tax under Section 501(a), Internal Revenue Code
of 1986, as amended, by being listed as an exempt organization under
Section 501(c)(3) of that code, as amended.
       Sec. 487.704 [110.004].  RESTRICTIONS ON BOARD APPOINTMENT,
MEMBERSHIP, AND EMPLOYMENT.  (a)  In this section, "Texas trade
association" means a cooperative and voluntarily joined
association of business or professional competitors in this state
designed to assist its members and its industry or profession in
dealing with mutual business or professional problems and in
promoting their common interest.
       (b)  A person may not be a member of the board of directors of
the Texas Rural Foundation and may not be a foundation employee
employed in a "bona fide executive, administrative, or professional
capacity," as that phrase is used for purposes of establishing an
exemption to the overtime provisions of the federal Fair Labor
Standards Act of 1938 (29 U.S.C. Section 201 et seq.), as amended,
if:
             (1)  the person is an officer, employee, or paid
consultant of a Texas trade association that is in the field of
health care or that contracts with the foundation; or
             (2)  the person's spouse is an officer, manager, or paid
consultant of a Texas trade association that is in the field of
health care or that contracts with the foundation.
       (c)  A person may not be a member of the board of directors of
the Texas Rural Foundation or act as the general counsel to the
board of directors or the foundation if the person is required to
register as a lobbyist under Chapter 305, Government Code, because
of the person's activities for compensation on behalf of a
profession related to the operation of the foundation.
       Sec. 487.705 [110.005].  REMOVAL OF BOARD MEMBER.  (a)  It
is a ground for removal from the board of directors of the Texas 
Rural Foundation that a member:
             (1)  is ineligible for membership under Section
110.004;
             (2)  cannot, because of illness or disability,
discharge the member's duties for a substantial part of the member's
term; or
             (3)  is absent from more than half of the regularly
scheduled board meetings that the member is eligible to attend
during a calendar year without an excuse approved by a majority vote
of the board of directors.
       (b)  The validity of an action of the board of directors of
the Texas Rural Foundation is not affected by the fact that it is
taken when a ground for removal of a board member exists.
       (c)  If the executive director of the Office of Rural
Community Affairs has knowledge that a potential ground for removal
exists, the executive director shall notify the presiding officer
of the board of directors of the Texas Rural Foundation of the
potential ground. The presiding officer shall then notify the
governor and the attorney general that a potential ground for
removal exists. If the potential ground for removal involves the
presiding officer, the executive director shall notify the next
highest ranking officer of the board of directors, who shall then
notify the governor and the attorney general that a potential
ground for removal exists.
       Sec. 487.706 [110.006].  VACANCY.  A vacancy on the board of
directors of the Texas Rural Foundation shall be filled for the
remainder of the unexpired term in the same manner as the original
appointment.
       Sec. 487.707 [110.007].  OFFICERS.  The board of directors
of the Texas Rural Foundation shall elect from among its members a
presiding officer, an assistant presiding officer, and other
officers the board considers necessary. The presiding officer and
assistant presiding officer serve for a period of one year and may
be reelected.
       Sec. 487.708 [110.008].  MEETINGS.  The board of directors
of the Texas Rural Foundation may meet as often as necessary, but
shall meet at least twice a year.
       Sec. 487.709 [110.009].  TAX EXEMPTION.  All income,
property, and other assets of the Texas Rural Foundation are exempt
from taxation by the state and political subdivisions of the state.
       Sec. 487.710 [110.010].  MEMORANDUM OF UNDERSTANDING.  The
Texas Rural Foundation and the Office of Rural Community Affairs
shall enter into a memorandum of understanding that:
             (1)  requires the board of directors and staff of the
foundation to report to the executive director and executive
committee of the Office of Rural Community Affairs;
             (2)  allows the Office of Rural Community Affairs to
provide staff functions to the foundation;
             (3)  allows the Office of Rural Community Affairs to
expend funds on the foundation; and
             (4)  outlines the financial contributions to be made to
the foundation from funds obtained from grants and other sources.
       Sec. 487.711 [110.011].  RECORDS.  (a)  The Texas Rural
Foundation shall maintain financial records and reports
independently from those of the Office of Rural Community Affairs.
       (b)  The Texas Rural Foundation shall comply with all filing
requirements of the secretary of state and the Internal Revenue
Service.
       Sec. 487.712 [110.012].  REPORT TO OFFICE OF RURAL COMMUNITY
AFFAIRS.  Not later than the 60th day after the last day of the
fiscal year, the Texas Rural Foundation shall submit to the Office
of Rural Community Affairs a report itemizing all income and
expenditures and describing all activities of the foundation during
the preceding fiscal year.
       Sec. 487.713 [110.013].  PROHIBITED USE OF FUNDS.  Funds
administered by the Texas Rural Foundation may not be used to
provide an abortion or a referral for an abortion, unless there is a
medically necessary reason to provide the referral.
       SECTION 2.  Subsection (a), Section 487.056, Government
Code, is amended to read as follows:
       (a)  Not later than January 1 of each odd-numbered year, the
office shall submit a biennial report to the legislature regarding
the activities of the office, the activities of the Texas Rural
Foundation, and any findings and recommendations relating to rural
issues.
       SECTION 3.  (a)  The name of the Rural Foundation is changed
to the Texas Rural Foundation.
       (b)  Any reference in law to the Rural Foundation means the
Texas Rural Foundation.
       SECTION 4.  As soon as practicable after the effective date
of this Act, the executive committee of the Office of Rural
Community Affairs shall appoint the additional members of the board
of directors of the Texas Rural Foundation as provided by Section
487.703, Government Code, as added by this Act.  In making the
appointments, the executive committee shall assign the lengths of
the terms of the additional members to meet the staggered six-year
term requirement under Subsection (b), Section 487.703, Government
Code, as added by this Act.
       SECTION 5.  This Act takes effect September 1, 2007.