BILL ANALYSIS

C.S.S.B. 19

By: Taylor, Van

State Affairs

Committee Report (Substituted)

BACKGROUND AND PURPOSE

Concerned parties report that there is a need to revise a variety of state laws relating to the ethics of public officers, in addition to other related requirements. C.S.S.B. 19 is an omnibus bill that seeks to accomplish those goals.

CRIMINAL JUSTICE IMPACT

It is the committee's opinion that this bill expressly does one or more of the following: creates a criminal offense, increases the punishment for an existing criminal offense or category of offenses, or changes the eligibility of a person for community supervision, parole, or mandatory supervision.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.

ANALYSIS

Disclosure Provisions

C.S.S.B. 19 amends the Election Code, effective September 1, 2015, to establish provisions relating to reporting by a person or group that is not a political committee and limits the applicability of those provisions to the reporting of a contribution in connection with campaign activity or a political expenditure made on or after September 1, 2015, and to such a person or group that is not a political committee, that accepts one or more contributions in connection with campaign activity from a person that in the aggregate exceed $2,000 during a reporting period, and that makes one or more political expenditures, excluding expenditures authorized by statutory provisions governing corporations and labor organizations' communication with stockholders or members, nonpartisan voter registration and get-out-the-vote campaigns, expenditures for a general-purpose committee, and contribution to a political party, that in the aggregate exceed $25,000 during a calendar year. The bill defines "contribution" for purposes of these provisions, by reference to the Election Code, specifies that the term includes dues and gifts, and specifies that the definition does not include a commercial transaction involving the transfer for consideration of anything of value pursuant to a contract or agreement that reflects the usual and normal business practice of an industry. The bill defines "contribution in connection with campaign activity" as a contribution from a donor to a person or group that, at the time that the donor makes the contribution, the donor knows or has reason to know may be used to make a political contribution or political expenditure or may be commingled with other funds used to make a political contribution or political expenditure. The bill establishes that a donor who signs a statement indicating that the donor's contribution to the person or group may not be used to make a political contribution or political expenditure does not have reason to know that the donor's contribution may be used to make a political contribution or political expenditure. The bill defines "donor" as a person who makes a contribution to such a person or group, regardless of whether the person making the contribution is a member of the person or group that accepts the contribution.

C.S.S.B. 19 requires an applicable person or group to comply with the statutory provisions governing political reporting as if the person or group were the campaign treasurer of a general-purpose committee that does not file monthly reports. The bill establishes that an applicable person or group is not required to file a campaign treasurer appointment for accepting contributions or making political expenditures for which reporting is required, unless the person or group is otherwise required to file a campaign treasurer appointment under statutory provisions relating to regulating political funds and campaigns. The bill establishes that an applicable person or group is not required to file a report under the bill's provisions regarding reporting by a person or group that is not political a committee if the applicable person or group is required to disclose the contributions and political expenditures in another report required under statutory provisions relating to regulating political funds and campaigns within the time applicable under those bill provisions for reporting the contributions and political expenditures or if no reportable activity occurs during the reporting period. The bill requires disclosure of a contribution as provided by statutory provisions relating to general and additional contents of reports in a report only if the contribution is a contribution in connection with campaign activity and the aggregate amount of contributions in connection with campaign activity accepted from a person exceeds $2,000 during the reporting period. The bill establishes that a report required under the bill's provisions regarding reporting by a person or group that is not a political committees is not required to include any contributions accepted by the applicable person or group that are not contributions in connection with campaign activity; the total amount of unitemized political contributions accepted by the applicable person or group; the total amount of political contributions maintained by the applicable person or group; any expenditures made by the applicable person or group that are not political expenditures; the total amount of unitemized political expenditures made by the applicable person or group; or the principal amount of all of the applicable person's or group's outstanding loans. The bill requires the first report required to be filed in a calendar year by a person or group that is not a political committee in which the $2,000 or $25,000 threshold under the applicable bill provision is exceeded to include all contributions in connection with campaign activity accepted from a person that in the aggregate exceed $2,000 and all political expenditures made in the 12 months immediately preceding the acceptance of the contribution in connection with campaign activity or the making of the political expenditure that triggers the applicable reporting requirements and not previously reported as required. The bill establishes that a contribution consisting of personal travel expense incurred by an individual or consisting of an individual's personal service is not required to be reported under the applicable bill provision if the individual receives no reimbursement for the expense or if the individual receives no compensation for the service, as applicable. The bill clarifies that statutory provisions requiring certain persons not acting in concert with another person who makes one or more direct campaign expenditures in an election from the person's own property, with certain exceptions, to comply with statutory provisions governing political reporting as if the person were the campaign treasurer of a general-purpose committee that does not file monthly reports do not apply to a person to whom the bill's provisions relating to reporting by a person or group that is not a political committee apply.

C.S.S.B. 19 establishes that the privilege established under Civil Practice and Remedies Code relating to journalist's qualified testimonial privilege in civil proceedings does not apply to a person who is required to file a report under statutory provisions relating to certain direct campaign expenditures, a person who controls a political committee, a person who serves as the campaign treasurer of a candidate or political committee, a person who makes a political expenditure described by statutory provisions governing the expenditures by a corporation, acting alone or in concert with one or more other corporations, to finance the establishment or administration of a general-purpose committee, a person who is required to be disclosed on federal Internal Revenue Service Form 990 as an entity related to such a described person, or a person who is an employee or contractor of, who acts under the control of, or who acts on behalf of such a described person or the person required to be disclosed as an entity related to such a described person.

C.S.S.B. 19 amends the Government Code to exclude from the definition of "expenditure," as that term is defined for purposes of statutory provisions governing the registration of lobbyists, a payment benefiting a member of the legislative or executive branch if the member fully reimburses the person making the expenditure before the date on which the person would otherwise be required to report the payment under statutory provisions generally relating to the legislative branch.

C.S.S.B. 19, effective September 1, 2015, makes it a Class B misdemeanor offense to knowingly communicate or knowingly enter into a contract to communicate legislative advertising to a member of the legislature using an automated dial announcing device and makes this provision applicable to an offense committed on or after that date; defines "automated dial announcing device," for purposes of the statutory provisions and bill provisions relating to required disclosure on legislative advertising as regards certain activities prohibited under statutory provisions governing the registration of lobbyists, as automated equipment used for telephone solicitation or collection that can store telephone numbers to be called or produce numbers to be called through use of a random or sequential number generator and can convey, alone or in conjunction with other equipment, a prerecorded or synthesized voice message to the number called without the use of a live operator; and includes within the definition of "legislative advertising," for those same purposes, a means of communication that supports, opposes, or proposes legislation that is conveyed to a member of the legislature using an automated dial announcing device.

C.S.S.B. 19 requires the electronic submission through a secure website maintained by the Texas Ethics Commission using software that meets the commission's specification of each personal financial statement required to be filed with the commission under the applicable state law governing such statements by, with certain exceptions, a state officer, a partisan or independent candidate for an office as an elected officer, and a state party chair.

C.S.S.B. 19 requires the account of financial activity in a personal financial statement to consist of, in addition to the current statutory requirements for such an account, the following: each source of a referral fee paid to a firm or other business entity in which the individual has a substantial interest; identification of each contract or subcontract with a public entity to which the individual or the individual's spouse is a party and each paid relationship the individual or the individual's spouse has with a public entity; and identification of any other source of earned or unearned income not reported as required by the statutory provisions governing the account of financial activity, including federal or state governmental disability payments, other public benefits, or a pension, individual retirement account, or other retirement plan, and the category of the amount of income derived from each source. The bill includes in the definition of "public benefit," for purposes of statutory provisions governing the contents of financial statements in general, the value of an exemption from taxation of the total appraised value of a residence homestead and includes in the definition of "public entity," for those same purposes, the state and a political subdivision of the state.

C.S.S.B. 19 requires an individual filing a personal financial statement to include with the statement an affirmation that the individual has filed a federal personal income tax return for the preceding calendar year and has made all payments as required for federal income taxes owed by the individual for the preceding year or an affirmation that the individual has filed for and is submitting the personal financial statement within the period of a valid extension for the filing of a federal personal income tax return. The bill requires an individual filing a personal financial statement to include with the statement an affirmation that the individual has paid all property taxes due and payable by the individual on the date the statement is filed.

C.S.S.B. 19 requires a state officer who receives compensation for government contract consulting services performed by the officer to report on the officer's personal financial statement the name of each person to whom the officer provided the services and the category of the amount of compensation actually received. The bill defines "government contract consulting services," for purposes of this provision, as services to advise or assist a person or entity in maintaining, applying for, soliciting, or entering into a contract with the state or a political subdivision of the state.

C.S.S.B. 19 requires an individual, before being appointed as an appointed officer by the governor, lieutenant governor, or speaker of the house of representatives, and notwithstanding the filing dates for personal financial statements for state officers and state party chairs, to file with the commission a statement that discloses any political contributions, as that term is defined by the Election Code, made during the two years preceding the individual's nomination to the appointed office by the individual or the individual's spouse to the appointing officer as a candidate or officeholder or to a specific-purpose political committee for supporting the appointing officer, opposing the appointing officer's opponent, or assisting the appointing officer as an officeholder.

C.S.S.B. 19 removes the requirement of the commission to grant a request of a state officer or a state party chair for an extension for filing a personal financial statement if the request is received before the filing deadline or if a timely filing or request for extension is prevented because of physical or mental incapacity. The bill removes the prohibition against the commission from granting more than one extension to an individual in one year except for good cause shown and instead prohibits the commission from granting an extension to an individual except for good cause shown, as determined by the commission.

C.S.S.B. 19 authorizes a person who files a personal financial statement to amend the report and establishes that a report that is amended before the eighth day after the date the original report was filed is considered to have been filed on the date on which the original report was filed. The bill establishes that a report that is amended on or after the eighth day after the original report was filed is considered to have been filed on the date on which the original report was filed if the amendment is made before any complaint is filed with the commission regarding the subject of the amendment and if the original report was made in good faith and without an intent to mislead or to misrepresent the information contained in the report.

C.S.S.B. 19 requires the commission, in addition to the statutory requirement that the commission maintain personal financial statements in separate alphabetical files and in a manner that is accessible to the public during regular office hours, to make the statements available in a searchable format to the public on the commission's website not later than the third business day after the date the statement is required to be filed or is actually filed, whichever is later. The bill requires the commission to remove the home address of an individual from a personal financial statement filed by the individual before making the statement available to the public on the commission's website. The bill authorizes the commission, and on notification from the former state officer requires the commission, after the second anniversary of the date the individual ceases to be a state officer, to remove each financial statement filed by the state officer from the commission's website, in addition to the applicable statutory authorization and requirement to destroy each financial statement filed by the state officer. The bill establishes that the commission is not required to continue to make available on its website a financial statement that may be so destroyed.

C.S.S.B. 19 repeals a provision requiring the commission, during the one-year period following the filing of a financial statement, each time a person requests to see the financial statement, excluding the commission or a commission employee acting on official business, to place in the file a statement of the person's name and address, whom the person represents, and the date of the request and requiring the commission to retain that statement in the file for one year after the date the requested financial statement is filed.

C.S.S.B. 19 makes its provisions regarding the filing of personal financial statements applicable to personal financial statements filed on or after January 1, 2016.

Conflicts of Interest

C.S.S.B. 19, effective January 1, 2017, amends the Election Code to make it a Class A misdemeanor for a person who is required to register as a lobbyist to, before the second anniversary of the date the term for which the person was elected ends, knowingly make or authorize a political contribution or political expenditure from political contributions accepted by that person as a candidate or officeholder. The bill makes this provision applicable to a political contribution, political expenditure, or lobbying expenditure made on or after January 1, 2017, from funds accepted as a political contribution, regardless of the date the funds were accepted.

C.S.S.B. 19, effective September 1, 2015, amends the Government Code to revise the statutory provision requiring a registered lobbyist to file an activities report containing certain additional statutorily prescribed information if the registered lobbyist or a person on the registered lobbyist's behalf and with the registered lobbyist's consent or ratification makes expenditures that exceed a certain percentage of the amount of the legislative per diem in a day for transportation or lodging or for food or beverages for a member of the legislative or executive branch or for entertainment for such a member or such a member's immediate family by changing the threshold expenditure amount that triggers the requirement that the registered lobbyist state the applicable additional statutorily prescribed information on the activities report to an expenditure that exceeds an amount set by the commission that is not less than $50 a day or greater than 60 percent of the amount of the legislative per diem in a day. The bill applies the bill's revised threshold expenditure amount triggering such applicable reporting, as regards expenditures for transportation or lodging and for food or beverages, to such expenditures made for the immediate family of a member of the legislative or executive branch. The bill requires a registered lobbyist, if the registered lobbyist or a person on the registered lobbyist's behalf and with the registered lobbyist's consent or ratification gives to the immediate family of a member of the legislative or executive branch a gift or an award or memento, the value of which exceeds $50 per gift, award, or memento, to file an activities report that also states the name of the member of the legislative or executive branch in whose behalf the expenditure is made, a general description of the gift, award, or memento, and the amount of the expenditure by the appropriate category of the amount, as determined by the commission. The bill makes these provisions relating to detailed activity reports by registered lobbyists applicable only to a gift, award, or memento given to or expenditures for transportation, lodging, food, beverages, or entertainment made for a member of the legislative or executive branch or the immediate family of a member of the legislative or executive branch on or after September 1, 2015.

C.S.S.B. 19, effective January 1, 2017, prohibits a person required to register as a lobbyist from, before the second anniversary of the date the last term for which the person was elected ends, knowingly making or authorizing an expenditure from political contributions, as defined under specified Election Code provisions, that are accepted by the person as a candidate or officeholder. The bill makes this provision applicable to a political contribution, political expenditure, or lobbying expenditure made on or after January 1, 2017, from funds accepted as a political contribution, regardless of the date the funds were accepted.

C.S.S.B. 19, effective January 1, 2017, for purposes of the Class A misdemeanor offense of voting by legislators on certain measures or bills as regards statutory provisions regarding standards of conduct and conflict of interest provisions, to change the conduct constituting that offense. The bill removes the provision prohibiting a member of the legislature from voting on a measure or a bill, other than a measure that will affect an entire class of business entities that will directly benefit a specific business transaction of a business entity in which the member has a controlling interest and replaces it with a prohibition against a member of the legislature voting on a measure or a bill if the member or the member's spouse would receive a direct and substantial pecuniary benefit because of the vote. The bill includes, for these purposes, the avoidance of a pecuniary detriment in the definition of "pecuniary benefit." The bill establishes that a member of the legislature is not prohibited from voting on a measure or bill if the benefit accrues to the member or the member's spouse as part of a class, including a profession, occupation, or industry, to no greater an extent than to the rest of the class. The bill establishes that a member of the legislature prohibited from voting on a measure or bill because the member of the member's spouse would receive a direct and substantial pecuniary benefit is not prohibited from participating in debate or deliberation in connection with the bill or measure. The bill makes this provision applicable to an offense committed on or after January 1, 2017.

C.S.S.B. 19, effective January 1, 2017, establishes that, for purposes of statutory provisions governing standards of conduct and conflict of interest, the ethics counselor is a licensed attorney designated by the Texas Legislative Council and authorizes the council to designate more than one ethics counselor. The bill requires the ethics counselor, not later than the 30th day after the legislature convenes in regular session, to review the most recently filed financial statement of each member of the legislature and to provide the member with an ethics analysis of the member's financial interests. The bill requires the ethics analysis to identify the subjects of legislation upon which a vote by the member has the potential to violate the duties imposed by statutory provisions and bill provisions relating to voting by legislators on certain measures or bills and by constitutional provisions relating to the disclosure of a private interest in measures or bills. The bill authorizes a member of the legislature to request an opinion with respect to the member's duty under statutory provisions and bill provisions relating to voting by legislators on certain measures or bills in relation to a specific bill or measure from the ethics counselor or another attorney designated by the legislative chamber in which the member serves. The bill requires the ethics counselor or other attorney, as applicable, to issue the opinion not later than the 10th day after receiving the request and makes such an opinion confidential. The bill establishes that a member of the legislature who reasonably relies on such an ethics analysis or opinion is not subject to a criminal penalty or other sanction for a violation of statutory provisions or bill provisions relating to voting by legislators on certain measures or bills, provided that the material facts are substantially similar to the facts stated in the opinion request. The bill establishes that an ethics analysis is public information.

C.S.S.B. 19 makes it a Class A misdemeanor offense for a member of the governor's senior staff who ceases employment with the governor to make any communication to or appearance before the governor or a member of the governor's senior staff for which the former staff member receives a benefit and with the intent to influence action by the governor before the end of the governor's term during which the staff member's employment ceased, or, if the staff member's employment ceased during the final 12 months of the governor's term, before the end of that term and, if the governor is reelected, before the next succeeding term of office. The bill makes this provision applicable to an offense committed on or after September 1, 2015. The bill, effective September 1, 2015, defines "member of the governor's senior staff," for purposes of general provisions governing personal financial disclosure, standards of conduct, and conflict of interest, as a person employed by the governor acting in the governor's official capacity whose regular job duties include formulating policy or testifying before and meeting with members of the legislature or supervising other employees in the governor's office whose regular job duties include formulating policy or testifying before and meeting with members of the legislature.

C.S.S.B. 19, effective September 1, 2015, makes it a Class A misdemeanor offense for a member of the legislature or an executive officer elected in a statewide election who is a member of the State Bar of Texas or who is licensed to practice law in another state, a federal court, or a U.S. territory to make or receive a referral for legal services for monetary compensation or any other benefit if the referral does not comply with the rules of the state bar and is not evidenced by a written contract between the parties who are subject to the referral. The bill makes this provision applicable to an offense committed on or after September 1, 2015.

Ethics Commission Filings and Proceedings

C.S.S.B. 19 amends the Government Code, for purposes of the statutory authority for the development by the commission of computer software to facilitate the discharge of the commission's statutory duties, to acquire, apply for, register, secure, hold, protect, and renew under state law and the laws of the United States, any state in the United States, or any nation certain specified evidence of protection or exclusivity issued for intellectual property; contract with a person or entity for the reproduction, distribution, public performance, display, advertising, marketing, lease, licensing, sale, use, or other distribution of the commission's intellectual property; obtain under such a described contract a royalty, license, right, or other appropriate means of securing reasonable compensation for the exercise of rights with respect to the commission's intellectual property; and waive, increase, or reduce the amount of compensation secured by such a described contract if the commission determines that the waiver, increase, or reduction will further a goal or mission of the commission and will result in a net benefit to the state. The bill requires money paid to the commission under the authorizations to be deposited to the credit of the general revenue fund.

C.S.S.B. 19 makes confidential the electronic report data saved in a commission temporary storage location for later retrieval and editing before a political report is filed and authorizes such data to be withheld from disclosure without the necessity of requesting a decision from the attorney general. The bill subjects the information disclosed in the report, after the report is filed, to the law requiring the filing of the report.

C.S.S.B. 19 adds the specification, in the statutory provision establishing that a required statement, registration, or report that is filed with the commission is not considered to be late for purposes of any applicable civil penalty for late filing of the statement under certain conditions, that the provision also applies to any applicable criminal penalty for late filing of the statement under the same conditions.

C.S.S.B. 19, effective January 1, 2016, establishes that statutory provisions relating to appeal of a final decision of the commission do not apply to a final decision if the final decision is that the respondent violated statutory provisions relating to registration of lobbyists. The bill establishes that an appeal of a final decision of the commission that the respondent violated statutory provisions relating to registration of lobbyists is considered to be a contested case under the Administrative Procedure Act and establishes that the standard of review is by substantial evidence. The bill makes these statutory and bill provisions applicable to an appeal of a final decision of the commission filed on or after January 1, 2016.

C.S.S.B. 19 authorizes the commission to disclose to a law enforcement agency information that is confidential under statutory provisions relating to certain complaint procedures and hearings to protect the public interest and the bill authorizes the commission to disclose such information only to the extent necessary for the recipient of the information to perform a duty or function that is in addition to the commission's duties and functions. The bill establishes that such information remains confidential, requires the agency to take appropriate measures to maintain that confidentiality, and makes it a Class C misdemeanor offense for a person to disclose the confidential information obtained under these provisions.

C.S.S.B. 19 specifies that a complaint is groundless, for purposes of statutory provisions establishing a civil penalty for a frivolous or bad-faith complaint, if the complaint does not allege a violation of the law that is material, nonclerical, or nontechnical. The bill requires the commission to award to the respondent of a frivolous complaint costs, reasonable attorney's fees, and other expenses incurred in defending against the complaint as justice and equity may require and sanctions against the person who filed the complaint as the commission determines sufficient to deter the person from filing similar frivolous complaints. The bill makes the person who filed the complaint liable to the respondent for the costs, fees, and expenses awarded by the commission. The bill, for purposes of the statutory provision making a person who files a frivolous complaint civilly liable to the respondent, in addition to other penalties, in an amount equal to the greater of $10,000 or the amount of actual damages incurred by the respondent, excludes court costs and attorney fees from those amounts.

Vacancy on Certain Convictions

C.S.S.B. 19 amends the Government Code to establish that a member of the legislature convicted of a felony vacates the member's office on the date the conviction becomes final.

Records of Certain Oral Communications

C.S.S.B. 19 amends the Government Code to extend the application of statutory provisions relating to certain records and communications collected and maintained by members of the legislature and the lieutenant governor to oral communications to members of the legislature and the lieutenant governor. The bill establishes that, for the purposes of ensuring the right of the citizens of Texas to petition state government as guaranteed by the Texas Constitution and of protecting the confidentiality of communications of citizens with a member of the legislature or the lieutenant governor, a person has a justified expectation that the person's oral communication with a member of the legislature or the lieutenant governor while in the State Capitol is not subject to interception. The bill establishes that a person whose oral communication with a member of the legislature or the lieutenant governor consists of testimony at a public meeting of a legislative committee or agency does not have a justified expectation that the communication is not subject to interception. The bill defines "intercept" as the aural acquisition of the contents of a communication through the use of an electronic, mechanical, or other device that is made without the consent of all parties to the communication but specifies that the term does not include the ordinary use of a telephone or telegraph instrument or facility or telephone or telegraph equipment; a hearing aid designed to correct subnormal hearing to not better than normal; a radio, television, or other wireless receiver; or a cable system that relays a public wireless broadcast from a common antenna to a receiver.

C.S.S.B. 19 grants to a party to a protected oral communication with a member of the legislature or the lieutenant governor while in the state capitol a civil cause of action against a person who, intercepts, attempts to intercept, or employs or obtains another to intercept or attempt to intercept the communication or uses or divulges information that the person knows or reasonably should know was obtained by interception of the communication. The bill defines "protected oral communication" as an oral communication uttered by a person exhibiting an expectation that the communication is not subject to interception under circumstances justifying that expectation and specifies that the term does not include an electronic communication. The bill's provisions relating to the interception of oral communications made in the state capitol do not apply to a party to an oral communication if an interception or attempted interception of the communication is authorized by certain federal law or if the party has an affirmative defense to prosecution under certain Penal Code provisions relating to the unlawful interception, use, or disclosure of wire, oral, or electronic communications, other than an affirmative defense established in that Penal Code provision for a person not acting under color of law who intercepts a wire, oral, or electronic communication under certain conditions as specified in that affirmative defense. The bill prescribes the relief to which a person who establishes such a cause of action is entitled and establishes that Civil Practice and Remedies Code provisions relating to actions involving the exercise of certain constitutional rights do not apply to a legal action authorized by the bill's provisions relating to interception of oral communications made in the state capitol.

Repealer

C.S.S.B. 19 repeals Section 572.032(b), Government Code.

EFFECTIVE DATE

Except as otherwise provided, on passage, or, if the bill does not receive the necessary vote, September 1, 2015

COMPARISON OF SENATE ENGROSSED AND SUBSTITUTE

While C.S.S.B. 19 may differ from the engrossed in minor or nonsubstantive ways, the following comparison is organized and formatted in a manner that indicates the substantial differences between the engrossed and committee substitute versions of the bill.

SENATE ENGROSSED

HOUSE COMMITTEE SUBSTITUTE

ARTICLE 1. DISCLOSURE PROVISIONS

ARTICLE 1. Same as engrossed version.

No equivalent provision.

SECTION 1.01. Section 254.261, Election Code, is amended by adding Subsection (e) to read as follows:

(e) This section does not apply to a person to whom Subchapter K applies.

No equivalent provision.

SECTION 1.02. Subchapter J, Chapter 254, Election Code, is amended by adding Section 254.263 to read as follows:

Sec. 254.263. APPLICABILITY OF PRIVILEGE TO CERTAIN PERSONS MAKING CERTAIN POLITICAL EXPENDITURES. The privilege established under Subchapter C, Chapter 22, Civil Practice and Remedies Code, does not apply to:

(1) a person who:

(A) is required to file a report under Section 254.261;

(B) controls a political committee;

(D) makes a political expenditure described by Section 253.100(a);

(2) a person who is required to be disclosed on federal Internal Revenue Service Form 990 as an entity related to a person described by Subdivision (1); or

(3) a person who is an employee or contractor of, who acts under the control of, or who acts on behalf of a person described by Subdivision (1) or (2).

No equivalent provision.

SECTION 1.03. Effective September 1, 2015, Chapter 254, Election Code, is amended by adding Subchapter K to read as follows:

SUBCHAPTER K. REPORTING BY CERTAIN PERSONS WHO ARE NOT POLITICAL COMMITTEES

Sec. 254.281. DEFINITIONS. In this subchapter:

(1) "Contribution" has the meaning assigned by Section 251.001 and includes dues and gifts, except that the term does not include a commercial transaction involving the transfer for consideration of anything of value pursuant to a contract or agreement that reflects the usual and normal business practice of an industry.

(2) "Contribution in connection with campaign activity" means a contribution from a donor to a person or group that, at the time that the donor makes the contribution, the donor knows or has reason to know may be used to make a political contribution or political expenditure or may be commingled with other funds used to make a political contribution or political expenditure. A donor who signs a statement indicating that the donor's contribution to the person or group may not be used to make a political contribution or political expenditure does not have reason to know that the donor's contribution may be used to make a political contribution or political expenditure.

(3) "Donor" means a person who makes a contribution to a person or group to whom this subchapter applies, regardless of whether the person making the contribution is a member of the person or group that accepts the contribution.

Sec. 254.282. APPLICABILITY OF SUBCHAPTER. This subchapter applies only to a person or group that:

(1) is not a political committee;

(2) accepts one or more contributions in connection with campaign activity from a person that in the aggregate exceed $2,000 during a reporting period; and

(3) makes one or more political expenditures, excluding expenditures authorized by Sections 253.098, 253.099, 253.100, and 253.104, that in the aggregate exceed $25,000 during a calendar year.

Sec. 254.283. REPORTING REQUIREMENTS. (a) Except as otherwise provided by this subchapter, a person or group shall comply with this chapter as if the person or group were the campaign treasurer of a general-purpose committee that does not file monthly reports under Section 254.155.

(b) A person or group is not required to file a campaign treasurer appointment for accepting contributions or making political expenditures for which reporting is required under this subchapter, unless the person or group is otherwise required to file a campaign treasurer appointment under this title.

(1) the person or group is required to disclose the contributions and political expenditures in another report required under this title within the time applicable under this subchapter for reporting the contributions and political expenditures; or

(2) no reportable activity occurs during the reporting period.

Sec. 254.284. CONTENTS OF REPORT. (a) Disclosure of a contribution as provided by Sections 254.031 and 254.151 is required in a report under this subchapter only if:

(1) the contribution is a contribution in connection with campaign activity; and

(2) the aggregate amount of contributions in connection with campaign activity accepted from a person exceeds $2,000 during the reporting period.

(b) A report required under this subchapter is not required to include:

(1) any contributions accepted by the person or group that are not contributions in connection with campaign activity;

(2) the total amount of unitemized political contributions accepted by the person or group;

(3) the total amount of political contributions maintained by the person or group;

(4) any expenditures made by the person or group that are not political expenditures;

(5) the total amount of unitemized political expenditures made by the person or group; or

(6) the principal amount of all of the person's or group's outstanding loans.

(c) The first report required to be filed in a calendar year in which the $2,000 or $25,000 threshold under Section 254.282 is exceeded must include all contributions in connection with campaign activity accepted from a person that in the aggregate exceed $2,000 and all political expenditures made in the 12 months immediately preceding the acceptance of the contribution in connection with campaign activity or the making of the political expenditure that triggers the reporting requirements of this subchapter and not previously reported as required under this subchapter.

Sec. 254.285. NONREPORTABLE PERSONAL TRAVEL EXPENSE. A contribution consisting of personal travel expense incurred by an individual is not required to be reported under this subchapter if the individual receives no reimbursement for the expense.

Sec. 254.286. NONREPORTABLE PERSONAL SERVICE. A contribution consisting of an individual's personal service is not required to be reported under this subchapter if the individual receives no compensation for the service.

No equivalent provision.

SECTION 1.04. Section 305.002(5), Government Code, is amended to read as follows:

(5) "Expenditure" means a payment, distribution, loan, advance, reimbursement, deposit, or gift of money or any thing of value and includes a contract, promise, or agreement, whether or not legally enforceable, to make an expenditure. The term does not include a payment benefiting a member of the legislative or executive branch if the member fully reimburses the person making the expenditure before the date on which the person would otherwise be required to report the payment under this title.

No equivalent provision.

SECTION 1.05. Effective September 1, 2015, Section 305.027, Government Code, is amended by amending Subsection (e) and adding Subsection (f) to read as follows:

(e) In this section:

(1) "Automated dial announcing device" means automated equipment used for telephone solicitation or collection that can:

(A) store telephone numbers to be called or produce numbers to be called through use of a random or sequential number generator; and

(B) convey, alone or in conjunction with other equipment, a prerecorded or synthesized voice message to the number called without the use of a live operator.

(2) "Legislative [~~, "legislative~~] advertising" means a communication that supports, opposes, or proposes legislation and that:

(A) [~~(1)~~] in return for consideration, is published in a newspaper, magazine, or other periodical or is broadcast by radio or television; [or]

(B) [~~(2)~~] appears in a pamphlet, circular, flier, billboard or other sign, bumper sticker, button, or similar form of written communication; or

(f) A person commits an offense if the person knowingly communicates or knowingly enters into a contract to communicate legislative advertising to a member of the legislature using an automated dial announcing device. Notwithstanding Section 305.031, an offense under this subsection is a Class B misdemeanor.

SECTION 1.01. Section 572.021, Government Code, is amended to read as follows:

Sec. 572.021. FINANCIAL STATEMENT REQUIRED. (a) Except as provided by Section 572.0211, a state officer, a partisan or independent candidate for an office as an elected officer, and a state party chair shall file with the commission a verified financial statement complying with Sections 572.022 through 572.0252.

(b) Each financial statement filed under this subchapter must be submitted electronically through a secure website maintained by the commission.

SECTION 1.06. Section 572.021, Government Code, is amended to read as follows:

(b) Each financial statement filed under this subchapter must be submitted electronically through a secure website maintained by the commission using software that meets the commission's specifications.

SECTION 1.02. Section 572.023, Government Code, is amended by amending Subsection (b) and adding Subsection (e) to read as follows:

(b) The account of financial activity consists of:

(1) a list of all sources of occupational income, identified by employer, or if self-employed, by the nature of the occupation, including identification of a person or other organization from which the individual or a business in which the individual has a substantial interest received a fee as a retainer for a claim on future services in case of need, as distinguished from a fee for services on a matter specified at the time of contracting for or receiving the fee, if professional or occupational services are not actually performed during the reporting period equal to or in excess of the amount of the retainer, and the category of the amount of the fee;

(2) identification by name and the category of the number of shares of stock of any business entity held or acquired, and if sold, the category of the amount of net gain or loss realized from the sale;

(3) a list of all bonds, notes, and other commercial paper held or acquired, and if sold, the category of the amount of net gain or loss realized from the sale;

(4) identification of each source and the category of the amount of income in excess of $500 derived from each source from interest, dividends, royalties, and rents;

(5) identification of each guarantor of a loan and identification of each person or financial institution to whom a personal note or notes or lease agreement for a total financial liability in excess of $1,000 existed at any time during the year and the category of the amount of the liability;

(6) identification by description of all beneficial interests in real property and business entities held or acquired, and if sold, the category of the amount of the net gain or loss realized from the sale;

(7) identification of a person or other organization from which the individual or the individual's spouse or dependent children received a gift of anything of value in excess of $250 and a description of each gift, except:

(A) a gift received from an individual related to the individual at any time within the second degree by consanguinity or affinity, as determined under Subchapter B, Chapter 573;

(B) a political contribution that was reported as required by Chapter 254, Election Code; and

(8) identification of the source and the category of the amount of all income received as beneficiary of a trust, other than a blind trust that complies with Subsection (c), and identification of each trust asset, if known to the beneficiary, from which income was received by the beneficiary in excess of $500;

(9) identification by description and the category of the amount of all assets and liabilities of a corporation, firm, partnership, limited partnership, limited liability partnership, professional corporation, professional association, joint venture, or other business association in which 50 percent or more of the outstanding ownership was held, acquired, or sold;

(10) a list of all boards of directors of which the individual is a member and executive positions that the individual holds in corporations, firms, partnerships, limited partnerships, limited liability partnerships, professional corporations, professional associations, joint ventures, or other business associations or proprietorships, stating the name of each corporation, firm, partnership, limited partnership, limited liability partnership, professional corporation, professional association, joint venture, or other business association or proprietorship and the position held;

(11) identification of any person providing transportation, meals, or lodging expenses permitted under Section 36.07(b), Penal Code, and the amount of those expenses, other than expenditures required to be reported under Chapter 305;

(12) any corporation, firm, partnership, limited partnership, limited liability partnership, professional corporation, professional association, joint venture, or other business association, excluding a publicly held corporation, in which both the individual and a person registered under Chapter 305 have an interest;

(13) identification by name and the category of the number of shares of any mutual fund held or acquired, and if sold, the category of the amount of net gain or loss realized from the sale; [~~and~~]

(14) identification of each blind trust that complies with Subsection (c), including:

(A) the category of the fair market value of the trust;

(B) the date the trust was created;

(D) a statement signed by the trustee, under penalty of perjury, stating that:

(i) the trustee has not revealed any information to the individual, except information that may be disclosed under Subdivision (8); and

(ii) to the best of the trustee's knowledge, the trust complies with this section;

(15) if the aggregate cost of goods or services sold under one or more written contracts described by this subdivision exceeds $10,000 in the year covered by the report, identification of each written contract, including the name of each party to the contract:

(A) for the sale of:

(i) goods in the amount of $2,500 or more; or

(ii) services, including professional services as defined by Section 2254.002, consulting services as defined by Section 2254.021, or legal counsel, in the amount of $5,000 or more;

(B) to which the individual or any business entity of which the individual has at least a 50 percent ownership interest is a party; and

(i) a governmental entity; or

(ii) a person who contracts with a governmental entity, to fulfill one or more of the person's obligations to the governmental entity under that contract;

(16) if the individual is a member of the legislature and provides bond counsel services to an issuer, as defined by Section 1201.002(1), identification of the following for each issuance for which the individual served as bond counsel:

(A) the amount of the issuance;

(B) the name of the issuer;

(D) the amount of fees paid to the individual, and whether the amount is:

(i) less than $5,000;

(ii) at least $5,000 but less than $10,000;

(iii) at least $10,000 but less than $25,000; or

(iv) $25,000 or more; and

(E) the amount of fees paid to the individual's firm, if applicable, and whether the amount is:

(i) less than $5,000;

(ii) at least $5,000 but less than $10,000;

(iii) at least $10,000 but less than $25,000; or

(iv) $25,000 or more; and

(17) identification of any other source of earned or unearned income not reported under another provision of this subsection, including public benefits or a pension, individual retirement account, or other retirement plan, and the category of the amount of income derived from each source.

(e) In this section, "governmental entity" means the state, a political subdivision of the state, or an agency or department of the state or a political subdivision of the state.

SECTION 1.07. Section 572.023, Government Code, is amended by amending Subsection (b) and adding Subsection (e) to read as follows:

(b) The account of financial activity consists of:

(3) a list of all bonds, notes, and other commercial paper held or acquired, and if sold, the category of the amount of net gain or loss realized from the sale;

(4) identification of each source and the category of the amount of income in excess of $500 derived from each source from interest, dividends, royalties, and rents;

(A) a gift received from an individual related to the individual at any time within the second degree by consanguinity or affinity, as determined under Subchapter B, Chapter 573;

(B) a political contribution that was reported as required by Chapter 254, Election Code; and

(13) identification by name and the category of the number of shares of any mutual fund held or acquired, and if sold, the category of the amount of net gain or loss realized from the sale; [~~and~~]

(14) identification of each blind trust that complies with Subsection (c), including:

(A) the category of the fair market value of the trust;

(B) the date the trust was created;

(D) a statement signed by the trustee, under penalty of perjury, stating that:

(i) the trustee has not revealed any information to the individual, except information that may be disclosed under Subdivision (8); and

(ii) to the best of the trustee's knowledge, the trust complies with this section;

(15) identification of each contract or subcontract with a public entity to which the individual or the individual's spouse is a party and each paid relationship the individual or the individual's spouse has with a public entity; and

(16) identification of any other source of earned or unearned income not reported under another provision of this subsection, including federal or state governmental disability payments, other public benefits, or a pension, individual retirement account, or other retirement plan, and the category of the amount of income derived from each source.

(e) In this section:

(1) "Public benefit" includes the value of an exemption from taxation of the total appraised value of a residence homestead.

(2) "Public entity" includes this state and a political subdivision of this state.

SECTION 1.03. Section 572.0252, Government Code, is amended to read as follows:

Sec. 572.0252. INFORMATION ABOUT LEGAL REFERRALS. A state officer who is an attorney shall report on the financial statement:

(1) making or receiving any referral for compensation for legal services; [~~and~~]

(2) the date the referral is made or received;

(3) the style of the case referred, if applicable; and

(4) the percentage of the legal fee paid or received that was agreed to between the parties to the referral, or, if the fee is not a percentage, the agreed amount of the fee paid or received [~~the category of the amount of any fee accepted for making a referral for legal services~~].

No equivalent provision.

SECTION 1.08. Subchapter B, Chapter 572, Government Code, is amended by adding Section 572.0231 to read as follows:

Sec. 572.0231. AFFIRMATION OF SUBMISSION OF FEDERAL INCOME TAX RETURN AND TAX PAYMENTS. (a) An individual filing a statement under this subchapter shall include with the statement an affirmation that:

(1) the individual has filed a federal personal income tax return for the preceding calendar year and has made all payments as required for federal income taxes owed by the individual for the preceding year; or

(2) the individual has filed for and is submitting the personal financial statement within the period of a valid extension for the filing of a federal personal income tax return.

(b) An individual filing a statement under this subchapter shall include with the statement an affirmation that the individual has paid all property taxes due and payable by the individual on the date the statement is filed.

No equivalent provision.

SECTION 1.09. Subchapter B, Chapter 572, Government Code, is amended by adding Sections 572.0253 and 572.0254 to read as follows:

Sec. 572.0253. INFORMATION ABOUT GOVERNMENT CONTRACT CONSULTING SERVICES. (a) In this section, "government contract consulting services" means services to advise or assist a person or entity in maintaining, applying for, soliciting, or entering into a contract with this state or a political subdivision of this state.

(b) A state officer who receives compensation for government contract consulting services performed by the officer shall report on the financial statement the name of each person to whom the officer provided the services and the category of the amount of compensation actually received.

Sec. 572.0254. PRE-APPOINTMENT STATEMENT OF POLITICAL CONTRIBUTIONS MADE BY APPOINTED OFFICER OR SPOUSE. (a) In this section, "political contribution" has the meaning assigned by Section 251.001, Election Code.

(b) Notwithstanding the filing dates provided by Section 572.026, before being appointed as an appointed officer by the governor, lieutenant governor, or speaker of the house of representatives, an individual must file with the commission a statement that discloses any political contributions made during the two years preceding the individual's nomination to the appointed office by the individual or the individual's spouse to:

(1) the appointing officer as a candidate or officeholder; or

(2) a specific-purpose political committee for:

(A) supporting the appointing officer;

(B) opposing the appointing officer's opponent; or

No equivalent provision.

SECTION 1.10. Section 572.026(d), Government Code, is amended to read as follows:

(d) An individual required to file a financial statement under Subsection (a) may request the commission to grant an extension of not more than 60 days for filing the statement. [~~The commission shall grant the request if it is received before the filing deadline or if a timely filing or request for extension is prevented because of physical or mental incapacity.~~] The commission may not grant an [~~more than one~~] extension to an individual [~~in one year~~] except for good cause shown, as determined by the commission.

SECTION 1.04. Subchapter B, Chapter 572, Government Code, is amended by adding Section 572.0295 to read as follows:

Sec. 572.0295. PERSONAL FINANCIAL STATEMENT. (a) A person who files a report under this chapter may amend the report.

(b) A report that is amended before the eighth day after the date the original report was filed is considered to have been filed on the date on which the original report was filed.

(c) A report that is amended on or after the eighth day after the original report was filed is considered to have been filed on the date on which the original report was filed if:

(1) the amendment is made before any complaint is filed with regard to the subject of the amendment; and

(2) the original report was made in good faith and without an intent to mislead or to misrepresent the information contained in the report.

SECTION 1.11. Subchapter B, Chapter 572, Government Code, is amended by adding Section 572.0295 to read as follows:

Sec. 572.0295. PERSONAL FINANCIAL STATEMENT. (a) A person who files a report under this chapter may amend the report.

(b) A report that is amended before the eighth day after the date the original report was filed is considered to have been filed on the date on which the original report was filed.

(c) A report that is amended on or after the eighth day after the original report was filed is considered to have been filed on the date on which the original report was filed if:

(1) the amendment is made before any complaint is filed with the commission regarding the subject of the amendment; and

(2) the original report was made in good faith and without an intent to mislead or to misrepresent the information contained in the report.

SECTION 1.05. Section 572.032, Government Code, is amended by amending Subsection (a) and adding Subsection (d) to read as follows:

(a) Financial statements filed under this subchapter are public records. The commission shall maintain the statements in separate alphabetical files and in a manner that is accessible to the public during regular office hours and make the statements available in a searchable format to the public on the commission's website not later than the 15th day after the date the statement is required to be filed or is actually filed, whichever is later.

(d) The commission is not required to continue to make available on its website a financial statement that may be destroyed under Subsection (c).

The commission may not make available on its website a financial statement that the commission is required to destroy under Subsection (c).

SECTION 1.12. Section 572.032, Government Code, is amended by amending Subsections (a) and (c) and adding Subsections (a-2) and (d) to read as follows:

(a) Financial statements filed under this subchapter are public records. The commission shall maintain the statements in separate alphabetical files and in a manner that is accessible to the public during regular office hours and make the statements available in a searchable format to the public on the commission's website not later than the third business day after the date the statement is required to be filed or is actually filed, whichever is later.

(a-2) The commission shall remove the home address of an individual from a financial statement filed by the individual under this subchapter before making the statement available to the public on the commission's Internet website.

(c) After the second anniversary of the date the individual ceases to be a state officer, the commission may and on notification from the former state officer shall:

(1) destroy each financial statement filed by the state officer; and

(2) remove each financial statement filed by the state officer from the commission's Internet website.

(d) The commission is not required to continue to make available on its website a financial statement that may be destroyed under Subsection (c).

ARTICLE 2. CONFLICTS OF INTEREST

ARTICLE 2. Same as engrossed version.

SECTION 2.01. Section 141.001, Election Code, is amended by amending Subsection (a) and adding Subsections (d) and (e) to read as follows:

(a) To be eligible to be a candidate for, or elected or appointed to, a public elective office in this state, a person must:

(1) be a United States citizen;

(2) be 18 years of age or older on the first day of the term to be filled at the election or on the date of appointment, as applicable;

(3) have not been determined by a final judgment of a court exercising probate jurisdiction to be:

(A) totally mentally incapacitated; or

(B) partially mentally incapacitated without the right to vote;

(4) have not been finally convicted of a felony from which the person has not been pardoned or otherwise released from the resulting disabilities;

(5) have resided continuously in the state for 12 months and in the territory from which the office is elected for six months immediately preceding the following date:

(A) for a candidate whose name is to appear on a general primary election ballot, the date of the regular filing deadline for a candidate's application for a place on the ballot;

(B) for an independent candidate, the date of the regular filing deadline for a candidate's application for a place on the ballot;

(D) for a party nominee who is nominated by any method other than by primary election, the date the nomination is made; and

(E) for an appointee to an office, the date the appointment is made; [~~and~~]

(6) not be required to be registered as a lobbyist under Chapter 305, Government Code; and

(7) satisfy any other eligibility requirements prescribed by law for the office.

(d) Except as provided by Section 7.103(c), Education Code, Subsection (a)(6) does not apply to:

(1) an office of a political subdivision with a population of 150,000 or less, other than the office of presiding officer of the governing body of the political subdivision, provided that the officeholder does not receive a salary or wage for that office; or

(2) the office of the presiding officer of the governing body of a political subdivision with a population of 50,000 or less, provided that the presiding officer does not receive a salary or wage for that office.

(e) In Subsection (d), a presiding officer or other officeholder is not considered to have received a salary or wage if the officeholder refuses to accept a salary or wage offered or budgeted for that office.

No equivalent provision.

SECTION 2.02. Subchapter A, Chapter 141, Election Code, is amended by adding Section 141.005 to read as follows:

Sec. 141.005. DRUG TESTING REQUIREMENT FOR PERSONS ELECTED TO PUBLIC OFFICE. (a) At the time a person files for a public elective office, the person must submit to a drug test to determine if the person has used a controlled substance, as that term is defined by Section 481.002, Health and Safety Code.

(b) The authority responsible for determining eligibility for the office to which the person is elected shall administer a drug test required under this section at the person's expense.

(1) obtain a waiver of confidentiality from the person with respect to the results of the drug test; and

(2) submit the results of the drug test to the Texas Ethics Commission.

(d) The Texas Ethics Commission shall publish the results of a drug test conducted under this section on the commission's Internet website not later than 30 days after receiving the results.

(e) The secretary of state shall adopt rules to administer this section.

No equivalent provision.

SECTION 2.03. Subchapter A, Chapter 305, Government Code, is amended by adding Section 305.0031 to read as follows:

Sec. 305.0031. CERTAIN ELECTED OFFICERS MAY NOT REGISTER. (a) A member of Congress, a member of the legislature, or a holder of a statewide office may not register under this chapter.

(b) A registration under this chapter expires on the date a person takes office as a member of Congress, a member of the legislature, or a holder of a statewide office.

No equivalent provision.

SECTION 2.01. Effective January 1, 2017, Subchapter A, Chapter 253, Election Code, is amended by adding Section 253.006 to read as follows:

Sec. 253.006. CERTAIN CONTRIBUTIONS AND EXPENDITURES BY LOBBYISTS RESTRICTED. (a) Notwithstanding any other provision of law, a person required to register under Chapter 305, Government Code, may not, before the second anniversary of the date the last term for which the person was elected ends, knowingly make or authorize a political contribution or political expenditure from political contributions accepted by the person as a candidate or officeholder.

(b) A person who violates this section commits an offense. An offense under this section is a Class A misdemeanor.

SECTION 2.04. Sections 305.0061(a), (b), and (c), Government Code, are amended to read as follows:

(a) If a registrant or a person on the registrant's behalf and with the registrant's consent or ratification makes expenditures that exceed $50 [~~60 percent of the amount of the legislative per diem in~~] a day for transportation or lodging for a member of the legislative or executive branch or for the immediate family of a member of the legislative or executive branch, the registrant shall also state the following on the report filed under Section 305.006: