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A BILL TO BE ENTITLED
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AN ACT
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relating to requirements for governmental contracts with nonprofit |
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organizations regarding the use of money provided under those |
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contracts. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter Z, Chapter 2252, Government Code, is |
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amended by adding Section 2252.909 to read as follows: |
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Sec. 2252.909. CONTRACTS WITH NONPROFIT ORGANIZATIONS. (a) |
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In this section: |
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(1) "Governmental entity" has the meaning assigned by |
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Section 2251.001. |
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(2) "Nonprofit organization" means an organization |
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exempt from federal income taxation under Section 501(a), Internal |
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Revenue Code of 1986, as an organization described by Section |
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501(c)(3) of that code. |
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(b) This section applies only to a contract to be paid |
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partly or wholly from public funds between a governmental entity |
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and a nonprofit organization. |
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(c) A governmental entity may not enter into a contract with |
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a nonprofit organization unless the contract contains a written |
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verification from the organization that the organization will not |
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use more than 20 percent of the money provided under the contract |
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for an administrative purpose, including for payment of the |
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organization's employee or officer salaries. |
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SECTION 2. The change in law made by this Act applies only |
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to a contract entered into on or after the effective date of this |
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Act. A contract entered into before the effective date of this Act |
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is governed by the law as it existed immediately before the |
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effective date of this Act, and that law is continued in effect for |
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that purpose. |
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SECTION 3. This Act takes effect September 1, 2021. |