BILL ANALYSIS

C.S.H.B. 3592

By: Phelan

State Affairs

Committee Report (Substituted)

BACKGROUND AND PURPOSE

The bill author has informed the committee that political contributions from out-of-state donors are not subject to strict limitations and that this may allow for significant external influence on Texas elections. By implementing safeguards, C.S.H.B. 3592 aims to reduce external influence in Texas elections while ensuring transparency and accountability in campaign financing. C.S.H.B. 3592 seeks to establish clear limits on the amount of political contributions candidates and officeholders can receive from out-of-state donors and establishes a civil penalty for a violation of these limitations.

CRIMINAL JUSTICE IMPACT

It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.

RULEMAKING AUTHORITY

It is the committee's opinion that rulemaking authority is expressly granted to the Texas Ethics Commission in SECTION 1 of this bill.

ANALYSIS

C.S.H.B. 3592 amends the Election Code to prohibit a candidate for public office or an officeholder from knowingly accepting, for an election in which the candidate's or officeholder's name appears on the ballot, political contributions that are made by a person with a principal address that is located outside Texas and that in the aggregate exceed the following amounts:

· $5,000 if the election is for a statewide office;

· $2,500 if the election is for a district office; or

· $1,000 if the election is for a county office.

The bill requires a candidate or an officeholder who accepts a political contribution in violation of the bill's provisions to return the contribution to the contributor not later than the later of the fifth day after the date the contribution was accepted or the last day of the reporting period under state political reporting law during which the contribution was accepted.

C.S.H.B. 3592 makes a person who violates the bill's provisions liable for a civil penalty not to exceed three times the amount of the political contributions accepted or made in violation of its provisions. The bill authorizes the Texas Ethics Commission (TEC) to impose such a civil penalty against a person only after a formal hearing is held as provided by Government Code provisions governing complaint procedures and hearings and requires the TEC to adopt rules as necessary to implement the bill's provisions.

C.S.H.B. 3592 applies only to a political contribution made on or after the bill's effective date. A contribution made before the bill's effective date is governed by the law in effect on the date the contribution was made and is not aggregated with contributions made on or after that date.

EFFECTIVE DATE

September 1, 2025.

COMPARISON OF INTRODUCED AND SUBSTITUTE

While C.S.H.B. 3592 may differ from the introduced in minor or nonsubstantive ways, the following summarizes the substantial differences between the introduced and committee substitute versions of the bill.

The substitute omits the provision from the introduced that prohibited a political committee from making a political contribution to a candidate or an officeholder for an election in which the candidate's or officeholder's name appears on the ballot if, during the preceding applicable political reporting period, more than 50 percent of the political contributions accepted by the committee were made by persons with a principal address that is located outside Texas.