S.B. No. 1128
 
 
 
 
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.
 
 
 
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
         I hereby certify that S.B. No. 1128 passed the Senate on
  April 26, 2007, by the following vote:  Yeas 31, Nays 0.
 
 
  ______________________________
  Secretary of the Senate    
 
         I hereby certify that S.B. No. 1128 passed the House on
  May 23, 2007, by the following vote:  Yeas 144, Nays 0, two
  present not voting.
 
 
  ______________________________
  Chief Clerk of the House   
 
 
 
  Approved:
 
  ______________________________ 
              Date
 
 
  ______________________________ 
            Governor