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AN ACT
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relating to authorizing certain distributions of income from a |
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nonprofit corporation to members of the corporation who are certain |
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nonprofit corporations. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 22.001(5), Business Organizations Code, |
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is amended to read as follows: |
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(5) "Nonprofit corporation" means a corporation no |
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part of the income of which is distributable to a member, director, |
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or officer of the corporation, except as provided by Section |
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22.054. |
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SECTION 2. Section 22.053, Business Organizations Code, is |
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amended to read as follows: |
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Sec. 22.053. DIVIDENDS PROHIBITED. Except as provided by |
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Section 22.054, a [A] dividend may not be paid to, and no part of the |
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income of a corporation may be distributed to, the corporation's |
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members, directors, or officers. |
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SECTION 3. Section 22.054, Business Organizations Code, is |
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amended to read as follows: |
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Sec. 22.054. AUTHORIZED BENEFITS AND DISTRIBUTIONS. A |
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corporation may: |
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(1) pay compensation in a reasonable amount to the |
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members, directors, or officers of the corporation for services |
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provided; |
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(2) confer benefits on the corporation's members in |
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conformity with the corporation's purposes; [and] |
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(3) make distributions to the corporation's members on |
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winding up and termination to the extent authorized by this |
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chapter; and |
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(4) make distributions of its income to the |
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corporation's members who are nonprofit corporations organized |
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under this code and who are exempt from income taxation under |
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Section 501(a), Internal Revenue Code of 1986, by being listed |
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under Section 501(c)(3) of that code, if: |
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(A) the distributions are made in accordance with |
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the purpose or purposes of the corporation as stated in the |
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certificate of formation and with the fiduciary responsibilities of |
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the board of directors, including the duty to safeguard restricted |
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funds for their intended purposes; and |
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(B) after the distributions are complete: |
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(i) the corporation would be able to pay the |
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corporation's debts as they become due in the usual course of its |
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activities; and |
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(ii) the corporation's total assets would |
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at least equal the sum of its total liabilities. |
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SECTION 4. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2015. |
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______________________________ |
______________________________ |
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President of the Senate |
Speaker of the House |
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I hereby certify that S.B. No. 1233 passed the Senate on |
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April 30, 2015, by the following vote: Yeas 31, Nays 0. |
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______________________________ |
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Secretary of the Senate |
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I hereby certify that S.B. No. 1233 passed the House on |
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May 12, 2015, by the following vote: Yeas 144, Nays 0, two |
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present not voting. |
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______________________________ |
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Chief Clerk of the House |
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Approved: |
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______________________________ |
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Date |
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______________________________ |
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Governor |