2011S0561-1 03/04/11
By: Lewis H.B. No. 2508
A BILL TO BE ENTITLED
AN ACT
relating to immunity and liability issues regarding unincorporated
charitable organizations, charitable organizations that utilize
self-insured retentions in their insurance coverage, and
charitable organizations that utilize Lloyd's plans and indemnity
policies.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subdivision (1), Section 84.003, Civil Practice
and Remedies Code, is amended to read as follows:
(1) "Charitable organization" means:
(A) any organization exempt from federal income
tax under Section 501(a) of the Internal Revenue Code of 1986 by
being listed as an exempt organization in Section 501(c)(3) or
501(c)(4) of the code, if it is a nonprofit entity [corporation,
foundation, community chest, or fund] organized and operated
exclusively for charitable, religious, prevention of cruelty to
children or animals, youth sports and youth recreational,
neighborhood crime prevention or patrol, fire protection or
prevention, emergency medical or hazardous material response
services, or educational purposes, including private primary or
secondary schools if accredited by a member association of the
Texas Private School Accreditation Commission but excluding
fraternities, sororities, and secret societies, or is organized and
operated exclusively for the promotion of social welfare by being
primarily engaged in promoting the common good and general welfare
of the people in a community;
(B) any bona fide charitable, religious,
prevention of cruelty to children or animals, youth sports and
youth recreational, neighborhood crime prevention or patrol, or
educational organization, excluding fraternities, sororities, and
secret societies, or other organization organized and operated
exclusively for the promotion of social welfare by being primarily
engaged in promoting the common good and general welfare of the
people in a community, and that:
(i) is organized and operated exclusively
for one or more of the above purposes;
(ii) does not engage in activities which in
themselves are not in furtherance of the purpose or purposes;
(iii) does not directly or indirectly
participate or intervene in any political campaign on behalf of or
in opposition to any candidate for public office;
(iv) dedicates its assets to achieving the
stated purpose or purposes of the organization;
(v) does not allow any part of its net
assets on dissolution of the organization to inure to the benefit of
any group, shareholder, or individual; and
(vi) normally receives more than one-third
of its support in any year from private or public gifts, grants,
contributions, or membership fees;
(C) a homeowners association as defined by
Section 528(c) of the Internal Revenue Code of 1986 or which is
exempt from federal income tax under Section 501(a) of the Internal
Revenue Code of 1986 by being listed as an exempt organization in
Section 501(c)(4) of the code;
(D) a volunteer center, as that term is defined
by Section 411.126, Government Code; or
(E) a local chamber of commerce that:
(i) is exempt from federal income tax under
Section 501(a) of the Internal Revenue Code of 1986 by being listed
as an exempt organization in Section 501(c)(6) of the code;
(ii) does not directly or indirectly
participate or intervene in any political campaign on behalf of or
in opposition to any candidate for public office; and
(iii) does not directly or indirectly
contribute to a political action committee that makes expenditures
to any candidates for public office.
SECTION 2. Subsection (g), Section 84.007, Civil Practice
and Remedies Code, is amended to read as follows:
(g) Sections 84.005 and 84.006 of this Act do not apply to
any charitable organization that does not have liability insurance
coverage in effect on any act or omission to which this chapter
applies. The coverage shall apply to the acts or omissions of the
organization and its employees and volunteers and be in the amount
of at least $500,000 for each person and $1,000,000 for each single
occurrence for death or bodily injury and $100,000 for each single
occurrence for injury to or destruction of property. The coverage
may be provided under a contract of insurance, a plan providing for
self-insured retention, a Lloyd's plan, an indemnity policy, or
other plan of insurance authorized by statute and may be satisfied
by the purchase of a $1,000,000 bodily injury and property damage
combined single limit policy. For the purposes of this chapter,
coverage amounts are inclusive of a self-insured retention, a
Lloyd's plan, or an indemnity policy. Nothing in this chapter shall
limit liability of any insurer or insurance plan in an action under
Chapter 21, Insurance Code, or in an action for bad faith conduct,
breach of fiduciary duty, or negligent failure to settle a claim.
SECTION 3. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2011.