BILL ANALYSIS Senate Research Center C.S.S.B. 504 89R17178 CS-D By: Kolkhorst Business & Commerce 3/10/2025 Committee Report (Substituted) AUTHOR'S / SPONSOR'S STATEMENT OF INTENT Over the last few years, local governments have had an increased reliance on contracting to carry out government purposes; as a result, the transparency of where tax dollars are spent has suffered. This bill would make it so that any contract between a nonprofit and a political subdivision valued over $500,000 must be accompanied by reporting requirements, namely: The organization's operating budget for the fiscal year. The salary of each employee of the organization whose compensation exceeds the median salary of state employees, as defined by the Comptroller of Public Accounts of the State of Texas. A political subdivision that keeps a website will publish the information on their website, and shall update the information not later than the 30th day of each fiscal year of the organization until the contract expires. (Original Author's/Sponsor's Statement of Intent) C.S.S.B. 504 amends current law relating to the disclosure of certain financial information by certain nonprofit organizations that enter into sizeable contracts with political subdivisions. RULEMAKING AUTHORITY This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency. SECTION BY SECTION ANALYSIS SECTION 1. Amends Subchapter Z, Chapter 2252, Government Code, by adding Section 2252.902, as follows: Sec. 2252.902. CONTRACTS WITH NONPROFIT ORGANIZATIONS. (a) Defines "economic development corporation," "nonprofit organization," "political subdivision," and "state agency." (b) Provides that this section applies only to a contract between a nonprofit organization and a political subdivision that has an annual value of more than $500,000. (c) Provides that this section does not apply to a nonprofit organization that is an electric cooperative as defined by Section 11.003 (Definitions), Utilities Code, an organization certified as an independent organization under Section 39.151 (Essential Organizations), Utilities Code, or a water supply corporation created and operating under Chapter 67 (Nonprofit Water Supply or Sewer Service Corporations), Water Code. (d) Requires a nonprofit organization that enters into a contract with a political subdivision to provide certain information to the political subdivision when the contract is entered into, and update the information not later than the 30th day of each fiscal year of the organization until the contract expires. (e) Requires a political subdivision that maintains an Internet website to publish and maintain the information received under Subsection (d) on the website. (f) Requires the Comptroller of Public Accounts of the State of Texas (comptroller), for the purposes of this section, to determine the median salary paid each state fiscal year from the state treasury to employees of a state agency. Requires that the comptroller's determination be published on the comptroller's Internet website not later than October 1 of each year. (g) Authorizes the attorney general to bring forth action to get injunctive relief to get a political subdivision to be in compliance with this section. SECTION 2. Makes application of Section 2252.902, Government Code, as added by this Act, prospective. SECTION 3. Effective date: September 1, 2025.
BILL ANALYSIS
Senate Research Center C.S.S.B. 504
89R17178 CS-D By: Kolkhorst
Business & Commerce
3/10/2025
Committee Report (Substituted)
Senate Research Center
C.S.S.B. 504
89R17178 CS-D
By: Kolkhorst
Business & Commerce
3/10/2025
Committee Report (Substituted)
AUTHOR'S / SPONSOR'S STATEMENT OF INTENT
Over the last few years, local governments have had an increased reliance on contracting to carry out government purposes; as a result, the transparency of where tax dollars are spent has suffered.
This bill would make it so that any contract between a nonprofit and a political subdivision valued over $500,000 must be accompanied by reporting requirements, namely:
The organization's operating budget for the fiscal year.
The salary of each employee of the organization whose compensation exceeds the median salary of state employees, as defined by the Comptroller of Public Accounts of the State of Texas.
A political subdivision that keeps a website will publish the information on their website, and shall update the information not later than the 30th day of each fiscal year of the organization until the contract expires.
(Original Author's/Sponsor's Statement of Intent)
C.S.S.B. 504 amends current law relating to the disclosure of certain financial information by certain nonprofit organizations that enter into sizeable contracts with political subdivisions.
RULEMAKING AUTHORITY
This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Subchapter Z, Chapter 2252, Government Code, by adding Section 2252.902, as follows:
Sec. 2252.902. CONTRACTS WITH NONPROFIT ORGANIZATIONS. (a) Defines "economic development corporation," "nonprofit organization," "political subdivision," and "state agency."
(b) Provides that this section applies only to a contract between a nonprofit organization and a political subdivision that has an annual value of more than $500,000.
(c) Provides that this section does not apply to a nonprofit organization that is an electric cooperative as defined by Section 11.003 (Definitions), Utilities Code, an organization certified as an independent organization under Section 39.151 (Essential Organizations), Utilities Code, or a water supply corporation created and operating under Chapter 67 (Nonprofit Water Supply or Sewer Service Corporations), Water Code.
(d) Requires a nonprofit organization that enters into a contract with a political subdivision to provide certain information to the political subdivision when the contract is entered into, and update the information not later than the 30th day of each fiscal year of the organization until the contract expires.
(e) Requires a political subdivision that maintains an Internet website to publish and maintain the information received under Subsection (d) on the website.
(f) Requires the Comptroller of Public Accounts of the State of Texas (comptroller), for the purposes of this section, to determine the median salary paid each state fiscal year from the state treasury to employees of a state agency. Requires that the comptroller's determination be published on the comptroller's Internet website not later than October 1 of each year.
(g) Authorizes the attorney general to bring forth action to get injunctive relief to get a political subdivision to be in compliance with this section.
SECTION 2. Makes application of Section 2252.902, Government Code, as added by this Act, prospective.
SECTION 3. Effective date: September 1, 2025.