Legislature moves to require nonprofit financial accountability_50205

Posted: 4/29/05

Legislature moves to require
nonprofit financial accountability

By Ken Camp

Managing Editor

AUSTIN–A bill in the Texas House of Representa-tives that requires annual financial audits for nonprofit organizations exempts churches and schools, but it likely would include many separate not-for-profit community ministries launched by churches.

HB 3417 would make it a misdemeanor if any corporation failed to maintain financial records, prepare an annual report or make its financial records or annual reports available to the public.

Under the bill, a corporation's annual report would need to conform to accepted accounting standards and include full financial information such as a statement of support, revenue and expenses, as well as changes in fund balances, a statement of functional expenses and balance sheets on all funds.

The bill exempts churches, denominational organizations and other places of worship “at which religious services are the primary activity and such activities are regularly conducted.”

It also exempts public and private institutions of higher education, elementary or secondary schools and vocational schools, as well as any corporation that solicits funds only from its members.

The bill requires financial review if a corporation's contributions are $500,000 or more and a financial audit if it has contributions of at least $750,000.

“The bottom line is that churches and denominational bodies are exempt, but probably separate 501(c)3 entities that churches create to do ministry would have to comply like other nonexempt not-for-profits,” said Suzii Paynter, director of citizenship and public policy with the Baptist General Convention of Texas' Christian Life Commission.

In other legislative developments:

The Texas House approved a constitutional ban on gay marriages and civil unions. To become law, the measure still must be approved by a two-thirds majority of the Texas Senate and then be approved by a majority of voters in an election this fall.

The House of Representatives amended a child protective services reform bill to include a provision that would prevent homosexual couples from becoming foster parents.

The House Appropriations Committee approved a bill that would make Texas the first state to allow people to buy lottery tickets on the Internet and pay with a debit card.

The House State Affairs Committee passed HB 1212, a bill that would require a woman under age 18 to get a parent's written permission before she could have an abortion. The Senate version of that same measure, SB 1150, is in the Senate State Affairs Committee.

Rep. Dianne Delisi, R-Temple, sponsor of HB 2479, announced plans to revise language in the bill to give the Health and Human Service Commission oversight of the Restoring Our Communities fund, rather than giving the Governor's Office of Faith-Based and Community Initiatives sole authority to administer it.