TITLE 1. ADMINISTRATION
PART 4. OFFICE OF THE SECRETARY OF STATE
CHAPTER 108. DESIGNATION PROGRAM FOR DISASTER RELIEF NONPROFIT ORGANIZATIONS AND FINANCIAL INSTITUTIONS
1 TAC §§108.1 - 108.6The Office of the Secretary of State (Office) proposes new Chapter 108, 1 TAC §§108.1 - 108.6, concerning the designation program for disaster relief nonprofit organizations and financial institutions. The Office proposes these rules to implement the new designation requirements for political subdivisions in the Disaster Scam Response Act, House Bill 20 (HB 20), enacted by the 89th Legislature, 2nd Called Session, codified at Chapter 418 of the Texas Government Code.
BACKGROUND INFORMATION AND JUSTIFICATION
HB 20, adopted by the 89th Legislature, 2nd Called Session, requires the Office to establish and administer a designation program for political subdivisions in Texas to designate a nonprofit organization or financial institution to solicit and accept donations for disaster relief efforts during a declared disaster threatening the political subdivision. HB 20 provides that the designation program is intended to assist Texas residents in identifying a reputable nonprofit organization or financial institution to which the residents may donate to support disaster relief efforts during a declared disaster.
As enacted by HB 20, Texas Government Code §418.403(a) requires each political subdivision in Texas to select and submit to the Office a nonprofit organization or financial institution the political subdivision proposes to designate to solicit and accept disaster relief donations during a declared disaster threatening the political subdivision. Texas Government Code §418.403(b) directs the Office to develop guidelines for approving a political subdivision's proposed designation of a nonprofit organization or financial institution.
The purpose of these new rules under Chapter 108 (Designation Program for Disaster Relief Nonprofit Organizations and Financial Institutions) is to provide information regarding the procedures for a political subdivision to follow in submitting to the Office a proposed designation of a nonprofit organization or financial institution and to establish guidelines for the Office's approval of these designations.
SECTION-BY-SECTION SUMMARY
Proposed §108.1 defines certain terms used within Chapter 108.
Proposed §108.2 specifies the procedures for a political subdivision to submit to the Office a proposed designation of a nonprofit organization or financial institution.
Proposed §108.3 establishes timelines for a political subdivision's proposed designation or redesignation of a nonprofit organization or financial institution.
Proposed §108.4 sets forth the procedures for a political subdivision to follow in making an update to an existing designation of a nonprofit organization or financial institution.
Proposed §108.5 establishes the Office's guidelines for approving a proposed designation of a nonprofit organization or financial institution.
Proposed §108.6 provides that a political subdivision is responsible for certifying that a named entity meets the definition of a nonprofit organization or financial institution and qualifies under the Office's designation approval guidelines.
FISCAL NOTE
Michael J. Powell, Director of the Office's Business & Government Filings Division, has determined that for each year of the first five years that the proposed new sections will be in effect, there will be no fiscal implications for state or local governments as a result of enforcing or administering the proposed rules. In addition, the Office does not anticipate that enforcing or administering the proposed rules will result in any reductions in costs or in any additional costs to the Office, the state, or local governments. The Office also does not anticipate that there will be any loss or increase in revenue to the Office, the state, or local governments as a result of enforcing or administering the proposed rules.
PUBLIC BENEFIT
Mr. Powell has determined that for each year of the first five years that the proposed new sections will be in effect, the public benefit expected as a result of adopting the proposed new rules will be clarity for individuals who wish to donate to reputable nonprofit organizations or financial institutions in response to a declared disaster. The rules will provide additional information to assist individuals in avoiding fraudulent charitable donations during difficult times. The rules also will provide guidance to, and bring about enhanced transparency for, political subdivisions in designating nonprofit organizations and financial institutions to solicit and accept donations for disaster relief efforts.
ECONOMIC COSTS TO PERSONS AND IMPACT ON LOCAL EMPLOYMENT
There are no anticipated economic costs to persons required to comply with the proposed new rules. There is no effect on local economy for the first five years that the proposed new rules will be in effect; therefore, no local employment impact statement is required under Texas Government Code §§2001.022 and 2001.024(a)(6).
FISCAL IMPACT ON SMALL BUSINESSES, MICRO-BUSINESSES, AND RURAL COMMUNITIES
The proposed new rules will have no direct adverse economic impact on small businesses, micro-businesses, or rural communities. Accordingly, the preparation of an economic impact statement and a regulatory flexibility analysis, as specified in Texas Government Code §2006.002, is not required.
GOVERNMENT GROWTH IMPACT STATEMENT
Pursuant to Texas Government Code §2001.0221, the Office provides the following government growth impact statement for the proposed rules. For each year of the first five years that the proposed new rules will be in effect, the Office has determined the following:
(1) the proposed rules will not create or eliminate a government program;
(2) implementation of the proposed rules will not require the creation of new employee positions or the elimination of existing employee positions;
(3) implementation of the proposed rules will not require an increase or decrease in future legislative appropriations to the Office;
(4) the proposed rules will not require an increase or decrease in fees paid to the Office;
(5) the proposed rules are new rules and therefore create new regulations;
(6) the proposed rules will not expand, limit, or repeal an existing regulation;
(7) the proposed rules will not increase or decrease the number of individuals subject to the rules' applicability; and
(8) the proposed rules will not positively or adversely affect the state's economy.
REQUEST FOR PUBLIC COMMENTS
Comments or questions on the proposed new rules may be submitted in writing and directed to Adam Bitter, General Counsel, Office of the Secretary of State, P.O. Box 12887, Austin, Texas 78711-2887, or by e-mail to generalcounsel@sos.texas.gov. Comments will be accepted for thirty (30) days from the date of publication of the proposed rules in the Texas Register. Comments should be organized in a manner consistent with the organization of the proposed new rules.
STATUTORY AUTHORITY
The proposed new rules are authorized by Texas Government Code §418.403 and Texas Government Code §2001.004(1). Texas Government Code §418.403 authorizes the Office to adopt rules necessary to establish and administer a designation program for disaster relief nonprofit organizations and financial institutions, and to establish guidelines for the Office's approval of a political subdivision's proposed designation. Texas Government Code §2001.004 requires a state agency to adopt rules of practice stating the nature and requirements of formal and informal procedures.
CROSS REFERENCE TO STATUTE
The proposed new rules implement Chapter 418 of the Texas Government Code.
No other statute, code, or article is affected by the proposed rules.
§108.1.
The following words and terms, when used in this chapter, have the following meanings unless the context clearly indicates otherwise.
(1) Business day--A day other than a Saturday or Sunday, a national holiday under Texas Government Code §662.003(a), or a state holiday under Texas Government Code §662.003(b).
(2) Financial institution--Has the meaning assigned by Texas Finance Code §201.101(1).
(3) Nonprofit organization--An organization that is exempt from federal income taxes under Section 501(c) of the Internal Revenue Code, Title 26, United States Code.
(4) Political subdivision--Has the meaning assigned by Texas Government Code §418.004(6).
(5) Primary physical address--The physical address at which the relevant entity is available for contact.
(6) Secretary--The Texas Secretary of State.
§108.2.
(a) A political subdivision must submit a proposed designation of a nonprofit organization or financial institution in the form promulgated by the secretary, using a delivery method specified in the form.
(b) A completed designation form must include the name and contact information of an authorized representative of the political subdivision, and be signed by the county clerk or city secretary, as applicable.
(c) A completed designation form must include the legal name, primary physical address, mailing address, and telephone number of the named nonprofit organization or financial institution.
(d) For the redesignation of a nonprofit organization or financial institution under §108.3(c) of this chapter (relating to Timing of Submission), the completed form must also specify that the submission is a redesignation of an existing designation.
(e) There is no filing fee for the submission of a designation form to the secretary.
§108.3.
(a) A political subdivision must submit a completed designation form to the secretary on or before the 10th business day after the date on which the political subdivision's governing body decides to designate a nonprofit organization or financial institution.
(b) The designation of a nonprofit organization or financial institution expires on the second anniversary of the date on which the secretary approved the designation, unless the designation is redesignated in accordance with subsection (c) of this section.
(c) A political subdivision seeking to redesignate a nonprofit organization or financial institution must submit a completed designation form to the secretary within ninety (90) calendar days before the expiration of the existing designation.
§108.4.
(a) If, while a designation is in effect, it becomes known to the political subdivision's governing body that information contained in its designation form has changed, the political subdivision must submit an updated designation form to the secretary on or before the 10th business day after the date on which the political subdivision's governing body becomes aware of the change.
(b) If, while a designation is in effect, it becomes known to the political subdivision's governing body that a designated entity no longer meets the definition of a nonprofit organization or financial institution in §108.1 of this chapter (relating to Definitions) or qualifies under the guidelines set forth in §108.5 of this chapter (relating to Approval Guidelines), the political subdivision must submit a withdrawal of the designation to the secretary on or before the 10th business day after the date on which the political subdivision's governing body becomes aware of the change.
§108.5.
(a) The proposed designation of a nonprofit organization or financial institution must be made by the political subdivision's governing body in an open meeting conducted in accordance with Chapter 551 of the Texas Government Code.
(b) A political subdivision may only designate a nonprofit organization that:
(1) is currently in existence and has operated continuously for at least one (1) year prior to the date on which the political subdivision selects the entity for designation;
(2) has filed a certificate of formation or application for registration with the secretary;
(3) has filed a Form 990 (Return of Organization Exempt from Income Tax) with the Internal Revenue Service within the twelve (12) months preceding the date on which the political subdivision selects the entity for designation;
(4) has a history of receiving or remitting donations that support and respond to community needs, including donations related to a declared disaster; and
(5) has agreed to be the designated entity and actively respond to the needs of the community during a declared disaster.
(c) A political subdivision may only designate a financial institution that:
(1) is currently in existence and has operated continuously for at least one (1) year prior to the date on which the political subdivision selects the entity for designation;
(2) has filed a certificate of formation or application for registration with the secretary; and
(3) has agreed to be the designated entity and actively respond to the needs of the community during a declared disaster.
(d) A political subdivision may not designate a nonprofit organization or financial institution that has a board member or employee who is also a member of the political subdivision's governing body.
(e) Upon receipt of a completed designation form, the secretary may approve, reject, or request additional information regarding the proposed designation of a nonprofit organization or financial institution.
§108.6.
(a) Each political subdivision is responsible for certifying that an entity named in a designation form meets the definition of a nonprofit organization or financial institution in §108.1 of this chapter (relating to Definitions) and qualifies under the guidelines set forth in §108.5 of this chapter (relating to Approval Guidelines).
(b) By submitting a completed designation form to the secretary, a political subdivision makes the certification required under subsection (a) of this section.
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on July 6, 2026.
TRD-202602767
Adam Bitter
General Counsel
Office of the Secretary of State
Earliest possible date of adoption: August 16, 2026
For further information, please call: (512) 475-2813