87R16894 EAS-F

By: Moody H.B. No. 2183

A BILL TO BE ENTITLED

AN ACT

relating to durable powers of attorney and the construction of certain powers conferred in those powers of attorney.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 751.002(5), Estates Code, is amended to read as follows:

(5) "Principal" means an adult individual [person] who signs or directs the signing of the individual's [person's] name on a power of attorney that designates an agent to act on the individual's [person's] behalf.

SECTION 2. Section 751.00201, Estates Code, is amended to read as follows:

Sec. 751.00201. MEANING OF DISABLED OR INCAPACITATED FOR PURPOSES OF DURABLE POWER OF ATTORNEY. Unless otherwise defined by a durable power of attorney, an individual [a person] is considered disabled or incapacitated for purposes of the durable power of attorney if a physician certifies in writing at a date later than the date the durable power of attorney is executed that, based on the physician's medical examination of the individual [person], the individual [person] is determined to be mentally incapable of managing the individual's [person's] financial affairs.

SECTION 3. Section 752.001(a), Estates Code, is amended to read as follows:

(a) An individual [A person] may use a statutory durable power of attorney to grant an [attorney in fact or] agent powers with respect to an individual's [a person's] property and financial matters.

SECTION 4. Section 752.107, Estates Code, is amended to read as follows:

Sec. 752.107. BUSINESS OPERATION TRANSACTIONS. Subject to the terms of an agreement or other document governing or relating to an entity or entity ownership interest, to the extent the agent is permitted by law to act for the principal and unless the power of attorney provides otherwise, the [The] language conferring authority with respect to business operating transactions in a statutory durable power of attorney empowers the [attorney in fact or] agent to:

(1) operate, buy, sell, enlarge, reduce, or terminate an ownership [a business] interest;

(2) [do the following, to the extent that an attorney in fact or agent is permitted by law to act for a principal and subject to the terms of a partnership agreement:

[(A)] perform a duty or[,] discharge a liability, or exercise in person or by proxy a right, power, privilege, or option that the principal has, may have, or claims to have [under the partnership agreement, whether or not the principal is a general or limited partner];

(3) [(B)] enforce the terms of an agreement or other document governing or relating to an entity or entity ownership interest [the partnership agreement by litigation, action, or otherwise]; [and]

(4) [(C)] defend, submit to arbitration, settle, or compromise litigation or an action to which the principal is a party because of an entity ownership interest [membership in the partnership];

(5) [(3)] exercise in person or by proxy, or enforce by litigation, action, or otherwise, a right, power, privilege, or option the principal has or claims to have as the holder of a certificated or uncertificated ownership interest;

(6) [bond, share, or other similar instrument and] defend, submit to alternative dispute resolution [arbitration], settle, or compromise litigation [a legal proceeding] to which the principal is a party concerning a certificated or uncertificated ownership interest [because of a bond, share, or similar instrument];

(7) [(4)] with respect to a business or entity owned solely by the principal:

(A) continue, modify, renegotiate, extend, and terminate a contract made by or on behalf of the principal with respect to the business or entity [before execution of the power of attorney with an individual, legal entity, firm, association, or corporation by or on behalf of the principal with respect to the business];

(B) determine:

(i) the location of the business's or entity's operation;

(ii) the nature and extent of the business;

(iii) the methods of manufacturing, selling, merchandising, financing, accounting, and advertising employed in the business's or entity's operation;

(iv) the amount and types of insurance carried; and

(v) the method of engaging, compensating, and dealing with the business's or entity's accountants, attorneys, or [and] other agents [and employees];

(C) change the name or form of organization under which the business or entity is operated and enter into an [a partnership] agreement with other persons [or organize a corporation] to take over all or part of the operation of the business or entity; and

(D) demand and receive money due or claimed by the principal or on the principal's behalf in the operation of the business or entity and control and disburse the money in the operation of the business or entity;

(8) [(5)] put additional capital into a business or entity in which the principal has an interest;

(9) [(6)] join in a plan of reorganization, consolidation, interest exchange, conversion, or merger of the business or entity;

(10) [(7)] sell or liquidate a business or entity or all or part of the assets of the business or entity [at the time and on the terms that the attorney in fact or agent considers desirable];

(11) [(8)] establish the value of a business or entity under a buy-out agreement to which the principal is a party;

(12) [(9) do the following:

[(A)] prepare, sign, file, and deliver reports, compilations of information, returns, or other papers with respect to a business or entity and[:

[(i) that are required by a governmental agency, department, or instrumentality; or

[(ii) that the attorney in fact or agent considers desirable; and

[(B)] make related payments; and

(13) [(10)] pay, compromise, or contest taxes or assessments and perform any other act [that the attorney in fact or agent considers desirable] to protect the principal from illegal or unnecessary taxation, fines, penalties, or assessments with respect to a business or entity, including attempts to recover, in any manner permitted by law, money paid before or after the execution of the power of attorney.

SECTION 5. Section 752.107, Estates Code, as amended by this Act, applies only to a durable power of attorney, including a statutory durable power of attorney, executed on or after the effective date of this Act. A durable power of attorney, including a statutory durable power of attorney, executed before the effective date of this Act is governed by the law in effect on the date the durable power of attorney was executed, and the former law is continued in effect for that purpose.

SECTION 6. This Act takes effect September 1, 2021.