By Grusendorf                                         H.B. No. 1441
                                 A BILL TO BE ENTITLED
    1-1                                AN ACT
    1-2  relating to the investment of funds by certain trustees in the
    1-3  securities of an open-end or closed-end management investment
    1-4  company or investment trust.
    1-5        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-6        SECTION 1.  Section 113.053, Property Code, is amended by
    1-7  amending Subsection (a) and adding Subsection (g) to read as
    1-8  follows:
    1-9        (a)  Except as provided by Subsections (b), (c), (d), (e),
   1-10  <and> (f), and (g), a trustee shall not directly or indirectly buy
   1-11  or sell trust property from or to:
   1-12              (1)  the trustee or an affiliate;
   1-13              (2)  a director, officer, or employee of the trustee or
   1-14  an affiliate;
   1-15              (3)  a relative of the trustee; or
   1-16              (4)  the trustee's employer, partner, or other business
   1-17  associate.
   1-18        (g)  In addition to other investments authorized by law for
   1-19  the investment of funds held by a fiduciary or by the instrument
   1-20  governing the fiduciary relationship, and notwithstanding any other
   1-21  provision of law  and subject to the standard contained in Section
   1-22  113.056, a bank or trust company acting as a fiduciary, agent, or
   1-23  otherwise, in the exercise of its investment discretion or at the
   1-24  direction of another person authorized to direct the investment of
    2-1  funds held by the bank or trust company as fiduciary, may invest
    2-2  and reinvest in the securities of an open-end or closed-end
    2-3  management investment company or investment trust registered under
    2-4  the Investment Company Act of 1940 (15 U.S.C. Sec. 80a-1 et seq.)
    2-5  if the portfolio of the investment company or investment trust
    2-6  consists substantially of investments that are not prohibited by
    2-7  the governing instrument.  The fact that the bank or trust company
    2-8  or an affiliate of the bank or trust company provides services to
    2-9  the investment company or investment trust, such as those of an
   2-10  investment advisor, custodian, transfer agent, registrar, sponsor,
   2-11  distributor, manager, or otherwise, and receives compensation for
   2-12  those services does not preclude the bank or trust company from
   2-13  investing or reinvesting in the securities if the compensation is
   2-14  disclosed by prospectus, account statement, or otherwise.  An
   2-15  executor or administrator of an estate under a dependent
   2-16  administration or a guardian of an estate shall not so invest or
   2-17  reinvest unless specifically authorized by the court in which such
   2-18  estate or guardianship is pending.
   2-19        SECTION 2.  The importance of this legislation and the
   2-20  crowded condition of the calendars in both houses create an
   2-21  emergency and an imperative public necessity that the
   2-22  constitutional rule requiring bills to be read on three several
   2-23  days in each house be suspended, and this rule is hereby suspended,
   2-24  and that this Act take effect and be in force from and after its
   2-25  passage, and it is so enacted.