By:  Grusendorf                                       H.B. No. 1441
       73R5089 LJD-F
                                 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, a bank or trust company acting as a fiduciary,
   1-22  agent, or otherwise, in the exercise of its investment discretion
   1-23  or at the direction of another person authorized to direct the
   1-24  investment of funds held by the bank or trust company as fiduciary,
    2-1  may invest and reinvest in the securities of an open-end or
    2-2  closed-end management investment company or investment trust
    2-3  registered under the Investment Company Act of 1940 (15 U.S.C. Sec.
    2-4  80a-1 et seq.) if the portfolio of the investment company or
    2-5  investment trust consists substantially of investments that are not
    2-6  prohibited by the governing instrument.  The fact that the bank or
    2-7  trust company or an affiliate of the bank or trust company provides
    2-8  services to the investment company or investment trust, such as
    2-9  those of an investment advisor, custodian, transfer agent,
   2-10  registrar, sponsor, distributor, manager, or otherwise, and
   2-11  receives compensation for those services does not preclude the bank
   2-12  or trust company from investing or reinvesting in the securities if
   2-13  the compensation is disclosed.  In this subsection, "fiduciary"
   2-14  means an independent executor, administrator, trustee, or an agent
   2-15  or custodian acting for an individual, firm, or corporation in any
   2-16  of those capacities.  The term does not include an executor or
   2-17  administrator of an estate under a dependent administration or a
   2-18  guardian of an estate unless the court having jurisdiction of the
   2-19  estate or guardianship specifically authorizes the executor,
   2-20  administrator, or guardian to act in the manner authorized by this
   2-21  subsection.
   2-22        SECTION 2.  The importance of this legislation and the
   2-23  crowded condition of the calendars in both houses create an
   2-24  emergency and an imperative public necessity that the
   2-25  constitutional rule requiring bills to be read on three several
   2-26  days in each house be suspended, and this rule is hereby suspended,
   2-27  and that this Act take effect and be in force from and after its
    3-1  passage, and it is so enacted.