BILL ANALYSIS H.B. 1348 By: Coleman 5-2-95 Committee Report (Amended) BACKGROUND There are several ambiguous and conflicting provisions in the statutes dealing with the authority of the attorney general in charitable trust matters. In 1987, amendments to the property Code changed the Attorney General's status from a "necessary" party in proceedings involving charitable trusts, to a "proper" party, by adding Chapter 123. However, Chapter 115, which references prior law (Article 4412a), was not changed to reflect the 1987 amendments. Because of these ambiguities, the Attorney General has been issued numerous citations which unnecessarily join the Attorney General as a party in actions in which the Charitable Trusts Section deems intervention unwarranted. PURPOSE To clarify existing statutes that deal with the authority of the attorney general in charitable trust matters. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Subsection (c), Section 115.011, Property Code, so that it conforms with changes made in Chapter 123 which indicate that the attorney general must only receive notice of proceedings involving charitable trust and need not be made a party to such proceedings. SECTION 2. Amends Section 123.001, Property Code, by adding a definition of "fiduciary or managerial agent" to encompass the broad range of people and entities that act as trustees of charitable trusts. The statute clearly anticipates that the attorney general may sue members of a board of directors as "trustees of a charitable trust" since the definition of "charitable trust" includes a corporation. This new definition clarifies the issue. SECTION 3. Amends Subsection (a), Section 123.003, Property Code, and adds new subsection (b), to clarify language relating to notice. It sets out notice requirements, establishes a time frame, and addresses the question of notice to the attorney general when pleadings are amended to add causes of action or to add new parties. Reletters subsections accordingly. SECTION 4. Amends Section 123.005, Property Code, to clarify the issue of whether the venue provision is permissive or mandatory. Allows the attorney general to recover costs from a fiduciary of managerial agent of a charitable trust in a proceeding against the fiduciary or managerial agent if the attorney general is successful. SECTION 5. This bill applies only to causes of action that accrue on or after its effective date. SECTION 6. The effective date of this bill is September 1, 1995. SECTION 7. Severability clause. SECTION 8. Emergency clause. EXPLANATION OF AMENDMENTS After introducing this bill, several clerical mistakes were found. Amendment #1 provides cleanup changes. These modifications are nonsubstantive. SUMMARY OF COMMITTEE ACTION The Business and Industry Committee considered H.B. 1348 in a public hearing on May 2, 1995. The following witness testified on H.B. 1348: Jan Soifer, representing Office of Attorney General. H.B. 1348 was left pending. H.B. 1348 was reconsidered without objection. One (1) amendment was considered for H.B. 1348. The 1 (one) amendment was adopted without objection. H.B. 1348, as amended, was reported favorably with the recommendation that it do pass and be printed and be sent to the Committee on Local and Consent Calendars, by a record vote of 6 (six) ayes, 0 (zero) nays, 0 (zero) present-not-voting, 3 (three) absent.