74(R) SB 1617 Senate Committee Report

BILL ANALYSIS

S.B. 1617
By: Harris
Economic Development
4-24-95
Committee Report (Amended)
BACKGROUND

The Texas Real Estate Investment Trust Act (TREITA) authorizes a
form of business organization, in conformance with federal tax law,
designed specifically for use in the acquisition and development of
real property. The establishment of a real estate investment trust
(REIT) pursuant to the TREITA has become an important financial
device for investor participation in major real estate development.
The TREITA, however, is in critical need of updating and
standardization to facilitate its use and to make it competitive
with other states. Areas of primary concern for modification
include the merger and share exchanges provisions.

The Texas Business Corporation Act (TBCA) provides an excellent
source for concepts and language for the TREITA modifications. By
transposing concepts from the developed body of corporation law,
the TREITA can obtain the benefit, by analogy, of established
judicial interpretations. The use of TBCA concepts also adds
flexibility.

Language taken from the TBCA has been modified to conform with
existing provisions of the TREITA. Other proposed changes are
technical in nature, intended to remove potential ambiguities.
Certain statutory limitations are proposed to be deleted when the
supporting rationale is unclear or no longer applicable. Other
minor changes include conforming changes to heading formats and
expansion of the numbering system. All modifications have been
analyzed and approved by the Corporation Law Committee of the
Business Law Section of the State Bar of Texas.

PURPOSE

As proposed, S.B. 1617 establishes a statutory basis for forming
real estate investment trusts.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not grant any
additional rulemaking authority to a state officer, institution, or
agency.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Article 6138A, V.T.C.S., as follows:

Art. 6138A. TEXAS REAL ESTATE INVESTMENT TRUST ACT

Sec. 1.10. SHORT TITLE: Texas Real Estate Investment Trust
Act. Redesignates existing Section 1.

Sec. 2.10. REAL ESTATE INVESTMENT TRUST DEFINED. Redesignates
existing Section 2. Deletes the provision that a real estate
investment trust (trust) is managed in accordance with the
provisions of Section 4 of this Act. Makes conforming changes.

Sec. 3.10. FORMATION OF REAL ESTATE INVESTMENT TRUST.
Redesignates existing Section 3. (A) Makes conforming changes.
Authorizes one or more persons to act as trust manager(s) of
a trust by subscribing and acknowledging to a declaration of
trust before an officer duly authorized to take
acknowledgments of deeds, which shall set forth:

(3) the post office address of its initial principal
office and place of business. Deletes the provision
relating to the requirement that major capital
improvements of any real property of any character be made
within 15 years of purchase or the property must be sold;

(4) the street address of its registered office and the
name of its registered agent at that address;

(8) a statement that the trust manager(s) shall manage the
money or property received for the issuance of shares for
the benefit of the shareholders of the trust; and

(9) a statement that the trust will not commence business
until it has received for the issuance of shares of
beneficial interest consideration of at least a $1,000
value, consisting of any tangible or intangible benefit to
the real estate investment trust, including cash,
promissory notes, services performed for, contracts for
services to be performed for, or other securities of the
real estate investment trust. Deletes the provision that
operations will not commence until the beneficial
ownership is held by 100 or more persons with no five
persons owing more than 50 percent of the total number of
outstanding shares of beneficial interest. Deletes the
provision that the word person shall not include
corporations as used herein.

(B) Requires the declaration of trust to be filed for record
with the county clerk of the county of the principal place
of business of the trust (county clerk). Provides that the
existence of the trust begins when the declaration of trust
is filed as required by this subsection.

(C) Requires an organizational meeting of the initial trust
managers named in the declaration of trust to be held, after
the trust has been formed, at the call of a majority of the
trust manager(s) named in the declaration of trust, to adopt
bylaws, elect officers, and transact other business that may
come before the trust managers at the meeting. Requires the
trust managers who call the meeting to give each trust
manager named in the declaration of trust at least three
days' notice of the meeting by mail. Requires the notice to
state the time and place of the meeting.

Sec. 3.20. DEFENSE OF ULTRA VIRES. (A) Provides that lack of
capacity of a trust may never be the basis of a claim or
defense at law or in equity.

(B) Prohibits an act of a trust or a conveyance or transfer
of real or personal property to or by a trust from being
declared invalid because the act, conveyance, or transfer
was beyond the scope of the purpose or purposes of the trust
as expressed in the declaration of trust on the authority of
the officers and trust manager(s) of the trust to exercise
any statutory power of the trust.

(C) Authorizes the fact that an act, conveyance, or transfer
was, or is, beyond the scope of the purpose or purposes of
the trust as expressed in its declaration or trust or
inconsistent with any expressed limitations of authority, to
be asserted: (1) in a proceeding by a shareholder against
the trust to enjoin an act or acts or the transfer of real
or personal property by or to the trust. Authorizes the
court, if the unauthorized act or transfer sought to be
enjoined is being, or is to be, performed or made pursuant
to any contract to which the trust is a party, to set aside
and enjoin the performance of the contract, if all of the
parties to the contract are parties to the proceeding and if
the court considers the action to be equitable. Authorizes
the court, if the court sets aside and enjoins the
performance of the contract, to allow compensation to the
trust or to the other parties to the contract for the loss
or damage sustained as a result of the court's action.
Prohibits the court from awarding anticipated profits to be
derived from the performance of the contract as a part of
loss or damage sustained; and (2) in a proceeding by the
trust against the incumbent or former officers or trust
manager(s) of the real estate investment trust for exceeding
their authority, whether the trust is acting directly or
through a receiver, trustee, or other legal representative,
or through shareholders in a representative suit.

Sec. 3.30. CLASSIFICATION OF SHARES. (A) Provides that a trust
may provide by its declaration of trust: for any other
preferences, rights, restrictions, including restrictions on
transferability, and qualifications not inconsistent with law;
provided, however, that no shareholder shall have a preemptive
right to acquire securities unless specifically provided for
in the declaration of trust. Makes a conforming change.

(B) Deletes the statement of designation to be filed with
county clerk.Deletes existing Subsections (C) and (D)
relating to statements in certificates evidencing shares and
alternatives to full statement. Makes conforming changes.

Sec. 4.10. OPERATION OF REAL ESTATE INVESTMENT TRUST; TRUST
MANAGERS AND OFFICERS. (A) Provides that trust managers must
be natural persons but need not be residents of this state or
shareholders of the trust unless the declaration of trust or
bylaws so require. Deletes the requirement that at least a
majority of the trust managers be natural persons and
residents of the State of Texas and the other trust
manager(s), if any, need not be residents of this state. Makes
nonsubstantive and conforming changes.

(B) Requires the number of trust manager(s) to be fixed by,
or in the manner provided in, the declaration of trust or
the bylaws, except for the number of initial trust
manager(s), which shall be fixed by the declaration of
trust. Authorizes the number of trust managers to be
increased or decreased from time to time by amendment to, or
in the manner provided in, the declaration of trust or the
bylaws. Provides that a decrease in the number of trust
managers does not shorten the term of any incumbent trust
manager. Requires a trust manager, unless otherwise provided
in the declaration of trust or the bylaws, to serve until
the manager's successor has been elected by the requisite
vote. Authorizes a trust manager to succeed himself or
herself in office. Requires the existing trust manager, if
no successor trust manager is elected, to remain in office
until the manager's successor is elected.

(C) Authorizes the bylaws of a real estate investment trust
to provide that the trust managers be divided into two or
three classes, each class to be as nearly equal in number as
possible. Authorizes the bylaws to provide that the terms of
office of trust managers of the first class expire on the
election of a successor at the first annual meeting of
shareholders after their election, that the terms of office
of trust managers of the second class expire on the election
of a successor at the second annual meeting after their
election, and that the terms of office of trust managers of
the third class, if any, expire on the election of a
successor at the third annual meeting after their election.
Provides that if the bylaws provide for the classification
of trust managers, (1) an annual election for the whole
number of trust managers is not necessary, and (2) at each
annual meeting after the classification, the number of trust
managers equal to the number of the class whose terms expire
at the time of the meeting shall stand for election to
office until the second succeeding annual meeting, if there
are two classes, or until the third succeeding annual
meeting if there are three classes. Provides that a
classification of trust managers does not take effect before
the next annual meeting of shareholders at which trust
managers are elected unless the classification is effected
by a bylaw adopted by the shareholders. Provides that a
classification of trust managers is not effective for any
real estate investment trust if any shareholder has the
right to cumulate votes for the election of trust managers
of the trust unless there are nine or more trust managers.

(D) Authorizes a vacancy occurring in the trust managers to
be filled by the vote of a majority of the remaining trust
managers, though less than a quorum; provided however, that
the declaration of trust or bylaws may provide an
alternative procedure for filling vacancies, including
simple majority or super-majority votes of the shareholders.
Requires a trust manager elected to fill a vacancy to be
elected for the unexpired term of the trust manager's
predecessor in office, and until the trust manager's
successor is elected and qualified. Deletes the provision
that a vacancy occurring in the trust managers may be filled
by the vote of two thirds of the outstanding voting shares
of the trust.

(E) Requires a majority of the number of trust managers to
constitute a quorum for the transaction of business unless
a greater number is required by the declaration of trust or
the bylaws. Deletes the provision that if the trust is
managed by three or more trust managers, a majority of the
number of trust managers shall constitute a quorum for the
transaction of business.

(F) Authorizes the trust manager(s) to designate one or more
persons, regardless of whether the persons are trust
managers, to constitute officers of the trust to the extent
provided in the declaration of trust or in the bylaws of the
trust. Makes conforming and nonsubstantive changes.

(G) Requires the trust manager(s) or officers to have the
power to exercise complete discretion with respect to the
investment of the trust estate so long as the investment is
not contrary to or inconsistent with this section or with
the sections of the Internal Revenue Code of 1986 which
relate to trusts or the regulations adopted under such
sections.

(H) Requires the trust manager(s) and the officers of the
trust to receive such compensation as may be fixed by, or in
the manner provided in, the declaration of trust or the
bylaws. Requires the compensation for the trust managers and
officers, if the declaration of trust or bylaws does not
contain a provision for compensation to the trust managers
and officers of the trust, to be determined by vote of the
trust managers.

(I) Makes nonsubstantive and conforming changes.

Sec. 4.20. INTERESTED TRUST MANAGERS AND OFFICERS. (A)
Provides that a contract or transaction between a trust and
the trust manager(s) or officers of the trust, or between a
trust and any other trust, corporation, partnership,
association, or organization (organization), is not void or
voidable solely because one or more of the trust manager(s) or
officers of the trust are trust manager(s), directors, or
officers or have a financial interest in the other
organization; solely because the trust manager or officer is
present at or participates in the meeting of the trust
manager(s) or committee of trust managers that authorizes the
contract or transaction; or solely because the trust manager's
or officer's votes are counted for the authorization of
certain issues.

(B) Authorizes common or interested trust manager(s) to be
counted in determining the presence of a quorum at a meeting
of the trust manager(s) or of a committee of trust managers
that authorizes the contract or transaction.

Sec. 4.30. COMMITTEES OF THE TRUST MANAGERS. (A) Authorizes
the trust manager(s), by resolution adopted by a majority of
the trust manager(s), if the declaration of trust or the
bylaws provide for the designation of committees of trust
managers, to designate from among the members of the trust
managers one or more committees. Requires the committees to be
composed of one or more of the members of the trust managers.
Authorizes the trust managers to designate one or more of
their members as alternate members of any committee who,
subject to any limitations imposed by the trust manager(s), to
replace absent or disqualified members at any meeting of that
committee. Provides that to the extent provided in the
resolution or in the declaration of trust or the bylaws, a
committee has and may exercise all of the authority of the
trust managers(s) subject to the limitations set forth in
Subsections (B) and (C) of this section.

(B) Sets forth provisions in which a committee of trust
manager(s) does not have the authority of the trust
manager(s).

(C) Prohibits a committee of the trust manager(s) from
authorizing a distribution or the issuance of shares of the
trust, unless the distribution or issuance is authorized by
the resolution designating that committee or the declaration
of trust or the bylaws.

(D) Provides that the designation of a committee of trust
manager(s) and the delegation to the committee of the trust
managers' authority does not relieve any trust manager of
any responsibility imposed by law.

Sec. 5.10. New heading: REGISTERED OFFICE AND REGISTERED
AGENT. (A) Sets forth provisions each trust shall have and
maintain in this state. Deletes the requirement that the
resident trust manager(s) and any officer of the trust be an
agent of the trust upon whom any process, notice, or demand
(demand) required or permitted by law to be served upon the
trust may be served.

(B) Authorizes a trust to change its registered office, its
registered agent, or both, on filing with the county clerk
of the county where the declaration of trust was filed a
statement that is executed by an officer on behalf of the
trust and sets forth certain provisions.

(D) Requires the notice described by Subsection (C)(2) of
this section to include the last known address of the real
estate investment trust, a statement that written notice of
resignation has been given to the trust and the date of the
resignation.

(E) Provides that on complying with the notice requirements
of Subsection (C) and (D), the appointment of a registered
agent who wants to resign as agent terminates on the
expiration of 30 days after the date on which the notice is
filed with the county clerk of the county where the
declaration of trust was filed.

(F) Authorizes the address of the location of the registered
office in this state for a trust to be changed to another
address on filing with the county clerk of the county where
the declaration of trust was filed a statement that is
executed by the registered agent for the trust, or if the
agent is a corporation or trust, by an officer on behalf of
the trust, and that sets forth certain information.

Sec. 5.20. SERVICE OF PROCESS. (A) Provides that the
president, all vice presidents, and the registered agent of
the trust are agents of the trust on whom any demand required
or permitted by law to be served on the trust may be served.

(B) Requires the secretary of state, when a trust fails to
appoint or maintain a registered agent in this state, or
when the registered agent of the trust cannot be found at
the registered office, to be an agent of the trust on whom
any demand may be served. Requires service of any demand on
the secretary of state to be made by delivering to and
leaving with the secretary of state, the assistant secretary
of state, or any clerk having charge of the corporation
department of the office of the secretary of state,
duplicate copies of the demand. Requires the secretary of
state, if any demand is served on the secretary of state, to
immediately forward by registered mail one of the copies of
the demand to the trust at its registered office. Requires
any service made on the secretary of state to be returnable
in no less than 30 days.

(C) Requires the secretary of state to keep a record of all
demands served on the secretary of state under this section.
Requires the record to include the time of the service and
the action of the secretary of state with regard to the
demand.

(D) Requires the secretary of state to collect for state use
the fee for maintaining a record of service of any process,
notice, or demand on the secretary of state as agent for any
trust under this section that is established by Section
A(20), Article 10.01, Texas Business Corporation Act.

Sec. 6.10. GENERAL POWERS OF REAL ESTATE INVESTMENT TRUST. (A)
Requires each trust to have the power:

(5) to lend money to, and otherwise assist, the employees,
officers, and trust managers of the real estate investment
trust if the loan or assistance may be expected to benefit
the lending or assisting trust.

(7) to purchase or otherwise acquire its own bonds,
debentures, or other evidences of its indebtedness or
obligations; to purchase or otherwise acquire its own
unredeemable shares and hold those acquired shares as
treasury shares or cancel or otherwise dispose of those
acquired shares; and to redeem or purchase shares made
redeemable by the provisions of its declaration of trust.

(13) to make donations for the public welfare or for
charitable, scientific, or educational purposes.

(14) to transact any lawful business that the trust
managers find will aid government policy.

(15) to indemnify trust managers, officers, employees, and
agents of the trust and to purchase and maintain liability
insurance for those persons.

(16) to pay pensions and establish pension plans, pension
trusts, profit sharing plans, stock option plans, stock
bonus plans, and other incentive plans for any or all of
its trust managers, officers, or employees.

(17) to be an organizer, partner, member, associate, or
manager of any partnership, joint venture, or other
enterprise, and to the extent permitted in any other
jurisdiction, to be an incorporator of any other
corporation of any type or kind.

(19) to engage in activities that are mandated or
authorized by sections of the Internal Revenue Code of
1986 or any successor statute that relates to or govern
trusts or the regulations adopted under that law.
(B) Makes no changes.

(C) Provides that nothing in this Act shall be deemed to
authorize any action in violation of the antitrust laws of
this state.

Sec. 7.10. SUBSCRIPTION FOR SHARES. (A) Prohibits a
subscription for shares of a trust, unless otherwise provided
in the subscription, to be organized from being revoked within
six months, except with the consent of all other subscribers.

(B) Provides that in the case of a trust to be organized,
the filing of the declaration of trust with the county clerk
constitutes acceptance by the trust of all subscriptions for
shares that are contained in a list of subscriptions filed
with the declaration of trust. Requires the list of
subscriptions to contain the name, post-office address,
number of shares, and amount paid by each subscriber.
Provides that failure to include a subscription for shares
in the list of subscriptions constitutes a rejection of the
offer.

(C) Provides that in the case of an existing trust,
acceptance of a subscription for shares is effected by a
resolution of acceptance by the trust manager(s) or by a
written memorandum of acceptance of the subscription for
shares executed by a person authorized to execute the
memorandum by the trust manager(s) and delivered to the
subscriber or the subscriber's assignee.

(D) Requires subscriptions for shares to be paid in full at
a time determined by the trust manager(s) or in installments
and at times determined by the trust manager(s). Requires
any call made by the trust manager(s) for payment on
subscriptions to be uniform for all shares of the same class
or all shares of the same series, as the case may be.
Authorizes the trust, in case of default in the payment of
any installment or call when the payment is due, to proceed
to collect the amount due in the same manner as the trust
would collect any debt due the trust. Authorizes the bylaws
to prescribe other penalties for failure to pay installments
or calls that may become due, but a penalty working a
forfeiture of a subscription, or of the amounts paid on the
subscription, may not be declared against any subscriber
unless the amount due on the subscription remains unpaid on
the 21st day after the day on which written demand is made
for payment. Provides that a written demand, if mailed, is
considered to be made when deposited in the U.S. mail in a
sealed envelope, with prepaid postage, addressed to the
subscriber at the subscriber's last post-office address
known to the trust. Authorizes a trust, if the demand
remains unsatisfied for the 20-day period, and if the trust
is solvent, to declare the subscription to be forfeited.
Provides that the effect of the declaration of forfeiture is
to terminate all the rights and obligations of the
subscriber as a subscriber of shares.

Sec. 7.20. CERTIFICATES REPRESENTING SHARES. (A) Requires a
trust to deliver certificates representing shares to which
shareholders are entitled, or the shares of a trust may be
uncertificated shares. Authorizes the trust manager(s) of a
trust, by resolution, unless otherwise provided by the
declaration of trust or bylaws, to provide that some or all of
its shares shall be uncertificated shares; provided, that the
resolution may not apply to shares represented by a
certificate until the certificate is surrendered to the trust.
Requires certificates representing shares to be signed by the
officer or officers prescribed by the bylaws of the trust to
sign the shares, and may be sealed with the seal of the trust,
if any, or a facsimile of the seal. Authorizes the signatures
of the officer or officers on a certificate to be facsimiles.
Provides that if an officer who has signed or whose facsimile
signature has been placed on the certificate ceases to serve
as officer before the certificate is issued, the trust may
issue the certificate, and the certificate has the same effect
as if that officer were serving as officer on the date of the
certificate's issuance.

(B) Sets forth requirements for each certificate
representing shares issued by the trust, if a trust is
authorized to issue shares of more than one class or series.

(D) Requires a trust, in accordance with Chapter 8, Business
& Commerce Code, after the issuance or transfer of
uncertificated shares, to send to the registered owner of
uncertificated shares a written notice containing the
information required to be set forth or stated on
certificates under this Act. Requires the rights and
obligations of the holders of uncertificated shares and the
rights and obligations of the holders of certificates
representing shares of the same class and series to be
identical. Prohibits a share from being issued until the
consideration for the shares, fixed as provided by law, has
been fully paid.

(E) Prohibits a requirement of this Act regarding matters to
be set forth on certificates representing shares of a trust
from applying to or affecting certificates outstanding when
the requirement first becomes applicable to the
certificates, but the requirement shall apply to all
certificates issued after the requirement becomes applicable
whether the requirement relates to an original issue of
shares, a transfer of shares, or otherwise.

(F) Sets forth requirements for each certificate
representing shares, if any restriction on the transfer or
registration of the transfer of shares is imposed or agreed
to by the trust.

(G) Prohibits a trust that fails to furnish without charge
to a record holder of a certificate who requested a copy of
the specified document from being permitted to enforce its
rights under the restriction imposed on the shares
represented by the certificate, with an exception.

(H) Requires each certificate representing shares issued by
the trust, if a trust has by its declaration of trust
provided for a preemptive right of shareholders to acquire
unissued securities of the trust, to set forth on the face
or back of the certificate a full statement of the existence
of preemptive rights.

Sec. 7.30. CONSIDERATION AND PAYMENT FOR SHARES. Redesignates
existing Section 7. (A) Provides that if the shares have a par
value, the consideration for the shares may not be less than
the par value. Deletes the provision that the shares be
expressed in dollars.

(B) Requires the consideration paid for the issuance of
shares to consist of any tangible or intangible benefit to
the trust, including cash, promissory notes, services
performed, contracts for services to be performed, or other
securities of the trust. Deletes the requirement of the
consideration paid for the issuance of shares to consist of
money paid or property actually received. Requires
consideration to have been paid to the trust or to another
entity of which all of the outstanding shares of each class
of capital stock are owned by the trust.

Sec. 7.40. TRANSFER OF SHARES AND OTHER SECURITIES AND
RESTRICTIONS ON TRANSFER. (A) Provides that except as
otherwise provided in this Act, the shares and other
securities of a trust are personal property for all purposes
and are transferable in accordance with Chapter 8, Business &
Commerce Code.

(B) Authorizes a restriction on the transfer or registration
of transfer of a security to be imposed by the declaration
of trust or bylaws, or by a written agreement among any
number of the holders of the securities or a written
agreement among any number of the holders and the trust,
provided the trust places on file a counterpart of the
agreement at its principal place of business or its
registered office. Requires the counterpart of the agreement
to be subject to the same right of examination by a
shareholder of the trust, in person or by agent, attorney,
or accountant, as are the books and records of the trust.
Provides that a restriction on the transfer or registration
of transfer of a security imposed as described by this
subsection is not valid with respect to any security issued
before the adoption of the restriction unless the holder of
the security voted in favor of the restriction or is a party
to the agreement imposing the restriction.

(C) Requires any restriction on the transfer or registration
of transfer of a security of a trust to be specifically
enforceable against the holder of the restricted security or
any successor or transferee of the holder if the restriction
meets certain provisions.

(D) Provides that a restriction, even though otherwise
enforceable, is ineffective against a transferee for value
without actual knowledge of the restriction at the time of
the transfer or against any subsequent transferee, unless
the restriction is noted on the certificate or other
instrument representing the security or, in the case of an
uncertificated security, notation of the restriction is
contained in the notice sent pursuant to Subsection (D) of
Section 7.20 of this Act with respect to the security.
Requires the restriction to be specifically enforceable
against any other person who is not a transferee for value
from and after the time that the person acquires actual
knowledge of the existence of the restriction.

(E) Sets forth provisions under which a restriction on the
transfer or registration of transfer of securities of a
trust is valid, in particular and without limiting the
general power granted in Subsections (B), (C), and (D) of
this section.

(F) Sets forth the provisions under which a trust that has
adopted a bylaw, or is a party to an agreement restricting
the transfer of its shares or other securities, may file the
bylaw or agreement as a matter of public record with the
county clerk.

(G) Authorizes a trust that is a party to an agreement
restricting the transfer of its shares or other securities
to make that agreement part of its declaration of trust
without restating the provisions of the agreement in the
declaration of trust, by complying with the provisions of
this Act or amending the declaration of trust. Requires the
articles of amendment, if the agreement alters any provision
of the original or amended declaration of trust, to identify
the altered provision by reference or description. Requires
the articles of amendment, if the agreement is to be an
addition to the original or amended declaration of trust, to
state that fact. Requires a copy of the agreement
restricting the transfer of shares or other securities to be
attached to the articles of amendment. Requires the articles
of amendment to state that the attached copy of the
agreement is a true and correct copy of the agreement and
that its inclusion as part of the declaration of trust has
been duly authorized in the manner required by this Act to
amend the declaration of trust.

(H) Authorizes the trust, when shares are registered on the
books of a trust in the names of two or more persons as
joint owners with the right of survivorship, after the death
of a joint owner and before the time that the trust receives
actual written notice that parties other than the surviving
joint owner or owners claim an interest in the shares of or
any distributions from the trust, to record on its books and
otherwise effect the transfer of those shares to any person,
firm, or entity and to pay any distributions made in respect
of those shares, in each case as if the surviving joint
owner or owners were the absolute owners of the shares.
Provides that a trust permitting such a transfer by and
making any distribution to a surviving joint owner or owners
before the receipt of written notice from other parties
claiming an interest in those shares or distributions is
discharged from all liability for the transfer or payment so
made; provided, however, that the discharge of the trust
from liability and the transfer of full legal and equitable
title of the shares does not affect, reduce, or limit any
cause of action existing in favor of any owner of an
interest in those shares or distributions against the
surviving owner or owners.

Sec. 8.10. New heading: LIABILITY OF SUBSCRIBERS AND
SHAREHOLDERS. Redesignates existing Section 8. (A) Provides
that a holder of shares, an owner of any beneficial interest
in shares, or a subscriber for shares whose subscription has
been accepted is not under an obligation to the trust or to
its obligees with respect to certain trusts and obligations.

(B) Provides that the liability of a holder, owner, or
subscriber (holder) of shares of a trust for an obligation
that is limited by Subsection (A) of this section is
exclusive and preempt any other liability imposed on a
holder of shares of a trust for that obligation under common
law or otherwise, except that this section does not limit
the obligation of a holder to an obligee of the trust when
the holder has expressly agreed to be personally liable to
the obligee for the obligation; or the holder is otherwise
liable to the obligee for the obligation under this Act or
another applicable statute. Deletes the provision
prohibiting a holder of a certificate of shares from being
personally or individually liable in any manner whatsoever
for any debt, act, omission or obligation incurred by the
trust or the trust managers. Deletes the provision
prohibiting a holder of a certificate of share from being
under obligation to the trust or to its creditors with
respect to such shares.

(C) Redesignates existing Subsection (B). Provides that any
person becoming an assignee or transferee of certificated
shares or of uncertificated shares or of a subscription for
shares in good faith and without knowledge or notice that
the full consideration therefor has not been paid to the
trust shall not be personally liable to the trust or its
creditors for any unpaid portion of such consideration.

(D) Redesignates existing Subsection (C). Makes conforming
changes.

(E) Redesignates existing Subsection (D). Deletes existing
Subsection (E).

Sec. 9.10. New heading: BYLAWS. Redesignates existing Section
9. Deletes the provision requiring the initial bylaws of the
trust to be adopted by the shareholders. Makes nonsubstantive
and conforming changes.

Sec. 9.20. INDEMNIFICATION. Redesignates existing Section 9.1.
Adds the definition of "real estate investment trust."
Requires a provision contained in the declaration of trust,
the bylaws, a resolution of shareholders or trust managers, to
be deemed to constitute authorization of that payment or
reimbursement. Makes nonsubstantive and conforming changes.

Sec. 10.10. MEETINGS OF SHAREHOLDERS. Redesignates existing
Section 10. (A) Makes conforming changes.

(B) Prohibits failure to hold the annual meeting at the
designated time from causing the dissolution of the trust.

(C) Deletes the provision that special meetings of the
shareholders may be called by the holders of no less than
one tenth of all the shares entitled to vote at the
meetings. Authorizes special meetings of the shareholders to
be called by the holders of at least 10 percent of all the
shares entitled to vote at the proposed special meeting,
unless the declaration of trust provides for an alternate
percentage of shares. Prohibits the declaration of trust
from providing for a number of shares greater than 50
percent.

Sec. 10.20. TRUST MANAGER MEETINGS AND NOTICE OF MEETINGS.
Redesignates existing Section 10.1. Makes nonsubstantive
changes.

Sec. 10.30. New heading: ACTIONS WITHOUT A MEETING; TELEPHONE
MEETINGS. Redesignates existing Section 10.2. (A) Authorizes
an action required or permitted to be taken at a meeting of
the shareholders of a trust, unless otherwise provided by the
declaration of trust or bylaws. Requires such action to have
the same force and effect as action taken at a meeting, rather
than a unanimous vote of shareholders. Deletes the provision
that an action may be stated in a declaration of trust or
document filed with the secretary of state.

(B)-(C) Make nonsubstantive and conforming changes.

(D) Provides that a provision of this Act that requires
advance notice of a meeting or of a proposed action, if the
action is taken with respect to a particular matter by the
holders of shares of a class or series by means of a written
consent in compliance with Subsection (A) of this section,
does not apply as to that class or series for that action.

Sec. 11.10. NOTICE OF SHAREHOLDERS MEETINGS. Redesignates
existing Section 11. (A) Makes no changes.

(B) Sets forth provisions under which a notice otherwise
required to be given to a shareholder under this Act or the
declaration of trust or bylaws of a trust is not required
for the shareholder.

(C) Provides that any action or meeting taken or held
without notice to a shareholder has the same force and
effect as if the notice had been duly given to the
shareholder. Authorizes a document, if the action taken by
the trust is reflected in a document filed with the
secretary of state, to state that notice was duly given to
all persons to whom notice was required to be given.

Sec. 11.20. REGISTERED HOLDERS OF SHARES, CLOSING OF SHARE
TRANSFER RECORDS, AND RECORD DATE. (A) Sets forth purposes
under which a trust may regard the person in whose name any
shares issued by the trust are registered in the share
transfer records of the trust at any particular time as the
owner of those share at that time.

(B) Provides that neither the trust nor any of the officers,
trust manager(s), employees, or agents of the trust are
liable for regarding a person described by Subsection (A) of
this section as the owner of those shares at that time for
those purposes, regardless of whether that person does not
possess a certificate for those shares.

(C) Authorizes the trust manager(s) of a trust to provide
that the share transfer records shall be closed for a stated
period not to exceed 60 days. Requires the share transfer
records, if the share transfer records are closed for the
purpose of determining shareholders entitled to notice of or
to vote at a meeting of shareholders, to be closed for at
least 10 days immediately before the meeting. Authorizes the
trust manager(s), in lieu of closing the share transfer
records, the bylaws, or in the absence of an applicable
bylaw, to fix in advance a date as the record date for the
determination of shareholders. Prohibits the record date
from being more than 60 days and, in the case of a meeting
of shareholders, no less than 10 days before the date on
which the action requiring the determination of shareholders
is to be taken. Provides that if the share- transfer records
are not closed and no record date is fixed for the
determination of shareholders entitled to notice of or to
vote at a meeting of shareholders, or share holders entitled
to receive a distribution or a share dividend, the date on
which the notice of the meeting is mailed or the date on
which the resolution of the trust manager(s) declaring such
distribution or share dividend is adopted, as the case may
be, shall be the record date for such determination of
shareholders. Requires the determination of shareholders,
when a determination of shareholders entitled to vote at any
meeting of shareholders has been made, to apply to any
adjournment of the meeting of shareholders except where the
determination has been made through the closing of the share
transfer records and the stated period of closing has
expired.

(D) Authorizes the trust manager(s) to fix a record date for
the purpose of determining shareholders entitled to consent
to that action. Prohibits the record date from preceding and
from being more than 10 days after, the date on which the
trust managers adopt the resolution fixing the record date.
Requires the record date for determining shareholders
entitled to consent to action in writing without a meeting,
if no record date has been fixed by the trust manager(s) and
the prior action of the trust manager(s) is not required by
this Act, to be the first date on which a signed written
consent setting forth the action taken or proposed to be
taken is delivered by hand or by certified or registered
mail, return receipt requested, to the trust as provided by
Section 10.30A of this Act. Requires delivery to the trust's
principal place of business to be addressed to the president
or the principal executive officer of the trust. Requires
the record date for determining shareholders entitled to
consent to action in writing without a meeting, if no record
date shall have been fixed by the trust manager(s) and prior
action of the trust manager(s) is required, to be at the
close of business on the date on which the trust manger(s)
adopt a resolution taking such prior action.

(E) Requires distributions made by a trust to be payable by
the trust, escrow agent, trustee, or custodian of the
distributions to the holder of the shares as of the record
date determined for that distribution as provided in
Subsection (B) of this section, or to the holder's heirs,
successors, or assigns.

Sec. 12.10. New heading: QUORUM OF AND VOTING BY SHAREHOLDERS.
(A)Redesignates existing Section 12. Requires a quorum to be
present for any matter to be presented at that meeting if the
holders of a majority of the shares entitled to vote at the
meeting are represented at the meeting in person or by proxy.
Sets forth provisions the declaration of trust may provide.

(B) Provides that unless otherwise provided in the
declaration of trust or the bylaws, once a quorum is present
at a meeting of shareholders, the shareholders represented
in person or by proxy at the meeting may conduct such
business as may be properly brought before the meeting until
the meeting is adjourned. Provides that the subsequent
withdrawal of any shareholder from the meeting or the
refusal of any shareholder represented in person or by proxy
to vote does not affect the presence of a quorum at the
meeting. Provides that unless otherwise provided in the
declaration of trust or the bylaws, the shareholders
represented in person or by proxy at a meeting at which a
quorum is not present may adjourn the meeting until such
time and to such place as may be determined by a vote of the
holders of majority of the shares represented in person or
by proxy at that meeting.

(C) Provides that with respect to any matter, other than the
election of trust manager(s) or a matter for which the
affirmative vote of the holders of a specified portion of
the shares entitled to vote is required by this Act, the
affirmative vote of the holders of a majority of the shares
entitled to vote on, and that voted for or against or
expressly abstained with respect to, that matter at a
meeting of shareholders, unless otherwise provided in the
declaration of trust or the bylaws in accordance with this
section. Sets forth provisions, with respect to any matter,
other than the election of trust manager(s) or a matter for
which the affirmative vote of the holders of a specified
portion of the shares entitled to vote is required by this
Act, the declaration of trust or the bylaws may provide.

(D) Requires trust manager(s), unless otherwise provided in
the declaration of trust or the bylaws, to be elected by
two-thirds of the votes cast by the holders of shares
entitled to vote in the election of trust manager(s) at a
meeting of shareholders at which a quorum is present. Sets
forth authorized provisions for the declaration of trust or
the bylaws.

(E) Authorizes the declaration of trust, with respect to any
matter for which the affirmative vote of the holders of a
specified portion of the shares entitled to vote is required
by this Act, to provide that the act of the shareholders on
that matter shall be the affirmative vote of the holders of
a specified portion, but not less than a majority, of the
shares entitled to vote on that matter, rather than the
affirmative vote otherwise required by this Act. Authorizes
the declaration of trust, with respect to any matter for
which the affirmative vote of the holders of a specified
portion of the shares of any class or series is required by
this Act, to also provide that the act of the holders of
shares shall be the affirmative vote of the holders of a
specified portion, but not less than a majority, of the
shares of that class or series, rather than the affirmative
vote of the holders of shares of that class or series
otherwise required by this Act. Provides that if any
provisions of the declaration of trust provides that the act
of the shareholders on any matter shall be the affirmative
vote of the holders of a specified portion of the shares
entitled to vote on that matter that is greater than a
majority of the shares so entitled to vote, that provision
of the declaration of trust may not be amended or modified
without the affirmative vote of the holders of that greater
portion of the shares entitled to vote on that matter,
unless otherwise provided in the declaration of trust.
Provides that if any provision of the declaration of trust
provides that the act of the holders of shares of any class
or series on any matter shall be the affirmative vote of the
holders of a specified portion of the shares of that class
or series that is greater than a majority of the shares of
that class or series, that provision of the declaration of
trust may not be amended or modified, without the
affirmative vote of the holders of that greater portion of
the shares of the class or series, unless otherwise provided
in the declaration of trust.

(F) Authorizes a trust to establish procedures in its bylaws
for determining the validity of proxies and whether shares
that are held of record by a bank, broker, or other nominee
are represented at a meeting of shareholders with respect to
any matter. Authorizes those procedures to incorporate or
look to rules and determinations of self regulatory
organizations regulating that bank, broker, or other
nominee. Deletes the provision that unless otherwise
provided in the declaration of trust, the holders of a
majority of the shares entitled to vote shall constitute a
quorum at a meeting of shareholders, but in no event shall
a quorum consist of the holders of less than one third of
the shares entitled to vote and thus represented at such
meeting.

Sec. 13.10. VOTING OF SHARES. Redesignates existing Section
13. (A)(1)(a) Makes no changes.

(b) Requires each outstanding share, regardless of
class, to be entitled to one vote on each matter submitted
to a vote at a meeting of shareholders, except as
otherwise provided by this Act.

(2) Provides that if the declaration of trust provides for
more or less than one vote per share for all the
outstanding shares or for the shares of any class or any
series on any matter, every reference in this Act, in
connection with such matter, to a specified portion of
those shares shall mean the portion of the votes entitled
to be cast in respect of the shares by virtue of the
provisions of the declaration of trust.

(B) Prohibits shares of the stock of a trust owned by
another trust or corporation, if a majority of the voting
stock of the other trust or corporation is owned or
controlled by the trust, from being voted at any meeting and
from being counted in determining the total number of
outstanding shares at any given time. Prohibits anything in
this subsection to be construed as limiting the right of any
trust to vote stock, held or controlled by the trust in a
fiduciary capacity or with respect to which the trust
otherwise exercises voting power in a fiduciary capacity.

(C) Authorizes any shareholder to vote either in person or
by proxy executed in writing by the shareholder. Requires a
telegram, telex, cablegram, or similar transmission by the
shareholder, or a photographic, photostatic, facsimile, or
similar reproduction of a writing executed by the
shareholder, to be treated as an execution in writing for
purposes of this section. Requires a proxy to be revocable
unless the proxy form states that the proxy is irrevocable
and the proxy is coupled with an interest. Provides that
proxies coupled with an interest include certain
appointments.

(D) Requires an irrevocable proxy, if noted on the
certificate representing the shares that are subject to the
proxy or, in the case of uncertificated shares, if notation
of the proxy is contained in the notice with respect to the
shares that are subject to the proxy, to be specifically
enforceable against the holder of those shares or any
successor or transferee of the holder. Provides that unless
noted on the certificate representing the shares that are
subject to the irrevocable proxy or, in the case of
uncertificated shares, unless notation of the proxy is
contained in the notice with respect to the shares subject
to the proxy, an irrevocable proxy, even though otherwise
enforceable, is ineffective against a transferee for value
without knowledge of the existence of the proxy at the time
of the transfer or against any subsequent transferee.

(E)(1) Requires every shareholder entitled to vote, at each
election of trust manager(s), to have the right to vote the
number of shares owned by the shareholder for as many
persons as there are trust manager(s) to be elected and for
whose election the shareholder has a right to vote.

(2) Prohibits cumulative voting, whereby a shareholder
gives one candidate as many votes as the number of trust
manager(s) multiplied by the shareholder's shares to
equal, or by distributing such votes on the same principle
among any number of candidates, from being permitted
unless specifically authorized in the declaration of
trust. Requires a shareholder who intends to cumulate the
shareholder's votes accordingly, if cumulative voting is
authorized in the declaration of trust, to give written
notice of the shareholder's intention to cumulate the
shareholder's votes to the trust manager(s) on or before
the day preceding the election at which the shareholder
intends to cumulate the shareholder's votes.
(F) Authorizes shares standing in the name of another trust
or corporation to be voted by an officer, agent, or proxy
that is authorized to vote those shares by the bylaws of the
trust or corporation, or in the absence of such
authorization, by an officer, agent, proxy as determined by
the trust manager(s) or board of directors of the trust or
corporation. Authorizes a foreign trust or corporation, when
any foreign trust or corporation without a permit to do
business in this state lawfully owns or may lawfully own or
acquire stock to vote that stock and participate in the
management and control of the business and affairs of the
Texas trust, as other shareholders, subject to all laws and
rules governing trusts in this state.

(G) Authorizes shares held by a person who is an
administrator, executor, guardian, or conservator to be
voted by the person so long as the shares forming a part of
an estate are in the possession and forming a part of the
estate being served by the person without a transfer of such
shares into the person's name. Authorizes shares standing in
the name of a trustee to be voted by the trustee but a
trustee is not entitled to vote shares held by the trustee
without a transfer of those shares into the trustee's name
as trustee.

(H) Authorizes shares standing in the name of, held by, or
under the control of a receiver to be voted by the receiver,
without transferring the shares into the receiver's name, if
authority to vote the shares is contained in an appropriate
court order by which the receiver was appointed to serve as
receiver.

(I) Entitles a shareholder whose shares are pledged to vote
those shares until the shares have been transferred into the
pledgee's name. Requires the pledgee, after the shares have
been transferred into the pledgee's name, to be entitled to
vote the transferred shares. Deletes existing Subsections
(B) and (C).
Sec. 13.20. VOTING TRUSTS AND VOTING AGREEMENTS. (A)
Authorizes any number of shareholders of a trust to enter into
a written voting trust agreement to confer on a trustee or
trustees the right to vote or otherwise represent shares of
the trust. Requires shares that are to be subject to the
agreement to be transferred to the trustee or trustees for
purposes of the agreement, and a counterpart of the agreement
to be deposited with the trust at its principal place of
business or registered office. Requires the counterpart of the
voting trust agreement deposited with the trust to be subject
to the same right of examination by a shareholder of the
trust, as are books and records of the trust, and to be
subject to examination by any holder of a beneficial interest
in the voting trust at any reasonable time for any proper
purpose.

(B) Authorizes any number of shareholders of a trust, or any
number of shareholders of a trust and the trust itself, to
enter into a written voting agreement for the purpose of
providing that shares of the trust must be voted in the
manner prescribed in the agreement. Requires a counterpart
of the agreement to be deposited with the trust at its
principal place of business or registered office and to be
subject to the same right of examination by a share holder
of the trust, as are the books and records of the trust.
Provides that the agreement is specifically enforceable
against the holders of those shares or any successor or
transferee of the holder, if the agreement is noted
conspicuously on the certificate representing the shares
that are subject to the agreement or, in the case of
uncertificated shares, if notation of the agreement is
contained in the notice sent pursuant to Section 7.20D of
this Act with respect to the shares that are subject to the
agreement. Provides that unless noted conspicuously on the
certificate representing the shares that are subject to the
agreement or, in the case of uncertificated shares, unless
notation of the agreement is contained in the notice with
respect to the shares that are subject to the agreement, the
agreement, even though otherwise enforceable, is ineffective
against a transferee for value without actual knowledge of
the existence of the agreement at the time of the transfer
or against any subsequent transferee. Provides that the
agreement is specifically enforceable against any other
person who is not a transferee for value from and after the
time that the person acquires actual knowledge of the
existence of the agreement. Provides that a voting agreement
entered into pursuant to this subsection is not subject to
Subsection (A) of this section.

Sec. 14.10. New heading: DISTRIBUTIONS. Redesignates existing
Section 14. (A) Authorizes the trust manager(s) to authorize
and the trust to make distributions subject to any
restrictions in its declaration of trust and to the
limitations set forth in this section.

(B) Prohibits a trust from making a distribution if after
giving effect to the distribution, the trust would be
insolvent; or the distribution exceeds the surplus of the
trust.

(C) Authorizes a trust, if the net assets of a trust are not
less than the amount of the proposed distribution, to make
a distribution involving a purchase or redemption of any of
its own shares if the purchase or redemption is made for
certain applications.

(D) Requires a trust's indebtedness to a shareholder
incurred by reason of a distribution made in accordance with
this section to be at parity with the trust's indebtedness
to its general, unsecured creditors, except to the extent
the indebtedness is subordinated, or payment of that
indebtedness is secured, by agreement. Deletes existing
Subsections (A) and (B).

Sec. 14.20. SHARE DIVIDENDS. (A) Authorizes the trust
manager(s) of a trust to authorize and the trust to pay share
dividend subject to any restrictions in the declaration of
trust of the trust and to the limitations set forth in this
section.

(B) Prohibits a trust from paying a share divided payable in
authorized but unissued shares if the surplus of the trust
is less than the amount required by this section to be
transferred to stated capital at the time that share
dividend is paid.

(C) Requires shares, if a share dividend is payable in
authorized but unissued shares having a par value, to be
issued at the par value. Requires an amount of surplus, at
the time that share dividend is paid, in an amount not less
than the aggregate par value of the shares to be issued as
a share dividend, to be transferred to stated capital.

(D) Requires shares, if a share divided is payable in
authorized but unissued shares without par value, to be
issued at the value fixed by resolution of the trust
manager(s) adopted at the time the share dividend is
authorized. Requires an amount of surplus equal to the
aggregate value fixed in respect of those shares to be
transferred to stated capital, at the time the share
dividend is paid.

(E) Prohibits a share dividend payable in shares of any
class from being paid to the holders of shares of any other
class unless the declaration of trust so provides or unless
the payment is authorized by the affirmative vote or the
written consent of the holders of at least a majority of the
outstanding shares of the class in which the payment is to
be made.

Sec. 14.30. SPLIT-UP OR DIVISION WITHOUT STATED CAPITAL
INCREASE. Provides that a split-up or division of the issued
shares of any class of a trust into a greater number of shares
of the same class without increasing the stated capital of the
trust does not constitute a share dividend or a distribution
and may therefore be approved and authorized by the trust
manager(s) and carried out by the trust.

Sec. 14.40. DETERMINATION OF NET ASSETS, STATED CAPITAL, AND
SURPLUS. (A) Provides that determinations whether a trust is
insolvent and determinations of the value of the net assets
and of stated capital and surplus of the trust, and each of
their components, may, but are not required to, be based on
certain provisions.

(B) Provides that Subsection (A) of this section and the
determinations made in accordance with that subsection do
not apply to the calculation of any tax imposed under the
laws of this state.

Sec. 14.50. DATE OF DETERMINATION OF SURPLUS. (A) Requires the
surplus of the trust, in the case of a distribution by a trust
or the payment of a share dividend, to be determined, and the
determination whether the trust would be insolvent after
giving effect to the distribution to be made under certain
circumstances.

(B) Provides that a distribution that involves the
incurrence by a trust of any indebtedness or deferred
payment obligation or a distribution that involves a
contract by the trust to acquire any of its own shares is
considered to have been made on the date the indebtedness or
obligation is incurred or, in the case of a contract to
purchase shares, at the option of the trust, either the date
the contract is made or is effective or the date on which
the shares to be acquired are acquired.

Sec. 14.60. SURPLUS AND RESERVES. Authorizes a trust, by
resolution of its trust managers, to create a reserve or
reserves out of its surplus or designate or allocate any part
or all of its surplus in any manner for any proper purpose;
and increase, decrease, or abolish the reserve, designation,
or allocation in the same manner.

Sec. 15.10. LIABILITY OF TRUST MANAGER(S). Redesignates
existing Section 15. (A)(1)-(2) Make nonsubstantive and
conforming changes.

(3) Provides that if the trust shall commence business
before the trust has received for the issuance of shares
of beneficial interest consideration of at least a $1,000
value, consisting of any tangible or intangible benefit to
the trust, including cash, promissory notes, services
performed for, contracts for services to be performed for,
or other securities of the trust, the trust manager(s) who
assent thereto shall be jointly and severally liable to
the trust for the part of the required consideration that
has not been received before commencing business, but such
liability shall be terminated when the trust has actually
received the required consideration for the issuance of
shares. Makes conforming changes.
(B) Prohibits the trust manager(s) from being liable under
Subsection (A)(1) of this section if the trust manager(s)
considered the assets to be of their book value or relied on
information, opinions, reports, or statements, including
financial statements and other financial statements and
other financial data, concerning the trust or another
person, that were prepared or presented by certain persons.

(C) Prohibits the trust manager(s) from being liable for any
claims or damages that may result from the manager(s) acts
in the discharge of any duty imposed or power conferred upon
the manager(s) by the trust upon information, opinions,
reports, or statements, including financial statements and
other financial statements and other financial data,
concerning the trust or another person, that were prepared
or presented by certain persons. Deletes the provision that
the trust manager is not liable for a claim or damages if
the manager acted in reliance upon the written opinion of an
attorney for the trust. Makes a conforming change.

(D) Provides that a trust manager is not relying in good
faith within the meaning of this section if the trust
manager has knowledge concerning the matter in question that
makes reliance otherwise permitted by this section
unwarranted.

(E) Redesignates existing Subsection (D). Prohibits a trust
manager from being liable to the trust for any act,
omission, loss, damage, or expense arising from the
performance of his duty under a real estate investment
trust, save only for his own wilful misfeasance, wilful
malfeasance, or gross negligence.

(F) Entitles a trust manager found liable with respect to a
claim to receive contribution, as appropriate to achieve
equity, from each of the other trust managers who are liable
with respect to that claim.

(G) Prohibits an action from being brought against a trust
manager for liability imposed by this section after two
years after the date on which the act alleged to give rise
to the liability occurred. Deletes existing Section 16.

Sec. 17.10. JOINDER OF SHAREHOLDERS NOT REQUIRED. Redesignates
existing Section 17.

Sec. 18.10. BOOKS AND RECORDS. Redesignates existing Section
18. Makes conforming changes. Deletes existing Section 19.

Sec. 19.10. TERMINATION AND LIQUIDATION. Redesignates existing
Section 20. Authorizes a trust to be dissolved by the
affirmative vote of the holders of at least two-thirds of the
outstanding voting shares of the trust, unless any class or
series of shares is entitled to vote as a class on the
dissolution, in which case the resolution shall require for
its adoption the affirmative vote of the holders of at least
two-thirds of the outstanding shares within each class or
series of shares entitled to vote as a class on the
dissolution and at least two-thirds of the outstanding shares
otherwise entitled to vote on the dissolution. Requires shares
entitled to vote as a class to be entitled to vote only as a
class unless otherwise entitled to vote on each matter
generally or provided in the declaration of trust. Makes
conforming changes. Deletes existing Section 21.

Sec. 19.20. ARTICLES OF DISSOLUTION. (A) Requires an officer,
on the termination and liquidation of the trust, to execute
articles of dissolution on behalf of the trust. Establishes
provisions to be set forth by the articles of dissolution.

(B) Requires a copy of the articles of dissolution to be
filed with the county clerk.

(C) Provides that the trust shall cease to exist on the
filing of the articles of dissolution with the county clerk.
Sec. 21.10. WAIVER OF NOTICE. Redesignates existing Section
22. Makes nonsubstantive and conforming changes.

Sec. 22.10. RIGHT TO AMEND DECLARATION OF TRUST. Redesignates
existing Section 23. (A) Deletes the authorization of the
declaration of trust to be amended upon receipt of the
affirmative vote of the holders of at least two-thirds of the
outstanding shares of the trust. Deletes the requirement of
amendments to the declaration of trust to be made of record in
the same manner as the original declaration of trust.

(B) Provides that a shareholder of a trust does not have a
vested property right resulting from any provision in the
declaration of trust, including a provision relating to
management, control, capital structure, dividend
entitlement, or purpose or duration of the trust.

Sec. 22.20. PROCEDURE TO AMEND DECLARATION OF TRUST. (A) Sets
forth the manner in which the declaration of trust may be
amended.

(B) Authorizes any number of amendments to be submitted to
and voted on by the shareholders at one meeting.

Sec. 22.30. CLASS VOTING ON AMENDMENTS. (A) Requires the
holders of the outstanding shares of a class or series to be
entitled to vote as a class on a proposed amendment, whether
or not entitled to vote on the proposed amendment by the
provisions of the declaration of trust, if the amendment meets
certain provisions, unless the amendment is undertaken
pursuant to authority granted to the trust manager(s) in the
declaration of trust.

(B) Provides that unless otherwise provided in a trust's
declaration of trust, if the holders of the outstanding
shares of a class that is divided into series are entitled
to vote as a class on a proposed amendment and the amendment
would affect all series of the class equally, the holders of
the separate series are not entitled to separate class
votes.

(C) Provides that unless otherwise provided in a trust's
declaration of trust, a proposed amendment to the trust's
declaration of trust that would solely effect changes in the
designations, preferences, limitations, or relative rights,
including voting rights, of one or more series of shares of
the trust that have been established pursuant to the
authority granted the trust manager(s) in the declaration of
trust in accordance with this Act does not require the
approval of the holders of the outstanding shares of any
class or series other than that series if the preferences,
limitations and relative rights of that series after giving
effect to the amendment and of any series that may be
established as a result of a reclassification of that series
are, in each case, within those permitted to be fixed and
determined by the trust manager(s) with respect to the
establishment of any new series of shares pursuant to the
authority granted to the trust manager(s) in the declaration
of trust in accordance with this Act.

Sec. 22.40. ARTICLES OF AMENDMENT. (A) Requires an officer to
execute the articles of amendment on behalf of the trust.
Provides that if no shares have been issued, and the articles
of amendment are adopted by the trust manager(s), a majority
of the trust manager(s) may execute the articles of amendment
on behalf of the trust.

(B) Sets forth provisions required of the articles of
amendment.

Sec. 22.50. FILING OF ARTICLES OF AMENDMENT. Requires a copy
of the articles of amendment to be filed with the county
clerk.

Sec. 22.60. EFFECT OF CERTIFICATE OF AMENDMENT. (A) Provides
that on the filing of the articles of amendment with the
county clerk, the amendment becomes effective and the
declaration of trust is considered to be amended accordingly.

(B) Prohibits an amendment from affecting any existing cause
of action in favor of or against the trust, or any pending
suit to which the trust is a party, or the existing rights
of persons other than shareholders. Prohibits a suit brought
by or against the trust under its former name, if the name
of a trust is changed by amendment, from being abated for
that reason.

Sec. 22.70. RESTATED DECLARATION OF TRUST. (A) Authorizes a
trust, by following the procedure to amend the declaration of
trust provided by this Act, to authorize, execute, and file a
restated declaration of trust that may restate the entire text
of the declaration of trust as amended or supplemented by all
articles of amendment previously filed with the county clerk
and may include further amendment by the restated declaration
of trust.

(B) Requires the introductory paragraph, if the restated
declaration of trust restated the entire declaration of
trust, as amended and supplemented by all articles of
amendment previously filed with the county clerk, without
making any further amendment to the declaration of trust, to
contain a statement that the instrument accurately copies
the declaration of trust and all amendments to the
declaration of trust that are in effect on that date and
that the instrument contains no change in any provision of
the declaration of trust. Authorizes the number of trust
manager(s) and the names and addresses of the persons
serving as trust manager(s) to be inserted in lieu of
similar information concerning the initial trust manager(s).

(C) Sets forth required provisions for the instrument
containing the declaration of trust, if the restated
declaration of trust restates the entire declaration of
trust, as amended and supplemented by all articles of
amendment previously filed with the county clerk.

(D) Requires an officer to execute the restated declaration
of trust on behalf of the trust. Authorizes a majority of
the trust manager(s), if no shares have been issued and the
restated declaration of trust is adopted by the trust
manager(s), to execute the restated declaration of trust on
behalf of the trust.

(E) Requires the original declaration of trust and all
amendments to the original declaration of trust, on the
filing of the copy of the restated declaration of trust with
the county clerk, to be superseded and the restated
declaration of trust is considered to be the declaration of
trust of the trust.

Sec. 23.10. MERGER. Redesignates existing Section 23.1. (A)
Authorizes a domestic trust to adopt a plan of merger and one
or more domestic trusts to merge with one or more domestic or
foreign corporations, trusts, partnerships or other entities
if certain provisions apply.

(B) Sets forth required provisions for a plan of merger.

(D) Provides that on the merger's taking effect, the
surviving or new foreign corporation, trust, partnership or
other entity (partnership), if any, that is the sole
surviving or new foreign partnership in the merger, or if
more than one domestic or foreign partnership is to survive
or to be created by the terms of the plan of the merger, the
surviving or new foreign partnership that is designated in
the plan of merger to be the entity obligated for the
payment of the fair value of any shares held by a
shareholder who has complied with the requirements of
Section 25.20 of this Act for the recovery of the fair value
of the shareholders shares is considered to appoint the
secretary of state in this state as its agent for service of
process in a proceeding to enforce any obligation or the
rights of dissenting shareholders of each domestic entity
that is a party to the merger; and agree that it will pay to
the dissenting shareholders of each domestic entity that is
a party to the merger the amount, if any, to which the
dissenting shareholders are entitled under Section 25.10 of
this Act.

(E) Provides that this section does not limit the power of
a domestic or foreign partnership to acquire all or part of
the shares of one or more classes or series of a domestic
trust through a voluntary exchange or otherwise.

(F) Provides that this section does not limit the power of
domestic or foreign subsidiary entities to merge into a
parent pursuant to applicable law. Deletes the definitions
for "business trust," "foreign business trust," and "Texas
real estate investment trust." Deletes existing Subsections
(B)-(L).

Sec. 23.20. SHARE EXCHANGE OR ACQUISITION. (A) Authorizes one
or more domestic or foreign partnerships to acquire all of the
outstanding shares of one or more classes or series of one or
more domestic trusts if certain provisions apply.

(B) Sets forth required provisions for a plan of exchange.

(C) Authorizes the plan of exchange to set forth any other
provisions relating to the exchange and to be contained in
and be part of a plan of merger.

(D) Prohibits a plan of exchange from being effected if any
shareholder of a domestic trust that is a party to the share
exchange will, as a result of the share exchange, become
personally liable, without the shareholder's consent, for
the liabilities or obligations of any other person or
entity.

(E) Provides that this section does not limit the power of
a domestic or foreign partnership to acquire all or part of
the shares of one or more classes or series of domestic
trust through a voluntary exchange or otherwise.

Sec. 23.30. ACTION ON PLAN OF MERGER OR EXCHANGE. (A) Requires
the trust manager(s) of each domestic trust that is a party to
the merger, and the trust manager(s) of each domestic trust
whose shares are to be acquired in the share exchange, after
acting on a plan of merger or exchange in the manner
prescribed by Subdivision (1) of Subsection (B) of this
section, to submit the plan of merger or exchange for approval
by its shareholders.

(B) Provides that, except as provided by Subsection (G) of
this section, certain provisions must apply for a plan of
merger or exchange to be approved.

(C) Authorizes the trust manager(s) to condition the trust
managers' submission to shareholders of a plan of merger or
exchange on any basis.

(D) Requires the trust to notify each share holder, whether
or not the shareholder is entitled to vote, of the meeting
of shareholders at which the plan of merger or exchange is
to be submitted for approval in accordance with Section
11.10 of this Act. Requires the notice to be given at least
20 days before the meeting and to state that the purpose, or
one of the purposes, of the meeting is to consider the plan
of merger or exchange and to contain or be accompanied by a
copy or summary of the plan.

(E) Requires the vote of shareholders required for approval
of a plan of merger or exchange, unless the trust manager(s)
requires a greater vote or a vote by class or series, to be
the affirmative vote of the holders of at least two-thirds
of the outstanding shares of each trust entitled to vote on
the plan of merger or exchange, unless any class or series
of shares of any such trust is entitled to vote as a class
on the plan of merger or exchange, in which event the vote
required for approval by the shareholders of the trust shall
be the affirmative vote of the holders of at least two-thirds of the outstanding shares otherwise entitled to vote
on the plan of merger or exchange as a class and at least
two-thirds of the outstanding shares otherwise entitled to
vote on the plan of merger or exchange. Requires shares
entitled to vote as a class to be entitled to vote only as
a class unless otherwise entitled to vote on each matter
submitted to the shareholders generally or as provided in
the declaration of trust.

(F) Sets forth provisions for which separate voting by a
class or series of shares of a declaration of trust are
required.

(G) Sets forth provisions under which, unless the
declaration of trust otherwise requires, approval by the
shareholders of a trust on a plan of merger is not required
and Subsections (A) through (F) of this section do not
apply.

(H) Defines "participating shares" and "voting shares."

(I) Authorizes the plan of merger or share exchange, after
a merger or share exchange is approved, and at any time
before the merger or share exchange has become effective, to
be abandoned by any of the trusts that are a party to the
merger, without shareholder action, in accordance with the
procedures set forth in the plan of merger or exchange, or,
if no such procedures are set forth in the plan, in the
manner determined by the trust manager(s). Authorizes the
merger or share exchange, if articles of merger or exchange
have been filed with the county clerk but the merger or
share exchange has not become effective, to be abandoned as
provided in this subsection if a statement, executed on
behalf of each domestic and foreign entity that is a party
to the merger or share exchange by an officer or other duly
authorized representative of the domestic or foreign entity,
and stating that the plan of merger or exchange has been
abandoned in accordance with the plan and this subsection,
is filed with the county clerk in each county where the
principal place of business of a Texas trust that is party
to the merger or exchange is located before the merger or
share exchange takes effect.

(J) Provides that on the filing with the county clerk of the
statement described by Subsection (I) of this section, the
merger or share exchange is considered abandoned and may not
take effect.

Sec. 23.40. ARTICLES OF MERGER OR EXCHANGE. (A) Requires
articles of merger or exchange, if a plan of merger or
exchange has been approved in accordance with Section 23.30 of
this Act and has not been abandoned, or approved by the trust
manager(s) if shareholder approval is not required under that
section, to be executed on behalf of each domestic or foreign
partnership that is party to the plan of merger or exchange by
an officer or other duly authorized representative of that
entity and to set forth certain provisions.

(B) Requires the original of the articles of merger or
exchange, and the number of copies of the articles that is
equal to the number of surviving, new, and acquiring
domestic partnerships that are parties to the plan of merger
or exchange or that will be created by the terms of the plan
of merger or exchange thereof, to be filed with the county
clerk in each county where the principal place of business
of a Texas trust that is a party to the merger or exchange
is located.

Sec. 23.50. EFFECTIVE DATE OF MERGER OR SHARE EXCHANGE.
Provides that, except as otherwise provided by Section 27.10
of this Act, the merger or share exchange is effective when
the articles of merger or exchange are filed as required by
Section 23.40 of this Act.

Sec. 23.60. EFFECT OF MERGER OR SHARE EXCHANGE. (A) Provides
that when a merger under Section 23.10 or 23.20 of this Act
takes effect, certain provisions apply.

(B) Provides that when a share exchange takes effect, the
shares of each acquired trust are considered to have been
exchanged as provided in the plan of exchange, and the
former holders of the shares exchanged pursuant to the plan
of exchange shall be entitled only to the exchange rights
provided in the articles of exchange or to their rights of
dissent under Section 25.10 of this Act. Requires the
acquiring domestic or foreign entity or entities of the
shares to be acquired and exchanged in the share exchange
when a share exchange takes effect, to be entitled to all
rights, title, and interest with respect to the shares so
acquired and exchanged subject to the provisions in the
articles of exchange.

(C) Requires an item of real estate or other property, if
the plan of merger fails to provide for the allocation and
vesting of the right, title, and interest in any particular
item of real estate or other property or for the allocation
of any liability or obligation of any party to the merger,
to be owned in undivided interest by, or such liability or
obligation shall be the joint and several liability and
obligation of, each of the surviving and new domestic and
foreign partnerships pro rata to the total number of
surviving and new domestic and foreign partnerships
resulting from the merger.

Sec. 24.10. DISPOSITION OF ASSETS AUTHORIZED BY TRUST
MANAGERS. (A) Authorizes the sale, lease, exchange, or other
disposition of all of the property and assets of a trust, when
made in the usual and regular course of the business of the
trust, except as otherwise provided in the declaration of
trust and as provided in the next sentence of this subsection,
to be made on the terms and conditions and for the
consideration, which may consist of money or real or personal
property. Authorizes the trust manager(s), except as otherwise
provided in the declaration of trust, to authorize any pledge,
mortgage, deed of trust, or trust indenture, and no
authorization or consent of the shareholders shall be required
for the validity of or for any sale pursuant to the terms of
the pledge, mortgage, deed of trust, or trust indenture.

(B) Provides that a transaction referred to in this section
is in the usual and regular course of business if the trust
continues to engage in one or more businesses or applies a
portion of the consideration received in connection with the
transaction to the conduct of a business in which it engages
following the transaction.

(C) Authorizes a trust, when authorized by appropriate
resolution of the trust manager(s), to convey land by deed,
with or without the seal of the trust, signed by an officer
or attorney in fact of the trust. Authorizes the deed, when
acknowledged by the officer or attorney in fact to be the
act of the trust, or proved in the manner prescribed for
other conveyances of lands, to be recorded in the same
manner and with the same effect as other deeds.

Sec. 24.20. DISPOSITION OF ASSETS REQUIRING SPECIAL
AUTHORIZATION OF SHAREHOLDERS; EFFECT OF DISPOSITION REQUIRING
OR NOT REQUIRING AUTHORIZATION; LIABILITY OF ACQUIRING ENTITY.
(A) Provides that a sale, lease, exchange, or other
disposition of all the property and assets, with or without
the good will, of a trust, if not made in the usual and
regular course of its business, to be made on the terms and
conditions and for the consideration that may consist of money
or real or personal property. Sets forth the manner in which
the terms and conditions may be authorized.

(B) Provides that a disposition of any, all, or
substantially all of the property and assets of a trust,
whether or not it requires the special authorization of the
shareholders of the trust, effected under Subsection (A) of
this section or under Section 23.60 of this Act or otherwise
is not considered to be a merger pursuant to this Act or
otherwise; and except as otherwise expressly provided by
another statute, does not make the acquiring partnership
responsible or liable for any liability or obligation of the
selling trust that the acquiring entity did not expressly
assume.

Sec. 25.10. RIGHTS OF DISSENTING SHAREHOLDERS IN THE EVENT OF
CERTAIN ACTIONS. (A) Sets forth actions from which any
shareholder of a domestic trust may dissent.

(B) Sets forth provisions under which a shareholder may not
dissent from any plan of merger in which there is a single
surviving or new domestic or foreign partnership or from any
plan of exchange.

Sec. 25.20. PROCEDURE FOR DISSENT BY SHAREHOLDERS AS TO
ACTIONS. (A) Sets forth procedures under which a shareholder
of a domestic trust who has the right to dissent from any of
the actions referred to in Section 25.10 of this Act may
exercise that right to dissent.

(B) Authorizes a shareholder or entity, if, within 60 days
after the action was effected, the shareholder and the
existing, surviving, or new entity do not agree on the value
of the shares, within 60 days after the expiration of the
60-day period, to file a petition in any court of competent
jurisdiction in the county in which the principal office of
the domestic trust is located, asking for a finding and
determination of the fair value of the shareholder's shares.
Requires service of a copy of the petition, on the filing of
a petition by the shareholder, to be made on the entity.
Requires the entity, within 10 days after receiving the
service, to file in the office of the clerk of the court in
which the petition was filed a list containing the names and
addresses of all shareholders of the domestic trust who have
demanded payment for their shares and with whom agreements
as to the value of their shares have not been reached by the
entity. Requires the list described in this subsection to be
attached to the petition, if the petition is filed by the
entity. Requires the clerk of the court to give notice of
the time and place fixed for the hearing of the petition by
registered mail to the entity and to the shareholders named
on the list at the addresses stated in the list. Requires
the court to approve the forms of notices sent by mail.
Provides that all shareholders notified as required by this
subsection and the entity are bound by the final judgment of
the court.

(C) Requires the court, after the hearing of a petition
filed under this section, to determine which shareholders
have complied with the provisions of this section and have
become entitled to the valuation of and payment of their
shares. Requires the court to appoint one or more qualified
appraisers to determine that value. Authorizes the
appraisers to examine any books and records of the trust
that relate to the shares the appraisers are charged with
the duty of valuing. Requires the appraisers to make a
determination of the fair value of the shares after
conducting an investigation. Requires the appraisers to
afford an opportunity to allow interested parties to submit
to the appraisers pertinent evidence relating to the value
of the shares. Provides that the appraisers have the power
and authority that may be conferred on masters in chancery
by the Rules of Civil Procedure.

(D) Requires the appraisers to determine the fair value of
the shares of the shareholders adjudged by the court to be
entitled to payment for their shares and to file their
report of that value in the office of the court clerk.
Requires the clerk to give notice of the filing of the
appraiser's report to interested parties. Requires the
appraiser's report to be subject to exceptions to be heard
before the court both on the law and the facts. Requires the
court to determine the fair value of the shares of the
shareholders entitled to payment for their shares and to
order the existing, surviving, or new entity to pay that
value, together with interest on the value of shares to the
shareholders entitled to payment, beginning 91 days after
the applicable action from which the shareholder elected to
dissent was effected to the date of such judgment. Requires
the judgment to be immediately payable to the holders of
uncertificated shares. Requires the judgment to be payable
to the holders of shares represented by certificates only on
and simultaneously with, the surrender to the existing,
surviving, or new entity of duly endorsed certificates for
those shares. Provides that on payment of the judgment, the
dissenting shareholders cease to have any interest in those
shares or in the trust. Requires the court to allow the
appraisers a reasonable fee as court costs, and all court
costs to be allocated between the parties in the manner that
the court determines to be fair and equitable.

(E) Requires shares acquired by the existing, surviving, or
new entity, pursuant to the payment of the agreed value of
the shares, to the payment of the agreed value of the
shares, or to payment of the judgment entered for the value
of the shares, as in this section provided, in the case of
a merger, to be treated as provided in the plan of merger
and, in all other cases, may be held and disposed of by the
trust as in the case of other treasury shares.

(F) Provides that this section does not apply to a merger
if, on the date of the filing of the articles of merger, the
surviving entity is the owner of all the outstanding shares
of the other entities, domestic or foreign, that are parties
to the merger.

(G) Provides that in the absence of fraud in the
transaction, the remedy provided by this section to a
shareholder objecting to any action referred to in Section
25.10 of this Act is the exclusive remedy for the recovery
of the value of the shareholder's shares or money damages to
the shareholder with respect to the action. Provides that if
the existing, surviving, or new entity complies with the
requirements of this section, any shareholder who fails to
comply with the requirements of this section is not entitled
to bring suit for the recovery of the value of the
shareholder's shares or money damages to the shareholder
with respect to the action.

Sec. 25.30. PROVISIONS AFFECTING REMEDIES OF DISSENTING
SHAREHOLDERS. (A) Provides that any shareholder who has
demanded payment for the shareholder's shares in accordance
with Section 25.20 of this Act is not entitled to vote or
exercise any other rights of a shareholder except the right to
receive payment for the shareholder's shares pursuant to the
provisions of that section and the right to maintain an
appropriate action to obtain relief on the ground that the
action would be or was fraudulent. Prohibits the respective
shares for which payment has been demanded from being
considered outstanding for the purposes of any subsequent vote
of shareholders.

(B) Requires the trust, on receiving a demand for payment
from any dissenting shareholder, to make an appropriate
notation of the demand in its shareholder records. Requires
each holder of certificates representing shares, within 20
days after demanding payment for shares in accordance with
Section 25.20 of this Act, to submit the certificates to the
trust for notation on the certificates that such demand has
been made. Requires failure of holders of certificated
shares to submit the certificates to the trust, at the
option of the trust, to terminate the shareholder's rights
under Section 25.20 of this Act unless a court of competent
jurisdiction for good and sufficient cause shown directs
otherwise. Requires a new certificate issued for shares, if
uncertificated shares for which payment has been demanded or
shares represented by a certificate on which the trust has
made a notation under this subsection are transferred, to
bear similar notation together with the name of the original
dissenting holder of those shares, and a transferee of those
shares shall acquire by the transfer no rights in the trust
other than those which the original dissenting shareholder
had after making demand for payment of the fair value of the
shares.

(C) Authorizes a shareholder who has demanded payment for
the shareholder's shares in accordance with Section 25.20 of
this Act to withdraw that demand at any time before payment
of those shares has been made or before any petition has
been filed pursuant to Section 25.20 of this Act. Prohibits
the demand from being withdrawn after the payment of the
shares has been made or after any such petition has been
filed, unless the trust consents to the withdrawal of the
demand. Requires the shareholder and all persons claiming
under the shareholder to be presumed to have approved and
ratified the action from which the shareholder dissented and
to be bound by the action, the rights of the shareholder to
be paid the fair value of the shareholder's shares shall
cease, and the shareholder's status as a shareholder shall
be restored without prejudice to any proceedings that may
have been taken during the interim, and the shareholder is
entitled to receive any dividends or other distributions
made to the shareholders in the interim under certain
provisions.

Sec. 26.10. REORGANIZATION UNDER A FEDERAL STATUTE. (A) Sets
forth provisions under which a trustee appointed for a trust
being reorganized under a federal statute, the designated
officers of the trust, or any other individual designated by
the court to act on behalf of the trust may do without action
by or notice to its trust managers or shareholders in order to
carry out a plan of reorganization ordered or decreed by a
court of competent jurisdiction under the federal statute.

(B) Provides that actions taken under Subsections(A)(4) or
(A)(5) take effect on the date the order or decree approving
the plan of reorganization is entered or on another
effective date as may be specified, without further action
of the trust, as and to the extent set forth in the plan of
reorganization or the order or decree approving the plan of
reorganization.

(C) Sets forth provisions authorized to be signed by a
trustee appointed for a trust being reorganized under a
federal statute, the designated officers of the trust, or
any other individual designated by the court on behalf of a
trust that is being reorganized.

(D) Sets forth provisions that apply when a domestic or
foreign partnership that is not being reorganized merges or
engages in a share exchange with a trust that is being
reorganized pursuant to a plan of reorganization.

(E) Provides that shareholders of a trust being reorganized
under a federal statute do not have a right to dissent under
this Act, unless the plan of reorganization provides
otherwise.

(F) Provides that this section does not apply after a final
decree is entered by a court in the reorganization case even
though the court may retain jurisdiction of the case for
limited purposes unrelated to consummation of the plan of
reorganization.

(G) Provides that this section does not preclude other
change in real estate investment securities by a plan of
reorganization ordered or decreed by a court of competent
jurisdiction under federal statute.

Sec. 27.10. DELAYED EFFECTIVENESS OF CERTAIN FILINGS. (A)
Authorizes a permitted act to be made effective at a time and
date after the time and date otherwise provided for the
permitted act in this Act or to be made effective on the
occurrence or future events or facts, including future acts of
any person or entity if certain provisions apply.

(B) Requires the statement required by Subsection (A)(3) to
be executed on behalf of each domestic or foreign
partnership that was required to execute the articles,
statement, application, or other filing that is otherwise
required to be filed with the county clerk to make effective
the permitted act by this Act by an officer or other duly
authorized representative of the entity, including an
officer or duly authorized representative of any successor
domestic or foreign partnership. Requires the original
statement and a copy of the original statement to be filed
with the county clerk.

(C) Requires a permitted act, if a permitted act is to take
effect as of a time or date after the time and date
otherwise provided in this Act for the permitted act to
become effective, to the extent permitted by Subsection (A),
to take effect on that subsequent time and date.

(D) Provides that if any permitted act is to be made
effective on the occurrence of future events or facts, other
than the mere passage of time, and the statement required by
Subsection (A)(3) is filed with the county clerk within the
time prescribed in that subdivision, that permitted act
takes effect on the time and date on which the latest
specified event or fact occurs or the time and date on which
the condition is otherwise satisfied or waived. Requires the
time and date on which a condition to the effectiveness of
a permitted act is satisfied or waived as set forth in a
statement filed with the county clerk under Subsection
(A)(3) to be conclusively regarded as the time and date on
which the condition was satisfied or waived for purposes of
this section.

(E) Prohibits a permitted act, if the effectiveness of any
permitted act is conditioned on the occurrence of future
events or facts, other than the mere passage of time, and
the statement required by Subsection (A)(3) is not filed
with the county clerk within the time prescribed in that
subdivision, from taking effect unless the articles,
statement, application, or other filing required by this Act
to be filed with the county clerk to make the permitted act
effective are subsequently filed with the county clerk.

(F) Defines "permitted act."

Sec. 28.10. CASES NOT PROVIDED FOR. Redesignates existing
Section 24. (A) Requires analogous provisions of the Texas
Business Corporation Act, in any case not provided for in this
Act, and the case law construing that Act, to govern;
provided, however, that in any case where a provision of this
Act conflicts with a provision of the Texas Business
Corporation Act, the provisions of this Act control. Prohibits
anything in this section from being construed to cause a
provision of the Texas Business Corporation Act to control
over a similar provision of this Act on the grounds that the
Texas Business Corporation Act provision is more or less
extensive, restrictive, or detailed. Deletes the requirement
that rules of law and equity, including the law of merchant,
govern. Deletes the definition of "business trust."

(B) Created from existing text.

SECTION 2. Effective date: September 1, 1995.
Makes application of this Act prospective.

SECTION 3. Emergency clause.