By: Ellis S.B. No. 1212
A BILL TO BE ENTITLED
AN ACT
1-1 relating to venue, notice, and attorney general participation in
1-2 proceedings involving charitable trusts.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Subsection (c), Section 115.011, Property Code,
1-5 is amended to read as follows:
1-6 (c) The attorney general shall be <made a party to and>
1-7 given notice of any <suit or judicial> proceeding involving a
1-8 <relating to> charitable trust as provided by Chapter 123 of this
1-9 code <trusts to the extent and in the same manner provided by
1-10 Article 4412e, Revised Statutes, as amended>.
1-11 SECTION 2. Section 123.001, Property Code, is amended to
1-12 read as follows:
1-13 Sec. 123.001. Definitions. In this chapter:
1-14 (1) "Charitable entity" means a corporation, trust,
1-15 community chest, fund, foundation, or other entity organized for
1-16 scientific, educational, philanthropic, or environmental purposes,
1-17 social welfare, the arts and humanities, or another civic or public
1-18 purpose described by Section 501(c)(3) of the Internal Revenue Code
1-19 of 1986 (26 U.S.C. 501(c)(3)).
1-20 (2) "Charitable trust" means a charitable entity, a
1-21 trust the stated purpose of which is to benefit a charitable
1-22 entity, or an inter vivos or testamentary gift to a charitable
1-23 entity.
2-1 (3) "Proceeding involving a charitable trust" means a
2-2 suit or other judicial proceeding the object of which is to:
2-3 (A) terminate a charitable trust or distribute
2-4 its assets to other charitable donees;
2-5 (B) depart from the objects of the charitable
2-6 trust stated in the instrument creating the trust, including a
2-7 proceeding in which the doctrine of cy-pres <cy-press> is invoked;
2-8 (C) construe, nullify, or impair the provisions
2-9 of a testamentary or other instrument creating or affecting a
2-10 charitable trust;
2-11 (D) contest or set aside the probate of an
2-12 alleged will under which money, property, or another thing of value
2-13 is given for charitable purposes;
2-14 (E) allow a charitable trust to contest or set
2-15 aside the probate of an alleged will;
2-16 (F) determine matters relating to the probate
2-17 and administration of an estate involving a charitable trust; or
2-18 (G) obtain a declaratory judgment involving a
2-19 charitable trust.
2-20 (4) "Fiduciary or managerial agent" means an
2-21 individual, corporation, or other entity, acting either as a
2-22 trustee, as a member of the board of directors, as an officer, as
2-23 an executor, or as an administrator for a charitable trust.
2-24 SECTION 3. Subsection (a), Section 123.003, Property Code,
2-25 is amended to read as follows:
3-1 Sec. 123.003. Notice. (a) Any <Any interested> party
3-2 initiating <or the party's attorney in> a proceeding involving a
3-3 charitable trust shall give notice of the proceeding to the
3-4 attorney general by sending to the attorney general by registered
3-5 or certified mail, a true <certified> copy of the petition or other
3-6 instrument initiating the <party's involvement in the> proceeding
3-7 involving a charitable trust within 30 days of the filing of such
3-8 petition or other instrument, but no less than 10 days prior to a
3-9 hearing in such a proceeding.
3-10 (b) Notice shall be given to the attorney general of any
3-11 pleading which adds new causes of action or additional parties to a
3-12 proceeding involving charitable trust in which the attorney general
3-13 has previously waived participation, or in which the attorney
3-14 general has otherwise failed to intervene. Notice shall be given
3-15 by sending to the attorney general by registered or certified mail
3-16 a true copy of the pleading within 30 days of the filing of the
3-17 pleading, but no less than 10 days prior to a hearing in the
3-18 proceeding.
3-19 (c) The party or the party's attorney shall execute and file
3-20 in the proceeding an affidavit stating the facts of the notice and
3-21 shall attach to the affidavit the customary postal receipts signed
3-22 by the attorney general or an assistant attorney general.
3-23 SECTION 4. Section 123.005, Property Code, is amended to
3-24 read as follows:
3-25 Sec. 123.005. Breach of Fiduciary Duty. (a) Venue in a
4-1 proceeding brought by the attorney general alleging breach of a
4-2 fiduciary duty by a fiduciary or managerial agent <the trustee> of
4-3 a charitable trust shall be <in> a court of competent jurisdiction
4-4 in Travis County or in the county where the defendant resides, has
4-5 its principal place of business, or has a fixed and established
4-6 place of business at the suit is brought.
4-7 (b) The attorney general, if successful in the proceeding,
4-8 is entitled to recover from a fiduciary or managerial agent of a
4-9 charitable trust <the trustee> actual costs incurred in bringing
4-10 the suit and may recover reasonable attorney's fees.
4-11 SECTION 5. The changes in law made by this Act apply only to
4-12 a cause of action that accrues on or after the effective date of
4-13 this article. A cause of action that accrues before the effective
4-14 date of this article is governed by the law in effect on the date
4-15 the cause of action accrues, and that law is continued in effect
4-16 for this purpose.
4-17 SECTION 6. EFFECTIVE DATE. This Act takes effect
4-18 September 1, 1995.
4-19 SECTION 7. SEVERABILITY. If any section, sentence, clause,
4-20 or part of this Act shall, for any reason, be held invalid, such
4-21 invalidity shall not affect the remaining portions of the Act, and
4-22 it is hereby declared to be the intention of this legislature to
4-23 have passed each section, sentence, clause, or part irrespective of
4-24 the fact that any other section, sentence, clause, or part may be
4-25 declared invalid.
5-1 SECTION 8. EMERGENCY. The importance of this legislation
5-2 and the crowded condition of the calendars in both houses create an
5-3 emergency and an imperative public necessity that the
5-4 constitutional rule requiring bills to be read on three several
5-5 days in each house be suspended, and this rule is hereby suspended.