1-1 By: Ellis S.B. No. 1212
1-2 (In the Senate - Filed March 10, 1995; March 16, 1995, read
1-3 first time and referred to Committee on Jurisprudence; May 3, 1995,
1-4 reported favorably, as amended, by the following vote: Yeas 6,
1-5 Nays 0; May 3, 1995, sent to printer.)
1-6 COMMITTEE AMENDMENT NO. 1 By: Ellis
1-7 Amend S.B. No. 1212 as follows:
1-8 (1) Strike "a involving" and substitute "involving a" in
1-9 Subsection (b), Section 123.003 of SECTION 3 of the bill (Committee
1-10 Printing page 2, line 14).
1-11 (2) Strike "a n" and substitute "an" in Subsection (c),
1-12 Section 123.003 of SECTION 3 of the bill (Committee Printing page
1-13 2, line 22).
1-14 (3) Strike "<in>" and substitute "<is in>" in Subsection
1-15 (a), Section 123.005 of SECTION 4 of the bill (Committee Printing
1-16 page 2, line 30).
1-17 (4) Between "at the" and "suit", insert "time" in Subsection
1-18 (a), Section 123.005 of SECTION 4 of the bill (Committee Printing
1-19 page 2, line 33).
1-20 A BILL TO BE ENTITLED
1-21 AN ACT
1-22 relating to venue, notice, and attorney general participation in
1-23 proceedings involving charitable trusts.
1-24 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-25 SECTION 1. Subsection (c), Section 115.011, Property Code,
1-26 is amended to read as follows:
1-27 (c) The attorney general shall be <made a party to and>
1-28 given notice of any <suit or judicial> proceeding involving a
1-29 <relating to> charitable trust as provided by Chapter 123 of this
1-30 code <trusts to the extent and in the same manner provided by
1-31 Article 4412a, Revised Statutes, as amended>.
1-32 SECTION 2. Section 123.001, Property Code, is amended to
1-33 read as follows:
1-34 Sec. 123.001. Definitions. In this chapter:
1-35 (1) "Charitable entity" means a corporation, trust,
1-36 community chest, fund, foundation, or other entity organized for
1-37 scientific, educational, philanthropic, or environmental purposes,
1-38 social welfare, the arts and humanities, or another civic or public
1-39 purpose described by Section 501(c)(3) of the Internal Revenue Code
1-40 of 1986 (26 U.S.C. 501(c)(3)).
1-41 (2) "Charitable trust" means a charitable entity, a
1-42 trust the stated purpose of which is to benefit a charitable
1-43 entity, or an inter vivos or testamentary gift to a charitable
1-44 entity.
1-45 (3) "Proceeding involving a charitable trust" means a
1-46 suit or other judicial proceeding the object of which is to:
1-47 (A) terminate a charitable trust or distribute
1-48 its assets to other than charitable donees;
1-49 (B) depart from the objects of the charitable
1-50 trust stated in the instrument creating the trust, including a
1-51 proceeding in which the doctrine of cy-pres is invoked;
1-52 (C) construe, nullify, or impair the provisions
1-53 of a testamentary or other instrument creating or affecting a
1-54 charitable trust;
1-55 (D) contest or set aside the probate of an
1-56 alleged will under which money, property, or another thing of value
1-57 is given for charitable purposes;
1-58 (E) allow a charitable trust to contest or set
1-59 aside the probate of an alleged will;
1-60 (F) determine matters relating to the probate
1-61 and administration of an estate involving a charitable trust; or
1-62 (G) obtain a declaratory judgment involving a
1-63 charitable trust.
1-64 (4) "Fiduciary or managerial agent" means an
1-65 individual, corporation, or other entity acting either as a
1-66 trustee, a member of the board of directors, an officer, an
1-67 executor, or an administrator for a charitable trust.
1-68 SECTION 3. Section 123.003, Property Code, is amended to
2-1 read as follows:
2-2 Sec. 123.003. Notice. (a) Any <An interested> party
2-3 initiating <or the party's attorney in> a proceeding involving a
2-4 charitable trust shall give notice of the proceeding to the
2-5 attorney general by sending to the attorney general, by registered
2-6 or certified mail, a true <certified> copy of the petition or other
2-7 instrument initiating the <party's involvement in the> proceeding
2-8 involving a charitable trust within 30 days of the filing of such
2-9 petition or other instrument, but no less than 10 days prior to a
2-10 hearing in such a proceeding.
2-11 (b) Notice shall be given to the attorney general of any
2-12 pleading which adds new causes of action or additional parties to a
2-13 proceeding a involving charitable trust in which the attorney
2-14 general has previously waived participation or in which the
2-15 attorney general has otherwise failed to intervene. Notice shall
2-16 be given by sending to the attorney general by registered or
2-17 certified mail a true copy of the pleading within 30 days of the
2-18 filing of the pleading, but no less than 10 days prior to a hearing
2-19 in the proceeding.
2-20 (c) The party or the party's attorney shall execute and file
2-21 in the proceeding a n affidavit stating the facts of the notice and
2-22 shall attach to the affidavit the customary postal receipts signed
2-23 by the attorney general or an assistant attorney general.
2-24 SECTION 4. Section 123.005, Property Code, is amended to
2-25 read as follows:
2-26 Sec. 123.005. Breach of Fiduciary Duty. (a) Venue in a
2-27 proceeding brought by the attorney general alleging breach of a
2-28 fiduciary duty by a fiduciary or managerial agent <the trustee> of
2-29 a charitable trust shall be <in> a court of competent jurisdiction
2-30 in Travis County or in the county where the defendant resides, has
2-31 its principal place of business, or has a fixed and established
2-32 place of business at the suit is brought.
2-33 (b) The attorney general, if successful in the proceeding,
2-34 is entitled to recover from a fiduciary or managerial agent of a
2-35 charitable trust <the trustee> actual costs incurred in bringing
2-36 the suit and may recover reasonable attorney's fees.
2-37 SECTION 5. The changes in law made by this Act apply only to
2-38 a cause of action that accrues on or after the effective date of
2-39 this Act. A cause of action that accrues before the effective date
2-40 of this Act is governed by the law in effect on the date the cause
2-41 of action accrues, and that law is continued in effect for this
2-42 purpose.
2-43 SECTION 6. This Act takes effect September 1, 1995.
2-44 SECTION 7. If any section, sentence, clause, or part of this
2-45 Act shall for any reason be held invalid, such invalidity shall not
2-46 affect the remaining portions of the Act, and it is hereby declared
2-47 to be the intention of this legislature to have passed each
2-48 section, sentence, clause, or part irrespective of the fact that
2-49 any other section, sentence, clause, or part may be declared
2-50 invalid.
2-51 SECTION 8. The importance of this legislation and the
2-52 crowded condition of the calendars in both houses create an
2-53 emergency and an imperative public necessity that the
2-54 constitutional rule requiring bills to be read on three several
2-55 days in each house be suspended, and this rule is hereby suspended.
2-56 * * * * *