By: Cain S.B. No. 911
A BILL TO BE ENTITLED
AN ACT
1-1 relating to the protection or release of a trustee from liability
1-2 under certain circumstances.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section 114.001, Property Code, is amended by
1-5 adding Subsection (e) to read as follows:
1-6 (e) The trustee has the same protection from liability
1-7 provided for a fiduciary under 42 U.S.C. Section 9607(n).
1-8 SECTION 2. Section 114.005, Property Code, is amended to
1-9 read as follows:
1-10 Sec. 114.005. RELEASE OF LIABILITY BY BENEFICIARY. (a) A
1-11 beneficiary who has full legal capacity and is acting on full
1-12 information may relieve a trustee from any duty, responsibility,
1-13 restriction, or liability as to the beneficiary that would
1-14 otherwise be imposed on the trustee by this subtitle, including
1-15 liability for past violations, except as to the duties,
1-16 restrictions, and liabilities imposed on corporate trustees by
1-17 Section 113.052 or 113.053 [of this subtitle].
1-18 (b) A beneficiary who has full legal capacity and is acting
1-19 on full information may release a trustee from liability for an
1-20 investment made or recommended by an agent retained by the trustee
1-21 for that purpose, including an agent who is an affiliate of the
1-22 trustee and whose employment is determined by the beneficiary to be
1-23 beneficial to the trust. The release is also a release as to a
2-1 minor or unborn or unascertained person who is not otherwise
2-2 represented to the extent that the person's interest is adequately
2-3 represented by another party with a substantially identical
2-4 interest in the trust estate.
2-5 (c) A [The] release under this section must be in writing
2-6 and delivered to the trustee.
2-7 (d) A beneficiary is not precluded from bringing an action
2-8 for breach of contract against an agent whose conduct is the basis
2-9 of a release under Subsection (b). In that action, the conduct of
2-10 the agent shall be judged on the basis of the standard for trust
2-11 management and investment prescribed by Section 113.056(a).
2-12 (e) In this section, "affiliate" has the meaning assigned by
2-13 Section 111.004.
2-14 SECTION 3. This Act takes effect September 1, 1997.
2-15 SECTION 4. The importance of this legislation and the
2-16 crowded condition of the calendars in both houses create an
2-17 emergency and an imperative public necessity that the
2-18 constitutional rule requiring bills to be read on three several
2-19 days in each house be suspended, and this rule is hereby suspended.
2-20 COMMITTEE AMENDMENT NO. 1
2-21 Amend S.B. 911 by striking SECTION 2 and renumbering
2-22 subsequent sections accordingly.
2-23 Goodman