76R7970 CAS-F
By Smith H.B. No. 115
Substitute the following for H.B. No. 115:
By Brimer C.S.H.B. No. 115
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to certain rights of a trustee and settlor concerning a
1-3 charitable trust.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Subchapter A, Chapter 113, Property Code, is
1-6 amended by adding Section 113.026 to read as follows:
1-7 Sec. 113.026. AUTHORITY TO DESIGNATE NEW CHARITABLE
1-8 BENEFICIARY. (a) In this section:
1-9 (1) "Charitable entity" has the meaning assigned by
1-10 Section 123.001.
1-11 (2) "Failed charitable beneficiary" means a charitable
1-12 entity that is named as a beneficiary of a trust and that:
1-13 (A) does not exist at the time the charitable
1-14 entity's interest in the trust becomes vested;
1-15 (B) ceases to exist during the term of the
1-16 trust; or
1-17 (C) ceases to be a charitable entity during the
1-18 term of the trust.
1-19 (b) This section applies only to an express written trust
1-20 created by an individual with a charitable entity as a beneficiary.
1-21 If the trust instrument provides a means for replacing a failed
1-22 charitable beneficiary, the trust instrument governs the
1-23 replacement of a failed charitable beneficiary, and this section
1-24 does not apply.
2-1 (c) The trustee of a trust may select one or more
2-2 replacement charitable beneficiaries for a failed charitable
2-3 beneficiary in accordance with this section.
2-4 (d) Each replacement charitable beneficiary selected under
2-5 this section by any person must:
2-6 (1) be a charitable entity and an entity described
2-7 under Sections 170(b)(1)(A), 170(c), 2055(a), and 2522(a) of the
2-8 Internal Revenue Code of 1986, as amended; and
2-9 (2) have the same or similar charitable purpose as the
2-10 failed charitable beneficiary.
2-11 (e) If the settlor of the trust is living and not
2-12 incapacitated at the time a trustee is selecting a replacement
2-13 charitable beneficiary, the trustee shall consult with the settlor
2-14 concerning the selection of one or more replacement charitable
2-15 beneficiaries.
2-16 (f) If the trustee and the settlor agree on the selection of
2-17 one or more replacement charitable beneficiaries, the trustee shall
2-18 send notice of the selection to the attorney general. If the
2-19 attorney general determines that one or more replacement charitable
2-20 beneficiaries do not have the same or similar charitable purpose as
2-21 the failed charitable beneficiary, not later than the 21st day
2-22 after the date the attorney general receives notice of the
2-23 selection, the attorney general shall request in writing that a
2-24 district court in the county in which the trust was created review
2-25 the selection. If the court agrees with the attorney general's
2-26 determination, any remaining replacement charitable beneficiary
2-27 agreed on by the trustee and the settlor is the replacement
3-1 charitable beneficiary. If there is not a remaining replacement
3-2 charitable beneficiary agreed on by the trustee and the settlor,
3-3 the court shall select one or more replacement charitable
3-4 beneficiaries. If the court finds that the attorney general's
3-5 request for a review is unreasonable, the replacement charitable
3-6 beneficiary is the charitable beneficiary agreed on by the trustee
3-7 and the settlor, and the court may require the attorney general to
3-8 pay all court costs of the parties involved. Not later than the
3-9 30th day after the date the selection is final, the trustee shall
3-10 provide to each replacement charitable beneficiary selected notice
3-11 of the selection by certified mail, return receipt requested.
3-12 (g) If the trustee and the settlor cannot agree on the
3-13 selection of a replacement charitable beneficiary, the trustee
3-14 shall send notice of that fact to the attorney general not later
3-15 than the 21st day after the date the trustee determines that an
3-16 agreement cannot be reached. The attorney general shall refer the
3-17 matter to a district court in the county in which the trust was
3-18 created. The trustee and the settlor may each recommend to the
3-19 court one or more replacement charitable beneficiaries. The court
3-20 shall select a replacement charitable beneficiary and, not later
3-21 than the 30th day after the date of the selection, provide to each
3-22 charitable beneficiary selected notice of the selection by
3-23 certified mail, return receipt requested.
3-24 SECTION 2. Section 113.026, Property Code, as added by this
3-25 Act, applies only to a trust created on or after the effective date
3-26 of this Act.
3-27 SECTION 3. The importance of this legislation and the
4-1 crowded condition of the calendars in both houses create an
4-2 emergency and an imperative public necessity that the
4-3 constitutional rule requiring bills to be read on three several
4-4 days in each house be suspended, and this rule is hereby suspended,
4-5 and that this Act take effect and be in force from and after its
4-6 passage, and it is so enacted.