1-1 AN ACT
1-2 relating to the application of the Texas Non-Profit Corporation Act
1-3 to charitable trustees.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Article 2.31, Texas Non-Profit Corporation Act
1-6 (Article 1396-2.31, Vernon's Texas Civil Statutes), is amended to
1-7 read as follows:
1-8 Art. 2.31. POWER TO SERVE AS TRUSTEE. A. A corporation
1-9 that is described by Section 501(c)(3) or 170(c), Internal Revenue
1-10 Code of 1986, or a corresponding provision of a subsequent federal
1-11 tax law, or a corporation listed by the Internal Revenue Service in
1-12 the Cumulative List of Organizations Described in Section 170(c) of
1-13 the Internal Revenue Code of 1986, I.R.S. Publication 78, may serve
1-14 as the trustee of a trust:
1-15 (1) of which the corporation is a beneficiary; or
1-16 (2) benefiting another organization described by one
1-17 of those sections of the Internal Revenue Code of 1986, or a
1-18 corresponding provision of a subsequent federal tax law, or listed
1-19 by the Internal Revenue Service in the Cumulative List of
1-20 Organizations Described in Section 170(c) of the Internal Revenue
1-21 Code of 1986, I.R.S. Publication 78.
1-22 B. Any corporation (or person or entity assisting such
1-23 corporation) described in this article shall have immunity from
1-24 suit (including both a defense to liability and the right not to
2-1 bear the cost, burden, and risk of discovery and trial) as to any
2-2 claim alleging that the corporation's role as trustee of a trust
2-3 described in this article constitutes engaging in the trust
2-4 business in a manner requiring a state charter as defined in
2-5 Section 1.002(a)(9), Texas Trust Company Act (Article 342a-1.002,
2-6 Vernon's Texas Civil Statutes). An interlocutory appeal may be
2-7 taken if a court denies or otherwise fails to grant a motion for
2-8 summary judgment that is based on an assertion of the immunity
2-9 provided in this subsection.
2-10 SECTION 2. (a) Article 2.31, Texas Non-Profit Corporation
2-11 Act (Article 1396-2.31, Vernon's Texas Civil Statutes), as that
2-12 article exists on the effective date of this Act, applies to any
2-13 trust created before, on, or after the effective date of this Act,
2-14 including any trust that is the subject of litigation or another
2-15 proceeding that is pending before, on, or after the effective date
2-16 of this Act.
2-17 (b) This section applies without regard to the effective
2-18 date of the legislation enacting Article 2.31, Texas Non-Profit
2-19 Corporation Act (Article 1396-2.31, Vernon's Texas Civil Statutes),
2-20 or any other legislation enacted by any legislature that amended
2-21 the provisions of Article 2.31, Texas Non-Profit Corporation Act
2-22 (Article 1396-2.31, Vernon's Texas Civil Statutes).
2-23 SECTION 3. This Act applies to any trust created before, on,
2-24 or after the effective date of this Act, including any trust that
2-25 is the subject of litigation or another proceeding that is pending
2-26 before, on, or after the effective date of this Act.
2-27 SECTION 4. The importance of this legislation and the
3-1 crowded condition of the calendars in both houses create an
3-2 emergency and an imperative public necessity that the
3-3 constitutional rule requiring bills to be read on three several
3-4 days in each house be suspended, and this rule is hereby suspended,
3-5 and that this Act take effect and be in force from and after its
3-6 passage, and it is so enacted.
_______________________________ _______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 3276 was passed by the House on May
4, 1999, by the following vote: Yeas 144, Nays 0, 2 present, not
voting.
_______________________________
Chief Clerk of the House
I certify that H.B. No. 3276 was passed by the Senate on May
26, 1999, by the following vote: Yeas 30, Nays 0.
_______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor