By: Villalba (Senate Sponsor - Huffines) H.B. No. 3190
         (In the Senate - Received from the House May 14, 2015;
  May 15, 2015, read first time and referred to Committee on Business
  and Commerce; May 22, 2015, reported favorably by the following
  vote:  Yeas 7, Nays 0; May 22, 2015, sent to printer.)
Click here to see the committee vote
 
 
A BILL TO BE ENTITLED
 
AN ACT
 
  relating to the authority of certain persons to direct, consent to,
  or disapprove a trustee's decisions.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 114.003, Property Code, is amended to
  read as follows:
         Sec. 114.003.  POWERS TO DIRECT: CHARITABLE TRUSTS. (a) In
  this section, "charitable trust" has the meaning assigned by
  Section 123.001.
         (a-1)  The terms of a charitable trust may give a trustee or
  other person a power to direct the modification or termination of
  the trust.
         (b)  If the terms of a charitable trust give a person the
  power to direct certain actions of the trustee, the trustee shall
  act in accordance with the person's direction unless:
               (1)  the direction is manifestly contrary to the terms
  of the trust; or
               (2)  the trustee knows the direction would constitute a
  serious breach of a fiduciary duty that the person holding the power
  to direct owes to the beneficiaries of the trust.
         (c)  A person, other than a beneficiary, who holds a power to
  direct with respect to a charitable trust is presumptively a
  fiduciary required to act in good faith with regard to the purposes
  of the trust and the interests of the beneficiaries.  The holder of
  a power to direct with respect to a charitable trust is liable for
  any loss that results from a breach of the person's fiduciary duty.
         SECTION 2.  Subchapter A, Chapter 114, Property Code, is
  amended by adding Section 114.0031 to read as follows:
         Sec. 114.0031.  DIRECTED TRUSTS; ADVISORS. (a) In this
  section:
               (1)  "Advisor" includes protector.
               (2)  "Investment decision" means, with respect to any
  investment, the retention, purchase, sale, exchange, tender, or
  other transaction affecting the ownership of the investment or
  rights in the investment and, with respect to a nonpublicly traded
  investment, the valuation of the investment.
         (b)  This section does not apply to a charitable trust as
  defined by Section 123.001.
         (c)  For purposes of this section, an advisor with authority
  with respect to investment decisions is an investment advisor.
         (d)  A protector has all the power and authority granted to
  the protector by the trust terms, which may include:
               (1)  the power to remove and appoint trustees,
  advisors, trust committee members, and other protectors;
               (2)  the power to modify or amend the trust terms to
  achieve favorable tax status or to facilitate the efficient
  administration of the trust; and
               (3)  the power to modify, expand, or restrict the terms
  of a power of appointment granted to a beneficiary by the trust
  terms.
         (e)  If the terms of a trust give a person the authority to
  direct, consent to, or disapprove a trustee's actual or proposed
  investment decisions, distribution decisions, or other decisions,
  the person is considered to be an advisor and a fiduciary when
  exercising that authority except that the trust terms may provide
  that an advisor acts in a nonfiduciary capacity.
         (f)  A trustee who acts in accordance with the direction of
  an advisor, as prescribed by the trust terms, is not liable, except
  in cases of wilful misconduct on the part of the trustee so
  directed, for any loss resulting directly or indirectly from that
  act.
         (g)  If the trust terms provide that a trustee must make
  decisions with the consent of an advisor, the trustee is not liable,
  except in cases of wilful misconduct or gross negligence on the part
  of the trustee, for any loss resulting directly or indirectly from
  any act taken or not taken as a result of the advisor's failure to
  provide the required consent after having been requested to do so by
  the trustee.
         (h)  If the trust terms provide that a trustee must act in
  accordance with the direction of an advisor with respect to
  investment decisions, distribution decisions, or other decisions
  of the trustee, the trustee does not, except to the extent the trust
  terms provide otherwise, have the duty to:
               (1)  monitor the conduct of the advisor;
               (2)  provide advice to the advisor or consult with the
  advisor; or
               (3)  communicate with or warn or apprise any
  beneficiary or third party concerning instances in which the
  trustee would or might have exercised the trustee's own discretion
  in a manner different from the manner directed by the advisor.
         (i)  Absent clear and convincing evidence to the contrary,
  the actions of a trustee pertaining to matters within the scope of
  the advisor's authority, such as confirming that the advisor's
  directions have been carried out and recording and reporting
  actions taken at the advisor's direction, are presumed to be
  administrative actions taken by the trustee solely to allow the
  trustee to perform those duties assigned to the trustee under the
  trust terms, and such administrative actions are not considered to
  constitute an undertaking by the trustee to monitor the advisor or
  otherwise participate in actions within the scope of the advisor's
  authority.
         SECTION 3.  (a) Except as specifically provided by a trust
  term in effect before the effective date of this Act, the changes in
  law made by this Act apply to a trust created before, on, or after
  the effective date of this Act with respect to an action taken or
  not taken on or after September 1, 2015, by a trustee or other
  person with respect to the trust.
         (b)  An action taken or not taken with respect to a trust
  before September 1, 2015, is governed by the law that applied to the
  action taken or not taken immediately before the effective date of
  this Act, and that law is continued in effect for that purpose.
         SECTION 4.  This Act takes effect immediately if it receives
  a vote of two-thirds of all the members elected to each house, as
  provided by Section 39, Article III, Texas Constitution.  If this
  Act does not receive the vote necessary for immediate effect, this
  Act takes effect September 1, 2015.
 
  * * * * *