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A BILL TO BE ENTITLED
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AN ACT
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relating to the designation of a trust as a business purpose trust. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Chapter 101, Property Code, is amended by adding |
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Section 101.003 to read as follows: |
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Sec. 101.003. BUSINESS PURPOSE TRUSTS. (a) In this |
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section, "express trust" has the meaning assigned by Section |
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111.004. |
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(b) If the settlor of an express trust, whether irrevocable |
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or revocable, and regardless of whether the trust is a disregarded |
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entity for federal tax purposes, designates the trust as a |
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"business purpose trust" in the trust instrument, the trust shall |
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be considered a legal organization for all purposes under the laws |
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of this state. |
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(c) An express trust whose trust instrument declares that |
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the trust is a "business purpose trust" shall be treated for all |
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purposes as a business trust even if distributions from the trust |
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are for personal, family, or household purposes. |
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SECTION 2. (a) Except as otherwise expressly provided by a |
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trust, a will creating a trust, or this section, the changes in law |
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made by this Act apply to a trust existing or created on or after |
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September 1, 2015. |
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(b) For a trust existing on September 1, 2015, that was |
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created before that date, the changes in law made by this Act apply |
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only to an act or omission relating to the trust that occurs on or |
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after September 1, 2015. |
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SECTION 3. This Act takes effect September 1, 2015. |