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A BILL TO BE ENTITLED
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AN ACT
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relating to the authority to transfer real property in the name of |
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an entity. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Chapter 12, Property Code, is amended by adding |
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Section 12.019 to read as follows: |
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Sec. 12.019. AFFIDAVIT OF AUTHORITY TO TRANSFER. (a) In |
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this section, "domestic entity," "foreign entity," "jurisdiction |
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of formation," and "nonprofit entity" have the meanings assigned by |
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Section 1.002, Business Organizations Code. |
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(b) This section does not apply to a domestic nonprofit |
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entity or a foreign entity that is: |
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(1) exempt from federal taxation under Section 501(a), |
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Internal Revenue Code of 1986, by being listed as an exempt entity |
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under Section 501(c)(3) of that code; or |
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(2) described by Section 170(c)(1) or (2), Internal |
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Revenue Code of 1986. |
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(c) A domestic entity or foreign entity to which this |
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section applies and that is active or in good standing under the |
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laws of the entity's jurisdiction of formation may execute and |
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record an affidavit identifying one or more individuals with |
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authority to transfer on behalf of the entity an estate or interest |
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in real property in the name of the entity. |
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(d) An estate or interest in real property in the name of a |
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domestic entity or foreign entity may be transferred by one or more |
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individuals identified as authorized to do so in an affidavit |
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described by Subsection (c). |
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(e) Subject to Subsection (f), an affidavit described by |
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Subsection (c) must: |
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(1) be executed under penalty of perjury by an |
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individual who swears that the individual: |
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(A) is at least 18 years of age; |
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(B) is authorized to act on behalf of the entity; |
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(C) is fully competent to execute the affidavit; |
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and |
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(D) understands that: |
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(i) third parties will rely on the |
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truthfulness of the statements made in the affidavit; and |
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(ii) the affidavit is made under penalty of |
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perjury; and |
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(2) state: |
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(A) the name of the domestic entity or foreign |
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entity that holds title to the real property and that the entity is |
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active or in good standing under the laws of the entity's |
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jurisdiction of formation; |
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(B) the address, including street address, of the |
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domestic entity's or foreign entity's principal place of business |
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in this state or, if the entity does not have a principal place of |
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business in this state, the address of the entity's principal place |
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of business in the state or country that is the entity's |
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jurisdiction of formation; |
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(C) the legal description of the real property an |
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estate or interest in which is to be transferred and specify the |
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nature of the transfer authorized; and |
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(D) the name and title of one or more individuals |
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authorized to transfer on the entity's behalf an estate or interest |
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in the real property described in the affidavit. |
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(f) An individual is authorized to execute an affidavit |
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described by Subsection (c) on behalf of a domestic entity that |
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files a franchise tax public information report under Section |
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171.203, Tax Code, if, on the date the affidavit is executed, the |
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individual: |
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(1) in the case of a corporation, is a director or |
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officer of the corporation; |
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(2) in the case of a limited liability company, is a |
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manager or member of the limited liability company; |
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(3) in the case of a limited partnership, is a general |
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partner of the limited partnership; or |
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(4) in the case of a professional corporation or |
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association, is a director or officer of the professional |
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corporation or association. |
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(g) Except as provided by Subsection (h), the individual |
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executing an affidavit described by Subsection (c) may not be the |
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individual authorized to transfer an estate or interest in the real |
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property described in the affidavit. |
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(h) The individual executing the affidavit described by |
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Subsection (c) may be the individual identified as authorized in |
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the affidavit if: |
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(1) the entity is a for-profit corporation and the |
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affidavit includes a representation by the affiant that the affiant |
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is the sole shareholder, director, and officer of the corporation; |
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(2) the entity is a limited liability company and the |
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affidavit includes a representation by the affiant that the affiant |
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is the sole member and manager of the limited liability company; |
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(3) the entity is a limited partnership and the |
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affidavit includes a representation by the affiant that the affiant |
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is the sole general partner of the limited partnership; |
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(4) the entity is a professional corporation or |
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association and the affidavit includes a representation by the |
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affiant that the affiant is the sole director and officer of the |
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professional corporation or association; or |
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(5) the most recent franchise tax public information |
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report of the entity under Section 171.203, Tax Code, available on |
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the date the affidavit is executed identifies only the affiant and |
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no other person as a shareholder, officer, director, member, |
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manager, or general partner of the entity. |
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(i) The affidavit may be recorded in the county clerk's |
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office in the county in which the real property is located. The |
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county clerk may collect a fee for recording an affidavit under this |
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section in the amount authorized for recording a transfer of real |
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property. |
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(j) An affidavit that complies with this section and is |
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filed as authorized by Subsection (i) is conclusive proof of the |
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factual matters stated in the affidavit. The following persons may |
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rely conclusively on the affidavit: |
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(1) a bona fide purchaser or mortgagee for value; |
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(2) a successor or assign of a bona fide purchaser or |
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mortgagee for value; or |
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(3) a third party without actual knowledge that the |
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representations contained in the affidavit are incorrect. |
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(k) A person who in good faith acts in reliance on an |
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affidavit that complies with this section and is filed as |
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authorized by Subsection (i), without actual knowledge that the |
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representations contained in the affidavit are incorrect, is not |
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liable to any person for that act and may assume without inquiry the |
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existence of the facts contained in the affidavit. |
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(l) Nothing in this section requires a person to rely on an |
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affidavit described by Subsection (c). |
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SECTION 2. This Act takes effect September 1, 2019. |