84R5957 AJA-F
By: Elkins H.B. No. 3762
A BILL TO BE ENTITLED
AN ACT
relating to the designation of a trust as a business purpose trust.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 101, Property Code, is amended by adding
Section 101.003 to read as follows:
Sec. 101.003. BUSINESS PURPOSE TRUSTS. (a) In this
section, "express trust" has the meaning assigned by Section
111.004.
(b) If the settlor of an express trust, whether irrevocable
or revocable, and regardless of whether the trust is a disregarded
entity for federal tax purposes, designates the trust as a
"business purpose trust" in the trust instrument, the trust shall
be considered a legal organization for all purposes under the laws
of this state.
(c) An express trust whose trust instrument declares that
the trust is a "business purpose trust" shall be treated for all
purposes as a business trust even if distributions from the trust
are for personal, family, or household purposes.
SECTION 2. (a) Except as otherwise expressly provided by a
trust, a will creating a trust, or this section, the changes in law
made by this Act apply to a trust existing or created on or after
September 1, 2015.
(b) For a trust existing on September 1, 2015, that was
created before that date, the changes in law made by this Act apply
only to an act or omission relating to the trust that occurs on or
after September 1, 2015.
SECTION 3. This Act takes effect September 1, 2015.