| 1 | 1 | | 84R5957 AJA-F |
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| 2 | 2 | | By: Elkins H.B. No. 3762 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | A BILL TO BE ENTITLED |
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| 6 | 6 | | AN ACT |
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| 7 | 7 | | relating to the designation of a trust as a business purpose trust. |
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| 8 | 8 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 9 | 9 | | SECTION 1. Chapter 101, Property Code, is amended by adding |
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| 10 | 10 | | Section 101.003 to read as follows: |
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| 11 | 11 | | Sec. 101.003. BUSINESS PURPOSE TRUSTS. (a) In this |
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| 12 | 12 | | section, "express trust" has the meaning assigned by Section |
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| 13 | 13 | | 111.004. |
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| 14 | 14 | | (b) If the settlor of an express trust, whether irrevocable |
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| 15 | 15 | | or revocable, and regardless of whether the trust is a disregarded |
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| 16 | 16 | | entity for federal tax purposes, designates the trust as a |
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| 17 | 17 | | "business purpose trust" in the trust instrument, the trust shall |
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| 18 | 18 | | be considered a legal organization for all purposes under the laws |
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| 19 | 19 | | of this state. |
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| 20 | 20 | | (c) An express trust whose trust instrument declares that |
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| 21 | 21 | | the trust is a "business purpose trust" shall be treated for all |
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| 22 | 22 | | purposes as a business trust even if distributions from the trust |
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| 23 | 23 | | are for personal, family, or household purposes. |
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| 24 | 24 | | SECTION 2. (a) Except as otherwise expressly provided by a |
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| 25 | 25 | | trust, a will creating a trust, or this section, the changes in law |
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| 26 | 26 | | made by this Act apply to a trust existing or created on or after |
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| 27 | 27 | | September 1, 2015. |
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| 28 | 28 | | (b) For a trust existing on September 1, 2015, that was |
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| 29 | 29 | | created before that date, the changes in law made by this Act apply |
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| 30 | 30 | | only to an act or omission relating to the trust that occurs on or |
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| 31 | 31 | | after September 1, 2015. |
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| 32 | 32 | | SECTION 3. This Act takes effect September 1, 2015. |
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