By: Moody (Senate Sponsor - Hughes) H.B. No. 2183
(In the Senate - Received from the House May 17, 2021;
May 17, 2021, read first time and referred to Committee on State
Affairs; May 21, 2021, reported favorably by the following vote:
Yeas 9, Nays 0; May 21, 2021, sent to printer.)
Click here to see the committee vote
A BILL TO BE ENTITLED
AN ACT
relating to durable powers of attorney and the construction of
certain powers conferred in those powers of attorney.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 751.002(5), Estates Code, is amended to
read as follows:
(5) "Principal" means an adult individual [person] who
signs or directs the signing of the individual's [person's] name on
a power of attorney that designates an agent to act on the
individual's [person's] behalf.
SECTION 2. Section 751.00201, Estates Code, is amended to
read as follows:
Sec. 751.00201. MEANING OF DISABLED OR INCAPACITATED FOR
PURPOSES OF DURABLE POWER OF ATTORNEY. Unless otherwise defined by
a durable power of attorney, an individual [a person] is considered
disabled or incapacitated for purposes of the durable power of
attorney if a physician certifies in writing at a date later than
the date the durable power of attorney is executed that, based on
the physician's medical examination of the individual [person], the
individual [person] is determined to be mentally incapable of
managing the individual's [person's] financial affairs.
SECTION 3. Section 752.001(a), Estates Code, is amended to
read as follows:
(a) An individual [A person] may use a statutory durable
power of attorney to grant an [attorney in fact or] agent powers
with respect to an individual's [a person's] property and financial
matters.
SECTION 4. Section 752.107, Estates Code, is amended to
read as follows:
Sec. 752.107. BUSINESS OPERATION TRANSACTIONS. Subject to
the terms of an agreement or other document governing or relating to
an entity or entity ownership interest, to the extent the agent is
permitted by law to act for the principal and unless the power of
attorney provides otherwise, the [The] language conferring
authority with respect to business operating transactions in a
statutory durable power of attorney empowers the [attorney in fact
or] agent to:
(1) operate, buy, sell, enlarge, reduce, or terminate
an ownership [a business] interest;
(2) [do the following, to the extent that an attorney
in fact or agent is permitted by law to act for a principal and
subject to the terms of a partnership agreement:
[(A)] perform a duty or[,] discharge a liability,
or exercise in person or by proxy a right, power, privilege, or
option that the principal has, may have, or claims to have [under
the partnership agreement, whether or not the principal is a
general or limited partner];
(3) [(B)] enforce the terms of an agreement or other
document governing or relating to an entity or entity ownership
interest [the partnership agreement by litigation, action, or
otherwise]; [and]
(4) [(C)] defend, submit to arbitration, settle, or
compromise litigation or an action to which the principal is a party
because of an entity ownership interest [membership in the
partnership];
(5) [(3)] exercise in person or by proxy, or enforce
by litigation, action, or otherwise, a right, power, privilege, or
option the principal has or claims to have as the holder of a
certificated or uncertificated ownership interest;
(6) [bond, share, or other similar instrument and]
defend, submit to alternative dispute resolution [arbitration],
settle, or compromise litigation [a legal proceeding] to which the
principal is a party concerning a certificated or uncertificated
ownership interest [because of a bond, share, or similar
instrument];
(7) [(4)] with respect to a business or entity owned
solely by the principal:
(A) continue, modify, renegotiate, extend, and
terminate a contract made by or on behalf of the principal with
respect to the business or entity [before execution of the power of
attorney with an individual, legal entity, firm, association, or
corporation by or on behalf of the principal with respect to the
business];
(B) determine:
(i) the location of the business's or
entity's operation;
(ii) the nature and extent of the business;
(iii) the methods of manufacturing,
selling, merchandising, financing, accounting, and advertising
employed in the business's or entity's operation;
(iv) the amount and types of insurance
carried; and
(v) the method of engaging, compensating,
and dealing with the business's or entity's accountants, attorneys,
or [and] other agents [and employees];
(C) change the name or form of organization under
which the business or entity is operated and enter into an [a
partnership] agreement with other persons [or organize a
corporation] to take over all or part of the operation of the
business or entity; and
(D) demand and receive money due or claimed by
the principal or on the principal's behalf in the operation of the
business or entity and control and disburse the money in the
operation of the business or entity;
(8) [(5)] put additional capital into a business or
entity in which the principal has an interest;
(9) [(6)] join in a plan of reorganization,
consolidation, interest exchange, conversion, or merger of the
business or entity;
(10) [(7)] sell or liquidate a business or entity or
all or part of the assets of the business or entity [at the time and
on the terms that the attorney in fact or agent considers
desirable];
(11) [(8)] establish the value of a business or entity
under a buy-out agreement to which the principal is a party;
(12) [(9) do the following:
[(A)] prepare, sign, file, and deliver reports,
compilations of information, returns, or other papers with respect
to a business or entity and[:
[(i) that are required by a governmental
agency, department, or instrumentality; or
[(ii) that the attorney in fact or agent
considers desirable; and
[(B)] make related payments; and
(13) [(10)] pay, compromise, or contest taxes or
assessments and perform any other act [that the attorney in fact or
agent considers desirable] to protect the principal from illegal or
unnecessary taxation, fines, penalties, or assessments with
respect to a business or entity, including attempts to recover, in
any manner permitted by law, money paid before or after the
execution of the power of attorney.
SECTION 5. Section 752.107, Estates Code, as amended by
this Act, applies only to a durable power of attorney, including a
statutory durable power of attorney, executed on or after the
effective date of this Act. A durable power of attorney, including a
statutory durable power of attorney, executed before the effective
date of this Act is governed by the law in effect on the date the
durable power of attorney was executed, and the former law is
continued in effect for that purpose.
SECTION 6. This Act takes effect September 1, 2021.
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