CHAPTER 123. ATTORNEY GENERAL PARTICIPATION IN PROCEEDINGS INVOLVING CHARITABLE TRUSTS - Texas Statutes

PROPERTY CODE

TITLE 9. TRUSTS

SUBTITLE C. MISCELLANEOUS TRUSTS

CHAPTER 123. ATTORNEY GENERAL PARTICIPATION IN PROCEEDINGS

INVOLVING CHARITABLE TRUSTS

Sec. 123.001. DEFINITIONS. In this chapter:

(1) "Charitable entity" means a corporation, trust, community

chest, fund, foundation, or other entity organized for

scientific, educational, philanthropic, or environmental

purposes, social welfare, the arts and humanities, or another

civic or public purpose described by Section 501(c)(3) of the

Internal Revenue Code of 1986 (26 U.S.C. 501(c)(3)).

(2) "Charitable trust" means a charitable entity, a trust the

stated purpose of which is to benefit a charitable entity, or an

inter vivos or testamentary gift to a charitable entity.

(3) "Proceeding involving a charitable trust" means a suit or

other judicial proceeding the object of which is to:

(A) terminate a charitable trust or distribute its assets to

other than charitable donees;

(B) depart from the objects of the charitable trust stated in

the instrument creating the trust, including a proceeding in

which the doctrine of cy-pres is invoked;

(C) construe, nullify, or impair the provisions of a

testamentary or other instrument creating or affecting a

charitable trust;

(D) contest or set aside the probate of an alleged will under

which money, property, or another thing of value is given for

charitable purposes;

(E) allow a charitable trust to contest or set aside the probate

of an alleged will;

(F) determine matters relating to the probate and administration

of an estate involving a charitable trust; or

(G) obtain a declaratory judgment involving a charitable trust.

(4) "Fiduciary or managerial agent" means an individual,

corporation, or other entity acting either as a trustee, a member

of the board of directors, an officer, an executor, or an

administrator for a charitable trust.

Added by Acts 1987, 70th Leg., ch. 147, Sec. 4, eff. Sept. 1,

1987. Amended by Acts 1995, 74th Leg., ch. 172, Sec. 2, eff.

Sept. 1, 1995.

Sec. 123.002. ATTORNEY GENERAL'S PARTICIPATION. For and on

behalf of the interest of the general public of this state in

charitable trusts, the attorney general is a proper party and may

intervene in a proceeding involving a charitable trust. The

attorney general may join and enter into a compromise, settlement

agreement, contract, or judgment relating to a proceeding

involving a charitable trust.

Added by Acts 1987, 70th Leg., ch. 147, Sec. 4, eff. Sept. 1,

1987.

Sec. 123.003. NOTICE. (a) Any party initiating a proceeding

involving a charitable trust shall give notice of the proceeding

to the attorney general by sending to the attorney general, by

registered or certified mail, a true copy of the petition or

other instrument initiating the proceeding involving a charitable

trust within 30 days of the filing of such petition or other

instrument, but no less than 25 days prior to a hearing in such a

proceeding. This subsection does not apply to a proceeding that

is initiated by an application that exclusively seeks the

admission of a will to probate, regardless of whether the

application seeks the appointment of a personal representative,

if the application:

(1) is uncontested; and

(2) is not subject to Section 83, Texas Probate Code.

(b) Notice shall be given to the attorney general of any

pleading which adds new causes of action or additional parties to

a proceeding involving a charitable trust in which the attorney

general has previously waived participation or in which the

attorney general has otherwise failed to intervene. Notice shall

be given by sending to the attorney general by registered or

certified mail a true copy of the pleading within 30 days of the

filing of the pleading, but no less than 25 days prior to a

hearing in the proceeding.

(c) The party or the party's attorney shall execute and file in

the proceeding an affidavit stating the facts of the notice and

shall attach to the affidavit the customary postal receipts

signed by the attorney general or an assistant attorney general.

Added by Acts 1987, 70th Leg., ch. 147, Sec. 4, eff. Sept. 1,

1987. Amended by Acts 1995, 74th Leg., ch. 172, Sec. 3, eff.

Sept. 1, 1995.

Amended by:

Acts 2005, 79th Leg., Ch.

1017, Sec. 1, eff. September 1, 2005.

Acts 2007, 80th Leg., R.S., Ch.

451, Sec. 15, eff. September 1, 2007.

Sec. 123.004. VOIDABLE JUDGMENT OR AGREEMENT. (a) A judgment

in a proceeding involving a charitable trust is voidable if the

attorney general is not given notice of the proceeding as

required by this chapter. On motion of the attorney general after

the judgment is rendered, the judgment shall be set aside.

(b) A compromise, settlement agreement, contract, or judgment

relating to a proceeding involving a charitable trust is voidable

on motion of the attorney general if the attorney general is not

given notice as required by this chapter unless the attorney

general has:

(1) declined in writing to be a party to the proceeding; or

(2) approved and joined in the compromise, settlement agreement,

contract, or judgment.

Added by Acts 1987, 70th Leg., ch. 147, Sec. 4, eff. Sept. 1,

1987.

Sec. 123.005. BREACH OF FIDUCIARY DUTY: VENUE. Venue in a

proceeding brought by the attorney general alleging breach of a

fiduciary duty by a charitable entity or a fiduciary or

managerial agent of a charitable trust shall be a court of

competent jurisdiction in Travis County or in the county where

the defendant resides or has its principal office. To the extent

of a conflict between this subsection and any provision of the

Texas Probate Code providing for venue of a proceeding brought

with respect to a charitable trust created by a will that has

been admitted to probate, this subsection controls.

Added by Acts 1987, 70th Leg., ch. 147, Sec. 4, eff. Sept. 1,

1987. Amended by Acts 1995, 74th Leg., ch. 172, Sec. 4, eff.

Sept. 1, 1995.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

133, Sec. 1, eff. September 1, 2009.

Acts 2009, 81st Leg., R.S., Ch.

1351, Sec. 12(g), eff. September 1, 2009.

Sec. 123.006. ATTORNEY'S FEES. (a) In a proceeding subject to

Section 123.005, the attorney general, if successful in the

proceeding, is entitled to recover from the charitable entity or

fiduciary or managerial agent of the charitable trust actual

costs incurred in bringing the suit and may recover reasonable

attorney's fees.

(b) In a proceeding in which the attorney general intervenes

under this chapter, other than a proceeding subject to Section

123.005, a court may award the attorney general court costs and

reasonable and necessary attorney's fees as may seem equitable

and just.

Added by Acts 2009, 81st Leg., R.S., Ch.

133, Sec. 2, eff. September 1, 2009.