HBA-JLV H.J.R. 9 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.J.R. 9
By: Averitt
Financial Institutions
3/2/2001
Introduced



BACKGROUND AND PURPOSE 

Currently, perpetual trusts are prohibited by the Texas Constitution and
the Property Code.  The Rule Against Perpetuities (RAP) provides that a
trust must end twenty-one years after the death of the last "measuring
life," or family members who are alive at the time the trust is created.
Since a Texas resident cannot create a perpetual trust in Texas, that
resident can create a perpetual trust by moving their capital to a trust
fund created in another state that allows perpetual trusts.  By revising
the RAP provision, Texas may be encouraged to leave trust assets in the
state, which may prevent an erosion of the intangible personal property tax
base.  As proposed, House Joint Resolution 9 requires the submission to the
voters of a constitutional amendment removing the prohibition against
perpetual trusts. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this resolution
does not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

ANALYSIS

House Joint Resolution 9 amends the Texas Constitution to remove the
prohibition against perpetual trusts. 

FOR ELECTION

This proposed constitutional amendment shall be submitted to the voters at
an election to be held November 6, 2001.