Sec. 712.0353. DETERMINATION OF FAIR MARKET VALUE. (a) The trustee of a total return fund, or of a net income fund seeking to convert to a total return fund, shall determine for the corporation, in the trustee's sole discretion and in accordance with this section, the average fair market value of the fund at the beginning of each fiscal year.

(b) The trustee shall derive the average fair market value of the fund at least annually by averaging the fair market value of fund assets, determined on an asset-by-asset basis, as of the beginning of the current fiscal year and in each of the two previous years, or for the entire term of the trust with less than two previous years, using the valuation date or averages of valuation dates as the trustee considers appropriate. The trustee shall exclude from the fair market value calculation any asset described in Section 712.030(b) and any asset for which the trustee is not able to reasonably ascertain a fair market value. In determining the average fair market value, the trustee shall adjust the fair market value for each year used in the calculation as follows:

(1) for assets added to the fund during the years used to determine the average, the trustee shall add the amount of each addition to all years in which the addition is not included; and

(2) for assets withdrawn from the fund during the years used to determine the average, other than in satisfaction of permissible distributions, the trustee shall subtract the amount of each withdrawal from all years in which the withdrawal is not included.

(c) Before the 31st day after the beginning of each fiscal year, the trustee of a total return fund shall send written notice to the commissioner and to the corporation of the trustee's determination of the current fair market value of the fund as of the beginning of the current fiscal year and the average fair market value of the fund for determining permissible distributions for the fiscal year, with identification and explanation of any asset excluded from the determination. If the trustee alters the methodology of determining fair market value in a manner that changes the fair market value of the fund during a fiscal year, the trustee shall send written notice to the commissioner and to the corporation of the revised current and average fair market value of the fund and the reason for the revision before the first distribution is made based on the revised average fair market value.

(d) This section does not alter or otherwise affect a fiduciary duty under other law to evaluate and monitor the fair market value of assets held in trust.

Added by Acts 2017, 85th Leg., R.S., Ch. 1051 (H.B. 1948), Sec. 1, eff. September 1, 2017.