(a) General rule.--Except as provided in subsection (b), a plan shall be approved in the case of a domestic business trust as follows:

(1) in the manner provided in its organic rules for the type of plan involved;

(2) if its organic rules do not provide for approval of the type of plan involved, in the manner provided in its organic rules for approval of a plan of merger; or

(3) if its organic rules do not provide for approval of the type of plan involved or a plan of merger, the plan shall be approved by all of the beneficial owners.

(b) Adoption of plan of merger without beneficiary vote.--Unless otherwise required by the organic rules, a plan of merger providing for the merger of a domestic business trust (referred to in this paragraph as the "constituent trust") with or into a single indirect wholly owned subsidiary (referred to in this paragraph as the "subsidiary trust") of the constituent trust shall not require the approval of the beneficiaries of the constituent trust if all of the following provisions are satisfied:

(1) The constituent trust and the subsidiary trust are the only parties to the merger, other than a surviving association created in the merger.

(2) Each interest in the constituent trust outstanding immediately prior to the effectiveness of the merger is converted in the merger into an interest in the holding trust having the same designations, rights, powers and preferences and the qualifications, limitations and restrictions as the interests in the constituent trust being converted in the merger.

(3) The holding trust and the surviving association are each domestic business trusts.

(4) Immediately following the effectiveness of the merger, the instrument and organic rules of the holding trust are identical to the instrument and organic rules of the constituent trust immediately before the effectiveness of the merger, except for changes that could be made without beneficiary approval under Chapter 95 (relating to business trusts).

(5) Immediately following the effectiveness of the merger, the surviving association is a direct or indirect wholly owned subsidiary of the holding trust.

(6) The trustees of the constituent trust become or remain the trustees of the holding trust on the effectiveness of the merger.

(7) The trustees of the constituent trust have made a good faith determination that the beneficiaries of the constituent trust will not recognize gain or loss for United States Federal income tax purposes.

(8) As used in this subsection only, the term "holding trust" means a business trust that, from its formation until consummation of the merger governed by this subsection, was at all times a direct wholly owned subsidiary of the constituent trust and the interests in which are issued in the merger.

(c) Cross reference.--See section 3304(b) (relating to election of benefit corporation status).