H.B. No. 1772
1-1 AN ACT
1-2 relating to the priority for the distribution of the assets of a
1-3 trust company on its liquidation.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Article 2, Chapter XI, The Texas Banking Code
1-6 (Article 342-1102, Vernon's Texas Civil Statutes), is amended to
1-7 read as follows:
1-8 Art. 2. APPLICABILITY OF STATE BANKING CODE. Unless
1-9 otherwise provided in this chapter, a trust company is subject to
1-10 the provisions of Chapters I, II, III, IV, V, VIII, and IX of this
1-11 code as if the trust company were a state bank; provided, however,
1-12 that Article 1, Chapter III, relating to banking powers, Article
1-13 11a, Chapter IV, relating to securities law exemption, Article 4a,
1-14 Chapter VIII, relating to priority of distribution in liquidation,
1-15 and Article 3, Chapter IX, relating to limited branch banking shall
1-16 not apply.
1-17 SECTION 2. Chapter XI, The Texas Banking Code (Article
1-18 342-1101 et seq., Vernon's Texas Civil Statutes), is amended by
1-19 adding Article 14 to read as follows:
1-20 Art. 14. PRIORITY OF CLAIMS
1-21 Sec. 1. On liquidation of a trust company, claims for
1-22 payment against that trust company have the following priority:
1-23 (1) obligations incurred by the Banking Commissioner,
1-24 fees and assessments due to the Banking Department, and expenses of
2-1 liquidation, including any taxes due, all of which may be covered
2-2 by a proper reserve of funds;
2-3 (2) claims of trust account holders having an approved
2-4 claim against the general liquidating account of the trust company;
2-5 (3) claims of salaried employees of the trust company
2-6 for salaries that are earned but unpaid at the time the trust
2-7 company is closed;
2-8 (4) claims of general creditors having an approved
2-9 claim against the general liquidating account of the trust company;
2-10 (5) claims otherwise proper that were not filed within
2-11 the time prescribed by this code;
2-12 (6) approved claims of subordinated creditors; and
2-13 (7) claims of stockholders of the trust company.
2-14 Sec. 2. Subject to the provisions of Articles 14 and 15 of
2-15 Chapter VIII of this Act, after fully satisfying all timely filed
2-16 and approved claims of a higher priority, the commissioner may make
2-17 a ratable distribution to approved claimants within a particular
2-18 class or priority if there are insufficient funds to fully satisfy
2-19 all of those claims, after reserving funds for administrative
2-20 expenses, if necessary.
2-21 SECTION 3. The change in law made by this Act applies only
2-22 to the liquidation of a trust company that begins on or after the
2-23 effective date of this Act.
2-24 SECTION 4. The importance of this legislation and the
2-25 crowded condition of the calendars in both houses create an
2-26 emergency and an imperative public necessity that the
2-27 constitutional rule requiring bills to be read on three several
3-1 days in each house be suspended, and this rule is hereby suspended,
3-2 and that this Act take effect and be in force from and after its
3-3 passage, and it is so enacted.