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.