1-1 By: Grusendorf (Senate Sponsor - Montford) H.B. No. 1772
1-2 (In the Senate - Received from the House May 10, 1993;
1-3 May 12, 1993, read first time and referred to Committee on Economic
1-4 Development; May 21, 1993, reported adversely, with favorable
1-5 Committee Substitute by the following vote: Yeas 8, Nays 0;
1-6 May 21, 1993, sent to printer.)
1-7 COMMITTEE VOTE
1-8 Yea Nay PNV Absent
1-9 Parker x
1-10 Lucio x
1-11 Ellis x
1-12 Haley x
1-13 Harris of Dallas x
1-14 Harris of Tarrant x
1-15 Leedom x
1-16 Madla x
1-17 Rosson x
1-18 Shapiro x
1-19 Wentworth x
1-20 COMMITTEE SUBSTITUTE FOR H.B. No. 1772 By: Lucio
1-21 A BILL TO BE ENTITLED
1-22 AN ACT
1-23 relating to the priority for the distribution of the assets of a
1-24 trust company on its liquidation.
1-25 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-26 SECTION 1. Article 2, Chapter XI, The Texas Banking Code
1-27 (Article 342-1102, Vernon's Texas Civil Statutes), is amended to
1-28 read as follows:
1-29 Art. 2. APPLICABILITY OF STATE BANKING CODE. Unless
1-30 otherwise provided in this chapter, a trust company is subject to
1-31 the provisions of Chapters I, II, III, IV, V, VIII, and IX of this
1-32 code as if the trust company were a state bank; provided, however,
1-33 that Article 1, Chapter III, relating to banking powers, Article
1-34 11a, Chapter IV, relating to securities law exemption, Article 4a,
1-35 Chapter VIII, relating to priority of distribution in liquidation,
1-36 and Article 3, Chapter IX, relating to limited branch banking shall
1-37 not apply.
1-38 SECTION 2. Chapter XI, The Texas Banking Code (Article
1-39 342-1101 et seq., Vernon's Texas Civil Statutes), is amended by
1-40 adding Article 14 to read as follows:
1-41 Art. 14. PRIORITY OF CLAIMS. Sec. 1. On liquidation of a
1-42 trust company, claims for payment against that trust company have
1-43 the following priority:
1-44 (1) obligations incurred by the Banking Commissioner,
1-45 fees and assessments due to the Banking Department, and expenses of
1-46 liquidation, including any taxes due, all of which may be covered
1-47 by a proper reserve of funds;
1-48 (2) claims of trust account holders having an approved
1-49 claim against the general liquidating account of the trust company;
1-50 (3) claims of salaried employees of the trust company
1-51 for salaries that are earned but unpaid at the time the trust
1-52 company is closed;
1-53 (4) claims of general creditors having an approved
1-54 claim against the general liquidating account of the trust company;
1-55 (5) claims otherwise proper that were not filed within
1-56 the time prescribed by this code;
1-57 (6) approved claims of subordinated creditors; and
1-58 (7) claims of stockholders of the trust company.
1-59 Sec. 2. Subject to the provisions of Articles 14 and 15 of
1-60 Chapter VIII of this Act, after fully satisfying all timely filed
1-61 and approved claims of a higher priority, the commissioner may make
1-62 a ratable distribution to approved claimants within a particular
1-63 class or priority if there are insufficient funds to fully satisfy
1-64 all of those claims, after reserving funds for administrative
1-65 expenses, if necessary.
1-66 SECTION 3. The change in law made by this Act applies only
1-67 to the liquidation of a trust company that begins on or after the
1-68 effective date of this Act.
2-1 SECTION 4. The importance of this legislation and the
2-2 crowded condition of the calendars in both houses create an
2-3 emergency and an imperative public necessity that the
2-4 constitutional rule requiring bills to be read on three several
2-5 days in each house be suspended, and this rule is hereby suspended,
2-6 and that this Act take effect and be in force from and after its
2-7 passage, and it is so enacted.
2-8 * * * * *
2-9 Austin,
2-10 Texas
2-11 May 21, 1993
2-12 Hon. Bob Bullock
2-13 President of the Senate
2-14 Sir:
2-15 We, your Committee on Economic Development to which was referred
2-16 H.B. No. 1772, have had the same under consideration, and I am
2-17 instructed to report it back to the Senate with the recommendation
2-18 that it do not pass, but that the Committee Substitute adopted in
2-19 lieu thereof do pass and be printed.
2-20 Parker,
2-21 Chairman
2-22 * * * * *
2-23 WITNESSES
2-24 FOR AGAINST ON
2-25 ___________________________________________________________________
2-26 Name: Catherine A. Ghiglieri x
2-27 Representing: Texas Department of Banking
2-28 City: Austin
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