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 2-29 -------------------------------------------------------------------