1-1 By: Montford S.B. No. 1214 1-2 (In the Senate - Filed March 12, 1993; March 16, 1993, read 1-3 first time and referred to Committee on Economic Development; 1-4 May 4, 1993, reported favorably by the following vote: Yeas 9, 1-5 Nays 0; May 4, 1993, sent to printer.) 1-6 COMMITTEE VOTE 1-7 Yea Nay PNV Absent 1-8 Parker x 1-9 Lucio x 1-10 Ellis x 1-11 Haley x 1-12 Harris of Dallas x 1-13 Harris of Tarrant x 1-14 Leedom x 1-15 Madla x 1-16 Rosson x 1-17 Shapiro x 1-18 Wentworth x 1-19 A BILL TO BE ENTITLED 1-20 AN ACT 1-21 relating to priority of claims in distribution of the assets of a 1-22 trust company on its liquidation. 1-23 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-24 SECTION 1. Article 2, Chapter XI, The Texas Banking Code 1-25 (Article 342-1102, Vernon's Texas Civil Statutes), is amended to 1-26 read as follows: 1-27 Art. 2. APPLICABILITY OF STATE BANKING CODE. Unless 1-28 otherwise provided in this chapter, a trust company is subject to 1-29 the provisions of Chapters I, II, III, IV, V, VIII, and IX of this 1-30 code as if the trust company were a state bank; provided, however, 1-31 that Article 1, Chapter III, relating to banking powers, Article 1-32 11a, Chapter IV, relating to securities law exemption, Article 4a, 1-33 Chapter VIII, relating to priority of distribution in liquidation, 1-34 and Article 3, Chapter IX, relating to limited branch banking shall 1-35 not apply. 1-36 SECTION 2. Chapter XI, The Texas Banking Code (Article 1-37 342-1102 et seq., Vernon's Texas Civil Statutes), is amended by 1-38 adding Article 14 to read as follows: 1-39 Art. 14. PRIORITY OF CLAIMS. 1-40 Sec. 1. On liquidation of a trust company, claims for 1-41 payment against that trust company have the following priority: 1-42 (1) obligations incurred by the Banking Commissioner, 1-43 fees and assessments due to the Banking Department, and expenses of 1-44 liquidation, including any taxes due, all of which may be covered 1-45 by a proper reserve of funds; 1-46 (2) claims of trust account holders having an approved 1-47 claim against the general liquidating account of the trust company; 1-48 (3) claims of salaried employees of the trust company 1-49 for salaries that are earned but unpaid at the time the trust 1-50 company is closed; 1-51 (4) claims of general creditors having an approved 1-52 claim against the general liquidating account of the trust company; 1-53 (5) claims otherwise proper that were not filed within 1-54 the time prescribed by this code; 1-55 (6) approved claims of subordinated creditors; and 1-56 (7) claims of stockholders of the trust company. 1-57 Sec. 2. The receiver shall make a ratable distribution 1-58 within the priority of the funds of the liquidation on all such 1-59 claims that have been approved if there are insufficient funds to 1-60 satisfy the claims fully. 1-61 SECTION 3. The change in law made by this Act applies only 1-62 to the liquidation of a trust company that begins on or after the 1-63 effective date of this Act. 1-64 SECTION 4. The importance of this legislation and the 1-65 crowded condition of the calendars in both houses create an 1-66 emergency and an imperative public necessity that the 1-67 constitutional rule requiring bills to be read on three several 1-68 days in each house be suspended, and this rule is hereby suspended. 2-1 * * * * * 2-2 Austin, 2-3 Texas 2-4 May 4, 1993 2-5 Hon. Bob Bullock 2-6 President of the Senate 2-7 Sir: 2-8 We, your Committee on Economic Development to which was referred 2-9 S.B. No. 1214, have had the same under consideration, and I am 2-10 instructed to report it back to the Senate with the recommendation 2-11 that it do pass and be printed. 2-12 Parker, 2-13 Chairman 2-14 * * * * * 2-15 WITNESSES 2-16 FOR AGAINST ON 2-17 ___________________________________________________________________ 2-18 Name: Catherine A. Ghiglieri x 2-19 Representing: Texas Dept. of Banking 2-20 City: Austin 2-21 -------------------------------------------------------------------