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
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