ZEM S.B. 887 75(R) BILL ANALYSIS CIVIL PRACTICES S.B. 887 By: Harris (Hilbert) 5-1-97 Committee Report (Unamended) BACKGROUND The Texas Uniform Transfers to Minors Act was amended in 1995 to raise the age at which custodianships terminate from 18 to 21. Custodianships created prior to the change are still required to terminate at age 18. Some financial institutions have refused to accept new transfers to old accounts because they believe the Uniform Transfers to Minors Act prohibits them from doing so. This legislation would clarify that donors may make new transfers to pre-1995 custodial accounts. PURPOSE As proposed, HB 2360 would amend the Texas Uniform Transfers to Minors Act to allow donors to make new contributions into a custodial account created prior to 1995, the termination date of which would remain age 18. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 22, Chapter 141, Property Code (Section 141.022, Vernon's Texas Property Code), to provide that this chapter is not applicable to additional transfers as described in Sec. 25 of the chapter. SECTION 2. Amends Chapter 141, Property Code (Section 141.001 et seq., Vernon's Texas Property Code) by adding Section 25 as follows: (a) Limits the scope of the section to transfers made after September 1, 1997 to custodianships created before September 1, 1995. (b) Allows additional transfers to these custodianships to be mixed with funds already in the custodianship. Provides that the property of the custodianship shall be transferred to the beneficiary at age 18 or the beneficiary's estate if the individual dies before the attaining age 18. SECTION 3. Effective date: September 1, 1997. Provides that this act applies only to transfers made on or after September 1, 1995. Transfers made before September 1, 1995 are governed by the former law which is continued in effect for that purpose. SECTION 4. Emergency clause.