By Reyna of Bexar                                H.B. No. 881

      75R3711 BEM-F                           

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to the priority of payment of claims against a decedent's

 1-3     estate.

 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-5           SECTION 1.  Section 320(a), Texas Probate Code, is amended to

 1-6     read as follows:

 1-7           (a)  Priority of Payments.  Personal representatives, when

 1-8     they have funds in their hands belonging to the estate, shall pay

 1-9     in the following order:

1-10                 (1)  Funeral expenses [and expenses of last sickness,]

1-11     in an amount not to exceed Five Thousand Dollars and expenses of

1-12     last sickness in an amount not to exceed Twenty-five Thousand

1-13     Dollars.

1-14                 (2)  Allowances made to the surviving spouse and

1-15     children, or to either.

1-16                 (3)  Expenses of administration and the expenses

1-17     incurred in the preservation, safekeeping, and management of the

1-18     estate.

1-19                 (4)  Other claims against the estate in the order of

1-20     their classification.

1-21           SECTION 2.  Section 322, Texas Probate Code, is amended to

1-22     read as follows:

1-23           Sec. 322.  CLASSIFICATION OF CLAIMS AGAINST ESTATES OF

1-24     DECEDENT.  Claims against an estate of a decedent shall be

 2-1     classified and have priority of payment, as follows:

 2-2           Class 1.  Funeral expenses and expenses of last sickness for

 2-3     a reasonable amount to be approved by the court, not to exceed a

 2-4     total of Thirty Thousand Dollars [Five Thousand Dollars], with any

 2-5     excess to be classified and paid as other unsecured claims.

 2-6           Class 2.  Expenses of administration and expenses incurred in

 2-7     the preservation, safekeeping, and management of the estate.

 2-8           Class 3.  Secured claims for money under Section 306(a)(1),

 2-9     including tax liens, so far as the same can be paid out of the

2-10     proceeds of the property subject to such mortgage or other lien,

2-11     and when more than one mortgage, lien, or security interest shall

2-12     exist upon the same property, they shall be paid in order of their

2-13     priority.

2-14           Class 4.  Claims for taxes, penalties, and interest due under

2-15     Title 2, Tax Code; Chapter 8, Title 132, Revised Statutes; Section

2-16     81.111, Natural Resources Code;  the Municipal Sales and Use Tax

2-17     Act (Chapter 321, Tax Code); Section 451.404, Transportation Code

2-18     [Section 11B, Chapter 141, Acts of the 63rd Legislature, Regular

2-19     Session, 1973 (Article 1118x, Vernon's Texas Civil Statutes)]; or

2-20     Subchapter I, Chapter 452, Transportation Code [Section 16, Chapter

2-21     683, Acts of the 66th Legislature, Regular Session, 1979 (Article

2-22     1118y, Vernon's Texas Civil Statutes)].

2-23           Class 5.  Claims for the cost of confinement established by

2-24     the institutional division of the Texas Department of Criminal

2-25     Justice under Section 501.017, Government Code.

2-26           Class 6.  Claims for repayment of medical assistance payments

2-27     made by the state under Chapter 32, Human Resources Code, to or for

 3-1     the benefit of the decedent.

 3-2           Class 7.  All other claims.

 3-3           SECTION 3.  This Act takes effect September 1, 1997, and

 3-4     applies only to the estate of a person who dies on or after that

 3-5     date.  The estate of a person who dies before the effective date of

 3-6     this Act is governed by the law in effect at the time of the

 3-7     person's death and that law is continued in effect for that

 3-8     purpose.

 3-9           SECTION 4.  The importance of this legislation and the

3-10     crowded condition of the calendars in both houses create an

3-11     emergency and an imperative public necessity that the

3-12     constitutional rule requiring bills to be read on three several

3-13     days in each house be suspended, and this rule is hereby suspended.