AN ACT

 1-1     relating to the administration and operation of certain trusts.

 1-2           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-3           SECTION 1.  Section 112.035, Property Code, is amended by

 1-4     adding Subsection (e) to read as follows:

 1-5           (e)  A beneficiary of the trust may not be considered a

 1-6     settlor merely because of a lapse, waiver, or release of the

 1-7     beneficiary's right to withdraw a part of the trust property if the

 1-8     value of the property that could have been withdrawn by exercising

 1-9     the right of withdrawal in any calendar year does not exceed at the

1-10     time of the lapse, waiver, or release the greater of the amount

1-11     specified in:

1-12                 (1)  Section 2041(b)(2) or 2514(e), Internal Revenue

1-13     Code of 1986; or

1-14                 (2)  Section 2503(b), Internal Revenue Code of 1986.

1-15           SECTION 2.  This Act takes effect September 1, 1997.

1-16           SECTION 3.  The importance of this legislation and the

1-17     crowded condition of the calendars in both houses create an

1-18     emergency and an imperative public necessity that the

1-19     constitutional rule requiring bills to be read on three several

1-20     days in each house be suspended, and this rule is hereby suspended.

                                                                S.B. No. 998

         _______________________________     _______________________________

             President of the Senate              Speaker of the House

               I hereby certify that S.B. No. 998 passed the Senate on

         April 3, 1997, by a viva-voce vote; and that the Senate concurred

         in House amendment on April 30, 1997, by a viva-voce vote.

                                             _______________________________

                                                 Secretary of the Senate

               I hereby certify that S.B. No. 998 passed the House, with

         amendment, on April 25, 1997, by a non-record vote.

                                             _______________________________

                                                 Chief Clerk of the House

         Approved:

         _______________________________

                     Date

         _______________________________

                   Governor