SRC-JJJ S.B. 1554 76(R)   BILL ANALYSIS


Senate Research Center   S.B. 1554
76R4137 CLG-DBy: Ellis
Jurisprudence
3/18/1999
As Filed


DIGEST 

Currently, interest on estate taxes is charged  to the principal rather
than to interest income.  This does not follow general accounting
principles and often results in an unfair allocation between beneficiaries.
S.B. 1554 would authorize the administrator of an estate to allocate the
interest due on the estate between income and principal. 

PURPOSE

As proposed, S.B. 1554 establishes provisions regarding fees and expenses
incurred in the administration or settlement of a decedent's estate. 

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 378B(a), Texas Probate Code, to require all
expenses incurred, except as provided by Subsection (b), in connection with
the settlement of a decedent's estate, other than interest due on estate
taxes, to be charged against the principal of the estate, including certain
debts, expenses, taxes, penalties, and allowances.  Requires interest due
on estate taxes and fees and certain expenses and costs to be allocated
between the income and principal of the estate as the executor determines
to be just and equitable.  Deletes text requiring interest to be charged
against the principal of the estate.  Makes conforming changes. 

SECTION 2.  Makes application of this Act prospective.

SECTION 3.  Effective date: September 1, 1999.

SECTION 4.  Emergency clause.