1-1     By:  Williams (Senate Sponsor - Sibley)               H.B. No. 1373
 1-2           (In the Senate - Received from the House April 14, 1999;
 1-3     April 15, 1999, read first time and referred to Committee on
 1-4     Jurisprudence; April 28, 1999, reported favorably, as amended, by
 1-5     the following vote:  Yeas 4, Nays 0; April 28, 1999, sent to
 1-6     printer.)
 1-7     COMMITTEE AMENDMENT NO. 1                               By:  Harris
 1-8           Amend H.B. 1373 in SECTION 1 of the bill, Section 113.1021,
 1-9     Property Code on page 1, line 17, by striking "CERTAIN" and
1-10     substituting "CHARITABLE".
1-11                            A BILL TO BE ENTITLED
1-12                                   AN ACT
1-13     relating to allocation of principal and income in certain trusts.
1-14           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-15           SECTION 1.  Subchapter D, Chapter 113, Property Code, is
1-16     amended by adding Section 113.1021 to read as follows:
1-17           Sec. 113.1021.  ALLOCATION OF PRINCIPAL AND INCOME IN CERTAIN
1-18     TRUSTS.  (a)  Unless otherwise provided by the trust instrument, an
1-19     increase in the value of the following obligations over the value
1-20     at the time the obligation was acquired by the trust is income:
1-21                 (1)  a deferred annuity before annuitization; and
1-22                 (2)  a life insurance contract before the death of the
1-23     insured.
1-24           (b)  For purposes of this section and unless otherwise
1-25     provided by the trust instrument, the increase in value of an
1-26     obligation described by Subsection (a) is available for
1-27     distribution only when the trustee receives cash on account of the
1-28     obligation.  If the obligation is surrendered or partially
1-29     liquidated, the cash received must be attributed first to the
1-30     increase.  Notwithstanding Section 113.103, the increase in the
1-31     value of the obligation is available for distribution to the income
1-32     beneficiary who is the income beneficiary when the cash is received
1-33     and, if different, not to the income beneficiary who was the income
1-34     beneficiary at the time the income accrued.
1-35           (c)  Section 113.109 applies to the allocation of principal
1-36     and income for a deferred annuity after annuitization.
1-37           SECTION 2.  (a)  This Act takes effect September 1, 1999.
1-38           (b)  The change in law made by this Act applies only to
1-39     principal and income subject to allocation on or after September 1,
1-40     1999.  Principal and income subject to allocation before September
1-41     1, 1999, is governed by the law in effect immediately before that
1-42     date, and the former law is continued in effect for that purpose.
1-43           SECTION 3.  The importance of this legislation and the
1-44     crowded condition of the calendars in both houses create an
1-45     emergency and an imperative public necessity that the
1-46     constitutional rule requiring bills to be read on three several
1-47     days in each house be suspended, and this rule is hereby suspended.
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