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. 1-48 * * * * *