I opened up a UTMA account for my daughter a year ago. She has been depositing $ in account from a part time job. I have allowed her take some $ out for a down payment on a car and misc things. She now has decided that she wants to move out and wants $ now. She is still 17.
Question 1 She had a pregnancy and our insurance did not cover depend pregnancy. Can i use $ to pay unpaid medical bills from her pregnancy. Bills are in our name since she is a minor
Question 2 If i giver her $, am i responsible as custodian for not overseeing the use of $ since she is still a minor (We live in Texas)

The bank isn't responsible to verify use of the money, and that is a legal question. Generally the funds must be used for the benefit of the minor. While medical bills for the minor sound like they meet that requirement, you can verify with an attorney if you are afraid of legal questions being asked about use or accountability.

The second part of your question is similar in that giving the funds directly to the minor seems contradictory to the reason the account was established. If in moving out your daughter also becomes emancipated, this may be moot as she would no longer be a minor. So again, you don't have to provide funds, and you may seek specific legal advice before you do.

I heard the the SEC has issued a ruling to restrict the withdrawal of money market funds if a banking emergency occurs. Is this true?

The restrictions to which you refer involve the short sale of investment money markets (Liquid investments invested in the stock market, bonds, or other funds.)

This has nothing to do with interest bearing money market accounts available at any banking institution insured by the FDIC.

The SEC only regulates investments, not banks.