Texas 2013 - 83rd Regular

Texas House Bill HB1646 Compare Versions

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1	1	By: Flynn (Senate Sponsor - Carona) H.B. No. 1646
2	2	(In the Senate - Received from the House April 22, 2013;
3	3	May 7, 2013, read first time and referred to Committee on Business
4	4	and Commerce; May 16, 2013, reported favorably by the following
5	5	vote: Yeas 7, Nays 0; May 16, 2013, sent to printer.)
6	6
7	7
8	8	A BILL TO BE ENTITLED
9	9	AN ACT
10	10	relating to revising provisions in certain laws governing certain
11	11	banks and trust companies in this state to conform to changes in
12	12	terminology made by the Business Organizations Code.
13	13	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
14	14	SECTION 1. The heading to Section 32.002, Finance Code, is
15	15	amended to read as follows:
16	16	Sec. 32.002. CERTIFICATE OF FORMATION [ARTICLES OF
17	17	ASSOCIATION] OF STATE BANK.
18	18	SECTION 2. Sections 32.002(a) and (c), Finance Code, are
19	19	amended to read as follows:
20	20	(a) The certificate of formation [articles of association]
21	21	of a state bank must be signed and acknowledged by each organizer
22	22	and must contain:
23	23	(1) the name of the bank, subject to Subsection (b);
24	24	(2) the period of the bank's duration, which may be
25	25	perpetual, subject to Subsection (c);
26	26	(3) the powers of the bank, which may be stated as:
27	27	(A) all powers granted by law to a state bank; or
28	28	(B) a list of the specific powers under Section
29	29	32.001 that the bank chooses to exercise;
30	30	(4) the aggregate number of shares that the bank will
31	31	be authorized to issue and the number of classes of shares, which
32	32	may be one or more;
33	33	(5) if the shares are to be divided into classes:
34	34	(A) the designation of each class and statement
35	35	of the preferences, limitations, and relative rights of the shares
36	36	of each class, which in the case of a limited banking association
37	37	may be more fully set forth in the participation agreement;
38	38	(B) the number of shares of each class; and
39	39	(C) a statement of the par value of the shares of
40	40	each class or that the shares are to be without par value;
41	41	(6) any provision limiting or denying to shareholders
42	42	the preemptive right to acquire additional or treasury shares of
43	43	the bank;
44	44	(7) any provision granting the right of shareholders
45	45	to cumulative voting in the election of directors;
46	46	(8) the aggregate amount of consideration to be
47	47	received for all shares initially issued by the bank and a statement
48	48	that:
49	49	(A) all authorized shares have been subscribed;
50	50	and
51	51	(B) all subscriptions received have been
52	52	irrevocably paid in cash;
53	53	(9) any provision that is otherwise required by this
54	54	subtitle to be set forth in the certificate of formation [articles
55	55	of association];
56	56	(10) the street address of the bank's initial home
57	57	office;
58	58	(11) the number of directors constituting the initial
59	59	board and the names and street addresses of the persons who are to
60	60	serve as directors until the first annual meeting of shareholders
61	61	or until successor directors have been elected and qualified; and
62	62	(12) subject to Section 32.008, any provision
63	63	consistent with law that the organizers elect to set forth in the
64	64	certificate of formation [articles of association] for the
65	65	regulation of the internal affairs of the bank, including
66	66	provisions permissible under the Business Organizations Code for:
67	67	(A) a for-profit corporation, in the case of a
68	68	proposed banking association; or
69	69	(B) a limited liability company, in the case of a
70	70	proposed limited banking association.
71	71	(c) A state bank, other than a private bank, organized
72	72	before August 31, 1993, is considered to have perpetual existence,
73	73	notwithstanding a contrary statement in its articles of
74	74	association, unless after September 1, 1995, the bank amends its
75	75	certificate of formation or articles of association to reaffirm its
76	76	limited duration.
77	77	SECTION 3. Section 32.008, Finance Code, is amended to read
78	78	as follows:
79	79	Sec. 32.008. APPLICATION OF GENERAL CORPORATE LAW.
80	80	(a) The Business Organizations Code applies to a banking
81	81	association as if it were a for-profit corporation, and to a limited
82	82	banking association as if it were a limited liability company, to
83	83	the extent not inconsistent with this subtitle or the proper
84	84	business of a state bank, except that:
85	85	(1) a reference in the Business Organizations Code to
86	86	the secretary of state means the banking commissioner unless the
87	87	context requires otherwise; and
88	88	(2) the right of shareholders to cumulative voting in
89	89	the election of directors exists only if granted by the bank's
90	90	certificate of formation [articles of association].
91	91	(b) The finance commission may adopt rules to limit or
92	92	refine the applicability of the laws listed by Subsection (a) [or
93	93	(d)] to a state bank or to alter or supplement the procedures and
94	94	requirements of those laws applicable to an action taken under this
95	95	chapter.
96	96	(c) Unless expressly authorized by this subtitle or a rule
97	97	adopted under this subtitle, a state bank may not take an action
98	98	authorized by a law listed by Subsection (a) [or (d)] regarding its
99	99	corporate status, its capital structure, or a matter of corporate
100	100	governance, of the type for which those laws would require a filing
101	101	with the secretary of state if the bank were a filing entity
102	102	[business corporation], without submitting the filing to the
103	103	banking commissioner and obtaining the banking commissioner's
104	104	prior written approval of the action.
105	105	(d) In this subtitle, a reference to a term or phrase listed
106	106	in a subdivision of Section 1.006, Business Organizations Code,
107	107	includes a synonymous term or phrase referenced by the same
108	108	subdivision in Section 1.006 of that code.
109	109	SECTION 4. The heading to Subchapter B, Chapter 32, Finance
110	110	Code, is amended to read as follows:
111	111	SUBCHAPTER B. AMENDMENT OF CERTIFICATE [ARTICLES]; CHANGES IN
112	112	CAPITAL AND SURPLUS
113	113	SECTION 5. The heading to Section 32.101, Finance Code, is
114	114	amended to read as follows:
115	115	Sec. 32.101. AMENDMENT OR RESTATEMENT OF STATE BANK
116	116	CERTIFICATE OF FORMATION [ARTICLES OF ASSOCIATION].
117	117	SECTION 6. Sections 32.101(a), (b), and (c), Finance Code,
118	118	are amended to read as follows:
119	119	(a) A state bank that has been granted a certificate of
120	120	authority may amend or restate its certificate of formation
121	121	[articles of association] for any lawful purpose, including the
122	122	creation of authorized but unissued shares or participation shares
123	123	in one or more classes or series.
124	124	(b) An amendment authorizing the issuance of shares or
125	125	participation shares in series must contain:
126	126	(1) the designation of each series and a statement of
127	127	any variations in the preferences, limitations, and relative rights
128	128	among series to the extent that the preferences, limitations, and
129	129	relative rights are to be established in the certificate of
130	130	formation [articles of association]; and
131	131	(2) a statement of any authority to be vested in the
132	132	bank's board to establish series and determine the preferences,
133	133	limitations, and relative rights of each series.
134	134	(c) Amendment or restatement of the certificate of
135	135	formation [articles of association] of a state bank and approval of
136	136	the bank's board and shareholders must be made or obtained as
137	137	provided by the Business Organizations Code [for the amendment or
138	138	restatement of a certificate of formation by a for-profit
139	139	corporation] except as otherwise provided by this subtitle or rules
140	140	adopted under this subtitle. The original and one copy of the
141	141	certificate [articles] of amendment or restated certificate of
142	142	formation [articles of association] must be filed with the banking
143	143	commissioner for approval. Unless the submission presents novel or
144	144	unusual questions, the banking commissioner shall approve or reject
145	145	the amendment or restatement not later than the 31st day after the
146	146	date the banking commissioner considers the submission
147	147	informationally complete and accepted for filing. The banking
148	148	commissioner may require the submission of additional information
149	149	as considered necessary to an informed decision to approve or
150	150	reject any amendment or restatement of a certificate of formation
151	151	[articles of association] under this section. If the banking
152	152	commissioner finds that the amendment or restatement conforms to
153	153	law and any conditions imposed by the banking commissioner, and any
154	154	required filing fee has been paid, the banking commissioner shall:
155	155	(1) endorse the face of the original and copy of the
156	156	amendment or restatement with the date of approval and the word
157	157	"Approved";
158	158	(2) file the original of the amendment or restatement
159	159	in the department's records; and
160	160	(3) deliver a certified copy of the amendment or
161	161	restatement to the bank.
162	162	SECTION 7. Sections 32.102(a) and (b), Finance Code, are
163	163	amended to read as follows:
164	164	(a) If the certificate of formation [articles of
165	165	association] expressly gives [give] the board of a state bank
166	166	authority to establish shares in series and determine the
167	167	preferences, limitations, and relative rights of each series, the
168	168	board may do so only in compliance with this section and any rules
169	169	adopted under this subtitle.
170	170	(b) A series of shares may be established in the manner
171	171	provided by the Business Organizations Code [as if the state bank
172	172	were a domestic entity], but the shares of the series may not be
173	173	issued and sold without the prior written approval of the banking
174	174	commissioner under Section 32.103. The bank shall file the
175	175	original and one copy of the statement of action required by the
176	176	Business Organizations Code with the banking commissioner.
177	177	SECTION 8. Section 32.301(b), Finance Code, is amended to
178	178	read as follows:
179	179	(b) Implementation of the merger by the parties and approval
180	180	of the board, shareholders, or owners of the parties must be made or
181	181	obtained in accordance with the Business Organizations Code as if
182	182	the state bank were a filing [domestic] entity and all other parties
183	183	to the merger were foreign entities, except as may be otherwise
184	184	provided by applicable rules.
185	185	SECTION 9. Sections 32.302(a) and (c), Finance Code, are
186	186	amended to read as follows:
187	187	(a) If the merger is subject to the prior written approval
188	188	of the banking commissioner, the original certificate [articles] of
189	189	merger and a number of copies of the certificate [articles] equal to
190	190	the number of surviving, new, and acquiring entities must be filed
191	191	with the banking commissioner. On this filing, the banking
192	192	commissioner shall investigate the condition of the merging
193	193	parties. The banking commissioner may require the submission of
194	194	additional information the banking commissioner determines
195	195	necessary to an informed decision to approve or reject a merger
196	196	under this subchapter.
197	197	(c) If the banking commissioner approves the merger and
198	198	finds that all required filing fees and investigative costs have
199	199	been paid, the banking commissioner shall:
200	200	(1) endorse the face of the original and each copy of
201	201	the certificate [articles] of merger with the date of approval and
202	202	the word "Approved";
203	203	(2) file the original of the certificate [articles] of
204	204	merger in the department's records; and
205	205	(3) deliver a certified copy of the certificate
206	206	[articles] of merger to each surviving, new, or acquiring entity.
207	207	SECTION 10. Section 32.501(b), Finance Code, is amended to
208	208	read as follows:
209	209	(b) The merger or conversion by the state bank must be made
210	210	and approval of its board and shareholders must be obtained in
211	211	accordance with the Business Organizations Code as if the state
212	212	bank were a filing [domestic] entity and all other parties to the
213	213	transaction, if any, were foreign entities, except as provided by
214	214	rule. For purposes of this subsection, a conversion is considered
215	215	a merger into the successor form of financial institution.
216	216	SECTION 11. Section 33.204(c), Finance Code, is amended to
217	217	read as follows:
218	218	(c) The certificate of formation [articles of association],
219	219	bylaws, and participation agreement of a limited banking
220	220	association may use "director" instead of "manager" and "board"
221	221	instead of "board of managers."
222	222	SECTION 12. Section 33.209, Finance Code, is amended to
223	223	read as follows:
224	224	Sec. 33.209. ALLOCATION OF PROFITS AND LOSSES. The profits
225	225	and losses of a limited banking association may be allocated among
226	226	the participants and among classes of participants as provided by
227	227	the participation agreement. Without the prior written approval of
228	228	the banking commissioner to use a different allocation method, the
229	229	profits and losses must be allocated according to the relative
230	230	interests of the participants as reflected in the certificate of
231	231	formation [articles of association] and related documents filed
232	232	with and approved by the banking commissioner.
233	233	SECTION 13. Section 33.210, Finance Code, is amended to
234	234	read as follows:
235	235	Sec. 33.210. DISTRIBUTIONS. Subject to Section 32.103,
236	236	distributions of cash or other assets of a limited banking
237	237	association may be made to the participants as provided by the
238	238	participation agreement. Without the prior written approval of the
239	239	banking commissioner to use a different distribution method,
240	240	distributions must be made to the participants according to the
241	241	relative interests of the participants as reflected in the
242	242	certificate of formation [articles of association] and related
243	243	documents filed with and approved by the banking commissioner.
244	244	SECTION 14. Section 36.312(a), Finance Code, is amended to
245	245	read as follows:
246	246	(a) The priority of distribution of assets from the estate
247	247	of a bank the deposits of which are not insured by the Federal
248	248	Deposit Insurance Corporation or its successor shall be in
249	249	accordance with the order of each class as provided by this section.
250	250	Every claim in each class shall be paid in full, or adequate money
251	251	shall be retained for that payment, before a member of the next
252	252	class receives any payment. A subclass may not be established
253	253	within a class, except for a preference or subordination within a
254	254	class expressly created by contract or other instrument or in the
255	255	certificate of formation [articles of association].
256	256	SECTION 15. Section 36.313(c), Finance Code, is amended to
257	257	read as follows:
258	258	(c) At the meeting, the shareholders shall appoint one or
259	259	more agents to take over the affairs to continue the liquidation for
260	260	the benefit of the shareholders. Voting privileges are governed by
261	261	the bank's bylaws and certificate of formation [articles of
262	262	association]. If a quorum cannot be obtained at the meeting, the
263	263	banking commissioner shall appoint an agent. An agent appointed
264	264	under this subsection shall execute and file with the court a bond
265	265	approved by the court, conditioned on the faithful performance of
266	266	all the duties of the trust.
267	267	SECTION 16. The heading to Section 182.002, Finance Code,
268	268	is amended to read as follows:
269	269	Sec. 182.002. CERTIFICATE OF FORMATION [ARTICLES OF
270	270	ASSOCIATION] OF STATE TRUST COMPANY.
271	271	SECTION 17. Sections 182.002(a) and (c), Finance Code, are
272	272	amended to read as follows:
273	273	(a) The certificate of formation [articles of association]
274	274	of a state trust company must be signed and acknowledged by each
275	275	organizer and must contain:
276	276	(1) the name of the state trust company, subject to
277	277	Subsection (b);
278	278	(2) the period of the state trust company's duration,
279	279	which may be perpetual;
280	280	(3) the powers of the state trust company, which may be
281	281	stated as:
282	282	(A) all powers granted to a state trust company
283	283	in this state; or
284	284	(B) a list of the specific powers that the state
285	285	trust company chooses and is authorized to exercise;
286	286	(4) the aggregate number of shares, or participation
287	287	shares in the case of a limited trust association, that the state
288	288	trust company will be authorized to issue, and the number of classes
289	289	of shares or participation shares, which may be one or more;
290	290	(5) if the shares or participation shares are to be
291	291	divided into classes:
292	292	(A) the designation of each class and statement
293	293	of the preferences, limitations, and relative rights of the shares
294	294	or participation shares of each class, which in the case of a
295	295	limited trust association may be more fully set forth in the
296	296	participation agreement;
297	297	(B) the number of shares or participation shares
298	298	of each class; and
299	299	(C) a statement of the par value of the shares or
300	300	participation shares of each class or that the shares or
301	301	participation shares are to be without par value;
302	302	(6) any provision limiting or denying to shareholders
303	303	or participants the preemptive right to acquire additional or
304	304	treasury shares or participation shares of the state trust company;
305	305	(7) any provision granting the right of shareholders
306	306	or participants to cumulative voting in the election of directors
307	307	or managers;
308	308	(8) the aggregate amount of consideration to be
309	309	received for all shares or participation shares initially issued by
310	310	the state trust company and a statement that:
311	311	(A) all authorized shares or participation
312	312	shares have been subscribed; and
313	313	(B) all subscriptions received have been
314	314	irrevocably paid in cash;
315	315	(9) any provision consistent with law that the
316	316	organizers elect to set forth in the certificate of formation
317	317	[articles of association] for the regulation of the internal
318	318	affairs of the state trust company or that is otherwise required by
319	319	this subtitle to be set forth in the certificate of formation
320	320	[articles of association];
321	321	(10) the street address of the state trust company's
322	322	home office; and
323	323	(11) either:
324	324	(A) the number of directors or managers
325	325	constituting the initial board and the names and street addresses
326	326	of the persons who are to serve as directors or managers until the
327	327	first annual meeting of shareholders or participants or until
328	328	successor directors or managers have been elected and qualified; or
329	329	(B) the statement described by Subsection (c).
330	330	(c) The organizers of a limited trust association that will
331	331	have not fewer than five or more than 25 participants may include in
332	332	the certificate of formation [articles of association] a statement
333	333	that management is vested in a board composed of all participants,
334	334	with management authority vested in each participant in proportion
335	335	to the participant's contribution to capital as adjusted from time
336	336	to time to properly reflect any additional contribution, and the
337	337	names and street addresses of the persons who are to be the initial
338	338	managing participants.
339	339	SECTION 18. Section 182.009, Finance Code, is amended to
340	340	read as follows:
341	341	Sec. 182.009. APPLICATION OF GENERAL CORPORATE LAW.
342	342	(a) The Business Organizations Code applies to a trust association
343	343	as if it were a for-profit corporation, and to a limited trust
344	344	association as if it were a limited liability company, to the extent
345	345	not inconsistent with this subtitle or the proper business of a
346	346	state trust company, except that:
347	347	(1) a reference to the secretary of state means the
348	348	banking commissioner unless the context requires otherwise; and
349	349	(2) the right of shareholders or participants to
350	350	cumulative voting in the election of directors or managers exists
351	351	only if granted by the state trust company's certificate of
352	352	formation [articles of association].
353	353	(b) Unless expressly authorized by this subtitle or a rule
354	354	of the finance commission, a state trust company may not take an
355	355	action authorized by a law listed under Subsection (a) [or (d)]
356	356	regarding its corporate status, capital structure, or a matter of
357	357	corporate governance, of the type for which a law listed under
358	358	Subsection (a) would require a filing with the secretary of state if
359	359	the state trust company were a filing entity [business corporation
360	360	or a limited liability company], without submitting the filing to
361	361	the banking commissioner for prior written approval of the action.
362	362	(c) The finance commission may adopt rules to alter or
363	363	supplement the procedures and requirements of the laws listed by
364	364	Subsection (a) [or (d)] applicable to an action taken under this
365	365	chapter by a state trust company.
366	366	(d) In this subtitle, a reference to a term or phrase listed
367	367	in a subdivision of Section 1.006, Business Organizations Code,
368	368	includes a synonymous term or phrase referenced by the same
369	369	subdivision in Section 1.006 of that code.
370	370	SECTION 19. The heading to Subchapter B, Chapter 182,
371	371	Finance Code, is amended to read as follows:
372	372	SUBCHAPTER B. AMENDMENT OF CERTIFICATE [ARTICLES]; CHANGES IN
373	373	CAPITAL AND SURPLUS
374	374	SECTION 20. The heading to Section 182.101, Finance Code,
375	375	is amended to read as follows:
376	376	Sec. 182.101. AMENDMENT OR RESTATEMENT OF STATE TRUST
377	377	COMPANY CERTIFICATE OF FORMATION [ARTICLES OF ASSOCIATION].
378	378	SECTION 21. Sections 182.101(a), (b), (c), and (d), Finance
379	379	Code, are amended to read as follows:
380	380	(a) A state trust company that has been granted a charter
381	381	under Section 182.006 or a predecessor statute may amend or restate
382	382	its certificate of formation [articles of association] for any
383	383	lawful purpose, including the creation of authorized but unissued
384	384	shares or participation shares in one or more classes or series.
385	385	(b) An amendment authorizing the issuance of shares or
386	386	participation shares in series must contain:
387	387	(1) the designation of each series and a statement of
388	388	any variations in the preferences, limitations, and relative rights
389	389	among series to the extent that the preferences, limitations, and
390	390	relative rights are to be established in the certificate of
391	391	formation [articles of association]; and
392	392	(2) a statement of any authority to be vested in the
393	393	board to establish series and determine the preferences,
394	394	limitations, and relative rights of each series.
395	395	(c) A limited trust association may not amend its
396	396	certificate of formation [articles of association] to extend its
397	397	period of existence for a perpetual period or for any period of
398	398	years, unless the period of existence is expressly contingent on
399	399	those events resulting in dissolution of the trust association
400	400	under Section 183.208.
401	401	(d) Amendment or restatement of the certificate of
402	402	formation [articles of association] of a state trust company and
403	403	approval of the board and shareholders or participants must be made
404	404	or obtained in accordance with the Business Organizations Code
405	405	[for the amendment or restatement of a certificate of formation by a
406	406	for-profit corporation], except as otherwise provided by this
407	407	subtitle or rules adopted under this subtitle. The original and one
408	408	copy of the certificate [articles] of amendment or restated
409	409	certificate of formation [articles of association] must be filed
410	410	with the banking commissioner for approval. Unless the submission
411	411	presents novel or unusual questions, the banking commissioner shall
412	412	approve or reject the amendment or restatement not later than the
413	413	31st day after the date the banking commissioner considers the
414	414	submission informationally complete and accepted for filing. The
415	415	banking commissioner may require the submission of additional
416	416	information as considered necessary to an informed decision to
417	417	approve or reject any amendment or restatement of a certificate of
418	418	formation [articles of association] under this section.
419	419	SECTION 22. Sections 182.102(a) and (b), Finance Code, are
420	420	amended to read as follows:
421	421	(a) If the certificate of formation [articles of
422	422	association] expressly gives [give] the board authority to
423	423	establish series and determine the preferences, limitations, and
424	424	relative rights of each series, the board may do so only on
425	425	compliance with this section and any rules adopted under this
426	426	chapter.
427	427	(b) A series of shares or participation shares may be
428	428	established in the manner provided by the Business Organizations
429	429	Code [as if a state trust company were a domestic corporation], but
430	430	the shares or participation shares of the series may not be issued
431	431	and sold except on compliance with Section 182.103. The state trust
432	432	company shall file the original and one copy of the statement of
433	433	action required by the Business Organizations Code with the banking
434	434	commissioner.
435	435	SECTION 23. Section 182.301, Finance Code, is amended to
436	436	read as follows:
437	437	Sec. 182.301. MERGER AUTHORITY. (a) Two or more trust
438	438	institutions, corporations, or other entities with the authority to
439	439	participate in a merger, at least one of which is a state trust
440	440	company, may adopt and implement a plan of merger in accordance with
441	441	this section. The merger may not be made without the prior written
442	442	approval of the banking commissioner if any surviving, new, or
443	443	acquiring entity that is a party to the merger or created by the
444	444	terms of the merger is a state trust company or is not a trust
445	445	institution. [Subject to this subchapter and with the prior written
446	446	approval of the banking commissioner, a state trust company may
447	447	merge with another person to the same extent as a for-profit
448	448	corporation under the Business Organizations Code.]
449	449	(b) Implementation of the plan of merger by the parties and
450	450	approval of the board, shareholders, participants, or owners of the
451	451	parties must be made or obtained as provided by the Business
452	452	Organizations Code as if the state trust company were a filing
453	453	entity [domestic corporation] and all other parties to the merger
454	454	were foreign [corporations and other] entities, except as otherwise
455	455	provided by rules adopted under this chapter.
456	456	SECTION 24. Section 182.302(a), Finance Code, is amended to
457	457	read as follows:
458	458	(a) To apply for approval of a merger, the parties must
459	459	submit the original certificate [articles] of merger, a number of
460	460	copies of the certificate [articles] of merger equal to the number
461	461	of surviving, new, and acquiring entities, and an application in
462	462	the form required by the banking commissioner. The banking
463	463	commissioner may require the submission of additional information
464	464	as considered necessary to an informed decision.
465	465	SECTION 25. Section 182.303(a), Finance Code, is amended to
466	466	read as follows:
467	467	(a) If the banking commissioner approves the merger and
468	468	finds that all required filing fees and investigative costs have
469	469	been paid, the banking commissioner shall:
470	470	(1) endorse the face of the original and each copy of
471	471	the certificate [articles] of merger with the date of approval and
472	472	the word "Approved";
473	473	(2) file the original in the department's records; and
474	474	(3) deliver a certified copy of the certificate
475	475	[articles] of merger to each surviving, new, or acquiring entity.
476	476	SECTION 26. Section 182.501(b), Finance Code, is amended to
477	477	read as follows:
478	478	(b) The merger or conversion must be made and approval of
479	479	the state trust company's board, shareholders, or participants must
480	480	be obtained in accordance with the Business Organizations Code as
481	481	if the state trust company were a filing entity [domestic
482	482	corporation] and all other parties to the transaction, if any, were
483	483	foreign [corporations or other] entities, except as may be
484	484	otherwise provided by rule. For purposes of this subsection, a
485	485	conversion is considered a merger into the successor trust
486	486	institution.
487	487	SECTION 27. Section 183.203, Finance Code, is amended to
488	488	read as follows:
489	489	Sec. 183.203. CONTRACTING FOR DEBT OR OBLIGATION. Except
490	490	as provided by this section or the certificate of formation
491	491	[articles of association] of the limited trust association, a debt,
492	492	liability, or other obligation may be contracted for or incurred on
493	493	behalf of a limited trust association only by:
494	494	(1) a majority of the managers, if management of the
495	495	limited trust association has been vested in a board of managers;
496	496	(2) a majority of the managing participants; or
497	497	(3) an officer or other agent vested with actual or
498	498	apparent authority to contract for or incur the debt, liability, or
499	499	other obligation.
500	500	SECTION 28. Sections 183.204(a) and (c), Finance Code, are
501	501	amended to read as follows:
502	502	(a) Management of a limited trust association is vested in
503	503	the participants in proportion to each participant's contribution
504	504	to capital, as adjusted periodically to properly reflect any
505	505	additional contribution. The certificate of formation [articles of
506	506	association] may provide that management of a limited trust
507	507	association is vested in a board of managers to be elected annually
508	508	by the participants as prescribed by the bylaws or the
509	509	participation agreement.
510	510	(c) The certificate of formation [articles of association],
511	511	bylaws, and participation agreement of a limited trust association
512	512	may use the term "director" instead of "manager" and the term
513	513	"board" instead of "board of managers."
514	514	SECTION 29. Sections 183.205(a) and (c), Finance Code, are
515	515	amended to read as follows:
516	516	(a) Except as otherwise provided by this chapter, a
517	517	participant may not receive from a limited trust association any
518	518	part of the participant's contribution to capital unless:
519	519	(1) all liabilities of the limited trust association,
520	520	except liabilities to participants on account of contribution to
521	521	capital, have been paid;
522	522	(2) after the withdrawal or reduction, sufficient
523	523	property of the limited trust association will remain to pay all
524	524	liabilities of the limited trust association, except liabilities to
525	525	participants on account of contribution to capital;
526	526	(3) all participants consent; or
527	527	(4) the certificate of formation is [articles of
528	528	association are] canceled or amended to set out the withdrawal or
529	529	reduction.
530	530	(c) A participant may demand the return of the participant's
531	531	contribution to capital only in cash unless a different form of
532	532	return of the contribution is allowed by the certificate of
533	533	formation [articles of association] or by the unanimous consent of
534	534	all participants.
535	535	SECTION 30. Section 183.207(a), Finance Code, is amended to
536	536	read as follows:
537	537	(a) A limited trust association in which management is
538	538	retained by the participants is not required to adopt bylaws if the
539	539	provisions required by law to be contained in the bylaws are
540	540	contained in the certificate of formation [articles of association]
541	541	or the participation agreement.
542	542	SECTION 31. Section 183.208(a), Finance Code, is amended to
543	543	read as follows:
544	544	(a) A limited trust association organized under this
545	545	chapter is dissolved on:
546	546	(1) the expiration of the period fixed for the
547	547	duration of the limited trust association;
548	548	(2) a vote to dissolve or the execution of a written
549	549	consent to dissolve by all full liability participants, if any, and
550	550	a sufficient number of other participants that, combined with all
551	551	full liability participants, hold at least two-thirds of the
552	552	participation shares in each class in the association, or a greater
553	553	fraction as provided by the certificate of formation [articles of
554	554	association];
555	555	(3) except as provided by the certificate of formation
556	556	[articles of association], the death, insanity, expulsion,
557	557	bankruptcy, retirement, or resignation of a participant unless a
558	558	majority in interest of all remaining participants elect in writing
559	559	not later than the 90th day after the date of the event to continue
560	560	the business of the association; or
561	561	(4) the occurrence of an event of dissolution
562	562	specified in the certificate of formation [articles of
563	563	association].
564	564	SECTION 32. Section 183.209, Finance Code, is amended to
565	565	read as follows:
566	566	Sec. 183.209. ALLOCATION OF PROFITS AND LOSSES. The
567	567	profits and losses of a limited trust association may be allocated
568	568	among the participants and among classes of participants as
569	569	provided by the participation agreement. Without the prior written
570	570	approval of the banking commissioner to use a different allocation
571	571	method, the profits and losses must be allocated according to the
572	572	relative interests of the participants as reflected in the
573	573	certificate of formation [articles of association] and related
574	574	documents filed with and approved by the banking commissioner.
575	575	SECTION 33. Section 183.210, Finance Code, is amended to
576	576	read as follows:
577	577	Sec. 183.210. DISTRIBUTIONS. Subject to Section 182.103,
578	578	distributions of cash or other assets of a limited trust
579	579	association may be made to the participants as provided by the
580	580	participation agreement. Without the prior written approval of the
581	581	banking commissioner to use a different distribution method,
582	582	distributions must be made to the participants according to the
583	583	relative interests of the participants as reflected in the
584	584	certificate of formation [articles of association] and related
585	585	documents filed with and approved by the banking commissioner.
586	586	SECTION 34. Section 186.312(a), Finance Code, is amended to
587	587	read as follows:
588	588	(a) The priority of distribution of assets from the estate
589	589	of a state trust company the trust deposits of which are not insured
590	590	by the Federal Deposit Insurance Corporation or its successor shall
591	591	be in accordance with the order of each class as provided by this
592	592	section. Every claim in each class shall be paid in full, or
593	593	adequate money shall be retained for that payment, before a member
594	594	of the next class may receive any payment. A subclass may not be
595	595	established within a class, except for a preference or
596	596	subordination within a class expressly created by contract or other
597	597	instrument or in the certificate of formation [articles of
598	598	association].
599	599	SECTION 35. Section 186.313(c), Finance Code, is amended to
600	600	read as follows:
601	601	(c) At the meeting, the shareholders or participants shall
602	602	appoint one or more agents to take over the affairs to continue the
603	603	liquidation for the benefit of the shareholders or participants and
604	604	participant-transferees. Voting privileges are governed by the
605	605	state trust company's bylaws and certificate of formation [articles
606	606	of association]. If a quorum cannot be obtained at the meeting, the
607	607	banking commissioner shall appoint an agent. An agent appointed
608	608	under this subsection shall execute and file with the court a bond
609	609	approved by the court, conditioned on the faithful performance of
610	610	all the duties of the trust.
611	611	SECTION 36. Section 204.101(a), Finance Code, is amended to
612	612	read as follows:
613	613	(a) A foreign bank that desires to establish and maintain a
614	614	Texas state branch or agency shall submit an application to the
615	615	commissioner. The application must:
616	616	(1) be accompanied by all application fees and
617	617	deposits required by applicable rules;
618	618	(2) be in the form specified by the commissioner;
619	619	(3) be subscribed and acknowledged by an officer of
620	620	the foreign bank;
621	621	(4) have attached:
622	622	(A) a complete copy of the foreign bank's
623	623	application to the Board of Governors of the Federal Reserve System
624	624	under Section 7(d), International Banking Act (12 U.S.C. Section
625	625	3105(d));
626	626	(B) an authenticated copy of the foreign bank's
627	627	certificate of formation [articles of incorporation] and bylaws or
628	628	other constitutive documents and, if the copy is in a language other
629	629	than English, an English translation of the document, under the
630	630	oath of the translator; and
631	631	(C) evidence of compliance with Section 201.102;
632	632	(5) be submitted when the federal application is
633	633	submitted to the board of governors; and
634	634	(6) include on its face or in accompanying documents:
635	635	(A) the name of the foreign bank;
636	636	(B) the street address where the principal office
637	637	of the Texas state branch or agency is to be located and, if
638	638	different, the Texas state branch or agency's mailing address;
639	639	(C) the name and qualifications of each officer
640	640	and director of the foreign bank who will have control of all or
641	641	part of the business and affairs of the Texas state branch or
642	642	agency;
643	643	(D) a detailed statement of the foreign bank's
644	644	financial condition as of a date not more than 360 days before the
645	645	date of the application; and
646	646	(E) other information that:
647	647	(i) is necessary to enable the commissioner
648	648	to make the findings listed in Section 204.103;
649	649	(ii) is required by rules adopted under
650	650	this subtitle; or
651	651	(iii) the commissioner reasonably
652	652	requests.
653	653	SECTION 37. Section 204.107, Finance Code, is amended to
654	654	read as follows:
655	655	Sec. 204.107. FILING OF AMENDMENTS TO CERTIFICATE OF
656	656	FORMATION [ARTICLES OF INCORPORATION]. If the certificate of
657	657	formation [articles of incorporation] of a foreign bank licensed to
658	658	maintain a Texas state branch or agency is [are] amended, the
659	659	foreign bank shall promptly file with the commissioner a copy of the
660	660	amendment, duly authenticated by the proper officer of the country
661	661	of the foreign bank's organization. The filing does not enlarge or
662	662	alter the business the foreign bank is authorized to pursue in this
663	663	state, authorize the foreign bank to transact business in this
664	664	state under a name other than the name set forth in its license, or
665	665	extend the duration of its corporate existence.
666	666	SECTION 38. Section 204.201(a), Finance Code, is amended to
667	667	read as follows:
668	668	(a) A foreign bank may establish a Texas representative
669	669	office if the foreign bank files with the commissioner a verified
670	670	statement of registration. A statement of registration must:
671	671	(1) be accompanied by all registration fees and
672	672	deposits required by rule;
673	673	(2) be in the form specified by the commissioner;
674	674	(3) be subscribed and acknowledged by an officer of
675	675	the foreign bank;
676	676	(4) contain as an exhibit or attachment:
677	677	(A) a copy of the foreign bank's notice or
678	678	application submitted to the Board of Governors of the Federal
679	679	Reserve System under Section 10, International Banking Act (12
680	680	U.S.C. Section 3107), and, when issued, the order or notification
681	681	from the board of governors indicating that the representative
682	682	office has been approved;
683	683	(B) an authenticated copy of the foreign bank's
684	684	certificate of formation [articles of incorporation] and bylaws or
685	685	other constitutive documents and, if the copy is in a language other
686	686	than English, an English translation of the document, under the
687	687	oath of the translator; and
688	688	(C) evidence of compliance with Section 201.102;
689	689	(5) be submitted when the federal notice or
690	690	application is submitted to the board of governors; and
691	691	(6) directly or in exhibits or attachments contain:
692	692	(A) the name of the foreign bank;
693	693	(B) the street address and post office address
694	694	where each Texas representative office is to be located in this
695	695	state;
696	696	(C) the name and qualifications of each officer
697	697	and director of the foreign bank who will have charge of any aspect
698	698	of the business and affairs of the Texas representative office;
699	699	(D) a complete and detailed statement of the
700	700	financial condition of the foreign bank as of a date not more than
701	701	360 days before the date of the filing; and
702	702	(E) other information the commissioner requires.
703	703	SECTION 39. This Act takes effect immediately if it
704	704	receives a vote of two-thirds of all the members elected to each
705	705	house, as provided by Section 39, Article III, Texas Constitution.
706	706	If this Act does not receive the vote necessary for immediate
707	707	effect, this Act takes effect September 1, 2013.
708	708	* * * * *