Texas 2013 - 83rd Regular

Texas Senate Bill SB804 Compare Versions

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1	1	By: Carona S.B. No. 804
2	2	(Flynn)
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to revising provisions in certain laws governing certain
8	8	banks and trust companies in this state to conform to changes in
9	9	terminology made by the Business Organizations Code.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	SECTION 1. The heading to Section 32.002, Finance Code, is
12	12	amended to read as follows:
13	13	Sec. 32.002. CERTIFICATE OF FORMATION [ARTICLES OF
14	14	ASSOCIATION] OF STATE BANK.
15	15	SECTION 2. Subsections (a) and (c), Section 32.002, Finance
16	16	Code, are amended to read as follows:
17	17	(a) The certificate of formation [articles of association]
18	18	of a state bank must be signed and acknowledged by each organizer
19	19	and must contain:
20	20	(1) the name of the bank, subject to Subsection (b);
21	21	(2) the period of the bank's duration, which may be
22	22	perpetual, subject to Subsection (c);
23	23	(3) the powers of the bank, which may be stated as:
24	24	(A) all powers granted by law to a state bank; or
25	25	(B) a list of the specific powers under Section
26	26	32.001 that the bank chooses to exercise;
27	27	(4) the aggregate number of shares that the bank will
28	28	be authorized to issue and the number of classes of shares, which
29	29	may be one or more;
30	30	(5) if the shares are to be divided into classes:
31	31	(A) the designation of each class and statement
32	32	of the preferences, limitations, and relative rights of the shares
33	33	of each class, which in the case of a limited banking association
34	34	may be more fully set forth in the participation agreement;
35	35	(B) the number of shares of each class; and
36	36	(C) a statement of the par value of the shares of
37	37	each class or that the shares are to be without par value;
38	38	(6) any provision limiting or denying to shareholders
39	39	the preemptive right to acquire additional or treasury shares of
40	40	the bank;
41	41	(7) any provision granting the right of shareholders
42	42	to cumulative voting in the election of directors;
43	43	(8) the aggregate amount of consideration to be
44	44	received for all shares initially issued by the bank and a statement
45	45	that:
46	46	(A) all authorized shares have been subscribed;
47	47	and
48	48	(B) all subscriptions received have been
49	49	irrevocably paid in cash;
50	50	(9) any provision that is otherwise required by this
51	51	subtitle to be set forth in the certificate of formation [articles
52	52	of association];
53	53	(10) the street address of the bank's initial home
54	54	office;
55	55	(11) the number of directors constituting the initial
56	56	board and the names and street addresses of the persons who are to
57	57	serve as directors until the first annual meeting of shareholders
58	58	or until successor directors have been elected and qualified; and
59	59	(12) subject to Section 32.008, any provision
60	60	consistent with law that the organizers elect to set forth in the
61	61	certificate of formation [articles of association] for the
62	62	regulation of the internal affairs of the bank, including
63	63	provisions permissible under the Business Organizations Code for:
64	64	(A) a for-profit corporation, in the case of a
65	65	proposed banking association; or
66	66	(B) a limited liability company, in the case of a
67	67	proposed limited banking association.
68	68	(c) A state bank, other than a private bank, organized
69	69	before August 31, 1993, is considered to have perpetual existence,
70	70	notwithstanding a contrary statement in its articles of
71	71	association, unless after September 1, 1995, the bank amends its
72	72	certificate of formation or articles of association to reaffirm its
73	73	limited duration.
74	74	SECTION 3. Section 32.008, Finance Code, is amended to read
75	75	as follows:
76	76	Sec. 32.008. APPLICATION OF GENERAL CORPORATE LAW.
77	77	(a) The Business Organizations Code applies to a banking
78	78	association as if it were a for-profit corporation, and to a limited
79	79	banking association as if it were a limited liability company, to
80	80	the extent not inconsistent with this subtitle or the proper
81	81	business of a state bank, except that:
82	82	(1) a reference in the Business Organizations Code to
83	83	the secretary of state means the banking commissioner unless the
84	84	context requires otherwise; and
85	85	(2) the right of shareholders to cumulative voting in
86	86	the election of directors exists only if granted by the bank's
87	87	certificate of formation [articles of association].
88	88	(b) The finance commission may adopt rules to limit or
89	89	refine the applicability of the laws listed by Subsection (a) [or
90	90	(d)] to a state bank or to alter or supplement the procedures and
91	91	requirements of those laws applicable to an action taken under this
92	92	chapter.
93	93	(c) Unless expressly authorized by this subtitle or a rule
94	94	adopted under this subtitle, a state bank may not take an action
95	95	authorized by a law listed by Subsection (a) [or (d)] regarding its
96	96	corporate status, its capital structure, or a matter of corporate
97	97	governance, of the type for which those laws would require a filing
98	98	with the secretary of state if the bank were a filing entity
99	99	[business corporation], without submitting the filing to the
100	100	banking commissioner and obtaining the banking commissioner's
101	101	prior written approval of the action.
102	102	(d) In this subtitle, a reference to a term or phrase listed
103	103	in a subdivision of Section 1.006, Business Organizations Code,
104	104	includes a synonymous term or phrase referenced by the same
105	105	subdivision in Section 1.006 of that code.
106	106	SECTION 4. The heading to Subchapter B, Chapter 32, Finance
107	107	Code, is amended to read as follows:
108	108	SUBCHAPTER B. AMENDMENT OF CERTIFICATE [ARTICLES]; CHANGES IN
109	109	CAPITAL AND SURPLUS
110	110	SECTION 5. The heading to Section 32.101, Finance Code, is
111	111	amended to read as follows:
112	112	Sec. 32.101. AMENDMENT OR RESTATEMENT OF STATE BANK
113	113	CERTIFICATE OF FORMATION [ARTICLES OF ASSOCIATION].
114	114	SECTION 6. Subsections (a), (b), and (c), Section 32.101,
115	115	Finance Code, are amended to read as follows:
116	116	(a) A state bank that has been granted a certificate of
117	117	authority may amend or restate its certificate of formation
118	118	[articles of association] for any lawful purpose, including the
119	119	creation of authorized but unissued shares or participation shares
120	120	in one or more classes or series.
121	121	(b) An amendment authorizing the issuance of shares or
122	122	participation shares in series must contain:
123	123	(1) the designation of each series and a statement of
124	124	any variations in the preferences, limitations, and relative rights
125	125	among series to the extent that the preferences, limitations, and
126	126	relative rights are to be established in the certificate of
127	127	formation [articles of association]; and
128	128	(2) a statement of any authority to be vested in the
129	129	bank's board to establish series and determine the preferences,
130	130	limitations, and relative rights of each series.
131	131	(c) Amendment or restatement of the certificate of
132	132	formation [articles of association] of a state bank and approval of
133	133	the bank's board and shareholders must be made or obtained as
134	134	provided by the Business Organizations Code [for the amendment or
135	135	restatement of a certificate of formation by a for-profit
136	136	corporation] except as otherwise provided by this subtitle or rules
137	137	adopted under this subtitle. The original and one copy of the
138	138	certificate [articles] of amendment or restated certificate of
139	139	formation [articles of association] must be filed with the banking
140	140	commissioner for approval. Unless the submission presents novel or
141	141	unusual questions, the banking commissioner shall approve or reject
142	142	the amendment or restatement not later than the 31st day after the
143	143	date the banking commissioner considers the submission
144	144	informationally complete and accepted for filing. The banking
145	145	commissioner may require the submission of additional information
146	146	as considered necessary to an informed decision to approve or
147	147	reject any amendment or restatement of a certificate of formation
148	148	[articles of association] under this section. If the banking
149	149	commissioner finds that the amendment or restatement conforms to
150	150	law and any conditions imposed by the banking commissioner, and any
151	151	required filing fee has been paid, the banking commissioner shall:
152	152	(1) endorse the face of the original and copy of the
153	153	amendment or restatement with the date of approval and the word
154	154	"Approved";
155	155	(2) file the original of the amendment or restatement
156	156	in the department's records; and
157	157	(3) deliver a certified copy of the amendment or
158	158	restatement to the bank.
159	159	SECTION 7. Subsections (a) and (b), Section 32.102, Finance
160	160	Code, are amended to read as follows:
161	161	(a) If the certificate of formation [articles of
162	162	association] expressly gives [give] the board of a state bank
163	163	authority to establish shares in series and determine the
164	164	preferences, limitations, and relative rights of each series, the
165	165	board may do so only in compliance with this section and any rules
166	166	adopted under this subtitle.
167	167	(b) A series of shares may be established in the manner
168	168	provided by the Business Organizations Code [as if the state bank
169	169	were a domestic entity], but the shares of the series may not be
170	170	issued and sold without the prior written approval of the banking
171	171	commissioner under Section 32.103. The bank shall file the
172	172	original and one copy of the statement of action required by the
173	173	Business Organizations Code with the banking commissioner.
174	174	SECTION 8. Subsection (b), Section 32.301, Finance Code, is
175	175	amended to read as follows:
176	176	(b) Implementation of the merger by the parties and approval
177	177	of the board, shareholders, or owners of the parties must be made or
178	178	obtained in accordance with the Business Organizations Code as if
179	179	the state bank were a filing [domestic] entity and all other parties
180	180	to the merger were foreign entities, except as may be otherwise
181	181	provided by applicable rules.
182	182	SECTION 9. Subsections (a) and (c), Section 32.302, Finance
183	183	Code, are amended to read as follows:
184	184	(a) If the merger is subject to the prior written approval
185	185	of the banking commissioner, the original certificate [articles] of
186	186	merger and a number of copies of the certificate [articles] equal to
187	187	the number of surviving, new, and acquiring entities must be filed
188	188	with the banking commissioner. On this filing, the banking
189	189	commissioner shall investigate the condition of the merging
190	190	parties. The banking commissioner may require the submission of
191	191	additional information the banking commissioner determines
192	192	necessary to an informed decision to approve or reject a merger
193	193	under this subchapter.
194	194	(c) If the banking commissioner approves the merger and
195	195	finds that all required filing fees and investigative costs have
196	196	been paid, the banking commissioner shall:
197	197	(1) endorse the face of the original and each copy of
198	198	the certificate [articles] of merger with the date of approval and
199	199	the word "Approved";
200	200	(2) file the original of the certificate [articles] of
201	201	merger in the department's records; and
202	202	(3) deliver a certified copy of the certificate
203	203	[articles] of merger to each surviving, new, or acquiring entity.
204	204	SECTION 10. Subsection (b), Section 32.501, Finance Code,
205	205	is amended to read as follows:
206	206	(b) The merger or conversion by the state bank must be made
207	207	and approval of its board and shareholders must be obtained in
208	208	accordance with the Business Organizations Code as if the state
209	209	bank were a filing [domestic] entity and all other parties to the
210	210	transaction, if any, were foreign entities, except as provided by
211	211	rule. For purposes of this subsection, a conversion is considered a
212	212	merger into the successor form of financial institution.
213	213	SECTION 11. Subsection (c), Section 33.204, Finance Code,
214	214	is amended to read as follows:
215	215	(c) The certificate of formation [articles of association],
216	216	bylaws, and participation agreement of a limited banking
217	217	association may use "director" instead of "manager" and "board"
218	218	instead of "board of managers."
219	219	SECTION 12. Section 33.209, Finance Code, is amended to
220	220	read as follows:
221	221	Sec. 33.209. ALLOCATION OF PROFITS AND LOSSES. The profits
222	222	and losses of a limited banking association may be allocated among
223	223	the participants and among classes of participants as provided by
224	224	the participation agreement. Without the prior written approval of
225	225	the banking commissioner to use a different allocation method, the
226	226	profits and losses must be allocated according to the relative
227	227	interests of the participants as reflected in the certificate of
228	228	formation [articles of association] and related documents filed
229	229	with and approved by the banking commissioner.
230	230	SECTION 13. Section 33.210, Finance Code, is amended to
231	231	read as follows:
232	232	Sec. 33.210. DISTRIBUTIONS. Subject to Section 32.103,
233	233	distributions of cash or other assets of a limited banking
234	234	association may be made to the participants as provided by the
235	235	participation agreement. Without the prior written approval of the
236	236	banking commissioner to use a different distribution method,
237	237	distributions must be made to the participants according to the
238	238	relative interests of the participants as reflected in the
239	239	certificate of formation [articles of association] and related
240	240	documents filed with and approved by the banking commissioner.
241	241	SECTION 14. Subsection (a), Section 36.312, Finance Code,
242	242	is amended to read as follows:
243	243	(a) The priority of distribution of assets from the estate
244	244	of a bank the deposits of which are not insured by the Federal
245	245	Deposit Insurance Corporation or its successor shall be in
246	246	accordance with the order of each class as provided by this section.
247	247	Every claim in each class shall be paid in full, or adequate money
248	248	shall be retained for that payment, before a member of the next
249	249	class receives any payment. A subclass may not be established
250	250	within a class, except for a preference or subordination within a
251	251	class expressly created by contract or other instrument or in the
252	252	certificate of formation [articles of association].
253	253	SECTION 15. Subsection (c), Section 36.313, Finance Code,
254	254	is amended to read as follows:
255	255	(c) At the meeting, the shareholders shall appoint one or
256	256	more agents to take over the affairs to continue the liquidation for
257	257	the benefit of the shareholders. Voting privileges are governed by
258	258	the bank's bylaws and certificate of formation [articles of
259	259	association]. If a quorum cannot be obtained at the meeting, the
260	260	banking commissioner shall appoint an agent. An agent appointed
261	261	under this subsection shall execute and file with the court a bond
262	262	approved by the court, conditioned on the faithful performance of
263	263	all the duties of the trust.
264	264	SECTION 16. The heading to Section 182.002, Finance Code,
265	265	is amended to read as follows:
266	266	Sec. 182.002. CERTIFICATE OF FORMATION [ARTICLES OF
267	267	ASSOCIATION] OF STATE TRUST COMPANY.
268	268	SECTION 17. Subsections (a) and (c), Section 182.002,
269	269	Finance Code, are amended to read as follows:
270	270	(a) The certificate of formation [articles of association]
271	271	of a state trust company must be signed and acknowledged by each
272	272	organizer and must contain:
273	273	(1) the name of the state trust company, subject to
274	274	Subsection (b);
275	275	(2) the period of the state trust company's duration,
276	276	which may be perpetual;
277	277	(3) the powers of the state trust company, which may be
278	278	stated as:
279	279	(A) all powers granted to a state trust company
280	280	in this state; or
281	281	(B) a list of the specific powers that the state
282	282	trust company chooses and is authorized to exercise;
283	283	(4) the aggregate number of shares, or participation
284	284	shares in the case of a limited trust association, that the state
285	285	trust company will be authorized to issue, and the number of classes
286	286	of shares or participation shares, which may be one or more;
287	287	(5) if the shares or participation shares are to be
288	288	divided into classes:
289	289	(A) the designation of each class and statement
290	290	of the preferences, limitations, and relative rights of the shares
291	291	or participation shares of each class, which in the case of a
292	292	limited trust association may be more fully set forth in the
293	293	participation agreement;
294	294	(B) the number of shares or participation shares
295	295	of each class; and
296	296	(C) a statement of the par value of the shares or
297	297	participation shares of each class or that the shares or
298	298	participation shares are to be without par value;
299	299	(6) any provision limiting or denying to shareholders
300	300	or participants the preemptive right to acquire additional or
301	301	treasury shares or participation shares of the state trust company;
302	302	(7) any provision granting the right of shareholders
303	303	or participants to cumulative voting in the election of directors
304	304	or managers;
305	305	(8) the aggregate amount of consideration to be
306	306	received for all shares or participation shares initially issued by
307	307	the state trust company and a statement that:
308	308	(A) all authorized shares or participation
309	309	shares have been subscribed; and
310	310	(B) all subscriptions received have been
311	311	irrevocably paid in cash;
312	312	(9) any provision consistent with law that the
313	313	organizers elect to set forth in the certificate of formation
314	314	[articles of association] for the regulation of the internal
315	315	affairs of the state trust company or that is otherwise required by
316	316	this subtitle to be set forth in the certificate of formation
317	317	[articles of association];
318	318	(10) the street address of the state trust company's
319	319	home office; and
320	320	(11) either:
321	321	(A) the number of directors or managers
322	322	constituting the initial board and the names and street addresses
323	323	of the persons who are to serve as directors or managers until the
324	324	first annual meeting of shareholders or participants or until
325	325	successor directors or managers have been elected and qualified; or
326	326	(B) the statement described by Subsection (c).
327	327	(c) The organizers of a limited trust association that will
328	328	have not fewer than five or more than 25 participants may include in
329	329	the certificate of formation [articles of association] a statement
330	330	that management is vested in a board composed of all participants,
331	331	with management authority vested in each participant in proportion
332	332	to the participant's contribution to capital as adjusted from time
333	333	to time to properly reflect any additional contribution, and the
334	334	names and street addresses of the persons who are to be the initial
335	335	managing participants.
336	336	SECTION 18. Section 182.009, Finance Code, is amended to
337	337	read as follows:
338	338	Sec. 182.009. APPLICATION OF GENERAL CORPORATE LAW.
339	339	(a) The Business Organizations Code applies to a trust association
340	340	as if it were a for-profit corporation, and to a limited trust
341	341	association as if it were a limited liability company, to the extent
342	342	not inconsistent with this subtitle or the proper business of a
343	343	state trust company, except that:
344	344	(1) a reference to the secretary of state means the
345	345	banking commissioner unless the context requires otherwise; and
346	346	(2) the right of shareholders or participants to
347	347	cumulative voting in the election of directors or managers exists
348	348	only if granted by the state trust company's certificate of
349	349	formation [articles of association].
350	350	(b) Unless expressly authorized by this subtitle or a rule
351	351	of the finance commission, a state trust company may not take an
352	352	action authorized by a law listed under Subsection (a) [or (d)]
353	353	regarding its corporate status, capital structure, or a matter of
354	354	corporate governance, of the type for which a law listed under
355	355	Subsection (a) would require a filing with the secretary of state if
356	356	the state trust company were a filing entity [business corporation
357	357	or a limited liability company], without submitting the filing to
358	358	the banking commissioner for prior written approval of the action.
359	359	(c) The finance commission may adopt rules to alter or
360	360	supplement the procedures and requirements of the laws listed by
361	361	Subsection (a) [or (d)] applicable to an action taken under this
362	362	chapter by a state trust company.
363	363	(d) In this subtitle, a reference to a term or phrase listed
364	364	in a subdivision of Section 1.006, Business Organizations Code,
365	365	includes a synonymous term or phrase referenced by the same
366	366	subdivision in Section 1.006 of that code.
367	367	SECTION 19. The heading to Subchapter B, Chapter 182,
368	368	Finance Code, is amended to read as follows:
369	369	SUBCHAPTER B. AMENDMENT OF CERTIFICATE [ARTICLES]; CHANGES IN
370	370	CAPITAL AND SURPLUS
371	371	SECTION 20. The heading to Section 182.101, Finance Code,
372	372	is amended to read as follows:
373	373	Sec. 182.101. AMENDMENT OR RESTATEMENT OF STATE TRUST
374	374	COMPANY CERTIFICATE OF FORMATION [ARTICLES OF ASSOCIATION].
375	375	SECTION 21. Subsections (a), (b), (c), and (d), Section
376	376	182.101, Finance Code, are amended to read as follows:
377	377	(a) A state trust company that has been granted a charter
378	378	under Section 182.006 or a predecessor statute may amend or restate
379	379	its certificate of formation [articles of association] for any
380	380	lawful purpose, including the creation of authorized but unissued
381	381	shares or participation shares in one or more classes or series.
382	382	(b) An amendment authorizing the issuance of shares or
383	383	participation shares in series must contain:
384	384	(1) the designation of each series and a statement of
385	385	any variations in the preferences, limitations, and relative rights
386	386	among series to the extent that the preferences, limitations, and
387	387	relative rights are to be established in the certificate of
388	388	formation [articles of association]; and
389	389	(2) a statement of any authority to be vested in the
390	390	board to establish series and determine the preferences,
391	391	limitations, and relative rights of each series.
392	392	(c) A limited trust association may not amend its
393	393	certificate of formation [articles of association] to extend its
394	394	period of existence for a perpetual period or for any period of
395	395	years, unless the period of existence is expressly contingent on
396	396	those events resulting in dissolution of the trust association
397	397	under Section 183.208.
398	398	(d) Amendment or restatement of the certificate of
399	399	formation [articles of association] of a state trust company and
400	400	approval of the board and shareholders or participants must be made
401	401	or obtained in accordance with the Business Organizations Code [for
402	402	the amendment or restatement of a certificate of formation by a
403	403	for-profit corporation], except as otherwise provided by this
404	404	subtitle or rules adopted under this subtitle. The original and one
405	405	copy of the certificate [articles] of amendment or restated
406	406	certificate of formation [articles of association] must be filed
407	407	with the banking commissioner for approval. Unless the submission
408	408	presents novel or unusual questions, the banking commissioner shall
409	409	approve or reject the amendment or restatement not later than the
410	410	31st day after the date the banking commissioner considers the
411	411	submission informationally complete and accepted for filing. The
412	412	banking commissioner may require the submission of additional
413	413	information as considered necessary to an informed decision to
414	414	approve or reject any amendment or restatement of a certificate of
415	415	formation [articles of association] under this section.
416	416	SECTION 22. Subsections (a) and (b), Section 182.102,
417	417	Finance Code, are amended to read as follows:
418	418	(a) If the certificate of formation [articles of
419	419	association] expressly gives [give] the board authority to
420	420	establish series and determine the preferences, limitations, and
421	421	relative rights of each series, the board may do so only on
422	422	compliance with this section and any rules adopted under this
423	423	chapter.
424	424	(b) A series of shares or participation shares may be
425	425	established in the manner provided by the Business Organizations
426	426	Code [as if a state trust company were a domestic corporation], but
427	427	the shares or participation shares of the series may not be issued
428	428	and sold except on compliance with Section 182.103. The state trust
429	429	company shall file the original and one copy of the statement of
430	430	action required by the Business Organizations Code with the banking
431	431	commissioner.
432	432	SECTION 23. Section 182.301, Finance Code, is amended to
433	433	read as follows:
434	434	Sec. 182.301. MERGER AUTHORITY. (a) Two or more trust
435	435	institutions, corporations, or other entities with the authority to
436	436	participate in a merger, at least one of which is a state trust
437	437	company, may adopt and implement a plan of merger in accordance with
438	438	this section. The merger may not be made without the prior written
439	439	approval of the banking commissioner if any surviving, new, or
440	440	acquiring entity that is a party to the merger or created by the
441	441	terms of the merger is a state trust company or is not a trust
442	442	institution [Subject to this subchapter and with the prior written
443	443	approval of the banking commissioner, a state trust company may
444	444	merge with another person to the same extent as a for-profit
445	445	corporation under the Business Organizations Code].
446	446	(b) Implementation of the plan of merger by the parties and
447	447	approval of the board, shareholders, participants, or owners of the
448	448	parties must be made or obtained as provided by the Business
449	449	Organizations Code as if the state trust company were a filing
450	450	entity [domestic corporation] and all other parties to the merger
451	451	were foreign [corporations and other] entities, except as otherwise
452	452	provided by rules adopted under this chapter.
453	453	SECTION 24. Subsection (a), Section 182.302, Finance Code,
454	454	is amended to read as follows:
455	455	(a) To apply for approval of a merger, the parties must
456	456	submit the original certificate [articles] of merger, a number of
457	457	copies of the certificate [articles] of merger equal to the number
458	458	of surviving, new, and acquiring entities, and an application in
459	459	the form required by the banking commissioner. The banking
460	460	commissioner may require the submission of additional information
461	461	as considered necessary to an informed decision.
462	462	SECTION 25. Subsection (a), Section 182.303, Finance Code,
463	463	is amended to read as follows:
464	464	(a) If the banking commissioner approves the merger and
465	465	finds that all required filing fees and investigative costs have
466	466	been paid, the banking commissioner shall:
467	467	(1) endorse the face of the original and each copy of
468	468	the certificate [articles] of merger with the date of approval and
469	469	the word "Approved";
470	470	(2) file the original in the department's records; and
471	471	(3) deliver a certified copy of the certificate
472	472	[articles] of merger to each surviving, new, or acquiring entity.
473	473	SECTION 26. Subsection (b), Section 182.501, Finance Code,
474	474	is amended to read as follows:
475	475	(b) The merger or conversion must be made and approval of
476	476	the state trust company's board, shareholders, or participants must
477	477	be obtained in accordance with the Business Organizations Code as
478	478	if the state trust company were a filing entity [domestic
479	479	corporation] and all other parties to the transaction, if any, were
480	480	foreign [corporations or other] entities, except as may be
481	481	otherwise provided by rule. For purposes of this subsection, a
482	482	conversion is considered a merger into the successor trust
483	483	institution.
484	484	SECTION 27. Section 183.203, Finance Code, is amended to
485	485	read as follows:
486	486	Sec. 183.203. CONTRACTING FOR DEBT OR OBLIGATION. Except
487	487	as provided by this section or the certificate of formation
488	488	[articles of association] of the limited trust association, a debt,
489	489	liability, or other obligation may be contracted for or incurred on
490	490	behalf of a limited trust association only by:
491	491	(1) a majority of the managers, if management of the
492	492	limited trust association has been vested in a board of managers;
493	493	(2) a majority of the managing participants; or
494	494	(3) an officer or other agent vested with actual or
495	495	apparent authority to contract for or incur the debt, liability, or
496	496	other obligation.
497	497	SECTION 28. Subsections (a) and (c), Section 183.204,
498	498	Finance Code, are amended to read as follows:
499	499	(a) Management of a limited trust association is vested in
500	500	the participants in proportion to each participant's contribution
501	501	to capital, as adjusted periodically to properly reflect any
502	502	additional contribution. The certificate of formation [articles of
503	503	association] may provide that management of a limited trust
504	504	association is vested in a board of managers to be elected annually
505	505	by the participants as prescribed by the bylaws or the
506	506	participation agreement.
507	507	(c) The certificate of formation [articles of association],
508	508	bylaws, and participation agreement of a limited trust association
509	509	may use the term "director" instead of "manager" and the term
510	510	"board" instead of "board of managers."
511	511	SECTION 29. Subsections (a) and (c), Section 183.205,
512	512	Finance Code, are amended to read as follows:
513	513	(a) Except as otherwise provided by this chapter, a
514	514	participant may not receive from a limited trust association any
515	515	part of the participant's contribution to capital unless:
516	516	(1) all liabilities of the limited trust association,
517	517	except liabilities to participants on account of contribution to
518	518	capital, have been paid;
519	519	(2) after the withdrawal or reduction, sufficient
520	520	property of the limited trust association will remain to pay all
521	521	liabilities of the limited trust association, except liabilities to
522	522	participants on account of contribution to capital;
523	523	(3) all participants consent; or
524	524	(4) the certificate of formation is [articles of
525	525	association are] canceled or amended to set out the withdrawal or
526	526	reduction.
527	527	(c) A participant may demand the return of the participant's
528	528	contribution to capital only in cash unless a different form of
529	529	return of the contribution is allowed by the certificate of
530	530	formation [articles of association] or by the unanimous consent of
531	531	all participants.
532	532	SECTION 30. Subsection (a), Section 183.207, Finance Code,
533	533	is amended to read as follows:
534	534	(a) A limited trust association in which management is
535	535	retained by the participants is not required to adopt bylaws if the
536	536	provisions required by law to be contained in the bylaws are
537	537	contained in the certificate of formation [articles of association]
538	538	or the participation agreement.
539	539	SECTION 31. Subsection (a), Section 183.208, Finance Code,
540	540	is amended to read as follows:
541	541	(a) A limited trust association organized under this
542	542	chapter is dissolved on:
543	543	(1) the expiration of the period fixed for the
544	544	duration of the limited trust association;
545	545	(2) a vote to dissolve or the execution of a written
546	546	consent to dissolve by all full liability participants, if any, and
547	547	a sufficient number of other participants that, combined with all
548	548	full liability participants, hold at least two-thirds of the
549	549	participation shares in each class in the association, or a greater
550	550	fraction as provided by the certificate of formation [articles of
551	551	association];
552	552	(3) except as provided by the certificate of formation
553	553	[articles of association], the death, insanity, expulsion,
554	554	bankruptcy, retirement, or resignation of a participant unless a
555	555	majority in interest of all remaining participants elect in writing
556	556	not later than the 90th day after the date of the event to continue
557	557	the business of the association; or
558	558	(4) the occurrence of an event of dissolution
559	559	specified in the certificate of formation [articles of
560	560	association].
561	561	SECTION 32. Section 183.209, Finance Code, is amended to
562	562	read as follows:
563	563	Sec. 183.209. ALLOCATION OF PROFITS AND LOSSES. The
564	564	profits and losses of a limited trust association may be allocated
565	565	among the participants and among classes of participants as
566	566	provided by the participation agreement. Without the prior written
567	567	approval of the banking commissioner to use a different allocation
568	568	method, the profits and losses must be allocated according to the
569	569	relative interests of the participants as reflected in the
570	570	certificate of formation [articles of association] and related
571	571	documents filed with and approved by the banking commissioner.
572	572	SECTION 33. Section 183.210, Finance Code, is amended to
573	573	read as follows:
574	574	Sec. 183.210. DISTRIBUTIONS. Subject to Section 182.103,
575	575	distributions of cash or other assets of a limited trust
576	576	association may be made to the participants as provided by the
577	577	participation agreement. Without the prior written approval of the
578	578	banking commissioner to use a different distribution method,
579	579	distributions must be made to the participants according to the
580	580	relative interests of the participants as reflected in the
581	581	certificate of formation [articles of association] and related
582	582	documents filed with and approved by the banking commissioner.
583	583	SECTION 34. Subsection (a), Section 186.312, Finance Code,
584	584	is amended to read as follows:
585	585	(a) The priority of distribution of assets from the estate
586	586	of a state trust company the trust deposits of which are not insured
587	587	by the Federal Deposit Insurance Corporation or its successor shall
588	588	be in accordance with the order of each class as provided by this
589	589	section. Every claim in each class shall be paid in full, or
590	590	adequate money shall be retained for that payment, before a member
591	591	of the next class may receive any payment. A subclass may not be
592	592	established within a class, except for a preference or
593	593	subordination within a class expressly created by contract or other
594	594	instrument or in the certificate of formation [articles of
595	595	association].
596	596	SECTION 35. Subsection (c), Section 186.313, Finance Code,
597	597	is amended to read as follows:
598	598	(c) At the meeting, the shareholders or participants shall
599	599	appoint one or more agents to take over the affairs to continue the
600	600	liquidation for the benefit of the shareholders or participants and
601	601	participant-transferees. Voting privileges are governed by the
602	602	state trust company's bylaws and certificate of formation [articles
603	603	of association]. If a quorum cannot be obtained at the meeting, the
604	604	banking commissioner shall appoint an agent. An agent appointed
605	605	under this subsection shall execute and file with the court a bond
606	606	approved by the court, conditioned on the faithful performance of
607	607	all the duties of the trust.
608	608	SECTION 36. Subsection (a), Section 204.101, Finance Code,
609	609	is amended to read as follows:
610	610	(a) A foreign bank that desires to establish and maintain a
611	611	Texas state branch or agency shall submit an application to the
612	612	commissioner. The application must:
613	613	(1) be accompanied by all application fees and
614	614	deposits required by applicable rules;
615	615	(2) be in the form specified by the commissioner;
616	616	(3) be subscribed and acknowledged by an officer of
617	617	the foreign bank;
618	618	(4) have attached:
619	619	(A) a complete copy of the foreign bank's
620	620	application to the Board of Governors of the Federal Reserve System
621	621	under Section 7(d), International Banking Act (12 U.S.C. Section
622	622	3105(d));
623	623	(B) an authenticated copy of the foreign bank's
624	624	certificate of formation [articles of incorporation] and bylaws or
625	625	other constitutive documents and, if the copy is in a language other
626	626	than English, an English translation of the document, under the
627	627	oath of the translator; and
628	628	(C) evidence of compliance with Section 201.102;
629	629	(5) be submitted when the federal application is
630	630	submitted to the board of governors; and
631	631	(6) include on its face or in accompanying documents:
632	632	(A) the name of the foreign bank;
633	633	(B) the street address where the principal office
634	634	of the Texas state branch or agency is to be located and, if
635	635	different, the Texas state branch or agency's mailing address;
636	636	(C) the name and qualifications of each officer
637	637	and director of the foreign bank who will have control of all or
638	638	part of the business and affairs of the Texas state branch or
639	639	agency;
640	640	(D) a detailed statement of the foreign bank's
641	641	financial condition as of a date not more than 360 days before the
642	642	date of the application; and
643	643	(E) other information that:
644	644	(i) is necessary to enable the commissioner
645	645	to make the findings listed in Section 204.103;
646	646	(ii) is required by rules adopted under
647	647	this subtitle; or
648	648	(iii) the commissioner reasonably
649	649	requests.
650	650	SECTION 37. Section 204.107, Finance Code, is amended to
651	651	read as follows:
652	652	Sec. 204.107. FILING OF AMENDMENTS TO CERTIFICATE OF
653	653	FORMATION [ARTICLES OF INCORPORATION]. If the certificate of
654	654	formation [articles of incorporation] of a foreign bank licensed to
655	655	maintain a Texas state branch or agency is [are] amended, the
656	656	foreign bank shall promptly file with the commissioner a copy of the
657	657	amendment, duly authenticated by the proper officer of the country
658	658	of the foreign bank's organization. The filing does not enlarge or
659	659	alter the business the foreign bank is authorized to pursue in this
660	660	state, authorize the foreign bank to transact business in this
661	661	state under a name other than the name set forth in its license, or
662	662	extend the duration of its corporate existence.
663	663	SECTION 38. Subsection (a), Section 204.201, Finance Code,
664	664	is amended to read as follows:
665	665	(a) A foreign bank may establish a Texas representative
666	666	office if the foreign bank files with the commissioner a verified
667	667	statement of registration. A statement of registration must:
668	668	(1) be accompanied by all registration fees and
669	669	deposits required by rule;
670	670	(2) be in the form specified by the commissioner;
671	671	(3) be subscribed and acknowledged by an officer of
672	672	the foreign bank;
673	673	(4) contain as an exhibit or attachment:
674	674	(A) a copy of the foreign bank's notice or
675	675	application submitted to the Board of Governors of the Federal
676	676	Reserve System under Section 10, International Banking Act (12
677	677	U.S.C. Section 3107), and, when issued, the order or notification
678	678	from the board of governors indicating that the representative
679	679	office has been approved;
680	680	(B) an authenticated copy of the foreign bank's
681	681	certificate of formation [articles of incorporation] and bylaws or
682	682	other constitutive documents and, if the copy is in a language other
683	683	than English, an English translation of the document, under the
684	684	oath of the translator; and
685	685	(C) evidence of compliance with Section 201.102;
686	686	(5) be submitted when the federal notice or
687	687	application is submitted to the board of governors; and
688	688	(6) directly or in exhibits or attachments contain:
689	689	(A) the name of the foreign bank;
690	690	(B) the street address and post office address
691	691	where each Texas representative office is to be located in this
692	692	state;
693	693	(C) the name and qualifications of each officer
694	694	and director of the foreign bank who will have charge of any aspect
695	695	of the business and affairs of the Texas representative office;
696	696	(D) a complete and detailed statement of the
697	697	financial condition of the foreign bank as of a date not more than
698	698	360 days before the date of the filing; and
699	699	(E) other information the commissioner requires.
700	700	SECTION 39. This Act takes effect immediately if it
701	701	receives a vote of two-thirds of all the members elected to each
702	702	house, as provided by Section 39, Article III, Texas Constitution.
703	703	If this Act does not receive the vote necessary for immediate
704	704	effect, this Act takes effect September 1, 2013.