| 1 | 1 | | 88R12649 SRA-F |
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| 2 | 2 | | By: Lambert, Ashby H.B. No. 3576 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | A BILL TO BE ENTITLED |
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| 6 | 6 | | AN ACT |
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| 7 | 7 | | relating to the regulation of state trust companies. |
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| 8 | 8 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 9 | 9 | | SECTION 1. Section 182.502(b), Finance Code, is amended to |
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| 10 | 10 | | read as follows: |
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| 11 | 11 | | (b) A trust institution applying to convert into a state |
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| 12 | 12 | | trust company may receive a certificate of authority to do business |
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| 13 | 13 | | as a state trust company if the banking commissioner finds that: |
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| 14 | 14 | | (1) the trust institution is not engaging in a pattern |
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| 15 | 15 | | or practice of unsafe and unsound fiduciary or banking practices; |
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| 16 | 16 | | (2) the trust institution has adequate capitalization |
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| 17 | 17 | | for a state trust company to act as a fiduciary at the same |
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| 18 | 18 | | locations as the trust institution is acting as a fiduciary before |
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| 19 | 19 | | the conversion; |
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| 20 | 20 | | (3) the trust institution can be expected to operate |
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| 21 | 21 | | profitably after the conversion; |
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| 22 | 22 | | (4) the officers and directors of the trust |
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| 23 | 23 | | institution as a group have sufficient fiduciary [banking] |
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| 24 | 24 | | experience, ability, standing, competence, trustworthiness, and |
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| 25 | 25 | | integrity to justify a belief that the trust institution will |
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| 26 | 26 | | operate as a state trust company in compliance with law; and |
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| 27 | 27 | | (5) each principal shareholder has sufficient |
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| 28 | 28 | | experience, ability, standing, competence, trustworthiness, and |
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| 29 | 29 | | integrity to justify a belief that the trust institution will be |
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| 30 | 30 | | free from improper or unlawful influence or interference with |
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| 31 | 31 | | respect to the trust institution's operation as a state trust |
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| 32 | 32 | | company in compliance with law. |
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| 33 | 33 | | SECTION 2. Section 184.002(c), Finance Code, is amended to |
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| 34 | 34 | | read as follows: |
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| 35 | 35 | | (c) A state trust company shall comply with regulatory |
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| 36 | 36 | | accounting principles in accounting for its investment in and |
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| 37 | 37 | | depreciation of trust company facilities, furniture, fixtures, and |
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| 38 | 38 | | equipment [dispose of any real property subject to Subsection (a) |
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| 39 | 39 | | not later than the fifth anniversary of the date the real property: |
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| 40 | 40 | | [(1) was acquired, except as otherwise provided by |
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| 41 | 41 | | rules adopted under this subtitle; |
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| 42 | 42 | | [(2) ceases to be used as a state trust company |
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| 43 | 43 | | facility; or |
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| 44 | 44 | | [(3) ceases to be a state trust company facility as |
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| 45 | 45 | | provided by Subsection (b)]. |
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| 46 | 46 | | SECTION 3. Sections 184.003(a) and (c), Finance Code, are |
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| 47 | 47 | | amended to read as follows: |
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| 48 | 48 | | (a) A state trust company may not invest its restricted |
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| 49 | 49 | | capital in real property except: |
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| 50 | 50 | | (1) as permitted by this subtitle or rules adopted |
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| 51 | 51 | | under this subtitle; [or] |
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| 52 | 52 | | (2) with the prior written approval of the banking |
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| 53 | 53 | | commissioner; or |
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| 54 | 54 | | (3) as necessary to avoid or minimize a loss on a loan |
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| 55 | 55 | | or investment previously made in good faith. |
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| 56 | 56 | | (c) A state trust company shall dispose of any real property |
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| 57 | 57 | | subject to Subsection (a) not later than[: |
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| 58 | 58 | | [(1)] the fifth anniversary of the date the real |
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| 59 | 59 | | property: |
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| 60 | 60 | | (1) [(A)] was acquired, except as otherwise provided |
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| 61 | 61 | | by rules adopted under this subtitle; [or] |
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| 62 | 62 | | (2) [(B)] ceases to be used as a state trust company |
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| 63 | 63 | | facility; or |
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| 64 | 64 | | (3) [(2) the second anniversary of the date the real |
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| 65 | 65 | | property] ceases to be a state trust company facility as provided by |
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| 66 | 66 | | Section 184.002(b). |
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| 67 | 67 | | SECTION 4. Section 182.502(b), Finance Code, as amended by |
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| 68 | 68 | | this Act, applies only to an application for conversion filed on or |
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| 69 | 69 | | after the effective date of this Act. An application for conversion |
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| 70 | 70 | | filed before the effective date of this Act is governed by the law |
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| 71 | 71 | | in effect on the date the application was filed, and the former law |
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| 72 | 72 | | is continued in effect for that purpose. |
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| 73 | 73 | | SECTION 5. This Act takes effect immediately if it receives |
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| 74 | 74 | | a vote of two-thirds of all the members elected to each house, as |
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| 75 | 75 | | provided by Section 39, Article III, Texas Constitution. If this |
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| 76 | 76 | | Act does not receive the vote necessary for immediate effect, this |
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| 77 | 77 | | Act takes effect September 1, 2023. |
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