BILL ANALYSIS

S.B. 1646

By: Parker

Pensions, Investments & Financial Services

Committee Report (Unamended)

BACKGROUND AND PURPOSE

The Texas Department of Banking has identified statutory language that requires technical corrections or updates to address regulatory issues that have come up since the 87th Legislative Session, such as the need to revise the requisite experience for a trust institution applying to convert into a state trust company. S.B. 1646 seeks to address these issues by providing these important corrections and updates, which will add necessary specificity to the Finance Code.

CRIMINAL JUSTICE IMPACT

It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.

ANALYSIS

S.B. 1646 amends the Finance Code to replace banking experience with fiduciary experience as one of the qualities that the officers and directors of a trust institution applying to convert into a state trust company must have in sufficient quantity as a group for the institution to be eligible to receive a certificate of authority to do business as a state trust company. This provision applies only to an application for conversion filed on or after the bill's effective date.

S.B. 1646 replaces the requirement that a state trust company dispose of certain real property that is subject to the limitation on its investment in state trust company facilities by a specified deadline with a requirement that such a company comply with regulatory accounting principles in accounting for its investment in and depreciation of trust company facilities, furniture, fixtures, and equipment. The bill excepts from the prohibition against a state trust company investing its restricted capital in real property such an investment for which the state trust company obtains the banking commissioner's prior written approval and extends the deadline for such a company to dispose of any real property obtained through such an investment that ceases to be a state trust company facility because it was not improved or occupied by the company within a specified time frame from not later than the second anniversary of the date the property ceases to be a state trust company facility to not later than the fifth anniversary of that date.

EFFECTIVE DATE

On passage, or, if the bill does not receive the necessary vote, September 1, 2023.