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A BILL TO BE ENTITLED
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AN ACT
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relating to the regulation of state trust companies. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 182.502(b), Finance Code, is amended to |
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read as follows: |
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(b) A trust institution applying to convert into a state |
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trust company may receive a certificate of authority to do business |
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as a state trust company if the banking commissioner finds that: |
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(1) the trust institution is not engaging in a pattern |
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or practice of unsafe and unsound fiduciary or banking practices; |
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(2) the trust institution has adequate capitalization |
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for a state trust company to act as a fiduciary at the same |
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locations as the trust institution is acting as a fiduciary before |
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the conversion; |
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(3) the trust institution can be expected to operate |
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profitably after the conversion; |
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(4) the officers and directors of the trust |
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institution as a group have sufficient fiduciary [banking] |
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experience, ability, standing, competence, trustworthiness, and |
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integrity to justify a belief that the trust institution will |
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operate as a state trust company in compliance with law; and |
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(5) each principal shareholder has sufficient |
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experience, ability, standing, competence, trustworthiness, and |
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integrity to justify a belief that the trust institution will be |
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free from improper or unlawful influence or interference with |
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respect to the trust institution's operation as a state trust |
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company in compliance with law. |
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SECTION 2. Section 184.002(c), Finance Code, is amended to |
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read as follows: |
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(c) A state trust company shall comply with regulatory |
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accounting principles in accounting for its investment in and |
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depreciation of trust company facilities, furniture, fixtures, and |
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equipment [dispose of any real property subject to Subsection (a) |
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not later than the fifth anniversary of the date the real property: |
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[(1) was acquired, except as otherwise provided by |
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rules adopted under this subtitle; |
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[(2) ceases to be used as a state trust company |
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facility; or |
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[(3) ceases to be a state trust company facility as |
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provided by Subsection (b)]. |
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SECTION 3. Sections 184.003(a) and (c), Finance Code, are |
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amended to read as follows: |
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(a) A state trust company may not invest its restricted |
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capital in real property except: |
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(1) as permitted by this subtitle or rules adopted |
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under this subtitle; [or] |
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(2) with the prior written approval of the banking |
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commissioner; or |
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(3) as necessary to avoid or minimize a loss on a loan |
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or investment previously made in good faith. |
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(c) A state trust company shall dispose of any real property |
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subject to Subsection (a) not later than[: |
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[(1)] the fifth anniversary of the date the real |
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property: |
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(1) [(A)] was acquired, except as otherwise provided |
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by rules adopted under this subtitle; [or] |
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(2) [(B)] ceases to be used as a state trust company |
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facility; or |
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(3) [(2) the second anniversary of the date the real |
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property] ceases to be a state trust company facility as provided by |
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Section 184.002(b). |
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SECTION 4. Section 182.502(b), Finance Code, as amended by |
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this Act, applies only to an application for conversion filed on or |
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after the effective date of this Act. An application for conversion |
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filed before the effective date of this Act is governed by the law |
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in effect on the date the application was filed, and the former law |
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is continued in effect for that purpose. |
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SECTION 5. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2023. |