HBA-TYH, NIK C.S.H.B. 2066 76(R)BILL ANALYSIS Office of House Bill AnalysisC.S.H.B. 2066 By: Marchant Financial Institutions 4/12/1999 Committee Report (Substituted) BACKGROUND AND PURPOSE In 1995, the Texas Legislature passed an "opt-out" bill (Acts 1995, 74th Leg., R.S., Ch. 58), eventually codified as Section 32.0095, Finance Code, for the purpose of prohibiting interstate branching in Texas. While "opt-out" was expressly permitted by the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994, Public Law No.103-328, and the Riegle-Neal Amendments Act of 1997 (Riegle-Neal), Public Law No. 105-24, this provision was ultimately preempted by federal law. With the passage of Riegle-Neal, beginning on June 1, 1997, 12 U.S.C. Section 1831u(a)(1) authorized federal approval of "a merger transaction under Section 1828(c) of this title between insured banks with different home States, without regard to whether such transaction is prohibited under the law of any State," unless a prohibiting state law exists that meets the requirements of Section 1831u(a)(2). Among other requirements, the state law must have been enacted after September 29, 1994, and before June 1, 1997, and apply equally to all out-of-State banks. The Texas "opt-out" legislation was enacted after September 29, 1994, and before June 1, 1997, but because the provision does not apply equally to all out-of-State banks, it was federally preempted. C.S.H.B. 2066 implements interstate banking and branching in Texas in conformity with federal law. The bill will also conform Texas law to international treaties regarding financial services, including NAFTA and GATT. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to Finance Commission of Texas in SECTION 1.001 (Sections 201.002, 201.003, 204.101, and 204.201, Title 3, Subtitle G, Finance Code), SECTION 2.006 (Section 32.010, Title 3, Subtitle A, Finance Code), and SECTION 3.001 (Articles 342a-9.001 and 342a-9.302, V.T.C.S. ), and to the secretary of state in SECTION 1.001 (Section 201.103, Title 3, Subtitle G, Finance Code) of this bill. It is the opinion of the Office of House Bill Analysis that rulemaking authority previously delegated to the Finance Commission of Texas is modified in SECTION 4.002 (Article 342a-1.003, V.T.C.S.) and in SECTION 4.025 (Article 342a-8.009, V.T.C.S.) of this bill. SECTION BY SECTION ANALYSIS ARTICLE 1. INTERSTATE BANKING AND BRANCHING SECTION 1.001. Amends Title 3, Finance Code, by adding Subtitle G, as follows: SUBTITLE G. BANK HOLDING COMPANIES; INTERSTATE BANK OPERATIONS CHAPTER 201. GENERAL PROVISIONS SUBCHAPTER A. GENERAL PROVISIONS Sec. 201.001. SCOPE OF SUBTITLE. (a) Provides that this subtitle sets forth the conditions under which a company may acquire a Texas bank or a Texas bank holding company, permits interstate branching under the Interstate Banking and Branching Efficiency Act, and provides for state regulation of the participation by foreign banks in the financial markets of this state. Provides that this subtitle is not intended to discriminate against out-of-state banks and bank holding companies in a manner that would violate the Interstate Banking and Branching Efficiency Act. Sec. 201.002. DEFINITIONS. Defines "acquire," "affiliate," "agency," "bank," "bank holding company," "Bank Holding Company Act," "bank supervisory agency," " branch," "commissioner," "company," "control," "de novo branch," "deposit," "depository institution," "federal agency," "federal branch," "Federal Deposit Insurance Act," "foreign bank," "foreign bank holding company," "foreign person," "home state," "home state regulator," "host state," "International Banking Act," "Interstate Banking and Branching Efficiency Act," "interstate branch," "interstate merger transaction," "limited branch," "outof-state bank," "out-of-state bank holding company," "out-of-state foreign bank," "out-ofstate state bank," "representative office," "resulting bank," "state," "state bank," "state savings bank," "subsidiary," "Texas bank," "Texas bank holding company," "Texas representative office," "Texas state agency," "Texas state bank," "texas state branch," and "United States." Sec. 201.003. RULES. (a) Authorizes the Finance Commission of Texas (finance commission) to adopt rules to accomplish the purposes of this subtitle, including rules necessary or reasonable to implement and clarify this subtitle in a manner consistent with and to the extent permitted by applicable federal law, preserve or protect the safety and soundness of banking in this state, grant the same rights and privileges to Texas state banks that are or may be granted to other depository institutions, recover the cost of maintaining and operating the department and the cost of enforcing this subtitle by imposing and collecting ratable and equitable fees for supervision and regulation, including fees for notices, applications, and examinations, and facilitate the fair hearing and adjudication of matters before the commissioner and the finance commission. (b) Requires the finance commission, in adopting rules, to consider the need to: coordinate with applicable federal law, promote a stable banking environment, provide the public with convenient, safe, and competitive banking services, preserve and promote the competitive parity of Texas state banks with other depository institutions consistent with the safety and soundness of Texas state banks and the Texas state bank system, and allow for economic development in this state. (c) Provides that the presence or absence in this subtitle of a specific reference to rules regarding a particular subject does not enlarge or diminish the rulemaking authority provided by this section. Sec. 201.004. LAW APPLICABLE TO INTERSTATE BRANCHES. (a) Provides that the laws of this state apply to an interstate branch located in this state to the same extent the laws of this state would apply if the branch in this state were a national bank with its main office located in this state, except to the extent otherwise provided under federal law. (b) Provides that to the extent provided by Section 4.102(c) (Applicability), Business & Commerce Code, the laws of this state govern a deposit contract between a bank and a consumer account holder if the branch or separate office of the bank that accepts the deposit contract is located in this state. (c) Provides that without limiting Subsection (a), for purposes of the laws of this state relating to authority to act as a fiduciary, depository of public funds, or custodian of securities pledged to secure public funds, or authority to engage in repurchase transactions with public entities, a legally operating interstate branch in this state is considered to be in, within, located in, authorized to do business in, domiciled in, and chartered in this state. Sec. 201.005. COOPERATIVE AGREEMENTS; FEES. Authorizes the banking commissioner of Texas (commissioner), in carrying out the purposes of this subtitle to the extent permitted by federal law, to perform the enumerated actions. Authorizes supervisory or examination fees assessed by the commissioner to be shared with another bank supervisory agency or an organization affiliated with or representing one or more bank supervisory agencies in accordance with an agreement between the commissioner and the agency or organization. Authorizes the commissioner to also receive a portion of supervisory or examination fees assessed by another bank supervisory agency in accordance with an agreement between the commissioner and the agency. Sec. 201.006. ISSUANCE OF INTERPRETIVE STATEMENTS AND OPINIONS. (a) Authorizes the commissioner, in encouraging the effective coordination and implementation of home state laws and host state laws with respect to interstate branching, either directly or through the deputy commissioner or a department attorney, to perform the enumerated actions. (b) Authorizes an interpretive statement or opinion to be disseminated by newsletter, via electronic medium such as the internet, in a volume of statutes or related materials published by the commissioner or others, or by other means reasonably calculated to notify persons affected by the interpretive statement or opinion. Authorizes an opinion to be disseminated to the public if the commissioner determines that the opinion is useful for the general guidance and convenience of the public or banks or bank holding companies. Provides that a published opinion must be redacted to preserve the confidentiality of the requesting party unless the requesting party consents to be identified in the published opinion. Provides that notice of an amended or withdrawn statement or opinion must be disseminated in a substantially similar manner as the affected statement or opinion was originally disseminated. (c) Provides that an interpretive statement or opinion issued under this subtitle does not have the force of law and is not a rule for the purposes of Chapter 2001(Administrative Procedure), Government Code, unless adopted by the finance commission as provided by Chapter 2001, Government Code. Provides that an interpretive statement or opinion is an administrative construction of this subtitle entitled to great weight if the construction is reasonable and does not conflict with this subtitle. Sec. 201.007. CONFIDENTIALITY. Provides that confidentiality of information obtained by the commissioner under this subtitle is governed by Subchapter D (Confidentiality of Information), Chapter 31, or, with respect to a state savings bank, Subtitle C (Administrative Procedures), and prohibits it to be disclosed by the commissioner or an employee of the commissioner's department except as provided by Subchapter D, Chapter 31, or, with respect to a state savings bank, Subtitle C. Sec. 201.008. NOTICE OF SUBSEQUENT EVENT. Requires each out-of-state state bank that has established and maintained an interstate branch in this state to give written notice to the commissioner, at least 30 days before the effective date of the event, or in the case of an emergency transaction, within a shorter period consistent with applicable state or federal law, of a merger or other transaction that would cause a change of control with respect to the bank or a bank holding company that controls the bank, with the result that an application would be required to be filed with the bank's home state regulator or a federal bank supervisory agency, including an application filed pursuant to Section 1817(j)(Change in Control of Insured Depository Institutions), Title 12, U.S.C. (Change in Bank Control Act of 1978)), as amended, or Section 1841 et seq. (Definitions), Title12, U.S.C. (Bank Holding Company Act). Sec. 201.009. ENFORCEMENT; APPEALS. (a) Authorizes the commissioner, if the commissioner determines that a bank holding company or a foreign bank has violated this subtitle or other applicable law of this state, to take any enforcement action the commissioner would be empowered to take if the bank holding company or foreign bank were a Texas state bank, except that the commissioner is required to promptly give notice to the home state regulator of each enforcement action taken against an out-of-state bank holding company or foreign bank and, to the extent practicable, to consult and cooperate with the home state regulator in pursuing and resolving the enforcement action. Authorizes a bank holding company or foreign bank to appeal a final order or other decision of the commissioner under this subtitle as provided by Sections 31.202 (Appeal of Banking Commissioner Decision or Order), 31.203 (Appeal to Finance Commission), and 31.204 (Direct Appeal to Court or Appeal of Finance Commission Order). (b) Authorizes the commissioner, if the commissioner determines that an interstate branch maintained by an out-of-state state bank in this state is being operated in violation of a law of this state or in an unsafe and unsound manner, to take any enforcement action the commissioner would be empowered to take if the branch were a Texas state bank or state savings bank, as the case may be, except that the commissioner is required to promptly give notice to the home state regulator of each enforcement action taken against an out-of-state state bank and, to the extent practicable, to consult and cooperate with the home state regulator in pursuing and resolving the enforcement action. An out-of-state state bank may appeal a final order or other decision of the commissioner under this subtitle as provided by Sections 31.202, 31.203, and 31.204, or as provided under Subtitle C (Savings Bank) with respect to a state savings bank. (c) Authorizes the commissioner, notwithstanding Subsections (a) and (b), to enforce the laws of this state against an entity subject to this subtitle by appropriate action in the courts, including an action for injunctive relief, if the banking commissioner concludes the action is necessary or desirable. Sec. 201.010. TAXATION. Provides that a bank subject to this subtitle is subject to the franchise tax to the extent provided by Chapter 171 (Franchise Tax), Tax Code. Sec. 201.011. SEVERABILITY. Provides that the provisions of this subtitle or the applications of those provisions are severable as provided by Section 311.032(c) (Severability of Statutes), Government Code. SUBCHAPTER B. REGISTRATION OF FINANCIAL INSTITUTIONS Sec. 201.101. DEFINITIONS. Defines, for this subchapter, "financial institution," "out-ofstate financial institution," and "Texas financial institution." Sec. 201.102. REGISTRATION TO DO BUSINESS. Provides that an out-of-state financial institution must file an application for registration with the secretary of state, before operating a branch or other office in this state, by complying with the law of this state relating to foreign corporations doing business in this state, notwithstanding a provision in that law that purports to limit or prohibit its applicability to financial institutions. Sec. 201.103. APPOINTMENT OF AGENT TO RECEIVE SERVICE OF PROCESS. (a) Authorizes a Texas financial institution to file in the office of the secretary of state a statement appointing an agent authorized to receive service of process. (b) Provides that a statement appointing an agent must set forth the specified information. (c) Provides that the agent named under Subsection (b) must have the specified qualifications. (d) A statement appointing an agent must be signed by an officer of the Texas financial institution. The statement must also be signed by the person appointed agent, who by signing accepts the appointment. The appointed agent may resign by filing a resignation in the office of the secretary of state and giving notice to the Texas financial institution. (e) Requires the secretary of state to collect for the use of the state a fee of $25 for indexing and filing the original statement appointing an agent and a fee of $15 for filing an amendment to or cancellation of a statement appointing an agent. (f) Provides that an amendment to a statement appointing an agent to receive service of process must meet the requirements for execution of an original statement. (g) Authorizes a statement appointing an agent to be canceled by filing with the secretary of state a written notice of cancellation executed by an officer of the Texas financial institution. Sets forth the contents of a notice of cancellation. (h) Provides that service of process on a registered agent is an alternate method of service in addition to other methods provided by law unless other law specifically requires service to be made on the registered agent. Provides that a resignation or notice of cancellation is effective immediately on acknowledgment of filing by the secretary of state, and after the acknowledgment the financial institution is subject to service of process as otherwise provided by law. (i) Authorizes the secretary of state to adopt forms and procedural rules for filing of documents under this section. CHAPTER 202. BANK HOLDING COMPANIES Sec. 202.001. ACQUISITION OF BANK OR BANK HOLDING COMPANY. (a) Requires a company intending to acquire a Texas bank holding company or a Texas bank to submit to the commissioner a copy of the application for approval or notice submitted to the Board of Governors of the Federal Reserve System under Section 1842 (Acquisition of Bank Shares or Assets), Title 12, U.S.C. (Bank Holding Company Act). Provides that the copy must comply with specified conditions. (b) Requires an applicant or notificant that is an out-of-state bank holding company to provide satisfactory evidence to the commissioner of compliance with or inapplicability of the requirements of Section 202.003 and, if the applicant or notificant is not incorporated under the laws of this state, the laws of this state relating to registration of foreign corporations to do business in this state. (c) Requires the commissioner, on receipt of the notice prescribed by Section 1842(b), Title 12, U.S.C. (Bank Holding Company Act), to state in writing within the period prescribed by that subsection the commissioner's specified views, recommendations, and opinions. (d) Provides that the commissioner is not required to disapprove the application or notice solely because of the opinion stated under Subsection (c)(3). (e) Authorizes the commissioner, if the commissioner's response disapproves an application for or notice of an acquisition of a Texas state bank or a Texas bank holding company controlling a Texas state bank, to appear at the hearing held as provided by Section 1842(b), Title 12, U.S.C. (Bank Holding Company Act), and present evidence at the hearing regarding the reasons the application or notice should be denied. (f) Authorizes the commissioner, if the commissioner's response disapproves an application for or notice of an acquisition other than as described by Subsection (e), to request that a hearing be held as provided by Section 1842(b), Title 12, U.S.C. (Bank Holding Company Act). Requires the commissioner, if the board of governors grants the request, to appear and present evidence at the hearing regarding the reasons the application or notice should be denied. (g) Authorizes the commissioner, if the board of governors approves an application or notice that the commissioner disapproved, to accept the decision or attempt to overturn the decision on appeal as provided by Section 1848 (Judicial Review), Title 12, U.S.C. (Bank Holding Company Act ). Sec. 202.002. LIMITATION ON CONTROL OF DEPOSITS. Prohibits the commissioner from approving an acquisition if, on consummation of the transaction, the applicant, including all depository institution affiliates of the applicant, would control 20 percent or more of the total amount of deposits in this state held by depository institutions in this state. Authorizes the commissioner to request, and requires the applicant to provide, supplemental information to the commissioner to aid in a determination under this section, including information that is more current than, or in addition to, information in the most recently available summary of deposits, reports of condition, or similar reports filed with or produced by state or federal authorities. Sec. 202.003. REQUIRED AGE OF ACQUIRED BANK. (a) Prohibits an out-of-state bank holding company from making an acquisition if the Texas bank to be acquired, or any Texas bank subsidiary of the bank holding company to be acquired, has not been in existence and in continuous operation for at least five years as of the effective date of acquisition. (b) For purposes of this section: (1) a bank that is the successor as a result of merger or acquisition of all or substantially all of the assets of a prior bank is considered to have been in existence and continuously operated during the period of its existence and continuous operation as a bank and during the period of existence and continuous operation of the prior bank; and (2) a bank effecting a purchase and assumption, merger, or similar transaction with or supervised by the Federal Deposit Insurance Corporation or its successor is considered to have been in existence and continuously operated during the existence and continuous operation of the bank with respect to which the transaction was consummated. Sec. 202.004. ACQUISITION OF NONBANKING INSTITUTION. (a) Requires a bank holding company doing business in this state that submits an application or notice to the Board of Governors of the Federal Reserve System regarding an acquisition or activity regulated by Section 1843 (Interests in Nonbanking Organizations), Title 12, U.S.C. (Bank Holding Company Act), that involves or will involve an office location in this state, to submit to the commissioner a copy of the application or notice when the application or notice is submitted to the board of governors. Requires the bank holding company to submit other information reasonably requested by the commissioner to determine the manner in which the acquisition or activity will directly or indirectly affect residents of this state. (b) Authorizes the commissioner, in determining whether to disapprove the proposed acquisition or activity, to hold a public hearing as provided by Section 31.201 (Banking Commissioner Hearing), regardless of whether requested to do so by a person, regarding the proposed acquisition or activity and its effect on this state. Requires the commissioner to convene a hearing if the bank holding company requests a hearing in writing when it submits the application or notice to the commissioner. (c) Requires the commissioner to disapprove the proposed acquisition or activity if the commissioner determines that the acquisition or activity would be detrimental to the public interest as a result of probable adverse effects, including undue concentration of resources, decreased or unfair competition, conflicts of interest, or unsound banking practices. (d) Authorizes the commissioner, if the commissioner determines to disapprove the proposed acquisition or activity, to prepare and file a response to the application or notice with the board of governors and may request that a hearing be held. Requires the commissioner, if the board of governors grants the request, to appear and present evidence at the hearing regarding the reasons the proposed acquisition or activity should be denied. (e) Authorizes the commissioner, if the board of governors approves a proposed acquisition or activity that the commissioner disapproved, to accept the decision or seek to overturn the decision on appeal as provided by Section 1848, Title 12, U.S.C. (Bank Holding Company Act). Sec. 202.005. APPLICABLE LAWS. (a) Authorizes the commissioner to: (1) examine a bank holding company that controls a Texas bank to the same extent as if the bank holding company were a Texas state bank; and (2) bring an enforcement proceeding under Chapter 35 (Enforcement Actions) against a bank holding company that violates or participates in a violation of this subtitle, an agreement filed with the commissioner under this chapter, or a rule adopted or order issued by the commissioner or the finance commission under this subtitle, as if the bank holding company were a Texas state bank. (b) Requires a Texas bank that is controlled by a bank holding company that is not a Texas bank holding company to be subject to all laws of this state that are applicable to Texas banks that are controlled by Texas bank holding companies. CHAPTER 203. INTERSTATE BANK MERGERS AND BRANCHING Sec. 203.001. INTERSTATE BRANCHING BY TEXAS STATE BANKS. (a) Authorizes a Texas state bank, with the prior approval of the commissioner, to establish and maintain a de novo branch or acquire a branch in a state other than Texas. Authorizes a Texas state bank, with the prior approval of the commissioner, to establish, maintain, and operate one or more branches in another state pursuant to an interstate merger transaction in which the Texas state bank is the resulting bank. Requires the applicant Texas state bank to file an application on a form prescribed by the commissioner and pay the fee prescribed by law, not later than the date on which the required application for the interstate merger transaction is filed with the responsible federal bank supervisory agency. Requires the applicant to also comply with the applicable provisions of Sections 32.301-32.303 (Merger Authority; Approval of Banking Commissioner; and Rights of Dissenters From Merger). Requires the commissioner to approve the interstate merger transaction and the operation of branches outside of this state by the Texas state bank if the commissioner makes the findings required by Section 32.302(b). Authorizes an interstate merger transaction to be consummated only after the applicant has received the commissioner's written approval. Sec. 203.002. CONDITIONS FOR ENTRY BY DE NOVO BRANCHING. (a) Authorizes an out-of-state bank to establish a de novo branch in this state if the enumerated conditions exist. Requires an out-of-state bank desiring to establish and maintain a de novo branch to provide written notice of the proposed transaction to the commissioner not later than the date on which the bank applies to the responsible federal bank supervisory agency for approval to establish the branch. Provides that the filing of the notice must be accompanied by the filing fee, if any, prescribed by the commissioner. Authorizes a de novo branch to be established in this state through the acquisition of a branch of an existing Texas bank if the acquiring out-of-state bank complies with this section. Sec. 203.003. ENTRY BY INTERSTATE MERGER TRANSACTION. (a) Authorizes one or more Texas banks, subject to Sections 203.004 and 203.005, to enter into an interstate merger transaction with one or more out-of-state banks under this chapter, and authorizes an out-of-state bank resulting from the transaction to maintain and operate the branches in this state of a Texas bank that participated in the transaction. Requires an out-of-state bank that will be the resulting bank in the interstate merger transaction to comply with Section 201.102. (b) Requires an out-of-state bank that will be the resulting bank pursuant to an interstate merger transaction involving a Texas state bank to notify the commissioner of the proposed merger not later than the date on which it files an application for an interstate merger transaction with the responsible federal bank supervisory agency, and to submit a copy of that application to the commissioner and pay the filing fee, if any, required by the commissioner. Requires a Texas state bank that is a party to the interstate merger transaction to comply with Chapter 32 (Powers, Organization, and Financial Requirements) and with other applicable state and federal laws. Requires an out-of-state bank that will be the resulting bank in the interstate merger transaction to provide satisfactory evidence to the commissioner of compliance with Section 201.102. (c) Prohibits an out-of-state bank that does not operate a branch in this state from establishing and maintaining a branch in this state through the acquisition of a branch of an existing Texas bank except as provided by Section 203.002. Sec. 203.004. LIMITATION ON CONTROL OF DEPOSITS. Provides that an interstate merger transaction is not permitted if, on consummation of the transaction, the resulting bank, including all depository institution affiliates of the resulting bank, would control 20 percent or more of the total amount of deposits in this state held by all depository institutions in this state. Authorizes the commissioner to request, and requires the applicant to provide, supplemental information to the commissioner to aid in a determination. Sec. 203.005. REQUIRED AGE OF ACQUIRED BANK. (a) Prohibits an out-of-state bank from acquiring a Texas bank in an interstate merger transaction if the Texas bank has not been in existence and in continuous operation for at least five years as of the effective date of the interstate merger transaction, unless the acquiring out-of-state bank could establish a de novo branch in this state pursuant to Section 203.002. (b) Provides that for purposes of this section: (1) a bank that is the successor as a result of merger or acquisition of all or substantially all of the assets of a prior bank is considered to have been in existence and continuously operated during the period of its existence and continuous operation as a bank and during the period of existence and continuous operation of the prior bank; and (2) a bank effecting a purchase and assumption, merger, or similar transaction with or supervised by the Federal Deposit Insurance Corporation or its successor is considered to have been in existence and continuously operated during the existence and continuous operation of the bank with respect to which the transaction was consummated. Sec. 203.006. ADDITIONAL BRANCHES. Authorizes an out-of-state bank that has established or acquired a branch in this state to establish or acquire additional branches in this state to the same extent that a Texas state bank may establish or acquire a branch in this state under applicable state and federal law. Sec. 203.007. EXAMINATIONS; PERIODIC REPORTS. Authorizes the banking commissioner to make examinations of a branch established and maintained in this state by an out-of-state bank as the banking commissioner considers necessary to determine whether the branch is being operated in compliance with the laws of this state and in accordance with safe and sound banking practices. Provides that Sections 31.105-31.107 (Examination Required; Cost of Regulation; and Regulation and Examination of Related Entities) or 96.054-96.057 (Examinations; Additional Examinations; Access to Books and Records; Access to Books and Records), as appropriate, apply to the examinations. Authorizes the commissioner to prescribe requirements for periodic reports from an out-of-state bank that operates a branch in Texas pursuant to this chapter. Provides that reporting requirements prescribed by the commissioner under this section must meet the enumerated conditions. CHAPTER 204. FOREIGN BANKS SUBCHAPTER A. GENERAL PROVISIONS Sec. 204.001. TRANSACTING BUSINESS. Prohibits a foreign bank from transacting business in this state except to the extent permitted by this chapter. Provides that this section does not prohibit a foreign bank from transacting business at a licensed federal branch or agency in this state in accordance with federal law and does not prohibit foreign banks that meet any of the enumerated descriptions. Provides that for purposes of this section, a foreign bank is not considered to be transacting business in this state merely because a subsidiary or affiliate transacts business in this state. Sec. 204.002. BOOKS, ACCOUNTS, AND RECORDS. Requires each Texas state branch, agency, or representative office to maintain and make available appropriate books, accounts, and records reflecting the specified transactions and actions Sec. 204.003. EXAMINATION; FEES. Authorizes the commissioner to make examinations of a Texas state branch, agency, or representative office as the commissioner considers necessary to determine whether the office is being operated in compliance with the laws of this state and in accordance with safe and sound banking practices. Provides that Sections 31.105-31.107 apply to the examinations. Requires a foreign bank that maintains a Texas state branch, agency, or representative office to pay fees to the commissioner in accordance with Section 201.005 or rules adopted under this subtitle. Sec. 204.004. REPORTS. Requires a foreign bank doing business in this state through a Texas state branch, agency, or representative office to make written reports to the commissioner that meet the enumerated requirements. Authorizes a license or registration of a foreign bank under this chapter to be revoked or the foreign bank to be subject to an enforcement action under Chapter 35 (Enforcement Actions) if the foreign bank fails to make a report required or makes a material false or misleading statement in the report. Sec. 204.005. CHANGE OF CONTROL OF FOREIGN BANK. Requires a foreign bank licensed to establish and maintain a Texas state branch or agency pursuant to Subchapter B, or which has registered a Texas representative office pursuant to Subchapter C, to file with the commissioner a notice of change of control, in the form and containing the information the commissioner requires, within 14 days of a merger or other transaction that results or will result in a change of control. Sec. 204.006. OPERATIONS IN THIS STATE OF BANKS OWNED OR CONTROLLED BY FOREIGN BANKS AND OTHER FOREIGN PERSONS. (a) Provides that except as provided in Subsection (b): (1) the laws of this state governing the acquisition or ownership of interests in Texas banks or out-of-state banks seeking to establish and maintain interstate branches in this state do not prohibit ownership of those institutions by, or otherwise discriminate against, foreign banks or other foreign persons; and (2) the laws of this state governing the powers and activities of Texas banks and out-of-state banks maintaining interstate branches in this state do not discriminate among those banks on the basis of their ownership or control by foreign banks or other foreign persons. (b) Authorizes the commissioner, notwithstanding Subsection (a), to apply the laws of this state governing the ownership, control, or operations of Texas banks, even if applicable specifically or exclusively to foreign banks or other foreign persons, to the extent those laws are determined by the commissioner to be: (1) substantially equivalent to or consistent with the standards or requirements governing the ownership, control, or operations of Texas banks by foreign banks or other foreign persons under applicable federal law; or (2) otherwise consistent with the laws and policies of the United States, including its international agreements governing financial services. Sec. 204.007. ESTABLISHMENT OF INTERSTATE BRANCH IN THIS STATE BY AN OUT-OF-STATE FOREIGN BANK. (a) Authorizes an out-of-state foreign bank to establish an interstate Texas state branch in the same manner as, and subject to the same criteria, standards, conditions, requirements, and procedures applicable to, the establishment of an interstate branch in this state by an out-of-state bank having the same home state in the United States. Provides that with respect to establishment of an initial interstate Texas state branch and subsequent intrastate branches of an out-of-state foreign bank, the commissioner is either required or authorized to carry out the enumerated actions. Sec. 204.008. CONVERSION OF EXISTING OFFICE. (a) Provides that for purposes of this section, foreign bank offices in this state are divided into classes and ranked in ascending order as representative office, Texas state agency, and Texas state branch. (b) Authorizes a foreign bank to change a lower class office into a higher class office by applying for the higher class office pursuant to Section 204.101. Authorizes the foreign bank, on approval of the application to establish the higher class office and, after all conditions to the approval have been fulfilled, to change the lower class office into the higher class office, and requires the commissioner to issue a license authorizing the bank to maintain the higher class office. Requires the foreign bank to promptly surrender any license or registration previously issued by the commissioner in connection with the lower class office. (c) Authorizes a foreign bank to change a higher class office into a lower class office by applying for approval to close the higher class office pursuant to Section 204.115. Authorizes the foreign bank, on approval of the application to close the higher class office and after conditions precedent to the closing have been fulfilled, to change the higher class office into the lower class office, and requires the commissioner to issue a license or registration authorizing the bank to maintain the lower class office. SUBCHAPTER B. DIRECT BRANCH AND AGENCY OFFICES OF FOREIGN BANKS Sec. 204.101. APPLICATION TO ESTABLISH BRANCH OR AGENCY. (a) Requires a foreign bank that desires to establish and maintain a Texas state branch or agency to submit an application to the commissioner. Provides that the application must meet the enumerated requirements. Authorizes the finance commission to adopt rules prescribing abbreviated application procedures and standards applicable to applications by foreign banks that have already established an initial Texas state branch or agency to establish additional intrastate branches or agencies. Sec. 204.102. HEARING AND DECISION ON APPLICATION. (a) Requires the commissioner, after the application is complete and accepted for filing and all required fees and deposits have been paid, to determine from the application and the initial investigation whether the conditions set forth by Section 204.103 have been established. Requires the commissioner to approve the application or set the application for hearing. (b) Provides that if the commissioner sets the application for hearing: (1) the commissioner is required to notify the Board of Governors of the Federal Reserve System that the application has been set for hearing as provided by federal regulations; (2) the department is required to participate as the opposing party; and (3) the commissioner is required to conduct the hearing and one or more prehearing conferences and opportunities for discovery as the commissioner considers advisable and consistent with applicable law. (c) Provides that information relating to the financial condition and business affairs of the foreign bank and financial information relating to its management and shareholders, except for previously published statements and information, is confidential and prohibits it from being considered in the public portion of the hearing or disclosed by the commissioner or an employee of the department except as provided by Subchapter D (Confidentiality of Information), Chapter 31. (d) Requires the commissioner to make a finding from the record of the hearing on each condition listed in Section 204.103 and enter an order granting or denying the license. Requires the commissioner, if the license is denied, to inform the Board of Governors of the Federal Reserve System of the order and the reasons the federal application should be denied. (e) Authorizes the commissioner to make approval of an application conditional. Requires the commissioner to include any conditions in the order granting the license but prohibiting the commissioner from issuing the license until the Texas state branch or agency has received the approval of the Board of Governors of the Federal Reserve System. Provides that if the approval is conditioned on a written commitment from the applicant offered to and accepted by the commissioner, the commitment is enforceable against the applicant. Sec. 204.103. ISSUANCE OF LICENSE. Requires the commissioner to issue a license to a foreign bank to establish and maintain a Texas state branch or agency if the commissioner finds the enumerated information after reasonable inquiry. Requires each Texas state branch or agency to post its license in a conspicuous place at its office. Provides that a license issued under this subchapter is not transferable or assignable. Sec. 204.104. NO CONCURRENT FEDERAL BRANCH OR AGENCY. Prohibits a foreign bank licensed under this subchapter to establish and maintain a Texas state branch or agency from concurrently maintaining a federal branch or federal agency in this state. Prohibits a foreign bank which maintains a federal branch or federal agency in this state from concurrently being licensed under this subchapter to maintain a Texas state branch or agency. Sec. 204.105. POWERS OF BRANCH AND AGENCY. (a) Provides that a Texas state branch or agency is subject to this subtitle and other laws of this state applicable to banks as if the Texas state branch or agency were a Texas state bank unless under the enumerated conditions. (b) Provides that among other exceptions to Subsection (a) that may be required or authorized by the commissioner provided by this subchapter or by rules adopted under this subtitle: (1) a Texas state branch is prohibited from accepting deposits of less than $100,000 from citizens or residents of the United States, other than credit balances that are incidental to or arise out of its exercise of other lawful banking powers, unless the Federal Deposit Insurance Corporation determines that specific deposit taking activities in lesser amounts do not constitute domestic retail deposit activities requiring deposit insurance protection within the meaning of Section 6, International Banking Act (12 U.S.C. Section 3104); (2) a Texas state agency is prohibited from accepting deposits from citizens or residents of the United States, other than credit balances that are incidental to or arise out of its exercise of other lawful banking powers, but may accept deposits from persons who are neither citizens nor residents of the United States; and (3) a limitation or restriction based on the capital and certified surplus of a Texas state bank is considered to refer, as applied to a Texas state branch or agency, to the dollar equivalent of the capital and surplus of the foreign bank, and if the foreign bank has more than one Texas state branch or agency in this state, the business transacted by all the branches and agencies must be aggregated in determining compliance with the limitation. (c) Authorizes a foreign bank licensed to transact business in this state through a Texas state branch or agency, subject to Subsections (a) and (b), to perform the enumerated actions. (d) Authorizes a foreign bank licensed to transact business in this state through a Texas state branch or agency to share the premises of the Texas state branch or agency with another authorized office of the foreign bank or a direct or indirect subsidiary of the foreign bank if the books and records of the Texas state branch or agency are kept separately from the books and records of the other office. (e) Defines, for purposes of this section, "resident of the United States." Sec. 204.106. APPLICATION TO ACT AS FIDUCIARY. (a) Prohibits a foreign bank, except as provided by Section 204.105(c)(10), from acting as a fiduciary at a Texas state branch or agency except by obtaining a fiduciary license as provided by this section. Requires a foreign bank that intends to act as a fiduciary at a Texas state branch or agency to submit an application to the commissioner. Provides that the application must meet the enumerated requirements. (b) Requires the commissioner, on or before the 60th day after the date the application is complete and accepted for filing and all required fees and deposits have been paid, to approve the application or set the application for hearing. Requires the department, if the commissioner sets the application for hearing, to participate as the opposing party and the commissioner to conduct the hearing and one or more prehearing conferences and opportunities for discovery as the commissioner considers advisable and consistent with applicable law. (c) Authorizes the commissioner to issue a license permitting the foreign bank to engage in fiduciary activities if the commissioner finds that the foreign bank will exercise its fiduciary powers in accordance with the laws of this state and has sufficient fiduciary and accounting expertise and controls to protect beneficial interests under its control. Authorizes the commissioner to make approval of an application conditional by including conditions and limitations in the order granting the license. Provides that if the approval is conditioned on a written commitment from the applicant offered to and accepted by the commissioner, the commitment is enforceable against the applicant. (d) Authorizes a foreign bank that obtains the approval of the commissioner under this section to engage in fiduciary activities at its Texas state branch or agency to the same extent and in the same manner as a Texas state bank could do so at the same location, subject to any conditions or limitations applicable to the license. (e) Authorizes the commissioner to initiate an enforcement action under Chapter 35 or to suspend or revoke the authority of a foreign bank to engage in fiduciary activities in this state in the same manner as a revocation of license under Section 204.118 if the commissioner finds in writing the enumerated items. Sec. 204.107. FILING OF AMENDMENTS TO ARTICLES OF INCORPORATION. Requires the foreign bank, if the articles of incorporation of a foreign bank licensed to maintain a Texas state branch or agency are amended, to promptly file with the commissioner a copy of the amendment, duly authenticated by the proper officer of the country of the foreign bank's organization. Provides that the filing does not enlarge or alter the business the foreign bank is authorized to pursue in this state, authorize the foreign bank to transact business in this state under a name other than the name set forth in its license, or extend the duration of its corporate existence. Sec. 204.108. AMENDED LICENSE FOR BRANCH OR AGENCY. (a) Requires a foreign bank licensed to establish and maintain a Texas state branch or agency to apply to the commissioner for an amended license if it changes its corporate name, changes the duration of its corporate existence, or desires to pursue in this state other or additional purposes than those set forth in its prior application for the foreign bank's license or amended license then in effect. Provides that the requirements with respect to the form and contents of an application, the manner of its execution, the issuance of an amended license, and the effect of the amended license are the same as in the case of an initial application for a license to establish and maintain a Texas state branch or agency. Sec. 204.109. RELOCATION OF OFFICE. Authorizes a foreign bank licensed to establish and maintain a Texas state branch or agency, with the prior written approval of the commissioner, to relocate the branch or agency office. Requires a foreign bank that intends to relocate a Texas state branch or agency office to submit a letter to the commissioner describing the address of the proposed location, the reasons for relocation, and the manner of notifying its customers of the relocation. Requires the commissioner, within 30 days of the date the foreign bank's letter has been accepted for filing and any required fee has been paid, to approve or deny the relocation. Prohibits the commissioner from permitting the foreign bank to relocate its Texas state branch or agency office if the commissioner finds that the proposed location and the manner of relocation and notification will be deceptive or that the relocation will impede or tend to impede the foreign bank's depositors and creditors in this state. Sec. 204.110. SEPARATE ASSETS. Requires each foreign bank licensed to establish and maintain a Texas state branch or agency in this state to keep the assets of its business in this state separate and apart from the assets of its business outside this state. Provides that the depositors and creditors of a foreign bank arising out of transactions with, and recorded on the books of, its Texas state branch or agency are entitled to absolute preference and priority over the depositors and creditors of the foreign bank's offices located outside this state with respect to the assets of the foreign bank in this state. Sec. 204.111. DISCLOSURE OF LACK OF DEPOSIT INSURANCE. Requires each foreign bank licensed to establish and maintain a Texas state branch or agency to give notice that deposits and credit balances in the office are not insured by the Federal Deposit Insurance Corporation. Sec. 204.112. LIMITATIONS ON PAYMENT OF INTEREST ON DEPOSITS. Provides that a foreign bank licensed to establish and maintain a Texas state branch or agency is subject to the same limitations with respect to the payment of interest on deposits as a state bank that is a member of the Federal Reserve System. Sec. 204.113. PLEDGE OF ASSETS. (a) Authorizes a foreign bank licensed to establish and maintain a Texas state branch or agency, in accordance with rules adopted under this subtitle, to be required to keep on deposit, with unaffiliated banks in this state that the foreign bank designates and the commissioner approves, money and securities pledged to the commissioner in an aggregate amount to be determined by the commissioner, valued at the lower of principal amount or market value, consisting of one of the enumerated items. (b) Provides that the assets deposited and the amount of the assets to be maintained under Subsection (a) are subject to the conditions and limitations the commissioner considers necessary or desirable for the maintenance of a sound financial condition, the protection of depositors, creditors, and the public interest in this state, and the support of public confidence in the business of the Texas state branch or agency. Authorizes the commissioner to give credit to reserves required to be maintained with a federal reserve bank in or outside this state pursuant to federal law, in accordance with rules adopted under this subtitle. (c) Authorizes the foreign bank, while a foreign bank continues business in the ordinary course, to collect interest on the money and securities deposited under this section and from time to time exchange, examine, and verify the securities. Sec. 204.114. ASSET MAINTENANCE. (a) Requires a foreign bank licensed to establish and maintain a Texas state branch or agency, in accordance with rules adopted under this subtitle, to at all times satisfy the ratio of branch or agency assets to liabilities determined by the commissioner, in the commissioner's sole discretion, to be necessary or desirable with respect to the foreign bank. Provides that the type of assets to be held in this state are specified by Subsection (b) and the type of liabilities to be included in the ratio are specified by Subsection (c). (b) Provides that assets to be held in this state for the purpose of satisfying the ratio of assets to liabilities include the enumerated materials and exclude obligations of a person for money borrowed to the extent that the total of the obligations of the person exceeds 10 percent of total assets considered for purposes of this section. (c) Provides that liabilities included for purposes of calculating the ratio of assets to liabilities include all liabilities of the foreign bank appearing in the books, accounts, or records of its Texas state branch or agency and exclude amounts due and other liabilities to other offices, agencies, branches, and wholly owned subsidiaries of the foreign bank, and other liabilities the commissioner determines. Provides that the existence of a nominal number of directors' shares outstanding does not cause a subsidiary to be considered less than wholly owned. (d) Authorizes the commissioner, subject to rules adopted under this subtitle and in the commissioner's sole discretion, to vary the ratio of assets to liabilities required by this section for a foreign bank as may be necessary or desirable to reflect differences among Texas branches or Texas agencies because of the enumerated conditions. (e) Provides that for purposes of this section, assets must be valued at the lower of principal amount or market value. Authorizes the commissioner to determine the value of a non-marketable security, loan, or other asset or obligation held or owed to the foreign bank or its Texas state branch or agency in this state. Provides that if the commissioner cannot determine the value of an non-marketable asset, the asset must be excluded from the ratio computation. (f) Authorizes the commissioner to require a foreign bank to deposit the assets required to be held in this state pursuant to this section with specific banks in this state designated by the commissioner if, because of the existence or the potential occurrence of unusual and extraordinary circumstances, the commissioner considers it necessary or desirable for the maintenance of a sound financial condition, the protection of depositors, creditors, and the public interest in this state, and the maintenance of public confidence in the business of a Texas state branch or agency. Sec. 204.115. VOLUNTARY CLOSURE OF BRANCH OR AGENCY. (a) Prohibits a foreign bank licensed to establish and maintain a Texas state branch or agency from closing the office without filing an application with, and obtaining the prior approval of, the commissioner. Provides that an application by a foreign bank under this section must be in the form and include the information the commissioner requires. (b) Requires the commissioner to approve the application if the commissioner finds that the closing of the office will not be substantially detrimental to the foreign bank's depositors and creditors in this state. Authorizes an application to be approved subject to conditions imposed by the commissioner for the continued protection of the foreign bank's depositors and creditors in this state, including a condition that the foreign bank pledge assets in the manner specified by Section 204.113 for a specified period of time. (c) Authorizes the foreign bank, when an application by a foreign bank under this section has been approved and all conditions precedent to the closing have been fulfilled, to close the office, and requires an officer, manager, or agent of the foreign bank to deliver to the commissioner the enumerated documents. Sec. 204.116. ENFORCEMENT. Authorizes the commissioner to initiate an enforcement action under Chapter 35 or a proceeding to revoke the license of a Texas state branch or agency if the commissioner by examination or other credible evidence finds that the foreign bank has committed one of the enumerated actions. Sec. 204.117. PROCEDURE FOR REVOCATION. (a) Provides that notice of a revocation proceeding must comply with the enumerated requirements. (b) Provides that unless the foreign bank requests a hearing in writing on or before the effective date of the proposed order, the order takes effect as proposed and is final and nonappealable. (c) Requires a hearing requested on a proposed order to be held within 30 days of the date the written request for hearing is received by the department unless the parties agree to a later hearing date. Requires the department to participate as the opposing party, and requires the commissioner to conduct the hearing and one or more prehearing conferences and opportunities for discovery as the commissioner considers advisable and consistent with applicable statutes and rules. Prohibits the foreign bank from accepting new business during the pendency of the hearing unless the commissioner gives prior written approval, except that it shall comply with any stricter requirements imposed by Section 7(e), International Banking Act (12 U.S.C. Section 3105(e)). (d) Provides that information relating to the financial condition and business affairs of the foreign bank, except previously published statements and information, is confidential and prohibits it from being considered in the public portion of the hearing or disclosed by the commissioner or an employee of the department except as provided by Subchapter D, Chapter 31. (e) Requires the commissioner, based on the record, to issue or refuse to issue the proposed order. Authorizes an issued order to contain modifications indicated by the record to be necessary or desirable, including modifications to impose penalties available under Chapter 35 in lieu of license revocation. Sec. 204.118. IMMEDIATE SUSPENSION OR REVOCATION. Authorizes the commissioner to issue, without notice and hearing, an order suspending or revoking the license of the foreign bank for a period of up to 90 days, pending investigation or hearing under Section 204.117, if the commissioner finds that any of the factors set forth in Section 204.116 are true with respect to a foreign bank licensed to maintain a Texas state branch or agency and that it is necessary for the protection of the interests of creditors of the foreign bank's business in this state or for the protection of the public interest that the commissioner immediately suspend or revoke the license of the foreign bank. Requires an order issued under this section to be served on the foreign bank in the manner required by Section 204.117(a)(2). Sec. 204.119. STATUS OF REVOKED LICENSE. Provides that a final order of the commissioner revoking a license is effective immediately, unless stayed by the finance commission or district court that has jurisdiction over an appeal, and requires the foreign bank to immediately cease all activity in this state requiring a license. Provides that subject to Section 204.120, all functions requiring a license must be immediately transferred to a branch, affiliate, or agency of the foreign bank that is located outside of this state and that has the power to perform those functions under governing law. Provides that continued activity in this state of an unlicensed foreign bank is subject to Subchapter C (Unauthorized Activity: Investigation And Enforcement), Chapter 35. Sec. 204.120. SEIZURE AND LIQUIDATION. (a) Authorizes the commissioner, if the commissioner finds that any of the factors set forth in Section 204.116 are true with respect to a foreign bank licensed to establish and maintain a Texas state branch or agency, to by order immediately take possession of the property and business of the foreign bank in this state if that action is necessary or desirable for the protection of the interests of the depositors and creditors of the foreign bank's business in this state or for the protection of the public. Requires the commissioner to retain possession until the foreign bank resumes business in this state or is finally liquidated, except that the commissioner is authorized to permit the foreign bank to resume business in this state on conditions the commissioner requires. Requires an order issued under this section to be served on the foreign bank in the manner required by Section 204.117(a)(2). (b) As soon as practicable after taking possession of the property and business of a foreign bank pursuant to Subsection (a), the commissioner shall initiate a receivership proceeding by filing a copy of the order issued under this section in a district court in Travis County to be governed by Chapter 36 as if the foreign bank were a Texas state bank, except as otherwise provided by this section. Notwithstanding the priorities established by Chapter 36, the depositors and creditors of the Texas state branch or agency, arising out of transactions with and recorded on the books of the Texas state branch or agency, have an absolute preference and priority over the creditors of the foreign bank's offices located outside this state. (c) Provides that an action initiated that seeks to directly or indirectly affect the assets of the Texas state branch or agency is considered to be an intervention in the receivership proceeding. Provides that venue for an action instituted to effect, contest, or otherwise intervene in the liquidation of a Texas state branch or agency is in Travis County, except that on motion filed and served concurrently with or before the filing of the answer, the court is authorized, on a finding of good cause, to transfer the action to the county of the Texas state branch or agency location. (d) Authorizes the foreign bank to contest the commissioner's actions as provided by this subsection. Authorizes the foreign bank, acting through a majority of its directors, to intervene within 10 days of the date the commissioner has taken possession of the property and business of a foreign bank pursuant to Subsection (a), in the action filed by the banking commissioner to challenge the commissioner's closing of the foreign bank's Texas state branch or agency and to enjoin the commissioner or other receiver from liquidating its assets. Authorizes the court to issue an ex parte order restraining the commissioner or other receiver from liquidating the foreign bank's assets pending a hearing on the injunction. Requires the commissioner or other receiver to comply with the restraining order but authorizes them to petition the court for permission to liquidate an asset as necessary to prevent its loss or diminution pending the outcome of the injunction. Prohibits the commissioner or other receiver from being required to post bond. Requires the court to hear this action as quickly as possible and shall give it priority over other business. Authorizes the foreign bank or the commissioner or other receiver to appeal the court's judgment as in other civil cases, except that the commissioner or other receiver is required to retain all seized foreign bank assets pending a final appellate court order even if the commissioner does not prevail in the trial court. Authorizes liquidation of the state trust company, if the commissioner prevails in the trial court, to proceed unless the trial court or appellate court orders otherwise. Provides that if liquidation is enjoined or stayed pending appeal, the trial court retains jurisdiction to permit liquidation of an asset as necessary to prevent its loss or diminution pending the outcome of the appeal. (e) Requires the commissioner or other receiver, after the commissioner or other receiver has completed the liquidation of the property and business of a foreign bank, to transfer any remaining assets to the foreign bank in accordance with the court's orders, except under any of the enumerated conditions. Sec. 204.121. DISSOLUTION. Provides that if a foreign bank licensed to maintain a Texas state branch or agency in this state is dissolved, has its authority or existence terminated or canceled in the jurisdiction of its incorporation, or has its authority to maintain a branch or agency in this state terminated by the Board of Governors of the Federal Reserve System under Section 7(e), International Banking Act (12 U.S.C. Section 3105(e)), then an officer, manager, or agent of the foreign bank is required to deliver to the commissioner the enumerated documents. Provides that the filing of the certificate, order, or decree has the same effect provided by Section 204.119 as if the license issued under this subchapter were revoked by the commissioner as of the effective date of termination or cancellation specified in the certificate, order, or decree unless the commissioner orders an earlier effective date, subject to the procedural protections of Section 204.117 or 204.118. SUBCHAPTER C. REPRESENTATIVE OFFICES OF FOREIGN BANK Sec. 204.201. REGISTRATION OF REPRESENTATIVE OFFICE. Authorizes a foreign bank to establish a Texas representative office if the foreign bank files with the commissioner a verified statement of registration. Provides that a statement of registration must meet the enumerated conditions. Authorizes the finance commission to adopt rules prescribing abbreviated registration procedures and standards for foreign banks that have already established an initial Texas representative office to establish additional Texas representative offices. Provides that a foreign bank that maintains a Texas state or federal branch or agency in this state is not prohibited from establishing or maintaining one or more Texas representative offices. Sec. 204.202. PLACE OF BUSINESS. Authorizes a Texas representative office to engage in the business authorized by this subchapter at each place of business registered with the commissioner. Authorizes a Texas representative office to change its location in this state by filing a notice with the commissioner containing the street address and post office address of the new location. Sec. 204.203. PERMISSIBLE ACTIVITIES OF REPRESENTATIVE OFFICE. Authorizes a registered Texas representative office of a foreign bank to perform the enumerated actions. Prohibits a representative office from soliciting or accepting credit balances or deposits or making final credit decisions. Authorizes a Texas representative office that is or becomes a regional administrative office of the foreign bank to engage in credit approval activities if the enumerated conditions exist. Provides that written notice must be in a form and contain the information the commissioner requires. Sec. 204.204. ENFORCEMENT. Authorizes the commissioner to initiate an enforcement action under Chapter 35 or a proceeding to revoke the registration of a representative office if the commissioner by examination or other credible evidence finds that the foreign bank has committed the enumerated actions. Sec. 204.205. PROCEDURE FOR REVOCATION. (a) Provides that notice of a revocation proceeding must meet the enumerated requirements. (b) Provides that unless the foreign bank requests a hearing in writing on or before the effective date of the proposed order, the order takes effect as proposed and is final and nonappealable. (c) Requires a hearing requested on a proposed order to be held not later than the 30th day after the date the written request for hearing is received by the commissioner unless the parties agree to a later hearing date. Requires the department to participate as the opposing party, and the commissioner to conduct the hearing and one or more prehearing conferences and opportunities for discovery as the commissioner considers advisable and consistent with applicable statutes and rules. Prohibits the foreign bank, during the pendency of the hearing and unless the commissioner gives prior written approval, from accepting new business from this state. (d) Provides that information relating to the financial condition and business affairs of the foreign bank, except previously published statements and information, is confidential and is prohibited from being considered in the public portion of the hearing or disclosed by the commissioner or an employee of the department except as provided by Subchapter D, Chapter 31. (e) Requires the commissioner, based on the record, to issue or refuse to issue the proposed order. Authorizes an issued order to contain modifications indicated by the record to be necessary or desirable, including modifications to impose penalties available under Chapter 35 in lieu of revocation of registration. Sec. 204.206. EFFECT OF REVOKED REGISTRATION. Requires a foreign bank that has had its registration under this subchapter revoked to cease all activities in this state. Provides that continued activity in this state of an unregistered foreign bank is subject to Subchapter C, Chapter 35. Sec. 204.207. DISSOLUTION. Provides that if a foreign bank with a registered Texas representative office is dissolved, has its authority or existence terminated or canceled in the jurisdiction of its incorporation, or has its authority to maintain its Texas representative office terminated by the Board of Governors of the Federal Reserve System under Section 10(b), International Banking Act (12 U.S.C. Section 3107(b)), then an officer, manager, or agent of the foreign bank is required to deliver to the commissioner a certified copy of the enumerated documents. Provides that the filing of the certificate, order, or decree has the same effect under Section 204.206 as if the registration made under this subchapter were revoked by the commissioner. ARTICLE 2. CONFORMING AMENDMENTS TO FINANCE CODE SECTION 2.001. Amends Section 12.1110(a), Finance Code, to make conforming changes. SECTION 2.002. Amends Sections 31.002(a)(2), (8), (50), and (52), Finance Code, to make conforming changes. SECTION 2.003. Amends Section 31.005(b), Finance Code, to make conforming changes. SECTION 2.004. Amends Section 31.007(a), Finance Code, to make conforming changes. SECTION 2.005. Amends Section 31.102 and 31.103, Finance Code, to make conforming changes. SECTION 2.006. Amends Subchapter A, Chapter 32, Finance Code, to make conforming changes. SECTION 2.007. Amends Section 32.202(a), Chapter 32, Finance Code, to make conforming changes. SECTION 2.008. Amends Subchapter D, Chapter 32, Finance Code, to make conforming changes. SECTION 2.009. Amends Subchapter E, Chapter 32, Finance Code, to make conforming changes. SECTION 2.010. Amends Subchapter F, Chapter 32, Finance Code, to make conforming changes. SECTION 2.011. Amends Section 33.005, Finance Code, to make conforming changes. SECTION 2.0115. Amends Section 33.103, Finance Code, to make conforming changes. SECTION 2.012. Amends Section 34.301, Finance Code, to make conforming changes. SECTION 2.013. Amends Section 35.003(a), Finance Code, to make conforming changes. SECTION 2.014. Amends Section 35.007(a), Finance Code, to make conforming changes. SECTION 2.015. Amends Section 35.201, Finance Code, to make conforming changes. SECTION 2.016. Amends Subchapter A, Chapter 59, Finance Code, to make conforming changes. SECTION 2.017. Amends Section 59.201, Finance Code, to make conforming changes. SECTION 2.018. Amends Section 59.202(c)(3), Finance Code, to make conforming changes. SECTION 2.019. Amends Section 59.301(7), Finance Code, to make conforming changes. SECTION 2.020. Amends Section 152.202(a), Finance Code, to make conforming changes. SECTION 2.021. Amends Section 152.301(b), Finance Code, to make conforming changes. SECTION 2.022. Amends Section 153.117(a), Finance Code, to make conforming changes. SECTION 2.023. Amends Sections 154.002(1)-(4), Finance Code, to make conforming changes. SECTION 2.024. Amends Section 154.253(a), Finance Code, to make conforming changes. SECTION 2.025. Amends Section 154.257(a), Finance Code, to make conforming changes. SECTION 2.026. Amends Section 154.258(a), Finance Code, to make conforming changes. SECTION 2.027. Amends Section 154.353(a), Finance Code, to make conforming changes. SECTION 2.028. Amends Section 271.001(a), Finance Code, to make conforming changes. SECTION 2.029. Section 271.002(a), Finance Code, to make conforming changes. SECTION 2.030. Amends Sections 274.001, 274.002, and 274.003, Finance Code, to make conforming changes. SECTION 2.031. Amends Section 274.101(a), Finance Code, to make conforming changes. SECTION 2.032. Amends Section 274.102, Finance Code, to make conforming changes. SECTION 2.033. Amends Sections 341.001(1), (2), and (8), Finance Code, to make conforming changes. SECTION 2.034. Amends Section 341.103, Finance Code, to make conforming changes. SECTION 2.035. Amends Section 345.001(1), Finance Code, to make conforming changes. SECTION 2.036. Amends Section 393.002(a), Finance Code, to make conforming changes. SECTION 2.037. Amends Section 393.402(a), Finance Code, to make conforming changes. SECTION 2.038. Amends Section 394.103, Finance Code, to make conforming changes. ARTICLE 3. MULTISTATE TRUST BUSINESS SECTION 3.001. Amends the Texas Trust Company Act (Article 342a-1.001 et seq., V.T.C.S.) by adding Chapter 9 as follows: CHAPTER 9. MULTISTATE TRUST BUSINESS SUBCHAPTER A. GENERAL PROVISIONS Sec. 9.001. DEFINITIONS. (a) Defines "acquire," "bank," "branch," "credit union," "de novo trust office," "foreign bank," "home state," "home state regulator," "host state," "office," "out-of-state trust company," "principal office," "representative trust office," "savings association," "savings bank," "state," "state trust institution," "supervisory agency," "trust company," "trust institution," and "trust office." Sec. 9.002. COMPANIES AUTHORIZED TO CONDUCT A TRUST BUSINESS. (a) Prohibits a company from conducting a trust business in this state unless the company is a trust institution and is any of the enumerated entities. (b) Authorizes a trust institution that does not maintain a principal office, branch, or trust office in this state to act as a fiduciary in this state to the extent permitted by Section 105A (Executor of Will Probated in Another Jurisdiction), Probate Code. (c) Provides that a company does not engage in the trust business in this state in a manner requiring a charter or license under this Act by engaging in an activity identified in Section 3.022 of this Act, except that the registration requirements of Section 9.202 of this Act may apply to a trust representative office engaging in the activity. Sec. 9.003. INTERSTATE TRUST BUSINESS OF STATE TRUST COMPANY. Authorizes a state trust company to engage in the trust business in another state or a foreign country at a trust office or a trust representative office to the extent permitted by and subject to applicable laws of the state or foreign country, subject to the approval of the banking commissioner pursuant to Section 3.203 of this Act. Sec. 9.004. TRUST BUSINESS OF OUT-OF-STATE TRUST COMPANY. Authorizes an out-of-state trust company that establishes or maintains an office in this state under this chapter to conduct any activity at the office that would be authorized under the laws of this state for a state trust company to conduct at the office. Provides that before establishing an office in this state, an out-of-state trust company must comply with Section 201.102. Sec. 9.005. DESIGNATION OF TRUSTEE AND GOVERNING LAW. Authorizes a person residing in this state to designate a trust institution to act as a fiduciary on behalf of the person, unless another law restricts the designation of trustee. Authorizes a trust institution and its affected client to agree that the law of this state or of the other state or country governs their rights and duties, including the law of a state or a foreign country where the affected client resides or where the trust institution has its principal office, unless another law specifies governing law and except as provided in Subsection (c), if a trust or its subject matter bears a reasonable relation to this state and also to another state or a foreign country. Provides that, notwithstanding Subsection (b), a trust institution is subject to Sections 113.052 (Loan of Trust Funds to Trustee) and 113.053 (Purchase or Sale of Trust Property by Trustee), Property Code, with respect to a trust if the trust is established by a client that resides in this state and is solicited from or accepted by an office of the trust institution in this state. Sec. 9.006. TAXATION. Provides that an out-of-state trust institution doing business in this state is subject to the franchise tax to the extent provided by Chapter 171(Franchise Tax), Tax Code. Sec. 9.007. SEVERABILITY. Provides that the provisions of this chapter or applications of those provisions are severable as provided by Section 312.013(c) (Severability of Statutes), Government Code. SUBCHAPTER B. OUT-OF-STATE TRUST COMPANY TRUST OFFICE Sec. 9.101. TRUST OFFICES IN THIS STATE. Authorizes an out-of-state trust company to engage in a trust business at an office in this state only if it establishes and maintains a trust office in this state as permitted by this subchapter. Sec. 9.102. ESTABLISHING AN INTERSTATE TRUST OFFICE. (a) Prohibits an out-of-state trust company that does not operate a trust office in this state from establishing and maintaining a de novo trust office in this state unless a state trust company would be permitted to establish a de novo trust office in the home state or foreign country of the out-of-state trust company; and a bank whose home state is this state would be permitted to establish a de novo branch in the home state or foreign country of the out-of-state trust company. (b) Authorizes a de novo trust office, subject to Subsection (a), to be established in this state under this section through the acquisition of a trust office in this state of an existing trust institution. Sec. 9.103. ACQUIRING AN INTERSTATE TRUST OFFICE. Authorizes an out-of-state trust company that does not operate a trust office in this state and that meets the requirements of this subchapter to acquire an existing trust institution in this state and after the acquisition operate and maintain the acquired institution as a trust office in this state, subject to Subchapter A, Chapter 4 of this Act, or Subchapter A, Chapter 33 (Ownership And Management of State Bank), Finance Code, if applicable. Provides that if the institution to be acquired is a bank or a state savings bank, Section 203.005, applies to the transaction. Prohibits an out-of-state trust institution that does not operate a trust office in this state from establishing and maintaining a trust office in this state through the acquisition of a trust office of an existing trust institution except as provided by Section 9.102 of this Act. Provides that this section does not affect or prohibit a trust institution, other entity, or person from chartering a state trust company pursuant to Section 3.001 of this Act. Sec. 9.104. REQUIREMENT OF NOTICE. Requires an out-of-state trust company desiring to establish and maintain a de novo trust office or acquire an existing trust institution in this state and to operate and maintain the acquired institution as a trust office pursuant to this subchapter to provide written notice of the proposed transaction to the banking commissioner on or after the date on which the out-of-state trust company applies to the home state regulator for approval to establish and maintain or acquire the trust office. Requires the filing of the notice to be preceded or accompanied by a copy of the resolution adopted by the board authorizing the additional office and the filing fee, if any, prescribed by law. Provides that the written notice must contain sufficient information to enable an informed decision under Section 9.105 of this Act. Sec. 9.105. CONDITIONS FOR APPROVAL. (a) Authorizes a trust office of an out-of-state trust company to be acquired or established in this state under this subchapter if the enumerated conditions exist. (b) Authorizes the banking commissioner to condition approval of a trust office on compliance by the out-of-state trust company with any requirement applicable to formation of a state trust company pursuant to Sections 3.003(b) and 3.007 of this Act. (c) Authorizes the out-of-state trust company to commence business at the trust office on the 61st day after the date the banking commissioner notifies the company that the notice required by Section 9.104 of this Act has been accepted for filing, unless the banking commissioner specifies an earlier or later date. (d) Authorizes the 60-day period of review to be extended by the banking commissioner on a determination that the written notice raises issues that require additional information or additional time for analysis. Authorizes the out-of-state trust company to establish the office only on prior written approval by the banking commissioner, if the period of review is extended. (e) Authorizes the banking commissioner to otherwise deny approval of the office if the banking commissioner finds that the out-of-state trust company lacks sufficient financial resources to undertake the proposed expansion without adversely affecting its safety or soundness or that the proposed office is contrary to the public interest, if all requirements of Subsection (a) have been met. Requires the banking commissioner to consider the views of the appropriate supervisory agencies, in acting on the notice. Sec. 9.106. ADDITIONAL TRUST OFFICES. Authorizes an out-of-state trust company that maintains a trust office in this state under this subchapter to establish or acquire additional trust offices or representative trust offices in this state to the same extent that a state trust company is authorized to establish or acquire additional offices in this state pursuant to the procedures for establishing or acquiring the offices set forth in Section 3.203 of this Act. SUBCHAPTER C. OUT-OF-STATE TRUST INSTITUTION REPRESENTATIVE TRUST OFFICE Sec. 9.201. REPRESENTATIVE TRUST OFFICE BUSINESS. Authorizes an out-of-state trust institution to establish a representative trust office as permitted by this subchapter to perform the enumerated actions. Prohibits a trust representative office from acting as a fiduciary or otherwise engage in the trust business in this state, except as provided by this section. Authorizes an out-of-state trust institution to establish and maintain representative trust offices anywhere in this state, subject to the requirements of this subchapter. Sec. 9.202. REGISTRATION OF REPRESENTATIVE TRUST OFFICE. (a) Requires an out-of-state trust institution, except as provided by Subsection (e) with respect to a credit union, a savings association, or a savings bank, that does not maintain a branch or trust office in this state and that desires to establish or acquire and maintain a representative trust office, to perform the enumerated actions. (b) Authorizes the notificant to commence business at the representative trust office on the 31st day after the date the banking commissioner accepts the notice unless the banking commissioner specifies an earlier or later date. (c) Authorizes the banking commissioner to extend the 30-day period of review on a determination that the written notice raises issues that require additional information or additional time for analysis. Authorizes the out-of-state trust institution to establish the representative trust office only on prior written approval by the banking commissioner if the period of review is extended. (d) Authorizes the banking commissioner to deny approval of the representative trust office if the banking commissioner finds that the notificant lacks sufficient financial resources to undertake the proposed expansion without adversely affecting its safety or soundness or that the proposed office would be contrary to the public interests. Requires the banking commissioner to consider the views of the appropriate supervisory agencies in acting on the notice. (e) Requires a credit union, savings association, or savings bank that does not maintain a branch in this state and desires to establish or acquire and maintain a representative trust office to comply with this section, except that the notice required by Subsection (a) must be filed with, and requires the duties and responsibilities of the banking commissioner under Subsections (b)-(d) to be performed by the Texas credit union commissioner, with respect to a credit union, or the Texas savings and loan commissioner, with respect to a savings association or savings bank. (f) Provides that an out-of-state trust institution that fails to register as required by this section is subject to Subchapter C, Chapter 6, of this Act. SUBCHAPTER D. SUPERVISION OF OUT-OF-STATE TRUST COMPANY Sec. 9.301. COOPERATIVE AGREEMENTS; FEES. (a) Authorizes the banking commissioner to perform the enumerated actions. Authorizes supervisory or examination fees assessed by the banking commissioner in accordance with this Act to be shared with another supervisory agency or an organization affiliated with or representing one or more supervisory agencies in accordance with an agreement between the banking commissioner and the agency or organization. Authorizes the banking commissioner to also receive a portion of supervisory or examination fees assessed by another supervisory agency in accordance with an agreement between the banking commissioner and the agency. Sec. 9.302. EXAMINATIONS; PERIODIC REPORTS. Authorizes the banking commissioner to make examinations of a trust office or trust representative office established and maintained in this state by an out-of-state trust company pursuant to this chapter as the banking commissioner considers necessary to determine whether the office is being operated in compliance with the laws of this state and in accordance with safe and sound fiduciary practices. Provides that the provisions of Section 2.002 of this Act apply to the examinations. Authorizes the finance commission to, by rule, prescribe requirements for periodic reports regarding a trust office or trust representative office in this state. Provides that the required reports must be provided by the trust institution maintaining the office. Provides that reporting requirements under this subsection must be appropriate for the purpose of enabling the banking commissioner to discharge the responsibilities of the banking commissioner under this chapter. Sec. 9.303. INTERPRETIVE STATEMENTS AND OPINIONS. Authorizes the banking commissioner, in order to encourage the effective coordination and implementation of home state laws and host state laws with respect to interstate trust business, directly or through the deputy banking commissioner or a department attorney in the manner provided by Sections 2.001 and 2.0011 of this Act, and with the effect provided by Section 2.0012 of this Act, to issue the enumerated items. Requires the duties and responsibilities of the banking commissioner, with respect to the trust business of a credit union, savings association, or savings bank, to be performed by the Texas credit union commissioner, with respect to a credit union; or the Texas savings and loan commissioner, with respect to a savings association or savings bank. Sec. 9.304. CONFIDENTIAL INFORMATION. Provides that information obtained directly or indirectly by the banking commissioner relative to the financial condition or business affairs of a trust institution, other than the public portions of a report of condition or income statement, or a present, former, or prospective shareholder, participant, officer, director, manager, affiliate, or service provider of the trust institution, whether obtained through application, examination, or otherwise, and each related file or record of the department is confidential. Prohibits this information from being disclosed by the banking commissioner or an employee of the department except as expressly provided by Subchapter B, Chapter 2 of this Act. Sec. 9.305. ENFORCEMENT; APPEALS. Authorizes the banking commissioner to take all enforcement actions the banking commissioner would be empowered to take if the out-of-state trust company were a state trust company, if the banking commissioner determines that an out-of-state trust company has violated this Act or other applicable law of this state. Provides an exception requiring the banking commissioner to promptly give notice to the home state regulator of each enforcement action to be taken against an out-of-state trust company and, to the extent practicable, to cooperate with the home state regulator in pursuing and resolving the enforcement action. Authorizes an out-of-state trust company to appeal a final order or other decision of the banking commissioner under this Act as provided by Section 3.010 of this Act. Authorizes the banking commissioner to enforce this Act against a trust institution by appropriate action in the courts, including an action for injunctive relief, if the banking commissioner concludes the action is necessary or desirable. Sec. 9.306. NOTICE OF SUBSEQUENT EVENT. Requires each out-of-state trust company that has established and maintains an office in this state pursuant to this Act to give written notice, at least 30 days before the effective date of the event, or, in the case of an emergency transaction, a shorter period before the effective date consistent with applicable state or federal law, to the banking commissioner of the enumerated transactions. ARTICLE 4. CONFORMING AMENDMENTS TO TRUST LAW SECTION 4.001. Amends Sections 1.002(a)(11), (46), and (52)-(54), Texas Trust Company Act (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), to make conforming changes. SECTION 4.002. Amends Section 1.003(a), Texas Trust Company Act (Article 342a-1.001 et seq., V.T.C.S.), to make conforming changes. SECTION 4.003. Amends Section 2.001, Texas Trust Company Act (Article 342a-1.001 et seq., V.T.C.S.), to make conforming changes. SECTION 4.004. Amends Section 3.001(a), Texas Trust Company Act (Article 342a-1.001 et seq., V.T.C.S.), to make conforming changes. SECTION 4.005. Amends Section 3.005(e), Texas Trust Company Act (Article 342a-1.001 et seq., V.T.C.S.), to make conforming changes. SECTION 4.006. Amends Section 3.022, Texas Trust Company Act (Article 342a-1.001 et seq., V.T.C.S.), to make conforming changes. SECTION 4.007. Amends Section 3.203(a), Texas Trust Company Act (Article 342a-1.001 et seq., V.T.C.S.), to make conforming changes. SECTION 4.008. Amends Section 3.302(c), Texas Trust Company Act (Article 342a-1.001 et seq., V.T.C.S.), to make conforming changes. SECTION 4.009. Amends Section 3.401, Texas Trust Company Act (Article 342a-1.001 et seq., V.T.C.S.), to make conforming changes. SECTION 4.010. Amends Section 3.405, Texas Trust Company Act (Article 342a-1.001 et seq., V.T.C.S.), to make conforming changes. SECTION 4.011. Amends Subchapter F, Chapter 3, Texas Trust Company Act (Article 342a-1.001 et seq., V.T.C.S.), to make conforming changes. SECTION 4.012. Amends Section 6.003(a), Texas Trust Company Act (Article 342a-1.001 et seq., V.T.C.S.), to make conforming changes. SECTION 4.013. Amends Section 6.007(a), Texas Trust Company Act (Article 342a-1.001 et seq., V.T.C.S.), to make conforming changes. SECTION 4.014. Amends Section 6.202(b), Texas Trust Company Act (Article 342a-1.001 et seq., V.T.C.S.), to make conforming changes. SECTION 4.015. Amends Section 7.101(b), Texas Trust Company Act (Article 342a-1.001 et seq., V.T.C.S.), to make conforming changes. SECTION 4.016. Amends Section 7.102(c), Texas Trust Company Act (Article 342a-1.001 et seq., V.T.C.S.), to make conforming changes. SECTION 4.017. Amends Section 7.105(d), Texas Trust Company Act (Article 342a-1.001 et seq., V.T.C.S.), to make conforming changes. SECTION 4.018. Amends Section 7.205(a), Texas Trust Company Act (Article 342a-1.001 et seq., V.T.C.S.), to make conforming changes. SECTION 4.019. Amends Section 8.002, Texas Trust Company Act (Article 342a-1.001 et seq., V.T.C.S.), to make conforming changes. SECTION 4.020. Amends Section 8.004, Texas Trust Company Act (Article 342a-1.001 et seq., V.T.C.S.), to make conforming changes. SECTION 4.021. Amends Section 8.005(a), Texas Trust Company Act (Article 342a-1.001 et seq., V.T.C.S.), to make conforming changes. SECTION 4.022. Amends Section 8.006, Texas Trust Company Act (Article 342a-1.001 et seq., V.T.C.S.), to make conforming changes. SECTION 4.023. Amends Section 8.007, Texas Trust Company Act (Article 342a-1.001 et seq., V.T.C.S.), to make conforming changes. SECTION 4.024. Amends Section 8.008, Texas Trust Company Act (Article 342a-1.001 et seq., V.T.C.S.), to make conforming changes. SECTION 4.025. Amends Section 8.009, Texas Trust Company Act (Article 342a-1.001 et seq., V.T.C.S.), to make conforming changes. SECTION 4.026. Amends Section 115.002, Property Code, to make conforming changes. ARTICLE 5. PUBLIC DEPOSITS SECTION 5.001. Amends Section 4.102, Business & Commerce Code, by adding Subsection (c), as follows: (c) Provides that notwithstanding Section 1.105 (Title Territorial Application of the Title; Parties' Power to Choose Applicable Law), the laws of this state govern a deposit contract between a bank and a consumer account holder if the branch or separate office of the bank that accepts the deposit contract is located in this state. Defines, for purposes of this subsection, "consumer account holder." SECTION 5.002. Amends Section 45.201(2), Education Code, to make conforming changes. SECTION 5.003. Amends Section 404.023, Government Code, to make conforming changes. SECTION 5.004. Amends Section 404.024(g), Government Code, to make conforming changes. SECTION 5.005. Amends Section 404.031(f), Government Code, to make conforming changes. SECTION 5.006. Amends Section 2257.024(a), Government Code, to make conforming changes. SECTION 5.007. Amends Section 2257.041(d), Government Code, to make conforming changes. SECTION 5.008. Amends Sections 105.001(1), (12), and (13), Local Government Code, to make conforming changes. SECTION 5.009. Amends Section 116.001(1), Local Government Code, to make conforming changes. SECTION 5.010. Amends Section 131.001, Local Government Code, to make conforming changes. SECTION 5.011. Amends Section 131.005(a), Local Government Code, to make conforming changes. SECTION 5.012. Amends Section 131.901(a), Local Government Code, to make conforming changes. SECTION 5.013. Amends Section 161.173(a), Natural Resources Code, to make conforming changes. SECTION 5.014. Amends Section 223.010(b) and (d), Transportation Code, to make conforming changes. SECTION 5.015. Amends Section 361.178, Transportation Code, to make conforming changes. ARTICLE 6. AMENDMENTS TO PROBATE CODE SECTION 6.001. Amends Section 3(d), Probate Code, to make conforming changes. SECTION 6.002. Amends Section 105A, Probate Code, to delete text prohibiting solicitation of trust business by out-of-state institutions and to make conforming changes. SECTION 6.003. Amends Subsection 5, Section 194, Probate Code, to make conforming changes. SECTION 6.004. Amends Section 389(b), Probate Code, to make conforming changes. SECTION 6.005. Amends Section 601(5), Probate Code, to make conforming changes. SECTION 6.006. Amends Sections 703(e) and (g), Probate Code, to make conforming changes. SECTION 6.007. Amends Section 855(b), Probate Code, to make conforming changes. ARTICLE 7. CIVIL PROCESS SECTION 7.001. Amends Section 30.007, Civil Practice and Remedies Code, to provide that civil discovery of a customer record maintained by a financial institution is governed by Section 59.006 (Discovery of Customer Records), Finance Code, and to delete text specifying definitions and providing circumstances under which, methods for, and issues surrounding the discovering of a record of a financial institution. SECTION 7.002. Amends Section 31.002, Civil Practice and Remedies Code, to make conforming changes. SECTION 7.003. Amends Subchapter C, Chapter 61, Civil Practice and Remedies Code, to make conforming changes. SECTION 7.004. Amends Chapter 63, Civil Practice and Remedies Code, to make conforming changes. SECTION 7.005. Amends Subchapter C, Chapter 64, Civil Practice and Remedies Code, to make conforming changes. SECTION 7.006. Amends Subchapter A, Chapter 65, Civil Practice and Remedies Code, to make conforming changes. SECTION 7.007. Amends Section 157.317(a), Family Code, to make conforming changes. SECTION 7.008. Amends Section 111.017, Tax Code, to make conforming changes. SECTION 7.009. Amends Section 111.021(e), Tax Code, to make conforming changes. ARTICLE 8. TRANSITION, EFFECTIVE DATE, EMERGENCY SECTION 8.001. DATE FOR CERTAIN FILINGS. (a) Provides that with respect to an interstate branch or other office of an out-of-state financial institution that exists in this state on the effective date of this Act, regardless of whether the out-of-state financial institution has filed a designation pursuant to or was not previously subject to Section 39.003 (Designated Agent for Service of Process) or 59.001 (Office of Out-Of-State Bank), Finance Code, as those sections existed before the effective date of this Act, the out-of-state financial institution must file the documentation and information required by Section 201.102, Finance Code, as added by this Act, before January 1, 2000. Provides that with respect to an out-of-state trust institution that does not maintain a branch or trust office in this state but maintains a representative trust office in this state on the effective date of this Act, the out-of-state trust institution must file the documentation and information required by Section 9.202, Texas Trust Company Act (Article 342a-1.001 et seq. (Short Title), V.T.C.S.), as added by this Act, before January 1, 2000. SECTION 8.002. REPEALER. (a) Repealer: Sections 31.002(a)(26) and (27) (Definitions), Sections 31.008 (Attachment, Injunction, Execution, or Garnishment) and 32.0095 (Interstate Banking Prohibition), and Chapters 38 (Bank Holding Companies), 39 (Foreign Bank Agencies And Representative Offices), and 272 (Disclosure by Uninsured Institution). (b) Repealer: Sections 1.002(a)(3), (6), (16), and (20), and Section 3.021, the Texas Trust Company Act (Article 342a-1.001 et seq. (Short Title), V.T.C.S.). SECTION 8.003. RELATIONSHIP TO OTHER LAWS. Provides that if this Act conflicts with an Act of the 76th Legislature, Regular Session, 1999, adopting a nonsubstantive revision of statutes relating to financial institutions and practices, this Act prevails. SECTION 8.004. EFFECTIVE DATE. Effective date: September 1, 1999. SECTION 8.005. EMERGENCY. Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE The substitute modifies the original bill in SECTION 1.001 in proposed Section 201.002 by redefining "branch" as having the meaning assigned to the term "domestic branch" by Section 1813(o) (Definitions), Title 12, U.S.C., with respect to an office of a bank as defined by this section (Definitions) for the purposes of Chapter 204. The substitute also modifies the original bill in proposed Section 204.201(a)(4) by replacing an "and" with an "or" to make the list of documents to be contained in a statement of registration to be conjunctive rather than disjunctive. The substitute modifies the original bill in proposed SECTION 2.006 to make conforming changes to the changes that were made in ARTICLE 1 of the bill. The substitute also modifies the original bill in proposed Section 32.110 by prohibiting the finance commission from adopting rules unless it considers the factors listed in Section 31.003(b) (Banking Rules) and finds that the conditions for prohibition by the banking commissioner under this section does not exist, rather than the conditions for approval of the banking commissioner under this section have been satisfied, as proposed in the original bill. The substitute modifies the original bill by adding SECTION 2.0115 to make conforming changes to the changes that were made in ARTICLE 1 of the bill. The substitute modifies the original bill in SECTION 3.001 in proposed Section 9.102 by making Subsection (b) subject to Subsection (a). The substitute modifies the original bill in SECTION 3.001 in proposed Section 9.105 by authorizing an out-of-state trust company to commence business at the trust office on the 61st day after the date the banking commissioner notifies the company that the notice required by Section 9.104 of this Act has been accepted for filing, rather than after the date the banking commissioner receives the notice required by Section 9.104 of this Act, as proposed by the original bill, unless the banking commissioner specifies an earlier or later date. The substitute also modifies the original bill in proposed Section 9.202(b), to replace the word "accepts" with "receives" when referring to the receipt of notice by the banking commissioner. The substitute modifies the original bill in proposed SECTION 5.014 by making conforming changes to both Sections 223.010(b) and (d), rather than only to Section 223.010(b), as proposed in the original bill. These are conforming changes to the changes that were made in SECTION 5.001 of the bill.