1-1     By:  Marchant (Senate Sponsor - Fraser)               H.B. No. 2066
 1-2           (In the Senate - Received from the House April 30, 1999;
 1-3     May 3, 1999, read first time and referred to Committee on Economic
 1-4     Development; May 13, 1999, reported favorably by the following
 1-5     vote:  Yeas 6, Nays 0; May 13, 1999, sent to printer.)
 1-6                            A BILL TO BE ENTITLED
 1-7                                   AN ACT
 1-8     relating to regulation of bank holding companies in an interstate
 1-9     banking and branching environment, the authorization of interstate
1-10     operations of financial institutions in accordance with the
1-11     requirements of federal law, and the enhancement of state bank and
1-12     trust company charters for the interstate banking and branching
1-13     environment.
1-14           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-15                ARTICLE 1.  INTERSTATE BANKING AND BRANCHING
1-16           SECTION 1.001.  Title 3, Finance Code, is amended by adding
1-17     Subtitle G to read as follows:
1-18       SUBTITLE G. BANK HOLDING COMPANIES; INTERSTATE BANK OPERATIONS
1-19                       CHAPTER 201. GENERAL PROVISIONS
1-20                      SUBCHAPTER A. GENERAL PROVISIONS
1-21           Sec. 201.001.  SCOPE OF SUBTITLE.  (a)  This subtitle:
1-22                 (1)  sets forth the conditions under which a company
1-23     may acquire a Texas bank or a Texas bank holding company, pursuant
1-24     to the provisions of Chapter 202;
1-25                 (2)  permits interstate branching under the Interstate
1-26     Banking and Branching Efficiency Act pursuant to the provisions of
1-27     Chapter 203; and
1-28                 (3)  provides for state regulation of the participation
1-29     by foreign banks in the financial markets of this state, pursuant
1-30     to the provisions of Chapter 204.
1-31           (b)  This subtitle is not intended to discriminate against
1-32     out-of-state banks and bank holding companies in a manner that
1-33     would violate the Interstate Banking and Branching Efficiency Act.
1-34           Sec. 201.002.  DEFINITIONS.  (a)  Unless the context requires
1-35     otherwise, in this subtitle:
1-36                 (1)  "Acquire" means an act that results in direct or
1-37     indirect control by a company of a bank holding company or a bank,
1-38     including an act that causes:
1-39                       (A)  the company to merge with a bank holding
1-40     company or a bank;
1-41                       (B)  the company to assume direct or indirect
1-42     ownership or control of:
1-43                             (i)  more than 25 percent of any class of
1-44     voting shares of a bank holding company or a bank, if the acquiring
1-45     company was not a bank holding company before the acquisition;
1-46                             (ii)  more than five percent of any class
1-47     of voting shares of a bank holding company or a bank, if the
1-48     acquiring company was a bank holding company before the
1-49     acquisition; or
1-50                             (iii)  all or substantially all of the
1-51     assets of a bank holding company or a bank; or
1-52                       (C)  an application relating to control of a bank
1-53     holding company or bank to be filed with a federal bank supervisory
1-54     agency.
1-55                 (2)  "Affiliate" has the meaning assigned by Section
1-56     2(k), Bank Holding Company Act (12 U.S.C. Section 1841(k)).
1-57                 (3)  "Agency" when used in reference to an office of a
1-58     foreign bank, has the meaning assigned by Section 1(b)(1),
1-59     International Banking Act (12 U.S.C. Section 3101(1)).
1-60                 (4)  "Bank":
1-61                       (A)  for purposes of Chapter 202 and the laws of
1-62     this state as they relate to Chapter 202, has the meaning assigned
1-63     by Section 2(c), Bank Holding Company Act (12 U.S.C. Section
1-64     1841(c));
 2-1                       (B)  for purposes of Chapter 203 and the laws of
 2-2     this state as they relate to Chapter 203, has the meaning assigned
 2-3     to the term "insured bank" by Section 3(h), Federal Deposit
 2-4     Insurance Act (12 U.S.C. Section 1813(h)), except that the term
 2-5     does not include a foreign bank unless it is organized under the
 2-6     laws of a territory of the United States, Puerto Rico, Guam,
 2-7     American Samoa, or the Virgin Islands and its deposits are insured
 2-8     by the Federal Deposit Insurance Corporation; and
 2-9                       (C)  for purposes of Chapter 204 and the laws of
2-10     this state as they relate to Chapter 204, has the meaning assigned
2-11     by Section 2(c), Bank Holding Company Act (12 U.S.C. Section
2-12     1841(c)), or Section 3(a)(1), Federal Deposit Insurance Act (12
2-13     U.S.C. Section 1813(a)(1)), except that the term does not include a
2-14     foreign bank or a branch or agency of a foreign bank.
2-15                 (5)  "Bank holding company" has the meaning assigned by
2-16     Section 2(a), Bank Holding Company Act (12 U.S.C. Section 1841(a)),
2-17     and includes a Texas bank holding company, an out-of-state bank
2-18     holding company, and a foreign bank holding company unless the
2-19     context requires otherwise.
2-20                 (6)  "Bank Holding Company Act" means the federal Bank
2-21     Holding Company Act of 1956 (12 U.S.C. Section 1841 et seq.), as
2-22     amended.
2-23                 (7)  "Bank supervisory agency" means any of the
2-24     following:
2-25                       (A)  an agency of another state with primary
2-26     responsibility for chartering and supervising banks;
2-27                       (B)  the Office of the Comptroller of the
2-28     Currency, the Federal Deposit Insurance Corporation, or the Board
2-29     of Governors of the Federal Reserve System, and any successor to
2-30     these agencies; or
2-31                       (C)  an agency of a country, including a colony,
2-32     dependency, possession, or political subdivision of a country,
2-33     other than the United States with primary responsibility for
2-34     chartering and supervising banks.
2-35                 (8)  "Branch" has the meaning assigned by Section
2-36     31.002(a), except that for purposes of Chapter 204 and the laws of
2-37     this state as they relate to Chapter 204 the term:
2-38                       (A)  with respect to an office of a foreign bank,
2-39     has the meaning assigned by Section 1(b)(3), International Banking
2-40     Act (12 U.S.C. Section 3101(3)); and
2-41                       (B)  with respect to an office of a bank as
2-42     defined by this section for the purposes of Chapter 204, has the
2-43     meaning assigned to the term "domestic branch" by Section 3(o),
2-44     Federal Deposit Insurance Act (12 U.S.C. Section 1813(o)).
2-45                 (9)  "Commissioner" has the meaning assigned to the
2-46     term "banking commissioner" by Section 31.002(a), except that for
2-47     purposes of Chapter 203 and the laws of this state as they relate
2-48     to Chapter 203, with respect to a state savings bank, the term
2-49     means the savings and loan commissioner of Texas.
2-50                 (10)  "Company" has the meaning assigned by Section
2-51     2(b), Bank Holding Company Act (12 U.S.C. Section 1841(b)), and
2-52     includes a bank holding company.
2-53                 (11)  "Control" shall be construed consistently with
2-54     Section 2(a)(2), Bank Holding Company Act (12 U.S.C. Section
2-55     1841(a)(2)), and regulations and interpretive rulings of the Board
2-56     of Governors of the Federal Reserve System.
2-57                 (12)  "De novo branch" means a branch of a bank located
2-58     in a host state that:
2-59                       (A)  is originally established by the bank as a
2-60     branch; and
2-61                       (B)  does not become a branch of the bank as a
2-62     result of:
2-63                             (i)  the acquisition of another bank or a
2-64     branch of another bank; or
2-65                             (ii)  the merger or conversion involving
2-66     the bank or branch.
2-67                 (13)  "Deposit" has the meaning assigned by Section
2-68     3(l), Federal Deposit Insurance Act (12 U.S.C. Section 1813(l)).
2-69                 (14)  "Depository institution" means an institution
 3-1     included for any purpose within the definitions of "insured
 3-2     depository institution" as assigned by Sections 3(c)(2) and
 3-3     3(c)(3), Federal Deposit Insurance Act (12 U.S.C.  Sections
 3-4     1813(c)(2) and 1813(c)(3)).
 3-5                 (15)  "Federal agency" means an agency of a foreign
 3-6     bank that is licensed by the Comptroller of the Currency pursuant
 3-7     to Section 4, International Banking Act (12 U.S.C. Section 3102).
 3-8                 (16)  "Federal branch" means a branch of a foreign bank
 3-9     that is licensed by the Comptroller of the Currency pursuant to
3-10     Section 4, International Banking Act (12 U.S.C. Section 3102).
3-11                 (17)  "Federal Deposit Insurance Act" means the Federal
3-12     Deposit Insurance Act (12 U.S.C. Section 1811 et seq.), as amended.
3-13                 (18)  "Foreign bank" has the meaning assigned by
3-14     Section 1(b)(7), International Banking Act (12 U.S.C. Section
3-15     3101(7)).
3-16                 (19)  "Foreign bank holding company" means a bank
3-17     holding company that is organized under the laws of a country other
3-18     than the United States or a territory or possession of the United
3-19     States.
3-20                 (20)  "Foreign person" means a natural or juridical
3-21     person who is a citizen or national of one or more countries,
3-22     including any colonies, dependencies, or possessions of the
3-23     countries, other than the United States.
3-24                 (21)  "Home state" means:
3-25                       (A)  with respect to a national bank, the state
3-26     in which the main office of the bank is located;
3-27                       (B)  with respect to a state bank, the state by
3-28     which the bank is chartered;
3-29                       (C)  with respect to a foreign bank, the state
3-30     determined to be the home state of the foreign bank under Section
3-31     5(c), International Banking Act (12 U.S.C. Section 3103(c)); and
3-32                       (D)  with respect to a bank holding company, the
3-33     state in which the total deposits of all bank subsidiaries of the
3-34     company are the largest on the later of July 1, 1966, or the date
3-35     on which the company became a bank holding company.
3-36                 (22)  "Home state regulator" means:
3-37                       (A)  with respect to an out-of-state bank holding
3-38     company, the bank supervisory agency of the home state of the bank
3-39     holding company; and
3-40                       (B)  with respect to an out-of-state state bank,
3-41     the bank supervisory agency of the state in which the bank is
3-42     chartered.
3-43                 (23)  "Host state" means:
3-44                       (A)  with respect to a bank, a state other than
3-45     the home state of the bank in which the bank maintains or seeks to
3-46     establish and maintain a branch; and
3-47                       (B)  with respect to a bank holding company, a
3-48     state other than the home state of the company in which the company
3-49     controls or seeks to control a bank subsidiary.
3-50                 (24)  "International Banking Act" means the federal
3-51     International Banking Act of 1978 (12 U.S.C. Section 3101 et seq.),
3-52     as amended.
3-53                 (25)  "Interstate Banking and Branching Efficiency Act"
3-54     means the federal Riegle-Neal Interstate Banking and Branching
3-55     Efficiency Act of 1994, Public Law No. 103-328, codified at various
3-56     sections of Title 12, United States Code.
3-57                 (26)  "Interstate branch" means a branch of a bank or a
3-58     branch of a foreign bank, as the context requires, established,
3-59     acquired, or retained pursuant to the Interstate Banking and
3-60     Branching Efficiency Act, outside the home state of the bank or
3-61     foreign bank.  The term does not include, with respect to a foreign
3-62     bank, a limited branch as that term is defined by this section.
3-63                 (27)  "Interstate merger transaction" means:
3-64                       (A)  the merger of banks with different home
3-65     states and the conversion of branches of a bank involved in the
3-66     merger into branches of the resulting bank; or
3-67                       (B)  the purchase of all or substantially all of
3-68     the assets, including all or substantially all of the branches, of
3-69     a bank whose home state is different from the home state of the
 4-1     acquiring bank.
 4-2                 (28)  "Limited branch" means a branch of a foreign bank
 4-3     that accepts only the deposits that would be permissible for a
 4-4     corporation organized under Section 25A, Federal Reserve Act (12
 4-5     U.S.C. Section 611 et seq.), in accordance with Section 5(a)(7),
 4-6     International Banking Act (12 U.S.C. Section 3103(a)(7)).
 4-7                 (29)  "Out-of-state bank" means a bank whose home state
 4-8     is another state.
 4-9                 (30)  "Out-of-state bank holding company" means a bank
4-10     holding company whose home state is another state.
4-11                 (31)  "Out-of-state foreign bank" means a foreign bank
4-12     whose home state is another state.
4-13                 (32)  "Out-of-state state bank" means a bank chartered
4-14     under the laws of another state.
4-15                 (33)  "Representative office" has the meaning assigned
4-16     by Section 1(b)(15), International Banking Act (12 U.S.C. Section
4-17     3101(15)).
4-18                 (34)  "Resulting bank" means a bank that results from
4-19     an interstate merger transaction.
4-20                 (35)  "State" means a state of the United States, the
4-21     District of Columbia, a territory of the United States, Puerto
4-22     Rico, Guam, American Samoa, the Trust Territory of the Pacific
4-23     Islands, the Virgin Islands, or the Northern Mariana Islands,
4-24     except that for purposes of Chapter 202 and the laws of this state
4-25     as they relate to Chapter 202 the term means a state, territory, or
4-26     other possession of the United States, including the District of
4-27     Columbia.
4-28                 (36)  "State bank" means a Texas state bank or an
4-29     out-of-state state bank, including an out-of-state state savings
4-30     bank.
4-31                 (37)  "State savings bank" has the meaning assigned to
4-32     the term "savings bank" by Section 3(g), Federal Deposit Insurance
4-33     Act (12 U.S.C. Section 1813(g)), and includes a savings bank
4-34     organized under Subtitle C or under similar laws of another state.
4-35                 (38)  "Subsidiary" has the meaning assigned by Section
4-36     2(d), Bank Holding Company Act (12 U.S.C. Section 1841(d)).
4-37                 (39)  "Texas bank" means a bank whose home state is
4-38     this state, except that for purposes of Chapter 202 and the laws of
4-39     this state as they relate to Chapter 202 the term means a Texas
4-40     state bank or a national bank organized under federal law with its
4-41     main office in this state.
4-42                 (40)  "Texas bank holding company" means a bank holding
4-43     company whose home state is this state and that is not controlled
4-44     by a bank holding company other than a Texas bank holding company.
4-45                 (41)  "Texas representative office" means a
4-46     representative office that is located in this state and registered
4-47     pursuant to Subchapter C, Chapter 204.
4-48                 (42)  "Texas state agency," means, when used in
4-49     reference to an office of a foreign bank, an agency of a foreign
4-50     bank that is located in this state and licensed pursuant to
4-51     Subchapter B, Chapter 204.
4-52                 (43)  "Texas state bank" means a bank that is organized
4-53     under Subtitle A.
4-54                 (44)  "Texas state branch," means, when used in
4-55     reference to an office of a foreign bank, a branch of a foreign
4-56     bank that is located in this state and licensed pursuant to
4-57     Subchapter B, Chapter 204.
4-58                 (45)  "United States" means:
4-59                       (A)  when used in a geographical sense, the
4-60     several states, the District of Columbia, Puerto Rico, Guam,
4-61     American Samoa, the American Virgin Islands, the Trust Territory of
4-62     the Pacific Islands, and other territories of the United States;
4-63     and
4-64                       (B)  when used in a political sense, the federal
4-65     government of the United States.
4-66           (b)  The definitions provided by Section 31.002 apply to this
4-67     subtitle to the extent not inconsistent with this section and as
4-68     the context requires.
4-69           (c)  The definitions shall be liberally construed to
 5-1     accomplish the purposes of this subtitle.
 5-2           (d)  The finance commission by rule may adopt other
 5-3     definitions to accomplish the purposes of this subtitle.
 5-4           Sec. 201.003.  RULES.  (a)  The finance commission may adopt
 5-5     rules to accomplish the purposes of this subtitle, including rules
 5-6     necessary or reasonable to:
 5-7                 (1)  implement and clarify this subtitle in a manner
 5-8     consistent with and to the extent permitted by applicable federal
 5-9     law;
5-10                 (2)  preserve or protect the safety and soundness of
5-11     banking in this state;
5-12                 (3)  grant the same rights and privileges to Texas
5-13     state banks that are or may be granted to other depository
5-14     institutions;
5-15                 (4)  recover the cost of maintaining and operating the
5-16     department and the cost of enforcing this subtitle by imposing and
5-17     collecting ratable and equitable fees for supervision and
5-18     regulation, including fees for notices, applications, and
5-19     examinations; and
5-20                 (5)  facilitate the fair hearing and adjudication of
5-21     matters before the commissioner and the finance commission.
5-22           (b)  In adopting rules, the finance commission shall consider
5-23     the need to:
5-24                 (1)  coordinate with applicable federal law;
5-25                 (2)  promote a stable banking environment;
5-26                 (3)  provide the public with convenient, safe, and
5-27     competitive banking services;
5-28                 (4)  preserve and promote the competitive parity of
5-29     Texas state banks with other depository institutions consistent
5-30     with the safety and soundness of Texas state banks and the Texas
5-31     state bank system; and
5-32                 (5)  allow for economic development in this state.
5-33           (c)  The presence or absence in this subtitle of a specific
5-34     reference to rules regarding a particular subject does not enlarge
5-35     or diminish the rulemaking authority provided by this section.
5-36           Sec. 201.004.  LAW APPLICABLE TO INTERSTATE BRANCHES.  (a)
5-37     The laws of this state apply to an interstate branch located in
5-38     this state to the same extent the laws of this state would apply if
5-39     the branch in this state were a national bank with its main office
5-40     located in this state, except to the extent otherwise provided
5-41     under federal law.
5-42           (b)  To the extent provided by Section 4.102(c), Business &
5-43     Commerce Code, the laws of this state govern a deposit contract
5-44     between a bank and a consumer account holder if the branch or
5-45     separate office of the bank that accepts the deposit contract is
5-46     located in this state.
5-47           (c)  Without limiting Subsection (a), for purposes of the
5-48     laws of this state relating to authority to act as a fiduciary,
5-49     depository of public funds, or custodian of securities pledged to
5-50     secure public funds, or authority to engage in repurchase
5-51     transactions with public entities, a legally operating interstate
5-52     branch in this state is considered to be in, within, located in,
5-53     authorized to do business in, domiciled in, and chartered in this
5-54     state.
5-55           Sec. 201.005.  COOPERATIVE AGREEMENTS; FEES.  (a)  To carry
5-56     out the purposes of this subtitle, to the extent permitted by
5-57     federal law, the commissioner may:
5-58                 (1)  enter into cooperative, coordinating, or
5-59     information sharing agreements with another bank supervisory agency
5-60     or an organization affiliated with or representing one or more bank
5-61     supervisory agencies;
5-62                 (2)  with respect to periodic examination or other
5-63     supervision or investigation, accept reports of examination or
5-64     investigation by, and reports submitted to, another bank
5-65     supervisory agency in lieu of conducting examinations or
5-66     investigations or receiving reports as might otherwise be required
5-67     or permissible under this subtitle;
5-68                 (3)  enter into contracts with another bank supervisory
5-69     agency having concurrent regulatory or supervisory jurisdiction to
 6-1     engage the services of the agency for reasonable compensation to
 6-2     assist in connection with the commissioner's performance of
 6-3     official duties under this subtitle or other law, or to provide
 6-4     services to the agency for reasonable compensation in connection
 6-5     with the agency's performance of official duties under law, except
 6-6     that Chapter 2254, Government Code, does not apply to the
 6-7     contracts;
 6-8                 (4)  enter into joint examinations or joint enforcement
 6-9     actions with another bank supervisory agency having concurrent
6-10     regulatory or supervisory jurisdiction, except that the
6-11     commissioner may independently take action under Section 201.009 if
6-12     the commissioner determines that the action is necessary to carry
6-13     out the commissioner's responsibilities under this subtitle or to
6-14     enforce compliance with the laws of this state; and
6-15                 (5)  assess supervisory and examination fees to be paid
6-16     by a state bank, state savings bank, bank holding company, or
6-17     foreign bank in connection with the commissioner's performance of
6-18     duties under this subtitle.
6-19           (b)  Supervisory or examination fees assessed by the
6-20     commissioner in accordance with this subtitle may be shared with
6-21     another bank supervisory agency or an organization affiliated with
6-22     or representing one or more bank supervisory agencies in accordance
6-23     with an agreement between the commissioner and the agency or
6-24     organization.  The commissioner may also receive a portion of
6-25     supervisory or examination fees assessed by another bank
6-26     supervisory agency in accordance with an agreement between the
6-27     commissioner and the agency.
6-28           Sec. 201.006.  ISSUANCE OF INTERPRETIVE STATEMENTS AND
6-29     OPINIONS.  (a)  To encourage the effective coordination and
6-30     implementation of home state laws and host state laws with respect
6-31     to interstate branching, the commissioner, directly or through the
6-32     deputy commissioner or a department attorney, may:
6-33                 (1)  issue interpretive statements containing matters
6-34     of general policy to guide the public and banks and bank holding
6-35     companies subject to this subtitle;
6-36                 (2)  amend or repeal a published interpretive statement
6-37     by issuing an amended statement or notice of repeal of a statement
6-38     and publishing the statement or notice;
6-39                 (3)  issue, in response to specific requests from the
6-40     public or the banking industry, opinions interpreting this subtitle
6-41     or determining the applicability of laws of this state to the
6-42     operation of interstate branches or other offices in this state by
6-43     out-of-state banks or in other states by Texas banks; and
6-44                 (4)  amend or repeal an opinion by issuing an amended
6-45     opinion or notice of repeal of an opinion, except that the
6-46     requesting party may rely on the original opinion if:
6-47                       (A)  all material facts were originally disclosed
6-48     to the commissioner;
6-49                       (B)  the safety and soundness of the affected
6-50     bank or bank holding company will not be affected by further
6-51     reliance on the original opinion; and
6-52                       (C)  the text and interpretation of relevant,
6-53     governing provisions of applicable home state, host state, and
6-54     federal law have not been changed by legislative or judicial
6-55     action.
6-56           (b)  An interpretive statement or opinion may be disseminated
6-57     by newsletter, via electronic medium such as the internet, in a
6-58     volume of statutes or related materials published by the
6-59     commissioner or others, or by other means reasonably calculated to
6-60     notify persons affected by the interpretive statement or opinion.
6-61     An opinion may be disseminated to the public if the commissioner
6-62     determines that the opinion is useful for the general guidance and
6-63     convenience of the public or banks or bank holding companies.  A
6-64     published opinion must be redacted to preserve the confidentiality
6-65     of the requesting party unless the requesting party consents to be
6-66     identified in the published opinion.  Notice of an amended or
6-67     withdrawn statement or opinion must be disseminated in a
6-68     substantially similar manner as the affected statement or opinion
6-69     was originally disseminated.
 7-1           (c)  An interpretive statement or opinion issued under this
 7-2     subtitle does not have the force of law and is not a rule for the
 7-3     purposes of Chapter 2001, Government Code, unless adopted by the
 7-4     finance commission as provided by Chapter 2001, Government Code.
 7-5     An interpretive statement or opinion is an administrative
 7-6     construction of this subtitle entitled to great weight if the
 7-7     construction is reasonable and does not conflict with this
 7-8     subtitle.
 7-9           Sec. 201.007.  CONFIDENTIALITY.  Except as expressly provided
7-10     otherwise in this subtitle, confidentiality of information obtained
7-11     by the commissioner under this subtitle is governed by Subchapter
7-12     D, Chapter 31, or, with respect to a state savings bank, Subtitle
7-13     C, and may not be disclosed by the commissioner or an employee of
7-14     the commissioner's department except as provided by Subchapter D,
7-15     Chapter 31, or, with respect to a state savings bank, Subtitle C.
7-16           Sec. 201.008.  NOTICE OF SUBSEQUENT EVENT.  Each out-of-state
7-17     state bank that has established and maintains an interstate branch
7-18     in this state pursuant to this subtitle shall give written notice
7-19     to the commissioner, at least 30 days before the effective date of
7-20     the event, or in the case of an emergency transaction, within a
7-21     shorter period consistent with applicable state or federal law, of
7-22     a merger or other transaction that would cause a change of control
7-23     with respect to the bank or a bank holding company that controls
7-24     the bank, with the result that an application would be required to
7-25     be filed with the bank's home state regulator or a federal bank
7-26     supervisory agency, including an application filed pursuant to the
7-27     Change in Bank Control Act of 1978 (12 U.S.C. Section 1817(j)), as
7-28     amended, or the Bank Holding Company Act (12 U.S.C. Section 1841 et
7-29     seq.).
7-30           Sec. 201.009.  ENFORCEMENT; APPEALS.  (a)  If the
7-31     commissioner determines that a bank holding company or a foreign
7-32     bank has violated this subtitle or other applicable law of this
7-33     state, the commissioner may take any enforcement action the
7-34     commissioner would be empowered to take if the bank holding company
7-35     or foreign bank were a Texas state bank, except that the
7-36     commissioner shall promptly give notice to the home state regulator
7-37     of each enforcement action taken against an out-of-state bank
7-38     holding company or foreign bank and, to the extent practicable,
7-39     shall consult and cooperate with the home state regulator in
7-40     pursuing and resolving the enforcement action.  A bank holding
7-41     company or foreign bank may appeal a final order or other decision
7-42     of the commissioner under this subtitle as provided by Sections
7-43     31.202, 31.203, and 31.204.
7-44           (b)  If the commissioner determines that an interstate branch
7-45     maintained by an out-of-state state bank in this state is being
7-46     operated in violation of a law of this state or in an unsafe and
7-47     unsound manner, the commissioner may take any enforcement action
7-48     the commissioner would be empowered to take if the branch were a
7-49     Texas state bank or state savings bank, as the case may be, except
7-50     that the commissioner shall promptly give notice to the home state
7-51     regulator of each enforcement action taken against an out-of-state
7-52     state bank and, to the extent practicable, shall consult and
7-53     cooperate with the home state regulator in pursuing and resolving
7-54     the enforcement action.  An out-of-state state bank may appeal a
7-55     final order or other decision of the commissioner under this
7-56     subtitle as provided by Sections 31.202, 31.203, and 31.204, or as
7-57     provided under Subtitle C with respect to a state savings bank.
7-58           (c)  Notwithstanding Subsections (a) and (b), the
7-59     commissioner may enforce the laws of this state against an entity
7-60     subject to this subtitle by appropriate action in the courts,
7-61     including an action for injunctive relief, if the banking
7-62     commissioner concludes the action is necessary or desirable.
7-63           Sec. 201.010.  TAXATION.  A bank subject to this subtitle is
7-64     subject to the franchise tax to the extent provided by Chapter 171,
7-65     Tax Code.
7-66           Sec. 201.011.  SEVERABILITY.  The provisions of this subtitle
7-67     or the applications of those provisions are severable as provided
7-68     by Section 311.032(c), Government Code.
7-69              (Sections 201.012-201.100 reserved for expansion
 8-1            SUBCHAPTER B. REGISTRATION OF FINANCIAL INSTITUTIONS
 8-2           Sec. 201.101.  DEFINITIONS.  In this subchapter:
 8-3                 (1)  "Financial institution" means:
 8-4                       (A)  a bank as defined for any purpose by Section
 8-5     201.002(a)(4), whether chartered under the laws of this state,
 8-6     another state, the United States, or another country, including a
 8-7     state savings bank;
 8-8                       (B)  a savings and loan association chartered
 8-9     under Chapter 62 or similar laws of another state;
8-10                       (C)  a federal savings and loan association,
8-11     federal savings bank, or federal credit union;
8-12                       (D)  a credit union chartered under Chapter 122
8-13     or similar laws of another state; or
8-14                       (E)  a trust company chartered under the laws of
8-15     this state or another state.
8-16                 (2)  "Out-of-state financial institution" means a
8-17     financial institution that:
8-18                       (A)  is not chartered under the laws of this
8-19     state; and
8-20                       (B)  has its main or principal office in another
8-21     state or country.
8-22                 (3)  "Texas financial institution" means a financial
8-23     institution that:
8-24                       (A)  is chartered under the laws of this state or
8-25     under federal law; and
8-26                       (B)  has its main or principal office in this
8-27     state.
8-28           Sec. 201.102.  REGISTRATION TO DO BUSINESS.  An out-of-state
8-29     financial institution must file an application for registration
8-30     with the secretary of state, before operating a branch or other
8-31     office in this state, by complying with the law of this state
8-32     relating to foreign corporations doing business in this state,
8-33     notwithstanding a provision in that law that purports to limit or
8-34     prohibit its applicability to financial institutions.
8-35           Sec. 201.103.  APPOINTMENT OF AGENT TO RECEIVE SERVICE OF
8-36     PROCESS.  (a)  A Texas financial institution may file in the office
8-37     of the secretary of state a statement appointing an agent
8-38     authorized to receive service of process.
8-39           (b)  A statement appointing an agent must set forth:
8-40                 (1)  the name of the Texas financial institution;
8-41                 (2)  the federal tax identification number of the Texas
8-42     financial institution;
8-43                 (3)  the address, including the street address, of the
8-44     principal office of the Texas financial institution; and
8-45                 (4)  the name of the agent in this state authorized to
8-46     receive service of process and the agent's address, including the
8-47     street address, in this state.
8-48           (c)  The agent named under Subsection (b) must be:
8-49                 (1)  an individual resident of this state;
8-50                 (2)  a domestic corporation, limited partnership,
8-51     partnership, limited liability company, professional association,
8-52     cooperative, or real estate investment trust; or
8-53                 (3)  a foreign entity registered with the secretary of
8-54     state to transact business in this state.
8-55           (d)  A statement appointing an agent must be signed by an
8-56     officer of the Texas financial institution.  The statement must
8-57     also be signed by the person appointed agent, who by signing
8-58     accepts the appointment.  The appointed agent may resign by filing
8-59     a resignation in the office of the secretary of state and giving
8-60     notice to the Texas financial institution.
8-61           (e)  The secretary of state shall collect for the use of the
8-62     state:
8-63                 (1)  a fee of $25 for indexing and filing the original
8-64     statement appointing an agent; and
8-65                 (2)  a fee of $15 for filing an amendment to or
8-66     cancellation of a statement appointing an agent.
8-67           (f)  An amendment to a statement appointing an agent to
8-68     receive service of process must meet the requirements for execution
8-69     of an original statement.
 9-1           (g)  A statement appointing an agent may be canceled by
 9-2     filing with the secretary of state a written notice of cancellation
 9-3     executed by an officer of the Texas financial institution.  A
 9-4     notice of cancellation must contain:
 9-5                 (1)  the name of the Texas financial institution;
 9-6                 (2)  the federal tax identification number of the Texas
 9-7     financial institution;
 9-8                 (3)  the date of filing of the statement appointing the
 9-9     agent; and
9-10                 (4)  the current street address of the principal office
9-11     of the Texas financial institution.
9-12           (h)  Service of process on a registered agent appointed under
9-13     this section is an alternate method of service in addition to other
9-14     methods provided by law unless other law specifically requires
9-15     service to be made on the registered agent.  A resignation or
9-16     notice of cancellation is effective immediately on acknowledgement
9-17     of filing by the secretary of state, and after the acknowledgement
9-18     the financial institution is subject to service of process as
9-19     otherwise provided by law.
9-20           (i)  The secretary of state may adopt forms and procedural
9-21     rules for filing of documents under this section.
9-22                     CHAPTER 202. BANK HOLDING COMPANIES
9-23           Sec. 202.001.  ACQUISITION OF BANK OR BANK HOLDING COMPANY.
9-24     (a)  A company intending to acquire a Texas bank holding company or
9-25     a Texas bank shall submit to the commissioner a copy of the
9-26     application for approval or notice submitted to the Board of
9-27     Governors of the Federal Reserve System under Section 3, Bank
9-28     Holding Company Act (12 U.S.C. Section 1842).  The copy must be:
9-29                 (1)  submitted to the commissioner when the application
9-30     is submitted to the board of governors;
9-31                 (2)  accompanied by any additional information required
9-32     under Subsection (b); and
9-33                 (3)  accompanied by any filing fee required by law.
9-34           (b)  An applicant or notificant that is an out-of-state bank
9-35     holding company shall provide satisfactory evidence to the
9-36     commissioner of compliance with or inapplicability of:
9-37                 (1)  the requirements of Section 202.003; and
9-38                 (2)  if the applicant or notificant is not incorporated
9-39     under the laws of this state, the laws of this state relating to
9-40     registration of foreign corporations to do business in this state.
9-41           (c)  On receipt of the notice prescribed by Section 3(b),
9-42     Bank Holding Company Act (12 U.S.C. Section 1842(b)), the
9-43     commissioner shall state in writing within the period prescribed by
9-44     that subsection the commissioner's:
9-45                 (1)  views and recommendations concerning the proposed
9-46     transaction;
9-47                 (2)  opinion regarding whether the proposed transaction
9-48     complies with this chapter and the Interstate Banking and Branching
9-49     Efficiency Act; and
9-50                 (3)  opinion regarding whether the proposed transaction
9-51     complies with the Community Reinvestment Act of 1977 (12 U.S.C.
9-52     Section 2901 et seq.), as amended.
9-53           (d)  The commissioner is not required to disapprove the
9-54     application or notice solely because of the opinion stated under
9-55     Subsection (c)(3).
9-56           (e)  If the commissioner's response disapproves an
9-57     application for or notice of an acquisition of a Texas state bank
9-58     or a Texas bank holding company controlling a Texas state bank, the
9-59     commissioner may:
9-60                 (1)  appear at the hearing held as provided by Section
9-61     3(b), Bank Holding Company Act (12 U.S.C. Section 1842(b)); and
9-62                 (2)  present evidence at the hearing regarding the
9-63     reasons the application or notice should be denied.
9-64           (f)  If the commissioner's response disapproves an
9-65     application for or notice of an acquisition other than as described
9-66     by Subsection (e), the commissioner may request that a hearing be
9-67     held as provided by Section 3(b), Bank Holding Company Act (12
9-68     U.S.C. Section 1842(b)).  If the board of governors grants the
9-69     request, the commissioner shall appear and present evidence at the
 10-1    hearing regarding the reasons the application or notice should be
 10-2    denied.
 10-3          (g)  If the board of governors approves an application or
 10-4    notice that the commissioner disapproved, the commissioner may
 10-5    accept the decision or attempt to overturn the decision on appeal
 10-6    as provided by Section 9, Bank Holding Company Act (12 U.S.C.
 10-7    Section 1848).
 10-8          Sec. 202.002.  LIMITATION ON CONTROL OF DEPOSITS.  (a)  The
 10-9    commissioner may not approve an acquisition if, on consummation of
10-10    the transaction, the applicant, including all depository
10-11    institution affiliates of the applicant, would control 20 percent
10-12    or more of the total amount of deposits in this state held by
10-13    depository institutions in this state.
10-14          (b)  The commissioner may request and the applicant shall
10-15    provide supplemental information to the commissioner to aid in a
10-16    determination under this section, including information that is
10-17    more current than or in addition to information in the most
10-18    recently available summary of deposits, reports of condition, or
10-19    similar reports filed with or produced by state or federal
10-20    authorities.
10-21          Sec. 202.003.  REQUIRED AGE OF ACQUIRED BANK.  (a)  An
10-22    out-of-state bank holding company may not make an acquisition under
10-23    this chapter if the Texas bank to be acquired, or any Texas bank
10-24    subsidiary of the bank holding company to be acquired, has not been
10-25    in existence and in continuous operation for at least five years as
10-26    of the effective date of acquisition.
10-27          (b)  For purposes of this section:
10-28                (1)  a bank that is the successor as a result of merger
10-29    or acquisition of all or substantially all of the assets of a prior
10-30    bank is considered to have been in existence and continuously
10-31    operated during the period of its existence and continuous
10-32    operation as a bank and during the period of existence and
10-33    continuous operation of the prior bank; and
10-34                (2)  a bank effecting a purchase and assumption,
10-35    merger, or similar transaction with or supervised by the Federal
10-36    Deposit Insurance Corporation or its successor is considered to
10-37    have been in existence and continuously operated during the
10-38    existence and continuous operation of the bank with respect to
10-39    which the transaction was consummated.
10-40          Sec. 202.004.  ACQUISITION OF NONBANKING INSTITUTION.  (a)  A
10-41    bank holding company doing business in this state that submits an
10-42    application or notice to the Board of Governors of the Federal
10-43    Reserve System regarding an acquisition or activity regulated by
10-44    Section 4, Bank Holding Company Act (12 U.S.C. Section 1843), that
10-45    involves or will involve an office location in this state shall
10-46    submit to the commissioner a copy of the application or notice when
10-47    the application or notice is submitted to the board of governors.
10-48    The bank holding company shall submit other information reasonably
10-49    requested by the commissioner to determine the manner in which the
10-50    acquisition or activity will directly or indirectly affect
10-51    residents of this state.
10-52          (b)  To assist in determining whether to disapprove the
10-53    proposed acquisition or activity, the commissioner may hold a
10-54    public hearing as provided by Section 31.201, regardless of whether
10-55    requested to do so by a person, regarding the proposed acquisition
10-56    or activity and its effect on this state. The commissioner shall
10-57    convene a hearing if the bank holding company requests a hearing in
10-58    writing when it submits the application or notice to the
10-59    commissioner.
10-60          (c)  The commissioner shall disapprove the proposed
10-61    acquisition or activity if the commissioner determines that the
10-62    acquisition or activity would be detrimental to the public interest
10-63    as a result of probable adverse effects, including undue
10-64    concentration of resources, decreased or unfair competition,
10-65    conflicts of interest, or unsound banking practices.
10-66          (d)  If the commissioner determines to disapprove the
10-67    proposed acquisition or activity, the commissioner may prepare and
10-68    file a response to the application or notice with the board of
10-69    governors and may request that a hearing be held.  If the board of
 11-1    governors grants the request, the commissioner shall appear and
 11-2    present evidence at the hearing regarding the reasons the proposed
 11-3    acquisition or activity should be denied.
 11-4          (e)  If the board of governors approves a proposed
 11-5    acquisition or activity that the commissioner disapproved, the
 11-6    commissioner may accept the decision or seek to overturn the
 11-7    decision on appeal as provided by Section 9, Bank Holding Company
 11-8    Act (12 U.S.C. Section 1848).
 11-9          Sec. 202.005.  APPLICABLE LAWS.  (a)  The commissioner may:
11-10                (1)  examine a bank holding company that controls a
11-11    Texas bank to the same extent as if the bank holding company were a
11-12    Texas state bank; and
11-13                (2)  bring an enforcement proceeding under Chapter 35
11-14    against a bank holding company that violates or participates in a
11-15    violation of this subtitle, an agreement filed with the
11-16    commissioner under this chapter, or a rule adopted or order issued
11-17    by the commissioner or the finance commission under this subtitle,
11-18    as if the bank holding company were a Texas state bank.
11-19          (b)  A Texas bank that is controlled by a bank holding
11-20    company that is not a Texas bank holding company shall be subject
11-21    to all laws of this state that are applicable to Texas banks that
11-22    are controlled by Texas bank holding companies.
11-23            CHAPTER 203.  INTERSTATE BANK MERGERS AND BRANCHING
11-24          Sec. 203.001.  INTERSTATE BRANCHING BY TEXAS STATE BANKS.
11-25    (a)  With the prior approval of the commissioner, a Texas state
11-26    bank may establish and maintain a de novo branch or acquire a
11-27    branch in a state other than Texas pursuant to Section 32.203.
11-28          (b)  With the prior approval of the commissioner, a Texas
11-29    state bank may establish, maintain, and operate one or more
11-30    branches in another state pursuant to an interstate merger
11-31    transaction in which the Texas state bank is the resulting bank.
11-32    Not later than the date on which the required application for the
11-33    interstate merger transaction is filed with the responsible federal
11-34    bank supervisory agency, the applicant Texas state bank shall file
11-35    an application on a form prescribed by the commissioner and pay the
11-36    fee prescribed by law.  The applicant shall also comply with the
11-37    applicable provisions of Sections 32.301-32.303.  The commissioner
11-38    shall approve the interstate merger transaction and the operation
11-39    of branches outside of this state by the Texas state bank if the
11-40    commissioner makes the findings required by Section 32.302(b).  An
11-41    interstate merger transaction may be consummated only after the
11-42    applicant has received the commissioner's written approval.
11-43          Sec. 203.002.  CONDITIONS FOR ENTRY BY DE NOVO BRANCHING.
11-44    (a)  An out-of-state bank may establish a de novo branch in this
11-45    state if:
11-46                (1)  the laws of the home state of the out-of-state
11-47    bank would permit a Texas bank to establish and maintain a de novo
11-48    branch in that state under substantially the same terms and
11-49    conditions as set forth in this subchapter;
11-50                (2)  the out-of-state bank confirms in writing to the
11-51    commissioner that as long as it maintains a branch in this state,
11-52    it will comply with all applicable laws of this state;
11-53                (3)  the applicant provides satisfactory evidence to
11-54    the commissioner of compliance with the applicable requirements of
11-55    Section 201.102; and
11-56                (4)  the commissioner, acting on or before the 30th day
11-57    after the date the commissioner receives notice of an application
11-58    under Subsection (b), certifies to the responsible federal bank
11-59    supervisory agency that the requirements of this subchapter have
11-60    been met.
11-61          (b)  An out-of-state bank desiring to establish and maintain
11-62    a de novo branch shall provide written notice of the proposed
11-63    transaction to the commissioner not later than the date on which
11-64    the bank applies to the responsible federal bank supervisory agency
11-65    for approval to establish the branch.  The filing of the notice
11-66    must be accompanied by the filing fee, if any, prescribed by the
11-67    commissioner.
11-68          (c)  A de novo branch may be established in this state
11-69    through the acquisition of a branch of an existing Texas bank if
 12-1    the acquiring out-of-state bank complies with this section.
 12-2          Sec. 203.003.  ENTRY BY INTERSTATE MERGER TRANSACTION.  (a)
 12-3    Subject to Sections 203.004 and 203.005, one or more Texas banks
 12-4    may enter into an interstate merger transaction with one or more
 12-5    out-of-state banks under this chapter, and an out-of-state bank
 12-6    resulting from the transaction may maintain and operate the
 12-7    branches in this state of a Texas bank that participated in the
 12-8    transaction.  An out-of-state bank that will be the resulting bank
 12-9    in the interstate merger transaction shall comply with Section
12-10    201.102.
12-11          (b)  An out-of-state bank that will be the resulting bank
12-12    pursuant to an interstate merger transaction involving a Texas
12-13    state bank shall notify the commissioner of the proposed merger not
12-14    later than the date on which it files an application for an
12-15    interstate merger transaction with the responsible federal bank
12-16    supervisory agency, and shall submit a copy of that application to
12-17    the commissioner and pay the filing fee, if any, required by the
12-18    commissioner.  A Texas state bank that is a party to the interstate
12-19    merger transaction shall comply with Chapter 32 and with other
12-20    applicable state and federal laws.  An out-of-state bank that will
12-21    be the resulting bank in the interstate merger transaction shall
12-22    provide satisfactory evidence to the commissioner of compliance
12-23    with Section 201.102.
12-24          (c)  An out-of-state bank that does not operate a branch in
12-25    this state may not establish and maintain a branch in this state
12-26    through the acquisition of a branch of an existing Texas bank
12-27    except as provided by Section 203.002.
12-28          Sec. 203.004.  LIMITATION ON CONTROL OF DEPOSITS.  (a)  An
12-29    interstate merger transaction is not permitted if, on consummation
12-30    of the transaction, the resulting bank, including all depository
12-31    institution affiliates of the resulting bank, would control 20
12-32    percent or more of the total amount of deposits in this state held
12-33    by all depository institutions in this state.
12-34          (b)  The commissioner may request and the applicant shall
12-35    provide supplemental information to the commissioner to aid in a
12-36    determination under this section, including information that is
12-37    more current than or in addition to information in the most
12-38    recently available summary of deposits, reports of condition, or
12-39    similar reports filed with or produced by state or federal
12-40    authorities.
12-41          Sec. 203.005.  REQUIRED AGE OF ACQUIRED BANK.  (a)  An
12-42    out-of-state bank may not acquire a Texas bank in an interstate
12-43    merger transaction if the Texas bank has not been in existence and
12-44    in continuous operation for at least five years as of the effective
12-45    date of the interstate merger transaction.  However, this section
12-46    does not apply if the acquiring out-of-state bank could establish a
12-47    de novo branch in this state pursuant to Section 203.002.
12-48          (b)  For purposes of this section:
12-49                (1)  a bank that is the successor as a result of merger
12-50    or acquisition of all or substantially all of the assets of a prior
12-51    bank is considered to have been in existence and continuously
12-52    operated during the period of its existence and continuous
12-53    operation as a bank and during the period of existence and
12-54    continuous operation of the prior bank; and
12-55                (2)  a bank effecting a purchase and assumption,
12-56    merger, or similar transaction with or supervised by the Federal
12-57    Deposit Insurance Corporation or its successor is considered to
12-58    have been in existence and continuously operated during the
12-59    existence and continuous operation of the bank with respect to
12-60    which the transaction was consummated.
12-61          Sec. 203.006.  ADDITIONAL BRANCHES.  An out-of-state bank
12-62    that has established or acquired a branch in this state under this
12-63    chapter may establish or acquire additional branches in this state
12-64    to the same extent that a Texas state bank may establish or acquire
12-65    a branch in this state under applicable state and federal law.
12-66          Sec. 203.007.  EXAMINATIONS; PERIODIC REPORTS.  (a)  The
12-67    banking commissioner may make examinations of a branch established
12-68    and maintained in this state pursuant to this chapter by an
12-69    out-of-state bank as the banking commissioner considers necessary
 13-1    to determine whether the branch is being operated in compliance
 13-2    with the laws of this state and in accordance with safe and sound
 13-3    banking practices.  Sections 31.105-31.107 or 96.054-96.057, as
 13-4    appropriate, apply to the examinations.
 13-5          (b)  The commissioner may prescribe requirements for periodic
 13-6    reports from an out-of-state bank that operates a branch in Texas
 13-7    pursuant to this chapter.  Reporting requirements prescribed by the
 13-8    commissioner under this section must be:
 13-9                (1)  consistent with the reporting requirements
13-10    applicable to Texas state banks or state savings banks, as
13-11    appropriate; and
13-12                (2)  appropriate to discharge the responsibilities of
13-13    the commissioner under this chapter.
13-14                        CHAPTER 204.  FOREIGN BANKS
13-15                     SUBCHAPTER A.  GENERAL PROVISIONS
13-16          Sec. 204.001.  TRANSACTING BUSINESS.  (a)  A foreign bank may
13-17    not transact business in this state except to the extent permitted
13-18    by this chapter.
13-19          (b)  Subsection (a) does not prohibit a foreign bank:
13-20                (1)  from transacting business at a licensed federal
13-21    branch or agency in this state in accordance with federal law;
13-22                (2)  that does not maintain a branch or agency in this
13-23    state or conduct business from an office or location in this state
13-24    from making unsecured loans in this state or loans secured by liens
13-25    on real or personal property located in this state, enforcing those
13-26    loans in this state, or transacting trust business in this state,
13-27    to the extent permitted by other law; or
13-28                (3)  organized under the laws of a territory of the
13-29    United States, Puerto Rico, Guam, American Samoa, or the Virgin
13-30    Islands, the deposits of which are insured by the Federal Deposit
13-31    Insurance Corporation, from establishing and operating an
13-32    interstate branch in this state in its capacity as a state bank
13-33    pursuant to Chapter 203.
13-34          (c)  For purposes of Subsection (a), a foreign bank is not
13-35    considered to be transacting business in this state merely because
13-36    a subsidiary or affiliate transacts business in this state,
13-37    including business that a depository institution subsidiary or
13-38    affiliate may lawfully conduct in this state as an agent for the
13-39    foreign bank to the extent authorized by the laws of this state.
13-40          Sec. 204.002.  BOOKS, ACCOUNTS, AND RECORDS.  Each Texas
13-41    state branch, agency, or representative office shall maintain and
13-42    make available appropriate books, accounts, and records reflecting:
13-43                (1)  all transactions effected by or on behalf of the
13-44    office; and
13-45                (2)  all other actions taken in this state by employees
13-46    of the foreign bank located in this state to effect transactions on
13-47    behalf of an office of the foreign bank located outside this state.
13-48          Sec. 204.003.  EXAMINATION; FEES.  (a)  The commissioner may
13-49    make examinations of a Texas state branch, agency, or
13-50    representative office as the commissioner considers necessary to
13-51    determine whether the office is being operated in compliance with
13-52    the laws of this state and in accordance with safe and sound
13-53    banking practices.  Sections 31.105-31.107 apply to the
13-54    examinations.
13-55          (b)  A foreign bank that maintains a Texas state branch,
13-56    agency, or representative office shall pay fees to the commissioner
13-57    in accordance with Section 201.005 or rules adopted under this
13-58    subtitle.
13-59          Sec. 204.004.  REPORTS.  (a)  A foreign bank doing business
13-60    in this state through a Texas state branch, agency, or
13-61    representative office shall make written reports to the
13-62    commissioner that:
13-63                (1)  are in English;
13-64                (2)  are submitted at the times and in the form
13-65    specified by the commissioner or by rules adopted under this
13-66    subtitle;
13-67                (3)  are under oath of one of the foreign bank's
13-68    officers, managers, or agents transacting business in this state;
13-69                (4)  show the amount of the foreign bank's assets and
 14-1    liabilities, expressed in United States currency;
 14-2                (5)  with respect to a Texas state branch or agency,
 14-3    show the amount of the branch or agency's assets and liabilities,
 14-4    expressed in United States currency; and
 14-5                (6)  contain other information that the commissioner
 14-6    requires.
 14-7          (b)  A license or registration of a foreign bank under this
 14-8    chapter may be revoked or the foreign bank may be subject to an
 14-9    enforcement action under Chapter 35 if the foreign bank fails to
14-10    make a report required under Subsection (a) or makes a material
14-11    false or misleading statement in the report.
14-12          Sec. 204.005.  CHANGE OF CONTROL OF FOREIGN BANK.  A foreign
14-13    bank licensed to establish and maintain a Texas state branch or
14-14    agency pursuant to Subchapter B, or which has registered a Texas
14-15    representative office pursuant to Subchapter C, shall file with the
14-16    commissioner a notice of change of control, in the form and
14-17    containing the information the commissioner requires, not later
14-18    than the 14th day after the date of a merger or other transaction
14-19    that results or will result in a change of control.
14-20          Sec. 204.006.  OPERATIONS IN THIS STATE OF BANKS OWNED OR
14-21    CONTROLLED BY FOREIGN BANKS AND OTHER FOREIGN PERSONS.  (a)  Except
14-22    as provided in Subsection (b):
14-23                (1)  the laws of this state governing the acquisition
14-24    or ownership of interests in Texas banks or out-of-state banks
14-25    seeking to establish and maintain interstate branches in this state
14-26    do not prohibit ownership of those  institutions by, or otherwise
14-27    discriminate against, foreign banks or other foreign persons; and
14-28                (2)  the laws of this state governing the powers and
14-29    activities of Texas banks and out-of-state banks maintaining
14-30    interstate branches in this state do not discriminate among those
14-31    banks on the basis of their ownership or control by foreign banks
14-32    or other foreign persons.
14-33          (b)  Notwithstanding Subsection (a), the commissioner may
14-34    apply the laws of this state governing the ownership, control, or
14-35    operations of Texas banks, even if applicable specifically or
14-36    exclusively to foreign banks or other foreign persons, to the
14-37    extent those laws are determined by the commissioner to be:
14-38                (1)  substantially equivalent to or consistent with the
14-39    standards or requirements governing the ownership, control, or
14-40    operations of Texas banks by foreign banks or other foreign persons
14-41    under applicable federal law; or
14-42                (2)  otherwise consistent with the laws and policies of
14-43    the United States, including its international agreements governing
14-44    financial services.
14-45          Sec. 204.007.  ESTABLISHMENT OF INTERSTATE BRANCH IN THIS
14-46    STATE BY AN OUT-OF-STATE FOREIGN BANK.  (a)  An out-of-state
14-47    foreign bank may establish an interstate Texas state branch in the
14-48    same manner as, and subject to the same criteria, standards,
14-49    conditions, requirements, and procedures applicable to, the
14-50    establishment of an interstate branch in this state by an
14-51    out-of-state bank having the same home state in the United States,
14-52    including by acquisition of or merger with a Texas bank, or
14-53    establishment of a de novo branch in the manner provided by Section
14-54    203.002, notwithstanding another law of this state to the contrary
14-55    other than Subsection (b).
14-56          (b)  With respect to establishment of an initial interstate
14-57    Texas state branch and subsequent intrastate branches of an
14-58    out-of-state foreign bank, the commissioner:
14-59                (1)  shall apply the same criteria, standards,
14-60    conditions, requirements, and procedures applicable under
14-61    Subchapter B to the establishment of an initial Texas state branch
14-62    and subsequent intrastate branches in this state;
14-63                (2)  may apply other criteria, standards, conditions,
14-64    requirements, or provisions of the laws of this state that are
14-65    determined by the commissioner to be substantially equivalent to or
14-66    consistent with federal law generally applicable to the
14-67    establishment of a branch in the United States by a foreign bank or
14-68    specifically applicable to the establishment of a branch in the
14-69    United States by the applicant foreign bank; and
 15-1                (3)  may allow an out-of-state foreign bank to:
 15-2                      (A)  acquire or merge with another foreign bank
 15-3    maintaining a Texas branch or agency and after the acquisition or
 15-4    merger continue the operations as its own;
 15-5                      (B)  acquire or establish an interstate Texas
 15-6    branch through another means not inconsistent with Section 5,
 15-7    International Banking Act (12 U.S.C. Section 3103); or
 15-8                      (C)  convert a state agency to a state branch as
 15-9    provided by Section 204.008.
15-10          Sec. 204.008.  CONVERSION OF EXISTING OFFICE.  (a)  For
15-11    purposes of this section, foreign bank offices in this state are
15-12    divided into classes and ranked in ascending order as:
15-13                (1)  representative office;
15-14                (2)  Texas state agency; and
15-15                (3)  Texas state branch.
15-16          (b)  A foreign bank may change a lower class office into a
15-17    higher class office by applying for the higher class office
15-18    pursuant to Section 204.101.  On approval of the application to
15-19    establish the higher class office and after all conditions to the
15-20    approval have been fulfilled, the foreign bank may change the lower
15-21    class office into the higher class office and the commissioner
15-22    shall issue a license authorizing the bank to maintain the higher
15-23    class office.  The foreign bank shall promptly surrender any
15-24    license or registration previously issued by the commissioner in
15-25    connection with the lower class office.
15-26          (c)  A foreign bank may change a higher class office into a
15-27    lower class office by applying for approval to close the higher
15-28    class office pursuant to Section 204.115.  On approval of the
15-29    application to close the higher class office and after conditions
15-30    precedent to the closing have been fulfilled, the foreign bank may
15-31    change the higher class office into the lower class office, and the
15-32    commissioner shall issue a license or registration authorizing the
15-33    bank to maintain the lower class office.
15-34             (Sections 204.009-204.100 reserved for expansion
15-35            SUBCHAPTER B.  DIRECT BRANCH AND AGENCY OFFICES OF
15-36                               FOREIGN BANKS
15-37          Sec. 204.101.  APPLICATION TO ESTABLISH BRANCH OR AGENCY.
15-38    (a)  A foreign bank that desires to establish and maintain a Texas
15-39    state branch or agency shall submit an application to the
15-40    commissioner.  The application must:
15-41                (1)  be accompanied by all application fees and
15-42    deposits required by applicable rules;
15-43                (2)  be in the form specified by the commissioner;
15-44                (3)  be subscribed and acknowledged by an officer of
15-45    the foreign bank;
15-46                (4)  have attached:
15-47                      (A)  a complete copy of the foreign bank's
15-48    application to the Board of Governors of the Federal Reserve System
15-49    under Section 7(d), International Banking Act (12 U.S.C. Section
15-50    3105(d));
15-51                      (B)  an authenticated copy of the foreign bank's
15-52    articles of incorporation and bylaws or other constitutive
15-53    documents and, if the copy is in a language other than English, an
15-54    English translation of the document, under the oath of the
15-55    translator; and
15-56                      (C)  evidence of compliance with Section 201.102;
15-57                (5)  be submitted when the federal application is
15-58    submitted to the board of governors; and
15-59                (6)  include on its face or in accompanying documents:
15-60                      (A)  the name of the foreign bank;
15-61                      (B)  the street address where the principal
15-62    office of the Texas state branch or agency is to be located and, if
15-63    different, the Texas state branch or agency's mailing address;
15-64                      (C)  the name and qualifications of each officer
15-65    and director of the foreign bank who will have control of all or
15-66    part of the business and affairs of the Texas state branch or
15-67    agency;
15-68                      (D)  a detailed statement of the foreign bank's
15-69    financial condition as of a date not more than 360 days before the
 16-1    date of the application; and
 16-2                      (E)  other information that:
 16-3                            (i)  is necessary to enable the
 16-4    commissioner to make the findings listed in Section 204.103;
 16-5                            (ii)  is required by rules adopted under
 16-6    this subtitle; or
 16-7                            (iii)  the commissioner reasonably
 16-8    requests.
 16-9          (b)  The finance commission may adopt rules prescribing
16-10    abbreviated application procedures and standards applicable to
16-11    applications by foreign banks that have already established an
16-12    initial Texas state branch or agency to establish additional
16-13    intrastate branches or agencies.
16-14          Sec. 204.102.  HEARING AND DECISION ON APPLICATION.  (a)
16-15    After the application is complete and accepted for filing and all
16-16    required fees and deposits have been paid, the commissioner shall
16-17    determine from the application and the initial investigation
16-18    whether the conditions set forth by Section 204.103 have been
16-19    established.  The commissioner shall approve the application or set
16-20    the application for hearing.
16-21          (b)  If the commissioner sets the application for hearing:
16-22                (1)  the commissioner shall notify the Board of
16-23    Governors of the Federal Reserve System that the application has
16-24    been set for hearing as provided by federal regulations;
16-25                (2)  the department shall participate as the opposing
16-26    party; and
16-27                (3)  the commissioner shall conduct the hearing and one
16-28    or more prehearing conferences and opportunities for discovery as
16-29    the commissioner considers advisable and consistent with applicable
16-30    law.
16-31          (c)  Information relating to the financial condition and
16-32    business affairs of the foreign bank and financial information
16-33    relating to its management and shareholders, except for previously
16-34    published statements and information, is confidential and may not
16-35    be considered in the public portion of the hearing or disclosed by
16-36    the commissioner or an employee of the department except as
16-37    provided by Subchapter D, Chapter 31.
16-38          (d)  The commissioner shall make a finding from the record of
16-39    the hearing on each condition listed in Section 204.103 and enter
16-40    an order granting or denying the license.  If the license is
16-41    denied, the commissioner shall inform the Board of Governors of the
16-42    Federal Reserve System of the order and the reasons the federal
16-43    application should be denied.
16-44          (e)  The commissioner may make approval of an application
16-45    conditional.  The commissioner shall include any conditions in the
16-46    order granting the license but may not issue the license until the
16-47    Texas state branch or agency has received the approval of the Board
16-48    of Governors of the Federal Reserve System.  If the approval is
16-49    conditioned on a written commitment from the applicant offered to
16-50    and accepted by the commissioner, the commitment is enforceable
16-51    against the applicant.
16-52          Sec. 204.103.  ISSUANCE OF LICENSE.  (a)  The commissioner
16-53    shall issue a license to a foreign bank to establish and maintain a
16-54    Texas state branch or agency if the commissioner finds after
16-55    reasonable inquiry that:
16-56                (1)  all members of the management of the Texas state
16-57    branch or agency have sufficient banking experience, ability,
16-58    standing, competence, trustworthiness, and integrity to justify a
16-59    belief that the agency will operate in compliance with state law;
16-60                (2)  the foreign bank has sufficient standing to
16-61    justify a belief that the Texas state branch or agency will be free
16-62    from improper or unlawful influence or interference with respect to
16-63    the office's operation in compliance with state law; and
16-64                (3)  the foreign bank is acting in good faith and the
16-65    application does not contain a material misrepresentation.
16-66          (b)  Each Texas state branch or agency shall post its license
16-67    in a conspicuous place at its office.  A license issued under this
16-68    subchapter is not transferable or assignable.
16-69          Sec. 204.104.  NO CONCURRENT FEDERAL BRANCH OR AGENCY.  (a)
 17-1    A foreign bank licensed under this subchapter to establish and
 17-2    maintain a Texas state branch or agency may not concurrently
 17-3    maintain a federal branch or federal agency in this state.
 17-4          (b)  A foreign bank which maintains a federal branch or
 17-5    federal agency in this state may not concurrently be licensed under
 17-6    this subchapter to maintain a Texas state branch or agency.
 17-7          Sec. 204.105.  POWERS OF BRANCH AND AGENCY.  (a)  A Texas
 17-8    state branch or agency is subject to this subtitle and other laws
 17-9    of this state applicable to banks as if the Texas state branch or
17-10    agency were a Texas state bank unless:
17-11                (1)  this chapter or a rule adopted under this subtitle
17-12    provides otherwise; or
17-13                (2)  the context of a provision or other information
17-14    indicates that a provision applies only to a bank organized under
17-15    the laws of a state or the United States.
17-16          (b)  Among other exceptions to Subsection (a) that may be
17-17    required or authorized by the commissioner provided by this
17-18    subchapter or by rules adopted under this subtitle:
17-19                (1)  a Texas state branch may not accept deposits of
17-20    less than $100,000 from citizens or residents of the United States,
17-21    other than credit balances that are incidental to or arise out of
17-22    its exercise of other lawful banking powers, unless the Federal
17-23    Deposit Insurance Corporation determines that specific deposit
17-24    taking activities in lesser amounts do not constitute domestic
17-25    retail deposit activities requiring deposit insurance protection
17-26    within the meaning of Section 6, International Banking Act (12
17-27    U.S.C. Section 3104);
17-28                (2)  a Texas state agency may not accept deposits from
17-29    citizens or residents of the United States, other than credit
17-30    balances that are incidental to or arise out of its exercise of
17-31    other lawful banking powers, but may accept deposits from persons
17-32    who are neither citizens nor residents of the United States; and
17-33                (3)  a limitation or restriction based on the capital
17-34    and certified surplus of a Texas state bank is considered to refer,
17-35    as applied to a Texas state branch or agency, to the dollar
17-36    equivalent of the capital and surplus of the foreign bank, and if
17-37    the foreign bank has more than one Texas state branch or agency in
17-38    this state, the business transacted by all the branches and
17-39    agencies must be aggregated in determining compliance with the
17-40    limitation.
17-41          (c)  Subject to Subsections (a) and (b), a foreign bank
17-42    licensed to transact business in this state through a Texas state
17-43    branch or agency may:
17-44                (1)  borrow and lend money with or without property as
17-45    security;
17-46                (2)  purchase, sell, and make loans regardless of
17-47    whether the loans are secured by bonds or mortgages on real
17-48    property;
17-49                (3)  engage in a foreign exchange transaction;
17-50                (4)  issue, advise, confirm, and otherwise deal with a
17-51    letter of credit and pay, accept, or negotiate a draft drawn under
17-52    a letter of credit;
17-53                (5)  accept a bill of exchange or draft;
17-54                (6)  buy or acquire and sell or dispose of a bill of
17-55    exchange, draft, note, acceptance, or other obligation for the
17-56    payment of money;
17-57                (7)  maintain a credit balance of money received at the
17-58    Texas state branch or agency incidental to or arising out of the
17-59    exercise of its authorized activities in this state if the money is
17-60    not intended to be a deposit and does not remain in the Texas state
17-61    branch or agency after the completion of all transactions to which
17-62    it relates;
17-63                (8)  accept deposits to the extent permitted by
17-64    Subsection (b);
17-65                (9)  receive money for transmission and transmit the
17-66    money from its authorized place of business in this state to any
17-67    other place;
17-68                (10)  act as an indenture trustee or as a registrar,
17-69    paying agent, or transfer agent, on behalf of the issuer, for
 18-1    equity or investment securities; and
 18-2                (11)  perform other activities that:
 18-3                      (A)  are authorized by rules adopted to
 18-4    accomplish the purposes of this subtitle; or
 18-5                      (B)  the commissioner determines are analogous or
 18-6    incidental to specific activities authorized by this section for a
 18-7    Texas state branch or agency.
 18-8          (d)  A foreign bank licensed to transact business in this
 18-9    state through a Texas state branch or agency may share the premises
18-10    of the Texas state branch or agency with another authorized office
18-11    of the foreign bank or a direct or indirect subsidiary of the
18-12    foreign bank if the books and records of the Texas state branch or
18-13    agency are kept separately from the books and records of the other
18-14    office.
18-15          (e)  For purposes of this section, the term "resident of the
18-16    United States" means:
18-17                (1)  an individual residing in the United States;
18-18                (2)  a corporation, partnership, association, or other
18-19    entity organized in the United States; or
18-20                (3)  a branch or office located in the United States of
18-21    an entity that is not organized in the United States.
18-22          Sec. 204.106.  APPLICATION TO ACT AS FIDUCIARY.  (a)  Except
18-23    as provided by Section 204.105(c)(10), a foreign bank may not act
18-24    as a fiduciary at a Texas state branch or agency except by
18-25    obtaining a fiduciary license as provided by this section.  A
18-26    foreign bank that intends to act as a fiduciary at a Texas state
18-27    branch or agency shall submit an application to the commissioner.
18-28    The application must:
18-29                (1)  be accompanied by all application fees and
18-30    deposits required by applicable rules;
18-31                (2)  be in the form specified by the commissioner;
18-32                (3)  be subscribed and acknowledged by an officer of
18-33    the foreign bank;
18-34                (4)  describe in detail:
18-35                      (A)  the proposed fiduciary activities;
18-36                      (B)  the names and relevant expertise of its
18-37    officers and employees that will conduct the fiduciary activities;
18-38    and
18-39                      (C)  the manner in which the fiduciary activities
18-40    will be captured in the books and records of the Texas state branch
18-41    or agency with due regard for separation of beneficial and legal
18-42    interests; and
18-43                (5)  contain other information that:
18-44                      (A)  is necessary to enable the commissioner to
18-45    make the findings required by Subsection (c);
18-46                      (B)  is required by rules adopted under this
18-47    subtitle; or
18-48                      (C)  the commissioner reasonably requests.
18-49          (b)  On or before the 60th day after the date the application
18-50    is complete and accepted for filing and all required fees and
18-51    deposits have been paid, the commissioner shall approve the
18-52    application or set the application for hearing.  If the
18-53    commissioner sets the application for hearing, the department shall
18-54    participate as the opposing party and the commissioner shall
18-55    conduct the hearing and one or more prehearing conferences and
18-56    opportunities for discovery as the commissioner considers advisable
18-57    and consistent with applicable law.
18-58          (c)  The commissioner may issue a license permitting the
18-59    foreign bank to engage in fiduciary activities if the commissioner
18-60    finds that the foreign bank will exercise its fiduciary powers in
18-61    accordance with the laws of this state and has sufficient fiduciary
18-62    and accounting expertise and controls to protect beneficial
18-63    interests under its control.  The commissioner may make approval of
18-64    an application conditional by including conditions and limitations
18-65    in the order granting the license.  If the approval is conditioned
18-66    on a written commitment from the applicant offered to and accepted
18-67    by the commissioner, the commitment is enforceable against the
18-68    applicant.
18-69          (d)  A foreign bank that obtains the approval of the
 19-1    commissioner under this section may engage in fiduciary activities
 19-2    at its Texas state branch or agency to the same extent and in the
 19-3    same manner as a Texas state bank could do so at the same location,
 19-4    subject to any conditions or limitations applicable to the license.
 19-5          (e)  The commissioner may initiate an enforcement action
 19-6    under Chapter 35 or may suspend or revoke the authority of a
 19-7    foreign bank to engage in fiduciary activities in this state in the
 19-8    same manner as a revocation of license under Section 204.118 if the
 19-9    commissioner finds in writing that:
19-10                (1)  conditions exist related to the fiduciary
19-11    activities of the foreign bank in this state which would authorize
19-12    the commissioner to revoke or suspend its license pursuant to
19-13    Section 204.117; or
19-14                (2)  a fact or condition exists which, if it had
19-15    existed at the time of the foreign bank's original notice to engage
19-16    in fiduciary activities, would have resulted in the commissioner
19-17    denying authority to engage in fiduciary activities.
19-18          Sec. 204.107.  FILING OF AMENDMENTS TO ARTICLES OF
19-19    INCORPORATION.  If the articles of incorporation of a foreign bank
19-20    licensed to maintain a Texas state branch or agency are amended,
19-21    the foreign bank shall promptly file with the commissioner a copy
19-22    of the amendment, duly authenticated by the proper officer of the
19-23    country of the foreign bank's organization.  The filing does not
19-24    enlarge or alter the business the foreign bank is authorized to
19-25    pursue in this state, authorize the foreign bank to transact
19-26    business in this state under a name other than the name set forth
19-27    in its license, or extend the duration of its corporate existence.
19-28          Sec. 204.108.  AMENDED LICENSE FOR BRANCH OR AGENCY.  (a)  A
19-29    foreign bank licensed to establish and maintain a Texas state
19-30    branch or agency shall apply to the commissioner for an amended
19-31    license if it changes its corporate name, changes the duration of
19-32    its corporate existence, or desires to pursue in this state other
19-33    or additional purposes than those set forth in its prior
19-34    application for the foreign bank's license or amended license then
19-35    in effect.
19-36          (b)  The requirements with respect to the form and contents
19-37    of an application under Subsection (a), the manner of its
19-38    execution, the issuance of an amended license, and the effect of
19-39    the amended license are the same as in the case of an initial
19-40    application for a license to establish and maintain a Texas state
19-41    branch or agency.
19-42          Sec. 204.109.  RELOCATION OF OFFICE.  (a)  With the prior
19-43    written approval of the commissioner, a foreign bank licensed to
19-44    establish and maintain a Texas state branch or agency may relocate
19-45    the branch or agency office.  A foreign bank that intends to
19-46    relocate a Texas state branch or agency office shall submit a
19-47    letter to the commissioner describing the address of the proposed
19-48    location, the reasons for relocation, and the manner of notifying
19-49    its customers of the relocation.
19-50          (b)  On or before the 30th day after the date the foreign
19-51    bank's letter has been accepted for filing and any required fee has
19-52    been paid, the commissioner shall approve or deny the relocation.
19-53    The commissioner may not permit the foreign bank to relocate its
19-54    Texas state branch or agency office if the commissioner finds that
19-55    the proposed location and the manner of relocation and notification
19-56    will be deceptive or that the relocation will impede or tend to
19-57    impede the foreign bank's depositors and creditors in this state.
19-58          Sec. 204.110.  SEPARATE ASSETS.  (a)  Each foreign bank
19-59    licensed to establish and maintain a Texas state branch or agency
19-60    in this state shall keep the assets of its business in this state
19-61    separate and apart from the assets of its business outside this
19-62    state.
19-63          (b)  The depositors and creditors of a foreign bank arising
19-64    out of transactions with, and recorded on the books of, its Texas
19-65    state branch or agency are entitled to absolute preference and
19-66    priority over the depositors and creditors of the foreign bank's
19-67    offices located outside this state with respect to the assets of
19-68    the foreign bank in this state.
19-69          Sec. 204.111.  DISCLOSURE OF LACK OF DEPOSIT INSURANCE.  Each
 20-1    foreign bank licensed to establish and maintain a Texas state
 20-2    branch or agency shall give notice that deposits and credit
 20-3    balances in the office are not insured by the Federal Deposit
 20-4    Insurance Corporation.
 20-5          Sec. 204.112.  LIMITATIONS ON PAYMENT OF INTEREST ON
 20-6    DEPOSITS.  A foreign bank licensed to establish and maintain a
 20-7    Texas state branch or agency is subject to the same limitations
 20-8    with respect to the payment of interest on deposits as a state bank
 20-9    that is a member of the Federal Reserve System.
20-10          Sec. 204.113.  PLEDGE OF ASSETS.  (a)  In accordance with
20-11    rules adopted under this subtitle, a foreign bank licensed to
20-12    establish and maintain a Texas state branch or agency may be
20-13    required to keep on deposit, with unaffiliated banks in this state
20-14    that the foreign bank designates and the commissioner approves,
20-15    money and securities pledged to the commissioner in an aggregate
20-16    amount to be determined by the commissioner, valued at the lower of
20-17    principal amount or market value, consisting of:
20-18                (1)  dollar deposits;
20-19                (2)  bonds, notes, debentures, or other legally
20-20    created, general obligations of a state, an agency or political
20-21    subdivision of a state, the United States, or an instrumentality of
20-22    the United States;
20-23                (3)  securities that this state, an agency or political
20-24    subdivision of this state, the United States, or an instrumentality
20-25    of the United States has unconditionally agreed to purchase,
20-26    insure, or guarantee;
20-27                (4)  securities issued or guaranteed by the Federal
20-28    Home Loan Mortgage Corporation, the Federal National Mortgage
20-29    Association, the Government National Mortgage Association, the
20-30    Federal Agricultural Mortgage Corporation, or the Federal Farm
20-31    Credit Banks Funding Corporation;
20-32                (5)  obligations of or issued or guaranteed by the
20-33    International Bank for Reconstruction and Development, the African
20-34    Development Bank, the Asian Development Bank, the InterAmerican
20-35    Development Bank, or the North American Development Bank; or
20-36                (6)  other assets as may be permitted by rule.
20-37          (b)  The assets deposited and the amount of the assets to be
20-38    maintained under Subsection (a) are subject to the conditions and
20-39    limitations the commissioner considers necessary or desirable for
20-40    the maintenance of a sound financial condition, the protection of
20-41    depositors, creditors, and the public interest in this state, and
20-42    the support of public confidence in the business of the Texas state
20-43    branch or agency.  The commissioner may give credit to reserves
20-44    required to be maintained with a federal reserve bank in or outside
20-45    this state pursuant to federal law, in accordance with rules
20-46    adopted under this subtitle.
20-47          (c)  While a foreign bank continues business in the ordinary
20-48    course, the foreign bank may collect interest on the money and
20-49    securities deposited under this section and from time to time
20-50    exchange, examine, and verify the securities.
20-51          Sec. 204.114.  ASSET MAINTENANCE.  (a)  In accordance with
20-52    rules adopted under this subtitle, a foreign bank licensed to
20-53    establish and maintain a Texas state branch or agency shall at all
20-54    times satisfy the ratio of branch or agency assets to liabilities
20-55    determined by the commissioner, in the commissioner's sole
20-56    discretion, to be necessary or desirable with respect to the
20-57    foreign bank.  The type of assets to be held in this state are
20-58    specified by Subsection (b) and the type of liabilities to be
20-59    included in the ratio are specified by Subsection (c).
20-60          (b)  Assets to be held in this state for the purpose of
20-61    satisfying the ratio of assets to liabilities:
20-62                (1)  include:
20-63                      (A)  currency, bonds, notes, debentures, drafts,
20-64    bills of exchange, or other evidences of indebtedness, including
20-65    loan participation agreements or certificates;
20-66                      (B)  other obligations payable in the United
20-67    States or in United States funds or, with the prior approval of the
20-68    commissioner, in funds freely convertible into United States funds;
20-69    and
 21-1                      (C)  other assets the commissioner permits or as
 21-2    may be specified by rule; and
 21-3                (2)  exclude obligations of a person for money borrowed
 21-4    to the extent that the total of the obligations of the person
 21-5    exceeds 10 percent of total assets considered for purposes of this
 21-6    section.
 21-7          (c)  Liabilities included for purposes of calculating the
 21-8    ratio of assets to liabilities:
 21-9                (1)  include all liabilities of the foreign bank
21-10    appearing in the books, accounts, or records of its Texas state
21-11    branch or agency, including acceptances; and
21-12                (2)  exclude amounts due and other liabilities to other
21-13    offices, agencies, branches, and wholly owned subsidiaries of the
21-14    foreign bank, and other liabilities the commissioner determines.
21-15    The existence of a nominal number of directors' shares outstanding
21-16    does not cause a subsidiary to be considered less than wholly
21-17    owned.
21-18          (d)  Subject to rules adopted under this subtitle, the
21-19    commissioner, in the commissioner's sole discretion, may vary the
21-20    ratio of assets to liabilities required by this section for a
21-21    foreign bank as may be necessary or desirable to reflect
21-22    differences among Texas branches or Texas agencies because of:
21-23                (1)  the financial condition of Texas branch or agency
21-24    offices of the foreign bank;
21-25                (2)  the financial condition of branch or agency
21-26    offices of the foreign bank located in other states;
21-27                (3)  the general economic conditions prevalent in the
21-28    home country of the foreign bank; or
21-29                (4)  the financial condition of the foreign bank
21-30    itself, including:
21-31                      (A)  the financial condition of its branches and
21-32    agencies located in other countries;
21-33                      (B)  the financial condition of its affiliated
21-34    bank and nonbank subsidiaries in the United States; and
21-35                      (C)  the financial condition of the foreign bank
21-36    on a worldwide consolidated basis or in its home country.
21-37          (e)  For purposes of this section, assets must be valued at
21-38    the lower of principal amount or market value.  The commissioner
21-39    may determine the value of a non-marketable security, loan, or
21-40    other asset or obligation held or owed to the foreign bank or its
21-41    Texas state branch or agency in this state.  If the commissioner
21-42    cannot determine the value of an non-marketable asset, the asset
21-43    must be excluded from the ratio computation.
21-44          (f)  The commissioner may require a foreign bank to deposit
21-45    the assets required to be held in this state pursuant to this
21-46    section with specific banks in this state designated by the
21-47    commissioner if, because of the existence or the potential
21-48    occurrence of unusual and extraordinary circumstances, the
21-49    commissioner considers it necessary or desirable for the
21-50    maintenance of a sound financial condition, the protection of
21-51    depositors, creditors, and the public interest in this state, and
21-52    the maintenance of public confidence in the business of a Texas
21-53    state branch or agency.
21-54          Sec. 204.115.  VOLUNTARY CLOSURE OF BRANCH OR AGENCY.  (a)  A
21-55    foreign bank licensed to establish and maintain a Texas state
21-56    branch or agency may not close the office without filing an
21-57    application with, and obtaining the prior approval of, the
21-58    commissioner.  An application by a foreign bank under this section
21-59    must be in the form and include the information the commissioner
21-60    requires.
21-61          (b)  The commissioner shall approve the application if the
21-62    commissioner finds that the closing of the office will not be
21-63    substantially detrimental to the foreign bank's depositors and
21-64    creditors in this state.  An application may be approved subject to
21-65    conditions imposed by the commissioner for the continued protection
21-66    of the foreign bank's depositors and creditors in this state,
21-67    including a condition that the foreign bank pledge assets in the
21-68    manner specified by Section 204.113 for a specified period of time.
21-69          (c)  When an application by a foreign bank under this section
 22-1    has been approved and all conditions precedent to the closing have
 22-2    been fulfilled, the foreign bank may close the office and an
 22-3    officer, manager, or agent of the foreign bank shall deliver to the
 22-4    commissioner:
 22-5                (1)  all copies of examination reports or other
 22-6    property of the department;
 22-7                (2)  a statement under oath by an authorized officer,
 22-8    manager, or agent of the foreign bank that all deposit and other
 22-9    liabilities of the Texas state branch or agency to depositors and
22-10    creditors in this state have been properly discharged by payment or
22-11    pledge or otherwise assumed or retained by a financial institution;
22-12                (3)  the license issued by the commissioner;
22-13                (4)  an appropriate board resolution closing the Texas
22-14    state branch or agency; and
22-15                (5)  a statement of the location where the records of
22-16    the Texas state branch or agency will be kept after the closing.
22-17          Sec. 204.116.  ENFORCEMENT.  The commissioner may initiate an
22-18    enforcement action under Chapter 35 or a proceeding to revoke the
22-19    license of a Texas state branch or agency if the commissioner by
22-20    examination or other credible evidence finds that the foreign bank:
22-21                (1)  does not currently meet the criteria established
22-22    by this chapter for the original issuance of a license;
22-23                (2)  has refused to permit the commissioner to examine
22-24    its books, papers, accounts, records, or affairs in accordance with
22-25    Sections 204.002 and 204.003;
22-26                (3)  has failed to make a report required under this
22-27    chapter or made a material false or misleading statement in the
22-28    report;
22-29                (4)  has violated this subtitle, another law or rule
22-30    applicable to a foreign bank or a Texas state branch or agency, or
22-31    a final and enforceable order of the commissioner or the finance
22-32    commission;
22-33                (5)  has misrepresented or concealed a material fact in
22-34    the original application for license;
22-35                (6)  has violated a condition of its license or an
22-36    agreement between the foreign bank and the commissioner or the
22-37    department; or
22-38                (7)  conducts business in an unsafe and unsound manner.
22-39          Sec. 204.117.  PROCEDURE FOR REVOCATION.  (a)  Notice of a
22-40    revocation proceeding must:
22-41                (1)  be in the form of a proposed order;
22-42                (2)  be served on the foreign bank by personal delivery
22-43    or registered or certified mail, return receipt requested, to a
22-44    director, officer, manager, or employee of the foreign bank at a
22-45    Texas state branch or agency location, or to the registered agent
22-46    of the foreign bank;
22-47                (3)  state the effective date of the proposed order,
22-48    which may not be before the 21st day after the date the proposed
22-49    order is mailed or delivered except as otherwise provided in
22-50    Section 204.118; and
22-51                (4)  state the grounds for the proposed revocation with
22-52    reasonable certainty.
22-53          (b)  Unless the foreign bank requests a hearing in writing on
22-54    or before the effective date of the proposed order, the order takes
22-55    effect as proposed and is final and nonappealable.
22-56          (c)  A hearing requested on a proposed order shall be held
22-57    not later than the 30th day after the date the written request for
22-58    hearing is received by the department unless the parties agree to a
22-59    later hearing date.  The department shall participate as the
22-60    opposing party, and the commissioner shall conduct the hearing and
22-61    one or more prehearing conferences and opportunities for discovery
22-62    as the commissioner considers advisable and consistent with
22-63    applicable statutes and rules.  The foreign bank may not accept new
22-64    business during the pendency of the hearing unless the commissioner
22-65    gives prior written approval, except that it shall comply with any
22-66    stricter requirements imposed by Section 7(e), International
22-67    Banking Act (12 U.S.C. Section 3105(e)).
22-68          (d)  Information relating to the financial condition and
22-69    business affairs of the foreign bank, except previously published
 23-1    statements and information, is confidential and may not be
 23-2    considered in the public portion of the hearing or disclosed by the
 23-3    commissioner or an employee of the department except as provided by
 23-4    Subchapter D, Chapter 31.
 23-5          (e)  Based on the record, the commissioner shall issue or
 23-6    refuse to issue the proposed order.  An issued order may contain
 23-7    modifications indicated by the record to be necessary or desirable,
 23-8    including modifications to impose penalties available under Chapter
 23-9    35 in lieu of license revocation.
23-10          Sec. 204.118.  IMMEDIATE SUSPENSION OR REVOCATION.  (a)  If
23-11    the commissioner finds that any of the factors set forth in Section
23-12    204.116 are true with respect to a foreign bank licensed to
23-13    maintain a Texas state branch or agency and that it is necessary
23-14    for the protection of the interests of creditors of the foreign
23-15    bank's business in this state or for the protection of the public
23-16    interest that the commissioner immediately suspend or revoke the
23-17    license of the foreign bank, the commissioner may issue, without
23-18    notice and hearing, an order suspending or revoking the license of
23-19    the foreign bank for a period of up to 90 days, pending
23-20    investigation or hearing under Section 204.117.
23-21          (b)  An order issued under this section shall be served on
23-22    the foreign bank in the manner required by Section 204.117(a)(2).
23-23          Sec. 204.119.  STATUS OF REVOKED LICENSE.  Unless stayed by
23-24    the finance commission or district court that has jurisdiction over
23-25    an appeal, a final order of the commissioner revoking a license is
23-26    effective immediately and the foreign bank shall immediately cease
23-27    all activity in this state requiring a license.  Subject to Section
23-28    204.120, all functions requiring a license must be immediately
23-29    transferred to a branch, affiliate, or agency of the foreign bank
23-30    that is located outside of this state and that has the power to
23-31    perform those functions under governing law.  Continued activity in
23-32    this state of an unlicensed foreign bank is subject to Subchapter
23-33    C, Chapter 35.
23-34          Sec. 204.120.  SEIZURE AND LIQUIDATION.  (a)  If the
23-35    commissioner finds that any of the factors set forth in Section
23-36    204.116 are true with respect to a foreign bank licensed to
23-37    establish and maintain a Texas state branch or agency, the
23-38    commissioner may by order immediately take possession of the
23-39    property and business of the foreign bank in this state if that
23-40    action is necessary or desirable for the protection of the
23-41    interests of the depositors and creditors of the foreign bank's
23-42    business in this state or for the protection of the public.  The
23-43    commissioner shall retain possession until the foreign bank resumes
23-44    business in this state or is finally liquidated, except that the
23-45    commissioner may permit the foreign bank to resume business in this
23-46    state on conditions the commissioner requires.  An order issued
23-47    under this section shall be served on the foreign bank in the
23-48    manner required by Section 204.117(a)(2).
23-49          (b)  As soon as practicable after taking possession of the
23-50    property and business of a foreign bank pursuant to Subsection (a),
23-51    the commissioner shall initiate a receivership proceeding by filing
23-52    a copy of the order issued under this section in a district court
23-53    in Travis County to be governed by Chapter 36 as if the foreign
23-54    bank were a Texas state bank, except as otherwise provided by this
23-55    section.  Notwithstanding the priorities established by Chapter 36,
23-56    the depositors and creditors of the Texas state branch or agency,
23-57    arising out of transactions with and recorded on the books of the
23-58    Texas state branch or agency, have an absolute preference and
23-59    priority over the creditors of the foreign bank's offices located
23-60    outside this state.
23-61          (c)  An action initiated that seeks to directly or indirectly
23-62    affect the assets of the Texas state branch or agency is considered
23-63    to be an intervention in the receivership proceeding.  Venue for an
23-64    action instituted to effect, contest, or otherwise intervene in the
23-65    liquidation of a Texas state branch or agency is in Travis County,
23-66    except that on motion filed and served concurrently with or before
23-67    the filing of the answer, the court may, on a finding of good
23-68    cause, transfer the action to the county of the Texas state branch
23-69    or agency location.
 24-1          (d)  The foreign bank may contest the commissioner's actions
 24-2    as provided by this subsection.  On or before the 10th day after
 24-3    the date the commissioner has taken possession of the property and
 24-4    business of a foreign bank pursuant to Subsection (a), the foreign
 24-5    bank, acting through a majority of its directors, may intervene in
 24-6    the action filed by the banking commissioner to challenge the
 24-7    commissioner's closing of the foreign bank's Texas state branch or
 24-8    agency and to enjoin the commissioner or other receiver from
 24-9    liquidating its assets.  The court may issue an ex parte order
24-10    restraining the commissioner or other receiver from liquidating the
24-11    foreign bank's assets pending a hearing on the injunction.  The
24-12    commissioner or other receiver shall comply with the restraining
24-13    order but may petition the court for permission to liquidate an
24-14    asset as necessary to prevent its loss or diminution pending the
24-15    outcome of the injunction.  The commissioner or other receiver may
24-16    not be required to post bond.  The court shall hear this action as
24-17    quickly as possible and shall give it priority over other business.
24-18    The foreign bank or the commissioner or other receiver may appeal
24-19    the court's judgment as in other civil cases, except that the
24-20    commissioner or other receiver shall retain all seized foreign bank
24-21    assets pending a final appellate court order even if the
24-22    commissioner does not prevail in the trial court.  If the
24-23    commissioner prevails in the trial court, liquidation of the state
24-24    trust company may proceed unless the trial court or appellate court
24-25    orders otherwise.  If liquidation is enjoined or stayed pending
24-26    appeal, the trial court retains jurisdiction to permit liquidation
24-27    of an asset as necessary to prevent its loss or diminution pending
24-28    the outcome of the appeal.
24-29          (e)  After the commissioner or other receiver has completed
24-30    the liquidation of the property and business of a foreign bank, the
24-31    commissioner or other receiver shall transfer any remaining assets
24-32    to the foreign bank in accordance with the court's orders, except
24-33    that:
24-34                (1)  if the foreign bank has an office in another state
24-35    of the United States that is in liquidation and the assets of the
24-36    office appear to be insufficient to pay in full the creditors of
24-37    that office, the court shall order the commissioner or other
24-38    receiver to transfer to the liquidator of that office the amount of
24-39    the remaining assets that appears to be necessary to cover the
24-40    insufficiency; or
24-41                (2)  if the foreign bank has two or more such offices
24-42    in liquidation and the amount of remaining assets is less than the
24-43    aggregate amount of insufficiencies with respect to the offices,
24-44    the court shall order the commissioner or other receiver to
24-45    distribute the remaining assets among the liquidators of the
24-46    offices in the manner the court finds equitable.
24-47          Sec. 204.121.  DISSOLUTION.  (a)  If a foreign bank licensed
24-48    to maintain a Texas state branch or agency in this state is
24-49    dissolved, has its authority or existence terminated or canceled in
24-50    the jurisdiction of its incorporation, or has its authority to
24-51    maintain a branch or agency in this state terminated by the Board
24-52    of Governors of the Federal Reserve System under Section 7(e),
24-53    International Banking Act (12 U.S.C. Section 3105(e)), an officer,
24-54    manager, or agent of the foreign bank shall deliver to the
24-55    commissioner:
24-56                (1)  a certified copy of:
24-57                      (A)  a certificate of the official responsible
24-58    for records of banking corporations of the foreign bank's
24-59    jurisdiction of incorporation attesting to the occurrence of
24-60    dissolution or of termination or cancellation of authority or
24-61    existence;
24-62                      (B)  an order or decree of a court directing the
24-63    dissolution of the foreign bank or the termination or cancellation
24-64    of its authority or existence; or
24-65                      (C)  an order of the Board of Governors of the
24-66    Federal Reserve System terminating its authority under Section
24-67    7(e), International Banking Act (12 U.S.C. Section 3105(e)); and
24-68                (2)  the documents and information required by Section
24-69    204.115(c).
 25-1          (b)  The filing of the certificate, order, or decree has the
 25-2    same effect provided by Section 204.119 as if the license issued
 25-3    under this subchapter were revoked by the commissioner as of the
 25-4    effective date of termination or cancellation specified in the
 25-5    certificate, order, or decree unless the commissioner orders an
 25-6    earlier effective date, subject to the procedural protections of
 25-7    Section 204.117 or 204.118.
 25-8             (Sections 204.122-204.200 reserved for expansion
 25-9           SUBCHAPTER C.  REPRESENTATIVE OFFICES OF FOREIGN BANK
25-10          Sec. 204.201.  REGISTRATION OF REPRESENTATIVE OFFICE.  (a)  A
25-11    foreign bank may establish a Texas representative office if the
25-12    foreign bank files with the commissioner a verified statement of
25-13    registration.  A statement of registration must:
25-14                (1)  be accompanied by all registration fees and
25-15    deposits required by rule;
25-16                (2)  be in the form specified by the commissioner;
25-17                (3)  be subscribed and acknowledged by an officer of
25-18    the foreign bank;
25-19                (4)  contain as an exhibit or attachment:
25-20                      (A)  a copy of the foreign bank's notice or
25-21    application submitted to the Board of Governors of the Federal
25-22    Reserve System under Section 10, International Banking Act (12
25-23    U.S.C. Section 3107), and, when issued, the order or notification
25-24    from the board of governors indicating that the representative
25-25    office has been approved;
25-26                      (B)  an authenticated copy of the foreign bank's
25-27    articles of incorporation and bylaws or other constitutive
25-28    documents and, if the copy is in a language other than English, an
25-29    English translation of the document, under the oath of the
25-30    translator; and
25-31                      (C)  evidence of compliance with Section 201.102;
25-32                (5)  be submitted when the federal notice or
25-33    application is submitted to the board of governors; and
25-34                (6)  directly or in exhibits or attachments contain:
25-35                      (A)  the name of the foreign bank;
25-36                      (B)  the street address and post office address
25-37    where each Texas representative office is to be located in this
25-38    state;
25-39                      (C)  the name and qualifications of each officer
25-40    and director of the foreign bank who will have charge of any aspect
25-41    of the business and affairs of the Texas representative office;
25-42                      (D)  a complete and detailed statement of the
25-43    financial condition of the foreign bank as of a date not more than
25-44    360 days before the date of the filing; and
25-45                      (E)  other information the commissioner requires.
25-46          (b)  The finance commission may adopt rules prescribing
25-47    abbreviated registration procedures and standards for foreign banks
25-48    that have already established an initial Texas representative
25-49    office to establish additional Texas representative offices.
25-50          (c)  A foreign bank that maintains a Texas state or federal
25-51    branch or agency in this state is not prohibited from establishing
25-52    or maintaining one or more Texas representative offices.
25-53          Sec. 204.202.  PLACE OF BUSINESS.  A Texas representative
25-54    office may engage in the business authorized by this subchapter at
25-55    each place of business registered with the commissioner.  A Texas
25-56    representative office may change its location in this state by
25-57    filing a notice with the commissioner containing the street address
25-58    and post office address of the new location.
25-59          Sec. 204.203.  PERMISSIBLE ACTIVITIES OF REPRESENTATIVE
25-60    OFFICE.  (a)  A registered Texas representative office of a foreign
25-61    bank may:
25-62                (1)  solicit loans and in connection with a loan:
25-63                      (A)  assemble credit information about the
25-64    borrower;
25-65                      (B)  inspect and appraise property;
25-66                      (C)  obtain property title information; and
25-67                      (D)  prepare a loan application;
25-68                (2)  solicit purchasers for loans from the foreign
25-69    bank;
 26-1                (3)  solicit persons to contract for servicing the
 26-2    foreign bank loans;
 26-3                (4)  conduct research;
 26-4                (5)  perform services as liaison for customers and
 26-5    correspondents of the foreign bank;
 26-6                (6)  execute loan documents relating to permitted loans
 26-7    with the written approval of the foreign bank;
 26-8                (7)  perform back office administrative functions as
 26-9    may be more specifically defined by rule; and
26-10                (8)  engage in other activities approved by the
26-11    commissioner or permitted by rule.
26-12          (b)  A representative office may not solicit or accept credit
26-13    balances  or deposits or make final credit decisions.
26-14          (c)  A Texas representative office that is or becomes a
26-15    regional administrative office of the foreign bank, as may be
26-16    defined more fully by rule, may engage in credit approval
26-17    activities if:
26-18                (1)  the foreign bank gives prior written notice to the
26-19    commissioner not later than the 30th day before the date the Texas
26-20    representative office engages in credit approval activities; and
26-21                (2)  the commissioner does not object within the 30-day
26-22    period to the conduct of the activities by the Texas representative
26-23    office.
26-24          (d)  Written notice under Subsection (c) must be in a form
26-25    and contain the information the commissioner requires.
26-26          Sec. 204.204.  ENFORCEMENT.  The commissioner may initiate an
26-27    enforcement action under Chapter 35 or a proceeding to revoke the
26-28    registration of a representative office if the commissioner by
26-29    examination or other credible evidence finds that the foreign bank:
26-30                (1)  has refused to permit the commissioner to examine
26-31    the books, papers, accounts, records, or affairs of a Texas
26-32    representative office in accordance with Sections 204.002 and
26-33    204.003;
26-34                (2)  has violated this subtitle, another law or rule
26-35    applicable to a foreign bank or a Texas representative office, or a
26-36    final and enforceable order of the commissioner or the finance
26-37    commission;
26-38                (3)  has misrepresented or concealed a material fact in
26-39    the original registration;
26-40                (4)  has violated a condition of an agreement between
26-41    the foreign bank and the commissioner, a bank supervisory agency,
26-42    or another state regulatory agency; or
26-43                (5)  conducts business in an unsafe and unsound manner.
26-44          Sec. 204.205.  PROCEDURE FOR REVOCATION.  (a)  Notice of a
26-45    revocation proceeding must:
26-46                (1)  be in the form of a proposed order;
26-47                (2)  be served on the foreign bank by personal delivery
26-48    or registered or certified mail, return receipt requested, to a
26-49    director, officer, or employee of the foreign bank at a Texas
26-50    representative office location, or to the registered agent of the
26-51    foreign bank;
26-52                (3)  state the effective date of the proposed order,
26-53    which may not be before the 21st day after the date the proposed
26-54    order is mailed or delivered; and
26-55                (4)  state the grounds for the proposed revocation with
26-56    reasonable certainty.
26-57          (b)  Unless the foreign bank requests a hearing in writing on
26-58    or before the effective date of the proposed order, the order takes
26-59    effect as proposed and is final and nonappealable.
26-60          (c)  A hearing requested on a proposed order shall be held
26-61    not later than the 30th day after the date the written request for
26-62    hearing is received by the commissioner unless the parties agree to
26-63    a later hearing date.  The department shall participate as the
26-64    opposing party, and the commissioner shall conduct the hearing and
26-65    one or more prehearing conferences and opportunities for discovery
26-66    as the commissioner considers advisable and consistent with
26-67    applicable statutes and rules.  During the pendency of the hearing
26-68    and unless the commissioner gives prior written approval, the
26-69    foreign bank may not accept new business from this state.
 27-1          (d)  Information relating to the financial condition and
 27-2    business affairs of the foreign bank, except previously published
 27-3    statements and information, is confidential and may not be
 27-4    considered in the public portion of the hearing or disclosed by the
 27-5    commissioner or an employee of the department except as provided by
 27-6    Subchapter D, Chapter 31.
 27-7          (e)  Based on the record, the commissioner shall issue or
 27-8    refuse to issue the proposed order.  An issued order may contain
 27-9    modifications indicated by the record to be necessary or desirable,
27-10    including modifications to impose penalties available under Chapter
27-11    35 in lieu of revocation of registration.
27-12          Sec. 204.206.  EFFECT OF REVOKED REGISTRATION.  A foreign
27-13    bank that has had its registration under this subchapter revoked
27-14    shall cease all activities in this state.  Continued activity in
27-15    this state of an unregistered foreign bank is subject to Subchapter
27-16    C, Chapter 35.
27-17          Sec. 204.207.  DISSOLUTION.  (a)  If a foreign bank with a
27-18    registered Texas representative office is dissolved, has its
27-19    authority or existence terminated or canceled in the jurisdiction
27-20    of its incorporation, or has its authority to maintain its Texas
27-21    representative office terminated by the Board of Governors of the
27-22    Federal Reserve System under Section 10(b), International Banking
27-23    Act (12 U.S.C. Section 3107(b)), an officer, manager, or agent of
27-24    the foreign bank shall deliver to the commissioner a certified copy
27-25    of:
27-26                (1)  a certificate of the official responsible for
27-27    records of banking corporations of the foreign bank's jurisdiction
27-28    of incorporation attesting to the occurrence of dissolution or of
27-29    termination or cancellation of authority or existence;
27-30                (2)  an order or decree of a court directing the
27-31    dissolution of the foreign bank or the termination or cancellation
27-32    of its authority or existence; or
27-33                (3)  an order of the Board of Governors of the Federal
27-34    Reserve System terminating its authority under Section 10(b),
27-35    International Banking Act (12 U.S.C. Section 3107(b)).
27-36          (b)  The filing of the certificate, order, or decree has the
27-37    same effect under Section 204.206 as if the registration made under
27-38    this subchapter were revoked by the commissioner.
27-39             ARTICLE 2.  CONFORMING AMENDMENTS TO FINANCE CODE
27-40          SECTION 2.001.  Section 12.110(a), Finance Code, is amended
27-41    to read as follows:
27-42          (a)  The banking commissioner or an officer or employee of
27-43    the department commits an offense if the person knowingly:
27-44                (1)  discloses information or permits access to a file
27-45    or record of the department in violation of Subchapter D, Chapter
27-46    31;
27-47                (2)  becomes directly or indirectly indebted to, or
27-48    financially interested in, an entity supervised or regulated by the
27-49    banking commissioner [a state bank, foreign bank agency, or trust
27-50    company]; or
27-51                (3)  purchases an asset owned by an entity supervised
27-52    or regulated by the banking commissioner [a state bank or trust
27-53    company] in the possession of the banking commissioner or other
27-54    receiver for purposes of liquidation.
27-55          SECTION 2.002.  Sections 31.002(a)(2), (8), (50), and (52),
27-56    Finance Code, are amended to read as follows:
27-57                (2)  "Bank" means a state or national bank.  If the
27-58    context requires, the term includes a bank as defined by Section
27-59    201.002(a)(4) that is organized under the laws of another state or
27-60    country.
27-61                (8)  "Branch" means a location of a bank, other than
27-62    the bank's home office, at which the bank engages in the business
27-63    of banking.  The term does not include:
27-64                      (A)  a drive-in facility located not more than
27-65    2,000 feet from the nearest wall of the home office or an approved
27-66    branch office of the bank;
27-67                      (B)  a night depository;
27-68                      (C)  an electronic terminal subject to Section
27-69    59.201;
 28-1                      (D)  a loan production office subject to Section
 28-2    32.204;
 28-3                      (E)  a state or federally licensed armored car
 28-4    service or other courier service transporting items for deposit or
 28-5    payment, unless:
 28-6                            (i)  the risk of loss of items in the
 28-7    custody of the service is borne by the employing bank; or
 28-8                            (ii)  the items in the custody of the
 28-9    service are considered to be in customer accounts at the employing
28-10    bank or federally insured through the employing bank;
28-11                      (F)  a bank acting as an agent for another [a]
28-12    depository institution [affiliate] as provided by Section
28-13    59.005(a); or
28-14                      (G)  other offices as determined by rule.
28-15                (50)  "State bank" means a banking association or
28-16    limited banking association organized or reorganized under this
28-17    subtitle, including an association organized under the laws of this
28-18    state before September 1, 1995, with the express power to receive
28-19    and accept deposits and possessing other rights and powers granted
28-20    by this subtitle expressly or by implication.  The term does not
28-21    include a savings association, savings bank, or credit union.  If
28-22    the context requires, the term includes a bank as defined by
28-23    Section 201.002(a)(4) that is organized under the laws of another
28-24    state or country.
28-25                (52)  "State savings bank" means a savings bank
28-26    organized under or subject to Subtitle C.  If the context requires,
28-27    the term includes a savings bank organized under the laws of
28-28    another state.
28-29          SECTION 2.003.  Section 31.005(b), Finance Code, is amended
28-30    to read as follows:
28-31          (b)  Subsection (a) does not apply to[:]
28-32                [(1)]  a depository institution or other [authorized to
28-33    conduct business in this state;]
28-34                [(2)  a foreign bank agency;]
28-35                [(3)  a loan production office or representative office
28-36    of a foreign bank corporation or an out-of-state bank established
28-37    in compliance with this subtitle; or]
28-38                [(4)  another] entity organized under the laws of this
28-39    state, another state, the United States, or a foreign sovereign
28-40    state to the extent that the depository institution or other entity
28-41    is:
28-42                (1) [(A)  the entity is] authorized under its charter
28-43    or the laws of this state or the United States to use a term, word,
28-44    character, ideogram, phonogram, or phrase prohibited by Subsection
28-45    (a); and
28-46                (2) [(B)  the entity is] authorized by the laws of this
28-47    state or the United States to conduct the activities in which it
28-48    [the entity] is engaged in this state.
28-49          SECTION 2.004.  Section 31.007(a), Finance Code, is amended
28-50    to read as follows:
28-51          (a)  An officer, director, manager, managing participant, or
28-52    employee of a bank that has its main office or a branch located in
28-53    this state with fewer than 500 shareholders or participants or of a
28-54    bank holding company with fewer than 500 shareholders or
28-55    participants that controls a bank that has its main office or a
28-56    branch located in this state is exempt from the registration and
28-57    licensing provisions of The Securities Act (Article 581-1 et seq.,
28-58    Vernon's Texas Civil Statutes) with respect to that person's
28-59    participation in a transaction, including a sale, involving
28-60    securities issued by:
28-61                (1)  the bank or bank holding company of which that
28-62    person is an officer, director, manager, managing participant, or
28-63    employee;
28-64                (2)  a bank holding company that controls the bank of
28-65    which that person is an officer, director, manager, managing
28-66    participant, or employee; or
28-67                (3)  a bank controlled by the bank holding company of
28-68    which that person is an officer, director, manager, managing
28-69    participant, or employee.
 29-1          SECTION 2.005.  Sections 31.102 and 31.103, Finance Code, are
 29-2    amended to read as follows:
 29-3          Sec. 31.102.  ISSUANCE OF INTERPRETIVE STATEMENTS.  (a)  The
 29-4    banking commissioner[:]
 29-5                [(1)]  may issue interpretive statements containing
 29-6    matters of general policy to guide the public and state banks,
 29-7    and[;]
 29-8                [(2)  shall file the statements for publication in the
 29-9    Texas Register; and]
29-10                [(3)]  may amend or repeal a published interpretive
29-11    statement by issuing an amended statement or notice of repeal of a
29-12    statement [and filing the statement or notice for publication in
29-13    the Texas Register].
29-14          (b)  An interpretive statement may be disseminated by
29-15    newsletter, via an electronic medium such as the internet, in a
29-16    volume of statutes or related materials published by the banking
29-17    commissioner or others, or by other means reasonably calculated to
29-18    notify persons affected by the interpretive statement.  Notice of
29-19    an amended or withdrawn statement must be disseminated in a
29-20    substantially similar manner as the affected statement was
29-21    originally disseminated [The secretary of state shall publish a
29-22    filed statement or notice in the Texas Register and a designated
29-23    chapter of the Texas Administrative Code].
29-24          Sec. 31.103.  ISSUANCE OF OPINION.  (a)  In response to a
29-25    specific request from a member of the public or the banking
29-26    industry, the banking commissioner may issue an opinion directly or
29-27    through the deputy banking commissioner or a department attorney.
29-28          (b)  If the banking commissioner determines that the opinion
29-29    is useful for the general guidance of the public, state banks, or
29-30    trust companies, the commissioner may disseminate the opinion by
29-31    newsletter, via an electronic medium such as the internet, in a
29-32    volume of statutes or related materials published by the banking
29-33    commissioner or others, or by other means reasonably calculated to
29-34    notify persons affected by the opinion [file the opinion for
29-35    publication in the Texas Register].  A published opinion must be
29-36    redacted to preserve the confidentiality of the requesting party
29-37    unless the requesting party consents to be identified in the
29-38    published opinion.
29-39          (c)  The banking commissioner may amend or repeal a published
29-40    opinion by issuing an amended opinion or notice of repeal of an
29-41    opinion and disseminating [filing] the opinion or notice in a
29-42    substantially similar manner as the affected statement or opinion
29-43    was originally disseminated  [for publication in the Texas
29-44    Register].  The requesting party, however, may rely on the original
29-45    opinion if:
29-46                (1)  all material facts were originally disclosed to
29-47    the banking commissioner;
29-48                (2)  the safety and soundness of the affected bank will
29-49    not be affected by further reliance on the original opinion; and
29-50                (3)  the text and interpretation of relevant, governing
29-51    provisions of this subtitle or Chapter 12 have not been changed by
29-52    legislative or judicial action.
29-53          [(d)  The secretary of state shall publish the filed opinions
29-54    and notices in the Texas Register and a designated chapter of the
29-55    Texas Administrative Code.]
29-56          SECTION 2.006.  Subchapter A, Chapter 32, Finance Code, is
29-57    amended by adding Section 32.010 to read as follows:
29-58          Sec. 32.010.  ADDITIONAL POWERS.  (a)  Notwithstanding
29-59    another law, a Texas state bank may perform an act, own property,
29-60    or offer a product or service that is at the time permissible
29-61    within the United States for a depository institution organized
29-62    under federal law or the law of this state or another state, if the
29-63    banking commissioner approves the exercise of the power as provided
29-64    by this section, subject to the same limitations and restrictions
29-65    applicable to the other depository institution by pertinent law,
29-66    except to the extent the limitations and restrictions are modified
29-67    by rules adopted under Subsection (e).  This section may not be
29-68    used by a Texas state bank to alter or negate the application of
29-69    the laws of this state with respect to:
 30-1                (1)  establishment and maintenance of a branch in this
 30-2    state or another state or country;
 30-3                (2)  sale of insurance products and services in this
 30-4    state;
 30-5                (3)  permissible interest rates and loan fees
 30-6    chargeable in this state;
 30-7                (4)  fiduciary duties owed to a client or customer by
 30-8    the bank in its capacity as fiduciary in this state;
 30-9                (5)  consumer protection laws applicable to
30-10    transactions in this state; or
30-11                (6)  real estate development, marketing, and sales
30-12    activities in this state.
30-13          (b)  A state bank that intends to exercise a power, directly
30-14    or through a subsidiary, granted by Subsection (a) that is not
30-15    otherwise authorized for state banks under the statutes of this
30-16    state shall submit a letter to the banking commissioner describing
30-17    in detail the power that the bank proposes to exercise and the
30-18    specific authority of another depository institution to exercise
30-19    the power.  The bank shall attach copies, if available, of relevant
30-20    law, regulations, and interpretive letters.  The bank may begin to
30-21    exercise the proposed power after the 30th day after the date the
30-22    banking commissioner receives the bank's letter unless the banking
30-23    commissioner specifies an earlier or later date or prohibits the
30-24    activity.  The banking commissioner may prohibit the bank from
30-25    exercising the power only if the banking commissioner finds that:
30-26                (1)  specific authority does not exist for another
30-27    depository institution to exercise the proposed power;
30-28                (2)  if the state bank is insured by the Federal
30-29    Deposit Insurance Corporation, the state bank is prohibited from
30-30    exercising the power pursuant to Section 24, Federal Deposit
30-31    Insurance Act (12 U.S.C. Section 1831a), as amended, and 12 C.F.R.
30-32    Part 362; or
30-33                (3)  the exercise of the power by the bank would
30-34    adversely affect the safety and soundness of the bank.
30-35          (c)  The banking commissioner may extend the 30-day period
30-36    under Subsection (b) if the banking commissioner determines that
30-37    the bank's letter raises issues requiring additional information or
30-38    additional time for analysis.  If the 30-day period is extended,
30-39    the bank may exercise the proposed power only on prior written
30-40    approval by the banking commissioner, except that the banking
30-41    commissioner must approve or prohibit the proposed power or convene
30-42    a hearing under Section 31.201 not later than the 60th day after
30-43    the date the banking commissioner receives the bank's letter.  If a
30-44    hearing is convened, the banking commissioner must approve or
30-45    prohibit the proposed power not later than the 30th day after the
30-46    date the hearing is completed.
30-47          (d)  A state bank that is denied the requested power by the
30-48    banking commissioner under this section may appeal as provided by
30-49    Sections 31.202, 31.203, and 31.204 or may resubmit a letter under
30-50    this section with additional information or authority relevant to
30-51    the banking commissioner's determination.  A denial is immediately
30-52    final for purposes of appeal.
30-53          (e)  To effectuate this section, the finance commission may
30-54    adopt rules implementing the method or manner in which a state bank
30-55    exercises specific powers granted under this section, including
30-56    rules regarding the exercise of a power that would be prohibited to
30-57    state banks under state law but for this section.  The finance
30-58    commission may not adopt rules under this subsection unless it
30-59    considers the factors listed in Section 31.003(b) and finds that:
30-60                (1)  the conditions for prohibition by the banking
30-61    commissioner under Subsection (b) do not exist; and
30-62                (2)  if the rights and privileges would be prohibited
30-63    to state banks under other state law, the rules contain adequate
30-64    safeguards and controls, consistent with safety and soundness, to
30-65    address the concern of the legislature evidenced by the state law
30-66    the rules would affect.
30-67          (f)  The exercise of a power by a state bank in compliance
30-68    with and in the manner authorized by this section is not a
30-69    violation of any statute of this state.
 31-1          SECTION 2.007.  Section 32.202(a), Chapter 32, Finance Code,
 31-2    is amended to read as follows:
 31-3          (a)  Each state bank must have and continuously maintain in
 31-4    this state a home office.  The home office must be a location at
 31-5    which the bank does business with the public and keeps its
 31-6    corporate books and records.  At least one officer of the bank must
 31-7    maintain an office at the home office.  In addition to the
 31-8    registered agent for the bank, if one is maintained pursuant to
 31-9    Section 201.103, [and] each officer at the home office is an agent
31-10    for service of process for the bank.
31-11          SECTION 2.008.  Subchapter D, Chapter 32, Finance Code, is
31-12    amended by adding Section 32.304 to read as follows:
31-13          Sec. 32.304.  LIMITATION ON CONTROL OF DEPOSITS.  (a)  A
31-14    merger is not permitted under this subchapter if, on consummation
31-15    of the transaction, the resulting state bank, including all insured
31-16    depository institution affiliates of the resulting state bank,
31-17    would control 20 percent or more of the total amount of deposits in
31-18    this state held by all insured depository institutions in this
31-19    state.
31-20          (b)  On request of the banking commissioner the applicant
31-21    shall provide supplemental information to the banking commissioner
31-22    to aid in a determination under this section, including information
31-23    that is more current than or in addition to information in the most
31-24    recently available summary of deposits, reports of condition, or
31-25    similar reports filed with or produced by state or federal
31-26    authorities.
31-27          (c)  In this section, "deposit" and "insured depository
31-28    institution" have the meanings assigned by Section 3, Federal
31-29    Deposit Insurance Act (12 U.S.C. Section 1813), as amended.
31-30          SECTION 2.009.  Subchapter E, Chapter 32, Finance Code, is
31-31    amended by adding Section 32.406 to read as follows:
31-32          Sec. 32.406.  LIMITATION ON CONTROL OF DEPOSITS.  (a)  A
31-33    purchase of assets is not permitted under Section 32.401 if, on
31-34    consummation of the transaction, the acquiring state bank,
31-35    including all insured depository institution affiliates of the
31-36    resulting state bank, would control 20 percent or more of the total
31-37    amount of deposits in this state held by all insured depository
31-38    institutions in this state.
31-39          (b)  On request of the banking commissioner the applicant
31-40    shall provide supplemental information to the banking commissioner
31-41    to aid in a determination under this section, including information
31-42    that is more current than or in addition to information in the most
31-43    recently available summary of deposits, reports of condition, or
31-44    similar reports filed with or produced by state or federal
31-45    authorities.
31-46          (c)  In this section, "deposit" and "insured depository
31-47    institution" have the meanings assigned by Section 3, Federal
31-48    Deposit Insurance Act (12 U.S.C.  Section 1813), as amended.
31-49          SECTION 2.010.  Subchapter F, Chapter 32, Finance Code, is
31-50    amended to read as follows:
31-51           SUBCHAPTER F.  EXIT OF STATE BANK OR ENTRY OF ANOTHER
31-52                           FINANCIAL INSTITUTION
31-53          Sec. 32.501.  MERGER[, REORGANIZATION,] OR CONVERSION OF
31-54    STATE BANK INTO ANOTHER FINANCIAL INSTITUTION [NATIONAL BANK OR
31-55    SAVINGS BANK OR SAVINGS ASSOCIATION].  (a)  Subject to Subtitle G,
31-56    a [A] state bank may act as necessary under and to the extent
31-57    permitted by the laws of the United States, [or] this state,
31-58    another state, or another country to merge[, reorganize,] or
31-59    convert into another financial institution, as that term is defined
31-60    by Section 201.101 [a national bank, state or federal savings bank,
31-61    or state or federal savings association].
31-62          (b)  The merger[, reorganization,] or conversion by the state
31-63    bank must be made and approval of its board, shareholders, or
31-64    participants must be obtained in accordance with the Texas Business
31-65    Corporation Act as if the state bank were a domestic corporation
31-66    and all other parties to the transaction, if any, were foreign
31-67    corporations and other entities, except as provided by rule.  For
31-68    purposes of this subsection, a conversion is considered a merger
31-69    into the successor form of financial institution.
 32-1          (c)  The state bank does not cease to be a state bank subject
 32-2    to the supervision of the banking commissioner unless:
 32-3                (1)  the banking commissioner has been given written
 32-4    notice of the intention to merge[, reorganize,] or convert before
 32-5    the 31st day before the date of the proposed transaction;
 32-6                (2)  the bank has published notice of the transaction,
 32-7    in the form and frequency specified by the banking commissioner,
 32-8    in:
 32-9                      (A)  a newspaper of general circulation published
32-10    in the county of its home office or, if such a newspaper is not
32-11    published in the county, in an adjacent county; and
32-12                      (B)  other locations that the banking
32-13    commissioner considers appropriate;
32-14                (3)  the bank has filed with the banking commissioner:
32-15                      (A)  a copy of the application filed with the
32-16    successor regulatory authority, including a copy of each contract
32-17    evidencing or implementing the merger[, reorganization,] or
32-18    conversion, or other documents sufficient to show compliance with
32-19    applicable law;
32-20                      (B)  a certified copy of all minutes of board
32-21    meetings and shareholder or participant meetings at which action
32-22    was taken regarding the merger[, reorganization,] or conversion;
32-23    and
32-24                      (C)  a publisher's certificate showing
32-25    publication of the required notice;
32-26                (4)  the banking commissioner determines that:
32-27                      (A)  all deposit and other liabilities of the
32-28    state bank are fully discharged, assumed, or otherwise retained by
32-29    the successor form of financial institution;
32-30                      (B)  any conditions imposed by the banking
32-31    commissioner for the protection of depositors and creditors have
32-32    been met or otherwise resolved; and
32-33                      (C)  any required filing fees have been paid; and
32-34                (5)  the bank has received a certificate of authority
32-35    to do business as the successor financial institution [a national
32-36    bank, state or federal savings bank, or state or federal savings
32-37    association].
32-38          (d)  Section 32.304 applies to a proposed merger under this
32-39    section.
32-40          Sec. 32.502.  CONVERSION OF FINANCIAL INSTITUTION INTO STATE
32-41    BANK.  (a)  A financial institution, as that term is defined by
32-42    Section 201.101, may apply to the banking commissioner for
32-43    conversion into a state bank on a form prescribed by the banking
32-44    commissioner and accompanied by any required fee if the institution
32-45    follows the procedures prescribed by the laws of the United States,
32-46    [or] this state, another state, or another country governing the
32-47    exit of the financial institution for the purpose of conversion
32-48    into a state bank from the regulatory system applicable before the
32-49    conversion.  A banking association or limited banking association
32-50    may convert its organizational form under this section.
32-51          (b)  A financial [An] institution applying to convert into a
32-52    state bank may receive a certificate of authority to do business as
32-53    a state bank if the banking commissioner finds that:
32-54                (1)  the financial institution is not engaging in a
32-55    pattern or practice of unsafe and unsound banking practices;
32-56                (2)  the financial institution has adequate
32-57    capitalization for a state bank to engage in business at the same
32-58    locations as the financial institution is engaged in business
32-59    before the conversion;
32-60                (3)  the financial institution can be expected to
32-61    operate profitably after the conversion;
32-62                (4)  the officers, directors, managers, and managing
32-63    participants of the financial institution as a group have
32-64    sufficient banking experience, ability, standing, competence,
32-65    trustworthiness, and integrity to justify a belief that the
32-66    financial institution will operate as a state bank in compliance
32-67    with law; [and]
32-68                (5)  each principal shareholder or participant has
32-69    sufficient experience, ability, standing, competence,
 33-1    trustworthiness, and integrity to justify a belief that the
 33-2    financial institution will be free from improper or unlawful
 33-3    influence or interference with respect to the financial
 33-4    institution's operation as a state bank in compliance with law; and
 33-5                (6)  if the converting financial institution did not
 33-6    have general depository powers and the state bank will have those
 33-7    powers, the factors set forth in Section 32.003(b) are satisfied.
 33-8          (c)  The banking commissioner may:
 33-9                (1)  request additional information considered
33-10    necessary to an informed decision under this section;
33-11                (2)  perform an examination of the converting financial
33-12    institution at the expense of the converting financial institution;
33-13    and
33-14                (3)  require that examination fees be paid before a
33-15    certificate of authority is issued.
33-16          (d)  In connection with the application, the converting
33-17    financial institution must:
33-18                (1)  submit a statement of the law governing the exit
33-19    of the financial institution from the regulatory system applicable
33-20    before the conversion and the terms of the transition into a state
33-21    bank; and
33-22                (2)  demonstrate that all applicable law has been fully
33-23    satisfied.
33-24          SECTION 2.011.  Section 33.005, Finance Code, is amended to
33-25    read as follows:
33-26          Sec. 33.005.  EXEMPTIONS.  The following acquisitions are
33-27    exempt from Section 33.001:
33-28                (1)  an acquisition of securities in connection with
33-29    the exercise of a security interest or otherwise in full or partial
33-30    satisfaction of a debt previously contracted for in good faith and
33-31    the acquiring person files written notice of acquisition with the
33-32    banking commissioner before the person votes the securities
33-33    acquired;
33-34                (2)  an acquisition of voting securities in any class
33-35    or series by a controlling person who has previously complied with
33-36    and received approval under this subchapter or who was identified
33-37    as a controlling person in a prior application filed with and
33-38    approved by the banking commissioner;
33-39                (3)  an acquisition or transfer by operation of law,
33-40    will, or intestate succession and the acquiring person files
33-41    written notice of acquisition with the banking commissioner before
33-42    the person votes the securities acquired;
33-43                (4)  a transaction subject to Chapter 202 [38]; and
33-44                (5)  a transaction exempted by the banking commissioner
33-45    or by rules adopted under this subtitle because the transaction is
33-46    not within the purposes of this subchapter or the regulation of the
33-47    transaction is not necessary or appropriate to achieve the
33-48    objectives of this subchapter.
33-49          SECTION 2.0115.  Section 33.103, Finance Code, is amended by
33-50    adding Subsection (f) to read as follows:
33-51          (f)  The banking commissioner in the exercise of discretion
33-52    may waive or reduce the residency requirements for directors set
33-53    forth in Subsection (a).
33-54          SECTION 2.012.  Section 34.301, Finance Code, is amended by
33-55    adding Subsection (c) to read as follows:
33-56          (c)  To the extent provided by Section 4.102(c), Business &
33-57    Commerce Code, the laws of this state govern a deposit contract
33-58    between a bank and a consumer account holder if the branch or
33-59    separate office of the bank that accepts the deposit contract is
33-60    located in this state.
33-61          SECTION 2.013.  Section 35.003(a), Finance Code, is amended
33-62    to read as follows:
33-63          (a)  The banking commissioner has grounds to remove a present
33-64    or former officer, director, manager, managing participant, or
33-65    employee of a state bank from office or employment in, or prohibit
33-66    a controlling shareholder or participant or other person
33-67    participating in the affairs of a state bank from further
33-68    participation in the affairs of, a state bank[, trust company, or
33-69    other entity chartered or licensed by the banking commissioner
 34-1    under the laws of this state] if the banking commissioner
 34-2    determines from examination or other credible evidence that:
 34-3                (1)  the person:
 34-4                      (A)  intentionally committed or participated in
 34-5    commission of an act described by Section 35.002(a) with regard to
 34-6    the affairs of the bank; or
 34-7                      (B)  violated a final cease and desist order
 34-8    issued in response to the same or a similar act;
 34-9                (2)  because of this action by the person:
34-10                      (A)  the bank has suffered or will probably
34-11    suffer financial loss or other damage;
34-12                      (B)  the interests of the bank's depositors have
34-13    been or could be prejudiced; or
34-14                      (C)  the person has received financial gain or
34-15    other benefit by reason of the action; and
34-16                (3)  the action:
34-17                      (A)  involves personal dishonesty on the part of
34-18    the person; or
34-19                      (B)  demonstrates wilful or continuing disregard
34-20    for the safety or soundness of the bank.
34-21          SECTION 2.014.  Section 35.007(a), Finance Code, is amended
34-22    to read as follows:
34-23          (a)  Without the prior written approval of the banking
34-24    commissioner, a person subject to a final and enforceable removal
34-25    or prohibition order issued by the banking commissioner may not:
34-26                (1)  serve as a director, officer, or employee of a
34-27    state bank, trust company, or other entity chartered or licensed by
34-28    the banking commissioner under the laws of this state, including an
34-29    interstate branch, trust office, or representative office in this
34-30    state of an out-of-state state bank, trust company, or foreign
34-31    bank;
34-32                (2)  directly or indirectly participate in any manner
34-33    in the management of such an entity;
34-34                (3)  directly or indirectly vote for a director of such
34-35    an entity; or
34-36                (4)  solicit, procure, transfer, attempt to transfer,
34-37    vote, or attempt to vote a proxy, consent, or authorization with
34-38    respect to voting rights in such an entity.
34-39          SECTION 2.015.  Section 35.201, Finance Code, is amended to
34-40    read as follows:
34-41          Sec. 35.201.  INAPPLICABILITY.  This subchapter does not
34-42    apply to a financial institution, as that term is defined by
34-43    Section 201.101, that lawfully maintains its main office or a
34-44    branch in this state [state or national bank, a state or federal
34-45    savings bank, a state or federal savings association, or a state or
34-46    federal credit union].
34-47          SECTION 2.016.  Subchapter  A, Chapter 59, Finance Code, is
34-48    amended to read as follows:
34-49                     SUBCHAPTER A. GENERAL PROVISIONS
34-50          Sec. 59.001.  DEFINITIONS.  In this subchapter:
34-51                (1)  "Civil action" means a civil proceeding pending in
34-52    a tribunal.  The term does not include an examination or
34-53    enforcement proceeding initiated by:
34-54                            (A)  a governmental agency with primary
34-55    regulatory jurisdiction over a financial institution in possession
34-56    of a compliance review document;
34-57                            (B)  the Federal Deposit Insurance
34-58    Corporation or its successor; or
34-59                            (C)  the board of governors of the Federal
34-60    Reserve System or its successor.
34-61                (2)  "Claim against a customer" means a writ of
34-62    attachment, writ of garnishment, notice of freeze, notice of levy,
34-63    notice of child support lien, notice of seizure, notice of
34-64    receivership, restraining order, injunction or other instrument
34-65    served on or delivered to a financial institution and purporting to
34-66    assert, establish, or perfect any interest in or claim against an
34-67    account, extension of credit, or product of the financial
34-68    institution held or established by the financial institution in the
34-69    name of the customer or for the benefit of the customer, or in the
 35-1    name of the financial institution as the fiduciary, agent, or
 35-2    custodian or in another representative capacity for the customer.
 35-3    The term does not include citation or other process in a civil suit
 35-4    in which the financial institution is made a defendant and against
 35-5    which claims for affirmative relief are asserted, even though the
 35-6    subject matter of the suit is an account, extension of credit, or
 35-7    product of the financial institution held or established by the
 35-8    financial institution in the name of a customer or in the name of
 35-9    the financial institution as the fiduciary, agent, or custodian or
35-10    in another representative capacity for the customer.
35-11                (3)  "Compliance review document" means a document
35-12    prepared by or for a compliance review committee acting pursuant to
35-13    Section 59.009.
35-14                (4)  "Customer" means a person who uses, purchases, or
35-15    obtains an account, extension of credit, or product of a financial
35-16    institution or for whom a financial institution acts as a
35-17    fiduciary, agent, or custodian or in another representative
35-18    capacity.
35-19                (5)  "Financial institution" has the meaning assigned
35-20    by Section 201.101, except that the term does not include a
35-21    financial institution organized under the laws of another state or
35-22    organized under federal law with its main office in another state
35-23    that does not maintain a branch or other office in this state.
35-24                (6)  "Out-of-state financial institution" means a
35-25    financial institution, organized under the laws of another state or
35-26    organized under federal law with its main office in another state,
35-27    that has a branch or other office in this state.
35-28                (7)  "Record" means financial or other information of a
35-29    customer maintained by a financial institution.
35-30                (8)  "Record request" means a valid and enforceable
35-31    subpoena, request for production, or other instrument issued under
35-32    authority of a tribunal that compels production of a customer
35-33    record.
35-34                (9)  "Texas financial institution" means a financial
35-35    institution organized under the laws of this state or organized
35-36    under federal law with its main office in this state.
35-37                (10)  "Tribunal" means a court or other adjudicatory
35-38    tribunal with jurisdiction to issue a request for records,
35-39    including a government agency exercising adjudicatory functions and
35-40    an alternative dispute resolution mechanism, voluntary or required,
35-41    under which a party may compel the production of records.  [OFFICE
35-42    OF OUT-OF-STATE BANK.  (a)  A bank that is not domiciled or
35-43    primarily located in this state may establish one or more offices
35-44    in this state for any lawful purpose.  Before transacting business
35-45    in this state, the bank shall file with the secretary of state:]
35-46                [(1)  an executed instrument, by its terms of
35-47    indefinite duration and irrevocable, appointing the secretary of
35-48    state as its agent for service of process on whom a notice or
35-49    process issued by a court in this state may be served in an action
35-50    or proceeding relating to the business of the bank in this state;
35-51    and]
35-52                [(2)  a written certificate of designation specifying
35-53    the name and address of the officer, agent, or other person to whom
35-54    the notice or process should be forwarded by the secretary of
35-55    state.]
35-56          [(b)  A bank may change a certificate of designation under
35-57    Subsection (a)(2) by filing an amended certificate of designation.]
35-58          [(c)  The secretary of state shall collect the following
35-59    fees:]
35-60                [(1)  $100 for indexing and filing the initial
35-61    certificate of designation and accompanying instruments required to
35-62    be filed by Subsection (a); and]
35-63                [(2)  $15 for filing an amended certificate of
35-64    designation.]
35-65          [(d)  On receipt of a notice or process, the secretary of
35-66    state shall promptly forward it by registered or certified mail,
35-67    return receipt requested, to the designated person.  Failure of the
35-68    bank to maintain a designated person does not affect the validity
35-69    of service mailed to the most recently designated person at the
 36-1    most recently designated address.  Service of notice or process on
 36-2    the secretary of state as agent for a bank described in this
 36-3    section has the same effect as personal service made in this state
 36-4    on a depository institution.]
 36-5          [(e)  A bank that complies with this section is not
 36-6    transacting business in this state for purposes of Part Eight,
 36-7    Texas Business Corporation Act.]
 36-8          [(f)  A bank described by Subsection (a) may not use any form
 36-9    of advertising, including a sign or printed or broadcast material,
36-10    that implies or tends to imply that the bank is engaged in banking
36-11    business that the bank is not legally authorized to transact.]
36-12          Sec. 59.002.  SLANDER OR LIBEL OF BANK.  (a)  A person
36-13    commits an offense if the person:
36-14                (1)  knowingly makes, circulates, or transmits to
36-15    another person an untrue statement that is derogatory to the
36-16    financial condition of a bank located in this state; or
36-17                (2)  with intent to injure a bank located in this
36-18    state, counsels, aids, procures, or induces another person to
36-19    knowingly make, circulate, or transmit to another person an untrue
36-20    statement that is derogatory to the financial condition of any bank
36-21    located in this state.
36-22          (b)  An offense under this section is a state jail felony.
36-23          Sec. 59.003.  AUTHORITY OF NOTARY PUBLIC.  A notary public is
36-24    not disqualified from taking an acknowledgment or proof of a
36-25    written instrument as provided by Section 406.016, Government Code,
36-26    solely because of the person's ownership of stock or a
36-27    participation interest in or employment by a financial institution
36-28    [bank] that is an interested party to the underlying transaction.
36-29          Sec. 59.004.  SUCCESSION OF TRUST POWERS.  (a)  If, at the
36-30    time of a merger, reorganization, conversion, [or] sale of
36-31    substantially all of its assets under Chapter 32 or other
36-32    applicable law, or sale of substantially all of its trust accounts
36-33    and related activities at a separate branch or other office, a
36-34    reorganizing or selling financial institution is acting as trustee,
36-35    guardian, executor, or administrator, or in another fiduciary
36-36    capacity, a [the] successor or purchasing financial institution
36-37    with sufficient fiduciary authority may [entity with fiduciary
36-38    powers may, without the necessity of judicial action or action by
36-39    the creator of the trust,] continue the office, trust, or fiduciary
36-40    relationship:
36-41                (1)  without the necessity of judicial action or action
36-42    by the creator of the office, trust, or fiduciary relationship; and
36-43                (2)  without regard to whether the successor or
36-44    purchasing financial institution meets qualification requirements
36-45    specified in an instrument creating the office, trust, or fiduciary
36-46    relationship other than a requirement related to geographic locale
36-47    of account administration, including requirements as to
36-48    jurisdiction of incorporation, location of principal office, or
36-49    type of financial institution.
36-50          (b)  The successor or purchasing financial institution
36-51    [entity] may perform all the duties and exercise all the powers
36-52    connected with or incidental to the fiduciary relationship in the
36-53    same manner as if the successor or purchasing financial institution
36-54    [entity] had been originally designated as the fiduciary.
36-55          Sec. 59.005.  AGENCY ACTIVITIES.  (a)  A state bank may, on
36-56    compliance with this section, agree to receive deposits, renew time
36-57    deposits, close loans, service loans, receive payments on loans and
36-58    other obligations, and perform other services, with the prior
36-59    approval of the banking commissioner, as an agent for another
36-60    financial institution.
36-61          (b)  A state bank that proposes to enter into an agency
36-62    agreement under this section shall file a letter with the banking
36-63    commissioner, not later than 30 days before the effective date of
36-64    the agreement, setting forth:
36-65                (1)  a notice of intention to enter into an agency
36-66    agreement with a financial institution;
36-67                (2)  a description of the services proposed to be
36-68    performed under the agency agreement;
36-69                (3)  a copy of the agency agreement; and
 37-1                (4)  other information the banking commissioner
 37-2    requests.
 37-3          (c)  If a proposed service is not specifically designated in
 37-4    Subsection (a) and has not previously been approved by rule or in
 37-5    an opinion or interpretation issued by the banking commissioner,
 37-6    the banking commissioner shall decide whether to approve the
 37-7    offering of the service on or before the 30th day after the date of
 37-8    receipt of the notice required by Subsection (b).  In deciding
 37-9    whether to approve a proposed service that is not specifically
37-10    designated by Subsection (a) or in a rule or prior opinion or
37-11    interpretation, the banking commissioner shall consider whether the
37-12    service would be consistent with applicable federal and state law
37-13    and the safety and soundness of the principal and agent.
37-14          (d)  A proposed service subject to Subsection (c) is
37-15    considered approved if the banking commissioner does not take
37-16    action on the notice required by Subsection (b) within the time
37-17    limits specified by Subsection (c).  The banking commissioner may
37-18    extend the 30-day period on a determination that the bank's letter
37-19    raises issues that require additional information or additional
37-20    time for analysis.  If the period is extended, the bank may engage
37-21    in the proposed service only on prior written approval of the
37-22    banking commissioner.
37-23          (e)  A state bank may not under an agency agreement:
37-24                (1)  conduct an activity as agent that it would be
37-25    prohibited from conducting as a principal under applicable state or
37-26    federal law; or
37-27                (2)  have an agent conduct an activity that the bank as
37-28    principal would be prohibited from conducting under applicable
37-29    state or federal law.
37-30          (f)  The banking commissioner may order a state bank or
37-31    another financial institution subject to the banking commissioner's
37-32    enforcement powers to cease acting as an agent or principal under
37-33    an agency agreement that the banking commissioner finds to be
37-34    inconsistent with safe and sound banking practices.
37-35          (g)  Notwithstanding another law, a state bank acting as an
37-36    agent for a financial institution in accordance with this section
37-37    is not considered  to be a branch of that institution, and a
37-38    financial institution acting as an agent for a state bank in
37-39    accordance with this section is not considered to be a branch of
37-40    the state bank.
37-41          (h)  This section does not affect:
37-42                (1)  authority under another law for a depository
37-43    institution to act as an agent on behalf of another person or to
37-44    act as a principal in employing another person as agent; or
37-45                (2)  whether an agent's activities on behalf of a
37-46    depository institution under another law would cause the agent to
37-47    be considered a branch of the depository institution.  [AGENT FOR
37-48    AFFILIATE.  (a)  A bank subsidiary of a bank holding company may
37-49    receive deposits, renew time deposits, close loans, service loans,
37-50    and receive payments on loans and other obligations as an agent for
37-51    a depository institution affiliate.  Notwithstanding any other
37-52    provision of law, a bank acting as an agent for a depository
37-53    institution affiliate as provided by this section is not considered
37-54    to be a branch of the affiliate.]
37-55          [(b)  A depository institution may not:]
37-56                [(1)  conduct an activity as an agent under Subsection
37-57    (a) that the institution is prohibited from conducting as a
37-58    principal under a law of this state or the United States; or]
37-59                [(2)  as a principal, have an agent conduct an activity
37-60    under Subsection (a) that the institution is prohibited from
37-61    conducting under a law of this state or the United States.]
37-62          [(c)  This section does not affect:]
37-63                [(1)  the authority of a depository institution to act
37-64    as an agent on behalf of another depository institution under
37-65    another law; or]
37-66                [(2)  whether a depository institution that conducts
37-67    activity as an agent on behalf of another depository institution
37-68    under another law is considered to be a branch of the other
37-69    institution.]
 38-1          [(d)  An agency relationship between depository institutions
 38-2    under Subsection (a) must be on terms that are consistent with safe
 38-3    and sound banking practices and applicable rules.]
 38-4          Sec. 59.006.  DISCOVERY OF CUSTOMER RECORDS.  (a)  This
 38-5    section provides the exclusive method for compelled discovery of a
 38-6    record of a financial institution relating to one or more
 38-7    customers.  This section does not create a right of privacy in a
 38-8    record and does not apply to:
 38-9                (1)  a demand or inquiry from a state or federal
38-10    government agency authorized by law to conduct an examination of
38-11    the financial institution;
38-12                (2)  a record request from a state or federal
38-13    government agency or instrumentality under statutory or
38-14    administrative authority that provides for, or is accompanied by, a
38-15    specific mechanism for discovery and protection of a customer
38-16    record of a financial institution, including a record request from
38-17    a federal agency subject to the Right to Financial Privacy Act of
38-18    1978 (12 U.S.C. Section 3401 et seq.), as amended, or from the
38-19    Internal Revenue Service under Section 1205, Internal Revenue Code
38-20    of 1986;
38-21                (3)  a record request from or report to a government
38-22    agency arising out of the investigation or prosecution of a
38-23    criminal offense;
38-24                (4)  a record request in connection with a garnishment
38-25    proceeding in which the financial institution is garnishee and the
38-26    customer is debtor;
38-27                (5)  a record request by a duly appointed receiver for
38-28    the customer;
38-29                (6)  an investigative demand or inquiry from a state
38-30    legislative investigating committee;
38-31                (7)  an investigative demand or inquiry from the
38-32    attorney general of this state as authorized by law other than the
38-33    procedural law governing discovery in civil cases; or
38-34                (8)  the voluntary use or disclosure of a record by a
38-35    financial institution subject to other applicable state or federal
38-36    law.
38-37          (b)  A financial institution shall produce a record in
38-38    response to a record request only if:
38-39                (1)  it is served with the record request not later
38-40    than the 24th day before the date that compliance with the record
38-41    request is required;
38-42                (2)  before the financial institution complies with the
38-43    record request the requesting party pays the financial
38-44    institution's reasonable costs of complying with the record
38-45    request, including costs of reproduction, postage, research,
38-46    delivery, and attorney's fees, or posts a cost bond in an amount
38-47    estimated by the financial institution to cover those costs; and
38-48                (3)  if the customer is not a party to the proceeding
38-49    in which the request was issued, the requesting party complies with
38-50    Subsections (c) and (d) and:
38-51                      (A)  the financial institution receives the
38-52    customer's written consent to release the record after a request
38-53    under Subsection (c)(3); or
38-54                      (B)  the tribunal takes further action based on
38-55    action initiated by the requesting party under Subsection (d).
38-56          (c)  If the affected customer is not a party to the
38-57    proceeding in which the record request was issued, in addition to
38-58    serving the financial institution with a record request, the
38-59    requesting party shall:
38-60                (1)  give notice stating the rights of the customer
38-61    under Subsection (e) and a copy of the request to each affected
38-62    customer in the manner and within the time provided by Rule 21a,
38-63    Texas Rules of Civil Procedure;
38-64                (2)  file a certificate of service indicating that the
38-65    customer has been mailed or served with the notice and a copy of
38-66    the record request as required by this subsection with the tribunal
38-67    and the financial institution; and
38-68                (3)  request the customer's written consent authorizing
38-69    the financial institution to comply with the request.
 39-1          (d)  If the customer that is not a party to the proceeding
 39-2    does not execute the written consent requested under Subsection
 39-3    (c)(3) on or before the date that compliance with the request is
 39-4    required, the requesting party may by written motion seek an in
 39-5    camera inspection of the requested record as its sole means of
 39-6    obtaining access to the requested record.  In response to a motion
 39-7    for in camera inspection, the tribunal may inspect the requested
 39-8    record to determine its relevance to the matter before the
 39-9    tribunal.  The tribunal may order redaction of portions of the
39-10    records that the tribunal determines should not be produced and
39-11    shall enter a protective order preventing the record that it orders
39-12    produced from being:
39-13                (1)  disclosed to a person who is not a party to the
39-14    proceeding before the tribunal; and
39-15                (2)  used by a person for any purpose other than
39-16    resolving the dispute before the tribunal.
39-17          (e)  A customer that is a party to the proceeding bears the
39-18    burden of preventing or limiting the financial institution's
39-19    compliance with a record request subject to this section by seeking
39-20    an appropriate remedy, including filing a motion to quash the
39-21    record request or a motion for a protective order.   Any motion
39-22    filed shall be served on the financial institution and the
39-23    requesting party before the date that compliance with the request
39-24    is required.  A financial institution  is not liable to its
39-25    customer or another person for disclosure of a record in compliance
39-26    with this section.
39-27          (f)  A financial institution may not be required to produce a
39-28    record under this section before the later of:
39-29                (1)  the 24th day after the date of receipt of the
39-30    record request as provided by Subsection (b)(1);
39-31                (2)  the 15th day after the date of receipt of a
39-32    customer consent to disclose a record as provided by Subsection
39-33    (b)(3); or
39-34                (3)  the 15th day after the date a court orders
39-35    production of a record after an in camera inspection of a requested
39-36    record as provided by Subsection (d).
39-37          (g)  An order to quash or for protection or other remedy
39-38    entered or denied by the tribunal under Subsection (d) or (e) is
39-39    not a final order and an interlocutory appeal may not be taken.
39-40    [Civil discovery of a customer record maintained by a financial
39-41    institution is governed by Section 30.007, Civil Practice and
39-42    Remedies Code, as added by Chapter 914, Acts of the 74th
39-43    Legislature, Regular Session, 1995.]
39-44          Sec. 59.007.  ATTACHMENT, INJUNCTION, EXECUTION, OR
39-45    GARNISHMENT.  (a)  An attachment, injunction, execution, or writ of
39-46    garnishment may not be issued against or served on a financial
39-47    institution that has its principal office or a branch in this state
39-48    to collect a money judgment or secure a prospective money judgment
39-49    against the financial institution before the judgment is final and
39-50    all appeals have been foreclosed by law.
39-51          (b)  An attachment, injunction, execution, or writ of
39-52    garnishment issued to or served on a financial institution for the
39-53    purpose of collecting a money judgment or securing a prospective
39-54    money judgment against a customer of the financial institution is
39-55    governed by Section 59.008 and not this section.
39-56          Sec. 59.008.  CLAIMS AGAINST CUSTOMERS OF FINANCIAL
39-57    INSTITUTIONS.  (a)  A claim against a customer of a financial
39-58    institution shall be delivered or served as otherwise required or
39-59    permitted by law at the address designated as the address of the
39-60    registered agent of the financial institution in a registration
39-61    filed with the secretary of state pursuant to Section 201.102, with
39-62    respect to an out-of-state financial institution, or Section
39-63    201.103, with respect to a Texas financial institution.
39-64          (b)  If a financial institution files a registration
39-65    statement with the secretary of state pursuant to Section 201.102,
39-66    with respect to an out-of-state financial institution, or Section
39-67    201.103, with respect to a Texas financial institution, a claim
39-68    against a customer of the financial institution is not effective as
39-69    to the financial institution if the claim is served or delivered to
 40-1    an address other than that designated by the financial institution
 40-2    in the registration as the address of the financial institution's
 40-3    registered agent.
 40-4          (c)  The customer bears the burden of preventing or limiting
 40-5    a financial institution's compliance with or response to a claim
 40-6    subject to this section by seeking an appropriate remedy, including
 40-7    a restraining order, injunction, protective order, or other remedy,
 40-8    to prevent or suspend the financial institution's response to a
 40-9    claim against the customer.
40-10          (d)  A financial institution that does not file a
40-11    registration with the secretary of state pursuant to Section
40-12    201.102, with respect to an out-of-state financial institution, or
40-13    Section 201.103, with respect to a Texas financial institution, is
40-14    subject to service or delivery of all claims against customers of
40-15    the financial institution as otherwise provided by law.
40-16          Sec. 59.009 [59.007].  COMPLIANCE REVIEW COMMITTEE.  (a)  A
40-17    financial institution or an affiliate of a financial institution,
40-18    including its holding company, may establish a compliance review
40-19    committee to test, review, or evaluate the financial institution's
40-20    conduct, transactions, or potential transactions for the purpose of
40-21    monitoring and improving or enforcing compliance with:
40-22                (1)  a statutory or regulatory requirement;
40-23                (2)  financial reporting to a governmental agency;
40-24                (3)  the policies and procedures of the financial
40-25    institution or its affiliates; or
40-26                (4)  safe, sound, and fair lending practices.
40-27          (b)  Except as provided by Subsection (c):
40-28                (1)  a compliance review document is confidential and
40-29    is not discoverable or admissible in evidence in a civil action;
40-30                (2)  an individual serving on a compliance review
40-31    committee or acting under the direction of a compliance review
40-32    committee may not be required to testify in a civil action as to:
40-33                      (A)  the contents or conclusions of a compliance
40-34    review document; or
40-35                      (B)  an action taken or discussions conducted by
40-36    or for a compliance review committee; and
40-37                (3)  a compliance review document or an action taken or
40-38    discussion conducted by or for a compliance review committee that
40-39    is disclosed to a governmental agency remains confidential and is
40-40    not discoverable or admissible in a civil action.
40-41          (c)  Subsection (b)(2) does not apply to an individual who
40-42    has management responsibility for the operations, records,
40-43    employees, or activities being examined or evaluated by the
40-44    compliance review committee.
40-45          (d)  This section does not limit the discovery or
40-46    admissibility in a civil action of a document that is not a
40-47    compliance review document.
40-48          [(e)  In this section:]
40-49                [(1)  "Civil action" means a civil proceeding pending
40-50    in a court or other adjudicatory tribunal with jurisdiction to
40-51    issue a request or subpoena for records, including a voluntary or
40-52    required alternative dispute resolution mechanism under which a
40-53    party may compel the production of records.  The term does not
40-54    include an examination or enforcement proceeding initiated by:]
40-55                      [(A)  a governmental agency with primary
40-56    regulatory jurisdiction over a financial institution in possession
40-57    of a compliance review document;]
40-58                      [(B)  the Federal Deposit Insurance Corporation
40-59    or its successor; or]
40-60                      [(C)  the board of governors of the Federal
40-61    Reserve System or its successor.]
40-62                [(2)  "Compliance review document" means a document
40-63    prepared by or for a compliance review committee.]
40-64          SECTION 2.017.  Section 59.201, Finance Code, is amended to
40-65    read as follows:
40-66          Sec. 59.201.  ELECTRONIC TERMINALS AUTHORIZED; SHARING OF
40-67    ELECTRONIC TERMINAL.  (a)  A person may install, maintain, and
40-68    operate one or more electronic terminals at any location in this
40-69    state for the convenience of customers of financial [depository]
 41-1    institutions.
 41-2          (b)  Financial [Depository] institutions may agree in writing
 41-3    to share in the use of an electronic terminal on a reasonable,
 41-4    nondiscriminatory basis and on the condition that a financial
 41-5    [depository] institution using an electronic terminal may be
 41-6    required to meet necessary and reasonable technical standards and
 41-7    to pay charges for the use of the electronic terminal.  The
 41-8    standards or charges imposed must be reasonable, fair, equitable,
 41-9    and nondiscriminatory among the financial [depository]
41-10    institutions.  Any charges imposed:
41-11                (1)  may not exceed an equitable proportion of the cost
41-12    of establishing the electronic terminal, including provisions for
41-13    amortization of development costs and capital expenditures over a
41-14    reasonable period, and the cost of operation and maintenance of the
41-15    electronic terminal, plus a reasonable return on those costs; and
41-16                (2)  must be related to the services provided to the
41-17    financial [depository] institution or its customers.
41-18          (c)  This section does not apply to:
41-19                (1)  an electronic terminal located at the domicile or
41-20    home office or a branch of a financial [depository] institution; or
41-21                (2)  the use by a person of an electronic terminal,
41-22    regardless of location, solely to withdraw cash, make account
41-23    balance inquiries, or make transfers between the person's accounts
41-24    in the same financial [depository] institution.
41-25          (d)  In this section, the term "financial institution" has
41-26    the meaning assigned by Section 201.101.
41-27          SECTION 2.018.  Section 59.202(c)(3), Finance Code, is
41-28    amended to read as follows:
41-29                (3)  "Financial institution" has the meaning assigned
41-30    by Section 201.101 [means a state, national, or private bank,
41-31    savings bank, savings association, thrift company, or credit
41-32    union].
41-33          SECTION 2.019.  Section 59.301(7), Finance Code, is amended
41-34    to read as follows:
41-35                (7)  "Financial institution" has the meaning assigned
41-36    by Section 201.101 [means a bank, savings association, credit
41-37    union, or savings bank].
41-38          SECTION 2.020.  Section 152.202(a), Finance Code, is amended
41-39    to read as follows:
41-40          (a)  Section 152.201 does not apply to:
41-41                (1)  a federally insured financial institution, as that
41-42    term is defined by Section 201.101 [bank, credit union, savings and
41-43    loan association, or savings bank, whether the institution is state
41-44    or federal], if the institution does not sell checks, other than
41-45    traveler's checks,[:]
41-46                      [(A)  off premises; or]
41-47                      [(B)]  through an agent who is not directly or
41-48    indirectly owned by the institution unless the agent is also a
41-49    federally insured financial institution [bank, credit union,
41-50    savings and loan association, or savings bank];
41-51                (2)  an agent or subagent of a license holder unless
41-52    the agent or subagent sells the license holder's checks
41-53    over-the-counter to the public and in the regular conduct of that
41-54    business receives or at any time has access to:
41-55                      (A)  a check of the license holder that is
41-56    returned after payment for verification, reconciliation, or
41-57    accounting; or
41-58                      (B)  a bank statement relating to a returned
41-59    check;
41-60                (3)  a title company or attorney that issues an escrow
41-61    or trust fund check;
41-62                (4)  the United States; or
41-63                (5)  with the commissioner's prior written consent, a
41-64    person who:
41-65                      (A)  holds a license issued under Chapter 153;
41-66                      (B)  has a net worth of at least $250,000 and
41-67    meets the licensing requirements of this chapter;
41-68                      (C)  maintains a bond under Section 152.206 in
41-69    the minimum principal amount of $350,000; and
 42-1                      (D)  sells checks only in conjunction with a
 42-2    currency exchange or transmission transaction, as defined by
 42-3    Chapter 153, and separates all proceeds from that transaction from
 42-4    the sale of checks.
 42-5          SECTION 2.021.  Section 152.301(b), Finance Code, is amended
 42-6    to read as follows:
 42-7          (b)  A surety bond or letter of credit required under
 42-8    Subsection (a)(3) must be:
 42-9                (1)  in addition to any other bond or security required
42-10    by this chapter;
42-11                (2)  issued by a bonding company or insurance company
42-12    authorized to do business in this state and acceptable to the
42-13    commissioner, in the case of a surety bond;
42-14                (3)  issued by a federally insured financial
42-15    institution, as that term is defined by Section 201.101, that has
42-16    its main office or a branch in this state and is [state or national
42-17    bank, savings bank, or savings and loan association] acceptable to
42-18    the commissioner, in the case of a letter of credit; and
42-19                (4)  payable to the commissioner on behalf of any
42-20    claimants against the license holder to secure the faithful
42-21    performance of the obligations of the license holder with respect
42-22    to the receipt, handling, and payment of money in connection with
42-23    the sale of checks.
42-24          SECTION 2.022.  Section 153.117(a), Finance Code, is amended
42-25    to read as follows:
42-26          (a)  The following persons are not required to be licensed
42-27    under this chapter:
42-28                (1)  a federally insured financial institution, as that
42-29    term is defined by Section 201.101, that is [bank, foreign bank
42-30    agency, credit union, savings bank, or savings and loan
42-31    association, whether] organized under the laws of this state,
42-32    another state, or [of] the United States;
42-33                (2)  a foreign bank branch or agency in the United
42-34    States established under the federal International Banking Act of
42-35    1978 (12 U.S.C. Section 3101 et seq.), as amended;
42-36                (3)  a license holder under Chapter 152, except that
42-37    the license holder is required to comply with the other provisions
42-38    of this chapter to the extent [unless] the license holder engages
42-39    in currency exchange, transportation, or transmission transactions;
42-40    or
42-41                (4) [(3)]  a person registered as a securities dealer
42-42    under The Securities Act (Article 581-1 et seq., Vernon's Texas
42-43    Civil Statutes).
42-44          SECTION 2.023.  Sections 154.002(1)-(4), Finance Code, are
42-45    amended to read as follows:
42-46                (1)  ["Bank" means a state or national bank.]
42-47                [(2)]  "Commissioner" means the banking commissioner of
42-48    Texas.
42-49                (2) [(3)]  "Department" means the Texas Department of
42-50    Banking.
42-51                (3) [(4)]  "Earnings" means the amount in an account in
42-52    excess of the amount paid by the purchaser of a prepaid funeral
42-53    benefits contract that is deposited in the account as provided by
42-54    Section 154.253, including accrued interest, accrued income, and
42-55    enhanced or increased value.
42-56                (4)  "Financial institution" has the meaning assigned
42-57    by Section 201.101.
42-58          SECTION 2.024.  Section 154.253(a), Finance Code, is amended
42-59    to read as follows:
42-60          (a)  Not later than the 30th day after the date of
42-61    collection, the money, other than money retained as provided by
42-62    Section 154.252, shall be deposited:
42-63                (1)  in a financial institution that has its main
42-64    office or a branch [savings and loan association] in this state in
42-65    an interest-bearing account insured by the federal government; or
42-66                (2)  in trust [in a bank in this state in an
42-67    interest-bearing account insured by the federal government; or]
42-68                [(3)]  with [the trust department in] a financial
42-69    institution that has its main office or a branch located in this
 43-1    state and is authorized to act as a fiduciary [bank in this state,
 43-2    or in a trust company authorized to do business] in this state, to
 43-3    be invested by the financial institution as trustee [trust
 43-4    department or company] in accordance with this subchapter.
 43-5          SECTION 2.025.  Section 154.257(a), Finance Code, is amended
 43-6    to read as follows:
 43-7          (a)  A permit holder or trustee, if the permit holder
 43-8    deposits the money with a financial institution as trustee [bank
 43-9    trust department or a trust company], shall:
43-10                (1)  adopt a written investment plan consistent with
43-11    this section and Sections 154.256 and 154.258 that specifies the
43-12    quality, maturity, and diversification of investments;
43-13                (2)  at least annually, review the adequacy and
43-14    implementation of the investment plan;
43-15                (3)  maintain investment records covering each
43-16    transaction; and
43-17                (4)  maintain the investment plan in the principal
43-18    offices of the permit holder and trustee.
43-19          SECTION 2.026.  Section 154.258(a), Finance Code, is amended
43-20    to read as follows:
43-21          (a)  Money in a prepaid funeral benefits trust may be
43-22    invested only in:
43-23                (1)  demand deposits, savings accounts, certificates of
43-24    deposit, or other accounts issued by financial institutions [banks
43-25    or savings and loan associations organized under state or federal
43-26    law] if the amounts deposited in those accounts are fully covered
43-27    by federal deposit insurance or otherwise fully secured by a
43-28    separate fund of securities in the manner provided by Section
43-29    5.401, Texas Trust Company Act (Article 342a-5.401, Vernon's Texas
43-30    Civil Statutes), and rules adopted under that section;
43-31                (2)  bonds, evidences of indebtedness, or obligations
43-32    of the United States or an instrumentality of the United States;
43-33                (3)  bonds, evidences of indebtedness, or obligations
43-34    the principal and interest of which are guaranteed by the full
43-35    faith and credit of the United States;
43-36                (4)  bonds of a state or local government that are
43-37    exempt from federal income taxation and that are rated:
43-38                      (A)  "Aa" or better by Moody's bond rating
43-39    service; or
43-40                      (B)  "AA" or better by Standard and Poor's bond
43-41    rating service;
43-42                (5)  bonds, evidences of indebtedness, or obligations
43-43    of corporations organized under state or federal law and that are
43-44    rated:
43-45                      (A)  "A" or better by Moody's bond rating
43-46    service; or
43-47                      (B)  "A" or better by Standard and Poor's bond
43-48    rating service;
43-49                (6)  notes, evidences of indebtedness, or participation
43-50    in notes or evidences of indebtedness, secured by a first lien on
43-51    real property located in the United States, if the amount of each
43-52    obligation does not exceed 90 percent of the value of the real
43-53    property securing that obligation;
43-54                (7)  common stock of a corporation that is organized
43-55    under state or federal law and:
43-56                      (A)  has a net worth of at least $1 million; or
43-57                      (B)  will have a net worth of at least $1 million
43-58    after completion of a securities offering to which the trust is
43-59    subscribing;
43-60                (8)  preferred stock of a corporation organized under
43-61    state or federal law and that is rated:
43-62                      (A)  "Baa" ["BAA"] or better by Moody's bond
43-63    rating service; or
43-64                      (B)  "BBB" or better by Standard and Poor's bond
43-65    rating service;
43-66                (9)  investments not covered by this subsection,
43-67    including real property, oil and gas interests, and limited
43-68    partnerships;
43-69                (10)  mutual funds, collective investment funds, or
 44-1    similar participative investment funds, the assets of which are
 44-2    invested only in investments that are permitted under this section
 44-3    and that, if aggregated with other investments, meet the percentage
 44-4    limitations specified by this section; and
 44-5                (11)  other investments the department approves in
 44-6    writing.
 44-7          SECTION 2.027.  Section 154.353(a), Finance Code, is amended
 44-8    to read as follows:
 44-9          (a)  The fund may be deposited with:
44-10                (1)  the comptroller;
44-11                (2)  a federally insured financial institution that has
44-12    its main office or a branch [bank] in this state; or
44-13                (3)  in trust with [a savings and loan association in
44-14    this state;]
44-15                [(4)  the trust department in] a financial institution
44-16    that has its main office or a branch in this state and is
44-17    authorized to act as a fiduciary [bank] in this state[; or]
44-18                [(5)  a trust company authorized to do business in this
44-19    state].
44-20          SECTION 2.028.  Section 271.001(a), Finance Code, is amended
44-21    to read as follows:
44-22          (a)  A financial institution [in this state] that is required
44-23    to file a report with respect to a transaction in this state under
44-24    the Currency and Foreign Transactions Reporting Act (31 U.S.C.
44-25    Section 5311 et seq.), 31 C.F.R.  Part 103, or 12 C.F.R. Section
44-26    21.11, and their subsequent amendments, shall file a copy of the
44-27    report with the attorney general.
44-28          SECTION 2.029.  Section 271.002(a), Finance Code, is amended
44-29    to read as follows:
44-30          (a)  A person engaged in a trade or business who, in the
44-31    course of the trade or business, receives more than $10,000 in one
44-32    transaction or in two or more related transactions in this state
44-33    and who is required to file a return under Section 6050I, Internal
44-34    Revenue Code of 1986 (26 U.S.C. Section 6050I), or 26 C.F.R.
44-35    Section 1.6050I-1, and their subsequent amendments, shall file a
44-36    copy of the return with the attorney general.
44-37          SECTION 2.030.  Sections 274.001, 274.002, and 274.003,
44-38    Finance Code, are amended to read as follows:
44-39          Sec. 274.001.  DEFINITIONS.  In this chapter:
44-40                (1)  "Bank" has the meaning assigned by Section 2(c),
44-41    Bank Holding Company Act of 1956 (12 U.S.C. Section 1841(c)) as
44-42    amended, excluding a bank that does not have its main office or a
44-43    branch located in this state.
44-44                (2)  "Bank holding company" has the meaning assigned by
44-45    Section 2(a), Bank Holding Company Act of 1956 (12 U.S.C. Section
44-46    1841(a)), as amended.
44-47                (3) [(2)]  "Commissioner" means the banking
44-48    commissioner of Texas.
44-49                (4) [(3)]  "Fiduciary" means an entity responsible for
44-50    managing a fiduciary account.
44-51                (5) [(4)]  "Fiduciary account" means an account with a
44-52    situs of administration in this state involving the exercise of a
44-53    corporate purpose specified by Section 151.052 or 151.103.
44-54          Sec. 274.002.  AFFILIATED BANK.  A bank is affiliated with a
44-55    subsidiary trust company if[:]
44-56                [(1)  the bank is a state or national bank that has its
44-57    main office in this state; and]
44-58                [(2)]  more than 50 percent of the bank's voting stock
44-59    is directly or indirectly owned by a bank holding company that owns
44-60    more than 50 percent of the voting stock of the subsidiary trust
44-61    company.
44-62          Sec. 274.003.  SUBSIDIARY TRUST COMPANY.  An entity is a
44-63    subsidiary trust company of a bank holding company if:
44-64                (1)  the entity is a:
44-65                      (A)  corporation incorporated under Subchapter B,
44-66    Chapter 151; or
44-67                      (B)  [national] bank that[:]
44-68                            [(i)]  is organized to conduct a trust
44-69    business and any incidental business or to exercise trust powers;
 45-1    and
 45-2                            [(ii)  has its main office in this state;
 45-3    or]
 45-4                      [(C)  state bank that is organized to exercise
 45-5    trust powers and has its main office in this state; and]
 45-6                (2)  more than 50 percent of the voting stock of the
 45-7    entity is directly or indirectly owned by the bank holding company.
 45-8          SECTION 2.031.  Section 274.101(a), Finance Code, is amended
 45-9    to read as follows:
45-10          (a)  A subsidiary trust company may enter into an agreement
45-11    with an affiliated bank of the company to substitute the company as
45-12    fiduciary for the bank in each fiduciary account listed in the
45-13    agreement, provided the situs of account administration is not
45-14    moved outside of this state without the express written consent of
45-15    all persons entitled to notice under Sections 274.103(a) and (c).
45-16          SECTION 2.032.  Section 274.102, Finance Code, is amended to
45-17    read as follows:
45-18          Sec. 274.102.  SITUS OF ACCOUNT ADMINISTRATION.  The situs of
45-19    administration of a fiduciary account is the county in this state
45-20    in which the fiduciary maintains the office that is primarily
45-21    responsible for dealing with the parties involved in the account.
45-22          SECTION 2.033.  Sections 341.001(1), (2), and (8), Finance
45-23    Code, are amended to read as follows:
45-24                (1)  "Authorized lender" means a person who holds a
45-25    license issued under Chapter 342, a bank, or a savings [and loan]
45-26    association.
45-27                (2)  "Bank" means a person:
45-28                      (A)  organized as a state bank [doing business]
45-29    under Subtitle A, Title 3, or under similar laws of another state
45-30    if the deposits of a bank from another state are insured by the
45-31    Federal Deposit Insurance Corporation; or
45-32                      (B)  organized as a national bank under 12 U.S.C.
45-33    Section 21 et seq., as subsequently amended.
45-34                (8)  "Savings [and loan] association" means a person:
45-35                      (A)  organized as a state savings and loan
45-36    association or savings bank [doing business] under Subtitle B or C,
45-37    Title 3, or under similar laws of another state if the deposits of
45-38    the savings association from another state are insured by the
45-39    Federal Deposit Insurance Corporation; or
45-40                      (B)  organized as a federal savings and loan
45-41    association or savings bank under the Home Owners' Loan Act (12
45-42    U.S.C. Section 1461 et seq.), as subsequently amended.
45-43          SECTION 2.034.  Section 341.103, Finance Code, is amended to
45-44    read as follows:
45-45          Sec. 341.103.  REGULATION OF SAVINGS [AND LOAN] ASSOCIATIONS.
45-46    (a)  The savings and loan commissioner shall enforce this subtitle
45-47    relating to the regulation of state savings [and loan] associations
45-48    operating under this subtitle.
45-49          (b)  The official exercising authority over the operation of
45-50    federal savings [and loan] associations equivalent to the authority
45-51    exercised by the savings and loan commissioner over state savings
45-52    [and loan] associations may enforce this subtitle relating to the
45-53    regulation of a federal savings [and loan] association operating
45-54    under this subtitle.
45-55          SECTION 2.035.  Section 345.001(1), Finance Code, is amended
45-56    to read as follows:
45-57                (1)  "Credit card issuer" means a person who issues an
45-58    identification device, including a card or plate, that is used to
45-59    obtain goods or services under a retail credit card arrangement,
45-60    other than a person who is:
45-61                      (A)  a bank, savings [and loan] association, or
45-62    credit union;
45-63                      (B)  licensed to do business under Chapter 342;
45-64    or
45-65                      (C)  regularly and principally engaged in the
45-66    business of lending money for personal, family, or household
45-67    purposes.
45-68          SECTION 2.036.  Section 393.002(a), Finance Code, is amended
45-69    to read as follows:
 46-1          (a)  This chapter does not apply to:
 46-2                (1)  a person:
 46-3                      (A)  authorized to make a loan or grant an
 46-4    extension of consumer credit under the laws of this state or the
 46-5    United States; and
 46-6                      (B)  subject to regulation and supervision by
 46-7    this state or the United States;
 46-8                (2)  a lender approved by the United States secretary
 46-9    of housing and urban development for participation in a mortgage
46-10    insurance program under the National Housing Act (12 U.S.C. Section
46-11    1701 et seq.);
46-12                (3)  a bank or savings [and loan] association the
46-13    deposits or accounts of which are eligible to be insured by the
46-14    Federal Deposit Insurance Corporation or a subsidiary of the bank
46-15    or association;
46-16                (4)  a credit union doing business in this state;
46-17                (5)  a nonprofit organization exempt from taxation
46-18    under Section 501(c)(3), Internal Revenue Code of 1986 (26 U.S.C.
46-19    Section 501(c)(3));
46-20                (6)  a real estate broker or salesman licensed under
46-21    The Real Estate License Act (Article 6573a, Vernon's Texas Civil
46-22    Statutes) who is acting within the course and scope of that
46-23    license;
46-24                (7)  an individual licensed to practice law in this
46-25    state who is acting within the course and scope of the individual's
46-26    practice as an attorney;
46-27                (8)  a broker-dealer registered with the Securities and
46-28    Exchange Commission or the Commodity Futures Trading Commission
46-29    acting within the course and scope of that regulation;
46-30                (9)  a consumer reporting agency; or
46-31                (10)  a person whose primary business is making loans
46-32    secured by liens on real property.
46-33          SECTION 2.037.  Section 393.402(a), Finance Code, is amended
46-34    to read as follows:
46-35          (a)  The surety account of a credit services organization
46-36    must be held in trust at a federally insured bank or savings [and
46-37    loan] association located in this state.
46-38          SECTION 2.038.  Section 394.103, Finance Code, is amended to
46-39    read as follows:
46-40          Sec. 394.103.  EXCEPTIONS.  A debt-pooling contract entered
46-41    into by the following is not void because of Section 394.102:
46-42                (1)  a bank, savings [and loan] association, trust
46-43    company, or credit union doing business under the laws of this
46-44    state or the United States;
46-45                (2)  an attorney at law;
46-46                (3)  a judicial officer or other person acting under
46-47    the orders of a court of this state or the United States;
46-48                (4)  an agency, instrumentality, or subdivision of this
46-49    state or the United States;
46-50                (5)  a retail merchants association or nonprofit trade
46-51    association formed to collect accounts and exchange credit
46-52    information; or
46-53                (6)  a nonprofit organization providing debt-counseling
46-54    services to residents of this state.
46-55                   ARTICLE 3.  MULTISTATE TRUST BUSINESS
46-56          SECTION 3.001.  The Texas Trust Company Act (Article
46-57    342a-1.001 et seq., Vernon's Texas Civil Statutes) is amended by
46-58    adding Chapter 9 to read as follows:
46-59                   CHAPTER 9.  MULTISTATE TRUST BUSINESS
46-60                     SUBCHAPTER A. GENERAL PROVISIONS
46-61          Sec. 9.001.  DEFINITIONS.  (a)  In this chapter:
46-62                (1)  "Acquire" means an act that results in direct or
46-63    indirect control by an out-of-state trust company of a state trust
46-64    institution, including an act that causes the company to:
46-65                      (A)  merge with the state trust institution;
46-66                      (B)  assume direct or indirect ownership of a
46-67    controlling interest in any class of voting shares of the state
46-68    trust institution; or
46-69                      (C)  assume direct ownership or control of all or
 47-1    substantially all of the accounts of a state trust institution.
 47-2                (2)  "Bank" means:
 47-3                      (A)  a state bank chartered under Chapter 32,
 47-4    Finance Code, or the laws of another state;
 47-5                      (B)  a national bank chartered under federal law;
 47-6    or
 47-7                      (C)  a foreign bank that is organized under the
 47-8    laws of a territory of the United States, Puerto Rico, Guam,
 47-9    American Samoa, or the Virgin Islands, and that has its deposits
47-10    insured by the Federal Deposit Insurance Corporation.
47-11                (3)  "Branch" has the meaning assigned by Section
47-12    31.002(a), Finance Code.
47-13                (4)  "Credit union" means a credit union chartered
47-14    under Chapter 122, Finance Code, the laws of another state, or
47-15    federal law.
47-16                (5)  "De novo trust office" means a trust office
47-17    located in a host state that:
47-18                      (A)  is originally established by a trust company
47-19    as a trust office; and
47-20                      (B)  does not become a trust office of the trust
47-21    company as a result of an acquisition or conversion of another
47-22    trust institution.
47-23                (6)  "Foreign bank" has the meaning assigned by Section
47-24    1(b)(7), federal International Banking Act of 1978 (12 U.S.C.
47-25    3101(7)), as amended.
47-26                (7)  "Home state" means:
47-27                      (A)  with respect to a federally chartered trust
47-28    institution or a foreign bank, the state in which the institution
47-29    maintains its principal office; and
47-30                      (B)  with respect to another trust institution,
47-31    the state which chartered the institution.
47-32                (8)  "Home state regulator" means the supervisory
47-33    agency with primary responsibility for chartering and supervising a
47-34    trust company.
47-35                (9)  "Host state" means a state, other than the home
47-36    state of a trust company, or a foreign country in which the trust
47-37    company maintains or seeks to acquire or establish an office.
47-38                (10)  "Office" means, with respect to a trust company,
47-39    the principal office, a trust office, or a representative trust
47-40    office.
47-41                (11)  "Out-of-state trust company" means a trust
47-42    company:
47-43                      (A)  whose home state is another state; or
47-44                      (B)  that is chartered under the laws of a
47-45    foreign country.
47-46                (12)  "Principal office" means:
47-47                      (A)  with respect to a state trust company, its
47-48    home office as defined by Section 1.002(a); and
47-49                      (B)  with respect to a bank, savings bank,
47-50    savings association, foreign bank, or out-of-state trust company,
47-51    its main office or principal place of business in the United
47-52    States.
47-53                (13)  "Representative trust office" means an office at
47-54    which a trust company has been authorized by the banking
47-55    commissioner to engage in activities other than acting as a
47-56    fiduciary as provided by Subchapter C.
47-57                (14)  "Savings association" means a savings and loan
47-58    association chartered under Chapter 62, Finance Code, the laws of
47-59    another state, or federal law.
47-60                (15)  "Savings bank" means a savings bank chartered
47-61    under Chapter 92, Finance Code, the laws of another state, or
47-62    federal law.
47-63                (16)  "State" means any state of the United States, the
47-64    District of Columbia, any territory of the United States, Puerto
47-65    Rico, Guam, American Samoa, the Trust Territory of the Pacific
47-66    Islands, the Virgin Islands, and the Northern Mariana Islands.
47-67                (17)  "State trust institution" means a trust
47-68    institution whose home state is this state.
47-69                (18)  "Supervisory agency" means:
 48-1                      (A)  an agency of another state or a foreign
 48-2    country with primary responsibility for chartering and supervising
 48-3    a trust institution; and
 48-4                      (B)  with respect to a federally chartered trust
 48-5    institution or foreign bank, the Office of the Comptroller of the
 48-6    Currency, the Federal Deposit Insurance Corporation, the Board of
 48-7    Governors of the Federal Reserve System, the Office of Thrift
 48-8    Supervision, or the National Credit Union Administration, as
 48-9    applicable.
48-10                (19)  "Trust company" means a state trust company or a
48-11    company chartered under the laws of another state or a foreign
48-12    country to conduct a trust business that is not a bank, credit
48-13    union, savings association, savings bank, or foreign bank.
48-14                (20)  "Trust institution" means a bank, credit union,
48-15    foreign bank, savings association, savings bank, or trust company
48-16    that is authorized by its charter to conduct a trust business.
48-17                (21)  "Trust office" means an office, other than the
48-18    principal office, at which a trust company is licensed by the
48-19    banking commissioner to conduct a trust business.
48-20          (b)  The definitions provided by Section 1.002(a) of this Act
48-21    apply to this chapter to the extent not inconsistent with this
48-22    chapter.
48-23          (c)  The definitions shall be liberally construed to
48-24    accomplish the purposes of this chapter.
48-25          (d)  The finance commission by rule may adopt other
48-26    definitions to accomplish the purposes of this chapter.
48-27          Sec. 9.002.  COMPANIES AUTHORIZED TO CONDUCT A TRUST
48-28    BUSINESS.  (a)  A company may not conduct a trust business in this
48-29    state unless the company is a trust institution and is:
48-30                (1)  a state trust company chartered pursuant to this
48-31    Act;
48-32                (2)  a bank, savings association, savings bank, or
48-33    credit union that maintains its principal office or a branch in
48-34    this state in accordance with governing law, or another office in
48-35    this state with the power to conduct a trust business to the extent
48-36    permitted by rule;
48-37                (3)  a trust company chartered under the laws of
48-38    another state or a foreign country that has a trust office in this
48-39    state licensed by the banking commissioner pursuant to this
48-40    chapter; or
48-41                (4)  a foreign bank with an office in this state that
48-42    is authorized to act as a fiduciary pursuant to Section 204.106,
48-43    Finance Code.
48-44          (b)  Notwithstanding Subsection (a), a trust institution that
48-45    does not maintain a principal office, branch, or trust office in
48-46    this state may act as a fiduciary in this state to the extent
48-47    permitted by Section 105A, Probate Code.
48-48          (c)  A company does not engage in the trust business in this
48-49    state in a manner requiring a charter or license under this Act by
48-50    engaging in an activity identified in Section 3.022 of this Act,
48-51    except that the registration requirements of Section 9.202 of this
48-52    Act may apply to a trust representative office engaging in the
48-53    activity.
48-54          Sec. 9.003.  INTERSTATE TRUST BUSINESS OF STATE TRUST
48-55    COMPANY.  Subject to the approval of the banking commissioner
48-56    pursuant to Section 3.203 of this Act, a state trust company may
48-57    engage in the trust business in another state or a foreign country
48-58    at a trust office or a trust representative office to the extent
48-59    permitted by and subject to applicable laws of the state or foreign
48-60    country.
48-61          Sec. 9.004.  TRUST BUSINESS OF OUT-OF-STATE TRUST COMPANY.
48-62    (a)  An out-of-state trust company that establishes or maintains an
48-63    office in this state under this chapter may conduct any activity at
48-64    the office that would be authorized under the laws of this state
48-65    for a state trust company to conduct at the office.
48-66          (b)  Before establishing an office in this state, an
48-67    out-of-state trust company must comply with Section 201.102,
48-68    Finance Code.
48-69          Sec. 9.005.  DESIGNATION OF TRUSTEE AND GOVERNING LAW.  (a)
 49-1    Unless another law restricts the designation of trustee, a person
 49-2    residing in this state may designate a trust institution to act as
 49-3    a fiduciary on behalf of the person.
 49-4          (b)  Unless another law specifies governing law and except as
 49-5    provided in Subsection (c), if a trust or its subject matter bears
 49-6    a reasonable relation to this state and also to another state or a
 49-7    foreign country, a trust institution and its affected client may
 49-8    agree that the law of this state or of the other state or country
 49-9    governs their rights and duties, including the law of a state or a
49-10    foreign country where the affected client resides or where the
49-11    trust institution has its principal office.
49-12          (c)  Notwithstanding Subsection (b), a trust institution is
49-13    subject to Sections 113.052 and 113.053, Property Code, with
49-14    respect to a trust if the trust is established by a client that
49-15    resides in this state and is solicited from or accepted by an
49-16    office of the trust institution in this state.
49-17          Sec. 9.006.  TAXATION.  An out-of-state trust institution
49-18    doing business in this state is subject to the franchise tax to the
49-19    extent provided by Chapter 171, Tax Code.
49-20          Sec. 9.007.  SEVERABILITY.  The provisions of this chapter or
49-21    applications of those provisions are severable as provided by
49-22    Section 312.013(c), Government Code.
49-23          SUBCHAPTER B.  OUT-OF-STATE TRUST COMPANY TRUST OFFICE
49-24          Sec. 9.101.  TRUST OFFICES IN THIS STATE.  An out-of-state
49-25    trust company may engage in a trust business at an office in this
49-26    state only if it establishes and maintains a trust office in this
49-27    state as permitted by this subchapter.
49-28          Sec. 9.102.  ESTABLISHING AN INTERSTATE TRUST OFFICE.  (a)
49-29    An out-of-state trust company that does not operate a trust office
49-30    in this state may not establish and maintain a de novo trust office
49-31    in this state unless:
49-32                (1)  a state trust company would be permitted to
49-33    establish a de novo trust office in the home state or foreign
49-34    country of the out-of-state trust company; and
49-35                (2)  a bank whose home state is this state would be
49-36    permitted to establish a de novo branch in the home state or
49-37    foreign country of the out-of-state trust company.
49-38          (b)  Subject to Subsection (a), a de novo trust office may be
49-39    established in this state under this section through the
49-40    acquisition of a trust office in this state of an existing trust
49-41    institution.
49-42          Sec. 9.103.  ACQUIRING AN INTERSTATE TRUST OFFICE.  (a)  An
49-43    out-of-state trust company that does not operate a trust office in
49-44    this state and that meets the requirements of this subchapter may
49-45    acquire an existing trust institution in this state and after the
49-46    acquisition operate and maintain the acquired institution as a
49-47    trust office in this state, subject to Subchapter A, Chapter 4 of
49-48    this Act, or Subchapter A, Chapter 33, Finance Code, if applicable.
49-49    If the institution to be acquired is a bank or a state savings
49-50    bank, Section 203.005, Finance Code, applies to the transaction.
49-51          (b)  An out-of-state trust institution that does not operate
49-52    a trust office in this state may not establish and maintain a trust
49-53    office in this state through the acquisition of a trust office of
49-54    an existing trust institution except as provided by Section 9.102
49-55    of this Act.  This section does not affect or prohibit a trust
49-56    institution, other entity, or person from chartering a state trust
49-57    company pursuant to Section 3.001 of this Act.
49-58          Sec. 9.104.  REQUIREMENT OF NOTICE.  An out-of-state trust
49-59    company desiring to establish and maintain a de novo trust office
49-60    or acquire an existing trust institution in this state and to
49-61    operate and maintain the acquired institution as a trust office
49-62    pursuant to this subchapter shall provide written notice of the
49-63    proposed transaction to the banking commissioner on or after the
49-64    date on which the out-of-state trust company applies to the home
49-65    state regulator for approval to establish and maintain or acquire
49-66    the trust office.  The filing of the notice shall be preceded or
49-67    accompanied by a copy of the resolution adopted by the board
49-68    authorizing the additional office and the filing fee, if any,
49-69    prescribed by law.  The written notice must contain sufficient
 50-1    information to enable an informed decision under Section 9.105 of
 50-2    this Act.
 50-3          Sec. 9.105.  CONDITIONS FOR APPROVAL.  (a)  A trust office of
 50-4    an out-of-state trust company may be acquired or established in
 50-5    this state under this subchapter if:
 50-6                (1)  the out-of-state trust company confirms in writing
 50-7    to the banking commissioner that while it maintains a trust office
 50-8    in this state, it will comply with all applicable laws of this
 50-9    state;
50-10                (2)  the out-of-state trust company provides
50-11    satisfactory evidence to the banking commissioner of compliance
50-12    with Section 201.102, Finance Code, and the applicable requirements
50-13    of its home state regulator for acquiring or establishing and
50-14    maintaining the office;
50-15                (3)  all filing fees have been paid as required by law;
50-16    and
50-17                (4)  the banking commissioner finds that:
50-18                      (A)  applicable conditions of Section 9.102 or
50-19    9.103 of this Act have been met; and
50-20                      (B)  if a state bank is being acquired, the
50-21    applicable requirements of Subchapter A, Chapter 33, and Section
50-22    203.005, Finance Code, have been met, or if a state trust company
50-23    is being acquired, the applicable requirements of Subchapter A,
50-24    Chapter 4 of this Act have been met; and
50-25                      (C)  any conditions imposed by the banking
50-26    commissioner pursuant to Subsection (b) have been satisfied.
50-27          (b)  The banking commissioner may condition approval of a
50-28    trust office on compliance by the out-of-state trust company with
50-29    any requirement applicable to formation of a state trust company
50-30    pursuant to Sections 3.003(b) and 3.007 of this Act.
50-31          (c)  If all requirements of Subsection (a) have been met, the
50-32    out-of-state trust company may commence business at the trust
50-33    office on the 61st day after the date the banking commissioner
50-34    notifies the company that the notice required by Section 9.104 of
50-35    this Act has been accepted for filing, unless the banking
50-36    commissioner specifies an earlier or later date.
50-37          (d)  The 60-day period of review may be extended by the
50-38    banking commissioner on a determination that the written notice
50-39    raises issues that require additional information or additional
50-40    time for analysis.  If the period of review is extended, the
50-41    out-of-state trust company may establish the office only on prior
50-42    written approval by the banking commissioner.
50-43          (e)  If all requirements of Subsection (a) have been met, the
50-44    banking commissioner may otherwise deny approval of the office if
50-45    the banking commissioner finds that the out-of-state trust company
50-46    lacks sufficient financial resources to undertake the proposed
50-47    expansion without adversely affecting its safety or soundness or
50-48    that the proposed office is contrary to the public interest.  In
50-49    acting on the notice, the banking commissioner shall consider the
50-50    views of the appropriate supervisory agencies.
50-51          Sec. 9.106.  ADDITIONAL TRUST OFFICES.  An out-of-state trust
50-52    company that maintains a trust office in this state under this
50-53    subchapter may establish or acquire additional trust offices or
50-54    representative trust offices in this state to the same extent that
50-55    a state trust company may establish or acquire additional offices
50-56    in this state pursuant to the procedures for establishing or
50-57    acquiring the offices set forth in Section 3.203 of this Act.
50-58               SUBCHAPTER C.  OUT-OF-STATE TRUST INSTITUTION
50-59                        REPRESENTATIVE TRUST OFFICE
50-60          Sec. 9.201.  REPRESENTATIVE TRUST OFFICE BUSINESS.  (a)  An
50-61    out-of-state trust institution may establish a representative trust
50-62    office as permitted by this subchapter to:
50-63                (1)  solicit, but not accept, fiduciary appointments;
50-64                (2)  act as a fiduciary in this state to the extent
50-65    permitted for a foreign corporate fiduciary by Section 105A,
50-66    Probate Code;
50-67                (3)  perform ministerial duties with respect to
50-68    existing clients and accounts of the trust institution;
50-69                (4)  engage in an activity permitted by Section 3.022
 51-1    of this Act; and
 51-2                (5)  the extent not acting as a fiduciary:
 51-3                      (A)  receive for safekeeping personal property of
 51-4    every description;
 51-5                      (B)  act as assignee, bailee, conservator,
 51-6    custodian, escrow agent, registrar, receiver, or transfer agent;
 51-7    and
 51-8                      (C)  act as financial advisor, investment advisor
 51-9    or manager, agent, or attorney-in-fact in any agreed capacity.
51-10          (b)  Except as provided by Subsection (a), a trust
51-11    representative office may not act as a fiduciary or otherwise
51-12    engage in the trust business in this state.
51-13          (c)  Subject to the requirements of this subchapter, an
51-14    out-of-state trust institution may establish and maintain
51-15    representative trust offices anywhere in this state.
51-16          Sec. 9.202.  REGISTRATION OF REPRESENTATIVE TRUST OFFICE.
51-17    (a)  Except as provided by Subsection (e) with respect to a credit
51-18    union, a savings association, or a savings bank, an out-of-state
51-19    trust institution that does not maintain a branch or trust office
51-20    in this state and that desires to establish or acquire and maintain
51-21    a representative trust office shall:
51-22                (1)  file a notice on a form prescribed by the banking
51-23    commissioner, setting forth:
51-24                      (A)  the name of the out-of-state trust
51-25    institution;
51-26                      (B)  the location of the proposed office; and
51-27                      (C)  satisfactory evidence that the notificant is
51-28    a trust institution;
51-29                (2)  pay the filing fee, if any, prescribed by law; and
51-30                (3)  submit a copy of the resolution adopted by the
51-31    board authorizing the representative trust office and a copy of the
51-32    trust institution's registration filed with the secretary of state
51-33    pursuant to Section 201.102, Finance Code.
51-34          (b)  The notificant may commence business at the
51-35    representative trust office on the 31st day after the date the
51-36    banking commissioner receives the notice unless the banking
51-37    commissioner specifies an earlier or later date.
51-38          (c)  The 30-day period of review may be extended by the
51-39    banking commissioner on a determination that the written notice
51-40    raises issues that require additional information or additional
51-41    time for analysis.  If the period of review is extended, the
51-42    out-of-state trust institution may establish the representative
51-43    trust office only on prior written approval by the banking
51-44    commissioner.
51-45          (d)  The banking commissioner may deny approval of the
51-46    representative trust office if the banking commissioner finds that
51-47    the notificant lacks sufficient financial resources to undertake
51-48    the proposed expansion without adversely affecting its safety or
51-49    soundness or that the proposed office would be contrary to the
51-50    public interests. In acting on the notice, the banking commissioner
51-51    shall consider the views of the appropriate supervisory agencies.
51-52          (e)  A credit union, savings association, or savings bank
51-53    that does not maintain a branch in this state and desires to
51-54    establish or acquire and maintain a representative trust office
51-55    shall comply with this section, except that the notice required by
51-56    Subsection (a) must be filed with, and the duties and
51-57    responsibilities of the banking commissioner under Subsections
51-58    (b)-(d) shall be performed by:
51-59                (1)  the Texas credit union commissioner, with respect
51-60    to a credit union; or
51-61                (2)  the Texas savings and loan commissioner, with
51-62    respect to a savings association or savings bank.
51-63          (f)  An out-of-state trust institution that fails to register
51-64    as required by this section is subject to Subchapter C, Chapter 6
51-65    of this Act.
51-66         SUBCHAPTER D.  SUPERVISION OF OUT-OF-STATE TRUST COMPANY
51-67          Sec. 9.301.  COOPERATIVE AGREEMENTS; FEES.  (a)  To carry out
51-68    the purposes of this Act, the banking commissioner may:
51-69                (1)  enter into cooperative, coordinating, or
 52-1    information sharing agreements with another supervisory agency or
 52-2    an organization affiliated with or representing one or more
 52-3    supervisory agencies;
 52-4                (2)  with respect to periodic examination or other
 52-5    supervision or investigation, accept reports of examination or
 52-6    investigation by, and reports submitted to, another supervisory
 52-7    agency in lieu of conducting examinations or investigations or
 52-8    receiving reports as might otherwise be required or permissible
 52-9    under this Act;
52-10                (3)  enter into contracts with another supervisory
52-11    agency having concurrent regulatory or supervisory jurisdiction to
52-12    engage the services of the agency for reasonable compensation to
52-13    assist in connection with the banking commissioner's performance of
52-14    official duties under this Act or other law, or to provide services
52-15    to the agency for reasonable compensation in connection with the
52-16    agency's performance of official duties under law, except that
52-17    Chapter 2254, Government Code, does not apply to such contracts;
52-18                (4)  enter into joint examinations or joint enforcement
52-19    actions with another supervisory agency having concurrent
52-20    regulatory or supervisory jurisdiction, except that the banking
52-21    commissioner may independently take action under Section 9.305 of
52-22    this Act if the banking commissioner determines that the action is
52-23    necessary to carry out the banking commissioner's responsibilities
52-24    under this Act or to enforce compliance with the laws of this
52-25    state; and
52-26                (5)  assess supervisory and examination fees to be paid
52-27    by an out-of-state trust company that maintains one or more offices
52-28    in this state in connection with the banking commissioner's
52-29    performance of duties under this Act.
52-30          (b)  Supervisory or examination fees assessed by the banking
52-31    commissioner in accordance with this Act may be shared with another
52-32    supervisory agency or an organization affiliated with or
52-33    representing one or more supervisory agencies in accordance with an
52-34    agreement between the banking commissioner and the agency or
52-35    organization.  The banking commissioner may also receive a portion
52-36    of supervisory or examination fees assessed by another supervisory
52-37    agency in accordance with an agreement between the banking
52-38    commissioner and the agency.
52-39          Sec. 9.302.  EXAMINATIONS; PERIODIC REPORTS.  (a)  To the
52-40    extent consistent with Section 9.301 of this Act, the banking
52-41    commissioner may make examinations of a trust office or trust
52-42    representative office established and maintained in this state by
52-43    an out-of-state trust company pursuant to this chapter as the
52-44    banking commissioner considers necessary to determine whether the
52-45    office is being operated in compliance with the laws of this state
52-46    and in accordance with safe and sound fiduciary practices.  The
52-47    provisions of Section 2.002 of this Act apply to the examinations.
52-48          (b)  The finance commission may by rule prescribe
52-49    requirements for periodic reports regarding a trust office or trust
52-50    representative office in this state.  The required reports must be
52-51    provided by the trust institution maintaining the office.
52-52    Reporting requirements under this subsection must be appropriate
52-53    for the purpose of enabling the banking commissioner to discharge
52-54    the responsibilities of the banking commissioner under this
52-55    chapter.
52-56          Sec. 9.303.  INTERPRETIVE STATEMENTS AND OPINIONS.  (a)
52-57    Subject to Subsection (b), to encourage the effective coordination
52-58    and implementation of home state laws and host state laws with
52-59    respect to interstate trust business, the banking commissioner,
52-60    directly or through the deputy banking commissioner or a department
52-61    attorney in the manner provided by Sections 2.001 and 2.0011 of
52-62    this Act, and with the effect provided by Section 2.0012 of this
52-63    Act, may issue:
52-64                (1)  an interpretive statement for the general guidance
52-65    of trust institutions in this state and the general public; or
52-66                (2)  an opinion interpreting or determining the
52-67    applicability of laws of this state to the trust business and the
52-68    operation of a branch, trust office, or another office in this
52-69    state of an out-of-state trust institution, or in other states by
 53-1    state trust companies.
 53-2          (b)  With respect to the trust business of a credit union,
 53-3    savings association, or savings bank, the duties and
 53-4    responsibilities of the banking commissioner under Subsection (a)
 53-5    shall be performed by:
 53-6                (1)  the Texas credit union commissioner, with respect
 53-7    to a credit union; or
 53-8                (2)  the Texas savings and loan commissioner, with
 53-9    respect to a savings association or savings bank.
53-10          Sec. 9.304.  CONFIDENTIAL INFORMATION.  Information obtained
53-11    directly or indirectly by the banking commissioner relative to the
53-12    financial condition or business affairs of a trust institution,
53-13    other than the public portions of a report of condition or income
53-14    statement, or a present, former, or prospective shareholder,
53-15    participant, officer, director, manager, affiliate, or service
53-16    provider of the trust institution, whether obtained through
53-17    application, examination, or otherwise, and each related file or
53-18    record of the department is confidential and may not be disclosed
53-19    by the banking commissioner or an employee of the department except
53-20    as expressly provided by Subchapter B, Chapter 2 of this Act.
53-21          Sec. 9.305.  ENFORCEMENT; APPEALS.  (a)  If the banking
53-22    commissioner determines that an out-of-state trust company has
53-23    violated this Act or other applicable law of this state, the
53-24    banking commissioner may take all enforcement actions the banking
53-25    commissioner would be empowered to take if the out-of-state trust
53-26    company were a state trust company, except that the banking
53-27    commissioner shall promptly give notice to the home state regulator
53-28    of each enforcement action to be taken against an out-of-state
53-29    trust company and, to the extent practicable, shall consult and
53-30    cooperate with the home state regulator in pursuing and resolving
53-31    the enforcement action.  An out-of-state trust company may appeal a
53-32    final order or other decision of the banking commissioner under
53-33    this Act as provided by Section 3.010 of this Act.
53-34          (b)  Notwithstanding Subsection (a) of this section, the
53-35    banking commissioner may enforce this Act against a trust
53-36    institution by appropriate action in the courts, including an
53-37    action for injunctive relief, if the banking commissioner concludes
53-38    the action is necessary or desirable.
53-39          Sec. 9.306.  NOTICE OF SUBSEQUENT EVENT.  Each out-of-state
53-40    trust company that has established and maintains an office in this
53-41    state pursuant to this Act shall give written notice, at least 30
53-42    days before the effective date of the event, or, in the case of an
53-43    emergency transaction, a shorter period before the effective date
53-44    consistent with applicable state or federal law, to the banking
53-45    commissioner of:
53-46                (1)  a merger or other transaction that would cause a
53-47    change of control with respect to the trust company, with the
53-48    result that an application would be required to be filed with the
53-49    home state regulator or a federal supervisory agency;
53-50                (2)  a transfer of all or substantially all of the
53-51    trust accounts or trust assets of the out-of-state trust company to
53-52    another person; or
53-53                (3)  the closing or disposition of an office in this
53-54    state.
53-55              ARTICLE 4.  CONFORMING AMENDMENTS TO TRUST LAW
53-56          SECTION 4.001.  Sections 1.002(a)(11), (46), and (52)-(54),
53-57    Texas Trust Company Act (Article 342a-1.001 et seq., Vernon's Texas
53-58    Civil Statutes), are amended to read as follows:
53-59                (11)  "Company" means a [includes a bank, trust
53-60    company,] corporation, partnership, association, business trust,
53-61    [or] another trust, or a similar organization, including a trust
53-62    institution.
53-63                (46)  "State trust company" or "trust company" means a
53-64    trust association or limited trust association organized or
53-65    reorganized under this Act, including an association organized
53-66    under the laws of this state before September 1, 1997.  If the
53-67    context or circumstances require, the term includes a trust company
53-68    organized under the laws of another state that lawfully maintains a
53-69    trust office in this state in accordance with Chapter 9 of this
 54-1    Act.
 54-2                (52)  "Unauthorized trust activity" means an act or
 54-3    practice within this state by a company [person] without a charter,
 54-4    license, permit, registration, or other authority issued or granted
 54-5    by the banking commissioner or other appropriate regulatory
 54-6    authority for which such a charter, license, permit, registration,
 54-7    or other authority is required to conduct trust business.
 54-8                (53)  "Trust institution" means a bank, credit union,
 54-9    foreign bank, savings association, savings bank, or trust company
54-10    that is authorized by its charter to conduct a trust business.
54-11                (54)  "Undivided profits" means the part of equity
54-12    capital of a state trust company equal to the balance of its net
54-13    profits, income, gains, and losses since the date of its formation
54-14    minus subsequent distributions to shareholders or participants and
54-15    transfers to surplus or capital under share dividends or
54-16    appropriate board resolutions.  The term includes amounts allocated
54-17    to undivided profits as a result of a merger.
54-18                (55) [(54)]  "Voting security" means a share,
54-19    participation share, or other evidence of proprietary interest in a
54-20    state trust company or other company that has as an attribute the
54-21    right to vote or participate in the election of the board of the
54-22    trust company or other company, regardless of whether the right is
54-23    limited to the election of fewer than all of the board members.
54-24    The term includes a security that is convertible or exchangeable
54-25    into a voting security and a nonvoting participation share of a
54-26    managing participant.
54-27          SECTION 4.002.  Section 1.003(a), Texas Trust Company Act
54-28    (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
54-29    amended to read as follows:
54-30          (a)  The finance commission may adopt rules to accomplish the
54-31    purposes of this Act, including rules necessary or reasonable to:
54-32                (1)  implement and clarify this Act;
54-33                (2)  preserve or protect the safety and soundness of
54-34    state trust companies;
54-35                (3)  grant the same rights and privileges to state
54-36    trust companies with respect to the exercise of fiduciary powers
54-37    that are or may be granted to a trust institution that maintains
54-38    its principal office or a branch or trust office [state or national
54-39    bank that is domiciled] in this state [and exercising fiduciary
54-40    powers];
54-41                (4)  provide for recovery of the cost of maintenance
54-42    and operation of the department and the cost of enforcing this Act
54-43    through the imposition and collection of ratable and equitable fees
54-44    for notices, applications, and examinations; and
54-45                (5)  facilitate the fair hearing and adjudication of
54-46    matters before the banking commissioner and the finance commission.
54-47          SECTION 4.003.  Section 2.001, Texas Trust Company Act
54-48    (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
54-49    amended to read as follows:
54-50          Sec. 2.001.  ISSUANCE OF INTERPRETIVE STATEMENTS [AND
54-51    OPINIONS].  (a)  The banking commissioner may issue interpretive
54-52    statements containing matters of general policy for the guidance of
54-53    the general public and state trust companies, and[.  The banking
54-54    commissioner shall file the statements for publication in the Texas
54-55    Register.  The banking commissioner] may amend or repeal a
54-56    published interpretive statement by issuing an amended statement or
54-57    notice of repeal of a statement [and filing the statement or notice
54-58    for publication in the Texas Register.  The secretary of state
54-59    shall publish the filed statements and notices in the Texas
54-60    Register and in a designated chapter of the Texas Administrative
54-61    Code].
54-62          (b)  An interpretive statement may be disseminated by
54-63    newsletter, via an electronic medium such as the internet, in a
54-64    volume of statutes or related materials published by the banking
54-65    commissioner or others, or by other means reasonably calculated to
54-66    notify persons affected by the interpretive statement.  Notice of
54-67    an amended or withdrawn statement must be published in a
54-68    substantially similar manner as the affected statement was
54-69    originally published.
 55-1          Sec. 2.0011.  ISSUANCE OF OPINION.  (a)  In response to a
 55-2    specific request from a member of the public or industry, the [The]
 55-3    banking commissioner may issue an opinion [in response to a
 55-4    specific request from a member of the public or the state trust
 55-5    company industry] directly or through the deputy banking
 55-6    commissioner or the department's attorneys.
 55-7          (b)  If the banking commissioner determines that the opinion
 55-8    is useful for the general guidance of trust companies and the
 55-9    general public, the banking commissioner may disseminate [file] the
55-10    opinion by newsletter, via an electronic medium such as the
55-11    internet, in a volume of statutes or related materials published by
55-12    the banking commissioner or others, or by other means reasonably
55-13    calculated to notify persons affected by the opinion [for
55-14    publication in the Texas Register].  A published opinion must be
55-15    redacted to preserve [in a manner that preserves] the
55-16    confidentiality of the requesting party, unless the requesting
55-17    party consents to be identified in the published opinion.
55-18          (c)  The banking commissioner may amend or repeal a published
55-19    opinion by issuing an amended opinion or notice of repeal of an
55-20    opinion and disseminating [filing] the opinion or notice in a
55-21    substantially similar manner as the affected statement or opinion
55-22    was originally published.  The [for publication in the Texas
55-23    Register, except that the] requesting party, however, may rely on
55-24    the original opinion if:
55-25                (1)  all material facts were originally disclosed to
55-26    the banking commissioner;
55-27                (2)  the[, considerations of] safety and soundness of
55-28    the affected trust company will not be affected by [companies are
55-29    not implicated with respect to] further [and prospective] reliance
55-30    on the original opinion; [,] and
55-31                (3)  the text and interpretation of relevant governing
55-32    provisions of this Act have not been changed by legislative or
55-33    judicial action.  [The secretary of state shall publish the filed
55-34    opinions and notices in the Texas Register and a designated chapter
55-35    of the Texas Administrative Code.]
55-36          Sec. 2.0012.  EFFECT OF INTERPRETIVE STATEMENT OR OPINION.
55-37    [(c)]  An interpretive statement or opinion issued under this
55-38    section does not have the force of law and is not a rule for the
55-39    purposes of Chapter 2001, Government Code, unless adopted by the
55-40    finance commission as provided by Chapter 2001, Government Code.
55-41    An interpretive statement or opinion is an administrative
55-42    construction of this Act entitled to great weight if the
55-43    construction is reasonable and does not conflict with this Act.
55-44          SECTION 4.004.  Section 3.001(a), Texas Trust Company Act
55-45    (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
55-46    amended to read as follows:
55-47          (a)  Subject to the other provisions of this chapter, one or
55-48    more persons may organize and charter a state trust company as a
55-49    state trust association or a limited trust association.  A state
55-50    trust company may engage in the trust business by [perform any act
55-51    as a fiduciary that a state bank or national bank exclusively
55-52    exercising trust powers may perform under the laws of this state,
55-53    including]:
55-54                (1)  acting as trustee under a written agreement;
55-55                (2)  receiving money and other property in its capacity
55-56    as trustee for investment in real or personal property;
55-57                (3)  acting as trustee and performing the fiduciary
55-58    duties committed or transferred to it by order of a court of
55-59    competent jurisdiction;
55-60                (4)  acting as executor, administrator, or trustee of
55-61    the estate of a deceased person;
55-62                (5)  acting as a custodian, guardian, conservator, or
55-63    trustee for a minor or incapacitated person;
55-64                (6)  acting as a successor fiduciary to a trust
55-65    [depository] institution or other fiduciary;
55-66                (7)  receiving for safekeeping personal property;
55-67                (8)  acting as custodian, assignee, transfer agent,
55-68    escrow agent, registrar, or receiver;
55-69                (9)  acting as investment advisor, agent, or attorney
 56-1    in fact according to an applicable agreement;
 56-2                (10)  exercising additional powers expressly conferred
 56-3    by rule of the finance commission; and
 56-4                (11)  exercising any incidental power that is
 56-5    reasonably necessary to enable it to fully exercise the powers
 56-6    expressly conferred according to commonly accepted fiduciary
 56-7    customs and usages.
 56-8          SECTION 4.005.  Section 3.005(e), Texas Trust Company Act
 56-9    (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
56-10    amended to read as follows:
56-11          (e)  Chapter 2001, Government Code, does not apply to a
56-12    charter application filed for the purpose of assuming all or any
56-13    portion of the assets, liabilities, and accounts of a trust [any
56-14    depository] institution [or state trust company] considered by the
56-15    banking commissioner to be in hazardous condition.
56-16          SECTION 4.006.  Section 3.022, Texas Trust Company Act
56-17    (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
56-18    amended to read as follows:
56-19          Sec. 3.022.  ACTIVITIES NOT REQUIRING CHARTER.  Subject to
56-20    Subchapter C, Chapter 9 of this Act, a [A] company does not engage
56-21    in the trust business in a manner requiring a state charter by:
56-22                (1)  acting in a manner authorized by law and in the
56-23    scope of authority as an agent of a trust institution [state trust
56-24    company];
56-25                (2)  rendering a service customarily performed as an
56-26    attorney in a manner approved and authorized by the Supreme Court
56-27    of Texas or State Bar of Texas;
56-28                (3)  acting as trustee under a deed of trust made only
56-29    as security for the payment of money or for the performance of
56-30    another act;
56-31                (4)  conducting [a trust] business as a trust
56-32    institution [under a charter that authorizes the exercise of trust
56-33    powers as a depository institution,] if the exercise of fiduciary
56-34    [trust] powers in this state by the trust [depository] institution
56-35    is not otherwise prohibited by law;
56-36                (5)  engaging in a business regulated by the Office of
56-37    Consumer Credit Commissioner, except as limited by rules adopted by
56-38    the finance commission;
56-39                (6)  receiving and distributing rents and proceeds of
56-40    sale as a licensed real estate broker on behalf of a principal in a
56-41    manner authorized by the Texas Real Estate Commission;
56-42                (7)  engaging in a securities transaction or providing
56-43    an investment advisory service as a licensed and registered dealer,
56-44    salesman, or advisor to the extent that the activity is regulated
56-45    by the State Securities Board or the Securities and Exchange
56-46    Commission;
56-47                (8)  engaging in the sale and administration of an
56-48    insurance product by an insurance company or agent licensed by the
56-49    Texas Department of Insurance to the extent that the activity is
56-50    regulated by the Texas Department of Insurance;
56-51                (9)  engaging in the lawful sale of prepaid funeral
56-52    benefits under a permit issued by the banking commissioner under
56-53    Chapter 154, Finance Code [512, Acts of the 54th Legislature,
56-54    Regular Session, 1955 (Article 548b, Vernon's Texas Civil
56-55    Statutes)];
56-56                (10)  engaging in the lawful business of a perpetual
56-57    care cemetery corporation under Chapter 712, Health and Safety
56-58    Code;
56-59                (11)  engaging as a principal or agent in the lawful
56-60    sale of checks under a license issued by the banking commissioner
56-61    under The Sale of Checks Act, Chapter 152, Finance Code [(Article
56-62    489d, Vernon's Texas Civil Statutes)];
56-63                (12)  acting as trustee under a voting trust as
56-64    provided by Article 2.30, Texas Business Corporation Act;
56-65                (13)  acting as trustee by a public, private, or
56-66    independent institution of higher education or a university system,
56-67    as defined by Section 61.003, Education Code, including an
56-68    affiliated foundation or corporation of such an institution or
56-69    system acting as trustee as provided by the Education Code;
 57-1                (14)  engaging in another activity expressly excluded
 57-2    from the application of this Act by rule of the finance commission;
 57-3                (15)  rendering services customarily performed by a
 57-4    certified accountant in a manner authorized by the Texas State
 57-5    Board of Public Accountancy;
 57-6                (16)  serving as trustee of a charitable trust as
 57-7    provided by Article 2.31, Texas Non-Profit Corporation Act (Article
 57-8    1396-2.31, Vernon's Texas Civil Statutes);
 57-9                (17)  performing escrow or settlement services if
57-10    licensed under Chapter 9, Insurance Code; [or]
57-11                (18)  acting as a qualified intermediary in a tax
57-12    deferred exchange under 26 U.S.C. Section 1031 and applicable
57-13    regulations; or
57-14                (19)  providing permitted services at a trust
57-15    representative office established in this state pursuant to
57-16    Subchapter C, Chapter 9 of this Act.
57-17          SECTION 4.007.  Section 3.203(a), Texas Trust Company Act
57-18    (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
57-19    amended to read as follows:
57-20          (a)  A state trust company may establish and maintain
57-21    additional offices [anywhere in this state] by filing a written
57-22    notice with the banking commissioner setting forth the name of the
57-23    state trust company, the street address of the proposed additional
57-24    office, a description of the activities proposed to be conducted at
57-25    the additional office, and a copy of the resolution adopted by the
57-26    board authorizing the additional office.
57-27          SECTION 4.008.  Section 3.302(c), Texas Trust Company Act
57-28    (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
57-29    amended to read as follows:
57-30          (c)  The banking commissioner may approve the merger if:
57-31                (1)  each resulting state trust company will be solvent
57-32    and have adequate capitalization for its business and location;
57-33                (2)  each resulting state trust company has in all
57-34    respects complied with the statutes and rules relating to the
57-35    organization of a state trust company;
57-36                (3)  all obligations and liabilities of each trust
57-37    company that is a party to the merger have been properly discharged
57-38    or otherwise lawfully assumed or retained by a trust institution
57-39    [company] or other fiduciary;
57-40                (4)  each surviving, new, or acquiring person that is
57-41    not authorized to engage in the trust business will not engage in
57-42    the trust business and has in all respects complied with the laws
57-43    of this state; and
57-44                (5)  all conditions imposed by the banking commissioner
57-45    have been satisfied or otherwise resolved.
57-46          SECTION 4.009.  Section 3.401, Texas Trust Company Act
57-47    (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
57-48    amended to read as follows:
57-49          Sec. 3.401.  AUTHORITY TO PURCHASE ASSETS OF ANOTHER TRUST
57-50    INSTITUTION [COMPANY].  (a)  A state trust company, with the prior
57-51    written approval of the banking commissioner, may purchase all or
57-52    substantially all of the assets of another trust [regulated
57-53    financial] institution, including the right to control accounts
57-54    established with the trust institution [state trust company].
57-55    Except as otherwise expressly provided by this section or another
57-56    statute, the purchase of all or part of the assets of the trust
57-57    institution does not make the purchasing state trust company
57-58    responsible for any liability or obligation of the selling trust
57-59    institution that the purchasing state trust company does not
57-60    expressly assume.  Except as otherwise provided by this Act, this
57-61    subchapter does not govern or prohibit the purchase by a state
57-62    trust company of all or part of the assets of a corporation or
57-63    other entity that is not a trust institution [state trust company].
57-64          (b)  To make a purchase under this section, an application in
57-65    the form required by the banking commissioner must be filed with
57-66    the banking commissioner.  The banking commissioner shall
57-67    investigate the condition of the purchaser and seller and may
57-68    require the submission of additional information as considered
57-69    necessary to make an informed decision.  The banking commissioner
 58-1    shall approve the purchase if:
 58-2                (1)  the acquiring state trust company will be solvent
 58-3    and have sufficient capitalization for its business and location;
 58-4                (2)  the acquiring state trust company has complied
 58-5    with all applicable statutes and rules;
 58-6                (3)  all obligations and liabilities of each trust
 58-7    institution [company] that is a party to the purchase or sale of
 58-8    assets have been properly discharged or otherwise lawfully assumed
 58-9    or retained by a trust institution [company] or other fiduciary;
58-10                (4)  all conditions imposed by the banking commissioner
58-11    have been satisfied or otherwise resolved; and
58-12                (5)  all fees and costs have been paid.
58-13          (c)  A purchase is effective on the date of approval unless
58-14    the purchase agreement provides for and the banking commissioner
58-15    consents to a different effective date.
58-16          (d)  The acquiring state trust company shall succeed by
58-17    operation of law to all of the rights, privileges, and obligations
58-18    of the selling trust institution under each account included in the
58-19    assets acquired.
58-20          SECTION 4.010.  Section 3.405, Texas Trust Company Act
58-21    (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
58-22    amended by adding Subsection (e) to read as follows:
58-23          (e)  The acquiring trust institution shall succeed by
58-24    operation of law to all of the rights, privileges, and obligations
58-25    of the selling state trust company under each account included in
58-26    the assets acquired.
58-27          SECTION 4.011.  Subchapter F, Chapter 3, Texas Trust Company
58-28    Act (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
58-29    amended to read as follows:
58-30              SUBCHAPTER F.  [STATE TRUST REGULATORY SYSTEM:]
58-31                      EXIT OF STATE TRUST COMPANY OR
58-32                    ENTRY OF ANOTHER TRUST INSTITUTION
58-33          Sec. 3.501.  MERGER[, REORGANIZATION,] OR CONVERSION OF STATE
58-34    TRUST COMPANY INTO ANOTHER TRUST INSTITUTION [NATIONAL BANK]
58-35    EXERCISING FIDUCIARY POWERS.  (a)  Subject to Chapter 9 of this
58-36    Act, a [A] state trust company may act as necessary and to the
58-37    extent permitted by [under] the laws of the United States, [or]
58-38    this state, another state, or another country to merge[,
58-39    reorganize,] or convert into another form of trust institution [a
58-40    national bank exercising fiduciary powers].
58-41          (b)  The merger [, reorganization,] or conversion must be
58-42    made and approval of the state trust company's board, shareholders,
58-43    or participants must be obtained in accordance with the Texas
58-44    Business Corporation Act as if the state trust company were a
58-45    domestic corporation and all other parties to the transaction, if
58-46    any, were foreign corporations or other entities, except as may be
58-47    otherwise provided by rules.  For purposes of this subsection, a
58-48    conversion is considered a merger into the successor trust
58-49    institution [national bank exercising fiduciary powers].
58-50          (c)  The state trust company does not cease to be a state
58-51    trust company subject to the supervision of the banking
58-52    commissioner unless:
58-53                (1)  the banking commissioner has been given written
58-54    notice of the intention to merge[, reorganize,] or convert before
58-55    the 31st day before the date of the proposed transaction;
58-56                (2)  the state trust company has published notice of
58-57    the transaction, in the form and frequency specified by the banking
58-58    commissioner, in a newspaper of general circulation published in
58-59    the county of its home office or, if such a newspaper is not
58-60    published in the county, in an adjacent county and in other
58-61    locations that the banking commissioner considers appropriate;
58-62                (3)  the state trust company has filed with the banking
58-63    commissioner:
58-64                      (A)  a copy of the application filed with the
58-65    successor regulatory authority, including a copy of each contract
58-66    evidencing or implementing the merger[, reorganization,] or
58-67    conversion, or other documents sufficient to show compliance with
58-68    applicable law;
58-69                      (B)  a certified copy of all minutes of board
 59-1    meetings and shareholder or participant meetings at which action
 59-2    was taken regarding the merger[, reorganization,] or conversion;
 59-3    and
 59-4                      (C)  a publisher's certificate showing
 59-5    publication of the required notice;
 59-6                (4)  the banking commissioner determines that:
 59-7                      (A)  all accounts and liabilities of the state
 59-8    trust company are fully discharged, assumed, or otherwise retained
 59-9    by the successor trust institution [national bank exercising
59-10    fiduciary powers];
59-11                      (B)  any conditions imposed by the banking
59-12    commissioner for the protection of clients and creditors have been
59-13    met or otherwise resolved; and
59-14                      (C)  any required filing fees have been paid; and
59-15                (5)  the state trust company has received a certificate
59-16    of authority to do business as the successor trust institution [a
59-17    national bank exercising fiduciary powers].
59-18          Sec. 3.502.  CONVERSION OF TRUST INSTITUTION INTO STATE TRUST
59-19    COMPANY.  (a)  A trust institution may apply to the banking
59-20    commissioner for conversion into a state trust company on a form
59-21    prescribed by the banking commissioner and accompanied by any
59-22    required fee if the trust institution follows the procedures
59-23    prescribed by the laws of the United States, this state, another
59-24    state, or another country governing the exit of the trust
59-25    institution for the purpose of conversion into a state trust
59-26    company from the regulatory system applicable before the
59-27    conversion.  A trust association or limited trust association may
59-28    convert its organizational form under this section.
59-29          (b)  A trust institution applying to convert into a state
59-30    trust company may receive a certificate of authority to do business
59-31    as a state trust company if the banking commissioner finds that:
59-32                (1)  the trust institution is not engaging in a pattern
59-33    or practice of unsafe and unsound fiduciary or banking practices;
59-34                (2)  the trust institution has adequate capitalization
59-35    for a state trust company to act as a fiduciary at the same
59-36    locations as the trust institution is acting as a fiduciary before
59-37    the conversion;
59-38                (3)  the trust institution can be expected to operate
59-39    profitably after the conversion;
59-40                (4)  the officers and directors of the trust
59-41    institution as a group have sufficient banking experience, ability,
59-42    standing, competence, trustworthiness, and integrity to justify a
59-43    belief that the trust institution will operate as a state trust
59-44    company in compliance with law; and
59-45                (5)  each principal shareholder has sufficient
59-46    experience, ability, standing, competence, trustworthiness, and
59-47    integrity to justify a belief that the trust institution will be
59-48    free from improper or unlawful influence or interference with
59-49    respect to the trust institution's operation as a state trust
59-50    company in compliance with law.
59-51          (c)  The banking commissioner may:
59-52                (1)  request additional information considered
59-53    necessary to an informed decision under this section;
59-54                (2)  perform an examination of the converting trust
59-55    institution at the expense of the converting trust institution; and
59-56                (3)  require that examination fees be paid before a
59-57    certificate of authority is issued.
59-58          (d)  In connection with the application, the converting trust
59-59    institution must:
59-60                (1)  submit a statement of the law governing the exit
59-61    of the trust institution from the regulatory system applicable
59-62    before the conversion and the terms of the transition into a state
59-63    trust company; and
59-64                (2)  demonstrate that all applicable law has been fully
59-65    satisfied.
59-66          SECTION 4.012.  Section 6.003(a), Texas Trust Company Act
59-67    (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
59-68    amended to read as follows:
59-69          (a)  The banking commissioner has grounds to remove a present
 60-1    or former officer, director, manager, managing participant, or
 60-2    employee of a state trust company from office or employment in, or
 60-3    prohibit a controlling shareholder or participant or other person
 60-4    [participating in the affairs of the state trust company] from
 60-5    further participation in the affairs of, the state trust company[,
 60-6    state bank, or other entity chartered or licensed by the banking
 60-7    commissioner under the laws of this state,] if the banking
 60-8    commissioner determines from examination or other credible evidence
 60-9    that:
60-10                (1)  the person committed, participated, or acted, in
60-11    other than an inadvertent or unintentional manner, as described by
60-12    Section 6.002(a) of this Act with regard to the affairs of the
60-13    state trust company, or violated a final cease and desist order
60-14    issued in response to the same or a similar act;
60-15                (2)  because of this action by the person:
60-16                      (A)  the state trust company has suffered or will
60-17    probably suffer financial loss or other damage;
60-18                      (B)  the interests of the trust company's clients
60-19    have been or could be prejudiced; or
60-20                      (C)  the person has received financial gain or
60-21    other benefit by reason of the violation; and
60-22                (3)  this action by the person:
60-23                      (A)  involves personal dishonesty on the part of
60-24    the person; or
60-25                      (B)  demonstrates wilful or continuing disregard
60-26    for the safety or soundness of the state trust company.
60-27          SECTION 4.013.  Section 6.007(a), Texas Trust Company Act
60-28    (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
60-29    amended to read as follows:
60-30          (a)  Without the prior written approval of the banking
60-31    commissioner, a person subject to a final and enforceable removal
60-32    or prohibition order issued by the banking commissioner:
60-33                (1)  may not serve as a director, officer, or employee
60-34    of a [any] state trust company, state bank, or other entity
60-35    chartered or licensed by the banking commissioner under the laws of
60-36    this state while the order is in effect, including an interstate
60-37    branch, trust office, or representative office in this state of an
60-38    out-of-state state bank, trust company, or foreign bank;
60-39                (2)  may not directly or indirectly participate in any
60-40    manner in the management of such an entity;
60-41                (3)  may not directly or indirectly vote for a director
60-42    of such an entity;
60-43                (4)  may not solicit, procure, transfer, attempt to
60-44    transfer, vote, or attempt to vote a proxy, consent, or
60-45    authorization with respect to voting rights in such an entity; and
60-46                (5)  remains entitled to receive dividends or a share
60-47    of profits, return of contribution, or other distributive benefit
60-48    from such an entity with respect to voting securities in the entity
60-49    owned by the person.
60-50          SECTION 4.014.  Section 6.202(b), Texas Trust Company Act
60-51    (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
60-52    amended to read as follows:
60-53          (b)  This section does not apply to:
60-54                (1)  a trust institution [state or national bank, a
60-55    state or federal savings bank, a state or federal savings
60-56    association, a state or federal credit union, or a depository or
60-57    trust company institution] authorized under this Act to conduct a
60-58    trust business in this state; and
60-59                (2)  another entity organized under the laws of this
60-60    state, another state, the United States, or a foreign sovereign
60-61    state to the extent that:
60-62                      (A)  the entity is authorized under its charter
60-63    or the laws of this state or the United States to use a term, word,
60-64    character, ideogram, phonogram, or phrase prohibited by Subsection
60-65    (a) of this section; and
60-66                      (B)  the entity is authorized by the laws of this
60-67    state or the United States to conduct the activities in which the
60-68    entity is engaged in this state.
60-69          SECTION 4.015.  Section 7.101(b), Texas Trust Company Act
 61-1    (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
 61-2    amended to read as follows:
 61-3          (b)  Unless the banking commissioner directs or consents
 61-4    otherwise, the home office and all additional trust [branch]
 61-5    offices of the state trust company shall remain open for business
 61-6    during normal business hours until the last date specified in
 61-7    published notices for presentation of claims, withdrawal of
 61-8    accounts, and redemption of property.
 61-9          SECTION 4.016.  Section 7.102(c), Texas Trust Company Act
61-10    (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
61-11    amended to read as follows:
61-12          (c)  The state trust company shall publish notice in a
61-13    newspaper of general circulation in each community where its home
61-14    office or an additional trust office [a branch] is located at least
61-15    once each week for eight consecutive weeks or at other times
61-16    specified by the banking commissioner or rules adopted under this
61-17    Act.  The notice must state that the state trust company is
61-18    liquidating, that clients, depositors, and creditors must present
61-19    their claims for payment on or before a specific date, and that all
61-20    safe deposit box holders and bailors of property left with the
61-21    state trust company should remove their property on or before a
61-22    specified date.  The dates selected by the state trust company must
61-23    be approved by the banking commissioner and must allow the affairs
61-24    of the state trust company to be wound up as quickly as feasible
61-25    and allow creditors, clients, and owners of property adequate time
61-26    for presentation of claims, withdrawal of accounts, and redemption
61-27    of property.  The banking commissioner may adjust the dates with or
61-28    without republication of notice if additional time appears needed
61-29    for these activities.
61-30          SECTION 4.017.  Section 7.105(d), Texas Trust Company Act
61-31    (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
61-32    amended to read as follows:
61-33          (d)  After distribution of all remaining assets, the state
61-34    trust company shall:
61-35                (1)  file with the department, under the oath or
61-36    affirmation of a majority of its board or managing participants,
61-37    another affidavit accompanied by schedules showing the distribution
61-38    to each shareholder, participant, or participant-transferee; and
61-39                (2)  tender to the department:
61-40                      (A)  all copies of reports of examination of the
61-41    state trust company in its possession; and
61-42                      (B)  its original charter, or an affidavit
61-43    stating that the original charter is lost, and any [branch]
61-44    certificates of authority for additional trust offices.
61-45          SECTION 4.018.  Section 7.205(a), Texas Trust Company Act
61-46    (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
61-47    amended to read as follows:
61-48          (a)  As soon as reasonably practicable after initiation of
61-49    the receivership proceeding, the receiver shall publish notice, in
61-50    a newspaper of general circulation in each community where the
61-51    state trust company's home office or any additional trust office is
61-52    [and a branch are] located.  The notice must state that the state
61-53    trust company has been closed for liquidation, that clients and
61-54    creditors must present their claims for payment on or before a
61-55    specific date, and that all safe deposit box holders and bailors of
61-56    property left with the state trust company should remove their
61-57    property not later than a specified date.  The receiver shall
61-58    select the dates to allow the affairs of the state trust company to
61-59    be wound up as quickly as feasible while allowing creditors,
61-60    clients, and owners of property adequate time for presentation of
61-61    claims, withdrawal of accounts, and redemption of property, but may
61-62    not select a date before the 121st day after the date of the
61-63    notice.  The receiver may adjust the dates with the approval of the
61-64    court with or without republication of notice if additional time
61-65    appears needed for these activities.
61-66          SECTION 4.019.  Section 8.002, Texas Trust Company Act
61-67    (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
61-68    amended to read as follows:
61-69          Sec. 8.002.  ATTACHMENT, INJUNCTION, OR EXECUTION.  [(a)]  An
 62-1    attachment, injunction, or execution for the purpose of collecting
 62-2    a money judgment or securing a prospective money judgment against a
 62-3    trust institution, including a state trust company or a trust
 62-4    institution organized under the laws of another state that lawfully
 62-5    maintains an office in this state, or against a client of or client
 62-6    account in the trust institution, is governed by Sections 59.007
 62-7    and 59.008, Finance Code [may not be issued against a state trust
 62-8    company located in this state before the judgment is final and all
 62-9    appeals have been exhausted or foreclosed by law.]
62-10          [(b)  This section does not affect an attachment, injunction,
62-11    execution, or writ of garnishment issued to or served on a state
62-12    trust company for the purpose of collecting a money judgment or
62-13    securing a prospective money judgment against a client of or client
62-14    account in the state trust company].
62-15          SECTION 4.020.  Section 8.004, Texas Trust Company Act
62-16    (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
62-17    amended to read as follows:
62-18          Sec. 8.004.  AUTHORITY TO ACT AS NOTARY PUBLIC.  A notary
62-19    public is not disqualified from taking an acknowledgement or proof
62-20    of a written instrument as provided by Section 406.016, Government
62-21    Code, solely because of the person's ownership of stock or
62-22    participation interest in or employment by a [state] trust
62-23    institution [company] that is an interested party in the underlying
62-24    transaction, including a state trust company or a trust institution
62-25    organized under the laws of another state that lawfully maintains
62-26    an office in this state.
62-27          SECTION 4.021.  Section 8.005(a), Texas Trust Company Act
62-28    (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
62-29    amended to read as follows:
62-30          (a)  An officer, director, manager, managing participant, or
62-31    employee of a [state] trust institution [company] with fewer than
62-32    500 shareholders or participants, including a state trust company
62-33    or a trust institution organized under the laws of another state
62-34    that lawfully maintains an office in this state, or a holding
62-35    company with fewer than 500 shareholders or participants that
62-36    controls a [state] trust institution, [company] is exempt from the
62-37    registration and licensing provisions of The Securities Act
62-38    (Article 581-1 et seq., Vernon's Texas Civil Statutes) with respect
62-39    to that person's participation in a sale or other transaction
62-40    involving securities issued by the [state] trust institution
62-41    [company] or the holding company of which that person is an
62-42    officer, director, manager, managing participant, or employee.
62-43          SECTION 4.022.  Section 8.006, Texas Trust Company Act
62-44    (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
62-45    amended to read as follows:
62-46          Sec. 8.006.  SUCCESSION OF TRUST POWERS.  (a)  If, [a
62-47    reorganizing or selling state trust company] at the time of a
62-48    merger, reorganization, conversion, [or] sale of substantially all
62-49    of its assets under Chapter 3 or Chapter 9 of this Act or other
62-50    applicable law, or sale of substantially all of its trust accounts
62-51    and related activities at a separate branch or trust office, a
62-52    reorganizing or selling trust institution is acting as trustee,
62-53    guardian, executor, or administrator, or in another fiduciary
62-54    capacity, a [the] successor or purchasing trust institution with
62-55    sufficient fiduciary authority may [entity with fiduciary powers
62-56    may, without the necessity of judicial action or action by the
62-57    creator of the trust,] continue the office, trust, or fiduciary
62-58    relationship:
62-59                (1)  without the necessity of judicial action or action
62-60    by the creator of the office, trust, or fiduciary relationship; and
62-61                (2)  without regard to whether the successor or
62-62    purchasing trust institution meets qualification requirements
62-63    specified in an instrument creating the office, trust, or fiduciary
62-64    relationship other than a requirement related to geographic locale
62-65    of account administration, including requirements as to
62-66    jurisdiction of incorporation, location of principal office, or
62-67    type of financial institution.
62-68          (b)  The successor or purchasing trust institution [entity]
62-69    may perform all the duties and exercise all the powers connected
 63-1    with or incidental to the fiduciary relationship in the same manner
 63-2    as if the successor or purchasing trust institution [entity] had
 63-3    been originally designated as the fiduciary.
 63-4          SECTION 4.023.  Section 8.007, Texas Trust Company Act
 63-5    (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
 63-6    amended to read as follows:
 63-7          Sec. 8.007.  DISCOVERY OF CLIENT RECORDS.  Civil discovery of
 63-8    a client record maintained by a trust institution, including a
 63-9    state trust company or a trust institution organized under the laws
63-10    of another state that lawfully maintains an office in this state,
63-11    is governed by Section 59.006, Finance Code [30.007, Civil Practice
63-12    and Remedies Code, as added by Chapter 914, Acts of the 74th
63-13    Legislature, Regular Session, 1995].
63-14          SECTION 4.024.  Section 8.008, Texas Trust Company Act
63-15    (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
63-16    amended to read as follows:
63-17          Sec. 8.008.  COMPLIANCE REVIEW COMMITTEE.  A trust company
63-18    may establish a compliance review committee as provided by Section
63-19    59.009, Finance Code [(a)  In this section:]
63-20                [(1)  "Civil action" means a civil proceeding pending
63-21    in a court or other adjudicatory tribunal with jurisdiction to
63-22    issue a request or subpoena for records, including an alternative
63-23    dispute resolution mechanism, voluntary or required, under which a
63-24    party may compel the production of records.  The term does not
63-25    include an examination or enforcement proceeding initiated by the
63-26    Federal Deposit Insurance Corporation or its successor and the
63-27    board of governors of the Federal Reserve System or its successor,
63-28    in exercise of their jurisdiction.]
63-29                [(2)  "Compliance review document" means a document
63-30    prepared for or created by a compliance review committee.]
63-31          [(b)  A state trust company or an affiliate of a state trust
63-32    company, including its holding company, may establish a compliance
63-33    review committee to test, review, or evaluate the institution's
63-34    conduct, transactions, or potential transactions for the purpose of
63-35    monitoring and improving or enforcing compliance with:]
63-36                [(1)  a statutory or regulatory requirement;]
63-37                [(2)  financial reporting to a governmental agency;]
63-38                [(3)  the policies and procedures of the state trust
63-39    company or its affiliates; or]
63-40                [(4)  safe, sound, and fair lending practices.]
63-41          [(c)  Except as provided by Subsection (d) of this section:]
63-42                [(1)  a compliance review document is confidential and
63-43    is not discoverable or admissible in evidence in a civil action;]
63-44                [(2)  an individual serving on a compliance review
63-45    committee or acting under the direction of a compliance review
63-46    committee may not be required to testify in a civil action as to
63-47    the contents or conclusions of a compliance review document or as
63-48    to an action taken or discussions conducted by or for a compliance
63-49    review committee; and]
63-50                [(3)  a compliance review document or an action taken
63-51    or discussion conducted by or for a compliance review committee
63-52    that is disclosed to a governmental agency remains confidential and
63-53    is not discoverable or admissible in a civil action.]
63-54          [(d)  Subsection (c)(2) of this section does not apply to an
63-55    individual that has management responsibility for the operations,
63-56    records, employees, or activities being examined or evaluated by
63-57    the compliance review committee.]
63-58          [(e)  This section does not limit the discovery or
63-59    admissibility in a civil action of a document that is not a
63-60    compliance review document].
63-61          SECTION 4.025.  Section 8.009, Texas Trust Company Act
63-62    (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes), is
63-63    amended to read as follows:
63-64          Sec. 8.009.  PARITY.  (a)  A state trust company has the same
63-65    rights and privileges with respect to the exercise of fiduciary
63-66    powers that are or may be granted to a trust institution [state or
63-67    national bank] that maintains its principal office or a branch or
63-68    trust office [is domiciled] in this state, except that this section
63-69    may not be used by a state trust company to:
 64-1                (1)  diminish its otherwise applicable fiduciary duties
 64-2    to a client under the laws of this state; or
 64-3                (2)  avoid otherwise applicable consumer protection
 64-4    laws of this state [and exercising fiduciary powers].
 64-5          (b)  A state trust company that intends to exercise a right
 64-6    or privilege with respect to the exercise of fiduciary powers
 64-7    granted to a trust [regulated financial] institution described in
 64-8    Subsection (a) of this section that is not authorized for state
 64-9    trust companies under the statutes and rules of this state shall
64-10    submit a letter to the banking commissioner, describing in detail
64-11    the activity in which the state trust company intends to engage and
64-12    the specific authority for the trust [regulated financial]
64-13    institution described in Subsection (a) to undertake the proposed
64-14    activity and shall attach copies, if available, of relevant state
64-15    and federal law, including regulations and interpretive letters.
64-16    The state trust company may begin to perform the proposed activity
64-17    after the 30th day after the date the banking commissioner receives
64-18    the state trust company's letter unless the banking commissioner
64-19    specifies an earlier or later date or prohibits the activity.  The
64-20    banking commissioner may prohibit the state trust company from
64-21    performing the activity only if the banking commissioner finds
64-22    that:
64-23                (1)  a trust [regulated financial] institution
64-24    described in Subsection (a) of this section [that is domiciled in
64-25    this state] does not possess the specific right or privilege to
64-26    perform the activity the state trust company seeks to perform; or
64-27                (2)  the performance of the activity by the state trust
64-28    company would adversely affect the safety and soundness of the
64-29    requesting state trust company.
64-30          (c)  The banking commissioner may extend the 30-day period
64-31    under Subsection (b) of this section if the banking commissioner
64-32    determines that the state trust company's letter raises issues
64-33    requiring additional information or additional time for analysis.
64-34    If the 30-day period is extended, the state trust company may
64-35    perform the proposed activity only on prior written approval by the
64-36    banking commissioner, except that the banking commissioner must
64-37    approve or prohibit the proposed activity or convene a hearing
64-38    under Section 3.009 of this Act not later than the 60th day after
64-39    the date the commissioner receives the state trust company's
64-40    letter.  If a hearing is covened under Section 3.009 of this Act,
64-41    the banking commissioner must approve or prohibit the proposed
64-42    activity not later than the 30th day after the date the hearing is
64-43    completed.
64-44          (d)  A state trust company that is denied the requested right
64-45    or privilege to engage in an activity by the banking commissioner
64-46    under this section may appeal as provided by Section 3.010 of this
64-47    Act or may resubmit a letter under this subsection with additional
64-48    information or authority relevant to the banking commissioner's
64-49    determination.  A denial is immediately final for purposes of
64-50    appeal.
64-51          (e)  The finance commission may adopt rules implementing the
64-52    method or manner in which a state trust company exercises specific
64-53    rights and privileges, including rules regarding the exercise of
64-54    rights and privileges that would be prohibited to state trust
64-55    companies under state law except as provided by this section.  The
64-56    finance commission may not adopt rules under this subsection unless
64-57    it finds that:
64-58                (1)  trust [regulated financial] institutions described
64-59    in Subsection (a) [of this section that are domiciled in this
64-60    state] possess the rights or privileges to perform activities the
64-61    rules would permit state trust companies to perform; and
64-62                (2)  if the rights and privileges would be prohibited
64-63    to state trust companies under other state law, the rules contain
64-64    adequate safeguards and controls, consistent with safety and
64-65    soundness, to address the concern of the legislature evidenced by
64-66    the state law the rules would impact.
64-67          (f)  The exercise of rights and privileges by a state trust
64-68    company in compliance with and in the manner authorized by this
64-69    section is not a violation of any statute of this state.
 65-1          SECTION 4.026.  Section 115.002, Property Code, is amended to
 65-2    read as follows:
 65-3          Sec. 115.002.  VENUE.  (a)  The venue of an action under
 65-4    Section 115.001 of this Act is determined according to this
 65-5    section.
 65-6          (b)  If there is a single, noncorporate trustee, an action
 65-7    shall be brought [venue is] in the county in which:
 65-8                (1)  the trustee resides or has resided at any time
 65-9    during the four-year period preceding the date the action is filed;
65-10    or
65-11                (2)  the situs of administration of the trust is
65-12    maintained or has been maintained at any time during the four-year
65-13    period preceding the date the action is filed [the trustee's
65-14    residence is located].
65-15          (c)  If there are multiple trustees or a corporate [any]
65-16    trustee, an action shall be brought [is a corporation, venue is] in
65-17    the  county in which the situs of administration of the trust is
65-18    maintained or has been maintained at any time during the four-year
65-19    period preceding the date the action is filed, provided that an
65-20    action against a corporate trustee as defendant may be brought in
65-21    the county in which the corporate trustee maintains its principal
65-22    office in this state [the corporation's principal office is
65-23    located, or, if two or more corporations are trustees of the trust,
65-24    venue is in the county in which the principal office of any of the
65-25    corporations is located].
65-26          (d)  For just and reasonable cause, including the location of
65-27    the records and the convenience of the parties and witnesses, the
65-28    court may transfer an action from a county of proper venue under
65-29    this section to another county of proper venue:
65-30                (1)  on motion of a defendant or joined party, filed
65-31    concurrently with or before the filing of the answer or other
65-32    initial responsive pleading, and served in accordance with law; or
65-33                (2)  on motion of an intervening party, filed not later
65-34    than the 20th day after the court signs the order allowing the
65-35    intervention, and served in accordance with law.
65-36          (e)  Notwithstanding any other provision of this section, on
65-37    agreement by all parties the court may transfer an action from a
65-38    county of proper venue under this section to any other county.
65-39          (f)  For the purposes of this section:
65-40                (1)  "Corporate trustee" means an entity organized as a
65-41    financial institution or a corporation with the authority to act in
65-42    a fiduciary capacity.
65-43                (2)  "Principal office" means an office of a corporate
65-44    trustee in this state where the decision makers for the corporate
65-45    trustee within this state conduct the daily affairs of the
65-46    corporate trustee.  The mere presence of an agent or representative
65-47    of the corporate trustee does not establish a principal office.
65-48    The principal office of the corporate trustee may also be but is
65-49    not necessarily the same as the situs of administration of the
65-50    trust.
65-51                (3)  "Situs of administration" means the location in
65-52    this state where the trustee maintains the office that is primarily
65-53    responsible for dealing with the settlor and beneficiaries of the
65-54    trust. The situs of administration may also be but is not
65-55    necessarily the same as the principal office of a corporate trustee
65-56    [If there are two or more trustees, none of which is a corporation,
65-57    venue is in the county in which the principal office of the trust
65-58    is maintained].
65-59                        ARTICLE 5.  PUBLIC DEPOSITS
65-60          SECTION 5.001.  Section 4.102, Business & Commerce Code, is
65-61    amended by adding Subsection (c) to read as follows:
65-62          (c)  Notwithstanding Section 1.105, the laws of this state
65-63    govern a deposit contract between a bank and a consumer account
65-64    holder if the branch or separate office of the bank that accepts
65-65    the deposit contract is located in this state.  For purposes of
65-66    this subsection, "consumer account holder" means a natural person
65-67    who holds a deposit account primarily for personal, family, or
65-68    household purposes but does not include a natural person who holds
65-69    an account for another in a professional capacity.
 66-1          SECTION 5.002.  Section 45.201(2), Education Code, is amended
 66-2    to read as follows:
 66-3                (2)  "Bank" means a [state bank authorized and
 66-4    regulated under the laws of this state pertaining to banking, in
 66-5    particular The Texas Banking Code (Article 342-101 et seq.,
 66-6    Vernon's Texas Civil Statutes), a national] bank, a savings and
 66-7    loan association, or a savings bank [authorized and regulated by
 66-8    federal law, or a savings and loan association or savings bank]
 66-9    organized under the laws of this state, another state, or federal
66-10    law that has its main office or a branch office in this state.  The
66-11    term does not include any bank the deposits of which are not
66-12    insured by the Federal Deposit Insurance Corporation.
66-13          SECTION 5.003.  Section 404.023, Government Code, is amended
66-14    to read as follows:
66-15          Sec. 404.023.  DESIGNATION.  The comptroller shall designate
66-16    one or more state depository banks that have main offices or
66-17    branches in centrally located cities in this state to be used for
66-18    clearing checks and other obligations due the state.
66-19          SECTION 5.004.  Section 404.024(g), Government Code, is
66-20    amended to read as follows:
66-21          (g)  To the extent practicable, the comptroller shall give
66-22    first consideration to [Texas] banks that maintain main offices or
66-23    branch offices in this state when investing in direct security
66-24    repurchase agreements.
66-25          SECTION 5.005.  Section 404.031(f), Government Code, is
66-26    amended to read as follows:
66-27          (f)  Instead of depositing pledged securities with the
66-28    comptroller, a state depository may deposit pledged securities with
66-29    a [the] Federal Reserve Bank [of Dallas] or a [the] Federal Home
66-30    Loan Bank [of Dallas].  The securities shall be held by the bank to
66-31    secure funds deposited by the comptroller in the state depository
66-32    pledging the securities.  When the pledged securities are
66-33    deposited, the bank may apply book entry to the securities.  The
66-34    records of the bank shall at all times reflect the name of the
66-35    state depository depositing the pledged securities, and the bank
66-36    shall issue an advice of transaction to the comptroller and the
66-37    state depository pledging the securities.
66-38          SECTION 5.006.  Section 2257.024(a), Government Code, is
66-39    amended to read as follows:
66-40          (a)  A public entity may contract with a bank that has its
66-41    main office or a branch office [domiciled] in this state to secure
66-42    a deposit of public funds.
66-43          SECTION 5.007.  Section 2257.041(d), Government Code, is
66-44    amended to read as follows:
66-45          (d)  A custodian must be approved by the public entity and
66-46    be:
66-47                (1)  a state or national bank that:
66-48                      (A)  is designated by the comptroller as a state
66-49    depository;
66-50                      (B)  has its main office or a branch office [is
66-51    domiciled] in this state; and
66-52                      (C)  has a capital stock and permanent surplus of
66-53    $5 million or more;
66-54                (2)  the Texas Treasury Safekeeping Trust Company;
66-55                (3)  a Federal Reserve Bank or a branch of a Federal
66-56    Reserve Bank; or
66-57                (4)  a federal home loan bank.
66-58          SECTION 5.008.  Sections 105.001(1), (12), and (13), Local
66-59    Government Code, are amended to read as follows:
66-60                (1)  "Bank" means a state bank or a national bank that
66-61    has its main office or a branch office [domiciled] in this state.
66-62                (12)  "Savings association" means a [state] savings
66-63    association or savings bank organized under the laws of this state,
66-64    another state, or federal law that has its main office or a branch
66-65    office [or a federal savings association domiciled] in this state.
66-66                (13)  "State bank" means a bank organized under the
66-67    laws of this state or another state [has the meaning assigned by
66-68    Section 1.002(a), Texas Banking Act].
66-69          SECTION 5.009.    Section 116.001(1), Local Government Code,
 67-1    is amended to read as follows:
 67-2                (1)  "Bank" means a:
 67-3                      (A)  bank organized under the laws of this state,
 67-4    another state, or federal law that has its main office or a branch
 67-5    office in this state; or
 67-6                      (B)  [banking corporation, association or an
 67-7    individual banker,] savings and loan association or savings bank
 67-8    organized under the laws of this state, another state, or [a
 67-9    savings and loan association or savings bank organized under]
67-10    federal law that has its main office or a branch office in this
67-11    state.
67-12          SECTION 5.010.    Section 131.001, Local Government Code, is
67-13    amended to read as follows:
67-14          Sec. 131.001.  SPECIAL DEPOSITORY AUTHORIZED.  If a financial
67-15    institution [bank] that is a depository under state law for the
67-16    public funds of a county, municipality, or district suspends
67-17    business or is taken charge of by a state or federal bank
67-18    regulatory agency [the banking commissioner of Texas or the federal
67-19    comptroller of the currency], the local government authority
67-20    authorized to select the original depository may select by contract
67-21    a special depository for the public funds in the suspended
67-22    financial institution [bank].
67-23          SECTION 5.011.  Section 131.005(a), Local Government Code, is
67-24    amended to read as follows:
67-25          (a)  The comptroller shall determine the amount of state
67-26    funds held by a county depository that suspends business or is
67-27    taken charge of by a state or federal bank regulatory agency [the
67-28    Banking Commissioner of Texas or the federal comptroller of the
67-29    currency].  The comptroller may:
67-30                (1)  contract with a special depository selected by the
67-31    county authorities as provided by this subchapter for the custody
67-32    and payment of those funds; and
67-33                (2)  approve a bond for the deposit contract.
67-34          SECTION 5.012.  Section 131.901(a), Local Government Code, is
67-35    amended to read as follows:
67-36          (a)  The governing body of a political subdivision, including
67-37    a county, municipality, school district, or other district, may not
67-38    designate a financial institution located outside the state as a
67-39    depository for funds under the governing body's jurisdiction.  An
67-40    out-of-state financial institution is not considered to be located
67-41    outside this state to the extent the governing body designates a
67-42    branch office of such institution that is located in this state.
67-43          SECTION 5.013.  Section 161.173(a), Natural Resources Code,
67-44    is amended to read as follows:
67-45          (a)  Money in the fund that is not immediately committed to
67-46    paying principal of and interest on the bonds, to the purchase of
67-47    land, or to the payment of expenses as provided in this chapter may
67-48    be invested in:
67-49                (1)  direct security repurchase agreements and reverse
67-50    security repurchase agreements made with state or national banks
67-51    that have main offices or branch offices [domiciled] in this state
67-52    or with primary dealers as approved by the Federal Reserve System;
67-53                (2)  direct obligations of or obligations the principal
67-54    and interest of which are guaranteed by the United States;
67-55                (3)  direct obligations of or obligations guaranteed by
67-56    the Federal Home Loan Banks, the Federal National Mortgage
67-57    Association, the Federal Farm Credit System, the Student Loan
67-58    Marketing Association, the Federal Home Loan Mortgage Corporation,
67-59    or a successor organization to one of those organizations;
67-60                (4)  bankers' acceptances that:
67-61                      (A)  are eligible for purchase by members of the
67-62    Federal Reserve System;
67-63                      (B)  do not exceed 270 days to maturity; and
67-64                      (C)  are issued by a bank that has received the
67-65    highest short-term credit rating by a nationally recognized
67-66    investment rating firm;
67-67                (5)  commercial paper that:
67-68                      (A)  does not exceed 270 days to maturity; and
67-69                      (B)  has received the highest short-term credit
 68-1    rating by a nationally recognized investment rating firm;
 68-2                (6)  contracts written by the board in which the board
 68-3    grants the purchaser the right to purchase securities in the
 68-4    board's marketable securities portfolio at a specified price over a
 68-5    specified period and for which the board is paid a fee and
 68-6    specifically prohibits naked-option or uncovered option trading;
 68-7                (7)  obligations of a state or an agency, county, city,
 68-8    or other political subdivision of a state and mutual funds composed
 68-9    of these obligations;
68-10                (8)  an investment instrument, obligation, or other
68-11    evidence of indebtedness the payment of which is directly or
68-12    indirectly guaranteed by the full faith and credit of the United
68-13    States;
68-14                (9)  an investment, account, depository receipt, or
68-15    deposit that is fully:
68-16                      (A)  insured by the Federal Deposit Insurance
68-17    Corporation or its[, the Federal Savings and Loan Insurance
68-18    Corporation, or a] successor [organization to one of those
68-19    organizations]; or
68-20                      (B)  secured by securities described by
68-21    Subdivision (2), (3), or (8) of this subsection;
68-22                (10)  a collateralized mortgage obligation fully
68-23    secured by securities or mortgages issued or guaranteed by the
68-24    Government National Mortgage Association (GNMA) or any entity
68-25    described by Subdivision (3) of this subsection;
68-26                (11)  a security or evidence of indebtedness issued by
68-27    the Farm Credit System Financial Assistance Corporation, the
68-28    Private Export Funding Corporation, or the Export-Import Bank; and
68-29                (12)  any other investment authorized for investment of
68-30    state funds by the comptroller under Section 404.024, Government
68-31    Code.
68-32          SECTION 5.014.  Sections 223.010(b) and (d), Transportation
68-33    Code, are amended to read as follows:
68-34          (b)  At the request of the contractor and with the approval
68-35    of the department and the comptroller, the amount retained may be
68-36    deposited under a trust agreement with a state or national bank
68-37    that has its main office or a branch office [domiciled] in this
68-38    state and is selected by the contractor.
68-39          (d)  The bank, acting as escrow agent and by instructions
68-40    from the contractor, may reinvest the retained amount in a
68-41    certificate of deposit issued by a state or national bank that has
68-42    its main office or a branch office [domiciled] in this state, bank
68-43    time deposit, or other similar investment prescribed by the trust
68-44    agreement.
68-45          SECTION 5.015.  Section 361.178, Transportation Code, is
68-46    amended to read as follows:
68-47          Sec. 361.178.  FURNISHING OF INDEMNIFYING BONDS OR PLEDGE OF
68-48    SECURITIES.  A bank or trust company that has its main office or a
68-49    branch office in [incorporated under the laws of] this state and
68-50    that acts as depository of the proceeds of bonds or of revenue may
68-51    furnish indemnifying bonds or pledge securities that the authority
68-52    requires.
68-53                  ARTICLE 6.  AMENDMENTS TO PROBATE CODE
68-54          SECTION 6.001.  Section 3(d), Probate Code, is amended to
68-55    read as follows:
68-56          (d)  "Corporate fiduciary" means a financial institution as
68-57    defined by Section 201.101, Finance Code, [trust company or bank]
68-58    having trust powers, existing or doing business under the laws of
68-59    this state, another state, or [of] the United States, which is
68-60    authorized by law to act under the order or appointment of any
68-61    court of record, without giving bond, as receiver, trustee,
68-62    executor, administrator, or, although without general depository
68-63    powers, depository for any moneys paid into court, or to become
68-64    sole guarantor or surety in or upon any bond required to be given
68-65    under the laws of this state.
68-66          SECTION 6.002.  Section 105A, Probate Code, is amended to
68-67    read as follows:
68-68          Sec. 105A.  APPOINTMENT AND SERVICE OF FOREIGN BANKS AND
68-69    TRUST COMPANIES IN FIDUCIARY CAPACITY.  (a)  A corporate fiduciary
 69-1    that does not have its main office or a branch office in this
 69-2    state, hereinafter called "foreign corporate fiduciaries" [Any bank
 69-3    or trust company organized under the laws of, and having its
 69-4    principal office in, the District of Columbia or any territory or
 69-5    state of the United States of America, other than the State of
 69-6    Texas, and any national bank having its principal office in the
 69-7    District of Columbia or such territory or other state (all such
 69-8    banks or trust companies being hereinafter sometimes called
 69-9    "foreign banks or trust companies")], having the corporate power to
69-10    so act, may be appointed and may serve in the State of Texas as
69-11    trustee (whether of a personal or corporate trust), executor,
69-12    administrator, guardian of the estate, or in any other fiduciary
69-13    capacity, whether the appointment be by will, deed, agreement,
69-14    declaration, indenture, court order or decree, or otherwise, when
69-15    and to the extent that the home state of the corporate fiduciary
69-16    [District of Columbia or territory or other state in which such
69-17    foreign bank or trust company is organized and has its principal
69-18    office] grants authority to serve in like fiduciary  capacity to a
69-19    corporate fiduciary whose home state is this state [bank or trust
69-20    company organized under the laws of, and having its principal
69-21    office in, the State of Texas, or to a national bank having its
69-22    principal office in the State of Texas].
69-23          (b)  Before qualifying or serving in the State of Texas in
69-24    any fiduciary capacity, as aforesaid, such a foreign corporate
69-25    fiduciary [bank or trust company] shall file in the office of the
69-26    Secretary of the State of the State of Texas (1) a copy of its
69-27    charter, articles of incorporation or of association, and all
69-28    amendments thereto, certified by its secretary under its corporate
69-29    seal; (2) a duly executed instrument in writing, by its terms of
69-30    indefinite duration and irrevocable, appointing the Secretary of
69-31    State and his successors its agent for service of process upon whom
69-32    all notices and processes issued by any court of this state may be
69-33    served in any action or proceeding relating to any trust, estate,
69-34    fund or other matter within this state with respect to which such
69-35    foreign corporate fiduciary [bank or trust company] is acting in
69-36    any fiduciary capacity, including the acts or defaults of such
69-37    foreign corporate fiduciary [bank or trust company] with respect to
69-38    any such trust, estate or fund; and (3) a written certificate of
69-39    designation, which may be changed from time to time thereafter by
69-40    the filing of a new certificate of designation, specifying the name
69-41    and address of the officer, agent or other person to whom such
69-42    notice or process shall be forwarded by the Secretary of State.
69-43    Upon receipt of such notice or process, it shall be the duty of the
69-44    Secretary of State forthwith to forward same by registered or
69-45    certified mail to the officer, agent or other person so designated.
69-46    Service of notice or process upon the Secretary of State as agent
69-47    for such a foreign corporate fiduciary [bank or trust company]
69-48    shall in all ways and for all purposes have the same effect as if
69-49    personal service had been had within this state upon such foreign
69-50    corporate fiduciary [bank or trust company].
69-51          (c)  [No foreign bank or trust company shall establish or
69-52    maintain any branch office, agency or other place of business
69-53    within this state, or shall in any way solicit, directly or
69-54    indirectly, any fiduciary business in this state of the types
69-55    embraced by subdivision (a) hereof. Except as authorized herein or
69-56    as may otherwise be authorized by the laws of this state, no
69-57    foreign bank or trust company shall act in a fiduciary capacity in
69-58    this state. Nothing in this Section shall be construed to authorize
69-59    foreign banks and trust companies to issue or to sell or otherwise
69-60    market or distribute in this state any investment certificates,
69-61    trust certificates, or other types of securities (including without
69-62    limiting the generality of the foregoing any securities of the
69-63    types authorized by Chapter 7 of the Insurance Code of 1951 prior
69-64    to the repeal thereof), or to conduct any activities or exercise
69-65    any powers of the type embraced and regulated by the Texas Banking
69-66    Act (Article 342-1.001 et seq., Vernon's Texas Civil Statutes) or
69-67    the Texas Trust Company Act other than those conducted and
69-68    exercised in a fiduciary capacity under the terms and conditions
69-69    hereof.]
 70-1          [(d)]  Any foreign corporate fiduciary [bank or trust
 70-2    company] acting in a fiduciary capacity in this state in strict
 70-3    accordance with the provisions of this Section shall not be deemed
 70-4    to be doing business in the State of Texas within the meaning of
 70-5    Article 8.01 of the Texas Business Corporation Act; and shall be
 70-6    deemed qualified to serve in such capacity under the provisions of
 70-7    Section 105 of this Code. [; and notwithstanding other law shall
 70-8    not be prohibited from using in its name and stationery the terms
 70-9    "bank," "trust," or "bank and trust."]
70-10          (d) [(e)]  The provisions hereof are in addition to, and not
70-11    a limitation on, the provisions of Subtitle G, Finance Code, and
70-12    the Texas Trust Company Act (Article 342a-1.001 et seq., Vernon's
70-13    Texas Civil Statutes) [Section 2 of Chapter 388, Acts of the 55th
70-14    Legislature, Regular Session, 1957].
70-15          (e) [(f)]  Any foreign corporate fiduciary [bank or trust
70-16    Company] which shall violate any provision of this Section 105a
70-17    shall be guilty of a misdemeanor and, upon conviction thereof,
70-18    shall be subject to a fine of not exceeding Five Thousand Dollars
70-19    ($5,000.00), and may, in the discretion of the court, be prohibited
70-20    from thereafter serving in this state in any fiduciary capacity.
70-21          SECTION 6.003.  Subsection 5, Section 194, Probate Code, is
70-22    amended to read as follows:
70-23                5.  Agreement as to Deposit of Assets. It shall be
70-24    lawful, and the court may require such action when deemed in the
70-25    best interest of an estate, for a personal representative to agree
70-26    with the surety or sureties, either corporate or personal, for the
70-27    deposit of any or all cash, and safekeeping of other assets of the
70-28    estate in a financial institution as defined by Section 201.101,
70-29    Finance Code, with its main office or a branch office in this state
70-30    [domestic state or national bank, trust company, savings and loan
70-31    association, or other domestic corporate depository, duly
70-32    incorporated] and qualified to act as a depository in this State
70-33    [such] under the laws of this State or of the United States, if
70-34    such deposit is otherwise proper, in such manner as to prevent the
70-35    withdrawal of such moneys or other assets without the written
70-36    consent of the surety, or an order of the court made on such notice
70-37    to the surety as the court shall direct. No such agreement shall in
70-38    any manner release from or change the liability of the principal or
70-39    sureties as established by the terms of the bond.
70-40          SECTION 6.004.  Section 389(b), Probate Code, is amended to
70-41    read as follows:
70-42          (b)  If, at any time, the guardian of the estate shall have
70-43    on hand money belonging to the ward beyond that which may be
70-44    necessary for the education and maintenance of such ward or wards,
70-45    he shall invest such money as follows:
70-46                (1)  In bonds or other obligations of the United
70-47    States;
70-48                (2)  In tax-supported bonds of the State of Texas;
70-49                (3)  In tax-supported bonds of any county, district,
70-50    political subdivision, or incorporated city or town in the State of
70-51    Texas; provided, that the bonds of counties, districts,
70-52    subdivisions, cities, and towns may be purchased only subject to
70-53    the following restrictions: the net funded debt of said issuing
70-54    unit shall not exceed ten per cent of the assessed value of taxable
70-55    property therein, "net funded debt" meaning the total funded debt
70-56    less sinking funds on hand; and further, in the case of cities or
70-57    towns, less that part of the debt incurred for acquisition or
70-58    improvement of revenue-producing utilities, the revenues of which
70-59    are not pledged to support other obligations; provided, however,
70-60    that these restrictions shall not apply to bonds issued for road
70-61    purposes in this state under authority of Section 52 of Article III
70-62    of the Constitution of Texas, which bonds are supported by a tax
70-63    unlimited as to rate or amount;
70-64                (4)  In shares or share accounts of any state savings
70-65    [building] and loan association or savings bank with its main
70-66    office or a branch office in [organized under the laws of] this
70-67    state, provided the payment of such shares or share accounts is
70-68    insured by the Federal Deposit [Savings & Loan] Insurance
70-69    Corporation;
 71-1                (5)  In the shares or share accounts of any federal
 71-2    savings and loan association or savings bank with its main office
 71-3    or a branch office [domiciled] in this state, where the payment of
 71-4    such shares or share accounts is insured by the Federal Deposit
 71-5    [Savings & Loan] Insurance Corporation;
 71-6                (6)  In collateral bonds of companies incorporated
 71-7    under the laws of the State of Texas, having a paid-in capital of
 71-8    One Million Dollars or more, when such bonds are a direct
 71-9    obligation of the company issuing them, and are specifically
71-10    secured by first mortgage real estate notes or other securities
71-11    pledged with a trustee; or
71-12                (7)  In interest-bearing time deposits which may be
71-13    withdrawn on or before one year after demand in any bank doing
71-14    business in Texas where the payment of such time deposits is
71-15    insured by the Federal Deposit Insurance Corporation.
71-16          SECTION 6.005.  Section 601(5), Probate Code, is amended to
71-17    read as follows:
71-18                (5)  "Corporate fiduciary" means a financial
71-19    institution as defined by Section 201.101, Finance Code, [trust
71-20    company or bank] having trust powers, existing or doing business
71-21    under the laws of this state, another state, or [of] the United
71-22    States, that is authorized by law to act under the order or
71-23    appointment of any court of record, without giving bond, as a
71-24    guardian, receiver, trustee, executor, or administrator, or,
71-25    although without general depository powers, as a depository for any
71-26    money paid into court, or to become sole guarantor or surety in or
71-27    on any bond required to be given under the laws of this state.
71-28          SECTION 6.006.  Sections 703(e) and (g), Probate Code, are
71-29    amended to read as follows:
71-30          (e)  If the court considers it to be in the best interests of
71-31    the ward, the court may require that the guardian and the corporate
71-32    or personal sureties on the bond of the guardian of the ward agree
71-33    to deposit any or all cash and safekeeping of other assets of the
71-34    guardianship estate in a financial institution as defined by
71-35    Section 201.101, Finance Code, with its main office or a branch
71-36    office in this state [domestic state or national bank, trust
71-37    company, savings and loan association, or other domestic corporate
71-38    depository, duly incorporated] and qualified to act as a depository
71-39    in this state [national bank, trust company, savings and loan
71-40    association, or other domestic corporate depository] under the laws
71-41    of this state or of the United States, and, if the depository is
71-42    otherwise proper, the court may require the deposit to be made in a
71-43    manner so as to prevent the withdrawal of the money or other assets
71-44    in the guardianship estate without the written consent of the
71-45    surety or on court order made on the notice to the surety. An
71-46    agreement made by a guardian and the sureties on the bond of the
71-47    guardian under this section does not release from liability or
71-48    change the liability of the principal or sureties as established by
71-49    the terms of the bond.
71-50          (g)  In lieu of giving a surety or sureties on a bond that is
71-51    required of the guardian, or for purposes of reducing the amount of
71-52    the bond, the guardian of an estate may deposit out of the
71-53    guardian's own assets cash or securities that are acceptable to the
71-54    court with a financial institution as defined by Section 201.101,
71-55    Finance Code, with its main office or a branch office in this state
71-56    [domestic state or national bank, trust company, savings and loan
71-57    association, or other domestic corporate depository or with any
71-58    other corporate depository approved by the court]. If the deposit
71-59    is otherwise proper, the deposit must be equal in amount or value
71-60    to the amount of the bond required or the bond shall be reduced by
71-61    the value of assets that are deposited.
71-62          SECTION 6.007.  Section 855(b), Probate Code, is amended to
71-63    read as follows:
71-64          (b)  If the guardian of the estate has on hand money that
71-65    belongs to the ward that exceeds that amount of money that may be
71-66    necessary for the education and maintenance of the ward, the
71-67    guardian shall invest the money as follows:
71-68                (1)  in bonds or other obligations of the United
71-69    States;
 72-1                (2)  in tax-supported bonds of this state;
 72-2                (3)  except as limited by Subsections (c) and (d) of
 72-3    this section, in tax-supported bonds of a county, district,
 72-4    political subdivision, or incorporated city or town in this state;
 72-5                (4)  in shares or share accounts of a state savings
 72-6    [building] and loan association or savings bank with its main
 72-7    office or a branch office in [organized under the laws of] this
 72-8    state if the payment of the shares or share accounts is insured by
 72-9    the Federal Deposit [Savings and Loan] Insurance Corporation;
72-10                (5)  in the shares or share accounts of a federal
72-11    savings and loan association or savings bank with its main office
72-12    or a branch office [domiciled] in this state if the payment of the
72-13    shares or share accounts is insured by the Federal Deposit [Savings
72-14    and Loan] Insurance Corporation;
72-15                (6)  in collateral bonds of companies incorporated
72-16    under the laws of this state, having a paid-in capital of
72-17    $1,000,000 or more, when the bonds are a direct obligation of the
72-18    company that issues the bonds and are specifically secured by first
72-19    mortgage real estate notes or other securities pledged with a
72-20    trustee; or
72-21                (7)  in interest-bearing time deposits that may be
72-22    withdrawn on or before one year after demand in a bank that does
72-23    business in this state where the payment of the time deposits is
72-24    insured by the Federal Deposit Insurance Corporation.
72-25                         ARTICLE 7.  CIVIL PROCESS
72-26          SECTION 7.001.  Section 30.007, Civil Practice and Remedies
72-27    Code, is amended to read as follows:
72-28          Sec. 30.007.  PRODUCTION OF FINANCIAL INSTITUTION RECORDS.
72-29    Civil discovery of a customer record maintained by a financial
72-30    institution is governed by Section 59.006, Finance Code.
72-31          [(a)  In this section:]
72-32                [(1)  "Customer" means a person who uses, purchases, or
72-33    obtains an account, extension of credit, or product of a financial
72-34    institution or for whom a financial institution acts as a
72-35    fiduciary, agent, or custodian or in another representative
72-36    capacity.]
72-37                [(2)  "Financial institution" means a state or national
72-38    bank, state or federal savings and loan association, state or
72-39    federal savings bank, state or federal credit union, foreign bank,
72-40    foreign bank agency, or trust company.]
72-41                [(3)  "Record" means financial or other information of
72-42    a customer maintained by a financial institution.]
72-43                [(4)  "Record request" means a valid and enforceable
72-44    subpoena, request for production, or other instrument issued under
72-45    authority of a tribunal that compels production of a customer
72-46    record.]
72-47                [(5)  "Tribunal" means a court or other adjudicatory
72-48    tribunal with jurisdiction to issue a request for records,
72-49    including a government agency exercising adjudicatory functions and
72-50    an alternative dispute resolution mechanism, voluntary or required,
72-51    under which a party may compel the production of records.]
72-52          [(b)  This section provides the exclusive method for
72-53    compelled discovery of a record of a financial institution relating
72-54    to one or more customers, does not create a right of privacy in a
72-55    record, and does not apply to:]
72-56                [(1)  a demand or inquiry from a state or federal
72-57    government agency authorized by law to conduct an examination of
72-58    the financial institution;]
72-59                [(2)  a record request from a state or federal
72-60    government agency or instrumentality under statutory or
72-61    administrative authority that provides for, or is accompanied by, a
72-62    specific mechanism for discovery and protection of a customer
72-63    record of a financial institution, including a record request from
72-64    a federal agency subject to the Right to Financial Privacy Act of
72-65    1978 (12 U.S.C. Section 3401 et seq.) or from the Internal Revenue
72-66    Service under 26 U.S.C. Section 7609;]
72-67                [(3)  a record request from or report to a government
72-68    agency arising out of the investigation or prosecution of a
72-69    criminal offense;]
 73-1                [(4)  a record request in connection with a garnishment
 73-2    proceeding in which the financial institution is garnishee and the
 73-3    customer is debtor;]
 73-4                [(5)  an investigative demand or inquiry from a state
 73-5    legislative investigating committee;]
 73-6                [(6)  an investigative demand or inquiry from the
 73-7    attorney general of this state as authorized by law other than the
 73-8    procedural law governing discovery in civil cases; or]
 73-9                [(7)  the voluntary use or disclosure of a record by a
73-10    financial institution subject to other applicable state or federal
73-11    law.]
73-12          [(c)  A financial institution shall produce a record in
73-13    response to a record request only if:]
73-14                [(1)  it is served with the record request not later
73-15    than the 24th day before the date that compliance with the record
73-16    request is required;]
73-17                [(2)  before the financial institution complies with
73-18    the record request the requesting party pays the financial
73-19    institution's reasonable costs of complying with the record
73-20    request, including costs of reproduction, postage, research,
73-21    delivery, and attorney's fees, or posts a cost bond in an amount
73-22    estimated by the financial institution to cover those costs; and]
73-23                [(3)  when the customer is not a party to the
73-24    proceeding in which the request was issued, the requesting party
73-25    complies with Subsections (d) and (e)  and:]
73-26                      [(A)  the financial institution receives the
73-27    customer's written consent to release the record after a request
73-28    under Subsection (d)(3); or]
73-29                      [(B)  the tribunal takes further action based on
73-30    action initiated by the requesting party under Subsection (e).]
73-31          [(d)  If the affected customer is not a party to the
73-32    proceeding in which the record request was issued, in addition to
73-33    serving the financial institution with a record request, the
73-34    requesting party shall:]
73-35                [(1)  give notice stating the rights of the customer
73-36    under Subsection (f) and a copy of the request to each affected
73-37    customer in the manner and within the time provided by Rule 21a,
73-38    Texas Rules of Civil Procedure;]
73-39                [(2)  file a certificate of service indicating that the
73-40    customer has been mailed or served with the notice and a copy of
73-41    the record request as required by this subsection with the tribunal
73-42    and the financial institution; and]
73-43                [(3)  request the customer's written consent
73-44    authorizing the financial institution to comply with the request.]
73-45          [(e)  If the customer refuses to execute the written consent
73-46    or fails to respond to the requesting party's request under
73-47    Subsection (d)(3) on or before the date that compliance with the
73-48    request is required, the requesting party may by written motion
73-49    seek an in camera inspection of the requested record as its sole
73-50    means of obtaining access to the requested record.  In response to
73-51    a motion for in camera inspection, the tribunal may inspect the
73-52    requested record to determine its relevance to the matter before
73-53    the tribunal.  The tribunal may order redaction of portions of the
73-54    records that the tribunal determines should not be produced and
73-55    shall enter a protective order preventing the record that it orders
73-56    produced from being:]
73-57                [(1)  disclosed to a person who is not a party to the
73-58    proceeding before the tribunal; and]
73-59                [(2)  used by a person for any purpose other than
73-60    resolving the dispute before the tribunal.]
73-61          [(f)  The customer bears the burden of preventing or limiting
73-62    the financial institution's compliance with a record request
73-63    subject to this section by seeking an appropriate remedy, including
73-64    filing a motion to quash the record request or a motion for a
73-65    protective order.  The customer has standing to appear before the
73-66    tribunal for that purpose if the customer is not otherwise a party.
73-67    Any motion filed shall be served on the financial institution and
73-68    the requesting party before the date that compliance with the
73-69    request is required.  A financial institution is not liable to its
 74-1    customer or another person for disclosure of a record in compliance
 74-2    with this section.]
 74-3          [(g)  A financial institution may not be required to produce
 74-4    a record under this section before the later of:]
 74-5                [(1)  the 24th day after the date of receipt of the
 74-6    record request as provided by Subsection (c)(1);]
 74-7                [(2)  the 15th day after the date of receipt of a
 74-8    customer consent to disclose a record as provided by Subsection
 74-9    (c)(3); or]
74-10                [(3)  the 15th day after the date a court orders
74-11    production of a record after an in camera inspection of a requested
74-12    record as provided by Subsection (e).]
74-13          [(h)  An order to quash or for protection or other remedy
74-14    entered or denied by the tribunal under Subsection (e) or (f) is
74-15    not a final order and an interlocutory appeal may not be taken.]
74-16          SECTION 7.002.  Section 31.002, Civil Practice and Remedies
74-17    Code, is amended by adding Subsection (g) to read as follows:
74-18          (g)  With respect to turnover of property held by a financial
74-19    institution in the name of or on behalf of the judgment debtor as
74-20    customer of the financial institution, the rights of a receiver
74-21    appointed under Subsection (b)(3) do not attach until the financial
74-22    institution receives service of a certified copy of the order of
74-23    receivership in the manner specified by Section 59.008, Finance
74-24    Code.
74-25          SECTION 7.003.  Subchapter C, Chapter 61, Civil Practice and
74-26    Remedies Code, is amended by adding Section 61.045 to read as
74-27    follows:
74-28          Sec. 61.045.  ATTACHMENT OF PERSONALTY HELD BY FINANCIAL
74-29    INSTITUTION.  Service of a writ of attachment on a financial
74-30    institution relating to personal property held by the financial
74-31    institution in the name of or on behalf of a customer of the
74-32    financial institution is governed by Section 59.008, Finance Code.
74-33          SECTION 7.004.  Chapter 63, Civil Practice and Remedies Code,
74-34    is amended by adding Section 63.008 to read as follows:
74-35          Sec. 63.008.  FINANCIAL INSTITUTION AS GARNISHEE.  Service of
74-36    a writ of garnishment on a financial institution named as the
74-37    garnishee in the writ is governed by Section 59.008, Finance Code.
74-38          SECTION 7.005.  Subchapter C, Chapter 64, Civil Practice and
74-39    Remedies Code, is amended by adding Section 64.036 to read as
74-40    follows:
74-41          Sec. 64.036.  RECEIVERSHIP PROPERTY HELD BY FINANCIAL
74-42    INSTITUTION.  Service or delivery of a notice of receivership, or a
74-43    demand or instruction by or on behalf of a receiver, relating to
74-44    receivership property held by a financial institution in the name
74-45    of or on behalf of a customer of the financial institution is
74-46    governed by Section 59.008, Finance Code.
74-47          SECTION 7.006.  Subchapter A, Chapter 65, Civil Practice and
74-48    Remedies Code, is amended by adding Section 65.002 to read as
74-49    follows:
74-50          Sec. 65.002.  RESTRAINING ORDER OR INJUNCTION AFFECTING
74-51    CUSTOMER OF FINANCIAL INSTITUTION.  Service or delivery of a
74-52    restraining order or injunction affecting property held by a
74-53    financial institution in the name of or on behalf of a customer of
74-54    the financial institution is governed by Section 59.008, Finance
74-55    Code.
74-56          SECTION 7.007.  Section 157.317(a), Family Code, is amended
74-57    to read as follows:
74-58          (a)  A lien attaches to all real and personal property not
74-59    exempt under the Texas Constitution, including a claim for
74-60    negligence, personal injury, or workers' compensation, or an
74-61    insurance award for the claim, owned by the obligor on or after the
74-62    date the lien notice or abstract of judgment is filed with the
74-63    county clerk of the county in which the property is located, with
74-64    the court clerk as to property or claims in litigation, or, as to
74-65    property of the obligor in the possession or control of a third
74-66    party, from the date the lien notice is filed with that party.
74-67    Service of a lien notice on a financial institution relating to
74-68    property held by the financial institution in the name of or on
74-69    behalf of an obligor who is a customer of the financial institution
 75-1    is governed by Section 59.008, Finance Code.
 75-2          SECTION 7.008.  Section 111.017, Tax Code, is amended to read
 75-3    as follows:
 75-4          Sec. 111.017.  SEIZURE AND SALE OF PROPERTY.  Before the
 75-5    expiration of three years after a person becomes delinquent in the
 75-6    payment of any amount under this title, the comptroller may seize
 75-7    and sell at public auction real and personal property of the
 75-8    person.  A seizure made to collect the tax is limited only to
 75-9    property of the person that is not exempt from execution.  Service
75-10    or delivery of a notice of seizure under this section affecting
75-11    property held by a financial institution in the name of or on
75-12    behalf of a delinquent who is a customer of the financial
75-13    institution is governed by Section 59.008, Finance Code.
75-14          SECTION 7.009.  Section 111.021(e), Tax Code, is amended to
75-15    read as follows:
75-16          (e)  A notice under this section that attempts to prohibit
75-17    the transfer or disposal of an asset possessed or controlled by a
75-18    bank or other financial institution is governed by Section 59.008,
75-19    Finance Code, and also is effective if it is delivered or mailed to
75-20    the principal or any branch office of the bank or other financial
75-21    institution including any office of the bank or other financial
75-22    institution at which the deposit is carried or the credit or
75-23    property is held.
75-24        ARTICLE 8.  AMENDMENTS TO TEXAS NON-PROFIT CORPORATION ACT
75-25          SECTION 8.001.  Article 2.31, Texas Non-Profit Corporation
75-26    Act (Article 1396-2.31, Vernon's Texas Civil Statutes), is amended
75-27    to read as follows:
75-28          Art. 2.31.  Power to Serve as Trustee
75-29          A.  A corporation that is described by Section 501(c)(3) or
75-30    170(c), Internal Revenue Code of 1986, or a corresponding provision
75-31    of a subsequent federal tax law, or a corporation listed by the
75-32    Internal Revenue Service in the Cumulative List of Organizations
75-33    Described in Section 170(c) of the Internal Revenue Code of 1986,
75-34    I.R.S. Publication 78, may serve as the trustee of a trust:
75-35                (1)  of which the corporation is a beneficiary; or
75-36                (2)  benefiting another organization described by one
75-37    of those sections of the Internal Revenue Code of 1986, or a
75-38    corresponding provision of a subsequent federal tax law, or listed
75-39    by the Internal Revenue Service in the Cumulative List of
75-40    Organizations Described in Section 170(c) of the Internal Revenue
75-41    Code of 1986, I.R.S. Publication 78.
75-42          B.  Any corporation (or person or entity assisting such
75-43    corporation) described in this article shall have immunity from
75-44    suit (including both a defense to liability and the right not to
75-45    bear the cost, burden, and risk of discovery and trial) as to any
75-46    claim alleging that the  corporation's role as trustee of a trust
75-47    described in this article constitutes engaging in the trust
75-48    business in a manner requiring a state charter as defined in
75-49    Section 1.002(9), Texas Trust Company Act (Article 342a-1.002,
75-50    Vernon's Texas Civil Statutes).  An interlocutory appeal may be
75-51    taken if a court denies or otherwise fails to grant a motion for
75-52    summary judgment that is based on an assertion of the immunity
75-53    provided in this section.
75-54          SECTION 8.002.  (a)  Article 2.31, Texas Non-Profit
75-55    Corporation Act (Article 1396-2.31, Vernon's Texas Civil Statutes),
75-56    as that section exists on the effective date of this article,
75-57    applies to any trust created before, on, or after the effective
75-58    date of this article, including any trust that is the subject of
75-59    litigation or another proceeding that is pending before, on, or
75-60    after the effective date of this article.
75-61          (b)  This section applies without regard to the effective
75-62    date of the legislation enacting Article 2.31, Texas Non-Profit
75-63    Corporation Act (Article 1396-2.31, Vernon's Texas Civil Statutes),
75-64    or any other legislation enacted by any legislature that amended
75-65    the provisions of Article 2.31, Texas Non-Profit Corporation Act
75-66    (Article 1396-2.31, Vernon's Texas Civil Statutes).
75-67          SECTION 8.003.  This article applies to any trust created
75-68    before, on, or after the effective date of this article, including
75-69    any trust that is the subject of litigation or another proceeding
 76-1    that is pending before, on, or after the effective date of this
 76-2    article.
 76-3             ARTICLE 9.  TRANSITION, EFFECTIVE DATE, EMERGENCY
 76-4          SECTION 9.001.  DATE FOR CERTAIN FILINGS.  (a)  With respect
 76-5    to an interstate branch or other office of an out-of-state
 76-6    financial institution that exists in this state on the effective
 76-7    date of this Act, regardless of whether the out-of-state financial
 76-8    institution has filed a designation pursuant to or was not
 76-9    previously subject to Section 39.003 or 59.001, Finance Code, as
76-10    those sections existed before the effective date of this Act, the
76-11    out-of-state financial institution must file the documentation and
76-12    information required by Section 201.102, Finance Code, as added by
76-13    this Act, before January 1, 2000.
76-14          (b)  With respect to an out-of-state trust institution that
76-15    does not maintain a branch or trust office in this state but
76-16    maintains a representative trust office in this state on the
76-17    effective date of this Act, the out-of-state trust institution must
76-18    file the documentation and information required by Section 9.202,
76-19    Texas Trust Company Act (Article 342a-1.001 et seq., Vernon's Texas
76-20    Civil Statutes), as added by this Act, before January 1, 2000.
76-21          SECTION 9.002.  REPEALER.  (a)  The following provisions of
76-22    the Finance Code are repealed:
76-23                (1)  Sections 31.002(a)(26) and (27);
76-24                (2)  Sections 31.008 and 32.0095; and
76-25                (3)  Chapters 38, 39, and 272.
76-26          (b)  The following provisions of the Texas Trust Company Act
76-27    (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes) are
76-28    repealed:
76-29                (1)  Sections 1.002(a)(3), (6), (16), and (20); and
76-30                (2)  Section 3.021.
76-31          SECTION 9.003.  RELATIONSHIP TO OTHER LAWS.  If this Act
76-32    conflicts with an Act of the 76th Legislature, Regular Session,
76-33    1999, adopting a nonsubstantive revision of statutes relating to
76-34    financial institutions and practices, this Act prevails.
76-35          SECTION 9.004.  EFFECTIVE DATE.  (a)  Except as provided by
76-36    Subsection (b), this Act takes effect immediately.
76-37          (b)  Articles 1-7 of this Act take effect September 1, 1999.
76-38          SECTION 9.005.  EMERGENCY.  The importance of this
76-39    legislation and the crowded condition of the calendars in both
76-40    houses create an emergency and an imperative public necessity that
76-41    the constitutional rule requiring bills to be read on three several
76-42    days in each house be suspended, and this rule is hereby suspended,
76-43    and that this Act take effect and be in force according to its
76-44    terms, and it is so enacted.
76-45                                 * * * * *