88R12649 SRA-F
 
  By: Lambert H.B. No. 3576
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the regulation of state trust companies.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 182.502(b), Finance Code, is amended to
  read as follows:
         (b)  A trust institution applying to convert into a state
  trust company may receive a certificate of authority to do business
  as a state trust company if the banking commissioner finds that:
               (1)  the trust institution is not engaging in a pattern
  or practice of unsafe and unsound fiduciary or banking practices;
               (2)  the trust institution has adequate capitalization
  for a state trust company to act as a fiduciary at the same
  locations as the trust institution is acting as a fiduciary before
  the conversion;
               (3)  the trust institution can be expected to operate
  profitably after the conversion;
               (4)  the officers and directors of the trust
  institution as a group have sufficient fiduciary [banking]
  experience, ability, standing, competence, trustworthiness, and
  integrity to justify a belief that the trust institution will
  operate as a state trust company in compliance with law; and
               (5)  each principal shareholder has sufficient
  experience, ability, standing, competence, trustworthiness, and
  integrity to justify a belief that the trust institution will be
  free from improper or unlawful influence or interference with
  respect to the trust institution's operation as a state trust
  company in compliance with law.
         SECTION 2.  Section 184.002(c), Finance Code, is amended to
  read as follows:
         (c)  A state trust company shall comply with regulatory
  accounting principles in accounting for its investment in and
  depreciation of trust company facilities, furniture, fixtures, and
  equipment [dispose of any real property subject to Subsection (a)
  not later than the fifth anniversary of the date the real property:
               [(1)  was acquired, except as otherwise provided by
  rules adopted under this subtitle;
               [(2)  ceases to be used as a state trust company
  facility; or
               [(3)  ceases to be a state trust company facility as
  provided by Subsection (b)].
         SECTION 3.  Sections 184.003(a) and (c), Finance Code, are
  amended to read as follows:
         (a)  A state trust company may not invest its restricted
  capital in real property except:
               (1)  as permitted by this subtitle or rules adopted
  under this subtitle; [or]
               (2)  with the prior written approval of the banking
  commissioner; or
               (3)  as necessary to avoid or minimize a loss on a loan
  or investment previously made in good faith.
         (c)  A state trust company shall dispose of any real property
  subject to Subsection (a) not later than[:
               [(1)]  the fifth anniversary of the date the real
  property:
               (1) [(A)]  was acquired, except as otherwise provided
  by rules adopted under this subtitle; [or]
               (2) [(B)]  ceases to be used as a state trust company
  facility; or
               (3) [(2)  the second anniversary of the date the real
  property] ceases to be a state trust company facility as provided by
  Section 184.002(b).
         SECTION 4.  Section 182.502(b), Finance Code, as amended by
  this Act, applies only to an application for conversion filed on or
  after the effective date of this Act.  An application for conversion
  filed before the effective date of this Act is governed by the law
  in effect on the date the application was filed, and the former law
  is continued in effect for that purpose.
         SECTION 5.  This Act takes effect immediately if it receives
  a vote of two-thirds of all the members elected to each house, as
  provided by Section 39, Article III, Texas Constitution.  If this
  Act does not receive the vote necessary for immediate effect, this
  Act takes effect September 1, 2023.