1999 Legislation:
HB 2066
-- Proposed Amendments to the
Texas Probate Code in the
Interstate Banking Bill
The following excerpt is from the introduced version of HB 2066, the interstate banking bill. These are the proposed amendments to the Texas Probate Code:
ARTICLE 6. AMENDMENTS TO PROBATE CODE
SECTION 6.001. Section 3(d), Probate Code, is amended to read as follows:
(d) "Corporate fiduciary" means a financial institution as
defined by Section 201.101, Finance Code, [trust company or bank]
having trust powers, existing or doing business under the laws of this state, another
state, or [of] the United States, which is authorized by law to act
under the order or appointment of any court of record, without giving bond, as receiver,
trustee, executor, administrator, or, although without general depository powers,
depository for any moneys paid into court, or to become sole guarantor or surety in or
upon any bond required to be given under the laws of this state.
SECTION 6.002. Section 105A, Probate Code, is amended to read as follows:
Sec. 105A. APPOINTMENT AND SERVICE OF FOREIGN BANKS AND TRUST COMPANIES
IN FIDUCIARY CAPACITY. (a) A corporate fiduciary that does not have its main
office or a branch office in this state, hereinafter called "foreign corporate
fiduciaries" [Any bank or trust company organized under the laws of, and
having its principal office in, the District of Columbia or any territory or state of the
United States of America, other than the State of Texas, and any national bank having its
principal office in the District of Columbia or such territory or other state (all such
banks or trust companies being hereinafter sometimes called "foreign banks or trust
companies")], having the corporate power to so act, may be appointed and may
serve in the State of Texas as trustee (whether of a personal or corporate trust),
executor, administrator, guardian of the estate, or in any other fiduciary capacity,
whether the appointment be by will, deed, agreement, declaration, indenture, court order
or decree, or otherwise, when and to the extent that the home state of the corporate
fiduciary [District of Columbia or territory or other state in which such
foreign bank or trust company is organized and has its principal office] grants
authority to serve in like fiduciary capacity to a corporate fiduciary whose home state
is this state [bank or trust company organized under the laws of, and having
its principal office in, the State of Texas, or to a national bank having its principal
office in the State of Texas].
(b) Before qualifying or serving in the State of Texas in any fiduciary
capacity, as aforesaid, such a foreign corporate fiduciary [bank or trust
company] shall file in the office of the Secretary of the State of the State of
Texas (1) a copy of its charter, articles of incorporation or of association, and all
amendments thereto, certified by its secretary under its corporate seal; (2) a duly
executed instrument in writing, by its terms of indefinite duration and irrevocable,
appointing the Secretary of State and his successors its agent for service of process upon
whom all notices and processes issued by any court of this state may be served in any
action or proceeding relating to any trust, estate, fund or other matter within this state
with respect to which such foreign corporate fiduciary [bank or trust
company] is acting in any fiduciary capacity, including the acts or defaults of
such foreign corporate fiduciary [bank or trust company] with
respect to any such trust, estate or fund; and (3) a written certificate of designation,
which may be changed from time to time thereafter by the filing of a new certificate of
designation, specifying the name and address of the officer, agent or other person to whom
such notice or process shall be forwarded by the Secretary of State. Upon receipt of such
notice or process, it shall be the duty of the Secretary of State forthwith to forward
same by registered or certified mail to the officer, agent or other person so designated.
Service of notice or process upon the Secretary of State as agent for such a foreign corporate
fiduciary [bank or trust company] shall in all ways and for all
purposes have the same effect as if personal service had been had within this state upon
such foreign corporate fiduciary [bank or trust company].
(c) [No foreign bank or trust company shall establish or maintain
any branch office, agency or other place of business within this state, or shall in any
way solicit, directly or indirectly, any fiduciary business in this state of the types
embraced by subdivision (a) hereof. Except as authorized herein or as may otherwise be
authorized by the laws of this state, no foreign bank or trust company shall act in a
fiduciary capacity in this state. Nothing in this Section shall be construed to authorize
foreign banks and trust companies to issue or to sell or otherwise market or distribute in
this state any investment certificates, trust certificates, or other types of securities
(including without limiting the generality of the foregoing any securities of the types
authorized by Chapter 7 of the Insurance Code of 1951 prior to the repeal thereof), or to
conduct any activities or exercise any powers of the type embraced and regulated by the
Texas Banking Act (Article 342-1.001 et seq., Vernon's Texas Civil Statutes) or the Texas
Trust Company Act other than those conducted and exercised in a fiduciary capacity under
the terms and conditions hereof.
[(d)] Any foreign corporate fiduciary [bank
or trust company] acting in a fiduciary capacity in this state in strict
accordance with the provisions of this Section shall not be deemed to be doing business in
the State of Texas within the meaning of Article 8.01 of the Texas Business Corporation
Act; and shall be deemed qualified to serve in such capacity under the provisions
of Section 105 of this Code. [; and notwithstanding other law shall not be
prohibited from using in its name and stationery the terms "bank,"
"trust," or "bank and trust."]
(d) [(e)] The provisions hereof are in addition
to, and not a limitation on, the provisions of Subtitle G, Finance Code, and the Texas
Trust Company Act (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes) [Section
2 of Chapter 388, Acts of the 55th Legislature, Regular Session, 1957].
(e) [(f)] Any foreign corporate fiduciary
[bank or trust Company] which shall violate any provision of this Section
105a shall be guilty of a misdemeanor and, upon conviction thereof, shall be subject to a
fine of not exceeding Five Thousand Dollars ($5,000.00), and may, in the discretion of the
court, be prohibited from thereafter serving in this state in any fiduciary capacity.
SECTION 6.003. Subsection 5, Section 194, Probate Code, is amended to read as follows:
5. Agreement as to Deposit of Assets. It shall be lawful, and the court may
require such action when deemed in the best interest of an estate, for a personal
representative to agree with the surety or sureties, either corporate or personal, for the
deposit of any or all cash, and safekeeping of other assets of the estate in a financial
institution as defined by Section 201.101, Finance Code, with its main office or a branch
office in this state [domestic state or national bank, trust company, savings
and loan association, or other domestic corporate depository, duly incorporated]
and qualified to act as a depository in this State [such] under
the laws of this State or of the United States, if such deposit is otherwise proper, in
such manner as to prevent the withdrawal of such moneys or other assets without the
written consent of the surety, or an order of the court made on such notice to the surety
as the court shall direct. No such agreement shall in any manner release from or change
the liability of the principal or sureties as established by the terms of the bond.
SECTION 6.004. Section 389(b), Probate Code, is amended to read as follows:
(b) If, at any time, the guardian of the estate shall have on hand money belonging to the ward beyond that which may be necessary for the education and maintenance of such ward or wards, he shall invest such money as follows:
(1) In bonds or other obligations of the United States;
(2) In tax-supported bonds of the State of Texas;
(3) In tax-supported bonds of any county, district, political subdivision, or incorporated city or town in the State of Texas; provided, that the bonds of counties, districts, subdivisions, cities, and towns may be purchased only subject to the following restrictions: the net funded debt of said issuing unit shall not exceed ten per cent of the assessed value of taxable property therein, "net funded debt" meaning the total funded debt less sinking funds on hand; and further, in the case of cities or towns, less that part of the debt incurred for acquisition or improvement of revenue-producing utilities, the revenues of which are not pledged to support other obligations; provided, however, that these restrictions shall not apply to bonds issued for road purposes in this state under authority of Section 52 of Article III of the Constitution of Texas, which bonds are supported by a tax unlimited as to rate or amount;
(4) In shares or share accounts of any state savings [building]
and loan association or savings bank with its main office or a branch office in [organized
under the laws of] this state, provided the payment of such shares or share
accounts is insured by the Federal Deposit [Savings & Loan]
Insurance Corporation;
(5) In the shares or share accounts of any federal savings and loan
association or savings bank with its main office or a branch office [domiciled]
in this state, where the payment of such shares or share accounts is insured by the
Federal Deposit [Savings & Loan] Insurance Corporation;
(6) In collateral bonds of companies incorporated under the laws of the State of Texas, having a paid-in capital of One Million Dollars or more, when such bonds are a direct obligation of the company issuing them, and are specifically secured by first mortgage real estate notes or other securities pledged with a trustee; or
(7) In interest-bearing time deposits which may be withdrawn on or before one year after demand in any bank doing business in Texas where the payment of such time deposits is insured by the Federal Deposit Insurance Corporation.
SECTION 6.005. Section 601(5), Probate Code, is amended to read as follows:
(5) "Corporate fiduciary" means a financial institution as
defined by Section 201.101, Finance Code, [trust company or bank]
having trust powers, existing or doing business under the laws of this state, another
state, or [of] the United States, that is authorized by law to act
under the order or appointment of any court of record, without giving bond, as a guardian,
receiver, trustee, executor, or administrator, or, although without general depository
powers, as a depository for any money paid into court, or to become sole guarantor or
surety in or on any bond required to be given under the laws of this state.
SECTION 6.006. Sections 703(e) and (g), Probate Code, are amended to read as follows:
(e) If the court considers it to be in the best interests of the ward, the
court may require that the guardian and the corporate or personal sureties on the bond of
the guardian of the ward agree to deposit any or all cash and safekeeping of other assets
of the guardianship estate in a financial institution as defined by Section 201.101,
Finance Code, with its main office or a branch office in this state [domestic
state or national bank, trust company, savings and loan association, or other domestic
corporate depository, duly incorporated] and qualified to act as a depository
in this state [national bank, trust company, savings and loan association, or
other domestic corporate depository] under the laws of this state or of the
United States, and, if the depository is otherwise proper, the court may require the
deposit to be made in a manner so as to prevent the withdrawal of the money or other
assets in the guardianship estate without the written consent of the surety or on court
order made on the notice to the surety. An agreement made by a guardian and the sureties
on the bond of the guardian under this section does not release from liability or change
the liability of the principal or sureties as established by the terms of the bond.
(g) In lieu of giving a surety or sureties on a bond that is required of the
guardian, or for purposes of reducing the amount of the bond, the guardian of an estate
may deposit out of the guardian's own assets cash or securities that are acceptable to the
court with a financial institution as defined by Section 201.101, Finance Code, with
its main office or a branch office in this state [domestic state or national
bank, trust company, savings and loan association, or other domestic corporate depository
or with any other corporate depository approved by the court]. If the deposit is
otherwise proper, the deposit must be equal in amount or value to the amount of the bond
required or the bond shall be reduced by the value of assets that are deposited.
SECTION 6.007. Section 855(b), Probate Code, is amended to read as follows:
(b) If the guardian of the estate has on hand money that belongs to the ward that exceeds that amount of money that may be necessary for the education and maintenance of the ward, the guardian shall invest the money as follows:
(1) in bonds or other obligations of the United States;
(2) in tax-supported bonds of this state;
(3) except as limited by Subsections (c) and (d) of this section, in tax-supported bonds of a county, district, political subdivision, or incorporated city or town in this state;
(4) in shares or share accounts of a state savings [building]
and loan association or savings bank with its main office or a branch office in [organized
under the laws of] this state if the payment of the shares or share accounts is
insured by the Federal Deposit [Savings and Loan] Insurance
Corporation;
(5) in the shares or share accounts of a federal savings and loan
association or savings bank with its main office or a branch office [domiciled]
in this state if the payment of the shares or share accounts is insured by the Federal Deposit
[Savings and Loan] Insurance Corporation;
(6) in collateral bonds of companies incorporated under the laws of this state, having a paid-in capital of $1,000,000 or more, when the bonds are a direct obligation of the company that issues the bonds and are specifically secured by first mortgage real estate notes or other securities pledged with a trustee; or
(7) in interest-bearing time deposits that may be withdrawn on or before one year after demand in a bank that does business in this state where the payment of the time deposits is insured by the Federal Deposit Insurance Corporation.
[03/08/99]
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Copyright 1999 by Glenn M.
Karisch Last Revised March 8, 1999