Texas § FI.182.011 - EXEMPTION FROM STATUTORY PROVISIONS FOR CERTAIN STATE TRUST COMPANIES

§ FI.182.011. EXEMPTION FROM STATUTORY PROVISIONS FOR CERTAIN STATE TRUST COMPANIES

EXEMPTION FROM STATUTORY PROVISIONS FOR CERTAIN STATE TRUST COMPANIES. (a) A state trust company may request in writing that it be exempted from specified provisions of this subtitle. The banking commissioner may grant the exemption in whole or in part, subject to Subsection (c), if the banking commissioner finds that the state trust company: (1) has only family clients and transacts business solely on behalf of family clients and their related interests; (2) is wholly owned, directly or indirectly, legally or beneficially, by one or more family members; and (3) does not hold itself out to the general public as a corporate fiduciary for hire. (a-1) In this section: (1) "Family client" includes: (A) a family member; (B) a former family member; (C) a key employee of the trust company as defined by and to the extent permitted by rules adopted under Subsection (e), including a former key employee for a reasonable transition period specified by rule; (D) a nonprofit organization, charitable foundation, charitable trust, including a charitable lead trust or charitable remainder trust whose only current beneficiaries are other family clients and charitable or nonprofit organizations, or another charitable organization for which all the funding came exclusively from one or more other family clients; (E) the estate of a family member or former family member; (F) an irrevocable trust under which one or more other family clients are the only current beneficiaries; (G) an irrevocable trust funded exclusively by one or more family clients in which other family clients and nonprofit organizations, charitable foundations, charitable trusts, or other charitable organizations are the only current beneficiaries; (H) a company wholly owned by, and operated for the sole benefit of, one or more other family clients; (I) a revocable trust of which one or more other family clients are the sole grantors, including any such trust that becomes irrevocable, wholly or partly, for a reasonable transition period as specified by rule; and (J) any other persons as may be permitted by rules adopted under Subsection (e). (2) "Family member," with respect to an individual, means an individual related to the individual within the seventh degree of consanguinity or affinity, as determined under Subchapter B , Chapter 573 , Government Code, except that a foster child is considered the child of the foster parent and a person for whom a guardian was appointed before the person's 18th birthday is considered the child of the guardian. (3) "Former family member" includes a former spouse or stepchild who was a family member but is no longer a family member due to a divorce or other similar event. (b) At the expense of a state trust company, the banking commissioner may examine or investigate the state trust company in connection with an application for an exemption. Unless the application presents novel or unusual questions, the banking commissioner shall approve the application for exemption or set the application for hearing not later than the 61st day after the date the banking commissioner considers the application complete and accepted for filing. The banking commissioner may require the submission of additional information as considered necessary to an informed decision. (c) An exemption granted under this section may be made subject to conditions or limitations imposed by the banking commissioner consistent with this subtitle. (d) A state trust company that is or has been exempt from a provision of this subtitle under this section or a predecessor statute may not transact business with the general public unless the banking commissioner determines, as provided by Section 182.003 , that public convenience and advantage will be promoted by permitting the state trust company to engage in the trust business with the general public. (e) The finance commission may adopt rules: (1) defining other circumstances under which a state trust company may be exempted from a provision of this subtitle because it does not transact business with the general public; (2) specifying the provisions of this subtitle that are subject to an exemption request; (3) establishing procedures and requirements for obtaining, maintaining, or revoking an exemption; and (4) defining or further defining terms used by this section. Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.16(a), eff. Sept. 1, 1999. Amended by: Acts 2015, 84th Leg., R.S., Ch. 250 (S.B. 875 ), Sec. 5, eff. September 1, 2015.