Minnesota Legislature
SF 908
as introduced - 80th Legislature (1997 - 1998) Posted on 12/15/2009 12:00am
KEY: stricken = removed, old language.
underscored = added, new language.
1.1 A bill for an act 1.2 relating to financial institutions; trust companies; 1.3 providing for the organization, powers, and duties of 1.4 trust companies; providing fiduciary provisions for 1.5 trust companies and banks exercising trust powers; 1.6 regulating interstate trust offices; making conforming 1.7 changes; amending Minnesota Statutes 1996, sections 1.8 16A.6701, subdivision 1; 48.01, subdivisions 1 and 2; 1.9 48.36, subdivision 1; 48.37; 48.39; 48.41; 48.42; 1.10 48.43; 48.44; 48.45; 48.46; 48.47; 50.085, subdivision 1.11 14; 303.25, subdivision 3; 525.551, subdivision 6; and 1.12 525.56, subdivision 4; proposing coding for new law as 1.13 Minnesota Statutes, chapter 48A; repealing Minnesota 1.14 Statutes 1996, sections 46.045, subdivision 2a; 48.38; 1.15 48.475; 48.65; 48.66; 48.67; 48.68; 48.69; 48.70; 1.16 48.71; 48.72; 48.73; 48.75; 48.76; 48.77; 48.78; 1.17 48.79; 48.80; 48.81; 48.82; 48.83; 48.84; 48.841; 1.18 48.845; 48.846; 48.85; and 48.86. 1.19 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.20 Section 1. Minnesota Statutes 1996, section 16A.6701, 1.21 subdivision 1, is amended to read: 1.22 Subdivision 1. [STATE LICENSE AND SERVICE FEES.] For 1.23 purposes of section 16A.67, subdivision 3, and this section, the 1.24 term "state license and service fees" means, and refers to, all 1.25 license fees, service fees, and charges imposed by law and 1.26 collected by any state officer, agency, or employee, which are 1.27 listed below or which are defined as departmental earnings under 1.28 section 16A.1285, subdivision 1, and the use of which is not 1.29 otherwise restricted by law, and which are not required to be 1.30 credited or transferred to a fund other than the general fund: 1.31 Minnesota Statutes 1994, sections 3.9221; 5.12; 5.14; 5.16; 1.32 5A.04; 6.58; 13.03, subdivision 10; 16A.155; 16A.48; 16A.54; 2.1 16A.72; 16B.59; 16B.70; 17A.04; 18.51, subdivision 2; 18.53; 2.2 18.54; 18C.551; 19.58; 19.64; 27.041, subdivision 2, clauses (d) 2.3 and (e); 27.07, subdivision 5; 28A.08; 32.071; 32.075; 32.392; 2.4 35.71; 35.824; 35.95; 41C.12; 45.027, subdivisions 3 and 6; 2.5 46.041, subdivision 1; 46.131, subdivisions 2, 7, 8, 9, and 10; 2.6 47.101, subdivision 2; 47.54, subdivisions 1 and 4; 47.62, 2.7 subdivision 4; 47.65;48.475, subdivision 1;48.61, subdivision 2.8 7; 48.93; 48A.16; 49.36, subdivision 1; 52.01; 52.203; 53.03, 2.9 subdivisions 1, 5, and 6; 53.09, subdivision 1; 53A.03; 53A.05, 2.10 subdivision 1; 53A.081, subdivision 3; 54.294, subdivision 1; 2.11 55.04, subdivision 2; 55.095; 56.02; 56.04; 56.10; 59A.03, 2.12 subdivision 2; 59A.06, subdivision 3; 60A.14, subdivisions 1 and 2.13 2; 60A.23, subdivision 8; 60K.19, subdivision 5; 65B.48, 2.14 subdivision 3; 70A.14, subdivision 4; 72B.04, subdivision 10; 2.15 79.251, subdivision 5; 80A.28, subdivisions 1, 2, 3, 4, 5, 6, 7, 2.16 7a, 8, and 9; 80C.04, subdivision 1; 80C.07; 80C.08, subdivision 2.17 1; 80C.16, subdivisions 2 and 3; 80C.18, subdivision 2; 82.20, 2.18 subdivision 8 and 9; 82A.04, subdivision 1; 82A.08, subdivision 2.19 2; 82A.16, subdivisions 2 and 6; 82B.09, subdivision 1; 83.23, 2.20 subdivisions 2, 3, and 4; 83.25, subdivisions 1 and 2; 83.26, 2.21 subdivision 2; 83.30, subdivision 2; 83.31, subdivision 2; 2.22 83.38, subdivision 2; 85.052; 85.053; 85.055; 88.79, subdivision 2.23 2; 89.035; 89.21; 115.073; 115.77, subdivisions 1 and 2; 116.41, 2.24 subdivision 2; 116C.69; 116C.712; 116J.9673; 125.08; 136C.04, 2.25 subdivision 9; 155A.045; 155A.16; 168.27, subdivision 11; 2.26 168.33, subdivisions 3 and 7; 168.54; 168.67; 168.705; 168A.152; 2.27 168A.29; 169.345; 171.06, subdivision 2a; 171.29, subdivision 2; 2.28 176.102; 176.1351; 176.181, subdivision 2a; 177.30; 181A.12; 2.29 183.545; 183.57; 184.28; 184.29; 184A.09; 201.091, subdivision 2.30 5; 204B.11; 207A.02; 214.06; 216C.261; 221.0355; 239.101; 2.31 240.06; 240.07; 240.08; 240.09; 240.10; 246.51; 270.69, 2.32 subdivision 2; 270A.07; 272.484; 296.06; 296.12; 296.17; 297.04; 2.33 297.33; 299C.46; 299C.62; 299K.09; 299K.095; 299L.07; 299M.04; 2.34 300.49; 318.02; 323.44, subdivision 3; 325D.415; 326.22; 2.35 326.3331; 326.47; 326.50; 326.92, subdivisions 1 and 3; 327.33; 2.36 331A.02; 332.15, subdivisions 2 and 3; 332.17; 332.22, 3.1 subdivision 1; 332.33, subdivisions 3 and 4; 332.54, subdivision 3.2 7; 333.055; 333.20; 333.23; 336.9-413; 336A.04; 336A.05; 3.3 336A.09; 345.35; 345.43, subdivision 2a; 345.44; 345.55, 3.4 subdivision 3; 347.33; 349.151; 349.161; 349.162; 349.163; 3.5 349.164; 349.165; 349.166; 349.167; 357.08; 359.01, subdivision 3.6 3; 360.018; 360.63; 386.68; and 414.01, subdivision 11; 3.7 Minnesota Statutes 1994, chapters 154; 216B; 237; 302A; 303; 3.8 308A; 317A; 322A; and 322B; Laws 1990, chapter 593; Laws 1993, 3.9 chapter 254, section 7; and Laws 1994, chapter 573, section 4; 3.10 Minnesota Rules, parts 1800.0500; 1950.1070; 2100.9300; 3.11 7515.0210; and 9545.2000 to 9545.2040. 3.12 Sec. 2. Minnesota Statutes 1996, section 48.01, 3.13 subdivision 1, is amended to read: 3.14 Subdivision 1. [WORDS, TERMS, AND PHRASES.] Unless the 3.15 language or context clearly indicates that a different meaning 3.16 is intended, the term defined in subdivision 2, for the purposes 3.17 of sections48.38,48.56 to 48.59,and 48.8448A.07, and 48A.08, 3.18 has that meaning; and the term defined in subdivision 3, for the 3.19 purposes of this chapter, has that meaning. 3.20 Sec. 3. Minnesota Statutes 1996, section 48.01, 3.21 subdivision 2, is amended to read: 3.22 Subd. 2. [BANKING INSTITUTION.] The term "banking 3.23 institution" means any bank, trust company, bank and trust 3.24 company, or savings bank which is now or may hereafter be 3.25 organized under the laws of this state. For purposes of 3.26 sections48.38, 48.8448A.07, 48A.08, and 501B.10, subdivision 3.27 6, and to the extent permitted by federal law, "banking 3.28 institution" includes any national banking association or 3.29 affiliate exercising trust powers in this state. 3.30 Sec. 4. Minnesota Statutes 1996, section 48.36, 3.31 subdivision 1, is amended to read: 3.32 Subdivision 1. Any state bank having a capital and surplus 3.33 of not less than $500,000 may exercise the powers and privileges 3.34 conferred by sections48.36 to 48.4348A.07 and 48A.08, in 3.35 addition to all other powers granted by law, upon complying with 3.36 the conditions and requirements of those sections, and receiving 4.1 the approval of the commissioner of commerce, who may grant or 4.2 reject, in the commissioner's judgment, the application of any 4.3 bank to acquire trust authority, and in doing so shall take into 4.4 consideration the following factors: 4.5 (1) The needs of the community for trust service of the 4.6 kind applied for and the probable volume of such trust business 4.7 available to the bank; 4.8 (2) The general condition of the bank, particularly the 4.9 adequacy of its net capital and surplus funds in relation to the 4.10 character and condition of its assets and to its deposit 4.11 liabilities and other corporate responsibilities, including the 4.12 proposed exercise of trust powers; 4.13 (3) The general character and ability of the management of 4.14 the bank; 4.15 (4) The nature of the supervision to be given to the 4.16 proposed trust activities, including the qualifications and 4.17 experience of the members of the proposed trust investment 4.18 committee; 4.19 (5) The qualifications, experience, and character of the 4.20 proposed executive officer or officers of the trust department; 4.21 (6) Whether the bank has available competent legal counsel 4.22 to advise and pass upon trust matters whenever necessary; and 4.23 (7) Any other facts and circumstances that seem proper. 4.24 Sec. 5. Minnesota Statutes 1996, section 48.37, is amended 4.25 to read: 4.26 48.37 [CERTIFICATES FROM COMMISSIONER.] 4.27 In order to exercise the powers herein conferred, any such 4.28 bank shall invest and keep invested in one or more of the first, 4.29 second, third, fourth, seventh, and eighth classes of authorized 4.30 securities, at least 25 percent of its capital, which securities 4.31 in the amounts above provided shall be duly assigned, 4.32 transferred to, and deposited with the commissioner, and shall 4.33 be maintained unimpaired as a guaranty fund for the integrity of 4.34 its trusts and for the faithful discharge of its duties, in 4.35 connection therewith, with the right to the bank to collect the 4.36 income thereof and to substitute other like authorized 5.1 securities of equal amount and value. The commissioner shall 5.2 carefully examine the securities offered for deposit and, if 5.3 they comply with all the provisions of law applicable thereto, 5.4 and, if the bank making such deposit shall possess the 5.5 qualifications stated in section 48.36, shall issue to the bank 5.6 a certificate stating that it is qualified to exercise the 5.7 powers herein conferred, and, upon the issuance of this 5.8 certificate and while the same remains in force, the bank may 5.9 exercise the powers and privileges conferred by sections48.365.10to 48.4348A.07 and 48A.08. 5.11 In case of any increase in the capital of any bank which 5.12 has qualified hereunder, this certificate shall be and become 5.13 revoked and the bank shall not thereafter exercise the powers 5.14 herein conferred until it shall have deposited the required 5.15 proportion of its capital in authorized securities and received 5.16 a new certificate that it is qualified hereunder. 5.17 Sec. 6. Minnesota Statutes 1996, section 48.39, is amended 5.18 to read: 5.19 48.39 [TRUST ACCOUNTS RECORDED.] 5.20 Besides its general books of account, it shall keep 5.21 separate books of account for all fiduciary accounts. All funds 5.22 and property held by it in a fiduciary capacity shall at all 5.23 times be kept separate from its own funds and property, and all 5.24 fiduciary funds deposited or held as fiduciary by the bank 5.25 awaiting investment shall be carried in a separate account, and 5.26 shall not be used by the bank in the conduct of its business, 5.27 unless the bank, under authorization by its board of directors, 5.28 first delivers to the commissioner of commerce, as collateral 5.29 security: (1) bonds, notes, bills, certificates of indebtedness 5.30 or other direct obligations of the United States or its 5.31 instrumentalities, or obligations fully guaranteed by the United 5.32 States as to principal and interest; or (2) other readily 5.33 marketable securities of the classes in which said trust 5.34 companies or state banks exercising trust powers are authorized 5.35 or permitted to invest trust funds under the laws of this 5.36 state. The securities so deposited as collateral shall be owned 6.1 by the bank and shall at all times be at least equal in market 6.2 value to the amount of the trust funds so used in the conduct of 6.3 the bank's business, and all deposits made by it of such funds 6.4 in any other banking institutions shall be deposited as 6.5 fiduciary funds, to its credit as fiduciary, and not otherwise. 6.6 Every security or property in which the funds held by it as 6.7 trustee, executor, administrator, guardian, receiver, or 6.8 assignee, or in any other fiduciary capacity are invested, shall 6.9 at once upon receipt thereof be immediately entered in the 6.10 proper books as belonging to the particular fiduciary account 6.11 whose funds have been invested therein. Any change in such 6.12 investment shall be fully specified in and under the account of 6.13 the particular fiduciary account to which it belongs so that all 6.14 fiduciary funds and property can be readily identified at any 6.15 time by any person. It shall be unlawful for any bank to lend 6.16 any officer, director or employee any funds held as fiduciary 6.17 under the powers conferred bysections 48.36 to 48.43section 6.18 48.37. Any officer, director or employee to whom such a loan is 6.19 made shall be guilty of theft of the amount of such loan from 6.20 the time of the making thereof. Any state bank, when acting in 6.21 a fiduciary capacity, either alone or jointly with an individual 6.22 or individuals, may, with the consent of such individual 6.23 fiduciary or fiduciaries, who are hereby authorized to give such 6.24 consent, cause any stocks, securities, or other property now 6.25 held or hereafter acquired in such capacity to be registered and 6.26 held in the name of a nominee or nominees of such state bank 6.27 without mention of the fiduciary relationship. Any such state 6.28 bank shall be liable for any loss occasioned by the acts of any 6.29 of its nominees with respect to such stocks, securities or other 6.30 property so registered. 6.31 Sec. 7. Minnesota Statutes 1996, section 48.41, is amended 6.32 to read: 6.33 48.41 [CORPORATE NAME.] 6.34 Any such bank which has qualified and obtained a 6.35 certificate, as provided insections 48.36 to 48.43section 6.36 48.37, may use in its corporate name or title, in addition to 7.1 the word "bank" or other words now permitted by law, the words 7.2 "trust" or "trust company," and may display and make use of 7.3 signs, symbols, tokens, letterheads, cards, circulars and 7.4 advertisements stating or indicating that it is authorized to 7.5 transact the business authorized by said sections, and any such 7.6 bank using the words "trust" or "trust company" is not required 7.7 to use the word "state" in its corporate name. 7.8 Sec. 8. Minnesota Statutes 1996, section 48.42, is amended 7.9 to read: 7.10 48.42 [BANK MAY BE DESIGNATED AS SAVINGS BANK.] 7.11 Any state bank which has qualified undersections 48.36 to7.1248.43section 48.37 and obtained the certificate therein 7.13 provided, and which has established and maintains a savings 7.14 department, may use in its name or title, in addition to other 7.15 words permitted by law, the words "savings" or "savings bank." 7.16 Savings deposits received by any such state bank using the words 7.17 "savings" or "savings bank" in its corporate name or title, 7.18 shall be invested only in authorized securities, as defined by 7.19 law, and the bank shall keep in hand at all times, in addition 7.20 to the securities required to be deposited under the provisions 7.21 of section 48.37, such securities as deposits in savings banks 7.22 may be invested in to an amount at least equal to the savings 7.23 deposits, and these securities to the amount of these deposits 7.24 shall be representative of and the fund for and applicable first 7.25 and exclusively to the payment of the savings deposits. 7.26 Deposits received by the bank subject to its right to require 7.27 notice of withdrawal evidenced by pass books, shall be deemed 7.28 savings deposits. 7.29 Sec. 9. Minnesota Statutes 1996, section 48.43, is amended 7.30 to read: 7.31 48.43 [BANKS MAY CEASE OPERATIONS; DUTIES OF COMMISSIONER.] 7.32 Any state bank which has qualified hereunder may at any 7.33 time notify the commissioner, in writing, that it intends to 7.34 cease to operate under the provisions ofsections 48.36 to 48.437.35 section 48.37, and thereupon the certificate issued to it, as 7.36 provided insections 48.36 to 48.43section 48.37, shall be 8.1 canceled and revoked, and the bank shall thereafter exercise no 8.2 power or privilege except those permitted to state banks which 8.3 have not qualified hereunder, and the securities deposited with 8.4 the commissioner, as provided in section 48.37, shall forthwith 8.5 be reassigned and returned to the bank; provided, that no part 8.6 of the deposited securities shall be so returned until the bank 8.7 shall have eliminated from its corporate name the words "trust," 8.8 "trust company," or "savings," nor until it has ceased to hold 8.9 any trust or trust office authorized bysections 48.36 to 48.438.10 section 48.37, nor until all its accounts in any such trust 8.11 shall have been settled and allowed and all property held in 8.12 trust by it delivered to the persons entitled thereto, nor until 8.13 all liabilities incurred by it as trustee, agent, or otherwise, 8.14 under the provisions ofsections 48.36 to 48.43section 48.37, 8.15 and which it could not have incurred unless qualified 8.16 thereunder, shall have been discharged; provided, further, that 8.17 if the amount of all these liabilities, or the maximum limit 8.18 thereof, has been or can be definitely ascertained, the 8.19 commissioner may retain only such part of the deposited 8.20 securities as shall be at least equal to and as shall be in the 8.21 commissioner's opinion sufficient to liquidate the same. If any 8.22 such bank so surrendering its powers hereunder shall have 8.23 heretofore used the word "savings" in its corporate name, the 8.24 provisions of section 48.42, relating to the investment of 8.25 savings deposits and the rights of such depositors, shall remain 8.26 operative as to all savings deposits on hand at the date of 8.27 surrendering such certificate and until the savings deposits 8.28 shall have been paid to the persons entitled thereto. 8.29 Sec. 10. Minnesota Statutes 1996, section 48.44, is 8.30 amended to read: 8.31 48.44 [BANKS MAY ORGANIZE AS TRUST COMPANY.] 8.32 Hereafter state banks which may be organized in the manner 8.33 now provided by law may be organized with the additional 8.34 authority to exercise the fiduciary powers and privileges set 8.35 out insection 48.38sections 48A.07 and 48A.08; provided, that 8.36 the capital and surplus of any such bank shall not be less than 9.1 $500,000. 9.2 Sec. 11. Minnesota Statutes 1996, section 48.45, is 9.3 amended to read: 9.4 48.45 [CORPORATE NAMES.] 9.5Any suchA bank with the additional authority provided for 9.6 in sections 48A.07 and 48A.08 may be organized with a corporate 9.7 name which may include the words "trust" or "trust company," in 9.8 addition to the word "bank" or other words now permitted by law, 9.9 and the word "state" shall not be a required part of the 9.10 corporate name of any such state bank. 9.11 Sec. 12. Minnesota Statutes 1996, section 48.46, is 9.12 amended to read: 9.13 48.46 [AUTHORIZED SECURITIES PURCHASED.] 9.14 No state bank hereafter organized with authority to 9.15 exercise fiduciary powers pursuant to the provisions of sections 9.1648.44 to 48.4648A.07 and 48A.08, the corporate name of which 9.17 contains the words "trust" or "trust company," shall transact 9.18 any banking or trust company business until it shall have 9.19 invested in and assigned, transferred to, and deposited with the 9.20 commissioner the authorized securities described in and required 9.21 by section 48.37, relating to the authorization of existing 9.22 state banks to exercise such fiduciary powers, and until the 9.23 commissioner of commerce has issued the certificate provided by 9.24 section 47.16, and a certificate stating that such bank is 9.25 qualified to exercise the fiduciary powers set forth insection9.2648.38sections 48A.07 and 48A.08. 9.27 Sec. 13. Minnesota Statutes 1996, section 48.47, is 9.28 amended to read: 9.29 48.47 [BANKING AND TRUST COMPANY BUSINESS.] 9.30 After the application of the corporation shall have been 9.31 favorably acted on by the department in compliance with sections 9.32 46.041 to 46.044, and upon compliance with the terms hereof and 9.33 the issuance of such certificates, the bank may commence the 9.34 transaction of banking and trust company business and may 9.35 exercise, in addition to all the powers and privileges conferred 9.36 by law on state banks, the powers and privileges set forth in 10.1section 48.38sections 48A.07 and 48A.08, and the bank shall 10.2 thereafter comply with and be subject to all of the provisions 10.3 of law relating to state banks exercising such fiduciary powers 10.4 and privileges. 10.5 TRUST COMPANIES 10.6 Sec. 14. [48A.01] [ORGANIZATION OF A STATE TRUST COMPANY.] 10.7 Subdivision 1. [ARTICLES OF INCORPORATION.] (a) Subject to 10.8 the other provisions of this chapter, three or more persons may 10.9 organize and charter a state trust company for purposes of 10.10 transacting business as a trust company in conformity with the 10.11 applicable laws. 10.12 (b) A state trust company may be organized under section 10.13 300.025. If the trust company does not exercise banking powers, 10.14 it may exercise the powers of a Minnesota business corporation 10.15 reasonably necessary or helpful to enable exercise of its 10.16 specific powers under this chapter. 10.17 (c) A state trust company may be organized as a limited 10.18 liability company if it does not exercise banking powers. 10.19 The articles of incorporation or articles of organization 10.20 of the company must be signed and acknowledged by each organizer 10.21 and must contain: 10.22 (1) the name of the state trust company; 10.23 (2) the period of its duration, which may be perpetual; 10.24 (3) the powers of the state trust company, which may be 10.25 stated as: 10.26 (i) all powers granted to a state trust company in this 10.27 state; or 10.28 (ii) a list of the specific powers that the state trust 10.29 company chooses and is authorized to exercise; 10.30 (4) the aggregate number of shares or membership interests 10.31 that the state trust company will be authorized to issue, the 10.32 number of classes of shares or membership interests, which may 10.33 be one or more, the number of shares or membership interests of 10.34 each class if more than one class, and a statement of the par 10.35 value of the shares of each class or that the shares or 10.36 membership interests are to be without par value; 11.1 (5) if the shares or membership interests are to be divided 11.2 into classes, the designation of each class and statement of the 11.3 preferences, limitations, and relative rights of the shares or 11.4 membership interests of each class, which in the case of a 11.5 limited trust association may be more fully set forth in the 11.6 statement of membership interest; 11.7 (6) a provision limiting or denying to participants the 11.8 preemptive right to acquire additional or treasury membership 11.9 interests or shares of the state trust company; 11.10 (7) a provision granting the right of members or 11.11 shareholders to cumulative voting in the election of directors 11.12 or managers; 11.13 (8) the aggregate amount of consideration to be received 11.14 for all shares or membership interests initially issued by the 11.15 state trust company, and a statement that all authorized 11.16 contributions or shares have been subscribed and that all 11.17 subscriptions received provide for the consideration to be fully 11.18 paid in cash before the charter is issued; 11.19 (9) a provision consistent with law that the organizers 11.20 elect to set forth in the articles of incorporation or articles 11.21 of organization for the regulation of the internal affairs of 11.22 the state trust company or that is otherwise required by this 11.23 chapter to be set forth in the articles; 11.24 (10) the street address of the state trust company's 11.25 principal office; and 11.26 (11) the number of directors or governors constituting the 11.27 initial board, which must not be fewer than five or more than 11.28 25, and a statement that management is vested in a board. 11.29 Subd. 2. [DIRECTORS OR MANAGERS; QUALIFICATIONS; 11.30 VACANCIES; HOW FILLED.] A majority of the directors or governors 11.31 of a trust company must be residents of this state. Each must 11.32 take and subscribe an oath to diligently and honestly perform 11.33 the official duties of a director or manager and not knowingly 11.34 violate, or permit to be violated, any provision of law relating 11.35 to trust companies. The taking of this oath must be noted on 11.36 the minutes of the records of the corporation and filed with the 12.1 commissioner. Failure of a person selected as director to 12.2 qualify creates a vacancy in the board. All vacancies in the 12.3 board must be filled by the qualified members. However, not 12.4 more than one-third of the membership of the board may be so 12.5 filled in any one year. 12.6 Sec. 15. [48A.02] [APPLICATION FOR STATE TRUST COMPANY 12.7 CHARTER.] 12.8 Subdivision 1. [PROCEDURE.] An application for a trust 12.9 company charter must be in the form prescribed by the 12.10 commissioner. The procedure in sections 46.041 to 46.045 apply, 12.11 except for the conditions in section 46.044, subdivision 1, 12.12 clauses (1) to (6). 12.13 Subd. 2. [CONDITIONS.] The commissioner shall grant an 12.14 application for a trust company charter if: 12.15 (1) the applicants are of good moral character and 12.16 financial integrity; 12.17 (2) there is reasonable public demand for this trust 12.18 company in this location that: 12.19 (i) considers the needs of the community for trust service 12.20 of the kind applied for and the probable volume of trust 12.21 business available to the applicant; and 12.22 (ii) the probable volume of business in this location is 12.23 sufficient to ensure and maintain the solvency of the new trust 12.24 company and the solvency of the existing trust company or trust 12.25 companies in the locality; 12.26 (3) the commissioner is satisfied the proposed trust 12.27 company will be properly and safely managed considering: 12.28 (i) the general character and ability of the proposed 12.29 management; 12.30 (ii) the nature of the supervision to be given to the 12.31 proposed trust activities, including the qualifications and 12.32 experience of the members of the proposed trust investment 12.33 committee; 12.34 (iii) the qualifications, experience, and character of the 12.35 proposed executive officer or officers of the trust company; and 12.36 (iv) whether the trust company will have available 13.1 competent legal counsel to advise and pass upon trust matters 13.2 whenever necessary; 13.3 (4) the commissioner is satisfied that the capital funds 13.4 are available and the commissioner may accept any reasonable 13.5 demonstration including subscription agreements supported by 13.6 current financial statements; and 13.7 (5) any other facts and circumstances that the commissioner 13.8 considers proper. 13.9 The commissioner shall deny an application that does not 13.10 satisfy the requirements of this subdivision. 13.11 Sec. 16. [48A.03] [CAPITAL AND SURPLUS REQUIREMENTS OF 13.12 TRUST COMPANIES.] 13.13 Subdivision 1. [REQUIRED AMOUNT.] The capital of a trust 13.14 company organized under this chapter must be not less than 13.15 $500,000. The trust company must also provide a surplus of at 13.16 least 20 percent of its capital in addition to the capital 13.17 amounts required by this section. The capital or the surplus 13.18 must not be reduced without the approval of the commissioner of 13.19 commerce. In the case of a trust company organized as a limited 13.20 liability company, "capital and surplus" is considered the 13.21 "contribution" of its members reflected in the required records 13.22 of a limited liability company. 13.23 Subd. 2. [REQUIRED INVESTMENT.] No trust company shall 13.24 transact business until all of its authorized capital stock and 13.25 required surplus has been paid in, in cash, and at least 25 13.26 percent of the capital has been invested in one or more of the 13.27 first, second, third, and fourth classes of authorized 13.28 securities and railroad bonds, as described by section 48.37, 13.29 and also in the farm loan bonds issued by the federal land 13.30 banks, federal intermediate credit banks, and the banks for 13.31 cooperatives. These investments must be assigned and 13.32 transferred to and deposited with the state treasurer. The 13.33 state treasurer shall submit the securities deposited according 13.34 to this subdivision to the commissioner. The commissioner shall 13.35 carefully examine the securities offered for deposit and 13.36 determine if they comply with all applicable provisions of law. 14.1 Upon receipt of an order of the commissioner, the state 14.2 treasurer shall issue a receipt. This deposit must be 14.3 maintained unimpaired as a guaranty fund for depositors and 14.4 creditors and for the faithful discharge of the trust company's 14.5 duties, with the right to collect the income from it and to 14.6 substitute other similar authorized securities, of equal amount 14.7 and value, upon approval and order of the commissioner. 14.8 If the securities comply with the law, the commissioner 14.9 shall issue a certificate of authorization for the trust company 14.10 to begin business. 14.11 Subd. 3. [REDUCTION OF CAPITAL STOCK.] The capital stock 14.12 of a trust company may be reduced with the approval of the 14.13 commissioner, but not below the minimum amounts in this 14.14 section. A trust company shall not return assets to the 14.15 stockholders unless its deposits of authorized securities after 14.16 the return equal one-fourth of the reduced capital, which in no 14.17 event may be less than $125,000. The liability of a stockholder 14.18 or participant upon an existing contract is not affected by the 14.19 return of assets. 14.20 Subd. 4. [REQUIREMENTS FOR CONSOLIDATED COMPANIES.] When 14.21 two or more trust companies have been or are consolidated under 14.22 sections 49.34 to 49.41, or, in the case of a limited liability 14.23 company, sections 322B.70 to 322B.75, the capital of the 14.24 consolidated trust company is considered substituted for the 14.25 capital of the several trust companies entering into the 14.26 consolidation, and the aggregate of the securities of these 14.27 trust companies on deposit with the state treasurer, according 14.28 to this section, must be increased or diminished accordingly. A 14.29 consolidated company may also be organized, with its principal 14.30 place of business in the state, with a capital of not less than 14.31 $10,000, to be paid in cash, of which 50 percent must be 14.32 invested in authorized securities and deposited with the state 14.33 treasurer, as provided in this section. The powers and business 14.34 of the consolidated company must be to act as assignee under an 14.35 assignment for the benefit of creditors, or be appointed and act 14.36 as a trustee or receiver, as a guardian, as executor of a will, 15.1 or administrator of an estate. The consolidated company may 15.2 accept and perform any other lawful trust over which a state or 15.3 federal court has jurisdiction. The consolidated company, 15.4 before entering upon the duties of its trust, shall give a 15.5 surety bond in the sum the court directs, with sufficient 15.6 surety, conditioned for the faithful performance of its duties. 15.7 The business of a consolidated company is limited to the matters 15.8 in this subdivision. The consolidated company with a capital 15.9 stock of $10,000 shall not use the word "trust" in the title or 15.10 name of the company. 15.11 Sec. 17. [48A.04] [CERTAIN TRUST COMPANIES MAY ASSUME 15.12 POWERS OF STATE BANKS.] 15.13 Subdivision 1. [AUTHORITY.] Upon complying with the terms 15.14 of this subdivision, a trust company organized under section 15.15 300.025 has all the powers and privileges of a state bank not 15.16 otherwise granted to trust companies and is subject to and must 15.17 comply with all the laws of this state applicable to state banks. 15.18 Subd. 2. [APPLICATION.] In considering the application of 15.19 a trust company to assume the powers of a state bank, the 15.20 department shall proceed in the same manner and be governed by 15.21 the same laws that are applicable to applications for charters 15.22 for new state banks. 15.23 Subd. 3. [CERTIFICATES TO BE AMENDED.] In order to 15.24 exercise the powers granted under this subdivision, the trust 15.25 company shall amend its certificate of incorporation to include 15.26 the additional powers of a state banking corporation. This 15.27 amendment may include the change of the corporate name of the 15.28 trust company. The trust company shall display in its place of 15.29 business the certificate of the authorization issued by the 15.30 commissioner of commerce. 15.31 Amendments to the certificate of incorporation must be made 15.32 under section 300.45. Before becoming effective, these 15.33 amendments must be approved by the department and the approval 15.34 must be endorsed upon the certificate of amendment. 15.35 Subd. 4. [TRUST COMPANIES TO COMPLY WITH CERTAIN LAWS.] No 15.36 trust company of this state shall conduct a banking business, as 16.1 defined in section 47.02, exercising deposit taking powers, 16.2 without complying with the reserve requirements of section 16.3 48.221. 16.4 Sec. 18. [48A.05] [NATIONAL ASSOCIATIONS; POWERS.] 16.5 The commissioner of commerce may authorize trust companies 16.6 organized under the laws of this state to engage in trust 16.7 activity in which banks exercising trust powers subject to the 16.8 jurisdiction of the federal government may be authorized to 16.9 engage. The commissioner may not authorize trust companies to 16.10 engage in an activity prohibited by the laws of this state. 16.11 Sec. 19. [48A.06] [PROHIBITED DEALINGS AND INDEBTEDNESS.] 16.12 (a) A trust company shall not engage in banking, 16.13 mercantile, manufacturing, or other business, unless this 16.14 business is expressly authorized in this chapter. 16.15 (b) A trust company shall not lend its funds, money, 16.16 capital, trust funds, or other property to a director, officer, 16.17 agent, or employee. 16.18 (c) A director, officer, agent, or employee of a trust 16.19 company shall not become indebted to it by means of an 16.20 overdraft, promissory note, account, endorsement, guaranty, or 16.21 any other contract. A director, officer, agent, or employee who 16.22 violates this paragraph is guilty of theft of the amount of the 16.23 indebtedness from the time of its creation. 16.24 FIDUCIARY PROVISIONS OF BANKS AND TRUST COMPANIES 16.25 Sec. 20. [48A.07] [TRUST COMPANY OR BANK; SPECIAL POWERS 16.26 AND DUTIES AS FIDUCIARY.] 16.27 Subdivision 1. [QUALIFYING ORGANIZATIONS.] A trust 16.28 company, or bank that holds a certificate as provided in section 16.29 48.37, may exercise the powers and privileges set forth in this 16.30 section. 16.31 Subd. 2. [TAKING AND HOLDING REAL AND PERSONAL PROPERTY IN 16.32 TRUST.] (a) The bank or trust company may take and hold in trust 16.33 any real or personal property, wherever situated, by order, 16.34 judgment, or decree of a court, or by gift, grant, assignment, 16.35 transfer, devise, legacy, or bequest from, or by lawful contract 16.36 with, a public or private corporation or an individual or 17.1 copartnership. It may manage this real or personal property 17.2 upon the terms and conditions declared or imposed. 17.3 (b) The bank or trust company may act as agent for the 17.4 signatures, countersignatures, registration, transfer, or 17.5 redemption of certificates of stock, bonds, coupons, or other 17.6 evidences of indebtedness. 17.7 (c) The bank or trust company may act as trustee under 17.8 mortgages in the form of trust deeds. 17.9 (d) The bank or trust company may act as general or special 17.10 agent or attorney in fact in the acquisition, management, sale, 17.11 assignment, transfer, encumbrance, conveyance, or other 17.12 disposition of real or personal property, in the collection of 17.13 rents, payment of taxes, and generally as the representative of 17.14 a person, corporation, or copartnership. 17.15 (e) The bank or trust company may guarantee the title to 17.16 securities sold and transferred by it. 17.17 Subd. 3. [TAKING AND HOLDING DEPOSITS.] The bank or trust 17.18 company may take and hold on deposit or for safekeeping, money, 17.19 bonds, stocks, or other securities, or personal property, that: 17.20 (1) is given to it by a public officer or a trustee or other 17.21 legal representative or a public or private corporation or a 17.22 person; or (2) is authorized, ordered, or otherwise required by 17.23 law to be deposited in a safe depository or paid into any court 17.24 of record. If a court orders the deposit, and the depositor 17.25 takes the receipt of the bank or trust company for it, the 17.26 depositor and the depositor's sureties are relieved from 17.27 liability on the deposits while they are held by the bank or 17.28 trust company. With respect to trust companies only, deposits 17.29 do not include checking or savings accounts, certificates of 17.30 deposit, or other liabilities not relating to its fiduciary 17.31 activities, except as may be authorized by sections 47.23 and 17.32 48A.04. 17.33 Subd. 4. [ACCEPTING AND PERFORMING ASSIGNMENTS OR TRUSTS.] 17.34 The bank or trust company may act as assignee under an 17.35 assignment for the benefit of creditors, or be appointed as a 17.36 trustee, receiver, guardian, executor, or administrator, and may 18.1 accept and perform any other lawful trust conferred by a court 18.2 or by a corporation or individual. No oath or security is 18.3 required of a bank or trust company accepting or performing a 18.4 trust under this subdivision. 18.5 Subd. 5. [COURT-ORDERED DEPOSIT OF SECURITIES.] The judge 18.6 or court having jurisdiction may direct an executor, 18.7 administrator, guardian, assignee, receiver, or other trustee to 18.8 deposit with the bank any securities belonging to the trust 18.9 subject to the order of the trustee when countersigned by the 18.10 judge of the court. The court may fix the security to be given 18.11 by the trustee with reference only to the remainder of the trust 18.12 estate. Securities may not be withdrawn and no part of the 18.13 principal or interest of the securities may be collected without 18.14 a court order. However, an officer of the bank or trust 18.15 company, upon satisfactory proof that additional security has 18.16 been furnished by the trustee or that the estate or fund has 18.17 been so reduced that the deposit is no longer required, may 18.18 withdraw securities or collect the principal of or interest on 18.19 the securities. 18.20 Subd. 6. [INVESTMENT AUTHORITY.] (a) The bank or trust 18.21 company may, in its discretion, retain and continue an 18.22 investment and security or securities coming into its possession 18.23 in a fiduciary capacity. 18.24 (b) In the absence of an express prohibition in the trust 18.25 instrument, the trustee may acquire and retain securities of an 18.26 open-end or closed-end management company or unit investment 18.27 trust registered under the federal Investment Company Act of 18.28 1940. The fact that the banking institution or an affiliate of 18.29 the banking institution, is providing services to the investment 18.30 company or trust as investment advisor, sponsor, broker, 18.31 distributor, custodian, transfer agent, registrar, or otherwise, 18.32 and receiving compensation for the services does not preclude 18.33 the trustee from investing in the securities of that investment 18.34 company or trust. The banking institution shall disclose to all 18.35 current income beneficiaries of the trust the rate, formula, and 18.36 method of the compensation. This paragraph does not alter the 19.1 degree of care and judgment required of trustees by section 19.2 501B.151. 19.3 (c) Except as otherwise provided in this subdivision, a 19.4 bank or trust company shall invest an amount not less than $500 19.5 received by it as representative or trustee or by order of the 19.6 court, not required for the purposes of the trust and not to be 19.7 accounted for within one year, as provided in this subdivision, 19.8 in authorized securities then held by it or specially procured 19.9 by it. Except as may be otherwise provided in the governing 19.10 will, trust agreement, court order, or other instrument, any 19.11 amount in any one trust account, may be invested in certificates 19.12 of deposit or savings accounts in the same bank, or any other 19.13 bank or banks if the certificates of deposit or savings accounts 19.14 are fully insured by the Federal Deposit Insurance Corporation 19.15 and receive the prevailing rate of interest on the certificates 19.16 or savings accounts. 19.17 (d) Where funds are invested in authorized securities, as 19.18 defined by law, the provisions of section 48.24 limiting the 19.19 amount of liability of a person, corporation, or copartnership, 19.20 with reference to a percentage of the capital and surplus of the 19.21 bank, does not apply. 19.22 (e) A bank or trust company may invest all money received 19.23 by it in trust in authorized securities. It is responsible to 19.24 the owner or cestui que trust for the validity, regularity, 19.25 quality, value, and genuineness of these investments and 19.26 securities at the time they are made. It is also responsible to 19.27 the owner or cestui que trust for the safekeeping of these 19.28 securities and evidences of them. When special directions are 19.29 given in an order, judgment, decree, will, or other written 19.30 instrument as to the particular manner or the particular class 19.31 or kind of securities or property in which an investment must be 19.32 made, the bank or trust company must follow these directions and 19.33 is not responsible for the performance of the trust. In all 19.34 other cases it may invest funds held in any trust capacity in 19.35 authorized securities using its best judgment in the selection 19.36 of them, and is responsible for the validity, regularity, 20.1 quality, and value of them at the time made, and for their 20.2 safekeeping. 20.3 (f) As the sole trustee or one of two or more cotrustees, 20.4 it may invest in fractional parts of, as well as in whole, 20.5 securities, or may commingle funds for investment. If it 20.6 invests in fractional parts of securities or commingles funds 20.7 for investment, all of the fractional parts of the securities, 20.8 or the whole of the funds so commingled must be owned and held 20.9 by the bank or trust company in its several trust capacities. 20.10 The bank or trust company is liable for the administration of 20.11 these trusts in all respects as though separately invested. Not 20.12 more than $100,000, at the cost price of the investments, may be 20.13 invested for any one trust at any one time in fractional parts 20.14 or as commingled funds for investment by a bank or trust company 20.15 having capital and surplus of less than $500,000, unless the 20.16 authority to invest in fractional parts or as commingled funds 20.17 is given in the order, judgment, decree, will, or other written 20.18 instrument governing the trust. Funds so commingled for 20.19 investment must be designated collectively as a common trust 20.20 fund. The trust company or bank shall maintain the common trust 20.21 fund in conformity with the rules and regulations prevailing 20.22 from time to time of the federal governmental agency that 20.23 regulates the collective investment of trust funds by national 20.24 banks. It may, in its discretion, retain and continue an 20.25 investment and security or securities coming into its possession 20.26 in any fiduciary capacity. Paragraphs (a) to (f) apply whether 20.27 a corporate trustee is acting alone or with an individual 20.28 cotrustee. 20.29 (g) Notwithstanding the provisions of this section, a trust 20.30 company may: 20.31 (1) establish and maintain common trust funds for the 20.32 collective investment of funds held in a fiduciary capacity by 20.33 it or by another bank or trust company that is owned or 20.34 controlled by a corporation that owns or controls the bank or 20.35 trust company; and 20.36 (2) as a fiduciary or cofiduciary, invest funds that it 21.1 holds for investment in common trust funds established and 21.2 maintained according to clause (1) if the investment is not 21.3 prohibited by the instrument, judgment, decree, or order 21.4 creating the fiduciary relationship. This section applies to 21.5 fiduciary relationships now in existence or hereafter created. 21.6 The provisions of this subdivision relating to common trust 21.7 funds apply to the establishment and maintenance of common trust 21.8 funds under paragraph (f), clauses (1) and (2), to the extent 21.9 they are not inconsistent with these provisions. 21.10 (h) A bank or trust company is entitled to reasonable 21.11 compensation for the faithful performance of its duties and 21.12 discharge of its trust, including all necessary expenses and 21.13 interest at the legal rate, or the amount that has been or may 21.14 be agreed upon by the parties. No compensation or commission 21.15 paid or agreed to be paid by it for the negotiation of a loan, 21.16 or the execution of a trust, is considered interest within the 21.17 meaning of the law, and no excess over the legal rate of 21.18 interest is considered usury. 21.19 Sec. 21. [48A.08] [INCIDENTAL INVESTMENTS, POWERS, AND 21.20 LIMITATIONS.] 21.21 Subdivision 1. [QUALIFYING ORGANIZATION.] A trust company, 21.22 or a bank that holds a certificate as provided in section 48.37, 21.23 may exercise the powers and privileges set forth in this section. 21.24 Subd. 2. [INVESTMENT POWERS.] (a) The bank or trust 21.25 company may acquire, use, and improve, and for that purpose 21.26 mortgage, lease, sell, and convey, real and personal property 21.27 that is necessary for the transaction of its business. 21.28 (b) The bank or trust company may sell or continue to hold 21.29 and use for its interests or those of the estate or trust to 21.30 which it belongs an estate or interest in real estate that the 21.31 bank or trust company acquires through foreclosure of a 21.32 mortgage, trust deed, or other security, or by the settlement of 21.33 an obligation or otherwise in the course of its business. 21.34 (c) The bank or trust company may become the purchaser at a 21.35 foreclosure or judicial sale to which it is a party as trustee 21.36 or otherwise. 22.1 (d) The bank or trust company may accept or make a deed, 22.2 mortgage, or other instrument necessary for the transaction of 22.3 its business. It may loan money and secure the loans by 22.4 mortgage, trust deed or pledge, and/or purchase. It may sell 22.5 and assign notes, bonds, mortgages, and other evidences of 22.6 indebtedness, and securities, and convert them into cash or into 22.7 other authorized securities, or securities and property not 22.8 expressly prohibited by this chapter. 22.9 (e) The investment of funds owned by the bank or trust 22.10 company, as distinguished from funds held by it in trust, are 22.11 restricted to authorized securities. 22.12 (f) The bank or trust company may guarantee a title to 22.13 securities sold and transferred by it. 22.14 (g) The bank or trust company may become sole surety upon a 22.15 bond. For trust companies organized after April 10, 1965, the 22.16 bond must pertain to its own fiduciary activities. 22.17 (h) The bank or trust company may maintain and operate safe 22.18 deposit vaults. 22.19 (i) The bank or trust company shall not invest its capital 22.20 or surplus in real estate except as authorized in this chapter. 22.21 It shall not invest deposits, trust funds, or property except as 22.22 authorized, or under or by virtue of an express contract, 22.23 judgment, or other instrument conferring or imposing special 22.24 power and authority so to do. 22.25 Subd. 3. [POWERS OF COURT; ANNUAL REPORT TO THE 22.26 COURT.] The bank or trust company is subject at all times to the 22.27 orders, judgments, and decrees of a court of record from which 22.28 it has accepted a trust, appointment, or commission as to the 22.29 trust. It shall provide to the court itemized and verified 22.30 accounts, statements, and reports required by law, or as the 22.31 court orders as to a particular trust. The bank or trust 22.32 company is subject to the general jurisdiction and authority of 22.33 the district court of the county of its principal place of 22.34 business. 22.35 Sec. 22. [48A.09] [DEFINITIONS.] 22.36 Subdivision 1. [TERMS.] For purposes of section 48.846, 23.1 this section, and section 48A.10, the terms defined in this 23.2 section have the meanings given them. 23.3 Subd. 2. [AFFILIATED BANK.] "Affiliated bank," with 23.4 respect to another bank or a trust company, means a bank that is 23.5 owned or controlled by the corporation that owns or controls 23.6 that other bank or trust company, including a wholly owned 23.7 subsidiary of the other bank or trust company. 23.8 Subd. 3. [BANK.] "Bank" means a state bank permitted to 23.9 exercise trust powers under sections 48.37 to 48.47, and a 23.10 national bank authorized to exercise fiduciary powers under the 23.11 laws of the United States, including a national bank whose 23.12 operations are limited to those of a trust company and related 23.13 activities. 23.14 Subd. 4. [FIDUCIARY CAPACITY.] "Fiduciary capacity" means 23.15 a capacity resulting from a bank undertaking to act alone or 23.16 jointly with others primarily for the benefit of another in all 23.17 matters connected with its undertaking. The term includes, but 23.18 is not limited to, the capacities of trustee, including trustee 23.19 of a common trust fund; executor; administrator; personal 23.20 representative; registrar or transfer agent with respect to 23.21 stocks, bonds, or other evidences of indebtedness of a 23.22 corporation, association, municipality, state or public 23.23 authority; guardian of estates; conservator; receiver; escrow 23.24 agent; agent for the investment of money; attorney-in-fact; or 23.25 any other similar capacity. 23.26 Subd. 5. [TRUST COMPANY.] "Trust company" means a trust 23.27 company incorporated under the laws of this state that is duly 23.28 authorized to exercise fiduciary powers. 23.29 Sec. 23. [48A.10] [SUBSTITUTION; PROCEDURE.] 23.30 Subdivision 1. [APPLICATION.] A bank or trust company may 23.31 file an application with the district court in the county in 23.32 which an affiliated bank or other bank or trust company for 23.33 which it seeks to be substituted is located requesting that it 23.34 be substituted, except as is expressly excluded in the 23.35 application, in every fiduciary capacity held by the affiliated 23.36 bank or other bank or trust company that is specified in the 24.1 application. The affiliated bank or other bank or trust company 24.2 for which substitution is sought shall join in the application. 24.3 The application need not list the fiduciary capacities in which 24.4 substitution is requested. 24.5 Subd. 2. [HEARING NOTICE.] When the application is filed 24.6 with the district court, the court shall set a date and time for 24.7 hearing and direct that notice of the hearing be given as 24.8 provided in this subdivision. The applicant shall cause a copy 24.9 of the notice to be published at least once a week for two 24.10 consecutive weeks in a legal newspaper in the county where the 24.11 hearing is to be held, the last publication of which is to be at 24.12 least ten days before the time set for the hearing. The court 24.13 may require additional notice as it considers necessary. A 24.14 defect in giving notice does not limit or affect the validity of 24.15 an order entered according to this section. 24.16 Subd. 3. [ORDER.] Upon finding that the applicant is 24.17 authorized to exercise fiduciary powers, the district court 24.18 shall enter an order substituting the applicant bank or trust 24.19 company in every fiduciary capacity held by the affiliated bank 24.20 or other bank or trust company for which substitution is sought 24.21 and which joined in the application, except as may be otherwise 24.22 specified in the application, and except for fiduciary 24.23 capacities in any account with respect to which a person 24.24 beneficially interested in the account has filed objection to 24.25 the substitution and has appeared and been heard in support of 24.26 the objection. Upon entry of the order, or at a later date as 24.27 may be specified in the order, the applicant bank or trust 24.28 company is substituted in every fiduciary capacity to which the 24.29 order extends. The substitution may be made a matter of record 24.30 in any county of this state by filing a certified copy of the 24.31 order of substitution in the office of the court administrator 24.32 of a district or county court, or by filing a certified copy of 24.33 the order in the office of the county recorder. 24.34 Subd. 4. [EFFECT OF SUBSTITUTION.] A designation in a will 24.35 or other instrument of an affiliated bank as fiduciary is 24.36 considered a designation of the bank or trust company 25.1 substituted for the affiliated bank according to this section 25.2 except where the will or other instrument is executed after the 25.3 substitution and expressly provides that this section does not 25.4 apply. Except as otherwise provided in this subdivision, a 25.5 grant in a will or other instrument of a discretionary power is 25.6 considered conferred upon the bank or trust company substituted 25.7 as the fiduciary according to this section. 25.8 Subd. 5. [ACCOUNTING AND TRANSFER OF ASSETS.] An 25.9 affiliated bank or other bank or trust company shall account 25.10 jointly with the substituted bank or trust company for the 25.11 accounting period during which the substitution occurred. Upon 25.12 substitution according to this section, the affiliated bank or 25.13 other bank or trust company shall deliver to the substituted 25.14 bank or trust company all assets held by the affiliated bank or 25.15 other bank or trust company as fiduciary, except assets held for 25.16 fiduciary accounts with respect to which no substitution occurs. 25.17 Upon substitution, all assets become the property of the 25.18 substituted bank or trust company without the necessity of any 25.19 instrument of transfer or conveyance. 25.20 Subd. 6. [TRANSFER OF TRUSTS TO COMPANY; CONDITION.] The 25.21 trustees of an estate or property may surrender and resign the 25.22 trust in favor of the trust company that will accept the trust 25.23 and convey and deliver to it all property and assets of the 25.24 trust, upon condition that the grantor, cestui que trust, and 25.25 all parties in any manner interested in the execution and 25.26 performance of the trust shall execute, acknowledge, and deliver 25.27 an instrument in writing, consenting to the transfer, releasing 25.28 and discharging the original trustee, and appointing the trust 25.29 company as successor. If either party to the original trust is 25.30 dead or does not join in the written consent, or if the original 25.31 trust was created under a last will or an order or decree of a 25.32 court of record, then the transfer is not valid except after 25.33 full compliance with the judgment or decree of a court having 25.34 jurisdiction to remove the acting trustee. 25.35 Subd. 7. [TRUST FUNDS; INVESTMENT OF ACCUMULATIONS.] A 25.36 bank or trust company that receives $500 or more as executor, 26.1 administrator, guardian, or other trustee, or by order of court, 26.2 that is not required for the purposes of the trust, or does not 26.3 have to be accounted for within one year, shall invest it as 26.4 soon as practicable in authorized securities either then held by 26.5 it or specially obtained by it. The income, less its proper 26.6 charges, becomes part of the trust estate. The net 26.7 accumulations on the income must be invested, accounted for, and 26.8 allowed in the settlement of the trust. 26.9 Except as may be otherwise provided in the governing will, 26.10 trust agreement, court order, or other instrument, any amount in 26.11 a trust account may be invested in certificates of deposit, 26.12 share certificates, or savings accounts in a bank or banks, or 26.13 credit union, if the beneficial owner is a member, if the 26.14 certificates of deposit, share certificates, or savings accounts 26.15 are fully insured by an agency of the federal government 26.16 insuring deposits and receive the prevailing rate of interest on 26.17 the certificates or savings accounts. 26.18 Sec. 24. [48A.11] [NATIONAL BANKS AS FIDUCIARIES.] 26.19 A national bank in this state granted a special permit by 26.20 the Federal Reserve Board to act in a fiduciary capacity under 26.21 subsection K of section 11 of the Federal Reserve Act, as 26.22 amended by the act of September 26, 1918, may without oath or 26.23 security assign, transfer to, and deposit with the commissioner, 26.24 and obtain certificates of the deposits, the kinds and amounts 26.25 of authorized securities required by section 48A.03 of a bank or 26.26 trust company in a city in which the national bank is located. 26.27 If the national bank has a capital of $500,000 or more, it is 26.28 not required to deposit these securities for more than ten 26.29 percent of this capital. The securities so deposited must be 26.30 held and maintained as a guaranty fund for the national bank for 26.31 the performance of its duties in this fiduciary capacity. 26.32 When a national bank has complied with section 48A.03, no 26.33 oath or security is required of it to accept and perform the 26.34 trust, as provided in section 48A.08, subdivision 4. 26.35 For purposes of this section, "bank" and "trust company" 26.36 have the meanings given in section 48A.09. 27.1 TRUST INSTITUTION OFFICES 27.2 Sec. 25. [48A.12] [DEFINITIONS.] 27.3 Subdivision 1. [TERMS.] For purposes of sections 48A.12 to 27.4 48A.25, the following words and phrases have the meanings given 27.5 them: 27.6 Subd. 2. [ACCOUNT.] "Account" means the client 27.7 relationship established with a trust company involving the 27.8 transfer of funds or property to the trust company, including a 27.9 relationship in which the trust company acts as trustee, 27.10 executor, administrator, guardian, custodian, conservator, 27.11 bailee, receiver, registrar, or agent, but excluding a 27.12 relationship in which the trust company acts solely in an 27.13 advisory capacity. 27.14 Subd. 3. [ACT AS A FIDUCIARY OR ACTING AS A FIDUCIARY.] 27.15 "Act as a fiduciary" or "acting as a fiduciary" means to: 27.16 (1) accept or execute trusts, including to: 27.17 (i) act as trustee under a written agreement; 27.18 (ii) receive money or other property in its capacity as a 27.19 trustee for investment in real or personal property; 27.20 (iii) act as trustee and perform the fiduciary duties 27.21 committed or transferred to it by order of court of competent 27.22 jurisdiction; 27.23 (iv) act as trustee of the estate of a deceased person; or 27.24 (v) act as trustee for a minor or incapacitated person; 27.25 (2) administer in any other fiduciary capacity real or 27.26 personal property; 27.27 (3) act according to order of court of competent 27.28 jurisdiction as executor or administrator of the estate of a 27.29 deceased person or as a guardian or conservator for a minor or 27.30 incapacitated person; or 27.31 (4) act under the special powers and duties in sections 27.32 48A.07 and 48A.08. 27.33 Subd. 4. [ADMINISTER.] "Administer" with respect to real 27.34 or tangible personal property means, as an agent or in another 27.35 representative capacity, to possess, purchase, sell, lease or 27.36 insure, safekeep, or otherwise manage the property. 28.1 Subd. 5. [AFFILIATE.] "Affiliate" means a company that 28.2 directly or indirectly controls, is controlled by, or is under 28.3 common control with a trust institution or other company. 28.4 Subd. 6. [BANK.] "Bank" has the meaning given the term in 28.5 United States Code, title 12, section 1813(h). The term "bank" 28.6 does not include a "foreign bank" as defined in United States 28.7 Code, title 12, section 3101(7), except for a foreign bank 28.8 organized under the laws of a territory of the United States, 28.9 Puerto Rico, Guam, American Samoa, or the Virgin Islands, the 28.10 deposits of which are insured by the Federal Deposit Insurance 28.11 Corporation. 28.12 Subd. 7. [BANK SUPERVISORY AGENCY.] "Bank supervisory 28.13 agency" means: 28.14 (1) an agency of another state with primary responsibility 28.15 for chartering and supervising a trust institution; and 28.16 (2) the Office of the Comptroller of the Currency, the 28.17 Federal Deposit Insurance Corporation, the Board of Governors of 28.18 the Federal Reserve System, the Office of Thrift Supervision, 28.19 and any successor to these agencies. 28.20 Subd. 8. [BRANCH.] "Branch," with respect to a trust 28.21 company or depository institution, has the meaning given in 28.22 section 48A.17 and in sections 47.51 and 49.411, subdivision 2, 28.23 paragraph (d). 28.24 Subd. 9. [CHARTER.] "Charter" means a charter, license, or 28.25 other authority issued by the commissioner or a bank supervisory 28.26 agency authorizing a trust institution to act as a fiduciary in 28.27 its home state. 28.28 Subd. 10. [CLIENT.] "Client" means a person to whom a 28.29 trust institution owes a duty or obligation under a trust or 28.30 other account administered by the trust institution or as an 28.31 advisor or agent, regardless of whether the trust institution 28.32 owes a fiduciary duty to the person. The term includes the 28.33 noncontingent beneficiaries of an account. 28.34 Subd. 11. [COMMISSIONER.] "Commissioner" means the 28.35 commissioner of commerce and, where appropriate, all of the 28.36 commissioner's successors and predecessors in office. 29.1 Subd. 12. [COMPANY.] "Company" includes a bank, trust 29.2 company, corporation, limited liability company, partnership, 29.3 association, business trust, or another trust. 29.4 Subd. 13. [DEPARTMENT.] "Department" means the Minnesota 29.5 commerce department. 29.6 Subd. 14. [DEPOSITORY INSTITUTION.] "Depository 29.7 institution" means a company chartered to act as a fiduciary and 29.8 included for any purpose within any of the definitions of 29.9 "insured depository institution" as set forth in United States 29.10 Code, title 12, section 1813(c)(2) and (3). 29.11 Subd. 15. [FIDUCIARY RECORD.] "Fiduciary record" means a 29.12 matter written, transcribed, recorded, received, or otherwise in 29.13 the possession or control of a trust company, whether in 29.14 physical, electromagnetic, or optical disk form, that is 29.15 necessary to preserve information concerning an act or event 29.16 relevant to an account or a client of a trust company. 29.17 Subd. 16. [FOREIGN BANK.] "Foreign bank" means a foreign 29.18 bank, as defined in section 1(b)(7) of the International Banking 29.19 Act of 1978, chartered to act as a fiduciary in a state other 29.20 than this state. 29.21 Subd. 17. [HOME STATE.] "Home state" means: 29.22 (1) with respect to a federally chartered trust institution 29.23 and a foreign bank, the state in which the institution maintains 29.24 its principal office; and 29.25 (2) with respect to any other trust institution, the state 29.26 that chartered the institution. 29.27 Subd. 18. [HOME STATE REGULATOR.] "Home state regulator" 29.28 means the bank supervisory agency with primary responsibility 29.29 for chartering and supervising an out-of-state trust institution. 29.30 Subd. 19. [HOST STATE.] "Host state" means a state, other 29.31 than the home state of a trust institution, or a foreign country 29.32 in which the trust institution maintains or seeks to acquire or 29.33 establish an office. 29.34 Subd. 20. [LICENSE.] "License" means the authority granted 29.35 by the commissioner under this chapter to establish, acquire, or 29.36 maintain a trust office. 30.1 Subd. 21. [NEW TRUST OFFICE.] "New trust office" means a 30.2 trust office located in a host state that: 30.3 (1) is originally established by the trust institution as a 30.4 trust office; and 30.5 (2) does not become a trust office of the trust institution 30.6 as a result of: 30.7 (i) the acquisition of another trust institution or trust 30.8 office of another trust institution; or 30.9 (ii) a merger, consolidation, or conversion involving the 30.10 trust institution or trust office. 30.11 Subd. 22. [OFFICE.] "Office," with respect to a trust 30.12 institution, means the principal office, a trust office, or a 30.13 representative trust office, but not a branch. 30.14 Subd. 23. [OUT-OF-STATE BANK.] "Out-of-state bank" means a 30.15 bank chartered to act as a fiduciary in a state or states other 30.16 than this state. 30.17 Subd. 24. [OUT-OF-STATE TRUST COMPANY.] "Out-of-state 30.18 trust company" means either a trust company that is not a state 30.19 trust company or a savings association whose principal office is 30.20 not located in this state. 30.21 Subd. 25. [OUT-OF-STATE TRUST INSTITUTION.] "Out-of-state 30.22 trust institution" means a trust institution that is not a state 30.23 trust institution. 30.24 Subd. 26. [PERSON.] "Person" means an individual, a 30.25 company, or any other legal entity. 30.26 Subd. 27. [PRINCIPAL OFFICE.] "Principal office" with 30.27 respect to: 30.28 (1) a state trust company, means a location registered with 30.29 the commissioner as the state trust company's home office at 30.30 which: 30.31 (i) the state trust company does business; 30.32 (ii) the state trust company keeps its corporate books and 30.33 a set of its material records, including material fiduciary 30.34 records; and 30.35 (iii) at least one executive officer of the state trust 30.36 company maintains an office; or 31.1 (2) a trust institution other than a state trust company, 31.2 means its principal place of business in the United States. 31.3 Subd. 28. [REGISTRATION.] "Registration" means the process 31.4 by which a trust institution has been authorized by the 31.5 commissioner to acquire, establish, or maintain a representative 31.6 trust office in this state. 31.7 Subd. 29. [REPRESENTATIVE TRUST OFFICE.] "Representative 31.8 trust office" means an office at which a trust institution has 31.9 been authorized by the commissioner to engage in a trust 31.10 business other than acting as a fiduciary. 31.11 Subd. 30. [SAVINGS ASSOCIATION.] "Savings association" 31.12 means a depository institution that is not a bank or a foreign 31.13 bank. 31.14 Subd. 31. [STATE.] "State" means a state of the United 31.15 States, the District of Columbia, a territory of the United 31.16 States, Puerto Rico, Guam, American Samoa, the Trust Territory 31.17 of the Pacific Islands, the Virgin Islands, and the Northern 31.18 Mariana Islands. 31.19 Subd. 32. [STATE BANK.] "State bank" means: 31.20 (1) a bank chartered to act as a fiduciary by this state; 31.21 or 31.22 (2) a foreign bank as defined in section 1(b)(7) of the 31.23 International Banking Act of 1978 chartered to act as a 31.24 fiduciary in this state. 31.25 Subd. 33. [STATE TRUST COMPANY.] "State trust company" 31.26 means a corporation or a limited liability trust company 31.27 organized or reorganized under this chapter, including a trust 31.28 company organized under the laws of this state before the 31.29 effective date of this chapter. 31.30 Subd. 34. [STATE TRUST INSTITUTION.] "State trust 31.31 institution" means a trust institution having its principal 31.32 office in this state. 31.33 Subd. 35. [TRUST BUSINESS.] "Trust business" means the 31.34 holding out by a person to the public by advertising, 31.35 solicitation, or other means that the person is available to 31.36 perform any service of a fiduciary in this or another state 32.1 including, but not limited to: 32.2 (1) acting as a fiduciary; or 32.3 (2) to the extent not acting as a fiduciary, any of the 32.4 following: 32.5 (i) receiving personal property for safekeeping; 32.6 (ii) acting as assignee, bailee, conservator, custodian, 32.7 escrow agent, registrar, receiver, or transfer agent; or 32.8 (iii) acting as financial advisor, investment advisor or 32.9 manager, agent, or attorney-in-fact in any agreed upon capacity. 32.10 Subd. 36. [TRUST COMPANY.] "Trust company" means a state 32.11 trust company or other company chartered to act as a fiduciary 32.12 that is not a depository institution or a foreign bank. 32.13 Subd. 37. [TRUST INSTITUTION.] "Trust institution" means a 32.14 depository institution, foreign bank, state bank, or trust 32.15 company. 32.16 Subd. 38. [TRUST OFFICE.] "Trust office" means an office, 32.17 other than the principal office, at which a trust institution is 32.18 licensed by the commissioner to act as a fiduciary. 32.19 Subd. 39. [UNAUTHORIZED ACTIVITY.] "Unauthorized activity" 32.20 means: 32.21 (1) a company, other than one identified in section 48.37, 32.22 48A.01, or 48A.11, acting as a fiduciary within this state; 32.23 (2) a company engaging in a trust business in this state at 32.24 an office of the company that is not its principal office, if it 32.25 is a state trust institution, or that is not a trust office or a 32.26 representative trust office of the company; or 32.27 (3) an out-of-state trust institution engaging in a trust 32.28 business in this state at any time an order issued by the 32.29 commissioner under section 48A.25 is in effect. 32.30 Sec. 26. [48A.13] [BRANCHES AND OFFICES OF STATE TRUST 32.31 INSTITUTIONS.] 32.32 Subdivision 1. [AUTHORITY TO CONDUCT BUSINESS.] A state 32.33 trust institution may act as a fiduciary and engage in a trust 32.34 business at each trust service office as permitted by this 32.35 section and at a branch. A state trust institution may not act 32.36 as a fiduciary but may otherwise engage in a trust business at a 33.1 representative trust office as permitted by this chapter. 33.2 Subd. 2. [LIMITATION ON OUT-OF-STATE 33.3 OFFICES.] Notwithstanding subdivision 1, a state bank or a state 33.4 trust company may not engage at an out-of-state office in any 33.5 trust business not permitted for the office by the host state 33.6 where the office is located to trust institutions chartered by 33.7 that state. 33.8 Sec. 27. [48A.14] [STATE TRUST COMPANY PRINCIPAL OFFICE.] 33.9 Subdivision 1. [REQUIREMENT.] A state trust company must 33.10 have and continuously maintain a principal office in this state. 33.11 Subd. 2. [SERVICE OF PROCESS.] Each executive officer at 33.12 the principal office is an agent of the state trust company for 33.13 service of process. 33.14 Subd. 3. [NOTICE OF CHANGE.] A state trust company not 33.15 authorized to engage in the business of banking may change its 33.16 principal office to a location within this state by filing a 33.17 written notice with the commissioner setting forth the name of 33.18 the state trust company, the street address of its principal 33.19 office before the change, the street address to which the 33.20 principal office is to be changed, and a copy of the resolution 33.21 adopted by the board authorizing the change. 33.22 The change of principal office takes effect on the 31st day 33.23 after the date the commissioner receives the notice under this 33.24 subdivision, unless the commissioner establishes an earlier or 33.25 later date or unless before that day the commissioner notifies 33.26 the state trust company that it must establish to the 33.27 satisfaction of the commissioner that the relocation is 33.28 consistent with the original determination made under section 33.29 48A.02, for the establishment of a state trust company at that 33.30 location, in which event the change of principal office takes 33.31 effect when approved by the commissioner. 33.32 Sec. 28. [48A.15] [STATE TRUST INSTITUTIONS; 33.33 REPRESENTATIVE TRUST OFFICES.] 33.34 Subdivision 1. [AUTHORITY.] (a) A state trust institution 33.35 not authorized to engage in the business of banking may 33.36 establish or acquire and maintain representative trust offices 34.1 anywhere in this state. A state trust institution may establish 34.2 or acquire and maintain the office by filing a written notice 34.3 with the commissioner setting forth the name of the state trust 34.4 institution and the location of the proposed additional office, 34.5 together with a copy of the resolution adopted by the board 34.6 authorizing the additional office, and a filing fee of $250. 34.7 (b) The state trust institution may begin business at the 34.8 additional office on the 31st day after the date the 34.9 commissioner receives the notice, unless the commissioner 34.10 specifies an earlier or later date. 34.11 Subd. 2. [REVIEW BY COMMISSIONER.] The 30-day period of 34.12 review may be extended by the commissioner on a determination 34.13 that the written notice raises issues that require additional 34.14 information or additional time for analysis. If the period of 34.15 review is extended, the state trust institution may establish 34.16 the additional office only on prior written approval by the 34.17 commissioner. 34.18 Subd. 3. [DISAPPROVAL.] The commissioner may deny approval 34.19 of the additional office if the commissioner finds that the 34.20 state trust institution lacks sufficient financial resources to 34.21 undertake the proposed expansion without adversely affecting its 34.22 safety or soundness or that the proposed office would be 34.23 contrary to the public interest. 34.24 Sec. 29. [48A.16] [STATE BANKS AND TRUST COMPANIES; TRUST 34.25 SERVICE OFFICES.] 34.26 Subdivision 1. [AUTHORIZATION.] A trust company organized 34.27 under the laws of this state or a state bank that is permitted 34.28 to exercise trust powers under section 48.37 may, after 34.29 completing the notification procedure required by this 34.30 subdivision, establish and maintain a trust service office at 34.31 any office in this state of any other state or national bank. A 34.32 state bank may, after completing the notification procedure 34.33 required by this subdivision, permit a trust company organized 34.34 under the laws of this state or a state bank that is permitted 34.35 to exercise trust powers under section 48.37 or a national bank 34.36 in this state that is authorized to exercise trust powers to 35.1 establish and maintain a trust service office at any of its 35.2 banking offices. 35.3 The trust company or state bank permitted to exercise trust 35.4 powers and a state bank at which a trust service office is to be 35.5 established according to this section shall jointly file, on 35.6 forms provided by the commissioner, a notification of intent to 35.7 establish a trust service office. The notification must be 35.8 accompanied by a filing fee of $100 payable to the commissioner, 35.9 to be deposited in the general fund of the state. No trust 35.10 service office shall be established according to this section if 35.11 disallowed by order of the commissioner within 45 days of the 35.12 filing of a complete and acceptable notification of intent to 35.13 establish a trust service office. An order of the commissioner 35.14 to disallow the establishment of a trust service office under 35.15 this section is subject to judicial review under sections 14.63 35.16 to 14.69. 35.17 Subd. 2. [SERVICES PERMITTED.] The trust company or bank 35.18 that establishes a trust service office under this section may 35.19 conduct at the office any trust business and business incidental 35.20 to the trust business that it is permitted to conduct at its 35.21 principal office. It may not accept deposits except as 35.22 incidental to the trust business. 35.23 Subd. 3. [GENERAL REQUIREMENTS FOR BANKS.] (a) If the bank 35.24 at which a trust service office is to be established has 35.25 exercised trust powers, then the trust company or bank that is 35.26 establishing the trust service office shall enter into an 35.27 agreement respecting those fiduciary powers to which the trust 35.28 company or bank shall succeed and shall file the agreement with 35.29 the commissioner. 35.30 (b) The trust company or bank that is establishing a trust 35.31 service office under this section shall publish a notice of the 35.32 filing in the form prescribed by the commissioner in a newspaper 35.33 published in the municipality in which the trust service office 35.34 is to be located, and if there is no such newspaper, then in a 35.35 qualified newspaper likely to give notice in the municipality in 35.36 which the proposed trust service office is to be located. The 36.1 trust company or bank shall file proof of publication of the 36.2 notice with the commissioner immediately after the notice is 36.3 published. 36.4 (c) After filing and publication, the trust company or bank 36.5 establishing the trust service office shall, as of the date the 36.6 office first opens for business, succeed to and be substituted 36.7 for the bank at which the trust service office is located as to 36.8 all fiduciary powers, rights, duties, privileges, and 36.9 liabilities of the bank in its capacity as fiduciary for all 36.10 estates, trusts, conservatorships, guardianships, and other 36.11 fiduciary relationships of which the bank is then serving as 36.12 fiduciary, except as may be otherwise specified in the agreement 36.13 between the bank and the trust company or bank which has 36.14 established the trust service office. 36.15 (d) The trust company or bank that has established the 36.16 trust service office shall also be considered named as fiduciary 36.17 in all writings, including, but not limited to, wills, trusts, 36.18 court orders, and similar documents and instruments, naming the 36.19 bank at which the trust service office is located signed before 36.20 the date the trust service office first opens for business, 36.21 unless expressly negated by the writing or otherwise specified 36.22 in the agreement between the trust company or bank and the bank 36.23 at which the trust service office is located. 36.24 (e) On the effective date of the substitution, the bank at 36.25 which the trust service office has been established is released 36.26 and absolved from all fiduciary duties and obligations under the 36.27 writings and shall discontinue its exercise of trust powers on 36.28 all matters not specifically retained by the agreement. This 36.29 subdivision does not absolve the bank from liabilities arising 36.30 out of a breach of fiduciary duty or obligation occurring before 36.31 the date the trust service office first opens for business. 36.32 (f) This subdivision does not affect the authority, duties, 36.33 or obligations of a bank with respect to relationships that may 36.34 be established without trust powers, whether the relationships 36.35 arise before or after the establishment of the trust service 36.36 office. 37.1 Subd. 4. [SUPERVISION.] A trust company or state bank 37.2 permitted to exercise trust powers establishing and operating 37.3 one or more trust service offices according to this section 37.4 shall at all times maintain records acceptable to the 37.5 commissioner regarding transactions originating at the trust 37.6 service offices and available at its principal office for 37.7 examination according to sections 46.04 and 46.05. 37.8 Subd. 5. [NATIONAL BANKS; REQUIREMENTS.] If a trust 37.9 service office is established by a national bank at the banking 37.10 office of another national bank, then the agreement respecting 37.11 fiduciary powers required by section 48A.14 must be filed with 37.12 the comptroller of the currency of the United States and the 37.13 notice required by section 48A.14 must be in the form prescribed 37.14 by the comptroller of the currency. 37.15 Subd. 6. [NOTICE OF SUBSTITUTIONS; DENIAL OF 37.16 SUBSTITUTION.] Not less than 60 days before the effective date 37.17 of the proposed substitution under this subdivision or section 37.18 48A.14, the parties to the substitution shall send written 37.19 notice of the proposed substitution to each cofiduciary, each 37.20 surviving settlor of a trust, each conservatee or ward under a 37.21 conservatorship or guardianship, each person who alone or in 37.22 conjunction with others has the power to remove the fiduciary 37.23 being substituted, and each adult beneficiary currently 37.24 receiving or entitled to receive a distribution of principal or 37.25 income from a trust or estate with respect to which the 37.26 substitution is to be effected. Intentional failure to send the 37.27 notice to a party at the party's current address as shown on the 37.28 fiduciary's records makes the substitution of fiduciaries 37.29 ineffective with respect to the fiduciary relationship. An 37.30 unintentional failure to give notice does not impair the 37.31 validity or effect of any substitution of fiduciaries under this 37.32 subdivision or section 48A.14. A trust company or bank that is 37.33 substituted or about to be substituted as fiduciary with respect 37.34 to a trust, estate, conservatorship, or guardianship under this 37.35 subdivision or section 48A.14 may be removed as fiduciary, or 37.36 the substitution may be denied, upon petition by a cofiduciary, 38.1 by a beneficiary of a trust or estate, by the settlor of a 38.2 trust, or on behalf of a conservatee or ward under a 38.3 conservatorship or guardianship if the trust company or bank 38.4 files a written consent to its removal or a written declination 38.5 to act, or if the court having jurisdiction over the fiduciary 38.6 relationship, upon notice and hearing, approves the petition as 38.7 in the best interests of the petitioner and all other parties 38.8 interested in the trust, estate, conservatorship, or 38.9 guardianship. This section applies in addition to any 38.10 applicable provision for removal of a fiduciary or appointment 38.11 of a successor fiduciary in any other statute or in the 38.12 instrument creating the fiduciary relationship. 38.13 Sec. 30. [48A.17] [BRANCH OFFICES.] 38.14 A state trust institution may establish or acquire and 38.15 maintain branch trust offices for the conduct of any or all of 38.16 the activities permitted for a trust institution following the 38.17 procedure and in compliance with sections 47.52 to 47.57. 38.18 Sec. 31. [48A.18] [AUTHORITY FOR OUT-OF-STATE TRUST 38.19 OFFICES; PRIOR WRITTEN NOTICE.] 38.20 (a) A state trust institution may establish and maintain a 38.21 new trust office or a representative trust office or acquire and 38.22 maintain an office in a state other than this state. The state 38.23 trust institution shall: 38.24 (1) file a notice on a form prescribed by the commissioner 38.25 stating the name of the state trust institution, the location of 38.26 the proposed office, and whether the laws of the jurisdiction 38.27 where the office will be located permit the office to be 38.28 maintained by the state trust institution; 38.29 (2) furnish a copy of the resolution adopted by the board 38.30 authorizing the out-of-state office; and 38.31 (3) pay the filing fee of $250. 38.32 (b) The state trust institution may begin business at the 38.33 additional office on the 31st day after the date the 38.34 commissioner receives the notice, unless the commissioner 38.35 specifies an earlier or later date. 38.36 (c) The 30-day period of review may be extended by the 39.1 commissioner if the written notice raises issues that require 39.2 additional information or additional time for analysis. If the 39.3 period of review is extended, the state trust institution may 39.4 establish the additional office only on prior written approval 39.5 by the commissioner. 39.6 (d) The commissioner may deny approval of the additional 39.7 office if the commissioner finds that the state trust 39.8 institution lacks sufficient financial resources to undertake 39.9 the proposed expansion without adversely affecting its safety or 39.10 soundness or that the proposed office would be contrary to the 39.11 public interest. In acting on the notice, the commissioner 39.12 shall consider the views of the appropriate bank supervisory 39.13 agencies. 39.14 Sec. 32. [48A.19] [OUT-OF-STATE TRUST INSTITUTION TRUST 39.15 OFFICES.] 39.16 Subdivision 1. [REQUIREMENT.] An out-of-state trust 39.17 institution may act as a fiduciary in this state or engage in a 39.18 trust business at an office in this state only if it maintains a 39.19 trust office in this state as permitted by this section. 39.20 Subd. 2. [ESTABLISHING AN INTERSTATE TRUST OFFICE.] An 39.21 out-of-state trust institution that does not operate a trust 39.22 office in this state and that meets the requirements of this 39.23 section may acquire and maintain a trust office or establish and 39.24 maintain a new trust office in this state. An out-of-state 39.25 trust institution may not establish a new trust office in this 39.26 state unless a similar institution chartered under the laws of 39.27 this state to act as a fiduciary is permitted to establish a new 39.28 trust office that may engage in activities substantially similar 39.29 to those permitted to trust offices of out-of-state trust 39.30 institutions under section 48.01 in the state where the 39.31 out-of-state trust institution has its principal office. 39.32 Subd. 3. [NOTICE.] An out-of-state trust institution 39.33 seeking to establish and maintain a new trust office or acquire 39.34 and maintain a trust office in this state according to this 39.35 section shall provide, or cause its home state regulator to 39.36 provide, written notice of the proposed transaction to the 40.1 commissioner on or after the date on which the out-of-state 40.2 trust institution applies to the home state regulator for 40.3 approval to establish and maintain or acquire the trust office. 40.4 The filing of the notice must be preceded or accompanied by a 40.5 copy of the resolution adopted by the board authorizing the 40.6 additional office and the filing fee, if any, prescribed by the 40.7 commissioner. 40.8 Subd. 4. [CONDITIONS FOR APPROVAL.] (a) No trust office of 40.9 an out-of-state trust institution may be acquired or established 40.10 in this state under this section unless: 40.11 (1) the out-of-state trust institution has confirmed in 40.12 writing to the commissioner that for as long as it maintains a 40.13 trust office in this state, it will comply with all applicable 40.14 laws of this state; 40.15 (2) the out-of-state trust institution has provided 40.16 satisfactory evidence to the commissioner that it has complied 40.17 with: 40.18 (i) the applicable requirements of section 303.25; and 40.19 (ii) the applicable requirements of its home state 40.20 regulator for acquiring or establishing and maintaining the 40.21 office; and 40.22 (3) the commissioner, acting within 60 days after receiving 40.23 notice under this section, has certified to the home state 40.24 regulator that the requirements of this section have been met 40.25 and the notice has been approved or, if applicable, that any 40.26 conditions imposed by the commissioner under paragraph (b) have 40.27 been satisfied. 40.28 (b) The out-of-state trust institution may begin business 40.29 at the trust office on the 61st day after the date the 40.30 commissioner receives the notice unless the commissioner 40.31 specifies an earlier or later date, provided, with respect to an 40.32 out-of-state trust institution that is not a depository 40.33 institution and for which the commissioner has conditioned the 40.34 approval on the satisfaction by the out-of-state trust 40.35 institution of any requirement applicable to a state trust 40.36 company under section 48A.02, the institution has satisfied the 41.1 conditions and provided to the commissioner satisfactory 41.2 evidence of that fact. 41.3 (c) The 60-day period of review may be extended by the 41.4 commissioner on a determination that the written notice raises 41.5 issues that require additional information or additional time 41.6 for analysis. If the period of review is extended, the 41.7 out-of-state trust institution may establish the office only on 41.8 prior written approval by the commissioner. 41.9 (d) The commissioner may deny approval of the office if the 41.10 commissioner finds that the out-of-state trust institution lacks 41.11 sufficient financial resources to undertake the proposed 41.12 expansion without adversely affecting its safety or soundness or 41.13 that the proposed office is contrary to the public interest. In 41.14 acting on the notice, the commissioner shall consider the views 41.15 of the appropriate bank supervisory agencies. 41.16 Subd. 5. [ADDITIONAL TRUST OFFICES.] An out-of-state trust 41.17 institution that maintains a trust office in this state under 41.18 this section may establish branches, trust service offices, or 41.19 representative trust offices in this state to the same extent 41.20 that a state trust institution may establish or acquire 41.21 additional offices in this state according to the procedures for 41.22 establishing or acquiring these offices. 41.23 Sec. 33. [48A.20] [OUT-OF-STATE TRUST INSTITUTION 41.24 REPRESENTATIVE TRUST OFFICES.] 41.25 Subdivision 1. [AUTHORIZATION.] (a) Subject to the 41.26 requirements contained in this section, an out-of-state trust 41.27 institution may establish and maintain representative trust 41.28 offices anywhere in this state. 41.29 (b) An out-of-state trust institution may establish or 41.30 acquire and maintain a representative trust office in this 41.31 state. An out-of-state trust institution not maintaining a 41.32 trust office in this state and desiring to establish or acquire 41.33 and maintain a representative trust office shall: 41.34 (1) file a notice on a form prescribed by the commissioner 41.35 stating the name of the out-of-state trust institution and the 41.36 location of the proposed office and satisfactory evidence that 42.1 it is a trust institution; 42.2 (2) furnish a copy of the resolution adopted by the board 42.3 authorizing the representative trust office; and 42.4 (3) pay the filing fee, if any, prescribed by the 42.5 commissioner. 42.6 (c) The out-of-state trust institution may begin business 42.7 at the representative trust office on the 31st day after the 42.8 date the commissioner receives the notice, unless the 42.9 commissioner specifies an earlier or later date. 42.10 Subd. 2. [REVIEW BY COMMISSIONER.] The 30-day period of 42.11 review may be extended by the commissioner on a determination 42.12 that the written notice raises issues that require additional 42.13 information or additional time for analysis. If the period of 42.14 review is extended, the out-of-state trust institution may 42.15 establish the representative trust office only on prior written 42.16 approval by the commissioner. 42.17 Subd. 3. [DISAPPROVAL.] The commissioner may deny approval 42.18 of the representative trust office if the commissioner finds 42.19 that the out-of-state trust institution lacks sufficient 42.20 financial resources to undertake the proposed expansion without 42.21 adversely affecting its safety or soundness or that the proposed 42.22 office would be contrary to the public interests. In acting on 42.23 the notice, the commissioner shall consider the views of the 42.24 appropriate bank supervisory agencies. 42.25 Sec. 34. [48A.21] [CHOICE OF LAW GOVERNING TRUSTS.] 42.26 A trust institution that maintains a trust office or 42.27 representative trust office in this state and its affected 42.28 clients may designate either (1) this state, (2) a state where 42.29 affected clients reside, or (3) the state where the trust 42.30 institution has its principal office, as the state whose laws 42.31 govern any written agreement between the trust institution and 42.32 its client or any instrument under which the trust institution 42.33 acts for a client. The choice of law provisions governing the 42.34 trust must be adequately disclosed in the trust agreement. 42.35 Sec. 35. [48A.22] [CHOICE OF LAW GOVERNING FIDUCIARY 42.36 INVESTMENTS.] 43.1 A trust institution that maintains a trust office or 43.2 representative trust office in this state and its affected 43.3 clients may designate either (1) this state, (2) a state where 43.4 affected clients reside, or (3) the state where the trust 43.5 institution has its principal office, as the state whose laws 43.6 govern with respect to fiduciary investment standards for any 43.7 written agreement between the trust institution or its client 43.8 and any other instrument under which the trust institution acts 43.9 for a client. The choice of law provisions governing fiduciary 43.10 investment standards must be adequately disclosed in the trust 43.11 instrument. 43.12 Sec. 36. [48A.23] [SUPERVISION OF OUT-OF-STATE TRUST 43.13 INSTITUTIONS.] 43.14 Subdivision 1. [EXAMINATIONS.] To the extent consistent 43.15 with subdivision 3, the commissioner may make examinations of an 43.16 office established and maintained in this state under this 43.17 chapter by an out-of-state trust institution as the commissioner 43.18 considers necessary to determine whether the office is being 43.19 operated in compliance with the laws of this state and according 43.20 to safe and sound banking practices. Section 46.04 applies to 43.21 these examinations. 43.22 Subd. 2. [PERIODIC REPORTS.] The commissioner may require 43.23 periodic reports regarding an out-of-state trust institution 43.24 that has established and maintained an office in this state 43.25 according to this chapter. The required reports shall be 43.26 provided by the trust institution or by the home state 43.27 regulator. Any reporting requirements prescribed by the 43.28 commissioner under this subdivision shall be: 43.29 (1) consistent with the reporting requirements applicable 43.30 to state trust companies; and 43.31 (2) appropriate to allow the commissioner to carry out the 43.32 commissioner's responsibilities under this chapter. 43.33 Subd. 3. [COOPERATIVE AGREEMENTS.] (a) The commissioner 43.34 may enter into cooperative, coordinating, and 43.35 information-sharing agreements with any other bank supervisory 43.36 agencies or an organization affiliated with or representing one 44.1 or more bank supervisory agencies with respect to the periodic 44.2 examination or other supervision of an office in this state of 44.3 an out-of-state trust institution, or an office of a state trust 44.4 institution in a host state. The commissioner may accept a 44.5 report of examination and report of investigation from a party 44.6 to the agreement in lieu of conducting the commissioner's own 44.7 examination or investigation. 44.8 (b) The commissioner may enter into contracts with any bank 44.9 supervisory agency that has concurrent jurisdiction over a state 44.10 trust institution or an out-of-state trust institution 44.11 maintaining an office in this state to engage the services of 44.12 that agency's examiners at a reasonable rate of compensation or 44.13 to provide the services of the commissioner's examiners to the 44.14 agency at a reasonable rate of compensation. 44.15 (c) The commissioner may enter into joint examinations or 44.16 joint enforcement actions with other bank supervisory agencies 44.17 having concurrent jurisdiction over any office established and 44.18 maintained in this state by an out-of-state trust institution or 44.19 an office established and maintained by a state trust 44.20 institution in any host state. The commissioner may at any time 44.21 take actions independently if the commissioner considers the 44.22 actions to be necessary or appropriate to carry out the 44.23 commissioner's responsibilities under this section or to ensure 44.24 compliance with the laws of this state. In the case of an 44.25 out-of-state trust institution, the commissioner shall recognize 44.26 the exclusive authority of the home state regulator over 44.27 corporate governance matters and the primary responsibility of 44.28 the home state regulator with respect to safety and soundness 44.29 matters. 44.30 Subd. 4. [FEES.] Each out-of-state trust institution that 44.31 maintains one or more offices in this state may be assessed and, 44.32 if assessed, shall pay supervisory and examination fees 44.33 according to the laws of this state and rules of the 44.34 commissioner. The fees may be shared with other bank 44.35 supervisory agencies or an organization affiliated with or 44.36 representing one or more bank supervisory agencies under 45.1 agreements between the parties and the commissioner. 45.2 Sec. 37. [48A.24] [NOTICE OF SUBSEQUENT MERGER, CLOSING.] 45.3 Each out-of-state trust institution that maintains an 45.4 office in this state according to section 48A.19, or the home 45.5 state regulator of the trust institution, shall give at least 30 45.6 days prior written notice or, in the case of an emergency 45.7 transaction, shorter notice as is consistent with applicable 45.8 state or federal law, to the commissioner of: 45.9 (1) a merger, consolidation, or other transaction that 45.10 would cause a change of control with respect to the out-of-state 45.11 trust institution or any bank holding company that controls the 45.12 trust institution, with the result that an application would be 45.13 required to be filed pursuant to the federal Change in Bank 45.14 Control Act of 1978, as amended, United States Code, title 12, 45.15 section 1817(j), or the federal Bank Holding Company Act of 45.16 1956, as amended, United States Code, title 12, section 1841 et 45.17 seq., or any successor statutes; 45.18 (2) a transfer of all or substantially all of the trust 45.19 accounts or trust assets of the out-of-state trust institution 45.20 to another person; or 45.21 (3) the closing or disposition of an office in this state. 45.22 Sec. 38. [48A.25] [ENFORCEMENT.] 45.23 Subdivision 1. [GENERAL AUTHORITY OF COMMISSIONER.] (a) 45.24 Consistent with hearing provisions of sections 46.23 to 46.33, 45.25 if the commissioner finds that: 45.26 (1) an office maintained by an out-of-state trust 45.27 institution in this state is being operated in violation of the 45.28 laws of this state or in an unsafe and unsound manner; or 45.29 (2) a company is engaged in an unauthorized trust activity, 45.30 the commissioner may take any enforcement action the 45.31 commissioner could take if the office or the company were a 45.32 state trust company including, but not limited to, issuing an 45.33 order temporarily or permanently prohibiting the company from 45.34 engaging in a trust business in this state. 45.35 (b) The commissioner may determine by order that an 45.36 out-of-state trust institution engaging in or proposing to 46.1 engage in a trust business in this state does not meet the 46.2 requirements for establishing a representative trust office in 46.3 this state according to section 48A.20, the order is effective 46.4 on the date of issuance or another date the commissioner 46.5 determines. 46.6 Subd. 2. [IMMEDIATE ENFORCEMENT ACTION; SUBSEQUENT 46.7 HEARING.] In cases involving extraordinary circumstances 46.8 requiring immediate action, the commissioner may take any action 46.9 permitted by subdivision 1 without notice or opportunity for 46.10 hearing but shall promptly upon application of the out-of-state 46.11 trust institution afford a subsequent hearing to rescind the 46.12 action taken. The commissioner shall promptly give notice to 46.13 the home state regulator of each enforcement action taken 46.14 against an out-of-state trust institution and, to the extent 46.15 practicable, shall consult and cooperate with the home state 46.16 regulator in pursuing and resolving the enforcement action. 46.17 Sec. 39. Minnesota Statutes 1996, section 50.085, 46.18 subdivision 14, is amended to read: 46.19 Subd. 14. [TRUST POWERS.] Upon application to and approval 46.20 by the commissioner of commerce, a savings bank may act as 46.21 trustee, executor, administrator, personal representative, 46.22 conservator, custodian, guardian, or in any other fiduciary 46.23 capacity in which state banks, trust companies, or other 46.24 corporations are permitted to act, and receive reasonable 46.25 compensation for it.A savings bank that has complied with46.26sections 48.36 to 48.43 and 48.475, and holds a certificate as46.27provided in section 48.37, may exercise the powers and46.28privileges set forth in sections 48.38, 48.475, 48.84, 48.841,46.2948.846, and 48.86.A savings bank that has qualified and 46.30 obtained a certificate, as provided insections 48.36 to46.3148.43section 48.37, may use in its corporate name or title, in 46.32 addition to the words "savings bank" or other words permitted by 46.33 law, the words "trust" or "trust company," and may display and 46.34 make use of signs, symbols, tokens, letterheads, cards, 46.35 circulars, and advertising stating or indicating that it is 46.36 authorized to transact the business authorized by those 47.1 sections, and a savings bank using the words "trust" or "trust 47.2 company" is not required to use the word "state" in its 47.3 corporate name. A savings bank may not invest, pursuant to 47.4 section 50.1465, in a corporation that engages in activities 47.5 described in this subdivision, without first obtaining the 47.6 approval of the commissioner of commerce. 47.7 Sec. 40. Minnesota Statutes 1996, section 303.25, 47.8 subdivision 3, is amended to read: 47.9 Subd. 3. [BOND MUST BE FILED.] Before accepting 47.10 appointment or acting as executor, administrator, trustee, 47.11 guardian, or conservator, every foreign trust association shall 47.12 file a bond with a court of competent jurisdiction in an amount 47.13 as the court directs, with sufficient sureties, conditioned upon 47.14 the faithful discharge of its duties as executor, administrator, 47.15 trustee, guardian, or conservator, or, in lieu of the bond, 47.16 shall deposit securities with the state treasurer in the same 47.17 manner and in the same amount as would be required under section 47.1848.6748A.03, subdivision 2, of a trust company organized under 47.19 the laws of this state. This deposit shall be maintained until 47.20 the foreign trust association shall cease to act as an executor, 47.21 administrator, trustee, guardian, or conservator under this 47.22 section. However, except as otherwise ordered by a court of 47.23 competent jurisdiction, the requirements of this subdivision do 47.24 not apply to a trustee with respect to a trust created otherwise 47.25 than by will if the trust instrument requests or directs that a 47.26 bond need not be required of the trustee. 47.27 Sec. 41. Minnesota Statutes 1996, section 525.551, 47.28 subdivision 6, is amended to read: 47.29 Subd. 6. [BOND.] Upon the filing of a bond by the guardian 47.30 or conservator of an estate in an amount the court may direct 47.31 and an oath according to law, or upon the filing of an 47.32 acceptance of the trust pursuant to section48.7948A.08, 47.33 subdivision 4, letters of guardianship or conservatorship shall 47.34 issue. If there is no personal property, the court may waive 47.35 the filing of a bond, but if the guardian or conservator 47.36 receives or becomes entitled to any property of the ward or 48.1 conservatee the guardian or conservator shall immediately file a 48.2 report thereof and a bond in an amount the court may direct. In 48.3 case of breach of a condition of the bond an action thereon may 48.4 be prosecuted by leave of the court by any interested person or 48.5 by the court on its own motion. 48.6 Sec. 42. Minnesota Statutes 1996, section 525.56, 48.7 subdivision 4, is amended to read: 48.8 Subd. 4. [DUTIES OF GUARDIAN OR CONSERVATOR OF THE 48.9 ESTATE.] The court may appoint a guardian of the estate if it 48.10 determines that all the powers and duties listed in this 48.11 subdivision are needed to provide for the needs of the 48.12 incapacitated person. The court may appoint a conservator of 48.13 the estate if it determines that a conservator is necessary to 48.14 provide for the needs of the incapacitated person through the 48.15 exercise of some, but not all, of the powers and duties listed 48.16 in this subdivision. The duties and powers of a guardian or 48.17 those which the court may grant to a conservator include, but 48.18 are not limited to: 48.19 (1) The duty to pay the reasonable charges for the support, 48.20 maintenance, and education of the ward or conservatee in a 48.21 manner suitable to the ward's or conservatee's station in life 48.22 and the value of the estate. Nothing herein contained shall 48.23 release parents from obligations imposed by law for the support, 48.24 maintenance, and education of their children. The guardian or 48.25 conservator has no duty to pay for these requirements out of 48.26 personal funds. Wherever possible and appropriate, the guardian 48.27 or conservator should meet these requirements through 48.28 governmental benefits or services to which the ward or 48.29 conservatee is entitled, rather than from the ward's or 48.30 conservatee's estate. Failure to satisfy the needs and 48.31 requirements of this clause shall be grounds for removal, but 48.32 the guardian or conservator shall have no personal or monetary 48.33 liability; 48.34 (2) The duty to pay out of the ward's or conservatee's 48.35 estate all just and lawful debts of the ward or conservatee and 48.36 the reasonable charges incurred for the support, maintenance, 49.1 and education of the ward's or conservatee's spouse and 49.2 dependent children and, upon order of the court, pay such sum as 49.3 the court may fix as reasonable for the support of any person 49.4 unable to earn a livelihood who is legally entitled to support 49.5 from the ward or conservatee; 49.6 (3) The duty to possess and manage the estate, collect all 49.7 debts and claims in favor of the ward or conservatee, or, with 49.8 the approval of the court, compromise them, institute suit on 49.9 behalf of the ward or conservatee and represent the ward or 49.10 conservatee in any court proceedings, and invest all funds not 49.11 currently needed for the debts and charges named in clauses (1) 49.12 and (2) and the management of the estate, in accordance with the 49.13 provisions of sections48.8448A.07, subdivision 6, and 49.14 501B.151, or as otherwise ordered by the court. The standard of 49.15 a fiduciary shall be applicable to all investments by a guardian 49.16 or conservator. A guardian or conservator shall also have the 49.17 power to purchase certain contracts of insurance as provided in 49.18 section 50.14, subdivision 14, clause (b); 49.19 (4) Where a ward or conservatee has inherited an undivided 49.20 interest in real estate, the court, on a showing that it is for 49.21 the best interest of the ward or conservatee, may authorize an 49.22 exchange or sale of the ward's or conservatee's interest or a 49.23 purchase by the ward or conservatee of any interest other heirs 49.24 may have in the real estate. 49.25 Sec. 43. [REPEALER.] 49.26 Minnesota Statutes 1996, sections 46.045, subdivision 2a; 49.27 48.38; 48.475; 48.65; 48.66; 48.67; 48.68; 48.69; 48.70; 48.71; 49.28 48.72; 48.73; 48.75; 48.76; 48.77; 48.78; 48.79; 48.80; 48.81; 49.29 48.82; 48.83; 48.84; 48.841; 48.845; 48.846; 48.85; and 48.86, 49.30 are repealed.