HB 176 — Trust Business Modifications

176 mislead the public;

(10)(10)(a) (a) Upon written request, the commissioner may grant an exemption to this section if the commissioner finds that the use of an otherwise restricted name or word is not reasonably likely to cause confusion or lead the public to believe that the person requesting the exemption is a depository or financial institution or is conducting a business subject to the jurisdiction of the department.

(11)(11)(a) (a) A person and a principal and officer of a business entity violating this section is guilty of a class A misdemeanor.

- 7 - HB0176 compared with HB0176S03 (b) In addition to a criminal penalty imposed under Subsection (11)(a), the commissioner may issue a cease and desist order against a person violating this section.

7-5-11.7-5-11 .

(3)(3)(a) (a) Every trust company shall adopt written policies and procedures regarding decisions- or7 recommendations- toH.B. purchase or sell any security to facilitate compliance with federal and state securities laws.

176 Enrolled Copy decisions or recommendations to purchase or sell any security to facilitate compliance with federal and state securities laws.

Section 7-5-1017-5-101, which is renumbered from Section 7-5-1 is renumbered and amended to read:

General Provisions [7-5-1] 7-5-101.7-5-101 .

-(4) 8 - HB0176 compared with HB0176S03 (2)(4) "Power of direction" means the same as that term is defined in Section 75B-3-102.

[(b)] (3){(5)}(5) "Trust" means the same as that term is defined in Section 75B-1-101.

[(c)] (4){(6)}(6)(a) (a) "Trust business" means[, except as provided in Subsection (1)(d),] a business in which [one] a person acts in [any] an agency or a fiduciary capacity, including [that of] as a personal representative, an executor, an administrator, a conservator, a guardian, an assignee, a receiver, a depositary, or a trustee under appointment as trustee for [any] a purpose permitted by law.

[(d)] (b) "Trust business" does not include{:include the following means of holding money, assets, or other property:

{(i)}(i) {[}money ]}[held] thethat followingan meansattorney ofauthorized holdingto money,practice assets,law orin otherthis property:state holds in a client trust account[ by an attorney authorized to practice law in this state];

{[(i){]}(ii) {(A)} } money [held] that ana attorneyperson authorizedlicensed toas practicea lawprincipal broker in thisaccordance statewith Title 61, Chapter 2f, Real Estate Licensing and Practices Act, holds in aconnection clientwith trustthe account[purchase or sale of real estate[ by ana attorneyperson authorizedlicensed toas practicea lawprincipal broker in thisaccordance state];with Title 61, Chapter 2f, Real Estate Licensing and Practices Act];

{[(ii){]}(iii) {(B)}money }or moneyother assets [held] that a person licensedthe asdepartment, a principal broker in accordance with Title 61, Chapter 2f,22, RealRegulation Estateof LicensingIndependent andEscrow PracticesAgents, Act,authorizes holdsto inact connectionas withan theescrow purchaseagent or salethat ofthe realInsurance estate[Department byauthorizes ato personact licensed as aan principalescrow broker- in8 accordance- withEnrolled TitleCopy 61,H.B. Chapter 2f, Real Estate Licensing and Practices Act];

{[(iii){]}176 {(C)} } money or other assets [held] that a person the department, in accordance with Chapter 22, Regulation of Independent Escrow Agents, authorizes to act as an escrow agent or that the Insurance Department authorizes to act as an escrow agent holds in escrow[ by a person authorized by the department in accordance with Chapter 22, Regulation of Independent Escrow Agents, or by the Insurance Department to act as an escrow agent in this state];

{[(iv){]}(iv) {(D)} } money [held by a] that a homeowners' association or similar organization holds to pay maintenance and other related costs for commonly owned property;

{[(v){]}(v) {(E)} } money [held] that a person, acting solely as the agent or representative or otherwise at the sole direction of the person to which the debt or payment is owed, holds in connection with the collection of debts or payments on loans[ by a person acting solely as the agent or representative or otherwise at the sole direction of the person to which the debt or payment is owed], including money [held by ]an escrow agent holds for payment of taxes or insurance;

{[(vi){]}(vi) {(F)} } money [and] or other assets [held] that {a person } an individual holds in trust on an occasional or isolated basis[ by a person who does not represent that the person is engaged in the trust business in Utah] if the {person } individual does not represent that the {person } individual engages in the trust business in this state;

-(vii) 9 - HB0176 compared with HB0176S03 {[(vii){]} {(G)} } money or other assets [found by a court to be held] that a court finds that a person holds in an implied, resulting, or constructive trust;

{[(viii){]}(viii) {(H)} } money or other assets [held by a court appointed conservator, guardian, receiver, trustee, or other fiduciary] that a {court appointed } court-appointed conservator, guardian, receiver, trustee, or other fiduciary holds if the court-appointed conservator, guardian, receiver, trustee, or other fiduciary{[:]}fiduciary: {[(A)]} (I) [ { }the conservator, receiver, guardian, trustee, or other fiduciary ]is responsible to the court in the same or similar manner as a personal representative under Title 75, Chapter 3, Part 5, Supervised Administration, or as a receiver under Rule 66, Utah Rules of Civil Procedure{[;]} and [(B)] (II) [{ {[(B)]} the conservator, trustee, or other fiduciary ]is a certified public accountant,[ or {[} has qualified{] qualifies} for and {[} received{] receives} a designation as] a certified financial planner, chartered financial consultant, or certified financial analyst[,] ;

or(A)(I) (B)[the [conservator, similarreceiver, designationguardian, suitabletrustee, to the court, that evidences the conservator's, trustee's, or other fiduciary'sfiduciary professional]is competenceresponsible to managethe financialcourt matters]in demonstrates to the satisfactionsame ofor thesimilar courtmanner as a levelpersonal ofrepresentative competenceunder necessaryTitle to75, carryChapter out,3, manage,Part and5, overseeSupervised theAdministration, financialor andas fiduciarya dutiesreceiver thatunder willRule reasonably66, beUtah requiredRules of theCivil court-appointedProcedure; conservator, guardian, receiver, trustee, or other fiduciary;

(ix)and money[(B)] (II) [the conservator, trustee, or other assetsfiduciary that]is a court-appointedcertified trusteepublic accountant,[ or personalhas representativequalified holds,for ifand thereceived court-a appointeddesignation trusteeas] a certified financial planner, chartered financial consultant, or personalcertified representative:financial analyst[,] ;

or (B) [ similar designation suitable to the court, that evidences the conservator's, trustee's, or other fiduciary's professional competence to manage financial matters] demonstrates to the satisfaction of the court a level of competence necessary to carry out, manage, and oversee the financial and fiduciary duties - 9 - H.B.

176 Enrolled Copy that will reasonably be required of the court-appointed conservator, guardian, receiver, trustee, or other fiduciary;

(ix) money or other assets that a court-appointed trustee or personal representative holds, if the court-appointed trustee or personal representative:

[(ix)] (I){(x)}(x) money or other assets [held by] that a credit services organization operating in compliance with Title 13, Chapter 21, Credit Services Organizations Act, holds;

[(x)] (J){(xi)}(xi) money, securities, or other assets [held in] that a customer account in connection with the purchase or sale of securities by a regulated securities broker, dealer, or transfer agent holds;[ or] - 10 - HB0176 compared with HB0176S03 [(xi)] (K){(xii)}(xii) money, assets, and other property [held] that a person holds in a business trust for the benefit of holders of certificates of beneficial interest if the fiduciary activities of the business trust are merely incidental to conducting business in the business trust form[.] ;

(ii){(xiii)}(xiii) a person exercising a fiduciary or non-fiduciary power, including power of directiondirection, , while acting as a trust director{;director, trust protector, trust advisor, or a similar capacity;

or}(xiv) ,a trustperson protector,acting trustas advisor,a surrogate under Title 75A, Chapter 9, Uniform Health Care Decisions Act, or in a similar capacity;

(iii){(xiv)} {an attorney } a person acting as a surrogate under Title 75A, Chapter 9, Uniform Health Care Decisions Act, or {certified(xv) public accountant who engages } in {fiduciary services that:}as a similarguardian, capacity;if:

or(A) (A){(xv)}the {areguardian's incidentward tois thea attorney'sprotected orperson certifiedwith publican accountant'sappointed traditionalconservator businessthat activities;serves with the guardian;

and}or services(B) asthe aresponsibilities, guardian,powers, if:and authorities of the guardian are limited and non-financial in nature.

(B){(A)}[(e)] {are(7) not"Trust }company" means [an institution] a person authorized to engage in [the ]trust business under this chapter.[ Only the {principalfollowing purposemay ofbe }a guardian'strust wardcompany:] is[(i) a protectedUtah persondepository withinstitution or its wholly owned subsidiary;] [(ii) an appointedout-of-state conservatordepository thatinstitution servesauthorized withto theengage {attorney'sin }business guardian;as a depository institution in Utah or its wholly owned subsidiary;] - 10 - Enrolled Copy H.B.

176 [(iii) a corporation, including a credit union service organization, owned entirely by one or {certifiedmore publicfederally accountant'sinsured depository institutions as defined in Subsection 7-1-103(8);] [(iv) a direct or indirect subsidiary of a depository institution holding company that also has a direct or indirect subsidiary authorized to engage in business activities.as a depository institution in Utah;

{[(e)]and] (5)}[(v) theany responsibilities,other powers,corporation continuously and authoritieslawfully ofengaged in the guardiantrust arebusiness limitedin andthis non-financialstate since before July 1, 1981.] (8) "Trust director" means the same as that term is defined in nature.Section 75B-3-102.

[(e)][(2) (7)Only "Trust company" means [an institution] a persontrust authorizedcompany tomay engage in [thethe ]trusttrust business underin this chapter.[state.] Only[(3) theThe followingrequirements mayof bethis achapter trustdo company:]not [(i)apply ato:] Utah[(a) depositoryan institution orauthorized itsto whollyengage ownedin subsidiary;]a [(ii)trust anbusiness out-of-statein depositoryanother institutionstate authorizedthat tois engageengaged in businesstrust asactivities ain depositorythis institutionstate insolely Utahto orfulfill its whollyduties ownedas subsidiary;]a [(iii)trustee of a corporation,trust includingcreated and administered in another state;] [(b) a creditnational unionbank, servicefederal organization,savings ownedbank, entirelyfederal bysavings oneand orloan moreassociation, federallyor insuredfederal depositorycredit institutionsunion asauthorized definedto engage in Subsectionbusiness 7-1-103(8);]as [(iv) a directdepository institution in Utah, or indirectany wholly owned subsidiary of aany depositoryof institutionthese, holdingto companythe thatextent alsothe hasinstitution ais directauthorized orby indirectits subsidiaryprimary authorizedfederal regulator to engage in businessthe astrust abusiness depository institution in Utah;this state;

and] [(v) any other corporation continuously and lawfully engaged in the trust business in this state since before July 1, 1981.] (6){(8)} "Trust director" means the same as that term is defined in Section 75B-3-102.

[(2) Only a trust company may engage in the trust business in this state.] [(3) The requirements of this chapter do not apply to:] - 11 - HB0176 compared with HB0176S03 [(a) an institution authorized to engage in a trust business in another state that is engaged in trust activities in this state solely to fulfill its duties as a trustee of a trust created and administered in another state;] [(b) a national bank, federal savings bank, federal savings and loan association, or federal credit union authorized to engage in business as a depository institution in Utah, or any wholly owned subsidiary of any of these, to the extent the institution is authorized by its primary federal regulator to engage in the trust business in this state;

Section 57-5-102 is enacted to read:

7-5-102.7-5-102 .

and (e)- any11 other- corporationH.B. continuously and lawfully engaged in the trust business in this state since before July 1, 1981.

176 Enrolled Copy (e) any other corporation continuously and lawfully engaged in the trust business in this state since before July 1, 1981.

(b) a national bank, federal savings bank, federal savings and loan association, or federal credit union authorized to engage in business as a depository institution in this state, or a wholly owned subsidiary of a national bank, federal savings bank, federal savings and loan association, or federal credit union authorized to engage in business as a depository institution in this state, to the extent the - 12 - HB0176 compared with HB0176S03 institution is authorized by the institution's primary federal regulator to engage in trust business in this state;

Section 7-5-1037-5-103, which is renumbered from Section 7-5-2 is renumbered and amended to read:

[7-5-2] 7-5-103.7-5-103 .

(1)(1)(a) (a) [No ] Unless a trust company [shall] obtains from the commissioner a permit to engage in trust business in this state, the trust company may not accept [any] an appointment to act in [any] an agency or a fiduciary capacity by order or judgment of a court or by authority of any law of this state, including [that of ] as a:

(b)- This12 [provision]- SubsectionEnrolled (1)Copy doesH.B. not apply to [any] a bank or other corporation authorized to engage and lawfully engaged in the trust business in this state before July 1, 1981.

176 (b) This [provision] Subsection (1) does not apply to [any] a bank or other corporation authorized to engage and lawfully engaged in the trust business in this state before July 1, 1981.

(b) [any ] a corporation, organized under Title 16, Chapter 6a, Utah Revised Nonprofit Corporation Act,[ and owned or controlled by] and that a charitable, benevolent, eleemosynary, or religious - 13 - HB0176 compared with HB0176S03 organization owns or controls, from acting as a trustee for that organization or members of that organization but not offering trust services to the general public;

Section 7-5-1047-5-104, which is renumbered from Section 7-5-3 is renumbered and amended to read:

[7-5-3] 7-5-104.7-5-104 .

(a)- the13 character- andH.B. condition of the applicant's assets;

176 Enrolled Copy (a) the character and condition of the applicant's assets;

(3) The commissioner may not apply criteria [making it] that makes the process to obtain approval to engage in trust business in this state more difficult for a state chartered depository institution [to - 14 - HB0176 compared with HB0176S03 obtain approval to engage in the trust business ]than for a federally chartered depository institution of the same class.

Section 7-5-1057-5-105, which is renumbered from Section 7-5-4 is renumbered and amended to read:

[7-5-4] 7-5-105.7-5-105 .

(1) [ Any] A trust company [which] that desires to withdraw from and discontinue doing [a[ a ]trust business shall furnish to the commissioner satisfactory evidence of [its] the trust company's release and discharge from all the obligations and trusts [undertaken by it, and ] the trust company undertakes.

(2) [after the company has furnished that evidence ] After the trust company provides the evidence required by Subsection (1) to the commissioner, the commissioner shall revoke [his[ his certificate of authority ] the trust company's permit to [do a] engage in trust business [previously[ previously issued to that trust company, and ] in this state.

(a)- [be14 permitted- toEnrolled useCopy andH.B. may not ]use the word "trust" in [its] the trust company's corporate name or in connection with [its] the trust company's business[, nor ] ;

176 (a) [be permitted to use and may not ]use the word "trust" in [its] the trust company's corporate name or in connection with [its] the trust company's business[, nor ] ;

Section 7-5-1067-5-106, which is renumbered from Section 7-5-5 is renumbered and amended to read:

[7-5-5] 7-5-106.7-5-106 .

Revocation of trust authority -- Procedure--Procedure -- Violations.

(1)(1)(a) (a) The commissioner may issue and serve upon a trust company a notice of intent to revoke the authority of the trust company to exercise the powers granted by this chapter, if, in the commissioner's opinion, the trust company:

- 15 - HB0176 compared with HB0176S03 (iii) has failed, for a period of five consecutive years, to exercise the powers granted by this chapter;

(2)(2)(a) (a) If the trust company or [its] the trust company's representative does not appear at the hearing, the commissioner may consider the trust company to be in default, and may issue a revocation order.

(c) Any order issued under this section permits the trust company to continue to service all- previously15 accepted- trustH.B. accounts pending [their] the trust accounts' expeditious divestiture or termination.

176 Enrolled Copy all previously accepted trust accounts pending [their] the trust accounts' expeditious divestiture or termination.

- 16 - HB0176 compared with HB0176S03 (5) If a certified public accountant described in Subsection 7-5-101(4)(b)(iv) violates Title 75B, Trusts, the certified public accountant:

Section 7-5-1077-5-107, which is renumbered from Section 7-5-6 is renumbered and amended to read:

[7-5-6] 7-5-107.7-5-107 .

(2)- [no16 ]- AEnrolled creditorCopy orH.B. stockholder of [any such] a trust company [shall be] is not entitled to disclosure or knowledge of [any such] a communication or writing described in Subsection (1), [except that the ] unless the creditor or stockholder is:

176 (2) [no ] A creditor or stockholder of [any such] a trust company [shall be] is not entitled to disclosure or knowledge of [any such] a communication or writing described in Subsection (1), [except that the ] unless the creditor or stockholder is:

- 17 - HB0176 compared with HB0176S03 (3) [that in any suit or ] In a proceeding relating to the existence, condition, management or administration of [the] an account described in Subsection (1), [the court in which the suit is pending may] a court may require disclosure of [any such] the communication or writing.

Section 7-5-1087-5-108, which is renumbered from Section 7-5-7 is renumbered and amended to read:

[7-5-7] 7-5-108.7-5-108 .

[(2)] (3) If the instrument creating an agency or fiduciary account [contains provisions authorizing] authorizes the trust company, [its] the trust company's officers, or [its] the trust company's directors to exercise[ their] discretion [in the matter of] over investments, the trust company, the trust company's officers, or the trust company's directors may invest- money17 [held]- theH.B. trust company holds in the trust account under that instrument [may be invested ]only in [those classes] a class of securities [which are approved by the directors of the trust company or a committee of directors appointed for that purpose] that the directors of the trust company, or a committee of directors that the directors appoint, approve.[ ] (4) If a trust company acts in [any] an agency or a fiduciary capacity under appointment by a court with jurisdiction, [it] the trust company shall make and account for the investments according to Title 75B, Trusts, unless the underlying instrument provides otherwise.

[(3)]176 (5)Enrolled (a)Copy [Moneyinvest receivedmoney or[held] held]the A trust company thatholds isin also a depository institution may deposit into the trust company'saccount commercialunder department or savings department money that theinstrument trust[ companymay holdsbe orinvested receives]only asin an[those agentclasses] or a fiduciaryclass [byof anysecurities trust[which companyare whichapproved isby alsothe adirectors depositoryof institution,the ]whethertrust forcompany investment or distribution,a [maycommittee beof depositeddirectors inappointed thefor commercialthat departmentpurpose] or savings department of that trust company ]to the creditdirectors of [its] the trust company'scompany, trustor department.[a ]committee -of 18directors -that HB0176 compared with HB0176S03 (b) [Whenever the moneydirectors soappoint, depositedapprove.[ in]] When(4) theIf money that a trust company deposits,acts in accordance[any] withan Subsectionagency (5)(a),or into a fiduciary orcapacity managingunder agencyappointment accountby [exceed]a exceedscourt thewith amountjurisdiction, of[it] federal deposit insurance applicable to that fiduciary or managing agency account, the trust company shall delivermake toand theaccount trustfor department or put under [its] the trustinvestments department'saccording controlto collateralTitle security75B, asTrusts, [outlined]unless described in [Regulation 9.10 of the Comptrollerunderlying ofinstrument theprovides Currency]otherwise. 12 C.F.R.

[(3)] (5)(a) [Money received or held] A trust company that is also a depository institution may deposit into the trust company's commercial department or savings department money that the trust company holds or receives as an agent or a fiduciary [by any trust company which is also a depository institution, ]whether for investment or distribution, [may be deposited in the commercial department or savings department of that trust company ]to the credit of [its] the trust company's trust department.[ ] (b) [Whenever the money so deposited in] When the money that a trust company deposits, in accordance with Subsection (5)(a), into a fiduciary or managing agency account [exceed] exceeds the amount of federal deposit insurance applicable to that fiduciary or managing agency account, the trust company shall deliver to the trust department or put under [its] the trust department's control collateral security as [ outlined] described in [Regulation 9.10 of the Comptroller of the Currency] 12 C.F.R.

[(b)] (6)(6)(a) (a) [Money received or held] A trust company may deposit in an affiliated depository- institution18 money- thatEnrolled aCopy trustH.B. company receives or holds as agent or fiduciary[ by a trust company], whether for investment or distribution[, may be deposited in an affiliated depository institution].

(b)176 [depository Wheneverinstitution the money so deposited in] If money that a trust company deposits,receives inor accordanceholds withas Subsectionagent (6)(a), into a fiduciary or managingfiduciary[ agencyby accounta [exceed]trust exceedscompany], thewhether amountfor ofinvestment federal deposit insurance applicable to that account, the depository institution shall deliver to the trust company or putdistribution[, undermay [its]be thedeposited trust company's control collateral security as [outlined in Regulationan 9.10affiliated ofdepository theinstitution]. Comptroller of the Currency] described in 12 C.F.R.

(b) [ Whenever the money so deposited in] If money that a trust company deposits, in accordance with Subsection (6)(a), into a fiduciary or managing agency account [ exceed] exceeds the amount of federal deposit insurance applicable to that account, the depository institution shall deliver to the trust company or put under [its] the trust company's control collateral security as [outlined in Regulation 9.10 of the Comptroller of the Currency] described in 12 C.F.R.

and[ ] - 19 - HB0176 compared with HB0176S03 (ii) [deposits ]in the event of insolvency of the depository institution, deposits the trust company makes shall be treated as other general deposits are treated.

[(4)] (7) In carrying out all aspects of [its] the trust company's trust business, a trust company [shall[ shall have] has all the powers, privileges, and duties as set forth in Sections 75B-2-813 and 75B-2-814 with respect to trustees, whether [or not ]the trust company [is acting] acts as a trustee as defined in Section 75B-1-101.

Section 7-5-1097-5-109, which is renumbered from Section 7-5-8 is renumbered and amended to read:

[7-5-8] 7-5-109.7-5-109 .

(1) A trust company exercising the powers to act as an agent or fiduciary under this chapter shall{:}[shall[ ] {(a)} :

and[ shall ] (b)- keep19 a- separateH.B. set of books and records showing in proper detail [all transactions engaged in under authority of] each transaction in which the trust company engages in accordance with this chapter.

176 Enrolled Copy (b) keep a separate set of books and records showing in proper detail [all transactions engaged in under authority of] each transaction in which the trust company engages in accordance with this chapter.

Section 7-5-1107-5-110, which is renumbered from Section 7-5-9 is renumbered and amended to read:

- 20 - HB0176 compared with HB0176S03 [7-5-9] 7-5-110.7-5-110 .

Section- 14.20 - Enrolled Copy H.B.

176 Section 7-5-11114. is renumbered and amended to read:

[7-5-10]Section 7-5-111.7-5-111, which is renumbered from Section 7-5-10 is renumbered and amended to read:

Lending[7-5-10] trust7-5-111 funds. to trust company, officer, director, or employee {as } a felony.

Lending trust funds to trust company, officer, director, or employee a felony.

- 21 - HB0176 compared with HB0176S03 (b) [or by ]a person authorized to [give that permission] grant authorization to the trust company to lend funds to the person grants authorization;

Section 7-5-1127-5-112, which is renumbered from Section 7-5-11 is renumbered and amended to read:

[7-5-11] 7-5-112.7-5-112 .

(b) use funds the trust company holds as an agent or fiduciary to acquire property from the- trust21 company- orH.B. any of the trust company's directors, officers, or employees;

176 Enrolled Copy the trust company or any of the trust company's directors, officers, or employees;

(3)(3)(a) (a) [Every ] A trust company shall adopt written policies and procedures regarding decisions or recommendations to purchase or sell [any] a security [to facilitate compliance] in accordance with federal and state securities laws.[ ] - 22 - HB0176 compared with HB0176S03 (b) [These policies and procedures, in particular, ] The policies and procedures described in Subsection (3)(a) shall prohibit the trust company from using material inside information in connection with any decision or recommendation to purchase or sell any security.

Section 7-5-1137-5-113, which is renumbered from Section 7-5-12 is renumbered and amended to read:

[7-5-12] 7-5-113.7-5-113 .

(a)(a)(i) (i) [make a suitable ] conduct an audit of the trust business operations of the [institution][ institution] trust company;

(2) [ A ] Upon request, the committee of the board of directors shall make available a report of the audit described in Subsection (1), [together with the action taken thereon] including any action the committee of the board of directors takes as a result of the audit, [shall[ shall be made available ]to the commissioner, the commissioner's examiners, or the examiners- of22 other- trustEnrolled companyCopy regulatingH.B. agencies[ upon request].

176 examiners of other trust company regulating agencies[ upon request].

Section 7-5-1147-5-114, which is renumbered from Section 7-5-13 is renumbered and amended to read:

[7-5-13] 7-5-114.7-5-114 .

and - 23 - HB0176 compared with HB0176S03 (b) participate in collective investment funds established by an affiliate of the trust company, if:

(3)(3)(a) (a) Unless ordered to do so by a court, a trust company operating collective investment funds is not required to render a court accounting [with regard to those funds] for the collective investment funds.

Section 7-5-1157-5-115, which is renumbered from Section 7-5-14 is renumbered and amended to read:

[7-5-14]- 7-5-115.23 - H.B.

176 Enrolled Copy [7-5-14] 7-5-115 .

and - 24 - HB0176 compared with HB0176S03 (B) organized solely for the purpose of conducting all or any portion of the trust business of that trust company;

(a)(a)(i) (i) merge or consolidate with another eligible trust company;

(3)(3)(a) (a) Subject to Subsection (3)(b), upon final approval by the commissioner of [any] a merger, a consolidation, an acquisition of control, an acquisition of assets, an assumption of liabilities, or a reorganization, and upon written notice of [this] the final approval- to24 [all- persons]Enrolled eachCopy personH.B. entitled to and then receiving trust accountings from the transferring or reorganizing trust company, the resulting or acquiring trust company shall, without court proceedings or a court order, succeed to[ ] :

176 approval to [all persons] each person entitled to and then receiving trust accountings from the transferring or reorganizing trust company, the resulting or acquiring trust company shall, without court proceedings or a court order, succeed to[ ] :

(b)(b)(i) - 25 - HB0176 compared with HB0176S03 (i) Except as provided otherwise in the relevant trust instrument, [any] an interested person may, not more than 30 days after [receipt of ] the day on which the interested person receives written notice of the merger, consolidation, acquisition, transfer, or reorganization, petition [any] a court [of competent] with jurisdiction to appoint another or succeeding trust company with respect to [any] an agency or fiduciary relationship affecting that interested person[, ] .

Section 7-5-1167-5-116, which is renumbered from Section 7-5-15 is renumbered and amended to read:

[7-5-15] 7-5-116.7-5-116 .

7-18a-302.7-18a-302 .

7-22-101.7-22-101 .

(a) "Escrow" means an agreement, express or implied, that provides for one or more parties- to25 deliver- orH.B. entrust money, a certificate of deposit, a security, a negotiable instrument, a deed, or other property or asset to another person to be held, paid, or delivered in accordance with terms and conditions prescribed in the agreement.

176 Enrolled Copy parties to deliver or entrust money, a certificate of deposit, a security, a negotiable instrument, a deed, or other property or asset to another person to be held, paid, or delivered in accordance with terms and conditions prescribed in the agreement.

- 26 - HB0176 compared with HB0176S03 (a) a trust company authorized to engage in the trust business in Utah in accordance with Chapter 5, Trust Business;

16-15-102.16-15-102 .

31A-23a-406.31A-23a-406 .

(a) "Automated clearing house network" or "ACH network" means a national electronic funds transfer system regulated by the Federal Reserve and the Office of the Comptroller- of26 the- Currency.Enrolled Copy H.B.

176 Comptroller of the Currency.

and - 27 - HB0176 compared with HB0176S03 (ii) the escrow subline of authority;

(g)- earnings27 on- moneyH.B. held in escrow may be paid out of the trust account to any person in accordance with the conditions of the escrow;

176 Enrolled Copy (g) earnings on money held in escrow may be paid out of the trust account to any person in accordance with the conditions of the escrow;

and - 28 - HB0176 compared with HB0176S03 (i) the individual title insurance producer or agency title insurance producer shall maintain a physical office in Utah staffed by a person with an escrow subline of authority who processes the escrow.

(4)(4)(a) (a) Subsection (2)(c) does not apply if the transaction is for the transfer of real property from the School and Institutional Trust Lands Administration.

(7) (a) A check from the trust account described in Subsection (2)(d) may not be drawn, executed, or dated, or money otherwise disbursed unless the segregated trust account from which money is to be - 2928 - HB0176Enrolled comparedCopy withH.B. HB0176S03 disbursed contains a sufficient credit balance consisting of collected and cleared money at the time the check is drawn, executed, or dated, or money is otherwise disbursed.

176 (7)(a) A check from the trust account described in Subsection (2)(d) may not be drawn, executed, or dated, or money otherwise disbursed unless the segregated trust account from which money is to be disbursed contains a sufficient credit balance consisting of collected and cleared money at the time the check is drawn, executed, or dated, or money is otherwise disbursed.

(B)- except29 as- aH.B. function of the ACH network process, the transferred funds are not subject to comingling or third party access during the transfer process;

-176 30Enrolled -Copy HB0176(B) comparedexcept withas HB0176S03a (C)function of the ACH network process, the transferred funds are depositednot intosubject theto titlecomingling insuranceor producer'sthird trustparty accountaccess andduring arethe availabletransfer forprocess; disbursement;

(C) the transferred funds are deposited into the title insurance producer's trust account and are available for disbursement;

31A-23a-409.31A-23a-409 .

(1)(1)(a) (a) Subject to Subsection (7), a licensee is a trustee for money that is paid to, received by,- or30 collected- byEnrolled aCopy licenseeH.B. for forwarding to insurers or to insureds.

(b)176 (i)by, Exceptor ascollected providedby in Subsection (1)(b)(ii), a licensee mayfor notforwarding commingleto trustinsurers fundsor with:to insureds.

(b)(i) Except as provided in Subsection (1)(b)(ii), a licensee may not commingle trust funds with:

or - 31 - HB0176 compared with HB0176S03 (B) money held in any other capacity.

(d)(d)(i) (i) Unless money is sent to the appropriate payee by the close of the next business day after their receipt, the licensee shall deposit them in an account authorized under Subsection (2).

(5) A depository institution or other organization holding trust funds under this section may not- offset31 or- impoundH.B. trust account funds against debts and obligations incurred by the licensee.

-176 32Enrolled -Copy HB0176 compared with HB0176S03 (6) A licensee who, not beingoffset lawfully entitled to do so, diverts or appropriatesimpound anytrust portionaccount offunds theagainst moneydebts heldand underobligations Subsectionincurred (1)by to the licensee'slicensee. own use, is guilty of theft under Title 76, Chapter 6, Part 4, Theft.

(6) A licensee who, not being lawfully entitled to do so, diverts or appropriates any portion of the money held under Subsection (1) to the licensee's own use, is guilty of theft under Title 76, Chapter 6, Part 4, Theft.

59-10-202.59-10-202 .

(d) the amount withdrawn under Title 53H, Chapter 10, Utah Education Savings, from the account of a resident or nonresident estate or trust that is an account owner as defined in Section 53H-10-101, for the taxable year for which the amount is withdrawn,- if32 that- amountEnrolled withdrawnCopy fromH.B. the account of the resident or nonresident estate or trust that is the account owner:

-176 33withdrawn, -if HB0176that comparedamount withwithdrawn HB0176S03from (i)the account of the resident or nonresident estate or trust that is notthe expendedaccount for:owner:

(i) is not expended for:

(iv)- the33 trustee- ofH.B. the trust is a trust company as that term is defined in [Subsection 7-5-1(1)(d)] Section 7-5-101;

-176 34Enrolled -Copy HB0176(iv) compared with HB0176S03 (v) the amounttrustee subtractedof under this Subsection (2)(b) is reduced to the extenttrust the settlor or any other person is treateda as an owner of any portion of the trust undercompany Subtitleas A,that Subchapterterm J,is Subpartdefined Ein of[Subsection the7-5-1(1)(d)] InternalSection Revenue7-5-101; Code;

(v) the amount subtracted under this Subsection (2)(b) is reduced to the extent the settlor or any other person is treated as an owner of any portion of the trust under Subtitle A, Subchapter J, Subpart E of the Internal Revenue Code;

(i)- received34 by- aEnrolled residentCopy orH.B. nonresident estate or trust if that amount is derived from a deceased enrolled member of an American Indian tribe;

and176 -(i) 35received -by HB0176a comparedresident withor HB0176S03nonresident (ii)estate toor thetrust extentif that theamount state is notderived authorizedfrom or permitted to impose a taxdeceased underenrolled thismember partof onan thatAmerican amountIndian intribe; accordance with:

and (ii) to the extent that the state is not authorized or permitted to impose a tax under this part on that amount in accordance with:

(3) Notwithstanding Subsection (1)(b), interest from bonds, notes, and other evidences of indebtedness- issued35 by- anH.B. entity described in Subsections (1)(b)(i)(A) through (D) may not be added to unadjusted income of a resident or nonresident estate or trust if, as annually determined by the commission:

-176 36Enrolled -Copy HB0176indebtedness comparedissued withby HB0176S03 (a) for an entity described in SubsectionSubsections (1)(b)(i)(A) orthrough (B),(D) themay entitynot andbe alladded ofto theunadjusted politicalincome subdivisions, agencies, or instrumentalities of thea entityresident door notnonresident imposeestate aor taxtrust basedif, onas incomeannually ondetermined anyby part of the bonds,commission: notes, and other evidences of indebtedness of this state;

(a) for an entity described in Subsection (1)(b)(i)(A) or (B), the entity and all of the political subdivisions, agencies, or instrumentalities of the entity do not impose a tax based on income on any part of the bonds, notes, and other evidences of indebtedness of this state;

or (ii)(ii)(A) (A) the state in which the entity is located;

(4)(4)(a) (a) A subtraction for an amount described in Subsection (2)(c) is allowed only if:

(c)- (i)36 The- governorEnrolled shallCopy reportH.B. to the commission by no later than February 1 of each year regarding whether or not an agreement meeting the requirements of this Subsection (4) is in effect.

-176 37(c)(i) -The HB0176governor comparedshall withreport HB0176S03to (ii) If an agreement meeting the requirementscommission ofby thisno Subsectionlater (4)than isFebruary terminated,1 theof subtractioneach permittedyear underregarding Subsectionwhether (2)(c)or is not allowedan foragreement taxablemeeting years beginning on or after the Januaryrequirements followingof thethis terminationSubsection of(4) theis agreement.in effect.

(ii) If an agreement meeting the requirements of this Subsection (4) is terminated, the subtraction permitted under Subsection (2)(c) is not allowed for taxable years beginning on or after the January 1 following the termination of the agreement.

75B-1-101.75B-1-101 .

(14)- "Guardian"37 means- theH.B. same as that term is defined in Section 75-1-201.

176 Enrolled Copy (14) "Guardian" means the same as that term is defined in Section 75-1-201.

- 38 - HB0176 compared with HB0176S03 (16) "Income" means the same as that term is defined in Section 75A-5-102.

(33)(33)(a) (a) "Settlor" means a person, including a testator, who creates, or contributes property to, a trust.

(38)(38)(a) (a) "Trust" means:

- 39 - HB0176 compared with HB0176S03 (ii) an express trust, private or charitable, with additions thereto, wherever and however- created;38 - Enrolled Copy H.B.

176 however created;

75B-3-107.75B-3-107 .

- 40 - HB0176 compared with HB0176S03 [(1)] (a) a payback provision in the terms of a trust necessary to comply with the Medicaid- reimbursement39 requirements- inH.B. Section 1917 of the Social Security Act, 42 U.S.C.

176 Enrolled Copy Medicaid reimbursement requirements in Section 1917 of the Social Security Act, 42 U.S.C.

1396p(d)(4)1396p(d)(4)(A), (A), as amended, and any related regulations;

Effective date.

2-27-26 10:49 AM - 4140 -