HS HCS HB 822 -- BANKING (Liese)

This substitute contains various provisions relating to
banking.  The substitute:

(1)  Specifies the formula to be used to calculate the pro rata
share of the tax credit for bank tax paid by S corporation
shareholders of banks and bank holding companies.  Shareholders
may carry forward the tax credit for up to 5 years;

(2)  Allows bank and trust company directors who are not
physically present at directors meetings to be counted towards a
quorum under certain conditions; if the bank or trust company
has a composite rating of 1 or 2 in the CAMELS (capital, assets,
management, earnings, liquidity, sensitivity) rating system; the
meeting is not attended by representatives of the bank or trust
company state or federal regulator; and any director not
physically present has to have a signed affidavit stating that
he or she received formal notice of the meeting and of the
information being presented;

(3)  Allows debtors' information submitted at board meetings to
be masked by code for directors not physically present at board
meetings;

(4)  Allows trusts or other fiduciary instruments to specify
whether a trustee or other fiduciary may invest in mutual funds;

(5)  Expands the definition of the term "principal balance" in
the Motor Vehicle Time Sales Act;

(6)  Exempts leases entered into by lessors which are financial
institutions in commercial lease transactions of at least
$25,000 from the requirement that deposits by personal property
lessees be returned to the lessee or applied in accordance with
the agreement at the end of the lease term;

(7)  Allows trustees to borrow money from any person, including
themselves, which will be repaid or secured by trust assets.
Trustees are permitted to employ or contract with certain
persons if they are affiliated with the trustee;

(8)  Allows courts or other grantors to establish inter vivos
trusts for the benefit of minors or disabled persons if, upon
the person's death, the state is reimbursed for Medicaid
expenses and any creditors are paid for the person's care.
Trustees of any trusts created prior to the effective date of
this substitute are not liable if the trust has insufficient
property to reimburse the state or creditors;

(9)  Authorizes the establishment of a trust for the benefit of
a protectee, minor, or disabled person under the provisions of
the Missouri Family Trust Fund;

(10)  Allows court judgments to include affirmative or other
relief for plaintiffs as well as defendants; and

(11)  Permits S corporation shareholders to file a substitute
bank franchise tax and take a tax credit against their state
income tax return;

(12)  Prohibits making false statements regarding identity,
address, or employment for the purpose of obtaining a credit or
debit card.  This substitute also prohibits using another
person's identifying information for the purpose of acquiring
credit, goods, or services without the authorization and consent
of that person;

(13)  Repeals the schedule of fees credit unions pay to support
the Division of Credit Unions and requires the Director of the
Division of Credit Unions to determine the fee, according to a
new maximum fee schedule.  No more than 15% of examination and
administration expenses, supporting services, and an amount
sufficient to cover the cost of fringe benefits will be paid by
the credit unions by payment of the annual fees according to the
new maximum fee schedule;

(14)  Repeals the current authorization of the Director of
Credit Unions to assess each credit union with a surcharge to
complete the director's office budget, including support
services and fringe benefits for the director's office;

(15)  Repeals the requirement that the amount for supporting
services, fringe benefits, and any amount remaining in the
Division of Credit Unions Fund exceeding 5% of the amount
assessed to credit unions be returned to the General Revenue
Fund; and

(16)  Allows any amount remaining in the Division of Credit
Unions Fund to remain in the fund, subject to appropriation, to
be applied against supporting services and fringe benefits
expenditures and to be applied toward the reduction of the
amount assessed to the credit unions in the succeeding fiscal
year;

The portion of the substitute pertaining to credit unions
contains an emergency.

FISCAL NOTE:  Estimated Net Cost to General Revenue Fund is
Unknown for FY 2000, FY 2001, and FY 2002.  Not expected to
exceed $100,000 annually.  Estimated Net Fiscal Income to
Division of Credit Unions Fund of $150,435 in FY 2000, FY 2001,
and FY 2002.

HCS HB 822 -- BANKING

SPONSOR:  Liese

COMMITTEE ACTION:  Voted "do pass" by the Committee on Banks and
Financial Institutions by a vote of 21 to 1.

This substitute contains various provisions relating to
banking.  The substitute:

(1)  Specifies the formula to be used to calculate the pro rata
share of the tax credit for bank tax paid by S corporation
shareholders of banks and bank holding companies.  Shareholders
may carry forward the tax credit for up to 5 years;

(2)  Allows bank and trust company directors who are not
physically present at directors meetings to be counted towards a
quorum under certain conditions; if the bank or trust company
has a composite rating of 1 or 2 in the CAMELS (capital, assets,
management, earnings, liquidity, sensitivity) rating system; the
meeting is not attended by representatives of the bank or trust
company state or federal regulator; and any director not
physically present has to have a signed affidavit stating that
he or she received formal notice of the meeting and of the
information being presented;

(3)  Allows debtors' information submitted at board meetings to
be masked by code for directors not physically present at board
meetings;

(4)  Allows trusts or other fiduciary instruments to specify
whether a trustee or other fiduciary may invest in mutual funds;

(5)  Expands the definition of the term "principal balance" in
the Motor Vehicle Time Sales Act;

(6)  Exempts leases entered into by lessors which are financial
institutions in commercial lease transactions of at least
$25,000 from the requirement that deposits by personal property
lessees be returned to the lessee or applied in accordance with
the agreement at the end of the lease term;

(7)  Allows trustees to borrow money from any person, including
themselves, which will be repaid or secured by trust assets.
Trustees are permitted to employ or contract with certain
persons if they are affiliated with the trustee;

(8)  Allows courts or other grantors to establish inter vivos
trusts for the benefit of minors or disabled persons if, upon
the person's death, the state is reimbursed for Medicaid
expenses and any creditors are paid for the person's care.
Trustees of any trusts created prior to the effective date of
this substitute are not liable if the trust has insufficient
property to reimburse the state or creditors;

(9)  Authorizes the establishment of a trust for the benefit of
a protectee, minor, or disabled person under the provisions of
the Missouri Family Trust Fund;

(10)  Allows court judgments to include affirmative or other
relief for plaintiffs as well as defendants; and

(11)  Permits S corporation shareholders to file a substitute
bank franchise tax and take a tax credit against their state
income tax return.

FISCAL NOTE:  Estimated Net Decrease to General Revenue Fund of
Unknown in FY 2000, Unknown in FY 2001, and Unknown in FY 2002.
Not expected to exceed $100,000 annually.

PROPONENTS:  Supporters say that this bill is needed to update
the statutes to coincide with federal law.

Testifying for the bill were Representative Liese; and Missouri
Bankers Association.

OPPONENTS:  There was no opposition voiced to the committee.

Bob Dominique, Legislative Analyst

HB 822 -- Banking

Sponsor:  Liese

This bill contains various provisions relating to banking.  The
bill:

(1)  Adds to the list of acceptable securities which the State
Treasurer requires as security for state deposits custodial
accounts of qualified investments.  Only custodial receipts are
required to be delivered to the State Treasurer;

(2)  Specifies the formula to be used to calculate the pro rata
share of the tax credit for bank tax paid by S corporation
shareholders of banks and bank holding companies.  Shareholders
may carry forward the tax credit for up to 5 years;

(3)  Allows bank and trust company directors who are not
physically present at directors meetings to be counted towards a
quorum under certain conditions; if the bank or trust company
has a composite rating of 1 or 2 in the CAMELS (capital, assets,
management, earnings, liquidity, sensitivity) rating system; the
meeting is not attended by representatives of the bank or trust
company state or federal regulator; and any director not
physically present has to have a signed affidavit stating that
he or she received formal notice of the meeting and of the
information being presented;

(4)  Allows debtors' information submitted at board meetings to
be redacted or masked by code for directors not physically
present at board meetings;

(5)  Allows trusts or other fiduciary instruments to specify
whether a trustee or other fiduciary may invest in mutual funds;

(6)  Expands the definition of the term "principal balance" in
the Motor Vehicle Time Sales Act;

(7)  Exempts leases entered into by lessors which are financial
institutions in commercial lease transactions of at least
$25,000, from the requirement that deposits by personal property
lessees be returned to the lessee or applied in accordance with
the agreement at the end of the lease term;

(8)  Allows trustees to borrow money from any person, including
themselves, which will be repaid or secured by trust assets.
Trustees are permitted to employ or contract with certain
persons if they are affiliated with the trustee;

(9)  Allows courts or other grantors to establish inter vivos
trusts for the benefit of minors or disabled persons if, upon
the person's death, the state is reimbursed for Medicaid
expenses and any creditors are paid for the person's care.
Trustees of any trusts created prior to the effective date of
this bill are not liable if the trust has insufficient property
to reimburse the state or creditors;

(10)  Authorizes the establishment of a trust for the benefit of
a protectee, minor, or disabled person under the provisions of
the Missouri Family Trust Fund;

(11)  Allows court judgments to include affirmative or other
relief for plaintiffs as well as defendants; and

(12)  Permits S corporation shareholders to file a substitute
bank franchise tax and take a tax credit against their state
income tax return.