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             48.01, subdivision 1; 48.36, subdivision 1; 48.37; 
  1.9             48.39; 48.41; 48.42; 48.43; 48.44; 48.45; 48.46; 
  1.10            48.47; 50.085, subdivision 14; 303.25, subdivision 3; 
  1.11            525.551, subdivision 6; and 525.56, subdivision 4; 
  1.12            Minnesota Statutes 1997 Supplement, sections 16A.6701, 
  1.13            subdivision 1; and 48.01, subdivision 2; proposing 
  1.14            coding for new law as Minnesota Statutes, chapter 48A; 
  1.15            repealing Minnesota Statutes 1996, sections 48.38; 
  1.16            48.475; 48.65; 48.66; 48.67; 48.68; 48.69; 48.70; 
  1.17            48.71; 48.72; 48.73; 48.75; 48.76; 48.77; 48.78; 
  1.18            48.79; 48.80; 48.81; 48.82; 48.83; 48.84; 48.841; 
  1.19            48.845; 48.846; 48.85; and 48.86; and Minnesota 
  1.20            Statutes 1997 Supplement, section 48.476. 
  1.21  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.22     Section 1.  Minnesota Statutes 1997 Supplement, section 
  1.23  16A.6701, subdivision 1, is amended to read: 
  1.24     Subdivision 1.  [STATE LICENSE AND SERVICE FEES.] For 
  1.25  purposes of section 16A.67, subdivision 3, and this section, the 
  1.26  term "state license and service fees" means, and refers to, all 
  1.27  license fees, service fees, and charges imposed by law and 
  1.28  collected by any state officer, agency, or employee, which are 
  1.29  listed below or which are defined as departmental earnings under 
  1.30  section 16A.1285, subdivision 1, and the use of which is not 
  1.31  otherwise restricted by law, and which are not required to be 
  1.32  credited or transferred to a fund other than the general fund:  
  1.33     Minnesota Statutes 1994, sections 3.9221; 5.12; 5.14; 5.16; 
  2.1   5A.04; 6.58; 13.03, subdivision 10; 16A.155; 16A.48; 16A.54; 
  2.2   16A.72; 16B.59; 16B.70; 17A.04; 18.51, subdivision 2; 18.53; 
  2.3   18.54; 18C.551; 19.58; 19.64; 27.041, subdivision 2, clauses (d) 
  2.4   and (e); 27.07, subdivision 5; 28A.08; 32.071; 32.075; 32.392; 
  2.5   35.71; 35.824; 35.95; 41C.12; 45.027, subdivisions 3 and 6; 
  2.6   46.041, subdivision 1; 46.131, subdivisions 2, 7, 8, 9, and 10; 
  2.7   47.101, subdivision 2; 47.54, subdivisions 1 and 4; 47.62, 
  2.8   subdivision 4; 47.65; ~~48.475, subdivision 1;~~ 48.61, subdivision 
  2.9   7; 48.93; 48A.16; 49.36, subdivision 1; 52.01; 52.203; 53.03, 
  2.10  subdivisions 1, 5, and 6; 53.09, subdivision 1; 53A.03; 53A.05, 
  2.11  subdivision 1; 53A.081, subdivision 3; 54.294, subdivision 1; 
  2.12  55.04, subdivision 2; 55.095; 56.02; 56.04; 56.10; 59A.03, 
  2.13  subdivision 2; 59A.06, subdivision 3; 60A.14, subdivisions 1 and 
  2.14  2; 60A.23, subdivision 8; 60K.19, subdivision 5; 65B.48, 
  2.15  subdivision 3; 70A.14, subdivision 4; 72B.04, subdivision 10; 
  2.16  79.251, subdivision 5; 80A.28, subdivisions 1, 2, 3, 4, 5, 6, 7, 
  2.17  7a, 8, and 9; 80C.04, subdivision 1; 80C.07; 80C.08, subdivision 
  2.18  1; 80C.16, subdivisions 2 and 3; 80C.18, subdivision 2; 82.20, 
  2.19  subdivision 8 and 9; 82A.04, subdivision 1; 82A.08, subdivision 
  2.20  2; 82A.16, subdivisions 2 and 6; 82B.09, subdivision 1; 83.23, 
  2.21  subdivisions 2, 3, and 4; 83.25, subdivisions 1 and 2; 83.26, 
  2.22  subdivision 2; 83.30, subdivision 2; 83.31, subdivision 2; 
  2.23  83.38, subdivision 2; 85.052; 85.053; 85.055; 88.79, subdivision 
  2.24  2; 89.035; 89.21; 115.073; 115.77, subdivisions 1 and 2; 116.41, 
  2.25  subdivision 2; 116C.69; 116C.712; 116J.9673; 125.08; 136C.04, 
  2.26  subdivision 9; 155A.045; 155A.16; 168.27, subdivision 11; 
  2.27  168.33, subdivisions 3 and 7; 168.54; 168.67; 168.705; 168A.152; 
  2.28  168A.29; 169.345; 171.06, subdivision 2a; 171.29, subdivision 2; 
  2.29  176.102; 176.1351; 176.181, subdivision 2a; 177.30; 181A.12; 
  2.30  183.545; 183.57; 184.28; 184.29; 184A.09; 201.091, subdivision 
  2.31  5; 204B.11; 207A.02; 214.06; 216C.261; 221.0355; 239.101; 
  2.32  240.06; 240.07; 240.08; 240.09; 240.10; 246.51; 270.69, 
  2.33  subdivision 2; 270A.07; 272.484; 296.06; 296.12; 296.17; 
  2.34  297F.03; 297.33; 299C.46; 299C.62; 299K.09; 299K.095; 299L.07; 
  2.35  299M.04; 300.49; 318.02; 323.44, subdivision 3; 325D.415; 
  2.36  326.22; 326.3331; 326.47; 326.50; 326.92, subdivisions 1 and 3; 
  3.1   327.33; 331A.02; 332.15, subdivisions 2 and 3; 332.17; 332.22, 
  3.2   subdivision 1; 332.33, subdivisions 3 and 4; 332.54, subdivision 
  3.3   7; 333.055; 333.20; 333.23; 336.9-413; 336A.04; 336A.05; 
  3.4   336A.09; 345.35; 345.43, subdivision 2a; 345.44; 345.55, 
  3.5   subdivision 3; 347.33; 349.151; 349.161; 349.162; 349.163; 
  3.6   349.164; 349.165; 349.166; 349.167; 357.08; 359.01, subdivision 
  3.7   3; 360.018; 360.63; 386.68; and 414.01, subdivision 11; 
  3.8   Minnesota Statutes 1994, chapters 154; 216B; 237; 302A; 303; 
  3.9   308A; 317A; 322A; and 322B; Laws 1990, chapter 593; Laws 1993, 
  3.10  chapter 254, section 7; and Laws 1994, chapter 573, section 4; 
  3.11  Minnesota Rules, parts 1800.0500; 1950.1070; 2100.9300; 
  3.12  7515.0210; and 9545.2000 to 9545.2040. 
  3.13     Sec. 2.  Minnesota Statutes 1996, section 48.01, 
  3.14  subdivision 1, is amended to read: 
  3.15     Subdivision 1.  [WORDS, TERMS, AND PHRASES.] Unless the 
  3.16  language or context clearly indicates that a different meaning 
  3.17  is intended, the term defined in subdivision 2, for the purposes 
  3.18  of sections ~~48.38,~~ 48.56 to 48.59, ~~and 48.84~~ 48A.07, and 48A.08, 
  3.19  has that meaning; and the term defined in subdivision 3, for the 
  3.20  purposes of this chapter, has that meaning. 
  3.21     Sec. 3.  Minnesota Statutes 1997 Supplement, section 48.01, 
  3.22  subdivision 2, is amended to read: 
  3.23     Subd. 2.  [BANKING INSTITUTION.] The term "banking 
  3.24  institution" means any bank, trust company, bank and trust 
  3.25  company, or savings bank which is now or may hereafter be 
  3.26  organized under the laws of this state.  For purposes of 
  3.27  sections ~~48.38, 48.84~~ 48A.07, 48A.08, and 501B.151, subdivision 
  3.28  11, and to the extent permitted by federal law, "banking 
  3.29  institution" includes any national banking association or 
  3.30  affiliate exercising trust powers in this state. 
  3.31     Sec. 4.  Minnesota Statutes 1996, section 48.36, 
  3.32  subdivision 1, is amended to read: 
  3.33     Subdivision 1.  Any state bank having a capital and surplus 
  3.34  of not less than $500,000 may exercise the powers and privileges 
  3.35  conferred by sections ~~48.36 to 48.43~~ 48A.07 and 48A.08, in 
  3.36  addition to all other powers granted by law, upon complying with 
  4.1   the conditions and requirements of those sections, and receiving 
  4.2   the approval of the commissioner of commerce, who may grant or 
  4.3   reject, in the commissioner's judgment, the application of any 
  4.4   bank to acquire trust authority, and in doing so shall take into 
  4.5   consideration the following factors: 
  4.6      (1) The needs of the community for trust service of the 
  4.7   kind applied for and the probable volume of such trust business 
  4.8   available to the bank; 
  4.9      (2) The general condition of the bank, particularly the 
  4.10  adequacy of its net capital and surplus funds in relation to the 
  4.11  character and condition of its assets and to its deposit 
  4.12  liabilities and other corporate responsibilities, including the 
  4.13  proposed exercise of trust powers; 
  4.14     (3) The general character and ability of the management of 
  4.15  the bank; 
  4.16     (4) The nature of the supervision to be given to the 
  4.17  proposed trust activities, including the qualifications and 
  4.18  experience of the members of the proposed trust investment 
  4.19  committee; 
  4.20     (5) The qualifications, experience, and character of the 
  4.21  proposed executive officer or officers of the trust department; 
  4.22     (6) Whether the bank has available competent legal counsel 
  4.23  to advise and pass upon trust matters whenever necessary; and 
  4.24     (7) Any other facts and circumstances that seem proper. 
  4.25     Sec. 5.  Minnesota Statutes 1996, section 48.37, is amended 
  4.26  to read: 
  4.27     48.37 [CERTIFICATES FROM COMMISSIONER.] 
  4.28     In order to exercise the powers herein conferred, any such 
  4.29  bank shall invest and keep invested in one or more of the first, 
  4.30  second, third, fourth, seventh, and eighth classes of authorized 
  4.31  securities, at least 25 percent of its capital, which securities 
  4.32  in the amounts above provided shall be duly assigned, 
  4.33  transferred to, and deposited with the commissioner provided, 
  4.34  however, that no bank and trust shall be required to deposit 
  4.35  securities in excess of $1,000,000, and shall be maintained 
  4.36  unimpaired as a guaranty fund for the integrity of its trusts 
  5.1   and for the faithful discharge of its duties, in connection 
  5.2   therewith, with the right to the bank to collect the income 
  5.3   thereof and to substitute other like authorized securities of 
  5.4   equal amount and value.  The commissioner shall carefully 
  5.5   examine the securities offered for deposit and, if they comply 
  5.6   with all the provisions of law applicable thereto, and, if the 
  5.7   bank making such deposit shall possess the qualifications stated 
  5.8   in section 48.36, shall issue to the bank a certificate stating 
  5.9   that it is qualified to exercise the powers herein conferred, 
  5.10  and, upon the issuance of this certificate and while the same 
  5.11  remains in force, the bank may exercise the powers and 
  5.12  privileges conferred by sections ~~48.36 to 48.43~~ 48A.07 and 
  5.13  48A.08. 
  5.14     In case of any increase in the capital of any bank which 
  5.15  has qualified hereunder, this certificate shall be and become 
  5.16  revoked and the bank shall not thereafter exercise the powers 
  5.17  herein conferred until it shall have deposited the required 
  5.18  proportion of its capital in authorized securities and received 
  5.19  a new certificate that it is qualified hereunder. 
  5.20     Sec. 6.  Minnesota Statutes 1996, section 48.39, is amended 
  5.21  to read: 
  5.22     48.39 [TRUST ACCOUNTS RECORDED.] 
  5.23     Besides its general books of account, it shall keep 
  5.24  separate books of account for all fiduciary accounts.  All funds 
  5.25  and property held by it in a fiduciary capacity shall at all 
  5.26  times be kept separate from its own funds and property, and all 
  5.27  fiduciary funds deposited or held as fiduciary by the bank 
  5.28  awaiting investment shall be carried in a separate account, and 
  5.29  shall not be used by the bank in the conduct of its business, 
  5.30  unless the bank, under authorization by its board of directors, 
  5.31  first delivers to the commissioner of commerce, as collateral 
  5.32  security:  (1) bonds, notes, bills, certificates of indebtedness 
  5.33  or other direct obligations of the United States or its 
  5.34  instrumentalities, or obligations fully guaranteed by the United 
  5.35  States as to principal and interest; or (2) other readily 
  5.36  marketable securities of the classes in which said trust 
  6.1   companies or state banks exercising trust powers are authorized 
  6.2   or permitted to invest trust funds under the laws of this 
  6.3   state.  The securities so deposited as collateral shall be owned 
  6.4   by the bank and shall at all times be at least equal in market 
  6.5   value to the amount of the trust funds so used in the conduct of 
  6.6   the bank's business, and all deposits made by it of such funds 
  6.7   in any other banking institutions shall be deposited as 
  6.8   fiduciary funds, to its credit as fiduciary, and not otherwise.  
  6.9   Every security or property in which the funds held by it as 
  6.10  trustee, executor, administrator, guardian, receiver, or 
  6.11  assignee, or in any other fiduciary capacity are invested, shall 
  6.12  at once upon receipt thereof be immediately entered in the 
  6.13  proper books as belonging to the particular fiduciary account 
  6.14  whose funds have been invested therein.  Any change in such 
  6.15  investment shall be fully specified in and under the account of 
  6.16  the particular fiduciary account to which it belongs so that all 
  6.17  fiduciary funds and property can be readily identified at any 
  6.18  time by any person.  It shall be unlawful for any bank to lend 
  6.19  any officer, director or employee any funds held as fiduciary 
  6.20  under the powers conferred by ~~sections 48.36 to 48.43~~ section 
  6.21  48.37.  Any officer, director or employee to whom such a loan is 
  6.22  made shall be guilty of theft of the amount of such loan from 
  6.23  the time of the making thereof.  Any state bank, when acting in 
  6.24  a fiduciary capacity, either alone or jointly with an individual 
  6.25  or individuals, may, with the consent of such individual 
  6.26  fiduciary or fiduciaries, who are hereby authorized to give such 
  6.27  consent, cause any stocks, securities, or other property now 
  6.28  held or hereafter acquired in such capacity to be registered and 
  6.29  held in the name of a nominee or nominees of such state bank 
  6.30  without mention of the fiduciary relationship.  Any such state 
  6.31  bank shall be liable for any loss occasioned by the acts of any 
  6.32  of its nominees with respect to such stocks, securities or other 
  6.33  property so registered.  
  6.34     Sec. 7.  Minnesota Statutes 1996, section 48.41, is amended 
  6.35  to read: 
  6.36     48.41 [CORPORATE NAME.] 
  7.1      Any such bank which has qualified and obtained a 
  7.2   certificate, as provided in ~~sections 48.36 to 48.43~~ section 
  7.3   48.37, may use in its corporate name or title, in addition to 
  7.4   the word "bank" or other words now permitted by law, the words 
  7.5   "trust" or "trust company," and may display and make use of 
  7.6   signs, symbols, tokens, letterheads, cards, circulars and 
  7.7   advertisements stating or indicating that it is authorized to 
  7.8   transact the business authorized by said sections, and any such 
  7.9   bank using the words "trust" or "trust company" is not required 
  7.10  to use the word "state" in its corporate name.  
  7.11     Sec. 8.  Minnesota Statutes 1996, section 48.42, is amended 
  7.12  to read: 
  7.13     48.42 [BANK MAY BE DESIGNATED AS SAVINGS BANK.] 
  7.14     Any state bank which has qualified under ~~sections 48.36 to~~ 
  7.15  ~~48.43~~ section 48.37 and obtained the certificate therein 
  7.16  provided, and which has established and maintains a savings 
  7.17  department, may use in its name or title, in addition to other 
  7.18  words permitted by law, the words "savings" or "savings bank."  
  7.19  Savings deposits received by any such state bank using the words 
  7.20  "savings" or "savings bank" in its corporate name or title, 
  7.21  shall be invested only in authorized securities, as defined by 
  7.22  law, and the bank shall keep in hand at all times, in addition 
  7.23  to the securities required to be deposited under the provisions 
  7.24  of section 48.37, such securities as deposits in savings banks 
  7.25  may be invested in to an amount at least equal to the savings 
  7.26  deposits, and these securities to the amount of these deposits 
  7.27  shall be representative of and the fund for and applicable first 
  7.28  and exclusively to the payment of the savings deposits.  
  7.29  Deposits received by the bank subject to its right to require 
  7.30  notice of withdrawal evidenced by pass books, shall be deemed 
  7.31  savings deposits.  
  7.32     Sec. 9.  Minnesota Statutes 1996, section 48.43, is amended 
  7.33  to read: 
  7.34     48.43 [BANKS MAY CEASE OPERATIONS; DUTIES OF COMMISSIONER.] 
  7.35     Any state bank which has qualified hereunder may at any 
  7.36  time notify the commissioner, in writing, that it intends to 
  8.1   cease to operate under the provisions of ~~sections 48.36 to 48.43~~ 
  8.2   section 48.37, and thereupon the certificate issued to it, as 
  8.3   provided in ~~sections 48.36 to 48.43~~ section 48.37, shall be 
  8.4   canceled and revoked, and the bank shall thereafter exercise no 
  8.5   power or privilege except those permitted to state banks which 
  8.6   have not qualified hereunder, and the securities deposited with 
  8.7   the commissioner, as provided in section 48.37, shall forthwith 
  8.8   be reassigned and returned to the bank; provided, that no part 
  8.9   of the deposited securities shall be so returned until the bank 
  8.10  shall have eliminated from its corporate name the words "trust," 
  8.11  "trust company," or "savings," nor until it has ceased to hold 
  8.12  any trust or trust office authorized by ~~sections 48.36 to 48.43~~ 
  8.13  section 48.37, nor until all its accounts in any such trust 
  8.14  shall have been settled and allowed and all property held in 
  8.15  trust by it delivered to the persons entitled thereto, nor until 
  8.16  all liabilities incurred by it as trustee, agent, or otherwise, 
  8.17  under the provisions of ~~sections 48.36 to 48.43~~ section 48.37, 
  8.18  and which it could not have incurred unless qualified 
  8.19  thereunder, shall have been discharged; provided, further, that 
  8.20  if the amount of all these liabilities, or the maximum limit 
  8.21  thereof, has been or can be definitely ascertained, the 
  8.22  commissioner may retain only such part of the deposited 
  8.23  securities as shall be at least equal to and as shall be in the 
  8.24  commissioner's opinion sufficient to liquidate the same.  If any 
  8.25  such bank so surrendering its powers hereunder shall have 
  8.26  heretofore used the word "savings" in its corporate name, the 
  8.27  provisions of section 48.42, relating to the investment of 
  8.28  savings deposits and the rights of such depositors, shall remain 
  8.29  operative as to all savings deposits on hand at the date of 
  8.30  surrendering such certificate and until the savings deposits 
  8.31  shall have been paid to the persons entitled thereto.  
  8.32     Sec. 10.  Minnesota Statutes 1996, section 48.44, is 
  8.33  amended to read: 
  8.34     48.44 [BANKS MAY ORGANIZE AS TRUST COMPANY.] 
  8.35     Hereafter state banks which may be organized in the manner 
  8.36  now provided by law may be organized with the additional 
  9.1   authority to exercise the fiduciary powers and privileges set 
  9.2   out in ~~section 48.38~~ sections 48A.07 and 48A.08; provided, that 
  9.3   the capital and surplus of any such bank shall not be less than 
  9.4   $500,000. 
  9.5      Sec. 11.  Minnesota Statutes 1996, section 48.45, is 
  9.6   amended to read: 
  9.7      48.45 [CORPORATE NAMES.] 
  9.8      ~~Any such~~ A bank with the additional authority provided for 
  9.9   in sections 48A.07 and 48A.08 may be organized with a corporate 
  9.10  name which may include the words "trust" or "trust company," in 
  9.11  addition to the word "bank" or other words now permitted by law, 
  9.12  and the word "state" shall not be a required part of the 
  9.13  corporate name of any such state bank.  
  9.14     Sec. 12.  Minnesota Statutes 1996, section 48.46, is 
  9.15  amended to read: 
  9.16     48.46 [AUTHORIZED SECURITIES PURCHASED.] 
  9.17     No state bank hereafter organized with authority to 
  9.18  exercise fiduciary powers pursuant to the provisions of sections 
  9.19  ~~48.44 to 48.46~~ 48A.07 and 48A.08, the corporate name of which 
  9.20  contains the words "trust" or "trust company," shall transact 
  9.21  any banking or trust company business until it shall have 
  9.22  invested in and assigned, transferred to, and deposited with the 
  9.23  commissioner the authorized securities described in and required 
  9.24  by section 48.37, relating to the authorization of existing 
  9.25  state banks to exercise such fiduciary powers, and until the 
  9.26  commissioner of commerce has issued the certificate provided by 
  9.27  section 47.16, and a certificate stating that such bank is 
  9.28  qualified to exercise the fiduciary powers set forth in ~~section~~ 
  9.29  ~~48.38~~ sections 48A.07 and 48A.08. 
  9.30     Sec. 13.  Minnesota Statutes 1996, section 48.47, is 
  9.31  amended to read: 
  9.32     48.47 [BANKING AND TRUST COMPANY BUSINESS.] 
  9.33     After the application of the corporation shall have been 
  9.34  favorably acted on by the department in compliance with sections 
  9.35  46.041 to 46.044, and upon compliance with the terms hereof and 
  9.36  the issuance of such certificates, the bank may commence the 
 10.1   transaction of banking and trust company business and may 
 10.2   exercise, in addition to all the powers and privileges conferred 
 10.3   by law on state banks, the powers and privileges set forth in 
 10.4   ~~section 48.38~~ sections 48A.07 and 48A.08, and the bank shall 
 10.5   thereafter comply with and be subject to all of the provisions 
 10.6   of law relating to state banks exercising such fiduciary powers 
 10.7   and privileges. 
 10.8                           TRUST COMPANIES 
 10.9      Sec. 14.  [48A.01] [ORGANIZATION OF A STATE TRUST COMPANY.] 
 10.10     Subdivision 1.  [ARTICLES OF INCORPORATION.] (a) Subject to 
 10.11  the other provisions of this chapter, three or more persons may 
 10.12  organize and charter a state trust company for purposes of 
 10.13  transacting business as a trust company in conformity with the 
 10.14  applicable laws. 
 10.15     (b) A state trust company may be organized under section 
 10.16  300.025.  If the trust company does not exercise banking powers, 
 10.17  it may exercise the powers of a Minnesota business corporation 
 10.18  reasonably necessary or helpful to enable exercise of its 
 10.19  specific powers under this chapter. 
 10.20     (c) A state trust company may be organized as a limited 
 10.21  liability company if it does not exercise banking powers. 
 10.22     The articles of incorporation or articles of organization 
 10.23  of the company must be signed and acknowledged by each organizer 
 10.24  and must contain: 
 10.25     (1) the name of the state trust company; 
 10.26     (2) the period of its duration, which may be perpetual; 
 10.27     (3) the powers of the state trust company, which may be 
 10.28  stated as: 
 10.29     (i) all powers granted to a state trust company in this 
 10.30  state; or 
 10.31     (ii) a list of the specific powers that the state trust 
 10.32  company chooses and is authorized to exercise; 
 10.33     (4) the aggregate number of shares or membership interests 
 10.34  that the state trust company will be authorized to issue, the 
 10.35  number of classes of shares or membership interests, which may 
 10.36  be one or more, the number of shares or membership interests of 
 11.1   each class if more than one class, and a statement of the par 
 11.2   value of the shares of each class or that the shares or 
 11.3   membership interests are to be without par value; 
 11.4      (5) if the shares or membership interests are to be divided 
 11.5   into classes, the designation of each class and statement of the 
 11.6   preferences, limitations, and relative rights of the shares or 
 11.7   membership interests of each class, which in the case of a 
 11.8   limited trust association may be more fully set forth in the 
 11.9   statement of membership interest; 
 11.10     (6) a provision limiting or denying to participants the 
 11.11  preemptive right to acquire additional or treasury membership 
 11.12  interests or shares of the state trust company; 
 11.13     (7) a provision granting the right of members or 
 11.14  shareholders to cumulative voting in the election of directors 
 11.15  or managers; 
 11.16     (8) the aggregate amount of consideration to be received 
 11.17  for all shares or membership interests initially issued by the 
 11.18  state trust company, and a statement that all authorized 
 11.19  contributions or shares have been subscribed and that all 
 11.20  subscriptions received provide for the consideration to be fully 
 11.21  paid in cash before the charter is issued; 
 11.22     (9) a provision consistent with law that the organizers 
 11.23  elect to set forth in the articles of incorporation or articles 
 11.24  of organization for the regulation of the internal affairs of 
 11.25  the state trust company or that is otherwise required by this 
 11.26  chapter to be set forth in the articles; 
 11.27     (10) the street address of the state trust company's 
 11.28  principal office; and 
 11.29     (11) the number of directors or governors constituting the 
 11.30  initial board, which must not be fewer than five or more than 
 11.31  25, and a statement that management is vested in a board. 
 11.32     Subd. 2.  [DIRECTORS OR MANAGERS; QUALIFICATIONS; 
 11.33  VACANCIES; HOW FILLED.] A majority of the directors or governors 
 11.34  of a trust company must be residents of this state.  Each must 
 11.35  take and subscribe an oath to diligently and honestly perform 
 11.36  the official duties of a director or manager and not knowingly 
 12.1   violate, or permit to be violated, any provision of law relating 
 12.2   to trust companies.  The taking of this oath must be noted on 
 12.3   the minutes of the records of the corporation and filed with the 
 12.4   commissioner.  Failure of a person selected as director to 
 12.5   qualify creates a vacancy in the board.  All vacancies in the 
 12.6   board must be filled by the qualified members.  However, not 
 12.7   more than one-third of the membership of the board may be so 
 12.8   filled in any one year. 
 12.9      Sec. 15.  [48A.02] [APPLICATION FOR STATE TRUST COMPANY 
 12.10  CHARTER.] 
 12.11     Subdivision 1.  [PROCEDURE.] An application for a trust 
 12.12  company charter must be in the form prescribed by the 
 12.13  commissioner.  The procedure in sections 46.041 to 46.045 apply, 
 12.14  except for the conditions in section 46.044, subdivision 1, 
 12.15  clauses (1) to (6). 
 12.16     Subd. 2.  [CONDITIONS.] The commissioner shall grant an 
 12.17  application for a trust company charter if: 
 12.18     (1) the applicants are of good moral character and 
 12.19  financial integrity; 
 12.20     (2) there is reasonable public demand for this trust 
 12.21  company in this location that: 
 12.22     (i) considers the needs of the community for trust service 
 12.23  of the kind applied for and the probable volume of trust 
 12.24  business available to the applicant; and 
 12.25     (ii) the probable volume of business in this location is 
 12.26  sufficient to ensure and maintain the solvency of the new trust 
 12.27  company and the solvency of the existing trust company or trust 
 12.28  companies in the locality; 
 12.29     (3) the commissioner is satisfied the proposed trust 
 12.30  company will be properly and safely managed considering: 
 12.31     (i) the general character and ability of the proposed 
 12.32  management; 
 12.33     (ii) the nature of the supervision to be given to the 
 12.34  proposed trust activities, including the qualifications and 
 12.35  experience of the members of the proposed trust investment 
 12.36  committee; 
 13.1      (iii) the qualifications, experience, and character of the 
 13.2   proposed executive officer or officers of the trust company; and 
 13.3      (iv) whether the trust company will have available 
 13.4   competent legal counsel to advise and pass upon trust matters 
 13.5   whenever necessary; 
 13.6      (4) the commissioner is satisfied that the capital funds 
 13.7   are available and the commissioner may accept any reasonable 
 13.8   demonstration including subscription agreements supported by 
 13.9   current financial statements; and 
 13.10     (5) any other facts and circumstances that the commissioner 
 13.11  considers proper. 
 13.12     The commissioner shall deny an application that does not 
 13.13  satisfy the requirements of this subdivision. 
 13.14     Sec. 16.  [48A.03] [CAPITAL AND SURPLUS REQUIREMENTS OF 
 13.15  TRUST COMPANIES.] 
 13.16     Subdivision 1.  [REQUIRED AMOUNT.] The capital of a trust 
 13.17  company organized under this chapter must be not less than 
 13.18  $500,000.  The trust company must also provide a surplus of at 
 13.19  least 20 percent of its capital in addition to the capital 
 13.20  amounts required by this section.  The capital or the surplus 
 13.21  must not be reduced without the approval of the commissioner of 
 13.22  commerce.  In the case of a trust company organized as a limited 
 13.23  liability company, "capital and surplus" is considered the 
 13.24  "contribution" of its members reflected in the required records 
 13.25  of a limited liability company. 
 13.26     Subd. 2.  [REQUIRED INVESTMENT.] No trust company shall 
 13.27  transact business until all of its authorized capital stock and 
 13.28  required surplus has been paid in, in cash, and at least 25 
 13.29  percent of the capital has been invested in one or more of the 
 13.30  first, second, third, and fourth classes of authorized 
 13.31  securities and railroad bonds, as described by section 48.37, 
 13.32  and also in the farm loan bonds issued by the federal land 
 13.33  banks, federal intermediate credit banks, and the banks for 
 13.34  cooperatives.  These investments must be assigned and 
 13.35  transferred to and deposited with the state treasurer, provided, 
 13.36  however, that no trust company shall be required to deposit 
 14.1   securities in excess of $1,000,000.  The state treasurer shall 
 14.2   submit the securities deposited according to this subdivision to 
 14.3   the commissioner.  The commissioner shall carefully examine the 
 14.4   securities offered for deposit and determine if they comply with 
 14.5   all applicable provisions of law.  Upon receipt of an order of 
 14.6   the commissioner, the state treasurer shall issue a receipt.  
 14.7   This deposit must be maintained unimpaired as a guaranty fund 
 14.8   for depositors and creditors and for the faithful discharge of 
 14.9   the trust company's duties, with the right to collect the income 
 14.10  from it and to substitute other similar authorized securities, 
 14.11  of equal amount and value, upon approval and order of the 
 14.12  commissioner. 
 14.13     If the securities comply with the law, the commissioner 
 14.14  shall issue a certificate of authorization for the trust company 
 14.15  to begin business. 
 14.16     Subd. 3.  [REDUCTION OF CAPITAL STOCK.] The capital stock 
 14.17  of a trust company may be reduced with the approval of the 
 14.18  commissioner, but not below the minimum amounts in this 
 14.19  section.  A trust company shall not return assets to the 
 14.20  stockholders unless its deposits of authorized securities after 
 14.21  the return equal one-fourth of the reduced capital, which in no 
 14.22  event may be less than $125,000.  The liability of a stockholder 
 14.23  or participant upon an existing contract is not affected by the 
 14.24  return of assets. 
 14.25     Subd. 4.  [REQUIREMENTS FOR CONSOLIDATED COMPANIES.] When 
 14.26  two or more trust companies have been or are consolidated under 
 14.27  sections 49.34 to 49.41, or, in the case of a limited liability 
 14.28  company, sections 322B.70 to 322B.75, the capital of the 
 14.29  consolidated trust company is considered substituted for the 
 14.30  capital of the several trust companies entering into the 
 14.31  consolidation, and the aggregate of the securities of these 
 14.32  trust companies on deposit with the state treasurer, according 
 14.33  to this section, must be increased or diminished accordingly.  
 14.34     Subd. 5.  [REQUIREMENTS FOR LIMITED PURPOSE COMPANIES.] A 
 14.35  company may also be organized, with its principal place of 
 14.36  business in the state, with a capital of not less than $10,000, 
 15.1   to be paid in cash, of which 50 percent must be invested in 
 15.2   authorized securities and deposited with the state treasurer, as 
 15.3   provided in this section.  The powers and business of the 
 15.4   company must be to act as assignee under an assignment for the 
 15.5   benefit of creditors, or be appointed and act as a trustee or 
 15.6   receiver, as a guardian, as executor of a will, or administrator 
 15.7   of an estate.  The company may accept and perform any other 
 15.8   lawful trust over which a state or federal court has 
 15.9   jurisdiction.  The company, before entering upon the duties of 
 15.10  its trust, shall give a surety bond in the sum the court 
 15.11  directs, with sufficient surety, conditioned for the faithful 
 15.12  performance of its duties.  The business of a company is limited 
 15.13  to the matters in this subdivision.  The company with a capital 
 15.14  stock of $10,000 shall not use the word "trust" in the title or 
 15.15  name of the company. 
 15.16     Sec. 17.  [48A.04] [CERTAIN TRUST COMPANIES MAY ASSUME 
 15.17  POWERS OF STATE BANKS.] 
 15.18     Subdivision 1.  [AUTHORITY.] Upon complying with the terms 
 15.19  of this section, a trust company organized under section 300.025 
 15.20  has all the powers and privileges of a state bank not otherwise 
 15.21  granted to trust companies and is subject to and must comply 
 15.22  with all the laws of this state applicable to state banks. 
 15.23     Subd. 2.  [APPLICATION.] In considering the application of 
 15.24  a trust company to assume the powers of a state bank, the 
 15.25  department shall proceed in the same manner and be governed by 
 15.26  the same laws that are applicable to applications for charters 
 15.27  for new state banks. 
 15.28     Subd. 3.  [CERTIFICATES TO BE AMENDED.] In order to 
 15.29  exercise the powers granted under this subdivision, the trust 
 15.30  company shall amend its certificate of incorporation to include 
 15.31  the additional powers of a state banking corporation.  This 
 15.32  amendment may include the change of the corporate name of the 
 15.33  trust company.  The trust company shall display in its place of 
 15.34  business the certificate of the authorization issued by the 
 15.35  commissioner of commerce. 
 15.36     Amendments to the certificate of incorporation must be made 
 16.1   under section 300.45.  Before becoming effective, these 
 16.2   amendments must be approved by the department and the approval 
 16.3   must be endorsed upon the certificate of amendment. 
 16.4      Subd. 4.  [TRUST COMPANIES TO COMPLY WITH CERTAIN LAWS.] No 
 16.5   trust company of this state shall conduct a banking business, as 
 16.6   defined in section 47.02, exercising deposit taking powers, 
 16.7   without complying with the reserve requirements of section 
 16.8   48.221. 
 16.9      Sec. 18.  [48A.05] [NATIONAL ASSOCIATIONS; POWERS.] 
 16.10     The commissioner of commerce may authorize trust companies 
 16.11  organized under the laws of this state to engage in trust 
 16.12  activity in which banks exercising trust powers subject to the 
 16.13  jurisdiction of the federal government may be authorized to 
 16.14  engage.  The commissioner may not authorize trust companies to 
 16.15  engage in an activity prohibited by the laws of this state. 
 16.16     Sec. 19.  [48A.06] [PROHIBITED DEALINGS AND INDEBTEDNESS.] 
 16.17     (a) A trust company shall not engage in banking, 
 16.18  mercantile, manufacturing, or other business, unless this 
 16.19  business is expressly authorized in this chapter. 
 16.20     (b) A trust company shall not lend its funds, money, 
 16.21  capital, trust funds, or other property to a director, officer, 
 16.22  agent, or employee. 
 16.23     (c) A director, officer, agent, or employee of a trust 
 16.24  company shall not become indebted to it by means of an 
 16.25  overdraft, promissory note, account, endorsement, guaranty, or 
 16.26  any other contract.  A director, officer, agent, or employee who 
 16.27  violates this paragraph is guilty of theft of the amount of the 
 16.28  indebtedness from the time of its creation. 
 16.29         FIDUCIARY PROVISIONS OF BANKS AND TRUST COMPANIES 
 16.30     Sec. 20.  [48A.07] [TRUST COMPANY OR BANK; SPECIAL POWERS 
 16.31  AND DUTIES AS FIDUCIARY.] 
 16.32     Subdivision 1.  [QUALIFYING ORGANIZATIONS.] A trust 
 16.33  company, or bank that holds a certificate as provided in section 
 16.34  48.37, may exercise the powers and privileges set forth in this 
 16.35  section. 
 16.36     Subd. 2.  [TAKING AND HOLDING REAL AND PERSONAL PROPERTY IN 
 17.1   TRUST.] (a) The bank or trust company may take and hold in trust 
 17.2   any real or personal property, wherever situated, by order, 
 17.3   judgment, or decree of a court, or by gift, grant, assignment, 
 17.4   transfer, devise, legacy, or bequest from, or by lawful contract 
 17.5   with, a public or private corporation or an individual or 
 17.6   copartnership.  It may manage this real or personal property 
 17.7   upon the terms and conditions declared or imposed.  
 17.8      (b) The bank or trust company may act as agent for the 
 17.9   signatures, countersignatures, registration, transfer, or 
 17.10  redemption of certificates of stock, bonds, coupons, or other 
 17.11  evidences of indebtedness. 
 17.12     (c) The bank or trust company may act as trustee under 
 17.13  mortgages in the form of trust deeds. 
 17.14     (d) The bank or trust company may act as general or special 
 17.15  agent or attorney in fact in the acquisition, management, sale, 
 17.16  assignment, transfer, encumbrance, conveyance, or other 
 17.17  disposition of real or personal property, in the collection of 
 17.18  rents, payment of taxes, and generally as the representative of 
 17.19  a person, corporation, or copartnership.  
 17.20     (e) The bank or trust company may guarantee the title to 
 17.21  securities sold and transferred by it. 
 17.22     Subd. 3.  [TAKING AND HOLDING DEPOSITS.] The bank or trust 
 17.23  company may take and hold on deposit or for safekeeping, money, 
 17.24  bonds, stocks, or other securities, or personal property, that:  
 17.25  (1) is given to it by a public officer or a trustee or other 
 17.26  legal representative or a public or private corporation or a 
 17.27  person; or (2) is authorized, ordered, or otherwise required by 
 17.28  law to be deposited in a safe depository or paid into any court 
 17.29  of record.  If a court orders the deposit, and the depositor 
 17.30  takes the receipt of the bank or trust company for it, the 
 17.31  depositor and the depositor's sureties are relieved from 
 17.32  liability on the deposits while they are held by the bank or 
 17.33  trust company.  With respect to trust companies only, deposits 
 17.34  do not include checking or savings accounts, certificates of 
 17.35  deposit, or other liabilities not relating to its fiduciary 
 17.36  activities, except as may be authorized by sections 47.23 and 
 18.1   48A.04. 
 18.2      Subd. 4.  [ACCEPTING AND PERFORMING ASSIGNMENTS OR TRUSTS.] 
 18.3   The bank or trust company may act as assignee under an 
 18.4   assignment for the benefit of creditors, or be appointed as a 
 18.5   trustee, receiver, guardian, executor, or administrator, and may 
 18.6   accept and perform any other lawful trust conferred by a court 
 18.7   or by a corporation or individual.  No oath or security is 
 18.8   required of a bank or trust company accepting or performing a 
 18.9   trust under this subdivision. 
 18.10     Subd. 5.  [COURT-ORDERED DEPOSIT OF SECURITIES.] The judge 
 18.11  or court having jurisdiction may direct an executor, 
 18.12  administrator, guardian, assignee, receiver, or other trustee to 
 18.13  deposit with the bank or trust company any securities belonging 
 18.14  to the trust subject to the order of the trustee when 
 18.15  countersigned by the judge of the court.  The court may fix the 
 18.16  security to be given by the trustee with reference only to the 
 18.17  remainder of the trust estate.  Securities may not be withdrawn 
 18.18  and no part of the principal or interest of the securities may 
 18.19  be collected without a court order.  However, an officer of the 
 18.20  bank or trust company, upon satisfactory proof that additional 
 18.21  security has been furnished by the trustee or that the estate or 
 18.22  fund has been so reduced that the deposit is no longer required, 
 18.23  may withdraw securities or collect the principal of or interest 
 18.24  on the securities. 
 18.25     Subd. 6.  [INVESTMENT AUTHORITY.] (a) The bank or trust 
 18.26  company may, in its discretion, retain and continue an 
 18.27  investment and security or securities coming into its possession 
 18.28  in a fiduciary capacity. 
 18.29     (b) In the absence of an express prohibition in the trust 
 18.30  instrument, the trustee may acquire and retain securities of an 
 18.31  open-end or closed-end management company or unit investment 
 18.32  trust registered under the federal Investment Company Act of 
 18.33  1940.  The fact that the banking institution or an affiliate of 
 18.34  the banking institution, is providing services to the investment 
 18.35  company or trust as investment advisor, sponsor, broker, 
 18.36  distributor, custodian, transfer agent, registrar, or otherwise, 
 19.1   and receiving compensation for the services does not preclude 
 19.2   the trustee from investing in the securities of that investment 
 19.3   company or trust.  The banking institution shall disclose to all 
 19.4   current income beneficiaries of the trust the rate, formula, and 
 19.5   method of the compensation.  This paragraph does not alter the 
 19.6   degree of care and judgment required of trustees by section 
 19.7   501B.151. 
 19.8      (c) Except as otherwise provided in this subdivision, a 
 19.9   bank or trust company shall invest an amount not less than $500 
 19.10  received by it as representative or trustee or by order of the 
 19.11  court, not required for the purposes of the trust and not to be 
 19.12  accounted for within one year, as provided in this subdivision, 
 19.13  in authorized securities then held by it or specially procured 
 19.14  by it.  Except as may be otherwise provided in the governing 
 19.15  will, trust agreement, court order, or other instrument, any 
 19.16  amount in any one trust account, may be invested in certificates 
 19.17  of deposit or savings accounts in the same bank, or any other 
 19.18  bank or banks if the certificates of deposit or savings accounts 
 19.19  are fully insured by the Federal Deposit Insurance Corporation 
 19.20  and receive the prevailing rate of interest on the certificates 
 19.21  or savings accounts. 
 19.22     (d) Where funds are invested in authorized securities, as 
 19.23  defined by law, the provisions of section 48.24 limiting the 
 19.24  amount of liability of a person, corporation, or copartnership, 
 19.25  with reference to a percentage of the capital and surplus of the 
 19.26  bank, does not apply. 
 19.27     (e) A bank or trust company may invest all money received 
 19.28  by it in trust in authorized securities.  It is responsible to 
 19.29  the owner or cestui que trust for the validity, regularity, 
 19.30  quality, value, and genuineness of these investments and 
 19.31  securities at the time they are made.  It is also responsible to 
 19.32  the owner or cestui que trust for the safekeeping of these 
 19.33  securities and evidences of them.  When special directions are 
 19.34  given in an order, judgment, decree, will, or other written 
 19.35  instrument as to the particular manner or the particular class 
 19.36  or kind of securities or property in which an investment must be 
 20.1   made, the bank or trust company must follow these directions and 
 20.2   is not responsible for the performance of the trust.  In all 
 20.3   other cases it may invest funds held in any trust capacity in 
 20.4   authorized securities using its best judgment in the selection 
 20.5   of them, and is responsible for the validity, regularity, 
 20.6   quality, and value of them at the time made, and for their 
 20.7   safekeeping.  
 20.8      (f) As the sole trustee or one of two or more cotrustees, 
 20.9   it may invest in fractional parts of, as well as in whole, 
 20.10  securities, or may commingle funds for investment.  If it 
 20.11  invests in fractional parts of securities or commingles funds 
 20.12  for investment, all of the fractional parts of the securities, 
 20.13  or the whole of the funds so commingled must be owned and held 
 20.14  by the bank or trust company in its several trust capacities.  
 20.15  The bank or trust company is liable for the administration of 
 20.16  these trusts in all respects as though separately invested.  Not 
 20.17  more than $100,000, at the cost price of the investments, may be 
 20.18  invested for any one trust at any one time in fractional parts 
 20.19  or as commingled funds for investment by a bank or trust company 
 20.20  having capital and surplus of less than $500,000, unless the 
 20.21  authority to invest in fractional parts or as commingled funds 
 20.22  is given in the order, judgment, decree, will, or other written 
 20.23  instrument governing the trust.  Funds so commingled for 
 20.24  investment must be designated collectively as a common trust 
 20.25  fund.  The trust company or bank shall maintain the common trust 
 20.26  fund in conformity with the rules and regulations prevailing 
 20.27  from time to time of the federal governmental agency that 
 20.28  regulates the collective investment of trust funds by national 
 20.29  banks.  It may, in its discretion, retain and continue an 
 20.30  investment and security or securities coming into its possession 
 20.31  in any fiduciary capacity.  Paragraphs (a) to (f) apply whether 
 20.32  a corporate trustee is acting alone or with an individual 
 20.33  cotrustee. 
 20.34     (g) Notwithstanding the provisions of paragraph (f), a bank 
 20.35  or trust company may: 
 20.36     (1) establish and maintain common trust funds for the 
 21.1   collective investment of funds held in a fiduciary capacity by 
 21.2   it or by another bank or trust company that is owned or 
 21.3   controlled by a corporation that owns or controls the bank or 
 21.4   trust company; and 
 21.5      (2) as a fiduciary or cofiduciary, invest funds that it 
 21.6   holds for investment in common trust funds established and 
 21.7   maintained according to clause (1) if the investment is not 
 21.8   prohibited by the instrument, judgment, decree, or order 
 21.9   creating the fiduciary relationship.  This section applies to 
 21.10  fiduciary relationships now in existence or hereafter created. 
 21.11     To the extent not inconsistent with this paragraph, the 
 21.12  provisions of paragraph (f) relating to common trust funds apply 
 21.13  to the establishment and maintenance of common trust funds under 
 21.14  this paragraph. 
 21.15     (h) A bank or trust company is entitled to reasonable 
 21.16  compensation for the faithful performance of its duties and 
 21.17  discharge of its trust, including all necessary expenses and 
 21.18  interest at the legal rate, or the amount that has been or may 
 21.19  be agreed upon by the parties.  No compensation or commission 
 21.20  paid or agreed to be paid by it for the negotiation of a loan, 
 21.21  or the execution of a trust, is considered interest within the 
 21.22  meaning of the law, and no excess over the legal rate of 
 21.23  interest is considered usury. 
 21.24     Sec. 21.  [48A.08] [INCIDENTAL INVESTMENTS, POWERS, AND 
 21.25  LIMITATIONS.] 
 21.26     Subdivision 1.  [QUALIFYING ORGANIZATION.] A trust company, 
 21.27  or a bank that holds a certificate as provided in section 48.37, 
 21.28  may exercise the powers and privileges set forth in this section.
 21.29     Subd. 2.  [INVESTMENT POWERS.] (a) The bank or trust 
 21.30  company may acquire, use, and improve, and for that purpose 
 21.31  mortgage, lease, sell, and convey, real and personal property 
 21.32  that is necessary for the transaction of its business.  
 21.33     (b) The bank or trust company may sell or continue to hold 
 21.34  and use for its interests or those of the estate or trust to 
 21.35  which it belongs an estate or interest in real estate that the 
 21.36  bank or trust company acquires through foreclosure of a 
 22.1   mortgage, trust deed, or other security, or by the settlement of 
 22.2   an obligation or otherwise in the course of its business. 
 22.3      (c) The bank or trust company may become the purchaser at a 
 22.4   foreclosure or judicial sale to which it is a party as trustee 
 22.5   or otherwise. 
 22.6      (d) The bank or trust company may accept or make a deed, 
 22.7   mortgage, or other instrument necessary for the transaction of 
 22.8   its business.  It may loan money and secure the loans by 
 22.9   mortgage, trust deed or pledge, and/or purchase.  It may sell 
 22.10  and assign notes, bonds, mortgages, and other evidences of 
 22.11  indebtedness, and securities, and convert them into cash or into 
 22.12  other authorized securities, or securities and property not 
 22.13  expressly prohibited by this chapter.  
 22.14     (e) The investment of funds owned by the trust company, as 
 22.15  distinguished from funds held by it in trust, are restricted to 
 22.16  authorized securities.  
 22.17     (f) The bank or trust company may guarantee a title to 
 22.18  securities sold and transferred by it. 
 22.19     (g) The bank or trust company may become sole surety upon a 
 22.20  bond.  For trust companies organized after April 10, 1965, the 
 22.21  bond must pertain to its own fiduciary activities. 
 22.22     (h) The bank or trust company may maintain and operate safe 
 22.23  deposit vaults. 
 22.24     (i) The bank or trust company shall not invest its capital 
 22.25  or surplus in real estate except as authorized.  It shall not 
 22.26  invest deposits, trust funds, or property except as authorized, 
 22.27  or under or by virtue of an express contract, judgment, or other 
 22.28  instrument conferring or imposing special power and authority so 
 22.29  to do. 
 22.30     Subd. 3.  [POWERS OF COURT; ANNUAL REPORT TO THE 
 22.31  COURT.] The bank or trust company is subject at all times to the 
 22.32  orders, judgments, and decrees of a court of record from which 
 22.33  it has accepted a trust, appointment, or commission as to the 
 22.34  trust.  It shall provide to the court itemized and verified 
 22.35  accounts, statements, and reports required by law, or as the 
 22.36  court orders as to a particular trust.  The bank or trust 
 23.1   company is subject to the general jurisdiction and authority of 
 23.2   the district court of the county of its principal place of 
 23.3   business. 
 23.4      Sec. 22.  [48A.09] [DEFINITIONS.] 
 23.5      Subdivision 1.  [TERMS.] For purposes of this section and 
 23.6   section 48A.10, the terms defined in this section have the 
 23.7   meanings given them. 
 23.8      Subd. 2.  [AFFILIATED BANK.] "Affiliated bank," with 
 23.9   respect to another bank or a trust company, means a bank that is 
 23.10  owned or controlled by the corporation that owns or controls 
 23.11  that other bank or trust company, including a wholly owned 
 23.12  subsidiary of the other bank or trust company. 
 23.13     Subd. 3.  [BANK.] "Bank" means a state bank permitted to 
 23.14  exercise trust powers under sections 48.37 to 48.47, and a 
 23.15  national bank authorized to exercise fiduciary powers under the 
 23.16  laws of the United States, including a national bank whose 
 23.17  operations are limited to those of a trust company and related 
 23.18  activities. 
 23.19     Subd. 4.  [FIDUCIARY CAPACITY.] "Fiduciary capacity" means 
 23.20  a capacity resulting from a bank undertaking to act alone or 
 23.21  jointly with others primarily for the benefit of another in all 
 23.22  matters connected with its undertaking.  The term includes, but 
 23.23  is not limited to, the capacities of trustee, including trustee 
 23.24  of a common trust fund; executor; administrator; personal 
 23.25  representative; registrar or transfer agent with respect to 
 23.26  stocks, bonds, or other evidences of indebtedness of a 
 23.27  corporation, association, municipality, state or public 
 23.28  authority; guardian of estates; conservator; receiver; escrow 
 23.29  agent; agent for the investment of money; attorney-in-fact; or 
 23.30  any other similar capacity.  
 23.31     Subd. 5.  [TRUST COMPANY.] "Trust company" means a trust 
 23.32  company incorporated under the laws of this state that is duly 
 23.33  authorized to exercise fiduciary powers. 
 23.34     Sec. 23.  [48A.10] [SUBSTITUTION; PROCEDURE.] 
 23.35     Subdivision 1.  [APPLICATION.] A bank or trust company may 
 23.36  file an application with the district court in the county in 
 24.1   which an affiliated bank or other bank or trust company for 
 24.2   which it seeks to be substituted is located requesting that it 
 24.3   be substituted, except as is expressly excluded in the 
 24.4   application, in every fiduciary capacity held by the affiliated 
 24.5   bank or other bank or trust company that is specified in the 
 24.6   application.  The affiliated bank or other bank or trust company 
 24.7   for which substitution is sought shall join in the application.  
 24.8   The application need not list the fiduciary capacities in which 
 24.9   substitution is requested. 
 24.10     Subd. 2.  [HEARING NOTICE.] When the application is filed 
 24.11  with the district court, the court shall set a date and time for 
 24.12  hearing and direct that notice of the hearing be given as 
 24.13  provided in this subdivision.  The applicant shall cause a copy 
 24.14  of the notice to be published at least once a week for two 
 24.15  consecutive weeks in a legal newspaper in the county where the 
 24.16  hearing is to be held, the last publication of which is to be at 
 24.17  least ten days before the time set for the hearing.  The court 
 24.18  may require additional notice as it considers necessary.  A 
 24.19  defect in giving notice does not limit or affect the validity of 
 24.20  an order entered according to this section.  
 24.21     Subd. 3.  [ORDER.] Upon finding that the applicant is 
 24.22  authorized to exercise fiduciary powers, the district court 
 24.23  shall enter an order substituting the applicant bank or trust 
 24.24  company in every fiduciary capacity held by the affiliated bank 
 24.25  or other bank or trust company for which substitution is sought 
 24.26  and which joined in the application, except as may be otherwise 
 24.27  specified in the application, and except for fiduciary 
 24.28  capacities in any account with respect to which a person 
 24.29  beneficially interested in the account has filed objection to 
 24.30  the substitution and has appeared and been heard in support of 
 24.31  the objection.  Upon entry of the order, or at a later date as 
 24.32  may be specified in the order, the applicant bank or trust 
 24.33  company is substituted in every fiduciary capacity to which the 
 24.34  order extends.  The substitution may be made a matter of record 
 24.35  in any county of this state by filing a certified copy of the 
 24.36  order of substitution in the office of the court administrator 
 25.1   of a district or county court, or by filing a certified copy of 
 25.2   the order in the office of the county recorder. 
 25.3      Subd. 4.  [EFFECT OF SUBSTITUTION.] A designation in a will 
 25.4   or other instrument of an affiliated bank as fiduciary is 
 25.5   considered a designation of the bank or trust company 
 25.6   substituted for the affiliated bank according to this section 
 25.7   except where the will or other instrument is executed after the 
 25.8   substitution and expressly provides that this section does not 
 25.9   apply.  Except as otherwise provided in this subdivision, a 
 25.10  grant in a will or other instrument of a discretionary power is 
 25.11  considered conferred upon the bank or trust company substituted 
 25.12  as the fiduciary according to this section. 
 25.13     Subd. 5.  [ACCOUNTING AND TRANSFER OF ASSETS.] An 
 25.14  affiliated bank or other bank or trust company shall account 
 25.15  jointly with the substituted bank or trust company for the 
 25.16  accounting period during which the substitution occurred.  Upon 
 25.17  substitution according to this section, the affiliated bank or 
 25.18  other bank or trust company shall deliver to the substituted 
 25.19  bank or trust company all assets held by the affiliated bank or 
 25.20  other bank or trust company as fiduciary, except assets held for 
 25.21  fiduciary accounts with respect to which no substitution occurs. 
 25.22  Upon substitution, all assets become the property of the 
 25.23  substituted bank or trust company without the necessity of any 
 25.24  instrument of transfer or conveyance. 
 25.25     Subd. 6.  [TRANSFER OF TRUSTS TO COMPANY; CONDITION.] The 
 25.26  trustees of an estate or property may surrender and resign the 
 25.27  trust in favor of the trust company that will accept the trust 
 25.28  and convey and deliver to it all property and assets of the 
 25.29  trust, upon condition that the grantor, cestui que trust, and 
 25.30  all parties in any manner interested in the execution and 
 25.31  performance of the trust shall execute, acknowledge, and deliver 
 25.32  an instrument in writing, consenting to the transfer, releasing 
 25.33  and discharging the original trustee, and appointing the trust 
 25.34  company as successor.  If either party to the original trust is 
 25.35  dead or does not join in the written consent, or if the original 
 25.36  trust was created under a last will or an order or decree of a 
 26.1   court of record, then the transfer is not valid except after 
 26.2   full compliance with the judgment or decree of a court having 
 26.3   jurisdiction to remove the acting trustee. 
 26.4      Subd. 7.  [TRUST FUNDS; INVESTMENT OF ACCUMULATIONS.] A 
 26.5   bank or trust company that receives $500 or more as executor, 
 26.6   administrator, guardian, or other trustee, or by order of court, 
 26.7   that is not required for the purposes of the trust, or does not 
 26.8   have to be accounted for within one year, shall invest it as 
 26.9   soon as practicable in authorized securities either then held by 
 26.10  it or specially obtained by it.  The income, less its proper 
 26.11  charges, becomes part of the trust estate.  The net 
 26.12  accumulations on the income must be invested, accounted for, and 
 26.13  allowed in the settlement of the trust. 
 26.14     Except as may be otherwise provided in the governing will, 
 26.15  trust agreement, court order, or other instrument, any amount in 
 26.16  a trust account may be invested in certificates of deposit, 
 26.17  share certificates, or savings accounts in a bank or banks, or 
 26.18  credit union, if the beneficial owner is a member, if the 
 26.19  certificates of deposit, share certificates, or savings accounts 
 26.20  are fully insured by an agency of the federal government 
 26.21  insuring deposits and receive the prevailing rate of interest on 
 26.22  the certificates or savings accounts. 
 26.23     Sec. 24.  [48A.11] [NATIONAL BANKS AS FIDUCIARIES.] 
 26.24     A national bank in this state granted a special permit to 
 26.25  act in a fiduciary capacity by either the Federal Reserve Board 
 26.26  under subsection K of section 11 of the Federal Reserve Act, as 
 26.27  amended by the act of September 26, 1918, or the Office of the 
 26.28  Comptroller of the Currency under the provisions of United 
 26.29  States Code, title 12, section 92a, may without oath or security 
 26.30  assign, transfer to, and deposit with the commissioner, the 
 26.31  kinds and amounts of authorized securities required by section 
 26.32  48A.03 of a bank or trust company in a city in which the 
 26.33  national bank is located.  If the national bank has a capital of 
 26.34  $500,000 or more, it is not required to deposit these securities 
 26.35  for more than the lesser of ten percent of this capital or 
 26.36  $1,000,000.  The securities so deposited must be held and 
 27.1   maintained as a guaranty fund for the national bank for the 
 27.2   performance of its duties in this fiduciary capacity.  
 27.3      When a national bank has complied with section 48A.03, no 
 27.4   oath or security is required of it to accept and perform the 
 27.5   trust, as provided in section 48A.07, subdivision 4. 
 27.6      For purposes of this section, "bank" and "trust company" 
 27.7   have the meanings given in section 48A.09. 
 27.8                      TRUST INSTITUTION OFFICES 
 27.9      Sec. 25.  [48A.12] [DEFINITIONS.] 
 27.10     Subdivision 1.  [TERMS.] For purposes of sections 48A.12 to 
 27.11  48A.25, the following words and phrases have the meanings given 
 27.12  them: 
 27.13     Subd. 2.  [ACCOUNT.] "Account" means the client 
 27.14  relationship established with a trust company involving the 
 27.15  transfer of funds or property to the trust company, including a 
 27.16  relationship in which the trust company acts as trustee, 
 27.17  executor, administrator, guardian, custodian, conservator, 
 27.18  bailee, receiver, registrar, or agent, but excluding a 
 27.19  relationship in which the trust company acts solely in an 
 27.20  advisory capacity. 
 27.21     Subd. 3.  [ADMINISTER.] "Administer" with respect to real 
 27.22  or tangible personal property means, as an agent or in another 
 27.23  representative capacity, to possess, purchase, sell, lease or 
 27.24  insure, safekeep, or otherwise manage the property. 
 27.25     Subd. 4.  [AFFILIATE.] "Affiliate" means a company that 
 27.26  directly or indirectly controls, is controlled by, or is under 
 27.27  common control with a trust institution or other company. 
 27.28     Subd. 5.  [BANK.] "Bank" has the meaning given the term in 
 27.29  United States Code, title 12, section 1813(h).  The term "bank" 
 27.30  does not include a "foreign bank" as defined in United States 
 27.31  Code, title 12, section 3101(7), except for a foreign bank 
 27.32  organized under the laws of a territory of the United States, 
 27.33  Puerto Rico, Guam, American Samoa, or the Virgin Islands, the 
 27.34  deposits of which are insured by the Federal Deposit Insurance 
 27.35  Corporation. 
 27.36     Subd. 6.  [BANK SUPERVISORY AGENCY.] "Bank supervisory 
 28.1   agency" means: 
 28.2      (1) an agency of another state with primary responsibility 
 28.3   for chartering and supervising a trust institution; and 
 28.4      (2) the Office of the Comptroller of the Currency, the 
 28.5   Federal Deposit Insurance Corporation, the Board of Governors of 
 28.6   the Federal Reserve System, the Office of Thrift Supervision, 
 28.7   and any successor to these agencies. 
 28.8      Subd. 7.  [BRANCH.] "Branch," with respect to a trust 
 28.9   company or depository institution, has the meaning given in 
 28.10  section 48A.17 and in sections 47.51 and 49.411, subdivision 2, 
 28.11  paragraph (d). 
 28.12     Subd. 8.  [CHARTER.] "Charter" means a charter, license, or 
 28.13  other authority issued by the commissioner or a bank supervisory 
 28.14  agency authorizing a trust institution to act as a fiduciary in 
 28.15  its home state. 
 28.16     Subd. 9.  [CLIENT.] "Client" means a person to whom a trust 
 28.17  institution owes a duty or obligation under a trust or other 
 28.18  account administered by the trust institution or as an advisor 
 28.19  or agent, regardless of whether the trust institution owes a 
 28.20  fiduciary duty to the person.  The term includes the 
 28.21  noncontingent beneficiaries of an account. 
 28.22     Subd. 10.  [COMMISSIONER.] "Commissioner" means the 
 28.23  commissioner of commerce and, where appropriate, all of the 
 28.24  commissioner's successors and predecessors in office. 
 28.25     Subd. 11.  [COMPANY.] "Company" includes a bank, trust 
 28.26  company, corporation, limited liability company, partnership, 
 28.27  association, business trust, or another trust. 
 28.28     Subd. 12.  [DEPARTMENT.] "Department" means the Minnesota 
 28.29  commerce department. 
 28.30     Subd. 13.  [FIDUCIARY RECORD.] "Fiduciary record" means a 
 28.31  matter written, transcribed, recorded, received, or otherwise in 
 28.32  the possession or control of a trust company, whether in 
 28.33  physical, electromagnetic, or optical disk form, that is 
 28.34  necessary to preserve information concerning an act or event 
 28.35  relevant to an account or a client of a trust company. 
 28.36     Subd. 14.  [HOME STATE.] "Home state" means: 
 29.1      (1) with respect to a federally chartered trust 
 29.2   institution, the state in which the institution maintains its 
 29.3   principal office; and 
 29.4      (2) with respect to any other trust institution, the state 
 29.5   that chartered the institution. 
 29.6      Subd. 15.  [HOME STATE REGULATOR.] "Home state regulator" 
 29.7   means the bank supervisory agency with primary responsibility 
 29.8   for chartering and supervising an out-of-state trust institution.
 29.9      Subd. 16.  [HOST STATE.] "Host state" means a state, other 
 29.10  than the home state of a trust institution, in which the trust 
 29.11  institution maintains or seeks to acquire or establish an office.
 29.12     Subd. 17.  [NEW TRUST OFFICE.] "New trust office" means a 
 29.13  trust office located in a host state that: 
 29.14     (1) is originally established by the trust institution as a 
 29.15  trust office; and 
 29.16     (2) does not become a trust office of the trust institution 
 29.17  as a result of: 
 29.18     (i) the acquisition of another trust institution or trust 
 29.19  office of another trust institution; or 
 29.20     (ii) a merger, consolidation, or conversion involving the 
 29.21  trust institution or trust office. 
 29.22     Subd. 18.  [OFFICE.] "Office," with respect to a trust 
 29.23  institution, means the principal office, a trust office, or a 
 29.24  representative trust office, but not a detached facility. 
 29.25     Subd. 19.  [OUT-OF-STATE BANK.] "Out-of-state bank" means a 
 29.26  bank chartered to act as a fiduciary in a state or states other 
 29.27  than this state. 
 29.28     Subd. 20.  [OUT-OF-STATE TRUST COMPANY.] "Out-of-state 
 29.29  trust company" means a trust company that is not a state trust 
 29.30  company whose principal office is not located in this state. 
 29.31     Subd. 21.  [OUT-OF-STATE TRUST INSTITUTION.] "Out-of-state 
 29.32  trust institution" means a trust institution that is not a state 
 29.33  trust institution. 
 29.34     Subd. 22.  [PRINCIPAL OFFICE.] "Principal office" with 
 29.35  respect to: 
 29.36     (1) a state trust company, means a location registered with 
 30.1   the commissioner as the state trust company's home office at 
 30.2   which: 
 30.3      (i) the state trust company does business; 
 30.4      (ii) the state trust company keeps its corporate books and 
 30.5   a set of its material records, including material fiduciary 
 30.6   records; and 
 30.7      (iii) at least one executive officer of the state trust 
 30.8   company maintains an office; or 
 30.9      (2) a trust institution other than a state trust company, 
 30.10  means its principal place of business in the United States. 
 30.11     Subd. 23.  [REGISTRATION.] "Registration" means the process 
 30.12  by which a trust institution has been authorized by the 
 30.13  commissioner to acquire, establish, or maintain a representative 
 30.14  trust office in this state. 
 30.15     Subd. 24.  [REPRESENTATIVE TRUST OFFICE.] "Representative 
 30.16  trust office" means an office at which a trust institution has 
 30.17  been authorized by the commissioner to engage in a trust 
 30.18  business other than: 
 30.19     (1) accepting or executing trusts, including to: 
 30.20     (i) act as trustee under a written agreement; 
 30.21     (ii) receive money or other property in its capacity as a 
 30.22  trustee for investment in real or personal property; 
 30.23     (iii) act as trustee and perform the fiduciary duties 
 30.24  committed or transferred to it by order of court of competent 
 30.25  jurisdiction; 
 30.26     (iv) act as trustee of the estate of a deceased person; or 
 30.27     (v) act as trustee for a minor or incapacitated person; 
 30.28     (2) administering in any other fiduciary capacity real or 
 30.29  personal property; or 
 30.30     (3) acting according to order of court of competent 
 30.31  jurisdiction as executor or administrator of the estate of a 
 30.32  deceased person or as a guardian or conservator for a minor or 
 30.33  incapacitated person.  
 30.34     Subd. 25.  [STATE.] "State" means a state of the United 
 30.35  States, the District of Columbia, a territory of the United 
 30.36  States, Puerto Rico, Guam, American Samoa, the Trust Territory 
 31.1   of the Pacific Islands, the Virgin Islands, and the Northern 
 31.2   Mariana Islands. 
 31.3      Subd. 26.  [STATE BANK AND TRUST.] "State bank and trust" 
 31.4   means a bank chartered by this state with the additional 
 31.5   authority to exercise fiduciary powers and privileges set out in 
 31.6   sections 48A.07 and 48A.08. 
 31.7      Subd. 27.  [STATE TRUST COMPANY.] "State trust company" 
 31.8   means a corporation or a limited liability trust company 
 31.9   organized or reorganized under this chapter, including a trust 
 31.10  company organized under the laws of this state before the 
 31.11  effective date of this chapter. 
 31.12     Subd. 28.  [STATE TRUST INSTITUTION.] "State trust 
 31.13  institution" means a trust institution chartered by the state. 
 31.14     Subd. 29.  [TRUST BUSINESS.] "Trust business" means the 
 31.15  holding out by a person to the public by advertising, 
 31.16  solicitation, or other means that the person is available to 
 31.17  perform any service of a trust institution.  
 31.18     Subd. 30.  [TRUST COMPANY.] "Trust company" means a state 
 31.19  trust company or other company chartered to act as a fiduciary 
 31.20  that is not a depository institution or a foreign bank. 
 31.21     Subd. 31.  [TRUST INSTITUTION.] "Trust institution" means a 
 31.22  bank and trust, or trust company. 
 31.23     Subd. 32.  [TRUST OFFICE.] "Trust office" means an office, 
 31.24  other than the principal office, at which a trust institution is 
 31.25  authorized by the commissioner to conduct any trust business 
 31.26  incidental to the trust business that it is permitted to conduct 
 31.27  at its principal office or branch.  It may not accept deposits 
 31.28  except as incidental to the trust business. 
 31.29     Subd. 33.  [UNAUTHORIZED ACTIVITY.] "Unauthorized activity" 
 31.30  means: 
 31.31     (1) a company, other than one identified in section 48.37, 
 31.32  48A.01, or 48A.11, acting as a fiduciary within this state; 
 31.33     (2) a company engaging in a trust business in this state at 
 31.34  an office of the company that is not its principal office, if it 
 31.35  is a state trust institution, or that is not a trust office or a 
 31.36  representative trust office of the company; or 
 32.1      (3) an out-of-state trust institution engaging in a trust 
 32.2   business in this state at any time an order issued by the 
 32.3   commissioner under section 48A.22 is in effect. 
 32.4      Sec. 26.  [48A.13] [STATE TRUST COMPANY PRINCIPAL OFFICE.] 
 32.5      Subdivision 1.  [REQUIREMENT.] A state trust company must 
 32.6   have and continuously maintain a principal office in this state. 
 32.7      Subd. 2.  [SERVICE OF PROCESS.] Each executive officer at 
 32.8   the principal office is an agent of the state trust company for 
 32.9   service of process. 
 32.10     Subd. 3.  [NOTICE OF CHANGE.] A state trust company not 
 32.11  authorized to engage in the business of banking may change its 
 32.12  principal office to a location within this state by filing a 
 32.13  written notice with the commissioner setting forth the name of 
 32.14  the state trust company, the street address of its principal 
 32.15  office before the change, the street address to which the 
 32.16  principal office is to be changed, and a copy of the resolution 
 32.17  adopted by the board authorizing the change. 
 32.18     The change of principal office takes effect on the 31st day 
 32.19  after the date the commissioner receives the notice under this 
 32.20  subdivision, unless the commissioner establishes an earlier or 
 32.21  later date or unless before that day the commissioner notifies 
 32.22  the state trust company that it must establish to the 
 32.23  satisfaction of the commissioner that the relocation is 
 32.24  consistent with the original determination made under section 
 32.25  48A.02, for the establishment of a state trust company at that 
 32.26  location, in which event the change of principal office takes 
 32.27  effect when approved by the commissioner. 
 32.28     Sec. 27.  [48A.14] [STATE TRUST INSTITUTIONS; 
 32.29  REPRESENTATIVE TRUST OFFICES.] 
 32.30     Subdivision 1.  [AUTHORITY.] (a) A state trust institution 
 32.31  may establish or acquire and maintain representative trust 
 32.32  offices anywhere in this state.  A state trust institution may 
 32.33  establish or acquire and maintain the office by filing a written 
 32.34  notice with the commissioner setting forth the name of the state 
 32.35  trust institution and the location of the proposed additional 
 32.36  office, together with a copy of the resolution adopted by the 
 33.1   board authorizing the additional office, and a filing fee of 
 33.2   $250. 
 33.3      (b) The state trust institution may begin business at the 
 33.4   additional office on the 31st day after the date the 
 33.5   commissioner receives the notice, unless the commissioner 
 33.6   specifies an earlier or later date. 
 33.7      Subd. 2.  [REVIEW BY COMMISSIONER.] The 30-day period of 
 33.8   review may be extended by the commissioner on a determination 
 33.9   that the written notice raises issues that require additional 
 33.10  information or additional time for analysis.  If the period of 
 33.11  review is extended, the state trust institution may establish 
 33.12  the additional office only on prior written approval by the 
 33.13  commissioner. 
 33.14     Subd. 3.  [DISAPPROVAL.] The commissioner may deny approval 
 33.15  of the additional office if the commissioner finds that the 
 33.16  state trust institution lacks sufficient financial resources to 
 33.17  undertake the proposed expansion without adversely affecting its 
 33.18  safety or soundness or that the proposed office would be 
 33.19  contrary to the public interest. 
 33.20     Sec. 28.  [48A.15] [STATE BANKS AND TRUST COMPANIES; TRUST 
 33.21  SERVICE OFFICES.] 
 33.22     Subdivision 1.  [AUTHORIZATION.] A trust company organized 
 33.23  under the laws of this state or a state bank and trust may, 
 33.24  after completing the notification procedure required by this 
 33.25  subdivision, establish and maintain a trust service office at 
 33.26  any office in this state of any other state or national bank.  A 
 33.27  state bank may, after completing the notification procedure 
 33.28  required by this subdivision, permit a trust company organized 
 33.29  under the laws of this state or a state bank and trust or a 
 33.30  national bank in this state that is authorized to exercise trust 
 33.31  powers to establish and maintain a trust service office at any 
 33.32  of its banking offices. 
 33.33     The trust company or state bank and trust and a state bank 
 33.34  at which a trust service office is to be established according 
 33.35  to this section shall jointly file, on forms provided by the 
 33.36  commissioner, a notification of intent to establish a trust 
 34.1   service office.  The notification must be accompanied by a 
 34.2   filing fee of $100 payable to the commissioner, to be deposited 
 34.3   in the general fund of the state.  No trust service office shall 
 34.4   be established according to this section if disallowed by order 
 34.5   of the commissioner within 45 days of the filing of a complete 
 34.6   and acceptable notification of intent to establish a trust 
 34.7   service office.  An order of the commissioner to disallow the 
 34.8   establishment of a trust service office under this section is 
 34.9   subject to judicial review under sections 14.63 to 14.69. 
 34.10     Subd. 2.  [SERVICES PERMITTED.] The trust company or bank 
 34.11  and trust that establishes a trust service office under this 
 34.12  section may conduct at the office any trust business and 
 34.13  business incidental to the trust business that it is permitted 
 34.14  to conduct at its principal office.  It may not accept deposits 
 34.15  except as incidental to the trust business. 
 34.16     Subd. 3.  [GENERAL REQUIREMENTS FOR BANKS.] (a) If the bank 
 34.17  at which a trust service office is to be established has 
 34.18  exercised trust powers, then the trust company or bank and trust 
 34.19  that is establishing the trust service office shall enter into 
 34.20  an agreement respecting those fiduciary powers to which the 
 34.21  trust company or bank and trust shall succeed and shall file the 
 34.22  agreement with the commissioner. 
 34.23     (b) The trust company or bank and trust that is 
 34.24  establishing a trust service office under this section shall 
 34.25  publish a notice of the filing in the form prescribed by the 
 34.26  commissioner in a newspaper published in the municipality in 
 34.27  which the trust service office is to be located, and if there is 
 34.28  no such newspaper, then in a qualified newspaper likely to give 
 34.29  notice in the municipality in which the proposed trust service 
 34.30  office is to be located.  The trust company or bank and trust 
 34.31  shall file proof of publication of the notice with the 
 34.32  commissioner immediately after the notice is published. 
 34.33     (c) After filing and publication, the trust company or bank 
 34.34  and trust establishing the trust service office shall, as of the 
 34.35  date the office first opens for business, succeed to and be 
 34.36  substituted for the bank at which the trust service office is 
 35.1   located as to all fiduciary powers, rights, duties, privileges, 
 35.2   and liabilities of the bank in its capacity as fiduciary for all 
 35.3   estates, trusts, conservatorships, guardianships, and other 
 35.4   fiduciary relationships of which the bank is then serving as 
 35.5   fiduciary, except as may be otherwise specified in the agreement 
 35.6   between the bank and the trust company or bank and trust which 
 35.7   has established the trust service office. 
 35.8      (d) The trust company or bank and trust that has 
 35.9   established the trust service office shall also be considered 
 35.10  named as fiduciary in all writings, including, but not limited 
 35.11  to, wills, trusts, court orders, and similar documents and 
 35.12  instruments, naming the bank at which the trust service office 
 35.13  is located signed before the date the trust service office first 
 35.14  opens for business, unless expressly negated by the writing or 
 35.15  otherwise specified in the agreement between the trust company 
 35.16  or bank and trust and the bank at which the trust service office 
 35.17  is located. 
 35.18     (e) On the effective date of the substitution, the bank at 
 35.19  which the trust service office has been established is released 
 35.20  and absolved from all fiduciary duties and obligations under the 
 35.21  writings and shall discontinue its exercise of trust powers on 
 35.22  all matters not specifically retained by the agreement.  This 
 35.23  subdivision does not absolve the bank from liabilities arising 
 35.24  out of a breach of fiduciary duty or obligation occurring before 
 35.25  the date the trust service office first opens for business. 
 35.26     (f) This subdivision does not affect the authority, duties, 
 35.27  or obligations of a bank with respect to relationships that may 
 35.28  be established without trust powers, whether the relationships 
 35.29  arise before or after the establishment of the trust service 
 35.30  office. 
 35.31     Subd. 4.  [SUPERVISION.] A trust company or state bank and 
 35.32  trust establishing and operating one or more trust service 
 35.33  offices according to this section shall at all times maintain 
 35.34  records acceptable to the commissioner regarding transactions 
 35.35  originating at the trust service offices and available at its 
 35.36  principal office for examination according to sections 46.04 and 
 36.1   46.05. 
 36.2      Subd. 5.  [NATIONAL BANKS; REQUIREMENTS.] If a trust 
 36.3   service office is established by a national bank at the banking 
 36.4   office of another national bank, then the agreement respecting 
 36.5   fiduciary powers required by subdivision 3 must be filed with 
 36.6   the comptroller of the currency of the United States and the 
 36.7   notice required by subdivision 3 must be in the form prescribed 
 36.8   by the comptroller of the currency. 
 36.9      Subd. 6.  [NOTICE OF SUBSTITUTIONS; DENIAL OF 
 36.10  SUBSTITUTION.] Not less than 60 days before the effective date 
 36.11  of the proposed substitution under subdivision 3 or 5, the 
 36.12  parties to the substitution shall send written notice of the 
 36.13  proposed substitution to each cofiduciary, each surviving 
 36.14  settlor of a trust, each conservatee or ward under a 
 36.15  conservatorship or guardianship, each person who alone or in 
 36.16  conjunction with others has the power to remove the fiduciary 
 36.17  being substituted, and each adult beneficiary currently 
 36.18  receiving or entitled to receive a distribution of principal or 
 36.19  income from a trust or estate with respect to which the 
 36.20  substitution is to be effected.  Intentional failure to send the 
 36.21  notice to a party at the party's current address as shown on the 
 36.22  fiduciary's records makes the substitution of fiduciaries 
 36.23  ineffective with respect to the fiduciary relationship.  An 
 36.24  unintentional failure to give notice does not impair the 
 36.25  validity or effect of any substitution of fiduciaries under 
 36.26  subdivision 3 or 5.  A trust company or bank that is substituted 
 36.27  or about to be substituted as fiduciary with respect to a trust, 
 36.28  estate, conservatorship, or guardianship under subdivision 3 or 
 36.29  5 may be removed as fiduciary, or the substitution may be 
 36.30  denied, upon petition by a cofiduciary, by a beneficiary of a 
 36.31  trust or estate, by the settlor of a trust, or on behalf of a 
 36.32  conservatee or ward under a conservatorship or guardianship if 
 36.33  the trust company or bank files a written consent to its removal 
 36.34  or a written declination to act, or if the court having 
 36.35  jurisdiction over the fiduciary relationship, upon notice and 
 36.36  hearing, approves the petition as in the best interests of the 
 37.1   petitioner and all other parties interested in the trust, 
 37.2   estate, conservatorship, or guardianship.  This section applies 
 37.3   in addition to any applicable provision for removal of a 
 37.4   fiduciary or appointment of a successor fiduciary in any other 
 37.5   statute or in the instrument creating the fiduciary relationship.
 37.6      Sec. 29.  [48A.16] [DETACHED FACILITIES.] 
 37.7      A state trust institution may establish or acquire and 
 37.8   maintain detached facilities for the conduct of any or all of 
 37.9   the activities permitted for a trust institution following the 
 37.10  procedure and in compliance with sections 47.52 to 47.57. 
 37.11     Sec. 30.  [48A.17] [AUTHORITY FOR OUT-OF-STATE TRUST 
 37.12  OFFICES; PRIOR WRITTEN NOTICE.] 
 37.13     (a) A state trust institution may establish and maintain a 
 37.14  new trust office or a representative trust office or acquire and 
 37.15  maintain an office in a state other than this state.  The state 
 37.16  trust institution shall: 
 37.17     (1) file a notice on a form prescribed by the commissioner 
 37.18  stating the name of the state trust institution, the location of 
 37.19  the proposed office, and whether the laws of the jurisdiction 
 37.20  where the office will be located permit the office to be 
 37.21  maintained by the state trust institution; 
 37.22     (2) furnish a copy of the resolution adopted by the board 
 37.23  authorizing the out-of-state office; and 
 37.24     (3) pay the filing fee of $250. 
 37.25     (b) The state trust institution may begin business at the 
 37.26  additional office on the 31st day after the date the 
 37.27  commissioner receives the notice, unless the commissioner 
 37.28  specifies an earlier or later date. 
 37.29     (c) The 30-day period of review may be extended by the 
 37.30  commissioner if the written notice raises issues that require 
 37.31  additional information or additional time for analysis.  If the 
 37.32  period of review is extended, the state trust institution may 
 37.33  establish the additional office only on prior written approval 
 37.34  by the commissioner. 
 37.35     (d) The commissioner may deny approval of the additional 
 37.36  office if the commissioner finds that the state trust 
 38.1   institution lacks sufficient financial resources to undertake 
 38.2   the proposed expansion without adversely affecting its safety or 
 38.3   soundness or that the proposed office would be contrary to the 
 38.4   public interest.  In acting on the notice, the commissioner 
 38.5   shall consider the views of the appropriate bank supervisory 
 38.6   agencies. 
 38.7      Sec. 31.  [48A.18] [OUT-OF-STATE TRUST INSTITUTION TRUST 
 38.8   OFFICES.] 
 38.9      Subdivision 1.  [REQUIREMENT.] An out-of-state trust 
 38.10  institution may act as a fiduciary in this state or engage in a 
 38.11  trust business at an office in this state only if it maintains a 
 38.12  trust office in this state as permitted by this section. 
 38.13     Subd. 2.  [ESTABLISHING AN INTERSTATE TRUST OFFICE.] An 
 38.14  out-of-state trust institution that does not operate a trust 
 38.15  office in this state and that meets the requirements of this 
 38.16  section may acquire and maintain a trust office or establish and 
 38.17  maintain a new trust office in this state.  An out-of-state 
 38.18  trust institution may not establish a new trust office in this 
 38.19  state unless a similar institution chartered under the laws of 
 38.20  this state to act as a fiduciary is permitted to establish a new 
 38.21  trust office that may engage in activities substantially similar 
 38.22  to those permitted to trust offices of out-of-state trust 
 38.23  institutions under subdivision 1 in the state where the 
 38.24  out-of-state trust institution has its principal office. 
 38.25     Subd. 3.  [NOTICE.] An out-of-state trust institution 
 38.26  seeking to establish and maintain a new trust office or acquire 
 38.27  and maintain a trust office in this state according to this 
 38.28  section shall provide, or cause its home state regulator to 
 38.29  provide, written notice of the proposed transaction to the 
 38.30  commissioner on or after the date on which the out-of-state 
 38.31  trust institution applies to the home state regulator for 
 38.32  approval to establish and maintain or acquire the trust office.  
 38.33  The filing of the notice must be preceded or accompanied by a 
 38.34  copy of the resolution adopted by the board authorizing the 
 38.35  additional office and the filing fee, if any, prescribed by the 
 38.36  commissioner. 
 39.1      Subd. 4.  [CONDITIONS FOR APPROVAL.] (a) No trust office of 
 39.2   an out-of-state trust institution may be acquired or established 
 39.3   in this state under this section unless: 
 39.4      (1) the out-of-state trust institution has confirmed in 
 39.5   writing to the commissioner that for as long as it maintains a 
 39.6   trust office in this state, it will comply with all applicable 
 39.7   laws of this state; 
 39.8      (2) the out-of-state trust institution has provided 
 39.9   satisfactory evidence to the commissioner that it has complied 
 39.10  with: 
 39.11     (i) the applicable requirements of section 303.25; and 
 39.12     (ii) the applicable requirements of its home state 
 39.13  regulator for acquiring or establishing and maintaining the 
 39.14  office; and 
 39.15     (3) the commissioner, acting within 60 days after receiving 
 39.16  notice under this section, has certified to the home state 
 39.17  regulator that the requirements of this section have been met 
 39.18  and the notice has been approved or, if applicable, that any 
 39.19  conditions imposed by the commissioner under paragraph (b) have 
 39.20  been satisfied. 
 39.21     (b) The out-of-state trust institution may begin business 
 39.22  at the trust office on the 61st day after the date the 
 39.23  commissioner receives the notice unless the commissioner 
 39.24  specifies an earlier or later date, provided, with respect to an 
 39.25  out-of-state trust institution that is not a depository 
 39.26  institution and for which the commissioner has conditioned the 
 39.27  approval on the satisfaction by the out-of-state trust 
 39.28  institution of any requirement applicable to a state trust 
 39.29  company under section 48A.02, the institution has satisfied the 
 39.30  conditions and provided to the commissioner satisfactory 
 39.31  evidence of that fact. 
 39.32     (c) The 60-day period of review may be extended by the 
 39.33  commissioner on a determination that the written notice raises 
 39.34  issues that require additional information or additional time 
 39.35  for analysis.  If the period of review is extended, the 
 39.36  out-of-state trust institution may establish the office only on 
 40.1   prior written approval by the commissioner. 
 40.2      (d) The commissioner may deny approval of the office if the 
 40.3   commissioner finds that the out-of-state trust institution lacks 
 40.4   sufficient financial resources to undertake the proposed 
 40.5   expansion without adversely affecting its safety or soundness or 
 40.6   that the proposed office is contrary to the public interest.  In 
 40.7   acting on the notice, the commissioner shall consider the views 
 40.8   of the appropriate bank supervisory agencies. 
 40.9      Subd. 5.  [ADDITIONAL TRUST OFFICES.] An out-of-state trust 
 40.10  institution that maintains a trust office in this state under 
 40.11  this section may establish trust service offices, or 
 40.12  representative trust offices in this state to the same extent 
 40.13  that a state trust institution may establish or acquire 
 40.14  additional offices in this state according to the procedures for 
 40.15  establishing or acquiring these offices. 
 40.16     Sec. 32.  [48A.19] [OUT-OF-STATE TRUST INSTITUTION 
 40.17  REPRESENTATIVE TRUST OFFICES.] 
 40.18     Subdivision 1.  [AUTHORIZATION.] (a) Subject to the 
 40.19  requirements contained in this section, an out-of-state trust 
 40.20  institution may establish and maintain representative trust 
 40.21  offices anywhere in this state. 
 40.22     (b) An out-of-state trust institution may establish or 
 40.23  acquire and maintain a representative trust office in this 
 40.24  state.  An out-of-state trust institution not maintaining a 
 40.25  trust office in this state and desiring to establish or acquire 
 40.26  and maintain a representative trust office shall: 
 40.27     (1) file a notice on a form prescribed by the commissioner 
 40.28  stating the name of the out-of-state trust institution and the 
 40.29  location of the proposed office and satisfactory evidence that 
 40.30  it is a trust institution; 
 40.31     (2) furnish a copy of the resolution adopted by the board 
 40.32  authorizing the representative trust office; and 
 40.33     (3) pay the filing fee, if any, prescribed by the 
 40.34  commissioner. 
 40.35     (c) The out-of-state trust institution may begin business 
 40.36  at the representative trust office on the 31st day after the 
 41.1   date the commissioner receives the notice, unless the 
 41.2   commissioner specifies an earlier or later date. 
 41.3      Subd. 2.  [REVIEW BY COMMISSIONER.] The 30-day period of 
 41.4   review may be extended by the commissioner on a determination 
 41.5   that the written notice raises issues that require additional 
 41.6   information or additional time for analysis.  If the period of 
 41.7   review is extended, the out-of-state trust institution may 
 41.8   establish the representative trust office only on prior written 
 41.9   approval by the commissioner. 
 41.10     Subd. 3.  [DISAPPROVAL.] The commissioner may deny approval 
 41.11  of the representative trust office if the commissioner finds 
 41.12  that the out-of-state trust institution lacks sufficient 
 41.13  financial resources to undertake the proposed expansion without 
 41.14  adversely affecting its safety or soundness or that the proposed 
 41.15  office would be contrary to the public interests.  In acting on 
 41.16  the notice, the commissioner shall consider the views of the 
 41.17  appropriate bank supervisory agencies. 
 41.18     Sec. 33.  [48A.20] [SUPERVISION OF OUT-OF-STATE TRUST 
 41.19  INSTITUTIONS.] 
 41.20     Subdivision 1.  [EXAMINATIONS.] To the extent consistent 
 41.21  with subdivision 3, the commissioner may make examinations of an 
 41.22  office established and maintained in this state under this 
 41.23  chapter by an out-of-state trust institution as the commissioner 
 41.24  considers necessary to determine whether the office is being 
 41.25  operated in compliance with the laws of this state and according 
 41.26  to safe and sound banking practices.  Section 46.04 applies to 
 41.27  these examinations. 
 41.28     Subd. 2.  [PERIODIC REPORTS.] The commissioner may require 
 41.29  periodic reports regarding an out-of-state trust institution 
 41.30  that has established and maintained an office in this state 
 41.31  according to this chapter.  The required reports shall be 
 41.32  provided by the trust institution or by the home state 
 41.33  regulator.  Any reporting requirements prescribed by the 
 41.34  commissioner under this subdivision shall be: 
 41.35     (1) consistent with the reporting requirements applicable 
 41.36  to state trust companies; and 
 42.1      (2) appropriate to allow the commissioner to carry out the 
 42.2   commissioner's responsibilities under this chapter. 
 42.3      Subd. 3.  [COOPERATIVE AGREEMENTS.] (a) The commissioner 
 42.4   may enter into cooperative, coordinating, and 
 42.5   information-sharing agreements with any other bank supervisory 
 42.6   agencies or an organization affiliated with or representing one 
 42.7   or more bank supervisory agencies with respect to the periodic 
 42.8   examination or other supervision of an office in this state of 
 42.9   an out-of-state trust institution, or an office of a state trust 
 42.10  institution in a host state.  The commissioner may accept a 
 42.11  report of examination and report of investigation from a party 
 42.12  to the agreement in lieu of conducting the commissioner's own 
 42.13  examination or investigation. 
 42.14     (b) The commissioner may enter into contracts with any bank 
 42.15  supervisory agency that has concurrent jurisdiction over a state 
 42.16  trust institution or an out-of-state trust institution 
 42.17  maintaining an office in this state to engage the services of 
 42.18  that agency's examiners at a reasonable rate of compensation or 
 42.19  to provide the services of the commissioner's examiners to the 
 42.20  agency at a reasonable rate of compensation. 
 42.21     (c) The commissioner may enter into joint examinations or 
 42.22  joint enforcement actions with other bank supervisory agencies 
 42.23  having concurrent jurisdiction over any office established and 
 42.24  maintained in this state by an out-of-state trust institution or 
 42.25  an office established and maintained by a state trust 
 42.26  institution in any host state.  The commissioner may at any time 
 42.27  take actions independently if the commissioner considers the 
 42.28  actions to be necessary or appropriate to carry out the 
 42.29  commissioner's responsibilities under this section or to ensure 
 42.30  compliance with the laws of this state.  In the case of an 
 42.31  out-of-state trust institution, the commissioner shall recognize 
 42.32  the exclusive authority of the home state regulator over 
 42.33  corporate governance matters and the primary responsibility of 
 42.34  the home state regulator with respect to safety and soundness 
 42.35  matters. 
 42.36     Subd. 4.  [FEES.] Each out-of-state trust institution that 
 43.1   maintains one or more offices in this state may be assessed and, 
 43.2   if assessed, shall pay supervisory and examination fees 
 43.3   according to the laws of this state and rules of the 
 43.4   commissioner.  The fees may be shared with other bank 
 43.5   supervisory agencies or an organization affiliated with or 
 43.6   representing one or more bank supervisory agencies under 
 43.7   agreements between the parties and the commissioner. 
 43.8      Sec. 34.  [48A.21] [NOTICE OF SUBSEQUENT MERGER, CLOSING.] 
 43.9      Each out-of-state trust institution that maintains an 
 43.10  office in this state according to section 48A.18, or the home 
 43.11  state regulator of the trust institution, shall give at least 30 
 43.12  days prior written notice or, in the case of an emergency 
 43.13  transaction, shorter notice as is consistent with applicable 
 43.14  state or federal law, to the commissioner of: 
 43.15     (1) a merger, consolidation, or other transaction that 
 43.16  would cause a change of control with respect to the out-of-state 
 43.17  trust institution or any bank holding company that controls the 
 43.18  trust institution, with the result that an application would be 
 43.19  required to be filed pursuant to the federal Change in Bank 
 43.20  Control Act of 1978, as amended, United States Code, title 12, 
 43.21  section 1817(j), or the federal Bank Holding Company Act of 
 43.22  1956, as amended, United States Code, title 12, section 1841 et 
 43.23  seq., or any successor statutes; 
 43.24     (2) a transfer of all or substantially all of the trust 
 43.25  accounts or trust assets of the out-of-state trust institution 
 43.26  to another person; or 
 43.27     (3) the closing or disposition of an office in this state. 
 43.28     Sec. 35.  [48A.22] [ENFORCEMENT.] 
 43.29     Subdivision 1.  [GENERAL AUTHORITY OF COMMISSIONER.] (a) 
 43.30  Consistent with hearing provisions of sections 46.23 to 46.33, 
 43.31  if the commissioner finds that: 
 43.32     (1) an office maintained by an out-of-state trust 
 43.33  institution in this state is being operated in violation of the 
 43.34  laws of this state or in an unsafe and unsound manner; or 
 43.35     (2) a company is engaged in an unauthorized trust activity, 
 43.36  the commissioner may take any enforcement action the 
 44.1   commissioner could take if the office or the company were a 
 44.2   state trust company including, but not limited to, issuing an 
 44.3   order temporarily or permanently prohibiting the company from 
 44.4   engaging in a trust business in this state. 
 44.5      (b) The commissioner may determine by order that an 
 44.6   out-of-state trust institution engaging in or proposing to 
 44.7   engage in a trust business in this state does not meet the 
 44.8   requirements for establishing a representative trust office in 
 44.9   this state according to section 48A.19, the order is effective 
 44.10  on the date of issuance or another date the commissioner 
 44.11  determines. 
 44.12     Subd. 2.  [IMMEDIATE ENFORCEMENT ACTION; SUBSEQUENT 
 44.13  HEARING.] In cases involving extraordinary circumstances 
 44.14  requiring immediate action, the commissioner may take any action 
 44.15  permitted by subdivision 1 without notice or opportunity for 
 44.16  hearing but shall promptly upon application of the out-of-state 
 44.17  trust institution afford a subsequent hearing to rescind the 
 44.18  action taken.  The commissioner shall promptly give notice to 
 44.19  the home state regulator of each enforcement action taken 
 44.20  against an out-of-state trust institution and, to the extent 
 44.21  practicable, shall consult and cooperate with the home state 
 44.22  regulator in pursuing and resolving the enforcement action. 
 44.23     Sec. 36.  Minnesota Statutes 1996, section 50.085, 
 44.24  subdivision 14, is amended to read: 
 44.25     Subd. 14.  [TRUST POWERS.] Upon application to and approval 
 44.26  by the commissioner of commerce, a savings bank may act as 
 44.27  trustee, executor, administrator, personal representative, 
 44.28  conservator, custodian, guardian, or in any other fiduciary 
 44.29  capacity in which state banks, trust companies, or other 
 44.30  corporations are permitted to act, and receive reasonable 
 44.31  compensation for it.  ~~A savings bank that has complied with~~ 
 44.32  ~~sections 48.36 to 48.43 and 48.475, and holds a certificate as~~ 
 44.33  ~~provided in section 48.37, may exercise the powers and~~ 
 44.34  ~~privileges set forth in sections 48.38, 48.475, 48.84, 48.841,~~ 
 44.35  ~~48.846, and 48.86.~~  A savings bank that has qualified and 
 44.36  obtained a certificate, as provided in ~~sections 48.36 to~~ 
 45.1   ~~48.43~~ section 48.37, may use in its corporate name or title, in 
 45.2   addition to the words "savings bank" or other words permitted by 
 45.3   law, the words "trust" or "trust company," and may display and 
 45.4   make use of signs, symbols, tokens, letterheads, cards, 
 45.5   circulars, and advertising stating or indicating that it is 
 45.6   authorized to transact the business authorized by those 
 45.7   sections, and a savings bank using the words "trust" or "trust 
 45.8   company" is not required to use the word "state" in its 
 45.9   corporate name.  A savings bank may not invest, pursuant to 
 45.10  section 50.1465, in a corporation that engages in activities 
 45.11  described in this subdivision, without first obtaining the 
 45.12  approval of the commissioner of commerce. 
 45.13     Sec. 37.  Minnesota Statutes 1996, section 303.25, 
 45.14  subdivision 3, is amended to read: 
 45.15     Subd. 3.  [BOND MUST BE FILED.] Before accepting 
 45.16  appointment or acting as executor, administrator, trustee, 
 45.17  guardian, or conservator, every foreign trust association shall 
 45.18  file a bond with a court of competent jurisdiction in an amount 
 45.19  as the court directs, with sufficient sureties, conditioned upon 
 45.20  the faithful discharge of its duties as executor, administrator, 
 45.21  trustee, guardian, or conservator, or, in lieu of the bond, 
 45.22  shall deposit securities with the state treasurer in the same 
 45.23  manner and in the same amount as would be required under section 
 45.24  ~~48.67~~ 48A.03, subdivision 2, of a trust company organized under 
 45.25  the laws of this state.  This deposit shall be maintained until 
 45.26  the foreign trust association shall cease to act as an executor, 
 45.27  administrator, trustee, guardian, or conservator under this 
 45.28  section.  However, except as otherwise ordered by a court of 
 45.29  competent jurisdiction, the requirements of this subdivision do 
 45.30  not apply to a trustee with respect to a trust created otherwise 
 45.31  than by will if the trust instrument requests or directs that a 
 45.32  bond need not be required of the trustee. 
 45.33     Sec. 38.  Minnesota Statutes 1996, section 525.551, 
 45.34  subdivision 6, is amended to read: 
 45.35     Subd. 6.  [BOND.] Upon the filing of a bond by the guardian 
 45.36  or conservator of an estate in an amount the court may direct 
 46.1   and an oath according to law, or upon the filing of an 
 46.2   acceptance of the trust pursuant to section ~~48.79~~ 48A.08, 
 46.3   subdivision 4, letters of guardianship or conservatorship shall 
 46.4   issue.  If there is no personal property, the court may waive 
 46.5   the filing of a bond, but if the guardian or conservator 
 46.6   receives or becomes entitled to any property of the ward or 
 46.7   conservatee the guardian or conservator shall immediately file a 
 46.8   report thereof and a bond in an amount the court may direct.  In 
 46.9   case of breach of a condition of the bond an action thereon may 
 46.10  be prosecuted by leave of the court by any interested person or 
 46.11  by the court on its own motion. 
 46.12     Sec. 39.  Minnesota Statutes 1996, section 525.56, 
 46.13  subdivision 4, is amended to read: 
 46.14     Subd. 4.  [DUTIES OF GUARDIAN OR CONSERVATOR OF THE 
 46.15  ESTATE.] The court may appoint a guardian of the estate if it 
 46.16  determines that all the powers and duties listed in this 
 46.17  subdivision are needed to provide for the needs of the 
 46.18  incapacitated person.  The court may appoint a conservator of 
 46.19  the estate if it determines that a conservator is necessary to 
 46.20  provide for the needs of the incapacitated person through the 
 46.21  exercise of some, but not all, of the powers and duties listed 
 46.22  in this subdivision.  The duties and powers of a guardian or 
 46.23  those which the court may grant to a conservator include, but 
 46.24  are not limited to: 
 46.25     (1) The duty to pay the reasonable charges for the support, 
 46.26  maintenance, and education of the ward or conservatee in a 
 46.27  manner suitable to the ward's or conservatee's station in life 
 46.28  and the value of the estate.  Nothing herein contained shall 
 46.29  release parents from obligations imposed by law for the support, 
 46.30  maintenance, and education of their children.  The guardian or 
 46.31  conservator has no duty to pay for these requirements out of 
 46.32  personal funds.  Wherever possible and appropriate, the guardian 
 46.33  or conservator should meet these requirements through 
 46.34  governmental benefits or services to which the ward or 
 46.35  conservatee is entitled, rather than from the ward's or 
 46.36  conservatee's estate.  Failure to satisfy the needs and 
 47.1   requirements of this clause shall be grounds for removal, but 
 47.2   the guardian or conservator shall have no personal or monetary 
 47.3   liability; 
 47.4      (2) The duty to pay out of the ward's or conservatee's 
 47.5   estate all just and lawful debts of the ward or conservatee and 
 47.6   the reasonable charges incurred for the support, maintenance, 
 47.7   and education of the ward's or conservatee's spouse and 
 47.8   dependent children and, upon order of the court, pay such sum as 
 47.9   the court may fix as reasonable for the support of any person 
 47.10  unable to earn a livelihood who is legally entitled to support 
 47.11  from the ward or conservatee; 
 47.12     (3) The duty to possess and manage the estate, collect all 
 47.13  debts and claims in favor of the ward or conservatee, or, with 
 47.14  the approval of the court, compromise them, institute suit on 
 47.15  behalf of the ward or conservatee and represent the ward or 
 47.16  conservatee in any court proceedings, and invest all funds not 
 47.17  currently needed for the debts and charges named in clauses (1) 
 47.18  and (2) and the management of the estate, in accordance with the 
 47.19  provisions of sections ~~48.84~~ 48A.07, subdivision 6, and 
 47.20  501B.151, or as otherwise ordered by the court.  The standard of 
 47.21  a fiduciary shall be applicable to all investments by a guardian 
 47.22  or conservator.  A guardian or conservator shall also have the 
 47.23  power to purchase certain contracts of insurance as provided in 
 47.24  section 50.14, subdivision 14, clause (b); 
 47.25     (4) Where a ward or conservatee has inherited an undivided 
 47.26  interest in real estate, the court, on a showing that it is for 
 47.27  the best interest of the ward or conservatee, may authorize an 
 47.28  exchange or sale of the ward's or conservatee's interest or a 
 47.29  purchase by the ward or conservatee of any interest other heirs 
 47.30  may have in the real estate.  
 47.31     Sec. 40.  [REPEALER.] 
 47.32     Minnesota Statutes 1996, sections 48.38; 48.475; 48.65; 
 47.33  48.66; 48.67; 48.68; 48.69; 48.70; 48.71; 48.72; 48.73; 48.75; 
 47.34  48.76; 48.77; 48.78; 48.79; 48.80; 48.81; 48.82; 48.83; 48.84; 
 47.35  48.841; 48.845; 48.846; 48.85; and 48.86; and Minnesota Statutes 
 47.36  1997 Supplement, section 48.476, are repealed.