*HCS SS SCS SB 892 — Financial Institutions and Missouri Uniform Trust Code. Changes the laws regarding financial institutions and the Missouri Uniform Trust Code.

Financial Institutions. The bill:

(1) Authorizes an income tax credit based on the pro rata share of corporate franchise tax paid by shareholders of S corporation savings and loan association holding companies and credit institutions;

(2) Prohibits industrial loan companies or industrial banks from establishing any deposit or loan production office or bank branch to conduct any banking business within the state;

(3) Requires a person seeking a repossession title to a motorboat, vessel, watercraft, or manufactured home to present a notice of lien receipt or the original certificate of ownership reflecting the holder’s lien. The bill removes the requirement that the lienholder must present the original or photostatic copy of the security agreement and instead requires presentation of an affidavit that the lienholder has the written consent of all owners or lienholders of record to repossess the motorboat, vessel, watercraft, or manufactured home has provided the parties with written notice of the repossession. The lienholder must give 10 days' written notice by first class mail to the owners and other lienholders;

(4) Increases the amount of a corporate surety bond that applicants for a license to sell travelers checks or money orders must have from $25,000 to $100,000. The bond will be used to secure the faithful performance of the obligations of the applicant and to pay the costs incurred by the Division of Finance within the Department of Economic Development to remedy any breach of the obligations of the applicant or to pay examination costs of the division that have not been paid. Upon license renewal, the bond amount will be either five times the highest outstanding balance or five times the greatest amount transmitted in a single day from the previous year with a minimum bond amount of $100,000 and a maximum of $1 million. The division director will be authorized to perform an examination of any person licensed under the bill if necessary; and

(5) Changes the reporting requirements of past due loan amounts that the board of directors of every bank and trust company must provide at their monthly meetings and allows lenders to accelerate maturity of an unpaid balance, take possession of the property, or enforce a security interest on a loan if a borrower has defaulted on a second mortgage three times.

*Missouri Uniform Trust Code. The bill makes several changes to a piece of legislation enacted in 2005 that is known as the Missouri Uniform Trust Code (which was based on the Uniform Trust Code). There are four reasons for the Technical Corrections:

(1) Changes have been made to the UTC at the national level. The MUTC is changed to conform to those changes. Conforming amendments were made to

§ 456.1-103(2), definition of “ascertainable standard,” § 456.3-301, limiting a settlor’s ability to represent and bind other beneficiaries in action to amend or terminate trust, § 456.5-501, dealing with rights of creditors in non-spendthrift trusts, and § 456.5-506, adding definition of “mandatory distribution;”

(2) In the year since the enactment of the MUTC, several technical glitches have been discovered. A prior statute incorporated into the venue statute, § 453.2-204, contained language that did not get changed to conform to the MUTC. That change is made. Many statutory sections which cross-referenced the Missouri Prudent Investor statute were not changed to reflect the move of those statutes from Chapter 456 to chapter 469. Those statutes changed to reflect the proper cross reference are § 404.051, 404.550, 404.714, 473.333, 473.787, 475.130, and 475.190;

(3) There has been vocal criticism of the UTC and the MUTC from attorneys that feel the provisions did not provide as much protection for special needs trusts and for trust beneficiaries from creditors as did prior law. While many disagreed with those claims, the scrutiny the controversy caused did result in changes made to assure that special needs trusts and creditor protection remained the same as was the case prior to the enactment of the MUTC. Provisions affected are § 456.4-401 (methods for creating trust amended to include judicial creation of Medicaid payback trusts), § 456.4-402 (requirements for creating trust to exclude properly created Medicaid payback trusts), § 456.4-411A (preventing special needs trust from being subject to termination on agreement of settlor and beneficiaries), § 456.5-504, (protection of discretionary interests in trust from creditors), § 475.092 (match provisions on court created special needs trust to Medicaid/SSI requirements) and § 469.500 (abolishment of Doctrine of Worthier Title to prevent inadvertent disqualification of special needs trusts); and

(4) Mainly minor changes made in response to issues raised as the MUTC become operational. These changes include: § 456.1-103(15), tweaking definition of “power of withdrawal,” § 456.1-105.2(8), making it easier for a settlor to modify trustees duty to notify trust beneficiaries under § 456.8-813, § 456.1-110, modifying situations in which charitable beneficiaries receive notice, § 456.3-301, allowing qualified beneficiaries to represent other beneficiaries in actions to modify trust administrative provisions, § 456.7-703, modifying rules allowing co-trustees to delegate duties to each other, § 456.8-813, expanding grandfathering of irrevocable trusts in existence on 1-1-05 from notice requirements, § 456.8-814, clarifying intent with respect to effect of discretionary language on ascertainable standards, and § 456.8-816, expressly allowing retention and compensation of accountants, investment advisors, and attorneys. (Signed 7/10/06)

*The portion of this bill making changes to the Missouri Uniform Trust Code was drafted by The Missouri Bar Probate& Trust Law Committee.

CCS#2 HCS SCS SB 932 — County Officials. (See Local Government Law)