There is a newer version of this Chapter
2023
2022
2021
2020 (you are here)
2019
Other previous versions
View our newest version here

2020 Guam Statutes
Title 11 - Finance & Taxation
Savings and Loans Associations
Chapter 160 - Guam-Based Trust Companies Act

Universal Citation: 11 Guam Code §§ 160101 - 160503 (2020)
Previous Next

Download as PDF
11 GCA FINANCE & TAXATION CH. 160 GUAM-BASED TRUST COMPANIES ACT CHAPTER 160 GUAM-BASED TRUST COMPANIES ACT SOURCE: Entire chapter added by P.L. 25-073:1 (Oct. 19, 1999). Article 1. Article 2. Article 3. Article 4. Article 5. General Provisions. Organization and Licensing. Powers and Miscellaneous Provisions. Examination and Regulation. Unlawful Acts; Penalties. ARTICLE 1 GENERAL PROVISIONS § 160101. § 160102. § 160103. Declaration of Legislative Intent. Definitions. Applicability of Chapter. § 160101. Declaration of Legislative Intent. Liheslaturan Guåhan finds as facts and determines that: (a) there exists on the island of Guam a need for the protection of the public interest, to regulate companies which are engaged in the Trust Company business; (b) such trust companies should be licensed and regulated in such a manner as to promote the public advantage and convenience; and (c) it is the purpose of this Chapter to bring under public supervision those persons who are engaged in, or who desire to engage in the business of a Trust Company, not in connection with banking business, and to insure that there is established on Guam an adequate, efficient and competitive Trust Company service. This Act has been derived from the State of Nevada. 2017 NOTE: Subsection designations altered pursuant to the authority of 1 GCA § 1606. § 160102. Definitions. For the purposes of this Chapter, except as otherwise specifically provided, the following words and phrases, together with all of the 1 COL4122017 11 GCA FINANCE & TAXATION CH. 160 GUAM-BASED TRUST COMPANIES ACT common derivatives thereof (i.e. verbs, plurals, feminine gender, etc.) shall have the meaning ascribed to them as follows: (a) Beneficiary means the person for whose benefit trust property is held. (b) Commissioner means the Commissioner of Banking of the government of Guam. (c) Court Trust means the action of a Trust Company acting under appointment, order or decree of any court as executor, administrator, guardian, conservator, assignee, receiver, depositary or trustee, or receiving on deposit money or property from a public administrator under any provision of this Chapter or from any executor, administrator, guardian, conservator, assignee, receiver, depositary or trustee under any order or decree of any court. (d) Equitable Duties include the common law duties of a trustee, the duty to exercise reasonable care, skill and caution in preserving and enhancing trust property, the duty to act with undivided loyalty to the beneficiaries of a trust and the duty to act with impartiality among all beneficiaries. (e) Fiduciary means trustee, agent, executor, administrator, committee, guardian, conservator for a minor or other incompetent person, receiver, trustee in bankruptcy, assignee for creditors or any holder of a similar position of trust. (f) Investment Company means any issuer which is, or holds itself out as, being engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities. (g) Investment Trust means a company which sells its own stock and invest the money in stocks, real estate and other investment. (h) Net Worth means paid in capital plus paid in surplus plus retained earnings, if any. (i) Person means an individual, a partnership, a corporation and any other entity established by law or otherwise established for a stated purpose. (j) Private Trust means every other trust, agency, fiduciary relationship or representative capacity other than a court trust. 2 COL4122017 11 GCA FINANCE & TAXATION CH. 160 GUAM-BASED TRUST COMPANIES ACT (k) Settlor means a person who creates a trust. (l) Trust means a fiduciary relationship with respect to property, the trust property, which arises as a result of a manifestation of an intention to create it and which subjects the person by whom the property is held, the trustee, to equitable duties to deal with the property for the benefit of another person, the beneficiary. (m) Trust Company means a corporation organized and licensed in Guam as provided in this Chapter and engaged in Trust Company business. (n) Trust Company Business means acting as a trustee and engaging in those activities stated in § 160301.1. (o) Trustee means a person who is subject to equitable duties and who holds trust property for a beneficiary. (p) Trust Property means property held in a trust. § 160103. Applicability of Chapter. This Chapter does not apply to: (a) banks or banking institutions regulated under the provisions of Chapter 100 of Title 11 of the Guam Code Annotated; (b) savings and loan institutions regulated under Chapter 141 of Title 11 of the Guam Code Annotated; (c) title insurers, but only respecting escrows; (d) nonprofit, charitable trusts or trust associations; (e) any person, if: (1) the fiduciary relationship is not one of the person’s principal occupations; or (2) that person serves as trustee for a relative by blood or marriage; or (f) to a beneficiary of the Guam Foreign Direct Investment Equity Act. SOURCE: Added by P.L. 25-073 (Oct. 19, 1999). Amended by P.L. 25-149:2 (July 5, 2000). 3 COL4122017 11 GCA FINANCE & TAXATION CH. 160 GUAM-BASED TRUST COMPANIES ACT 2017 NOTE: Subsection/subitem designations altered pursuant to the authority of 1 GCA § 1606. --------ARTICLE 2 ORGANIZATION AND LICENSING § 160201. § 160202. § 160203. § 160204. § 160205. § 160206. § 160207. § 160208. § 160209. § 160210. § 160211. § 160212. Unlawful to Engage in Business of Trust Company Without License. Unlawful to Use or Advertise Word >Trust= as Part of Name; Exceptions. Minimum Capitalization. Incorporation; Required Number of Persons. Contents of Articles of Incorporation. Commissioner to Issue Certificate of Incorporation; Commissioner Must Authorize Business Before Company May Transact Business. Subscription, Acknowledgment and Filing of Articles of Incorporation; Filing of Copies. Application for License: Contents; Fees. Procedure for Granting or Denying License. Issuance or Denial of License; Renewal. License Fees; Renewals. Cancellation of License If Trust Company Fails to Open for Business. § 160201. Unlawful to Engage in Business of Trust Company Without License. It is unlawful for any Trust Company to engage in the business of a Trust Company without complying with the provisions of this Chapter and having a license issued by the Commissioner. § 160202. Unlawful to Use or Advertise Word >Trust== as Part of Name; Exceptions. (a) Except as otherwise provided in Subsection 2, no person, partnership, firm, association, corporation or other business organization formed and doing business under the laws of Guam may: (1) use the words >Trust Company= or any direct derivative of these words as a part of its name. 4 COL4122017 11 GCA FINANCE & TAXATION CH. 160 GUAM-BASED TRUST COMPANIES ACT (2) advertise or use any sign with the words >Trust Company= used as a part of its name. (b) The provisions of Subsection (a) do not apply to a person or business organization which is supervised by the Commissioner pursuant to this Chapter. 2017 NOTE: Subsection/subitem designations added/altered pursuant to the authority of 1 GCA § 1606. Internal reference altered to reflect the change. § 160203. Minimum Capitalization. No Trust Company may be organized or operated with a capital of less than One Hundred Thousand Dollars ($100,000.00), or in such greater amount as may be required by the Commissioner, and paid-up surplus of Fifty Thousand Dollars ($50,000.00), or in such greater amount as may be required by the Commissioner. The full amount of the capital and surplus must be paid in cash, exclusive of all organization expenses, before the Trust Company is authorized to commence business. § 160204. Incorporation; Required Number of Persons. (a) Any three (3) or more persons may execute articles of incorporation and be incorporated as a trust company in the manner prescribed in this Chapter. (b) Any two (2) or more persons may execute articles of organization and form a trust company in the manner prescribed in this Chapter. SOURCE: Added by P.L. 25-073:1 (Oct. 19, 1999). Repealed and reenacted by P.L. 33-239:2 (Jan. 27, 2017). 2017 NOTE: Subsection designations added pursuant to the authority of 1 GCA § 1606. § 160205. Contents of Articles of Incorporation. (a) The articles of incorporation must contain: (1) the corporate name adopted by the corporation, which must be such as to distinguish it from any other Trust Company formed or incorporated on Guam, or engaged in the trust business on Guam; (2) the place where its business is to be conducted; (3) the purpose for which it is formed; 5 COL4122017 11 GCA FINANCE & TAXATION CH. 160 GUAM-BASED TRUST COMPANIES ACT (4) the amount of its capital stock, which must be divided into shares of the par value of not less than Twenty-five Dollars ($25.00) each, except that upon the written approval of the Commissioner the capital stock may be divided into shares of the par value of not less than One Dollar ($1.00) each (The amount of capital stock must not be less than One Hundred Thousand Dollars ($100,000.00), and must be assessable.); (5) the amount of its original paid-in surplus, which must not be less than fifty percent (50%) of its capital stock; (6) the name and place of residence of, and the number of shares subscribed by, each stockholder; (7) the number of directors, which must not be less than three (3), and the names of the stockholders selected to act as the first board of directors, each of whom must be a bona fide subscriber for at least One Thousand Dollars ($1,000.00) of the stock of the Trust Company, fully paid and not hypothecated; (8) the location of all branch offices as approved by the Commissioner; and (9) such other matters, not inconsistent with law, as the incorporators may deem proper. (b) The articles of incorporation may also provide for the issuance and sale of preferred stock in such amount as is fixed by the articles or by amendments thereto, and the amount and number of shares thereof, and the terms and conditions thereof consistent with the provisions of this Chapter. 2017 NOTE: Subsection/subitem designations added/altered pursuant to the authority of 1 GCA § 1606. § 160206. Commissioner to Issue Certificate of Incorporation; Commissioner Must Authorize Business Before Company May Transact Business. (a) The Commissioner shall issue a certificate in the form provided by law for other corporations, and the existence of the Trust Company as a corporation dates from the issuance of the certificate by the Commissioner, from which time it has and may exercise the powers conferred by law upon corporations generally, except as limited or modified by this Chapter. 6 COL4122017 11 GCA FINANCE & TAXATION CH. 160 GUAM-BASED TRUST COMPANIES ACT (b) The Trust Company shall transact no business, except the election of officers, and the taking and approving of their official bonds, and the receipt of payments on account of the subscriptions of the capital stock, and such other business as is incidental to its organization, until it is authorized by the Commissioner to commence the Trust Company business as provided in this Chapter. 2017 NOTE: Subsection designations altered pursuant to the authority of 1 GCA § 1606. § 160207. Subscription, Acknowledgment and Filing of Articles of Incorporation; Filing of Copies. The articles of incorporation must: (a) be subscribed to by at least three (3) of the stockholders of the proposed corporate Trust Company; (b) be acknowledged by them before some person competent to take an acknowledgment of deeds; and (c) be filed in the office of the Commissioner. § 160208. Application for License: Contents; Fees. (a) The corporate Trust Company shall file an application for a license to transact Trust Company business with the Commissioner on forms prescribed by the Commissioner, which must contain such information as the Commissioner requires. (b) A non-refundable fee of One Thousand Dollars ($1,000.00) for the application and investigation must accompany the application. The applicant shall also pay such additional expenses incurred in the process of investigation as the Commissioner deems necessary. (c) Notification of the location of a Trust Company branch office shall be made to the Commissioner, accompanied by a non-refundable fee in the amount of Two Hundred Fifty Dollars ($250.00). (d) All money received by the Commissioner pursuant to this Section must be placed in a special purpose trust account, pursuant to § 160307 of this Act. 2017 NOTE: Subsection designations altered pursuant to the authority of 1 GCA § 1606. § 160209. Procedure for Granting or Denying License. 7 COL4122017 11 GCA FINANCE & TAXATION CH. 160 GUAM-BASED TRUST COMPANIES ACT (a) Within forty-five (45) days following the filing of the application for a license, the Commissioner shall investigate the facts of the application and the other requirements of this Chapter to determine: (1) that the persons who will serve as directors or officers are qualified by character and experience; (2) that the financial strength of the significant incorporators, ten percent (10%) or more ownership, are commensurate with the undertaking; (3) that the name of the proposed company is not deceptively similar to that of another Trust Company or otherwise misleading; (4) that the capital and surplus are not less than the required minimum; and (5) such other matters concerning the proposed Trust Company as the Commissioner may deem relevant. (b) Within thirty (30) days after the application is filed, the Commissioner shall conduct a public hearing to consider the application. The Commissioner shall give two (2) written notices of the public hearing in a newspaper of general circulation on Guam. Publication of such notices should be no more than fifteen (15) days, nor less than two (2) complete days, before the hearing date. Costs of publication and other directly related expenses shall be paid by the applicant. 2017 NOTE: Subsection designations altered pursuant to the authority of 1 GCA § 1606. § 160210. Issuance or Denial of License; Renewal. (a) If the Commissioner finds that the applicant has met all the requirements of this Chapter and other applicable laws, the Commissioner shall, within thirty (30) days after the conclusion of the investigation, issue a license to the applicant to conduct a Trust Company business upon the applicant=s paying the required license fee. Otherwise, the Commissioner shall deny the application and notify the applicant in writing of the reasons for the denial. (b) All licenses granted under the Act shall expire on the June 30 following the date of issuance. On or before June 1 of each year thereafter, every company holding a license that wishes to renew the license for an additional year shall apply to the Commissioner for a renewal of the license. 8 COL4122017 11 GCA FINANCE & TAXATION CH. 160 GUAM-BASED TRUST COMPANIES ACT 2017 NOTE: Subsection designations altered pursuant to the authority of 1 GCA § 1606. § 160211. License Fees; Renewals. (a) The initial fee to be paid for a Trust Company license must be in proportion to the authorized capitalization of the Trust Company as follows: (1) a Trust Company having a capitalization of more than One Hundred Thousand Dollars ($100,000.00), up to and including Five Hundred Thousand Dollars ($500,000.00), shall pay a license fee of Five Hundred Dollars ($500.00); (2) a Trust Company having a capitalization of more than Five Hundred Thousand Dollars ($500,000.00), up to and including One Million Dollars ($1,000,000.00), shall pay a license fee of Seven Hundred Fifty Dollars ($750.00); and (3) a Trust Company having a capitalization of more than One Million Dollars ($1,000,000.00) shall pay a license fee of One Thousand Dollars ($1,000.00). (b) In addition, every Trust Company shall pay an initial license fee of One Hundred Dollars ($100.00) for each branch office that may be authorized by the Commissioner. (c) Thereafter, every Trust Company shall pay annually, on or before June 30 of each year, a license fee which must be in proportion to its initial paid-in capital and surplus, or to its net worth as of December 31st of the preceding year, whichever is higher, as follows: (1) a Trust Company having a capitalization of less than One Hundred Thousand Dollars ($100,000.00) shall pay a license fee of Two Hundred Fifty Dollars ($250.00); (2) a Trust Company having a capitalization of more than One Hundred Thousand Dollars ($100,000.00), up to and including Five Hundred Thousand Dollars ($500,000.00), shall pay a license fee of Five Hundred Dollars ($500.00); (3) a Trust Company having a capitalization of more than Five Hundred Thousand Dollars ($500,000.00), up to and including One Million Dollars ($1,000,000.00), shall pay a license fee of Seven Hundred Fifty Dollars ($750.00); and 9 COL4122017 11 GCA FINANCE & TAXATION CH. 160 GUAM-BASED TRUST COMPANIES ACT (4) A Trust Company having a capitalization of more than One Million Dollars ($1,000,000.00) shall pay a license fee of One Thousand Dollars ($1,000.00). (d) All money collected under the provisions of this Section must be paid into the special purpose trust account as directed under § 160307. 2017 NOTE: Subsection/subitem designations altered pursuant to the authority of 1 GCA § 1606. § 160212. Cancellation of License If Trust Company Fails to Open for Business. If a proposed Trust Company fails to open for business within six (6) months after the date the license was issued, or within an additional six (6) month extension granted by the Commissioner upon written application and for good cause shown, the Commissioner shall issue an order canceling the Trust Company=s license. ---------ARTICLE 3 POWERS AND MISCELLANEOUS PROVISIONS § 160301. § 160302. § 160303. § 160304. § 160305. § 160306. § 160307. § 160308. § 160309. § 160310. § 160311. § 160312. Powers of Licensed Trust Companies; Banking Business Prohibited. Investments; General Requirements. Investments; Purchase of Securities Authorized. Other Requirements. Discontinuing Business. Commissioner in Possession. Requirements of Reorganization Plan. Liquidation by Commissioner. Fidelity Bonds; Insurance. Income Tax Rebates. Use of Funds. Confidentiality Treatment of Trust Information. § 160301. Powers of Licensed Trust Companies; Banking Business Prohibited. (a) Each licensed Trust Company may: 10 COL4122017 11 GCA FINANCE & TAXATION CH. 160 GUAM-BASED TRUST COMPANIES ACT (1) act as trustee under any mortgage or bond of any person or of any municipality or body politic; (2) accept and execute any municipal or corporate or individual trust consistent with the laws of Guam; (3) act under the order or appointment of any court as guardian, administrator, receiver or trustee; (4) act as executor or trustee under any will or inter vivos trust; (5) act as fiscal or transfer agent of any state, municipality, body politic or corporation, and in such capacity receive and disburse money and register, transfer and countersign certificates of stock, bonds and other evidences of indebtedness; (6) act as local or resident agent of foreign corporations; (7) accept and execute any trust business; (8) acquire the fiduciary rights, powers, duties and liabilities of a bank, savings and loan association, thrift company, or Trust Company licensed pursuant to Title 11 of the Guam Code Annotated, and upon the effective date of such an acquisition, the fiduciary rights, powers, duties and liabilities of the bank, savings and loan association, thrift company, or Trust Company vest in and must be performed by the acquiring Trust Company; and (9) do and perform all acts necessary to exercise the powers enumerated in this Subsection and authorized by this Chapter. (b) A Trust Company may not engage in any banking business by accepting deposits or making loans. 2017 NOTE: Subsection/subitem designations altered pursuant to the authority of 1 GCA § 1606. § 160302. Investments; General Requirements. (a) Every Trust Company: (1) shall keep all trust funds and investments separate from the assets of the Company (These funds shall not be mingled with the securities and investments of any other trust or of the corporation, and all investments made by the Company as a fiduciary must be designated so that the trust or estate to which the investments belong may be clearly identified.); 11 COL4122017 11 GCA FINANCE & TAXATION CH. 160 GUAM-BASED TRUST COMPANIES ACT (2) holding trust funds for more than twenty-four (24) hours, awaiting investment or distribution, must deposit or leave on deposit such funds with a local financial institution (Such funds must not be deposited or left with the Trust Company or with an affiliate corporation or association, unless that affiliate corporation or association first pledges, as security for the deposit, securities eligible for investment by local financial institutions which have a market value equal to that of the deposited funds. No security is required with respect to any portion of such deposits which is insured under the provisions of any law of the United States.); (3) acting in any capacity under a court trust or private trust, unless the instrument creating the trust provides otherwise, may cause any securities held by it in its representative capacity to be registered in the name of a nominee or nominees of the Company; and (4) when acting as depositary or custodian for the personal representative of a court trust or private trust, unless the instrument creating the trust provides otherwise, may with the consent of the personal representative of the trust, cause any securities held by it to be registered in the name of a nominee or nominees of the Company. (b) Every Trust Company is liable for any loss occasioned by the acts of its nominees with respect to securities registered under this Section. (c) No corporation or the registrar or transfer agent of the corporation is liable for registering or causing to be registered on the books of the corporation any securities in the name of any nominee of a Trust Company, or for transferring or causing to be transferred on the books of the corporation any securities registered by the corporation in the name of any nominee of a Trust Company, when the transfer is made on the authorization of the nominee. (d) Except as provided in Subsection (e), a Trust Company=s investments of invested capital and earnings, must: (1) be U.S. governmental obligations or Federally insured deposits; or (2) be investment grade securities and mature within three (3) years after acquisition. The aggregate market value of all 12 COL4122017 11 GCA FINANCE & TAXATION CH. 160 GUAM-BASED TRUST COMPANIES ACT investments must equal or exceed sixty percent (60%) of the Company=s current capital, surplus and undivided profits, or sixty percent (60%) of the Company=s capital and surplus when it was organized, whichever is greater. (e) A Trust Company may purchase or rent land, facilities and equipment for use in the daily activities of the company. 2017 NOTE: Subsection/subitem designations altered pursuant to the authority of 1 GCA § 1606. § 160303. Investments; Purchase of Securities Authorized. (a) A Trust Company which is acting as a fiduciary or agent shall, in its discretion or at the direction of another person who is authorized to direct the investment of money held by the Trust Company as a fiduciary or agent, make investments in accordance with the Uniform Prudent Investors Act, as adopted in 1994 by the National Conference of Commissioners on Uniform State Laws, if: (1) the investment trust or investment company is registered with the Commissioner; and (2) the portfolio of the investment trust or investment company consists substantially of investments which are not prohibited by the instrument creating the fiduciary or agency relationship. (b) A Trust Company or an affiliate of the Trust Company may provide services to the investment trust or investment company, including, without limitation, acting as an investment adviser, custodian, transfer agent, registrar, sponsor, distributor or manager, and may receive reasonable compensation for the services. The manner in which the compensation is calculated must be disclosed to the person who is currently receiving the benefits of the fiduciary or agency relationship with the Trust Company. The disclosure shall be made in a prospectus, a report to the Trustor or manner prescribed by the Commissioner. (c) A Trust Company may deposit money held by the Trust Company as a fiduciary or agent with an affiliate before investing or making other disposition of the money. 2017 NOTE: Subsection/subitem designations altered/added pursuant to the authority of 1 GCA § 1606. § 160304. Other Requirements. 13 COL4122017 11 GCA FINANCE & TAXATION CH. 160 GUAM-BASED TRUST COMPANIES ACT (a) Annual Statement. Every Trust Company that is licensed under the Act shall, on or before May 1 of each year, file with the Commissioner, a financial statement verified under oath by two (2) executive officers of the company, setting forth its financial condition, transactions and affairs as of the 31st day of December immediately preceding, in accordance with generally accepted accounting principles plus any additional information required by the Commissioner. (b) Annual Audit. Every Trust Company that is licensed under the Act shall file an annual audit report to accompany the filing of an annual statement prior to May 1 of each year. The audit report shall be rendered by its appointed, Independent Auditor as approved by the Commissioner, and shall cover the financial condition, transactions and affairs as of the 31st day of December immediately preceding in accordance with generally accepted auditing standards. The audited report shall include an unqualified opinion with respect to the financial condition of the Company, except that the Commissioner may accept qualified opinions at the discretion of the Commissioner. (c) Notification. An auditor who is aware that the Trust Company failed to meet the necessary capital and surplus requirements of the Act, or who has rendered other than an unqualified opinion on the financial condition of a Trust Company, and the president of the Trust Company shall both notify the Commissioner in writing within fifteen (15) days of the discovery of failure of the Trust Company to meet the capital or surplus requirements of the Act or within fifteen (15) days of the issuance of such qualified opinion. 2017 NOTE: Subsection designations altered pursuant to the authority of 1 GCA § 1606. § 160305. Discontinuing Business. (a) Whenever any Trust Company desires to discontinue its trust business, it shall do the following: (1) publish the intention of the company, once a week for three (3) consecutive weeks in a newspaper of general circulation on Guam; and (2) submit an affidavit to the Commissioner that all the obligations and indebtedness arising from its trust business and operations on Guam have been satisfactorily discharged. 14 COL4122017 11 GCA FINANCE & TAXATION CH. 160 GUAM-BASED TRUST COMPANIES ACT (b) After the Trust Company has furnished proof of publication and the affidavit, and no objection to discontinue business or no proof is submitted by any claimant of an outstanding receivable or claim against the Trust Company, the Commissioner shall enter an order canceling the Trust Company=s license. 2017 NOTE: Subsection/subitem designations altered pursuant to the authority of 1 GCA § 1606. § 160306. Commissioner in Possession. (a) The Commissioner may take possession of a Trust Company if, after a hearing, the Commissioner shall find: (1) its capital is impaired or it is otherwise in an unsound condition; (2) its business is being conducted in an unlawful or unsound manner; (3) it is unable to continue normal operations; or (4) its examination has been obstructed or impeded. (b) The Commissioner shall take possession by posting upon the premises a notice reciting that the Commissioner is assuming possession pursuant to this Act, and the time, not earlier than the posting of the notice, when the Commissioner’s possession shall be deemed to commence. A copy of the notice shall be filed in the U.S. District Court of Guam. The Commissioner shall notify the trustor of all the trusts under the management of the Trust Company. (c) When the Commissioner has taken possession of a Trust Company, the Commissioner shall be vested with the full and exclusive power of management and control, including the power to continue or to discontinue the business, to stop or to limit the payment of its obligations, to employ any necessary assistants, to execute any instrument in the name of the Trust Company, to commence, defend and conduct in its name any action or proceeding in which it may be a party, to terminate the Commissioner’s possession by restoring the Trust Company to its board of directors and to reorganize or liquidate the Trust Company in accordance with this Act. As soon as practicable after taking possession, the Commissioner shall make an inventory of the assets and file a copy thereof with the U.S. District Court of Guam. 15 COL4122017 11 GCA FINANCE & TAXATION CH. 160 GUAM-BASED TRUST COMPANIES ACT (d) When the Commissioner has taken possession there shall be a postponement until six (6) months after the commencement of such possession of the date upon which any period of limitation fixed by a statute or agreement would otherwise expire on a claim or right of action of the Trust Company, or upon which an appeal must be taken or a pleading or other document must be filed by the Trust Company in any pending action or proceeding. (e) If, in the opinion of the Commissioner, an emergency exists which will result in serious losses to the trustors and creditors, the Commissioner may take possession of the Trust Company without a prior hearing. Within ten (10) days after the Commissioner has taken possession, any interested party may file an application with the U.S. District Court of Guam for an order vacating such possession. The U.S. District Court of Guam shall grant the application if it finds that the action of the Commissioner was unauthorized under this Act. (f) If the Commissioner shall determine to liquidate the Trust Company, the Commissioner shall give such notice of the Commissioner’s determination to the directors, stockholders and the trustors. Any objection to the liquidation shall be filed with the U.S. District Court of Guam within thirty (30) days after such notice. Unless within thirty (30) days thereafter, the U.S. District Court of Guam issues an order staying the liquidation, the Commissioner shall proceed to liquidate the Trust Company. (g) If the Commissioner determines to reorganize the Trust Company, or the U.S. District Court of Guam, after staying its liquidation, orders such reorganization, the Commissioner, after according a hearing to all interested parties, shall propose a reorganization plan. A copy of the Plan shall be sent to each trustor and creditor who will not receive payment of the Commissioner’s claim in full under the Plan, together with notice. Unless within thirty (30) days the Plan is disapproved in writing by persons holding one-third (1/3) or more of the aggregate amount of such claims, the Commissioner will proceed to effect the reorganization. A department or agency of the government of Guam holding a claim which will not be paid in full is authorized to participate as any other creditor. (h) No judgment, lien or attachment shall be executed upon any asset of the Trust Company while it is in the possession of the 16 COL4122017 11 GCA FINANCE & TAXATION CH. 160 GUAM-BASED TRUST COMPANIES ACT Commissioner. Upon the election of the Commissioner in connection with a liquidation or reorganization: (1) any lien or attachment, other than a mechanic=s lien, obtained upon any asset of the Trust Company during the Commissioner=s possession or within four (4) months prior to commencement thereof, shall be vacated, except liens created by the Commissioner while in possession; and (2) Any transfer of an asset of the Trust Company made after or in contemplation of its insolvency with intent to effect a preference shall be voided. (i) With the approval of the U.S. District Court of Guam, the Commissioner may borrow money in the name of the Trust Company and may pledge its assets as security for the loan. (j) All necessary and reasonable expenses of the Commissioner=s possession of a Trust Company and of its reorganization or liquidation shall be defrayed from the assets thereof. § 160307. Requirements of Reorganization Plan. (a) A plan or reorganization shall not be prescribed under this Act, unless: (1) the plan is feasible and fair to all classes of trustors, creditors and stockholders; (2) the face amount of the interest accorded to any trustors, creditors or stockholders under the Plan does not exceed the value of the assets upon liquidation, less that full amount of the claims of all prior classes, subject, however, to any fair adjustment for new capital that any class will pay in under the Plan; (3) the Plan provides for the issuance of common stock in an amount that will provide an adequate ratio to all assets held in trust by the Trust Company; (4) the Plan assures the removal of any director, officer or employee responsible for any unsound or unlawful action or the existence of an unsound condition; and (5) any merger or consolidation provided by the Plan conforms to the requirements of this Act. 17 COL4122017 11 GCA FINANCE & TAXATION CH. 160 GUAM-BASED TRUST COMPANIES ACT (b) Whenever in the course or reorganization supervening conditions render the Plan unfair, or its execution impractical, the Commissioner may modify the Plan or liquidate the institution. Any such action shall be taken by order of the U.S. District Court of Guam upon appropriate notice. § 160308. Liquidation by Commissioner. (a) In liquidating a Trust Company, the Commissioner may exercise any power thereof, but the Commissioner shall not, without the approval of the U.S. District Court of Guam: (1) sell any asset of the Trust Company having a value in excess of One Thousand Dollars ($1,000.00); (2) compromise or release any claim, if the amount of the claim exceeds Five Hundred Dollars ($500.00), exclusive of interest; or (3) make any payment on any claim, other than a claim upon an obligation incurred by the Commissioner, before preparing and filing a schedule of the Commissioner’s determinations in accordance with this Act. (b) Within six (6) months of the commencement of liquidation, the Commissioner may by the Commissioner’s election terminate any executory contract for services or advertising to which the Trust Company is a party, or any obligation of the Trust Company as a lessee. A lessor who receives sixty (60) days notice of the Commissioner’=s election to terminate the lease shall have no claim for rent other than rent accrued to the date of termination, nor for damages for such termination. (c) As soon after the commencement of liquidation as is practicable, the Commissioner shall take the necessary steps to terminate all fiduciary positions held by the Trust Company, and take such action as may be necessary to surrender all property held by the Trust Company as a fiduciary and to settle its fiduciary accounts. (d) As soon after the commencement of liquidation as practicable, the Commissioner shall send notice of the liquidation to each known trustor and creditor. The notice shall also be published in a newspaper of general circulation on Guam once a week for three (3) successive weeks. The Commissioner shall send with the notice a statement of the amount shown on the books of the Trust Company to be the claim of the trustor or creditor. The notice shall demand that if the amount claimed differs 18 COL4122017 11 GCA FINANCE & TAXATION CH. 160 GUAM-BASED TRUST COMPANIES ACT from that stated on the notice to be due, be filed with the Commissioner before a specified date not earlier than sixty (60) days thereafter in accordance with the procedure prescribed in the notice. (e) Within six (6) months after the last day specified in the notice for the filing of claims or such longer period as may be allowed by the U.S. District Court of Guam in which notice of possession has been filed, the Commissioner shall: (1) reject any claim if the Commissioner doubts the validity thereof; (2) determine the amount, if any, owing to each known Trustor or creditor; (3) prepare a schedule of the Commissioner’s determination for filing in the U.S. District Court of Guam in which notice of possession was filed; and (4) notify each person whose claim has not been allowed in full, and publish once a week for three (3) successive weeks a notice of the time when and the place where the schedule of determinations will be available for inspection and the date, not sooner than thirty (30) days thereafter, when the Commissioner will file the Commissioner’s schedule in Court. (f) Within thirty (30) days after the filing of the Commissioner’=s schedule, any trustor or creditor or stockholder may file an objection to any determination made. Any objections so filed shall be heard and determined by the Court, upon such notice to the Commissioner and interested claimants as the Court may prescribe. If the objection is sustained, the Court shall direct an appropriate modification of the schedule. After filing the Commissioner’s schedule, the Commissioner may, from time to time, make partial distribution to the holders of claims which are undisputed or have been allowed by the Court, if a proper reserve is established for the payment of disputed claims. As soon as is practicable after the determination of all objections, the Commissioner shall make final distribution. (g) The following claims shall have priority: (1) obligations incurred by the Commissioner; (2) wages and salaries of officers and employees earned during the four (4) month period preceding the Commissioner=s possession 19 COL4122017 11 GCA FINANCE & TAXATION CH. 160 GUAM-BASED TRUST COMPANIES ACT in an amount not exceeding Three Thousand Dollars ($3,000.00) for any one (1) person; and (3) fees and assessments due to the government of Guam. (h) After the payment of all other claims which were timely filed, the Commissioner shall pay claims otherwise proper which were not filed within the time prescribed. If the sum available for any class is insufficient to provide payment in full, such sum shall be distributed to the claimants in the class pro rata. (i) Any assets remaining after all claims have been paid shall be distributed to the stockholders in accordance with their respective interests. (j) Unclaimed funds remaining after completion of the liquidation shall be retained for ten (10) years by the Commissioner, unless sooner claimed by the owner. At the expiration of such period, the remaining sum shall be transferred to the Treasurer of Guam as abandoned funds. (k) When the assets have been distributed in accordance with this Act, the Commissioner shall file an account with the U.S. District Court of Guam. Upon approval thereof the Commissioner shall be relieved of liability in connection with the liquidation and the charter of the Trust Company shall be canceled. § 160309. Fidelity Bonds; Insurance. (a) The directors of a Trust Company shall require good and sufficient fidelity bonds in the amount of Twenty-five Thousand Dollars ($25,000.00) or more on all active officers and employees, whether or not they receive a salary or other compensation from the Company, to indemnify the Company against loss because of any dishonest, fraudulent or criminal act or omission by any officer or employee acting alone or in combination with any other person. The bonds may be in any form and may be paid for by the Trust Company. (b) The directors shall obtain suitable insurance for their Company against burglary, robbery, theft and other hazards to which it may be exposed in the operation of its business. (c) The directors shall at least annually prescribe the amount of penal sum of the bonds or policies and designate the sureties and underwriters thereof, after giving due and careful consideration to all known elements and factors constituting a risk or hazard. The directors= 20 COL4122017 11 GCA FINANCE & TAXATION CH. 160 GUAM-BASED TRUST COMPANIES ACT action must be recorded in the minutes of the board of directors and reported to the Commissioner. 2017 NOTE: Subsection designations altered pursuant to the authority of 1 GCA § 1606. § 160310. Income Tax Rebates. (a) Notwithstanding any other provisions of this Act, Trust Companies licensed pursuant to the provisions of this Chapter and any bank conducting trust business pursuant to § § 106151 et seq. of Title 11 of the Guam Code Annotated may apply on behalf of the Guam-based trusts under their management, for a Special Qualifying Certificate (>QC=) from the Guam Economic Development Authority, which would allow a one hundred percent (100%) tax rebate as authorized under §§ 58128.6(a) and (b) of Chapter 58 of Title 12 of the Guam Code Annotated. (1) Provided, however, notwithstanding any other provision of this Section, the tax rebate shall not apply to trust property which has been employed in a business in which the settlor was engaged and trust property which is used to embark upon a business for the settlor or the beneficiary. (2) For the purposes of this Subsection, business has the same meaning as engaging in or carrying on a business as in the Business License Law in § 70103(e) of Title 11 of the Guam Code Annotated, and includes only businesses which are required to be licensed, or are excepted from obtaining a license pursuant to the policy and provisions of §§ 70102 and 70130 of Title 11 of the Guam Code Annotated. (b) The Guam Economic Development Authority is hereby authorized to promulgate rules and regulations to implement a Special QC program to allow for expeditious processing of requests by Trust Companies or trustees of Guam-based trusts, for benefits as provided under §§ 58128.6(a) and (b) of Chapter 58 of Title 12 of the Guam Code Annotated. (c) A true copy of the Special QC shall be attached to each tax return of the Guam-based trust, and the amount of tax due prior to the rebate shall be deposited with the government at the time of filing of each income tax return. Taxes deposited on behalf of a Guam-based trust shall not be placed in the General Fund or commingled with other funds, 21 COL4122017 11 GCA FINANCE & TAXATION CH. 160 GUAM-BASED TRUST COMPANIES ACT but shall be deposited by the Director of Revenue and Taxation in special purpose trust accounts in one (1) or more FDIC insured banks with offices within Guam, and shall be withdrawn from such accounts only for the purpose of: (1) making rebates as provided herein; or (2) making payments as provided in § 160308. (d) Upon the application of the Guam-based trust at the completion of the one hundred eighty (180) days from the date of filing of income tax returns, the Director of Revenue and Taxation shall immediately thereafter cause the refund of the income tax to the Guam-based trust. 2017 NOTE: Subsection/subitem designations altered/added pursuant to the authority of 1 GCA § 1606. § 160311. Use of Funds. (a) The income tax payments made under the Special QC program, shall be returned to the respective trusts at the completion of the one hundred eighty (180) day period without interest. (b) The first One Million Dollars ($1,000,000) generated from the trust shall be authorized and appropriated to the Guam Memorial Hospital Authority. All other revenues generated from the implementation of this Act, including, but not limited to, the initial and annual License Fees, Examination Fees and interest earned from these funds, shall be allocated as follows: (1) subject to legislative appropriation, up to fifty percent (50%) to the Chamorro Land Trust Commission, for the purposes of infrastructure development (i.e. roads, power, water, sewer and telephone services) on Chamorro Land Trust properties; (2) subject to legislative appropriation, up to ten percent (10%) shall be earmarked for the Department of Revenue and Taxation for maintaining the operational functions of the government of Guam; (3) subject to legislative appropriation, up to ten percent (10%) of this revenue, shall be remitted immediately to the Guam Economic Development Authority for the development and promotion of Guam=s financial services industry; and 22 COL4122017 11 GCA FINANCE & TAXATION CH. 160 GUAM-BASED TRUST COMPANIES ACT (4) all remaining revenues generated from the implementation of this Act shall be remitted to the General Fund to be appropriated by I Liheslaturan Guåhan. SOURCE: Added by P.L. 25-73. Item 2 amended by P.L. 25-150:17. 2017 NOTE: Subsection/subitem designations added/altered pursuant to the authority of 1 GCA § 1606. § 160312. Confidentiality Treatment of Trust Information. All information pertaining to Guam-based trusts shall be deemed proprietorial and confidential unless: (a) the Commissioner deems it in the public interest to make such information available for public inspection; or (b) the Grantor/Trust authorizes the Commissioner to make available such information for public inspection. ---------ARTICLE 4 EXAMINATION AND REGULATION § 160401. § 160402. § 160403. § 160404. Examination; Powers and Duties of Department of Revenue and Taxation. Fees for Examination; Frequency of Examination. Applicability of Other Provisions of Title. Regulations of Commissioner. § 160401. Examination; Powers and Duties of Department of Revenue and Taxation. (a) The Commissioner of Banking and Insurance, or any examiner duly authorized, shall once during each year make a full examination into all the books, papers and affairs or any Trust Company doing business under §§ 160301, 160302, 160303 and 160304 of this Chapter, and in so doing, shall have power to administer oaths and affirmation and to examine on oath or affirmation the officers, agents and clerks of such company, touching the matter which they may be authorized to inquire into and examine, and to summon, and by subpoena compel the attendance of any person(s) on Guam to testify under oath in relation to the affairs of such company. 23 COL4122017 11 GCA FINANCE & TAXATION CH. 160 GUAM-BASED TRUST COMPANIES ACT (b) If the Commissioner has reason to believe the affairs of any corporation are not being conducted in compliance with said sections, the Commissioner may at any time make, or cause to be made, a special examination of the assets of such corporation. 2011 NOTE: Reference to the “Banking Commisioner” changed to the “Commissioner of Banking and Insurance” pursuant to P.L. 27-088:10 (May 6, 2004). 2017 NOTE: Subsection designations added pursuant to the authority of 1 GCA § 1606. § 160402. Fees for Examination; Frequency of Examination. (a) For each examination of a Trust Company=s books and records required or authorized under this Chapter, the Commissioner shall charge and collect from the Trust Company a fee for conducting the examination and in preparing and typing the report of the examination at a reasonable rate to be established by the Commissioner. (b) All money collected under this Section must be paid directly to the General Fund of the government of Guam and allocated pursuant to § 160308. (c) The Commissioner shall examine a licensee as often as the Commissioner deems necessary, with cause. 2017 NOTE: Subsection designations altered pursuant to the authority of 1 GCA § 1606. § 160403. Applicability of Other Provisions of Title. In addition to other provisions of this Title which are applicable to this Title as a whole or specifically made applicable to Trust Companies, the Commissioner may by regulation make applicable to trust companies any regulatory provision contained therein, which can be reasonably applied and which are not inconsistent with the provisions of this Chapter. § 160404. Regulations of Commissioner. The Commissioner may adopt such regulations as may be necessary to carry out the purposes and provisions of this Chapter. Attached [to P.L. 25-073] as Exhibit A are Trust Company Rules and Regulations of the Department of Revenue and Taxation. These Rules and Regulations are hereby approved by I Liheslaturan Guåhan as the initial Rules and Regulations for this Chapter. 24 COL4122017 11 GCA FINANCE & TAXATION CH. 160 GUAM-BASED TRUST COMPANIES ACT 2017 NOTE: These rules and regulations are found in 30 GAR Ch. 21. ---------ARTICLE 5 UNLAWFUL ACTS; PENALTIES § 160501. § 160502. § 160503. Violations by Officers or Directors Sufficient Cause to Close Company, Liquidate Business and Revoke License; Failure to Allow Inspection Constitutes Ground to Revoke License. Penalty. Violation of This Chapter Shall Constitute a Misdemeanor, Unless Otherwise Specified. § 160501. Violations by Officers or Directors Sufficient Cause to Close Company, Liquidate Business and Revoke License; Failure to Allow Inspection Constitutes Ground to Revoke License. (a) The violation of any of the provisions of this Chapter by the officers or directors of any Trust Company authorized to do business under the provisions of this Chapter is sufficient cause for the Commissioner to close the Trust Company, liquidate its business and revoke its license. (b) If any officer or director of a Trust Company refuses to allow the Commissioner or the Commissioner=s deputies to inspect all books, records, papers and effects of its business, the Commissioner may revoke its license and proceed to terminate its affairs. (c) Unlawful concealment of transactions. (d) Improper maintenance of accounts, false or deceptive entries and statements. 2017 NOTE: Subsection designations altered pursuant to the authority of 1 GCA § 1606. § 160502. Penalty. Every officer, employer, director or agent of a Trust Company who knowingly or willfully neglects to perform any duty required by this Chapter or other applicable law, or who knowingly or willfully fails to conform to any material lawful requirement made by the Commissioner, is subject to removal upon order of the Commissioner, and upon 25 COL4122017 11 GCA FINANCE & TAXATION CH. 160 GUAM-BASED TRUST COMPANIES ACT conviction shall be punished by either imprisonment of not less than one (1) year, and not to exceed six (6) years, or by a fine of not more than Five Thousand Dollars ($5,000.00), or by both fine and imprisonment. § 160503. Violation of This Chapter Misdemeanor, Unless Otherwise Specified. Shall Constitute a Where no other punishment is otherwise provided by law, any person violating any provision of this Chapter is guilty of a misdemeanor. ---------- 26 COL4122017
Previous Next
Disclaimer: These codes may not be the most recent version. Guam may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.