1. (a) Authority. The assessment schedule contained in this section is made under the authority contained in Finance Code, §31.003(a)(4) and §204.003(b).

2. (b) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise.

   1. (1) Assessable assets--The sum of on-book assets and average off-book assets of a bank, foreign bank branch, or foreign bank agency.
   2. (2) Average off-book assets--The average of the off-balance sheet items reported by a bank in its most recent March 31st call report and the three immediately preceding call reports, as adjusted under subsection (c) of this section and pursuant to the instructions accompanying the assessment form applicable to and submitted by the bank, foreign bank branch, or foreign bank agency.
   3. (3) Call report--The quarterly, consolidated report of condition and income (including domestic and foreign subsidiaries) promulgated in a form by the Federal Financial Institutions Examination Council and prepared and filed by a bank, foreign bank branch, or foreign bank agency under state and federal law.
   4. (4) Examination frequency--The frequency of which a bank is subject to examination by the department. The criteria for placement into one of three examination frequencies are set forth in Commissioner Policy Memorandum Number 1003.
   5. (5) On-book assets--The total assets reported by a bank, foreign bank branch, or foreign bank agency on the balance sheet contained in its most recent March 31st call report.

3. (c) Calculation of average off-book assets. A bank, foreign bank branch, or foreign bank agency must calculate a four-quarter average of off-book assets, as adjusted under this subsection, using the most recent March 31st call report and the three preceding call reports, as a component of assessable assets. In general, the bank, foreign bank branch, or foreign bank agency must sum all line items for which values are included on "Schedule RC-L-Off Balance Sheet Items," which could result in assets of the institution, with the exception of:

   1. (1) Amount of financial standby letter of credit conveyed to others;
   2. (2) Amount of performance standby letter of credit conveyed to others;
   3. (3) Participations in acceptances conveyed to others by the reporting bank, foreign bank branch, or foreign bank agency; and
   4. (4) All line items related to derivative products as identified by the department.
4. (d) Annual assessment for banks, foreign bank branches, and foreign bank agencies. The department will establish the annual assessment for each bank, foreign bank branch, and foreign bank agency effective September 1 of each year. Each bank, foreign bank branch, and foreign bank agency must pay to the department the annual assessment fee, in quarterly installments as billed effective September 1, December 1, March 1, and June 1 of each year, except that an installment may be adjusted under subsections (f) and (g) of this section. To facilitate collection, the department may require each bank, foreign bank branch, and foreign bank agency to pay quarterly installments through electronic funds transfer on each effective billing date. Assessments will be calculated on the total assessable assets. The assessment will be calculated on the basis of the factors identified in and in the manner described in §3.37 of this title (relating to Calculation of Annual Assessment for Banks) or §3.38 of this title (relating to Calculation of Annual Assessment for Foreign Bank Branches and Agencies).
5. (e) Review of assessment factors. The department will review all appropriations authorities, expenditure patterns, and other costs related to bank, foreign bank branch, or foreign bank agency examination and supervision functions, and present to the finance commission no less frequently than once each biennium such information and a calculation chart that sets forth the annual assessment factors.

6. (f) Interim adjustments.

   1. (1) If the size, condition, or other characteristics of a bank change sufficiently during a year to cause the bank to fall into a different category of examination frequency, the department will adjust the annual assessment to the appropriate rate beginning with the first billed quarterly installment after the change in examination frequency.
   2. (2) In the event of an acquisition or merger involving a surviving state bank, foreign bank branch, or foreign bank agency, the department will adjust the annual assessment to reflect the result of the acquisition or merger beginning with the first billed quarterly installment after the consummation of the transaction. The asset group will be calculated on the basis of the combined assessable assets, including branches, of the surviving bank, foreign bank branch, or foreign bank agency.
   3. (3) A financial institution converting to a state bank must pay to the department an assessment beginning in the quarter of the conversion to reflect only the quarter or quarters of the year in which the financial institution is a state bank.
   4. (4) Each bank, foreign bank branch, and foreign bank agency, on the due date of an assessment installment, must pay to the department the full quarterly installment of the assessment for the next three-month period without proration for any reason.
7. (g) Adjustment of an installment. The commissioner may, after review and consideration of actual expenditures to date and projected expenditures for the remainder of the fiscal year, lower the aggregate amount of an installment and bill each bank, foreign bank branch, and foreign bank agency a proportionally lower amount, without the prior approval of the finance commission.

8. (h) Specialty examination fees.

   1. (1) Examinations of fiduciary activities and other special examinations and investigations, including but not limited to examinations of bank holding companies, interstate branches of state banks in Texas as host state, affiliates, and third-party contractors, are subject to a separate charge to cover the cost of time and expenses incurred in these examinations.
   2. (2) The fee for an examination under this subsection will be calculated at a uniform rate of $500 per examiner per day to cover the cost of the examinations including the salary expense of examiners plus a proportionate share of department overhead allocable to the examination function. The commissioner may lower the uniform rate without the prior approval of the finance commission.
   3. (3) In connection with an examination under this subsection, the regulated entity or other legally responsible party shall pay to the department the examination fee set forth in paragraph (2) of this subsection, and shall also pay to the department an amount for actual travel expenses incurred by the examiners, including mileage, public transportation, food, and lodging.
9. (i) Special assessments. The finance commission may approve a special assessment to cover material expenditures, such as major facility repairs and improvements and other extraordinary expenses.
10. (j) Annual assessment for foreign bank representative offices. The annual assessment fee for foreign bank representative offices will be $2,500, and will cover the cost of examinations and all associated expenses. A foreign bank representative office will not be subject to the annual assessment fee if the foreign bank maintains a foreign bank branch or foreign bank agency in this state subject to assessment under subsection (d) of this section. Each foreign bank representative office subject to the annual assessment under this subsection must pay to the department the annual assessment fee effective September 1 of each year. To facilitate collection, the department may require each foreign bank representative office to pay the annual assessment fee on September 1 of each year through electronic funds transfer.

Source Note:The provisions of this §3.36 adopted to be effective January 5, 1996, 20 TexReg 10994; amended to be effective March 21, 1997, 22 TexReg 2608; amended to be effective September 9, 1999, 24 TexReg 6969.