ROBERT L. EHRLICH, JR., Governor                           H.B. 215

(3) A trust company in its fiduciary capacity may purchase bonds of the
State or of any political subdivision of the State underwritten in whole or in part by
the trust company or a financial institution that is an affiliate of the trust company
unless the agreement or instrument that gives the trust company investment
authority provides to the contrary.

(c)      (1) Subject to the provisions of paragraph (2) of this subsection, a
corporate fiduciary may invest and reinvest fiduciary funds and other funds over
which the corporate fiduciary has investment discretion in securities of, or other
interests in, a no-load open-end OR CLOSED-END management type investment
[company,] COMPANY or investment trust registered under the provisions of the
federal Investment Company Act of 1940 that does not impose a contingent deferred
sales charge or distribution charge on that investment or reinvestment.

(2) The provisions of paragraph (1) of this subsection apply even if the
corporate fiduciary or an affiliate of the corporate fiduciary provides services as
investment adviser or manager, sponsor, distributor, custodian, transfer agent,
registrar, or similar related services to the investment company or investment trust
and receives reasonable compensation for those services if:

(i) The investment is authorized by the agreement or instrument
that gives the corporate fiduciary investment authority, or by court order; or

(ii) The corporate fiduciary discloses to its principal or, if the assets
are held in trust, to any current income beneficiaries of the trust:

1.       The services provided by the corporate fiduciary or its
affiliate to the investment company or investment trust; and

2.       The rate, formula, or other method by which compensation
paid to the corporate fiduciary or its affiliate is determined.

(d)     Any person holding a mortgage or other lien on property may exchange it,
prior or subsequent to maturity, for any other lawful investment.

(e)     This section shall not be construed as relieving any person from any duty
of exercising reasonable care in selecting securities.

(f)      No general, local, or special law which is inconsistent with this section
shall have any effect.

(g)     This section shall not be construed to make unlawful any investment not
listed in this section.

SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect
June 1, 2003.

May 22, 2003

The Honorable Michael E. Busch
Speaker of the House

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