Bill Text: TX HB1535 | 2019-2020 | 86th Legislature | Enrolled
Bill Title: Relating to the continuation and functions of the State Securities Board.
Spectrum: Slight Partisan Bill (Republican 4-2)
Status: (Passed) 2019-06-10 - Effective on 9/1/19 [HB1535 Detail]
Download: Texas-2019-HB1535-Enrolled.html
H.B. No. 1535 |
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relating to the continuation and functions of the State Securities | ||
Board. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Subsections J and O, Section 2, The Securities | ||
Act (Article 581-2, Vernon's Texas Civil Statutes), are amended to | ||
read as follows: | ||
J. On or before January 1 of each year, the Board, with the | ||
advice of the Commissioner, shall report to the Governor and the | ||
presiding officer of each house of the Legislature as to its | ||
administration of this Act, as well as plans and needs for future | ||
securities regulation. The report must include: | ||
(1) a detailed accounting of all funds received and | ||
disbursed by the Board during the preceding year, including the | ||
amount spent by the Board assisting in the criminal prosecution of | ||
cases under Subsection B of Section 3 of this Act; and | ||
(2) with respect to cases referred during the | ||
preceding year by the Board under Subsection A of Section 3 of this | ||
Act, a breakdown by county and district attorney of the number of | ||
cases where: | ||
(A) criminal charges were filed; | ||
(B) prosecution is ongoing; or | ||
(C) prosecution was completed. | ||
O. The State Securities Board is subject to Chapter 325, | ||
Government Code (Texas Sunset Act). Unless continued in existence | ||
as provided by that chapter, the board is abolished and this Act | ||
expires September 1, 2031 [ |
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SECTION 2. Section 2-3, The Securities Act (Article | ||
581-2-3, Vernon's Texas Civil Statutes), is amended by amending | ||
Subsection B and adding Subsection D to read as follows: | ||
B. The training program must provide the person with | ||
information regarding: | ||
(1) the law governing [ |
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Board operations; | ||
(2) the programs, [ |
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Board; | ||
(3) the scope of and limitations on the rulemaking | ||
authority [ |
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(4) the types of Board rules, interpretations, and | ||
enforcement actions that may implicate federal antitrust law by | ||
limiting competition or impacting prices charged by persons engaged | ||
in a profession or business the Board regulates, including any | ||
rule, interpretation, or enforcement action that: | ||
(A) regulates the scope of practice of persons in | ||
a profession or business the Board regulates; | ||
(B) restricts advertising by persons in a | ||
profession or business the Board regulates; | ||
(C) affects the price of goods or services | ||
provided by persons in a profession or business the Board | ||
regulates; or | ||
(D) restricts participation in a profession or | ||
business the Board regulates; | ||
(5) [ |
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the Board; | ||
(6) [ |
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(A) laws relating to [ |
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conflicts-of-interest; and | ||
(B) [ |
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members of a state policymaking body in performing their duties | ||
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(7) [ |
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the Board or the Texas Ethics Commission. | ||
D. The Commissioner shall create a training manual that | ||
includes the information required by Subsection B of this section. | ||
The Commissioner shall distribute a copy of the training manual | ||
annually to each member of the Board. Each member of the Board | ||
shall sign and submit to the Commissioner a statement acknowledging | ||
that the member received and has reviewed the training manual. | ||
SECTION 3. Section 2-6, The Securities Act (Article | ||
581-2-6, Vernon's Texas Civil Statutes), is amended to read as | ||
follows: | ||
Art. 581-2-6. COMPLAINTS INFORMATION. A. The | ||
Commissioner or the Commissioner's designee shall maintain a system | ||
to promptly and efficiently act [ |
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or the Commissioner's designee shall maintain information about | ||
parties to the complaint, the subject matter of the complaint, a | ||
summary of the results of the review or investigation of the | ||
complaint, and its disposition [ |
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B. The Commissioner or the Commissioner's designee shall | ||
make information available describing [ |
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complaint investigation and resolution. | ||
C. The Commissioner or the Commissioner's designee [ |
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periodically notify the [ |
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complaint until final disposition [ |
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notice would jeopardize a law enforcement [ |
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investigation. | ||
SECTION 4. The Securities Act (Article 581-1 et seq., | ||
Vernon's Texas Civil Statutes) is amended by adding Section 2-8 to | ||
read as follows: | ||
Sec. 2-8. ALTERNATIVE RULEMAKING AND DISPUTE RESOLUTION. | ||
A. The Board shall develop a policy to encourage the use of: | ||
(1) negotiated rulemaking procedures under Chapter | ||
2008, Government Code, for the adoption of Board rules; and | ||
(2) appropriate alternative dispute resolution | ||
procedures under Chapter 2009, Government Code, to assist in the | ||
resolution of internal and external disputes under the Board's | ||
jurisdiction. | ||
B. The Board's procedures relating to alternative dispute | ||
resolution must conform, to the extent possible, to any model | ||
guidelines issued by the State Office of Administrative Hearings | ||
for the use of alternative dispute resolution by state agencies. | ||
C. The Board shall: | ||
(1) coordinate the implementation of the policy | ||
adopted under Subsection A of this section; | ||
(2) provide training as needed to implement the | ||
procedures for negotiated rulemaking or alternative dispute | ||
resolution; and | ||
(3) collect data concerning the effectiveness of those | ||
procedures. | ||
SECTION 5. Section 3, The Securities Act (Article 581-3, | ||
Vernon's Texas Civil Statutes), is amended to read as follows: | ||
Art. 581-3. ADMINISTRATION AND ENFORCEMENT BY THE | ||
SECURITIES COMMISSIONER AND THE ATTORNEY GENERAL AND LOCAL LAW | ||
ENFORCEMENT OFFICIALS. A. The administration of the provisions of | ||
this Act shall be vested in the Securities Commissioner. It shall | ||
be the duty of the Securities Commissioner and the Attorney General | ||
to see that its provisions are at all times obeyed and to take such | ||
measures and to make such investigations as will prevent or detect | ||
the violation of any provision thereof. The Commissioner shall at | ||
once lay before the District or County Attorney of the proper county | ||
any evidence which shall come to his knowledge of criminality under | ||
this Act. In the event of the neglect or refusal of such attorney to | ||
institute and prosecute such violation, the Commissioner shall | ||
submit such evidence to the Attorney General, who is hereby | ||
authorized to proceed therein with all the rights, privileges and | ||
powers conferred by law upon district or county attorneys, | ||
including the power to appear before grand juries and to | ||
interrogate witnesses before such grand juries. | ||
B. Subject to Subsection E of this section, the Board may | ||
provide assistance to a county or district attorney who requests | ||
assistance in a criminal prosecution involving an alleged violation | ||
of this Act that is referred by the Board to the attorney under | ||
Subsection A of this section. | ||
C. Before referring a case to a county or district attorney | ||
for prosecution as required by Subsection A of this section, the | ||
Commissioner shall make a determination of: | ||
(1) the potential resources of the Board, including | ||
the number and types of Board employees, that would be needed to | ||
assist in the prosecution of the case; and | ||
(2) the availability of Board employees and other | ||
resources necessary to carry out any request for assistance. | ||
D. The Board by rule shall establish a process to enable the | ||
Commissioner to determine whether to provide any requested | ||
assistance to the appropriate prosecuting attorney following | ||
referral of a case under Subsection A of this section and, if so, | ||
the appropriate amount of such assistance. The rules must require | ||
the Commissioner to consider: | ||
(1) whether resources are available after taking into | ||
account any ongoing Board investigations, investigations under | ||
Section 28 of this Act, and criminal prosecutions for which | ||
assistance is being provided; | ||
(2) the seriousness of the alleged violation or | ||
violations in the case, including the severity of the harm and | ||
number of victims involved; and | ||
(3) the state's interest in the prosecution of a | ||
particular case and the availability of other methods of redress | ||
for the alleged violations, including the pursuit of a civil | ||
action. | ||
E. In response to a request for assistance under Subsection | ||
B of this section, the Board may provide only those Board employees | ||
or resources, if any, determined to be available for that case in | ||
accordance with Subsection C of this section. If a change in | ||
circumstances occurs after the time of the determination under | ||
Subsection C of this section, the Commissioner may reconsider the | ||
Commissioner's determination under that subsection and may | ||
increase or reduce the number of Board employees or other resources | ||
to be made available for a case using the process established under | ||
Subsection D of this section. | ||
F. The Attorney General, at least biennially, shall review a | ||
sample of criminal cases for which the Board provided requested | ||
assistance to county or district attorneys under this section. The | ||
review must include an evaluation of the pre-referral determination | ||
of available resources to support each case being reviewed as | ||
required by Subsection C of this section and any subsequent | ||
determination of those resources made by the Commissioner as | ||
authorized under Subsection E of this section. The Attorney | ||
General may report any concerns the Attorney General has in | ||
connection with the Board's provision of assistance to the standing | ||
committee of each house of the legislature with primary | ||
jurisdiction over Board matters. | ||
SECTION 6. The Securities Act (Article 581-1 et seq., | ||
Vernon's Texas Civil Statutes) is amended by adding Section 32-1 to | ||
read as follows: | ||
Sec. 32-1. REFUND. A. Subject to Subsection B of this | ||
section, the Commissioner may order a dealer, agent, investment | ||
adviser, or investment adviser representative regulated under this | ||
Act to pay a refund to a client or a purchaser of securities or | ||
services from the person or company as provided in an agreed order | ||
or an enforcement order instead of or in addition to imposing an | ||
administrative penalty or other sanctions. | ||
B. The amount of a refund ordered as provided in an agreed | ||
order or an enforcement order may not exceed the amount the client | ||
or purchaser paid to the dealer, agent, investment adviser, or | ||
investment adviser representative for a service or transaction | ||
regulated by the Board. The Commissioner may not require payment of | ||
other damages or estimate harm in a refund order. | ||
SECTION 7. Subsection B, Section 35, The Securities Act | ||
(Article 581-35, Vernon's Texas Civil Statutes), is amended to read | ||
as follows: | ||
B. The Commissioner or Board shall charge and collect the | ||
following fees and shall daily pay all fees received into the State | ||
Treasury: | ||
(1) for any filing to amend the registration | ||
certificate of a dealer or investment adviser or evidence of | ||
registration of an agent or investment adviser representative, or | ||
issue a duplicate certificate or evidence of registration, [ |
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(2) for the examination of any original or amended | ||
application filed under Subsection A, B, or C of Section 7 of this | ||
Act, regardless of whether the application is denied, abandoned, | ||
withdrawn, or approved, a fee of one-tenth (1/10) of one percent | ||
(1%) of the aggregate amount of securities described and proposed | ||
to be sold to persons located within this state based upon the price | ||
at which such securities are to be offered to the public; | ||
(3) for certified copies of any papers filed in the | ||
office of the Commissioner, the Commissioner shall charge such fees | ||
as are reasonably related to costs; however, in no event shall such | ||
fees be more than those which the Secretary of State is authorized | ||
to charge in similar cases; | ||
(4) for the filing of any application for approval of a | ||
stock exchange so that securities fully listed thereon will be | ||
exempt, a fee of $10,000; | ||
(5) for the filing of a request to take the Texas | ||
Securities Law Examination, $35; | ||
(6) for the filing of an initial notice required by the | ||
Commissioner to claim a secondary trading exemption, a fee of $500, | ||
and for the filing of a secondary trading exemption renewal notice, | ||
a fee of $500; | ||
(7) for the filing of an initial notice required by the | ||
Commissioner to claim a limited offering exemption, a fee of | ||
one-tenth (1/10) of one percent (1%) of the aggregate amount of | ||
securities described as being offered for sale, but in no case more | ||
than $500; and | ||
(8) for an interpretation by the Board's general | ||
counsel of this Act or a rule adopted under this Act, a fee of $100, | ||
except that an officer or employee of a governmental entity and the | ||
entity that the officer or employee represents are exempt from the | ||
fee under this subsection when the officer or employee is | ||
conducting official business of the entity. | ||
SECTION 8. (a) Except as provided by Subsection (b) of this | ||
section, Section 2-3, The Securities Act (Article 581-2-3, Vernon's | ||
Texas Civil Statutes), as amended by this Act, applies to a member | ||
of the State Securities Board appointed before, on, or after the | ||
effective date of this Act. | ||
(b) A member of the State Securities Board who, before the | ||
effective date of this Act, completed the training program required | ||
by Section 2-3, The Securities Act (Article 581-2-3, Vernon's Texas | ||
Civil Statutes), as that law existed before the effective date of | ||
this Act, is required to complete additional training only on | ||
subjects added by this Act to the training program as required by | ||
Section 2-3, The Securities Act (Article 581-2-3, Vernon's Texas | ||
Civil Statutes), as amended by this Act. A board member described | ||
by this subsection may not vote, deliberate, or be counted as a | ||
member in attendance at a meeting of the board held on or after | ||
December 1, 2019, until the member completes the additional | ||
training. | ||
SECTION 9. Subsection A, Section 2-6, The Securities Act, | ||
(Article 581-2-6, Vernon's Texas Civil Statutes), as amended by | ||
this Act, applies only to a complaint filed with the State | ||
Securities Board on or after the effective date of this Act. A | ||
complaint filed before the effective date of this Act is governed by | ||
the law in effect on the date the complaint was filed, and the | ||
former law is continued in effect for that purpose. | ||
SECTION 10. Not later than March 1, 2020, the State | ||
Securities Board shall adopt rules necessary to implement the | ||
changes in law made by this Act to Section 3, The Securities Act | ||
(Article 581-3, Vernon's Texas Civil Statutes). | ||
SECTION 11. The change in law made by this Act to Section | ||
35, The Securities Act (Article 581-35, Vernon's Texas Civil | ||
Statutes), does not entitle a person to a refund of a registration | ||
or other fee paid by the person before the effective date of this | ||
Act. | ||
SECTION 12. This Act takes effect September 1, 2019. | ||
______________________________ | ______________________________ | |
President of the Senate | Speaker of the House | |
I certify that H.B. No. 1535 was passed by the House on April | ||
17, 2019, by the following vote: Yeas 123, Nays 2, 2 present, not | ||
voting; and that the House concurred in Senate amendments to H.B. | ||
No. 1535 on May 22, 2019, by the following vote: Yeas 143, Nays 0, | ||
1 present, not voting. | ||
______________________________ | ||
Chief Clerk of the House | ||
I certify that H.B. No. 1535 was passed by the Senate, with | ||
amendments, on May 14, 2019, by the following vote: Yeas 31, Nays | ||
0. | ||
______________________________ | ||
Secretary of the Senate | ||
APPROVED: __________________ | ||
Date | ||
__________________ | ||
Governor |