By: Villarreal H.B. No. 3486
A BILL TO BE ENTITLED
AN ACT
relating to financial inclusion through financial coaching and
removal of other barriers to saving for economically disadvantaged
persons.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
ARTICLE 1. FINANCIAL COACHES ASSISTING CLIENTS OF CERTAIN NONPROFIT
ORGANIZATIONS
SECTION 1.01. Section 5, The Securities Act (Article 581-5,
Vernon's Texas Civil Statutes), is amended to read as follows:
Sec. 5. EXEMPT TRANSACTIONS. Except as hereinafter in this
Act specifically provided, the provisions of this Act shall not
apply to the sale of any security when made in any of the following
transactions and under any of the following conditions, and the
company or person engaged therein shall not be deemed a dealer
within the meaning of this Act; that is to say, the provisions of
this Act shall not apply to any sale, offer for sale, solicitation,
subscription, dealing in or delivery of any security under any of
the following transactions or conditions:
A. At any judicial, executor's, administrator's,
guardian's or conservator's sale, or any sale by a receiver or
trustee in insolvency or bankruptcy.
B. The sale by or for the account of a pledge holder or
mortgagee, selling or offering for sale or delivery in the ordinary
course of business to liquidate a bona fide debt, of a security
pledged in good faith as security for such debt.
C. (1) Sales of securities made by or in behalf of a
vendor, whether by dealer or other agent, in the ordinary course of
bona fide personal investment of the personal holdings of such
vendor, or change in such investment, if such vendor is not engaged
in the business of selling securities and the sale or sales are
isolated transactions not made in the course of repeated and
successive transactions of a like character; provided, that in no
event shall such sales or offerings be exempt from the provisions of
this Act when made or intended by the vendor or his agent, for the
benefit, either directly or indirectly, of any company or
corporation except the individual vendor (other than a usual
commission to said agent), and provided further, that any person
acting as agent for said vendor shall be registered pursuant to this
Act;
(2) Sales by or on behalf of any insurance
company subject to the supervision or control of the Texas
Department of Insurance of any security owned by such company as a
legal and bona fide investment, provided that in no event shall any
such sale or offering be exempt from the provisions of this Act when
made or intended, either directly or indirectly, for the benefit of
any other company as that term is defined in this Act.
D. The distribution by a corporation of securities
direct to its stockholders as a stock dividend or other
distribution paid out of earnings or surplus.
E. Any offer and any transaction pursuant to any offer
by the issuer of its securities to its existing security holders
(including persons who at the time of the transaction are holders of
convertible securities or nontransferable warrants) if no
commission or other remuneration (other than a stand-by commission)
is paid or given directly or indirectly for soliciting any security
holder in this State.
F. The issue in good faith of securities by a company
to its security holders, or creditors, in the process of a bona fide
reorganization of the company made in good faith, or the issue in
good faith of securities by a company, organized solely for the
purpose of taking over the assets and continuing the business of a
predecessor company, to the security holders or creditors of such
predecessor company, provided that in either such case such
securities are issued in exchange for the securities of such
holders or claims of such creditors, or both, and in either such
case security holders or creditors do not pay or give or promise and
are not obligated to pay or give any consideration for the
securities so issued other than the securities of or claims against
said company or its predecessor then held or owned by them.
G. The issue or sale of securities (a) by one
corporation to another corporation or the security holders thereof
pursuant to a vote by one or more classes of such security holders,
as required by the certificate of incorporation or the applicable
corporation statute, in connection with a merger, consolidation or
sale of corporate assets, or (b) by one corporation to its own
stockholders in connection with the change of par value stock to no
par value stock or vice versa, or the exchange of outstanding shares
for the same or a greater or smaller number of shares; provided that
in any such case such security holders do not pay or give or promise
and are not obligated to pay or give any consideration for the
securities so issued or sold other than the securities of the
corporation then held by them.
H. The sale of any security to any bank, trust company,
building and loan association, insurance company, surety or
guaranty company, savings institution, investment company as
defined in the Investment Company Act of 1940, small business
investment company as defined in the Small Business Investment Act
of 1958, as amended, or to any registered dealer actually engaged in
buying and selling securities.
I. Provided such sale is made without any public
solicitation or advertisements:
(a) the sale of any security by the issuer
thereof so long as the total number of security holders of the
issuer thereof does not exceed thirty-five (35) persons after
taking such sale into account;
(b) the sale or distribution by an issuer or a
participating subsidiary of the issuer, if any, of a security under
a bona fide thrift, savings, stock purchase, retirement, pension,
profit-sharing, option, bonus, appreciation right, incentive, or
similar written compensation plan or written compensation contract
established by the issuer or its subsidiary for the benefit of
employees, directors, general partners, managers, or officers of
the issuer or subsidiary, for the benefit of its trustees if the
issuer or subsidiary is a business trust, or for the benefit of
consultants or advisors who provide to the issuer or subsidiary
bona fide services unrelated to the offer or sale of securities in a
capital-raising transaction; or
(c) the sale by an issuer of its securities
during the period of twelve (12) months ending with the date of the
sale in question to not more than fifteen (15) persons (excluding,
in determining such fifteen (15) persons, purchasers of securities
in transactions exempt under other provisions of this Section 5,
purchasers of securities exempt under Section 6 hereof and
purchasers of securities which are part of an offering registered
under Section 7 hereof), provided such persons purchased such
securities for their own account and not for distribution.
J. Wherein the securities disposed of consist
exclusively of notes or bonds secured by mortgage or vendor's lien
upon real estate or tangible personal property, and the entire
mortgage is sold or transferred with all of the notes or bonds
secured thereby in a single transaction.
K. Any security or membership issued by a corporation
or association, organized exclusively for religious, educational,
benevolent, fraternal, charitable, or reformatory purposes and not
for pecuniary profit, and no part of the net earnings of which
inures to the benefit of any stockholder, shareholder, or
individual members, and where no commission or remuneration is paid
or given or is to be paid or given in connection with the
disposition thereof.
L. The sale by the issuer itself, or by a registered
dealer, of any security issued or guaranteed by any bank organized
and subject to regulation under the laws of the United States or
under the laws of any State or territory of the United States, or
any insular possession thereof, or by any savings and loan
association organized and subject to regulation under the laws of
this State, or the sale by the issuer itself of any security issued
by any federal savings and loan association.
M. The sale by the issuer itself, or by a registered
dealer, of any security either issued or guaranteed by the United
States or by any territory or insular possession thereof, or by the
District of Columbia, or by any state of the United States, or
political subdivision thereof (including but not limited to any
county, city, municipal corporation, district, or authority), or by
any public or governmental agency or instrumentality of any of the
foregoing.
N. The sale and issuance of any securities issued by
any farmers' cooperative marketing association organized under
Chapter 52, Agriculture Code, or the predecessor of that law
(Article 5737 et seq., Revised Statutes); the sale and issuance of
any securities issued by any mutual loan corporation organized
under Chapter 54, Agriculture Code, or the predecessor of that law
(Article 2500 et seq., Revised Statutes); the sale and issuance of
any equity securities issued by any cooperative association
organized under the Cooperative Association Act, as amended
(Article 1396-50.01, Vernon's Texas Civil Statutes); and the sale
of any securities issued by any farmers' cooperative society
organized under Chapter 51, Agriculture Code, or the predecessor of
that law (Article 2514 et seq., Revised Statutes). Provided,
however, this exemption shall not be applicable to agents of any
farmers' cooperative marketing association, mutual loan
corporation, cooperative association, or farmers' cooperative
society when the sale of such securities is made to non-members, or
when the sale of such securities is made to members or non-members
and a commission is paid or contracted to be paid to the said
agents.
0. The sale by a registered dealer of outstanding
securities provided that:
(1) Such securities form no part of an unsold
allotment to or subscription by such dealer as a participant in the
distribution of such securities by the issuer thereof; and
(2) Securities of the same class, of the same
issuer, are outstanding in the hands of the public; and
(3) Such securities are offered for sale, in good
faith, at prices reasonably related to the current market price of
such securities at the time of such sale; and
(4) No part of the proceeds of such sale are paid
directly or indirectly to the issuer of such securities; and
(5) Such sale is not directly or indirectly for
the purposes of providing or furthering any scheme to violate or
evade any provision of this Act; and
(6) The right to sell or resell such securities
has not been enjoined by any court of competent jurisdiction in this
State by proceedings instituted by an officer or agency of this
State charged with enforcement of this Act; and
(7) The right to sell such securities has not
been revoked or suspended by the commissioner under any of the
provisions of this Act, or, if so, revocation or suspension is not
in force and effect; and
(8) At the time of such sale, the issuer of such
securities shall be a going concern actually engaged in business
and shall then be neither in an organization stage nor in
receivership or bankruptcy; and
(9) Such securities or other securities of the
issuer of the same class have been registered by qualification,
notification or coordination under Section 7 of this Act; or at the
time of such sale at least the following information about the
issuer shall appear in a recognized securities manual or in a
statement, in form and extent acceptable to the commissioner, filed
with the commissioner by the issuer or by a registered dealer:
(a) A statement of the issuer's principal
business;
(b) A balance sheet as of a date within eighteen
(18) months of the date of such sale; and
(c) Profit and loss statements and a record of
the dividends paid, if any, for a period of not less than three (3)
years prior to the date of such balance sheet or for the period of
existence of the issuer, if such period of existence is less than
three (3) years.
The term "recognized securities manual" means a
nationally distributed manual of securities that is approved for
use hereunder by the Board.
The Commissioner may issue a stop order or by
order prohibit, revoke or suspend the exemption under this
Subsection 0 with respect to any security if the Commissioner has
reasonable cause to believe that the plan of business of the issuer
of such security, the security, or the sale thereof would tend to
work a fraud or deceit upon any purchaser or purchasers thereof,
such order to be subject to review in the manner provided by Section
24 of this Act. Notice of any court injunction enjoining the sale,
or resale, of any such security, or of an order revoking or
suspending the exemption under this subdivision with respect to any
security, shall be delivered or shall be mailed by certified or
registered mail with return receipt requested, to any dealers
believed to be selling, or offering for sale, securities of the type
referred to in the notice; and the prohibitions of (6) and (7) above
of this Subsection 0 shall be inapplicable to any dealer until the
dealer has received actual notice from the commissioner of such
revocation or suspension.
The Board may for cause shown revoke or suspend
the recognition hereunder of any manuals previously approved under
this Subsection but no such action may be taken unless upon notice
and opportunity for hearing before the Board or a hearings officer
as now or hereafter required by law. A judgment sustaining the Board
in the action complained of shall not bar after one year an
application by the plaintiff for approval of its manual or manuals
hereunder, nor shall a judgment in favor of the plaintiff prevent
the Board from thereafter revoking such recognition for any proper
cause which may thereafter accrue or be discovered.
P. The execution by a dealer of an unsolicited order
for the purchase of securities, where the initial offering of such
securities has been completed and provided that the dealer acts
solely as an agent for the purchaser, has no direct or indirect
interest in the sale or distribution of the security ordered, and
receives no commission, profit, or other compensation from any
source other than the purchaser.
Q. The sales of interests in and under oil, gas or
mining leases, fees or titles, or contracts relating thereto, where
(1) the total number of sales by any one owner of interests, whether
whole, fractional, segregated or undivided in any single oil, gas
or mineral lease, fee or title, or contract relating thereto, shall
not exceed thirty-five (35) within a period of twelve (12)
consecutive months and (2) no use is made of advertisement or public
solicitation; provided, however, if such sale or sales are made by
an agent for such owner or owners, such agent shall be licensed
pursuant to this Act. No oil, gas or mineral unitization or pooling
agreement shall be deemed a sale under this Act.
R. The sale by the issuer itself, or by a subsidiary of
such issuer, of any securities which would be exempt if sold by a
registered dealer under Section 6 (other than Section 6E) of this
Act.
S. The sale by or through a registered dealer of any
option if at the time of the sale of the option:
(1) the performance of the terms of the option is
guaranteed by any broker-dealer registered under the federal
Securities Exchange Act of 1934, as amended, which guaranty and
broker-dealer are in compliance with such requirements or
regulations as may be approved or adopted by the board;
(2) the option is not sold by or for the benefit
of the issuer of the security which may be purchased or sold upon
exercise of the option;
(3) the security which may be purchased or sold
upon exercise of the option is either (a) exempted under Subsection
F of Section 6 of this Act or (b) quoted on the NASDAQ stock market
and meets the requirements of Paragraphs (1), (6), (7), and (8) of
Subsection 0 of Section 5 of this Act; and
(4) such sale is not directly or indirectly for
the purposes of providing or furthering any scheme to violate or
evade any provisions of this Act.
For purposes of this subsection the term "option"
shall mean and include any put, call, straddle, or other option or
privilege of buying or selling a specified number of securities at a
specified price from or to another person, without being bound to do
so, on or prior to a specified date, but such term shall not include
any option or privilege which by its terms may terminate prior to
such specified date upon the occurrence of a specified event.
T. Such other transactions or conditions as the board
by rule, regulation, or order may define or prescribe,
conditionally or unconditionally.
U. The issuance or transfer of securities by the
issuer of its securities to a corporation or association, organized
exclusively for religious, educational, benevolent, fraternal,
charitable, or reformatory purposes and not for pecuniary profit,
only if:
(a) the corporation or association does not
provide anything of value for the securities other than, in the case
of any security that is an option, payment of the exercise price of
the option to acquire the securities at a price not to exceed the
fair market value of the underlying securities on the date the
option was granted;
(b) the issuance or transfer of securities is not
made for the purpose of raising capital for the issuer;
(c) no commission or other form of consideration
is paid or provided to a third party with respect to the issuance or
transfer; and
(d) the issuance or transfer is not directly or
indirectly for the purpose of providing or furthering a scheme in
violation of or to evade this Act.
V. The sale of a security involving an individual's
enrollment in any fund or plan established under Subchapter G or H,
Chapter 54, Education Code, that is arranged or facilitated by a
financial coach certified under Section 14.1021, Finance Code, who
is working for a nonprofit corporation that:
(a) is located in this State;
(b) is exempt from federal income tax under
Section 501(a), Internal Revenue Code of 1986, by being listed as an
exempt organization in Section 501(c)(3) of that code; and
(c) provides services to economically
disadvantaged individuals and families.
SECTION 1.02. Subchapter C, Chapter 14, Finance Code, is
amended by adding Section 14.1021 to read as follows:
Sec. 14.1021. CERTIFICATION PROGRAM FOR FINANCIAL COACHES.
(a) In this section, "charitable organization" means a nonprofit
corporation that:
(1) is located in this state;
(2) is exempt from federal income tax under Section
501(a) of the Internal Revenue Code of 1986 by being listed as an
exempt organization in Section 501(c)(3) of that code; and
(3) provides services to economically disadvantaged
individuals and families.
(b) The commission shall establish and operate a voluntary
certification program for persons serving as financial coaches for
clients of charitable organizations.
(c) The finance commission by rule shall adopt forms,
criteria, and procedures for issuing certificates to financial
coaches under this section.
(d) The criteria for the program must include training in
investing in securities and providing educational materials and
information regarding the state securities laws.
SECTION 1.03. Section 393.628, Finance Code, is amended by
adding Subsection (g) to read as follows:
(g) In awarding money under the fund for financial coaching
activities or initiatives, the finance commission shall give
priority to applicants who are certified financial coaches under
Section 14.1021.
ARTICLE 2. PROVISIONS TO ENCOURAGE RECIPIENTS OF CERTAIN BENEFITS
PROGRAMS TO SAVE MONEY
Sec. 2.01. Subchapter B, Chapter 531, Government Code, is
amended by adding Section 531.0911 to read as follows:
Sec. 531.0911. EXCLUSION OF CERTAIN INCOME, ASSETS, AND
RESOURCES FOR PURPOSES OF DETERMINING ELIGIBILITY UNDER CERTAIN
BENEFITS PROGRAMS. (a) In this section, "benefits program"
includes:
(1) the child health plan program;
(2) the financial assistance program under Chapter 31,
Human Resources Code;
(3) the medical assistance program under Chapter 32,
Human Resources Code; and
(4) the nutritional assistance programs under Chapter
33, Human Resources Code, including the supplemental nutrition
assistance program under that chapter.
(b) To the extent permitted under applicable federal law and
notwithstanding any other state law, if a benefits program
administered by the commission or a health and human services
agency imposes income, asset, or resource requirements for purposes
of determining whether a person is eligible for assistance or the
amount of assistance for which a person is eligible under the
program, the commission or health and human services agency may not
include as available income, assets, or resources of the person:
(1) any ownership interest the person has in:
(A) a United States savings bond; or
(B) a structured savings program or product; or
(2) an amount equal to the sum of federal income tax
refunds received by the person as a result of claiming refundable
federal income tax credits, including the earned income tax credit,
child tax credit, and other refundable credits.
(c) For purposes of this section and subject to Subsection
(d), "savings program or product" means a program or product,
including but not limited to emergency savings products, tax-time
savings products, children's savings accounts, and Individual
Development Accounts not authorized by the federal Assets for
Independence Act:
(1) offered or coordinated by or in partnership with a
nonprofit organization that is exempt from federal income tax under
Section 501(a), Internal Revenue Code of 1986, by being listed as an
exempt organization in Section 501(c)(3) of that code and meeting
all other applicable requirements for that exemption; or offered by
other entities and
(2) offered for the purpose of encouraging savings and
financial independence by recipients.
(d) The commission shall provide information about and
referrals to providers of structured savings programs or products
to recipients of a benefits program under Subsection (a) through
its self-service portal;
(e) The executive commissioner shall adopt rules to define
"structured savings program or product" for purposes of this
section.
SECTION 2.02. The change in law made by this article applies
to an initial determination or redetermination of eligibility of a
person for assistance under a benefits program that is made on or
after the effective date of this Act.
SECTION 2.03. If before implementing any provision of this
article a state agency determines that a waiver or authorization
from a federal agency is necessary for implementation of that
provision, the agency affected by the provision shall request the
waiver or authorization and may delay implementing that provision
until the waiver or authorization is granted.
ARTICLE 3. EFFECTIVE DATE
SECTION 3.01. This Act takes effect September 1, 2013.