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