June 24, 2022

TITLE 7. BANKING AND SECURITIES

PART 7. STATE SECURITIES BOARD.

CHAPTER 101. GENERAL ADMINISTRATION.

7 TAC §101.9.

The Texas State Securities Board proposes new §101.9, concerning Vendor Protest Procedures. The new rule would establish the Agency's protest review and appeal process and identify the rules and requirements of both Agency staff and the protesting party as required by §2155.076 of the Government Code.

Travis J. Iles, Securities Commissioner; Clint Edgar, Deputy Securities Commissioner; and Derek Lauterjung, Director, Staff Services Division, have determined that for the first five-year period the proposed rule is in effect there will be no foreseeable fiscal implications for state or local government as a result of enforcing or administering the proposed rule.

Mr. Iles, Mr. Edgar, and Mr. Lauterjung have also determined that for each year of the first five years the rule is in effect the public benefit expected as a result of adoption of the proposed rule will be to provide consistent standards for filing and resolving a vendor protest. There will be no adverse economic effect on micro- or small businesses or rural communities. Since the proposed rule will have no adverse economic effect on micro- or small businesses or rural communities, preparation of an economic impact statement and a regulatory flexibility analysis is not required. There is no anticipated economic cost to persons who are required to comply with the rule as proposed. There is no anticipated impact on local employment.

Mr. Iles, Mr. Edgar, and Mr. Lauterjung have also determined that for the first five-year period the proposed rule is in effect: it does not create or eliminate a government program; it does not require the creation or elimination of existing employee positions; it does not require an increase or decrease in future legislative appropriations to this agency; it does not require an increase or decrease in fees paid to this agency; it does not increase or decrease the number of individuals subject to the rule's applicability; and it does not positively or negatively affect the state's economy. Additionally, the proposed rule does not limit, expand, or repeal an existing regulation. The proposed rule would create a new rule to comply with §2155.076 of the Government Code.

Comments on the proposal must be in writing and will be accepted for 30 days following publication of the proposed section in the Texas Register. Written comments should be submitted to Marlene K. Sparkman, General Counsel, State Securities Board, P.O. Box 13167, Austin, Texas 78711‑3167 or faxed to (512) 305‑8336. Comments may also be submitted electronically to proposal@ssb.texas.gov. In order to be considered by the Board at adoption, comments must be received no later than 30 days following publication.

The new rule is proposed under the authority of Government Code, §4002.151 and §2155.076. Section 4002.151 provides the Board with the authority to adopt rules as necessary to implement the provisions of the Texas Securities Act, including rules governing registration statements, applications, notices, and reports; defining terms; classifying securities, persons, and matters within its jurisdiction; and prescribing different requirements for different classes. Section 2155.076 requires state agencies to adopt by rule vendor protest procedures.

The proposed new rule affects: none applicable.

§101.9. Vendor Protest Procedures.

(a) Purpose. The purpose of this section is to establish procedures for resolving vendor protests relating to purchasing issues. Except as otherwise provided in this section, the State Securities Board adopts by reference the rules of the Comptroller of Public Accounts relating to Protests and Appeals, contained in Title 34, Part 1, Chapter 20, Subchapter F, Division 3 of the Texas Administrative Code (the "CPA Protest Rules").

(b) Bid Protests by Vendors Related to a Solicitation or Contract Award. A protest vendor may file a protest with the Director of Staff Services.

(1) To be considered, a protest must be submitted in writing, signed by an authorized representative of the protesting vendor, and delivered to the Director of Staff Services in the time period specified §20.535 of the CPA Protest Rules.

(2) In addition to the filing requirements of §20.535 of the CPA Protest Rules, the protest must contain a statement that copies of the protest have been delivered to all other identifiable interested parties. The protesting vendor is required to and is responsible for mailing or delivering copies of the protest to all other identifiable interested parties. Upon request, the Director of Staff Services will provide the protesting vendor with a list of interested parties as reflected by the records of the Agency.

(d) Appeal.

(1) If a protest is based on a solicitation or contract award, the protesting party may appeal the determination of the Director of Staff Services to the Deputy Securities Commissioner.

(2) The Deputy Securities Commissioner may refer the matter to the Securities Commissioner for consideration or may issue a written decision that resolves the protest.

(3) An appeal that is not filed timely shall not be considered unless good cause for delay is shown or the Deputy Securities Commissioner determines that an appeal raises issues that are significant to the Agency's procurement practices or procedures in general.

(4) A written decision issued by the Deputy Securities Commissioner or the Securities Commissioner shall be the final administrative action of the Agency regarding the protest and appeal.

(e) Consultation. In performing their duties under this section, the Director of Staff Services, the Deputy Securities Commissioner, and the Securities Commissioner may consult with the Comptroller of Public Accounts, as well as Agency employees, including the General Counsel, concerning the dispute.

(f) Standards for Maintaining Documentation. All documentation on the purchasing process that is the subject of a protest or appeal shall be maintained in accordance with the Agency's records retention schedule.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on June 13, 2022.

TRD-202202198

Travis J. Iles

Securities Commissioner

State Securities Board

Earliest possible date of adoption: July 24, 2022

For further information, please call: (512) 305-8303

CHAPTER 133. FORMS.

7 TAC §§133.5 - 133.7, 133.12, 133.13, 133.16, 133.18, 133.26, 133.27, 133.29, 133.30, 133.34, 133.36.

The Texas State Securities Board proposes the repeal of thirteen rules, concerning forms adopted by reference. These forms, which contain references to the former version of the Texas Securities Act (formerly located in Vernon's Civil Statutes) would be repealed. New replacement forms that would contain references to both the former version of the Act and to the codified version are being currently proposed. Specifically, the State Securities Board proposes the repeal of §133.5, a form concerning Secondary Trading Exemption Notice; §133.6, a form concerning Secondary Trading Exemption Renewal Notice; §133.7, a form concerning Application for Registration of Securities; §133.12, a form concerning Renewal Application for Mutual Funds and Other Continuous Offerings; §133.13, a form concerning Application for Renewal Permit; §133.16, a form concerning Texas Crowdfunding Portal Withdrawal of Registration; §133.18, a form concerning Certification of Balance Sheet by Principal Financial Officer; §133.26, a form concerning Request for Determination of Money Market Fund Status for Federal Covered Securities; §133.27, a form concerning Year-End Report of Sales of Federal Covered Securities by a Money Market Fund (Pursuant to §123.3); §133.29, a form concerning Intrastate Exemption Notice; §133.30, a form concerning Information Concerning Projected Market Prices and Related Market Information; §133.34, a form concerning Undertaking Regarding Non-Issuer Sales; and §133.36, a form concerning Request for Reduced Fees for Certain Persons Registered in Multiple Capacities.

Clint Edgar, Deputy Securities Commissioner; and Emily Diaz and Shaun Yarroll, Assistant Directors, Registration Division, have determined that for the first five-year period the repeals are in effect, there will be no foreseeable fiscal implications for state or local government as a result of administering the repeals.

Mr. Edgar, Ms. Diaz, and Mr. Yarroll have also determined that for each year of the first five years the proposed repeals are in effect the public benefit expected as a result of adoption of the proposed repeals will be that forms that are no longer needed will be eliminated. There will be no adverse economic effect on micro- or small businesses or rural communities. Since the proposed repeals will have no adverse economic effect on micro- or small businesses or rural communities, preparation of an economic impact statement and a regulatory flexibility analysis is not required. There is no anticipated economic cost to persons who are required to comply with the repeals as proposed. There is no anticipated impact on local employment.

Mr. Edgar, Ms. Diaz, and Mr. Yarroll have also determined that for the first five-year period the proposed repeals of the rules adopting by reference the forms are in effect: they do not create or eliminate a government program; they do not require the creation or elimination of existing employee positions; they do not require an increase or decrease in future legislative appropriations to this agency; they do not require an increase or decrease in fees paid to this agency; they do not increase or decrease the number of individuals subject to the rule's applicability; they do not positively or negatively affect the state's economy; and they do not create a new regulation, or expand, limit, or repeal an existing regulation. Although the rulemaking involves repealing existing forms, the net effect is to merely replace the forms with new forms that are being concurrently proposed, while leaving the scope and the content of the current regulations that relate to these forms unchanged.

Comments on the proposal must be in writing and will be accepted for 30 days following publication of the proposed repeals in the Texas Register. Written comments should be submitted to Marlene K. Sparkman, General Counsel, State Securities Board, P.O. Box 13167, Austin, Texas 78711‑3167 or faxed to (512) 305‑8336. Comments may also be submitted electronically to proposal@ssb.texas.gov. In order to be considered by the Board at adoption, comments must be received no later than 30 days following publication.

The repeals are proposed under the authority of Texas Government Code, §§4002.151 and 4006.102(b). Section 4002.151 provides the Board with the authority to adopt rules as necessary to implement the provisions of the Texas Securities Act, including rules governing registration statements, applications, notices, and reports; defining terms; classifying securities, persons, and matters within its jurisdiction; and prescribing different requirements for different classes. Section 4006.102(b) provides the Board with the authority to adopt rules reducing fees for persons registered in two or more capacities.

The proposal affects Chapters 4003 and 4004 of the Texas Government Code, and Subchapter A of Chapter 4005 of the Texas Government Code.

§133.5.Secondary Trading Exemption Notice.

§133.6.Secondary Trading Exemption Renewal Notice.

§133.7.Application for Registration of Securities.

§133.12.Renewal Application for Mutual Funds and Other Continuous Offerings.

§133.13.Application for Renewal Permit.

§133.16.Texas Crowdfunding Portal Withdrawal of Registration.

§133.18.Certification of Balance Sheet by Principal Financial Officer.

§133.26.Request for Determination of Money Market Fund Status for Federal Covered Securities.

§133.27.Year-End Report of Sales of Federal Covered Securities by a Money Market Fund (Pursuant to §123.3).

§133.29.Intrastate Exemption Notice.

§133.30.Information Concerning Projected Market Prices and Related Market Information.

§133.34.Undertaking Regarding Non-issuer Sales.

§133.36.Request for Reduced Fees for Certain Persons Registered in Multiple Capacities.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on June 13, 2022.

TRD-202202200

Travis J. Iles

Securities Commissioner

State Securities Board

Earliest possible date of adoption: July 24, 2022

For further information, please call: (512) 305-8303

7 TAC §§133.5 - 133.7, 133.12, 133.13, 133.16, 133.18, 133.26, 133.27, 133.29, 133.30, 133.34, 133.36.

The Texas State Securities Board proposes thirteen new rules, concerning forms adopted by reference. Specifically, the State Securities Board proposes new §133.5, a form concerning Secondary Trading Exemption Notice; §133.6, a form concerning Secondary Trading Exemption Renewal Notice; §133.7, a form concerning Securities Application; §133.12, a form concerning Renewal Application for Mutual Funds and Other Continuous Offerings; §133.13, a form concerning Application for Renewal Permit; §133.16, a form concerning Texas Crowdfunding Portal Withdrawal of Registration; §133.18, a form concerning Certification of Balance Sheet by Principal Financial Officer; §133.26, a form concerning Request for Determination of Money Market Fund Status for Federal Covered Securities; §133.27, a form concerning Year-End Report of Sales of Federal Covered Securities by a Money Market Fund; §133.29, a form concerning Intrastate Exemption Notice; §133.30, a form concerning Information Concerning Projected Market Prices and Related Market Information; §133.34, a form concerning Undertaking Regarding Non-Issuer Sales; and §133.36, a form concerning Request for Reduced Fees for Certain Persons Registered in Multiple Capacities.

The new sections would adopt by reference forms that would be updated to add references to the forms to the codified version of the Texas Securities Act in the Government Code, which became effective on January 1, 2022, so that the new forms would contain references to both the former version of the Act (formerly located in Vernon's Civil Statutes) and to the codified version. Other non-substantive changes would be made to the sections and the forms, and the name of Form 133.7 would be changed to be more descriptive of its use. In addition, the name of Form 133.27 would also be changed to remove an unnecessary parenthetical. Existing forms §§133.5 - 133.7, 133.12, 133.13, 133.16, 133.18, 133.26, 133.27, 133.29, 133.30, 133.34, and 133.36 are being concurrently proposed for repeal.

Clint Edgar, Deputy Securities Commissioner; and Emily Diaz and Shaun Yarroll, Assistant Directors, Registration Division, have determined that for the first five-year period the proposed forms are used there will be no foreseeable fiscal implications for state or local government as a result of using the proposed forms.

Mr. Edgar, Ms. Diaz, and Mr. Yarroll have also determined that for each year of the first five years the proposed forms are used the public benefit expected as a result of adoption of the proposed forms will be to assist the public in navigating the transition from the former version of the Act to the current Government Code version of the Act. There will be no adverse economic effect on micro- or small businesses or rural communities. Since the proposed forms will have no adverse economic effect on micro- or small businesses or rural communities, preparation of an economic impact statement and a regulatory flexibility analysis is not required. There is no anticipated economic cost to persons who are required to use the forms as proposed. There is no anticipated impact on local employment.

Mr. Edgar, Ms. Diaz, and Mr. Yarroll have also determined that for the first five-year period the proposed rules adopting by reference the forms are in effect: they do not create or eliminate a government program; they do not require the creation or elimination of existing employee positions; they do not require an increase or decrease in future legislative appropriations to this agency; they do not require an increase or decrease in fees paid to this agency; they do not increase or decrease the number of individuals subject to the rules' applicability; they do not positively or negatively affect the state's economy; and they do not create a new regulation, or expand, limit or repeal an existing regulation. Although the rulemaking involves the creation of new forms, there would be no new regulation created since the net effect is to merely replace forms that are being concurrently proposed for repeal, while leaving the scope and the content of the current regulations that relate to these forms unchanged.

Comments on the proposal must be in writing and will be accepted for 30 days following publication of the proposed sections in the Texas Register. Written comments should be submitted to Marlene K. Sparkman, General Counsel, State Securities Board, P.O. Box 13167, Austin, Texas 78711‑3167 or faxed to (512) 305‑8336. Comments may also be submitted electronically to proposal@ssb.texas.gov. In order to be considered by the Board at adoption, comments must be received no later than 30 days following publication.

The new rules are proposed under the authority of Texas Government Code, §§4002.151 and 4006.102(b). Section 4002.151 provides the Board with the authority to adopt rules as necessary to implement the provisions of the Texas Securities Act, including rules governing registration statements, applications, notices, and reports; defining terms; classifying securities, persons, and matters within its jurisdiction; and prescribing different requirements for different classes. Section 4006.102(b) provides the Board with the authority to adopt rules reducing fees for persons registered in two or more capacities.

The proposal affects Chapters 4003 and 4004 of the Texas Government Code, and Subchapter A of Chapter 4005 of the Texas Government Code.

§133.5.Secondary Trading Exemption Notice.