TITLE 7. BANKING AND SECURITIES

PART 7. STATE SECURITIES BOARD

CHAPTER 113. REGISTRATION OF SECURITIES

7 TAC §113.1

The Texas State Securities Board proposes an amendment to §113.1, concerning qualification of securities. The amendment adds a reference to §114.4, relating to filings and fees for federal covered securities, to the section that discusses state registration of Regulation A offerings. Section 114.4(a) operates to require a notice filing, payment of the fee that would have been paid if the securities had been registered, and, if applicable, a consent to service for federal covered securities that are offered and sold pursuant to Tier 2 of Regulation A.

Earlier this year, the Securities and Exchange Commission (SEC) adopted final rules that updated and expanded Regulation A, an existing federal exemption from registration for smaller issuers of securities. These rules provide for two tiers of offerings: Tier 1, for offerings of securities of up to $20 million in a 12-month period; and Tier 2, for offerings of securities up to $50 million in a 12-month period. The SEC rules operate to preempt state securities law registration and qualification requirements for securities offered or sold to "qualified purchasers" in Tier 2 offerings. The SEC defined "qualified purchasers" as all offerees and purchasers in a Regulation A, Tier 2 offering. Accordingly, securities offered and sold in a Regulation A, Tier 2 offering would be federal covered securities, as that term is defined elsewhere in the Board's rules, and would be subject to the filing and fee requirements in Chapter 114 of the Board's rules.

Patricia Loutherback, Director, Registration Division, has determined that for the first five-year period the rule is in effect there will be no foreseeable fiscal implications for state or local government as a result of enforcing or administering the rule.

Ms. Loutherback also has determined that for each year of the first five years the rule is in effect the public benefit anticipated as a result of enforcing the rule will be to apprise readers that some Regulation A offerings may involve federal covered securities, rather than registered securities in Texas, and direct the reader to the provisions that relate to filings and fees for federal covered securities. There will be no effect on micro- or small businesses. Since the rule will have no adverse economic effect on micro- or small businesses, 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.

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 amendment is proposed under Texas Civil Statutes, Article 581-28-1. Section 28-1 provides the Board with the authority to adopt rules and regulations necessary to carry out and implement the provisions of the Texas Securities Act, including rules and regulations governing registration statements and applications; defining terms; classifying securities, persons, and matters within its jurisdiction; and prescribing different requirements for different classes.

The proposal affects Texas Civil Statutes, Article 581 7.

§113.1.Qualification of Securities.

Regulation "A" and "B" filings with the SEC are forms of exemption and cannot be the basis for a filing by coordination with the State Securities Board under the Texas Securities Act, §7.C. Such registrations with the Board should meet the requirements as outlined in the Act, §7.A or, if federal covered securities, the requirements in §114.4 of this title (relating to Filings and Fees).

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 September 16, 2015.

TRD-201503807

John Morgan

Securities Commissioner

State Securities Board

Earliest possible date of adoption: November 1, 2015

For further information, please call: (512) 305-8301

CHAPTER 115. SECURITIES DEALERS AND AGENTS

7 TAC §§115.4, 115.8, 115.18

The Texas State Securities Board proposes amendments to §115.4, concerning evidences of registration, §115.8, concerning fee requirements, and §115.18, concerning special application provisions available to a military spouse, military service member, or military veteran. The proposals are required by Senate Bill 1307, Senate Bill 807, and House Bill 7, passed by the 84th Texas Legislature. Related forms are being concurrently proposed as are comparable amendments to the corresponding rules for investment advisers and investment adviser representatives.

SB 1307, effective for applications or renewals filed on or after January 1, 2016, changed Chapter 55 of the Occupations Code relating to occupational licenses and registrations issued to military service members, military veterans, and military spouses (collectively, military applicants). Among its provisions, it requires that a state agency post a notice on its website describing the provisions available to military applicants. To simplify how this notice will be provided, the provisions that relate to military applicants are being relocated to §115.18. Accordingly, portions of subsection (e) of §115.4 would be amended to move the substantive portions relating to renewals by military service members to §115.18.

SB 1307 is applicable to applications and renewals filed on or after January 1, 2016. The amendments to §115.18 incorporate those statutory changes. Specifically, the definitions in subsection (a) have been amended to conform to the statute. The changes to subsection (b), elimination of most of current subsection (c), and relocation of the remainder of current subsection (c) to (b), implement the portions of Senate Bill 1307 that changed provisions that related to only spouses or only to service members and veterans, and expanded the expedited process to cover all military applicants.

SB 1307 also changed Chapter 55 of the Occupations Code to remove the requirement in Section 55.002 that to qualify for later renewal of a registration without an increase in fees or penalty, the military service member must be serving outside the state when on active duty. Section 55.003 was changed to permit a military service member two years of additional time to complete the requirements related to renewal of the license or registration. The text of new subsection (e) incorporates these changes and moves the other provisions related to renewals by military service members into §115.18 from §115.4.

SB 807, which is effective September 1, 2015, made an additional change to Chapter 55 by providing for the waiver of an occupational license application fee and an examination fee paid to the state by certain military applicants. The history of the bill clarifies that the application fee waiver is for the initial application only and not for renewals of the license or registration. The examination fee waiver applies only to fees paid to the State of Texas, so would relate only to the fee paid to the Agency to take the Texas Securities Examination, not to fees paid to third parties to take any of the uniform examinations administered by FINRA.

New subsection (c) of §115.18 would implement the SB 807 fee waivers. Since some qualifying filers (those filing through CRD or IARD) would have to pay the fee anyway to use the electronic system, the amendment also provides for a refund to an applicant who pays the fee. This would enable electronic filers to take advantage of the fee waiver. To avoid problems associated with processing stale claims, the subsection provides that a refund request must be received within four years from the date the fee was collected or received.

HB 7, also effective September 1st, repealed Section 41 of the Texas Securities Act that imposed the $200 professional fee on dealer, investment adviser, agent, and investment adviser representative applications and renewals. The amendment to §115.8, subsection (d), removes the reference to the Section 41 fee. The repeal of Section 41 fees effectively eliminates the Agency's mechanism for granting reduced fees to small businesses required to register in multiple capacities which was accomplished through subsection (b)(3) of §115.8. The proposed amendments to subsection (b)(3) would restructure the fee reduction to apply to the second set of Section 35.A fees (relating to registration as an investment adviser or investment adviser representative) so that a small business registered in multiple capacities would continue to receive a reduction in fees.

Patricia Loutherback, Director, Registration Division, has determined that for the first five-year period §115.4 is in effect there will be no foreseeable fiscal implications for state or local government as a result of enforcing or administering the rule. However, there will be fiscal implications as a result of enforcing or administering §115.8 and §115.18 on state, but not local, government.

The effect on state government for the first five-year period that §115.8 will be in effect is an estimated loss in revenue in the form of reduced fees that would be paid by small businesses registered in multiple capacities. The dealer and agent fees will continue to be paid so the fiscal impact would be from the waiver of the investment adviser or investment adviser representation fees. Accordingly, the fiscal impact is addressed in the discussion of the amendment to §116.8.

The effect on state government for the first five-year period that §115.18 will be in effect is an estimated loss in revenue as a result of the application and examination fee waivers that would be granted to military applicants. Although there would be a fiscal impact, it is the result of legislation rather than Agency rulemaking. A decrease in revenue resulting from the fee waivers was reflected in the fiscal note to SB 807. According to the Texas Comptroller of Public Accounts, "this bill would reduce state revenue from occupational license application and exam fees. However, insufficient data exist to determine how much revenue would be forgone. Therefore, the fiscal impact of the bill cannot be estimated." Two military applicants would have been eligible for waiver of the application fee in fiscal year 2015. That number was four in fiscal year 2014. Based on these numbers, the anticipated fiscal impact is likely to be minor.

Ms. Loutherback also has determined that for each year of the first five years the rules are in effect the public benefit anticipated as a result of enforcing the rules will be that a military applicant licensed in another jurisdiction or with comparable military service, training, or education can request special consideration or credit for such licensure or experience as well as expedited review of an application for registration. There will be no effect on micro- or small businesses. Since the rules will have no adverse economic effect on micro- or small businesses, 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 rules as proposed. There is no anticipated impact on local employment.

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 amendments are proposed under Texas Civil Statutes, Article 581-28-1 and Chapter 55 of the Texas Occupations Code. Section 28-1 provides the Board with the authority to adopt rules and regulations necessary to carry out and implement the provisions of the Texas Securities Act, including rules and regulations governing registration statements and applications; defining terms; classifying securities, persons, and matters within its jurisdiction; and prescribing different requirements for different classes. Chapter 55 of the Texas Occupations Code authorizes the agency to adopt rules for licensure or registration of a person who is a military spouse, military service member, or military veteran who meets certain criteria.

The proposals affect Texas Civil Statutes, Articles 581 12, 581-13, 581-14, 581-15, and 581-18.

§115.4.Evidences of Registration.

(a) - (d) (No change.)

(e) Renewal.

(1) - (2) (No change.)

(3) If a person's registration is not renewed in a timely manner because such person is a military service member, as defined in §115.18(a) of this chapter (relating to Special Provisions Relating to Military Applicants) [or was on active duty with the armed forces of the United States of America serving outside Texas], such person may renew the registration pursuant to the provisions of §115.18(e) [this paragraph].

[(A) Renewal of the registration may be requested by such person, such person's spouse, or an individual having power of attorney from such person. The renewal application shall include a current address and telephone number for the individual requesting the renewal.]

[(B) Renewal may be requested before or after expiration of the registration.]

[(C) A copy of the official orders or other official military documentation showing that such person is or was on active duty serving outside Texas shall be submitted to the Securities Commissioner along with the renewal application.]

[(D) A copy of the power of attorney from such person, if any, shall be filed with the Securities Commissioner along with the renewal application if the individual having the power of attorney executes any of the documents required in this paragraph.]

[(E) A renewal application submitted to the Securities Commissioner pursuant to this paragraph shall be accompanied by the applicable renewal fee set out in §115.8 of this title (relating to Fee Requirements).]

[(F) The State Securities Board will not assess any increased fee or other penalty against the person for failure to timely renew such person's registration if such person establishes to the satisfaction of the Securities Commissioner that all requirements of this paragraph have been met.]

§115.8.Fee Requirements.

(a) (No change.)

(b) Reduced fees for certain persons [person ] registered in multiple capacities.

(1) - (2) (No change.)

(3) Reduced fees. If the Securities Commissioner grants a person's request, the person must pay all applicable fees for securities agent or dealer registration as specified in the Texas Securities Act, §35.A [§§35.A(2), 35.A(4), 35.A(5), and 41(a)], but is exempt from the fees specified in the Texas Securities Act, §35.A [§41(a)], in connection with original and renewal applications for investment adviser representative or sole proprietor investment adviser registration, as applicable at the time Form 133.36 is filed. The reduction in fees granted by the Securities Commissioner under this subsection shall continue in force, without any further filings, as long as a person remains registered in a multiple capacity status.

(c) (No change.)

(d) Fees for concurrent registrations. Notwithstanding the Texas Securities Act, §35 [§§35 and 41], a person shall pay only one fee required under that section [those sections] to engage in business in this state concurrently for the same person or company as:

(1) a dealer and an investment adviser; or

(2) an agent and an investment adviser representative.

(e) Waiver of initial application fee and examination fee for certain military applicants. A military applicant who meets the requirements in §115.18(c) of this chapter (relating to Special Provisions Relating to Military Applicants) is eligible to have his or her initial application fee in Texas and the fee to take the Texas Securities Law Examination waived or refunded by following the procedure set out in §115.18(c).

§115.18.Special [Application] Provisions Relating [Available] to [a] Military Applicants [Spouse, Military Service Member, or Military Veteran].

(a) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise.

(1) - (2) (No change.)

(3) Military spouse--A person [An applicant ] who is married to a military service member [who is currently on active duty].

(4) Military service member--A person who is on active duty [currently serving in the armed forces of the United States, in a reserve component of the armed forces of the United States, including the National Guard, or in the state military service of any state].

(5) Military veteran--A person who has served on active duty and who was discharged or released from active duty [in the Army, Navy, Air Force, Marine Corps, or Coast Guard of the United States, or in the auxiliary service of one of those branches of the armed forces].

(6) Active duty--Current full-time military service in the armed forces of the United States or active duty military service as a member of the Texas military forces, as defined by Government Code, Section 437.001, or similar military service of another state.

(7) Armed forces of the United States--The Army, Navy, Air Force, Coast Guard, or Marine Corps of the United States or a reserve unit of one of those branches of the armed forces.

(8) Military applicant--A military spouse, military service member, or military veteran.

(b) Expedited review of an application submitted by [Alternative procedure for] a military applicant [spouse] as authorized by Occupations Code, §§55.004 - 55.006 [§55.004].

(1) A military [An] applicant [who is a military spouse] may use the procedure set out in this subsection if the military applicant:

(A) [the applicant] holds a current registration in another jurisdiction; or

(B) has been registered in Texas in the same capacity within the five years preceding the date of the application for registration[, but whose registration in Texas expired while the applicant lived in another state for at least six months].

(2) If the military applicant is not registered within five days of submitting an application, the military applicant may request special consideration of his or her application for registration by filing Form 133.4, Request for [Special] Consideration of a Registration Application by a Military Applicant [Spouse, Military Service Member, or Military Veteran], with the Securities Commissioner ("Commissioner"). Within five business days of receipt of the completed Form 133.4, the military applicant will be notified in writing of the reason(s) for the pending or deficient status assigned to the application.

(3) In addition to the waivers of examination requirements set out in §115.3 of this title (relating to Examination), the Commissioner in his or her discretion is authorized by the Board to grant full or partial waivers of the examination requirements of the Texas Securities Act, §13.D, on a showing of alternative demonstrations of competency to meet the requirements for obtaining the registration sought.

(4) A military applicant proceeding under this subsection may be registered despite having pending and/or deficient items ("deficiencies"). The deficiencies will be communicated to the military applicant in writing or by electronic means within five business days from approval of the registration.

(5) The deficiencies noted at the time the registration is granted must be resolved by the military applicant within a 12 month period. Failure to resolve outstanding deficiencies will cause the registration granted under this subsection or any renewal of such registration to automatically terminate 12 months after the date the registration was initially granted pursuant to this subsection.

(c) Waiver or refund of initial application fee and Texas Securities Law Examination fee for a military applicant as authorized by Occupations Code, §55.009.

(1) To qualify for a fee waiver or refund, the applicant must be:

(A) a military applicant who holds a current registration in another jurisdiction; or

(B) a military service member or military veteran whose military service, training, or education substantially meets all the requirements for the registration sought who submits Form 133.4, Request for Consideration of a Registration Application by a Military Applicant, with the applicant's registration application.

(2) To request a waiver or refund of a fee previously paid, the applicant must submit Form 133.19, Waiver or Refund Request by a Military Applicant.

(A) If requesting a waiver of the fee to take the Texas Securities Law Examination, Form 133.19 must be submitted when filing the request to take the Texas Securities Law Examination.

(B) If requesting a waiver of the initial application fee, Form 133.19 must be submitted with the initial application.

(C) If requesting a refund of the initial application fee or Texas Securities Law Examination fee that was paid in error, Form 133.19 must be submitted within four years from the date the fee was collected or received.

[(c) Expedited review of an application submitted by a military spouse as authorized by Occupations Code, §55.005 and §55.006.]

[(1) An applicant who is a military spouse may use the procedure set out in this subsection if the applicant holds a current registration in another jurisdiction.]

[(2) If the applicant is not registered within five days of submitting an application, the applicant may request special consideration of his or her application for registration by filing Form 133.4, Request for Special Consideration of a Registration Application by a Military Spouse, Military Service Member, or Military Veteran, with the Commissioner.]

[(3) An applicant proceeding under this subsection may be registered despite having pending and/or deficient items ("deficiencies"). The deficiencies will be communicated to the applicant in writing or by electronic means within five business days from approval of the registration.]

[(4) The deficiencies noted at the time the registration is granted must be resolved by the applicant within a 12 month period. Failure to resolve outstanding deficiencies will cause the registration granted under this subsection or any renewal of such registration to automatically terminate 12 months after the date the registration was initially granted pursuant to this subsection.]

(d) Registration of persons with military experience as authorized by Occupations Code, §55.007.

(1) An applicant who is a military service member or military veteran may request special consideration of verified military service, training, or education towards registration requirements, other than an examination requirement, for the registration sought by submitting Form 133.4, Request for [Special] Consideration of a Registration Application by a Military Applicant [Spouse, Military Service Member, or Military Veteran], with the applicant's registration application.

(2) (No change.)

(e) Renewals by military service members. If a military service member's registration is not renewed in a timely manner, the military service member may renew the registration pursuant to this subsection.

(1) Renewal of the registration may be requested by the military service member, the military service member's spouse, or an individual having power of attorney from the military service member. The renewal application shall include a current address and telephone number for the individual requesting the renewal.

(2) Renewal may be requested before or within two years after expiration of the registration.

(3) A copy of the official orders or other official military documentation showing that the military service member is or was on active duty shall be submitted to the Securities Commissioner along with the renewal application.

(4) A copy of the power of attorney from the military service member, if any, shall be filed with the Securities Commissioner along with the renewal application if the individual having the power of attorney executes any of the documents required in this subsection.

(5) A renewal application submitted to the Securities Commissioner pursuant to this subsection shall be accompanied by the applicable renewal fee set out in §115.8 of this title (relating to Fee Requirements).

(6) The State Securities Board will not assess any increased fee or other penalty against the military service member for failure to timely renew the registration if it is established to the satisfaction of the Securities Commissioner that all requirements of this subsection have been met.

(f) [(e)] Other provisions in this chapter.

(1) Unless specifically allowed in this section, an applicant must meet the requirements for registration or renewal specified in this chapter. This includes the requirement that certain filings be made electronically through the CRD.

(2) A one-year period, instead of the 90-day period contained in §115.2 of this title (relating to Application Requirements), will apply to the automatic withdrawal of an application for which a Form 133.4 is properly filed.

(g) [(f)] Additional information. An applicant receiving special consideration pursuant to this section in connection with a registration application or renewal shall provide any other information deemed necessary by the Commissioner. Such information may include, but is not limited to documentation:

(1) demonstrating status as a military spouse, service member, or military veteran;

(2) to determine whether the applicant meets licensing requirements through some alternative method;

(3) relating to prior military service, training, or education that may be credited towards a registration requirement; or

(4) to determine a dealer's financial responsibility or a dealer's or agent's business repute or qualifications.

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 September 16, 2015.

TRD-201503808

John Morgan

Securities Commissioner

State Securities Board

Earliest possible date of adoption: November 1, 2015

For further information, please call: (512) 305-8301

CHAPTER 116. INVESTMENT ADVISERS AND INVESTMENT ADVISER REPRESENTATIVES

7 TAC §§116.4, 116.8, 116.18

The Texas State Securities Board proposes amendments to §116.4, concerning evidences of registration, §116.8, concerning fee requirements, and §116.18, concerning special application provisions available to a military spouse, military service member, or military veteran. The proposals are required by Senate Bill 1307, Senate Bill 807, and House Bill 7, passed by the 84th Texas Legislature. Related forms are being concurrently proposed as are comparable amendments to the corresponding rules for dealers and agents.

SB 1307, effective for applications or renewals filed on or after January 1, 2016, changed Chapter 55 of the Occupations Code relating to occupational licenses and registrations issued to military service members, military veterans, and military spouses (collectively, military applicants). Among its provisions, it requires that a state agency post a notice on its website describing the provisions available to military applicants. To simplify how this notice will be provided, the provisions that relate to military applicants are being relocated to §116.18. Accordingly, portions of subsection (e) of §116.4 would be amended to move the substantive portions relating to renewals by military service members to §116.18.

SB 1307 is applicable to applications and renewals filed on or after January 1, 2016. The amendments to §116.18 incorporate those statutory changes. Specifically, the definitions in subsection (a) have been amended to conform to the statute. The changes to subsection (b), elimination of most of current subsection (c), and relocation of the remainder of current subsection (c) to (b), implement the portions of Senate Bill 1307 that changed provisions that related to only spouses or only to service members and veterans, and expanded the expedited process to cover all military applicants.

SB 1307 also changed Chapter 55 of the Occupations Code to remove the requirement in Section 55.002 that to qualify for later renewal of a registration without an increase in fees or penalty, the military service member must be serving outside the state when on active duty. Section 55.003 was changed to permit a military service member two years of additional time to complete the requirements related to renewal of the license or registration. The text of new subsection (e) incorporates these changes and moves the other provisions related to renewals by military service members into §116.18 from §116.4.

SB 807, which is effective September 1, 2015, made an additional change to Chapter 55 by providing for the waiver of an occupational license application fee and an examination fee paid to the state by certain military applicants. The history of the bill clarifies that the application fee waiver is for the initial application only and not for renewals of the license or registration. The examination fee waiver applies only to fees paid to the State of Texas, so would relate only to the fee paid to the Agency to take the Texas Securities Examination, not to fees paid to third parties to take any of the uniform examinations administered by FINRA.

New subsection (c) of §116.18 would implement the SB 807 fee waivers. Since some qualifying filers (those filing through CRD or IARD) would have to pay the fee anyway to use the electronic system, the amendment also provides for a refund to an applicant who pays the fee. This would enable electronic filers to take advantage of the fee waiver. To avoid problems associated with processing stale claims, the subsection provides that a refund request must be received within four years from the date the fee was collected or received.

HB 7, also effective September 1st, repealed Section 41 of the Texas Securities Act that imposed the $200 professional fee on dealer, investment adviser, agent, and investment adviser representative applications and renewals. The amendment to §116.8, subsection (d), removes the reference to the Section 41 fee. The repeal of Section 41 fees effectively eliminates the Agency's mechanism for granting reduced fees to small businesses required to register in multiple capacities which was accomplished through subsection (b)(3) of §116.8. The proposed amendments to subsection (b)(3) would restructure the fee reduction to apply to the second set of Section 35.A fees so that a small business registered in multiple capacities would continue to receive a reduction in fees.

Patricia Loutherback, Director, Registration Division, has determined that for the first five-year period §116.4 is in effect there will be no foreseeable fiscal implications for state or local government as a result of enforcing or administering the rule. However, there will be fiscal implications as a result of enforcing or administering §116.8 and §116.18 on state, but not local, government.

The effect on state government for the first five-year period that §116.8 will be in effect is an estimated loss in revenue in the form of reduced fees that would be paid by small businesses registered in multiple capacities. The fiscal impact would be minor given the small number of applicants who have requested reduced fees under this provision--11 (6 advisers and 5 representatives) in fiscal year 2015; 12 (6 advisers and 6 representatives) in fiscal year 2014; and 16 (6 advisers and 10 representatives) in fiscal year 2013. Using an average of the number and types of fees involved (6 advisers and 7 representatives), the fiscal impact when the rule becomes effective, based on reduced Section 35.A fees that go into effect on September 1, 2015, would be approximately a $380 per year reduction in fees collected.

The effect on state government for the first five-year period that §116.18 will be in effect is an estimated loss in revenue as a result of the application and examination fee waivers that would be granted to military applicants. Although there would be a fiscal impact, it is the result of legislation rather than Agency rulemaking. A decrease in revenue resulting from the fee waivers was reflected in the fiscal note to SB 807. According to the Texas Comptroller of Public Accounts, "this bill would reduce state revenue from occupational license application and exam fees. However, insufficient data exist to determine how much revenue would be forgone. Therefore, the fiscal impact of the bill cannot be estimated." Two military applicants would have been eligible for waiver of the application fee in fiscal year 2015. That number was four in fiscal year 2014. Based on these numbers, the anticipated fiscal impact is likely to be minor.

Ms. Loutherback also has determined that for each year of the first five years the rules are in effect the public benefit anticipated as a result of enforcing the rules will be that a military applicant licensed in another jurisdiction or with comparable military service, training, or education can request special consideration or credit for such licensure or experience as well as expedited review of an application for registration. There will be no effect on micro- or small businesses. Since the rules will have no adverse economic effect on micro- or small businesses, 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 rules as proposed. There is no anticipated impact on local employment.

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 amendments are proposed under Texas Civil Statutes, Article 581-28-1 and Chapter 55 of the Texas Occupations Code. Section 28-1 provides the Board with the authority to adopt rules and regulations necessary to carry out and implement the provisions of the Texas Securities Act, including rules and regulations governing registration statements and applications; defining terms; classifying securities, persons, and matters within its jurisdiction; and prescribing different requirements for different classes. Chapter 55 of the Texas Occupations Code authorizes the agency to adopt rules for licensure or registration of a person who is a military spouse, military service member, or military veteran who meets certain criteria.

The proposals affect Texas Civil Statutes, Articles 581 12, 581-13, 581-14, 581-15, and 581-18.

§116.4.Evidences of Registration.

(a) - (d) (No change.)

(e) Renewal.

(1) - (2) (No change.)

(3) If a person's registration is not renewed in a timely manner because such person is a military service member as defined in §116.18(a) of this chapter (relating to Special Provisions Relating to Military Applicants) [or was on active duty with the armed forces of the United States of America serving outside Texas], such person may renew the registration pursuant to the provisions of §116.18(e) [this paragraph].

[(A) Renewal of the registration may be requested by such person, such person's spouse, or an individual having power of attorney from such person. The renewal application shall include a current address and telephone number for the individual requesting the renewal.]

[(B) Renewal may be requested before or after expiration of the registration.]

[(C) A copy of the official orders or other official military documentation showing that such person is or was on active duty serving outside Texas shall be submitted to the Securities Commissioner along with the renewal application.]

[(D) A copy of the power of attorney from such person, if any, shall be filed with the Securities Commissioner along with the renewal application if the individual having the power of attorney executes any of the documents required in this paragraph.]

[(E) A renewal application submitted to the Securities Commissioner pursuant to this paragraph shall be accompanied by the applicable renewal fee set out in §116.8 of this title (relating to Fee Requirements).]

[(F) The State Securities Board will not assess any increased fee or other penalty against the person for failure to timely renew such person's registration if such person establishes to the satisfaction of the Securities Commissioner that all requirements of this paragraph have been met.]

§116.8.Fee Requirements.

(a) (No change.)

(b) Reduced fees for certain persons [person ] registered in multiple capacities.

(1) - (2) (No change.)

(3) Reduced fees. If the Securities Commissioner grants a person's request, the person must pay all applicable fees for registration as a dealer or dealer's agent as specified in the Texas Securities Act, §35.A [§§35.A(2), 35.A(4), 35.A(5), and 41(a)], but is exempt from the fees specified in the Texas Securities Act, §35.A [§41(a)], in connection with original and renewal applications for registration as an investment adviser representative or sole proprietor investment adviser, as applicable at the time Form 133.36 is filed. The reduction in fees granted by the Securities Commissioner under this subsection shall continue in force, without any further filings, as long as a person remains registered in a multiple capacity status.

(c) (No change.)

(d) Fees for concurrent registrations. Notwithstanding the Texas Securities Act, §35 [§§35 and 41], a person shall pay only one fee required under that section [those sections] to engage in business in this state concurrently for the same person or company as:

(1) a dealer and an investment adviser; or

(2) an agent and an investment adviser representative.

(e) Waiver of initial application fee and examination fee for certain military applicants. A military applicant who meets the requirements in §116.18(c) of this chapter (relating to Special Provisions Relating to Military Applicants) is eligible to have his or her initial application fee in Texas and the fee to take the Texas Securities Law Examination waived or refunded by following the procedure set out in §116.18(c).

§116.18.Special [Application] Provisions Relating [Available] to [a] Military Applicants [Spouse, Military Service Member, or Military Veteran].

(a) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise.

(1) - (2) (No change.)

(3) Military spouse--A person [An applicant ] who is married to a military service member [who is currently on active duty].

(4) Military service member--A person who is on active duty. [currently serving in the armed forces of the United States, in a reserve component of the armed forces of the United States, including the National Guard, or in the state military service of any state.]

(5) Military veteran--A person who has served on active duty and who was discharged or released from active duty. [in the Army, Navy, Air Force, Marine Corps, or Coast Guard of the United States, or in the auxiliary service of one of those branches of the armed forces.]

(6) Active duty--Current full-time military service in the armed forces of the United States or active duty military service as a member of the Texas military forces, as defined by Government Code, §437.001, or similar military service of another state.

(7) Armed forces of the United States--The Army, Navy, Air Force, Coast Guard, or Marine Corps of the United States or a reserve unit of one of those branches of the armed forces.

(8) Military applicant--A military spouse, military service member, or military veteran.

(b) Expedited review of an application submitted by [Alternative procedure for] a military applicant [spouse] as authorized by Occupations Code, §§55.004 - 55.006 [§55.004].

(1) A military [An] applicant [who is a military spouse] may use the procedure set out in this subsection if the military applicant:

(A) [the applicant] holds a current registration in another jurisdiction; or

(B) has been registered in Texas in the same capacity within the five years preceding the date of the application for registration[, but whose registration in Texas expired while the applicant lived in another state for at least six months].

(2) If the military applicant is not registered within five days of submitting an application, the military applicant may request special consideration of his or her application for registration by filing Form 133.4, Request for [Special] Consideration of a Registration Application by a Military Applicant [Spouse, Military Service Member, or Military Veteran], with the Securities Commissioner ("Commissioner"). Within five business days of receipt of the completed Form 133.4, the military applicant will be notified in writing of the reason(s) for the pending or deficient status assigned to the application.

(3) In addition to the waivers of examination requirements set out in §116.3 of this title (relating to Examination), the Commissioner in his or her discretion is authorized by the Board to grant full or partial waivers of the examination requirements of the Texas Securities Act, Section 13.D, on a showing of alternative demonstrations of competency to meet the requirements for obtaining the registration sought.

(4) A military applicant proceeding under this subsection may be registered despite having pending and/or deficient items ("deficiencies"). The deficiencies will be communicated to the military applicant in writing or by electronic means within five business days from approval of the registration.

(5) The deficiencies noted at the time the registration is granted must be resolved by the military applicant within a 12 month period. Failure to resolve outstanding deficiencies will cause the registration granted under this subsection or any renewal of such registration to automatically terminate 12 months after the date the registration was initially granted pursuant to this subsection.

(c) Waiver or refund of initial application fee and Texas Securities Law Examination fee for a military applicant as authorized by Occupations Code, §55.009.

(1) To qualify for a fee waiver or refund, the applicant must be:

(A) a military applicant who holds a current registration in another jurisdiction; or

(B) a military service member or military veteran whose military service, training, or education substantially meets all the requirements for the registration sought who submits Form 133.4, Request for Consideration of a Registration Application by a Military Applicant, with the applicant's registration application.

(2) To request a waiver or refund of a fee previously paid, the applicant must submit Form 133.19, Waiver or Refund Request by a Military Applicant.

(A) If requesting a waiver of the fee to take the Texas Securities Law Examination, Form 133.19 must be submitted when filing the request to take the Texas Securities Law Examination.

(B) If requesting a waiver of the initial application fee, Form 133.19 must be submitted with the initial application.

(C) If requesting a refund of the initial application fee or Texas Securities Law Examination fee that was paid in error, Form 133.19 must be submitted within four years from the date the fee was collected or received.

[(c) Expedited review of an application submitted by a military spouse as authorized by Occupations Code, §55.005 and §55.006.]

[(1) An applicant who is a military spouse may use the procedure set out in this subsection if the applicant holds a current registration in another jurisdiction.]

[(2) If the applicant is not registered within five days of submitting an application, the applicant may request special consideration of his or her application for registration by filing Form 133.4, Request for Special Consideration of a Registration Application by a Military Spouse, Military Service Member, or Military Veteran, with the Commissioner.]

[(3) An applicant proceeding under this subsection may be registered despite having pending and/or deficient items ("deficiencies"). The deficiencies will be communicated to the applicant in writing or by electronic means within five business days from approval of the registration.]

[(4) The deficiencies noted at the time the registration is granted must be resolved by the applicant within a 12 month period. Failure to resolve outstanding deficiencies will cause the registration granted under this subsection or any renewal of such registration to automatically terminate 12 months after the date the registration was initially granted pursuant to this subsection.]

(d) Registration of persons with military experience as authorized by Occupations Code, §55.007.

(1) An applicant who is a military service member or military veteran may request special consideration of verified military service, training, or education towards registration requirements, other than an examination requirement, for the registration sought by submitting Form 133.4, Request for [Special] Consideration of a Registration Application by a Military Applicant [Spouse, Military Service Member, or Military Veteran], with the applicant's registration application.

(2) (No change.)

(e) Renewals by military service members. If a military service member's registration is not renewed in a timely manner, the military service member may renew the registration pursuant to this subsection.

(1) Renewal of the registration may be requested by the military service member, the military service member's spouse, or an individual having power of attorney from the military service member. The renewal application shall include a current address and telephone number for the individual requesting the renewal.

(2) Renewal may be requested before or within two years after expiration of the registration.

(3) A copy of the official orders or other official military documentation showing that the military service member is or was on active duty shall be submitted to the Securities Commissioner along with the renewal application.

(4) A copy of the power of attorney from the military service member, if any, shall be filed with the Securities Commissioner along with the renewal application if the individual having the power of attorney executes any of the documents required in this subsection.

(5) A renewal application submitted to the Securities Commissioner pursuant to this subsection shall be accompanied by the applicable renewal fee set out in §116.8 of this title (relating to Fee Requirements).

(6) The State Securities Board will not assess any increased fee or other penalty against the military service member for failure to timely renew the registration if it is established to the satisfaction of the Securities Commissioner that all requirements of this subsection have been met.

(f) [(e)] Other provisions in this chapter.

(1) Unless specifically allowed in this section, an applicant must meet the requirements for registration or renewal specified in this chapter. This includes the requirement that certain filings be made electronically through the IARD.

(2) A one-year period, instead of the 90-day period contained in §116.2 of this title (relating to Application Requirements), will apply to the automatic withdrawal of an application for which a Form 133.4 is properly filed.

(g) [(f)] Additional information. An applicant receiving special consideration pursuant to this section in connection with a registration application or renewal shall provide any other information deemed necessary by the Commissioner. Such information may include, but is not limited to documentation:

(1) demonstrating status as a military spouse, service member, or military veteran;

(2) to determine whether the applicant meets licensing requirements through some alternative method;

(3) relating to prior military service, training, or education that may be credited towards a registration requirement; or

(4) to determine an investment adviser's financial responsibility or an investment adviser's or investment adviser representative's business repute or qualifications.

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 September 16, 2015.

TRD-201503809

John Morgan

Securities Commissioner

State Securities Board

Earliest possible date of adoption: November 1, 2015

For further information, please call: (512) 305-8301

CHAPTER 133. FORMS

7 TAC §133.4

(Editor's note: The text of the following section proposed for repeal will not be published. The section may be examined in the offices of the State Securities Board or in the Texas Register office, James Earl Rudder Building, 1019 Brazos Street, Austin, Texas.)

The Texas State Securities Board proposes the repeal of §133.4, which adopts by reference a form concerning request for special consideration of a registration application by a military spouse, military service member, or military veteran. Repeal of the existing form would allow for the simultaneous adoption of a new form, which is being concurrently proposed.

Patricia Loutherback, Director, Registration Division, has determined that for the first five-year period the repeal is in effect there will be no foreseeable fiscal implications for state or local government as a result of enforcing or administering the repeal.

Ms. Loutherback also has determined that for each year of the first five years the repeal is in effect the public benefit anticipated as a result of enforcing the repeal will be that a military service member, military spouse, or military veteran (collectively, military applicants) licensed in another jurisdiction or with comparable military service, training, or education can complete the form to request special consideration or credit for such licensure or experience as well as expedited review of an application for registration pursuant to §115.18 or §116.18. There will be no effect on micro- or small businesses. Since the repeal will have no adverse economic effect on micro- or small businesses, 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 repeal as proposed. There is no anticipated impact on local employment.

Comments on the proposal must be in writing and will be accepted for 30 days following publication of the proposed repeal 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 repeal is proposed under Texas Civil Statutes, Article 581-28-1 and Chapter 55 of the Texas Occupations Code. Section 28-1 provides the Board with the authority to adopt rules and regulations necessary to carry out and implement the provisions of the Texas Securities Act, including rules and regulations governing registration statements and applications; defining terms; classifying securities, persons, and matters within its jurisdiction; and prescribing different requirements for different classes. Chapter 55 of the Texas Occupations Code authorizes the agency to adopt rules for licensure or registration of a person who is a military spouse, military service member, or military veteran who meets certain criteria.

The proposal affects Texas Civil Statutes, Articles 581 12, 581-13, 581-14, 581-15, and 581-18.

§133.4.Request for Special Consideration of a Registration Application by a Military Spouse, Military Service Member, or Military Veteran.

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 September 16, 2015.

TRD-201503811

John Morgan

Securities Commissioner

State Securities Board

Earliest possible date of adoption: November 1, 2015

For further information, please call: (512) 305-8301

7 TAC §133.4

The Texas State Securities Board proposes new §133.4, which adopts by reference a form concerning request for consideration of a registration application by a military applicant. The form will allow a military service member, military spouse, or military veteran (collectively, military applicants) licensed in another jurisdiction or with comparable military service, training, or education to request special consideration or credit for such licensure or experience as well as expedited review of an application for registration pursuant to §115.18 or §116.18, which are being concurrently amended. Existing §133.4 is being concurrently proposed for repeal.

Patricia Loutherback, Director, Registration Division, has determined that for the first five-year period the rule is in effect there will be no foreseeable fiscal implications for state or local government as a result of enforcing or administering the rule.

Ms. Loutherback also has determined that for each year of the first five years the rule is in effect the public benefit anticipated as a result of enforcing the rule will be that a military applicant licensed in another jurisdiction or with comparable military service, training, or education can complete the form to request special consideration or credit for such licensure or experience as well as expedited review of an application for registration pursuant to §115.18 or §116.18. There will be no effect on micro- or small businesses. Since the rule will have no adverse economic effect on micro- or small businesses, 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.

Comments on the proposal must be in writing and will be accepted for 30 days following publication of the proposed rule 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 rule is proposed under Texas Civil Statutes, Article 581-28-1 and Chapter 55 of the Texas Occupations Code. Section 28-1 provides the Board with the authority to adopt rules and regulations necessary to carry out and implement the provisions of the Texas Securities Act, including rules and regulations governing registration statements and applications; defining terms; classifying securities, persons, and matters within its jurisdiction; and prescribing different requirements for different classes. Chapter 55 of the Texas Occupations Code authorizes the agency to adopt rules for licensure or registration of a person who is a military spouse, military service member, or military veteran who meets certain criteria.

The proposal affects Texas Civil Statutes, Articles 581 12, 581-13, 581-14, 581-15, and 581-18.

§133.4.Request for Consideration of a Registration Application by a Military Applicant.

The State Securities Board adopts by reference Form 133.4, Request for Consideration of a Registration Application by a Military Applicant. This form is available from the State Securities Board, P.O. Box 13167, Austin, Texas 78711-3167 and at www.ssb.state.tx.us.

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 September 16, 2015.

TRD-201503810

John Morgan

Securities Commissioner

State Securities Board

Earliest possible date of adoption: November 1, 2015

For further information, please call: (512) 305-8301

7 TAC §133.19

The Texas State Securities Board proposes new §133.19, which adopts by reference a form concerning waiver or refund request by a military applicant. The form will allow a military service member, military spouse, or military veteran (collectively, military applicants) to request a waiver or refund of the initial registration application fee or the fee to take the Texas Securities Law Examination under the new procedures to be established in §115.18 and §116.18, which are being concurrently amended.

Patricia Loutherback, Director, Registration Division, has determined that for the first five-year period the rule is in effect there will be no foreseeable fiscal implications for state or local government as a result of enforcing or administering the rule.

Ms. Loutherback also has determined that for each year of the first five years the rule is in effect the public benefit anticipated as a result of enforcing the rule will be that a military applicant can complete the form to request a waiver or refund of the initial application fee or the fee to take the Texas Securities Law Examination. There will be no effect on micro- or small businesses. Since the rule will have no adverse economic effect on micro- or small businesses, 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.

Comments on the proposal must be in writing and will be accepted for 30 days following publication of the proposed rule 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 rule is proposed under Texas Civil Statutes, Article 581-28-1 and Chapter 55 of the Texas Occupations Code. Section 28-1 provides the Board with the authority to adopt rules and regulations necessary to carry out and implement the provisions of the Texas Securities Act, including rules and regulations governing registration statements and applications; defining terms; classifying securities, persons, and matters within its jurisdiction; and prescribing different requirements for different classes. Chapter 55 of the Texas Occupations Code authorizes the agency to adopt rules for licensure or registration of a person who is a military spouse, military service member, or military veteran who meets certain criteria.

The proposal affects Texas Civil Statutes, Articles 581 12, 581-13, 581-15, and 581-18.

§133.19.Waiver or Refund Request by a Military Applicant.

The State Securities Board adopts by reference Form 133.19, Waiver or Refund Request by a Military Applicant. This form is available from the State Securities Board, P.O. Box 13167, Austin, Texas 78711-3167 and at www.ssb.state.tx.us.

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 September 16, 2015.

TRD-201503812

John Morgan

Securities Commissioner

State Securities Board

Earliest possible date of adoption: November 1, 2015

For further information, please call: (512) 305-8301

CHAPTER 139. EXEMPTIONS BY RULE OR ORDER

7 TAC §139.12

The Texas State Securities Board proposes an amendment to §139.12, concerning oil and gas auction exemption. The proposal would add "associate auctioneer," a new type of registration under the Texas Occupations Code added by House Bill 2481, effective September 1, 2015. An "associate auctioneer" is an individual who, for compensation, is employed by and under the direct supervision of a licensed auctioneer to sell or offer to sell property at an auction. The proposal also eliminates the reference to an "auction company" licensed by the Texas Department of Licensing and Regulation since there is no such equivalent license in Chapter 1802 of the Texas Occupations Code.

Patricia Loutherback, Director, Registration Division, has determined that for the first five-year period the rule is in effect there will be no foreseeable fiscal implications for state or local government as a result of enforcing or administering the rule.

Ms. Loutherback also has determined that for each year of the first five years the rule is in effect the public benefit anticipated as a result of enforcing the rule will be to correctly identify the licensed persons who may act as an auctioneer for purposes of the exemption. There will be no effect on micro- or small businesses. Since the rule will have no adverse economic effect on micro- or small businesses, 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.

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 amendment is proposed under Texas Civil Statutes, Articles 581-5.T and Article 581-28-1. Section 5.T provides that the Board may prescribe new exemptions by rule. Section 28-1 provides the Board with the authority to adopt rules and regulations necessary to carry out and implement the provisions of the Texas Securities Act, including rules and regulations governing registration statements and applications; defining terms; classifying securities, persons, and matters within its jurisdiction; and prescribing different requirements for different classes.

The proposal affects Texas Civil Statutes, Articles 581 5, 581-7, and 581-12.

§139.12.Oil and Gas Auction Exemption.

For purposes of this rule only, the term "mineral interest" means an interest in or under an oil, gas, or mining lease, fee, or title, including real property from which the minerals have not been severed, or contracts relating thereto. The offer and sale of a mineral interest, at an auction, by the seller itself, or a registered dealer or agent acting on behalf of the seller, is exempt from the securities registration requirements of the Texas Securities Act, Section 7, if all of the following conditions are met.

(1) Auctioneer. The auctioneer or associate auctioneer [or auction company] through which the mineral interest is offered or sold must be licensed as a dealer under the Texas Securities Act and licensed by the Texas Department of Licensing and Regulation in accordance with Texas Occupations Code, §1802.001 et. seq.

(2) - (6) (No change.)

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 September 16, 2015.

TRD-201503813

John Morgan

Securities Commissioner

State Securities Board

Earliest possible date of adoption: November 1, 2015

For further information, please call: (512) 305-8300