• News
  • Celebrities
  • Finance
  • Crypto
  • Travel
  • Entertainment
  • Health
  • Others

Texas officials cry foul to SEC over Dodd-Frank Act, appointed boards

Image has not been found. URL: http://images.americanindependent.com/2010/08/Mahurinhousing-crisis_Thumb1.jpgA sweeping federal law aimed at preventing bailouts, “too big to fail” and another financial crisis has provoked objections from a variety of Texas governmental entities, big and small, who argue that it would hinder the hundreds of appointed boards and commission in the state.

Among its several provisions, the Dodd-Frank Wall Street Reform and Consumer Protection Act, signed by Pres. Barack Obama in July 2010, requires “municipal advisors” — who participate in the issuance of municipal securities, for example — to register with federal regulators for the first time. In the context of the law, municipal entities include “states, their political subdivisions such as cities, towns and counties, and their instrumentalities such as school districts or port authorities.”

In December, the Securities and Exchange Commission issued a proposed rule (PDF) excluding elected officials from the definition of “municipal advisor” — but specifically including appointed board members.

According to the proposed rule:

“The Commission does not believe that appointed members of a governing body of a municipal entity that are not elected ex officio members should be excluded from the definition of a “municipal advisor.” The Commission believes that this interpretation is appropriate because employees and elected members are accountable to the municipal entity for their actions. In addition, the Commission is concerned that appointed members, unlike elected officials and elected ex officio members, are not directly accountable for their performance to the citizens of the municipal entity.”

The proposal to make appointed board members register with the SEC and Municipal Securities Rulemaking Board has drawn comments from dozens of Texas entities — ranging from the Dallas/Fort Worth International Airport, to the City of Taylor, to university systems, to the Texas Attorney General — who all argue that the SEC should consider appointed board members as “municipal employees” rather than “municipal advisors,” exempting them from federal registration and regulation.

Despite the differences in size and scope of the entities, they all say that the proposed rule would dissuade citizens from volunteering to serve on the bevy of boards and commissions throughout the state. Registration with the SEC involves filling out a form (PDF) with contact information, municipal advisory activities and disciplinary information (such as felonies, financial regulatory violations or investment-related transgressions). Registration with the MSRB carries an initial $100 fee and annual fee of $500.

Texas AG Greg Abbott writes in a letter dated Feb. 22 (PDF):

“Citizen volunteers serve on approximately 400 Texas state boards, commissions, authorities and committees. Collectively, they are critical to the governance of Texas. These citizen volunteers oversee great universities, public health and safety, criminal justice, historic preservation, parks and wildlife, environmental protection, public utilities, occupational licensing, and virtually every other aspect of Texas state government. These boards and commissions are a bastion of democracy, where over 3000 uncompensated citizen volunteers, selected from 25 million Texans for their skills for the job and their heart for the work, come to serve their State on a part time basis in the finest tradition of participatory government. There is no beltway mentality in Austin because these citizen volunteers bring Texas to the Capitol. Their hometown insights and experience guide Texas government. Texas government cannot run without the service of these citizen volunteers on its state boards and commissions. The SEC must not create a needless roadblock to their service.”

Multiplying $600 times 3,000 board members, Abbott estimates that the initial cost to Texas government — which typically reimburses board members for expenses — would run about $1.8 million.

Here are some of Abbott’s key statements and arguments, echoed by other entities as well:

“The SEC Should Issue Definitive Public Guidance on the Interim Rules.”

“The Proposed Rule Interferes with Traditional State Authority.”

“The Intrusion of the Proposed Interpretation into State Governance Is Breathtaking.”

“The Proposed Registration Requirements Could Cripple Texas State Boards.”

“Board Members Do Not Meet the Definition of Municipal Advisors.”

“If Necessary, the SEC Should Exercise Its Discretion to Exempt Board Members.”

“In Texas, Citizen Volunteers Are Held Directly and Publicly Accountable by Law for Honest and Ethical Conduct. Accordingly, There Is No Justification for the Many Burdens Resulting from the SEC’s Proposed Intrusion into State Governance.”

“The Proposed Rule Would Impose a Significant Financial Burden on States at a Time When They Can Least Afford It.”

“Texas’ Ability to Recruit Board Members Could Be Crippled If the Proposed Rule Is Adopted.”

“The Proposed Rules Will Interrupt State Government and Place Board Members Choosing Not to Register in an Untenable Position.”

“The SEC Should Adopt the Same Standard for Appointed Members as Elected Members.”

On Jan. 13, 2011, Jim Dunaway, city manager for the City of Taylor, wrote that the SEC should “distinguish between consultation and solicitation and policymaking.”

Dunaway writes:

“Board members, appointed or elected, perform the function of policymaking and approving certain decisions of their staff. A board’s function is to guide an organization in order to meets its constitutional and statutory objectives. Board members are not advisors or consultants in that they are responsible for making final decisions on behalf of the municipal entity. The duty of every board member to respective state constitutions and statutes does not discriminate based on employment or election. Each board member takes the same oath and, just as important, is subject to liability for fraud and subject to suit for malfeasance.

In contrast, advisors such as financial and swap advisors have minimal legal or ethical duties to the City of Taylor or the citizens of Taylor, Texas. Their objective is to receive compensation in return for providing a service. Even when compensation is not immediate or expressly sought, it is fair to conclude that they seek clients for the purpose of profit making and providing expert advice. Their services are critical to municipal governments, both large and small, yet their motivations and their relationship to the City of Taylor cannot be compared to a citizen volunteer who is an appointed board member.”

(Image by: Matt Mahurin)

Discussion & Comments (0)

    Recent Articles

    • Things You Should Know about North America

      Things You Should Know about North America

      Get to know more about North America.

    • Eurovision 2010 Paula Seling Unpredictable Contest

      Eurovision 2010 Paula Seling Unpredictable Contest

      Paula Seling's experience on the Eurovision stage led her to declare that "Eurovision is an unpredictable contest". Which may explain the success of the young Lena from Germany, about whom the predictions before the event did not offer much chances for victory.

    • VIPRow.me - The Best Sports Streaming Website Today

      VIPRow.me - The Best Sports Streaming Website Today

      Have you ever contemplated creating a user-friendly site dedicated to sports-related free live streaming channels?

    • Learn How To Download, Install, And Use The Xnxubd 2022 Frame App

      Learn How To Download, Install, And Use The Xnxubd 2022 Frame App

      XNXUBD 2022 Nvidia users are able to watch thousands of videos and other contents online. XNXUBD 2022 Nvidia New is a piece of software that enables people to watch videos online without having to pay for memberships. On a graphics card, the XNXubd also provides some of the best gaming and virtual reality experiences.

    • Xvideostudio Video Editor Apk Free Download For Pc Full Version In 2022

      Xvideostudio Video Editor Apk Free Download For Pc Full Version In 2022

      A new edition of the Video Editor Apk for xVideostudio.Video Studio has all the latest features, including support for multiple video download formats in HD, FHD, and even 4K resolutions.

    • 9 Best Lotion For Masturbation - Popular Choice For 2022

      9 Best Lotion For Masturbation - Popular Choice For 2022

      Masturbation is a common activity for men and women. It's a natural and risk-free way to explore your body, experience pleasure, and release sexual tension.

    • Reasons Why You Need To Stop Watching Movies From Sflix

      Reasons Why You Need To Stop Watching Movies From Sflix

      Without having to sign up or pay anything, you can watch movies online for free with SFlix. It has more than 10,000 movies and television shows.

    • Coi Leray Mom And Dad's Family History & Wife, Explained

      Coi Leray Mom And Dad's Family History & Wife, Explained

      Coi Leray Collins (born May 11, 1997) is a rapper from the United States. Leray started publishing songs to SoundCloud in 2014, and in 2018 she released her breakthrough track "Huddy" as well as her first mixtape, Everythingcoz.

    • Listen And Download Music On MyFreeMP3 For Free

      Listen And Download Music On MyFreeMP3 For Free

      Are you in a bind and looking for a place to obtain free mp3 songs? Never again will you need to bother, since this article has everything necessary to obtain your solution. Download free music from MyfreeMP3.com, one of the world's most popular websites.