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AN ACT
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relating to the transfer of an ad valorem tax lien; providing for |
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the imposition of an administrative penalty. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 32.06, Tax Code, is amended by amending |
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Subsections (a-3), (d-1), (f-3), and (j) and adding Subsections |
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(e-1) and (e-2) to read as follows: |
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(a-3) If the property owner has executed an authorization |
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under Subsection (a-2)(2)(B) consenting to a transfer of the tax |
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liens for both the taxes on the property that are not delinquent and |
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taxes on the property that are delinquent, the collector's |
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certification under Subsection (b) may be [collector shall certify] |
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in one document [the transfer of the liens for all the taxes]. |
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(d-1) A right of rescission described by 12 C.F.R. Section |
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226.23 applies to a [tax lien] transfer under this section of a tax |
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lien on residential property owned and used by the property owner |
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for personal, family, or household purposes. |
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(e-1) A transferee of a tax lien may not charge a fee for any |
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expenses arising after closing, including collection costs, except |
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for: |
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(1) interest expressly authorized under this section; |
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(2) the fees for filing the release of the tax lien |
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under Subsection (b); |
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(3) the fee for providing a payoff statement under |
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Subsection (f-3); |
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(4) the fee for providing information regarding the |
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current balance owed by the property owner under Subsection (g); |
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and |
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(5) the fees expressly authorized under Section |
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351.0021, Finance Code. |
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(e-2) The contract between the property owner and the |
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transferee may provide for interest for default, in addition to the |
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interest permitted under Subsection (e), if any part of the |
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installment remains unpaid after the 10th day after the date the |
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installment is due, including Sundays and holidays. If the lien |
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transferred is on residential property owned and used by the |
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property owner for personal, family, or household purposes, the |
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additional interest may not exceed five cents for each $1 of a |
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scheduled installment. |
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(f-3) Notwithstanding any contractual agreement with the |
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property owner, the transferee of a tax lien must provide the payoff |
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information required by this section to the greatest extent |
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permitted by 15 U.S.C. Section 6802 and 12 C.F.R. Part 216. The |
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payoff statement must meet the requirements of a payoff statement |
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defined by Section 12.017, Property Code. A transferee may charge a |
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reasonable fee for a payoff statement that is requested after an |
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initial payoff statement is provided. However, a transferee is not |
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required to release payoff information pursuant to a notice under |
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Subsection (f-1) unless the notice contains the information |
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prescribed by the Finance Commission of Texas. |
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(j) After one year from the date on which a tax lien |
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transferred as provided by this section is recorded in all counties |
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in which the property is located, the transferee of the lien may |
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foreclose the lien in the manner provided by Subsection (c) unless a |
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contract between the holder of the lien and the owner of the |
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property encumbered by the lien provides otherwise. [If a
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foreclosure suit results in foreclosure of the lien, the transferee
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is entitled to recover attorney's fees in an amount not to exceed 10
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percent of the judgment.] The proceeds of a sale following a |
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judicial foreclosure as provided by this subsection shall be |
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applied first to the payment of court costs, then to payment of the |
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judgment, including accrued interest, and then to the payment of |
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any attorney's fees fixed in the judgment. Any remaining proceeds |
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shall be paid to other holders of liens on the property in the order |
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of their priority and then to the person whose property was sold at |
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the tax sale. |
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SECTION 2. Subsection (b), Section 33.445, Tax Code, is |
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amended to read as follows: |
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(b) In consideration of the payment by the transferee of |
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those taxes and charges, each joined taxing unit shall transfer its |
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tax lien to the transferee in the form and manner provided by |
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Section 32.06(b) and enter its disclaimer in the suit. The transfer |
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of a tax lien under this subsection does not require authorization |
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by the property owner. |
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SECTION 3. Subchapter A, Chapter 351, Finance Code, is |
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amended by adding Section 351.0021 to read as follows: |
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Sec. 351.0021. AUTHORIZED CHARGES. (a) The contract |
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between a property tax lender and a property owner may require the |
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property owner to pay the following costs after closing: |
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(1) a reasonable fee for filing the release of a tax |
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lien authorized under Section 32.06(b), Tax Code; |
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(2) a reasonable fee for a payoff statement authorized |
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under Section 32.06(f-3), Tax Code; |
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(3) a reasonable fee for providing information |
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regarding the current balance owed by the property owner authorized |
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under Section 32.06(g), Tax Code; |
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(4) reasonable and necessary attorney's fees, |
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recording fees, and court costs for actions that are legally |
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required to respond to a suit filed under Chapter 33, Tax Code, or |
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to perform a foreclosure, including fees required to be paid to an |
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official and fees for an attorney ad litem; |
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(5) to the extent permitted by the United States |
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Bankruptcy Code, attorney's fees and court costs for services |
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performed after the property owner files a voluntary bankruptcy |
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petition; |
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(6) a reasonable fee for title examination and |
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preparation of an abstract of title by an attorney, a title company, |
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or a property search company authorized to do business in this |
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state; |
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(7) a processing fee for insufficient funds, as |
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authorized under Section 3.506, Business & Commerce Code; |
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(8) a fee for collateral protection insurance, as |
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authorized under Chapter 307; |
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(9) a prepayment penalty, unless the lien transferred |
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is on residential property owned and used by the property owner for |
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personal, family, or household purposes; |
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(10) recording expenses incurred in connection with a |
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modification necessary to preserve a borrower's ability to avoid a |
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foreclosure proceeding; and |
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(11) fees for copies of transaction documents |
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requested by the property owner. |
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(b) Notwithstanding Subsection (a)(11), a property tax |
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lender shall provide a property owner: |
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(1) one free copy of the transaction documents at |
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closing; and |
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(2) an additional free copy of the transaction |
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documents on the property owner's request following closing. |
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(c) A property tax lender may not charge: |
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(1) any fee, other than interest, after closing in |
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connection with the transfer of a tax lien unless the fee is |
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expressly authorized under this section; or |
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(2) any interest that is not expressly authorized |
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under Section 32.06, Tax Code. |
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(d) Except for charges authorized under Subsections (a)(1), |
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(2), (3), (9), and (11), any amount charged by a property tax lender |
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after closing must be for services performed by a person that is not |
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an employee of the property tax lender. |
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(e) The finance commission may adopt rules implementing and |
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interpreting this section. |
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SECTION 4. Section 351.006, Finance Code, is amended to |
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read as follows: |
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Sec. 351.006. ENFORCEMENT. (a) In addition to any other |
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applicable enforcement provisions, Subchapters E, F, and G, Chapter |
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14, apply to a violation of this chapter or Section 32.06 or 32.065, |
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Tax Code, in connection with property tax loans. |
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(b) Notwithstanding Section 14.251, the commissioner may |
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assess an administrative penalty under Subchapter F, Chapter 14, |
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against a person who violates Section 32.06(b-1), Tax Code, |
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regardless of whether the violation is knowing or wilful. |
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SECTION 5. Subsection (a), Section 351.051, Finance Code, |
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is amended to read as follows: |
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(a) A person must hold a license issued under this chapter |
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to: |
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(1) engage in the business of making, transacting, or |
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negotiating property tax loans; or |
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(2) contract for, charge, or receive, directly or |
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indirectly, in connection with a property tax loan subject to this |
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chapter, a charge, including interest, compensation, |
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consideration, or another expense, authorized under this chapter or |
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Chapter 32, Tax Code [that in the aggregate exceeds the charges
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authorized under other law]. |
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SECTION 6. (a) The Finance Commission of Texas shall |
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conduct a study regarding the fees, costs, interest, and other |
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expenses charged to property owners by property tax lenders in |
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conjunction with the transfer of property tax liens and the payoff |
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of loans secured by property tax liens. |
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(b) Not later than June 1, 2012, the Finance Commission of |
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Texas shall submit to the legislature a report containing the |
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findings of the study conducted under Subsection (a) of this |
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section and any recommendations for legislative changes. |
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SECTION 7. The changes in law made by this Act apply only to |
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the transfer of an ad valorem tax lien that occurs on or after the |
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effective date of this Act. A transfer of an ad valorem tax lien |
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that occurs before the effective date of this Act is governed by the |
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law in effect at the time the transfer occurred, and the former law |
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is continued in effect for that purpose. |
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SECTION 8. This Act takes effect September 1, 2011. |
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______________________________ |
______________________________ |
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President of the Senate |
Speaker of the House |
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I hereby certify that S.B. No. 762 passed the Senate on |
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March 24, 2011, by the following vote: Yeas 31, Nays 0; and that |
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the Senate concurred in House amendments on May 25, 2011, by the |
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following vote: Yeas 31, Nays 0. |
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______________________________ |
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Secretary of the Senate |
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I hereby certify that S.B. No. 762 passed the House, with |
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amendments, on May 23, 2011, by the following vote: Yeas 140, |
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Nays 1, two present not voting. |
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______________________________ |
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Chief Clerk of the House |
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Approved: |
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______________________________ |
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Date |
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______________________________ |
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Governor |