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AN ACT
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relating to the business of travel insurance; authorizing |
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penalties. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. The heading to Subchapter D, Chapter 4055, |
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Insurance Code, is amended to read as follows: |
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SUBCHAPTER D. TRAVEL INSURANCE [LICENSE] |
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SECTION 2. Section 4055.151, Insurance Code, is amended by |
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adding Subdivisions (1-b) and (2-b) to read as follows: |
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(1-b) "Supervising entity" means a travel insurance |
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supervising entity designated by an insurer under Section |
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4055.1515. |
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(2-b) "Travel retailer" means a business entity that |
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makes, arranges, or offers travel services. |
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SECTION 3. Subchapter D, Chapter 4055, Insurance Code, is |
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amended by adding Section 4055.1515 to read as follows: |
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Sec. 4055.1515. TRAVEL INSURANCE SUPERVISING ENTITY. An |
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insurer authorized to engage in the business of travel insurance in |
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this state may designate a travel insurance supervising entity for |
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purposes of this subchapter. The supervising entity must be: |
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(1) a licensed managing general agent; |
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(2) a licensed third-party administrator; or |
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(3) a licensed insurance agent, including a specialty |
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license holder and a person described by Section 4055.002(a). |
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SECTION 4. Sections 4055.152 and 4055.153, Insurance Code, |
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are amended to read as follows: |
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Sec. 4055.152. SPECIALTY [ISSUANCE OF] LICENSE; LICENSE NOT |
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REQUIRED FOR TRAVEL RETAILER. (a) The commissioner may issue to |
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an applicant under this chapter a specialty license that authorizes |
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the license holder to sell, solicit, or negotiate travel insurance |
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through a licensed insurer. |
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(b) Notwithstanding any other provision of this chapter or |
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this code, [the commissioner may issue a specialty license to] a |
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travel retailer that operates on behalf of and under the license and |
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direction of a supervising entity does not require a license issued |
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under this title, subject to Section 4055.153 [agency, the
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franchisee of a travel agency, or a public carrier that complies
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with this subchapter.
The specialty license may be issued only for
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the limited purposes specified by this subchapter]. |
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Sec. 4055.153. AUTHORITY OF TRAVEL RETAILER [AGENCY OR
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FRANCHISEE]. (a) A travel retailer may offer and disseminate |
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travel insurance as a service to the retailer's customers on behalf |
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of and under the license and direction of a supervising entity |
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[agency or franchisee licensed under this chapter may act as an
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agent for an authorized insurer] only: |
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(1) in connection with the sale or arrangement of |
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transportation, [or] accommodations, or events for travelers; and |
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(2) with respect to travel insurance that includes: |
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(A) accident and health insurance that provides |
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coverage to a traveler for accidental death or dismemberment and |
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for medical expenses resulting from an accident or sickness |
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involving the traveler that occurs during the planned trip; |
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(B) insurance that provides coverage to a |
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traveler for expenses incurred as a result of trip cancellation or |
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interruption of a planned trip or event; |
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(C) personal effects insurance that provides |
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coverage to a traveler for loss of or damage to personal effects |
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during the planned trip or event; |
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(D) insurance that provides coverage for damage |
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to accommodations or rental vehicles [life insurance not exceeding
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$150,000 on any one life covering risks of travel during a planned
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trip]; or |
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(E) any other coverage the commissioner approves |
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as meaningful and appropriate in connection with the transportation |
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or accommodations arranged through a travel agency. |
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(b) Travel insurance does not include major medical expense |
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coverage for a traveler on a planned trip for six months or more, |
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including: |
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(1) an individual working abroad; |
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(2) an expatriate; and |
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(3) a military service member on deployment. |
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SECTION 5. Subchapter D, Chapter 4055, Insurance Code, is |
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amended by adding Sections 4055.154, 4055.155, 4055.156, and |
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4055.157 to read as follows: |
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Sec. 4055.154. TRAVEL INSURANCE GENERALLY. (a) A travel |
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retailer, or the supervising entity, shall provide to a traveler |
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seeking to purchase travel insurance: |
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(1) a description of the material terms or the actual |
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terms of the coverage; |
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(2) a description of the claims filing process; |
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(3) a description of the review and cancellation |
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process for the insurance policy; and |
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(4) the name and contact information for the insurer |
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and the supervising entity. |
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(b) Travel insurance coverage may be provided under an |
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individual policy or a group or master policy. |
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Sec. 4055.155. DUTIES OF INSURERS AND SUPERVISING ENTITIES. |
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(a) An insurer must notify the department in the manner prescribed |
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by the commissioner by rule of the designation of a supervising |
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entity described by Subsection (b). |
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(b) A supervising entity designated by an insurer that |
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provides travel insurance may authorize a travel retailer to offer |
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and disseminate a travel insurance policy on behalf of the |
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supervising entity by establishing a retailer registry. |
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(c) The registry established under Subsection (b) must be |
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maintained and updated on an ongoing basis in a form prescribed by |
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the commissioner by rule. The registry must include the name, |
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address, and contact information, and federal employer |
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identification number, if any, of each registered travel retailer |
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and an individual contact person at the retailer. |
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(d) The registry must be submitted to the department on the |
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request of the commissioner. |
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(e) The supervising entity must certify in a form prescribed |
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by the commissioner by rule that each registered travel retailer is |
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in compliance with 18 U.S.C. Section 1033. |
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(f) The supervising entity shall designate an individual |
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who is an officer of the entity and a licensed agent as the |
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compliance officer responsible for compliance with insurance laws, |
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rules, and regulations related to travel insurance. |
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(g) The compliance officer and the officers of the |
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supervising entity that direct or control the travel insurance |
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business of the supervising entity must submit fingerprints as |
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required by the commissioner by rule. |
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(h) The supervising entity shall provide travel insurance |
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instruction and training to each employee of a registered travel |
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retailer whose duties include offering and disseminating travel |
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insurance. The instruction and training material are subject to |
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review by the commissioner and must include instruction relating to |
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the insurance offered, ethical sales practices, and required |
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disclosures to travelers. |
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(i) The supervising entity is responsible for the acts of a |
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travel retailer and shall use reasonable means to ensure each |
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registered retailer's compliance with this subchapter. |
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Sec. 4055.156. DUTIES OF TRAVEL RETAILERS. (a) A travel |
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retailer offering and disseminating travel insurance under this |
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subchapter shall register with an insurer in a registry established |
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under Section 4055.155. |
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(b) The travel retailer shall make available to travelers |
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brochures or other written materials that: |
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(1) provide the name, address, and contact information |
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of the authorized insurer and the supervising entity; |
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(2) explain that the purchase of travel insurance is |
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not required for the purchase from the travel retailer of any other |
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product or service; and |
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(3) disclose that the travel retailer is authorized to |
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provide general information about travel insurance, including a |
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description of coverage and the price for coverage, but is not |
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qualified or authorized to provide answers to questions about |
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specific policy terms or to evaluate the adequacy of the traveler's |
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existing insurance coverage. |
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(c) A travel retailer may not: |
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(1) evaluate or interpret technical words or phrases |
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used in a travel insurance policy or benefits under or terms of the |
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policy; |
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(2) evaluate or provide advice related to a traveler's |
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existing insurance coverage; or |
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(3) advertise or otherwise hold out the travel |
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retailer as a license holder or an insurance expert. |
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(d) A travel retailer that complies with this subchapter may |
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receive compensation for offering and disseminating travel |
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insurance on behalf of a supervising entity on or after the date the |
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retailer registers with the insurer under this subchapter. |
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Sec. 4055.157. ENFORCEMENT. A supervising entity and a |
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travel retailer registered with the supervising entity are subject |
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to Chapters 82 and 83 and Subtitle C, Title 5. |
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SECTION 6. The commissioner of insurance shall promulgate |
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forms described by Section 4055.155, Insurance Code, as added by |
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this Act, as soon as practicable after the effective date of this |
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Act, but not later than January 1, 2014. |
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SECTION 7. This Act applies only to a travel insurance |
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policy that is delivered, issued for delivery, or renewed on or |
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after January 1, 2014. A policy delivered, issued for delivery, or |
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renewed before January 1, 2014, is governed by the law as it existed |
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immediately before the effective date of this Act, and that law is |
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continued in effect for that purpose. |
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SECTION 8. This Act takes effect September 1, 2013. |
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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. 1672 passed the Senate on |
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April 18, 2013, by the 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. 1672 passed the House on |
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May 22, 2013, by the following vote: Yeas 143, Nays 3, two |
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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 |