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AN ACT
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relating to the authority to transfer real property in the name of |
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an entity. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Chapter 12, Property Code, is amended by adding |
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Section 12.019 to read as follows: |
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Sec. 12.019. AFFIDAVIT OF AUTHORITY TO TRANSFER. (a) In |
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this section: |
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(1) "Domestic entity," "foreign entity," |
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"jurisdiction of formation," and "nonprofit entity" have the |
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meanings assigned by Section 1.002, Business Organizations Code. |
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(2) "Transfer" means a transaction to sell, exchange, |
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convey with or without covenants, quitclaim, release, surrender, |
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mortgage, encumber, partition or consent to partitioning, |
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subdivide, apply for zoning, rezoning, or other governmental |
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permits, plat or consent to platting, develop, grant options |
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concerning, lease or sublet, or otherwise dispose of an estate or |
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interest in real property or a right incident to real property. |
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(b) This section does not apply to: |
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(1) a domestic nonprofit entity or a foreign entity |
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that is: |
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(A) exempt from federal taxation under Section |
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501(a), Internal Revenue Code of 1986, by being listed as an exempt |
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entity under Section 501(c)(3) of that code; or |
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(B) described by Section 170(c)(1) or (2), |
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Internal Revenue Code of 1986; or |
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(2) a transaction involving the transfer of an estate |
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or interest in real property in an amount that exceeds $1 million. |
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(c) A domestic entity or foreign entity may execute and |
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record an affidavit identifying one or more individuals with |
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authority to transfer on behalf of the entity an estate or interest |
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in real property in the name of the entity if the entity is: |
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(1) a limited liability company, a limited |
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partnership, or a professional entity as defined by Section |
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301.003, Business Organizations Code; and |
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(2) active or in good standing under the laws of the |
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entity's jurisdiction of formation. |
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(d) An estate or interest in real property in the name of a |
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domestic entity or foreign entity may be transferred on behalf of |
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the entity by one or more individuals identified as authorized to do |
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so in an affidavit described by Subsection (c). |
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(e) Subject to Subsection (f), an affidavit described by |
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Subsection (c) must: |
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(1) be executed under penalty of perjury by an |
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individual who swears that the individual: |
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(A) is at least 18 years of age; |
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(B) is authorized to execute and deliver the |
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affidavit on behalf of the entity; |
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(C) is fully competent to execute the affidavit; |
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and |
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(D) understands that: |
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(i) third parties will rely on the |
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truthfulness of the statements made in the affidavit; and |
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(ii) the affidavit is made under penalty of |
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perjury; and |
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(2) state: |
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(A) the name of the domestic entity or foreign |
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entity that holds title to the real property and that the entity is |
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active or in good standing under the laws of the entity's |
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jurisdiction of formation; |
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(B) the address, including street address, of the |
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domestic entity's or foreign entity's principal place of business |
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in this state or, if the entity does not have a principal place of |
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business in this state, the address of the entity's principal place |
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of business in the state or country that is the entity's |
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jurisdiction of formation; |
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(C) the legal description of the real property an |
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estate or interest in which is to be transferred and specify the |
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nature of the transfer authorized; and |
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(D) the name and title of one or more individuals |
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authorized to transfer on the entity's behalf an estate or interest |
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in the real property described in the affidavit. |
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(f) An individual is authorized to execute an affidavit |
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described by Subsection (c) on behalf of a domestic entity that |
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files a franchise tax public information report under Section |
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171.203, Tax Code, if, on the date the affidavit is executed, the |
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individual: |
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(1) in the case of a limited liability company, is a |
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manager or member of the limited liability company; |
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(2) in the case of a limited partnership, is a general |
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partner of the limited partnership; or |
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(3) in the case of a professional entity, is a director |
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or officer of the applicable professional entity. |
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(g) Except as provided by Subsection (h), the individual |
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executing an affidavit described by Subsection (c) may not be the |
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individual identified in the affidavit as authorized to transfer an |
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estate or interest in the real property described in the affidavit. |
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(h) The individual executing the affidavit described by |
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Subsection (c) may be the individual identified in the affidavit as |
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authorized to transfer an estate or interest in the real property |
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described in the affidavit if: |
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(1) the entity is a limited liability company and the |
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affidavit includes a representation by the affiant that the affiant |
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is the sole member and manager of the limited liability company; |
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(2) the entity is a limited partnership and the |
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affidavit includes a representation by the affiant that the affiant |
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is the sole general partner of the limited partnership; |
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(3) the entity is a professional entity and the |
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affidavit includes a representation by the affiant that the affiant |
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is the sole director and officer of the applicable professional |
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entity; or |
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(4) the most recent franchise tax public information |
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report of the entity under Section 171.203, Tax Code, available on |
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the date the affidavit is executed identifies only the affiant and |
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no other person as an officer, director, member, manager, or |
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general partner of the entity. |
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(i) The affidavit must be recorded with the county clerk in |
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the county in which the real property is located. The county clerk |
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may collect a fee for recording an affidavit under this section in |
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the amount authorized for recording a transfer of real property. |
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(j) A person who in good faith acts in reliance on an |
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affidavit that complies with this section and that contains |
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transfer authority that has not been terminated under Subsection |
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(n) or has not expired under Subsection (o) is not liable to any |
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person for that act and may assume without inquiry the existence of |
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the facts contained in the affidavit if the person does not have |
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actual knowledge that any material representations contained in the |
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affidavit are incorrect. |
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(k) A person who in good faith enters into a transaction |
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involving the transfer of an estate or interest in real property |
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described in an affidavit that is described by Subsection (c) and |
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who relies on the affidavit, without actual knowledge that any |
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material representations contained in the affidavit are incorrect, |
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may enforce the transaction against the entity and the real |
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property described in the affidavit as if the representations |
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contained in the affidavit are correct if: |
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(1) the affidavit complies with this section; and |
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(2) the transfer authority specified in the affidavit |
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has not been terminated under Subsection (n) or has not expired |
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under Subsection (o). |
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(l) With respect to an affidavit described by Subsection |
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(c), this section does not limit the rights of an owner of an |
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interest in the entity against the affiant, the entity, or any |
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individual identified in the affidavit with authority to transfer |
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on behalf of the entity an estate or interest in real property in |
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the name of the entity. |
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(m) Nothing in this section: |
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(1) requires an individual to rely on an affidavit |
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described by Subsection (c); |
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(2) requires an entity to deliver an affidavit that |
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complies with this section in order for a transfer of an estate or |
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interest in real property on behalf of the entity to take effect; |
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(3) prohibits an entity from authorizing an individual |
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to transfer an estate or interest in real property on behalf of the |
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entity by a means other than an affidavit described by Subsection |
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(c); or |
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(4) shall be construed to validate a transfer of an |
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estate or interest in real property that is void by other law. |
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(n) An entity that executes and records an affidavit |
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described by Subsection (c) may terminate the transfer authority |
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specified in the affidavit at any time by recording a written |
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termination of the authority specified in the affidavit with the |
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county clerk in the county in which the real property is located. |
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The written termination must be in the form of an affidavit that: |
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(1) satisfies the requirements of Subsection (e) other |
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than Subsection (e)(2)(D); |
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(2) provides the recording information for the |
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affidavit that specifies the transfer authority being terminated; |
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and |
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(3) states that the authority to transfer an estate or |
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interest in real property as contained in the previously recorded |
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affidavit is terminated. |
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(o) The transfer authority contained in an affidavit that |
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complies with this section and that has not been terminated as |
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provided by Subsection (n) expires on the first anniversary of the |
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date on which the affidavit was recorded under Subsection (i). |
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(p) The transfer authority or the termination of the |
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transfer authority specified in an affidavit that is recorded under |
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Subsection (i) or (n) is effective on the date the county clerk |
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indexes the affidavit. |
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SECTION 2. This Act takes effect September 1, 2019. |
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______________________________ |
______________________________ |
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President of the Senate |
Speaker of the House |
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I certify that H.B. No. 1833 was passed by the House on May 3, |
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2019, by the following vote: Yeas 141, Nays 0, 2 present, not |
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voting; and that the House concurred in Senate amendments to H.B. |
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No. 1833 on May 24, 2019, by the following vote: Yeas 140, Nays 0, |
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2 present, not voting. |
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______________________________ |
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Chief Clerk of the House |
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I certify that H.B. No. 1833 was passed by the Senate, with |
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amendments, on May 22, 2019, by the following vote: Yeas 31, Nays |
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0. |
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______________________________ |
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Secretary of the Senate |
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APPROVED: __________________ |
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Date |
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__________________ |
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Governor |