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A BILL TO BE ENTITLED
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AN ACT
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relating to consumer labeling requirements for certain health |
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benefit plans; providing penalties. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Chapter 541, Insurance Code, is amended by |
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adding Subchapter K to read as follows: |
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SUBCHAPTER K. REQUIRED LABELING FOR HEALTH BENEFIT PLANS |
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Sec. 541.501. DEFINITIONS. In this subchapter: |
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(1) "Enrollee" means an individual who is eligible to |
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receive health care services under a health benefit plan. |
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(2) "Insurance facts label" means a notice that |
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complies with the requirements of this subchapter. |
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(3) "Covered days for inpatient mental health" means |
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the number of days covered for inpatient treatment related to |
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mental health, detoxification, or treatment for addiction. |
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Sec. 541.502. APPLICABILITY OF SUBCHAPTER. (a) This |
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subchapter applies to any health benefit plan that provides |
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benefits for medical or surgical expenses incurred as a result of a |
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health condition, accident, or sickness, including an individual, |
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group, blanket, or franchise insurance policy or insurance |
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agreement, a small employer health benefit plan under Chapter 1501, |
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a group hospital service contract, or an individual or group |
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evidence of coverage that is offered by: |
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(1) an insurance company; |
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(2) a group hospital service corporation operating |
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under Chapter 842; |
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(3) a fraternal benefit society operating under |
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Chapter 885; |
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(4) a stipulated premium company operating under |
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Chapter 884; |
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(5) a health maintenance organization operating under |
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Chapter 843; |
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(6) an approved nonprofit health corporation that |
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holds a certificate of authority under Chapter 844; or |
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(7) an entity not authorized under this code or |
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another insurance law of this state that contracts directly for |
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health care services on a risk-sharing basis, including a |
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capitation basis. |
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(b) This subchapter does not apply to: |
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(1) the child health plan program under Chapter 62, |
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Health and Safety Code, or the health benefits plan for children |
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under Chapter 63, Health and Safety Code; |
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(2) a Medicaid managed care program operated under |
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Chapter 533, Government Code, or a Medicaid program operated under |
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Chapter 32, Human Resources Code; |
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(3) a multiple employer welfare arrangement that holds |
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a certificate of authority under Chapter 846; or |
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(4) a large employer health benefit plan as defined |
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under Section 1501.002. |
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Sec. 541.503. INSURANCE FACTS LABEL REQUIRED; NOTICE OF |
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LABEL REQUIRED. (a) The following documents must contain an |
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insurance facts label: |
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(1) a written plan description; |
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(2) an outline of coverage; |
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(3) a disclosure statement; |
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(4) a rate increase notice; |
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(5) a renewal notice; or |
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(6) a notice for product or plan modifications. |
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(b) An insurance facts label must be provided to an |
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individual on the individual's oral or written request. |
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Sec. 541.504. GENERAL FORMAT OF INSURANCE FACTS LABEL. |
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(a) An insurance facts label must include a box outline that |
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contains only white background and black text. |
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(b) An insurance facts label must: |
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(1) be conspicuous and not less than three inches in |
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height and two inches in width; |
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(2) be enclosed by a one-half point box rule within |
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three points of text measure; and |
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(3) separate all lines of text by two points, leading |
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above and below. |
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(c) The phrase "Insurance Facts" must: |
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(1) appear in a widely used sans serif font that is no |
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smaller than 13 point; and |
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(2) be located inside and at the top of the box to fit |
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the width of the label flush left and right. |
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(d) The health benefit plan name and the name of the company |
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must: |
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(1) appear in a widely used sans serif font that is no |
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smaller than 10 point; and |
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(2) be located immediately below the phrase "Insurance |
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Facts" and separated from the phrase "Insurance Facts" by a |
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seven-point rule. |
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(e) Any disclaimer or other information not otherwise |
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required to appear at a specific location on the label by this |
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subchapter must appear in a widely used sans serif font that is no |
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smaller than six point and located at the bottom of the label box as |
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the commissioner permits by rule. |
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Sec. 541.505. REQUIRED HEADINGS; FORMAT. (a) An insurance |
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facts label must contain the following headings: |
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(1) "Monthly Premium (Avg.)"; |
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(2) "Percent of Expense Paid by Insurance (est.)"; and |
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(3) "Benefit Levels." |
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(b) The headings described by this section must be flush |
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left in the label box and appear in a widely used sans serif font |
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that is no smaller than eight point. |
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(c) "Monthly Premium (Avg.)" must be the first heading and |
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must be: |
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(1) located immediately below the health benefit plan |
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and health benefit plan issuer name; and |
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(2) separated from all other headings by a three-point |
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rule. |
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(d) A numeric value that corresponds to a heading must |
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appear flush right in a widely used sans serif font that is no |
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smaller than eight point. |
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(e) Each heading must be separated from another heading and |
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any applicable subheadings by a one-quarter-point rule. |
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(f) "Benefit Levels" must be the last heading, when headings |
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are listed top to bottom, and must appear immediately before the |
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required subheadings. There is no value for the "Benefit Levels" |
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heading. |
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Sec. 541.506. REQUIRED HEADINGS; DEFINITIONS. For the |
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purposes of Section 541.505, the following terms have the following |
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meanings: |
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(1) "Monthly Premium (Avg.)" means the average dollar |
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amount an enrollee pays each month for coverage under a health |
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benefit plan. |
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(2) "Percent of Expense Paid by Insurance (est.)" |
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means the estimate of the average percentage share of enrollees' |
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costs that a health benefit plan pays versus out-of-pocket charges. |
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Sec. 541.507. REQUIRED SUBHEADINGS; FORMAT. |
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(a) Subheadings under the "Benefit Levels" heading must disclose |
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the dollar value provided by the underlying certificate, policy, or |
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contract, and must be as follows: |
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(1) "Annual Deductible"; |
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(2) "Out-of-Pocket Maximum"; |
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(3) "Office Visit Copayment" listed separately for |
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primary care providers and specialists; |
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(4) "Prescription Copayment (Generic/Brand)"; |
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(5) "Prescription Deductible"; |
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(6) "Lifetime Maximum Coverage"; |
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(7) "Maternity Coverage Included"; |
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(8) "Emergency Room Visit Copayment"; |
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(9) "Covered Days for Inpatient Mental Health"; |
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(10) "Outpatient Surgery Copayment"; and |
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(11) "Inpatient Cost Sharing." |
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(b) Each subheading required by this section must be |
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indented six points from the left and appear in a widely used sans |
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serif font that is no smaller than eight point. |
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(c) A numeric value that corresponds to a subheading must |
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appear flush right in a widely used sans serif font that is no |
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smaller than eight point. |
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(d) Each subheading must be separated from another |
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subheading or heading by a one-quarter-point rule. |
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Sec. 541.508. RULES. (a) The commissioner may: |
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(1) require differing titles, headings, and |
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subheadings as may otherwise be required by this subchapter as |
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necessary to prevent confusion between insurance and noninsurance |
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products; |
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(2) adopt rules to resolve legibility and format |
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issues; and |
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(3) adopt any other rules as necessary to implement |
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and administer this subchapter. |
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(b) The commissioner shall adopt rules regulating: |
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(1) the use of insurance and noninsurance terms in the |
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insurance facts label to prevent confusion in the marketplace |
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between insurance and noninsurance products; |
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(2) the manner in which a health benefit plan may use |
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space available in the label box after disclosure of the consumer |
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information required by this subchapter; |
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(3) allowable disclaimers that may appear in a |
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separate section at the bottom of an insurance facts label box below |
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all headings and subheadings on the label; |
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(4) the format for a label containing information |
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about multiple health benefit plans for a document that presents or |
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promotes multiple health benefit plans; and |
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(5) the composition and computation of the estimates |
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required in the insurance facts label. |
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Sec. 541.509. REMEDIES AND ENFORCEMENT. A violation of |
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this subchapter is an unfair and deceptive act or practice in the |
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business of insurance under this chapter. |
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SECTION 2. As soon as practicable, but not later than |
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October 31, 2009, the commissioner of insurance shall prepare a |
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sample of an insurance facts label that complies with Subchapter K, |
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Chapter 541, Insurance Code, as added by this Act, and create an |
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Internet web page that explains the insurance facts label to |
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consumers. |
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SECTION 3. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2009. |
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