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A BILL TO BE ENTITLED
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AN ACT
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relating to the appointment of a receiver to remedy hazardous |
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properties. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter A, Chapter 214, Local Government |
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Code, is amended by adding Section 214.0031 to read as follows: |
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Sec. 214.0031. ADDITIONAL AUTHORITY TO APPOINT RECEIVER FOR |
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HAZARDOUS PROPERTIES. (a) A home-rule municipality, or a |
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nonprofit housing organization approved by a home-rule |
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municipality by ordinance to initiate an action under this section, |
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may bring an action under this section in district court against an |
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owner of property that is not in substantial compliance with one or |
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more municipal ordinances regarding: |
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(1) the prevention of substantial risk of injury to |
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any person or property; or |
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(2) the prevention of an adverse health impact to any |
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person. |
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(b) A municipality that grants authority to a nonprofit |
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housing organization to initiate an action under this section has |
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standing to intervene in the proceedings at any time as a matter of |
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right. |
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(c) The court may appoint a receiver if the court finds |
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that: |
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(1) the property is in violation of one or more |
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ordinances of the municipality described by Subsection (a); |
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(2) the condition of the property constitutes a |
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serious and imminent public health or safety hazard; and |
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(3) the property is not an owner-occupied, |
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single-family residence. |
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(d) The following are eligible to serve as court-appointed |
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receivers: |
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(1) a nonprofit housing organization with, as |
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determined by the municipality, sufficient resources and |
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experience rehabilitating properties; and |
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(2) an individual with, as determined by the |
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municipality, sufficient resources and experience rehabilitating |
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properties. |
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(e) In an action under this section, each record owner and |
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each lienholder of record of the property shall be served with |
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notice of the proceedings or, if not available after due diligence, |
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may be served by alternative means, including publication, as |
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prescribed by the Texas Rules of Civil Procedure. Actual service or |
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service by publication on a record owner or lienholder constitutes |
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notice to each unrecorded owner or lienholder. |
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(f) On a showing of imminent risk of injury to a person |
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occupying the property or present in the community, the court may |
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issue a mandatory or prohibitory temporary restraining order or |
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temporary injunction as necessary to protect the public health or |
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safety. |
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(g) Unless inconsistent with this section or other law, the |
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rules of equity govern all matters relating to a court action under |
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this section. |
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(h) Subject to control of the court, a court-appointed |
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receiver has all powers necessary and customary to the powers of a |
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receiver under the laws of equity and may: |
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(1) take possession and control of the property; |
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(2) operate and manage the property; |
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(3) establish and collect rents and income on the |
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property; |
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(4) lease the property; |
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(5) make any repairs and improvements necessary to |
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bring the property into compliance with local codes and ordinances |
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and state laws, including: |
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(A) performing and entering into contracts for |
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the performance of work and the furnishing of materials for repairs |
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and improvements; and |
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(B) entering into loan and grant agreements for |
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repairs and improvements to the property; |
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(6) pay expenses, including paying for utilities and |
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paying taxes and assessments, insurance premiums, and reasonable |
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compensation to a property management agent; |
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(7) enter into contracts for operating and maintaining |
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the property; |
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(8) exercise all other authority of an owner of the |
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property other than the authority to sell the property unless |
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authorized by the court under Subsection (j); and |
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(9) perform other acts regarding the property as |
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authorized by the court. |
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(i) A court-appointed receiver may demolish a structure on |
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the property as authorized by the court and only if the court finds: |
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(1) it is not economically feasible to bring the |
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structure into compliance with local codes and ordinances and state |
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laws; or |
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(2) the structure is: |
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(A) unfit for human habitation or is a hazard to |
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the public health or safety; |
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(B) regardless of its structural condition: |
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(i) unoccupied by its owners or lessees or |
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other invitees; and |
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(ii) unsecured from unauthorized entry to |
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the extent that it could be entered or used by vagrants or other |
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uninvited persons as a place of harborage or could be entered or |
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used by children; or |
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(C) boarded, fenced, or otherwise secured, but: |
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(i) the structure constitutes a danger to |
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the public even though secured from entry; or |
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(ii) the means used to secure the structure |
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are inadequate to prevent unauthorized entry or use of the |
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structure in the manner described by Paragraph (B)(ii). |
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(j) On demolition of the structure, the court may authorize |
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the receiver to sell the property to an individual or organization |
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that will bring the property into productive use. |
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(k) On completing the repairs or demolishing the structure |
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or before petitioning a court for termination of the receivership, |
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the receiver shall file with the court a full accounting of all |
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costs and expenses incurred in the repairs or demolition, including |
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reasonable costs for labor and supervision, all income received |
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from the property, and, at the receiver's discretion, a |
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receivership fee of 10 percent of those costs and expenses. If the |
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property was sold under Subsection (j) and the revenue exceeds the |
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total of the costs and expenses incurred by the receiver plus any |
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receivership fee, any net income shall be returned to the owner. If |
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the property is not sold and the income produced exceeds the total |
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of the costs and expenses incurred by the receiver plus any |
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receivership fee, the rehabilitated property shall be restored to |
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the owner and any net income shall be returned to the owner. If the |
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total of the costs and expenses incurred by the receiver plus any |
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receivership fee exceeds the income produced during the |
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receivership, the receiver may maintain control of the property |
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until all rehabilitation and maintenance costs plus any |
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receivership fee are recovered or until the receivership is |
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terminated. |
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(l) A receiver shall have a lien on the property superior to |
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all other liens on the property, excluding a tax lien, for all of |
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the receiver's unreimbursed costs and expenses, plus any |
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receivership fee. |
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(m) Any record lienholder may, after initiation of an action |
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under this section: |
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(1) intervene in the action; and |
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(2) request appointment as a receiver under this |
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section if the lienholder demonstrates to the court an ability and |
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willingness to rehabilitate the property. |
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(n) A receiver appointed under this section or the home-rule |
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municipality or nonprofit housing organization that filed the |
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action under which the receiver was appointed may petition the |
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court to terminate the receivership and order the sale of the |
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property if an owner has been served with notice but has failed to |
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repay all of the receiver's outstanding costs and expenses plus any |
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receivership fee on or before the 180th day after the date the |
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notice was served. |
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(o) The court may order the sale of the property if the court |
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finds that: |
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(1) notice was given to each record owner of the |
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property and each lienholder of record; |
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(2) the receiver has been in control of the property |
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and the owner has failed to repay all the receiver's outstanding |
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costs and expenses of rehabilitation plus any receivership fee |
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within the period prescribed by Subsection (n); and |
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(3) no lienholder of record has intervened in the |
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action and tendered the receiver's costs and expenses, plus any |
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receivership fee and assumed control of the property. |
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(p) The court may order the property sold: |
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(1) to a land bank or other party as the court may |
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direct; or |
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(2) at public auction. |
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(q) The receiver, if a nonprofit housing organization, may |
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bid on the property at the sale described by Subsection (p)(2) and |
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may use a lien granted under Subsection (l) as credit toward the |
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purchase. |
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(r) The court shall confirm a sale under this section and |
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order a distribution of the proceeds of the sale in the following |
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order: |
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(1) court costs; |
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(2) costs and expenses, plus a receivership fee, and |
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any lien held by the receiver; and |
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(3) other valid liens. |
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(s) Any remaining amount shall be paid to the owner. If the |
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owner cannot be identified or located, the court shall order the |
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remaining amount to be deposited in an interest-bearing account |
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with the district clerk's office in the district court in which the |
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action is pending. The district clerk shall hold the funds as |
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provided by other law. |
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(t) After the proceeds are distributed, the court shall |
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award fee title to the purchaser. If the proceeds of the sale are |
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insufficient to pay all liens, claims, and encumbrances on the |
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property, the court shall extinguish all unpaid liens, claims, and |
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encumbrances on the property and award title to the purchaser free |
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and clear. |
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(u) This section does not foreclose any right or remedy that |
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may be available under Section 214.003, other state law, or the laws |
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of equity. |
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SECTION 2. This Act takes effect September 1, 2009. |