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Sub. H. B. No. 9 As Passed by the SenateAs Passed by the Senate
130th General Assembly | Regular Session | 2013-2014 |
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Cosponsors:
Representatives Celebrezze, Hayes, Letson, Pillich, Winburn, Adams, J., Adams, R., Antonio, Barborak, Beck, Blair, Boose, Brown, Buchy, Budish, Burkley, Butler, Carney, Damschroder, Derickson, Duffey, Foley, Green, Hackett, McClain, Milkovich, O'Brien, Patterson, Pelanda, Perales, Rogers, Romanchuk, Rosenberger, Schuring, Sears, Slaby, Slesnick, Smith, Sprague, Szollosi Speaker Batchelder
Senator Coley
A BILL
To amend sections 317.08, 2333.22, 2715.21, 2735.01,
2735.02, 2735.04, and 5301.09 and to enact
sections 2735.07, 2735.08, and 4928.80 of the
Revised Code to add to and clarify the powers of a
receiver, to provide a procedure for a receiver's
sale of property, to prohibit an electric
distribution utility from altering, refusing, or
discontinuing service to, or discriminating
against, a receiver under certain circumstances,
to specify the order of the distribution of the
proceeds of the receivership, to address the
effect of a receivership on noncompetitive retail
electric service, and to specify that a lease of
natural gas and petroleum is an interest in real
estate.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That sections 317.08, 2333.22, 2715.21, 2735.01,
2735.02, 2735.04, and 5301.09 be amended and sections 2735.07,
2735.08, and 4928.80 of the Revised Code be enacted to read as
follows:
Sec. 317.08. (A) Except as provided in divisions (C), (D),
and (E) of this section, the county recorder shall keep six
separate sets of records as follows:
(1) A record of deeds, in which shall be recorded all deeds
and other instruments of writing for the absolute and
unconditional sale or conveyance of lands, tenements, and
hereditaments; all notices as provided in sections 5301.47 to
5301.56 of the Revised Code; all judgments or decrees in actions
brought under section 5303.01 of the Revised Code; all
declarations and bylaws, and all amendments to declarations and
bylaws, as provided in Chapter 5311. of the Revised Code;
affidavits as provided in sections 5301.252 and 5301.56 of the
Revised Code; all certificates as provided in section 5311.17 of
the Revised Code; all articles dedicating archaeological preserves
accepted by the director of the Ohio historical society under
section 149.52 of the Revised Code; all articles dedicating nature
preserves accepted by the director of natural resources under
section 1517.05 of the Revised Code; all conveyances of
conservation easements and agricultural easements under section
5301.68 of the Revised Code; all instruments extinguishing
agricultural easements under section 901.21 or 5301.691 of the
Revised Code or pursuant to terms of such an easement granted to a
charitable organization under section 5301.68 of the Revised Code;
all instruments or orders described in division (B)(2)(b) of
section 5301.56 of the Revised Code; all no further action letters
issued under section 122.654 or 3746.11 of the Revised Code; all
covenants not to sue issued under section 3746.12 of the Revised
Code, including all covenants not to sue issued pursuant to
section 122.654 of the Revised Code; any restrictions on the use
of property contained in a no further action letter issued under
section 122.654 of the Revised Code, any restrictions on the use
of property identified pursuant to division (C)(3)(a) of section
3746.10 of the Revised Code, and any restrictions on the use of
property contained in a deed or other instrument as provided in
division (E) or (F) of section 3737.882 of the Revised Code; any
easement executed or granted under section 3734.22, 3734.24,
3734.25, or 3734.26 of the Revised Code; any environmental
covenant entered into in accordance with sections 5301.80 to
5301.92 of the Revised Code; all memoranda of trust, as described
in division (A) of section 5301.255 of the Revised Code, that
describe specific real property; and all agreements entered into
under division (A) of section 1506.44 of the Revised Code;
(2) A record of mortgages, in which shall be recorded all of
the following:
(a) All mortgages, including amendments, supplements,
modifications, and extensions of mortgages, or other instruments
of writing by which lands, tenements, or hereditaments are or may
be mortgaged or otherwise conditionally sold, conveyed, affected,
or encumbered;
(b) All executory installment contracts for the sale of land
executed after September 29, 1961, that by their terms are not
required to be fully performed by one or more of the parties to
them within one year of the date of the contracts;
(c) All options to purchase real estate, including
supplements, modifications, and amendments of the options, but no
option of that nature shall be recorded if it does not state a
specific day and year of expiration of its validity;
(d) Any tax certificate sold under section 5721.33 of the
Revised Code, or memorandum of it, that is presented for filing of
record.
(3) A record of powers of attorney, including all memoranda
of trust, as described in division (A) of section 5301.255 of the
Revised Code, that do not describe specific real property;
(4) A record of plats, in which shall be recorded all plats
and maps of town lots, of the subdivision of town lots, and of
other divisions or surveys of lands, any center line survey of a
highway located within the county, the plat of which shall be
furnished by the director of transportation or county engineer,
and all drawings and amendments to drawings, as provided in
Chapter 5311. of the Revised Code;
(5) A record of leases, including a lease described in
section 5301.09 of the Revised Code, in which shall be recorded
all leases, memoranda of leases, and supplements, modifications,
and amendments of leases and memoranda of leases;
(6) A record of declarations executed pursuant to section
2133.02 of the Revised Code and durable powers of attorney for
health care executed pursuant to section 1337.12 of the Revised
Code.
(B) All instruments or memoranda of instruments entitled to
record shall be recorded in the proper record in the order in
which they are presented for record. The recorder may index, keep,
and record in one volume unemployment compensation liens, internal
revenue tax liens and other liens in favor of the United States as
described in division (A) of section 317.09 of the Revised Code,
personal tax liens, mechanic's liens, agricultural product liens,
notices of liens, certificates of satisfaction or partial release
of estate tax liens, discharges of recognizances, excise and
franchise tax liens on corporations, broker's liens, and liens
provided for in sections 1513.33, 1513.37, 3752.13, 5164.56, and
5311.18 of the Revised Code.
The recording of an option to purchase real estate, including
any supplement, modification, and amendment of the option, under
this section shall serve as notice to any purchaser of an interest
in the real estate covered by the option only during the period of
the validity of the option as stated in the option.
(C) In lieu of keeping the six separate sets of records
required in divisions (A)(1) to (6) of this section and the
records required in divisions (D) and (E) of this section, a
county recorder may record all the instruments required to be
recorded by this section in two separate sets of record books. One
set shall be called the "official records" and shall contain the
instruments listed in divisions (A)(1), (2), (3), (5), and (6) and
(D) and (E) of this section. The second set of records shall
contain the instruments listed in division (A)(4) of this section.
(D) Except as provided in division (C) of this section, the
county recorder shall keep a separate set of records containing
all corrupt activity lien notices filed with the recorder pursuant
to section 2923.36 of the Revised Code and a separate set of
records containing all medicaid fraud lien notices filed with the
recorder pursuant to section 2933.75 of the Revised Code.
(E)(1) The county recorder shall keep a separate set of
records containing all transfers, conveyances, or assignments of
any type of tangible or intangible personal property or any rights
or interests in that property if and to the extent that any person
wishes to record that personal property transaction and if the
applicable instrument is acknowledged before a notary public. If
the transferor is a natural person, the notice of personal
property transfer shall be recorded in the county in this state in
which the transferor maintains the transferor's principal
residence. If the transferor is not a natural person, the notice
of personal property transfer shall be recorded in the county in
this state in which the transferor maintains its principal place
of business. If the transferor does not maintain a principal
residence or a principal place of business in this state and the
transfer is to a trustee of a legacy trust formed pursuant to
Chapter 5816. of the Revised Code, the notice of personal property
transfer shall be recorded in the county in this state where that
trustee maintains a principal residence or principal place of
business. In all other instances, the notice of personal property
transfer shall be recorded in the county in this state where the
property described in the notice is located.
(2) The records described in division (E)(1) of this section
shall be maintained in or as part of the "official records" under
division (C) of this section.
Sec. 2333.22. (A) In proceedings under sections 2333.09 to
2333.27, inclusive, of the Revised Code, the judge by order may
appoint the sheriff of the proper county, or other suitable
person, a receiver of the property of the judgment debtor. Such
(B) The judge also who appointed the receiver under division
(A) of this section, by order, may forbid a transfer, or other
disposition of or interference with, the property of the judgment
debtor not exempt by law.
(C) Under the control of the judge who appointed a receiver
under division (A) of this section and except as ordered by the
judge under division (B) of this section, the receiver may do any
of the acts specified in section 2735.04 of the Revised Code.
Sec. 2715.21. (A) The receiver appointed under section
2715.20 of the Revised Code shall take possession of all notes,
due bills, books of account, accounts, and other evidences of
debt, that have been taken by the levying officer as the property
of the defendant in attachment, and proceed to settle and collect
them. For that purpose, the receiver may commence and maintain
actions in his the receiver's own name, as receiver, but no right
of defense therein in the action shall be impaired or affected.
(B) Under the control of the court that appointed the
receiver under section 2715.20 of the Revised Code, the receiver
may do any of the acts specified in section 2735.04 of the Revised
Code.
Sec. 2735.01. (A) A receiver may be appointed by the supreme
court or a judge thereof, the court of appeals or a judge thereof
in his the judge's district, the court of common pleas or a judge
thereof in
his the judge's county, or the probate court, in causes
pending in such courts respectively, in the following cases:
(A)(1) In an action by a vendor to vacate a fraudulent
purchase of property, or by a creditor to subject property or a
fund to his the creditor's claim, or between partners or others
jointly owning or interested in any property or fund, on the
application of the plaintiff, or of a party whose right to or
interest in the property or fund, or the proceeds thereof of the
property or fund, is probable, and when it is shown that the
property or fund is in danger of being lost, removed, or
materially injured;
(B)(2) In an action by a mortgagee, for the foreclosure of
his the mortgagee's mortgage and sale of the mortgage mortgaged
property, when it appears that the mortgaged property is in danger
of being lost, removed, or materially injured, diminished in
value, or squandered, or that the condition of the mortgage has
not been performed, and the either of the following applies:
(a) The property is probably insufficient to discharge the
mortgage debt.
(b) The mortgagor has consented in writing to the appointment
of a receiver.
(3) To enforce a contractual assignment of rents and leases;
(C)(4) After judgment, to carry the judgment into effect;
(D)(5) After judgment, to dispose of the property according
to the judgment, or to preserve it during the pendency of an
appeal, or when an execution has been returned unsatisfied and the
judgment debtor refuses to apply the property in satisfaction of
the judgment;
(E)(6) When a corporation, limited liability company,
partnership, limited partnership, or other entity has been
dissolved, or is insolvent, or is in imminent danger of
insolvency, or has forfeited its corporate, limited liability
company, partnership, limited partnership, or other entity rights;
(F)(7) In all other cases in which receivers have been
appointed by the usages of equity.
(B) A receiver appointed under division (A)(1), (2), (3), or
(5) of this section shall be appointed only with respect to the
particular property that is the subject of the action in which the
appointment of a receiver is sought.
(C) A receiver appointed under division (A)(6) of this
section may be appointed to manage all the affairs of the
corporation, limited liability company, partnership, limited
partnership, or other entity with respect to which the appointment
of a receiver is sought.
(D) A receiver appointed under division (A)(4) or (7) of this
section may be appointed to manage all the affairs of the
corporation, limited liability company, partnership, limited
partnership, or other entity, or only with respect to particular
property as determined by the court.
Sec. 2735.02. No party, attorney for a party, or person
interested in an action shall be appointed receiver therein in the
action except by consent of all of the parties to the action and
all other persons holding a recorded ownership interest in or a
recorded or filed lien on the property that is subject to the
action. No person except a resident of this state shall be
appointed or act as receiver of a
railroad or other corporation
within, partnership, limited liability company, or other entity
created under the laws of this state. In selecting a receiver,
priority consideration shall be afforded to any of the qualified
persons nominated by the party seeking the receivership. No
nomination of qualified persons for the receivership is binding
upon the court.
Sec. 2735.04. (A) The powers of a receiver shall be set
forth in the order of the court that appointed the receiver as
those powers may be modified by the court or as otherwise approved
by the court upon application of the receiver or a party to the
action.
(B) Under the control of the court which that appointed him,
the receiver as provided in section 2735.01 of the Revised Code,
a
the receiver may bring do any of the following:
(1) Bring and defend actions in his the receiver's own name
as receiver, take;
(2) Take and keep possession of real or personal property,
receive;
(3) Collect rents, collect, compound for and other
obligations, and compromise demands, make;
(4) Enter into contracts, including, but not limited to
contracts of sale, lease, or, so long as existing lien rights will
not be impacted, contracts for construction and for the completion
of construction work;
(5) Sell and make transfers, and generally of real or
personal property;
(6) Execute deeds, leases, or other documents of conveyance
of real or personal property;
(7) Open and maintain deposit accounts in the receiver's
name;
(8) Generally do such any other acts respecting the property
as that the court authorizes.
(C) Any funds that are expended by or on behalf of the
receiver, including receivership fees, fees for professionals
assisting the receivership, and those expended in entering into or
performing contracts under division (B)(4) of this section,
including those for the completion of construction work authorized
by the court, shall be taxed as court costs or otherwise treated
as an administrative expense of the action. The court may require
an additional deposit to cover funds that would be expended by the
receiver under a contract entered into under division (B)(4) of
this section only from the parties that have requested or
expressly consented to the receiver incurring those expenses.
(D)(1)(a) Subject to the approval and supervision of the
court and the requirements of this section, a receiver may sell
property free and clear of liens by private sale pursuant to a
written contract between the receiver and the prospective
purchaser, by private auction, by public auction, or by any other
method that the court determines is fair to the owner of the
property and all other parties with an interest in the property,
is reasonable under the circumstances, and will maximize the
return from the property to the receivership estate, taking into
account the potential cost of holding and operating the property.
(b) Before entering an order authorizing the sale of the
property by the receiver, the court may require that the receiver
provide evidence of the value of the property. That valuation may
be provided by any evidence that the court determines is
appropriate. In a public or private auction, the court may
establish a minimum bid.
(c) If the receiver requests authority to sell the property
pursuant to a prospective purchase contract and if warranted by
the circumstances, the court may require that the receiver solicit
and consider additional offers. If the receiver ultimately sells
the property to a party other than the original proposed
purchaser, if approved by the court, the receiver may pay to the
unsuccessful original proposed purchaser a reasonable amount of
costs and expenses from the sale proceeds in an amount determined
by the court to compensate that proposed purchaser for
participation in the sale process to the extent that participation
brought value to the receivership.
(2) Any sale of real property under division (B)(5) of this
section shall be made only after all of the following occur:
(a) An application is made by the receiver or the first
mortgage holder that requests that the receiver be granted the
authority to sell the specific real property and sets forth either
of the following:
(i) If the receiver has not received a specific offer for
sale that the receiver desires to accept, the proposed procedures
for the conduct of the sale;
(ii) If the receiver has received a specific offer for sale
that the receiver desires to accept, the identity of the buyer and
the proposed terms of the sale.
(b) At least ten days' prior written notice is given in
accordance with the Rules of Civil Procedure to all of the owners
of the real property, all parties to the action, and all other
persons with a recorded or filed lien encumbering the real
property to be sold as those persons are identified in a
preliminary judicial report or a commitment for an owner's policy
of title insurance previously filed with the court pursuant to
section 2329.191 of the Revised Code or, if not previously filed,
in a preliminary judicial report or a commitment for an owner's
policy of title insurance filed with the application of the
receiver for authority to sell the real property that otherwise
complies with the requirements of section 2329.191 of the Revised
Code, unless the lien or interest is barred by lis pendens
pursuant to section 2703.26 of the Revised Code.
(c) An opportunity is given for a hearing at which all of the
parties and persons to whom the notice is given under division
(D)(2)(b) of this section may be heard, provided that if no such
party or person objects to the proposed sale or requests a hearing
within the period provided pursuant to that division, the court
may proceed without a hearing.
(d) The court issues an order of sale of the real property
that sets forth the required procedure for or the terms of the
sale. The order of sale is the final appealable order with respect
to the matters contained in the order.
(3)(a) If requested in the receiver's application for
authority to sell the real property under division (D)(2)(a) of
this section, upon a finding by the court after notice and an
opportunity for a hearing as provided in divisions (D)(2)(b) and
(c) of this section that it is in the best interest of the
receivership estate that the real property be sold free and clear
of liens, the court may order that the real property be sold free
and clear of all liens other than the lien of the treasurer of the
county in which the real property is located for real estate taxes
and assessments.
(b) In the event of a sale free and clear of liens, upon the
recording of the deed from the receiver to the purchaser, those
liens shall be canceled as to the real property and shall be
transferred to the proceeds of the sale in the hands of the
receiver with the same priority as those liens previously attached
to the real property sold.
(4) The sale of real property under division (D)(2) of this
section is in lieu of a sale pursuant to Chapter 2329. of the
Revised Code, and except as provided in division (D)(2)(b) of this
section with respect to the applicability of section 2329.191 of
the Revised Code and as provided in division (D)(9) of this
section with respect to the applicability of section 2329.37 of
the Revised Code, the provisions of Chapter 2329. of the Revised
Code do not apply to a sale of real property under division (D)(2)
of this section.
(5) If the contemplated sale of real property is under
division (D)(2)(a)(ii) of this section, the court may finally
approve the sale, and no separate confirmation order is required.
(6) If the contemplated sale of real property is under
division (D)(2)(a)(i) of this section, following the sale or
auction process described in the application, the receiver or
first mortgage holder shall seek an order confirming the sale
process and approving the proposed sale.
(7) The court's order approving the application by a receiver
or first mortgage holder for authority to sell real property under
division (D)(2)(a) of this section shall establish a reasonable
time, but not less than three days, after the date of the order
approving the specific sale or the sale process for the owner and
all other parties possessing an equity of redemption in the real
property to exercise their equity of redemption in the real
property or to have that equity of redemption forever barred.
Section 2329.33 of the Revised Code does not apply to a sale by a
receiver under this section.
(8)(a) Until the date the court sets for the termination of
the fee owner's time to redeem the real property, any fee owner of
the real property proposed to be sold may redeem the real property
from the sale by paying to the receiver by cashier's check or
other form of immediately available funds an amount equal to the
greater of the following:
(i) The sale price at which the real property was sold;
(ii) An amount equal to the total of all liens upon the real
property that were to be canceled as liens upon the real property
by virtue of the sale, including all principal, interest, costs,
and other amounts secured by those liens through the date of
payment to the receiver.
(b) The amount determined under division (D)(8)(a)(i) or (ii)
of this section may include interest on the amount of the sale
price at a rate that may be fixed by the court, from the date of
the sale to the date of the payment of the full amount to the
receiver.
(c) Upon receipt of the amount determined under divisions
(D)(8)(a) and (b) of this section, the receiver shall advise the
court and all of the parties and persons to whom notice was given
pursuant to division (D)(2)(b) of this section of the receipt of
that amount and shall set aside the sale. The fee title to the
real property shall remain in the name of the owner of the real
property, and the liens upon the real property, except as provided
in division (D)(3) of this section, shall be transferred in the
same order of priority to the proceeds received by the receiver
from the owner of the real property.
(9) If the sale of the real property by the receiver under
division (D)(2) of this section is conducted in accordance with
the terms of the order of the court authorizing the sale, upon
closing of the sale the receiver shall execute and deliver a
receiver's deed for the real property sold to the purchaser. The
receiver's deed has the effect provided for in section 2329.37 of
the Revised Code.
(10) If the contemplated sale of the real property is under
division (D)(2)(a)(ii) of this section, as soon as is reasonably
possible following the delivery of the deed to the purchaser under
division (D)(9) of this section, the receiver shall file with the
court and serve upon all of the parties and persons to whom the
notice of the application for the authority to sell the real
property was given under division (D)(2)(b) of this section a
certificate and report of sale in which the receiver certifies all
of the following:
(a) That the sale was conducted in accordance with the order
authorizing the sale;
(b) The date of the sale;
(c) The name of the purchaser;
(e) The amount of the net proceeds of the sale after payment
of all expenses associated with the sale;
(f) A copy of the closing statement, if a closing statement
was prepared;
(g) Any other information that the court may require.
Sec. 2735.07. (A) As used in this section, "assurance of
payment" means one or more of the following:
(3) A certificate of deposit;
(5) A prepayment of utility consumption;
(6) Another form of security that is mutually agreed on
between the public utility and the receiver, which may include a
provision for services provided by the public utility prior to the
date of the appointment of the receiver.
(B) The electric distribution utility may alter, refuse, or
discontinue service if the receiver, within five days after the
date of the appointment of the receiver, does not furnish adequate
assurance of payment for service after that date in an amount that
is agreeable to the electric distribution utility.
Sec. 2735.08. (A) As used in this section, "administrative
expenses" includes, but is not limited to, all of the following:
(1) The receiver's fees and expenses;
(2) Payment of receiver certificates;
(3) Expenses incurred by the receiver in operating the entity
or property over which the receiver was appointed, including but
not limited to, charges by a public utility for service after the
date of the appointment of a receiver.
(B) The receiver shall make distributions from the
receivership in the following order of priority:
(1) First, to holders of actual, necessary administrative
expenses of the receivership, which shall be paid in full in the
ordinary course of business unless otherwise agreed to by the
receiver and the provider of the necessary expenses;
(2) Second, to secured creditors that hold liens on the
property subject to the receivership, in the order of their
priority;
(3) Third, pro rata, to each public utility for services
provided to the property subject to the receivership prior to the
date of the appointment of the receiver;
(4) Fourth, unsecured claims arising against the owner of the
property subject to the receivership prior to the date of the
appointment of the receiver that are recognized under the law of
this state or of the United States as having priority over other
unsecured creditors.
(5) Fifth, pro rata, to all other unsecured creditors for
claims arising against the owner of the property subject to the
receivership prior to the date of the appointment of the receiver;
(6) Sixth, if all amounts payable under divisions (B)(1) to
(5) of this section have been paid in full by the receiver, any
remaining property that is subject to the receivership shall be
returned to the person or entity that owned the property subject
to the receivership.
Sec. 4928.80. (A) An electric distribution utility to which
a customer owes unpaid charges for retail electric service
provided prior to the date of the appointment of the receiver
shall continue to provide noncompetitive retail electric service
to the customer if both of the following apply:
(1) The customer or the property being serviced by the
electric distribution utility is under the control of a receiver
appointed under section 2333.22, 2715.20, or 2735.01 of the
Revised Code.
(2) The receiver described in division (A)(1) of this section
obtains competitive retail electric service from another provider
or providers of competitive retail electric service.
(B) The public utilities commission shall adopt rules
necessary to implement the provisions of this section and sections
2735.07 and 2735.08 of the Revised Code not later than ninety days
after the effective date of this section. The rules adopted under
this section shall not prohibit the denial or disconnection of
nonresidential service for reasons other than nonpayment for
services provided prior to the date of the appointment of the
receiver.
Sec. 5301.09. All In recognition that such leases and
licenses create an interest in real estate, all leases, licenses,
and assignments thereof, or of any interest therein, given or made
concerning lands or tenements in this state, by which any right is
granted to operate or to sink or drill wells thereon for natural
gas and petroleum or either, or pertaining thereto, shall be filed
for record and recorded in such lease record without delay, and
shall not be removed until recorded. No such lease or assignment
thereof shall be accepted for record after September 24, 1963,
unless it contains the mailing address of both the lessor and
lessee or assignee. If the county in which the land subject to any
such lease is located maintains permanent parcel numbers or
sectional indexes pursuant to section 317.20 of the Revised Code,
no such lease shall be accepted for record after December 31,
1984, unless it contains the applicable permanent parcel number
and the information required by section 317.20 of the Revised Code
to index such lease in the sectional indexes; and, in the event
any such lease recorded after December 31, 1984, is subsequently
assigned in whole or in part, and the county in which the land
subject thereto is located maintains records by microfilm or other
microphotographic process, the assignment shall contain the same
descriptive information required to be included in the original
lease by this sentence, but the omission of the information
required by this section does not affect the validity of any
lease. Whenever any such lease is forfeited for failure of the
lessee, his the lessee's successors or assigns to abide by
specifically described covenants provided for in the lease, or
because the term of the lease has expired, the lessee, his the
lessee's successors or assigns, shall have such lease released of
record in the county where such land is situated without cost to
the owner thereof.
No such lease or license is valid until it is filed for
record, except as between the parties thereto, unless the person
claiming thereunder is in actual and open possession.
Section 2. That existing sections 317.08, 2333.22, 2715.21,
2735.01, 2735.02, 2735.04, and 5301.09 of the Revised Code are
hereby repealed.
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