BILL ANALYSIS



C.S.H.B. 73
By: Delisi
02-15-95
Committee Report (Substituted)


BACKGROUND

In recent months, a nationwide campaign has taken place to file
fraudulent liens against numerous judges, attorneys, and bankers to
retaliate or intimidate for their part in bankruptcy proceedings. 
In order to place these liens on land, false financing statements
had to be filed by the person wanting to place the lien.  

Currently, under Section 37.10 of the Penal Code, a person commits
a Class A misdemeanor if he or she knowingly makes a false entry on
a "governmental record".  This act becomes a third degree felony if
it is intended to defraud another.  However, the broad definition
of a "governmental record" is ambiguous to whether a financing
statement is included in this category of documents.  Therefore,
legislation is needed to remedy this ambiguity.

PURPOSE

HB 73 would place the filing of fraudulent financing statements
under Section 37.10 of the Penal Code and create a civil liability
to the owner of the property of which the lien is placed against.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not grant any
additional rulemaking authority to a state officer, institution, or
agency.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Subchapter D, Chapter 9, Business & Commerce
Code, by adding Section 9.412, as follows:

           Sec. 9.412.  FRAUDULENT FILING. (a) Restricts a person
from filing or           presenting for filing a financing
statement if it is (1) forged, (2) contains a false         statement, (3) is groundless, or (4) is invalid.

           (b) Sets the liability of person filing statement to the
owner of the property for          (1) $5,000 or the owner's actual
damages, (2) court costs, (3) reasonable          attorney's fees.

           (c) Specifies that a person who violates Subsection (a)
commits an offense under           Section 37.10, Penal Code.

SECTION 2. Effective Date: September 1, 1995.

SECTION 3. Emergency clause.

COMPARISON OF ORIGINAL TO SUBSTITUTE

The bill prohibits the fraudulent filing of a financing statement. 
In the original bill, a person filing a financing statement that
was invalid, or contained a mistake, could have been punished.  The
substitute deletes this language to ensure that a person filing a
financing statement which contains a mistake is not guilty of a
crime if they were not aware of the mistake.  

The language of the bill states that no person should file a
financing statement which they know contains a material false
statement.

SUMMARY OF COMMITTEE ACTION

The committee convened in a public hearing on February 20, 1995 to
consider HB 73.  The following people testified in favor of the
bill:  Rep. Delisi, James O. Boyd, L. George Ellis, Karen M.
Neeley.  The bill was referred to subcommittee with the following
members:  Grusendorf (Chair), Gutierrez, and Patterson.

The committee convened in a public hearing on March 13, 1995 to
consider HB 73.  The chair recalled the bill from subcommittee. 
Rep. Grusendorf offered a committee substitute which was adopted
without objection.  The motion to report HB 73 favorably as
substituted with the recommendation that it do pass and be printed
prevailed by the following record vote:  7 Ayes, 0 Nays, 0 PNV, 2
Absent.