BILL ANALYSIS


                                                          H.B. 73
                                            By: Delisi (Montford)
                                             Economic Development
                                                         05-17-95
                                Senate Committee Report (Amended)
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 the
person knowingly makes a false entry on a governmental record. This act becomes a third degree
felony if it is intended to defraud another. However, it is not clear if a financing statement is included
in the definition of a governmental record.

PURPOSE

As proposed, H.B. 73 provides a penalty for the fraudulent filing of a financing statement.

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 Chapter 9D, Business and Commerce Code, by adding Section 9.412, as
follows:

     Sec. 9.412. FRAUDULENT FILING. (a) Provides that a person may not intentionally or
     knowingly present for filing or cause to be presented for filing a financing statement if the
     person knows that the financing statement is forged, contains a material false statement, or
     is groundless.
     
     (b) Provides that a person who violates Subsection (a) is liable to the owner of property
       covered by the financing statement for the greater of $5,000 or the owner's actual
       damages, court costs, and reasonable attorney's fees.
       
       (c) Provides that a person who violates Subsection (a) commits an offense under Section
       37.10, Penal Code.
       
       (d) Requires an owner of property covered by a fraudulent financing statement described
       in Subsection (a) to have certain additional remedies, including the authorization to file
       suit in a court of suitable jurisdiction, requesting specific relief including release of such
       fraudulent financing statement. Requires a successful plaintiff to be entitled to attorney's
       fees and costs of court to be assessed against the person who filed the fraudulent financing
       statement. Authorizes the owner of property, in the event the person who filed the
       fraudulent financing statement cannot be located or is a fictitious person, to serve the
       defendant through publication in a newspaper of general circulation in the county wherein
       the suit is brought.
       
       SECTION 2.   Effective date: September 1, 1995.

SECTION 3. Emergency clause.