By:  Harris                                   S.B. No. 505

         97S0296/1                           

                                A BILL TO BE ENTITLED

                                       AN ACT

 1-1     relating to the characterization of a transaction as a sale of

 1-2     accounts or chattel paper.

 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-4           SECTION 1.  Section 9.102, Business & Commerce Code, is

 1-5     amended by adding Subsection (d) to read as follows:

 1-6           (d)  For all purposes, the parties' characterization of a

 1-7     transaction as a sale of accounts or chattel paper shall be

 1-8     conclusive that the transaction is a sale and is not a secured

 1-9     transaction and that the title has passed to the party

1-10     characterized as the purchaser of the accounts or chattel paper,

1-11     regardless of whether the secured party has any recourse against

1-12     the debtor, whether the debtor is entitled to any surplus, or any

1-13     other term of the parties' agreement.

1-14           SECTION 2.  This Act takes effect September 1, 1997.

1-15           SECTION 3.  The importance of this legislation and the

1-16     crowded condition of the calendars in both houses create an

1-17     emergency and an imperative public necessity that the

1-18     constitutional rule requiring bills to be read on three several

1-19     days in each house be suspended, and this rule is hereby suspended.