1-1           By:  Harris                                      S.B. No. 505

 1-2           (In the Senate - Filed February 10, 1997; February 12, 1997,

 1-3     read first time and referred to Committee on Jurisprudence;

 1-4     February 26, 1997, reported favorably, as amended, by the following

 1-5     vote:  Yeas 6, Nays 0; February 26, 1997, sent to printer.)

 1-6     COMMITTEE AMENDMENT NO. 1                               By:  Harris

 1-7     Amend S.B. No. 505 as follows:

 1-8           (1)  Strike the section heading of SECTION 1 (page 1, lines

 1-9     34-35) and substitute the following:

1-10           "SECTION 1.  Section 9.102, Business & Commerce Code, is

1-11     amended by amending Subsection (a) and adding Subsection (d) to

1-12     read as follows:"

1-13           (2)  In SECTION 1, Section 9.102 (page 1, line 36), add

1-14     Subsection (a) to read as follows:

1-15           "(a)  Except as otherwise provided in Section 9.104 on

1-16     excluded transactions, this chapter applies

1-17                 (1)  to any transaction (regardless of its form) which

1-18     is intended to create a security interest in personal property or

1-19     fixtures including goods, documents, instruments, general

1-20     intangibles, chattel paper or accounts; and also

1-21                 (2)  to any sale of accounts or chattel paper, provided

1-22     that the application of this chapter to the sale of accounts or

1-23     chattel paper is not to recharacterize the sale of accounts or

1-24     chattel paper as a secured transaction but to protect purchasers of

1-25     accounts or chattel paper by providing a notice filing system."

1-26           (3)  In SECTION 1, Subsection (d), Section 9.102 (page 1,

1-27     line 39), strike "the title" and substitute "title, legal and

1-28     equitable,"

1-29                            A BILL TO BE ENTITLED

1-30                                   AN ACT

1-31     relating to the characterization of a transaction as a sale of

1-32     accounts or chattel paper.

1-33           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

1-34           SECTION 1.  Section 9.102, Business & Commerce Code, is

1-35     amended by adding Subsection (d) to read as follows:

1-36           (d)  For all purposes, the parties' characterization of a

1-37     transaction as a sale of accounts or chattel paper shall be

1-38     conclusive that the transaction is a sale and is not a secured

1-39     transaction and that the title has passed to the party

1-40     characterized as the purchaser of the accounts or chattel paper,

1-41     regardless of whether the secured party has any recourse against

1-42     the debtor, whether the debtor is entitled to any surplus, or any

1-43     other term of the parties' agreement.

1-44           SECTION 2.  This Act takes effect September 1, 1997.

1-45           SECTION 3.  The importance of this legislation and the

1-46     crowded condition of the calendars in both houses create an

1-47     emergency and an imperative public necessity that the

1-48     constitutional rule requiring bills to be read on three several

1-49     days in each house be suspended, and this rule is hereby suspended.

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