HBA-MPM S.B. 433 77(R) BILL ANALYSIS Office of House Bill AnalysisS.B. 433 By: Carona Business & Industry 4/10/2001 Engrossed BACKGROUND AND PURPOSE In 1999, the 76th Texas Legislature adopted the revised Uniform Commercial Code relating to secured transactions, which becomes effective July 1, 2001. This revision is based on the official text of the Uniform Commercial Code, formally approved by the National Conference of Commissioners on Uniform State Laws (conference) and the American Law Institute. Certain technical amendments have been approved by the conference's executive committee. Senate Bill 433 incorporates these technical amendments to the Uniform Commercial Code. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. ANALYSIS Senate Bill 433 amends the Business & Commerce Code to modify the Uniform Commercial Code -Secured Transactions to make technical changes. S.B. 433 includes in the definition of "chattel paper" a record or records evidencing both a monetary obligation and a security interest in specific goods and license of software used in the goods, and a lease of specific goods and license of software used in the goods. The bill specifies that this term does not include records that evidence a right to payment arising out of the use of a credit or charge card or information contained on or for use with the card (Sec. 9.102). The bill clarifies that the filing with the filing office of a termination statement relating to a financial statement that indicates the debtor is a transmitting utility also causes the effectiveness of the financing statement to lapse, except as provided in law regarding the conditions in which a filed record is effective (Sec. 9.513). The bill also transfers applicable law relating to secured transactions passed by the 76th Legislature from session law to the Business & Commerce Code (SECTION 22). The bill authorizes a person to add or delete collateral covered by, continue or terminate the effectiveness of, or otherwise amend the information provided in a pre-effective-date financing statement only according to laws of jurisdiction governing perfection. However, the effectiveness of such a statement may also be terminated according to the law of jurisdiction in which the statement is filed. The bill authorizes a preeffective-date financing statement to be amended and specifies conditions which must be met to amend the statement. The bill makes provisions for the continuance of the statement and sets forth conditions under which the effectiveness of the statement may be terminated (Sec. 9.707). S.B. 433 specifies that no provision in the Uniform Commercial Code--Secured Transactions as effective July 1, 2001, preempts or otherwise affects any limitation or prohibition provided by another law of this state against assessment of a claim or right to receive: _amounts received under workers' compensation acts or the amount of any damages received for personal physical injuries or sickness; or _benefits under a special needs trust established for an individual who is disabled and receiving medical assistance from the state and from which the state will be repaid for the medical assistance upon the death of the individual (SECTION 25). EFFECTIVE DATE On passage, or if the Act does not receive the necessary vote, the Act takes effect September 1, 2001.