SRC-MWN S.B. 1740 77(R)   BILL ANALYSIS


Senate Research Center   S.B. 1740
77R2719 AJA-DBy: Cain
Business & Commerce
4/16/2001
As Filed


DIGEST AND PURPOSE 

Currently, many products deposited in public warehouses are handled by
electronic exchange so that, in many cases, there are no signatures. This
procedure has been an accepted practice by the parties and the transaction
is treated as if the documents were actually endorsed. However, bankruptcy
courts have held that a warehouseman's lien can only be secured through the
use of a properly endorsed paper receipt.  As proposed, S.B. 1740 amends
state law to allow that electronically transmitted warehouse receipts
ensure a warehouseman's lien. 

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a
state officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Sections 7.209(a) and (b), Business and Commerce Code, to
provide that a warehouseman has a lien against the bailor on the goods
deposited, rather than covered by a warehouse receipt, or on the proceeds
thereof in his possession for charges for storage or transportation or
certain other expenses incurred in their sale pursuant to law. Deletes text
regarding certain information stated in the receipt. Deletes text regarding
the warehouseman reserving security interest for a maximum amount specified
on the receipt. Provides that if a warehouse receipt is issued for the
goods, the security interest is not valid against a third person without
notice to whom the receipt is duly negotiated unless the maximum amount of
the security interest is conspicuously specified on the receipt. 

SECTION 2. Effective date: September 1, 2001.
                      Makes application of this Act prospective.