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A BILL TO BE ENTITLED
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AN ACT
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relating to the assignment of security interests in certain |
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collateral. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 261.004(a), Business & Commerce Code, is |
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amended to read as follows: |
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(a) Subject to Subsection (b), the filing with the secretary |
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of state of a utility security instrument executed by a utility and |
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described by Section 261.003(1) and payment of the filing fee |
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prescribed by Section 261.008: |
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(1) constitute perfection of a security interest |
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created by the instrument in any personal property: |
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(A) in which a security interest may be perfected |
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by filing under Chapter 9, including any goods that are or will |
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become a fixture; |
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(B) that is located in this state; and |
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(C) that was owned by the utility when the |
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instrument was executed or is to be acquired by the utility after |
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the instrument is executed; [and] |
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(2) if the instrument is proven, acknowledged, or |
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certified as otherwise required by law for the recording of real |
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property mortgages, serve as notice to all persons of the existence |
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of the instrument and the security interest granted by the |
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instrument in any real property, or in any fixture on or to be |
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placed on the property, that: |
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(A) is located in this state; and |
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(B) was owned by the utility when the instrument |
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was executed or is to be acquired by the utility after the |
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instrument is executed; and |
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(3) result in priority of the secured party reflected |
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on the utility security instrument and assignees under Section |
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261.012 over the rights of a lien creditor, as defined by Section |
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9.102, for so long as the lien is recorded on the utility security |
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instrument. |
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SECTION 2. Chapter 261, Business & Commerce Code, is |
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amended by adding Section 261.012 to read as follows: |
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Sec. 261.012. ASSIGNMENT OF SECURITY INTEREST. (a) A |
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secured party may assign a security interest recorded under Section |
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261.004 without making any filing or giving any notice under this |
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chapter. The security interest assigned remains valid and |
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perfected and retains its priority, securing the obligation |
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assigned to the assignee, against transferees from and creditors of |
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the debtor utility, including lien creditors, as defined by Section |
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9.102. |
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(b) An assignee or assignor may, but need not to retain the |
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validity, perfection, and priority of the security interest |
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assigned, as evidence of the assignment of the security interest |
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recorded under Section 261.004, apply to the secretary of state for |
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the assignee to be reflected as secured party on the utility |
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security instrument and notify the debtor utility of the |
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assignment. Failure to make application under this section or |
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notify a debtor utility of an assignment does not create a cause of |
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action against the secured party reflected on the utility security |
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instrument, the assignor, or the assignee or affect the |
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continuation of the perfected status of the assigned security |
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interest in favor of the assignee against transferees from and |
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creditors of the debtor utility, including lien creditors, as |
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defined by Section 9.102. |
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SECTION 3. Section 31.052, Parks and Wildlife Code, is |
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amended by amending Subsection (a) and adding Subsections (c) and |
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(d) to read as follows: |
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(a) Except as provided by this section and Section |
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31.050(c), [in Subsection (c) of Section 31.050 of this code] and |
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except for statutory liens, security interests in a vessel or |
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outboard motor shall be noted on the certificate of title of the |
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vessel or outboard motor to which the security interest applies. On |
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recordation of a security interest on the certificate of title, the |
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recorded security interest owner and assignees under Subsection (c) |
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obtain priority over the rights of a lien creditor, as defined by |
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Section 9.102, Business & Commerce Code, for so long as the security |
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interest is recorded on the certificate of title. |
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(c) A security interest owner may assign a security interest |
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recorded under this chapter without making any filing or giving any |
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notice under this chapter. The security interest assigned remains |
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valid and perfected and retains its priority, securing the |
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obligation assigned to the assignee, against transferees from and |
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creditors of the debtor, including lien creditors, as defined by |
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Section 9.102, Business & Commerce Code. |
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(d) An assignee or assignor may, but need not to retain the |
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validity, perfection, and priority of the security interest |
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assigned, as evidence of the assignment of the security interest |
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recorded under this chapter, apply to the department or a county |
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assessor-collector for the assignee to be named as security |
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interest owner on the certificate of title and notify the debtor of |
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the assignment. Failure to make application under this subsection |
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or notify a debtor of an assignment does not create a cause of |
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action against the recorded security interest owner, the assignor, |
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or the assignee or affect the continuation of the perfected status |
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of the assigned security interest in favor of the assignee against |
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transferees from and creditors of the debtor, including lien |
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creditors, as defined by Section 9.102, Business & Commerce Code. |
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SECTION 4. Section 501.113(b), Transportation Code, is |
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amended to read as follows: |
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(b) For purposes of Chapter 9, Business & Commerce Code, the |
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time of recording a lien under this chapter is considered to be the |
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time of filing the security interest, and on such recordation, the |
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recorded lienholder and assignees under Section 501.114 obtain |
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priority over the rights of a lien creditor, as defined by Section |
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9.102, Business & Commerce Code, for so long as the lien is recorded |
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on the certificate of title. |
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SECTION 5. Section 501.114, Transportation Code, is amended |
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to read as follows: |
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Sec. 501.114. ASSIGNMENT OF LIEN. (a) A lienholder may |
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assign a lien recorded under Section 501.113 without making any |
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filing or giving any notice under this chapter. The lien assigned |
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remains valid and perfected and retains its priority, securing the |
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obligation assigned to the assignee, against transferees from and |
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creditors of the debtor, including lien creditors, as defined by |
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Section 9.102, Business & Commerce Code. |
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(b) An assignee or assignor may, but need not to retain the |
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validity, perfection, and priority of the lien assigned, as |
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evidence of the assignment of a lien recorded under Section 501.113 |
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[by]: |
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(1) apply [applying] to the county |
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assessor-collector for the assignee to be named as lienholder on |
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the certificate of title [assignment of the lien]; and |
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(2) notify [notifying] the debtor of the assignment. |
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(c) Failure [(b) A lienholder's failure] to make |
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application under Subsection (b) or notify a debtor of an |
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assignment does not create a cause of action against the recorded |
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lienholder, the assignor, or the assignee or affect the |
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continuation of the perfected status of the assigned lien in favor |
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of the assignee against transferees from and creditors of the |
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debtor, including lien creditors, as defined by Section 9.102, |
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Business & Commerce Code. |
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(d) [(c)] An application under Subsection (b) [(a)] must |
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be: |
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(1) signed by the assignee [person to whom the lien is
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assigned]; and |
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(2) accompanied by: |
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(A) the applicable fee; |
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(B) a copy of the assignment agreement executed |
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by the parties; and |
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(C) the certificate of title on which the lien to |
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be assigned is recorded. |
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(e) [(d)] On receipt of the completed application and fee, |
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the department: |
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(1) may amend the department's records to substitute |
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the assignee [subsequent lienholder] for the recorded [previous] |
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lienholder; and |
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(2) shall issue a new certificate of title as provided |
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by Section 501.027. |
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(f) [(e)] The issuance of a certificate of title under |
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Subsection (e) [(d)] is recordation of the assignment. |
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(g) Regardless of whether application is made for the |
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assignee to be named as lienholder on the certificate of title, the |
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[The] time of the recordation of a lien assigned under this section |
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is considered to be the time the lien was initially recorded under |
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Section 501.113. |
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(h) Notwithstanding Subsections (a) through (g), and |
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procedures that may be conducted under those subsections, the |
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assignment of a lien does not affect the procedures applicable to |
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the foreclosure of a worker's lien under Chapter 70, Property Code, |
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or the rights of the holder of a worker's lien. Notice given to the |
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last known lienholder of record, as provided by that chapter, is |
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adequate to allow foreclosure under that chapter. |
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(i) Notwithstanding Subsections (a) through (g), and the |
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procedures that may be conducted under those subsections, the |
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assignment of a lien does not affect the procedures applicable to |
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the release of a holder's lien under Section 348.408, Finance Code. |
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SECTION 6. This Act is intended to clarify that under |
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existing law, an assignment of a recorded security interest may be |
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recorded on the title, but does not have to be recorded on the title |
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to retain the validity, perfection, and priority of the security |
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interest securing the obligation assigned to the assignee. |
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SECTION 7. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2009. |