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A BILL TO BE ENTITLED
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AN ACT
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relating to the filing of a fraudulent financing statement in |
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relation to certain secured transactions; authorizing the |
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imposition of a fee. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 9.5185, Business & Commerce Code, is |
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amended to read as follows: |
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Sec. 9.5185. FRAUDULENT FILING. (a) A person may not |
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intentionally or knowingly present for filing or cause to be |
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presented for filing a financing statement that the person knows: |
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(1) is forged; |
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(2) contains a material false statement; or |
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(3) is groundless. |
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(b) A person who violates Subsection (a) is liable to a |
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person injured by the violation [the owner of property covered by |
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the financing statement] for: |
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(1) the greater of $10,000 [$5,000] or the [owner's] |
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actual damages caused by the violation; |
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(2) court costs; and |
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(3) reasonable attorney's fees. |
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(c) A person who violates Subsection (a) also may be |
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prosecuted under Section 37.101, Penal Code. |
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(d) An owner of property covered by a fraudulent financing |
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statement described in Subsection (a) also may file suit in a court |
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of suitable jurisdiction requesting specific relief, including, |
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but not limited to, release of the fraudulent financing statement. |
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A successful plaintiff is entitled to reasonable attorney's fees |
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and costs of court assessed against the person who filed the |
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fraudulent financing statement. If the person who filed the |
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fraudulent financing statement cannot be located or is a fictitious |
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person, the owner of the property may serve the known or unknown |
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defendant through publication in a newspaper of general circulation |
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in the county in which the suit is brought. |
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(e) A person identified as a debtor in a financing statement |
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that the person believes was not permitted to be filed under Section |
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9.509, 9.708, or 9.808, or was otherwise filed in violation of |
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Subsection (a), may, under penalty of perjury, file an affidavit |
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stating the impermissibility of the statement with the filing |
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office in which the statement was filed. The secretary of state |
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shall make available a form affidavit for use when filing an |
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affidavit with the secretary of state under this subsection. The |
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affiant shall file the affidavit together with proof of notice |
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required by Subsection (f). The filing office shall reject an |
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affidavit filed under this subsection if: |
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(1) the affidavit is incomplete; or |
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(2) the affiant did not file the affidavit together |
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with proof of notice required by Subsection (f). |
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(f) A person who files an affidavit under Subsection (e) |
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shall send each secured party of record a written notice of the |
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person's intention to file the affidavit, together with a copy of |
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the financing statement. The notice must contain the following |
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language at the beginning of the notice in at least 14-point |
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boldfaced type: "An affidavit will be filed under penalty of |
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perjury that the financing statement enclosed with this notice was |
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impermissible under Texas law. Once the affidavit is accepted, a |
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termination statement will be filed with respect to the financing |
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statement. The termination statement will be effective as of the |
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30th day after the date it is filed. If you were a regulated lending |
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institution, as defined by Section 9.5185(r), Business & Commerce |
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Code, on the date the financing statement was filed, you must notify |
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the filing office in which the financing statement was filed that |
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you qualify as a regulated lending institution not later than the |
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90th day after the date the financing statement is filed. If you |
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believe that the financing statement was permitted to be filed |
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under Texas law, you must bring an action against the affiant not |
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later than the 90th day after the date on which the termination |
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statement is filed. The action must be brought in the district |
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court in the county where the filing office in which the financing |
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statement was filed is located." The notice must be sent to the |
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mailing address provided for each secured party of record in the |
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financing statement to which the affidavit relates by certified |
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mail, return receipt requested, not earlier than the 30th day |
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before and not later than the 5th day before the date the affidavit |
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is filed. |
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(g) On acceptance of an affidavit properly filed under |
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Subsection (e), the filing office shall promptly file a termination |
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statement with respect to the financing statement identified in the |
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affidavit. The termination statement must indicate that the |
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statement was filed under this section. Except as provided by |
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Subsections (i) and (k), a termination statement filed under this |
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subsection shall be effective as of the 30th day after the date the |
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termination statement is filed. |
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(h) A secured party of record identified in a financing |
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statement for which a termination statement has been filed under |
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Subsection (g) may bring an action against the person who filed the |
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affidavit under Subsection (e) seeking a determination of whether |
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the person who filed the financing statement was entitled to file |
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the financing statement. An action under this subsection shall |
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have priority on the court's calendar and shall proceed by |
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expedited hearing. The action must be brought in the district court |
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in the county where the filing office in which the financing |
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statement was filed is located. An action under this subsection |
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must be brought not later than the 90th day after the date on which |
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the termination statement is filed. |
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(i) In an action brought under Subsection (h), a court may |
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order, in appropriate circumstances, preliminary relief, including |
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an order suspending the effectiveness of the termination statement |
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from taking effect or directing a party to take action to prevent |
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the termination statement from taking effect. If the court issues |
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an order under this subsection, and the filing office receives a |
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certified copy of the order: |
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(1) the effectiveness of the termination statement is |
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immediately suspended as of the date the order is filed with the |
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filing office; and |
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(2) the filing office shall promptly file an amendment |
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to the financing statement indicating that an order has suspended |
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the effectiveness of the termination statement. |
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(j) If an order issued under Subsection (i) to suspend the |
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effectiveness of the termination statement ceases to be effective |
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due to a subsequent order or final judgment of a court, and the |
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filing office receives a certified copy of the subsequent order or |
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final judgment: |
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(1) the termination statement shall immediately |
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become effective as of the date the order or judgment is filed with |
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the filing office; and |
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(2) the filing office shall promptly file an amendment |
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to the financing statement indicating that the termination |
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statement is effective. |
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(k) If a court determines in an action brought under |
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Subsection (h) that the financing statement was filed by a person |
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entitled to file the statement, and the filing office receives a |
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certified copy of the court's final judgment or order: |
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(1) the termination statement shall immediately |
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become ineffective as of the date the order or judgment is filed |
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with the filing office; and |
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(2) the filing office shall promptly file an amendment |
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to the financing statement indicating that the financing statement |
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has been reinstated. |
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(l) A financing statement reinstated under Subsection (k) |
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or (q) is effective from the initial filing date and is considered |
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to have never been ineffective against all persons and for all |
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purposes except against a purchaser of the collateral described in |
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the financing statement who gave value in reliance on the |
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termination statement. |
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(m) If the period of effectiveness of a financing statement |
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reinstated under Subsection (k) or (q) would have lapsed during the |
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period of termination, a secured party of record may file a |
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continuation statement not later than the 30th day after the |
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financing statement is reinstated, and the continuation statement |
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shall have the same effect as if it had been filed during the |
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six-month period prescribed by Section 9.515(d). |
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(n) The filing office shall collect a fee for the filing of |
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an affidavit under Subsection (e) in an amount sufficient to |
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recover the cost of administering this section. The filing office |
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may not return a fee paid for filing a financing statement |
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identified in the affidavit, even if the financing statement is |
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subsequently reinstated. |
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(o) The filing office or an employee of the filing office |
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may not be subject to liability for the termination or amendment of |
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a financing statement in the lawful performance of the duties of the |
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filing office under this section. |
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(p) An affidavit filed under Subsection (e) is not effective |
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with respect to a financing statement filed by or on behalf of a |
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regulated lending institution. |
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(q) A regulated lending institution must notify the filing |
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office that it qualifies as a regulated lending institution under |
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Subsection (p) not later than the 90th day after the filing of the |
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termination statement under Subsection (g). The secretary of state |
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may prescribe a form for use when notifying the secretary of state |
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under this subsection. On timely receipt of a notice under this |
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subsection, the termination statement shall immediately become |
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ineffective, and the filing office shall promptly file an amendment |
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to the financing statement indicating that the financing statement |
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has been reinstated. |
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(r) For purposes of this section, "regulated lending |
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institution" means an entity in the business of extending credit or |
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acquiring, purchasing, selling, brokering, or servicing loans or |
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other extensions of credit including a bank, savings bank, savings |
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association, trust company, building and loan association, savings |
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and loan association, credit union, consumer finance company, |
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industrial bank, industrial loan company, insurance company, |
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investment company, investment fund, installment seller, mortgage |
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company, sales finance company, or leasing company that: |
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(1) is subject to licensure, regulatory oversight, or |
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examination by a state or federal agency; and |
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(2) is operating as a regulated lending institution as |
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of the date on which a financing statement is filed. |
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SECTION 2. Section 9.510(c), Business & Commerce Code, is |
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amended to read as follows: |
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(c) Except as otherwise provided by Section 9.5185(m), a [A] |
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continuation statement that is not filed within the six-month |
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period prescribed by Section 9.515(d) is ineffective. |
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SECTION 3. Section 9.515(d), Business & Commerce Code, is |
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amended to read as follows: |
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(d) Except as otherwise provided by Section 9.5185(m), a [A] |
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continuation statement may be filed only within six months before |
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the expiration of the five-year period specified in Subsection (a) |
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or the 30-year period specified in Subsection (b), whichever is |
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applicable. |
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SECTION 4. This Act takes effect September 1, 2025. |