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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 under this |
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subsection. The filing office shall reject an affidavit filed |
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under this subsection if: |
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(1) the affidavit is incomplete; |
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(2) the affidavit is prohibited under Subsection (q); |
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or |
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(3) the filing office believes in good faith that the |
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affidavit was filed: |
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(A) without a reasonable basis; or |
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(B) with the intent to harass or defraud. |
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(f) On receipt of an affidavit filed under Subsection (e), |
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the filing office shall promptly file a termination statement with |
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respect to the financing statement identified in the affidavit. |
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The termination statement must indicate that the statement was |
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filed under this section. Except as provided by Subsections (i) and |
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(k), a termination statement filed under this subsection shall be |
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effective until the 30th day after the date the statement is filed. |
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(g) On the same day that the filing office files a |
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termination statement under Subsection (f), the office shall send |
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to each secured party of record identified in the financing |
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statement a notice that the termination statement has been filed. |
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The notice shall be sent by certified mail, return receipt |
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requested, to the mailing address provided for the secured party of |
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record in the financing statement. |
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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 (f) 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 statement. An action under this subsection shall have priority |
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on the court's calendar and shall proceed by expedited hearing. The |
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action shall be brought in the district court in the county where |
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the filing office in which the financing statement was filed is |
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located. An action under this subsection must be filed not later |
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than the 60th day after the date on which the termination statement |
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becomes effective. |
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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 preventing the termination statement from taking effect or |
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directing a party to take action to prevent the termination |
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statement from taking effect. If the court issues an order under |
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this subsection, and the filing office receives a certified copy of |
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the order before the termination statement takes effect: |
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(1) the termination statement may not take effect; 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 prevented |
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the termination statement from taking effect. |
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(j) If an order issued under Subsection (i) to prevent the |
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termination statement from taking effect ceases to be effective due |
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to a subsequent order or final judgment of a court, and the filing |
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office receives a certified copy of the subsequent order or final |
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judgment: |
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(1) the termination statement shall immediately |
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become effective on receipt of the certified copy by the filing |
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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 before the |
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termination statement takes effect: |
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(1) the termination statement may not take effect; and |
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(2) the filing office shall promptly remove the |
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termination statement and any amendments filed under Subsection (i) |
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from its public records. |
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(l) 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 after the |
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termination statement takes effect, the filing office shall |
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promptly file an amendment to the financing statement indicating |
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that the financing statement has been reinstated. |
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(m) A financing statement reinstated under Subsection (l) |
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is effective from the initial filing date and is considered to have |
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never been ineffective against all persons and for all purposes |
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except against a purchaser of the collateral described in the |
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financing statement who gave value in reliance on the termination |
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statement. |
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(n) If the period of effectiveness of a financing statement |
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reinstated under Subsection (l) would have lapsed during the period |
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of termination, the secured party of record may file a continuation |
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statement not later than the 30th day after the financing statement |
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is reinstated, and the continuation statement shall have the same |
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effect as if it had been filed during the six-month period |
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prescribed by Section 9.515(d). |
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(o) 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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(p) 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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(q) An affidavit may not be filed under Subsection (e) with |
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respect to a financing statement filed by or on behalf of a |
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regulated lending institution. For purposes of this subsection, |
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"regulated lending institution" means an entity in the business of |
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extending credit or acquiring, purchasing, selling, brokering, or |
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servicing loans or other extensions of credit that is subject to |
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licensure, regulatory oversight, or examination by a state or |
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federal agency and includes banks, savings banks, savings |
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associations, trust companies, building and loan associations, |
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savings and loan associations, credit unions, consumer finance |
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companies, industrial banks, industrial loan companies, insurance |
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companies, investment companies, investment funds, installment |
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sellers, mortgage companies, sales finance companies, and leasing |
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companies. |
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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(n), 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(n), 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. |