HBA-ATS H.B. 1305 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 1305
By: George
Business & Industry
2/17/1999
Introduced



BACKGROUND AND PURPOSE 

Title 1 (Uniform Commercial Code) of the Business & Commerce Code
prescribes the proper place to file a security interest to perfect it.  The
determination of where to file depends on the type of security interest.
Most security interests need to be filed in the Office of the Secretary of
State, who is authorized to prescribe the forms to be used in making any
filing.  In 1996, the secretary of state made available to banks and other
lending institutions a computer system designed to receive any required
filings electronically as an alternative to the traditional filing of paper
forms.  Financial institutions have been hesitant to transmit filings
electronically, however. These institutions perceive a danger of losing
their secured commercial loans because no provision expressly permits
electronic filing. 

H.B. 1305 provides that the secretary of state is authorized, by rule, to
allow a person to file a financing statement or other filing electronically
as an alternative to the traditional filing of a paper document.  In
addition, this bill avows that the secretary of state has always been
authorized to adopt such a measure. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that rulemaking
authority is expressly delegated to the secretary of state in SECTION 1
(Section 9.409(c), Business & Commerce Code) of this bill. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 9.409, Business & Commerce Code, by adding
Subsection (c), to authorize the secretary of state, by rule, to allow a
person to file electronically a financing statement or other filing made
under Subchapter D (Filings) as an alternative to the traditional filing of
a paper document. 

SECTION 2.  Provides that Section 9.409(c) is a clarification of existing
law.  Makes this Act applicable to the filing of a financing statement or
other filing made before, on, or after the effective date of this Act. 

SECTION 3.  Emergency clause.
            Effective date: upon passage.