HBA-ATS H.B. 1306 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 1306 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. 1306 provides that a financing statement or other filing is not required to be filed on paper with the secretary of state, and if a filing is made electronically, the filing is neither ineffective nor insufficient. In addition, this bill avows that an electronic filing made before this Act has always been acceptable. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 9.402, Business & Commerce Code, by adding Subsection (i), to provide that a financing statement or other filing is not required to be filed on paper with the secretary of state, and if a filing is made electronically, in accordance with rules adopted under this subchapter, the filing is neither ineffective nor insufficient. SECTION 2. Provides that Section 9.402(i) 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.