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.