The text as introduced · 1,434 words
89R7736 SRA-F
By: Parker
S.B. No. 2221
A BILL TO BE ENTITLED
AN ACT
relating to the filing of a fraudulent financing statement in
relation to certain secured transactions; authorizing the
imposition of a fee.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 9.5185, Business & Commerce Code, is
amended to read as follows:
Sec. 9.5185. FRAUDULENT FILING. (a) A person may not
intentionally or knowingly present for filing or cause to be
presented for filing a financing statement that the person knows:
(1) is forged;
(2) contains a material false statement; or
(3) is groundless.
(b) A person who violates Subsection (a) is liable to a
person injured by the violation [ the owner of property covered by
the financing statement ] for:
(1) the greater of $10,000 [ $5,000 ] or the [ owner's ]
actual damages caused by the violation ;
(2) court costs; and
(3) reasonable attorney's fees.
(c) A person who violates Subsection (a) also may be
prosecuted under Section 37.101, Penal Code.
(d) An owner of property covered by a fraudulent financing
statement described in Subsection (a) also may file suit in a court
of suitable jurisdiction requesting specific relief, including,
but not limited to, release of the fraudulent financing statement.
A successful plaintiff is entitled to reasonable attorney's fees
and costs of court assessed against the person who filed the
fraudulent financing statement. If the person who filed the
fraudulent financing statement cannot be located or is a fictitious
person, the owner of the property may serve the known or unknown
defendant through publication in a newspaper of general circulation
in the county in which the suit is brought.
(e) A person identified as a debtor in a financing statement
that the person believes was not permitted to be filed under Section
9.509, 9.708, or 9.808, or was otherwise filed in violation of
Subsection (a), may, under penalty of perjury, file an affidavit
stating the impermissibility of the statement with the filing
office in which the statement was filed. The secretary of state
shall make available a form affidavit for use under this
subsection. The filing office shall reject an affidavit filed
under this subsection if:
(1) the affidavit is incomplete;
(2) the affidavit is prohibited under Subsection (q);
or
(3) the filing office believes in good faith that the
affidavit was filed:
(A) without a reasonable basis; or
(B) with the intent to harass or defraud.
(f) On receipt of an affidavit filed under Subsection (e),
the filing office shall promptly file a termination statement with
respect to the financing statement identified in the affidavit.
The termination statement must indicate that the statement was
filed under this section. Except as provided by Subsections (i) and
(k), a termination statement filed under this subsection shall be
effective until the 30th day after the date the statement is filed.
(g) On the same day that the filing office files a
termination statement under Subsection (f), the office shall send
to each secured party of record identified in the financing
statement a notice that the termination statement has been filed.
The notice shall be sent by certified mail, return receipt
requested, to the mailing address provided for the secured party of
record in the financing statement.
(h) A secured party of record identified in a financing
statement for which a termination statement has been filed under
Subsection (f) may bring an action against the person who filed the
affidavit under Subsection (e) seeking a determination of whether
the person who filed the financing statement was entitled to file
the statement. An action under this subsection shall have priority
on the court's calendar and shall proceed by expedited hearing. The
action shall be brought in the district court in the county where
the filing office in which the financing statement was filed is
located. An action under this subsection must be filed not later
than the 60th day after the date on which the termination statement
becomes effective.
(i) In an action brought under Subsection (h), a court may
order, in appropriate circumstances, preliminary relief, including
an order preventing the termination statement from taking effect or
directing a party to take action to prevent the termination
statement from taking effect. If the court issues an order under
this subsection, and the filing office receives a certified copy of
the order before the termination statement takes effect:
(1) the termination statement may not take effect; and
(2) the filing office shall promptly file an amendment
to the financing statement indicating that an order has prevented
the termination statement from taking effect.
(j) If an order issued under Subsection (i) to prevent the
termination statement from taking effect ceases to be effective due
to a subsequent order or final judgment of a court, and the filing
office receives a certified copy of the subsequent order or final
judgment:
(1) the termination statement shall immediately
become effective on receipt of the certified copy by the filing
office; and
(2) the filing office shall promptly file an amendment
to the financing statement indicating that the termination
statement is effective.
(k) If a court determines in an action brought under
Subsection (h) that the financing statement was filed by a person
entitled to file the statement, and the filing office receives a
certified copy of the court's final judgment or order before the
termination statement takes effect:
(1) the termination statement may not take effect; and
(2) the filing office shall promptly remove the
termination statement and any amendments filed under Subsection (i)
from its public records.
(l) If a court determines in an action brought under
Subsection (h) that the financing statement was filed by a person
entitled to file the statement, and the filing office receives a
certified copy of the court's final judgment or order after the
termination statement takes effect, the filing office shall
promptly file an amendment to the financing statement indicating
that the financing statement has been reinstated.
(m) A financing statement reinstated under Subsection (l)
is effective from the initial filing date and is considered to have
never been ineffective against all persons and for all purposes
except against a purchaser of the collateral described in the
financing statement who gave value in reliance on the termination
statement.
(n) If the period of effectiveness of a financing statement
reinstated under Subsection (l) would have lapsed during the period
of termination, the secured party of record may file a continuation
statement not later than the 30th day after the financing statement
is reinstated, and the continuation statement shall have the same
effect as if it had been filed during the six-month period
prescribed by Section 9.515(d).
(o) The filing office shall collect a fee for the filing of
an affidavit under Subsection (e) in an amount sufficient to
recover the cost of administering this section. The filing office
may not return a fee paid for filing a financing statement
identified in the affidavit, even if the financing statement is
subsequently reinstated.
(p) The filing office or an employee of the filing office
may not be subject to liability for the termination or amendment of
a financing statement in the lawful performance of the duties of the
filing office under this section.
(q) An affidavit may not be filed under Subsection (e) with
respect to a financing statement filed by or on behalf of a
regulated lending institution. For purposes of this subsection,
"regulated lending institution" means an entity in the business of
extending credit or acquiring, purchasing, selling, brokering, or
servicing loans or other extensions of credit that is subject to
licensure, regulatory oversight, or examination by a state or
federal agency and includes banks, savings banks, savings
associations, trust companies, building and loan associations,
savings and loan associations, credit unions, consumer finance
companies, industrial banks, industrial loan companies, insurance
companies, investment companies, investment funds, installment
sellers, mortgage companies, sales finance companies, and leasing
companies.
SECTION 2. Section 9.510(c), Business & Commerce Code, is
amended to read as follows:
(c) Except as otherwise provided by Section 9.5185(n), a [ A ]
continuation statement that is not filed within the six-month
period prescribed by Section 9.515(d) is ineffective.
SECTION 3. Section 9.515(d), Business & Commerce Code, is
amended to read as follows:
(d) Except as otherwise provided by Section 9.5185(n), a [ A ]
continuation statement may be filed only within six months before
the expiration of the five-year period specified in Subsection (a)
or the 30-year period specified in Subsection (b), whichever is
applicable.
SECTION 4. This Act takes effect September 1, 2025.
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