S.B. No. 1592
 
 
 
 
AN ACT
  relating to the assignment of security interests in certain
  collateral.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subsection (a), Section 261.004, Business &
  Commerce Code, is amended to read as follows:
         (a)  Subject to Subsection (b), the filing with the secretary
  of state of a utility security instrument executed by a utility and
  described by Section 261.003(1) and payment of the filing fee
  prescribed by Section 261.008:
               (1)  constitute perfection of a security interest
  created by the instrument in any personal property:
                     (A)  in which a security interest may be perfected
  by filing under Chapter 9, including any goods that are or will
  become a fixture;
                     (B)  that is located in this state; and
                     (C)  that was owned by the utility when the
  instrument was executed or is to be acquired by the utility after
  the instrument is executed; [and]
               (2)  if the instrument is proven, acknowledged, or
  certified as otherwise required by law for the recording of real
  property mortgages, serve as notice to all persons of the existence
  of the instrument and the security interest granted by the
  instrument in any real property, or in any fixture on or to be
  placed on the property, that:
                     (A)  is located in this state; and
                     (B)  was owned by the utility when the instrument
  was executed or is to be acquired by the utility after the
  instrument is executed; and
               (3)  result in priority of the secured party reflected
  on the utility security instrument and assignees under Section
  261.012 over the rights of a lien creditor, as defined by Section
  9.102, for so long as the lien is recorded on the utility security
  instrument.
         SECTION 2.  Chapter 261, Business & Commerce Code, is
  amended by adding Section 261.012 to read as follows:
         Sec. 261.012.  ASSIGNMENT OF SECURITY INTEREST. (a)  A
  secured party may assign a security interest recorded under Section
  261.004 without making any filing or giving any notice under this
  chapter. The security interest assigned remains valid and
  perfected and retains its priority, securing the obligation
  assigned to the assignee, against transferees from and creditors of
  the debtor utility, including lien creditors, as defined by Section
  9.102.
         (b)  An assignee or assignor may, but need not to retain the
  validity, perfection, and priority of the security interest
  assigned, as evidence of the assignment of the security interest
  recorded under Section 261.004, apply to the secretary of state for
  the assignee to be reflected as secured party on the utility
  security instrument and notify the debtor utility of the
  assignment. Failure to make application under this section or
  notify a debtor utility of an assignment does not create a cause of
  action against the secured party reflected on the utility security
  instrument, the assignor, or the assignee or affect the
  continuation of the perfected status of the assigned security
  interest in favor of the assignee against transferees from and
  creditors of the debtor utility, including lien creditors, as
  defined by Section 9.102.
         SECTION 3.  Section 31.052, Parks and Wildlife Code, is
  amended by amending Subsection (a) and adding Subsections (c) and
  (d) to read as follows:
         (a)  Except as provided by this section and Section
  31.050(c), [in Subsection (c) of Section 31.050 of this code] and
  except for statutory liens, security interests in a vessel or
  outboard motor shall be noted on the certificate of title of the
  vessel or outboard motor to which the security interest applies. On
  recordation of a security interest on the certificate of title, the
  recorded security interest owner and assignees under Subsection (c)
  obtain priority over the rights of a lien creditor, as defined by
  Section 9.102, Business & Commerce Code, for so long as the security
  interest is recorded on the certificate of title.
         (c)  A security interest owner may assign a security interest
  recorded under this chapter without making any filing or giving any
  notice under this chapter. The security interest assigned remains
  valid and perfected and retains its priority, securing the
  obligation assigned to the assignee, against transferees from and
  creditors of the debtor, including lien creditors, as defined by
  Section 9.102, Business & Commerce Code.
         (d)  An assignee or assignor may, but need not to retain the
  validity, perfection, and priority of the security interest
  assigned, as evidence of the assignment of the security interest
  recorded under this chapter, apply to the department or a county
  assessor-collector for the assignee to be named as security
  interest owner on the certificate of title and notify the debtor of
  the assignment. Failure to make application under this subsection
  or notify a debtor of an assignment does not create a cause of
  action against the recorded security interest owner, the assignor,
  or the assignee or affect the continuation of the perfected status
  of the assigned security interest in favor of the assignee against
  transferees from and creditors of the debtor, including lien
  creditors, as defined by Section 9.102, Business & Commerce Code.
         SECTION 4.  Subsection (b), Section 501.113, Transportation
  Code, is amended to read as follows:
         (b)  For purposes of Chapter 9, Business & Commerce Code, the
  time of recording a lien under this chapter is considered to be the
  time of filing the security interest, and on such recordation, the
  recorded lienholder and assignees under Section 501.114 obtain
  priority over the rights of a lien creditor, as defined by Section
  9.102, Business & Commerce Code, for so long as the lien is recorded
  on the certificate of title.
         SECTION 5.  Section 501.114, Transportation Code, is amended
  to read as follows:
         Sec. 501.114.  ASSIGNMENT OF LIEN. (a)  A lienholder may
  assign a lien recorded under Section 501.113 without making any
  filing or giving any notice under this chapter. The lien assigned
  remains valid and perfected and retains its priority, securing the
  obligation assigned to the assignee, against transferees from and
  creditors of the debtor, including lien creditors, as defined by
  Section 9.102, Business & Commerce Code.
         (b)  An assignee or assignor may, but need not to retain the
  validity, perfection, and priority of the lien assigned, as
  evidence of the assignment of a lien recorded under Section 501.113
  [by]:
               (1)  apply  [applying] to the county
  assessor-collector for the assignee to be named as lienholder on
  the certificate of title [assignment of the lien]; and
               (2)  notify  [notifying] the debtor of the assignment.
         (c)  Failure [(b)  A lienholder's failure] to make
  application under Subsection (b) or notify a debtor of an
  assignment does not create a cause of action against the recorded
  lienholder, the assignor, or the assignee or affect the
  continuation of the perfected status of the assigned lien in favor
  of the assignee against transferees from and creditors of the
  debtor, including lien creditors, as defined by Section 9.102,
  Business & Commerce Code.
         (d) [(c)]  An application under Subsection (b) [(a)] must
  be:
               (1)  signed by the assignee [person to whom the lien is
  assigned]; and
               (2)  accompanied by:
                     (A)  the applicable fee;
                     (B)  a copy of the assignment agreement executed
  by the parties; and
                     (C)  the certificate of title on which the lien to
  be assigned is recorded.
         (e) [(d)]  On receipt of the completed application and fee,
  the department:
               (1)  may amend the department's records to substitute
  the assignee [subsequent lienholder] for the recorded [previous]
  lienholder; and
               (2)  shall issue a new certificate of title as provided
  by Section 501.027.
         (f) [(e)]  The issuance of a certificate of title under
  Subsection (e) [(d)] is recordation of the assignment.
         (g)  Regardless of whether application is made for the
  assignee to be named as lienholder on the certificate of title, the
  [The] time of the recordation of a lien assigned under this section
  is considered to be the time the lien was initially recorded under
  Section 501.113.
         (h)  Notwithstanding Subsections (a)-(g) and procedures that
  may be conducted under those subsections, the assignment of a lien
  does not affect the procedures applicable to the foreclosure of a
  worker's lien under Chapter 70, Property Code, or the rights of the
  holder of a worker's lien. Notice given to the last known
  lienholder of record, as provided by that chapter, is adequate to
  allow foreclosure under that chapter.
         (i)  Notwithstanding Subsections (a)-(g) and the procedures
  that may be conducted under those subsections, the assignment of a
  lien does not affect the procedures applicable to the release of a
  holder's lien under Section 348.408, Finance Code.
         SECTION 6.  This Act is intended to clarify that under
  existing law, an assignment of a recorded security interest may be
  recorded on the title, but does not have to be recorded on the title
  to retain the validity, perfection, and priority of the security
  interest securing the obligation assigned to the assignee.
         SECTION 7.  This Act takes effect immediately if it receives
  a vote of two-thirds of all the members elected to each house, as
  provided by Section 39, Article III, Texas Constitution. If this
  Act does not receive the vote necessary for immediate effect, this
  Act takes effect September 1, 2009.
 
 
 
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
         I hereby certify that S.B. No. 1592 passed the Senate on
  April 16, 2009, by the following vote: Yeas 31, Nays 0; and that
  the Senate concurred in House amendment on May 29, 2009, by the
  following vote: Yeas 31, Nays 0.
 
 
  ______________________________
  Secretary of the Senate    
 
         I hereby certify that S.B. No. 1592 passed the House, with
  amendment, on May 15, 2009, by the following vote: Yeas 144,
  Nays 0, one present not voting.
 
 
  ______________________________
  Chief Clerk of the House   
 
 
 
  Approved:
 
  ______________________________ 
              Date
 
 
  ______________________________ 
            Governor