S.B. No. 2221         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 when filing an   affidavit with the secretary of state under this subsection. The   affiant shall file the affidavit together with proof of notice   required by Subsection (f).  The filing office shall reject an   affidavit filed under this subsection if:                (1)  the affidavit is incomplete; or                (2)  the affiant did not file the affidavit together   with proof of notice required by Subsection (f).          (f)  A person who files an affidavit under Subsection (e)   shall send each secured party of record a written notice of the   person's intention to file the affidavit, together with a copy of   the financing statement.  The notice must contain the following   language at the beginning of the notice in at least 14-point   boldfaced type: "An affidavit will be filed under penalty of   perjury that the financing statement enclosed with this notice was   impermissible under Texas law.  Once the affidavit is accepted, a   termination statement will be filed with respect to the financing   statement.  The termination statement will be effective as of the   30th day after the date it is filed. If you were a regulated lending   institution, as defined by Section 9.5185(r), Business & Commerce   Code, on the date the financing statement was filed, you must notify   the filing office in which the financing statement was filed that   you qualify as a regulated lending institution not later than the   90th day after the date the termination statement is filed.  If you   believe that the financing statement was permitted to be filed   under Texas law, you must bring an action against the affiant not   later than the 90th day after the date on which the termination   statement is filed.  The action must be brought in the district   court in the county where the filing office in which the financing   statement was filed is located."  The notice must be sent to the   mailing address provided for each secured party of record in the   financing statement to which the affidavit relates by certified   mail, return receipt requested, not earlier than the 30th day   before and not later than the 5th day before the date the affidavit   is filed.          (g)  On acceptance of an affidavit properly 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 as of the 30th day after the date the   termination statement is filed.          (h)  A secured party of record identified in a financing   statement for which a termination statement has been filed under   Subsection (g) 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 financing statement. An action under this subsection shall   have priority on the court's calendar and shall proceed by   expedited hearing. The action must 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 brought not later than the 90th day after the date on which   the termination statement is filed.          (i)  In an action brought under Subsection (h), a court may   order, in appropriate circumstances, preliminary relief, including   an order suspending the effectiveness of 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:                (1)  the effectiveness of the termination statement is   immediately suspended as of the date the order is filed with the   filing office; and                (2)  the filing office shall promptly file an amendment   to the financing statement indicating that an order has suspended   the effectiveness of the termination statement.          (j)  If an order issued under Subsection (i) to suspend the   effectiveness of the termination statement 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 as of the date the order or judgment is filed with   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:                (1)  the termination statement shall immediately   become ineffective as of the date the order or judgment is filed   with the filing office; and                (2)  the filing office shall promptly file an amendment   to the financing statement indicating that the financing statement   has been reinstated.          (l)  A financing statement reinstated under Subsection (k)   or (q) 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.          (m)  If the period of effectiveness of a financing statement   reinstated under Subsection (k) or (q) would have lapsed during the   period of termination, a 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).          (n)  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.          (o)  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.          (p)  An affidavit filed under Subsection (e) is not effective   with respect to a financing statement filed by or on behalf of a   regulated lending institution.          (q)  A regulated lending institution must notify the filing   office that it qualifies as a regulated lending institution under   Subsection (p) not later than the 90th day after the filing of the   termination statement under Subsection (g). The secretary of state   may prescribe a form for use when notifying the secretary of state   under this subsection.  On timely receipt of a notice under this   subsection, the termination statement shall immediately become   ineffective, and the filing office shall promptly file an amendment   to the financing statement indicating that the financing statement   has been reinstated.          (r)  For purposes of this section, "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 including a bank, savings bank, savings   association, trust company, building and loan association, savings   and loan association, credit union, consumer finance company,   industrial bank, industrial loan company, insurance company,   investment company, investment fund, installment seller, mortgage   company, sales finance company, or leasing company that:                (1)  is subject to licensure, regulatory oversight, or   examination by a state or federal agency; and                (2)  is operating as a regulated lending institution as   of the date on which a financing statement is filed.          SECTION 2.  Section 9.510(c), Business & Commerce Code, is   amended to read as follows:          (c)  Except as otherwise provided by Section 9.5185(m), 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(m), 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.               ______________________________ ______________________________      President of the Senate Speaker of the House                 I hereby certify that S.B. No. 2221 passed the Senate on   May 8, 2025, by the following vote: Yeas 31, Nays 0; and that the   Senate concurred in House amendment on May 30, 2025, by the   following vote: Yeas 31, Nays 0.       ______________________________   Secretary of the Senate                I hereby certify that S.B. No. 2221 passed the House, with   amendment, on May 28, 2025, by the following vote: Yeas 129,   Nays 5, one present not voting.       ______________________________   Chief Clerk of the House            Approved:     ______________________________                Date       ______________________________              Governor