The bill amends the Business & Commerce Code to address the filing of fraudulent financing statements in secured transactions. It prohibits individuals from knowingly presenting or causing to be presented a financing statement that is forged, contains false statements, or is groundless. Violators are liable to any injured party for damages of at least $10,000, court costs, and reasonable attorney's fees. Additionally, the bill allows property owners affected by fraudulent filings to seek specific relief, including the release of the fraudulent statement, and establishes a process for debtors to file affidavits contesting the validity of such statements.

New provisions include the requirement for the filing office to reject incomplete affidavits and to promptly file termination statements upon receipt of valid affidavits. The bill also outlines the procedures for notifying secured parties of record about the termination and allows them to challenge the validity of the financing statement in court. Furthermore, it introduces a fee for filing affidavits to cover administrative costs and specifies that the filing office and its employees are not liable for actions taken in compliance with the new regulations. The act is set to take effect on September 1, 2025.

Statutes affected:
Introduced: Commerce Code 9.5185, Commerce Code 9.510, Commerce Code 9.515 (Commerce Code 9)