Texas Senate Bill SB2033

Texas 2019 - 86th Regular

Caption

Relating to the development of a central filing system by the secretary of state for the filing of financing statements for certain security interests; authorizing fees; providing civil penalties.

Impact

The enactment of SB2033 would significantly modify existing regulations within the Business & Commerce Code pertaining to agricultural liens. Specifically, it mandates that any effective financing statement for agricultural liens must be filed with the Secretary of State, thereby centralizing the documentation process and enhancing transparency. This change is expected to benefit lenders by providing them with a clear framework for asserting their security interests while offering farmers a greater understanding of their financial obligations and associated risks.

Summary

SB2033 proposes the creation of a central filing system, overseen by the Secretary of State, for the filing of financing statements related to security interests in certain agricultural liens and farm products. This bill aims to streamline the process by which secured parties can perfect their security interests, making it more efficient for agricultural producers to document their financial agreements with lenders. The proposal includes provisions for the systematic management of records pertaining to these interests and sets rules for notification requirements among buyers and sellers involved in farm product transactions.

Contention

Some potential points of contention surrounding SB2033 may arise from the implementation costs of the central filing system, as well as concerns over privacy and data security regarding the information that will be collected and stored by the Secretary of State. Additionally, while the bill aims to protect buyers and commission merchants from liability if they follow the established protocols, stakeholders may worry about the consequences of minor errors in filings, which could lead to significant legal and financial repercussions under the proposed civil penalty provisions. Balancing the interests of agricultural producers and financial institutions will be crucial to the successful implementation of SB2033.