CHAPTER 261. UTILITY SECURITY INSTRUMENTS

BUSINESS AND COMMERCE CODE

TITLE 8. SECURITY INSTRUMENTS

CHAPTER 261. UTILITY SECURITY INSTRUMENTS

Sec. 261.001. DEFINITIONS. (a) In this chapter:

(1) "Utility" means a person engaged in this state in:

(A) generating, transmitting, or distributing and selling

electric power;

(B) transporting, distributing, and selling, through a local

distribution system, natural or other gas for domestic,

commercial, industrial, or other use;

(C) owning or operating a pipeline to transmit or sell natural

or other gas, natural gas liquids, crude oil, or petroleum

products to another pipeline company or to a refinery, local

distribution system, municipality, or industrial consumer;

(D) providing telephone or telegraph service to others;

(E) producing, transmitting, or distributing and selling steam

or water;

(F) operating a railroad; or

(G) providing sewer service to others.

(2) "Utility security instrument" means:

(A) a mortgage, deed of trust, security agreement, or other

instrument executed to secure payment of a bond, note, or other

obligation of a utility; or

(B) an instrument that supplements or amends an instrument

described by Paragraph (A), including a signed copy of the

instrument.

(b) The definitions in Chapters 1 and 9 apply to this chapter.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 2.01, eff. April 1, 2009.

Sec. 261.002. ACT CONSTITUTING FILING. For purposes of this

chapter, a utility security instrument is filed when it is

deposited for filing with the secretary of state.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 2.01, eff. April 1, 2009.

Sec. 261.003. APPLICABILITY OF CHAPTER. A utility is subject to

the requirements and entitled to the benefits of this chapter:

(1) only if the utility files with the secretary of state a

utility security instrument that states conspicuously on its

title page: "This Instrument Grants A Security Interest By A

Utility"; and

(2) only with respect to collateral covered by a utility

security instrument filed by the utility in accordance with

Subdivision (1).

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 2.01, eff. April 1, 2009.

Sec. 261.004. FILING UTILITY SECURITY INSTRUMENT WITH SECRETARY

OF STATE: PERFECTION AND NOTICE. (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;

(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.

(b) For perfection or notice under Subsection (a) to be

effective as to a particular item of property, the filed utility

security instrument must:

(1) identify the property by type, character, or description if

the property is presently owned personal property, including a

fixture, and for that purpose any description of personal

property or real property is sufficient, regardless of whether

specific, if it reasonably identifies what is described;

(2) provide a description of the property if the property is

presently owned real property; or

(3) if the property is to be acquired after the instrument is

executed, state conspicuously on its title page: "This

Instrument Contains After-Acquired Property Provisions."

(c) A filing under this section satisfies any requirement of:

(1) a filing of the utility security instrument or a financing

statement in the office of a county clerk if that filing would

otherwise be necessary to perfect a security interest; and

(2) a recording of the utility security instrument in the office

of a county clerk if that recording would otherwise make the

instrument effective as to all creditors and subsequent

purchasers for valuable consideration without notice.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 2.01, eff. April 1, 2009.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

814, Sec. 1, eff. June 19, 2009.

Sec. 261.005. DURATION OF PERFECTION AND NOTICE. The perfection

and notice provided by the filing of a utility security

instrument under Section 261.004 take effect on the date of

filing and remain in effect without any renewal, refiling, or

continuation statement until the interest granted as security is

released by the filing of a termination statement, or a release

of all or a part of the property, signed by the secured party.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 2.01, eff. April 1, 2009.

Sec. 261.006. PRIORITIES AND REMEDIES APPLICABLE TO CERTAIN

PERFECTED SECURITY INTERESTS. The provisions of Chapter 9

relating to priorities and remedies apply to security interests

in personal property, including fixtures, perfected under Section

261.004.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 2.01, eff. April 1, 2009.

Sec. 261.007. NOTICE OF NAME CHANGE, MERGER, OR CONSOLIDATION.

(a) A utility that changes its name or merges or consolidates

after filing a utility security instrument under Section 261.004

shall promptly file with the secretary of state a written

statement of the name change, merger, or consolidation. The

written statement must:

(1) be signed by the secured party and the utility;

(2) identify the appropriate utility security instrument by file

number; and

(3) state the name of the utility after the name change, merger,

or consolidation.

(b) Unless a written statement is filed under Subsection (a) not

later than four months after the effective date of the name

change, merger, or consolidations, the filing of a utility

security instrument before the name change, merger, or

consolidation does not constitute perfection or serve as notice

under Section 261.004 of a security interest in property acquired

by the utility more than four months after the name change,

merger, or consolidation.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 2.01, eff. April 1, 2009.

Sec. 261.008. ENDORSEMENT AND FILING BY SECRETARY OF STATE;

FEES. (a) The secretary of state shall endorse on a utility

security instrument and any statement of name change, merger, or

consolidation filed with the secretary of state:

(1) the day and hour of receipt; and

(2) the assigned file number.

(b) In the absence of other evidence, an endorsement under

Subsection (a) is conclusive proof of the time and fact of

filing.

(c) The secretary of state shall file in adequate filing devices

and retain in the secretary of state's office all utility

security instruments and statements of name change, merger, or

consolidation filed with the secretary of state.

(d) The secretary of state shall charge a $25 fee to:

(1) file and index:

(A) a utility security instrument;

(B) an instrument that supplements or amends a utility security

instrument; or

(C) a statement of name change, merger, or consolidation; and

(2) stamp a copy of a document described by Subdivision (1),

provided by the secured party or the utility, to indicate the

date and place of filing.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 2.01, eff. April 1, 2009.

Sec. 261.009. CERTIFICATE OF FILING; FEE. (a) On request of

any person, the secretary of state shall issue a certificate

that:

(1) indicates whether on the date and hour stated in the

request, there is on file any presently effective utility

security instrument naming a particular utility; and

(2) if there is, states:

(A) the date and hour the utility security instrument was filed;

and

(B) the names and addresses of each secured party.

(b) The amount of the fee for a certificate under this section

is the same as the amount of the fee provided by Section

9.525(d).

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 2.01, eff. April 1, 2009.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

547, Sec. 4, eff. September 1, 2009.

Sec. 261.010. COPY OF FILED UTILITY SECURITY INSTRUMENT; FEE.

(a) On request and payment of the fee prescribed by Subsection

(b), the secretary of state shall provide a person with a copy of

any filed utility security instrument.

(b) The fee for a copy under this section is in the amount

provided by Section 405.031, Government Code.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 2.01, eff. April 1, 2009.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

547, Sec. 5, eff. September 1, 2009.

Sec. 261.011. NOTICE OF UTILITY SECURITY INSTRUMENT AFFECTING

REAL PROPERTY. (a) If a utility security instrument filed with

the secretary of state under Section 261.004 grants a security

interest in real property owned by the utility, a notice of

utility security instrument affecting real property must be

recorded in the office of the county clerk in the county in which

the real property is located. The notice must state:

(1) the name of the utility that executed the utility security

instrument;

(2) that a utility security instrument affecting real property

in the county has been executed by the utility; and

(3) that the utility security instrument was filed, and other

security instruments may be on file, with the secretary of state.

(b) A notice recorded under Subsection (a) is sufficient to

provide notice of any other security instrument filed with the

secretary of state that:

(1) was executed by the utility; and

(2) grants a security interest in any real property located in

the county in which the notice was recorded or in any fixture on

the property.

(c) The county clerk shall record and index a notice described

by Subsection (a) in the same records and indices as the clerk

records and indexes mortgages on real property.

(d) The county clerk shall maintain a separate index of utility

security instruments and continuation statements recorded under

prior law.

Added by Acts 2007, 80th Leg., R.S., Ch.

885, Sec. 2.01, eff. April 1, 2009.

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.

Added by Acts 2009, 81st Leg., R.S., Ch.

814, Sec. 2, eff. June 19, 2009.