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.