SB2221

The existing ban covers intentionally or knowingly presenting a financing statement known to be forged, materially false or groundless. Liability now runs to a person injured by the violation, not only the property owner, for the greater of $10,000 or actual damages caused by the violation, plus court costs and reasonable attorney fees; the former minimum was $5,000. The existing property-owner suit for relief and possible criminal prosecution remain. This bill does not make every disputed filing knowingly fraudulent. Final law, 9.5185(a)–(d); Prior civil remedies; Existing criminal provision.

A person identified as a debtor who believes a financing statement was not authorized under the listed filing provisions or was knowingly fraudulent may file an affidavit under penalty of perjury in the office where the statement was filed. The office must reject an incomplete affidavit or one lacking proof of notice. The debtor must send each secured party of record the prescribed notice and a copy of the statement by certified mail, return receipt requested, to the address on the financing statement, between 30 and 5 days before filing the affidavit. The notice begins with the statutory warning in at least 14-point bold type. This procedure is different from the existing information statement, which by itself does not change a financing statement’s effectiveness. Final law, 9.5185(e)–(f); Filing authorization; Earlier transition filing authority; 2013 transition filing authority; Existing information-statement limit.

After accepting a properly filed affidavit, the office promptly files a termination statement. It generally becomes effective on the 30th day after that statement is filed, subject to the statute’s exceptions and court orders. A secured party can sue the affiant in the district court in the filing office’s county within 90 days after the termination statement is filed; that case receives priority and an expedited hearing. A court can suspend effectiveness, and a judgment upholding the original filing can lead to reinstatement once the required certified order is filed with the office. These clocks run from the termination filing, not from the original financing statement or the affidavit’s mailing. Final law, 9.5185(g)–(k).

The affidavit is ineffective against a financing statement filed by or for a regulated lending institution. The institution must notify the office of its qualifying status within 90 days after the termination filing; timely notice makes the termination ineffective and triggers reinstatement. The definition requires the specified credit business to be subject to state or federal licensing, oversight or examination and to have been operating as a regulated lending institution when the financing statement was filed. Merely calling oneself a lender is not enough. This exception does not repeal the separate civil remedies against knowingly fraudulent filings. Final law, 9.5185(p)–(r).

Reinstatement generally relates back to the original filing date, except against a purchaser who gave value in reliance on the termination. If the financing statement would have expired while terminated, the secured party gets 30 days after reinstatement to file a continuation with the specified effect. The office must charge an affidavit fee sufficient to recover administration costs; the act sets no dollar fee. It protects the office and employees from liability for lawful performance of these duties. Final law, 9.5185(l)–(o) and sections 2–3; Prior continuation timing.

Changes during passage: The Senate substitute moved notice to the affiant before filing, required proof of notice, replaced the proposed filing-office bad-faith screening with the final completeness/notice checks, reworked termination and court-order timing, and added the regulated-lender notification/reinstatement route. It changed the proposed suit deadline from 60 days after effectiveness to 90 days after filing. The sole indexed House amendment, adopted May 27, corrected the notice’s lender deadline to run from the termination statement rather than the financing statement; the Senate concurred May 30. The Senate-passed and House committee texts otherwise match. Introduced proposal; Senate substitute; Senate-passed; House committee; Lambert amendment; Adopted disposition; Version index; Final law.

Compare the published text versions in the official text index. A change is not attributed to a specific amendment here without a verified record.

People named in improper filings gain an administrative challenge route, while injured people gain a higher civil-damages floor. Legitimate secured parties must watch notices and deadlines; challengers face mailing, filing-fee and possible litigation costs. The safeguards matter because terminating a financing statement can affect collateral rights, but the act does not simply forgive underlying debt or establish that every affidavit is true. Final law.

The May 29 final-stage fiscal note estimates $1,613,383 in state costs for 2026 and $381,443 annually for 2027–30, offset by equal fee revenue, for zero net general-revenue impact. It assumes four additional staff, at least 600 affidavits annually and $1.2 million in technology changes. Earlier estimates were a $2,607,626 cost for 2026–27 with six staff, then $1,994,826 with four staff before counting offsetting fees. No significant local impact is anticipated; the bill appropriates no money. The note retains wording about bad-faith screening that is not in the final affidavit-rejection criteria; the final law controls. These are estimates, not actual fee collections or staffing results. Final-stage fiscal note; House-passed fiscal note; Introduced fiscal note; Substitute fiscal note; Final law.