uniform commercial code;
secured transactions
Purpose
Makes numerous technical and
clarifying changes to the Uniform Commercial Code Secured Transactions statutes
relating to the definitions, requirements for financing statements and
effective dates.
Background
Laws 1999, Chapter 203
rewrote and modified Article 9, the secured transactions chapter of the Uniform
Commercial Code (UCC). The revised
Article 9 was based on model legislation crafted by the National Conference of
Commissioners on Uniform State Laws (NCCUSL) and becomes effective July 1,
2001. Article 9 provides a statutory
framework that governs secured transactions --- transactions which involve the
granting of credit secured by personal property.
Since the enactment of the
revised Article 9 of the UCC, the NCCUSL has made further revisions to the
secured transaction chapter, including clarifications to the definitions,
requirements for financing statements and effective dates. H.B. 2025 incorporates the modifications to
the revised Article 9 of the UCC as recommended by the NCCUSL.
There is no anticipated
fiscal impact to the state general fund associated with this measure.
Provisions
1. Clarifies the exemption for a transaction by the state, another state or their political subdivision.
2. Clarifies that the inapplicability of certain inventory to a security interest in a collateral does not purport to override federal law.
3. Clarifies that a security interest does not prevail over a judicial lien unless the security interest is created before the judicial lien attaches.
4. Specifies that filing a termination statement relating to a financing statement that indicates that the debtor is a transmitting utility also causes the effectiveness of the financing statement to lapse.
5. Requires the filing office to make available certain financing statement information but not for dates within the previous five business days of the request. (Current law states three days.)
6. Allows a person, after July 1, 2001, to amend a pre-effective date financing statement only in accordance with the law of the jurisdiction governing perfection. Outlines the requirements that must be met to amend a pre-effective date financing statement after July 1, 2001.
7. Allows the effectiveness of a pre-effective date financing statement to be terminated in accordance with the law of the jurisdiction in which the financing statement is filed.
8. Modifies the definition of “chattel paper” to include a record of a security interest in specific goods and the licensing of associated software or in a lease of such goods and their software. Specifies that chattel paper does not include the records evidencing the right to payment from the use of a credit card or their associated information. Defines “monetary obligation.”
9. Clarifies the definitions of “governmental unit,” “original debtor” and “proceeds.”
10. Eliminates the definition of and references to “public finance transactions.”
11. Expands the parties’ power to choose applicable laws to include governing laws on fund transfers.
12. Makes numerous clarifying, technical and conforming changes.
13. Contains a retroactive effective date of July 1, 2001.
CED 1/22/01 DPA 9-0-0-1
3rd Read 1/29/01 57-0-3
Prepared by Senate Staff
March 12, 2001