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First Substitute H.B. 86

Senator Peter C. Knudson proposes to substitute the following bill:


             1     
CHECK ABUSE AMENDMENTS

             2     
1999 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Sponsor: John E. Swallow

             5      AN ACT RELATING TO COLLECTING ON DISHONORED INSTRUMENTS; AMENDING
             6      PROVISIONS RELATED TO DISHONORED CHECKS OR OTHER INSTRUMENTS;
             7      PROVIDING EXCEPTIONS; MAKING TECHNICAL CORRECTIONS; AND PROVIDING A
             8      COORDINATION CLAUSE ADDRESSING FINANCIAL INSTITUTION LIABILITY.
             9      This act affects sections of Utah Code Annotated 1953 as follows:
             10      AMENDS:
             11          7-15-1, as last amended by Chapter 245, Laws of Utah 1997
             12          7-15-2, as last amended by Chapter 245, Laws of Utah 1997
             13          7-15-3, as enacted by Chapter 52, Laws of Utah 1988
             14          35A-4-305, as last amended by Chapter 13, Laws of Utah 1998
             15      Be it enacted by the Legislature of the state of Utah:
             16          Section 1. Section 7-15-1 is amended to read:
             17           7-15-1. Definitions -- Civil liability of issuer -- Notice of action -- Collection costs.
             18          (1) As used in this chapter:
             19          (a) "Check" means a payment instrument on a depository institution including a:
             20          (i) check;
             21          (ii) draft;
             22          (iii) order; or
             23          (iv) other instrument.
             24          [(1) Any] (b) "Issuer" means a person who makes, draws, signs, or issues [any] a check[,
             25      draft, order, or other instrument upon any depository institution], whether as corporate agent or


             26      otherwise, for the purpose of:
             27          (i) obtaining from any person[, firm, partnership, or corporation] any money, merchandise,
             28      property, or other thing of value; or
             29          (ii) paying for any service, wages, salary, or rent.
             30          (c) "Mailed" means the day that a notice is properly deposited in the United States mail.
             31          (2) (a) An issuer of a check is liable to the holder of the check[, draft, order, or other
             32      instrument] if:
             33          [(a)] (i) the check[, draft, order, or other instrument]:
             34          [(i)] (A) is not honored upon presentment; and
             35          [(ii)] (B) is marked "refer to maker"; [or]
             36          [(b)] (ii) the account upon which the check[, draft, order, or other instrument has been] is
             37      made or drawn:
             38          [(i)] (A) does not exist;
             39          [(ii)] (B) has been closed; or
             40          [(iii)] (C) does not have sufficient funds or sufficient credit for payment in full of the
             41      check[, draft, or other instrument.]; or
             42          (iii) (A) the check is issued in partial or complete fulfillment of a valid and legally binding
             43      obligation; and
             44          (B) the issuer stops payment on the check with the intent to:
             45          (I) fraudulently defeat a possessory lien; or
             46          (II) otherwise defraud the holder of the check.
             47          (b) If an issuer of a check is liable under Subsection (2)(a), the issuer is liable for:
             48          (i) the check amount; and
             49          (ii) a service charge of $20.
             50          [(2)] (3) (a) The holder of [the] a check[, draft, order, or other instrument] that has been
             51      dishonored may:
             52          (i) give written or [verbal] oral notice of dishonor to the [person making, drawing, signing,
             53      or issuing] issuer of the check[, draft, order, or other instrument]; and
             54          (ii) [impose a] waive all or part of the service charge [that may not exceed $20] imposed
             55      under Subsection (2)(b).
             56          (b) Notwithstanding Subsection (2)[(a)](b), a holder of a check[, draft, order, or other


             57      instrument] that has been dishonored may not [charge] collect and the issuer is not liable for the
             58      service charge [permitted] imposed under Subsection (2)[(a)](b) if:
             59          (i) the holder redeposits the check[, draft, order, or other instrument]; and
             60          (ii) that check[, draft, order, or other instrument] is honored.
             61          (4) If the issuer does not pay the amount owed under Subsection (2)(b) within 15 calendar
             62      days from the day on which the notice required under Subsection (5) is mailed, the issuer is liable
             63      for:
             64          (a) the amount owed under Subsection (2)(b); and
             65          (b) collection costs not to exceed $20.
             66          [(3)] (5) (a) [Prior to] A holder shall provide written notice to an issuer before:
             67          (i) charging collection costs under Subsection (4) in addition to the amount owed under
             68      Subsection (2)(b); or
             69          (ii) filing an action based upon this section[, the holder of a dishonored check, draft, order,
             70      or other instrument].
             71          (b) The written notice required under Subsection (5)(a) shall [give the person making,
             72      drawing, signing, or issuing] notify the issuer of the dishonored check[, draft, order, or other
             73      instrument written notice of intent to] that:
             74          (i) if the amount owed under Subsection (2)(b) is not paid within 15 calendar days from
             75      the day on which the notice is mailed, the issuer is liable for:
             76          (A) the amount owed under Subsection (2)(b); and
             77          (B) collection costs under Subsection (4); and
             78          (ii) the holder may file civil action[, allowing] if the [person seven] issuer does not pay to
             79      the holder the amount owed under Subsection (4) within 30 calendar days from the [date] day on
             80      which the notice [was] is mailed [to tender payment in full, plus the service charge imposed for
             81      the dishonored check, draft, order, or other instrument].
             82          (6) If the issuer has not paid the holder the amounts owed under Subsection (4) within 30
             83      calendar days from the day on which the notice required by Subsection (5) is mailed, the holder
             84      may offer to not file civil action under this section if the issuer pays the holder:
             85          (a) an amount that:
             86          (i) is equal to the greater of:
             87          (A) $50; or


             88          (B) triple the check amount; and
             89          (ii) does not exceed the check amount plus $250; and
             90          (b) if the holder retains an attorney to recover on the dishonored check, reasonable
             91      attorney's fees not to exceed the amounts set forth in Utah Code of Judicial Administration, Rule
             92      4-505.01.
             93          [(4)] (7) (a) A civil action may not be filed under this section unless the issuer fails to pay
             94      the amounts owed under Subsection (4) within 30 calendar days from the day on which the notice
             95      required by Subsection (5) is mailed.
             96          (b) In a civil action, the [person making, drawing, signing, or issuing] issuer of the check[,
             97      draft, order, or other instrument] is liable to the holder for:
             98          [(a)] (i) the check amount [of the check, draft, order, or other instrument];
             99          [(b)] (ii) interest; [and]
             100          [(c)] (iii) all costs of collection, including all court costs and reasonable attorneys' fees;
             101      and
             102          (iv) damages:
             103          (A) equal to the greater of:
             104          (I) $100; or
             105          (II) triple the check amount; and
             106          (B) not to exceed the check amount plus $500.
             107          [(5) As used in this section, "costs of collection" includes reasonable compensation, as
             108      approved by the court, for time expended if the collection is pursued personally by the holder and
             109      not through an agent.]
             110          (c) If an issuer is held liable under Subsection (7)(b), notwithstanding Subsection (7)(b),
             111      a court may waive all or part of the amounts owed under Subsections (7)(b)(ii) through (iv) upon
             112      a finding of good cause.
             113          (8) This section may not be construed to prohibit the holder of the check from seeking
             114      relief under any other applicable statute or cause of action.
             115          (9) (a) Notwithstanding the other provisions of this section, a holder of a check is exempt
             116      from this section if:
             117          (i) the holder:
             118          (A) is a depository institution; or


             119          (B) a person that receives a payment on behalf of a depository institution;
             120          (ii) the check is a payment on a loan that originated at the depository institution that:
             121          (A) is the holder; or
             122          (B) on behalf of which the holder received the payment; and
             123          (iii) the loan contract states a specific service charge for dishonor.
             124          (b) A holder exempt under Subsection (9)(a) may contract with an issuer for the collection
             125      of fees or charges for the dishonor of a check.
             126          Section 2. Section 7-15-2 is amended to read:
             127           7-15-2. Notice -- Form.
             128          (1) (a) "Notice" means notice given to the [person making, drawing, or issuing the] issuer
             129      of a check[, draft, order, or other instrument] either [in person] orally or in writing.
             130          (b) [A] Written notice may be given by United States mail that is:
             131          (i) first class; and
             132          (ii) postage prepaid.
             133          (c) Notwithstanding Subsection (1)(b), written notice is conclusively presumed to have
             134      been given when the notice is:
             135          (i) properly deposited in the United States [mails,] mail;
             136          (ii) postage prepaid[, by];
             137          (iii) certified or registered mail[,];
             138          (iv) return receipt requested[,]; and
             139          (v) addressed to the signer at the signer's:
             140          (A) address as it appears on the check[, draft, order, or other instrument]; or [at the
             141      signer's]
             142          (B) last-known address.
             143          (2) Written notice [as applied in] under Subsection 7-15-1 [(3)] (5) shall take substantially
             144      the following form:
             145          Date: ____
             146          To: _____
             147          You are hereby notified that the check(s) described below issued by you has (have) been
             148      returned to us unpaid:
             149          [Instrument] Check date: ____


             150          [Instrument] Check number: ____
             151          Originating institution: ____
             152          Amount: ____
             153          Reason for dishonor (marked on [instrument] check): ____
             154          [This instrument,] In accordance with Section 7-15-1 , Utah Code Annotated, you are liable
             155      for this check together with a service charge of $20, which must be paid to the undersigned [within
             156      seven days from the date of this notice].
             157          If you do not pay the check amount and the $20 service charge within 15 calendar days
             158      from the day on which this notice was mailed, you are required to pay within 30 calendar days
             159      from the day on which this notice is mailed:
             160          (1) the check amount;
             161          (2) the $20 service charge; and
             162          (3) collection costs not to exceed $20.
             163          If you do not pay the check amount, the $20 service charge, and the collection costs within
             164      30 calendar days from the day on which this notice is mailed, in accordance with Section 7-15-1 ,
             165      Utah Code Annotated, [or] an appropriate civil legal action may be filed against you for:
             166          (1) the check amount [due and owing together with];
             167          (2) interest[,];
             168          (3) court costs[,];
             169          (4) attorneys' fees[, and];
             170          (5) actual costs of collection as provided by law; and
             171          (6) damages in an amount equal to the greater of $100 or triple the check amount, except
             172      that damages recovered under this Subsection (6) may not exceed the check amount by more than
             173      $500.
             174          In addition, the criminal code provides in Section 76-6-505 , Utah Code Annotated, that any
             175      person who issues or passes a check for the payment of money, for the purpose of obtaining from
             176      any person, firm, partnership, or corporation, any money, property, or other thing of value or
             177      paying for any services, wages, salary, labor, or rent, knowing it will not be paid by the drawee and
             178      payment is refused by the drawee, is guilty of issuing a bad check.
             179          The civil action referred to in this notice does not preclude the right to prosecute under the
             180      criminal code of the state of Utah.


             181          (Signed)     _____________________________________________________________
             182          Name of Holder:     _______________________________________________________
             183          Address of Holder:     _____________________________________________________
             184          Telephone Number:     ____________________________________________________
             185          (3) Notwithstanding the other provisions of this section, a holder exempt under Subsection
             186      7-15-1 (9) is exempt from this section.
             187          Section 3. Section 7-15-3 is amended to read:
             188           7-15-3. Liability of financial institution upon wrongful dishonor.
             189          If a person is liable to a holder under Section 7-15-1 or under a contract with a depository
             190      institution as provided in Subsection 7-15-1 (9), and the liability is proximately caused by a
             191      financial institution's wrongful dishonor under Section 70A-4-402 , any award against the financial
             192      institution under Section 70A-4-402 shall include[, but not be limited to,] all amounts awarded
             193      against the person to the holder under:
             194          (1) Section 7-15-1 [.]; or
             195          (2) the contract with the depository institution as provided in Subsection 7-15-1 (9).
             196          Section 4. Section 35A-4-305 is amended to read:
             197           35A-4-305. Collection of contributions -- Unpaid contributions to bear interest.
             198          (1) (a) Contributions unpaid on the date on which they are due and payable, as prescribed
             199      by the division, shall bear interest at the rate of 1% per month from and after that date until
             200      payment plus accrued interest is received by the division.
             201          (b) (i) Contribution reports not made and filed by the date on which they are due as
             202      prescribed by the division shall be subject to a penalty to be assessed and collected in the same
             203      manner as contributions due under this section equal to 5% of the contribution due if the failure
             204      to file on time was not more than 15 days, with an additional 5% for each additional 15 days or
             205      fraction thereof during which the failure continued, but not to exceed 25% in the aggregate and not
             206      less than $25 with respect to each reporting period.
             207          (ii) If a report is filed after such time and it is shown to the satisfaction of the division or
             208      its authorized representative that the failure to file was due to a reasonable cause and not to willful
             209      neglect, no addition shall be made to the contribution.
             210          (c) (i) If contributions are unpaid after ten days from the date of the mailing or personal
             211      delivery by the division or its authorized representative, of a written demand for payment, there


             212      shall attach to the contribution, to be assessed and collected in the same manner as contributions
             213      due under this section, a penalty equal to 5% of the contribution due.
             214          (ii) A penalty may not attach if within ten days after the mailing or personal delivery,
             215      arrangements for payment have been made with the division, or its authorized representative, and
             216      payment is made in accordance with those arrangements.
             217          (d) The division shall assess as a penalty a service charge, in addition to any other penalties
             218      that may apply, in an amount not to exceed the [maximum] service charge [allowed] imposed by
             219      [Subsection] Section 7-15-1 [(2)] for dishonored instruments if:
             220          (i) any amount due the division for contributions, interest, other penalties or benefit
             221      overpayments is paid by check, draft, order, or other instrument; and
             222          (ii) the instrument is dishonored or not paid by the institution against which it is drawn.
             223          (e) Except for benefit overpayments under Subsection 35A-4-405 (5), benefit overpayments,
             224      contributions, interest, penalties, and assessed costs, uncollected three years after they become due,
             225      may be charged as uncollectable and removed from the records of the division if:
             226          (i) no assets belonging to the liable person and subject to attachment can be found; and
             227          (ii) in the opinion of the division there is no likelihood of collection at a future date.
             228          (f) Interest and penalties collected in accordance with this section shall be paid into the
             229      Special Administrative Expense Fund.
             230          (g) Action required for the collection of sums due under this chapter is subject to the
             231      applicable limitations of actions under Title 78, Chapter 12, Limitation of Actions.
             232          (2) (a) If an employer fails to file a report when prescribed by the division for the purpose
             233      of determining the amount of the employer's contribution due under this chapter, or if the report
             234      when filed is incorrect or insufficient or is not satisfactory to the division, the division may
             235      determine the amount of wages paid for employment during the period or periods with respect to
             236      which the reports were or should have been made and the amount of contribution due from the
             237      employer on the basis of such information as it may be able to obtain.
             238          (b) The division shall give written notice of the determination to the employer.
             239          (c) The determination is considered correct unless:
             240          (i) the employer, within ten days after mailing or personal delivery of notice of the
             241      determination, applies to the division for a review of the determination as provided in Section
             242      35A-4-508 ; or


             243          (ii) unless the division or its authorized representative of its own motion reviews the
             244      determination.
             245          (d) The amount of contribution so determined shall be subject to penalties and interest as
             246      provided in Subsection (1).
             247          (3) (a) If, after due notice, any employer defaults in any payment of contributions, interest,
             248      or penalties on the contributions, or any claimant defaults in any repayment of benefit
             249      overpayments and penalties on the overpayments, the amount due shall be collectible by civil
             250      action in the name of the division, and the employer adjudged in default shall pay the costs of the
             251      action.
             252          (b) Civil actions brought under this section to collect contributions, interest or penalties
             253      from an employer, or benefit overpayments and penalties from a claimant shall be:
             254          (i) heard by the court at the earliest possible date; and
             255          (ii) entitled to preference upon the calendar of the court over all other civil actions except:
             256          (A) petitions for judicial review under this chapter; and
             257          (B) cases arising under the workers' compensation law of this state.
             258          (c) (i) To collect contributions, interest or penalties, or benefit overpayments and penalties
             259      due from employers or claimants located outside Utah the division may employ private collectors
             260      providing debt collection services outside Utah. Accounts may be placed with private collectors
             261      only after the employer or claimant has been given a final notice that the division intends to place
             262      the account with a private collector for further collection action. The notice shall advise the
             263      employer or claimant of the employer's or claimant's rights under this chapter and the rules
             264      applicable of the department.
             265          (ii) A private collector may receive as compensation up to, but no more than, 25% of the
             266      lesser of the amount collected or the amount due, plus the costs and fees of any civil action or
             267      post-judgment remedy instituted by the private collector with the approval of the division. The
             268      employer or claimant shall be liable to pay the compensation of the collector, costs, and fees in
             269      addition to the original amount due.
             270          (iii) A private collector is subject to the federal Fair Debt Collection Practices Act, 15
             271      U.S.C. Sec. 1692 et seq.
             272          (iv) A civil action may not be maintained by any private collector without specific prior
             273      written approval of the division. When division approval is given for civil action against an


             274      employer or claimant, the division may cooperate with the private collector to the extent necessary
             275      to effect the civil action.
             276          (d) (i) Notwithstanding Section 35A-4-312 , the division may disclose the contribution,
             277      interest, penalties or benefit overpayments and penalties, costs due, the name of the employer or
             278      claimant, and the employer's or claimant's address and telephone number when any collection
             279      matter is referred to a private collector under Subsection (3)(c).
             280          (ii) A private collector is subject to the confidentiality requirements and penalty provisions
             281      provided in Section 35A-4-312 and Subsection 35A-4-104 (4), except to the extent disclosure is
             282      necessary in any civil action to enforce collection of the amounts due.
             283          (e) An action taken by the division under this section may not be construed to be an
             284      election to forego other collection procedures by the division.
             285          (4) (a) In the event of any distribution of an employer's assets under an order of any court
             286      under the laws of Utah, including any receivership, assignment for benefits of creditors,
             287      adjudicated insolvency, composition, or similar proceedings, contributions then or thereafter due
             288      shall be paid in full prior to all other claims except taxes and claims for wages of not more than
             289      $400 to each claimant, earned within five months of the commencement of the proceeding.
             290          (b) If an employer commences a proceeding in the Federal Bankruptcy Court under any
             291      chapter of the Bankruptcy Reform Act of 1978, 11 U.S.C. 101 et seq., as amended, contributions,
             292      interest, and penalties then or thereafter due shall be entitled to the priority provided for taxes,
             293      interest, and penalties in the Bankruptcy Reform Act of 1978.
             294          (5) (a) In addition and as an alternative to any other remedy provided by this chapter and
             295      provided that no appeal or other proceeding for review provided by this chapter is then pending
             296      and the time for taking it has expired, the division may issue a warrant in duplicate, under its
             297      official seal, directed to the sheriff of any county of the state, commanding the sheriff to levy upon
             298      and sell the real and personal property of a delinquent employer or claimant found within the
             299      sheriff's county for the payment of the contributions due thereon, with the added penalties, interest,
             300      or benefit overpayment and penalties, and costs, and to return the warrant to the division and pay
             301      into the fund the money collected by virtue of the warrant by a time to be therein specified, not
             302      more than 60 days from the date of the warrant.
             303          (b) Immediately upon receipt of the warrant in duplicate, the sheriff shall file the duplicate
             304      with the clerk of the district court in the sheriff's county. The clerk shall enter in the judgment


             305      docket, in the column for judgment debtors, the name of the delinquent employer or claimant
             306      mentioned in the warrant, and in appropriate columns the amount of the contribution, penalties,
             307      interest, or benefit overpayment and penalties, and costs, for which the warrant is issued and the
             308      date when the duplicate is filed.
             309          (c) The amount of the warrant so docketed shall:
             310          (i) have the force and effect of an execution against all personal property of the delinquent
             311      employer; and
             312          (ii) become a lien upon the real property of the delinquent employer or claimant in the
             313      same manner and to the same extent as a judgment duly rendered by any district court and
             314      docketed in the office of the clerk.
             315          (d) After docketing, the sheriff shall:
             316          (i) proceed in the same manner as is prescribed by law with respect to execution issued
             317      against property upon judgments of a court of record; and
             318          (ii) be entitled to the same fees for the sheriff's services in executing the warrant, to be
             319      collected in the same manner.
             320          (6) (a) Contributions imposed by this chapter are a lien upon the property of any employer
             321      liable for the contribution required to be collected under this section who shall sell out the
             322      employer's business or stock of goods or shall quit business, if the employer fails to make a final
             323      report and payment on the date subsequent to the date of selling or quitting business on which they
             324      are due and payable as prescribed by rule.
             325          (b) An employer's successor, successors, or assigns, if any, shall be required to withhold
             326      sufficient of the purchase money to cover the amount of the contributions and interest or penalties
             327      due and payable until such time as the former owner shall produce a receipt from the division
             328      showing that they have been paid or a certificate stating that no amount is due. If the purchaser
             329      of a business or stock of goods fails to withhold sufficient purchase money, the purchaser shall be
             330      personally liable for the payment of the amount of the contributions required to be paid by the
             331      former owner, interest and penalties accrued and unpaid by the former owner, owners, or assignors.
             332          (7) (a) If any employer is delinquent in the payment of any contribution, the division may
             333      give notice of the amount of the delinquency by registered mail to all persons having in their
             334      possession or under their control, any credits or other personal property belonging to the employer,
             335      or owing any debts to the employer at the time of the receipt by them of the notice.


             336          (b) Any persons notified under Subsection (7)(a) shall neither transfer nor make any other
             337      disposition of the credits, other personal property, or debts until:
             338          (i) the division has consented to a transfer or disposition; or
             339          (ii) 20 days after the receipt of the notice.
             340          (c) All persons notified under Subsection (7)(a) shall within five days after receipt of the
             341      notice, advise the division of credits, other personal property, or other debts in their possession,
             342      under their control or owing by them, as the case may be.
             343          (8) (a) Each employer shall furnish the division necessary information for the proper
             344      administration of this chapter and shall include wage information for each employee, for each
             345      calendar quarter beginning October 1, 1984. The information shall be furnished at a time, in the
             346      form, and to those individuals as the department may by rule require.
             347          (b) Each employer shall furnish each individual worker who is separated that information
             348      as the department may by rule require, and shall furnish within 48 hours of the receipt of a request
             349      from the division a report of the earnings of any individual during the individual's base-period.
             350      The report shall be on a form prescribed by the division and contain all information prescribed by
             351      the division.
             352          (c) For each failure by an employer to conform to this Subsection (8) the division shall,
             353      unless good cause is shown to the satisfaction of the division for the failure, assess a $50 penalty
             354      to be collected in the same manner as contributions due under this chapter.
             355          (9) If any person liable to pay any contribution or benefit overpayment imposed by this
             356      chapter neglects or refuses to pay the same after demand, the amount, including any interest,
             357      additional amount, addition to contributions, or assessable penalty, together with any additional
             358      accruable costs, shall be a lien in favor of the division upon all property and rights to property,
             359      whether real or personal belonging to the person.
             360          (10) (a) The lien imposed by Subsection (9) arises at the time the assessment, as defined
             361      in the department rules, is made and continues until the liability for the amount so assessed, or a
             362      judgment against the taxpayer arising out of the liability, is satisfied.
             363          (b) The lien imposed by Subsection (9) is not valid as against any purchaser, holder of a
             364      security interest, mechanics lien holder, or judgment lien creditor until a warrant which meets the
             365      requirements of Subsection (5) has been filed with the clerk of the district court. For the purposes
             366      of Subsection (10)(b):


             367          (i) "Judgment lien creditor" means a person who obtains a valid judgment of a court of
             368      record for recovery of specific property or a sum certain of money, and who in the case of a
             369      recovery of money, has a perfected lien under the judgment on the property involved. A judgment
             370      lien does not include inchoate liens such as attachment or garnishment liens until they ripen into
             371      a judgment. A judgment lien does not include the determination or assessment of a quasi-judicial
             372      authority, such as a state or federal taxing authority.
             373          (ii) "Mechanics lien holder" means any person who has a lien on real property, or on the
             374      proceeds of a contract relating to real property, for services, labor, or materials furnished in
             375      connection with the construction or improvement of the property. A person has a lien on the
             376      earliest date the lien becomes valid against subsequent purchasers without actual notice, but not
             377      before the person begins to furnish the services, labor, or materials.
             378          (iii) "Person" means:
             379          (A) an individual;
             380          (B) a trust;
             381          (C) an estate;
             382          (D) a partnership;
             383          (E) an association;
             384          (F) a company;
             385          (G) a limited liability company;
             386          (H) a limited liability partnership; or
             387          (I) a corporation.
             388          (iv) "Purchaser" means a person who, for adequate and full consideration in money or
             389      money's worth, acquires an interest, other than a lien or security interest, in property which is valid
             390      under state law against subsequent purchasers without actual notice.
             391          (v) "Security interest" means any interest in property acquired by contract for the purpose
             392      of securing payment or performance of an obligation or indemnifying against loss or liability. A
             393      security interest exists at any time:
             394          (A) the property is in existence and the interest has become protected under the law against
             395      a subsequent judgment lien arising out of an unsecured obligation; and
             396          (B) to the extent that, at that time, the holder has parted with money or money's worth.
             397          Section 5. Coordination clause.


             398          If this bill and S.B. 113, Financial Services Amendments, both pass, it is the intent of the
             399      Legislature that the amendments to Sections 7-15-1 and 7-15-2 in this bill supersede the
             400      amendments to these sections in S.B. 113 including the amendments referred to in the coordination
             401      clause.


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