Download Zipped Introduced WordPerfect SB0041S01.ZIP
[Status][Bill Documents][Fiscal Note][Bills Directory]

First Substitute S.B. 41

Senator Lyle W. Hillyard proposes the following substitute bill:


             1     
UNIFORM COMMERCIAL CODE AMENDMENTS

             2     
2013 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Lyle W. Hillyard

             5     
House Sponsor: Derek E. Brown

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill modifies the Uniform Commercial Code to address secured transactions and
             10      repeal outdated language.
             11      Highlighted Provisions:
             12          This bill:
             13          .    modifies definition provisions;
             14          .    addresses control of electronic chattel paper;
             15          .    modifies provision addressing location of debtor;
             16          .    addresses certificate of title;
             17          .    provides for rules that apply when there is a change in governing law;
             18          .    addresses interests that take priority over or take free of security interest or
             19      agricultural lien;
             20          .    modifies provisions related to priority of security interests created by new debtor;
             21          .    addresses the application of statute to the sale of a payment intangible or promissory
             22      note;
             23          .    addresses contents of financing statements;
             24          .    modifies provisions related to name of debtor and secured party;
             25          .    addresses effect of certain events on effectiveness of financing statement;


             26          .    clarifies filings by a transmitting utility;
             27          .    modifies provisions related to what constitutes a filing and the effectiveness of a
             28      filing;
             29          .    addresses claims concerning inaccurate or wrongfully filed records;
             30          .    updates the reference to revisions incorporated into chapter;
             31          .    addresses collection and enforcement by secured party;
             32          .    enacts transition provisions for 2010 amendments;
             33          .    repeals Chapter 11, Corrected Uniform Commercial Code - Effective Date and
             34      Transition Provisions; and
             35          .    makes technical and conforming changes.
             36      Money Appropriated in this Bill:
             37          None
             38      Other Special Clauses:
             39          This bill takes effect on July 1, 2013.
             40          This bill provides revisor instructions.
             41      Utah Code Sections Affected:
             42      AMENDS:
             43          70A-2a-103, as last amended by Laws of Utah 2007, Chapter 272
             44          70A-9a-102, as last amended by Laws of Utah 2006, Chapter 42
             45          70A-9a-105, as enacted by Laws of Utah 2000, Chapter 252
             46          70A-9a-307, as enacted by Laws of Utah 2000, Chapter 252
             47          70A-9a-311, as enacted by Laws of Utah 2000, Chapter 252
             48          70A-9a-316, as enacted by Laws of Utah 2000, Chapter 252
             49          70A-9a-317, as last amended by Laws of Utah 2006, Chapter 42
             50          70A-9a-326, as enacted by Laws of Utah 2000, Chapter 252
             51          70A-9a-406, as enacted by Laws of Utah 2000, Chapter 252
             52          70A-9a-408, as enacted by Laws of Utah 2000, Chapter 252
             53          70A-9a-502, as enacted by Laws of Utah 2000, Chapter 252
             54          70A-9a-503, as enacted by Laws of Utah 2000, Chapter 252
             55          70A-9a-507, as enacted by Laws of Utah 2000, Chapter 252
             56          70A-9a-515, as enacted by Laws of Utah 2000, Chapter 252


             57          70A-9a-516, as enacted by Laws of Utah 2000, Chapter 252
             58          70A-9a-518, as enacted by Laws of Utah 2000, Chapter 252
             59          70A-9a-520, as last amended by Laws of Utah 2002, Chapter 291
             60          70A-9a-521, as enacted by Laws of Utah 2000, Chapter 252
             61          70A-9a-607, as enacted by Laws of Utah 2000, Chapter 252
             62      ENACTS:
             63          70A-9a-801, Utah Code Annotated 1953
             64          70A-9a-802, Utah Code Annotated 1953
             65          70A-9a-803, Utah Code Annotated 1953
             66          70A-9a-804, Utah Code Annotated 1953
             67          70A-9a-805, Utah Code Annotated 1953
             68          70A-9a-806, Utah Code Annotated 1953
             69          70A-9a-807, Utah Code Annotated 1953
             70          70A-9a-808, Utah Code Annotated 1953
             71      REPEALS:
             72          70A-11-101, as enacted by Laws of Utah 1977, Chapter 272
             73          70A-11-102, as enacted by Laws of Utah 1977, Chapter 272
             74          70A-11-103, as enacted by Laws of Utah 1977, Chapter 272
             75          70A-11-104, as enacted by Laws of Utah 1977, Chapter 272
             76          70A-11-105, as last amended by Laws of Utah 2003, Chapter 131
             77          70A-11-106, as last amended by Laws of Utah 2003, Chapter 131
             78          70A-11-107, as enacted by Laws of Utah 1977, Chapter 272
             79          70A-11-108, as enacted by Laws of Utah 1977, Chapter 272
             80     
             81      Be it enacted by the Legislature of the state of Utah:
             82          Section 1. Section 70A-2a-103 is amended to read:
             83           70A-2a-103. Definitions -- Index of definitions.
             84          (1) In this chapter, unless the context otherwise requires:
             85          (a) "Buyer in ordinary course of business" means a person, who in good faith and
             86      without knowledge that the sale to him is in violation of the ownership rights or security
             87      interest or leasehold interest of a third party in the goods, buys in ordinary course from a person


             88      in the business of selling goods of that kind, but does not include a pawnbroker. "Buying" may
             89      be for cash or by exchange of other property or on secured or unsecured credit and includes
             90      acquiring goods or documents of title under a preexisting contract for sale, but does not include
             91      a transfer in bulk, or as security for, or in total or partial satisfaction of a money debt.
             92          (b) "Cancellation" occurs when either party puts an end to the lease contract for default
             93      by the other party.
             94          (c) "Commercial unit" means a unit of goods which by commercial usage is a single
             95      whole for purposes of lease, and the division of which materially impairs its character or value
             96      on the market or in use. A commercial unit may be a single article, such as a machine, or a set
             97      of articles, such as a suite of furniture or a line of machinery, or a quantity, such as a gross or
             98      carload, or any other unit treated in use or in the relevant market as a single whole.
             99          (d) "Conforming goods or performance under a lease contract" means goods or
             100      performance that are in accordance with the obligations under the lease contract.
             101          (e) "Consumer lease" means a lease that a lessor, regularly engaged in the business of
             102      leasing or selling, makes to a lessee, who is an individual and who takes under the lease
             103      primarily for a personal, family, or household purpose.
             104          (f) "Fault" means wrongful act, omission, breach, or default.
             105          (g) "Finance lease" means a lease in which:
             106          (i) the lessor does not select, manufacture, or supply the goods;
             107          (ii) the lessor acquires the goods or the right to possession and use of the goods in
             108      connection with the lease; and
             109          (iii) one of the following occurs:
             110          (A) the lessee receives a copy of the contract by which the lessor acquired the goods or
             111      the right to possession and use of the goods before signing the lease contract;
             112          (B) the lessee's approval of the contract by which the lessor acquired the goods or the
             113      right to possession and use of the goods is a condition to effectiveness of the lease contract;
             114          (C) the lessee, before signing the lease contract, receives an accurate and complete
             115      statement designating the promises and warranties, and any disclaimers of warranties,
             116      limitations, or modifications of remedies, or liquidated damages, including those of a third
             117      party, such as the manufacturer of the goods, provided to the lessor by the person supplying the
             118      goods in connection with or as part of the contract by which the lessor acquired the goods or


             119      the right to possession and use of the goods; or
             120          (D) if the lease is not a consumer lease, the lessor, before the lessee signs the lease
             121      contract, informs the lessee in writing:
             122          (I) of the identity of the person supplying the goods to the lessor, unless the lessee has
             123      selected that person and directed the lessor to acquire the goods or the right to possession and
             124      use of the goods from that person;
             125          (II) that the lessee is entitled under this chapter to the promises and warranties,
             126      including those of any third party, provided to the lessor by the person supplying the goods in
             127      connection with or as part of the contract by which the lessor acquired the goods or the right to
             128      possession and use of the goods; and
             129          (III) that the lessee may communicate with the person supplying the goods to the lessor
             130      and receive an accurate and complete statement of those promises and warranties, including
             131      any disclaimers and limitations of them or of remedies.
             132          (h) "Goods" means all things that are movable at the time of identification to the lease
             133      contract, or are fixtures. The term does not include money, documents, instruments, accounts,
             134      chattel paper, general intangibles, or minerals or the like, including oil and gas, before
             135      extraction. The term also includes the unborn young of animals.
             136          (i) "Installment lease contract" means a lease contract that authorizes or requires the
             137      delivery of goods in separate lots to be separately accepted, even though the lease contract
             138      contains a clause stating "each delivery is a separate lease" or its equivalent.
             139          (j) "Lease" means a transfer of the right to possession and use of goods for a term, in
             140      return for consideration. Unless the context clearly indicates otherwise, the term includes a
             141      sublease. But a sale, including a sale on approval or a sale or return, or retention or creation of
             142      a security interest is not a lease.
             143          (k) "Lease agreement" with respect to the lease, means the bargain of the lessor and the
             144      lessee in fact as found in their language or by implication from other circumstances including
             145      course of dealing or usage of trade or course of performance as provided in this chapter.
             146      Unless the context clearly indicates otherwise, the term includes a sublease agreement.
             147          (l) "Lease contract" means the total legal obligation that results from the lease
             148      agreement as affected by this chapter and any other applicable rules of law. Unless the context
             149      clearly indicates otherwise, the term includes a sublease contract.


             150          (m) "Leasehold interest" means the interest of the lessor or the lessee under a lease
             151      contract.
             152          (n) "Lessee" means a person who acquires the right to possession and use of goods
             153      under a lease. Unless the context clearly indicates otherwise, the term includes a sublessee.
             154          (o) "Lessee in ordinary course of business" means a person who in good faith and
             155      without knowledge that the lease to him is in violation of the ownership rights, security
             156      interest, or leasehold interest of a third party in the goods, leases in ordinary course from a
             157      person in the business of selling or leasing goods of that kind, but does not include a
             158      pawnbroker. "Leasing" may be for cash or by exchange of other property, or on secured or
             159      unsecured credit, and includes acquiring goods or documents of title under a preexisting lease
             160      contract. "Leasing" does not include a transfer in bulk or as security for or in total or partial
             161      satisfaction of a money debt.
             162          (p) "Lessor" means a person who transfers the right to possession and use of goods
             163      under a lease. Unless the context clearly indicates otherwise, the term includes a sublessor.
             164          (q) "Lessor's residual interest" means the lessor's interest in the goods after expiration,
             165      termination, or cancellation of the lease contract.
             166          (r) "Lien" means a charge against or interest in goods to secure payment of a debt or
             167      performance of an obligation, but the term does not include a security interest.
             168          (s) "Lot" means a parcel or single article that is the subject matter of a separate lease or
             169      delivery, whether or not it is sufficient to perform the lease contract.
             170          (t) "Merchant lessee" means a lessee that is a merchant with respect to goods of the
             171      kind subject to the lease.
             172          (u) "Present value" means the amount as of a date certain of one or more sums payable
             173      in the future, discounted to the date certain. The discount is determined by the interest rate
             174      specified by the parties if the rate was not manifestly unreasonable at the time the transaction
             175      was entered into; otherwise, the discount is determined by a commercially reasonable rate that
             176      takes into account the facts and circumstances of each case at the time the transaction was
             177      entered into.
             178          (v) "Purchase" includes taking by sale, lease, mortgage, security interest, pledge, gift,
             179      or any other voluntary transaction creating an interest in goods.
             180          (w) "Sublease" means a lease of goods, the right to possession and use of which was


             181      acquired by the lessor as a lessee under an existing lease.
             182          (x) "Supplier" means a person from whom a lessor buys or leases goods to be leased
             183      under a finance lease.
             184          (y) "Supply contract" means a contract under which a lessor buys or leases goods to be
             185      leased.
             186          (z) "Termination" occurs when either party, pursuant to a power created by agreement
             187      or law, puts an end to the lease contract otherwise than for default.
             188          (2) Other definitions applying to this chapter and the sections in which they appear are:
             189          (a) "Accessions," Section 70A-2a-310 .
             190          (b) "Construction mortgage," Section 70A-2a-309 .
             191          (c) "Encumbrance," Section 70A-2a-309 .
             192          (d) "Fixtures," Section 70A-2a-309 .
             193          (e) "Fixture filing," Section 70A-2a-309 .
             194          (f) "Purchase money lease," Section 70A-2a-309 .
             195          (3) The following definitions in other chapters apply to this chapter:
             196          (a) "Account," Subsection 70A-9a-102 (2).
             197          (b) "Between merchants," Section 70A-2-104 .
             198          (c) "Buyer," Section 70A-2-103 .
             199          (d) "Chattel paper," Subsection 70A-9a-102 (11).
             200          (e) "Consumer goods," Subsection 70A-9a-102 (23).
             201          (f) "Document," Subsection 70A-9a-102 (30).
             202          (g) "Entrusting," Section 70A-2-403 .
             203          (h) "General intangible," Subsection 70A-9a-102 (42).
             204          (i) "Good faith," Section 70A-2-103 [;].
             205          (j) "Instrument," Subsection 70A-9a-102 [(46)](47).
             206          (k) "Merchant," Section 70A-2-104 .
             207          (l) "Mortgage," Subsection 70A-9a-102 [(54)](55).
             208          (m) "Pursuant to commitment," Subsection 70A-9a-102 [(67)](69).
             209          (n) "Receipt," Section 70A-2-103 .
             210          (o) "Sale," Section 70A-2-106 .
             211          (p) "Sale on approval," Section 70A-2-326 .


             212          (q) "Sale or return," Section 70A-2-326 .
             213          (r) "Seller," Section 70A-2-103 .
             214          (4) In addition, Title 70A, Chapter 1a, Uniform Commercial Code - General
             215      Provisions, contains general definitions and principles of construction and interpretation
             216      applicable throughout this chapter.
             217          Section 2. Section 70A-9a-102 is amended to read:
             218           70A-9a-102. Definitions and index of definitions.
             219          In this chapter:
             220          (1) "Accession" means goods that are physically united with other goods in such a
             221      manner that the identity of the original goods is not lost.
             222          (2) (a) "Account," except as used in "account for," means a right to payment of a
             223      monetary obligation, whether or not earned by performance:
             224          (i) for property that has been or is to be sold, leased, licensed, assigned, or otherwise
             225      disposed of;
             226          (ii) for services rendered or to be rendered;
             227          (iii) for a policy of insurance issued or to be issued;
             228          (iv) for a secondary obligation incurred or to be incurred;
             229          (v) for energy provided or to be provided;
             230          (vi) for the use or hire of a vessel under a charter or other contract;
             231          (vii) arising out of the use of a credit or charge card or information contained on or for
             232      use with the card; or
             233          (viii) as winnings in a lottery or other game of chance operated or sponsored by a state,
             234      governmental unit of a state, or person licensed or authorized to operate the game by a state or
             235      governmental unit of a state.
             236          (b) "Account" includes health-care-insurance receivables.
             237          (c) "Account" does not include:
             238          (i) rights to payment evidenced by chattel paper or an instrument;
             239          (ii) commercial tort claims;
             240          (iii) deposit accounts;
             241          (iv) investment property;
             242          (v) letter-of-credit rights or letters of credit; or


             243          (vi) rights to payment for money or funds advanced or sold, other than rights arising
             244      out of the use of a credit or charge card or information contained on or for use with the card.
             245          (3) (a) "Account debtor" means a person obligated on an account, chattel paper, or
             246      general intangible.
             247          (b) "Account debtor" does not include persons obligated to pay a negotiable
             248      instrument, even if the instrument constitutes part of chattel paper.
             249          (4) "Accounting," except as used in "accounting for," means a record:
             250          (a) authenticated by a secured party;
             251          (b) indicating the aggregate unpaid secured obligations as of a date not more than 35
             252      days earlier or 35 days later than the date of the record; and
             253          (c) identifying the components of the obligations in reasonable detail.
             254          (5) "Agricultural lien" means an interest, other than a security interest, in farm
             255      products:
             256          (a) which secures payment or performance of an obligation for:
             257          (i) goods or services furnished in connection with a debtor's farming operation; or
             258          (ii) rent on real property leased by a debtor in connection with its farming operation;
             259          (b) which is created by statute in favor of a person that:
             260          (i) in the ordinary course of its business furnished goods or services to a debtor in
             261      connection with a debtor's farming operation; or
             262          (ii) leased real property to a debtor in connection with the debtor's farming operation;
             263      and
             264          (c) whose effectiveness does not depend on the person's possession of the personal
             265      property.
             266          (6) "As-extracted collateral" means:
             267          (a) oil, gas, or other minerals that are subject to a security interest that:
             268          (i) is created by a debtor having an interest in the minerals before extraction; and
             269          (ii) attaches to the minerals as extracted; or
             270          (b) accounts arising out of the sale at the wellhead or minehead of oil, gas, or other
             271      minerals in which the debtor had an interest before extraction.
             272          (7) "Authenticate" means:
             273          (a) to sign; or


             274          [(b) to execute or otherwise adopt a symbol, or encrypt or similarly process a record in
             275      whole or in part, with the present intent of the authenticating person to identify the person and
             276      adopt or accept a record.]
             277          (b) with present intent to adopt or accept a record, to attach to or logically associate
             278      with the record an electronic sound, symbol, or process.
             279          (8) (a) "Bank" means an organization that is engaged in the business of banking.
             280          (b) "Bank" includes:
             281          (i) a depository institution as defined in Section 7-1-103 ; and
             282          (ii) a trust company.
             283          (9) "Cash proceeds" means proceeds that are money, checks, deposit accounts, or the
             284      like.
             285          (10) (a) "Certificate of title" means a certificate of title with respect to which a statute
             286      provides for the security interest in question to be indicated on the certificate as a condition or
             287      result of the security interest's obtaining priority over the rights of a lien creditor with respect to
             288      the collateral.
             289          (b) "Certificate of title" includes another record maintained as an alternative to a
             290      certificate of title by the governmental unit that issues certificates of title if a statute permits the
             291      security interest in question to be indicated on the record as a condition or result of the security
             292      interest's obtaining priority over the rights of a lien creditor with respect to the collateral.
             293          (11) (a) "Chattel paper" means a record or records that evidence both a monetary
             294      obligation and a security interest in specific goods, a security interest in specific goods and
             295      software used in the goods, a security interest in specific goods and license of software used in
             296      the goods, a lease of specific goods, or a lease of specific goods and license of software used in
             297      the goods. In this Subsection (11), "monetary obligation" means a monetary obligation secured
             298      by the goods or owed under a lease of the goods and includes a monetary obligation with
             299      respect to software used in the goods.
             300          (b) "Chattel paper" does not include:
             301          (i) charters or other contracts involving the use or hire of a vessel; or
             302          (ii) records that evidence a right to payment arising out of the use of a credit or charge
             303      card or information contained or for use with the card.
             304          (c) If a transaction is evidenced by records that include an instrument or series of


             305      instruments, the group of records taken together constitutes chattel paper.
             306          (12) "Collateral" means the property subject to a security interest or agricultural lien.
             307      "Collateral" includes:
             308          (a) proceeds to which a security interest attaches;
             309          (b) accounts, chattel paper, payment intangibles, and promissory notes that have been
             310      sold; and
             311          (c) goods that are the subject of a consignment.
             312          (13) "Commercial tort claim" means a claim arising in tort with respect to which:
             313          (a) the claimant is an organization; or
             314          (b) the claimant is an individual and the claim:
             315          (i) arose in the course of the claimant's business or profession; and
             316          (ii) does not include damages arising out of personal injury to or the death of an
             317      individual.
             318          (14) "Commodity account" means an account maintained by a commodity intermediary
             319      in which a commodity contract is carried for a commodity customer.
             320          (15) "Commodity contract" means a commodity futures contract, an option on a
             321      commodity futures contract, a commodity option, or another contract if the contract or option
             322      is:
             323          (a) traded on or subject to the rules of a board of trade that has been designated as a
             324      contract market for such a contract pursuant to federal commodities laws; or
             325          (b) traded on a foreign commodity board of trade, exchange, or market, and is carried
             326      on the books of a commodity intermediary for a commodity customer.
             327          (16) "Commodity customer" means a person for which a commodity intermediary
             328      carries a commodity contract on its books.
             329          (17) "Commodity intermediary" means a person that:
             330          (a) is registered as a futures commission merchant under federal commodities law; or
             331          (b) in the ordinary course of its business provides clearance or settlement services for a
             332      board of trade that has been designated as a contract market pursuant to federal commodities
             333      law.
             334          (18) "Communicate" means:
             335          (a) to send a written or other tangible record;


             336          (b) to transmit a record by any means agreed upon by the persons sending and
             337      receiving the record; or
             338          (c) in the case of transmission of a record to or by a filing office, to transmit a record
             339      by any means prescribed by filing-office rule.
             340          (19) "Consignee" means a merchant to which goods are delivered in a consignment.
             341          (20) "Consignment" means a transaction, regardless of its form, in which a person
             342      delivers goods to a merchant for the purpose of sale and:
             343          (a) the merchant:
             344          (i) deals in goods of that kind under a name other than the name of the person making
             345      delivery;
             346          (ii) is not an auctioneer; and
             347          (iii) is not generally known by its creditors to be substantially engaged in selling the
             348      goods of others;
             349          (b) with respect to each delivery, the aggregate value of the goods is $1,000 or more at
             350      the time of delivery;
             351          (c) the goods are not consumer goods immediately before delivery; and
             352          (d) the transaction does not create a security interest that secures an obligation.
             353          (21) "Consignor" means a person that delivers goods to a consignee in a consignment.
             354          (22) "Consumer debtor" means a debtor in a consumer transaction.
             355          (23) "Consumer goods" means goods that are used or bought for use primarily for
             356      personal, family, or household purposes.
             357          (24) "Consumer-goods transaction" means a consumer transaction in which:
             358          (a) an individual incurs an obligation primarily for personal, family, or household
             359      purposes; and
             360          (b) a security interest in consumer goods secures the obligation.
             361          (25) "Consumer obligor" means an obligor who is an individual and who incurred the
             362      obligation as part of a transaction entered into primarily for personal, family, or household
             363      purposes.
             364          (26) (a) "Consumer transaction" means a transaction in which:
             365          (i) an individual incurs an obligation primarily for personal, family, or household
             366      purposes;


             367          (ii) a security interest secures the obligation; and
             368          (iii) the collateral is held or acquired primarily for personal, family, or household
             369      purposes.
             370          (b) "Consumer transaction" includes consumer-goods transactions.
             371          (27) "Continuation statement" means an amendment of a financing statement which:
             372          (a) identifies, by its file number, the initial financing statement to which it relates; and
             373          (b) indicates that it is a continuation statement for, or that it is filed to continue the
             374      effectiveness of, the identified financing statement.
             375          (28) "Debtor" means:
             376          (a) a person having an interest, other than a security interest or other lien, in the
             377      collateral, whether or not the person is an obligor;
             378          (b) a seller of accounts, chattel paper, payment intangibles, or promissory notes; or
             379          (c) a consignee.
             380          (29) (a) "Deposit account" means a demand, time, savings, passbook, or similar
             381      account maintained with a bank.
             382          (b) "Deposit account" does not include investment property or accounts evidenced by
             383      an instrument.
             384          (30) "Document" means a document of title or a receipt of the type described in
             385      Subsection 70A-7a-201 (2).
             386          (31) "Electronic chattel paper" means chattel paper evidenced by a record or records
             387      consisting of information stored in an electronic medium.
             388          (32) "Encumbrance" means a right, other than an ownership interest, in real property.
             389      "Encumbrance" includes mortgages and other liens on real property.
             390          (33) "Equipment" means goods other than inventory, farm products, or consumer
             391      goods.
             392          (34) "Farm products" means goods, other than standing timber, with respect to which
             393      the debtor is engaged in a farming operation and which are:
             394          (a) crops grown, growing, or to be grown, including:
             395          (i) crops produced on trees, vines, and bushes; and
             396          (ii) aquatic goods produced in aquacultural operations;
             397          (b) livestock, born or unborn, including aquatic goods produced in aquacultural


             398      operations;
             399          (c) supplies used or produced in a farming operation; or
             400          (d) products of crops or livestock in their unmanufactured states.
             401          (35) "Farming operation" means raising, cultivating, propagating, fattening, grazing, or
             402      any other farming, livestock, or aquacultural operation.
             403          (36) "File number" means the number assigned to an initial financing statement
             404      pursuant to Subsection 70A-9a-519 (1).
             405          (37) "Filing office" means an office designated in Section 70A-9a-501 as the place to
             406      file a financing statement.
             407          (38) "Filing-office rule" means a rule adopted pursuant to Section 70A-9a-526 .
             408          (39) "Financing statement" means a record or records composed of an initial financing
             409      statement and any filed record relating to the initial financing statement.
             410          (40) (a) "Fixture filing" means the filing of a financing statement covering goods that
             411      are or are to become fixtures and satisfying Subsections 70A-9a-502 (1) and (2).
             412          (b) "Fixture filing" includes the filing of a financing statement covering goods of a
             413      transmitting utility which are or are to become fixtures.
             414          (41) "Fixtures" means goods that have become so related to particular real property that
             415      an interest in them arises under real property law.
             416          (42) (a) "General intangible" means any personal property, including things in action,
             417      other than accounts, chattel paper, commercial tort claims, deposit accounts, documents, goods,
             418      instruments, investment property, letter-of-credit rights, letters of credit, money, and oil, gas, or
             419      other minerals before extraction.
             420          (b) "General intangible" includes payment intangibles and software.
             421          (43) "Good faith" means honesty in fact and the observance of reasonable commercial
             422      standards of fair dealing.
             423          (44) (a) "Goods" means all things that are movable when a security interest attaches.
             424          (b) "Goods" includes:
             425          (i) fixtures;
             426          (ii) standing timber that is to be cut and removed under a conveyance or contract for
             427      sale;
             428          (iii) the unborn young of animals;


             429          (iv) crops grown, growing, or to be grown, even if the crops are produced on trees,
             430      vines, or bushes; and
             431          (v) manufactured homes.
             432          (c) "Goods" also includes a computer program embedded in goods and any supporting
             433      information provided in connection with a transaction relating to the program if:
             434          (i) the program is associated with the goods in such a manner that it customarily is
             435      considered part of the goods; or
             436          (ii) by becoming the owner of the goods, a person acquires a right to use the program
             437      in connection with the goods.
             438          (d) "Goods" does not include a computer program embedded in goods that consist
             439      solely of the medium in which the program is embedded.
             440          (e) "Goods" also does not include accounts, chattel paper, commercial tort claims,
             441      deposit accounts, documents, general intangibles, instruments, investment property,
             442      letter-of-credit rights, letters of credit, money, or oil, gas, or other minerals before extraction.
             443          (45) (a) "Governmental unit" means a subdivision, agency, department, county, parish,
             444      municipality, or other unit of the government of the United States, a state, or a foreign country.
             445          (b) "Governmental unit" includes an organization having a separate corporate existence
             446      if the organization is eligible to issue debt on which interest is exempt from income taxation
             447      under the laws of the United States.
             448          (46) "Health-care-insurance receivable" means an interest in or claim under a policy of
             449      insurance which is a right to payment of a monetary obligation for health-care goods or
             450      services provided.
             451          (47) (a) "Instrument" means a negotiable instrument or any other writing that evidences
             452      a right to the payment of a monetary obligation, is not itself a security agreement or lease, and
             453      is of a type that in ordinary course of business is transferred by delivery with any necessary
             454      indorsement or assignment.
             455          (b) "Instrument" does not include:
             456          (i) investment property;
             457          (ii) letters of credit; or
             458          (iii) writings that evidence a right to payment arising out of the use of a credit or charge
             459      card or information contained on or for use with the card.


             460          (48) "Inventory" means goods, other than farm products, which:
             461          (a) are leased by a person as lessor;
             462          (b) are held by a person for sale or lease or to be furnished under a contract of service;
             463          (c) are furnished by a person under a contract of service; or
             464          (d) consist of raw materials, work in process, or materials used or consumed in a
             465      business.
             466          (49) "Investment property" means a security, whether certificated or uncertificated,
             467      security entitlement, securities account, commodity contract, or commodity account.
             468          (50) "Jurisdiction of organization," with respect to a registered organization, means the
             469      jurisdiction under whose law the organization is formed or organized.
             470          (51) (a) "Letter-of-credit right" means a right to payment or performance under a letter
             471      of credit, whether or not the beneficiary has demanded or is at the time entitled to demand
             472      payment or performance.
             473          (b) "Letter-of-credit right" does not include the right of a beneficiary to demand
             474      payment or performance under a letter of credit.
             475          (52) "Lien creditor" means:
             476          (a) a creditor that has acquired a lien on the property involved by attachment, levy, or
             477      the like;
             478          (b) an assignee for benefit of creditors from the time of assignment;
             479          (c) a trustee in bankruptcy from the date of the filing of the petition; or
             480          (d) a receiver in equity from the time of appointment.
             481          (53) (a) "Manufactured home" means a structure, transportable in one or more sections,
             482      which, in the traveling mode, is eight body feet or more in width or 40 body feet or more in
             483      length, or, when erected on site, is 320 or more square feet, and which is built on a permanent
             484      chassis and designed to be used as a dwelling with or without a permanent foundation when
             485      connected to the required utilities, and includes the plumbing, heating, air-conditioning, and
             486      electrical systems contained therein.
             487          (b) "Manufactured home" includes any structure that meets all of the requirements of
             488      this Subsection (53) except the size requirements and with respect to which the manufacturer
             489      voluntarily files a certification required by the United States Secretary of Housing and Urban
             490      Development and complies with the standards established under Title 42 of the United States


             491      Code.
             492          (54) "Manufactured-home transaction" means a secured transaction:
             493          (a) that creates a purchase-money security interest in a manufactured home, other than
             494      a manufactured home held as inventory; or
             495          (b) in which a manufactured home, other than a manufactured home held as inventory,
             496      is the primary collateral.
             497          (55) "Mortgage" means a consensual interest in real property, including fixtures, which
             498      secures payment or performance of an obligation.
             499          (56) "New debtor" means a person that becomes bound as debtor under Subsection
             500      70A-9a-203 (4) by a security agreement previously entered into by another person.
             501          (57) (a) "New value" means:
             502          (i) money;
             503          (ii) money's worth in property, services, or new credit; or
             504          (iii) release by a transferee of an interest in property previously transferred to the
             505      transferee.
             506          (b) "New value" does not include an obligation substituted for another obligation.
             507          (58) "Noncash proceeds" means proceeds other than cash proceeds.
             508          (59) (a) "Obligor" means a person that, with respect to an obligation secured by a
             509      security interest in or an agricultural lien on the collateral:
             510          (i) owes payment or other performance of the obligation;
             511          (ii) has provided property other than the collateral to secure payment or other
             512      performance of the obligation; or
             513          (iii) is otherwise accountable in whole or in part for payment or other performance of
             514      the obligation.
             515          (b) "Obligor" does not include issuers or nominated persons under a letter of credit.
             516          (60) "Original debtor," except as used in Subsection 70A-9a-310 (3), means a person
             517      that, as debtor, entered into a security agreement to which a new debtor has become bound
             518      under Subsection 70A-9a-203 (4).
             519          (61) "Payment intangible" means a general intangible under which the account debtor's
             520      principal obligation is a monetary obligation.
             521          (62) "Person related to," with respect to an individual, means:


             522          (a) the spouse of the individual;
             523          (b) a brother, brother-in-law, sister, or sister-in-law of the individual;
             524          (c) an ancestor or lineal descendant of the individual or the individual's spouse; or
             525          (d) any other relative, by blood or marriage, of the individual or the individual's spouse
             526      who shares the same home with the individual.
             527          (63) "Person related to," with respect to an organization, means:
             528          (a) a person directly or indirectly controlling, controlled by, or under common control
             529      with the organization;
             530          (b) an officer or director of, or a person performing similar functions with respect to,
             531      the organization;
             532          (c) an officer or director of, or a person performing similar functions with respect to, a
             533      person described in Subsection (63)(a);
             534          (d) the spouse of an individual described in Subsection (63)(a), (b), or (c); or
             535          (e) an individual who is related by blood or marriage to an individual described in
             536      Subsection (63)(a), (b), (c), or (d) and shares the same home with the individual.
             537          (64) "Proceeds," except as used in Subsection 70A-9a-609 (2), means the following
             538      property:
             539          (a) whatever is acquired upon the sale, lease, license, exchange, or other disposition of
             540      collateral;
             541          (b) whatever is collected on, or distributed on account of, collateral;
             542          (c) rights arising out of collateral;
             543          (d) to the extent of the value of collateral, claims arising out of the loss,
             544      nonconformity, or interference with the use of, defects or infringement of rights in, or damage
             545      to, the collateral; or
             546          (e) to the extent of the value of collateral and to the extent payable to the debtor or the
             547      secured party, insurance payable by reason of the loss or nonconformity of, defects or
             548      infringement of rights in, or damage to, the collateral.
             549          (65) "Promissory note" means an instrument that evidences a promise to pay a
             550      monetary obligation, does not evidence an order to pay, and does not contain an
             551      acknowledgment by a bank that the bank has received for deposit a sum of money or funds.
             552          (66) "Proposal" means a record authenticated by a secured party which includes the


             553      terms on which the secured party is willing to accept collateral in full or partial satisfaction of
             554      the obligation it secures pursuant to Sections 70A-9a-620 , 70A-9a-621 , and 70A-9a-622 .
             555          (67) "Public-finance transaction" means a secured transaction in connection with
             556      which:
             557          (a) debt securities are issued;
             558          (b) all or a portion of the securities issued have an initial stated maturity of at least 20
             559      years; and
             560          (c) the debtor, obligor, secured party, account debtor or other person obligated on
             561      collateral, assignor or assignee of a secured obligation, or assignor or assignee of a security
             562      interest is a state or a governmental unit of a state.
             563          (68) "Public organic record" means a record that is available to the public for
             564      inspection and is:
             565          (a) a record consisting of the record initially filed with or issued by a state or the
             566      United States to form or organize an organization and any record filed with or issued by the
             567      state or the United States which amends or restates the initial record;
             568          (b) an organic record of a business trust consisting of the record initially filed with a
             569      state and any record filed with the state which amends or restates the initial record, if a statute
             570      of the state governing business trusts requires that the record be filed with the state; or
             571          (c) a record consisting of legislation enacted by the legislature of a state or the
             572      Congress of the United States which forms or organizes an organization, any record amending
             573      the legislation, and any record filed with or issued by the state or the United States which
             574      amends or restates the name of the organization.
             575          [(68)] (69) "Pursuant to commitment," with respect to an advance made or other value
             576      given by a secured party, means pursuant to the secured party's obligation, whether or not a
             577      subsequent event of default or other event not within the secured party's control has relieved or
             578      may relieve the secured party from its obligation.
             579          [(69)] (70) "Record," except as used in "for record," "of record," "record or legal title,"
             580      and "record owner," means information that is inscribed on a tangible medium or which is
             581      stored in an electronic or other medium and is retrievable in perceivable form.
             582          [(70)] (71) (a) "Registered organization" means an organization formed or organized
             583      solely under the law of a single state or the United States [and as to which the state or the


             584      United States must maintain a public record showing the organization to have been organized.]
             585      by the filing of a public organic record with, the issuance of a public organic record by, or the
             586      enactment of legislation by the state or the United States.
             587          (b) "Registered organization" includes a business trust that is formed or organized
             588      under the law of a single state if a statute of the state governing business trusts requires that the
             589      business trust's organic record be filed with the state.
             590          [(71)] (72) "Secondary obligor" means an obligor to the extent that:
             591          (a) the obligor's obligation is secondary; or
             592          (b) the obligor has a right of recourse with respect to an obligation secured by collateral
             593      against the debtor, another obligor, or property of either.
             594          [(72)] (73) "Secured party" means:
             595          (a) a person in whose favor a security interest is created or provided for under a
             596      security agreement, whether or not any obligation to be secured is outstanding;
             597          (b) a person that holds an agricultural lien;
             598          (c) a consignor;
             599          (d) a person to which accounts, chattel paper, payment intangibles, or promissory notes
             600      have been sold;
             601          (e) a trustee, indenture trustee, agent, collateral agent, or other representative in whose
             602      favor a security interest or agricultural lien is created or provided for; or
             603          (f) a person that holds a security interest arising under Section 70A-2-401 , 70A-2-505 ,
             604      70A-4-210 , or 70A-5-118 or Subsection 70A-2-711 (3) or 70A-2a-508 (5).
             605          [(73)] (74) "Security agreement" means an agreement that creates or provides for a
             606      security interest.
             607          [(74)] (75) "Send," in connection with a record or notification, means:
             608          (a) to deposit in the mail, deliver for transmission, or transmit by any other usual
             609      means of communication, with postage or cost of transmission provided for, addressed to any
             610      address reasonable under the circumstances; or
             611          (b) to cause the record or notification to be received within the time that it would have
             612      been received if properly sent under Subsection [(74)] (75)(a).
             613          [(75)] (76) (a) "Software" means a computer program and any supporting information
             614      provided in connection with a transaction relating to the program.


             615          (b) "Software" does not include a computer program that is included in the definition
             616      of goods.
             617          [(76)] (77) "State" means a state of the United States, the District of Columbia, Puerto
             618      Rico, the United States Virgin Islands, or any territory or insular possession subject to the
             619      jurisdiction of the United States.
             620          [(77)] (78) "Supporting obligation" means a letter-of-credit right or secondary
             621      obligation that supports the payment or performance of an account, chattel paper, a document,
             622      a general intangible, an instrument, or investment property.
             623          [(78)] (79) "Tangible chattel paper" means chattel paper evidenced by a record or
             624      records consisting of information that is inscribed on a tangible medium.
             625          [(79)] (80) "Termination statement" means an amendment of a financing statement
             626      which:
             627          (a) identifies, by its file number, the initial financing statement to which it relates; and
             628          (b) indicates either that it is a termination statement or that the identified financing
             629      statement is no longer effective.
             630          [(80)] (81) "Transmitting utility" means a person primarily engaged in the business of:
             631          (a) operating a railroad, subway, street railway, or trolley bus;
             632          (b) transmitting communications electrically, electromagnetically, or by light;
             633          (c) transmitting goods by pipeline or sewer; or
             634          (d) transmitting or producing and transmitting electricity, steam, gas, or water.
             635          Section 3. Section 70A-9a-105 is amended to read:
             636           70A-9a-105. Control of electronic chattel paper.
             637          (1) A secured party has control of electronic chattel paper if a system employed by
             638      evidencing the transfer of interests in the chattel paper reliably establishes the secured party as
             639      the person to whom the chattel paper was assigned.
             640          (2) A system satisfies Subsection (1) if the record or records comprising the chattel
             641      paper are created, stored, and assigned in such a manner that:
             642          [(1)] (a) a single authoritative copy of the record or records exists which is unique,
             643      identifiable and, except as otherwise provided in Subsections [(4), (5), and (6)] (2)(d), (e), and
             644      (f), unalterable;
             645          [(2)] (b) the authoritative copy identifies the secured party as the assignee of the record


             646      or records;
             647          [(3)] (c) the authoritative copy is communicated to and maintained by the secured party
             648      or its designated custodian;
             649          [(4)] (d) copies or [revisions] amendments that add or change an identified assignee of
             650      the authoritative copy can be made only with the [participation] consent of the secured party;
             651          [(5)] (e) each copy of the authoritative copy and any copy of a copy is readily
             652      identifiable as a copy that is not the authoritative copy; and
             653          [(6)] (f) any [revision] amendment of the authoritative copy is readily identifiable as
             654      [an] authorized or unauthorized [revision].
             655          Section 4. Section 70A-9a-307 is amended to read:
             656           70A-9a-307. Location of debtor.
             657          (1) In this section, "place of business" means a place where a debtor conducts its
             658      affairs.
             659          (2) Except as otherwise provided in this section, the following rules determine a
             660      debtor's location:
             661          (a) A debtor who is an individual is located at the individual's principal residence.
             662          (b) A debtor that is an organization and has only one place of business is located at its
             663      place of business.
             664          (c) A debtor that is an organization and has more than one place of business is located
             665      at its chief executive office.
             666          (3) Subsection (2) applies only if a debtor's residence, place of business, or chief
             667      executive office, as applicable, is located in a jurisdiction whose law generally requires
             668      information concerning the existence of a nonpossessory security interest to be made generally
             669      available in a filing, recording, or registration system as a condition or result of the security
             670      interest's obtaining priority over the rights of a lien creditor with respect to the collateral. If
             671      Subsection (2) does not apply, the debtor is located in the District of Columbia.
             672          (4) A person that ceases to exist, have a residence, or have a place of business
             673      continues to be located in the jurisdiction specified by Subsections (2) and (3).
             674          (5) A registered organization that is organized under the law of a state is located in that
             675      state.
             676          (6) Except as otherwise provided in Subsection (9), a registered organization that is


             677      organized under the law of the United States and a branch or agency of a bank that is not
             678      organized under the law of the United States or a state are located:
             679          (a) in the state that the law of the United States designates, if the law designates a state
             680      of location;
             681          (b) in the state that the registered organization, branch, or agency designates, if the law
             682      of the United States authorizes the registered organization, branch, or agency to designate its
             683      state of location, including by designating its main office, home office, or other comparable
             684      office; or
             685          (c) in the District of Columbia, if neither Subsection (6)(a) nor Subsection (6)(b)
             686      applies.
             687          (7) A registered organization continues to be located in the jurisdiction specified by
             688      Subsection (5) or (6) notwithstanding:
             689          (a) the suspension, revocation, forfeiture, or lapse of the registered organization's status
             690      as such in its jurisdiction of organization; or
             691          (b) the dissolution, winding up, or cancellation of the existence of the registered
             692      organization.
             693          (8) The United States is located in the District of Columbia.
             694          (9) A branch or agency of a bank that is not organized under the law of the United
             695      States or a state is located in the state in which the branch or agency is licensed, if all branches
             696      and agencies of the bank are licensed in only one state.
             697          (10) A foreign air carrier under the Federal Aviation Act of 1958, as amended, is
             698      located at the designated office of the agent upon which service of process may be made on
             699      behalf of the carrier.
             700          (11) This section applies only for purposes of this part.
             701          Section 5. Section 70A-9a-311 is amended to read:
             702           70A-9a-311. Perfection of security interests in property subject to certain
             703      statutes, regulations, and treaties.
             704          (1) Except as otherwise provided in Subsection (4), the filing of a financing statement
             705      is not necessary or effective to perfect a security interest in property subject to:
             706          (a) a statute, regulation, or treaty of the United States whose requirements for a security
             707      interest's obtaining priority over the rights of a lien creditor with respect to the property


             708      preempt Subsection 70A-9a-310 (1);
             709          (b) Section 41-1a-601 ; or
             710          (c) a [certificate-of-title] statute of another jurisdiction which provides for a security
             711      interest to be indicated on [the] a certificate of title as a condition or result of the security
             712      interest's obtaining priority over the rights of a lien creditor with respect to the property.
             713          (2) Compliance with the requirements of a statute, regulation, or treaty described in
             714      Subsection (1) for obtaining priority over the rights of a lien creditor is equivalent to the filing
             715      of a financing statement under this chapter. Except as otherwise provided in Subsection (4),
             716      Section 70A-9a-313 , and Subsections 70A-9a-316 (4) and (5) for goods covered by a certificate
             717      of title, a security interest in property subject to a statute, regulation, or treaty described in
             718      Subsection (1) may be perfected only by compliance with those requirements, and a security
             719      interest so perfected remains perfected notwithstanding a change in the use or transfer of
             720      possession of the collateral.
             721          (3) Except as otherwise provided in Subsection (4) and Subsections 70A-9a-316 (4) and
             722      (5), duration and renewal of perfection of a security interest perfected by compliance with the
             723      requirements prescribed by a statute, regulation, or treaty described in Subsection (1) are
             724      governed by the statute, regulation, or treaty. In other respects, the security interest is subject
             725      to this chapter.
             726          (4) During any period in which collateral subject to a statute specified in Subsection
             727      (1)(b) is inventory held for sale or lease by a person or leased by that person as lessor and that
             728      person is in the business of selling goods of that kind, this section does not apply to a security
             729      interest in that collateral created by that person.
             730          Section 6. Section 70A-9a-316 is amended to read:
             731           70A-9a-316. Effect of change in governing law.
             732          (1) A security interest perfected pursuant to the law of the jurisdiction designated in
             733      Subsection 70A-9a-301 (1) or 70A-9a-305 (3) remains perfected until the earliest of:
             734          (a) the time perfection would have ceased under the law of that jurisdiction;
             735          (b) the expiration of four months after a change of the debtor's location to another
             736      jurisdiction; or
             737          (c) the expiration of one year after a transfer of collateral to a person that thereby
             738      becomes a debtor and is located in another jurisdiction.


             739          (2) If a security interest described in Subsection (1) becomes perfected under the law of
             740      the other jurisdiction before the earliest time or event described in that subsection, it remains
             741      perfected thereafter. If the security interest does not become perfected under the law of the
             742      other jurisdiction before the earliest time or event, it becomes unperfected and is deemed never
             743      to have been perfected as against a purchaser of the collateral for value.
             744          (3) A possessory security interest in collateral, other than goods covered by a certificate
             745      of title and as-extracted collateral consisting of goods, remains continuously perfected if:
             746          (a) the collateral is located in one jurisdiction and subject to a security interest
             747      perfected under the law of that jurisdiction;
             748          (b) thereafter the collateral is brought into another jurisdiction; and
             749          (c) upon entry into the other jurisdiction, the security interest is perfected under the law
             750      of the other jurisdiction.
             751          (4) Except as otherwise provided in Subsection (5), a security interest in goods covered
             752      by a certificate of title which is perfected by any method under the law of another jurisdiction
             753      when the goods become covered by a certificate of title from this state remains perfected until
             754      the security interest would have become unperfected under the law of the other jurisdiction had
             755      the goods not become so covered.
             756          (5) A security interest described in Subsection (4) becomes unperfected as against a
             757      purchaser of the goods for value and is deemed never to have been perfected as against a
             758      purchaser of the goods for value if the applicable requirements for perfection under Subsection
             759      70A-9a-311 (2) or Section 70A-9a-313 are not satisfied before the earlier of:
             760          (a) the time the security interest would have become unperfected under the law of the
             761      other jurisdiction had the goods not become covered by a certificate of title from this state; or
             762          (b) the expiration of four months after the goods had become so covered.
             763          (6) A security interest in deposit accounts, letter-of-credit rights, or investment
             764      property which is perfected under the law of the bank's jurisdiction, the issuer's jurisdiction, a
             765      nominated person's jurisdiction, the securities intermediary's jurisdiction, or the commodity
             766      intermediary's jurisdiction, as applicable, remains perfected until the earlier of:
             767          (a) the time the security interest would have become unperfected under the law of that
             768      jurisdiction; or
             769          (b) the expiration of four months after a change of the applicable jurisdiction to another


             770      jurisdiction.
             771          (7) If a security interest described in Subsection (6) becomes perfected under the law of
             772      the other jurisdiction before the earlier of the time or the end of the period described in that
             773      subsection, it remains perfected thereafter. If the security interest does not become perfected
             774      under the law of the other jurisdiction before the earlier of that time or the end of that period, it
             775      becomes unperfected and is deemed never to have been perfected as against a purchaser of the
             776      collateral for value.
             777          (8) The following rules apply to collateral to which a security interest attaches within
             778      four months after the debtor changes its location to another jurisdiction:
             779          (a) A financing statement filed before the change pursuant to the law of the jurisdiction
             780      designated in Subsection 70A-9a-301 (1) or 70A-9a-305 (3) is effective to perfect a security
             781      interest in the collateral if the financing statement would have been effective to perfect a
             782      security interest in the collateral had the debtor not changed its location.
             783          (b) If a security interest perfected by a financing statement that is effective under
             784      Subsection (8)(a) becomes perfected under the law of the other jurisdiction before the earlier of
             785      the time the financing statement would have been ineffective under the law of the jurisdiction
             786      designated in Subsection 70A-9a-301 (1) or 70A-9a-305 (3) or the expiration of the four-month
             787      period, it remains perfected thereafter. If the security interest does not become perfected under
             788      the law of the other jurisdiction before the earlier time or event, it becomes unperfected and is
             789      deemed never to have been perfected as against a purchaser of the collateral for value.
             790          (9) If a financing statement naming an original debtor is filed pursuant to the law of the
             791      jurisdiction designated in Subsection 70A-9a-301 (1) or 70A-9a-305 (3) and the new debtor is
             792      located in another jurisdiction, the following rules apply:
             793          (a) The financing statement is effective to perfect a security interest in collateral
             794      acquired by the new debtor before, and within four months after, the new debtor becomes
             795      bound under Subsection 70A-9a-203 (4), if the financing statement would have been effective
             796      to perfect a security interest in the collateral had the collateral been acquired by the original
             797      debtor.
             798          (b) A security interest perfected by the financing statement and which becomes
             799      perfected under the law of the other jurisdiction before the earlier of the time the financing
             800      statement would have been ineffective under the law of the jurisdiction designated in


             801      Subsection 70A-9a-301 (1) or 70A-9a-305 (3) or the expiration of the four-month period
             802      remains perfected thereafter. A security interest that is perfected by the financing statement but
             803      which does not become perfected under the law of the other jurisdiction before the earlier time
             804      or event becomes unperfected and is deemed never to have been perfected as against a
             805      purchaser of the collateral for value.
             806          Section 7. Section 70A-9a-317 is amended to read:
             807           70A-9a-317. Interests that take priority over or take free of security interest or
             808      agricultural lien.
             809          (1) A security interest or agricultural lien is subordinate to the rights of:
             810          (a) a person entitled to priority under Section 70A-9a-322 ; and
             811          (b) except as otherwise provided in Subsection (5), a person that becomes a lien
             812      creditor before the earlier of the time:
             813          (i) the security interest or agricultural lien is perfected; or
             814          (ii) one of the conditions specified in Subsection 70A-9a-203 (2)(c) is met and a
             815      financing statement covering the collateral is filed.
             816          (2) Except as otherwise provided in Subsection (5), a buyer, other than a secured party,
             817      of tangible chattel paper, tangible documents, goods, instruments, or a [security certificate]
             818      certificated security takes free of a security interest or agricultural lien if the buyer gives value
             819      and receives delivery of the collateral without knowledge of the security interest or agricultural
             820      lien and before it is perfected.
             821          (3) Except as otherwise provided in Subsection (5), a lessee of goods takes free of a
             822      security interest or agricultural lien if the lessee gives value and receives delivery of the
             823      collateral without knowledge of the security interest or agricultural lien and before it is
             824      perfected.
             825          (4) A licensee of a general intangible or a buyer, other than a secured party, of
             826      [accounts, electronic chattel paper, electronic documents, general intangibles, or investment
             827      property other than] collateral other than tangible chattel paper, tangible documents, goods,
             828      instruments, or a certificated security takes free of a security interest if the licensee or buyer
             829      gives value without knowledge of the security interest and before it is perfected.
             830          (5) Except as otherwise provided in Sections 70A-9a-320 and 70A-9a-321 , if a person
             831      files a financing statement with respect to a purchase-money security interest before or within


             832      20 days after the debtor receives delivery of the collateral, the security interest takes priority
             833      over the rights of a buyer, lessee, or lien creditor which arise between the time the security
             834      interest attaches and the time of filing.
             835          Section 8. Section 70A-9a-326 is amended to read:
             836           70A-9a-326. Priority of security interests created by new debtor.
             837          (1) Subject to Subsection (2), a security interest that is created by a new debtor [which
             838      is perfected] in collateral in which the new debtor has or acquires rights and is perfected solely
             839      by a filed financing statement that [is effective solely under Section 70A-9a-508 in collateral in
             840      which a new debtor has or acquires rights] would be ineffective to perfect the security interest
             841      but for the application of Subsection 70A-9a-316 (9)(a) or Section 70A-9a-508 is subordinate to
             842      a security interest in the same collateral which is perfected other than by such a filed financing
             843      statement [that is effective solely under Section 70A-9a-508 ].
             844          (2) The other provisions of this part determine the priority among conflicting security
             845      interests in the same collateral perfected by filed financing statements [that are effective solely
             846      under Section 70A-9a-508 ] described in Subsection (1). However, if the security agreements
             847      to which a new debtor became bound as debtor were not entered into by the same original
             848      debtor, the conflicting security interests rank according to priority in time of the new debtor's
             849      having become bound.
             850          Section 9. Section 70A-9a-406 is amended to read:
             851           70A-9a-406. Discharge of account debtor -- Notification of assignment --
             852      Identification and proof of assignment -- Restrictions on assignment of accounts, chattel
             853      paper, payment intangibles, and promissory notes ineffective.
             854          (1) Subject to Subsections (2) through (9), an account debtor on an account, chattel
             855      paper, or a payment intangible may discharge its obligation by paying the assignor until, but not
             856      after, the account debtor receives a notification, authenticated by the assignor or the assignee,
             857      that the amount due or to become due has been assigned and that payment is to be made to the
             858      assignee. After receipt of the notification, the account debtor may discharge its obligation by
             859      paying the assignee and may not discharge the obligation by paying the assignor.
             860          (2) Subject to Subsection (8), notification is ineffective under Subsection (1):
             861          (a) if it does not reasonably identify the rights assigned;
             862          (b) to the extent that an agreement between an account debtor and a seller of a payment


             863      intangible limits the account debtor's duty to pay a person other than the seller and the
             864      limitation is effective under law other than this chapter; or
             865          (c) at the option of an account debtor, if the notification notifies the account debtor to
             866      make less than the full amount of any installment or other periodic payment to the assignee,
             867      even if:
             868          (i) only a portion of the account, chattel paper, or payment intangible has been assigned
             869      to that assignee;
             870          (ii) a portion has been assigned to another assignee; or
             871          (iii) the account debtor knows that the assignment to that assignee is limited.
             872          (3) Subject to Subsection (8), if requested by the account debtor, an assignee shall
             873      seasonably furnish reasonable proof that the assignment has been made. Unless the assignee
             874      complies, the account debtor may discharge its obligation by paying the assignor, even if the
             875      account debtor has received a notification under Subsection (1).
             876          (4) Except as otherwise provided in Subsection (5) and Sections 70A-2a-303 and
             877      70A-9a-407 , and subject to Subsection (8), a term in an agreement between an account debtor
             878      and an assignor or in a promissory note is ineffective to the extent that it:
             879          (a) prohibits, restricts, or requires the consent of the account debtor or person obligated
             880      on the promissory note to the assignment or transfer of, or the creation, attachment, perfection,
             881      or enforcement of a security interest in, the account, chattel paper, payment intangible, or
             882      promissory note; or
             883          (b) provides that the assignment or transfer or the creation, attachment, perfection, or
             884      enforcement of the security interest may give rise to a default, breach, right of recoupment,
             885      claim, defense, termination, right of termination, or remedy under the account, chattel paper,
             886      payment intangible, or promissory note.
             887          (5) Subsection (4) does not apply to the sale of a payment intangible or promissory
             888      note, other than a sale pursuant to a disposition under Section 70A-9a-610 or an acceptance of
             889      collateral under Section 70A-9a-620 .
             890          (6) Except as otherwise provided in Sections 70A-2a-303 and 70A-9a-407 and subject
             891      to Subsections (8) and (9), a rule of law, statute, or regulation that prohibits, restricts, or
             892      requires the consent of a government, governmental body or official, or account debtor to the
             893      assignment or transfer of, or creation of a security interest in, an account or chattel paper is


             894      ineffective to the extent that the rule of law, statute, or regulation:
             895          (a) prohibits, restricts, or requires the consent of the government, governmental body or
             896      official, or account debtor to the assignment or transfer of, or the creation, attachment,
             897      perfection, or enforcement of a security interest in the account or chattel paper; or
             898          (b) provides that the assignment or transfer or the creation, attachment, perfection, or
             899      enforcement of the security interest may give rise to a default, breach, right of recoupment,
             900      claim, defense, termination, right of termination, or remedy under the account or chattel paper.
             901          (7) Subject to Subsection (8), an account debtor may not waive or vary its option under
             902      Subsection (2)(c).
             903          (8) This section is subject to law other than this chapter which establishes a different
             904      rule for an account debtor who is an individual and who incurred the obligation primarily for
             905      personal, family, or household purposes.
             906          (9) This section does not apply to an assignment of a health-care-insurance receivable.
             907          Section 10. Section 70A-9a-408 is amended to read:
             908           70A-9a-408. Restrictions on assignment of promissory notes,
             909      health-care-insurance receivables, and certain general intangibles ineffective.
             910          (1) Except as otherwise provided in Subsection (2), a term in a promissory note or in
             911      an agreement between an account debtor and a debtor which relates to a health-care-insurance
             912      receivable or a general intangible, including a contract, permit, license, or franchise, and which
             913      term prohibits, restricts, or requires the consent of the person obligated on the promissory note
             914      or the account debtor to, the assignment or transfer of, or creation, attachment, or perfection of
             915      a security interest in, the promissory note, health-care-insurance receivable, or general
             916      intangible, is ineffective to the extent that the term:
             917          (a) would impair the creation, attachment, or perfection of a security interest; or
             918          (b) provides that the assignment or transfer or the creation, attachment, or perfection of
             919      the security interest may give rise to a default, breach, right of recoupment, claim, defense,
             920      termination, right of termination, or remedy under the promissory note, health-care-insurance
             921      receivable, or general intangible.
             922          (2) Subsection (1) applies to a security interest in a payment intangible or promissory
             923      note only if the security interest arises out of a sale of the payment intangible or promissory
             924      note, other than a sale pursuant to a disposition under Section 70A-9a-610 or an acceptance of


             925      collateral under Section 70A-9a-620 .
             926          (3) A rule of law, statute, or regulation that prohibits, restricts, or requires the consent
             927      of a government, governmental body or official, person obligated on a promissory note, or
             928      account debtor to the assignment or transfer of, or creation of a security interest in, a
             929      promissory note, health-care-insurance receivable, or general intangible, including a contract,
             930      permit, license, or franchise between an account debtor and a debtor, is ineffective to the extent
             931      that the rule of law, statute, or regulation:
             932          (a) would impair the creation, attachment, or perfection of a security interest; or
             933          (b) provides that the assignment or transfer or the creation, attachment, or perfection of
             934      the security interest may give rise to a default, breach, right of recoupment, claim, defense,
             935      termination, right of termination, or remedy under the promissory note, health-care-insurance
             936      receivable, or general intangible.
             937          (4) To the extent that a term in a promissory note or in an agreement between an
             938      account debtor and a debtor which relates to a health-care-insurance receivable or general
             939      intangible or a rule of law, statute, or regulation described in Subsection (3) would be effective
             940      under law other than this chapter but is ineffective under Subsection (1) or (3), the creation,
             941      attachment, or perfection of a security interest in the promissory note, health-care-insurance
             942      receivable, or general intangible:
             943          (a) is not enforceable against the person obligated on the promissory note or the
             944      account debtor;
             945          (b) does not impose a duty or obligation on the person obligated on the promissory
             946      note or the account debtor;
             947          (c) does not require the person obligated on the promissory note or the account debtor
             948      to recognize the security interest, pay or render performance to the secured party, or accept
             949      payment or performance from the secured party;
             950          (d) does not entitle the secured party to use or assign the debtor's rights under the
             951      promissory note, health-care-insurance receivable, or general intangible, including any related
             952      information or materials furnished to the debtor in the transaction giving rise to the promissory
             953      note, health-care-insurance receivable, or general intangible;
             954          (e) does not entitle the secured party to use, assign, possess, or have access to any trade
             955      secrets or confidential information of the person obligated on the promissory note or the


             956      account debtor; and
             957          (f) does not entitle the secured party to enforce the security interest in the promissory
             958      note, health-care-insurance receivable, or general intangible.
             959          Section 11. Section 70A-9a-502 is amended to read:
             960           70A-9a-502. Contents of financing statement -- Record of mortgage as financing
             961      statement -- Time of filing financing statement.
             962          (1) Subject to Subsection (2), a financing statement is sufficient only if it:
             963          (a) provides the name of the debtor;
             964          (b) provides the name of the secured party or a representative of the secured party; and
             965          (c) indicates the collateral covered by the financing statement.
             966          (2) Except as otherwise provided in Subsection 70A-9a-501 (2), to be sufficient, a
             967      financing statement that covers as-extracted collateral or timber to be cut, or which is filed as a
             968      fixture filing and covers goods that are or are to become fixtures, must satisfy Subsection (1)
             969      and also:
             970          (a) indicate that it covers this type of collateral;
             971          (b) indicate that it is to be filed for record in the real property records;
             972          (c) provide a legal description of the real property to which the collateral is related; and
             973          (d) if the debtor does not have an interest of record in the real property, provide the
             974      name of a record owner.
             975          (3) A record of a mortgage is effective, from the date of recording, as a financing
             976      statement filed as a fixture filing or as a financing statement covering as-extracted collateral or
             977      timber to be cut only if:
             978          (a) the record indicates the goods or accounts that it covers;
             979          (b) the goods are or are to become fixtures related to the real property described in the
             980      record or the collateral is related to the real property described in the record and is as-extracted
             981      collateral or timber to be cut;
             982          (c) the record satisfies the requirements for a financing statement in this section [other
             983      than an indication], but:
             984          (i) the record need not indicate that it is to be filed in the real property records; and
             985          (ii) the record sufficiently provides the name of a debtor who is an individual if it
             986      provides the individual name of the debtor or the surname and first personal name of the


             987      debtor, even if the debtor is an individual to whom Subsection 70A-9a-503 (1)(d) applies; and
             988          (d) the record is recorded.
             989          (4) A financing statement may be filed before a security agreement is made or a
             990      security interest otherwise attaches.
             991          (5) (a) The requirements of Title 57 do not apply to a financing statement filed or
             992      recorded in a filing office described in Subsection 70A-9a-501 (1)(a) that:
             993          (i) covers as-extracted collateral or timber to be cut; or
             994          (ii) (A) is filed as a fixture filing; and
             995          (B) covers goods that are or are to become fixtures.
             996          (b) For purposes of Subsection (5)(a), the requirements of Title 57 include
             997      requirements related to:
             998          (i) execution;
             999          (ii) acknowledgment;
             1000          (iii) certification; and
             1001          (iv) originality.
             1002          Section 12. Section 70A-9a-503 is amended to read:
             1003           70A-9a-503. Name of debtor and secured party.
             1004          (1) A financing statement sufficiently provides the name of the debtor:
             1005          (a) except as otherwise provided in Subsection (1)(c), if the debtor is a registered
             1006      organization or the collateral is held in a trust that is a registered organization, only if the
             1007      financing statement provides the name [of the debtor indicated on the public record of the
             1008      debtor's] that is stated to be the registered organization's name on the public organic record
             1009      most recently filed with or issued or enacted by the registered organization's jurisdiction of
             1010      organization which [shows the debtor to have been organized] purports to state, amend, or
             1011      restate the registered organization's name;
             1012          (b) [if the debtor is a decedent's estate] subject to Subsection (6), if the collateral is
             1013      being administered by the personal representative of a decedent, only if the financing statement
             1014      provides, as the name of the debtor, the name of the decedent and, in a separate part of the
             1015      financing statement, indicates that the [debtor is an estate] collateral is being administered by a
             1016      personal representative;
             1017          [(c) if the debtor is a trust or a trustee acting with respect to property held in trust, only


             1018      if the financing statement:]
             1019          [(i) provides the name specified for the trust in its organic documents or, if no name is
             1020      specified, provides the name of the settlor and additional information sufficient to distinguish
             1021      the debtor from other trusts having one or more of the same settlors; and]
             1022          [(ii) indicates, in the debtor's name or otherwise, that the debtor is a trust or is a trustee
             1023      acting with respect to property held in trust; and]
             1024          (c) if the collateral is held in a trust that is not a registered organization, only if the
             1025      financing statement:
             1026          (i) provides, as the name of the debtor:
             1027          (A) if the organic record of the trust specifies a name for the trust, the name specified;
             1028      or
             1029          (B) if the organic record of the trust does not specify a name for the trust, the name of
             1030      the settlor or testator; and
             1031          (ii) in a separate part of the financing statement:
             1032          (A) if the name provided in accordance with Subsection (1)(c)(i)(A), indicates the
             1033      collateral is held in a trust; or
             1034          (B) if the name is provided in accordance with Subsection (1)(c)(i)(B), provides
             1035      additional information sufficient to distinguish the trust from other trusts having one or more of
             1036      the same settlors or the same testator and indicates that the collateral is held in a trust, unless
             1037      the additional information so indicates;
             1038          (d) subject to Subsection (7), if the debtor is an individual to whom the state has issued
             1039      a driver license that has not expired, or if the debtor does not have an unexpired driver license,
             1040      an individual to whom the state has issued an unexpired identification card, only if the
             1041      financing statement provides the name of the individual which is indicated on the driver license
             1042      or identification card;
             1043          (e) if the debtor is an individual to whom Subsection (1)(d) does not apply, only if the
             1044      financing statement provides the individual name of the debtor or the surname and first
             1045      personal name of the debtor; and
             1046          [(d)] (f) in other cases:
             1047          (i) if the debtor has a name, only if [it] the financing statement provides the [individual
             1048      or] organizational name of the debtor; and


             1049          (ii) if the debtor does not have a name, only if it provides the names of the partners,
             1050      members, associates, or other persons comprising the debtor, in a manner that each name
             1051      provided would be sufficient if the person named were the debtor.
             1052          (2) A financing statement that provides the name of the debtor in accordance with
             1053      Subsection (1) is not rendered ineffective by the absence of:
             1054          (a) a trade name or other name of the debtor; or
             1055          (b) unless required under Subsection (1)[(d)](f)(ii), names of partners, members,
             1056      associates, or other persons comprising the debtor.
             1057          (3) A financing statement that provides only the debtor's trade name does not
             1058      sufficiently provide the name of the debtor.
             1059          (4) Failure to indicate the representative capacity of a secured party or representative of
             1060      a secured party does not affect the sufficiency of a financing statement.
             1061          (5) A financing statement may provide the name of more than one debtor and the name
             1062      of more than one secured party.
             1063          (6) The name of the decedent indicated on the order appointing the personal
             1064      representative of the decedent issued by the court having jurisdiction over the collateral is
             1065      sufficient as the "name of the decedent" under Subsection (1)(b).
             1066          (7) If this state has issued to an individual more than one driver license or identification
             1067      card of a kind described in Subsection (1)(d), the one that was issued most recently is the one
             1068      to which Subsection (1)(d) refers.
             1069          (8) In this section, the "name of the settlor or testator" means:
             1070          (a) if the settlor is a registered organization, the name that is stated to be the settlor's
             1071      name on the public organic record most recently filed with or issued or enacted by the settlor's
             1072      jurisdiction of organization which purports to state, amend, or restate the settlor's name; or
             1073          (b) in the other cases, the name of the settlor or testator indicated in the trust's organic
             1074      record.
             1075          Section 13. Section 70A-9a-507 is amended to read:
             1076           70A-9a-507. Effect of certain events on effectiveness of financing statement.
             1077          (1) A filed financing statement remains effective with respect to collateral that is sold,
             1078      exchanged, leased, licensed, or otherwise disposed of and in which a security interest or
             1079      agricultural lien continues, even if the secured party knows of or consents to the disposition.


             1080          (2) Except as otherwise provided in Subsection (3) and Section 70A-9a-508 , a
             1081      financing statement is not rendered ineffective if, after the financing statement is filed, the
             1082      information provided in the financing statement becomes seriously misleading under Section
             1083      70A-9a-506 .
             1084          (3) If [a debtor so changes its] the name that a filed financing statement [becomes]
             1085      provides for a debtor becomes insufficient as the name of the debtor under Subsection
             1086      70A-9a-503 (1) so that the financing statement becomes seriously misleading under Section
             1087      70A-9a-506 :
             1088          (a) the financing statement is effective to perfect a security interest in collateral
             1089      acquired by the debtor before, or within four months after, the [change] filed financing
             1090      statement becomes seriously misleading; and
             1091          (b) the financing statement is not effective to perfect a security interest in collateral
             1092      acquired by the debtor more than four months after the [change] filed financing statement
             1093      becomes seriously misleading, unless an amendment to the financing statement which renders
             1094      the financing statement not seriously misleading is filed within four months after the [change]
             1095      financing statement became seriously misleading.
             1096          Section 14. Section 70A-9a-515 is amended to read:
             1097           70A-9a-515. Duration and effectiveness of financing statement -- Effect of lapsed
             1098      financing statement.
             1099          (1) Except as otherwise provided in Subsections (2), (5), (6), and (7), a filed financing
             1100      statement is effective for a period of five years after the date of filing.
             1101          (2) Except as otherwise provided in Subsections (5), (6), and (7), an initial financing
             1102      statement filed in connection with a public-finance transaction or manufactured-home
             1103      transaction is effective for a period of 30 years after the date of filing if it indicates that it is
             1104      filed in connection with a public-finance transaction or manufactured-home transaction.
             1105          (3) The effectiveness of a filed financing statement lapses on the expiration of the
             1106      period of its effectiveness unless before the lapse a continuation statement is filed pursuant to
             1107      Subsection (4). Upon lapse, a financing statement ceases to be effective and any security
             1108      interest or agricultural lien that was perfected by the financing statement becomes unperfected,
             1109      unless the security interest is perfected otherwise. If the security interest or agricultural lien
             1110      becomes unperfected upon lapse, it is deemed never to have been perfected as against a


             1111      purchaser of the collateral for value.
             1112          (4) A continuation statement may be filed only within six months before the expiration
             1113      of the five-year period specified in Subsection (1) or the 30-year period specified in Subsection
             1114      (2), whichever is applicable.
             1115          (5) Except as otherwise provided in Section 70A-9a-510 , upon timely filing of a
             1116      continuation statement, the effectiveness of the initial financing statement continues for a
             1117      period of five years commencing on the day on which the financing statement would have
             1118      become ineffective in the absence of the filing. Upon the expiration of the five-year period, the
             1119      financing statement lapses in the same manner as provided in Subsection (3), unless, before the
             1120      lapse, another continuation statement is filed pursuant to Subsection (4). Succeeding
             1121      continuation statements may be filed in the same manner to continue the effectiveness of the
             1122      initial financing statement.
             1123          (6) If a debtor is a transmitting utility and a filed initial financing statement so
             1124      indicates, the financing statement is effective until a termination statement is filed.
             1125          (7) A record of a mortgage that is effective as a financing statement filed as a fixture
             1126      filing under Subsection 70A-9a-502 (3) remains effective as a financing statement filed as a
             1127      fixture filing until the mortgage is released or satisfied of record or its effectiveness otherwise
             1128      terminates as to the real property.
             1129          Section 15. Section 70A-9a-516 is amended to read:
             1130           70A-9a-516. What constitutes filing -- Effectiveness of filing.
             1131          (1) Except as otherwise provided in Subsection (2) or (4), communication of a record
             1132      to a filing office and tender of the filing fee or acceptance of the record by the filing office
             1133      constitutes filing.
             1134          (2) Filing does not occur with respect to a record that a filing office refuses to accept
             1135      because:
             1136          (a) the record is not communicated by a method or medium of communication
             1137      authorized by the filing office;
             1138          (b) an amount equal to or greater than the applicable filing fee is not tendered;
             1139          (c) the filing office is unable to index the record because:
             1140          (i) in the case of an initial financing statement, the record does not provide a name for
             1141      the debtor;


             1142          (ii) in the case of an amendment or [correction] information statement, the record:
             1143          (A) does not identify the initial financing statement as required by Section 70A-9a-512
             1144      or 70A-9a-518 , as applicable; or
             1145          (B) identifies an initial financing statement whose effectiveness has lapsed under
             1146      Section 70A-9a-515 ;
             1147          (iii) in the case of an initial financing statement that provides the name of a debtor
             1148      identified as an individual or an amendment that provides a name of a debtor identified as an
             1149      individual which was not previously provided in the financing statement to which the record
             1150      relates, the record does not identify the debtor's [last name] surname; or
             1151          (iv) in the case of a record filed or recorded in the filing office described in Subsection
             1152      70A-9a-501 (1)(a), the record does not provide a sufficient description of the real property to
             1153      which it relates;
             1154          (d) in the case of an initial financing statement or an amendment that adds a secured
             1155      party of record, the record does not provide a name and mailing address for the secured party of
             1156      record;
             1157          (e) in the case of an initial financing statement or an amendment that provides a name
             1158      of a debtor which was not previously provided in the financing statement to which the
             1159      amendment relates, the record does not:
             1160          (i) provide a mailing address for the debtor; or
             1161          (ii) indicate whether the name provided as the name of the debtor is the name of an
             1162      individual or an organization; [or]
             1163          [(iii) if the financing statement indicates that the debtor is an organization, provide:]
             1164          [(A) a type of organization for the debtor;]
             1165          [(B) a jurisdiction of organization for the debtor; or]
             1166          [(C) an organizational identification number for the debtor or indicate that the debtor
             1167      has none;]
             1168          (f) in the case of an assignment reflected in an initial financing statement under
             1169      Subsection 70A-9a-514 (1) or an amendment filed under Subsection 70A-9a-514 (2), the record
             1170      does not provide a name and mailing address for the assignee; or
             1171          (g) in the case of a continuation statement, the record is not filed within the six-month
             1172      period prescribed by Subsection 70A-9a-515 (4).


             1173          (3) For purposes of Subsection (2):
             1174          (a) a record does not provide information if the filing office is unable to read or
             1175      decipher the information; and
             1176          (b) a record that does not indicate that it is an amendment or identify an initial
             1177      financing statement to which it relates, as required by Section 70A-9a-512 , 70A-9a-514 , or
             1178      70A-9a-518 , is an initial financing statement.
             1179          (4) A filing office may refuse to accept a record for filing, and if it does so, filing does
             1180      not occur with respect to the record, because:
             1181          (a) the debtor is an individual and the debtor's name contains unusually placed and
             1182      apparently unnecessary punctuation, symbols, or other nonalphabetic characters;
             1183          (b) the record, in the collateral description or elsewhere, including an attachment,
             1184      discloses personally identifying information such as a Social Security number, driver license
             1185      number, identification card number, bank account number, credit or debit card account number,
             1186      date of birth, or place of birth; or
             1187          (c) the debtor is an individual and the record indicates that the debtor is a transmitting
             1188      utility.
             1189          [(4)] (5) A record that is communicated to the filing office with tender of the filing fee,
             1190      but which the filing office refuses to accept for a reason other than one set forth in Subsection
             1191      (2) or (4), is effective as a filed record except as against a purchaser of the collateral which
             1192      gives value in reasonable reliance upon the absence of the record from the files.
             1193          Section 16. Section 70A-9a-518 is amended to read:
             1194           70A-9a-518. Claim concerning inaccurate or wrongfully filed record.
             1195          (1) A person may file in the filing office [a correction] an information statement with
             1196      respect to a record indexed there under the person's name if the person believes that the record
             1197      is inaccurate or was wrongfully filed.
             1198          (2) [A correction] An information statement under Subsection (1) must:
             1199          (a) identify the record to which it relates by[: (i)] the file number assigned to the initial
             1200      financing statement to which the record relates; [and]
             1201          [(ii) if the correction statement relates to a record filed or recorded in a filing office
             1202      described in Subsection 70A-9a-501 (1)(a):]
             1203          [(A) (I) the entry number of the initial financing statement; or]


             1204          [(II) the book and page where that the initial financing statement was filed or recorded;
             1205      and]
             1206          [(B) the information specified in Subsection 70A-9a-502 (2);]
             1207          [(b) indicate that it is a correction statement; and]
             1208          (b) indicate that it is an information statement; and
             1209          (c) provide the basis for the person's belief that the record is inaccurate and indicate the
             1210      manner in which the person believes the record should be amended to cure any inaccuracy or
             1211      provide the basis for the person's belief that the record was wrongfully filed.
             1212          (3) A person may file in the filing office an information statement with respect to a
             1213      record filed there if the person is a secured party of record with respect to the financing
             1214      statement to which the record relates and believes that the person that filed the record was not
             1215      entitled to do so under Subsection 70A-9a-509 (4).
             1216          (4) An information statement under Subsection (3) must:
             1217          (a) identify the record to which it relates by the file number assigned to the initial
             1218      financing statement to which the record relates;
             1219          (b) indicate that it is an information statement; and
             1220          (c) provide the basis for the person's belief that the person that filed the record was not
             1221      entitled to do so under Subsection 70A-9a-509 (4).
             1222          [(3)] (5) The filing of [a correction] an information statement does not affect the
             1223      effectiveness of an initial financing statement or other filed record.
             1224          Section 17. Section 70A-9a-520 is amended to read:
             1225           70A-9a-520. Acceptance and refusal to accept record.
             1226          (1) A filing office shall refuse to accept a record for filing for a reason set forth in
             1227      Subsection 70A-9a-516 (2) or (4) and may refuse to accept a record for filing only for a reason
             1228      set forth in Subsection 70A-9a-516 (2).
             1229          (2) If a filing office refuses to accept a record for filing, it shall communicate to the
             1230      person that presented the record the fact of and reason for the refusal and the date and time the
             1231      record would have been filed had the filing office accepted it. The communication must be
             1232      made at the time and in the manner prescribed by filing-office rule but, in the case of a filing
             1233      office described in Subsection 70A-9a-501 (1)(b), in no event more than two business days after
             1234      the filing office receives the record.


             1235          (3) A filed financing statement satisfying Subsections 70A-9a-502 (1) and (2) is
             1236      effective, even if the filing office is required to refuse to accept it for filing under Subsection
             1237      (1). However, Section 70A-9a-338 applies to a filed financing statement providing information
             1238      described in Subsection 70A-9a-516 (2)(e) which is incorrect at the time the financing
             1239      statement is filed.
             1240          (4) If a record communicated to a filing office provides information that relates to more
             1241      than one debtor, this part applies as to each debtor separately.
             1242          (5) This section does not apply to a filing office described in Subsection
             1243      70A-9a-501 (1)(a).
             1244          Section 18. Section 70A-9a-521 is amended to read:
             1245           70A-9a-521. Uniform form of written financing statement and amendment.
             1246          (1) A filing office that accepts written records may not refuse to accept a written initial
             1247      financing statement in the form and format set forth in the final official text of the [1999] 2010
             1248      revisions to Article 9 of the Uniform Commercial Code promulgated by The American Law
             1249      Institute and the National Conference of Commissioners on Uniform State Laws, except for a
             1250      reason set forth in Subsection 70A-9a-516 (2) or (4).
             1251          (2) A filing office that accepts written records may not refuse to accept a written record
             1252      in the form and format set forth in the final official text of the [1999] 2010 revisions to Article
             1253      9 of the Uniform Commercial Code promulgated by The American Law Institute and the
             1254      National Conference of Commissioners on Uniform State Laws, except for a reason set forth in
             1255      Subsection 70A-9a-516 (2) or (4).
             1256          Section 19. Section 70A-9a-607 is amended to read:
             1257           70A-9a-607. Collection and enforcement by secured party.
             1258          (1) If so agreed, and in any event after default, a secured party:
             1259          (a) may notify an account debtor or other person obligated on collateral to make
             1260      payment or otherwise render performance to or for the benefit of the secured party;
             1261          (b) may take any proceeds to which the secured party is entitled under Section
             1262      70A-9a-315 ;
             1263          (c) may enforce the obligations of an account debtor or other person obligated on
             1264      collateral and exercise the rights of the debtor with respect to the obligation of the account
             1265      debtor or other person obligated on collateral to make payment or otherwise render


             1266      performance to the debtor, and with respect to any property that secures the obligations of the
             1267      account debtor or other person obligated on the collateral;
             1268          (d) if it holds a security interest in a deposit account perfected by control under
             1269      Subsection 70A-9a-104 (1)(a), may apply the balance of the deposit account to the obligation
             1270      secured by the deposit account; and
             1271          (e) if it holds a security interest in a deposit account perfected by control under
             1272      Subsection 70A-9a-104 (1)(b) or (c), may instruct the bank to pay the balance of the deposit
             1273      account to or for the benefit of the secured party.
             1274          (2) If necessary to enable a secured party to exercise under Subsection (1)(c) the right
             1275      of a debtor to enforce a mortgage nonjudicially, the secured party may record in the office in
             1276      which a record of the mortgage is recorded:
             1277          (a) a copy of the security agreement that creates or provides for a security interest in the
             1278      obligation secured by the mortgage; and
             1279          (b) the secured party's sworn affidavit in recordable form stating that:
             1280          (i) a default has occurred with respect to the obligation secured by the mortgage; and
             1281          (ii) the secured party is entitled to enforce the mortgage nonjudicially.
             1282          (3) A secured party shall proceed in a commercially reasonable manner if the secured
             1283      party:
             1284          (a) undertakes to collect from or enforce an obligation of an account debtor or other
             1285      person obligated on collateral; and
             1286          (b) is entitled to charge back uncollected collateral or otherwise to full or limited
             1287      recourse against the debtor or a secondary obligor.
             1288          (4) A secured party may deduct from the collections made pursuant to Subsection (3)
             1289      reasonable expenses of collection and enforcement, including reasonable attorney's fees and
             1290      legal expenses incurred by the secured party.
             1291          (5) This section does not determine whether an account debtor, bank, or other person
             1292      obligated on collateral owes a duty to a secured party.
             1293          Section 20. Section 70A-9a-801 is enacted to read:
             1294     
Part 8. Transition Provisions for 2010 Amendments

             1295          70A-9a-801. Savings clause.
             1296          (1) Except as otherwise provided in this part, the bill applies to a transaction or lien


             1297      within its scope, even if the transaction or lien was entered into or created before July 1, 2013.
             1298          (2) This bill does not affect an action, case, or proceeding commenced before July 1,
             1299      2013.
             1300          Section 21. Section 70A-9a-802 is enacted to read:
             1301          70A-9a-802. Security interest perfected before effective date.
             1302          (1) A security interest that is a perfected security interest immediately before July 1,
             1303      2013, is a perfected security interest under this chapter as amended by this bill if, when this bill
             1304      takes effect, the applicable requirements for attachment and perfection under this chapter as
             1305      amended by this bill are satisfied without further action.
             1306          (2) Except as otherwise provided in Section 70A-9a-805 , if immediately before July 1,
             1307      2013, a security interest is a perfected security interest, but the applicable requirements for
             1308      perfection under this chapter as amended by this bill are not satisfied when this bill takes effect,
             1309      the security interest remains perfected thereafter only if the applicable requirements for
             1310      perfection under this chapter as amended by this bill are satisfied within one year after July 1,
             1311      2013.
             1312          Section 22. Section 70A-9a-803 is enacted to read:
             1313          70A-9a-803. Security interest unperfected before effective date.
             1314          A security interest that is an unperfected security interest immediately before this bill
             1315      takes effect becomes a perfected security interest:
             1316          (1) without further action, when this bill takes effect if the applicable requirements for
             1317      perfection under this chapter as amended by this bill are satisfied before or at that time; or
             1318          (2) when the applicable requirements for perfection are satisfied if the requirements are
             1319      satisfied after that time.
             1320          Section 23. Section 70A-9a-804 is enacted to read:
             1321          70A-9a-804. Effectiveness of action taken before effective date.
             1322          (1) The filing of a financing statement before this bill takes effect is effective to perfect
             1323      a security interest to the extent the filing would satisfy the applicable requirements for
             1324      perfection under this chapter as amended by this bill.
             1325          (2) This bill does not render ineffective an effective financing statement that, before
             1326      this bill takes effect, is filed and satisfies the applicable requirements for perfection under the
             1327      law of the jurisdiction governing perfection as provided in this chapter as it existed before


             1328      amendment. However, except as otherwise provided in Subsections (3) and (4) and Section
             1329      70A-9a-805 , the financing statement ceases to be effective:
             1330          (a) if the financing statement is filed in this state, at the time the financing statement
             1331      would have ceased to be effective had this bill not taken effect; or
             1332          (b) if the financing statement is filed in another jurisdiction, at the earlier of:
             1333          (i) the time the financing statement would have ceased to be effective under the law of
             1334      that jurisdiction; or
             1335          (ii) June 30, 2018.
             1336          (3) The filing of a continuation statement after this bill takes effect does not continue
             1337      the effectiveness of a financing statement filed before this bill takes effect. However, upon the
             1338      timely filing of a continuation statement after this bill takes effect and in accordance with the
             1339      law of the jurisdiction governing perfection as provided in this chapter as amended by this bill,
             1340      the effectiveness of a financing statement filed in the same office in that jurisdiction before this
             1341      bill takes effect continues for the period provided by the law of that jurisdiction.
             1342          (4) Subsection (2)(b)(ii) applies to a financing statement that, before this bill takes
             1343      effect, is filed against a transmitting utility and satisfies the applicable requirements for
             1344      perfection under the law of the jurisdiction governing perfection as provided in this chapter as
             1345      it existed before amendment, only to the extent that this chapter as amended by this bill
             1346      provides that the law of a jurisdiction other than the jurisdiction in which the financing
             1347      statement is filed governs perfection of a security interest in collateral covered by the financing
             1348      statement.
             1349          (5) A financing statement that includes a financing statement filed before this bill takes
             1350      effect and a continuation statement filed after this bill takes effect is effective only to the extent
             1351      that it satisfies the requirements of Part 5, Filing, as amended by this bill for an initial financing
             1352      statement. A financing statement that indicates that the debtor is a decedent's estate indicates
             1353      that the collateral is being administered by a personal representative within the meaning of
             1354      Subsection 70A-9a-503 (1)(b) as amended by this bill. A financing statement that indicates that
             1355      the debtor is a trust or is a trustee acting with respect to property held in trust indicates that the
             1356      collateral is held in a trust within the meaning of Subsection 70A-9a-503 (1)(c) as amended by
             1357      this bill.
             1358          Section 24. Section 70A-9a-805 is enacted to read:


             1359          70A-9a-805. When initial financing statement suffices to continue effectiveness of
             1360      financing statement.
             1361          (1) The filing of an initial financing statement in the office specified in Section
             1362      70A-9a-501 continues the effectiveness of a financing statement filed before this bill takes
             1363      effect if:
             1364          (a) the filing of an initial financing statement in that office would be effective to
             1365      perfect a security interest under this chapter as amended by this bill;
             1366          (b) the pre-effective-date financing statement was filed in an office in another state;
             1367      and
             1368          (c) the initial financing statement satisfies Subsection (3).
             1369          (2) The filing of an initial financing statement under Subsection (1) continues the
             1370      effectiveness of the pre-effective-date financing statement:
             1371          (a) if the initial financing statement is filed before this bill takes effect, for the period
             1372      provided in unamended Section 70A-9a-515 with respect to an initial financing statement; and
             1373          (b) if the initial financing statement is filed after this bill takes effect, for the period
             1374      provided in Section 70A-9a-515 as amended by this bill with respect to an initial financing
             1375      statement.
             1376          (3) To be effective for purposes of Subsection (1), an initial financing statement must:
             1377          (a) satisfy the requirements of Part 5, Filing, as amended by this bill for an initial
             1378      financing statement;
             1379          (b) identify the pre-effective-date financing statement by indicating the office in which
             1380      the financing statement was filed and providing the dates of filing and file numbers, if any, of
             1381      the financing statement and of the most recent continuation statement filed with respect to the
             1382      financing statement; and
             1383          (c) indicate that the pre-effective-date financing statement remains effective.
             1384          Section 25. Section 70A-9a-806 is enacted to read:
             1385          70A-9a-806. Amendment of pre-effective-date financing statement.
             1386          (1) In this section, "pre-effective-date financing statement" means a financing
             1387      statement filed before this bill takes effect.
             1388          (2) After this bill takes effect, a person may add or delete collateral covered by,
             1389      continue or terminate the effectiveness of, or otherwise amend the information provided in, a


             1390      pre-effective-date financing statement only in accordance with the law of the jurisdiction
             1391      governing perfection as provided in this chapter as amended by this bill. However, the
             1392      effectiveness of a pre-effective-date financing statement also may be terminated in accordance
             1393      with the law of the jurisdiction in which the financing statement is filed.
             1394          (3) Except as otherwise provided in Subsection (4), if the law of this state governs
             1395      perfection of a security interest, the information in a pre-effective-date financing statement may
             1396      be amended after this bill takes effect only if:
             1397          (a) the pre-effective-date financing statement and an amendment are filed in the office
             1398      specified in Section 70A-9a-501 ;
             1399          (b) an amendment is filed in the office specified in Section 70A-9a-501 concurrently
             1400      with, or after the filing in that office of, an initial financing statement that satisfies Subsection
             1401      70A-9a-805 (3); or
             1402          (c) an initial financing statement that provides the information as amended and satisfies
             1403      Subsection 70A-9a-805 (3) is filed in the office specified in Section 70A-9a-501 .
             1404          (4) If the law of this state governs perfection of a security interest, the effectiveness of
             1405      a pre-effective-date financing statement may be continued only under Subsections
             1406      70A-9a-804 (3) and (5) or Section 70A-9a-805 .
             1407          (5) Whether or not the law of this state governs perfection of a security interest, the
             1408      effectiveness of a pre-effective-date financing statement filed in this state may be terminated
             1409      after this bill takes effect by filing a termination statement in the office in which the
             1410      pre-effective-date financing statement is filed, unless an initial financing statement that
             1411      satisfies Subsection 70A-9a-805 (3) has been filed in the office specified by the law of the
             1412      jurisdiction governing perfection as provided in this chapter as amended by this bill as the
             1413      office in which to file a financing statement.
             1414          Section 26. Section 70A-9a-807 is enacted to read:
             1415          70A-9a-807. Person entitled to file initial financing statement or continuation
             1416      statement.
             1417          A person may file an initial financing statement or a continuation statement under this
             1418      part if:
             1419          (1) the secured party of record authorizes the filing; and
             1420          (2) the filing is necessary under this part:


             1421          (a) to continue the effectiveness of a financing statement filed before this bill takes
             1422      effect; or
             1423          (b) to perfect or continue the perfection of a security interest.
             1424          Section 27. Section 70A-9a-808 is enacted to read:
             1425          70A-9a-808. Priority.
             1426          This bill determines the priority of conflicting claims to collateral. However, if the
             1427      relative priorities of the claims were established before this bill takes effect, this chapter as it
             1428      existed before amendment determines priority.
             1429          Section 28. Repealer.
             1430          This bill repeals:
             1431          Section 70A-11-101, Effective date.
             1432          Section 70A-11-102, Preservation of old transition provision.
             1433          Section 70A-11-103, Transition to corrected Uniform Commercial Code -- General
             1434      rule.
             1435          Section 70A-11-104, Transition provision on change of requirement of filing.
             1436          Section 70A-11-105, Transition provision on change of place of filing.
             1437          Section 70A-11-106, Required refilings.
             1438          Section 70A-11-107, Transition provisions as to priorities.
             1439          Section 70A-11-108, Presumption that rule of law continues unchanged.
             1440          Section 29. Effective date.
             1441          This bill takes effect on July 1, 2013.
             1442          Section 30. Revisor instructions.
             1443          The Legislature intends that the Office of Legislative Research and General Counsel, in
             1444      preparing the Utah Code database for publication, replace the language in Sections 70A-9a-801
             1445      through 70A-9a-808 , from "this bill" with the bill's designated chapter number in the Laws of
             1446      Utah.


[Bill Documents][Bills Directory]