Text: HF02512 Text: HF02514 Text: HF02500 - HF02599 Text: HF Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 HOUSE FILE 2513 1 2 1 3 AN ACT 1 4 PROVIDING FOR SECURED TRANSACTIONS UNDER THE UNIFORM COMMERCIAL 1 5 CODE, BY ADOPTING NEW ARTICLE 9, ELIMINATING CONFLICTING 1 6 PROVISIONS, AND PROVIDING AN EFFECTIVE DATE. 1 7 1 8 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 1 9 1 10 DIVISION I 1 11 ARTICLE 9 AMENDMENTS 1 12 ARTICLE 9 – SECURED TRANSACTIONS 1 13 PART 1 1 14 GENERAL PROVISIONS 1 15 A. SHORT TITLE, DEFINITIONS, AND GENERAL CONCEPTS 1 16 Section 1. NEW SECTION. 554.9101 SHORT TITLE. 1 17 This Article may be cited as Uniform Commercial Code – 1 18 Secured Transactions. 1 19 Sec. 2. NEW SECTION. 554.9102 DEFINITIONS AND INDEX OF 1 20 DEFINITIONS. 1 21 1. ARTICLE 9 DEFINITIONS. In this Article: 1 22 a. "Accession" means goods that are physically united with 1 23 other goods in such a manner that the identity of the original 1 24 goods is not lost. 1 25 b. "Account", except as used in "account for", means a 1 26 right to payment of a monetary obligation, whether or not 1 27 earned by performance, (i) for property that has been or is to 1 28 be sold, leased, licensed, assigned, or otherwise disposed of, 1 29 (ii) for services rendered or to be rendered, (iii) for a 1 30 policy of insurance issued or to be issued, (iv) for a 1 31 secondary obligation incurred or to be incurred, (v) for 1 32 energy provided or to be provided, (vi) for the use or hire of 1 33 a vessel under a charter or other contract, (vii) arising out 1 34 of the use of a credit or charge card or information contained 1 35 on or for use with the card, or (viii) as winnings in a 2 1 lottery or other game of chance operated or sponsored by a 2 2 state, governmental unit of a state, or person licensed or 2 3 authorized to operate the game by a state or governmental unit 2 4 of a state. The term includes health-care-insurance 2 5 receivables. The term does not include (i) rights to payment 2 6 evidenced by chattel paper or an instrument, (ii) commercial 2 7 tort claims, (iii) deposit accounts, (iv) investment property, 2 8 (v) letter-of-credit rights or letters of credit, or (vi) 2 9 rights to payment for money or funds advanced or sold, other 2 10 than rights arising out of the use of a credit or charge card 2 11 or information contained on or for use with the card. 2 12 c. "Account debtor" means a person obligated on an 2 13 account, chattel paper, or general intangible. The term does 2 14 not include persons obligated to pay a negotiable instrument, 2 15 even if the instrument constitutes part of chattel paper. 2 16 d. "Accounting", except as used in "accounting for", means 2 17 a record: 2 18 (1) authenticated by a secured party; 2 19 (2) indicating the aggregate unpaid secured obligations as 2 20 of a date not more than thirty-five days earlier or thirty- 2 21 five days later than the date of the record; and 2 22 (3) identifying the components of the obligations in 2 23 reasonable detail. 2 24 e. "Agricultural lien" means an interest, other than a 2 25 security interest, in farm products: 2 26 (1) which secures payment or performance of an obligation 2 27 for: 2 28 (a) goods or services furnished in connection with a 2 29 debtor's farming operation; or 2 30 (b) rent on real property leased by a debtor in connection 2 31 with its farming operation; 2 32 (2) which is created by statute in favor of a person that: 2 33 (a) in the ordinary course of its business furnished goods 2 34 or services to a debtor in connection with a debtor's farming 2 35 operation; or 3 1 (b) leased real property to a debtor in connection with 3 2 the debtor's farming operation; and 3 3 (3) whose effectiveness does not depend on the person's 3 4 possession of the personal property. 3 5 f. "As-extracted collateral" means: 3 6 (1) oil, gas, or other minerals that are subject to a 3 7 security interest that: 3 8 (a) is created by a debtor having an interest in the 3 9 minerals before extraction; and 3 10 (b) attaches to the minerals as extracted; or 3 11 (2) accounts arising out of the sale at the wellhead or 3 12 minehead of oil, gas, or other minerals in which the debtor 3 13 had an interest before extraction. 3 14 g. "Authenticate" means: 3 15 (1) to sign; or 3 16 (2) to execute or otherwise adopt a symbol, or encrypt or 3 17 similarly process a record in whole or in part, with the 3 18 present intent of the authenticating person to identify the 3 19 person and adopt or accept a record. 3 20 h. "Bank" means an organization that is engaged in the 3 21 business of banking. The term includes savings banks, savings 3 22 and loan associations, credit unions, and trust companies. 3 23 i. "Cash proceeds" means proceeds that are money, checks, 3 24 deposit accounts, or the like. 3 25 j. "Certificate of title" means a certificate of title 3 26 with respect to which a statute provides for the security 3 27 interest in question to be indicated on the certificate as a 3 28 condition or result of the security interest's obtaining 3 29 priority over the rights of a lien creditor with respect to 3 30 the collateral. 3 31 k. "Chattel paper" means a record or records that evidence 3 32 both a monetary obligation and a security interest in specific 3 33 goods, a security interest in specific goods and software used 3 34 in the goods, a security interest in specific goods and 3 35 license of software used in the goods, a lease of specific 4 1 goods, or a lease of specific goods and license of software 4 2 used in the goods. In this paragraph, "monetary obligation" 4 3 means a monetary obligation secured by the goods or owed under 4 4 a lease of the goods and includes a monetary obligation with 4 5 respect to software used in the goods. The term does not 4 6 include (i) charters or other contracts involving the use or 4 7 hire of a vessel or (ii) records that evidence a right to 4 8 payment arising out of the use of a credit or charge card or 4 9 information contained on or for use with the card. If a 4 10 transaction is evidenced by records that include an instrument 4 11 or series of instruments, the group of records taken together 4 12 constitutes chattel paper. 4 13 l. "Collateral" means the property subject to a security 4 14 interest or agricultural lien. The term includes: 4 15 (1) proceeds to which a security interest attaches; 4 16 (2) accounts, chattel paper, payment intangibles, and 4 17 promissory notes that have been sold; and 4 18 (3) goods that are the subject of a consignment. 4 19 m. "Commercial tort claim" means a claim arising in tort 4 20 with respect to which: 4 21 (1) the claimant is an organization; or 4 22 (2) the claimant is an individual and the claim: 4 23 (a) arose in the course of the claimant's business or 4 24 profession; and 4 25 (b) does not include damages arising out of personal 4 26 injury to or the death of an individual. 4 27 n. "Commodity account" means an account maintained by a 4 28 commodity intermediary in which a commodity contract is 4 29 carried for a commodity customer. 4 30 o. "Commodity contract" means a commodity futures 4 31 contract, an option on a commodity futures contract, a 4 32 commodity option, or another contract if the contract or 4 33 option is: 4 34 (1) traded on or subject to the rules of a board of trade 4 35 that has been designated as a contract market for such a 5 1 contract pursuant to federal commodities laws; or 5 2 (2) traded on a foreign commodity board of trade, 5 3 exchange, or market, and is carried on the books of a 5 4 commodity intermediary for a commodity customer. 5 5 p. "Commodity customer" means a person for which a 5 6 commodity intermediary carries a commodity contract on its 5 7 books. 5 8 q. "Commodity intermediary" means a person that: 5 9 (1) is registered as a futures commission merchant under 5 10 federal commodities law; or 5 11 (2) in the ordinary course of its business provides 5 12 clearance or settlement services for a board of trade that has 5 13 been designated as a contract market pursuant to federal 5 14 commodities law. 5 15 r. "Communicate" means: 5 16 (1) to send a written or other tangible record; 5 17 (2) to transmit a record by any means agreed upon by the 5 18 persons sending and receiving the record; or 5 19 (3) in the case of transmission of a record to or by a 5 20 filing office, to transmit a record by any means prescribed by 5 21 filing-office rule. 5 22 s. "Consignee" means a merchant to which goods are 5 23 delivered in a consignment. 5 24 t. "Consignment" means a transaction, regardless of its 5 25 form, in which a person delivers goods to a merchant for the 5 26 purpose of sale and: 5 27 (1) the merchant: 5 28 (a) deals in goods of that kind under a name other than 5 29 the name of the person making delivery; 5 30 (b) is not an auctioneer; and 5 31 (c) is not generally known by its creditors to be 5 32 substantially engaged in selling the goods of others; 5 33 (2) with respect to each delivery, the aggregate value of 5 34 the goods is one thousand dollars or more at the time of 5 35 delivery; 6 1 (3) the goods are not consumer goods immediately before 6 2 delivery; and 6 3 (4) the transaction does not create a security interest 6 4 that secures an obligation. 6 5 u. "Consignor" means a person that delivers goods to a 6 6 consignee in a consignment. 6 7 v. "Consumer debtor" means a debtor in a consumer 6 8 transaction. 6 9 w. "Consumer goods" means goods that are used or bought 6 10 for use primarily for personal, family, or household purposes. 6 11 x. "Consumer-goods transaction" means a consumer 6 12 transaction in which: 6 13 (1) an individual incurs an obligation primarily for 6 14 personal, family, or household purposes; and 6 15 (2) a security interest in consumer goods secures the 6 16 obligation. 6 17 y. "Consumer obligor" means an obligor who is an 6 18 individual and who incurred the obligation as part of a 6 19 transaction entered into primarily for personal, family, or 6 20 household purposes. 6 21 z. "Consumer transaction" means a transaction in which (i) 6 22 an individual incurs an obligation primarily for personal, 6 23 family, or household purposes, (ii) a security interest 6 24 secures the obligation, and (iii) the collateral is held or 6 25 acquired primarily for personal, family, or household 6 26 purposes. The term includes consumer-goods transactions. 6 27 aa. "Continuation statement" means an amendment of a 6 28 financing statement which: 6 29 (1) identifies, by its file number, the initial financing 6 30 statement to which it relates; and 6 31 (2) indicates that it is a continuation statement for, or 6 32 that it is filed to continue the effectiveness of, the 6 33 identified financing statement. 6 34 ab. "Debtor" means: 6 35 (1) a person having an interest, other than a security 7 1 interest or other lien, in the collateral, whether or not the 7 2 person is an obligor; 7 3 (2) a seller of accounts, chattel paper, payment 7 4 intangibles, or promissory notes; or 7 5 (3) a consignee. 7 6 ac. "Deposit account" means a demand, time, savings, 7 7 passbook, or similar account maintained with a bank. The term 7 8 does not include investment property or accounts evidenced by 7 9 an instrument. 7 10 ad. "Document" means a document of title or a receipt of 7 11 the type described in section 554.7201, subsection 2. 7 12 ae. "Electronic chattel paper" means chattel paper 7 13 evidenced by a record or records consisting of information 7 14 stored in an electronic medium. 7 15 af. "Encumbrance" means a right, other than an ownership 7 16 interest, in real property. The term includes mortgages and 7 17 other liens on real property. 7 18 ag. "Equipment" means goods other than inventory, farm 7 19 products, or consumer goods. 7 20 ah. "Farm products" means goods, other than standing 7 21 timber, with respect to which the debtor is engaged in a 7 22 farming operation and which are: 7 23 (1) crops grown, growing, or to be grown, including: 7 24 (a) crops produced on trees, vines, and bushes; and 7 25 (b) aquatic goods produced in aquacultural operations; 7 26 (2) livestock, born or unborn, including aquatic goods 7 27 produced in aquacultural operations; 7 28 (3) supplies used or produced in a farming operation; or 7 29 (4) products of crops or livestock in their unmanufactured 7 30 states. 7 31 ai. "Farming operation" means raising, cultivating, 7 32 propagating, fattening, grazing, or any other farming, 7 33 livestock, or aquacultural operation. 7 34 aj. "File number" means the number assigned to an initial 7 35 financing statement pursuant to section 554.9519, subsection 8 1 1. 8 2 ak. "Filing office" means an office designated in section 8 3 554.9501 as the place to file a financing statement. 8 4 al. "Filing-office rule" means a rule adopted pursuant to 8 5 section 554.9526. 8 6 am. "Financing statement" means a record or records 8 7 composed of an initial financing statement and any filed 8 8 record relating to the initial financing statement. 8 9 an. "Fixture filing" means the filing of a financing 8 10 statement covering goods that are or are to become fixtures 8 11 and satisfying section 554.9502, subsections 1 and 2. The 8 12 term includes the filing of a financing statement covering 8 13 goods of a transmitting utility which are or are to become 8 14 fixtures. 8 15 ao. "Fixtures" means goods that have become so related to 8 16 particular real property that an interest in them arises under 8 17 real property law. 8 18 ap. "General intangible" means any personal property, 8 19 including things in action, other than accounts, chattel 8 20 paper, commercial tort claims, deposit accounts, documents, 8 21 goods, instruments, investment property, letter-of-credit 8 22 rights, letters of credit, money, and oil, gas, or other 8 23 minerals before extraction. The term includes payment 8 24 intangibles and software. 8 25 aq. "Good faith" means honesty in fact and the observance 8 26 of reasonable commercial standards of fair dealing. 8 27 ar. "Goods" means all things that are movable when a 8 28 security interest attaches. The term includes (i) fixtures, 8 29 (ii) standing timber that is to be cut and removed under a 8 30 conveyance or contract for sale, (iii) the unborn young of 8 31 animals, (iv) crops grown, growing, or to be grown, even if 8 32 the crops are produced on trees, vines, or bushes, and (v) 8 33 manufactured homes. The term also includes a computer program 8 34 embedded in goods and any supporting information provided in 8 35 connection with a transaction relating to the program if (i) 9 1 the program is associated with the goods in such a manner that 9 2 it customarily is considered part of the goods, or (ii) by 9 3 becoming the owner of the goods, a person acquires a right to 9 4 use the program in connection with the goods. The term does 9 5 not include a computer program embedded in goods that consist 9 6 solely of the medium in which the program is embedded. The 9 7 term also does not include accounts, chattel paper, commercial 9 8 tort claims, deposit accounts, documents, general intangibles, 9 9 instruments, investment property, letter-of-credit rights, 9 10 letters of credit, money, or oil, gas, or other minerals 9 11 before extraction. 9 12 as. "Governmental unit" means a subdivision, agency, 9 13 department, county, parish, municipality, or other unit of the 9 14 government of the United States, a state, or a foreign 9 15 country. The term includes an organization having a separate 9 16 corporate existence if the organization is eligible to issue 9 17 debt on which interest is exempt from income taxation under 9 18 the laws of the United States. 9 19 at. "Health-care-insurance receivable" means an interest 9 20 in or claim under a policy of insurance which is a right to 9 21 payment of a monetary obligation for health-care goods or 9 22 services provided. 9 23 au. "Instrument" means a negotiable instrument or any 9 24 other writing that evidences a right to the payment of a 9 25 monetary obligation, is not itself a security agreement or 9 26 lease, and is of a type that in ordinary course of business is 9 27 transferred by delivery with any necessary indorsement or 9 28 assignment. The term does not include (i) investment 9 29 property, (ii) letters of credit, or (iii) writings that 9 30 evidence a right to payment arising out of the use of a credit 9 31 or charge card or information contained on or for use with the 9 32 card. 9 33 av. "Inventory" means goods, other than farm products, 9 34 which: 9 35 (1) are leased by a person as lessor; 10 1 (2) are held by a person for sale or lease or to be 10 2 furnished under a contract of service; 10 3 (3) are furnished by a person under a contract of service; 10 4 or 10 5 (4) consist of raw materials, work in process, or 10 6 materials used or consumed in a business. 10 7 aw. "Investment property" means a security, whether 10 8 certificated or uncertificated, security entitlement, 10 9 securities account, commodity contract, or commodity account. 10 10 ax. "Jurisdiction of organization", with respect to a 10 11 registered organization, means the jurisdiction under whose 10 12 law the organization is organized. 10 13 ay. "Letter-of-credit right" means a right to payment or 10 14 performance under a letter of credit, whether or not the 10 15 beneficiary has demanded or is at the time entitled to demand 10 16 payment or performance. The term does not include the right 10 17 of a beneficiary to demand payment or performance under a 10 18 letter of credit. 10 19 az. "Lien creditor" means: 10 20 (1) a creditor that has acquired a lien on the property 10 21 involved by attachment, levy, or the like; 10 22 (2) an assignee for benefit of creditors from the time of 10 23 assignment; 10 24 (3) a trustee in bankruptcy from the date of the filing of 10 25 the petition; or 10 26 (4) a receiver in equity from the time of appointment. 10 27 ba. "Manufactured home" means a structure, transportable 10 28 in one or more sections, which, in the traveling mode, is 10 29 eight body feet or more in width or forty body feet or more in 10 30 length, or, when erected on site, is three hundred twenty or 10 31 more square feet, and which is built on a permanent chassis 10 32 and designed to be used as a dwelling with or without a 10 33 permanent foundation when connected to the required utilities, 10 34 and includes the plumbing, heating, air-conditioning, and 10 35 electrical systems contained therein. The term includes any 11 1 structure that meets all of the requirements of this paragraph 11 2 except the size requirements and with respect to which the 11 3 manufacturer voluntarily files a certification required by the 11 4 United States secretary of housing and urban development and 11 5 complies with the standards established under Title 42 of the 11 6 United States Code. 11 7 bb. "Manufactured-home transaction" means a secured 11 8 transaction: 11 9 (1) that creates a purchase-money security interest in a 11 10 manufactured home, other than a manufactured home held as 11 11 inventory; or 11 12 (2) in which a manufactured home, other than a 11 13 manufactured home held as inventory, is the primary 11 14 collateral. 11 15 bc. "Mortgage" means a consensual interest in real 11 16 property, including fixtures, which secures payment or 11 17 performance of an obligation. 11 18 bd. "New debtor" means a person that becomes bound as 11 19 debtor under section 554.9203, subsection 4, by a security 11 20 agreement previously entered into by another person. 11 21 be. "New value" means (i) money, (ii) money's worth in 11 22 property, services, or new credit, or (iii) release by a 11 23 transferee of an interest in property previously transferred 11 24 to the transferee. The term does not include an obligation 11 25 substituted for another obligation. 11 26 bf. "Noncash proceeds" means proceeds other than cash 11 27 proceeds. 11 28 bg. "Obligor" means a person that, with respect to an 11 29 obligation secured by a security interest in or an 11 30 agricultural lien on the collateral, (i) owes payment or other 11 31 performance of the obligation, (ii) has provided property 11 32 other than the collateral to secure payment or other 11 33 performance of the obligation, or (iii) is otherwise 11 34 accountable in whole or in part for payment or other 11 35 performance of the obligation. The term does not include 12 1 issuers or nominated persons under a letter of credit. 12 2 bh. "Original debtor", except as used in section 554.9310, 12 3 subsection 3, means a person that, as debtor, entered into a 12 4 security agreement to which a new debtor has become bound 12 5 under section 554.9203, subsection 4. 12 6 bi. "Payment intangible" means a general intangible under 12 7 which the account debtor's principal obligation is a monetary 12 8 obligation. 12 9 bj. "Person related to", with respect to an individual, 12 10 means: 12 11 (1) the spouse of the individual; 12 12 (2) a brother, brother-in-law, sister, or sister-in-law of 12 13 the individual; 12 14 (3) an ancestor or lineal descendant of the individual or 12 15 the individual's spouse; or 12 16 (4) any other relative, by blood or marriage, of the 12 17 individual or the individual's spouse who shares the same home 12 18 with the individual. 12 19 bk. "Person related to", with respect to an organization, 12 20 means: 12 21 (1) a person directly or indirectly controlling, 12 22 controlled by, or under common control with the organization; 12 23 (2) an officer or director of, or a person performing 12 24 similar functions with respect to, the organization; 12 25 (3) an officer or director of, or a person performing 12 26 similar functions with respect to, a person described in 12 27 subparagraph (1); 12 28 (4) the spouse of an individual described in subparagraph 12 29 (1), (2), or (3); or 12 30 (5) an individual who is related by blood or marriage to 12 31 an individual described in subparagraph (1), (2), (3), or (4) 12 32 and shares the same home with the individual. 12 33 bl. "Proceeds", except as used in section 554.9609, 12 34 subsection 2, means the following property: 12 35 (1) whatever is acquired upon the sale, lease, license, 13 1 exchange, or other disposition of collateral; 13 2 (2) whatever is collected on, or distributed on account 13 3 of, collateral; 13 4 (3) rights arising out of collateral; 13 5 (4) to the extent of the value of collateral, claims 13 6 arising out of the loss, nonconformity, or interference with 13 7 the use of, defects or infringement of rights in, or damage 13 8 to, the collateral; or 13 9 (5) to the extent of the value of collateral and to the 13 10 extent payable to the debtor or the secured party, insurance 13 11 payable by reason of the loss or nonconformity of, defects or 13 12 infringement of rights in, or damage to, the collateral. 13 13 bm. "Promissory note" means an instrument that evidences a 13 14 promise to pay a monetary obligation, does not evidence an 13 15 order to pay, and does not contain an acknowledgment by a bank 13 16 that the bank has received for deposit a sum of money or 13 17 funds. 13 18 bn. "Proposal" means a record authenticated by a secured 13 19 party which includes the terms on which the secured party is 13 20 willing to accept collateral in full or partial satisfaction 13 21 of the obligation it secures pursuant to sections 554.9620, 13 22 554.9621, and 554.9622. 13 23 bo. "Public-finance transaction" means a secured 13 24 transaction in connection with which: 13 25 (1) debt securities are issued; 13 26 (2) all or a portion of the securities issued have an 13 27 initial stated maturity of at least twenty years; and 13 28 (3) the debtor, obligor, secured party, account debtor or 13 29 other person obligated on collateral, assignor or assignee of 13 30 a secured obligation, or assignor or assignee of a security 13 31 interest is a state or a governmental unit of a state. 13 32 bp. "Pursuant to commitment", with respect to an advance 13 33 made or other value given by a secured party, means pursuant 13 34 to the secured party's obligation, whether or not a subsequent 13 35 event of default or other event not within the secured party's 14 1 control has relieved or may relieve the secured party from its 14 2 obligation. 14 3 bq. "Record", except as used in "for record", "of record", 14 4 "record or legal title", and "record owner", means information 14 5 that is inscribed on a tangible medium or which is stored in 14 6 an electronic or other medium and is retrievable in 14 7 perceivable form. 14 8 br. "Registered organization" means an organization 14 9 organized solely under the law of a single state or the United 14 10 States and as to which the state or the United States must 14 11 maintain a public record showing the organization to have been 14 12 organized. 14 13 bs. "Secondary obligor" means an obligor to the extent 14 14 that: 14 15 (1) the obligor's obligation is secondary; or 14 16 (2) the obligor has a right of recourse with respect to an 14 17 obligation secured by collateral against the debtor, another 14 18 obligor, or property of either. 14 19 bt. "Secured party" means: 14 20 (1) a person in whose favor a security interest is created 14 21 or provided for under a security agreement, whether or not any 14 22 obligation to be secured is outstanding; 14 23 (2) a person that holds an agricultural lien; 14 24 (3) a consignor; 14 25 (4) a person to which accounts, chattel paper, payment 14 26 intangibles, or promissory notes have been sold; 14 27 (5) a trustee, indenture trustee, agent, collateral agent, 14 28 or other representative in whose favor a security interest or 14 29 agricultural lien is created or provided for; or 14 30 (6) a person that holds a security interest arising under 14 31 section 554.2401, 554.2505, 554.2711, subsection 3, section 14 32 554.4210, 554.5118, or 554.13508, subsection 5. 14 33 bu. "Security agreement" means an agreement that creates 14 34 or provides for a security interest. 14 35 bv. "Send", in connection with a record or notification, 15 1 means: 15 2 (1) to deposit in the mail, deliver for transmission, or 15 3 transmit by any other usual means of communication, with 15 4 postage or cost of transmission provided for, addressed to any 15 5 address reasonable under the circumstances; or 15 6 (2) to cause the record or notification to be received 15 7 within the time that it would have been received if properly 15 8 sent under subparagraph (1). 15 9 bw. "Software" means a computer program and any supporting 15 10 information provided in connection with a transaction relating 15 11 to the program. The term does not include a computer program 15 12 that is included in the definition of goods. 15 13 bx. "State" means a state of the United States, the 15 14 District of Columbia, Puerto Rico, the United States Virgin 15 15 Islands, or any territory or insular possession subject to the 15 16 jurisdiction of the United States. 15 17 by. "Supporting obligation" means a letter-of-credit right 15 18 or secondary obligation that supports the payment or 15 19 performance of an account, chattel paper, a document, a 15 20 general intangible, an instrument, or investment property. 15 21 bz. "Tangible chattel paper" means chattel paper evidenced 15 22 by a record or records consisting of information that is 15 23 inscribed on a tangible medium. 15 24 ca. "Termination statement" means an amendment of a 15 25 financing statement which: 15 26 (1) identifies, by its file number, the initial financing 15 27 statement to which it relates; and 15 28 (2) indicates either that it is a termination statement or 15 29 that the identified financing statement is no longer 15 30 effective. 15 31 cb. "Transmitting utility" means a person primarily 15 32 engaged in the business of: 15 33 (1) operating a railroad, subway, street railway, or 15 34 trolley bus; 15 35 (2) transmitting communications electrically, 16 1 electromagnetically, or by light; 16 2 (3) transmitting goods by pipeline or sewer; or 16 3 (4) transmitting or producing and transmitting 16 4 electricity, steam, gas, or water. 16 5 2. DEFINITIONS IN OTHER ARTICLES. The following 16 6 definitions in other Articles apply to this Article: 16 7 "Applicant" Section 554.5102 16 8 "Beneficiary" Section 554.5102 16 9 "Broker" Section 554.8102 16 10 "Certificated security" Section 554.8102 16 11 "Check" Section 554.3104 16 12 "Clearing corporation" Section 554.8102 16 13 "Contract for sale" Section 554.2106 16 14 "Customer" Section 554.4104 16 15 "Entitlement holder" Section 554.8102 16 16 "Financial asset" Section 554.8102 16 17 "Holder in due course" Section 554.3302 16 18 "Issuer" (with respect to a letter of 16 19 credit or letter-of-credit right) Section 554.5102 16 20 "Issuer" (with respect to a security) Section 554.8201 16 21 "Lease" Section 554.13103 16 22 "Lease agreement" Section 554.13103 16 23 "Lease contract" Section 554.13103 16 24 "Leasehold interest" Section 554.13103 16 25 "Lessee" Section 554.13103 16 26 "Lessee in ordinary course of business" Section 554.13103 16 27 "Lessor" Section 554.13103 16 28 "Lessor's residual interest" Section 554.13103 16 29 "Letter of credit" Section 554.5102 16 30 "Merchant" Section 554.2104 16 31 "Negotiable instrument" Section 554.3104 16 32 "Nominated person" Section 554.5102 16 33 "Note" Section 554.3104 16 34 "Proceeds of a letter of credit" Section 554.5114 16 35 "Prove" Section 554.3103 17 1 "Sale" Section 554.2106 17 2 "Securities account" Section 554.8501 17 3 "Securities intermediary" Section 554.8102 17 4 "Security" Section 554.8102 17 5 "Security certificate" Section 554.8102 17 6 "Security entitlement" Section 554.8102 17 7 "Uncertificated security" Section 554.8102 17 8 3. ARTICLE 1 DEFINITIONS AND PRINCIPLES. Article 1 17 9 contains general definitions and principles of construction 17 10 and interpretation applicable throughout this Article. 17 11 4. FEDERAL FOOD SECURITY ACT. For purposes of the Federal 17 12 Food Security Act, 7 U.S.C. } 1631, written notice shall be 17 13 considered to be received by the person to whom it was 17 14 delivered if the notice is delivered in hand to the person, or 17 15 mailed by certified or registered mail with the proper postage 17 16 and properly addressed to the person to whom it was sent. The 17 17 refusal of a person to whom a notice is so mailed to accept 17 18 delivery of the notice shall be considered receipt. 17 19 Sec. 3. NEW SECTION. 554.9103 PURCHASE-MONEY SECURITY 17 20 INTEREST – APPLICATION OF PAYMENTS – BURDEN OF ESTABLISHING. 17 21 1. DEFINITIONS. In this section: 17 22 a. "purchase-money collateral" means goods or software 17 23 that secures a purchase-money obligation incurred with respect 17 24 to that collateral; and 17 25 b. "purchase-money obligation" means an obligation of an 17 26 obligor incurred as all or part of the price of the collateral 17 27 or for value given to enable the debtor to acquire rights in 17 28 or the use of the collateral if the value is in fact so used. 17 29 2. PURCHASE-MONEY SECURITY INTEREST IN GOODS. A security 17 30 interest in goods is a purchase-money security interest: 17 31 a. to the extent that the goods are purchase-money 17 32 collateral with respect to that security interest; 17 33 b. if the security interest is in inventory that is or was 17 34 purchase-money collateral, also to the extent that the 17 35 security interest secures a purchase-money obligation incurred 18 1 with respect to other inventory in which the secured party 18 2 holds or held a purchase-money security interest; and 18 3 c. also to the extent that the security interest secures a 18 4 purchase-money obligation incurred with respect to software in 18 5 which the secured party holds or held a purchase-money 18 6 security interest. 18 7 3. PURCHASE-MONEY SECURITY INTEREST IN SOFTWARE. A 18 8 security interest in software is a purchase-money security 18 9 interest to the extent that the security interest also secures 18 10 a purchase-money obligation incurred with respect to goods in 18 11 which the secured party holds or held a purchase-money 18 12 security interest if: 18 13 a. the debtor acquired its interest in the software in an 18 14 integrated transaction in which it acquired an interest in the 18 15 goods; and 18 16 b. the debtor acquired its interest in the software for 18 17 the principal purpose of using the software in the goods. 18 18 4. CONSIGNOR'S INVENTORY PURCHASE-MONEY SECURITY INTEREST. 18 19 The security interest of a consignor in goods that are the 18 20 subject of a consignment is a purchase-money security interest 18 21 in inventory. 18 22 5. APPLICATION OF PAYMENT IN NONCONSUMER-GOODS 18 23 TRANSACTION. In a transaction other than a consumer-goods 18 24 transaction, if the extent to which a security interest is a 18 25 purchase-money security interest depends on the application of 18 26 a payment to a particular obligation, the payment must be 18 27 applied: 18 28 a. in accordance with any reasonable method of application 18 29 to which the parties agree; 18 30 b. in the absence of the parties' agreement to a 18 31 reasonable method, in accordance with any intention of the 18 32 obligor manifested at or before the time of payment; or 18 33 c. in the absence of an agreement to a reasonable method 18 34 and a timely manifestation of the obligor's intention, in the 18 35 following order: 19 1 (1) to obligations that are not secured; and 19 2 (2) if more than one obligation is secured, to obligations 19 3 secured by purchase-money security interests in the order in 19 4 which those obligations were incurred. 19 5 6. NO LOSS OF STATUS OF PURCHASE-MONEY SECURITY INTEREST 19 6 IN NONCONSUMER-GOODS TRANSACTION. In a transaction other than 19 7 a consumer-goods transaction, a purchase-money security 19 8 interest does not lose its status as such, even if: 19 9 a. the purchase-money collateral also secures an 19 10 obligation that is not a purchase-money obligation; 19 11 b. collateral that is not purchase-money collateral also 19 12 secures the purchase-money obligation; or 19 13 c. the purchase-money obligation has been renewed, 19 14 refinanced, consolidated, or restructured. 19 15 7. BURDEN OF PROOF IN NONCONSUMER-GOODS TRANSACTION. In a 19 16 transaction other than a consumer-goods transaction, a secured 19 17 party claiming a purchase-money security interest has the 19 18 burden of establishing the extent to which the security 19 19 interest is a purchase-money security interest. 19 20 8. NONCONSUMER-GOODS TRANSACTIONS – NO INFERENCE. The 19 21 limitation of the rules in subsections 5, 6, and 7 to 19 22 transactions other than consumer-goods transactions is 19 23 intended to leave to the court the determination of the proper 19 24 rules in consumer-goods transactions. The court may not infer 19 25 from that limitation the nature of the proper rule in 19 26 consumer-goods transactions and may continue to apply 19 27 established approaches. 19 28 Sec. 4. NEW SECTION. 554.9104 CONTROL OF DEPOSIT 19 29 ACCOUNT. 19 30 1. REQUIREMENTS FOR CONTROL. A secured party has control 19 31 of a deposit account if: 19 32 a. the secured party is the bank with which the deposit 19 33 account is maintained; 19 34 b. the debtor, secured party, and bank have agreed in an 19 35 authenticated record that the bank will comply with 20 1 instructions originated by the secured party directing 20 2 disposition of the funds in the deposit account without 20 3 further consent by the debtor; or 20 4 c. the secured party becomes the bank's customer with 20 5 respect to the deposit account. 20 6 2. DEBTOR'S RIGHT TO DIRECT DISPOSITION. A secured party 20 7 that has satisfied subsection 1 has control, even if the 20 8 debtor retains the right to direct the disposition of funds 20 9 from the deposit account. 20 10 Sec. 5. NEW SECTION. 554.9105 CONTROL OF ELECTRONIC 20 11 CHATTEL PAPER. 20 12 A secured party has control of electronic chattel paper if 20 13 the record or records comprising the chattel paper are 20 14 created, stored, and assigned in such a manner that: 20 15 1. a single authoritative copy of the record or records 20 16 exists which is unique, identifiable and, except as otherwise 20 17 provided in subsections 4, 5, and 6, unalterable; 20 18 2. the authoritative copy identifies the secured party as 20 19 the assignee of the record or records; 20 20 3. the authoritative copy is communicated to and 20 21 maintained by the secured party or its designated custodian; 20 22 4. copies or revisions that add or change an identified 20 23 assignee of the authoritative copy can be made only with the 20 24 participation of the secured party; 20 25 5. each copy of the authoritative copy and any copy of a 20 26 copy is readily identifiable as a copy that is not the 20 27 authoritative copy; and 20 28 6. any revision of the authoritative copy is readily 20 29 identifiable as an authorized or unauthorized revision. 20 30 Sec. 6. NEW SECTION. 554.9106 CONTROL OF INVESTMENT 20 31 PROPERTY. 20 32 1. CONTROL UNDER SECTION 554.8106. A person has control 20 33 of a certificated security, uncertificated security, or 20 34 security entitlement as provided in section 554.8106. 20 35 2. CONTROL OF COMMODITY CONTRACT. A secured party has 21 1 control of a commodity contract if: 21 2 a. the secured party is the commodity intermediary with 21 3 which the commodity contract is carried; or 21 4 b. the commodity customer, secured party, and commodity 21 5 intermediary have agreed that the commodity intermediary will 21 6 apply any value distributed on account of the commodity 21 7 contract as directed by the secured party without further 21 8 consent by the commodity customer. 21 9 3. EFFECT OF CONTROL OF SECURITIES ACCOUNT OR COMMODITY 21 10 ACCOUNT. A secured party having control of all security 21 11 entitlements or commodity contracts carried in a securities 21 12 account or commodity account has control over the securities 21 13 account or commodity account. 21 14 Sec. 7. NEW SECTION. 554.9107 CONTROL OF LETTER-OF- 21 15 CREDIT RIGHT. 21 16 A secured party has control of a letter-of-credit right to 21 17 the extent of any right to payment or performance by the 21 18 issuer or any nominated person if the issuer or nominated 21 19 person has consented to an assignment of proceeds of the 21 20 letter of credit under section 554.5114, subsection 3, or 21 21 otherwise applicable law or practice. 21 22 Sec. 8. NEW SECTION. 554.9108 SUFFICIENCY OF 21 23 DESCRIPTION. 21 24 1. SUFFICIENCY OF DESCRIPTION. Except as otherwise 21 25 provided in subsections 3, 4, and 5, a description of personal 21 26 or real property is sufficient, whether or not it is specific, 21 27 if it reasonably identifies what is described. 21 28 2. EXAMPLES OF REASONABLE IDENTIFICATION. Except as 21 29 otherwise provided in subsection 4, a description of 21 30 collateral reasonably identifies the collateral if it 21 31 identifies the collateral by: 21 32 a. specific listing; 21 33 b. category; 21 34 c. except as otherwise provided in subsection 5, a type of 21 35 collateral defined in this chapter; 22 1 d. quantity; 22 2 e. computational or allocational formula or procedure; or 22 3 f. except as otherwise provided in subsection 3, any other 22 4 method, if the identity of the collateral is objectively 22 5 determinable. 22 6 3. SUPERGENERIC DESCRIPTION NOT SUFFICIENT. A description 22 7 of collateral as "all the debtor's assets" or "all the 22 8 debtor's personal property" or using words of similar import 22 9 does not reasonably identify the collateral. 22 10 4. INVESTMENT PROPERTY. Except as otherwise provided in 22 11 subsection 5, a description of a security entitlement, 22 12 securities account, or commodity account is sufficient if it 22 13 describes: 22 14 a. the collateral by those terms or as investment 22 15 property; or 22 16 b. the underlying financial asset or commodity contract. 22 17 5. WHEN DESCRIPTION BY TYPE INSUFFICIENT. A description 22 18 only by type of collateral defined in this chapter is an 22 19 insufficient description of: 22 20 a. a commercial tort claim; or 22 21 b. in a consumer transaction, consumer goods, a security 22 22 entitlement, a securities account, or a commodity account. 22 23 B. APPLICABILITY OF ARTICLE 22 24 Sec. 9. NEW SECTION. 554.9109 SCOPE. 22 25 1. GENERAL SCOPE OF ARTICLE. Except as otherwise provided 22 26 in subsections 3 and 4, this Article applies to: 22 27 a. a transaction, regardless of its form, that creates a 22 28 security interest in personal property or fixtures by 22 29 contract; 22 30 b. an agricultural lien; 22 31 c. a sale of accounts, chattel paper, payment intangibles, 22 32 or promissory notes; 22 33 d. a consignment; 22 34 e. a security interest arising under section 554.2401, 22 35 554.2505, 554.2711, subsection 3, section 554.9110, or 23 1 554.13508, subsection 5; and 23 2 f. a security interest arising under section 554.4210 or 23 3 554.5118. 23 4 2. SECURITY INTEREST IN SECURED OBLIGATION. The 23 5 application of this Article to a security interest in a 23 6 secured obligation is not affected by the fact that the 23 7 obligation is itself secured by a transaction or interest to 23 8 which this Article does not apply. 23 9 3. EXTENT TO WHICH ARTICLE DOES NOT APPLY. This Article 23 10 does not apply to the extent that: 23 11 a. a statute, regulation, or treaty of the United States 23 12 preempts this Article; 23 13 b. another statute of this state expressly governs the 23 14 creation, perfection, priority, or enforcement of a security 23 15 interest created by this state or a governmental unit of this 23 16 state; 23 17 c. a statute of another state, a foreign country, or a 23 18 governmental unit of another state or a foreign country, other 23 19 than a statute generally applicable to security interests, 23 20 expressly governs creation, perfection, priority, or 23 21 enforcement of a security interest created by the state, 23 22 country, or governmental unit; or 23 23 d. the rights of a transferee beneficiary or nominated 23 24 person under a letter of credit are independent and superior 23 25 under section 554.5114. 23 26 4. INAPPLICABILITY OF ARTICLE. This Article does not 23 27 apply to: 23 28 a. a landlord's lien, other than an agricultural lien; 23 29 b. a lien, other than an agricultural lien, given by 23 30 statute or other rule of law for services or materials, but 23 31 section 554.9333 applies with respect to priority of the lien; 23 32 c. an assignment of a claim for wages, salary, or other 23 33 compensation of an employee; 23 34 d. a sale of accounts, chattel paper, payment intangibles, 23 35 or promissory notes as part of a sale of the business out of 24 1 which they arose; 24 2 e. an assignment of accounts, chattel paper, payment 24 3 intangibles, or promissory notes which is for the purpose of 24 4 collection only; 24 5 f. an assignment of a right to payment under a contract to 24 6 an assignee that is also obligated to perform under the 24 7 contract; 24 8 g. an assignment of a single account, payment intangible, 24 9 or promissory note to an assignee in full or partial 24 10 satisfaction of a preexisting indebtedness; 24 11 h. a transfer of an interest in or an assignment of a 24 12 claim under a policy of insurance, other than an assignment by 24 13 or to a health-care provider of a health-care-insurance 24 14 receivable and any subsequent assignment of the right to 24 15 payment, but sections 554.9315 and 554.9322 apply with respect 24 16 to proceeds and priorities in proceeds; 24 17 i. an assignment of a right represented by a judgment, 24 18 other than a judgment taken on a right to payment that was 24 19 collateral; 24 20 j. a right of recoupment or setoff, but: 24 21 (1) section 554.9340 applies with respect to the 24 22 effectiveness of rights of recoupment or setoff against 24 23 deposit accounts; and 24 24 (2) section 554.9404 applies with respect to defenses or 24 25 claims of an account debtor; 24 26 k. the creation or transfer of an interest in or lien on 24 27 real property, including a lease or rents thereunder, except 24 28 to the extent that provision is made for: 24 29 (1) liens on real property in sections 554.9203 and 24 30 554.9308; 24 31 (2) fixtures in section 554.9334; 24 32 (3) fixture filings in sections 554.9501, 554.9502, 24 33 554.9512, 554.9516, and 554.9519; and 24 34 (4) security agreements covering personal and real 24 35 property in section 554.9604; 25 1 l. an assignment of a claim arising in tort, other than a 25 2 commercial tort claim, but sections 554.9315 and 554.9322 25 3 apply with respect to proceeds and priorities in proceeds; or 25 4 m. an assignment of a deposit account in a consumer 25 5 transaction, but sections 554.9315 and 554.9322 apply with 25 6 respect to proceeds and priorities in proceeds. 25 7 n. a transfer, other than a transfer pursuant to chapter 25 8 419, by this state or a governmental unit within this state in 25 9 connection with a public-finance transaction or a transaction 25 10 that would be a public-finance transaction but for failure to 25 11 meet the criterion set forth in section 554.9102, subsection 25 12 1, paragraph "bo", subparagraph (2). 25 13 o. an assignment of a claim or right to receive any of the 25 14 following: 25 15 (1) compensation for injuries or sickness as provided in 25 16 26 U.S.C. } 104(a)(1) or (2). 25 17 (2) benefits under a special needs trust as provided in 42 25 18 U.S.C. } 1396p(d)(4). 25 19 Sec. 10. NEW SECTION. 554.9110 SECURITY INTERESTS 25 20 ARISING UNDER ARTICLE 2 OR 13. 25 21 A security interest arising under section 554.2401, 25 22 554.2505, 554.2711, subsection 3, or section 554.13508, 25 23 subsection 5, is subject to this Article. However, until the 25 24 debtor obtains possession of the goods: 25 25 1. the security interest is enforceable, even if section 25 26 554.9203, subsection 2, paragraph "c", has not been satisfied; 25 27 2. filing is not required to perfect the security 25 28 interest; 25 29 3. the rights of the secured party after default by the 25 30 debtor are governed by Article 2 or 13; and 25 31 4. the security interest has priority over a conflicting 25 32 security interest created by the debtor. 25 33 PART 2 25 34 EFFECTIVENESS OF SECURITY AGREEMENT – 25 35 ATTACHMENT OF SECURITY INTEREST – 26 1 RIGHTS OF PARTIES TO SECURITY AGREEMENT 26 2 A. EFFECTIVENESS AND ATTACHMENT 26 3 Sec. 11. NEW SECTION. 554.9201 GENERAL EFFECTIVENESS OF 26 4 SECURITY AGREEMENT. 26 5 1. GENERAL EFFECTIVENESS. Except as otherwise provided in 26 6 this chapter, a security agreement is effective according to 26 7 its terms between the parties, against purchasers of the 26 8 collateral, and against creditors. 26 9 2. APPLICABLE CONSUMER LAWS. A transaction subject to 26 10 this Article is subject to any applicable rule of law which 26 11 establishes a different rule for consumers, including as 26 12 provided in chapter 537, or any other statute or regulation of 26 13 this state that regulates the rates, charges, agreements, and 26 14 practices for loans, credit sales, or other extensions of 26 15 credit, and to any consumer protection statute or regulation. 26 16 3. OTHER APPLICABLE LAW CONTROLS. In case of conflict 26 17 between this Article and a rule of law, statute, or regulation 26 18 described in subsection 2, the rule of law, statute, or 26 19 regulation controls. Failure to comply with a statute or 26 20 regulation described in subsection 2 has only the effect the 26 21 statute or regulation specifies. 26 22 4. FURTHER DEFERENCE TO OTHER APPLICABLE LAW. This 26 23 Article does not: 26 24 a. validate any rate, charge, agreement, or practice that 26 25 violates a rule of law, statute, or regulation described in 26 26 subsection 2; or 26 27 b. extend the application of the rule of law, statute, or 26 28 regulation to a transaction not otherwise subject to it. 26 29 Sec. 12. NEW SECTION. 554.9202 TITLE TO COLLATERAL 26 30 IMMATERIAL. 26 31 Except as otherwise provided with respect to consignments 26 32 or sales of accounts, chattel paper, payment intangibles, or 26 33 promissory notes, the provisions of this Article with regard 26 34 to rights and obligations apply whether title to collateral is 26 35 in the secured party or the debtor. 27 1 Sec. 13. NEW SECTION. 554.9203 ATTACHMENT AND 27 2 ENFORCEABILITY OF SECURITY INTEREST – PROCEEDS – SUPPORTING 27 3 OBLIGATIONS – FORMAL REQUISITES. 27 4 1. ATTACHMENT. A security interest attaches to collateral 27 5 when it becomes enforceable against the debtor with respect to 27 6 the collateral, unless an agreement expressly postpones the 27 7 time of attachment. 27 8 2. ENFORCEABILITY. Except as otherwise provided in 27 9 subsections 3 through 9, a security interest is enforceable 27 10 against the debtor and third parties with respect to the 27 11 collateral only if: 27 12 a. value has been given; 27 13 b. the debtor has rights in the collateral or the power to 27 14 transfer rights in the collateral to a secured party; and 27 15 c. one of the following conditions is met: 27 16 (1) the debtor has authenticated a security agreement that 27 17 provides a description of the collateral and, if the security 27 18 interest covers timber to be cut, a description of the land 27 19 concerned; 27 20 (2) the collateral is not a certificated security and is 27 21 in the possession of the secured party under section 554.9313 27 22 pursuant to the debtor's security agreement; 27 23 (3) the collateral is a certificated security in 27 24 registered form and the security certificate has been 27 25 delivered to the secured party under section 554.8301 pursuant 27 26 to the debtor's security agreement; or 27 27 (4) the collateral is deposit accounts, electronic chattel 27 28 paper, investment property, or letter-of-credit rights, and 27 29 the secured party has control under section 554.9104, 27 30 554.9105, 554.9106, or 554.9107 pursuant to the debtor's 27 31 security agreement. 27 32 3. OTHER UCC PROVISIONS. Subsection 2 is subject to 27 33 section 554.4210 on the security interest of a collecting 27 34 bank, section 554.5118 on the security interest of a letter- 27 35 of-credit issuer or nominated person, section 554.9110 on a 28 1 security interest arising under Article 2 or 13, and section 28 2 554.9206 on security interests in investment property. 28 3 4. WHEN PERSON BECOMES BOUND BY ANOTHER PERSON'S SECURITY 28 4 AGREEMENT. A person becomes bound as debtor by a security 28 5 agreement entered into by another person if, by operation of 28 6 law other than this Article or by contract: 28 7 a. the security agreement becomes effective to create a 28 8 security interest in the person's property; or 28 9 b. the person becomes generally obligated for the 28 10 obligations of the other person, including the obligation 28 11 secured under the security agreement, and acquires or succeeds 28 12 to all or substantially all of the assets of the other person. 28 13 5. EFFECT OF NEW DEBTOR BECOMING BOUND. If a new debtor 28 14 becomes bound as debtor by a security agreement entered into 28 15 by another person: 28 16 a. the agreement satisfies subsection 2, paragraph "c", 28 17 with respect to existing or after-acquired property of the new 28 18 debtor to the extent the property is described in the 28 19 agreement; and 28 20 b. another agreement is not necessary to make a security 28 21 interest in the property enforceable. 28 22 6. PROCEEDS AND SUPPORTING OBLIGATIONS. The attachment of 28 23 a security interest in collateral gives the secured party the 28 24 rights to proceeds provided by section 554.9315 and is also 28 25 attachment of a security interest in a supporting obligation 28 26 for the collateral. 28 27 7. LIEN SECURING RIGHT TO PAYMENT. The attachment of a 28 28 security interest in a right to payment or performance secured 28 29 by a security interest or other lien on personal or real 28 30 property is also attachment of a security interest in the 28 31 security interest, mortgage, or other lien. 28 32 8. SECURITY ENTITLEMENT CARRIED IN SECURITIES ACCOUNT. 28 33 The attachment of a security interest in a securities account 28 34 is also attachment of a security interest in the security 28 35 entitlements carried in the securities account. 29 1 9. COMMODITY CONTRACTS CARRIED IN COMMODITY ACCOUNT. The 29 2 attachment of a security interest in a commodity account is 29 3 also attachment of a security interest in the commodity 29 4 contracts carried in the commodity account. 29 5 Sec. 14. NEW SECTION. 554.9204 AFTER-ACQUIRED PROPERTY 29 6 – FUTURE ADVANCES. 29 7 1. AFTER-ACQUIRED COLLATERAL. Except as otherwise 29 8 provided in subsection 2, a security agreement may create or 29 9 provide for a security interest in after-acquired collateral. 29 10 2. WHEN AFTER-ACQUIRED PROPERTY CLAUSE NOT EFFECTIVE. A 29 11 security interest does not attach under a term constituting an 29 12 after-acquired property clause to: 29 13 a. consumer goods, other than an accession when given as 29 14 additional security, unless the debtor acquires rights in them 29 15 within ten days after the secured party gives value; or 29 16 b. a commercial tort claim. 29 17 3. FUTURE ADVANCES AND OTHER VALUE. A security agreement 29 18 may provide that collateral secures, or that accounts, chattel 29 19 paper, payment intangibles, or promissory notes are sold in 29 20 connection with, future advances or other value, whether or 29 21 not the advances or value are given pursuant to commitment. 29 22 Sec. 15. NEW SECTION. 554.9205 USE OR DISPOSITION OF 29 23 COLLATERAL PERMISSIBLE. 29 24 1. WHEN SECURITY INTEREST NOT INVALID OR FRAUDULENT. A 29 25 security interest is not invalid or fraudulent against 29 26 creditors solely because: 29 27 a. the debtor has the right or ability to: 29 28 (1) use, commingle, or dispose of all or part of the 29 29 collateral, including returned or repossessed goods; 29 30 (2) collect, compromise, enforce, or otherwise deal with 29 31 collateral; 29 32 (3) accept the return of collateral or make repossessions; 29 33 or 29 34 (4) use, commingle, or dispose of proceeds; or 29 35 b. the secured party fails to require the debtor to 30 1 account for proceeds or replace collateral. 30 2 2. REQUIREMENTS OF POSSESSION NOT RELAXED. This section 30 3 does not relax the requirements of possession if attachment, 30 4 perfection, or enforcement of a security interest depends upon 30 5 possession of the collateral by the secured party. 30 6 Sec. 16. NEW SECTION. 554.9206 SECURITY INTEREST ARISING 30 7 IN PURCHASE OR DELIVERY OF FINANCIAL ASSET. 30 8 1. SECURITY INTEREST WHEN PERSON BUYS THROUGH SECURITIES 30 9 INTERMEDIARY. A security interest in favor of a securities 30 10 intermediary attaches to a person's security entitlement if: 30 11 a. the person buys a financial asset through the 30 12 securities intermediary in a transaction in which the person 30 13 is obligated to pay the purchase price to the securities 30 14 intermediary at the time of the purchase; and 30 15 b. the securities intermediary credits the financial asset 30 16 to the buyer's securities account before the buyer pays the 30 17 securities intermediary. 30 18 2. SECURITY INTEREST SECURES OBLIGATION TO PAY FOR 30 19 FINANCIAL ASSET. The security interest described in 30 20 subsection 1 secures the person's obligation to pay for the 30 21 financial asset. 30 22 3. SECURITY INTEREST IN PAYMENT AGAINST DELIVERY 30 23 TRANSACTION. A security interest in favor of a person that 30 24 delivers a certificated security or other financial asset 30 25 represented by a writing attaches to the security or other 30 26 financial asset if: 30 27 a. the security or other financial asset: 30 28 (1) in the ordinary course of business is transferred by 30 29 delivery with any necessary indorsement or assignment; and 30 30 (2) is delivered under an agreement between persons in the 30 31 business of dealing with such securities or financial assets; 30 32 and 30 33 b. the agreement calls for delivery against payment. 30 34 4. SECURITY INTEREST SECURES OBLIGATION TO PAY FOR 30 35 DELIVERY. The security interest described in subsection 3 31 1 secures the obligation to make payment for the delivery. 31 2 B. RIGHTS AND DUTIES 31 3 Sec. 17. NEW SECTION. 554.9207 RIGHTS AND DUTIES OF 31 4 SECURED PARTY HAVING POSSESSION OR CONTROL OF COLLATERAL. 31 5 1. DUTY OF CARE WHEN SECURED PARTY IN POSSESSION. Except 31 6 as otherwise provided in subsection 4, a secured party shall 31 7 use reasonable care in the custody and preservation of 31 8 collateral in the secured party's possession. In the case of 31 9 chattel paper or an instrument, reasonable care includes 31 10 taking necessary steps to preserve rights against prior 31 11 parties unless otherwise agreed. 31 12 2. EXPENSES, RISKS, DUTIES, AND RIGHTS WHEN SECURED PARTY 31 13 IN POSSESSION. Except as otherwise provided in subsection 4, 31 14 if a secured party has possession of collateral: 31 15 a. reasonable expenses, including the cost of insurance 31 16 and payment of taxes or other charges, incurred in the 31 17 custody, preservation, use, or operation of the collateral are 31 18 chargeable to the debtor and are secured by the collateral; 31 19 b. the risk of accidental loss or damage is on the debtor 31 20 to the extent of a deficiency in any effective insurance 31 21 coverage; 31 22 c. the secured party shall keep the collateral 31 23 identifiable, but fungible collateral may be commingled; and 31 24 d. the secured party may use or operate the collateral: 31 25 (1) for the purpose of preserving the collateral or its 31 26 value; 31 27 (2) as permitted by an order of a court having competent 31 28 jurisdiction; or 31 29 (3) except in the case of consumer goods, in the manner 31 30 and to the extent agreed by the debtor. 31 31 3. DUTIES AND RIGHTS WHEN SECURED PARTY IN POSSESSION OR 31 32 CONTROL. Except as otherwise provided in subsection 4, a 31 33 secured party having possession of collateral or control of 31 34 collateral under section 554.9104, 554.9105, 554.9106, or 31 35 554.9107: 32 1 a. may hold as additional security any proceeds, except 32 2 money or funds, received from the collateral; 32 3 b. shall apply money or funds received from the collateral 32 4 to reduce the secured obligation, unless remitted to the 32 5 debtor; and 32 6 c. may create a security interest in the collateral. 32 7 4. BUYER OF CERTAIN RIGHTS TO PAYMENT. If the secured 32 8 party is a buyer of accounts, chattel paper, payment 32 9 intangibles, or promissory notes or a consignor: 32 10 a. subsection 1 does not apply unless the secured party is 32 11 entitled under an agreement: 32 12 (1) to charge back uncollected collateral; or 32 13 (2) otherwise to full or limited recourse against the 32 14 debtor or a secondary obligor based on the nonpayment or other 32 15 default of an account debtor or other obligor on the 32 16 collateral; and 32 17 b. subsections 2 and 3 do not apply. 32 18 Sec. 18. NEW SECTION. 554.9208 ADDITIONAL DUTIES OF 32 19 SECURED PARTY HAVING CONTROL OF COLLATERAL. 32 20 1. APPLICABILITY OF SECTION. This section applies to 32 21 cases in which there is no outstanding secured obligation and 32 22 the secured party is not committed to make advances, incur 32 23 obligations, or otherwise give value. 32 24 2. DUTIES OF SECURED PARTY AFTER RECEIVING DEMAND FROM 32 25 DEBTOR. Within ten days after receiving an authenticated 32 26 demand by the debtor: 32 27 a. a secured party having control of a deposit account 32 28 under section 554.9104, subsection 1, paragraph "b", shall 32 29 send to the bank with which the deposit account is maintained 32 30 an authenticated statement that releases the bank from any 32 31 further obligation to comply with instructions originated by 32 32 the secured party; 32 33 b. a secured party having control of a deposit account 32 34 under section 554.9104, subsection 1, paragraph "c", shall: 32 35 (1) pay the debtor the balance on deposit in the deposit 33 1 account; or 33 2 (2) transfer the balance on deposit into a deposit account 33 3 in the debtor's name; 33 4 c. a secured party, other than a buyer, having control of 33 5 electronic chattel paper under section 554.9105 shall: 33 6 (1) communicate the authoritative copy of the electronic 33 7 chattel paper to the debtor or its designated custodian; 33 8 (2) if the debtor designates a custodian that is the 33 9 designated custodian with which the authoritative copy of the 33 10 electronic chattel paper is maintained for the secured party, 33 11 communicate to the custodian an authenticated record releasing 33 12 the designated custodian from any further obligation to comply 33 13 with instructions originated by the secured party and 33 14 instructing the custodian to comply with instructions 33 15 originated by the debtor; and 33 16 (3) take appropriate action to enable the debtor or its 33 17 designated custodian to make copies of or revisions to the 33 18 authoritative copy which add or change an identified assignee 33 19 of the authoritative copy without the consent of the secured 33 20 party; 33 21 d. a secured party having control of investment property 33 22 under section 554.8106, subsection 4, paragraph "b", or 33 23 section 554.9106, subsection 2, shall send to the securities 33 24 intermediary or commodity intermediary with which the security 33 25 entitlement or commodity contract is maintained an 33 26 authenticated record that releases the securities intermediary 33 27 or commodity intermediary from any further obligation to 33 28 comply with entitlement orders or directions originated by the 33 29 secured party; and 33 30 e. a secured party having control of a letter-of-credit 33 31 right under section 554.9107 shall send to each person having 33 32 an unfulfilled obligation to pay or deliver proceeds of the 33 33 letter of credit to the secured party an authenticated release 33 34 from any further obligation to pay or deliver proceeds of the 33 35 letter of credit to the secured party. 34 1 Sec. 19. NEW SECTION. 554.9209 DUTIES OF SECURED PARTY 34 2 IF ACCOUNT DEBTOR HAS BEEN NOTIFIED OF ASSIGNMENT. 34 3 1. APPLICABILITY OF SECTION. Except as otherwise provided 34 4 in subsection 3, this section applies if: 34 5 a. there is no outstanding secured obligation; and 34 6 b. the secured party is not committed to make advances, 34 7 incur obligations, or otherwise give value. 34 8 2. DUTIES OF SECURED PARTY AFTER RECEIVING DEMAND FROM 34 9 DEBTOR. Within ten days after receiving an authenticated 34 10 demand by the debtor, a secured party shall send to an account 34 11 debtor that has received notification of an assignment to the 34 12 secured party as assignee under section 554.9406, subsection 34 13 1, an authenticated record that releases the account debtor 34 14 from any further obligation to the secured party. 34 15 3. INAPPLICABILITY TO SALES. This section does not apply 34 16 to an assignment constituting the sale of an account, chattel 34 17 paper, or payment intangible. 34 18 Sec. 20. NEW SECTION. 554.9210 REQUEST FOR ACCOUNTING – 34 19 REQUEST REGARDING LIST OF COLLATERAL OR STATEMENT OF ACCOUNT. 34 20 1. DEFINITIONS. In this section: 34 21 a. "Request" means a record of a type described in 34 22 paragraph "b", "c", or "d". 34 23 b. "Request for an accounting" means a record 34 24 authenticated by a debtor requesting that the recipient 34 25 provide an accounting of the unpaid obligations secured by 34 26 collateral and reasonably identifying the transaction or 34 27 relationship that is the subject of the request. 34 28 c. "Request regarding a list of collateral" means a record 34 29 authenticated by a debtor requesting that the recipient 34 30 approve or correct a list of what the debtor believes to be 34 31 the collateral securing an obligation and reasonably 34 32 identifying the transaction or relationship that is the 34 33 subject of the request. 34 34 d. "Request regarding a statement of account" means a 34 35 record authenticated by a debtor requesting that the recipient 35 1 approve or correct a statement indicating what the debtor 35 2 believes to be the aggregate amount of unpaid obligations 35 3 secured by collateral as of a specified date and reasonably 35 4 identifying the transaction or relationship that is the 35 5 subject of the request. 35 6 2. DUTY TO RESPOND TO REQUESTS. Subject to subsections 3, 35 7 4, 5, and 6, a secured party, other than a buyer of accounts, 35 8 chattel paper, payment intangibles, or promissory notes or a 35 9 consignor, shall comply with a request within fourteen days 35 10 after receipt: 35 11 a. in the case of a request for an accounting, by 35 12 authenticating and sending to the debtor an accounting; and 35 13 b. in the case of a request regarding a list of collateral 35 14 or a request regarding a statement of account, by 35 15 authenticating and sending to the debtor an approval or 35 16 correction. 35 17 3. REQUEST REGARDING LIST OF COLLATERAL – STATEMENT 35 18 CONCERNING TYPE OF COLLATERAL. A secured party that claims a 35 19 security interest in all of a particular type of collateral 35 20 owned by the debtor may comply with a request regarding a list 35 21 of collateral by sending to the debtor an authenticated record 35 22 including a statement to that effect within fourteen days 35 23 after receipt. 35 24 4. REQUEST REGARDING LIST OF COLLATERAL – NO INTEREST 35 25 CLAIMED. A person that receives a request regarding a list of 35 26 collateral, claims no interest in the collateral when it 35 27 receives the request, and claimed an interest in the 35 28 collateral at an earlier time shall comply with the request 35 29 within fourteen days after receipt by sending to the debtor an 35 30 authenticated record: 35 31 a. disclaiming any interest in the collateral; and 35 32 b. if known to the recipient, providing the name and 35 33 mailing address of any assignee of or successor to the 35 34 recipient's interest in the collateral. 35 35 5. REQUEST FOR ACCOUNTING OR REGARDING STATEMENT OF 36 1 ACCOUNT – NO INTEREST IN OBLIGATION CLAIMED. A person that 36 2 receives a request for an accounting or a request regarding a 36 3 statement of account, claims no interest in the obligations 36 4 when it receives the request, and claimed an interest in the 36 5 obligations at an earlier time shall comply with the request 36 6 within fourteen days after receipt by sending to the debtor an 36 7 authenticated record: 36 8 a. disclaiming any interest in the obligations; and 36 9 b. if known to the recipient, providing the name and 36 10 mailing address of any assignee of or successor to the 36 11 recipient's interest in the obligations. 36 12 6. CHARGES FOR RESPONSES. A debtor is entitled without 36 13 charge to one response to a request under this section during 36 14 any six-month period. The secured party may require payment 36 15 of a charge not exceeding twenty-five dollars for each 36 16 additional response. 36 17 PART 3 36 18 PERFECTION AND PRIORITY 36 19 A. LAW GOVERNING PERFECTION AND PRIORITY 36 20 Sec. 21. NEW SECTION. 554.9301 LAW GOVERNING PERFECTION 36 21 AND PRIORITY OF SECURITY INTERESTS. 36 22 Except as otherwise provided in sections 554.9303, 36 23 554.9304, 554.9305, and 554.9306, the following rules 36 24 determine the law governing perfection, the effect of 36 25 perfection or nonperfection, and the priority of a security 36 26 interest in collateral: 36 27 1. Except as otherwise provided in this section, while a 36 28 debtor is located in a jurisdiction, the local law of that 36 29 jurisdiction governs perfection, the effect of perfection or 36 30 nonperfection, and the priority of a security interest in 36 31 collateral. 36 32 2. While collateral is located in a jurisdiction, the 36 33 local law of that jurisdiction governs perfection, the effect 36 34 of perfection or nonperfection, and the priority of a 36 35 possessory security interest in that collateral. 37 1 3. Except as otherwise provided in subsection 4, while 37 2 negotiable documents, goods, instruments, money, or tangible 37 3 chattel paper is located in a jurisdiction, the local law of 37 4 that jurisdiction governs: 37 5 a. perfection of a security interest in the goods by 37 6 filing a fixture filing; 37 7 b. perfection of a security interest in timber to be cut; 37 8 and 37 9 c. the effect of perfection or nonperfection and the 37 10 priority of a nonpossessory security interest in the 37 11 collateral. 37 12 4. The local law of the jurisdiction in which the wellhead 37 13 or minehead is located governs perfection, the effect of 37 14 perfection or nonperfection, and the priority of a security 37 15 interest in as-extracted collateral. 37 16 Sec. 22. NEW SECTION. 554.9302 LAW GOVERNING PERFECTION 37 17 AND PRIORITY OF AGRICULTURAL LIENS. 37 18 While farm products are located in a jurisdiction, the 37 19 local law of that jurisdiction governs perfection, the effect 37 20 of perfection or nonperfection, and the priority of an 37 21 agricultural lien on the farm products. 37 22 Sec. 23. NEW SECTION. 554.9303 LAW GOVERNING PERFECTION 37 23 AND PRIORITY OF SECURITY INTERESTS IN GOODS COVERED BY A 37 24 CERTIFICATE OF TITLE. 37 25 1. APPLICABILITY OF SECTION. This section applies to 37 26 goods covered by a certificate of title, even if there is no 37 27 other relationship between the jurisdiction under whose 37 28 certificate of title the goods are covered and the goods or 37 29 the debtor. 37 30 2. WHEN GOODS COVERED BY CERTIFICATE OF TITLE. Goods 37 31 become covered by a certificate of title when a valid 37 32 application for the certificate of title and the applicable 37 33 fee are delivered to the appropriate authority. Goods cease 37 34 to be covered by a certificate of title at the earlier of the 37 35 time the certificate of title ceases to be effective under the 38 1 law of the issuing jurisdiction or the time the goods become 38 2 covered subsequently by a certificate of title issued by 38 3 another jurisdiction. 38 4 3. APPLICABLE LAW. The local law of the jurisdiction 38 5 under whose certificate of title the goods are covered governs 38 6 perfection, the effect of perfection or nonperfection, and the 38 7 priority of a security interest in goods covered by a 38 8 certificate of title from the time the goods become covered by 38 9 the certificate of title until the goods cease to be covered 38 10 by the certificate of title. 38 11 Sec. 24. NEW SECTION. 554.9304 LAW GOVERNING PERFECTION 38 12 AND PRIORITY OF SECURITY INTERESTS IN DEPOSIT ACCOUNTS. 38 13 1. LAW OF BANK'S JURISDICTION GOVERNS. The local law of a 38 14 bank's jurisdiction governs perfection, the effect of 38 15 perfection or nonperfection, and the priority of a security 38 16 interest in a deposit account maintained with that bank. 38 17 2. BANK'S JURISDICTION. The following rules determine a 38 18 bank's jurisdiction for purposes of this part: 38 19 a. If an agreement between the bank and the debtor 38 20 governing the deposit account expressly provides that a 38 21 particular jurisdiction is the bank's jurisdiction for 38 22 purposes of this part, this Article, or this chapter, that 38 23 jurisdiction is the bank's jurisdiction. 38 24 b. If paragraph "a" does not apply and an agreement 38 25 between the bank and its customer governing the deposit 38 26 account expressly provides that the agreement is governed by 38 27 the law of a particular jurisdiction, that jurisdiction is the 38 28 bank's jurisdiction. 38 29 c. If neither paragraph "a" nor paragraph "b" applies and 38 30 an agreement between the bank and its customer governing the 38 31 deposit account expressly provides that the deposit account is 38 32 maintained at an office in a particular jurisdiction, that 38 33 jurisdiction is the bank's jurisdiction. 38 34 d. If none of the preceding paragraphs applies, the bank's 38 35 jurisdiction is the jurisdiction in which the office 39 1 identified in an account statement as the office serving the 39 2 customer's account is located. 39 3 e. If none of the preceding paragraphs applies, the bank's 39 4 jurisdiction is the jurisdiction in which the chief executive 39 5 office of the bank is located. 39 6 Sec. 25. NEW SECTION. 554.9305 LAW GOVERNING PERFECTION 39 7 AND PRIORITY OF SECURITY INTERESTS IN INVESTMENT PROPERTY. 39 8 1. GOVERNING LAW – GENERAL RULES. Except as otherwise 39 9 provided in subsection 3, the following rules apply: 39 10 a. While a security certificate is located in a 39 11 jurisdiction, the local law of that jurisdiction governs 39 12 perfection, the effect of perfection or nonperfection, and the 39 13 priority of a security interest in the certificated security 39 14 represented thereby. 39 15 b. The local law of the issuer's jurisdiction as specified 39 16 in section 554.8110, subsection 4, governs perfection, the 39 17 effect of perfection or nonperfection, and the priority of a 39 18 security interest in an uncertificated security. 39 19 c. The local law of the securities intermediary's 39 20 jurisdiction as specified in section 554.8110, subsection 5, 39 21 governs perfection, the effect of perfection or nonperfection, 39 22 and the priority of a security interest in a security 39 23 entitlement or securities account. 39 24 d. The local law of the commodity intermediary's 39 25 jurisdiction governs perfection, the effect of perfection or 39 26 nonperfection, and the priority of a security interest in a 39 27 commodity contract or commodity account. 39 28 2. COMMODITY INTERMEDIARY'S JURISDICTION. The following 39 29 rules determine a commodity intermediary's jurisdiction for 39 30 purposes of this part: 39 31 a. If an agreement between the commodity intermediary and 39 32 commodity customer governing the commodity account expressly 39 33 provides that a particular jurisdiction is the commodity 39 34 intermediary's jurisdiction for purposes of this part, this 39 35 Article, or this chapter, that jurisdiction is the commodity 40 1 intermediary's jurisdiction. 40 2 b. If paragraph "a" does not apply and an agreement 40 3 between the commodity intermediary and commodity customer 40 4 governing the commodity account expressly provides that the 40 5 agreement is governed by the law of a particular jurisdiction, 40 6 that jurisdiction is the commodity intermediary's 40 7 jurisdiction. 40 8 c. If neither paragraph "a" nor paragraph "b" applies and 40 9 an agreement between the commodity intermediary and commodity 40 10 customer governing the commodity account expressly provides 40 11 that the commodity account is maintained at an office in a 40 12 particular jurisdiction, that jurisdiction is the commodity 40 13 intermediary's jurisdiction. 40 14 d. If none of the preceding paragraphs applies, the 40 15 commodity intermediary's jurisdiction is the jurisdiction in 40 16 which the office identified in an account statement as the 40 17 office serving the commodity customer's account is located. 40 18 e. If none of the preceding paragraphs applies, the 40 19 commodity intermediary's jurisdiction is the jurisdiction in 40 20 which the chief executive office of the commodity intermediary 40 21 is located. 40 22 3. WHEN PERFECTION GOVERNED BY LAW OF JURISDICTION WHERE 40 23 DEBTOR LOCATED. The local law of the jurisdiction in which 40 24 the debtor is located governs: 40 25 a. perfection of a security interest in investment 40 26 property by filing; 40 27 b. automatic perfection of a security interest in 40 28 investment property created by a broker or securities 40 29 intermediary; and 40 30 c. automatic perfection of a security interest in a 40 31 commodity contract or commodity account created by a commodity 40 32 intermediary. 40 33 Sec. 26. NEW SECTION. 554.9306 LAW GOVERNING PERFECTION 40 34 AND PRIORITY OF SECURITY INTERESTS IN LETTER-OF-CREDIT RIGHTS. 40 35 1. GOVERNING LAW – ISSUER'S OR NOMINATED PERSON'S 41 1 JURISDICTION. Subject to subsection 3, the local law of the 41 2 issuer's jurisdiction or a nominated person's jurisdiction 41 3 governs perfection, the effect of perfection or nonperfection, 41 4 and the priority of a security interest in a letter-of-credit 41 5 right if the issuer's jurisdiction or nominated person's 41 6 jurisdiction is a state. 41 7 2. ISSUER'S OR NOMINATED PERSON'S JURISDICTION. For 41 8 purposes of this part, an issuer's jurisdiction or nominated 41 9 person's jurisdiction is the jurisdiction whose law governs 41 10 the liability of the issuer or nominated person with respect 41 11 to the letter-of-credit right as provided in section 554.5116. 41 12 3. WHEN SECTION NOT APPLICABLE. This section does not 41 13 apply to a security interest that is perfected only under 41 14 section 554.9308, subsection 4. 41 15 Sec. 27. NEW SECTION. 554.9307 LOCATION OF DEBTOR. 41 16 1. PLACE OF BUSINESS. In this section, "place of 41 17 business" means a place where a debtor conducts its affairs. 41 18 2. DEBTOR'S LOCATION – GENERAL RULES. Except as 41 19 otherwise provided in this section, the following rules 41 20 determine a debtor's location: 41 21 a. A debtor who is an individual is located at the 41 22 individual's principal residence. 41 23 b. A debtor that is an organization and has only one place 41 24 of business is located at its place of business. 41 25 c. A debtor that is an organization and has more than one 41 26 place of business is located at its chief executive office. 41 27 3. LIMITATION OF APPLICABILITY OF SUBSECTION 2. 41 28 Subsection 2 applies only if a debtor's residence, place of 41 29 business, or chief executive office, as applicable, is located 41 30 in a jurisdiction whose law generally requires information 41 31 concerning the existence of a nonpossessory security interest 41 32 to be made generally available in a filing, recording, or 41 33 registration system as a condition or result of the security 41 34 interest's obtaining priority over the rights of a lien 41 35 creditor with respect to the collateral. If subsection 2 does 42 1 not apply, the debtor is located in the District of Columbia. 42 2 4. CONTINUATION OF LOCATION – CESSATION OF EXISTENCE, 42 3 ETC. A person that ceases to exist, have a residence, or have 42 4 a place of business continues to be located in the 42 5 jurisdiction specified by subsections 2 and 3. 42 6 5. LOCATION OF REGISTERED ORGANIZATION ORGANIZED UNDER 42 7 STATE LAW. A registered organization that is organized under 42 8 the law of a state is located in that state. 42 9 6. LOCATION OF REGISTERED ORGANIZATION ORGANIZED UNDER 42 10 FEDERAL LAW – BANK BRANCHES AND AGENCIES. Except as 42 11 otherwise provided in subsection 9, a registered organization 42 12 that is organized under the law of the United States and a 42 13 branch or agency of a bank that is not organized under the law 42 14 of the United States or a state are located: 42 15 a. in the state that the law of the United States 42 16 designates, if the law designates a state of location; 42 17 b. in the state that the registered organization, branch, 42 18 or agency designates, if the law of the United States 42 19 authorizes the registered organization, branch, or agency to 42 20 designate its state of location; or 42 21 c. in the District of Columbia, if neither paragraph "a" 42 22 nor paragraph "b" applies. 42 23 7. CONTINUATION OF LOCATION – CHANGE IN STATUS OF 42 24 REGISTERED ORGANIZATION. A registered organization continues 42 25 to be located in the jurisdiction specified by subsection 5 or 42 26 6 notwithstanding: 42 27 a. the suspension, revocation, forfeiture, or lapse of the 42 28 registered organization's status as such in its jurisdiction 42 29 of organization; or 42 30 b. the dissolution, winding up, or cancellation of the 42 31 existence of the registered organization. 42 32 8. LOCATION OF UNITED STATES. The United States is 42 33 located in the District of Columbia. 42 34 9. LOCATION OF FOREIGN BANK BRANCH OR AGENCY IF LICENSED 42 35 IN ONLY ONE STATE. A branch or agency of a bank that is not 43 1 organized under the law of the United States or a state is 43 2 located in the state in which the branch or agency is 43 3 licensed, if all branches and agencies of the bank are 43 4 licensed in only one state. 43 5 10. LOCATION OF FOREIGN AIR CARRIER. A foreign air 43 6 carrier under the Federal Aviation Act of 1958, as amended, is 43 7 located at the designated office of the agent upon which 43 8 service of process may be made on behalf of the carrier. 43 9 11. SECTION APPLIES ONLY TO THIS PART. This section 43 10 applies only for purposes of this part. 43 11 B. PERFECTION 43 12 Sec. 28. NEW SECTION. 554.9308 WHEN SECURITY INTEREST OR 43 13 AGRICULTURAL LIEN IS PERFECTED – CONTINUITY OF PERFECTION. 43 14 1. PERFECTION OF SECURITY INTEREST. Except as otherwise 43 15 provided in this section and section 554.9309, a security 43 16 interest is perfected if it has attached and all of the 43 17 applicable requirements for perfection in sections 554.9310, 43 18 554.9311, 554.9312, 554.9313, 554.9314, 554.9315, and 554.9316 43 19 have been satisfied. A security interest is perfected when it 43 20 attaches if the applicable requirements are satisfied before 43 21 the security interest attaches. 43 22 2. PERFECTION OF AGRICULTURAL LIEN. An agricultural lien 43 23 is perfected if it has become effective and all of the 43 24 applicable requirements for perfection in section 554.9310 43 25 have been satisfied. An agricultural lien is perfected when 43 26 it becomes effective if the applicable requirements are 43 27 satisfied before the agricultural lien becomes effective. 43 28 3. CONTINUOUS PERFECTION – PERFECTION BY DIFFERENT 43 29 METHODS. A security interest or agricultural lien is 43 30 perfected continuously if it is originally perfected by one 43 31 method under this Article and is later perfected by another 43 32 method under this Article, without an intermediate period when 43 33 it was unperfected. 43 34 4. SUPPORTING OBLIGATION. Perfection of a security 43 35 interest in collateral also perfects a security interest in a 44 1 supporting obligation for the collateral. 44 2 5. LIEN SECURING RIGHT TO PAYMENT. Perfection of a 44 3 security interest in a right to payment or performance also 44 4 perfects a security interest in a security interest, mortgage, 44 5 or other lien on personal or real property securing the right. 44 6 6. SECURITY ENTITLEMENT CARRIED IN SECURITIES ACCOUNT. 44 7 Perfection of a security interest in a securities account also 44 8 perfects a security interest in the security entitlements 44 9 carried in the securities account. 44 10 7. COMMODITY CONTRACT CARRIED IN COMMODITY ACCOUNT. 44 11 Perfection of a security interest in a commodity account also 44 12 perfects a security interest in the commodity contracts 44 13 carried in the commodity account. 44 14 Sec. 29. NEW SECTION. 554.9309 SECURITY INTEREST 44 15 PERFECTED UPON ATTACHMENT. 44 16 The following security interests are perfected when they 44 17 attach: 44 18 1. a purchase-money security interest in consumer goods, 44 19 except as otherwise provided in section 554.9311, subsection 44 20 2, with respect to consumer goods that are subject to a 44 21 statute or treaty described in section 554.9311, subsection 1; 44 22 2. an assignment of accounts or payment intangibles which 44 23 does not by itself or in conjunction with other assignments to 44 24 the same assignee transfer a significant part of the 44 25 assignor's outstanding accounts or payment intangibles; 44 26 3. a sale of a payment intangible; 44 27 4. a sale of a promissory note; 44 28 5. a security interest created by the assignment of a 44 29 health-care-insurance receivable to the provider of the 44 30 health-care goods or services; 44 31 6. a security interest arising under section 554.2401, 44 32 554.2505, 554.2711, subsection 3, or section 554.13508, 44 33 subsection 5, until the debtor obtains possession of the 44 34 collateral; 44 35 7. a security interest of a collecting bank arising under 45 1 section 554.4210; 45 2 8. a security interest of an issuer or nominated person 45 3 arising under section 554.5118; 45 4 9. a security interest arising in the delivery of a 45 5 financial asset under section 554.9206, subsection 3; 45 6 10. a security interest in investment property created by 45 7 a broker or securities intermediary; 45 8 11. a security interest in a commodity contract or a 45 9 commodity account created by a commodity intermediary; 45 10 12. an assignment for the benefit of all creditors of the 45 11 transferor and subsequent transfers by the assignee 45 12 thereunder; and 45 13 13. a security interest created by an assignment of a 45 14 beneficial interest in a decedent's estate. 45 15 Sec. 30. NEW SECTION. 554.9310 WHEN FILING REQUIRED TO 45 16 PERFECT SECURITY INTEREST OR AGRICULTURAL LIEN – SECURITY 45 17 INTERESTS AND AGRICULTURAL LIENS TO WHICH FILING PROVISIONS DO 45 18 NOT APPLY. 45 19 1. GENERAL RULE – PERFECTION BY FILING. Except as 45 20 otherwise provided in subsection 2 and section 554.9312, 45 21 subsection 2, a financing statement must be filed to perfect 45 22 all security interests and agricultural liens. 45 23 2. EXCEPTIONS – FILING NOT NECESSARY. The filing of a 45 24 financing statement is not necessary to perfect a security 45 25 interest: 45 26 a. that is perfected under section 554.9308, subsection 4, 45 27 5, 6, or 7; 45 28 b. that is perfected under section 554.9309 when it 45 29 attaches; 45 30 c. in property subject to a statute, regulation, or treaty 45 31 described in section 554.9311, subsection 1; 45 32 d. in goods in possession of a bailee which is perfected 45 33 under section 554.9312, subsection 4, paragraph "a" or "b"; 45 34 e. in certificated securities, documents, goods, or 45 35 instruments which is perfected without filing or possession 46 1 under section 554.9312, subsection 5, 6, or 7; 46 2 f. in collateral in the secured party's possession under 46 3 section 554.9313; 46 4 g. in a certificated security which is perfected by 46 5 delivery of the security certificate to the secured party 46 6 under section 554.9313; 46 7 h. in deposit accounts, electronic chattel paper, 46 8 investment property, or letter-of-credit rights which is 46 9 perfected by control under section 554.9314; 46 10 i. in proceeds which is perfected under section 554.9315; 46 11 or 46 12 j. that is perfected under section 554.9316. 46 13 3. ASSIGNMENT OF PERFECTED SECURITY INTEREST. If a 46 14 secured party assigns a perfected security interest or 46 15 agricultural lien, a filing under this Article is not required 46 16 to continue the perfected status of the security interest 46 17 against creditors of and transferees from the original debtor. 46 18 Sec. 31. NEW SECTION. 554.9311 PERFECTION OF SECURITY 46 19 INTERESTS IN PROPERTY SUBJECT TO CERTAIN STATUTES, 46 20 REGULATIONS, AND TREATIES. 46 21 1. SECURITY INTEREST SUBJECT TO OTHER LAW. Except as 46 22 otherwise provided in subsection 4, the filing of a financing 46 23 statement is not necessary or effective to perfect a security 46 24 interest in property subject to: 46 25 a. a statute, regulation, or treaty of the United States 46 26 whose requirements for a security interest's obtaining 46 27 priority over the rights of a lien creditor with respect to 46 28 the property preempt section 554.9310, subsection 1; 46 29 b. any certificate-of-title statute, including as provided 46 30 in chapter 321, covering automobiles, trailers, mobile homes, 46 31 boats, farm tractors, or the like, which provides for a 46 32 security interest to be indicated on the certificate as a 46 33 condition or result of perfection; or 46 34 c. a certificate-of-title statute of another jurisdiction 46 35 which provides for a security interest to be indicated on the 47 1 certificate as a condition or result of the security 47 2 interest's obtaining priority over the rights of a lien 47 3 creditor with respect to the property. 47 4 2. COMPLIANCE WITH OTHER LAW. Compliance with the 47 5 requirements of a statute, regulation, or treaty described in 47 6 subsection 1 for obtaining priority over the rights of a lien 47 7 creditor is equivalent to the filing of a financing statement 47 8 under this Article. Except as otherwise provided in 47 9 subsection 4 and sections 554.9313 and 554.9316, subsections 4 47 10 and 5, for goods covered by a certificate of title, a security 47 11 interest in property subject to a statute, regulation, or 47 12 treaty described in subsection 1 may be perfected only by 47 13 compliance with those requirements, and a security interest so 47 14 perfected remains perfected notwithstanding a change in the 47 15 use or transfer of possession of the collateral. 47 16 3. DURATION AND RENEWAL OF PERFECTION. Except as 47 17 otherwise provided in subsection 4 and section 554.9316, 47 18 subsections 4 and 5, duration and renewal of perfection of a 47 19 security interest perfected by compliance with the 47 20 requirements prescribed by a statute, regulation, or treaty 47 21 described in subsection 1 are governed by the statute, 47 22 regulation, or treaty. In other respects, the security 47 23 interest is subject to this Article. 47 24 4. INAPPLICABILITY TO CERTAIN INVENTORY. During any 47 25 period in which collateral subject to a statute specified in 47 26 subsection 1, paragraph "b" is inventory held for sale or 47 27 lease by a person or leased by that person as lessor and that 47 28 person is in the business of selling goods of that kind, this 47 29 section does not apply to a security interest in that 47 30 collateral created by that person. 47 31 Sec. 32. NEW SECTION. 554.9312 PERFECTION OF SECURITY 47 32 INTERESTS IN CHATTEL PAPER, DEPOSIT ACCOUNTS, DOCUMENTS, GOODS 47 33 COVERED BY DOCUMENTS, INSTRUMENTS, INVESTMENT PROPERTY, 47 34 LETTER-OF-CREDIT RIGHTS, AND MONEY – PERFECTION BY PERMISSIVE 47 35 FILING – TEMPORARY PERFECTION WITHOUT FILING OR TRANSFER OF 48 1 POSSESSION. 48 2 1. PERFECTION BY FILING PERMITTED. A security interest in 48 3 chattel paper, negotiable documents, instruments, or 48 4 investment property may be perfected by filing. 48 5 2. CONTROL OR POSSESSION OF CERTAIN COLLATERAL. Except as 48 6 otherwise provided in section 554.9315, subsections 3 and 4, 48 7 for proceeds: 48 8 a. a security interest in a deposit account may be 48 9 perfected only by control under section 554.9314; 48 10 b. and except as otherwise provided in section 554.9308, 48 11 subsection 4, a security interest in a letter-of-credit right 48 12 may be perfected only by control under section 554.9314; and 48 13 c. a security interest in money may be perfected only by 48 14 the secured party's taking possession under section 554.9313. 48 15 3. GOODS COVERED BY NEGOTIABLE DOCUMENT. While goods are 48 16 in the possession of a bailee that has issued a negotiable 48 17 document covering the goods: 48 18 a. a security interest in the goods may be perfected by 48 19 perfecting a security interest in the document; and 48 20 b. a security interest perfected in the document has 48 21 priority over any security interest that becomes perfected in 48 22 the goods by another method during that time. 48 23 4. GOODS COVERED BY NONNEGOTIABLE DOCUMENT. While goods 48 24 are in the possession of a bailee that has issued a 48 25 nonnegotiable document covering the goods, a security interest 48 26 in the goods may be perfected by: 48 27 a. issuance of a document in the name of the secured 48 28 party; 48 29 b. the bailee's receipt of notification of the secured 48 30 party's interest; or 48 31 c. filing as to the goods. 48 32 5. TEMPORARY PERFECTION – NEW VALUE. A security interest 48 33 in certificated securities, negotiable documents, or 48 34 instruments is perfected without filing or the taking of 48 35 possession for a period of twenty days from the time it 49 1 attaches to the extent that it arises for new value given 49 2 under an authenticated security agreement. 49 3 6. TEMPORARY PERFECTION – GOODS OR DOCUMENTS MADE 49 4 AVAILABLE TO DEBTOR. A perfected security interest in a 49 5 negotiable document or goods in possession of a bailee, other 49 6 than one that has issued a negotiable document for the goods, 49 7 remains perfected for twenty days without filing if the 49 8 secured party makes available to the debtor the goods or 49 9 documents representing the goods for the purpose of: 49 10 a. ultimate sale or exchange; or 49 11 b. loading, unloading, storing, shipping, transshipping, 49 12 manufacturing, processing, or otherwise dealing with them in a 49 13 manner preliminary to their sale or exchange. 49 14 7. TEMPORARY PERFECTION – DELIVERY OF SECURITY 49 15 CERTIFICATE OR INSTRUMENT TO DEBTOR. A perfected security 49 16 interest in a certificated security or instrument remains 49 17 perfected for twenty days without filing if the secured party 49 18 delivers the security certificate or instrument to the debtor 49 19 for the purpose of: 49 20 a. ultimate sale or exchange; or 49 21 b. presentation, collection, enforcement, renewal, or 49 22 registration of transfer. 49 23 8. EXPIRATION OF TEMPORARY PERFECTION. After the twenty- 49 24 day period specified in subsection 5, 6, or 7 expires, 49 25 perfection depends upon compliance with this Article. 49 26 Sec. 33. NEW SECTION. 554.9313 WHEN POSSESSION BY OR 49 27 DELIVERY TO SECURED PARTY PERFECTS SECURITY INTEREST WITHOUT 49 28 FILING. 49 29 1. PERFECTION BY POSSESSION OR DELIVERY. Except as 49 30 otherwise provided in subsection 2, a secured party may 49 31 perfect a security interest in negotiable documents, goods, 49 32 instruments, money, or tangible chattel paper by taking 49 33 possession of the collateral. A secured party may perfect a 49 34 security interest in certificated securities by taking 49 35 delivery of the certificated securities under section 50 1 554.8301. 50 2 2. GOODS COVERED BY CERTIFICATE OF TITLE. With respect to 50 3 goods covered by a certificate of title issued by this state, 50 4 a secured party may perfect a security interest in the goods 50 5 by taking possession of the goods only in the circumstances 50 6 described in section 554.9316, subsection 5. 50 7 3. COLLATERAL IN POSSESSION OF PERSON OTHER THAN DEBTOR. 50 8 With respect to collateral other than certificated securities 50 9 and goods covered by a document, a secured party takes 50 10 possession of collateral in the possession of a person other 50 11 than the debtor, the secured party, or a lessee of the 50 12 collateral from the debtor in the ordinary course of the 50 13 debtor's business, when: 50 14 a. the person in possession authenticates a record 50 15 acknowledging that it holds possession of the collateral for 50 16 the secured party's benefit; or 50 17 b. the person takes possession of the collateral after 50 18 having authenticated a record acknowledging that it will hold 50 19 possession of collateral for the secured party's benefit. 50 20 4. TIME OF PERFECTION BY POSSESSION – CONTINUATION OF 50 21 PERFECTION. If perfection of a security interest depends upon 50 22 possession of the collateral by a secured party, perfection 50 23 occurs no earlier than the time the secured party takes 50 24 possession and continues only while the secured party retains 50 25 possession. 50 26 5. TIME OF PERFECTION BY DELIVERY – CONTINUATION OF 50 27 PERFECTION. A security interest in a certificated security in 50 28 registered form is perfected by delivery when delivery of the 50 29 certificated security occurs under section 554.8301 and 50 30 remains perfected by delivery until the debtor obtains 50 31 possession of the security certificate. 50 32 6. ACKNOWLEDGMENT NOT REQUIRED. A person in possession of 50 33 collateral is not required to acknowledge that it holds 50 34 possession for a secured party's benefit. 50 35 7. EFFECTIVENESS OF ACKNOWLEDGMENT – NO DUTIES OR 51 1 CONFIRMATION. If a person acknowledges that it holds 51 2 possession for the secured party's benefit: 51 3 a. the acknowledgment is effective under subsection 3 or 51 4 section 554.8301, subsection 1, even if the acknowledgment 51 5 violates the rights of a debtor; and 51 6 b. unless the person otherwise agrees or law other than 51 7 this Article otherwise provides, the person does not owe any 51 8 duty to the secured party and is not required to confirm the 51 9 acknowledgment to another person. 51 10 8. SECURED PARTY'S DELIVERY TO PERSON OTHER THAN DEBTOR. 51 11 A secured party having possession of collateral does not 51 12 relinquish possession by delivering the collateral to a person 51 13 other than the debtor or a lessee of the collateral from the 51 14 debtor in the ordinary course of the debtor's business if the 51 15 person was instructed before the delivery or is instructed 51 16 contemporaneously with the delivery: 51 17 a. to hold possession of the collateral for the secured 51 18 party's benefit; or 51 19 b. to redeliver the collateral to the secured party. 51 20 9. EFFECT OF DELIVERY UNDER SUBSECTION 8 – NO DUTIES OR 51 21 CONFIRMATION. A secured party does not relinquish possession, 51 22 even if a delivery under subsection 8 violates the rights of a 51 23 debtor. A person to which collateral is delivered under 51 24 subsection 8 does not owe any duty to the secured party and is 51 25 not required to confirm the delivery to another person unless 51 26 the person otherwise agrees or law other than this Article 51 27 otherwise provides. 51 28 Sec. 34. NEW SECTION. 554.9314 PERFECTION BY CONTROL. 51 29 1. PERFECTION BY CONTROL. A security interest in 51 30 investment property, deposit accounts, letter-of-credit 51 31 rights, or electronic chattel paper may be perfected by 51 32 control of the collateral under section 554.9104, 554.9105, 51 33 554.9106, or 554.9107. 51 34 2. SPECIFIED COLLATERAL – TIME OF PERFECTION BY CONTROL 51 35 – CONTINUATION OF PERFECTION. A security interest in deposit 52 1 accounts, electronic chattel paper, or letter-of-credit rights 52 2 is perfected by control under section 554.9104, 554.9105, or 52 3 554.9107 when the secured party obtains control and remains 52 4 perfected by control only while the secured party retains 52 5 control. 52 6 3. INVESTMENT PROPERTY – TIME OF PERFECTION BY CONTROL – 52 7 CONTINUATION OF PERFECTION. A security interest in investment 52 8 property is perfected by control under section 554.9106 from 52 9 the time the secured party obtains control and remains 52 10 perfected by control until: 52 11 a. the secured party does not have control; and 52 12 b. one of the following occurs: 52 13 (1) if the collateral is a certificated security, the 52 14 debtor has or acquires possession of the security certificate; 52 15 (2) if the collateral is an uncertificated security, the 52 16 issuer has registered or registers the debtor as the 52 17 registered owner; or 52 18 (3) if the collateral is a security entitlement, the 52 19 debtor is or becomes the entitlement holder. 52 20 Sec. 35. NEW SECTION. 554.9315 SECURED PARTY'S RIGHTS ON 52 21 DISPOSITION OF COLLATERAL AND IN PROCEEDS. 52 22 1. DISPOSITION OF COLLATERAL – CONTINUATION OF SECURITY 52 23 INTEREST OR AGRICULTURAL LIEN – PROCEEDS. Except as 52 24 otherwise provided in this Article and in section 554.2403, 52 25 subsection 2: 52 26 a. a security interest or agricultural lien continues in 52 27 collateral notwithstanding sale, lease, license, exchange, or 52 28 other disposition thereof unless the secured party authorized 52 29 the disposition free of the security interest or agricultural 52 30 lien; and 52 31 b. a security interest attaches to any identifiable 52 32 proceeds of collateral. 52 33 2. WHEN COMMINGLED PROCEEDS IDENTIFIABLE. Proceeds that 52 34 are commingled with other property are identifiable proceeds: 52 35 a. if the proceeds are goods, to the extent provided by 53 1 section 554.9336; and 53 2 b. if the proceeds are not goods, to the extent that the 53 3 secured party identifies the proceeds by a method of tracing, 53 4 including application of equitable principles, that is 53 5 permitted under law other than this Article with respect to 53 6 commingled property of the type involved. 53 7 3. PERFECTION OF SECURITY INTEREST IN PROCEEDS. A 53 8 security interest in proceeds is a perfected security interest 53 9 if the security interest in the original collateral was 53 10 perfected. 53 11 4. CONTINUATION OF PERFECTION. A perfected security 53 12 interest in proceeds becomes unperfected on the twenty-first 53 13 day after the security interest attaches to the proceeds 53 14 unless: 53 15 a. the following conditions are satisfied: 53 16 (1) a filed financing statement covers the original 53 17 collateral; 53 18 (2) the proceeds are collateral in which a security 53 19 interest may be perfected by filing in the office in which the 53 20 financing statement has been filed; and 53 21 (3) the proceeds are not acquired with cash proceeds; 53 22 b. the proceeds are identifiable cash proceeds; or 53 23 c. the security interest in the proceeds is perfected 53 24 other than under subsection 3 when the security interest 53 25 attaches to the proceeds or within twenty days thereafter. 53 26 5. WHEN PERFECTED SECURITY INTEREST IN PROCEEDS BECOMES 53 27 UNPERFECTED. If a filed financing statement covers the 53 28 original collateral, a security interest in proceeds which 53 29 remains perfected under subsection 4, paragraph "a", becomes 53 30 unperfected at the later of: 53 31 a. when the effectiveness of the filed financing statement 53 32 lapses under section 554.9515 or is terminated under section 53 33 554.9513; or 53 34 b. the twenty-first day after the security interest 53 35 attaches to the proceeds. 54 1 Sec. 36. NEW SECTION. 554.9316 CONTINUED PERFECTION OF 54 2 SECURITY INTEREST FOLLOWING CHANGE IN GOVERNING LAW. 54 3 1. GENERAL RULE – EFFECT ON PERFECTION OF CHANGE IN 54 4 GOVERNING LAW. A security interest perfected pursuant to the 54 5 law of the jurisdiction designated in section 554.9301, 54 6 subsection 1, or section 554.9305, subsection 3, remains 54 7 perfected until the earliest of: 54 8 a. the time perfection would have ceased under the law of 54 9 that jurisdiction; 54 10 b. the expiration of four months after a change of the 54 11 debtor's location to another jurisdiction; or 54 12 c. the expiration of one year after a transfer of 54 13 collateral to a person that thereby becomes a debtor and is 54 14 located in another jurisdiction. 54 15 2. SECURITY INTEREST PERFECTED OR UNPERFECTED UNDER LAW OF 54 16 NEW JURISDICTION. If a security interest described in 54 17 subsection 1 becomes perfected under the law of the other 54 18 jurisdiction before the earliest time or event described in 54 19 that subsection, it remains perfected thereafter. If the 54 20 security interest does not become perfected under the law of 54 21 the other jurisdiction before the earliest time or event, it 54 22 becomes unperfected and is deemed never to have been perfected 54 23 as against a purchaser of the collateral for value. 54 24 3. POSSESSORY SECURITY INTEREST IN COLLATERAL MOVED TO NEW 54 25 JURISDICTION. A possessory security interest in collateral, 54 26 other than goods covered by a certificate of title and as- 54 27 extracted collateral consisting of goods, remains continuously 54 28 perfected if: 54 29 a. the collateral is located in one jurisdiction and 54 30 subject to a security interest perfected under the law of that 54 31 jurisdiction; 54 32 b. thereafter the collateral is brought into another 54 33 jurisdiction; and 54 34 c. upon entry into the other jurisdiction, the security 54 35 interest is perfected under the law of the other jurisdiction. 55 1 4. GOODS COVERED BY CERTIFICATE OF TITLE FROM THIS STATE. 55 2 Except as otherwise provided in subsection 5, a security 55 3 interest in goods covered by a certificate of title which is 55 4 perfected by any method under the law of another jurisdiction 55 5 when the goods become covered by a certificate of title from 55 6 this state remains perfected until the security interest would 55 7 have become unperfected under the law of the other 55 8 jurisdiction had the goods not become so covered. 55 9 5. WHEN SUBSECTION 4 SECURITY INTEREST BECOMES UNPERFECTED 55 10 AGAINST PURCHASERS. A security interest described in 55 11 subsection 4 becomes unperfected as against a purchaser of the 55 12 goods for value and is deemed never to have been perfected as 55 13 against a purchaser of the goods for value if the applicable 55 14 requirements for perfection under section 554.9311, subsection 55 15 2, or section 554.9313 are not satisfied before the earlier 55 16 of: 55 17 a. the time the security interest would have become 55 18 unperfected under the law of the other jurisdiction had the 55 19 goods not become covered by a certificate of title from this 55 20 state; or 55 21 b. the expiration of four months after the goods had 55 22 become so covered. 55 23 6. CHANGE IN JURISDICTION OF BANK, ISSUER, NOMINATED 55 24 PERSON, SECURITIES INTERMEDIARY, OR COMMODITY INTERMEDIARY. A 55 25 security interest in deposit accounts, letter-of-credit 55 26 rights, or investment property which is perfected under the 55 27 law of the bank's jurisdiction, the issuer's jurisdiction, a 55 28 nominated person's jurisdiction, the securities intermediary's 55 29 jurisdiction, or the commodity intermediary's jurisdiction, as 55 30 applicable, remains perfected until the earlier of: 55 31 a. the time the security interest would have become 55 32 unperfected under the law of that jurisdiction; or 55 33 b. the expiration of four months after a change of the 55 34 applicable jurisdiction to another jurisdiction. 55 35 7. SUBSECTION 6 SECURITY INTEREST PERFECTED OR UNPERFECTED 56 1 UNDER LAW OF NEW JURISDICTION. If a security interest 56 2 described in subsection 6 becomes perfected under the law of 56 3 the other jurisdiction before the earlier of the time or the 56 4 end of the period described in that subsection, it remains 56 5 perfected thereafter. If the security interest does not 56 6 become perfected under the law of the other jurisdiction 56 7 before the earlier of that time or the end of that period, it 56 8 becomes unperfected and is deemed never to have been perfected 56 9 as against a purchaser of the collateral for value. 56 10 C. PRIORITY 56 11 Sec. 37. NEW SECTION. 554.9317 INTERESTS THAT TAKE 56 12 PRIORITY OVER OR TAKE FREE OF SECURITY INTEREST OR 56 13 AGRICULTURAL LIEN. 56 14 1. CONFLICTING SECURITY INTERESTS AND RIGHTS OF LIEN 56 15 CREDITORS. A security interest or agricultural lien is 56 16 subordinate to the rights of: 56 17 a. a person entitled to priority under section 554.9322; 56 18 and 56 19 b. except as otherwise provided in subsection 5, a person 56 20 that becomes a lien creditor before the earlier of the time: 56 21 (1) The security interest or agricultural lien is 56 22 perfected; or 56 23 (2) One of the conditions specified in section 554.9203, 56 24 subsection 2, paragraph "c" is met and a financing statement 56 25 covering the collateral is filed. 56 26 2. BUYERS THAT RECEIVE DELIVERY. Except as otherwise 56 27 provided in subsection 5, a buyer, other than a secured party, 56 28 of tangible chattel paper, documents, goods, instruments, or a 56 29 security certificate takes free of a security interest or 56 30 agricultural lien if the buyer gives value and receives 56 31 delivery of the collateral without knowledge of the security 56 32 interest or agricultural lien and before it is perfected. 56 33 3. LESSEES THAT RECEIVE DELIVERY. Except as otherwise 56 34 provided in subsection 5, a lessee of goods takes free of a 56 35 security interest or agricultural lien if the lessee gives 57 1 value and receives delivery of the collateral without 57 2 knowledge of the security interest or agricultural lien and 57 3 before it is perfected. 57 4 4. LICENSEES AND BUYERS OF CERTAIN COLLATERAL. A licensee 57 5 of a general intangible or a buyer, other than a secured 57 6 party, of accounts, electronic chattel paper, general 57 7 intangibles, or investment property other than a certificated 57 8 security takes free of a security interest if the licensee or 57 9 buyer gives value without knowledge of the security interest 57 10 and before it is perfected. 57 11 5. PURCHASE-MONEY SECURITY INTEREST. Except as otherwise 57 12 provided in sections 554.9320 and 554.9321, if a person files 57 13 a financing statement with respect to a purchase-money 57 14 security interest before or within twenty days after the 57 15 debtor receives delivery of the collateral, the security 57 16 interest takes priority over the rights of a buyer, lessee, or 57 17 lien creditor which arise between the time the security 57 18 interest attaches and the time of filing. 57 19 Sec. 38. NEW SECTION. 554.9318 NO INTEREST RETAINED IN 57 20 RIGHT TO PAYMENT THAT IS SOLD – RIGHTS AND TITLE OF SELLER OF 57 21 ACCOUNT OR CHATTEL PAPER WITH RESPECT TO CREDITORS AND 57 22 PURCHASERS. 57 23 1. SELLER RETAINS NO INTEREST. A debtor that has sold an 57 24 account, chattel paper, payment intangible, or promissory note 57 25 does not retain a legal or equitable interest in the 57 26 collateral sold. 57 27 2. DEEMED RIGHTS OF DEBTOR IF BUYER'S SECURITY INTEREST 57 28 UNPERFECTED. For purposes of determining the rights of 57 29 creditors of, and purchasers for value of an account or 57 30 chattel paper from, a debtor that has sold an account or 57 31 chattel paper, while the buyer's security interest is 57 32 unperfected, the debtor is deemed to have rights and title to 57 33 the account or chattel paper identical to those the debtor 57 34 sold. 57 35 Sec. 39. NEW SECTION. 554.9319 RIGHTS AND TITLE OF 58 1 CONSIGNEE WITH RESPECT TO CREDITORS AND PURCHASERS. 58 2 1. CONSIGNEE HAS CONSIGNOR'S RIGHTS. Except as otherwise 58 3 provided in subsection 2, for purposes of determining the 58 4 rights of creditors of, and purchasers for value of goods 58 5 from, a consignee, while the goods are in the possession of 58 6 the consignee, the consignee is deemed to have rights and 58 7 title to the goods identical to those the consignor had or had 58 8 power to transfer. 58 9 2. APPLICABILITY OF OTHER LAW. For purposes of 58 10 determining the rights of a creditor of a consignee, law other 58 11 than this Article determines the rights and title of a 58 12 consignee while goods are in the consignee's possession if, 58 13 under this part, a perfected security interest held by the 58 14 consignor would have priority over the rights of the creditor. 58 15 Sec. 40. NEW SECTION. 554.9320 BUYER OF GOODS. 58 16 1. BUYER IN ORDINARY COURSE OF BUSINESS. Except as 58 17 otherwise provided in subsection 5, a buyer in ordinary course 58 18 of business, other than a person buying farm products from a 58 19 person engaged in farming operations, takes free of a security 58 20 interest created by the buyer's seller, even if the security 58 21 interest is perfected and the buyer knows of its existence. 58 22 2. BUYER OF CONSUMER GOODS. Except as otherwise provided 58 23 in subsection 5, a buyer of goods from a person who used or 58 24 bought the goods for use primarily for personal, family, or 58 25 household purposes takes free of a security interest, even if 58 26 perfected, if the buyer buys: 58 27 a. without knowledge of the security interest; 58 28 b. for value; 58 29 c. primarily for the buyer's personal, family, or 58 30 household purposes; and 58 31 d. before the filing of a financing statement covering the 58 32 goods. 58 33 3. EFFECTIVENESS OF FILING FOR SUBSECTION 2. To the 58 34 extent that it affects the priority of a security interest 58 35 over a buyer of goods under subsection 2, the period of 59 1 effectiveness of a filing made in the jurisdiction in which 59 2 the seller is located is governed by section 554.9316, 59 3 subsections 1 and 2. 59 4 4. BUYER IN ORDINARY COURSE OF BUSINESS AT WELLHEAD OR 59 5 MINEHEAD. A buyer in ordinary course of business buying oil, 59 6 gas, or other minerals at the wellhead or minehead or after 59 7 extraction takes free of an interest arising out of an 59 8 encumbrance. 59 9 5. POSSESSORY SECURITY INTEREST NOT AFFECTED. Subsections 59 10 1 and 2 do not affect a security interest in goods in the 59 11 possession of the secured party under section 554.9313. 59 12 Sec. 41. NEW SECTION. 554.9321 LICENSEE OF GENERAL 59 13 INTANGIBLE AND LESSEE OF GOODS IN ORDINARY COURSE OF BUSINESS. 59 14 1. LICENSEE IN ORDINARY COURSE OF BUSINESS. In this 59 15 section, "licensee in ordinary course of business" means a 59 16 person that becomes a licensee of a general intangible in good 59 17 faith, without knowledge that the license violates the rights 59 18 of another person in the general intangible, and in the 59 19 ordinary course from a person in the business of licensing 59 20 general intangibles of that kind. A person becomes a licensee 59 21 in the ordinary course if the license to the person comports 59 22 with the usual or customary practices in the kind of business 59 23 in which the licensor is engaged or with the licensor's own 59 24 usual or customary practices. 59 25 2. RIGHTS OF LICENSEE IN ORDINARY COURSE OF BUSINESS. A 59 26 licensee in ordinary course of business takes its rights under 59 27 a nonexclusive license free of a security interest in the 59 28 general intangible created by the licensor, even if the 59 29 security interest is perfected and the licensee knows of its 59 30 existence. 59 31 3. RIGHTS OF LESSEE IN ORDINARY COURSE OF BUSINESS. A 59 32 lessee in ordinary course of business takes its leasehold 59 33 interest free of a security interest in the goods created by 59 34 the lessor, even if the security interest is perfected and the 59 35 lessee knows of its existence. 60 1 Sec. 42. NEW SECTION. 554.9322 PRIORITIES AMONG 60 2 CONFLICTING SECURITY INTERESTS IN AND AGRICULTURAL LIENS ON 60 3 SAME COLLATERAL. 60 4 1. GENERAL PRIORITY RULES. Except as otherwise provided 60 5 in this section, priority among conflicting security interests 60 6 and agricultural liens in the same collateral is determined 60 7 according to the following rules: 60 8 a. Conflicting perfected security interests and 60 9 agricultural liens rank according to priority in time of 60 10 filing or perfection. Priority dates from the earlier of the 60 11 time a filing covering the collateral is first made or the 60 12 security interest or agricultural lien is first perfected, if 60 13 there is no period thereafter when there is neither filing nor 60 14 perfection. 60 15 b. A perfected security interest or agricultural lien has 60 16 priority over a conflicting unperfected security interest or 60 17 agricultural lien. 60 18 c. The first security interest or agricultural lien to 60 19 attach or become effective has priority if conflicting 60 20 security interests and agricultural liens are unperfected. 60 21 2. TIME OF PERFECTION – PROCEEDS AND SUPPORTING 60 22 OBLIGATIONS. For the purposes of subsection 1, paragraph "a": 60 23 a. the time of filing or perfection as to a security 60 24 interest in collateral is also the time of filing or 60 25 perfection as to a security interest in proceeds; and 60 26 b. the time of filing or perfection as to a security 60 27 interest in collateral supported by a supporting obligation is 60 28 also the time of filing or perfection as to a security 60 29 interest in the supporting obligation. 60 30 3. SPECIAL PRIORITY RULES – PROCEEDS AND SUPPORTING 60 31 OBLIGATIONS. Except as otherwise provided in subsection 6, a 60 32 security interest in collateral which qualifies for priority 60 33 over a conflicting security interest under section 554.9327, 60 34 554.9328, 554.9329, 554.9330, or 554.9331 also has priority 60 35 over a conflicting security interest in: 61 1 a. any supporting obligation for the collateral; and 61 2 b. proceeds of the collateral if: 61 3 (1) the security interest in proceeds is perfected; 61 4 (2) the proceeds are cash proceeds or of the same type as 61 5 the collateral; and 61 6 (3) in the case of proceeds that are proceeds of proceeds, 61 7 all intervening proceeds are cash proceeds, proceeds of the 61 8 same type as the collateral, or an account relating to the 61 9 collateral. 61 10 4. FIRST-TO-FILE PRIORITY RULE FOR CERTAIN COLLATERAL. 61 11 Subject to subsection 5 and except as otherwise provided in 61 12 subsection 6, if a security interest in chattel paper, deposit 61 13 accounts, negotiable documents, instruments, investment 61 14 property, or letter-of-credit rights is perfected by a method 61 15 other than filing, conflicting perfected security interests in 61 16 proceeds of the collateral rank according to priority in time 61 17 of filing. 61 18 5. APPLICABILITY OF SUBSECTION 4. Subsection 4 applies 61 19 only if the proceeds of the collateral are not cash proceeds, 61 20 chattel paper, negotiable documents, instruments, investment 61 21 property, or letter-of-credit rights. 61 22 6. LIMITATIONS ON SUBSECTIONS 1 THROUGH 5. Subsections 1 61 23 through 5 are subject to: 61 24 a. subsection 7 and the other provisions of this part; 61 25 b. section 554.4210 with respect to a security interest of 61 26 a collecting bank; 61 27 c. section 554.5118 with respect to a security interest of 61 28 an issuer or nominated person; and 61 29 d. section 554.9110 with respect to a security interest 61 30 arising under Article 2 or 13. 61 31 7. PRIORITY UNDER AGRICULTURAL LIEN STATUTE. A perfected 61 32 agricultural lien on collateral has priority over a 61 33 conflicting security interest in or agricultural lien on the 61 34 same collateral if the statute creating the agricultural lien 61 35 so provides. 62 1 Sec. 43. NEW SECTION. 554.9323 FUTURE ADVANCES. 62 2 1. WHEN PRIORITY BASED ON TIME OF ADVANCE. Except as 62 3 otherwise provided in subsection 3, for purposes of 62 4 determining the priority of a perfected security interest 62 5 under section 554.9322, subsection 1, paragraph "a", 62 6 perfection of the security interest dates from the time an 62 7 advance is made to the extent that the security interest 62 8 secures an advance that: 62 9 a. is made while the security interest is perfected only: 62 10 (1) under section 554.9309 when it attaches; or 62 11 (2) temporarily under section 554.9312, subsection 5, 6, 62 12 or 7; and 62 13 b. is not made pursuant to a commitment entered into 62 14 before or while the security interest is perfected by a method 62 15 other than under section 554.9309 or 554.9312, subsection 5, 62 16 6, or 7. 62 17 2. LIEN CREDITOR. Except as otherwise provided in 62 18 subsection 3, a security interest is subordinate to the rights 62 19 of a person that becomes a lien creditor to the extent that 62 20 the security interest secures an advance made more than forty- 62 21 five days after the person becomes a lien creditor unless the 62 22 advance is made: 62 23 a. without knowledge of the lien; or 62 24 b. pursuant to a commitment entered into without knowledge 62 25 of the lien. 62 26 3. BUYER OF RECEIVABLES. Subsections 1 and 2 do not apply 62 27 to a security interest held by a secured party that is a buyer 62 28 of accounts, chattel paper, payment intangibles, or promissory 62 29 notes or a consignor. 62 30 4. BUYER OF GOODS. Except as otherwise provided in 62 31 subsection 5, a buyer of goods other than a buyer in ordinary 62 32 course of business takes free of a security interest to the 62 33 extent that it secures advances made after the earlier of: 62 34 a. the time the secured party acquires knowledge of the 62 35 buyer's purchase; or 63 1 b. forty-five days after the purchase. 63 2 5. ADVANCES MADE PURSUANT TO COMMITMENT – PRIORITY OF 63 3 BUYER OF GOODS. Subsection 4 does not apply if the advance is 63 4 made pursuant to a commitment entered into without knowledge 63 5 of the buyer's purchase and before the expiration of the 63 6 forty-five-day period. 63 7 6. LESSEE OF GOODS. Except as otherwise provided in 63 8 subsection 7, a lessee of goods, other than a lessee in 63 9 ordinary course of business, takes the leasehold interest free 63 10 of a security interest to the extent that it secures advances 63 11 made after the earlier of: 63 12 a. the time the secured party acquires knowledge of the 63 13 lease; or 63 14 b. forty-five days after the lease contract becomes 63 15 enforceable. 63 16 7. ADVANCES MADE PURSUANT TO COMMITMENT – PRIORITY OF 63 17 LESSEE OF GOODS. Subsection 6 does not apply if the advance 63 18 is made pursuant to a commitment entered into without 63 19 knowledge of the lease and before the expiration of the forty- 63 20 five-day period. 63 21 Sec. 44. NEW SECTION. 554.9324 PRIORITY OF PURCHASE- 63 22 MONEY SECURITY INTERESTS. 63 23 1. GENERAL RULE – PURCHASE-MONEY PRIORITY. Except as 63 24 otherwise provided in subsection 7, a perfected purchase-money 63 25 security interest in goods other than inventory or livestock 63 26 has priority over a conflicting security interest in the same 63 27 goods, and, except as otherwise provided in section 554.9327, 63 28 a perfected security interest in its identifiable proceeds 63 29 also has priority, if the purchase-money security interest is 63 30 perfected when the debtor receives possession of the 63 31 collateral or within twenty days thereafter. 63 32 2. INVENTORY PURCHASE-MONEY PRIORITY. Subject to 63 33 subsection 3 and except as otherwise provided in subsection 7, 63 34 a perfected purchase-money security interest in inventory has 63 35 priority over a conflicting security interest in the same 64 1 inventory, has priority over a conflicting security interest 64 2 in chattel paper or an instrument constituting proceeds of the 64 3 inventory and in proceeds of the chattel paper, if so provided 64 4 in section 554.9330, and, except as otherwise provided in 64 5 section 554.9327, also has priority in identifiable cash 64 6 proceeds of the inventory to the extent the identifiable cash 64 7 proceeds are received on or before the delivery of the 64 8 inventory to a buyer, if: 64 9 a. the purchase-money security interest is perfected when 64 10 the debtor receives possession of the inventory; 64 11 b. the purchase-money secured party sends an authenticated 64 12 notification to the holder of the conflicting security 64 13 interest; 64 14 c. the holder of the conflicting security interest 64 15 receives the notification within five years before the debtor 64 16 receives possession of the inventory; and 64 17 d. the notification states that the person sending the 64 18 notification has or expects to acquire a purchase-money 64 19 security interest in inventory of the debtor and describes the 64 20 inventory. 64 21 3. HOLDERS OF CONFLICTING INVENTORY SECURITY INTERESTS TO 64 22 BE NOTIFIED. Subsection 2, paragraphs "b" through "d", apply 64 23 only if the holder of the conflicting security interest had 64 24 filed a financing statement covering the same types of 64 25 inventory: 64 26 a. if the purchase-money security interest is perfected by 64 27 filing, before the date of the filing; or 64 28 b. if the purchase-money security interest is temporarily 64 29 perfected without filing or possession under section 554.9312, 64 30 subsection 6, before the beginning of the twenty-day period 64 31 thereunder. 64 32 4. LIVESTOCK PURCHASE-MONEY PRIORITY. Subject to 64 33 subsection 5 and except as otherwise provided in subsection 7, 64 34 a perfected purchase-money security interest in livestock that 64 35 are farm products has priority over a conflicting security 65 1 interest in the same livestock, and, except as otherwise 65 2 provided in section 554.9327, a perfected security interest in 65 3 their identifiable proceeds and identifiable products in their 65 4 unmanufactured states also has priority, if: 65 5 a. the purchase-money security interest is perfected when 65 6 the debtor receives possession of the livestock; 65 7 b. the purchase-money secured party sends an authenticated 65 8 notification to the holder of the conflicting security 65 9 interest; 65 10 c. the holder of the conflicting security interest 65 11 receives the notification within six months before the debtor 65 12 receives possession of the livestock; and 65 13 d. the notification states that the person sending the 65 14 notification has or expects to acquire a purchase-money 65 15 security interest in livestock of the debtor and describes the 65 16 livestock. 65 17 5. HOLDERS OF CONFLICTING LIVESTOCK SECURITY INTERESTS TO 65 18 BE NOTIFIED. Subsection 4, paragraphs "b" through "d", apply 65 19 only if the holder of the conflicting security interest had 65 20 filed a financing statement covering the same types of 65 21 livestock: 65 22 a. if the purchase-money security interest is perfected by 65 23 filing, before the date of the filing; or 65 24 b. if the purchase-money security interest is temporarily 65 25 perfected without filing or possession under section 554.9312, 65 26 subsection 6, before the beginning of the twenty-day period 65 27 thereunder. 65 28 6. SOFTWARE PURCHASE-MONEY PRIORITY. Except as otherwise 65 29 provided in subsection 7, a perfected purchase-money security 65 30 interest in software has priority over a conflicting security 65 31 interest in the same collateral, and, except as otherwise 65 32 provided in section 554.9327, a perfected security interest in 65 33 its identifiable proceeds also has priority, to the extent 65 34 that the purchase-money security interest in the goods in 65 35 which the software was acquired for use has priority in the 66 1 goods and proceeds of the goods under this section. 66 2 7. CONFLICTING PURCHASE-MONEY SECURITY INTERESTS. If more 66 3 than one security interest qualifies for priority in the same 66 4 collateral under subsection 1, 2, 4, or 6: 66 5 a. a security interest securing an obligation incurred as 66 6 all or part of the price of the collateral has priority over a 66 7 security interest securing an obligation incurred for value 66 8 given to enable the debtor to acquire rights in or the use of 66 9 collateral; and 66 10 b. in all other cases, section 554.9322, subsection 1, 66 11 applies to the qualifying security interests. 66 12 Sec. 45. NEW SECTION. 554.9325 PRIORITY OF SECURITY 66 13 INTERESTS IN TRANSFERRED COLLATERAL. 66 14 1. SUBORDINATION OF SECURITY INTEREST IN TRANSFERRED 66 15 COLLATERAL. Except as otherwise provided in subsection 2, a 66 16 security interest created by a debtor is subordinate to a 66 17 security interest in the same collateral created by another 66 18 person if: 66 19 a. the debtor acquired the collateral subject to the 66 20 security interest created by the other person; 66 21 b. the security interest created by the other person was 66 22 perfected when the debtor acquired the collateral; and 66 23 c. there is no period thereafter when the security 66 24 interest is unperfected. 66 25 2. LIMITATION OF SUBSECTION 1 SUBORDINATION. Subsection 1 66 26 subordinates a security interest only if the security 66 27 interest: 66 28 a. otherwise would have priority solely under section 66 29 554.9322, subsection 1, or section 554.9324; or 66 30 b. arose solely under section 554.2711, subsection 3, or 66 31 section 554.13508, subsection 5. 66 32 Sec. 46. NEW SECTION. 554.9326 PRIORITY OF SECURITY 66 33 INTERESTS CREATED BY NEW DEBTOR. 66 34 1. SUBORDINATION OF SECURITY INTEREST CREATED BY NEW 66 35 DEBTOR. Subject to subsection 2, a security interest created 67 1 by a new debtor which is perfected by a filed financing 67 2 statement that is effective solely under section 554.9508 in 67 3 collateral in which a new debtor has or acquires rights is 67 4 subordinate to a security interest in the same collateral 67 5 which is perfected other than by a filed financing statement 67 6 that is effective solely under section 554.9508. 67 7 2. PRIORITY UNDER OTHER PROVISIONS – MULTIPLE ORIGINAL 67 8 DEBTORS. The other provisions of this part determine the 67 9 priority among conflicting security interests in the same 67 10 collateral perfected by filed financing statements that are 67 11 effective solely under section 554.9508. However, if the 67 12 security agreements to which a new debtor became bound as 67 13 debtor were not entered into by the same original debtor, the 67 14 conflicting security interests rank according to priority in 67 15 time of the new debtor's having become bound. 67 16 Sec. 47. NEW SECTION. 554.9327 PRIORITY OF SECURITY 67 17 INTERESTS IN DEPOSIT ACCOUNT. 67 18 The following rules govern priority among conflicting 67 19 security interests in the same deposit account: 67 20 1. A security interest held by a secured party having 67 21 control of the deposit account under section 554.9104 has 67 22 priority over a conflicting security interest held by a 67 23 secured party that does not have control. 67 24 2. Except as otherwise provided in subsections 3 and 4, 67 25 security interests perfected by control under section 554.9314 67 26 rank according to priority in time of obtaining control. 67 27 3. Except as otherwise provided in subsection 4, a 67 28 security interest held by the bank with which the deposit 67 29 account is maintained has priority over a conflicting security 67 30 interest held by another secured party. 67 31 4. A security interest perfected by control under section 67 32 554.9104, subsection 1, paragraph "c", has priority over a 67 33 security interest held by the bank with which the deposit 67 34 account is maintained. 67 35 Sec. 48. NEW SECTION. 554.9328 PRIORITY OF SECURITY 68 1 INTERESTS IN INVESTMENT PROPERTY. 68 2 The following rules govern priority among conflicting 68 3 security interests in the same investment property: 68 4 1. A security interest held by a secured party having 68 5 control of investment property under section 554.9106 has 68 6 priority over a security interest held by a secured party that 68 7 does not have control of the investment property. 68 8 2. Except as otherwise provided in subsections 3 and 4, 68 9 conflicting security interests held by secured parties each of 68 10 which has control under section 554.9106 rank according to 68 11 priority in time of: 68 12 a. if the collateral is a security, obtaining control; 68 13 b. if the collateral is a security entitlement carried in 68 14 a securities account and: 68 15 (1) if the secured party obtained control under section 68 16 554.8106, subsection 4, paragraph "a", the secured party's 68 17 becoming the person for which the securities account is 68 18 maintained; 68 19 (2) if the secured party obtained control under section 68 20 554.8106, subsection 4, paragraph "b", the securities 68 21 intermediary's agreement to comply with the secured party's 68 22 entitlement orders with respect to security entitlements 68 23 carried or to be carried in the securities account; or 68 24 (3) if the secured party obtained control through another 68 25 person under section 554.8106, subsection 4, paragraph "b", 68 26 the time on which priority would be based under this 68 27 subsection if the other person were the secured party; or 68 28 c. if the collateral is a commodity contract carried with 68 29 a commodity intermediary, the satisfaction of the requirement 68 30 for control specified in section 554.9106, subsection 2, 68 31 paragraph "b", with respect to commodity contracts carried or 68 32 to be carried with the commodity intermediary. 68 33 3. A security interest held by a securities intermediary 68 34 in a security entitlement or a securities account maintained 68 35 with the securities intermediary has priority over a 69 1 conflicting security interest held by another secured party. 69 2 4. A security interest held by a commodity intermediary in 69 3 a commodity contract or a commodity account maintained with 69 4 the commodity intermediary has priority over a conflicting 69 5 security interest held by another secured party. 69 6 5. A security interest in a certificated security in 69 7 registered form which is perfected by taking delivery under 69 8 section 554.9313, subsection 1, and not by control under 69 9 section 554.9314 has priority over a conflicting security 69 10 interest perfected by a method other than control. 69 11 6. Conflicting security interests created by a broker, 69 12 securities intermediary, or commodity intermediary which are 69 13 perfected without control under section 554.9106 rank equally. 69 14 7. In all other cases, priority among conflicting security 69 15 interests in investment property is governed by sections 69 16 554.9322 and 554.9323. 69 17 Sec. 49. NEW SECTION. 554.9329 PRIORITY OF SECURITY 69 18 INTERESTS IN LETTER-OF-CREDIT RIGHT. 69 19 The following rules govern priority among conflicting 69 20 security interests in the same letter-of-credit right: 69 21 1. A security interest held by a secured party having 69 22 control of the letter-of-credit right under section 554.9107 69 23 has priority to the extent of its control over a conflicting 69 24 security interest held by a secured party that does not have 69 25 control. 69 26 2. Security interests perfected by control under section 69 27 554.9314 rank according to priority in time of obtaining 69 28 control. 69 29 Sec. 50. NEW SECTION. 554.9330 PRIORITY OF PURCHASER OF 69 30 CHATTEL PAPER OR INSTRUMENT. 69 31 1. PURCHASER'S PRIORITY – SECURITY INTEREST CLAIMED 69 32 MERELY AS PROCEEDS. A purchaser of chattel paper has priority 69 33 over a security interest in the chattel paper which is claimed 69 34 merely as proceeds of inventory subject to a security interest 69 35 if: 70 1 a. in good faith and in the ordinary course of the 70 2 purchaser's business, the purchaser gives new value and takes 70 3 possession of the chattel paper or obtains control of the 70 4 chattel paper under section 554.9105; and 70 5 b. the chattel paper does not indicate that it has been 70 6 assigned to an identified assignee other than the purchaser. 70 7 2. PURCHASER'S PRIORITY – OTHER SECURITY INTERESTS. A 70 8 purchaser of chattel paper has priority over a security 70 9 interest in the chattel paper which is claimed other than 70 10 merely as proceeds of inventory subject to a security interest 70 11 if the purchaser gives new value and takes possession of the 70 12 chattel paper or obtains control of the chattel paper under 70 13 section 554.9105 in good faith, in the ordinary course of the 70 14 purchaser's business, and without knowledge that the purchase 70 15 violates the rights of the secured party. 70 16 3. CHATTEL PAPER PURCHASER'S PRIORITY IN PROCEEDS. Except 70 17 as otherwise provided in section 554.9327, a purchaser having 70 18 priority in chattel paper under subsection 1 or 2 also has 70 19 priority in proceeds of the chattel paper to the extent that: 70 20 a. section 554.9322 provides for priority in the proceeds; 70 21 or 70 22 b. the proceeds consist of the specific goods covered by 70 23 the chattel paper or cash proceeds of the specific goods, even 70 24 if the purchaser's security interest in the proceeds is 70 25 unperfected. 70 26 4. INSTRUMENT PURCHASER'S PRIORITY. Except as otherwise 70 27 provided in section 554.9331, subsection 1, a purchaser of an 70 28 instrument has priority over a security interest in the 70 29 instrument perfected by a method other than possession if the 70 30 purchaser gives value and takes possession of the instrument 70 31 in good faith and without knowledge that the purchase violates 70 32 the rights of the secured party. 70 33 5. HOLDER OF PURCHASE-MONEY SECURITY INTEREST GIVES NEW 70 34 VALUE. For purposes of subsections 1 and 2, the holder of a 70 35 purchase-money security interest in inventory gives new value 71 1 for chattel paper constituting proceeds of the inventory. 71 2 6. INDICATION OF ASSIGNMENT GIVES KNOWLEDGE. For purposes 71 3 of subsections 2 and 4, if chattel paper or an instrument 71 4 indicates that it has been assigned to an identified secured 71 5 party other than the purchaser, a purchaser of the chattel 71 6 paper or instrument has knowledge that the purchase violates 71 7 the rights of the secured party. 71 8 Sec. 51. NEW SECTION. 554.9331 PRIORITY OF RIGHTS OF 71 9 PURCHASERS OF INSTRUMENTS, DOCUMENTS, AND SECURITIES UNDER 71 10 OTHER ARTICLES – PRIORITY OF INTERESTS IN FINANCIAL ASSETS 71 11 AND SECURITY ENTITLEMENTS UNDER ARTICLE 8. 71 12 1. RIGHTS UNDER ARTICLES 3, 7, AND 8 NOT LIMITED. This 71 13 Article does not limit the rights of a holder in due course of 71 14 a negotiable instrument, a holder to which a negotiable 71 15 document of title has been duly negotiated, or a protected 71 16 purchaser of a security. These holders or purchasers take 71 17 priority over an earlier security interest, even if perfected, 71 18 to the extent provided in Articles 3, 7, and 8. 71 19 2. PROTECTION UNDER ARTICLE 8. This Article does not 71 20 limit the rights of or impose liability on a person to the 71 21 extent that the person is protected against the assertion of a 71 22 claim under Article 8. 71 23 3. FILING NOT NOTICE. Filing under this Article does not 71 24 constitute notice of a claim or defense to the holders, or 71 25 purchasers, or persons described in subsections 1 and 2. 71 26 Sec. 52. NEW SECTION. 554.9332 TRANSFER OF MONEY – 71 27 TRANSFER OF FUNDS FROM DEPOSIT ACCOUNT. 71 28 1. TRANSFEREE OF MONEY. A transferee of money takes the 71 29 money free of a security interest unless the transferee acts 71 30 in collusion with the debtor in violating the rights of the 71 31 secured party. 71 32 2. TRANSFEREE OF FUNDS FROM DEPOSIT ACCOUNT. A transferee 71 33 of funds from a deposit account takes the funds free of a 71 34 security interest in the deposit account unless the transferee 71 35 acts in collusion with the debtor in violating the rights of 72 1 the secured party. 72 2 Sec. 53. NEW SECTION. 554.9333 PRIORITY OF CERTAIN LIENS 72 3 ARISING BY OPERATION OF LAW. 72 4 1. POSSESSORY LIEN. In this section, "possessory lien" 72 5 means an interest, other than a security interest or an 72 6 agricultural lien: 72 7 a. which secures payment or performance of an obligation 72 8 for services or materials furnished with respect to goods by a 72 9 person in the ordinary course of the person's business; 72 10 b. which is created by statute or rule of law in favor of 72 11 the person; and 72 12 c. whose effectiveness depends on the person's possession 72 13 of the goods. 72 14 2. PRIORITY OF POSSESSORY LIEN. A possessory lien on 72 15 goods has priority over a security interest in the goods 72 16 unless the lien is created by a statute that expressly 72 17 provides otherwise. 72 18 Sec. 54. NEW SECTION. 554.9334 PRIORITY OF SECURITY 72 19 INTERESTS IN FIXTURES AND CROPS. 72 20 1. SECURITY INTEREST IN FIXTURES UNDER THIS ARTICLE. A 72 21 security interest under this Article may be created in goods 72 22 that are fixtures or may continue in goods that become 72 23 fixtures. A security interest does not exist under this 72 24 Article in ordinary building materials incorporated into an 72 25 improvement on land. 72 26 2. SECURITY INTEREST IN FIXTURES UNDER REAL-PROPERTY LAW. 72 27 This Article does not prevent creation of an encumbrance upon 72 28 fixtures under real property law. 72 29 3. GENERAL RULE – SUBORDINATION OF SECURITY INTEREST IN 72 30 FIXTURES. In cases not governed by subsections 4 through 8, a 72 31 security interest in fixtures is subordinate to a conflicting 72 32 interest of an encumbrancer or owner of the related real 72 33 property other than the debtor. 72 34 4. FIXTURES PURCHASE-MONEY PRIORITY. Except as otherwise 72 35 provided in subsection 8, a perfected security interest in 73 1 fixtures has priority over a conflicting interest of an 73 2 encumbrancer or owner of the real property if the debtor has 73 3 an interest of record in or is in possession of the real 73 4 property and: 73 5 a. the security interest is a purchase-money security 73 6 interest; 73 7 b. the interest of the encumbrancer or owner arises before 73 8 the goods become fixtures; and 73 9 c. the security interest is perfected by a fixture filing 73 10 before the goods become fixtures or within twenty days 73 11 thereafter. 73 12 5. PRIORITY OF SECURITY INTEREST IN FIXTURES OVER 73 13 INTERESTS IN REAL PROPERTY. A perfected security interest in 73 14 fixtures has priority over a conflicting interest of an 73 15 encumbrancer or owner of the real property if: 73 16 a. the debtor has an interest of record in the real 73 17 property or is in possession of the real property and the 73 18 security interest: 73 19 (1) is perfected by a fixture filing before the interest 73 20 of the encumbrancer or owner is of record; and 73 21 (2) has priority over any conflicting interest of a 73 22 predecessor in title of the encumbrancer or owner; 73 23 b. before the goods become fixtures, the security interest 73 24 is perfected by any method permitted by this Article and the 73 25 fixtures are readily removable: 73 26 (1) factory or office machines; 73 27 (2) equipment that is not primarily used or leased for use 73 28 in the operation of the real property; or 73 29 (3) replacements of domestic appliances that are consumer 73 30 goods; 73 31 c. the conflicting interest is a lien on the real property 73 32 obtained by legal or equitable proceedings after the security 73 33 interest was perfected by any method permitted by this 73 34 Article; or 73 35 d. the security interest is: 74 1 (1) created in a manufactured home in a manufactured-home 74 2 transaction; and 74 3 (2) perfected pursuant to a statute described in section 74 4 554.9311, subsection 1, paragraph "b". 74 5 6. PRIORITY BASED ON CONSENT, DISCLAIMER, OR RIGHT TO 74 6 REMOVE. A security interest in fixtures, whether or not 74 7 perfected, has priority over a conflicting interest of an 74 8 encumbrancer or owner of the real property if: 74 9 a. the encumbrancer or owner has, in an authenticated 74 10 record, consented to the security interest or disclaimed an 74 11 interest in the goods as fixtures; or 74 12 b. the debtor has a right to remove the goods as against 74 13 the encumbrancer or owner. 74 14 7. CONTINUATION OF SUBSECTION 6, PARAGRAPH "b", PRIORITY. 74 15 The priority of the security interest under subsection 6, 74 16 paragraph "b", continues for a reasonable time if the debtor's 74 17 right to remove the goods as against the encumbrancer or owner 74 18 terminates. 74 19 8. PRIORITY OF CONSTRUCTION MORTGAGE. A mortgage is a 74 20 construction mortgage to the extent that it secures an 74 21 obligation incurred for the construction of an improvement on 74 22 land, including the acquisition cost of the land, if a 74 23 recorded record of the mortgage so indicates. Except as 74 24 otherwise provided in subsections 5 and 6, a security interest 74 25 in fixtures is subordinate to a construction mortgage if a 74 26 record of the mortgage is recorded before the goods become 74 27 fixtures and the goods become fixtures before the completion 74 28 of the construction. A mortgage has this priority to the same 74 29 extent as a construction mortgage to the extent that it is 74 30 given to refinance a construction mortgage. 74 31 9. PRIORITY OF SECURITY INTEREST IN CROPS. Except as 74 32 provided in subsection 10, a perfected security interest in 74 33 crops growing on real property has priority over a conflicting 74 34 interest of an encumbrancer or owner of the real property if 74 35 the debtor has an interest of record in or is in possession of 75 1 the real property. 75 2 10. AGRICULTURAL LIENS PREVAIL. The provisions of this 75 3 Article regarding agricultural liens prevail over any 75 4 inconsistent provisions of subsection 9. 75 5 Sec. 55. NEW SECTION. 554.9335 ACCESSIONS. 75 6 1. CREATION OF SECURITY INTEREST IN ACCESSION. A security 75 7 interest may be created in an accession and continues in 75 8 collateral that becomes an accession. 75 9 2. PERFECTION OF SECURITY INTEREST. If a security 75 10 interest is perfected when the collateral becomes an 75 11 accession, the security interest remains perfected in the 75 12 collateral. 75 13 3. PRIORITY OF SECURITY INTEREST. Except as otherwise 75 14 provided in subsection 4, the other provisions of this part 75 15 determine the priority of a security interest in an accession. 75 16 4. COMPLIANCE WITH CERTIFICATE-OF-TITLE STATUTE. A 75 17 security interest in an accession is subordinate to a security 75 18 interest in the whole which is perfected by compliance with 75 19 the requirements of a certificate-of-title statute under 75 20 section 554.9311, subsection 2. 75 21 5. REMOVAL OF ACCESSION AFTER DEFAULT. After default, 75 22 subject to part 6, a secured party may remove an accession 75 23 from other goods if the security interest in the accession has 75 24 priority over the claims of every person having an interest in 75 25 the whole. 75 26 6. REIMBURSEMENT FOLLOWING REMOVAL. A secured party that 75 27 removes an accession from other goods under subsection 5 shall 75 28 promptly reimburse any holder of a security interest or other 75 29 lien on, or owner of, the whole or of the other goods, other 75 30 than the debtor, for the cost of repair of any physical injury 75 31 to the whole or the other goods. The secured party need not 75 32 reimburse the holder or owner for any diminution in value of 75 33 the whole or the other goods caused by the absence of the 75 34 accession removed or by any necessity for replacing it. A 75 35 person entitled to reimbursement may refuse permission to 76 1 remove until the secured party gives adequate assurance for 76 2 the performance of the obligation to reimburse. 76 3 Sec. 56. NEW SECTION. 554.9336 COMMINGLED GOODS. 76 4 1. COMMINGLED GOODS. In this section, "commingled goods" 76 5 means goods that are physically united with other goods in 76 6 such a manner that their identity is lost in a product or 76 7 mass. 76 8 2. NO SECURITY INTEREST IN COMMINGLED GOODS AS SUCH. A 76 9 security interest does not exist in commingled goods as such. 76 10 However, a security interest may attach to a product or mass 76 11 that results when goods become commingled goods. 76 12 3. ATTACHMENT OF SECURITY INTEREST TO PRODUCT OR MASS. If 76 13 collateral becomes commingled goods, a security interest 76 14 attaches to the product or mass. 76 15 4. PERFECTION OF SECURITY INTEREST. If a security 76 16 interest in collateral is perfected before the collateral 76 17 becomes commingled goods, the security interest that attaches 76 18 to the product or mass under subsection 3 is perfected. 76 19 5. PRIORITY OF SECURITY INTEREST. Except as otherwise 76 20 provided in subsection 6, the other provisions of this part 76 21 determine the priority of a security interest that attaches to 76 22 the product or mass under subsection 3. 76 23 6. CONFLICTING SECURITY INTERESTS IN PRODUCT OR MASS. If 76 24 more than one security interest attaches to the product or 76 25 mass under subsection 3, the following rules determine 76 26 priority: 76 27 a. A security interest that is perfected under subsection 76 28 4 has priority over a security interest that is unperfected at 76 29 the time the collateral becomes commingled goods. 76 30 b. If more than one security interest is perfected under 76 31 subsection 4, the security interests rank equally in 76 32 proportion to the value of the collateral at the time it 76 33 became commingled goods. 76 34 Sec. 57. NEW SECTION. 554.9337 PRIORITY OF SECURITY 76 35 INTERESTS IN GOODS COVERED BY CERTIFICATE OF TITLE. 77 1 If, while a security interest in goods is perfected by any 77 2 method under the law of another jurisdiction, this state 77 3 issues a certificate of title that does not show that the 77 4 goods are subject to the security interest or contain a 77 5 statement that they may be subject to security interests not 77 6 shown on the certificate: 77 7 1. a buyer of the goods, other than a person in the 77 8 business of selling goods of that kind, takes free of the 77 9 security interest if the buyer gives value and receives 77 10 delivery of the goods after issuance of the certificate and 77 11 without knowledge of the security interest; and 77 12 2. the security interest is subordinate to a conflicting 77 13 security interest in the goods that attaches, and is perfected 77 14 under section 554.9311, subsection 2, after issuance of the 77 15 certificate and without the conflicting secured party's 77 16 knowledge of the security interest. 77 17 Sec. 58. NEW SECTION. 554.9338 PRIORITY OF SECURITY 77 18 INTEREST OR AGRICULTURAL LIEN PERFECTED BY FILED FINANCING 77 19 STATEMENT PROVIDING CERTAIN INCORRECT INFORMATION. 77 20 If a security interest or agricultural lien is perfected by 77 21 a filed financing statement providing information described in 77 22 section 554.9516, subsection 2, paragraph "e", which is 77 23 incorrect at the time the financing statement is filed: 77 24 1. the security interest or agricultural lien is 77 25 subordinate to a conflicting perfected security interest in 77 26 the collateral to the extent that the holder of the 77 27 conflicting security interest gives value in reasonable 77 28 reliance upon the incorrect information; and 77 29 2. a purchaser, other than a secured party, of the 77 30 collateral takes free of the security interest or agricultural 77 31 lien to the extent that, in reasonable reliance upon the 77 32 incorrect information, the purchaser gives value and, in the 77 33 case of chattel paper, documents, goods, instruments, or a 77 34 security certificate, receives delivery of the collateral. 77 35 Sec. 59. NEW SECTION. 554.9339 PRIORITY SUBJECT TO 78 1 SUBORDINATION. 78 2 This Article does not preclude subordination by agreement 78 3 by a person entitled to priority. 78 4 D. RIGHTS OF BANK 78 5 Sec. 60. NEW SECTION. 554.9340 EFFECTIVENESS OF RIGHT OF 78 6 RECOUPMENT OR SETOFF AGAINST DEPOSIT ACCOUNT. 78 7 1. EXERCISE OF RECOUPMENT OR SETOFF. Except as otherwise 78 8 provided in subsection 3, a bank with which a deposit account 78 9 is maintained may exercise any right of recoupment or setoff 78 10 against a secured party that holds a security interest in the 78 11 deposit account. 78 12 2. RECOUPMENT OR SETOFF NOT AFFECTED BY SECURITY INTEREST. 78 13 Except as otherwise provided in subsection 3, the application 78 14 of this Article to a security interest in a deposit account 78 15 does not affect a right of recoupment or setoff of the secured 78 16 party as to a deposit account maintained with the secured 78 17 party. 78 18 3. WHEN SETOFF INEFFECTIVE. The exercise by a bank of a 78 19 setoff against a deposit account is ineffective against a 78 20 secured party that holds a security interest in the deposit 78 21 account which is perfected by control under section 554.9104, 78 22 subsection 1, paragraph "c", if the setoff is based on a claim 78 23 against the debtor. 78 24 Sec. 61. NEW SECTION. 554.9341 BANK'S RIGHTS AND DUTIES 78 25 WITH RESPECT TO DEPOSIT ACCOUNT. 78 26 Except as otherwise provided in section 554.9340, 78 27 subsection 3, and unless the bank otherwise agrees in an 78 28 authenticated record, a bank's rights and duties with respect 78 29 to a deposit account maintained with the bank are not 78 30 terminated, suspended, or modified by: 78 31 1. the creation, attachment, or perfection of a security 78 32 interest in the deposit account; 78 33 2. the bank's knowledge of the security interest; or 78 34 3. the bank's receipt of instructions from the secured 78 35 party. 79 1 Sec. 62. NEW SECTION. 554.9342 BANK'S RIGHT TO REFUSE TO 79 2 ENTER INTO OR DISCLOSE EXISTENCE OF CONTROL AGREEMENT. 79 3 This Article does not require a bank to enter into an 79 4 agreement of the kind described in section 554.9104, 79 5 subsection 1, paragraph "b", even if its customer so requests 79 6 or directs. A bank that has entered into such an agreement is 79 7 not required to confirm the existence of the agreement to 79 8 another person unless requested to do so by its customer. 79 9 PART 4 79 10 RIGHTS OF THIRD PARTIES 79 11 Sec. 63. NEW SECTION. 554.9401 ALIENABILITY OF DEBTOR'S 79 12 RIGHTS. 79 13 1. OTHER LAW GOVERNS ALIENABILITY – EXCEPTIONS. Except 79 14 as otherwise provided in subsection 2 and sections 554.9406, 79 15 554.9407, 554.9408, and 554.9409, whether a debtor's rights in 79 16 collateral may be voluntarily or involuntarily transferred is 79 17 governed by law other than this Article. 79 18 2. AGREEMENT DOES NOT PREVENT TRANSFER. An agreement 79 19 between the debtor and secured party which prohibits a 79 20 transfer of the debtor's rights in collateral or makes the 79 21 transfer a default does not prevent the transfer from taking 79 22 effect. 79 23 Sec. 64. NEW SECTION. 554.9402 SECURED PARTY NOT 79 24 OBLIGATED ON CONTRACT OF DEBTOR OR IN TORT. 79 25 The existence of a security interest, agricultural lien, or 79 26 authority given to a debtor to dispose of or use collateral, 79 27 without more, does not subject a secured party to liability in 79 28 contract or tort for the debtor's acts or omissions. 79 29 Sec. 65. NEW SECTION. 554.9403 AGREEMENT NOT TO ASSERT 79 30 DEFENSES AGAINST ASSIGNEE. 79 31 1. VALUE. In this section, "value" has the meaning 79 32 provided in section 554.3303, subsection 1. 79 33 2. AGREEMENT NOT TO ASSERT CLAIM OR DEFENSE. Except as 79 34 otherwise provided in this section, an agreement between an 79 35 account debtor and an assignor not to assert against an 80 1 assignee any claim or defense that the account debtor may have 80 2 against the assignor is enforceable by an assignee that takes 80 3 an assignment: 80 4 a. for value; 80 5 b. in good faith; 80 6 c. without notice of a claim of a property or possessory 80 7 right to the property assigned; and 80 8 d. without notice of a defense or claim in recoupment of 80 9 the type that may be asserted against a person entitled to 80 10 enforce a negotiable instrument under section 554.3305, 80 11 subsection 1. 80 12 3. WHEN SUBSECTION 2 NOT APPLICABLE. Subsection 2 does 80 13 not apply to defenses of a type that may be asserted against a 80 14 holder in due course of a negotiable instrument under section 80 15 554.3305, subsection 2. 80 16 4. OMISSION OF REQUIRED STATEMENT IN CONSUMER TRANSACTION. 80 17 In a consumer transaction, if a record evidences the account 80 18 debtor's obligation, law other than this Article requires that 80 19 the record include a statement to the effect that the rights 80 20 of an assignee are subject to claims or defenses that the 80 21 account debtor could assert against the original obligee, and 80 22 the record does not include such a statement: 80 23 a. the record has the same effect as if the record 80 24 included such a statement; and 80 25 b. the account debtor may assert against an assignee those 80 26 claims and defenses that would have been available if the 80 27 record included such a statement. 80 28 5. RULE FOR INDIVIDUAL UNDER OTHER LAW. This section is 80 29 subject to law other than this Article which establishes a 80 30 different rule for an account debtor who is an individual and 80 31 who incurred the obligation primarily for personal, family, or 80 32 household purposes. 80 33 6. OTHER LAW NOT DISPLACED. Except as otherwise provided 80 34 in subsection 4, this section does not displace law other than 80 35 this Article which gives effect to an agreement by an account 81 1 debtor not to assert a claim or defense against an assignee. 81 2 Sec. 66. NEW SECTION. 554.9404 RIGHTS ACQUIRED BY 81 3 ASSIGNEE – CLAIMS AND DEFENSES AGAINST ASSIGNEE. 81 4 1. ASSIGNEE'S RIGHTS SUBJECT TO TERMS, CLAIMS, AND 81 5 DEFENSES – EXCEPTIONS. Unless an account debtor has made an 81 6 enforceable agreement not to assert defenses or claims, and 81 7 subject to subsections 2 through 5, the rights of an assignee 81 8 are subject to: 81 9 a. all terms of the agreement between the account debtor 81 10 and assignor and any defense or claim in recoupment arising 81 11 from the transaction that gave rise to the contract; and 81 12 b. any other defense or claim of the account debtor 81 13 against the assignor which accrues before the account debtor 81 14 receives a notification of the assignment authenticated by the 81 15 assignor or the assignee. 81 16 2. ACCOUNT DEBTOR'S CLAIM REDUCES AMOUNT OWED TO ASSIGNEE. 81 17 Subject to subsection 3 and except as otherwise provided in 81 18 subsection 4, the claim of an account debtor against an 81 19 assignor may be asserted against an assignee under subsection 81 20 1 only to reduce the amount the account debtor owes. 81 21 3. RULE FOR INDIVIDUAL UNDER OTHER LAW. This section is 81 22 subject to law other than this Article which establishes a 81 23 different rule for an account debtor who is an individual and 81 24 who incurred the obligation primarily for personal, family, or 81 25 household purposes. 81 26 4. OMISSION OF REQUIRED STATEMENT IN CONSUMER TRANSACTION. 81 27 In a consumer transaction, if a record evidences the account 81 28 debtor's obligation, law other than this Article requires that 81 29 the record include a statement to the effect that the account 81 30 debtor's recovery against an assignee with respect to claims 81 31 and defenses against the assignor may not exceed amounts paid 81 32 by the account debtor under the record, and the record does 81 33 not include such a statement, the extent to which a claim of 81 34 an account debtor against the assignor may be asserted against 81 35 an assignee is determined as if the record included such a 82 1 statement. 82 2 5. INAPPLICABILITY TO HEALTH-CARE-INSURANCE RECEIVABLE. 82 3 This section does not apply to an assignment of a health-care- 82 4 insurance receivable. 82 5 Sec. 67. NEW SECTION. 554.9405 MODIFICATION OF ASSIGNED 82 6 CONTRACT. 82 7 1. EFFECT OF MODIFICATION ON ASSIGNEE. A modification of 82 8 or substitution for an assigned contract is effective against 82 9 an assignee if made in good faith. The assignee acquires 82 10 corresponding rights under the modified or substituted 82 11 contract. The assignment may provide that the modification or 82 12 substitution is a breach of contract by the assignor. This 82 13 subsection is subject to subsections 2 through 4. 82 14 2. APPLICABILITY OF SUBSECTION 1. Subsection 1 applies to 82 15 the extent that: 82 16 a. the right to payment or a part thereof under an 82 17 assigned contract has not been fully earned by performance; or 82 18 b. the right to payment or a part thereof has been fully 82 19 earned by performance and the account debtor has not received 82 20 notification of the assignment under section 554.9406, 82 21 subsection 1. 82 22 3. RULE FOR INDIVIDUAL UNDER OTHER LAW. This section is 82 23 subject to law other than this Article which establishes a 82 24 different rule for an account debtor who is an individual and 82 25 who incurred the obligation primarily for personal, family, or 82 26 household purposes. 82 27 4. INAPPLICABILITY TO HEALTH-CARE-INSURANCE RECEIVABLE. 82 28 This section does not apply to an assignment of a health-care- 82 29 insurance receivable. 82 30 Sec. 68. NEW SECTION. 554.9406 DISCHARGE OF ACCOUNT 82 31 DEBTOR – NOTIFICATION OF ASSIGNMENT – IDENTIFICATION AND 82 32 PROOF OF ASSIGNMENT – RESTRICTIONS ON ASSIGNMENT OF ACCOUNTS, 82 33 CHATTEL PAPER, PAYMENT INTANGIBLES, AND PROMISSORY NOTES 82 34 INEFFECTIVE. 82 35 1. DISCHARGE OF ACCOUNT DEBTOR – EFFECT OF NOTIFICATION. 83 1 Subject to subsections 2 through 9, an account debtor on an 83 2 account, chattel paper, or a payment intangible may discharge 83 3 its obligation by paying the assignor until, but not after, 83 4 the account debtor receives a notification, authenticated by 83 5 the assignor or the assignee, that the amount due or to become 83 6 due has been assigned and that payment is to be made to the 83 7 assignee. After receipt of the notification, the account 83 8 debtor may discharge its obligation by paying the assignee and 83 9 may not discharge the obligation by paying the assignor. 83 10 2. WHEN NOTIFICATION INEFFECTIVE. Subject to subsection 83 11 8, notification is ineffective under subsection 1: 83 12 a. if it does not reasonably identify the rights assigned; 83 13 b. to the extent that an agreement between an account 83 14 debtor and a seller of a payment intangible limits the account 83 15 debtor's duty to pay a person other than the seller and the 83 16 limitation is effective under law other than this Article; or 83 17 c. at the option of an account debtor, if the notification 83 18 notifies the account debtor to make less than the full amount 83 19 of any installment or other periodic payment to the assignee, 83 20 even if: 83 21 (1) only a portion of the account, chattel paper, or 83 22 payment intangible has been assigned to that assignee; 83 23 (2) a portion has been assigned to another assignee; or 83 24 (3) the account debtor knows that the assignment to that 83 25 assignee is limited. 83 26 3. PROOF OF ASSIGNMENT. Subject to subsection 8, if 83 27 requested by the account debtor, an assignee shall seasonably 83 28 furnish reasonable proof that the assignment has been made. 83 29 Unless the assignee complies, the account debtor may discharge 83 30 its obligation by paying the assignor, even if the account 83 31 debtor has received a notification under subsection 1. 83 32 4. TERM RESTRICTING ASSIGNMENT GENERALLY INEFFECTIVE. 83 33 Except as otherwise provided in subsection 5 and sections 83 34 554.9407 and 554.13303, and subject to subsection 8, a term in 83 35 an agreement between an account debtor and an assignor or in a 84 1 promissory note is ineffective to the extent that it: 84 2 a. prohibits, restricts, or requires the consent of the 84 3 account debtor or person obligated on the promissory note to 84 4 the assignment or transfer of, or the creation, attachment, 84 5 perfection, or enforcement of a security interest in, the 84 6 account, chattel paper, payment intangible, or promissory 84 7 note; or 84 8 b. provides that the assignment or transfer or the 84 9 creation, attachment, perfection, or enforcement of the 84 10 security interest may give rise to a default, breach, right of 84 11 recoupment, claim, defense, termination, right of termination, 84 12 or remedy under the account, chattel paper, payment 84 13 intangible, or promissory note. 84 14 5. INAPPLICABILITY OF SUBSECTION 4 TO CERTAIN SALES. 84 15 Subsection 4 does not apply to the sale of a payment 84 16 intangible or promissory note. 84 17 6. LEGAL RESTRICTIONS ON ASSIGNMENT GENERALLY INEFFECTIVE. 84 18 Except as otherwise provided in sections 554.9407 and 84 19 554.13303 and subject to subsections 8 and 9, a rule of law, 84 20 statute, or regulation that prohibits, restricts, or requires 84 21 the consent of a government, governmental body or official, or 84 22 account debtor to the assignment or transfer of, or creation 84 23 of a security interest in, an account or chattel paper is 84 24 ineffective to the extent that the rule of law, statute, or 84 25 regulation: 84 26 a. prohibits, restricts, or requires the consent of the 84 27 government, governmental body or official, or account debtor 84 28 to the assignment or transfer of, or the creation, attachment, 84 29 perfection, or enforcement of a security interest in the 84 30 account or chattel paper; or 84 31 b. provides that the assignment or transfer or the 84 32 creation, attachment, perfection, or enforcement of the 84 33 security interest may give rise to a default, breach, right of 84 34 recoupment, claim, defense, termination, right of termination, 84 35 or remedy under the account or chattel paper. 85 1 7. SUBSECTION 2, PARAGRAPH "C", NOT WAIVABLE. Subject to 85 2 subsection 8, an account debtor may not waive or vary its 85 3 option under subsection 2, paragraph "c". 85 4 8. RULE FOR INDIVIDUAL UNDER OTHER LAW. This section is 85 5 subject to law other than this Article which establishes a 85 6 different rule for an account debtor who is an individual and 85 7 who incurred the obligation primarily for personal, family, or 85 8 household purposes. 85 9 9. INAPPLICABILITY TO HEALTH-CARE-INSURANCE RECEIVABLE. 85 10 This section does not apply to an assignment of a health-care- 85 11 insurance receivable. 85 12 10. SECTION PREVAILS OVER SPECIFIED INCONSISTENT LAW. 85 13 This section prevails over any inconsistent provision of an 85 14 existing or future statute, rule, or regulation of this state 85 15 unless the provision is contained in a statute of this state, 85 16 refers expressly to this section, and states that the 85 17 provision prevails over this section. 85 18 Sec. 69. NEW SECTION. 554.9407 RESTRICTIONS ON CREATION 85 19 OR ENFORCEMENT OF SECURITY INTEREST IN LEASEHOLD INTEREST OR 85 20 IN LESSOR'S RESIDUAL INTEREST. 85 21 1. TERM RESTRICTING ASSIGNMENT GENERALLY INEFFECTIVE. 85 22 Except as otherwise provided in subsection 2, a term in a 85 23 lease agreement is ineffective to the extent that it: 85 24 a. prohibits, restricts, or requires the consent of a 85 25 party to the lease to the assignment or transfer of, or the 85 26 creation, attachment, perfection, or enforcement of a security 85 27 interest in, an interest of a party under the lease contract 85 28 or in the lessor's residual interest in the goods; or 85 29 b. provides that the assignment or transfer or the 85 30 creation, attachment, perfection, or enforcement of the 85 31 security interest may give rise to a default, breach, right of 85 32 recoupment, claim, defense, termination, right of termination, 85 33 or remedy under the lease. 85 34 2. EFFECTIVENESS OF CERTAIN TERMS. Except as otherwise 85 35 provided in section 554.13303, subsection 7, a term described 86 1 in subsection 1, paragraph "b", is effective to the extent 86 2 that there is: 86 3 a. a transfer by the lessee of the lessee's right of 86 4 possession or use of the goods in violation of the term; or 86 5 b. a delegation of a material performance of either party 86 6 to the lease contract in violation of the term. 86 7 3. SECURITY INTEREST NOT MATERIAL IMPAIRMENT. The 86 8 creation, attachment, perfection, or enforcement of a security 86 9 interest in the lessor's interest under the lease contract or 86 10 the lessor's residual interest in the goods is not a transfer 86 11 that materially impairs the lessee's prospect of obtaining 86 12 return performance or materially changes the duty of or 86 13 materially increases the burden or risk imposed on the lessee 86 14 within the purview of section 554.13303, subsection 3, unless, 86 15 and then only to the extent that, enforcement actually results 86 16 in a delegation of material performance of the lessor. 86 17 Sec. 70. NEW SECTION. 554.9408 RESTRICTIONS ON 86 18 ASSIGNMENT OF PROMISSORY NOTES, HEALTH-CARE-INSURANCE 86 19 RECEIVABLES, AND CERTAIN GENERAL INTANGIBLES INEFFECTIVE. 86 20 1. TERM RESTRICTING ASSIGNMENT GENERALLY INEFFECTIVE. 86 21 Except as otherwise provided in subsection 2, a term in a 86 22 promissory note or in an agreement between an account debtor 86 23 and a debtor which relates to a health-care-insurance 86 24 receivable or a general intangible, including a contract, 86 25 permit, license, or franchise, and which term prohibits, 86 26 restricts, or requires the consent of the person obligated on 86 27 the promissory note or the account debtor to, the assignment 86 28 or transfer of, or creation, attachment, or perfection of a 86 29 security interest in, the promissory note, health-care- 86 30 insurance receivable, or general intangible, is ineffective to 86 31 the extent that the term: 86 32 a. would impair the creation, attachment, or perfection of 86 33 a security interest; or 86 34 b. provides that the assignment or transfer or the 86 35 creation, attachment, or perfection of the security interest 87 1 may give rise to a default, breach, right of recoupment, 87 2 claim, defense, termination, right of termination, or remedy 87 3 under the promissory note, health-care-insurance receivable, 87 4 or general intangible. 87 5 2. APPLICABILITY OF SUBSECTION 1 TO SALES OF CERTAIN 87 6 RIGHTS TO PAYMENT. Subsection 1 applies to a security 87 7 interest in a payment intangible or promissory note only if 87 8 the security interest arises out of a sale of the payment 87 9 intangible or promissory note. 87 10 3. LEGAL RESTRICTIONS ON ASSIGNMENT GENERALLY INEFFECTIVE. 87 11 A rule of law, statute, or regulation that prohibits, 87 12 restricts, or requires the consent of a government, 87 13 governmental body or official, person obligated on a 87 14 promissory note, or account debtor to the assignment or 87 15 transfer of, or creation of a security interest in, a 87 16 promissory note, health-care-insurance receivable, or general 87 17 intangible, including a contract, permit, license, or 87 18 franchise between an account debtor and a debtor, is 87 19 ineffective to the extent that the rule of law, statute, or 87 20 regulation: 87 21 a. would impair the creation, attachment, or perfection of 87 22 a security interest; or 87 23 b. provides that the assignment or transfer or the 87 24 creation, attachment, or perfection of the security interest 87 25 may give rise to a default, breach, right of recoupment, 87 26 claim, defense, termination, right of termination, or remedy 87 27 under the promissory note, health-care-insurance receivable, 87 28 or general intangible. 87 29 4. LIMITATION ON INEFFECTIVENESS UNDER SUBSECTIONS 1 AND 87 30 3. To the extent that a term in a promissory note or in an 87 31 agreement between an account debtor and a debtor which relates 87 32 to a health-care-insurance receivable or general intangible or 87 33 a rule of law, statute, or regulation described in subsection 87 34 3 would be effective under law other than this Article but is 87 35 ineffective under subsection 1 or 3, the creation, attachment, 88 1 or perfection of a security interest in the promissory note, 88 2 health-care-insurance receivable, or general intangible: 88 3 a. is not enforceable against the person obligated on the 88 4 promissory note or the account debtor; 88 5 b. does not impose a duty or obligation on the person 88 6 obligated on the promissory note or the account debtor; 88 7 c. does not require the person obligated on the promissory 88 8 note or the account debtor to recognize the security interest, 88 9 pay or render performance to the secured party, or accept 88 10 payment or performance from the secured party; 88 11 d. does not entitle the secured party to use or assign the 88 12 debtor's rights under the promissory note, health-care- 88 13 insurance receivable, or general intangible, including any 88 14 related information or materials furnished to the debtor in 88 15 the transaction giving rise to the promissory note, health- 88 16 care-insurance receivable, or general intangible; 88 17 e. does not entitle the secured party to use, assign, 88 18 possess, or have access to any trade secrets or confidential 88 19 information of the person obligated on the promissory note or 88 20 the account debtor; and 88 21 f. does not entitle the secured party to enforce the 88 22 security interest in the promissory note, health-care- 88 23 insurance receivable, or general intangible. 88 24 5. SECTION PREVAILS OVER SPECIFIED INCONSISTENT LAW. This 88 25 section prevails over any inconsistent provision of an 88 26 existing or future statute, rule, or regulation of this state 88 27 unless the provision is contained in a statute of this state, 88 28 refers expressly to this section, and states that the 88 29 provision prevails over this section. 88 30 Sec. 71. NEW SECTION. 554.9409 RESTRICTIONS ON 88 31 ASSIGNMENT OF LETTER-OF-CREDIT RIGHTS INEFFECTIVE. 88 32 1. TERM OR LAW RESTRICTING ASSIGNMENT GENERALLY 88 33 INEFFECTIVE. A term in a letter of credit or a rule of law, 88 34 statute, regulation, custom, or practice applicable to the 88 35 letter of credit which prohibits, restricts, or requires the 89 1 consent of an applicant, issuer, or nominated person to a 89 2 beneficiary's assignment of or creation of a security interest 89 3 in a letter-of-credit right is ineffective to the extent that 89 4 the term or rule of law, statute, regulation, custom, or 89 5 practice: 89 6 a. would impair the creation, attachment, or perfection of 89 7 a security interest in the letter-of-credit right; or 89 8 b. provides that the assignment or the creation, 89 9 attachment, or perfection of the security interest may give 89 10 rise to a default, breach, right of recoupment, claim, 89 11 defense, termination, right of termination, or remedy under 89 12 the letter-of-credit right. 89 13 2. LIMITATION ON INEFFECTIVENESS UNDER SUBSECTION 1. To 89 14 the extent that a term in a letter of credit is ineffective 89 15 under subsection 1 but would be effective under law other than 89 16 this Article or a custom or practice applicable to the letter 89 17 of credit, to the transfer of a right to draw or otherwise 89 18 demand performance under the letter of credit, or to the 89 19 assignment of a right to proceeds of the letter of credit, the 89 20 creation, attachment, or perfection of a security interest in 89 21 the letter-of-credit right: 89 22 a. is not enforceable against the applicant, issuer, 89 23 nominated person, or transferee beneficiary; 89 24 b. imposes no duties or obligations on the applicant, 89 25 issuer, nominated person, or transferee beneficiary; and 89 26 c. does not require the applicant, issuer, nominated 89 27 person, or transferee beneficiary to recognize the security 89 28 interest, pay or render performance to the secured party, or 89 29 accept payment or other performance from the secured party. 89 30 PART 5 89 31 FILING 89 32 A. FILING OFFICE – CONTENTS AND 89 33 EFFECTIVENESS OF FINANCING STATEMENT 89 34 Sec. 72. NEW SECTION. 554.9501 FILING OFFICE. 89 35 1. FILING OFFICES. Except as otherwise provided in 90 1 subsection 2, if the local law of this state governs 90 2 perfection of a security interest or agricultural lien, the 90 3 office in which to file a financing statement to perfect the 90 4 security interest or agricultural lien is: 90 5 a. the office designated for the filing or recording of a 90 6 record of a mortgage on the related real property, if: 90 7 (1) the collateral is as-extracted collateral or timber to 90 8 be cut; or 90 9 (2) the financing statement is filed as a fixture filing 90 10 and the collateral is goods that are or are to become 90 11 fixtures; or 90 12 b. the office of the secretary of state in all other 90 13 cases, including a case in which the collateral is goods that 90 14 are or are to become fixtures and the financing statement is 90 15 not filed as a fixture filing. 90 16 2. FILING OFFICE FOR TRANSMITTING UTILITIES. The office 90 17 in which to file a financing statement to perfect a security 90 18 interest in collateral, including fixtures, of a transmitting 90 19 utility is the office of the secretary of state. The 90 20 financing statement also constitutes a fixture filing as to 90 21 the collateral indicated in the financing statement which is 90 22 or is to become fixtures. 90 23 Sec. 73. NEW SECTION. 554.9502 CONTENTS OF FINANCING 90 24 STATEMENT – RECORD OF MORTGAGE AS FINANCING STATEMENT – TIME 90 25 OF FILING FINANCING STATEMENT. 90 26 1. SUFFICIENCY OF FINANCING STATEMENT. Subject to 90 27 subsection 2, a financing statement is sufficient only if it: 90 28 a. provides the name of the debtor; 90 29 b. provides the name of the secured party or a 90 30 representative of the secured party; and 90 31 c. indicates the collateral covered by the financing 90 32 statement. 90 33 2. REAL-PROPERTY-RELATED FINANCING STATEMENTS. Except as 90 34 otherwise provided in section 554.9501, subsection 2, to be 90 35 sufficient, a financing statement that covers as-extracted 91 1 collateral or timber to be cut, or which is filed as a fixture 91 2 filing and covers goods that are or are to become fixtures, 91 3 must satisfy subsection 1 and also: 91 4 a. indicate that it covers this type of collateral; 91 5 b. indicate that it is to be filed for record in the real 91 6 property records; 91 7 c. provide a description of the real property to which the 91 8 collateral is related sufficient to give constructive notice 91 9 of a mortgage under the law of this state if the description 91 10 were contained in a record of the mortgage of the real 91 11 property; and 91 12 d. if the debtor does not have an interest of record in 91 13 the real property, provide the name of a record owner. 91 14 3. RECORD OF MORTGAGE AS FINANCING STATEMENT. A record of 91 15 a mortgage is effective, from the date of recording, as a 91 16 financing statement filed as a fixture filing or as a 91 17 financing statement covering as-extracted collateral or timber 91 18 to be cut only if: 91 19 a. the record indicates the goods or accounts that it 91 20 covers; 91 21 b. the goods are or are to become fixtures related to the 91 22 real property described in the record or the collateral is 91 23 related to the real property described in the record and is 91 24 as-extracted collateral or timber to be cut; 91 25 c. the record satisfies the requirements for a financing 91 26 statement in this section other than an indication that it is 91 27 to be filed in the real property records; and 91 28 d. the record is duly recorded. 91 29 4. FILING BEFORE SECURITY AGREEMENT OR ATTACHMENT. A 91 30 financing statement may be filed before a security agreement 91 31 is made or a security interest otherwise attaches. 91 32 Sec. 74. NEW SECTION. 554.9503 NAME OF DEBTOR AND 91 33 SECURED PARTY. 91 34 1. SUFFICIENCY OF DEBTOR'S NAME. A financing statement 91 35 sufficiently provides the name of the debtor: 92 1 a. if the debtor is a registered organization, only if the 92 2 financing statement provides the name of the debtor indicated 92 3 on the public record of the debtor's jurisdiction of 92 4 organization which shows the debtor to have been organized; 92 5 b. if the debtor is a decedent's estate, only if the 92 6 financing statement provides the name of the decedent and 92 7 indicates that the debtor is an estate; 92 8 c. if the debtor is a trust or a trustee acting with 92 9 respect to property held in trust, only if the financing 92 10 statement: 92 11 (1) provides the name specified for the trust in its 92 12 organic documents or, if no name is specified, provides the 92 13 name of the settlor and additional information sufficient to 92 14 distinguish the debtor from other trusts having one or more of 92 15 the same settlors; and 92 16 (2) indicates, in the debtor's name or otherwise, that the 92 17 debtor is a trust or is a trustee acting with respect to 92 18 property held in trust; and 92 19 d. in other cases: 92 20 (1) if the debtor has a name, only if it provides the 92 21 individual or organizational name of the debtor; and 92 22 (2) if the debtor does not have a name, only if it 92 23 provides the names of the partners, members, associates, or 92 24 other persons comprising the debtor. 92 25 2. ADDITIONAL DEBTOR-RELATED INFORMATION. A financing 92 26 statement that provides the name of the debtor in accordance 92 27 with subsection 1 is not rendered ineffective by the absence 92 28 of: 92 29 a. a trade name or other name of the debtor; or 92 30 b. unless required under subsection 1, paragraph "d", 92 31 subparagraph (2), names of partners, members, associates, or 92 32 other persons comprising the debtor. 92 33 3. DEBTOR'S TRADE NAME INSUFFICIENT. A financing 92 34 statement that provides only the debtor's trade name does not 92 35 sufficiently provide the name of the debtor. 93 1 4. REPRESENTATIVE CAPACITY. Failure to indicate the 93 2 representative capacity of a secured party or representative 93 3 of a secured party does not affect the sufficiency of a 93 4 financing statement. 93 5 5. MULTIPLE DEBTORS AND SECURED PARTIES. A financing 93 6 statement may provide the name of more than one debtor and the 93 7 name of more than one secured party. 93 8 Sec. 75. NEW SECTION. 554.9504 INDICATION OF COLLATERAL. 93 9 A financing statement sufficiently indicates the collateral 93 10 that it covers if the financing statement provides: 93 11 1. a description of the collateral pursuant to section 93 12 554.9108; or 93 13 2. an indication that the financing statement covers all 93 14 assets or all personal property. 93 15 Sec. 76. NEW SECTION. 554.9505 FILING AND COMPLIANCE 93 16 WITH OTHER STATUTES AND TREATIES FOR CONSIGNMENTS, LEASES, 93 17 OTHER BAILMENTS, AND OTHER TRANSACTIONS. 93 18 1. USE OF TERMS OTHER THAN DEBTOR AND SECURED PARTY. A 93 19 consignor, lessor, or other bailor of goods, a licensor, or a 93 20 buyer of a payment intangible or promissory note may file a 93 21 financing statement, or may comply with a statute or treaty 93 22 described in section 554.9311, subsection 1, using the terms 93 23 "consignor", "consignee", "lessor", "lessee", "bailor", 93 24 "bailee", "licensor", "licensee", "owner", "registered owner", 93 25 "buyer", "seller", or words of similar import, instead of the 93 26 terms "secured party" and "debtor". 93 27 2. EFFECT OF FINANCING STATEMENT UNDER SUBSECTION 1. This 93 28 part applies to the filing of a financing statement under 93 29 subsection 1 and, as appropriate, to compliance that is 93 30 equivalent to filing a financing statement under section 93 31 554.9311, subsection 2, but the filing or compliance is not of 93 32 itself a factor in determining whether the collateral secures 93 33 an obligation. If it is determined for another reason that 93 34 the collateral secures an obligation, a security interest held 93 35 by the consignor, lessor, bailor, licensor, owner, or buyer 94 1 which attaches to the collateral is perfected by the filing or 94 2 compliance. 94 3 Sec. 77. NEW SECTION. 554.9506 EFFECT OF ERRORS OR 94 4 OMISSIONS. 94 5 1. MINOR ERRORS AND OMISSIONS. A financing statement 94 6 substantially satisfying the requirements of this part is 94 7 effective, even if it has minor errors or omissions, unless 94 8 the errors or omissions make the financing statement seriously 94 9 misleading. 94 10 2. FINANCING STATEMENT SERIOUSLY MISLEADING. Except as 94 11 otherwise provided in subsection 3, a financing statement that 94 12 fails sufficiently to provide the name of the debtor in 94 13 accordance with section 554.9503, subsection 1, is seriously 94 14 misleading. 94 15 3. FINANCING STATEMENT NOT SERIOUSLY MISLEADING. If a 94 16 search of the records of the filing office under the debtor's 94 17 correct name, using the filing office's standard search logic, 94 18 if any, would disclose a financing statement that fails 94 19 sufficiently to provide the name of the debtor in accordance 94 20 with section 554.9503, subsection 1, the name provided does 94 21 not make the financing statement seriously misleading. 94 22 4. DEBTOR'S CORRECT NAME. For purposes of section 94 23 554.9508, subsection 2, the "debtor's correct name" in 94 24 subsection 3 means the correct name of the new debtor. 94 25 Sec. 78. NEW SECTION. 554.9507 EFFECT OF CERTAIN EVENTS 94 26 ON EFFECTIVENESS OF FINANCING STATEMENT. 94 27 1. DISPOSITION. A filed financing statement remains 94 28 effective with respect to collateral that is sold, exchanged, 94 29 leased, licensed, or otherwise disposed of and in which a 94 30 security interest or agricultural lien continues, even if the 94 31 secured party knows of or consents to the disposition. 94 32 2. INFORMATION BECOMING SERIOUSLY MISLEADING. Except as 94 33 otherwise provided in subsection 3 and section 554.9508, a 94 34 financing statement is not rendered ineffective if, after the 94 35 financing statement is filed, the information provided in the 95 1 financing statement becomes seriously misleading under section 95 2 554.9506. 95 3 3. CHANGE IN DEBTOR'S NAME. If a debtor so changes its 95 4 name that a filed financing statement becomes seriously 95 5 misleading under section 554.9506: 95 6 a. the financing statement is effective to perfect a 95 7 security interest in collateral acquired by the debtor before, 95 8 or within four months after, the change; and 95 9 b. the financing statement is not effective to perfect a 95 10 security interest in collateral acquired by the debtor more 95 11 than four months after the change, unless an amendment to the 95 12 financing statement which renders the financing statement not 95 13 seriously misleading is filed within four months after the 95 14 change. 95 15 Sec. 79. NEW SECTION. 554.9508 EFFECTIVENESS OF 95 16 FINANCING STATEMENT IF NEW DEBTOR BECOMES BOUND BY SECURITY 95 17 AGREEMENT. 95 18 1. FINANCING STATEMENT NAMING ORIGINAL DEBTOR. Except as 95 19 otherwise provided in this section, a filed financing 95 20 statement naming an original debtor is effective to perfect a 95 21 security interest in collateral in which a new debtor has or 95 22 acquires rights to the extent that the financing statement 95 23 would have been effective had the original debtor acquired 95 24 rights in the collateral. 95 25 2. FINANCING STATEMENT BECOMING SERIOUSLY MISLEADING. If 95 26 the difference between the name of the original debtor and 95 27 that of the new debtor causes a filed financing statement that 95 28 is effective under subsection 1 to be seriously misleading 95 29 under section 554.9506: 95 30 a. the financing statement is effective to perfect a 95 31 security interest in collateral acquired by the new debtor 95 32 before, and within four months after, the new debtor becomes 95 33 bound under section 554.9203, subsection 4; and 95 34 b. the financing statement is not effective to perfect a 95 35 security interest in collateral acquired by the new debtor 96 1 more than four months after the new debtor becomes bound under 96 2 section 554.9203, subsection 4, unless an initial financing 96 3 statement providing the name of the new debtor is filed before 96 4 the expiration of that time. 96 5 3. WHEN SECTION NOT APPLICABLE. This section does not 96 6 apply to collateral as to which a filed financing statement 96 7 remains effective against the new debtor under section 96 8 554.9507, subsection 1. 96 9 Sec. 80. NEW SECTION. 554.9509 PERSONS ENTITLED TO FILE 96 10 A RECORD. 96 11 1. PERSON ENTITLED TO FILE RECORD. A person may file an 96 12 initial financing statement, amendment that adds collateral 96 13 covered by a financing statement, or amendment that adds a 96 14 debtor to a financing statement only if: 96 15 a. the debtor authorizes the filing in an authenticated 96 16 record or pursuant to subsection 2 or 3; or 96 17 b. the person holds an agricultural lien that has become 96 18 effective at the time of filing and the financing statement 96 19 covers only collateral in which the person holds an 96 20 agricultural lien. 96 21 2. SECURITY AGREEMENT AS AUTHORIZATION. By authenticating 96 22 or becoming bound as debtor by a security agreement, a debtor 96 23 or new debtor authorizes the filing of an initial financing 96 24 statement, and an amendment, covering: 96 25 a. the collateral described in the security agreement; and 96 26 b. property that becomes collateral under section 96 27 554.9315, subsection 1, paragraph "b", whether or not the 96 28 security agreement expressly covers proceeds. 96 29 3. ACQUISITION OF COLLATERAL AS AUTHORIZATION. By 96 30 acquiring collateral in which a security interest or 96 31 agricultural lien continues under section 554.9315, subsection 96 32 1, paragraph "a", a debtor authorizes the filing of an initial 96 33 financing statement, and an amendment, covering the collateral 96 34 and property that becomes collateral under section 554.9315, 96 35 subsection 1, paragraph "b". 97 1 4. PERSON ENTITLED TO FILE CERTAIN AMENDMENTS. A person 97 2 may file an amendment other than an amendment that adds 97 3 collateral covered by a financing statement or an amendment 97 4 that adds a debtor to a financing statement only if: 97 5 a. the secured party of record authorizes the filing; or 97 6 b. the amendment is a termination statement for a 97 7 financing statement as to which the secured party of record 97 8 has failed to file or send a termination statement as required 97 9 by section 554.9513, subsection 1 or 3, the debtor authorizes 97 10 the filing, and the termination statement indicates that the 97 11 debtor authorized it to be filed. 97 12 5. MULTIPLE SECURED PARTIES OF RECORD. If there is more 97 13 than one secured party of record for a financing statement, 97 14 each secured party of record may authorize the filing of an 97 15 amendment under subsection 4. 97 16 Sec. 81. NEW SECTION. 554.9510 EFFECTIVENESS OF FILED 97 17 RECORD. 97 18 1. FILED RECORD EFFECTIVE IF AUTHORIZED. A filed record 97 19 is effective only to the extent that it was filed by a person 97 20 that may file it under section 554.9509. 97 21 2. AUTHORIZATION BY ONE SECURED PARTY OF RECORD. A record 97 22 authorized by one secured party of record does not affect the 97 23 financing statement with respect to another secured party of 97 24 record. 97 25 3. CONTINUATION STATEMENT NOT TIMELY FILED. A 97 26 continuation statement that is not filed within the six-month 97 27 period prescribed by section 554.9515, subsection 4, is 97 28 ineffective. 97 29 Sec. 82. NEW SECTION. 554.9511 SECURED PARTY OF RECORD. 97 30 1. SECURED PARTY OF RECORD. A secured party of record 97 31 with respect to a financing statement is a person whose name 97 32 is provided as the name of the secured party or a 97 33 representative of the secured party in an initial financing 97 34 statement that has been filed. If an initial financing 97 35 statement is filed under section 554.9514, subsection 1, the 98 1 assignee named in the initial financing statement is the 98 2 secured party of record with respect to the financing 98 3 statement. 98 4 2. AMENDMENT NAMING SECURED PARTY OF RECORD. If an 98 5 amendment of a financing statement which provides the name of 98 6 a person as a secured party or a representative of a secured 98 7 party is filed, the person named in the amendment is a secured 98 8 party of record. If an amendment is filed under section 98 9 554.9514, subsection 2, the assignee named in the amendment is 98 10 a secured party of record. 98 11 3. AMENDMENT DELETING SECURED PARTY OF RECORD. A person 98 12 remains a secured party of record until the filing of an 98 13 amendment of the financing statement which deletes the person. 98 14 Sec. 83. NEW SECTION. 554.9512 AMENDMENT OF FINANCING 98 15 STATEMENT. 98 16 1. AMENDMENT OF INFORMATION IN FINANCING STATEMENT. 98 17 Subject to section 554.9509, a person may add or delete 98 18 collateral covered by, continue or terminate the effectiveness 98 19 of, or, subject to subsection 5, otherwise amend the 98 20 information provided in, a financing statement by filing an 98 21 amendment that: 98 22 a. identifies, by its file number, the initial financing 98 23 statement to which the amendment relates; and 98 24 b. if the amendment relates to an initial financing 98 25 statement filed or recorded in a filing office described in 98 26 section 554.9501, subsection 1, paragraph "a", provides the 98 27 date and time that the initial financing statement was filed 98 28 or recorded and the information specified in section 554.9502, 98 29 subsection 2. 98 30 2. PERIOD OF EFFECTIVENESS NOT AFFECTED. Except as 98 31 otherwise provided in section 554.9515, the filing of an 98 32 amendment does not extend the period of effectiveness of the 98 33 financing statement. 98 34 3. EFFECTIVENESS OF AMENDMENT ADDING COLLATERAL. A 98 35 financing statement that is amended by an amendment that adds 99 1 collateral is effective as to the added collateral only from 99 2 the date of the filing of the amendment. 99 3 4. EFFECTIVENESS OF AMENDMENT ADDING DEBTOR. A financing 99 4 statement that is amended by an amendment that adds a debtor 99 5 is effective as to the added debtor only from the date of the 99 6 filing of the amendment. 99 7 5. CERTAIN AMENDMENTS INEFFECTIVE. An amendment is 99 8 ineffective to the extent it: 99 9 a. purports to delete all debtors and fails to provide the 99 10 name of a debtor to be covered by the financing statement; or 99 11 b. purports to delete all secured parties of record and 99 12 fails to provide the name of a new secured party of record. 99 13 Sec. 84. NEW SECTION. 554.9513 TERMINATION STATEMENT. 99 14 1. CONSUMER GOODS. A secured party shall cause the 99 15 secured party of record for a financing statement to file a 99 16 termination statement for the financing statement if the 99 17 financing statement covers consumer goods and: 99 18 a. there is no obligation secured by the collateral 99 19 covered by the financing statement and no commitment to make 99 20 an advance, incur an obligation, or otherwise give value; or 99 21 b. the debtor did not authorize the filing of the initial 99 22 financing statement. 99 23 2. TIME FOR COMPLIANCE WITH SUBSECTION 1. To comply with 99 24 subsection 1, a secured party shall cause the secured party of 99 25 record to file the termination statement: 99 26 a. within one month after there is no obligation secured 99 27 by the collateral covered by the financing statement and no 99 28 commitment to make an advance, incur an obligation, or 99 29 otherwise give value; or 99 30 b. if earlier, within twenty days after the secured party 99 31 receives an authenticated demand from a debtor. 99 32 3. OTHER COLLATERAL. In cases not governed by subsection 99 33 1, within twenty days after a secured party receives an 99 34 authenticated demand from a debtor, the secured party shall 99 35 cause the secured party of record for a financing statement to 100 1 send to the debtor a termination statement for the financing 100 2 statement or file the termination statement in the filing 100 3 office if: 100 4 a. except in the case of a financing statement covering 100 5 accounts or chattel paper that has been sold or goods that are 100 6 the subject of a consignment, there is no obligation secured 100 7 by the collateral covered by the financing statement and no 100 8 commitment to make an advance, incur an obligation, or 100 9 otherwise give value; 100 10 b. the financing statement covers accounts or chattel 100 11 paper that has been sold but as to which the account debtor or 100 12 other person obligated has discharged its obligation; 100 13 c. the financing statement covers goods that were the 100 14 subject of a consignment to the debtor but are not in the 100 15 debtor's possession; or 100 16 d. the debtor did not authorize the filing of the initial 100 17 financing statement. 100 18 4. EFFECT OF FILING TERMINATION STATEMENT. Except as 100 19 otherwise provided in section 554.9510, upon the filing of a 100 20 termination statement with the filing office, the financing 100 21 statement to which the termination statement relates ceases to 100 22 be effective. Except as otherwise provided in section 100 23 554.9510, for purposes of section 554.9519, subsection 7, 100 24 section 554.9522, subsection 1, and section 554.9523, 100 25 subsection 3, the filing with the filing office of a 100 26 termination statement relating to a financing statement that 100 27 indicates that the debtor is a transmitting utility also 100 28 causes the effectiveness of the financing statement to lapse. 100 29 Sec. 85. NEW SECTION. 554.9514 ASSIGNMENT OF POWERS OF 100 30 SECURED PARTY OF RECORD. 100 31 1. ASSIGNMENT REFLECTED ON INITIAL FINANCING STATEMENT. 100 32 Except as otherwise provided in subsection 3, an initial 100 33 financing statement may reflect an assignment of all of the 100 34 secured party's power to authorize an amendment to the 100 35 financing statement by providing the name and mailing address 101 1 of the assignee as the name and address of the secured party. 101 2 2. ASSIGNMENT OF FILED FINANCING STATEMENT. Except as 101 3 otherwise provided in subsection 3, a secured party of record 101 4 may assign of record all or part of its power to authorize an 101 5 amendment to a financing statement by filing in the filing 101 6 office an amendment of the financing statement which: 101 7 a. identifies, by its file number, the initial financing 101 8 statement to which it relates; 101 9 b. provides the name of the assignor; and 101 10 c. provides the name and mailing address of the assignee. 101 11 3. ASSIGNMENT OF RECORD OF MORTGAGE. An assignment of 101 12 record of a security interest in a fixture covered by a record 101 13 of a mortgage which is effective as a financing statement 101 14 filed as a fixture filing under section 554.9502, subsection 101 15 3, may be made only by an assignment of record of the mortgage 101 16 in the manner provided by law of this state other than this 101 17 chapter. 101 18 Sec. 86. NEW SECTION. 554.9515 DURATION AND 101 19 EFFECTIVENESS OF FINANCING STATEMENT – EFFECT OF LAPSED 101 20 FINANCING STATEMENT. 101 21 1. FIVE-YEAR EFFECTIVENESS. Except as otherwise provided 101 22 in subsections 2, 5, 6, and 7, a filed financing statement is 101 23 effective for a period of five years after the date of filing. 101 24 2. PUBLIC-FINANCE OR MANUFACTURED-HOME TRANSACTION. 101 25 Except as otherwise provided in subsections 5, 6, and 7, an 101 26 initial financing statement filed in connection with a public- 101 27 finance transaction or manufactured-home transaction is 101 28 effective for a period of thirty years after the date of 101 29 filing if it indicates that it is filed in connection with a 101 30 public-finance transaction or manufactured-home transaction. 101 31 3. LAPSE AND CONTINUATION OF FINANCING STATEMENT. The 101 32 effectiveness of a filed financing statement lapses on the 101 33 expiration of the period of its effectiveness unless before 101 34 the lapse a continuation statement is filed pursuant to 101 35 subsection 4. Upon lapse, a financing statement ceases to be 102 1 effective and any security interest or agricultural lien that 102 2 was perfected by the financing statement becomes unperfected, 102 3 unless the security interest is perfected otherwise. If the 102 4 security interest or agricultural lien becomes unperfected 102 5 upon lapse, it is deemed never to have been perfected as 102 6 against a purchaser of the collateral for value. 102 7 4. WHEN CONTINUATION STATEMENT MAY BE FILED. A 102 8 continuation statement may be filed only within six months 102 9 before the expiration of the five-year period specified in 102 10 subsection 1 or the thirty-year period specified in subsection 102 11 2, whichever is applicable. 102 12 5. EFFECT OF FILING CONTINUATION STATEMENT. Except as 102 13 otherwise provided in section 554.9510, upon timely filing of 102 14 a continuation statement, the effectiveness of the initial 102 15 financing statement continues for a period of five years 102 16 commencing on the day on which the financing statement would 102 17 have become ineffective in the absence of the filing. Upon 102 18 the expiration of the five-year period, the financing 102 19 statement lapses in the same manner as provided in subsection 102 20 3, unless, before the lapse, another continuation statement is 102 21 filed pursuant to subsection 4. Succeeding continuation 102 22 statements may be filed in the same manner to continue the 102 23 effectiveness of the initial financing statement. 102 24 6. TRANSMITTING UTILITY FINANCING STATEMENT. If a debtor 102 25 is a transmitting utility and a filed financing statement so 102 26 indicates, the financing statement is effective until a 102 27 termination statement is filed. 102 28 7. RECORD OF MORTGAGE AS FINANCING STATEMENT. A record of 102 29 a mortgage that is effective as a financing statement filed as 102 30 a fixture filing under section 554.9502, subsection 3, remains 102 31 effective as a financing statement filed as a fixture filing 102 32 until the mortgage is released or satisfied of record or its 102 33 effectiveness otherwise terminates as to the real property. 102 34 Sec. 87. NEW SECTION. 554.9516 WHAT CONSTITUTES FILING 102 35 – EFFECTIVENESS OF FILING. 103 1 1. WHAT CONSTITUTES FILING. Except as otherwise provided 103 2 in subsection 2, communication of a record to a filing office 103 3 and tender of the filing fee or acceptance of the record by 103 4 the filing office constitutes filing. 103 5 2. REFUSAL TO ACCEPT RECORD – FILING DOES NOT OCCUR. 103 6 Filing does not occur with respect to a record that a filing 103 7 office refuses to accept because: 103 8 a. the record is not communicated by a method or medium of 103 9 communication authorized by the filing office; 103 10 b. an amount equal to or greater than the applicable 103 11 filing fee is not tendered; 103 12 c. the filing office is unable to index the record 103 13 because: 103 14 (1) in the case of an initial financing statement, the 103 15 record does not provide a name for the debtor; 103 16 (2) in the case of an amendment or correction statement, 103 17 the record: 103 18 (a) does not identify the initial financing statement as 103 19 required by section 554.9512 or 554.9518, as applicable; or 103 20 (b) identifies an initial financing statement whose 103 21 effectiveness has lapsed under section 554.9515; 103 22 (3) in the case of an initial financing statement that 103 23 provides the name of a debtor identified as an individual or 103 24 an amendment that provides a name of a debtor identified as an 103 25 individual which was not previously provided in the financing 103 26 statement to which the record relates, the record does not 103 27 identify the debtor's last name; or 103 28 (4) in the case of a record filed or recorded in the 103 29 filing office described in section 554.9501, subsection 1, 103 30 paragraph "a", the record does not provide a sufficient 103 31 description of the real property to which it relates; 103 32 d. in the case of an initial financing statement or an 103 33 amendment that adds a secured party of record, the record does 103 34 not provide a name and mailing address for the secured party 103 35 of record; 104 1 e. in the case of an initial financing statement or an 104 2 amendment that provides a name of a debtor which was not 104 3 previously provided in the financing statement to which the 104 4 amendment relates, the record does not: 104 5 (1) provide a mailing address for the debtor; 104 6 (2) indicate whether the debtor is an individual or an 104 7 organization; or 104 8 (3) if the financing statement indicates that the debtor 104 9 is an organization, provide: 104 10 (a) a type of organization for the debtor; 104 11 (b) a jurisdiction of organization for the debtor; or 104 12 (c) an organizational identification number for the debtor 104 13 or indicate that the debtor has none; 104 14 f. in the case of an assignment reflected in an initial 104 15 financing statement under section 554.9514, subsection 1, or 104 16 an amendment filed under section 554.9514, subsection 2, the 104 17 record does not provide a name and mailing address for the 104 18 assignee; or 104 19 g. in the case of a continuation statement, the record is 104 20 not filed within the six-month period prescribed by section 104 21 554.9515, subsection 4. 104 22 3. RULES APPLICABLE TO SUBSECTION 2. For purposes of 104 23 subsection 2: 104 24 a. a record does not provide information if the filing 104 25 office is unable to read or decipher the information; and 104 26 b. a record that does not indicate that it is an amendment 104 27 or identify an initial financing statement to which it 104 28 relates, as required by section 554.9512, 554.9514, or 104 29 554.9518, is an initial financing statement. 104 30 4. REFUSAL TO ACCEPT RECORD – RECORD EFFECTIVE AS FILED 104 31 RECORD. A record that is communicated to the filing office 104 32 with tender of the filing fee, but which the filing office 104 33 refuses to accept for a reason other than one set forth in 104 34 subsection 2, is effective as a filed record except as against 104 35 a purchaser of the collateral which gives value in reasonable 105 1 reliance upon the absence of the record from the files. 105 2 Sec. 88. NEW SECTION. 554.9517 EFFECT OF INDEXING 105 3 ERRORS. 105 4 The failure of the filing office to index a record 105 5 correctly does not affect the effectiveness of the filed 105 6 record. 105 7 Sec. 89. NEW SECTION. 554.9518 CLAIM CONCERNING 105 8 INACCURATE OR WRONGFULLY FILED RECORD. 105 9 1. CORRECTION STATEMENT. A person may file in the filing 105 10 office a correction statement with respect to a record indexed 105 11 there under the person's name if the person believes that the 105 12 record is inaccurate or was wrongfully filed. 105 13 2. SUFFICIENCY OF CORRECTION STATEMENT. A correction 105 14 statement must: 105 15 a. identify the record to which it relates by: 105 16 (1) the file number assigned to the initial financing 105 17 statement to which the record relates; and 105 18 (2) if the correction statement relates to a record filed 105 19 or recorded in a filing office described in section 554.9501, 105 20 subsection 1, paragraph "a", the date and time that the 105 21 initial financing statement was filed or recorded and the 105 22 information specified in section 554.9502, subsection 2; 105 23 b. indicate that it is a correction statement; and 105 24 c. provide the basis for the person's belief that the 105 25 record is inaccurate and indicate the manner in which the 105 26 person believes the record should be amended to cure any 105 27 inaccuracy or provide the basis for the person's belief that 105 28 the record was wrongfully filed. 105 29 3. RECORD NOT AFFECTED BY CORRECTION STATEMENT. The 105 30 filing of a correction statement does not affect the 105 31 effectiveness of an initial financing statement or other filed 105 32 record. 105 33 B. DUTIES AND OPERATION OF FILING OFFICE 105 34 Sec. 90. NEW SECTION. 554.9519 NUMBERING, MAINTAINING, 105 35 AND INDEXING RECORDS – COMMUNICATING INFORMATION PROVIDED IN 106 1 RECORDS. 106 2 1. FILING OFFICE DUTIES. For each record filed in a 106 3 filing office, the filing office shall: 106 4 a. assign a unique number to the filed record; 106 5 b. create a record that bears the number assigned to the 106 6 filed record and the date and time of filing; 106 7 c. maintain the filed record for public inspection; and 106 8 d. index the filed record in accordance with subsections 106 9 3, 4, and 5. 106 10 2. FILE NUMBER. A file number assigned after January 1, 106 11 2002, must include a digit that: 106 12 a. is mathematically derived from or related to the other 106 13 digits of the file number; and 106 14 b. aids the filing office in determining whether a number 106 15 communicated as the file number includes a single-digit or 106 16 transpositional error. 106 17 3. INDEXING – GENERAL. Except as otherwise provided in 106 18 subsections 4 and 5, the filing office shall: 106 19 a. index an initial financing statement according to the 106 20 name of the debtor and index all filed records relating to the 106 21 initial financing statement in a manner that associates with 106 22 one another an initial financing statement and all filed 106 23 records relating to the initial financing statement; and 106 24 b. index a record that provides a name of a debtor which 106 25 was not previously provided in the financing statement to 106 26 which the record relates also according to the name that was 106 27 not previously provided. 106 28 4. INDEXING – REAL-PROPERTY-RELATED FINANCING STATEMENT. 106 29 If a financing statement is filed as a fixture filing or 106 30 covers as-extracted collateral or timber to be cut, it must be 106 31 filed for record and the filing office shall index it: 106 32 a. under the names of the debtor and of each owner of 106 33 record shown on the financing statement as if they were the 106 34 mortgagors under a mortgage of the real property described; 106 35 and 107 1 b. to the extent that the law of this state provides for 107 2 indexing of records of mortgages under the name of the 107 3 mortgagee, under the name of the secured party as if the 107 4 secured party were the mortgagee thereunder, or, if indexing 107 5 is by description, as if the financing statement were a record 107 6 of a mortgage of the real property described. 107 7 5. INDEXING – REAL-PROPERTY-RELATED ASSIGNMENT. If a 107 8 financing statement is filed as a fixture filing or covers as- 107 9 extracted collateral or timber to be cut, the filing office 107 10 shall index an assignment filed under section 554.9514, 107 11 subsection 1, or an amendment filed under section 554.9514, 107 12 subsection 2: 107 13 a. under the name of the assignor as grantor; and 107 14 b. to the extent that the law of this state provides for 107 15 indexing a record of the assignment of a mortgage under the 107 16 name of the assignee, under the name of the assignee. 107 17 6. RETRIEVAL AND ASSOCIATION CAPABILITY. The filing 107 18 office shall maintain a capability: 107 19 a. to retrieve a record by the name of the debtor and: 107 20 (1) if the filing office is described in section 554.9501, 107 21 subsection 1, paragraph "a", by the file number assigned to 107 22 the initial financing statement to which the record relates 107 23 and the date and time that the record was filed or recorded; 107 24 or 107 25 (2) if the filing office is described in section 554.9501, 107 26 subsection 1, paragraph "b", by the file number assigned to 107 27 the initial financing statement to which the record relates; 107 28 and 107 29 b. to associate and retrieve with one another an initial 107 30 financing statement and each filed record relating to the 107 31 initial financing statement. 107 32 7. REMOVAL OF DEBTOR'S NAME. The filing office may not 107 33 remove a debtor's name from the index until one year after the 107 34 effectiveness of a financing statement naming the debtor 107 35 lapses under section 554.9515 with respect to all secured 108 1 parties of record. 108 2 8. TIMELINESS OF FILING OFFICE PERFORMANCE. The filing 108 3 office shall perform the acts required by subsections 1 108 4 through 5 at the time and in the manner prescribed by filing- 108 5 office rule, but not later than two business days after the 108 6 filing office receives the record in question. 108 7 Sec. 91. NEW SECTION. 554.9520 ACCEPTANCE AND REFUSAL TO 108 8 ACCEPT RECORD. 108 9 1. MANDATORY REFUSAL TO ACCEPT RECORD. A filing office 108 10 shall refuse to accept a record for filing for a reason set 108 11 forth in section 554.9516, subsection 2, and may refuse to 108 12 accept a record for filing only for a reason set forth in 108 13 section 554.9516, subsection 2. 108 14 2. COMMUNICATION CONCERNING REFUSAL. If a filing office 108 15 refuses to accept a record for filing, it shall communicate to 108 16 the person that presented the record the fact of and reason 108 17 for the refusal and the date and time the record would have 108 18 been filed had the filing office accepted it. The 108 19 communication must be made at the time and in the manner 108 20 prescribed by filing-office rule but in no event more than two 108 21 business days after the filing office receives the record. 108 22 3. WHEN FILED FINANCING STATEMENT EFFECTIVE. A filed 108 23 financing statement satisfying section 554.9502, subsections 1 108 24 and 2, is effective, even if the filing office is required to 108 25 refuse to accept it for filing under subsection 1. However, 108 26 section 554.9338 applies to a filed financing statement 108 27 providing information described in section 554.9516, 108 28 subsection 2, paragraph "e", which is incorrect at the time 108 29 the financing statement is filed. 108 30 4. SEPARATE APPLICATION TO MULTIPLE DEBTORS. If a record 108 31 communicated to a filing office provides information that 108 32 relates to more than one debtor, this part applies as to each 108 33 debtor separately. 108 34 Sec. 92. NEW SECTION. 554.9521 UNIFORM FORM OF WRITTEN 108 35 FINANCING STATEMENT AND AMENDMENT. 109 1 1. INITIAL FINANCING STATEMENT FORM. A filing office that 109 2 accepts written records may not refuse to accept a written 109 3 initial financing statement in a form and format approved by 109 4 the secretary of state by rule adopted pursuant to chapter 17A 109 5 except for a reason set forth in section 554.9516, subsection 109 6 2. The forms shall be consistent with those set forth in the 109 7 final official text of the 1999 revisions to Article 9 of the 109 8 Uniform Commercial Code promulgated by the American law 109 9 institute and the national conference of commissioners on 109 10 uniform state laws. 109 11 2. AMENDMENT FORM. A filing office that accepts written 109 12 records may not refuse to accept a written record in a form 109 13 and format approved by the secretary of state by rule adopted 109 14 pursuant to chapter 17A except for a reason set forth in 109 15 section 554.9516, subsection 2. The forms shall be consistent 109 16 with those set forth in the final official text of the 1999 109 17 revisions to Article 9 of the Uniform Commercial Code 109 18 promulgated by the American law institute and the national 109 19 conference of commissioners on uniform state laws. 109 20 Sec. 93. NEW SECTION. 554.9522 MAINTENANCE AND 109 21 DESTRUCTION OF RECORDS. 109 22 1. POST-LAPSE MAINTENANCE AND RETRIEVAL OF INFORMATION. 109 23 The filing office shall maintain a record of the information 109 24 provided in a filed financing statement for at least one year 109 25 after the effectiveness of the financing statement has lapsed 109 26 under section 554.9515 with respect to all secured parties of 109 27 record. The record must be retrievable by using the name of 109 28 the debtor and: 109 29 a. if the record was filed or recorded in the filing 109 30 office described in section 554.9501, subsection 1, paragraph 109 31 "a", by using the file number assigned to the initial 109 32 financing statement to which the record relates and the date 109 33 and time that the record was filed or recorded; or 109 34 b. if the record was filed in the filing office described 109 35 in section 554.9501, subsection 1, paragraph "b", by using the 110 1 file number assigned to the initial financing statement to 110 2 which the record relates. 110 3 2. DESTRUCTION OF WRITTEN RECORDS. Except to the extent 110 4 that a statute governing disposition of public records 110 5 provides otherwise, the filing office immediately may destroy 110 6 any written record evidencing a financing statement. However, 110 7 if the filing office destroys a written record, it shall 110 8 maintain another record of the financing statement which 110 9 complies with subsection 1. 110 10 Sec. 94. NEW SECTION. 554.9523 INFORMATION FROM FILING 110 11 OFFICE – SALE OR LICENSE OF RECORDS. 110 12 1. ACKNOWLEDGMENT OF FILING WRITTEN RECORD. If a person 110 13 that files a written record requests an acknowledgment of the 110 14 filing, the filing office shall send to the person an image of 110 15 the record showing the number assigned to the record pursuant 110 16 to section 554.9519, subsection 1, paragraph "b", and the date 110 17 and time of the filing of the record. However, if the person 110 18 furnishes a copy of the record to the filing office, the 110 19 filing office may instead: 110 20 a. note upon the copy the number assigned to the record 110 21 pursuant to section 554.9519, subsection 1, paragraph "a", and 110 22 the date and time of the filing of the record; and 110 23 b. send the copy to the person. 110 24 2. ACKNOWLEDGMENT OF FILING OTHER RECORD. If a person 110 25 files a record other than a written record, the filing office 110 26 shall communicate to the person an acknowledgment that 110 27 provides: 110 28 a. the information in the record; 110 29 b. the number assigned to the record pursuant to section 110 30 554.9519, subsection 1, paragraph "a"; and 110 31 c. the date and time of the filing of the record. 110 32 3. COMMUNICATION OF REQUESTED INFORMATION. The filing 110 33 office shall communicate or otherwise make available in a 110 34 record the following information to any person that requests 110 35 it: 111 1 a. whether there is on file on a date and time specified 111 2 by the filing office, but not a date earlier than three 111 3 business days before the filing office receives the request, 111 4 any financing statement that: 111 5 (1) designates a particular debtor or, if the request so 111 6 states, designates a particular debtor at the address 111 7 specified in the request; 111 8 (2) has not lapsed under section 554.9515 with respect to 111 9 all secured parties of record; and 111 10 (3) if the request so states, has lapsed under section 111 11 554.9515 and a record of which is maintained by the filing 111 12 office under section 554.9522, subsection 1; 111 13 b. the date and time of filing of each financing 111 14 statement; and 111 15 c. the information provided in each financing statement. 111 16 4. MEDIUM FOR COMMUNICATING INFORMATION. In complying 111 17 with its duty under subsection 3, the filing office may 111 18 communicate information in any medium. However, if requested, 111 19 the filing office shall communicate information by issuing a 111 20 record that can be admitted into evidence in the courts of 111 21 this state without extrinsic evidence of its authenticity. 111 22 5. TIMELINESS OF FILING OFFICE PERFORMANCE. The filing 111 23 office shall perform the acts required by subsections 1 111 24 through 4 at the time and in the manner prescribed by filing- 111 25 office rule, but not later than two business days after the 111 26 filing office receives the request. 111 27 6. PUBLIC AVAILABILITY OF RECORDS. At least weekly, the 111 28 filing office shall offer to sell or license to the public on 111 29 a nonexclusive basis, in bulk, copies of all records filed in 111 30 it under this part, in every medium from time to time 111 31 available to the filing office, as provided in chapter 22. 111 32 Sec. 95. NEW SECTION. 554.9524 DELAY BY FILING OFFICE. 111 33 Delay by the filing office beyond a time limit prescribed 111 34 by this part is excused if: 111 35 1. the delay is caused by interruption of communication or 112 1 computer facilities, war, emergency conditions, failure of 112 2 equipment, or other circumstances beyond control of the filing 112 3 office; and 112 4 2. the filing office exercises reasonable diligence under 112 5 the circumstances. 112 6 Sec. 96. NEW SECTION. 554.9525 FEES. 112 7 1. INITIAL FINANCING STATEMENT OR OTHER RECORD – GENERAL 112 8 RULE. Except as otherwise provided in subsection 5, fees for 112 9 services rendered by the filing office under this part must be 112 10 set by rules adopted by the secretary of state's office for 112 11 services for that office. The rule must set the fees for 112 12 filing and indexing a record under this part on the following 112 13 basis: 112 14 a. if a record presented for filing is communicated to the 112 15 filing office in writing and consists of more than two pages, 112 16 the fee for filing and indexing the record must be at least 112 17 twice the amount of the fee for a record communicated in 112 18 writing that consists of one or two pages; and 112 19 b. if the record is communicated by another medium 112 20 authorized by the secretary of state's office, the fee must be 112 21 no more than half the amount of the fee for a record 112 22 communicated in writing that consists of one or two pages. 112 23 3. NUMBER OF NAMES. The number of names required to be 112 24 indexed does not affect the amount of the fee in subsections 1 112 25 and 2. 112 26 4. RESPONSE TO INFORMATION REQUEST. A rule or ordinance 112 27 adopted pursuant to subsection 1 must set the fee for 112 28 responding to a request for information from the filing 112 29 office, including for communicating whether there is on file 112 30 any financing statement naming a particular debtor. A fee for 112 31 responding to a request communicated in writing must be not 112 32 less than twice the amount of the fee for responding to a 112 33 request communicated by another medium authorized by the 112 34 office of secretary of state or the board of supervisors for 112 35 the filing office where its filing office is located. 113 1 5. RECORD OF MORTGAGE. This section does not require a 113 2 fee with respect to a record of a mortgage which is effective 113 3 as a financing statement filed as a fixture filing or as a 113 4 financing statement covering as-extracted collateral or timber 113 5 to be cut under section 554.9502, subsection 3. However, the 113 6 recording and satisfaction fees that otherwise would be 113 7 applicable to the record of the mortgage apply. 113 8 Sec. 97. NEW SECTION. 554.9526 FILING-OFFICE RULES. 113 9 1. ADOPTION OF FILING-OFFICE RULES. The office of 113 10 secretary of state shall adopt and publish rules to implement 113 11 this Article. The filing-office rules must be: 113 12 a. consistent with this Article; and 113 13 b. adopted and published in accordance with chapter 17A. 113 14 2. HARMONIZATION OF RULES. To keep the filing-office 113 15 rules and practices of the filing office in harmony with the 113 16 rules and practices of filing offices in other jurisdictions 113 17 that enact substantially this part, and to keep the technology 113 18 used by the filing office compatible with the technology used 113 19 by filing offices in other jurisdictions that enact 113 20 substantially this part, the office of secretary of state, so 113 21 far as is consistent with the purposes, policies, and 113 22 provisions of this Article, in adopting, amending, and 113 23 repealing filing-office rules, shall: 113 24 a. consult with filing offices in other jurisdictions that 113 25 enact substantially this part; and 113 26 b. consult the most recent version of the Model Rules 113 27 promulgated by the International Association of Corporate 113 28 Administrators or any successor organization; and 113 29 c. take into consideration the rules and practices of, and 113 30 the technology used by, filing offices in other jurisdictions 113 31 that enact substantially this part. 113 32 Sec. 98. NEW SECTION. 554.9527 DUTY TO REPORT. 113 33 The office of secretary of state shall report annually on 113 34 or before December 31 to the governor on the operation of the 113 35 filing office. The report must contain a statement of the 114 1 extent to which: 114 2 1. the filing-office rules are not in harmony with the 114 3 rules of filing offices in other jurisdictions that enact 114 4 substantially this part and the reasons for these variations; 114 5 and 114 6 2. the filing-office rules are not in harmony with the 114 7 most recent version of the Model Rules promulgated by the 114 8 International Association of Corporate Administrators, or any 114 9 successor organization, and the reasons for these variations. 114 10 PART 6 114 11 DEFAULT 114 12 A. DEFAULT AND ENFORCEMENT OF SECURITY INTEREST 114 13 Sec. 99. NEW SECTION. 554.9601 RIGHTS AFTER DEFAULT – 114 14 JUDICIAL ENFORCEMENT – CONSIGNOR OR BUYER OF ACCOUNTS, 114 15 CHATTEL PAPER, PAYMENT INTANGIBLES, OR PROMISSORY NOTES. 114 16 1. RIGHTS OF SECURED PARTY AFTER DEFAULT. After default, 114 17 a secured party has the rights provided in this part and, 114 18 except as otherwise provided in section 554.9602, those 114 19 provided by agreement of the parties. A secured party: 114 20 a. may reduce a claim to judgment, foreclose, or otherwise 114 21 enforce the claim, security interest, or agricultural lien by 114 22 any available judicial procedure; and 114 23 b. if the collateral is documents, may proceed either as 114 24 to the documents or as to the goods they cover. 114 25 2. RIGHTS AND DUTIES OF SECURED PARTY IN POSSESSION OR 114 26 CONTROL. A secured party in possession of collateral or 114 27 control of collateral under section 554.9104, 554.9105, 114 28 554.9106, or 554.9107 has the rights and duties provided in 114 29 section 554.9207. 114 30 3. RIGHTS CUMULATIVE – SIMULTANEOUS EXERCISE. The rights 114 31 under subsections 1 and 2 are cumulative and may be exercised 114 32 simultaneously. 114 33 4. RIGHTS OF DEBTOR AND OBLIGOR. Except as otherwise 114 34 provided in subsection 7 and section 554.9605, after default, 114 35 a debtor and an obligor have the rights provided in this part 115 1 and by agreement of the parties. 115 2 5. LIEN OF LEVY AFTER JUDGMENT. If a secured party has 115 3 reduced its claim to judgment, the lien of any levy that may 115 4 be made upon the collateral by virtue of an execution based 115 5 upon the judgment relates back to the earliest of: 115 6 a. the date of perfection of the security interest or 115 7 agricultural lien in the collateral; 115 8 b. the date of filing a financing statement covering the 115 9 collateral; or 115 10 c. any date specified in a statute under which the 115 11 agricultural lien was created. 115 12 6. EXECUTION SALE. A sale pursuant to an execution is a 115 13 foreclosure of the security interest or agricultural lien by 115 14 judicial procedure within the meaning of this section. A 115 15 secured party may purchase at the sale and thereafter hold the 115 16 collateral free of any other requirements of this Article. 115 17 7. CONSIGNOR OR BUYER OF CERTAIN RIGHTS TO PAYMENT. 115 18 Except as otherwise provided in section 554.9607, subsection 115 19 3, this part imposes no duties upon a secured party that is a 115 20 consignor or is a buyer of accounts, chattel paper, payment 115 21 intangibles, or promissory notes. 115 22 Sec. 100. NEW SECTION. 554.9602 WAIVER AND VARIANCE OF 115 23 RIGHTS AND DUTIES. 115 24 Except as otherwise provided in section 554.9624, to the 115 25 extent that they give rights to a debtor or obligor and impose 115 26 duties on a secured party, the debtor or obligor may not waive 115 27 or vary the rules stated in the following listed sections: 115 28 1. section 554.9207, subsection 2, paragraph "d", 115 29 subparagraph (3), which deals with use and operation of the 115 30 collateral by the secured party; 115 31 2. section 554.9210, which deals with requests for an 115 32 accounting and requests concerning a list of collateral and 115 33 statement of account; 115 34 3. section 554.9607, subsection 3, which deals with 115 35 collection and enforcement of collateral; 116 1 4. section 554.9608, subsection 1, and section 554.9615, 116 2 subsection 3, to the extent that they deal with application or 116 3 payment of noncash proceeds of collection, enforcement, or 116 4 disposition; 116 5 5. section 554.9608, subsection 1, and section 554.9615, 116 6 subsection 4, to the extent that they require accounting for 116 7 or payment of surplus proceeds of collateral; 116 8 6. section 554.9609 to the extent that it imposes upon a 116 9 secured party that takes possession of collateral without 116 10 judicial process the duty to do so without breach of the 116 11 peace; 116 12 7. section 554.9610, subsection 2, and sections 554.9611, 116 13 554.9613, and 554.9614, which deal with disposition of 116 14 collateral; 116 15 8. section 554.9615, subsection 6, which deals with 116 16 calculation of a deficiency or surplus when a disposition is 116 17 made to the secured party, a person related to the secured 116 18 party, or a secondary obligor; 116 19 9. section 554.9616, which deals with explanation of the 116 20 calculation of a surplus or deficiency; 116 21 10. sections 554.9620, 554.9621, and 554.9622, which deal 116 22 with acceptance of collateral in satisfaction of obligation; 116 23 11. section 554.9623, which deals with redemption of 116 24 collateral; 116 25 12. section 554.9624, which deals with permissible 116 26 waivers; and 116 27 13. sections 554.9625 and 554.9626, which deal with the 116 28 secured party's liability for failure to comply with this 116 29 Article. 116 30 Sec. 101. NEW SECTION. 554.9603 AGREEMENT ON STANDARDS 116 31 CONCERNING RIGHTS AND DUTIES. 116 32 1. AGREED STANDARDS. The parties may determine by 116 33 agreement the standards measuring the fulfillment of the 116 34 rights of a debtor or obligor and the duties of a secured 116 35 party under a rule stated in section 554.9602 if the standards 117 1 are not manifestly unreasonable. 117 2 2. AGREED STANDARDS INAPPLICABLE TO BREACH OF PEACE. 117 3 Subsection 1 does not apply to the duty under section 554.9609 117 4 to refrain from breaching the peace. 117 5 Sec. 102. NEW SECTION. 554.9604 PROCEDURE IF SECURITY 117 6 AGREEMENT COVERS REAL PROPERTY OR FIXTURES. 117 7 1. ENFORCEMENT – PERSONAL AND REAL PROPERTY. If a 117 8 security agreement covers both personal and real property, a 117 9 secured party may proceed: 117 10 a. under this part as to the personal property without 117 11 prejudicing any rights with respect to the real property; or 117 12 b. as to both the personal property and the real property 117 13 in accordance with the rights with respect to the real 117 14 property, in which case the other provisions of this part do 117 15 not apply. 117 16 2. ENFORCEMENT – FIXTURES. Subject to subsection 3, if a 117 17 security agreement covers goods that are or become fixtures, a 117 18 secured party may proceed: 117 19 a. under this part; or 117 20 b. in accordance with the rights with respect to real 117 21 property, in which case the other provisions of this part do 117 22 not apply. 117 23 3. REMOVAL OF FIXTURES. Subject to the other provisions 117 24 of this part, if a secured party holding a security interest 117 25 in fixtures has priority over all owners and encumbrancers of 117 26 the real property, the secured party, after default, may 117 27 remove the collateral from the real property. 117 28 4. INJURY CAUSED BY REMOVAL. A secured party that removes 117 29 collateral shall promptly reimburse any encumbrancer or owner 117 30 of the real property, other than the debtor, for the cost of 117 31 repair of any physical injury caused by the removal. The 117 32 secured party need not reimburse the encumbrancer or owner for 117 33 any diminution in value of the real property caused by the 117 34 absence of the goods removed or by any necessity of replacing 117 35 them. A person entitled to reimbursement may refuse 118 1 permission to remove until the secured party gives adequate 118 2 assurance for the performance of the obligation to reimburse. 118 3 Sec. 103. NEW SECTION. 554.9605 UNKNOWN DEBTOR OR 118 4 SECONDARY OBLIGOR. 118 5 A secured party does not owe a duty based on its status as 118 6 secured party: 118 7 1. to a person that is a debtor or obligor, unless the 118 8 secured party knows: 118 9 a. that the person is a debtor or obligor; 118 10 b. the identity of the person; and 118 11 c. how to communicate with the person; or 118 12 2. to a secured party or lienholder that has filed a 118 13 financing statement against a person, unless the secured party 118 14 knows: 118 15 a. that the person is a debtor; and 118 16 b. the identity of the person. 118 17 Sec. 104. NEW SECTION. 554.9606 TIME OF DEFAULT FOR 118 18 AGRICULTURAL LIEN. 118 19 For purposes of this part, a default occurs in connection 118 20 with an agricultural lien at the time the secured party 118 21 becomes entitled to enforce the lien in accordance with the 118 22 statute under which it was created. 118 23 Sec. 105. NEW SECTION. 554.9607 COLLECTION AND 118 24 ENFORCEMENT BY SECURED PARTY. 118 25 1. COLLECTION AND ENFORCEMENT GENERALLY. If so agreed, 118 26 and in any event after default, a secured party: 118 27 a. may notify an account debtor or other person obligated 118 28 on collateral to make payment or otherwise render performance 118 29 to or for the benefit of the secured party; 118 30 b. may take any proceeds to which the secured party is 118 31 entitled under section 554.9315; 118 32 c. may enforce the obligations of an account debtor or 118 33 other person obligated on collateral and exercise the rights 118 34 of the debtor with respect to the obligation of the account 118 35 debtor or other person obligated on collateral to make payment 119 1 or otherwise render performance to the debtor, and with 119 2 respect to any property that secures the obligations of the 119 3 account debtor or other person obligated on the collateral; 119 4 d. if it holds a security interest in a deposit account 119 5 perfected by control under section 554.9104, subsection 1, 119 6 paragraph "a", may apply the balance of the deposit account to 119 7 the obligation secured by the deposit account; and 119 8 e. if it holds a security interest in a deposit account 119 9 perfected by control under section 554.9104, subsection 1, 119 10 paragraph "b" or "c", may instruct the bank to pay the balance 119 11 of the deposit account to or for the benefit of the secured 119 12 party. 119 13 2. NONJUDICIAL ENFORCEMENT OF MORTGAGE. If necessary to 119 14 enable a secured party to exercise under subsection 1, 119 15 paragraph "c", the right of a debtor to enforce a mortgage 119 16 nonjudicially, the secured party may record in the office in 119 17 which a record of the mortgage is recorded: 119 18 a. a copy of the security agreement that creates or 119 19 provides for a security interest in the obligation secured by 119 20 the mortgage; and 119 21 b. the secured party's sworn affidavit in recordable form 119 22 stating that: 119 23 (1) a default has occurred; and 119 24 (2) the secured party is entitled to enforce the mortgage 119 25 nonjudicially. 119 26 3. COMMERCIALLY REASONABLE COLLECTION AND ENFORCEMENT. A 119 27 secured party shall proceed in a commercially reasonable 119 28 manner if the secured party: 119 29 a. undertakes to collect from or enforce an obligation of 119 30 an account debtor or other person obligated on collateral; and 119 31 b. is entitled to charge back uncollected collateral or 119 32 otherwise to full or limited recourse against the debtor or a 119 33 secondary obligor. 119 34 4. EXPENSES OF COLLECTION AND ENFORCEMENT. A secured 119 35 party may deduct from the collections made pursuant to 120 1 subsection 3 reasonable expenses of collection and 120 2 enforcement, including reasonable attorney's fees and legal 120 3 expenses incurred by the secured party. 120 4 5. DUTIES TO SECURED PARTY NOT AFFECTED. This section 120 5 does not determine whether an account debtor, bank, or other 120 6 person obligated on collateral owes a duty to a secured party. 120 7 Sec. 106. NEW SECTION. 554.9608 APPLICATION OF PROCEEDS 120 8 OF COLLECTION OR ENFORCEMENT – LIABILITY FOR DEFICIENCY AND 120 9 RIGHT TO SURPLUS. 120 10 1. APPLICATION OF PROCEEDS, SURPLUS, AND DEFICIENCY IF 120 11 OBLIGATION SECURED. If a security interest or agricultural 120 12 lien secures payment or performance of an obligation, the 120 13 following rules apply: 120 14 a. a secured party shall apply or pay over for application 120 15 the cash proceeds of collection or enforcement under section 120 16 554.9607 in the following order to: 120 17 (1) the reasonable expenses of collection and enforcement 120 18 and, to the extent provided for by agreement and not 120 19 prohibited by law, reasonable attorney's fees and legal 120 20 expenses incurred by the secured party; 120 21 (2) the satisfaction of obligations secured by the 120 22 security interest or agricultural lien under which the 120 23 collection or enforcement is made; and 120 24 (3) the satisfaction of obligations secured by any 120 25 subordinate security interest in or other lien on the 120 26 collateral subject to the security interest or agricultural 120 27 lien under which the collection or enforcement is made if the 120 28 secured party receives an authenticated demand for proceeds 120 29 before distribution of the proceeds is completed. 120 30 b. if requested by a secured party, a holder of a 120 31 subordinate security interest or other lien shall furnish 120 32 reasonable proof of the interest or lien within a reasonable 120 33 time. Unless the holder complies, the secured party need not 120 34 comply with the holder's demand under paragraph "a", 120 35 subparagraph (3). 121 1 c. a secured party need not apply or pay over for 121 2 application noncash proceeds of collection and enforcement 121 3 under section 554.9607 unless the failure to do so would be 121 4 commercially unreasonable. A secured party that applies or 121 5 pays over for application noncash proceeds shall do so in a 121 6 commercially reasonable manner. 121 7 d. a secured party shall account to and pay a debtor for 121 8 any surplus, and the obligor is liable for any deficiency. 121 9 2. NO SURPLUS OR DEFICIENCY IN SALES OF CERTAIN RIGHTS TO 121 10 PAYMENT. If the underlying transaction is a sale of accounts, 121 11 chattel paper, payment intangibles, or promissory notes, the 121 12 debtor is not entitled to any surplus, and the obligor is not 121 13 liable for any deficiency. 121 14 Sec. 107. NEW SECTION. 554.9609 SECURED PARTY'S RIGHT TO 121 15 TAKE POSSESSION AFTER DEFAULT. 121 16 1. POSSESSION – RENDERING EQUIPMENT UNUSABLE – 121 17 DISPOSITION ON DEBTOR'S PREMISES. After default, a secured 121 18 party: 121 19 a. may take possession of the collateral; and 121 20 b. without removal, may render equipment unusable and 121 21 dispose of collateral on a debtor's premises under section 121 22 554.9610. 121 23 2. JUDICIAL AND NONJUDICIAL PROCESS. A secured party may 121 24 proceed under subsection 1: 121 25 a. pursuant to judicial process; or 121 26 b. without judicial process, if it proceeds without breach 121 27 of the peace. 121 28 3. ASSEMBLY OF COLLATERAL. If so agreed, and in any event 121 29 after default, a secured party may require the debtor to 121 30 assemble the collateral and make it available to the secured 121 31 party at a place to be designated by the secured party which 121 32 is reasonably convenient to both parties. 121 33 Sec. 108. NEW SECTION. 554.9610 DISPOSITION OF 121 34 COLLATERAL AFTER DEFAULT. 121 35 1. DISPOSITION AFTER DEFAULT. After default, a secured 122 1 party may sell, lease, license, or otherwise dispose of any or 122 2 all of the collateral in its present condition or following 122 3 any commercially reasonable preparation or processing. 122 4 2. COMMERCIALLY REASONABLE DISPOSITION. Every aspect of a 122 5 disposition of collateral, including the method, manner, time, 122 6 place, and other terms, must be commercially reasonable. If 122 7 commercially reasonable, a secured party may dispose of 122 8 collateral by public or private proceedings, by one or more 122 9 contracts, as a unit or in parcels, and at any time and place 122 10 and on any terms. 122 11 3. PURCHASE BY SECURED PARTY. A secured party may 122 12 purchase collateral: 122 13 a. at a public disposition; or 122 14 b. at a private disposition only if the collateral is of a 122 15 kind that is customarily sold on a recognized market or the 122 16 subject of widely distributed standard price quotations. 122 17 4. WARRANTIES ON DISPOSITION. A contract for sale, lease, 122 18 license, or other disposition includes the warranties relating 122 19 to title, possession, quiet enjoyment, and the like which by 122 20 operation of law accompany a voluntary disposition of property 122 21 of the kind subject to the contract. 122 22 5. DISCLAIMER OF WARRANTIES. A secured party may disclaim 122 23 or modify warranties under subsection 4: 122 24 a. in a manner that would be effective to disclaim or 122 25 modify the warranties in a voluntary disposition of property 122 26 of the kind subject to the contract of disposition; or 122 27 b. by communicating to the purchaser a record evidencing 122 28 the contract for disposition and including an express 122 29 disclaimer or modification of the warranties. 122 30 6. RECORD SUFFICIENT TO DISCLAIM WARRANTIES. A record is 122 31 sufficient to disclaim warranties under subsection 5 if it 122 32 indicates "There is no warranty relating to title, possession, 122 33 quiet enjoyment, or the like in this disposition" or uses 122 34 words of similar import. 122 35 Sec. 109. NEW SECTION. 554.9611 NOTIFICATION BEFORE 123 1 DISPOSITION OF COLLATERAL. 123 2 1. NOTIFICATION DATE. In this section, "notification 123 3 date" means the earlier of the date on which: 123 4 a. a secured party sends to the debtor and any secondary 123 5 obligor an authenticated notification of disposition; or 123 6 b. the debtor and any secondary obligor waive the right to 123 7 notification. 123 8 2. NOTIFICATION OF DISPOSITION REQUIRED. Except as 123 9 otherwise provided in subsection 4, a secured party that 123 10 disposes of collateral under section 554.9610 shall send to 123 11 the persons specified in subsection 3 a reasonable 123 12 authenticated notification of disposition. 123 13 3. PERSONS TO BE NOTIFIED. To comply with subsection 2, 123 14 the secured party shall send an authenticated notification of 123 15 disposition to: 123 16 a. the debtor; 123 17 b. any secondary obligor; and 123 18 c. if the collateral is other than consumer goods: 123 19 (1) any other person from which the secured party has 123 20 received, before the notification date, an authenticated 123 21 notification of a claim of an interest in the collateral; 123 22 (2) any other secured party or lienholder that, ten days 123 23 before the notification date, held a security interest in or 123 24 other lien on the collateral perfected by the filing of a 123 25 financing statement that: 123 26 (a) identified the collateral; 123 27 (b) was indexed under the debtor's name as of that date; 123 28 and 123 29 (c) was filed in the office in which to file a financing 123 30 statement against the debtor covering the collateral as of 123 31 that date; and 123 32 (3) any other secured party that, ten days before the 123 33 notification date, held a security interest in the collateral 123 34 perfected by compliance with a statute, regulation, or treaty 123 35 described in section 554.9311, subsection 1. 124 1 4. SUBSECTION 2 INAPPLICABLE – PERISHABLE COLLATERAL – 124 2 RECOGNIZED MARKET. Subsection 2 does not apply if the 124 3 collateral is perishable or threatens to decline speedily in 124 4 value or is of a type customarily sold on a recognized market. 124 5 5. COMPLIANCE WITH SUBSECTION 3, PARAGRAPH "C", 124 6 SUBPARAGRAPH (2). A secured party complies with the 124 7 requirement for notification prescribed by subsection 3, 124 8 paragraph "c", subparagraph (2), if: 124 9 a. not later than twenty days or earlier than thirty days 124 10 before the notification date, the secured party requests, in a 124 11 commercially reasonable manner, information concerning 124 12 financing statements indexed under the debtor's name in the 124 13 office indicated in subsection 3, paragraph "c", subparagraph 124 14 (2); and 124 15 b. before the notification date, the secured party: 124 16 (1) did not receive a response to the request for 124 17 information; or 124 18 (2) received a response to the request for information and 124 19 sent an authenticated notification of disposition to each 124 20 secured party or other lienholder named in that response whose 124 21 financing statement covered the collateral. 124 22 Sec. 110. NEW SECTION. 554.9612 TIMELINESS OF 124 23 NOTIFICATION BEFORE DISPOSITION OF COLLATERAL. 124 24 1. REASONABLE TIME IS QUESTION OF FACT. Except as 124 25 otherwise provided in subsection 2, whether a notification is 124 26 sent within a reasonable time is a question of fact. 124 27 2. TEN-DAY PERIOD SUFFICIENT IN NONCONSUMER TRANSACTION. 124 28 In a transaction other than a consumer transaction, a 124 29 notification of disposition sent after default and ten days or 124 30 more before the earliest time of disposition set forth in the 124 31 notification is sent within a reasonable time before the 124 32 disposition. 124 33 Sec. 111. NEW SECTION. 554.9613 CONTENTS AND FORM OF 124 34 NOTIFICATION BEFORE DISPOSITION OF COLLATERAL – GENERAL. 124 35 Except in a consumer-goods transaction, the following rules 125 1 apply: 125 2 1. The contents of a notification of disposition are 125 3 sufficient if the notification: 125 4 a. describes the debtor and the secured party; 125 5 b. describes the collateral that is the subject of the 125 6 intended disposition; 125 7 c. states the method of intended disposition; 125 8 d. states that the debtor is entitled to an accounting of 125 9 the unpaid indebtedness and states the charge, if any, for an 125 10 accounting; and 125 11 e. states the time and place of a public disposition or 125 12 the time after which any other disposition is to be made. 125 13 2. Whether the contents of a notification that lacks any 125 14 of the information specified in subsection 1 are nevertheless 125 15 sufficient is a question of fact. 125 16 3. The contents of a notification providing substantially 125 17 the information specified in subsection 1 are sufficient, even 125 18 if the notification includes: 125 19 a. information not specified by that subsection; or 125 20 b. minor errors that are not seriously misleading. 125 21 4. A particular phrasing of the notification is not 125 22 required. 125 23 5. The following form of notification and the form 125 24 appearing in section 554.9614, subsection 3, when completed, 125 25 each provides sufficient information: 125 26 NOTIFICATION OF DISPOSITION OF COLLATERAL 125 27 To: [name of debtor, obligor, or other person to which the 125 28 notification is sent] 125 29 From: [name, address, and telephone number of secured 125 30 party] 125 31 Name of Debtor(s): [include only if debtor(s) are not an 125 32 addressee] 125 33 [for a public disposition:] 125 34 We will sell [or lease or license, as applicable] the 125 35 [describe collateral] [to the highest qualified bidder] in 126 1 public as follows: 126 2 Day and Date: _________ 126 3 Time: _________ 126 4 Place: _________ 126 5 [for a private disposition:] 126 6 We will sell [or lease or license, as applicable] the 126 7 [describe collateral] privately sometime after [day and date]. 126 8 You are entitled to an accounting of the unpaid indebtedness 126 9 secured by the property that we intend to sell [or lease or 126 10 license, as applicable] [for a charge of __________ dollars]. 126 11 You may request an accounting by calling us at [telephone 126 12 number]. 126 13 Sec. 112. NEW SECTION. 554.9614 CONTENTS AND FORM OF 126 14 NOTIFICATION BEFORE DISPOSITION OF COLLATERAL – CONSUMER- 126 15 GOODS TRANSACTION. 126 16 In a consumer-goods transaction, the following rules apply: 126 17 1. A notification of disposition must provide the 126 18 following information: 126 19 a. the information specified in section 554.9613, 126 20 subsection 1; 126 21 b. a description of any liability for a deficiency of the 126 22 person to which the notification is sent; 126 23 c. a telephone number from which the amount that must be 126 24 paid to the secured party to redeem the collateral under 126 25 section 554.9623 is available; and 126 26 d. a telephone number or mailing address from which 126 27 additional information concerning the disposition and the 126 28 obligation secured is available. 126 29 2. A particular phrasing of the notification is not 126 30 required. 126 31 3. The following form of notification, when completed, 126 32 provides sufficient information: 126 33 [name and address of secured party] 126 34 [date] 126 35 NOTICE OF OUR PLAN TO SELL PROPERTY 127 1 [name and address of any obligor who is also a debtor] 127 2 Subject: [identification of transaction] 127 3 We have your [describe collateral], because you broke 127 4 promises in our agreement. 127 5 [for a public disposition:] 127 6 We will sell [describe collateral] at public sale. A sale 127 7 could include a lease or license. The sale will be held as 127 8 follows: 127 9 Date: _____________ 127 10 Time: _____________ 127 11 Place: _____________ 127 12 You may attend the sale and bring bidders if you want. 127 13 [for a private disposition:] 127 14 We will sell [describe collateral] at private sale sometime 127 15 after [date]. A sale could include a lease or license. 127 16 The money that we get from the sale (after paying our costs) 127 17 will reduce the amount you owe. If we get less money than you 127 18 owe, you [will or will not, as applicable] still owe us the 127 19 difference. If we get more money than you owe, you will get 127 20 the extra money, unless we must pay it to someone else. 127 21 You can get the property back at any time before we sell it 127 22 by paying us the full amount you owe (not just the past due 127 23 payments), including our expenses. To learn the exact amount you 127 24 must pay, call us at [telephone number]. 127 25 If you want us to explain to you in writing how we have 127 26 figured the amount that you owe us, you may call us at 127 27 [telephone number] [or write us at [secured party's address]] 127 28 and request a written explanation. [We will charge you 127 29 for the explanation if we sent you another 127 30 written explanation of the amount you owe us within the 127 31 last six months.] 127 32 If you need more information about the sale call us at 127 33 [telephone number] [or write us at [secured party's address]]. 127 34 We are sending this notice to the following other people who 127 35 have an interest in [describe collateral] or who owe money under 128 1 your agreement: 128 2 [names of all other debtors and obligors, if any] 128 3 4. A notification in the form of subsection 3 is 128 4 sufficient, even if additional information appears at the end 128 5 of the form. 128 6 5. A notification in the form of subsection 3 is 128 7 sufficient, even if it includes errors in information not 128 8 required by subsection 1, unless the error is misleading with 128 9 respect to rights arising under this Article. 128 10 6. If a notification under this section is not in the form 128 11 of subsection 3, law other than this Article determines the 128 12 effect of including information not required by subsection 1. 128 13 Sec. 113. NEW SECTION. 554.9615 APPLICATION OF PROCEEDS 128 14 OF DISPOSITION – LIABILITY FOR DEFICIENCY AND RIGHT TO 128 15 SURPLUS. 128 16 1. APPLICATION OF PROCEEDS. A secured party shall apply 128 17 or pay over for application the cash proceeds of disposition 128 18 under section 554.9610 in the following order to: 128 19 a. the reasonable expenses of retaking, holding, preparing 128 20 for disposition, processing, and disposing, and, to the extent 128 21 provided for by agreement and not prohibited by law, 128 22 reasonable attorney's fees and legal expenses incurred by the 128 23 secured party; 128 24 b. the satisfaction of obligations secured by the security 128 25 interest or agricultural lien under which the disposition is 128 26 made; 128 27 c. the satisfaction of obligations secured by any 128 28 subordinate security interest in or other subordinate lien on 128 29 the collateral if: 128 30 (1) the secured party receives from the holder of the 128 31 subordinate security interest or other lien an authenticated 128 32 demand for proceeds before distribution of the proceeds is 128 33 completed; and 128 34 (2) in a case in which a consignor has an interest in the 128 35 collateral, the subordinate security interest or other lien is 129 1 senior to the interest of the consignor; and 129 2 d. a secured party that is a consignor of the collateral 129 3 if the secured party receives from the consignor an 129 4 authenticated demand for proceeds before distribution of the 129 5 proceeds is completed. 129 6 2. PROOF OF SUBORDINATE INTEREST. If requested by a 129 7 secured party, a holder of a subordinate security interest or 129 8 other lien shall furnish reasonable proof of the interest or 129 9 lien within a reasonable time. Unless the holder does so, the 129 10 secured party need not comply with the holder's demand under 129 11 subsection 1, paragraph "c". 129 12 3. APPLICATION OF NONCASH PROCEEDS. A secured party need 129 13 not apply or pay over for application noncash proceeds of 129 14 disposition under section 554.9610 unless the failure to do so 129 15 would be commercially unreasonable. A secured party that 129 16 applies or pays over for application noncash proceeds shall do 129 17 so in a commercially reasonable manner. 129 18 4. SURPLUS OR DEFICIENCY IF OBLIGATION SECURED. If the 129 19 security interest under which a disposition is made secures 129 20 payment or performance of an obligation, after making the 129 21 payments and applications required by subsection 1 and 129 22 permitted by subsection 3: 129 23 a. unless subsection 1, paragraph "d", requires the 129 24 secured party to apply or pay over cash proceeds to a 129 25 consignor, the secured party shall account to and pay a debtor 129 26 for any surplus; and 129 27 b. the obligor is liable for any deficiency. 129 28 5. NO SURPLUS OR DEFICIENCY IN SALES OF CERTAIN RIGHTS TO 129 29 PAYMENT. If the underlying transaction is a sale of accounts, 129 30 chattel paper, payment intangibles, or promissory notes: 129 31 a. the debtor is not entitled to any surplus; and 129 32 b. the obligor is not liable for any deficiency. 129 33 6. CALCULATION OF SURPLUS OR DEFICIENCY IN DISPOSITION TO 129 34 PERSON RELATED TO SECURED PARTY. The surplus or deficiency 129 35 following a disposition is calculated based on the amount of 130 1 proceeds that would have been realized in a disposition 130 2 complying with this part to a transferee other than the 130 3 secured party, a person related to the secured party, or a 130 4 secondary obligor if: 130 5 a. the transferee in the disposition is the secured party, 130 6 a person related to the secured party, or a secondary obligor; 130 7 and 130 8 b. the amount of proceeds of the disposition is 130 9 significantly below the range of proceeds that a complying 130 10 disposition to a person other than the secured party, a person 130 11 related to the secured party, or a secondary obligor would 130 12 have brought. 130 13 7. CASH PROCEEDS RECEIVED BY JUNIOR SECURED PARTY. A 130 14 secured party that receives cash proceeds of a disposition in 130 15 good faith and without knowledge that the receipt violates the 130 16 rights of the holder of a security interest or other lien that 130 17 is not subordinate to the security interest or agricultural 130 18 lien under which the disposition is made: 130 19 a. takes the cash proceeds free of the security interest 130 20 or other lien; 130 21 b. is not obligated to apply the proceeds of the 130 22 disposition to the satisfaction of obligations secured by the 130 23 security interest or other lien; and 130 24 c. is not obligated to account to or pay the holder of the 130 25 security interest or other lien for any surplus. 130 26 Sec. 114. NEW SECTION. 554.9616 EXPLANATION OF 130 27 CALCULATION OF SURPLUS OR DEFICIENCY. 130 28 1. DEFINITIONS. In this section: 130 29 a. "Explanation" means a writing that: 130 30 (1) states the amount of the surplus or deficiency; 130 31 (2) provides an explanation in accordance with subsection 130 32 3 of how the secured party calculated the surplus or 130 33 deficiency; 130 34 (3) states, if applicable, that future debits, credits, 130 35 charges, including additional credit service charges or 131 1 interest, rebates, and expenses may affect the amount of the 131 2 surplus or deficiency; and 131 3 (4) provides a telephone number or mailing address from 131 4 which additional information concerning the transaction is 131 5 available. 131 6 b. "Request" means a record: 131 7 (1) authenticated by a debtor or consumer obligor; 131 8 (2) requesting that the recipient provide an explanation; 131 9 and 131 10 (3) sent after disposition of the collateral under section 131 11 554.9610. 131 12 2. EXPLANATION OF CALCULATION. In a consumer-goods 131 13 transaction in which the debtor is entitled to a surplus or a 131 14 consumer obligor is liable for a deficiency under section 131 15 554.9615, the secured party shall: 131 16 a. send an explanation to the debtor or consumer obligor, 131 17 as applicable, after the disposition and: 131 18 (1) before or when the secured party accounts to the 131 19 debtor and pays any surplus or first makes written demand on 131 20 the consumer obligor after the disposition for payment of the 131 21 deficiency; and 131 22 (2) within fourteen days after receipt of a request; or 131 23 b. in the case of a consumer obligor who is liable for a 131 24 deficiency, within fourteen days after receipt of a request, 131 25 send to the consumer obligor a record waiving the secured 131 26 party's right to a deficiency. 131 27 3. REQUIRED INFORMATION. To comply with subsection 1, 131 28 paragraph "a", subparagraph (2), a writing must provide the 131 29 following information in the following order: 131 30 a. the aggregate amount of obligations secured by the 131 31 security interest under which the disposition was made, and, 131 32 if the amount reflects a rebate of unearned interest or credit 131 33 service charge, an indication of that fact, calculated as of a 131 34 specified date: 131 35 (1) if the secured party takes or receives possession of 132 1 the collateral after default, not more than thirty-five days 132 2 before the secured party takes or receives possession; or 132 3 (2) if the secured party takes or receives possession of 132 4 the collateral before default or does not take possession of 132 5 the collateral, not more than thirty-five days before the 132 6 disposition; 132 7 b. the amount of proceeds of the disposition; 132 8 c. the aggregate amount of the obligations after deducting 132 9 the amount of proceeds; 132 10 d. the amount, in the aggregate or by type, and types of 132 11 expenses, including expenses of retaking, holding, preparing 132 12 for disposition, processing, and disposing of the collateral, 132 13 and attorney's fees secured by the collateral which are known 132 14 to the secured party and relate to the current disposition; 132 15 e. the amount, in the aggregate or by type, and types of 132 16 credits, including rebates of interest or credit service 132 17 charges, to which the obligor is known to be entitled and 132 18 which are not reflected in the amount in paragraph "a"; and 132 19 f. the amount of the surplus or deficiency. 132 20 4. SUBSTANTIAL COMPLIANCE. A particular phrasing of the 132 21 explanation is not required. An explanation complying 132 22 substantially with the requirements of subsection 1 is 132 23 sufficient, even if it includes minor errors that are not 132 24 seriously misleading. 132 25 5. CHARGES FOR RESPONSES. A debtor or consumer obligor is 132 26 entitled without charge to one response to a request under 132 27 this section during any six-month period in which the secured 132 28 party did not send to the debtor or consumer obligor an 132 29 explanation pursuant to subsection 2, paragraph "a". The 132 30 secured party may require payment of a charge not exceeding 132 31 twenty-five dollars for each additional response. 132 32 Sec. 115. NEW SECTION. 554.9617 RIGHTS OF TRANSFEREE OF 132 33 COLLATERAL. 132 34 1. EFFECTS OF DISPOSITION. A secured party's disposition 132 35 of collateral after default: 133 1 a. transfers to a transferee for value all of the debtor's 133 2 rights in the collateral; 133 3 b. discharges the security interest under which the 133 4 disposition is made; and 133 5 c. discharges any subordinate security interest or other 133 6 subordinate lien. 133 7 2. RIGHTS OF GOOD-FAITH TRANSFEREE. A transferee that 133 8 acts in good faith takes free of the rights and interests 133 9 described in subsection 1, even if the secured party fails to 133 10 comply with this Article or the requirements of any judicial 133 11 proceeding. 133 12 3. RIGHTS OF OTHER TRANSFEREE. If a transferee does not 133 13 take free of the rights and interests described in subsection 133 14 1, the transferee takes the collateral subject to: 133 15 a. the debtor's rights in the collateral; 133 16 b. the security interest or agricultural lien under which 133 17 the disposition is made; and 133 18 c. any other security interest or other lien. 133 19 Sec. 116. NEW SECTION. 554.9618 RIGHTS AND DUTIES OF 133 20 CERTAIN SECONDARY OBLIGORS. 133 21 1. RIGHTS AND DUTIES OF SECONDARY OBLIGOR. A secondary 133 22 obligor acquires the rights and becomes obligated to perform 133 23 the duties of the secured party after the secondary obligor: 133 24 a. receives an assignment of a secured obligation from the 133 25 secured party; 133 26 b. receives a transfer of collateral from the secured 133 27 party and agrees to accept the rights and assume the duties of 133 28 the secured party; or 133 29 c. is subrogated to the rights of a secured party with 133 30 respect to collateral. 133 31 2. EFFECT OF ASSIGNMENT, TRANSFER, OR SUBROGATION. An 133 32 assignment, transfer, or subrogation described in subsection 133 33 1: 133 34 a. is not a disposition of collateral under section 133 35 554.9610; and 134 1 b. relieves the secured party of further duties under this 134 2 Article. 134 3 Sec. 117. NEW SECTION. 554.9619 TRANSFER OF RECORD OR 134 4 LEGAL TITLE. 134 5 1. TRANSFER STATEMENT. In this section, "transfer 134 6 statement" means a record authenticated by a secured party 134 7 stating: 134 8 a. that the debtor has defaulted in connection with an 134 9 obligation secured by specified collateral; 134 10 b. that the secured party has exercised its post-default 134 11 remedies with respect to the collateral; 134 12 c. that, by reason of the exercise, a transferee has 134 13 acquired the rights of the debtor in the collateral; and 134 14 d. the name and mailing address of the secured party, 134 15 debtor, and transferee. 134 16 2. EFFECT OF TRANSFER STATEMENT. A transfer statement 134 17 entitles the transferee to the transfer of record of all 134 18 rights of the debtor in the collateral specified in the 134 19 statement in any official filing, recording, registration, or 134 20 certificate-of-title system covering the collateral. If a 134 21 transfer statement is presented with the applicable fee and 134 22 request form to the official or office responsible for 134 23 maintaining the system, the official or office shall: 134 24 a. accept the transfer statement; 134 25 b. promptly amend its records to reflect the transfer; and 134 26 c. if applicable, issue a new appropriate certificate of 134 27 title in the name of the transferee. 134 28 3. TRANSFER NOT A DISPOSITION – NO RELIEF OF SECURED 134 29 PARTY'S DUTIES. A transfer of the record or legal title to 134 30 collateral to a secured party under subsection 2 or otherwise 134 31 is not of itself a disposition of collateral under this 134 32 Article and does not of itself relieve the secured party of 134 33 its duties under this Article. 134 34 Sec. 118. NEW SECTION. 554.9620 ACCEPTANCE OF COLLATERAL 134 35 IN FULL OR PARTIAL SATISFACTION OF OBLIGATION – COMPULSORY 135 1 DISPOSITION OF COLLATERAL. 135 2 1. CONDITIONS TO ACCEPTANCE IN SATISFACTION. Except as 135 3 otherwise provided in subsection 7, a secured party may accept 135 4 collateral in full or partial satisfaction of the obligation 135 5 it secures only if: 135 6 a. the debtor consents to the acceptance under subsection 135 7 3; 135 8 b. the secured party does not receive, within the time set 135 9 forth in subsection 4, a notification of objection to the 135 10 proposal authenticated by: 135 11 (1) a person to which the secured party was required to 135 12 send a proposal under section 554.9621; or 135 13 (2) any other person, other than the debtor, holding an 135 14 interest in the collateral subordinate to the security 135 15 interest that is the subject of the proposal; 135 16 c. if the collateral is consumer goods, the collateral is 135 17 not in the possession of the debtor when the debtor consents 135 18 to the acceptance; and 135 19 d. subsection 5 does not require the secured party to 135 20 dispose of the collateral or the debtor waives the requirement 135 21 pursuant to section 554.9624. 135 22 2. PURPORTED ACCEPTANCE INEFFECTIVE. A purported or 135 23 apparent acceptance of collateral under this section is 135 24 ineffective unless: 135 25 a. the secured party consents to the acceptance in an 135 26 authenticated record or sends a proposal to the debtor; and 135 27 b. the conditions of subsection 1 are met. 135 28 3. DEBTOR'S CONSENT. For purposes of this section: 135 29 a. a debtor consents to an acceptance of collateral in 135 30 partial satisfaction of the obligation it secures only if the 135 31 debtor agrees to the terms of the acceptance in a record 135 32 authenticated after default; and 135 33 b. a debtor consents to an acceptance of collateral in 135 34 full satisfaction of the obligation it secures only if the 135 35 debtor agrees to the terms of the acceptance in a record 136 1 authenticated after default or the secured party: 136 2 (1) sends to the debtor after default a proposal that is 136 3 unconditional or subject only to a condition that collateral 136 4 not in the possession of the secured party be preserved or 136 5 maintained; 136 6 (2) in the proposal, proposes to accept collateral in full 136 7 satisfaction of the obligation it secures; and 136 8 (3) does not receive a notification of objection 136 9 authenticated by the debtor within twenty days after the 136 10 proposal is sent. 136 11 4. EFFECTIVENESS OF NOTIFICATION. To be effective under 136 12 subsection 1, paragraph "b", a notification of objection must 136 13 be received by the secured party: 136 14 a. in the case of a person to which the proposal was sent 136 15 pursuant to section 554.9621, within twenty days after 136 16 notification was sent to that person; and 136 17 b. in other cases: 136 18 (1) within twenty days after the last notification was 136 19 sent pursuant to section 554.9621; or 136 20 (2) if a notification was not sent, before the debtor 136 21 consents to the acceptance under subsection 3. 136 22 5. MANDATORY DISPOSITION OF CONSUMER GOODS. A secured 136 23 party that has taken possession of collateral shall dispose of 136 24 the collateral pursuant to section 554.9610 within the time 136 25 specified in subsection 6 if: 136 26 a. sixty percent of the cash price has been paid in the 136 27 case of a purchase-money security interest in consumer goods; 136 28 or 136 29 b. sixty percent of the principal amount of the obligation 136 30 secured has been paid in the case of a non-purchase-money 136 31 security interest in consumer goods. 136 32 6. COMPLIANCE WITH MANDATORY DISPOSITION REQUIREMENT. To 136 33 comply with subsection 5, the secured party shall dispose of 136 34 the collateral: 136 35 a. within ninety days after taking possession; or 137 1 b. within any longer period to which the debtor and all 137 2 secondary obligors have agreed in an agreement to that effect 137 3 entered into and authenticated after default. 137 4 7. NO PARTIAL SATISFACTION IN CONSUMER TRANSACTION. In a 137 5 consumer transaction, a secured party may not accept 137 6 collateral in partial satisfaction of the obligation it 137 7 secures. 137 8 Sec. 119. NEW SECTION. 554.9621 NOTIFICATION OF PROPOSAL 137 9 TO ACCEPT COLLATERAL. 137 10 1. PERSONS TO WHICH PROPOSAL TO BE SENT. A secured party 137 11 that desires to accept collateral in full or partial 137 12 satisfaction of the obligation it secures shall send its 137 13 proposal to: 137 14 a. any person from which the secured party has received, 137 15 before the debtor consented to the acceptance, an 137 16 authenticated notification of a claim of an interest in the 137 17 collateral; 137 18 b. any other secured party or lienholder that, ten days 137 19 before the debtor consented to the acceptance, held a security 137 20 interest in or other lien on the collateral perfected by the 137 21 filing of a financing statement that: 137 22 (1) identified the collateral; 137 23 (2) was indexed under the debtor's name as of that date; 137 24 and 137 25 (3) was filed in the office or offices in which to file a 137 26 financing statement against the debtor covering the collateral 137 27 as of that date; and 137 28 c. any other secured party that, ten days before the 137 29 debtor consented to the acceptance, held a security interest 137 30 in the collateral perfected by compliance with a statute, 137 31 regulation, or treaty described in section 554.9311, 137 32 subsection 1. 137 33 2. PROPOSAL TO BE SENT TO SECONDARY OBLIGOR IN PARTIAL 137 34 SATISFACTION. A secured party that desires to accept 137 35 collateral in partial satisfaction of the obligation it 138 1 secures shall send its proposal to any secondary obligor in 138 2 addition to the persons described in subsection 1. 138 3 Sec. 120. NEW SECTION. 554.9622 EFFECT OF ACCEPTANCE OF 138 4 COLLATERAL. 138 5 1. EFFECT OF ACCEPTANCE. A secured party's acceptance of 138 6 collateral in full or partial satisfaction of the obligation 138 7 it secures: 138 8 a. discharges the obligation to the extent consented to by 138 9 the debtor; 138 10 b. transfers to the secured party all of a debtor's rights 138 11 in the collateral; 138 12 c. discharges the security interest or agricultural lien 138 13 that is the subject of the debtor's consent and any 138 14 subordinate security interest or other subordinate lien; and 138 15 d. terminates any other subordinate interest. 138 16 2. DISCHARGE OF SUBORDINATE INTEREST NOTWITHSTANDING 138 17 NONCOMPLIANCE. A subordinate interest is discharged or 138 18 terminated under subsection 1, even if the secured party fails 138 19 to comply with this Article. 138 20 Sec. 121. NEW SECTION. 554.9623 RIGHT TO REDEEM 138 21 COLLATERAL. 138 22 1. PERSONS THAT MAY REDEEM. A debtor, any secondary 138 23 obligor, or any other secured party or lienholder may redeem 138 24 collateral. 138 25 2. REQUIREMENTS FOR REDEMPTION. To redeem collateral, a 138 26 person shall tender: 138 27 a. fulfillment of all obligations secured by the 138 28 collateral; and 138 29 b. the reasonable expenses and attorney's fees described 138 30 in section 554.9615, subsection 1, paragraph "a". 138 31 3. WHEN REDEMPTION MAY OCCUR. A redemption may occur at 138 32 any time before a secured party: 138 33 a. has collected collateral under section 554.9607; 138 34 b. has disposed of collateral or entered into a contract 138 35 for its disposition under section 554.9610; or 139 1 c. has accepted collateral in full or partial satisfaction 139 2 of the obligation it secures under section 554.9622. 139 3 Sec. 122. NEW SECTION. 554.9624 WAIVER. 139 4 1. WAIVER OF DISPOSITION NOTIFICATION. A debtor or 139 5 secondary obligor may waive the right to notification of 139 6 disposition of collateral under section 554.9611 only by an 139 7 agreement to that effect entered into and authenticated after 139 8 default. 139 9 2. WAIVER OF MANDATORY DISPOSITION. A debtor may waive 139 10 the right to require disposition of collateral under section 139 11 554.9620, subsection 5, only by an agreement to that effect 139 12 entered into and authenticated after default. 139 13 3. WAIVER OF REDEMPTION RIGHT. Except in a consumer-goods 139 14 transaction, a debtor or secondary obligor may waive the right 139 15 to redeem collateral under section 554.9623 only by an 139 16 agreement to that effect entered into and authenticated after 139 17 default. 139 18 B. NONCOMPLIANCE WITH ARTICLE 139 19 Sec. 123. NEW SECTION. 554.9625 REMEDIES FOR SECURED 139 20 PARTY'S FAILURE TO COMPLY WITH ARTICLE. 139 21 1. JUDICIAL ORDERS CONCERNING NONCOMPLIANCE. If it is 139 22 established that a secured party is not proceeding in 139 23 accordance with this Article, a court may order or restrain 139 24 collection, enforcement, or disposition of collateral on 139 25 appropriate terms and conditions. 139 26 2. DAMAGES FOR NONCOMPLIANCE. Subject to subsections 3, 139 27 4, and 6, a person is liable for damages in the amount of any 139 28 loss caused by a failure to comply with this Article. Loss 139 29 caused by a failure to comply may include loss resulting from 139 30 the debtor's inability to obtain, or increased costs of, 139 31 alternative financing. 139 32 3. PERSONS ENTITLED TO RECOVER DAMAGES – STATUTORY 139 33 DAMAGES IN CONSUMER-GOODS TRANSACTION. Except as otherwise 139 34 provided in section 554.9628: 139 35 a. a person that, at the time of the failure, was a 140 1 debtor, was an obligor, or held a security interest in or 140 2 other lien on the collateral may recover damages under 140 3 subsection 2 for its loss; and 140 4 b. if the collateral is consumer goods, a person that was 140 5 a debtor or a secondary obligor at the time a secured party 140 6 failed to comply with this part may recover for that failure 140 7 in any event an amount not less than the credit service charge 140 8 plus ten percent of the principal amount of the obligation or 140 9 the time-price differential plus ten percent of the cash 140 10 price. 140 11 4. RECOVERY WHEN DEFICIENCY ELIMINATED OR REDUCED. A 140 12 debtor whose deficiency is eliminated under section 554.9626 140 13 may recover damages for the loss of any surplus. However, a 140 14 debtor or secondary obligor whose deficiency is eliminated or 140 15 reduced under section 554.9626 may not otherwise recover under 140 16 subsection 2 for noncompliance with the provisions of this 140 17 part relating to collection, enforcement, disposition, or 140 18 acceptance. 140 19 5. STATUTORY DAMAGES – NONCOMPLIANCE WITH SPECIFIED 140 20 PROVISIONS. In addition to any damages recoverable under 140 21 subsection 2, the debtor, consumer obligor, or person named as 140 22 a debtor in a filed record, as applicable, may recover five 140 23 hundred dollars in each case from a person that: 140 24 a. fails to comply with section 554.9208; 140 25 b. fails to comply with section 554.9209; 140 26 c. files a record that the person is not entitled to file 140 27 under section 554.9509, subsection 1; 140 28 d. fails to cause the secured party of record to file or 140 29 send a termination statement as required by section 554.9513, 140 30 subsection 1 or 3; 140 31 e. fails to comply with section 554.9616, subsection 2, 140 32 paragraph "a", and whose failure is part of a pattern, or 140 33 consistent with a practice, of noncompliance; or 140 34 f. fails to comply with section 554.9616, subsection 2, 140 35 paragraph "b". 141 1 6. STATUTORY DAMAGES – NONCOMPLIANCE WITH SECTION 141 2 554.9210. A debtor or consumer obligor may recover damages 141 3 under subsection 2 and, in addition, five hundred dollars in 141 4 each case from a person that, without reasonable cause, fails 141 5 to comply with a request under section 554.9210. A recipient 141 6 of a request under section 554.9210 which never claimed an 141 7 interest in the collateral or obligations that are the subject 141 8 of a request under that section has a reasonable excuse for 141 9 failure to comply with the request within the meaning of this 141 10 subsection. 141 11 7. LIMITATION OF SECURITY INTEREST – NONCOMPLIANCE WITH 141 12 SECTION 554.9210. If a secured party fails to comply with a 141 13 request regarding a list of collateral or a statement of 141 14 account under section 554.9210, the secured party may claim a 141 15 security interest only as shown in the list or statement 141 16 included in the request as against a person that is reasonably 141 17 misled by the failure. 141 18 Sec. 124. NEW SECTION. 554.9626 ACTION IN WHICH 141 19 DEFICIENCY OR SURPLUS IS IN ISSUE. 141 20 1. APPLICABLE RULES IF AMOUNT OF DEFICIENCY OR SURPLUS IN 141 21 ISSUE. In an action arising from a transaction, other than a 141 22 consumer transaction, in which the amount of a deficiency or 141 23 surplus is in issue, the following rules apply: 141 24 a. a secured party need not prove compliance with the 141 25 provisions of this part relating to collection, enforcement, 141 26 disposition, or acceptance unless the debtor or a secondary 141 27 obligor places the secured party's compliance in issue. 141 28 b. if the secured party's compliance is placed in issue, 141 29 the secured party has the burden of establishing that the 141 30 collection, enforcement, disposition, or acceptance was 141 31 conducted in accordance with this part. 141 32 c. except as otherwise provided in section 554.9628, if a 141 33 secured party fails to prove that the collection, enforcement, 141 34 disposition, or acceptance was conducted in accordance with 141 35 the provisions of this part relating to collection, 142 1 enforcement, disposition, or acceptance, the liability of a 142 2 debtor or a secondary obligor for a deficiency is limited to 142 3 an amount by which the sum of the secured obligation, 142 4 expenses, and attorney's fees exceeds the greater of: 142 5 (1) the proceeds of the collection, enforcement, 142 6 disposition, or acceptance; or 142 7 (2) the amount of proceeds that would have been realized 142 8 had the noncomplying secured party proceeded in accordance 142 9 with the provisions of this part relating to collection, 142 10 enforcement, disposition, or acceptance. 142 11 d. for purposes of paragraph "c", subparagraph (2), the 142 12 amount of proceeds that would have been realized is equal to 142 13 the sum of the secured obligation, expenses, and attorney's 142 14 fees unless the secured party proves that the amount is less 142 15 than that sum. 142 16 e. if a deficiency or surplus is calculated under section 142 17 554.9615, subsection 6, the debtor or obligor has the burden 142 18 of establishing that the amount of proceeds of the disposition 142 19 is significantly below the range of prices that a complying 142 20 disposition to a person other than the secured party, a person 142 21 related to the secured party, or a secondary obligor would 142 22 have brought. 142 23 2. NONCONSUMER TRANSACTIONS – NO INFERENCE. The 142 24 limitation of the rules in subsection 1 to transactions other 142 25 than consumer transactions is intended to leave to the court 142 26 the determination of the proper rules in consumer 142 27 transactions. The court may not infer from that limitation 142 28 the nature of the proper rule in consumer transactions and may 142 29 continue to apply established approaches. 142 30 Sec. 125. NEW SECTION. 554.9627 DETERMINATION OF WHETHER 142 31 CONDUCT WAS COMMERCIALLY REASONABLE. 142 32 1. GREATER AMOUNT OBTAINABLE UNDER OTHER CIRCUMSTANCES – 142 33 NO PRECLUSION OF COMMERCIAL REASONABLENESS. The fact that a 142 34 greater amount could have been obtained by a collection, 142 35 enforcement, disposition, or acceptance at a different time or 143 1 in a different method from that selected by the secured party 143 2 is not of itself sufficient to preclude the secured party from 143 3 establishing that the collection, enforcement, disposition, or 143 4 acceptance was made in a commercially reasonable manner. 143 5 2. DISPOSITIONS THAT ARE COMMERCIALLY REASONABLE. A 143 6 disposition of collateral is made in a commercially reasonable 143 7 manner if the disposition is made: 143 8 a. in the usual manner on any recognized market; 143 9 b. at the price current in any recognized market at the 143 10 time of the disposition; or 143 11 c. otherwise in conformity with reasonable commercial 143 12 practices among dealers in the type of property that was the 143 13 subject of the disposition. 143 14 3. APPROVAL BY COURT OR ON BEHALF OF CREDITORS. A 143 15 collection, enforcement, disposition, or acceptance is 143 16 commercially reasonable if it has been approved: 143 17 a. in a judicial proceeding; 143 18 b. by a bona fide creditors' committee; 143 19 c. by a representative of creditors; or 143 20 d. by an assignee for the benefit of creditors. 143 21 4. APPROVAL UNDER SUBSECTION 3 NOT NECESSARY – ABSENCE OF 143 22 APPROVAL HAS NO EFFECT. Approval under subsection 3 need not 143 23 be obtained, and lack of approval does not mean that the 143 24 collection, enforcement, disposition, or acceptance is not 143 25 commercially reasonable. 143 26 Sec. 126. NEW SECTION. 554.9628 NONLIABILITY AND 143 27 LIMITATION ON LIABILITY OF SECURED PARTY – LIABILITY OF 143 28 SECONDARY OBLIGOR. 143 29 1. LIMITATION OF LIABILITY OF SECURED PARTY FOR 143 30 NONCOMPLIANCE WITH ARTICLE. Unless a secured party knows that 143 31 a person is a debtor or obligor, knows the identity of the 143 32 person, and knows how to communicate with the person: 143 33 a. the secured party is not liable to the person, or to a 143 34 secured party or lienholder that has filed a financing 143 35 statement against the person, for failure to comply with this 144 1 Article; and 144 2 b. the secured party's failure to comply with this Article 144 3 does not affect the liability of the person for a deficiency. 144 4 2. LIMITATION OF LIABILITY BASED ON STATUS AS SECURED 144 5 PARTY. A secured party is not liable because of its status as 144 6 secured party: 144 7 a. to a person that is a debtor or obligor, unless the 144 8 secured party knows: 144 9 (1) that the person is a debtor or obligor; 144 10 (2) the identity of the person; and 144 11 (3) how to communicate with the person; or 144 12 b. to a secured party or lienholder that has filed a 144 13 financing statement against a person, unless the secured party 144 14 knows: 144 15 (1) that the person is a debtor; and 144 16 (2) the identity of the person. 144 17 3. LIMITATION OF LIABILITY IF REASONABLE BELIEF THAT 144 18 TRANSACTION NOT A CONSUMER-GOODS TRANSACTION OR CONSUMER 144 19 TRANSACTION. A secured party is not liable to any person, and 144 20 a person's liability for a deficiency is not affected, because 144 21 of any act or omission arising out of the secured party's 144 22 reasonable belief that a transaction is not a consumer-goods 144 23 transaction or a consumer transaction or that goods are not 144 24 consumer goods, if the secured party's belief is based on its 144 25 reasonable reliance on: 144 26 a. a debtor's representation concerning the purpose for 144 27 which collateral was to be used, acquired, or held; or 144 28 b. an obligor's representation concerning the purpose for 144 29 which a secured obligation was incurred. 144 30 4. LIMITATION OF LIABILITY FOR STATUTORY DAMAGES. A 144 31 secured party is not liable to any person under section 144 32 554.9625, subsection 3, paragraph "b", for its failure to 144 33 comply with section 554.9616. 144 34 5. LIMITATION OF MULTIPLE LIABILITY FOR STATUTORY DAMAGES. 144 35 A secured party is not liable under section 554.9625, 145 1 subsection 3, paragraph "b", more than once with respect to 145 2 any one secured obligation. 145 3 PART 7 145 4 TRANSITION 145 5 Sec. 127. NEW SECTION. 554.9701 EFFECTIVE DATE. 145 6 This Article takes effect on July 1, 2001. 145 7 Sec. 128. NEW SECTION. 554.9702 SAVINGS CLAUSE. 145 8 1. PRE-EFFECTIVE-DATE TRANSACTIONS OR LIENS. Except as 145 9 otherwise provided in this part, this Act applies to a 145 10 transaction or lien within its scope, even if the transaction 145 11 or lien was entered into or created before this Act takes 145 12 effect. 145 13 2. CONTINUING VALIDITY. Except as otherwise provided in 145 14 subsection 3 and sections 554.9703, 554.9704, 554.9705, 145 15 554.9706, 554.9707, 554.9708, and 554.9709: 145 16 a. transactions and liens that were not governed by former 145 17 Article 9, were validly entered into or created before this 145 18 Act takes effect, and would be subject to this Act if they had 145 19 been entered into or created after this Act takes effect, and 145 20 the rights, duties, and interests flowing from those 145 21 transactions and liens remain valid after this Act takes 145 22 effect; and 145 23 b. the transactions and liens may be terminated, 145 24 completed, consummated, and enforced as required or permitted 145 25 by this Act or by the law that otherwise would apply if this 145 26 Act had not taken effect. 145 27 3. PRE-EFFECTIVE-DATE PROCEEDINGS. This Act does not 145 28 affect an action, case, or proceeding commenced before this 145 29 Act takes effect. 145 30 Sec. 129. NEW SECTION. 554.9703 SECURITY INTEREST 145 31 PERFECTED BEFORE EFFECTIVE DATE. 145 32 1. CONTINUING PRIORITY OVER LIEN CREDITOR – PERFECTION 145 33 REQUIREMENTS SATISFIED. A security interest that is 145 34 enforceable immediately before this Act takes effect and would 145 35 have priority over the rights of a person that becomes a lien 146 1 creditor at that time is a perfected security interest under 146 2 this Act if, when this Act takes effect, the applicable 146 3 requirements for enforceability and perfection under this Act 146 4 are satisfied without further action. 146 5 2. CONTINUING PRIORITY OVER LIEN CREDITOR – PERFECTION 146 6 REQUIREMENTS NOT SATISFIED. Except as otherwise provided in 146 7 section 554.9705, if, immediately before this Act takes 146 8 effect, a security interest is enforceable and would have 146 9 priority over the rights of a person that becomes a lien 146 10 creditor at that time, but the applicable requirements for 146 11 enforceability or perfection under this Act are not satisfied 146 12 when this Act takes effect, the security interest: 146 13 a. is a perfected security interest for one year after 146 14 this Act takes effect; 146 15 b. remains enforceable thereafter only if the security 146 16 interest becomes enforceable under section 554.9203 before the 146 17 year expires; and 146 18 c. remains perfected thereafter only if the applicable 146 19 requirements for perfection under this Act are satisfied 146 20 before the year expires. 146 21 Sec. 130. NEW SECTION. 554.9704 SECURITY INTEREST 146 22 UNPERFECTED BEFORE EFFECTIVE DATE. 146 23 A security interest that is enforceable immediately before 146 24 this Act takes effect but which would be subordinate to the 146 25 rights of a person that becomes a lien creditor at that time: 146 26 1. remains an enforceable security interest for one year 146 27 after this Act takes effect; 146 28 2. remains enforceable thereafter if the security interest 146 29 becomes enforceable under section 554.9203 when this Act takes 146 30 effect or within one year thereafter; and 146 31 3. becomes perfected: 146 32 a. without further action, when this Act takes effect if 146 33 the applicable requirements for perfection under this Act are 146 34 satisfied before or at that time; or 146 35 b. when the applicable requirements for perfection are 147 1 satisfied if the requirements are satisfied after that time. 147 2 Sec. 131. NEW SECTION. 554.9705 EFFECTIVENESS OF ACTION 147 3 TAKEN BEFORE EFFECTIVE DATE. 147 4 1. PRE-EFFECTIVE-DATE ACTION – ONE-YEAR PERFECTION PERIOD 147 5 UNLESS REPERFECTED. If action, other than the filing of a 147 6 financing statement, is taken before this Act takes effect and 147 7 the action would have resulted in priority of a security 147 8 interest over the rights of a person that becomes a lien 147 9 creditor had the security interest become enforceable before 147 10 this Act takes effect, the action is effective to perfect a 147 11 security interest that attaches under this Act within one year 147 12 after this Act takes effect. An attached security interest 147 13 becomes unperfected one year after this Act takes effect 147 14 unless the security interest becomes a perfected security 147 15 interest under this Act before the expiration of that period. 147 16 2. PRE-EFFECTIVE-DATE FILING. The filing of a financing 147 17 statement before this Act takes effect is effective to perfect 147 18 a security interest to the extent the filing would satisfy the 147 19 applicable requirements for perfection under this Act. 147 20 3. PRE-EFFECTIVE-DATE FILING IN JURISDICTION FORMERLY 147 21 GOVERNING PERFECTION. This Act does not render ineffective an 147 22 effective financing statement that, before this Act takes 147 23 effect, is filed and satisfies the applicable requirements for 147 24 perfection under the law of the jurisdiction governing 147 25 perfection as provided in former section 554.9103. However, 147 26 except as otherwise provided in subsections 4 and 5 and 147 27 section 554.9706, the financing statement ceases to be 147 28 effective at the earlier of: 147 29 a. the time the financing statement would have ceased to 147 30 be effective under the law of the jurisdiction in which it is 147 31 filed; or 147 32 b. June 30, 2006. 147 33 4. CONTINUATION STATEMENT. The filing of a continuation 147 34 statement after this Act takes effect does not continue the 147 35 effectiveness of the financing statement filed before this Act 148 1 takes effect. However, upon the timely filing of a 148 2 continuation statement after this Act takes effect and in 148 3 accordance with the law of the jurisdiction governing 148 4 perfection as provided in part 3, the effectiveness of a 148 5 financing statement filed in the same office in that 148 6 jurisdiction before this Act takes effect continues for the 148 7 period provided by the law of that jurisdiction. 148 8 5. APPLICATION OF SUBSECTION 3, PARAGRAPH "b", TO 148 9 TRANSMITTING UTILITY FINANCING STATEMENT. Subsection 3, 148 10 paragraph "b", applies to a financing statement that, before 148 11 this Act takes effect, is filed against a transmitting utility 148 12 and satisfies the applicable requirements for perfection under 148 13 the law of the jurisdiction governing perfection as provided 148 14 in former section 554.9103 only to the extent that part 3 148 15 provides that the law of a jurisdiction other than the 148 16 jurisdiction in which the financing statement is filed governs 148 17 perfection of a security interest in collateral covered by the 148 18 financing statement. 148 19 6. APPLICATION OF PART 5. A financing statement that 148 20 includes a financing statement filed before this Act takes 148 21 effect and a continuation statement filed after this Act takes 148 22 effect is effective only to the extent that it satisfies the 148 23 requirements of part 5 for an initial financing statement. 148 24 Sec. 132. NEW SECTION. 554.9706 WHEN INITIAL FINANCING 148 25 STATEMENT SUFFICES TO CONTINUE EFFECTIVENESS OF FINANCING 148 26 STATEMENT. 148 27 1. INITIAL FINANCING STATEMENT IN LIEU OF CONTINUATION 148 28 STATEMENT. The filing of an initial financing statement in 148 29 the office specified in section 554.9501 continues the 148 30 effectiveness of a financing statement filed before this Act 148 31 takes effect if: 148 32 a. the filing of an initial financing statement in that 148 33 office would be effective to perfect a security interest under 148 34 this Act; 148 35 b. the pre-effective-date financing statement was filed in 149 1 an office in another state or another office in this state; 149 2 and 149 3 c. the initial financing statement satisfies subsection 3. 149 4 2. PERIOD OF CONTINUED EFFECTIVENESS. The filing of an 149 5 initial financing statement under subsection 1 continues the 149 6 effectiveness of the pre-effective-date financing statement: 149 7 a. if the initial financing statement is filed before this 149 8 Act takes effect, for the period provided in former section 149 9 554.9403 with respect to a financing statement; and 149 10 b. if the initial financing statement is filed after this 149 11 Act takes effect, for the period provided in section 554.9515 149 12 with respect to an initial financing statement. 149 13 3. REQUIREMENTS FOR INITIAL FINANCING STATEMENT UNDER 149 14 SUBSECTION 1. To be effective for purposes of subsection 1, 149 15 an initial financing statement must: 149 16 a. satisfy the requirements of part 5 for an initial 149 17 financing statement; 149 18 b. identify the pre-effective-date financing statement by 149 19 indicating the office in which the financing statement was 149 20 filed and providing the dates of filing and file numbers, if 149 21 any, of the financing statement and of the most recent 149 22 continuation statement filed with respect to the financing 149 23 statement; and 149 24 c. indicate that the pre-effective-date financing 149 25 statement remains effective. 149 26 Sec. 133. NEW SECTION. 554.9707 AMENDMENT OF PRE- 149 27 EFFECTIVE-DATE FINANCING STATEMENT. 149 28 1. PRE-EFFECTIVE-DATE FINANCING STATEMENT. In this 149 29 section, "pre-effective-date financing statement" means a 149 30 financing statement filed before this Act takes effect. 149 31 2. APPLICABLE LAW. After this Act takes effect, a person 149 32 may add or delete collateral covered by, continue or terminate 149 33 the effectiveness of, or otherwise amend the information 149 34 provided in, a pre-effective-date financing statement only in 149 35 accordance with the law of the jurisdiction governing 150 1 perfection as provided in part 3. However, the effectiveness 150 2 of pre-effective-date financing statement also may be 150 3 terminated in accordance with the law of the jurisdiction in 150 4 which the financing statement is filed. 150 5 3. METHOD OF AMENDING – GENERAL RULE. Except as 150 6 otherwise provided in subsection 4, if the law of this state 150 7 governs perfection of a security interest, the information in 150 8 a pre-effective-date financing statement may be amended after 150 9 this Act takes effect only if: 150 10 a. The pre-effective-date financing statement and an 150 11 amendment are filed in the office specified in section 150 12 554.9501; or 150 13 b. An amendment is filed in the office specified in 150 14 section 554.9501 concurrently with, or after the filing in 150 15 that office of, an initial financing statement that satisfies 150 16 section 554.9706, subsection 3; or 150 17 c. An initial financing statement that provides the 150 18 information as amended and satisfies section 554.9706, 150 19 subsection 3 is filed in the office specified in section 150 20 554.9501. 150 21 4. METHOD OF AMENDING – CONTINUATION. If the law of this 150 22 state governs perfection of a security interest, the 150 23 effectiveness of a pre-effective-date financing statement may 150 24 be continued only under section 554.9705, subsections 4 and 6 150 25 or section 554.9706. 150 26 5. METHOD OF AMENDING – ADDITIONAL TERMINATION RULE. 150 27 Whether or not the law of this state governs perfection of a 150 28 security interest, the effectiveness of a pre-effective-date 150 29 financing statement filed in this state may be terminated 150 30 after this Act takes effect by filing a termination statement 150 31 in the office in which the pre-effective-date financing 150 32 statement is filed, unless an initial financing statement that 150 33 satisfies section 554.9706, subsection 3, has been filed in 150 34 the office specified by the law of the jurisdiction governing 150 35 perfection as provided in part 3 as the office in which to 151 1 file a financing statement. 151 2 Sec. 134. NEW SECTION. 554.9708 PERSONS ENTITLED TO FILE 151 3 INITIAL FINANCING STATEMENT OR CONTINUATION STATEMENT. 151 4 A person may file an initial financing statement or a 151 5 continuation statement under this part if: 151 6 1. the secured party of record authorizes the filing; and 151 7 2. the filing is necessary under this part: 151 8 a. to continue the effectiveness of a financing statement 151 9 filed before this Act takes effect; or 151 10 b. to perfect or continue the perfection of a security 151 11 interest. 151 12 Sec. 135. NEW SECTION. 554.9709 PRIORITY. 151 13 1. LAW GOVERNING PRIORITY. This Act determines the 151 14 priority of conflicting claims to collateral. However, if the 151 15 relative priorities of the claims were established before this 151 16 Act takes effect, former Article 9 determines priority. 151 17 2. PRIORITY IF SECURITY INTEREST BECOMES ENFORCEABLE UNDER 151 18 SECTION 554.9203. For purposes of section 554.9322, 151 19 subsection 1, the priority of a security interest that becomes 151 20 enforceable under section 554.9203 of this Act dates from the 151 21 time this Act takes effect if the security interest is 151 22 perfected under this Act by the filing of a financing 151 23 statement before this Act takes effect which would not have 151 24 been effective to perfect the security interest under former 151 25 Article 9. This subsection does not apply to conflicting 151 26 security interests each of which is perfected by the filing of 151 27 such a financing statement. 151 28 Sec. 136. NEW SECTION. 554.9710 "FORMER" DEFINED. 151 29 References in this part to "former Article 9" or a former 151 30 section are to that Article or section as in effect 151 31 immediately before this Act takes effect. 151 32 DIVISION II 151 33 CONFORMING AMENDMENTS TO CODE CHAPTER 554 151 34 Sec. 137. Section 554.1105, subsection 2, Code 1999, is 151 35 amended to read as follows: 152 1 2. Where one of the following provisions of this chapter 152 2 specifies the applicable law, that provision governs and a 152 3 contrary agreement is effective only to the extent permitted 152 4 by the law (including the conflict of laws rules) so 152 5 specified: 152 6 Rights of creditors against sold goods. Section 554.2402. 152 7 Applicability of the Article on Bank Deposits and 152 8 Collections. Section 554.4102. 152 9 Letters of Credit. Section 554.5116. 152 10 Applicability of the Article on Investment Securities. 152 11 Section 554.8110. 152 12Perfection provisions of the Article on Secured152 13Transactions. Section 554.9103.152 14 Law governing perfection, the effect of perfection or 152 15 nonperfection, and the priority of security interests and 152 16 agricultural liens. Sections 554.9301, 554.9302, 554.9303, 152 17 554.9304, 554.9305, 554.9306, and 554.9307. 152 18 Governing law in the Article on Funds Transfers. Section 152 19 554.12507. 152 20 Applicability of the Article on Leases. Sections 554.13105 152 21 and 554.13106. 152 22 Sec. 138. Section 554.1201, subsections 9 and 32, Code 152 23 1999, are amended to read as follows: 152 24 9. "Buyer in ordinary course of business" means a person 152 25whothat buys goods in good faith,andwithout knowledge that 152 26 the saleto that person is in violation ofviolates the 152 27ownershiprightsor security interestofa third partyanother 152 28 person in the goodsbuys, and in the ordinary course from a 152 29 person, other than a pawnbroker, in the business of selling 152 30 goods of that kindbut does not include a pawnbroker.All152 31persons who sell minerals or the like (including oil and gas)152 32at wellhead or minehead shall be deemed to be personsA person 152 33 buys goods in the ordinary course if the sale to the person 152 34 comports with the usual or customary practices in the kind of 152 35 business in which the seller is engaged or with the seller's 153 1 own usual or customary practices. A person that sells oil, 153 2 gas, or other minerals at the wellhead or minehead is a person 153 3 in the business of selling goods of that kind."Buying"A 153 4 buyer in ordinary course of business maybebuy for cash,or153 5 by exchange of other property, or on secured or unsecured 153 6 credit, andincludes receivingmay acquire goods or documents 153 7 of title under a pre-existing contract for salebut does not153 8include a transfer in bulk or as security for or in total or153 9partial satisfaction of a money debt. Only a buyer that takes 153 10 possession of the goods or has a right to recover the goods 153 11 from the seller under article 2 may be a buyer in ordinary 153 12 course of business. A person that acquires goods in a 153 13 transfer in bulk or as security for or in total or partial 153 14 satisfaction of a money debt is not a buyer in ordinary course 153 15 of business. 153 16 32. "Purchase" means any voluntary transaction creating an 153 17 interest in property, including taking by sale, discount, 153 18 negotiation, mortgage, pledge, voluntary lien, security 153 19 interest, issue, reissue, or gift. 153 20 Sec. 139. Section 554.1201, subsection 37, paragraph a, 153 21 Code 1999, is amended to read as follows: 153 22 a. "Security interest" means an interest in personal 153 23 property or fixtures which secures payment or performance of 153 24 an obligation.The retention or reservation of title by a153 25seller of goods notwithstanding shipment or delivery to the153 26buyer (section 554.2401) is limited in effect to a reservation153 27of a "security interest".The term also includes any interest 153 28 of a consignor and a buyer of accounts,orchattel paper 153 29which, a payment intangible, or a promissory note in a 153 30 transaction that is subject to Article 9. The special 153 31 property interest of a buyer of goods on identification of 153 32 those goods to a contract for sale under section 554.2401 is 153 33 not a "security interest", but a buyer may also acquire a 153 34 "security interest" by complying with Article 9.Unless a153 35consignment is intended as security, reservation of title154 1thereunder is not a "security interest", but a consignment in154 2any event is subject to the provisions on consignment sales154 3(section 554.2326).Except as otherwise provided in section 154 4 554.2505, the right of a seller or lessor of goods under 154 5 Article 2 or 13 to retain or acquire possession of the goods 154 6 is not a "security interest", but a seller or lessor may also 154 7 acquire a "security interest" by complying with Article 9. 154 8 The retention or reservation of title by a seller of goods 154 9 notwithstanding shipment or delivery to the buyer (section 154 10 554.2401) is limited in effect to a reservation of a "security 154 11 interest". 154 12 Sec. 140. Section 554.2103, subsection 3, Code 1999, is 154 13 amended to read as follows: 154 14 3. The following definitions in other Articles apply to 154 15 this Article: 154 16 "Check" Section 554.3104 154 17 "Consignee" Section 554.7102 154 18 "Consignor" Section 554.7102 154 19 "Consumer goods"Section 554.9109154 20 Section 554.9102 154 21 "Dishonor" Section 554.3502 154 22 "Draft" Section 554.3104 154 23 Sec. 141. Section 554.2210, subsection 2, Code 1999, is 154 24 amended to read as follows: 154 25 2.UnlessExcept as otherwise provided in section 154 26 554.9406, unless otherwise agreed all rights of either seller 154 27 or buyer can be assigned except where the assignment would 154 28 materially change the duty of the other party, or increase 154 29 materially the burden of risk imposed on the other party by 154 30 the contract, or impair materially the other party's chance of 154 31 obtaining return performance. A right to damages for breach 154 32 of the whole contract or a right arising out of the assignor's 154 33 due performance of the assignor's entire obligation can be 154 34 assigned despite agreement otherwise. 154 35 Sec. 142. Section 554.2210, Code 1999, is amended by 155 1 adding the following new subsection, and renumbering 155 2 subsequent subsections: 155 3 NEW SUBSECTION. 3. The creation, attachment, perfection, 155 4 or enforcement of a security interest in the seller's interest 155 5 under a contract is not a transfer that materially changes the 155 6 duty of or increases materially the burden or risk imposed on 155 7 the buyer or impairs materially the buyer's chance of 155 8 obtaining return performance within the purview of subsection 155 9 2 unless, and then only to the extent that, enforcement 155 10 actually results in a delegation of material performance of 155 11 the seller. Even in that event, the creation, attachment, 155 12 perfection, and enforcement of the security interest remain 155 13 effective, but (i) the seller is liable to the buyer for 155 14 damages caused by the delegation to the extent that the 155 15 damages could not reasonably be prevented by the buyer, and 155 16 (ii) a court having jurisdiction may grant other appropriate 155 17 relief, including cancellation of the contract for sale or an 155 18 injunction against enforcement of the security interest or 155 19 consummation of the enforcement. 155 20 Sec. 143. Section 554.2326, Code 1999, is amended to read 155 21 as follows: 155 22 554.2326 SALE ON APPROVAL AND SALE OR RETURN – 155 23CONSIGNMENT SALES ANDRIGHTS OF CREDITORS. 155 24 1. Unless otherwise agreed, if delivered goods may be 155 25 returned by the buyer even though they conform to the 155 26 contract, the transaction is 155 27 a. a "sale on approval" if the goods are delivered 155 28 primarily for use, and 155 29 b. a "sale or return" if the goods are delivered primarily 155 30 for resale. 155 31 2.Except as provided in subsection 3, goodsGoods held on 155 32 approval are not subject to the claims of the buyer's 155 33 creditors until acceptance; goods held on sale or return are 155 34 subject to such claims while in the buyer's possession. 155 353. Where goods are delivered to a person for sale and such156 1person maintains a place of business at which that person156 2deals in goods of the kind involved, under a name other than156 3the name of the person making delivery, then with respect to156 4claims of creditors of the person conducting the business the156 5goods are deemed to be on sale or return. The provisions of156 6this subsection are applicable even though an agreement156 7purports to reserve title to the person making delivery until156 8payment or resale or uses such words as "on consignment" or156 9"on memorandum". However, this subsection is not applicable156 10if the person making delivery156 11a. complies with an applicable law providing for a156 12consignor's interest or the like to be evidenced by a sign, or156 13b. establishes that the person conducting the business is156 14generally known by creditors of the person conducting the156 15business to be substantially engaged in selling the goods of156 16others, or156 17c. complies with the filing provisions of the Article on156 18Secured Transactions (Article 9).156 194.3. Any "or return" term of a contract for sale is to be 156 20 treated as a separate contract for sale within the statute of 156 21 frauds section of this Article (section 554.2201) and as 156 22 contradicting the sale aspect of the contract within the 156 23 provisions of this Article on parol or extrinsic evidence 156 24 (section 554.2202). 156 25 Sec. 144. Section 554.2502, Code 1999, is amended to read 156 26 as follows: 156 27 554.2502 BUYER'S RIGHT TO GOODS ON SELLER'S REPUDIATION, 156 28 FAILURE TO DELIVER, OR INSOLVENCY. 156 29 1. Subject tosubsectionsubsections 2 and 3 and even 156 30 though the goods have not been shipped a buyer who has paid a 156 31 part or all of the price of goods in which the buyer has a 156 32 special property under the provisions of the immediately 156 33 preceding section may on making and keeping good a tender of 156 34 any unpaid portion of their price recover them from the seller 156 35 if: 157 1 a. in the case of goods bought for personal, family, or 157 2 household purposes, the seller repudiates or fails to deliver 157 3 as required by the contract; or 157 4 b. in all cases the seller becomes insolvent within ten 157 5 days after receipt of the first installment on their price. 157 6 2. The buyer's right to recover the goods under subsection 157 7 1, paragraph "a", vests upon acquisition of a special 157 8 property, even if the seller had not then repudiated or failed 157 9 to deliver. 157 102.3. If the identification creating the buyer's special 157 11 property has been made by the buyer, the buyer acquires the 157 12 right to recover the goods only if they conform to the 157 13 contract for sale. 157 14 Sec. 145. Section 554.2716, subsection 3, Code 1999, is 157 15 amended to read as follows: 157 16 3. The buyer has a right of replevin for goods identified 157 17 to the contract if after reasonable effort the buyer is unable 157 18 to effect cover for such goods or the circumstances reasonably 157 19 indicate that such effort will be unavailing or if the goods 157 20 have been shipped under reservation and satisfaction of the 157 21 security interest in them has been made or tendered. In the 157 22 case of goods bought for personal, family, or household 157 23 purposes, the buyer's right of replevin vests upon acquisition 157 24 of a special property, even if the seller had not then 157 25 repudiated or failed to deliver. 157 26 Sec. 146. Section 554.4210, subsection 3, paragraph a, 157 27 Code 1999, is amended to read as follows: 157 28 a. no security agreement is necessary to make the security 157 29 interest enforceable (section 554.9203, subsection12, 157 30 paragraph"a""c", subparagraph (1)); 157 31 Sec. 147. NEW SECTION. 554.5118 SECURITY INTEREST OF 157 32 ISSUER OR NOMINATED PERSON. 157 33 1. An issuer or nominated person has a security interest 157 34 in a document presented under a letter of credit to the extent 157 35 that the issuer or nominated person honors or gives value for 158 1 the presentation. 158 2 2. So long as and to the extent that an issuer or 158 3 nominated person has not been reimbursed or has not otherwise 158 4 recovered the value given with respect to a security interest 158 5 in a document under subsection 1, the security interest 158 6 continues and is subject to Article 9, but: 158 7 a. a security agreement is not necessary to make the 158 8 security interest enforceable under section 554.9203, 158 9 subsection 2, paragraph "c"; 158 10 b. if the document is presented in a medium other than a 158 11 written or other tangible medium, the security interest is 158 12 perfected; and 158 13 c. if the document is presented in a written or other 158 14 tangible medium and is not a certificated security, chattel 158 15 paper, a document of title, an instrument, or a letter of 158 16 credit, the security interest is perfected and has priority 158 17 over a conflicting security interest in the document so long 158 18 as the debtor does not have possession of the document. 158 19 Sec. 148. Section 554.7503, subsection 1, paragraph a, 158 20 Code 1999, is amended to read as follows: 158 21 a. delivered or entrusted them or any document of title 158 22 covering them to the bailor or the bailor's nominee with 158 23 actual or apparent authority to ship, store or sell or with 158 24 power to obtain delivery under this Article (section 554.7403) 158 25 or with power of disposition under this chapter (sections 158 26 554.2403 and554.9307554.9320) or other statute or rule of 158 27 law; nor 158 28 Sec. 149. Section 554.8103, subsection 6, Code 1999, is 158 29 amended to read as follows: 158 30 6. A commodity contract, as defined in section554.9115158 31 554.9102, subsection 1, paragraph "o", is not a security or a 158 32 financial asset. 158 33 Sec. 150. Section 554.8106, subsections 4 and 6, Code 158 34 1999, are amended to read as follows: 158 35 4. A purchaser has "control" of a security entitlement if: 159 1 a. the purchaser becomes the entitlement holder;or159 2 b. the securities intermediary has agreed that it will 159 3 comply with entitlement orders originated by the purchaser 159 4 without further consent by the entitlement holder.; or 159 5 c. another person has control of the security entitlement 159 6 on behalf of the purchaser or, having previously acquired 159 7 control of the security entitlement, acknowledges that it has 159 8 control on behalf of the purchaser. 159 9 6. A purchaser who has satisfied the requirements of 159 10 subsection 3, paragraph "b",orsubsection4,paragraph "b",159 11 has control, even if the registered owner in the case of 159 12 subsection 3, paragraph "b", or the entitlement holder in the 159 13 case of subsection 4,paragraph "b",retains the right to make 159 14 substitutions for the uncertificated security or security 159 15 entitlement, to originate instructions or entitlement orders 159 16 to the issuer or securities intermediary, or otherwise to deal 159 17 with the uncertificated security or security entitlement. 159 18 Sec. 151. Section 554.8110, subsection 5, paragraphs a 159 19 through d, Code 1999, are amended to read as follows: 159 20 a. if an agreement between the securities intermediary and 159 21 its entitlement holderspecifies that it is governed by the159 22law of a particular jurisdictiongoverning the securities 159 23 account expressly provides that a particular jurisdiction is 159 24 the securities intermediary's jurisdiction for purposes of 159 25 this part, this Article, or this [Act], that jurisdiction is 159 26 the securities intermediary's jurisdiction. 159 27 b. if paragraph "a" does not apply and an agreement 159 28 between the securities intermediary and its entitlement holder 159 29 governing the securities account expressly provides that the 159 30 agreement is governed by the law of a particular jurisdiction, 159 31 that jurisdiction is the securities intermediary's 159 32 jurisdiction. 159 33 c. if neither paragraph "a" nor paragraph "b" applies and 159 34 an agreement between the securities intermediary and its 159 35 entitlement holderdoes not specify the governing law as160 1provided in paragraph "a", butgoverning the securities 160 2 account expresslyspecifiesprovides that the securities 160 3 account is maintained at an office in a particular 160 4 jurisdiction, that jurisdiction is the securities 160 5 intermediary's jurisdiction. 160 6c.d. ifan agreement between the securities intermediary160 7and its entitlement holder does not specify a jurisdiction as160 8provided in paragraph "a" or "b"none of the preceding 160 9 paragraphs applies, the securities intermediary's jurisdiction 160 10 is the jurisdiction in whichis locatedthe office identified 160 11 in an account statement as the office serving the entitlement 160 12 holder's account is located. 160 13d.e. ifan agreement between the securities intermediary160 14and its entitlement holder does not specify a jurisdiction as160 15provided in paragraph "a" or "b" and an account statement does160 16not identify an office serving the entitlement holder's160 17account as provided in paragraph "c"none of the preceding 160 18 paragraphs applies, the securities intermediary's jurisdiction 160 19 is the jurisdiction in whichis locatedthe chief executive 160 20 office of the securities intermediary is located. 160 21 Sec. 152. Section 554.8301, subsection 1, paragraph c, 160 22 Code 1999, is amended to read as follows: 160 23 c. a securities intermediary acting on behalf of the 160 24 purchaser acquires possession of the security certificate, 160 25 only if the certificate is in registered form andhas beenis 160 26 (i) registered in the name of the purchaser, (ii) payable to 160 27 the order of the purchaser, or (iii) specially indorsed to the 160 28 purchaser by an effective indorsement and has not been 160 29 indorsed to the securities intermediary or in blank. 160 30 Sec. 153. Section 554.8302, subsection 1, Code 1999, is 160 31 amended to read as follows: 160 32 1. Except as otherwise provided in subsections 2 and 3, 160 33upon deliverya purchaser of a certificated or uncertificated 160 34 securityto a purchaser, the purchaseracquires all rights in 160 35 the security that the transferor had or had power to transfer. 161 1 Sec. 154. Section 554.8510, Code 1999, is amended to read 161 2 as follows: 161 3 554.8510 RIGHTS OF PURCHASER OF SECURITY ENTITLEMENT FROM 161 4 ENTITLEMENT HOLDER. 161 5 1.AnIn a case not covered by the priority rules in 161 6 Article 9 or the rules stated in subsection 3, an action based 161 7 on an adverse claim to a financial asset or security 161 8 entitlement, whether framed in conversion, replevin, 161 9 constructive trust, equitable lien, or other theory, may not 161 10 be asserted against a person who purchases a security 161 11 entitlement, or an interest therein, from an entitlement 161 12 holder if the purchaser gives value, does not have notice of 161 13 the adverse claim, and obtains control. 161 14 2. If an adverse claim could not have been asserted 161 15 against an entitlement holder under section 554.8502, the 161 16 adverse claim cannot be asserted against a person who 161 17 purchases a security entitlement, or an interest therein, from 161 18 the entitlement holder. 161 19 3. In a case not covered by the priority rules in Article 161 20 9, a purchaser for value of a security entitlement, or an 161 21 interest therein, who obtains control has priority over a 161 22 purchaser of a security entitlement, or an interest therein, 161 23 who does not obtain control.PurchasersExcept as otherwise 161 24 provided in subsection 4, purchasers who have control rank 161 25equally, except that aaccording to priority in time of: 161 26 a. the purchaser's becoming the person for whom the 161 27 securities account, in which the security entitlement is 161 28 carried, is maintained, if the purchaser obtained control 161 29 under section 554.8106, subsection 4, paragraph "a"; 161 30 b. the securities intermediary's agreement to comply with 161 31 the purchaser's entitlement orders with respect to security 161 32 entitlements carried or to be carried in the securities 161 33 account in which the security entitlement is carried, if the 161 34 purchaser obtained control under section 554.8106, subsection 161 35 4, paragraph "b"; 162 1 c. if the purchaser obtained control through another 162 2 person under section 554.8106, subsection 4, paragraph "c", 162 3 the time on which priority would be based under this 162 4 subsection if the other person were the secured party; or 162 5 4. A securities intermediary as purchaser has priority 162 6 over a conflicting purchaser who has control unless otherwise 162 7 agreed by the securities intermediary. 162 8 Sec. 155. Section 554.11108, Code 1999, is amended to read 162 9 as follows: 162 10 554.11108 PRESUMPTION THAT RULE OF LAW CONTINUES 162 11 UNCHANGED. 162 12 Unless a change in law has clearly been made, the 162 13 provisions of this chapter as amended shall be deemed 162 14 declaratory of the meaning of this chapter prior to amendment. 162 15The first sentence of section 554.9402, subsection 7, shall be162 16deemed to be a change in law.162 17 Sec. 156. Section 554.13103, subsection 3, Code 1999, is 162 18 amended to read as follows: 162 19 3. The following definitions in other Articles apply to 162 20 this Article: 162 21 "Account" Section554.9106554.9102, 162 22 subsection 1, paragraph "b" 162 23 "Between merchants" Section 554.2104, 162 24 subsection 3 162 25 "Buyer" Section 554.2103, 162 26 subsection 1, paragraph "a" 162 27 "Chattel paper" Section554.9105554.9102, 162 28 subsection 1, paragraph"b""k" 162 29 "Consumer goods" Section554.9109554.9102, 162 30 subsection 1, paragraph "w" 162 31 "Document" Section554.9105554.9102, 162 32 subsection 1, paragraph"f""ad" 162 33 "Entrusting" Section 554.2403, 162 34 subsection 3 162 35"General intangibles" Section 554.9106163 1 "General intangible" Section 554.9102, 163 2 subsection 1, paragraph "ap" 163 3 "Good faith" Section 554.2103, 163 4 subsection 1, paragraph "b" 163 5 "Instrument" Section554.9105554.9102, 163 6 subsection 1, paragraph"i""au" 163 7 "Merchant" Section 554.2104, 163 8 subsection 1 163 9 "Mortgage" Section554.9105554.9102, 163 10 subsection 1, paragraph"j""bc" 163 11 "Pursuant to commitment" Section554.9105554.9102, 163 12 subsection 1, paragraph"k""bq" 163 13 "Receipt" Section 554.2103, 163 14 subsection 1, paragraph "c" 163 15 "Sale" Section 554.2106, 163 16 subsection 1 163 17 "Sale on approval" Section 554.2326 163 18 "Sale or return" Section 554.2326 163 19 "Seller" Section 554.2103, 163 20 subsection 1, paragraph "d" 163 21 Sec. 157. Section 554.13303, subsections 1 through 5, Code 163 22 1999, are amended to read as follows: 163 23 1. As used in this section, "creation of a security 163 24 interest" includes the sale of a lease contract that is 163 25 subject to Article 9, Secured Transactions, by reason of 163 26 section554.9102554.9109, subsection 1, paragraph"b""c". 163 27 2. Except as provided insubsectionssubsection 3and 4,163 28 and section 554.9407, a provision in a lease agreement which 163 29 (i) prohibits the voluntary or involuntary transfer, including 163 30 a transfer by sale, sublease, creation or enforcement of a 163 31 security interest, or attachment, levy, or other judicial 163 32 process, of an interest of a party under the lease contract or 163 33 of the lessor's residual interest in the goods, or (ii) makes 163 34 such a transfer an event of default, gives rise to the rights 163 35 and remedies provided in subsection54, but a transfer that 164 1 is prohibited or is an event of default under the lease 164 2 agreement is otherwise effective. 164 33. A provision in a lease agreement which (i) prohibits164 4the creation or enforcement of a security interest in an164 5interest of a party under the lease contract or in the164 6lessor's residual interest in the goods, or (ii) makes such a164 7transfer an event of default, is not enforceable unless, and164 8then only to the extent that, there is an actual transfer by164 9the lessee of the lessee's right of possession or use of the164 10goods in violation of the provision or an actual delegation of164 11a material performance of either party to the lease contract164 12in violation of the provision. Neither the granting nor the164 13enforcement of a security interest in (i) the lessor's164 14interest under the lease contract or (ii) the lessor's164 15residual interest in the goods is a transfer that materially164 16impairs the prospect of obtaining return performance by,164 17materially changes the duty of, or materially increases the164 18burden or risk imposed on, the lessee within the purview of164 19subsection 5 unless, and then only to the extent that, there164 20is an actual delegation of a material performance of the164 21lessor.164 224.3. A provision in a lease agreement which (i) prohibits 164 23 a transfer of a right to damages for default with respect to 164 24 the whole lease contract or of a right to payment arising out 164 25 of the transferor's due performance of the transferor's entire 164 26 obligation, or (ii) makes such a transfer an event of default, 164 27 is not enforceable, and such a transfer is not a transfer that 164 28 materially impairs the prospect of obtaining return 164 29 performance by, materially changes the duty of, or materially 164 30 increases the burden or risk imposed on, the other party to 164 31 the lease contract within the purview of subsection54. 164 325.4. Subject tosubsectionssubsection 3 and4section 164 33 554.9407: 164 34 a. if a transfer is made which is made an event of default 164 35 under a lease agreement, the party to the lease contract not 165 1 making the transfer, unless that party waives the default or 165 2 otherwise agrees, has the rights and remedies described in 165 3 section 554.13501, subsection 2; 165 4 b. if paragraph "a" is not applicable and if a transfer is 165 5 made that (i) is prohibited under a lease agreement or (ii) 165 6 materially impairs the prospect of obtaining return 165 7 performance by, materially changes the duty of, or materially 165 8 increases the burden or risk imposed on, the other party to 165 9 the lease contract, unless the party not making the transfer 165 10 agrees at any time to the transfer in the lease contract or 165 11 otherwise, then, except as limited by contract, (i) the 165 12 transferor is liable to the party not making the transfer for 165 13 damages caused by the transfer to the extent that the damages 165 14 could not reasonably be prevented by the party not making the 165 15 transfer and (ii) a court having jurisdiction may grant other 165 16 appropriate relief, including cancellation of the lease 165 17 contract or an injunction against the transfer. 165 18 Sec. 158. Section 554.13307, subsections 1 through 4, Code 165 19 1999, are amended by striking the subsections and inserting in 165 20 lieu thereof the following: 165 21 1. Except as otherwise provided in section 554.13306, a 165 22 creditor of a lessee takes subject to the lease contract. 165 23 2. Except as otherwise provided in subsection 3 and in 165 24 sections 554.13306 and 554.13308, a creditor of a lessor takes 165 25 subject to the lease contract unless the creditor holds a lien 165 26 that attached to the goods before the lease contract became 165 27 enforceable. 165 28 3. Except as otherwise provided in sections 554.9317, 165 29 554.9321, and 554.9323, a lessee takes a leasehold interest 165 30 subject to a security interest held by a creditor of the 165 31 lessor. 165 32 Sec. 159. Section 554.13309, subsection 1, paragraph b, 165 33 Code 1999, is amended to read as follows: 165 34 b. a "fixture filing" is the filing, in the office where a 165 35 record of a mortgage on the real estate would be filed or 166 1 recorded, of a financing statement covering goods that are or 166 2 are to become fixtures and conforming to the requirements of 166 3 section554.9402554.9502,subsection 5subsections 1 and 2; 166 4 DIVISION III 166 5 AMENDMENTS IN OTHER CODE CHAPTERS 166 6 Sec. 160. Section 15E.91, subsection 7, Code 1999, is 166 7 amended to read as follows: 166 8 7. A copy of each pledge agreement by or to the 166 9 corporation, including without limitation each bond 166 10 resolution, indenture of trust, or similar agreement, or any 166 11 revisions or supplements to it shall be filed with the 166 12 secretary of state and no further filing or other action under 166 13sections 554.9101 to 554.9507chapter 554, article 9 of the 166 14 uniform commercial code, or any other law of the state is 166 15 required to perfect the security interest in the collateral or 166 16 any additions to it or substitutions for it, and the lien and 166 17 trust created are binding from and after the time made against 166 18 all parties having claims of any kind in tort, contract, or 166 19 otherwise against the pledgor. 166 20 Sec. 161. Section 16.26, subsection 7, Code 1999, is 166 21 amended to read as follows: 166 22 7. A copy of each pledge agreement by or to the authority, 166 23 including without limitation each bond resolution, indenture 166 24 of trust or similar agreement, or any revisions or supplements 166 25 to it shall be filed with the secretary of state and no 166 26 further filing or other action undersections 554.9101 to166 27554.9507chapter 554, article 9 of the uniform commercial 166 28 code, or any other law of the state shall be required to 166 29 perfect the security interest in the collateral or any 166 30 additions to it or substitutions for it, and the lien and 166 31 trust so created shall be binding from and after the time made 166 32 against all parties having claims of any kind in tort, 166 33 contract, or otherwise against the pledgor. 166 34 Sec. 162. Section 16A.9, subsection 7, Code 1999, is 166 35 amended to read as follows: 167 1 7. A copy of each pledge agreement by or to the authority, 167 2 including without limitation each obligation resolution, 167 3 indenture of trust or similar agreement, or any revisions or 167 4 supplements to it shall be filed with the secretary of state 167 5 and no further filing or other action undersections 554.9101167 6to 554.9507chapter 554, article 9 of the uniform commercial 167 7 code, or any other law of the state shall be required to 167 8 perfect the security interest in the collateral or any 167 9 additions to it or substitutions for it, and the lien and 167 10 trust so created shall be binding from and after the time made 167 11 against all parties having claims of any kind in tort, 167 12 contract, or otherwise against the pledgor. 167 13 Sec. 163. Section 203.12A, subsections 2, 7, and 9, Code 167 14 1999, are amended to read as follows: 167 15 2. "Grain dealer assets" includes proceeds received or due 167 16 a grain dealer upon the sale, including exchange, collection, 167 17 or other disposition, of grain sold by the grain dealer. As 167 18 used in this section, "proceeds" means noncash and cash 167 19 proceeds asprovideddefined in section554.9306554.9102. 167 20 "Grain dealer assets" also includes any other funds or 167 21 property of the grain dealer which can be directly traced as 167 22 being from the sale of grain by the grain dealer, or which 167 23 were utilized in the business operation of the grain dealer. 167 24 A court, upon petition by an affected party, may order that 167 25 claimed grain dealer assets are not grain dealer assets as 167 26 defined in this section. The burden of proof shall be upon 167 27 the petitioner to establish that the assets are not grain 167 28 dealer assets as defined in this section. 167 29 7. A lien statement filed under this section shall be a 167 30 security interest perfected under chapter 554 and subject to 167 31 the same priority as provided under section554.9312554.9322. 167 32 9. The board may enforce the lien in the manner provided 167 33 in chapter 554, article 9, part56, for the enforcement of 167 34 security interests. If, upon enforcement of the lien, the 167 35 lien amount is satisfied in full without exhaustion of the 168 1 grain dealer assets, the remaining assets shall be returned to 168 2 the grain dealer or, if there are competing claims to those 168 3 remaining assets by other creditors, shall place those assets 168 4 in the custody of the district court and implead the known 168 5 creditors. 168 6 For purposes of enforcement of the lien, the board is 168 7 deemed to be the secured party and the grain dealer is deemed 168 8 to be the debtor, and each has the respective rights and 168 9 duties of a secured party and a debtor as provided in chapter 168 10 554, article 9, part56. If a right or duty under chapter 168 11 554, article 9, part56, is contingent upon the existence of 168 12 express language in a security agreement, or may be waived by 168 13 express language in a security agreement, the requisite 168 14 language is deemed not to exist for purposes of enforcement of 168 15 the lien created by this section. 168 16 Sec. 164. Section 203C.12A, subsections 2, 7, and 9, Code 168 17 1999, are amended to read as follows: 168 18 2. "Warehouse operator assets" includes proceeds received 168 19 or due a warehouse operator upon the sale, including exchange, 168 20 collection, or other disposition, of grain sold by the 168 21 warehouse operator. As used in this section, "proceeds" means 168 22 noncash and cash proceeds asprovideddefined in section 168 23554.9306554.9102. "Warehouse operator assets" also includes 168 24 storage payments received or due to a warehouse operator, 168 25 grain owned by the warehouse operator, and any other funds or 168 26 property of the warehouse operator which can be directly 168 27 traced as being from the sale of grain by the warehouse 168 28 operator, or which were utilized in the business operation of 168 29 the warehouse operator. A court, upon petition by an affected 168 30 party, may order that claimed warehouse operator assets are 168 31 not warehouse operator assets as defined in this section. The 168 32 burden of proof shall be upon the petitioner to establish that 168 33 the assets are not warehouse operator assets as defined in 168 34 this section. 168 35 7. A lien statement filed under this section shall be a 169 1 security interest perfected under chapter 554 and subject to 169 2 the same priority as provided under section554.9312554.9322. 169 3 9. The Iowa grain indemnity fund board may enforce the 169 4 lien in the manner provided in chapter 554, article 9, part5169 5 6, for the enforcement of security interests. If, upon 169 6 enforcement of the lien, the lien amount is satisfied in full 169 7 without exhaustion of the warehouse operator assets, the 169 8 remaining assets shall be returned to the warehouse operator 169 9 or, if there are competing claims to those remaining assets by 169 10 other creditors, those assets shall be placed in the custody 169 11 of the district court and the known creditors impleaded. 169 12 For purposes of enforcement of the lien, the board is 169 13 deemed to be the secured party and the warehouse operator is 169 14 deemed to be the debtor, and each has the respective rights 169 15 and duties of a secured party and a debtor as provided in 169 16 chapter 554, article 9, part56. If a right or duty under 169 17 chapter 554, article 9, part56, is contingent upon the 169 18 existence of express language in a security agreement, or may 169 19 be waived by express language in a security agreement, the 169 20 requisite language is deemed not to exist for purposes of 169 21 enforcement of the lien created by this section. 169 22 Sec. 165. Section 321.47, unnumbered paragraph 2, Code 169 23 Supplement 1999, is amended to read as follows: 169 24 The persons entitled under the laws of descent and 169 25 distribution of an intestate's property to the possession and 169 26 ownership of a vehicle owned in whole or in part by a 169 27 decedent, upon filing an affidavit stating the name and date 169 28 of death of the decedent, the right to possession and 169 29 ownership of the persons filing the affidavit, and that there 169 30 has been no administration of the decedent's estate, which 169 31 instrument shall also contain an agreement to indemnify 169 32 creditors of the decedent who would be entitled to levy 169 33 execution upon the motor vehicle to the extent of the value of 169 34 the motor vehicle, are entitled upon fulfilling the other 169 35 requirements of this chapter, to the issuance of a 170 1 registration card for the interest of the decedent in the 170 2 vehicle and a certificate of title to it. If a decedent dies 170 3 testate, and either the will is not probated or is admitted to 170 4 probate without administration, the persons entitled to the 170 5 possession and ownership of a vehicle owned in whole or in 170 6 part by the decedent may file an affidavit, and upon 170 7 fulfilling the other requirements of this chapter, are 170 8 entitled to the issuance of a registration card for the 170 9 interest of the decedent in the vehicle and a certificate of 170 10 title to the vehicle. The affidavit shall contain the same 170 11 information and indemnity agreement as is required in cases of 170 12 intestacy pursuant to this section.NoA requirement of 170 13 chapter 450 or 451 shall not be considered satisfied by the 170 14 filing of the affidavit provided for in this section. If, 170 15 from the records in the office of the county treasurer, there 170 16 appear to be any liens on the vehicle, the certificate of 170 17 title shall contain a statement of the liens unless the 170 18 application is accompanied by proper evidence of their 170 19 satisfaction or extinction. Evidence of extinction may 170 20 consist of, but is not limited to, an affidavit of the 170 21 applicant stating that a security interest was foreclosed as 170 22 provided in chapter 554, article 9, part56. 170 23 Sec. 166. Section 321.50, subsection 1, Code Supplement 170 24 1999, is amended to read as follows: 170 25 1. A security interest in a vehicle subject to 170 26 registration under the laws of this state or a mobile home or 170 27 manufactured housing, except trailers whose empty weight is 170 28 two thousand pounds or less, and except new or used vehicles 170 29 held by a dealer or manufacturer as inventory for sale, is 170 30 perfected by the delivery to the county treasurer of the 170 31 county where the certificate of title was issued or, in the 170 32 case of a new certificate, to the county treasurer where the 170 33 certificate will be issued, of an application for certificate 170 34 of title which lists the security interest, or an application 170 35 for notation of security interest signed by the owner, or by 171 1 one owner of a vehicle owned jointly by more than one person, 171 2 or a certificate of title from another jurisdiction which 171 3 shows the security interest, and a fee of five dollars for 171 4 each security interest shown. If the owner or secured party 171 5 is in possession of the certificate of title, it must also be 171 6 delivered at this time in order to perfect the security 171 7 interest. If a vehicle is subject to a security interest when 171 8 brought into this state, the validity of the security interest 171 9 and the date of perfection is determined by section554.9103171 10 554.9303. Delivery as provided in this subsection is an 171 11 indication of a security interest on a certificate of title 171 12 for purposes of chapter 554. 171 13 Sec. 167. Section 322.21, Code Supplement 1999, is amended 171 14 to read as follows: 171 15 322.21 REMAINING BALANCE ON TRADE VEHICLE. 171 16 The extension of credit by a retail seller to a retail 171 17 buyer, pursuant to a retail installment contract, of the 171 18 amount actually paid or to be paid by the retail seller to 171 19 discharge a purchase money security interest, asdefined171 20 provided in section554.9107554.9103, on a motor vehicle 171 21 traded in by the retail buyer shall not subject the retail 171 22 seller to the provisions of chapter 536 or 536A. 171 23 Sec. 168. Section 331.602, subsection 28, Code Supplement 171 24 1999, is amended to read as follows: 171 25 28. Carry out duties relating to the filing of financing 171 26 statements or instruments as provided insections 554.9401 to171 27554.9408chapter 554, article 9, part 5. 171 28 Sec. 169. Section 331.609, subsection 3, paragraph a, 171 29 subparagraph (1), Code 1999, is amended to read as follows: 171 30 (1) If the filing officer is the secretary of state, the 171 31 secretary shall cause the notice to be marked, held, and 171 32 indexed in accordance with section554.9403, subsection 4171 33 554.9519, as if the notice were a financing statementwithin171 34the meaning of that sectionas provided in chapter 554, 171 35 article 9, part 5. 172 1 Sec. 170. Section 461A.6, Code 1999, is amended to read as 172 2 follows: 172 3 461A.6 COSTS – LIEN. 172 4 The cost of such removal shall be paid by the owner of said 172 5 pier, wharf, sluice, piling, wall, fence, obstruction, 172 6 erection or building, and the state shall have a lien upon the 172 7 property removed for such costs. Said costs shall be payable 172 8 at the time of removal and such lien may be enforced and 172 9 foreclosed, as provided for the foreclosure of security 172 10 interests in Uniform Commercial Code, chapter 554, article 9, 172 11 part56. 172 12 Sec. 171. Section 537.5103, subsections 2 and 3, Code 172 13 1999, are amended to read as follows: 172 14 2. If the seller repossesses or voluntarily accepts 172 15 surrender either of goods which were the subject of the sale 172 16 and in which the seller has a security interest, or of goods 172 17 which were not the subject of the sale but in which the seller 172 18 has a security interest to secure a debt arising from a sale 172 19 of goods or services or a combined sale of goods and services, 172 20 the seller's duty to dispose of the collateral is governed by 172 21 the provisions on disposition of collateral insections172 22554.9501 to 554.9507chapter 554, article 9, part 6. 172 23 3. If a lender takes possession or voluntarily accepts 172 24 surrender of goods in which the lender has a security interest 172 25 to secure a debt arising from a consumer loan, the lender's 172 26 duty to dispose of the collateral is governed by the 172 27 provisions on disposition of collateral insections 554.9501172 28to 554.9507chapter 554, article 9, part 6. 172 29 Sec. 172. Section 539.1, Code 1999, is amended to read as 172 30 follows: 172 31 539.1 ASSIGNMENT OF NONNEGOTIABLE INSTRUMENTS. 172 32 Bonds, due bills, and all instruments by which the maker 172 33 promises to pay another, without words of negotiability, a sum 172 34 of money, or by which the maker promises to pay a sum of money 172 35 in property or labor, or to pay or deliver any property or 173 1 labor, or acknowledges any money, labor, or property to be 173 2 due, are assignable by endorsement on the instrument, or by 173 3 other writing. The assignee, including a person who takes 173 4 assignment for collection in the regular course of business, 173 5 has a right of action on them in the assignee's own name, 173 6 subject to any defense or counterclaim which the maker or 173 7 debtor had against an assignor of the instrument before notice 173 8 of the assignment. In case of conflict between this section 173 9 andsectionssection 554.5112, 554.5113, 554.5114,and173 10554.9318, sections554.9404, or 554.9405, section 554.5112, 173 11 554.5113, 554.5114,and 554.9318 control554.9404, or 554.9405 173 12 controls. 173 13 Sec. 173. Section 539.2, Code 1999, is amended to read as 173 14 follows: 173 15 539.2 ASSIGNMENT PROHIBITED BY INSTRUMENT. 173 16 When by the terms of an instrument its assignment is 173 17 prohibited, an assignment thereof shall nevertheless be valid, 173 18 but the maker may make use of any defense or counterclaim 173 19 against the assignee which the maker may have against any 173 20 assignor thereof before notice of such assignment is given to 173 21 the maker in writing. In case of conflict between this 173 22 section andsectionssection 554.5112, 554.5113, 554.5114,and173 23554.9318, sections554.9404, or 554.9405, section 554.5112, 173 24 554.5113, 554.5114,and 554.9318 control554.9404, or 554.9405 173 25 controls. 173 26 Sec. 174. Section 539.3, Code 1999, is amended to read as 173 27 follows: 173 28 539.3 ASSIGNMENT OF OPEN ACCOUNT. 173 29 An open account of sums of money due on contract may be 173 30 assigned. The assignee, including a person who takes 173 31 assignment for collection in the regular course of business, 173 32 has a right of action on the account in the assignee's own 173 33 name, subject to the defenses and counterclaims allowed 173 34 against the instruments mentioned in section 539.2, before 173 35 notice of the assignment is given to the debtor in writing by 174 1 the assignee. In case of conflict Uniform Commercial Code, 174 2 section554.9318554.9404 or 554.9405, controls. 174 3 Sec. 175. Section 554B.1, Code 1999, is amended to read as 174 4 follows: 174 5 554B.1 DEFINITIONS. 174 6 As used in this chapter "transmitting utility" has the same 174 7 meaning as defined in the Uniform Commercial Code, section 174 8554.9105, subsection 1, paragraph "n"554.9102, subsection 1. 174 9 Security interests filed pursuant to this chapter prior to 174 10 January 1, 1975, which have not been terminated, are deemed to 174 11 be filed in accordance with section554.9401554.9501, 174 12 subsection52. 174 13 Sec. 176. Section 570.1, Code 1999, is amended to read as 174 14 follows: 174 15 570.1 LIEN CREATED – PROPERTY SUBJECTED. 174 16 1. A landlord shall have a lien for the rent upon all 174 17 crops grown upon the leased premises, and upon any other 174 18 personal property of the tenant which has been used or kept 174 19 thereon during the term and which is not exempt from 174 20 execution. 174 21 2. In order to perfect a lien in farm products as defined 174 22 in section 554.9102, which is created under this section, a 174 23 landlord must file a financing statement as required by 174 24 section 554.9308, subsection 2. Except as provided in 174 25 chapters 571, 572, 579A, 579B, and 581, a perfected lien in 174 26 the farm products has priority over a conflicting security 174 27 interest or lien, including a security interest or lien that 174 28 was perfected prior to the creation of the lien under this 174 29 section, if the lien created in this section is perfected on 174 30 either of the following dates: 174 31 a. Prior to July 1, 2001. 174 32 b. When the debtor takes possession of the leased premises 174 33 or within twenty days after the debtor takes possession of the 174 34 leased premises. 174 35 A financing statement filed to perfect a lien in the farm 175 1 products must include a statement that it is filed for the 175 2 purpose of perfecting a landlord's lien. Within twenty days 175 3 after a landlord who has filed a financing statement receives 175 4 a written demand, authenticated as provided in Article 9 of 175 5 chapter 554, from a tenant, the landlord shall file a 175 6 termination statement, if the lien in the farm products has 175 7 expired or if the tenant is no longer in possession of the 175 8 leased premises and has performed all obligations under the 175 9 lease. 175 10 Sec. 177. Section 570A.4, subsection 4, Code 1999, is 175 11 amended to read as follows: 175 12 4. The secretary of state shall note the filing of a lien 175 13 statement under this section in the manner provided by chapter 175 14 554, the uniform commercial code, and shall charge a fee as 175 15 provided under section554.9403554.9525. 175 16 Sec. 178. Section 570A.6, Code 1999, is amended to read as 175 17 follows: 175 18 570A.6 ENFORCEMENT OF LIEN. 175 19 The holder of a lien perfected under this chapter may 175 20 enforce the lien in the manner providedinfor agricultural 175 21 liens pursuant to chapter 554, article 9, part56, for the 175 22 enforcement of security interests. For purposes of 175 23 enforcement of the lien, the lienholder is deemed to be the 175 24 secured party, and the farmer for whom the agricultural 175 25 chemical, seed, feed, or petroleum product was furnished is 175 26 deemed to be the debtor, and each has the respective rights 175 27 and duties of a secured party and a debtor as provided in 175 28 chapter 554, article 9, part56. Where a right or duty under 175 29 chapter 554, article 9, part56, is contingent upon the 175 30 existence of express language in a security agreement, or may 175 31 be waived by express language in a security agreement, the 175 32 requisite language is deemed not to exist for purposes of 175 33 enforcement of the lien created by this chapter. 175 34 Sec. 179. Section 571.5, Code 1999, is amended to read as 175 35 follows: 176 1 571.5FORECLOSUREENFORCEMENT OF LIEN. 176 2SaidA lien as provided in this chapter may beforeclosed176 3 enforced in the manner providedinfor agricultural liens 176 4 pursuant to the Uniform Commercial Code, chapter 554, Article 176 5 9, Part56. 176 6 Sec. 180. Section 579A.3, unnumbered paragraph 1, Code 176 7 1999, is amended to read as follows: 176 8 While the cattle are located at the custom cattle feedlot, 176 9 the custom cattle feedlot operator may foreclose a lien 176 10 created in section 579A.2 in the manner provided for the 176 11foreclosure of secured transactionsenforcement of an 176 12 agricultural lien as provided insections 554.9504, 554.9506,176 13and 554.9507chapter 554, article 9, part 6. After the cattle 176 14 have left the custom cattle feedlot, the custom cattle feedlot 176 15 operator may enforce the lien by commencing an action at law 176 16 for the amount of the lien against either of the following: 176 17 Sec. 181. Section 579B.3, subsection 1, paragraph a, 176 18 subparagraph (1), subparagraph subdivision (c), Code 176 19 Supplement 1999, is amended to read as follows: 176 20 (c) If the livestock is slaughtered by the contractor, the 176 21 lien shall be on any property of the contractor that may be 176 22 subject to a security interest as provided in section554.9102176 23 554.9109. 176 24 Sec. 182. Section 579B.3, subsection 1, paragraph a, 176 25 subparagraph (2), subparagraph subdivision (c), Code 176 26 Supplement 1999, is amended to read as follows: 176 27 (c) If the raw milk is processed by the contractor, the 176 28 lien shall be on any property of the contractor that may be 176 29 subject to a security interest as provided in section554.9102176 30 554.9109. 176 31 Sec. 183. Section 579B.3, subsection 2, paragraph a, 176 32 subparagraph (3), Code Supplement 1999, is amended to read as 176 33 follows: 176 34 (3) If the crop is processed by the contractor, the lien 176 35 shall be on any property of the contractor that may be subject 177 1 to a security interest as provided in section554.9102177 2 554.9109. 177 3 Sec. 184. Section 579B.5, Code Supplement 1999, is amended 177 4 to read as follows: 177 5 579B.5 ENFORCEMENT. 177 6 Before a commodity leaves the authority of the contract 177 7 producer as provided in section 579B.3, the contract producer 177 8 mayforecloseenforce a lien created in that section in the 177 9 manner provided for theforeclosure of secured transactions177 10 enforcement of an agricultural lien as provided insections177 11554.9504, 554.9506, and 554.9507chapter 554, article 9, part 177 12 6. After the commodity is no longer under the authority of 177 13 the contract producer, the contract producer may enforce the 177 14 lien in the manner provided in chapter 554, article 9, part5177 15 6. 177 16 DIVISION IV 177 17 REPEALS AND EFFECTIVE DATE 177 18 Sec. 185. Sections 554.9101 through 554.9507, Code 2001, 177 19 are repealed. 177 20 Sec. 186. Section 554.11105, Code 2001, is repealed. 177 21 Sec. 187. EFFECTIVE DATE. This Act takes effect July 1, 177 22 2001. 177 23 177 24 177 25 177 26 BRENT SIEGRIST 177 27 Speaker of the House 177 28 177 29 177 30 177 31 MARY E. KRAMER 177 32 President of the Senate 177 33 177 34 I hereby certify that this bill originated in the House and 177 35 is known as House File 2513, Seventy-eighth General Assembly. 178 1 178 2 178 3 178 4 ELIZABETH ISAACSON 178 5 Chief Clerk of the House 178 6 Approved , 2000 178 7 178 8 178 9 178 10 THOMAS J. VILSACK 178 11 Governor
Text: HF02512 Text: HF02514 Text: HF02500 - HF02599 Text: HF Index Bills and Amendments: General Index Bill History: General Index
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