Text: HSB00735 Text: HSB00737 Text: HSB00700 - HSB00799 Text: HSB Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 DIVISION I 1 2 ARTICLE 9 AMENDMENTS 1 3 ARTICLE 9 – SECURED TRANSACTIONS 1 4 PART 1 1 5 GENERAL PROVISIONS 1 6 A. SHORT TITLE, DEFINITIONS, AND GENERAL CONCEPTS 1 7 Section 1. NEW SECTION. 554.9101 SHORT TITLE. 1 8 This Article may be cited as Uniform Commercial Code – 1 9 Secured Transactions. 1 10 Sec. 2. NEW SECTION. 554.9102 DEFINITIONS AND INDEX OF 1 11 DEFINITIONS. 1 12 1. ARTICLE 9 DEFINITIONS. In this Article: 1 13 a. "Accession" means goods that are physically united with 1 14 other goods in such a manner that the identity of the original 1 15 goods is not lost. 1 16 b. "Account", except as used in "account for", means a 1 17 right to payment of a monetary obligation, whether or not 1 18 earned by performance, (i) for property that has been or is to 1 19 be sold, leased, licensed, assigned, or otherwise disposed of, 1 20 (ii) for services rendered or to be rendered, (iii) for a 1 21 policy of insurance issued or to be issued, (iv) for a 1 22 secondary obligation incurred or to be incurred, (v) for 1 23 energy provided or to be provided, (vi) for the use or hire of 1 24 a vessel under a charter or other contract, (vii) arising out 1 25 of the use of a credit or charge card or information contained 1 26 on or for use with the card, or (viii) as winnings in a 1 27 lottery or other game of chance operated or sponsored by a 1 28 state, governmental unit of a state, or person licensed or 1 29 authorized to operate the game by a state or governmental unit 1 30 of a state. The term includes health-care-insurance 1 31 receivables. The term does not include (i) rights to payment 1 32 evidenced by chattel paper or an instrument, (ii) commercial 1 33 tort claims, (iii) deposit accounts, (iv) investment property, 1 34 (v) letter-of-credit rights or letters of credit, or (vi) 1 35 rights to payment for money or funds advanced or sold, other 2 1 than rights arising out of the use of a credit or charge card 2 2 or information contained on or for use with the card. 2 3 c. "Account debtor" means a person obligated on an 2 4 account, chattel paper, or general intangible. The term does 2 5 not include persons obligated to pay a negotiable instrument, 2 6 even if the instrument constitutes part of chattel paper. 2 7 d. "Accounting", except as used in "accounting for", means 2 8 a record: 2 9 (1) authenticated by a secured party; 2 10 (2) indicating the aggregate unpaid secured obligations as 2 11 of a date not more than thirty-five days earlier or thirty- 2 12 five days later than the date of the record; and 2 13 (3) identifying the components of the obligations in 2 14 reasonable detail. 2 15 e. "Agricultural lien" means an interest, other than a 2 16 security interest, in farm products: 2 17 (1) which secures payment or performance of an obligation 2 18 for: 2 19 (a) goods or services furnished in connection with a 2 20 debtor's farming operation; or 2 21 (b) rent on real property leased by a debtor in connection 2 22 with its farming operation; 2 23 (2) which is created by statute in favor of a person that: 2 24 (a) in the ordinary course of its business furnished goods 2 25 or services to a debtor in connection with a debtor's farming 2 26 operation; or 2 27 (b) leased real property to a debtor in connection with 2 28 the debtor's farming operation; and 2 29 (3) whose effectiveness does not depend on the person's 2 30 possession of the personal property. 2 31 f. "As-extracted collateral" means: 2 32 (1) oil, gas, or other minerals that are subject to a 2 33 security interest that: 2 34 (a) is created by a debtor having an interest in the 2 35 minerals before extraction; and 3 1 (b) attaches to the minerals as extracted; or 3 2 (2) accounts arising out of the sale at the wellhead or 3 3 minehead of oil, gas, or other minerals in which the debtor 3 4 had an interest before extraction. 3 5 g. "Authenticate" means: 3 6 (1) to sign; or 3 7 (2) to execute or otherwise adopt a symbol, or encrypt or 3 8 similarly process a record in whole or in part, with the 3 9 present intent of the authenticating person to identify the 3 10 person and adopt or accept a record. 3 11 h. "Bank" means an organization that is engaged in the 3 12 business of banking. The term includes savings banks, savings 3 13 and loan associations, credit unions, and trust companies. 3 14 i. "Cash proceeds" means proceeds that are money, checks, 3 15 deposit accounts, or the like. 3 16 j. "Certificate of title" means a certificate of title 3 17 with respect to which a statute provides for the security 3 18 interest in question to be indicated on the certificate as a 3 19 condition or result of the security interest's obtaining 3 20 priority over the rights of a lien creditor with respect to 3 21 the collateral. 3 22 k. "Chattel paper" means a record or records that evidence 3 23 both a monetary obligation and a security interest in specific 3 24 goods, a security interest in specific goods and software used 3 25 in the goods, a security interest in specific goods and 3 26 license of software used in the goods, a lease of specific 3 27 goods, or a lease of specific goods and license of software 3 28 used in the goods. In this paragraph, "monetary obligation" 3 29 means a monetary obligation secured by the goods or owed under 3 30 a lease of the goods and includes a monetary obligation with 3 31 respect to software used in the goods. The term does not 3 32 include charters or other contracts involving the use or hire 3 33 of a vessel. If a transaction is evidenced by records that 3 34 include an instrument or series of instruments, the group of 3 35 records taken together constitutes chattel paper. 4 1 l. "Collateral" means the property subject to a security 4 2 interest or agricultural lien. The term includes: 4 3 (1) proceeds to which a security interest attaches; 4 4 (2) accounts, chattel paper, payment intangibles, and 4 5 promissory notes that have been sold; and 4 6 (3) goods that are the subject of a consignment. 4 7 m. "Commercial tort claim" means a claim arising in tort 4 8 with respect to which: 4 9 (1) the claimant is an organization; or 4 10 (2) the claimant is an individual and the claim: 4 11 (a) arose in the course of the claimant's business or 4 12 profession; and 4 13 (b) does not include damages arising out of personal 4 14 injury to or the death of an individual. 4 15 n. "Commodity account" means an account maintained by a 4 16 commodity intermediary in which a commodity contract is 4 17 carried for a commodity customer. 4 18 o. "Commodity contract" means a commodity futures 4 19 contract, an option on a commodity futures contract, a 4 20 commodity option, or another contract if the contract or 4 21 option is: 4 22 (1) traded on or subject to the rules of a board of trade 4 23 that has been designated as a contract market for such a 4 24 contract pursuant to federal commodities laws; or 4 25 (2) traded on a foreign commodity board of trade, 4 26 exchange, or market, and is carried on the books of a 4 27 commodity intermediary for a commodity customer. 4 28 p. "Commodity customer" means a person for which a 4 29 commodity intermediary carries a commodity contract on its 4 30 books. 4 31 q. "Commodity intermediary" means a person that: 4 32 (1) is registered as a futures commission merchant under 4 33 federal commodities law; or 4 34 (2) in the ordinary course of its business provides 4 35 clearance or settlement services for a board of trade that has 5 1 been designated as a contract market pursuant to federal 5 2 commodities law. 5 3 r. "Communicate" means: 5 4 (1) to send a written or other tangible record; 5 5 (2) to transmit a record by any means agreed upon by the 5 6 persons sending and receiving the record; or 5 7 (3) in the case of transmission of a record to or by a 5 8 filing office, to transmit a record by any means prescribed by 5 9 filing-office rule. 5 10 s. "Consignee" means a merchant to which goods are 5 11 delivered in a consignment. 5 12 t. "Consignment" means a transaction, regardless of its 5 13 form, in which a person delivers goods to a merchant for the 5 14 purpose of sale and: 5 15 (1) the merchant: 5 16 (a) deals in goods of that kind under a name other than 5 17 the name of the person making delivery; 5 18 (b) is not an auctioneer; and 5 19 (c) is not generally known by its creditors to be 5 20 substantially engaged in selling the goods of others; 5 21 (2) with respect to each delivery, the aggregate value of 5 22 the goods is one thousand dollars or more at the time of 5 23 delivery; 5 24 (3) the goods are not consumer goods immediately before 5 25 delivery; and 5 26 (4) the transaction does not create a security interest 5 27 that secures an obligation. 5 28 u. "Consignor" means a person that delivers goods to a 5 29 consignee in a consignment. 5 30 v. "Consumer debtor" means a debtor in a consumer 5 31 transaction. 5 32 w. "Consumer goods" means goods that are used or bought 5 33 for use primarily for personal, family, or household purposes. 5 34 x. "Consumer-goods transaction" means a consumer 5 35 transaction in which: 6 1 (1) an individual incurs an obligation primarily for 6 2 personal, family, or household purposes; and 6 3 (2) a security interest in consumer goods secures the 6 4 obligation. 6 5 y. "Consumer obligor" means an obligor who is an 6 6 individual and who incurred the obligation as part of a 6 7 transaction entered into primarily for personal, family, or 6 8 household purposes. 6 9 z. "Consumer transaction" means a transaction in which (i) 6 10 an individual incurs an obligation primarily for personal, 6 11 family, or household purposes, (ii) a security interest 6 12 secures the obligation, and (iii) the collateral is held or 6 13 acquired primarily for personal, family, or household 6 14 purposes. The term includes consumer-goods transactions. 6 15 aa. "Continuation statement" means an amendment of a 6 16 financing statement which: 6 17 (1) identifies, by its file number, the initial financing 6 18 statement to which it relates; and 6 19 (2) indicates that it is a continuation statement for, or 6 20 that it is filed to continue the effectiveness of, the 6 21 identified financing statement. 6 22 ab. "Debtor" means: 6 23 (1) a person having an interest, other than a security 6 24 interest or other lien, in the collateral, whether or not the 6 25 person is an obligor; 6 26 (2) a seller of accounts, chattel paper, payment 6 27 intangibles, or promissory notes; or 6 28 (3) a consignee. 6 29 ac. "Deposit account" means a demand, time, savings, 6 30 passbook, or similar account maintained with a bank. The term 6 31 does not include investment property or accounts evidenced by 6 32 an instrument. 6 33 ad. "Document" means a document of title or a receipt of 6 34 the type described in section 554.7201, subsection 2. 6 35 ae. "Electronic chattel paper" means chattel paper 7 1 evidenced by a record or records consisting of information 7 2 stored in an electronic medium. 7 3 af. "Encumbrance" means a right, other than an ownership 7 4 interest, in real property. The term includes mortgages and 7 5 other liens on real property. 7 6 ag. "Equipment" means goods other than inventory, farm 7 7 products, or consumer goods. 7 8 ah. "Farm products" means goods, other than standing 7 9 timber, with respect to which the debtor is engaged in a 7 10 farming operation and which are: 7 11 (1) crops grown, growing, or to be grown, including: 7 12 (a) crops produced on trees, vines, and bushes; and 7 13 (b) aquatic goods produced in aquacultural operations; 7 14 (2) livestock, born or unborn, including aquatic goods 7 15 produced in aquacultural operations; 7 16 (3) supplies used or produced in a farming operation; or 7 17 (4) products of crops or livestock in their unmanufactured 7 18 states. 7 19 ai. "Farming operation" means raising, cultivating, 7 20 propagating, fattening, grazing, or any other farming, 7 21 livestock, or aquacultural operation. 7 22 aj. "File number" means the number assigned to an initial 7 23 financing statement pursuant to section 554.9519, subsection 7 24 1. 7 25 ak. "Filing office" means an office designated in section 7 26 554.9501 as the place to file a financing statement. 7 27 al. "Filing-office rule" means a rule adopted pursuant to 7 28 section 554.9526. 7 29 am. "Financing statement" means a record or records 7 30 composed of an initial financing statement and any filed 7 31 record relating to the initial financing statement. 7 32 an. "Fixture filing" means the filing of a financing 7 33 statement covering goods that are or are to become fixtures 7 34 and satisfying section 554.9502, subsections 1 and 2. The 7 35 term includes the filing of a financing statement covering 8 1 goods of a transmitting utility which are or are to become 8 2 fixtures. 8 3 ao. "Fixtures" means goods that have become so related to 8 4 particular real property that an interest in them arises under 8 5 real property law. 8 6 ap. "General intangible" means any personal property, 8 7 including things in action, other than accounts, chattel 8 8 paper, commercial tort claims, deposit accounts, documents, 8 9 goods, instruments, investment property, letter-of-credit 8 10 rights, letters of credit, money, and oil, gas, or other 8 11 minerals before extraction. The term includes payment 8 12 intangibles and software. 8 13 aq. "Good faith" means honesty in fact and the observance 8 14 of reasonable commercial standards of fair dealing. 8 15 ar. "Goods" means all things that are movable when a 8 16 security interest attaches. The term includes (i) fixtures, 8 17 (ii) standing timber that is to be cut and removed under a 8 18 conveyance or contract for sale, (iii) the unborn young of 8 19 animals, (iv) crops grown, growing, or to be grown, even if 8 20 the crops are produced on trees, vines, or bushes, and (v) 8 21 manufactured homes. The term also includes a computer program 8 22 embedded in goods and any supporting information provided in 8 23 connection with a transaction relating to the program if (i) 8 24 the program is associated with the goods in such a manner that 8 25 it customarily is considered part of the goods, or (ii) by 8 26 becoming the owner of the goods, a person acquires a right to 8 27 use the program in connection with the goods. The term does 8 28 not include a computer program embedded in goods that consist 8 29 solely of the medium in which the program is embedded. The 8 30 term also does not include accounts, chattel paper, commercial 8 31 tort claims, deposit accounts, documents, general intangibles, 8 32 instruments, investment property, letter-of-credit rights, 8 33 letters of credit, money, or oil, gas, or other minerals 8 34 before extraction. 8 35 as. "Governmental unit" means a subdivision, agency, 9 1 department, county, parish, municipality, or other unit of the 9 2 government of the United States, a state, or a foreign 9 3 country. The term includes an organization having a separate 9 4 corporate existence if the organization is eligible to issue 9 5 debt on which interest is exempt from income taxation under 9 6 the laws of the United States. 9 7 at. "Health-care-insurance receivable" means an interest 9 8 in or claim under a policy of insurance which is a right to 9 9 payment of a monetary obligation for health-care goods or 9 10 services provided. 9 11 au. "Instrument" means a negotiable instrument or any 9 12 other writing that evidences a right to the payment of a 9 13 monetary obligation, is not itself a security agreement or 9 14 lease, and is of a type that in ordinary course of business is 9 15 transferred by delivery with any necessary indorsement or 9 16 assignment. The term does not include (i) investment 9 17 property, (ii) letters of credit, or (iii) writings that 9 18 evidence a right to payment arising out of the use of a credit 9 19 or charge card or information contained on or for use with the 9 20 card. 9 21 av. "Inventory" means goods, other than farm products, 9 22 which: 9 23 (1) are leased by a person as lessor; 9 24 (2) are held by a person for sale or lease or to be 9 25 furnished under a contract of service; 9 26 (3) are furnished by a person under a contract of service; 9 27 or 9 28 (4) consist of raw materials, work in process, or 9 29 materials used or consumed in a business. 9 30 aw. "Investment property" means a security, whether 9 31 certificated or uncertificated, security entitlement, 9 32 securities account, commodity contract, or commodity account. 9 33 ax. "Jurisdiction of organization", with respect to a 9 34 registered organization, means the jurisdiction under whose 9 35 law the organization is organized. 10 1 ay. "Letter-of-credit right" means a right to payment or 10 2 performance under a letter of credit, whether or not the 10 3 beneficiary has demanded or is at the time entitled to demand 10 4 payment or performance. The term does not include the right 10 5 of a beneficiary to demand payment or performance under a 10 6 letter of credit. 10 7 az. "Lien creditor" means: 10 8 (1) a creditor that has acquired a lien on the property 10 9 involved by attachment, levy, or the like; 10 10 (2) an assignee for benefit of creditors from the time of 10 11 assignment; 10 12 (3) a trustee in bankruptcy from the date of the filing of 10 13 the petition; or 10 14 (4) a receiver in equity from the time of appointment. 10 15 ba. "Manufactured home" means a structure, transportable 10 16 in one or more sections, which, in the traveling mode, is 10 17 eight body feet or more in width or forty body feet or more in 10 18 length, or, when erected on site, is three hundred twenty or 10 19 more square feet, and which is built on a permanent chassis 10 20 and designed to be used as a dwelling with or without a 10 21 permanent foundation when connected to the required utilities, 10 22 and includes the plumbing, heating, air-conditioning, and 10 23 electrical systems contained therein. The term includes any 10 24 structure that meets all of the requirements of this paragraph 10 25 except the size requirements and with respect to which the 10 26 manufacturer voluntarily files a certification required by the 10 27 United States secretary of housing and urban development and 10 28 complies with the standards established under Title 42 of the 10 29 United States Code. 10 30 bb. "Manufactured-home transaction" means a secured 10 31 transaction: 10 32 (1) that creates a purchase-money security interest in a 10 33 manufactured home, other than a manufactured home held as 10 34 inventory; or 10 35 (2) in which a manufactured home, other than a 11 1 manufactured home held as inventory, is the primary 11 2 collateral. 11 3 bc. "Mortgage" means a consensual interest in real 11 4 property, including fixtures, which secures payment or 11 5 performance of an obligation. 11 6 bd. "New debtor" means a person that becomes bound as 11 7 debtor under section 554.9203, subsection 4, by a security 11 8 agreement previously entered into by another person. 11 9 be. "New value" means (i) money, (ii) money's worth in 11 10 property, services, or new credit, or (iii) release by a 11 11 transferee of an interest in property previously transferred 11 12 to the transferee. The term does not include an obligation 11 13 substituted for another obligation. 11 14 bf. "Noncash proceeds" means proceeds other than cash 11 15 proceeds. 11 16 bg. "Obligor" means a person that, with respect to an 11 17 obligation secured by a security interest in or an 11 18 agricultural lien on the collateral, (i) owes payment or other 11 19 performance of the obligation, (ii) has provided property 11 20 other than the collateral to secure payment or other 11 21 performance of the obligation, or (iii) is otherwise 11 22 accountable in whole or in part for payment or other 11 23 performance of the obligation. The term does not include 11 24 issuers or nominated persons under a letter of credit. 11 25 bh. "Original debtor" means a person that, as debtor, 11 26 entered into a security agreement to which a new debtor has 11 27 become bound under section 554.9203, subsection 4. 11 28 bj. "Payment intangible" means a general intangible under 11 29 which the account debtor's principal obligation is a monetary 11 30 obligation. 11 31 bk. "Person related to", with respect to an individual, 11 32 means: 11 33 (1) the spouse of the individual; 11 34 (2) a brother, brother-in-law, sister, or sister-in-law of 11 35 the individual; 12 1 (3) an ancestor or lineal descendant of the individual or 12 2 the individual's spouse; or 12 3 (4) any other relative, by blood or marriage, of the 12 4 individual or the individual's spouse who shares the same home 12 5 with the individual. 12 6 bl. "Person related to", with respect to an organization, 12 7 means: 12 8 (1) a person directly or indirectly controlling, 12 9 controlled by, or under common control with the organization; 12 10 (2) an officer or director of, or a person performing 12 11 similar functions with respect to, the organization; 12 12 (3) an officer or director of, or a person performing 12 13 similar functions with respect to, a person described in 12 14 subparagraph (1); 12 15 (4) the spouse of an individual described in subparagraph 12 16 (1), (2), or (3); or 12 17 (5) an individual who is related by blood or marriage to 12 18 an individual described in subparagraph (1), (2), (3), or (4) 12 19 and shares the same home with the individual. 12 20 bm. "Proceeds" means the following property: 12 21 (1) whatever is acquired upon the sale, lease, license, 12 22 exchange, or other disposition of collateral; 12 23 (2) whatever is collected on, or distributed on account 12 24 of, collateral; 12 25 (3) rights arising out of collateral; 12 26 (4) to the extent of the value of collateral, claims 12 27 arising out of the loss, nonconformity, or interference with 12 28 the use of, defects or infringement of rights in, or damage 12 29 to, the collateral; or 12 30 (5) to the extent of the value of collateral and to the 12 31 extent payable to the debtor or the secured party, insurance 12 32 payable by reason of the loss or nonconformity of, defects or 12 33 infringement of rights in, or damage to, the collateral. 12 34 bn. "Promissory note" means an instrument that evidences a 12 35 promise to pay a monetary obligation, does not evidence an 13 1 order to pay, and does not contain an acknowledgment by a bank 13 2 that the bank has received for deposit a sum of money or 13 3 funds. 13 4 bo. "Proposal" means a record authenticated by a secured 13 5 party which includes the terms on which the secured party is 13 6 willing to accept collateral in full or partial satisfaction 13 7 of the obligation it secures pursuant to sections 554.9620, 13 8 554.9621, and 554.9622. 13 9 bp. "Public-finance transaction" means a secured 13 10 transaction in connection with which: 13 11 (1) debt securities are issued; 13 12 (2) all or a portion of the securities issued have an 13 13 initial stated maturity of at least twenty years; and 13 14 (3) the debtor, obligor, secured party, account debtor or 13 15 other person obligated on collateral, assignor or assignee of 13 16 a secured obligation, or assignor or assignee of a security 13 17 interest is a state or a governmental unit of a state. 13 18 bq. "Pursuant to commitment", with respect to an advance 13 19 made or other value given by a secured party, means pursuant 13 20 to the secured party's obligation, whether or not a subsequent 13 21 event of default or other event not within the secured party's 13 22 control has relieved or may relieve the secured party from its 13 23 obligation. 13 24 br. "Record", except as used in "for record", "of record", 13 25 "record or legal title", and "record owner", means information 13 26 that is inscribed on a tangible medium or which is stored in 13 27 an electronic or other medium and is retrievable in 13 28 perceivable form. 13 29 bs. "Registered organization" means an organization 13 30 organized solely under the law of a single state or the United 13 31 States and as to which the state or the United States must 13 32 maintain a public record showing the organization to have been 13 33 organized. 13 34 bt. "Secondary obligor" means an obligor to the extent 13 35 that: 14 1 (1) the obligor's obligation is secondary; or 14 2 (2) the obligor has a right of recourse with respect to an 14 3 obligation secured by collateral against the debtor, another 14 4 obligor, or property of either. 14 5 bu. "Secured party" means: 14 6 (1) a person in whose favor a security interest is created 14 7 or provided for under a security agreement, whether or not any 14 8 obligation to be secured is outstanding; 14 9 (2) a person that holds an agricultural lien; 14 10 (3) a consignor; 14 11 (4) a person to which accounts, chattel paper, payment 14 12 intangibles, or promissory notes have been sold; 14 13 (5) a trustee, indenture trustee, agent, collateral agent, 14 14 or other representative in whose favor a security interest or 14 15 agricultural lien is created or provided for; or 14 16 (6) a person that holds a security interest arising under 14 17 section 554.2401, 554.2505, 554.2711, subsection 3, section 14 18 554.4210, 554.5118, or 554.13508, subsection 5. 14 19 bv. "Security agreement" means an agreement that creates 14 20 or provides for a security interest. 14 21 bw. "Send", in connection with a record or notification, 14 22 means: 14 23 (1) to deposit in the mail, deliver for transmission, or 14 24 transmit by any other usual means of communication, with 14 25 postage or cost of transmission provided for, addressed to any 14 26 address reasonable under the circumstances; or 14 27 (2) to cause the record or notification to be received 14 28 within the time that it would have been received if properly 14 29 sent under subparagraph (1). 14 30 bx. "Software" means a computer program and any supporting 14 31 information provided in connection with a transaction relating 14 32 to the program. The term does not include a computer program 14 33 that is included in the definition of goods. 14 34 by. "State" means a state of the United States, the 14 35 District of Columbia, Puerto Rico, the United States Virgin 15 1 Islands, or any territory or insular possession subject to the 15 2 jurisdiction of the United States. 15 3 bz. "Supporting obligation" means a letter-of-credit right 15 4 or secondary obligation that supports the payment or 15 5 performance of an account, chattel paper, a document, a 15 6 general intangible, an instrument, or investment property. 15 7 ca. "Tangible chattel paper" means chattel paper evidenced 15 8 by a record or records consisting of information that is 15 9 inscribed on a tangible medium. 15 10 cb. "Termination statement" means an amendment of a 15 11 financing statement which: 15 12 (1) identifies, by its file number, the initial financing 15 13 statement to which it relates; and 15 14 (2) indicates either that it is a termination statement or 15 15 that the identified financing statement is no longer 15 16 effective. 15 17 cc. "Transmitting utility" means a person primarily 15 18 engaged in the business of: 15 19 (1) operating a railroad, subway, street railway, or 15 20 trolley bus; 15 21 (2) transmitting communications electrically, 15 22 electromagnetically, or by light; 15 23 (3) transmitting goods by pipeline or sewer; or 15 24 (4) transmitting or producing and transmitting 15 25 electricity, steam, gas, or water. 15 26 2. DEFINITIONS IN OTHER ARTICLES. The following 15 27 definitions in other Articles apply to this Article: 15 28 "Applicant" Section 554.5102 15 29 "Beneficiary" Section 554.5102 15 30 "Broker" Section 554.8102 15 31 "Certificated security" Section 554.8102 15 32 "Check" Section 554.3104 15 33 "Clearing corporation" Section 554.8102 15 34 "Contract for sale" Section 554.2106 15 35 "Customer" Section 554.4104 16 1 "Entitlement holder" Section 554.8102 16 2 "Financial asset" Section 554.8102 16 3 "Holder in due course" Section 554.3302 16 4 "Issuer" (with respect to a letter of 16 5 credit or letter-of-credit right) Section 554.5102 16 6 "Issuer" (with respect to a security) Section 554.8201 16 7 "Lease" Section 554.13103 16 8 "Lease agreement" Section 554.13103 16 9 "Lease contract" Section 554.13103 16 10 "Leasehold interest" Section 554.13103 16 11 "Lessee" Section 554.13103 16 12 "Lessee in ordinary course of business" Section 554.13103 16 13 "Lessor" Section 554.13103 16 14 "Lessor's residual interest" Section 554.13103 16 15 "Letter of credit" Section 554.5102 16 16 "Merchant" Section 554.2104 16 17 "Negotiable instrument" Section 554.3104 16 18 "Nominated person" Section 554.5102 16 19 "Note" Section 554.3104 16 20 "Proceeds of a letter of credit" Section 554.5114 16 21 "Prove" Section 554.3103 16 22 "Sale" Section 554.2106 16 23 "Securities account" Section 554.8501 16 24 "Securities intermediary" Section 554.8102 16 25 "Security" Section 554.8102 16 26 "Security certificate" Section 554.8102 16 27 "Security entitlement" Section 554.8102 16 28 "Uncertificated security" Section 554.8102 16 29 3. ARTICLE 1 DEFINITIONS AND PRINCIPLES. Article 1 16 30 contains general definitions and principles of construction 16 31 and interpretation applicable throughout this Article. 16 32 4. FEDERAL FOOD SECURITY ACT. For purposes of the Federal 16 33 Food Security Act, 7 U.S.C. } 1631, written notice shall be 16 34 considered to be received by the person to whom it was 16 35 delivered if the notice is delivered in hand to the person, or 17 1 mailed by certified or registered mail with the proper postage 17 2 and properly addressed to the person to whom it was sent. The 17 3 refusal of a person to whom a notice is so mailed to accept 17 4 delivery of the notice shall be considered receipt. 17 5 Sec. 3. NEW SECTION. 554.9103 PURCHASE-MONEY SECURITY 17 6 INTEREST – APPLICATION OF PAYMENTS – BURDEN OF ESTABLISHING. 17 7 1. DEFINITIONS. In this section: 17 8 a. "purchase-money collateral" means goods or software 17 9 that secures a purchase-money obligation incurred with respect 17 10 to that collateral; and 17 11 b. "purchase-money obligation" means an obligation of an 17 12 obligor incurred as all or part of the price of the collateral 17 13 or for value given to enable the debtor to acquire rights in 17 14 or the use of the collateral if the value is in fact so used. 17 15 2. PURCHASE-MONEY SECURITY INTEREST IN GOODS. A security 17 16 interest in goods is a purchase-money security interest: 17 17 a. to the extent that the goods are purchase-money 17 18 collateral with respect to that security interest; 17 19 b. if the security interest is in inventory that is or was 17 20 purchase-money collateral, also to the extent that the 17 21 security interest secures a purchase-money obligation incurred 17 22 with respect to other inventory in which the secured party 17 23 holds or held a purchase-money security interest; and 17 24 c. also to the extent that the security interest secures a 17 25 purchase-money obligation incurred with respect to software in 17 26 which the secured party holds or held a purchase-money 17 27 security interest. 17 28 3. PURCHASE-MONEY SECURITY INTEREST IN SOFTWARE. A 17 29 security interest in software is a purchase-money security 17 30 interest to the extent that the security interest also secures 17 31 a purchase-money obligation incurred with respect to goods in 17 32 which the secured party holds or held a purchase-money 17 33 security interest if: 17 34 a. the debtor acquired its interest in the software in an 17 35 integrated transaction in which it acquired an interest in the 18 1 goods; and 18 2 b. the debtor acquired its interest in the software for 18 3 the principal purpose of using the software in the goods. 18 4 4. CONSIGNOR'S INVENTORY PURCHASE-MONEY SECURITY INTEREST. 18 5 The security interest of a consignor in goods that are the 18 6 subject of a consignment is a purchase-money security interest 18 7 in inventory. 18 8 5. APPLICATION OF PAYMENT IN NONCONSUMER-GOODS 18 9 TRANSACTION. In a transaction other than a consumer-goods 18 10 transaction, if the extent to which a security interest is a 18 11 purchase-money security interest depends on the application of 18 12 a payment to a particular obligation, the payment must be 18 13 applied: 18 14 a. in accordance with any reasonable method of application 18 15 to which the parties agree; 18 16 b. in the absence of the parties' agreement to a 18 17 reasonable method, in accordance with any intention of the 18 18 obligor manifested at or before the time of payment; or 18 19 c. in the absence of an agreement to a reasonable method 18 20 and a timely manifestation of the obligor's intention, in the 18 21 following order: 18 22 (1) to obligations that are not secured; and 18 23 (2) if more than one obligation is secured, to obligations 18 24 secured by purchase-money security interests in the order in 18 25 which those obligations were incurred. 18 26 6. NO LOSS OF STATUS OF PURCHASE-MONEY SECURITY INTEREST 18 27 IN NONCONSUMER-GOODS TRANSACTION. In a transaction other than 18 28 a consumer-goods transaction, a purchase-money security 18 29 interest does not lose its status as such, even if: 18 30 a. the purchase-money collateral also secures an 18 31 obligation that is not a purchase-money obligation; 18 32 b. collateral that is not purchase-money collateral also 18 33 secures the purchase-money obligation; or 18 34 c. the purchase-money obligation has been renewed, 18 35 refinanced, consolidated, or restructured. 19 1 7. BURDEN OF PROOF IN NONCONSUMER-GOODS TRANSACTION. In a 19 2 transaction other than a consumer-goods transaction, a secured 19 3 party claiming a purchase-money security interest has the 19 4 burden of establishing the extent to which the security 19 5 interest is a purchase-money security interest. 19 6 8. NONCONSUMER-GOODS TRANSACTIONS – NO INFERENCE. The 19 7 limitation of the rules in subsections 5, 6, and 7 to 19 8 transactions other than consumer-goods transactions is 19 9 intended to leave to the court the determination of the proper 19 10 rules in consumer-goods transactions. The court may not infer 19 11 from that limitation the nature of the proper rule in 19 12 consumer-goods transactions and may continue to apply 19 13 established approaches. 19 14 Sec. 4. NEW SECTION. 554.9104 CONTROL OF DEPOSIT 19 15 ACCOUNT. 19 16 1. REQUIREMENTS FOR CONTROL. A secured party has control 19 17 of a deposit account if: 19 18 a. the secured party is the bank with which the deposit 19 19 account is maintained; 19 20 b. the debtor, secured party, and bank have agreed in an 19 21 authenticated record that the bank will comply with 19 22 instructions originated by the secured party directing 19 23 disposition of the funds in the deposit account without 19 24 further consent by the debtor; or 19 25 c. the secured party becomes the bank's customer with 19 26 respect to the deposit account. 19 27 2. DEBTOR'S RIGHT TO DIRECT DISPOSITION. A secured party 19 28 that has satisfied subsection 1 has control, even if the 19 29 debtor retains the right to direct the disposition of funds 19 30 from the deposit account. 19 31 Sec. 5. NEW SECTION. 554.9105 CONTROL OF ELECTRONIC 19 32 CHATTEL PAPER. 19 33 A secured party has control of electronic chattel paper if 19 34 the record or records comprising the chattel paper are 19 35 created, stored, and assigned in such a manner that: 20 1 1. a single authoritative copy of the record or records 20 2 exists which is unique, identifiable and, except as otherwise 20 3 provided in subsections 4, 5, and 6, unalterable; 20 4 2. the authoritative copy identifies the secured party as 20 5 the assignee of the record or records; 20 6 3. the authoritative copy is communicated to and 20 7 maintained by the secured party or its designated custodian; 20 8 4. copies or revisions that add or change an identified 20 9 assignee of the authoritative copy can be made only with the 20 10 participation of the secured party; 20 11 5. each copy of the authoritative copy and any copy of a 20 12 copy is readily identifiable as a copy that is not the 20 13 authoritative copy; and 20 14 6. any revision of the authoritative copy is readily 20 15 identifiable as an authorized or unauthorized revision. 20 16 Sec. 6. NEW SECTION. 554.9106 CONTROL OF INVESTMENT 20 17 PROPERTY. 20 18 1. CONTROL UNDER SECTION 554.8106. A person has control 20 19 of a certificated security, uncertificated security, or 20 20 security entitlement as provided in section 554.8106. 20 21 2. CONTROL OF COMMODITY CONTRACT. A secured party has 20 22 control of a commodity contract if: 20 23 a. the secured party is the commodity intermediary with 20 24 which the commodity contract is carried; or 20 25 b. the commodity customer, secured party, and commodity 20 26 intermediary have agreed that the commodity intermediary will 20 27 apply any value distributed on account of the commodity 20 28 contract as directed by the secured party without further 20 29 consent by the commodity customer. 20 30 3. EFFECT OF CONTROL OF SECURITIES ACCOUNT OR COMMODITY 20 31 ACCOUNT. A secured party having control of all security 20 32 entitlements or commodity contracts carried in a securities 20 33 account or commodity account has control over the securities 20 34 account or commodity account. 20 35 Sec. 7. NEW SECTION. 554.9107 CONTROL OF LETTER-OF- 21 1 CREDIT RIGHT. 21 2 A secured party has control of a letter-of-credit right to 21 3 the extent of any right to payment or performance by the 21 4 issuer or any nominated person if the issuer or nominated 21 5 person has consented to an assignment of proceeds of the 21 6 letter of credit under section 554.5114, subsection 3, or 21 7 otherwise applicable law or practice. 21 8 Sec. 8. NEW SECTION. 554.9108 SUFFICIENCY OF 21 9 DESCRIPTION. 21 10 1. SUFFICIENCY OF DESCRIPTION. Except as otherwise 21 11 provided in subsections 3, 4, and 5, a description of personal 21 12 or real property is sufficient, whether or not it is specific, 21 13 if it reasonably identifies what is described. 21 14 2. EXAMPLES OF REASONABLE IDENTIFICATION. Except as 21 15 otherwise provided in subsection 4, a description of 21 16 collateral reasonably identifies the collateral if it 21 17 identifies the collateral by: 21 18 a. specific listing; 21 19 b. category; 21 20 c. except as otherwise provided in subsection 5, a type of 21 21 collateral defined in this chapter; 21 22 d. quantity; 21 23 e. computational or allocational formula or procedure; or 21 24 f. except as otherwise provided in subsection 3, any other 21 25 method, if the identity of the collateral is objectively 21 26 determinable. 21 27 3. SUPERGENERIC DESCRIPTION NOT SUFFICIENT. A description 21 28 of collateral as "all the debtor's assets" or "all the 21 29 debtor's personal property" or using words of similar import 21 30 does not reasonably identify the collateral. 21 31 4. INVESTMENT PROPERTY. Except as otherwise provided in 21 32 subsection 5, a description of a security entitlement, 21 33 securities account, or commodity account is sufficient if it 21 34 describes: 21 35 a. the collateral by those terms or as investment 22 1 property; or 22 2 b. the underlying financial asset or commodity contract. 22 3 5. WHEN DESCRIPTION BY TYPE INSUFFICIENT. A description 22 4 only by type of collateral defined in this chapter is an 22 5 insufficient description of: 22 6 a. a commercial tort claim; or 22 7 b. in a consumer transaction, consumer goods, a security 22 8 entitlement, a securities account, or a commodity account. 22 9 B. APPLICABILITY OF ARTICLE 22 10 Sec. 9. NEW SECTION. 554.9109 SCOPE. 22 11 1. GENERAL SCOPE OF ARTICLE. Except as otherwise provided 22 12 in subsections 3 and 4, this Article applies to: 22 13 a. a transaction, regardless of its form, that creates a 22 14 security interest in personal property or fixtures by 22 15 contract; 22 16 b. an agricultural lien; 22 17 c. a sale of accounts, chattel paper, payment intangibles, 22 18 or promissory notes; 22 19 d. a consignment; 22 20 e. a security interest arising under section 554.2401, 22 21 554.2505, 554.2711, subsection 3, section 554.9110, or 22 22 554.13508, subsection 5; and 22 23 f. a security interest arising under section 554.4210 or 22 24 554.5118. 22 25 2. SECURITY INTEREST IN SECURED OBLIGATION. The 22 26 application of this Article to a security interest in a 22 27 secured obligation is not affected by the fact that the 22 28 obligation is itself secured by a transaction or interest to 22 29 which this Article does not apply. 22 30 3. EXTENT TO WHICH ARTICLE DOES NOT APPLY. This Article 22 31 does not apply to the extent that: 22 32 a. a statute, regulation, or treaty of the United States 22 33 preempts this Article; 22 34 b. another statute of this state expressly governs the 22 35 creation, perfection, priority, or enforcement of a security 23 1 interest created by this state or a governmental unit of this 23 2 state; 23 3 c. a statute of another state, a foreign country, or a 23 4 governmental unit of another state or a foreign country, other 23 5 than a statute generally applicable to security interests, 23 6 expressly governs creation, perfection, priority, or 23 7 enforcement of a security interest created by the state, 23 8 country, or governmental unit; or 23 9 d. the rights of a transferee beneficiary or nominated 23 10 person under a letter of credit are independent and superior 23 11 under section 554.5114. 23 12 4. INAPPLICABILITY OF ARTICLE. This Article does not 23 13 apply to: 23 14 a. a landlord's lien, other than an agricultural lien; 23 15 b. a lien, other than an agricultural lien, given by 23 16 statute or other rule of law for services or materials, but 23 17 section 554.9333 applies with respect to priority of the lien; 23 18 c. an assignment of a claim for wages, salary, or other 23 19 compensation of an employee; 23 20 d. a sale of accounts, chattel paper, payment intangibles, 23 21 or promissory notes as part of a sale of the business out of 23 22 which they arose; 23 23 e. an assignment of accounts, chattel paper, payment 23 24 intangibles, or promissory notes which is for the purpose of 23 25 collection only; 23 26 f. an assignment of a right to payment under a contract to 23 27 an assignee that is also obligated to perform under the 23 28 contract; 23 29 g. an assignment of a single account, payment intangible, 23 30 or promissory note to an assignee in full or partial 23 31 satisfaction of a preexisting indebtedness; 23 32 h. a transfer of an interest in or an assignment of a 23 33 claim under a policy of insurance, other than an assignment by 23 34 or to a health-care provider of a health-care-insurance 23 35 receivable and any subsequent assignment of the right to 24 1 payment, but sections 554.9315 and 554.9322 apply with respect 24 2 to proceeds and priorities in proceeds; 24 3 i. an assignment of a right represented by a judgment, 24 4 other than a judgment taken on a right to payment that was 24 5 collateral; 24 6 j. a right of recoupment or setoff, but: 24 7 (1) section 554.9340 applies with respect to the 24 8 effectiveness of rights of recoupment or setoff against 24 9 deposit accounts; and 24 10 (2) section 554.9404 applies with respect to defenses or 24 11 claims of an account debtor; 24 12 k. the creation or transfer of an interest in or lien on 24 13 real property, including a lease or rents thereunder, except 24 14 to the extent that provision is made for: 24 15 (1) liens on real property in sections 554.9203 and 24 16 554.9308; 24 17 (2) fixtures in section 554.9334; 24 18 (3) fixture filings in sections 554.9501, 554.9502, 24 19 554.9512, 554.9516, and 554.9519; and 24 20 (4) security agreements covering personal and real 24 21 property in section 554.9604; 24 22 l. an assignment of a claim arising in tort, other than a 24 23 commercial tort claim, but sections 554.9315 and 554.9322 24 24 apply with respect to proceeds and priorities in proceeds; or 24 25 m. an assignment of a deposit account in a consumer 24 26 transaction, but sections 554.9315 and 554.9322 apply with 24 27 respect to proceeds and priorities in proceeds. 24 28 Sec. 10. NEW SECTION. 554.9110 SECURITY INTERESTS 24 29 ARISING UNDER ARTICLE 2 OR 13. 24 30 A security interest arising under section 554.2401, 24 31 554.2505, 554.2711, subsection 3, or section 554.13508, 24 32 subsection 5, is subject to this Article. However, until the 24 33 debtor obtains possession of the goods: 24 34 1. the security interest is enforceable, even if section 24 35 554.9203, subsection 2, paragraph "c", has not been satisfied; 25 1 2. filing is not required to perfect the security 25 2 interest; 25 3 3. the rights of the secured party after default by the 25 4 debtor are governed by Article 2 or 13; and 25 5 4. the security interest has priority over a conflicting 25 6 security interest created by the debtor. 25 7 PART 2 25 8 EFFECTIVENESS OF SECURITY AGREEMENT – 25 9 ATTACHMENT OF SECURITY INTEREST – 25 10 RIGHTS OF PARTIES TO SECURITY AGREEMENT 25 11 A. EFFECTIVENESS AND ATTACHMENT 25 12 Sec. 11. NEW SECTION. 554.9201 GENERAL EFFECTIVENESS OF 25 13 SECURITY AGREEMENT. 25 14 1. GENERAL EFFECTIVENESS. Except as otherwise provided in 25 15 this chapter, a security agreement is effective according to 25 16 its terms between the parties, against purchasers of the 25 17 collateral, and against creditors. 25 18 2. APPLICABLE CONSUMER LAWS. A transaction subject to 25 19 this Article is subject to any applicable rule of law which 25 20 establishes a different rule for consumers, including as 25 21 provided in chapter 537, or any other statute or regulation of 25 22 this state that regulates the rates, charges, agreements, and 25 23 practices for loans, credit sales, or other extensions of 25 24 credit, and to any consumer protection statute or regulation. 25 25 3. OTHER APPLICABLE LAW CONTROLS. In case of conflict 25 26 between this Article and a rule of law, statute, or regulation 25 27 described in subsection 2, the rule of law, statute, or 25 28 regulation controls. Failure to comply with a statute or 25 29 regulation described in subsection 2 has only the effect the 25 30 statute or regulation specifies. 25 31 4. FURTHER DEFERENCE TO OTHER APPLICABLE LAW. This 25 32 Article does not: 25 33 a. validate any rate, charge, agreement, or practice that 25 34 violates a rule of law, statute, or regulation described in 25 35 subsection 2; or 26 1 b. extend the application of the rule of law, statute, or 26 2 regulation to a transaction not otherwise subject to it. 26 3 Sec. 12. NEW SECTION. 554.9202 TITLE TO COLLATERAL 26 4 IMMATERIAL. 26 5 Except as otherwise provided with respect to consignments 26 6 or sales of accounts, chattel paper, payment intangibles, or 26 7 promissory notes, the provisions of this Article with regard 26 8 to rights and obligations apply whether title to collateral is 26 9 in the secured party or the debtor. 26 10 Sec. 13. NEW SECTION. 554.9203 ATTACHMENT AND 26 11 ENFORCEABILITY OF SECURITY INTEREST – PROCEEDS – SUPPORTING 26 12 OBLIGATIONS – FORMAL REQUISITES. 26 13 1. ATTACHMENT. A security interest attaches to collateral 26 14 when it becomes enforceable against the debtor with respect to 26 15 the collateral, unless an agreement expressly postpones the 26 16 time of attachment. 26 17 2. ENFORCEABILITY. Except as otherwise provided in 26 18 subsections 3 through 9, a security interest is enforceable 26 19 against the debtor and third parties with respect to the 26 20 collateral only if: 26 21 a. value has been given; 26 22 b. the debtor has rights in the collateral or the power to 26 23 transfer rights in the collateral to a secured party; and 26 24 c. one of the following conditions is met: 26 25 (1) the debtor has authenticated a security agreement that 26 26 provides a description of the collateral and, if the security 26 27 interest covers timber to be cut, a description of the land 26 28 concerned; 26 29 (2) the collateral is not a certificated security and is 26 30 in the possession of the secured party under section 554.9313 26 31 pursuant to the debtor's security agreement; 26 32 (3) the collateral is a certificated security in 26 33 registered form and the security certificate has been 26 34 delivered to the secured party under section 554.8301 pursuant 26 35 to the debtor's security agreement; or 27 1 (4) the collateral is deposit accounts, electronic chattel 27 2 paper, investment property, or letter-of-credit rights, and 27 3 the secured party has control under section 554.9104, 27 4 554.9105, 554.9106, or 554.9107 pursuant to the debtor's 27 5 security agreement. 27 6 3. OTHER UCC PROVISIONS. Subsection 2 is subject to 27 7 section 554.4210 on the security interest of a collecting 27 8 bank, section 554.5118 on the security interest of a letter- 27 9 of-credit issuer or nominated person, section 554.9110 on a 27 10 security interest arising under Article 2 or 13, and section 27 11 554.9206 on security interests in investment property. 27 12 4. WHEN PERSON BECOMES BOUND BY ANOTHER PERSON'S SECURITY 27 13 AGREEMENT. A person becomes bound as debtor by a security 27 14 agreement entered into by another person if, by operation of 27 15 law other than this Article or by contract: 27 16 a. the security agreement becomes effective to create a 27 17 security interest in the person's property; or 27 18 b. the person becomes generally obligated for the 27 19 obligations of the other person, including the obligation 27 20 secured under the security agreement, and acquires or succeeds 27 21 to all or substantially all of the assets of the other person. 27 22 5. EFFECT OF NEW DEBTOR BECOMING BOUND. If a new debtor 27 23 becomes bound as debtor by a security agreement entered into 27 24 by another person: 27 25 a. the agreement satisfies subsection 2, paragraph "c", 27 26 with respect to existing or after-acquired property of the new 27 27 debtor to the extent the property is described in the 27 28 agreement; and 27 29 b. another agreement is not necessary to make a security 27 30 interest in the property enforceable. 27 31 6. PROCEEDS AND SUPPORTING OBLIGATIONS. The attachment of 27 32 a security interest in collateral gives the secured party the 27 33 rights to proceeds provided by section 554.9315 and is also 27 34 attachment of a security interest in a supporting obligation 27 35 for the collateral. 28 1 7. LIEN SECURING RIGHT TO PAYMENT. The attachment of a 28 2 security interest in a right to payment or performance secured 28 3 by a security interest or other lien on personal or real 28 4 property is also attachment of a security interest in the 28 5 security interest, mortgage, or other lien. 28 6 8. SECURITY ENTITLEMENT CARRIED IN SECURITIES ACCOUNT. 28 7 The attachment of a security interest in a securities account 28 8 is also attachment of a security interest in the security 28 9 entitlements carried in the securities account. 28 10 9. COMMODITY CONTRACTS CARRIED IN COMMODITY ACCOUNT. The 28 11 attachment of a security interest in a commodity account is 28 12 also attachment of a security interest in the commodity 28 13 contracts carried in the commodity account. 28 14 Sec. 14. NEW SECTION. 554.9204 AFTER-ACQUIRED PROPERTY 28 15 – FUTURE ADVANCES. 28 16 1. AFTER-ACQUIRED COLLATERAL. Except as otherwise 28 17 provided in subsection 2, a security agreement may create or 28 18 provide for a security interest in after-acquired collateral. 28 19 2. WHEN AFTER-ACQUIRED PROPERTY CLAUSE NOT EFFECTIVE. A 28 20 security interest does not attach under a term constituting an 28 21 after-acquired property clause to: 28 22 a. consumer goods, other than an accession when given as 28 23 additional security, unless the debtor acquires rights in them 28 24 within ten days after the secured party gives value; or 28 25 b. a commercial tort claim. 28 26 3. FUTURE ADVANCES AND OTHER VALUE. A security agreement 28 27 may provide that collateral secures, or that accounts, chattel 28 28 paper, payment intangibles, or promissory notes are sold in 28 29 connection with, future advances or other value, whether or 28 30 not the advances or value are given pursuant to commitment. 28 31 Sec. 15. NEW SECTION. 554.9205 USE OR DISPOSITION OF 28 32 COLLATERAL PERMISSIBLE. 28 33 1. WHEN SECURITY INTEREST NOT INVALID OR FRAUDULENT. A 28 34 security interest is not invalid or fraudulent against 28 35 creditors solely because: 29 1 a. the debtor has the right or ability to: 29 2 (1) use, commingle, or dispose of all or part of the 29 3 collateral, including returned or repossessed goods; 29 4 (2) collect, compromise, enforce, or otherwise deal with 29 5 collateral; 29 6 (3) accept the return of collateral or make repossessions; 29 7 or 29 8 (4) use, commingle, or dispose of proceeds; or 29 9 b. the secured party fails to require the debtor to 29 10 account for proceeds or replace collateral. 29 11 2. REQUIREMENTS OF POSSESSION NOT RELAXED. This section 29 12 does not relax the requirements of possession if attachment, 29 13 perfection, or enforcement of a security interest depends upon 29 14 possession of the collateral by the secured party. 29 15 Sec. 16. NEW SECTION. 554.9206 SECURITY INTEREST ARISING 29 16 IN PURCHASE OR DELIVERY OF FINANCIAL ASSET. 29 17 1. SECURITY INTEREST WHEN PERSON BUYS THROUGH SECURITIES 29 18 INTERMEDIARY. A security interest in favor of a securities 29 19 intermediary attaches to a person's security entitlement if: 29 20 a. the person buys a financial asset through the 29 21 securities intermediary in a transaction in which the person 29 22 is obligated to pay the purchase price to the securities 29 23 intermediary at the time of the purchase; and 29 24 b. the securities intermediary credits the financial asset 29 25 to the buyer's securities account before the buyer pays the 29 26 securities intermediary. 29 27 2. SECURITY INTEREST SECURES OBLIGATION TO PAY FOR 29 28 FINANCIAL ASSET. The security interest described in 29 29 subsection 1 secures the person's obligation to pay for the 29 30 financial asset. 29 31 3. SECURITY INTEREST IN PAYMENT AGAINST DELIVERY 29 32 TRANSACTION. A security interest in favor of a person that 29 33 delivers a certificated security or other financial asset 29 34 represented by a writing attaches to the security or other 29 35 financial asset if: 30 1 a. the security or other financial asset: 30 2 (1) in the ordinary course of business is transferred by 30 3 delivery with any necessary indorsement or assignment; and 30 4 (2) is delivered under an agreement between persons in the 30 5 business of dealing with such securities or financial assets; 30 6 and 30 7 b. the agreement calls for delivery against payment. 30 8 4. SECURITY INTEREST SECURES OBLIGATION TO PAY FOR 30 9 DELIVERY. The security interest described in subsection 3 30 10 secures the obligation to make payment for the delivery. 30 11 B. RIGHTS AND DUTIES 30 12 Sec. 17. NEW SECTION. 554.9207 RIGHTS AND DUTIES OF 30 13 SECURED PARTY HAVING POSSESSION OR CONTROL OF COLLATERAL. 30 14 1. DUTY OF CARE WHEN SECURED PARTY IN POSSESSION. Except 30 15 as otherwise provided in subsection 4, a secured party shall 30 16 use reasonable care in the custody and preservation of 30 17 collateral in the secured party's possession. In the case of 30 18 chattel paper or an instrument, reasonable care includes 30 19 taking necessary steps to preserve rights against prior 30 20 parties unless otherwise agreed. 30 21 2. EXPENSES, RISKS, DUTIES, AND RIGHTS WHEN SECURED PARTY 30 22 IN POSSESSION. Except as otherwise provided in subsection 4, 30 23 if a secured party has possession of collateral: 30 24 a. reasonable expenses, including the cost of insurance 30 25 and payment of taxes or other charges, incurred in the 30 26 custody, preservation, use, or operation of the collateral are 30 27 chargeable to the debtor and are secured by the collateral; 30 28 b. the risk of accidental loss or damage is on the debtor 30 29 to the extent of a deficiency in any effective insurance 30 30 coverage; 30 31 c. the secured party shall keep the collateral 30 32 identifiable, but fungible collateral may be commingled; and 30 33 d. the secured party may use or operate the collateral: 30 34 (1) for the purpose of preserving the collateral or its 30 35 value; 31 1 (2) as permitted by an order of a court having competent 31 2 jurisdiction; or 31 3 (3) except in the case of consumer goods, in the manner 31 4 and to the extent agreed by the debtor. 31 5 3. DUTIES AND RIGHTS WHEN SECURED PARTY IN POSSESSION OR 31 6 CONTROL. Except as otherwise provided in subsection 4, a 31 7 secured party having possession of collateral or control of 31 8 collateral under section 554.9104, 554.9105, 554.9106, or 31 9 554.9107: 31 10 a. may hold as additional security any proceeds, except 31 11 money or funds, received from the collateral; 31 12 b. shall apply money or funds received from the collateral 31 13 to reduce the secured obligation, unless remitted to the 31 14 debtor; and 31 15 c. may create a security interest in the collateral. 31 16 4. BUYER OF CERTAIN RIGHTS TO PAYMENT. If the secured 31 17 party is a buyer of accounts, chattel paper, payment 31 18 intangibles, or promissory notes or a consignor: 31 19 a. subsection 1 does not apply unless the secured party is 31 20 entitled under an agreement: 31 21 (1) to charge back uncollected collateral; or 31 22 (2) otherwise to full or limited recourse against the 31 23 debtor or a secondary obligor based on the nonpayment or other 31 24 default of an account debtor or other obligor on the 31 25 collateral; and 31 26 b. subsections 2 and 3 do not apply. 31 27 Sec. 18. NEW SECTION. 554.9208 ADDITIONAL DUTIES OF 31 28 SECURED PARTY HAVING CONTROL OF COLLATERAL. 31 29 1. APPLICABILITY OF SECTION. This section applies to 31 30 cases in which there is no outstanding secured obligation and 31 31 the secured party is not committed to make advances, incur 31 32 obligations, or otherwise give value. 31 33 2. DUTIES OF SECURED PARTY AFTER RECEIVING DEMAND FROM 31 34 DEBTOR. Within ten days after receiving an authenticated 31 35 demand by the debtor: 32 1 a. a secured party having control of a deposit account 32 2 under section 554.9104, subsection 1, paragraph "b", shall 32 3 send to the bank with which the deposit account is maintained 32 4 an authenticated statement that releases the bank from any 32 5 further obligation to comply with instructions originated by 32 6 the secured party; 32 7 b. a secured party having control of a deposit account 32 8 under section 554.9104, subsection 1, paragraph "c", shall: 32 9 (1) pay the debtor the balance on deposit in the deposit 32 10 account; or 32 11 (2) transfer the balance on deposit into a deposit account 32 12 in the debtor's name; 32 13 c. a secured party, other than a buyer, having control of 32 14 electronic chattel paper under section 554.9105 shall: 32 15 (1) communicate the authoritative copy of the electronic 32 16 chattel paper to the debtor or its designated custodian; 32 17 (2) if the debtor designates a custodian that is the 32 18 designated custodian with which the authoritative copy of the 32 19 electronic chattel paper is maintained for the secured party, 32 20 communicate to the custodian an authenticated record releasing 32 21 the designated custodian from any further obligation to comply 32 22 with instructions originated by the secured party and 32 23 instructing the custodian to comply with instructions 32 24 originated by the debtor; and 32 25 (3) take appropriate action to enable the debtor or its 32 26 designated custodian to make copies of or revisions to the 32 27 authoritative copy which add or change an identified assignee 32 28 of the authoritative copy without the consent of the secured 32 29 party; 32 30 d. a secured party having control of investment property 32 31 under section 554.8106, subsection 4, paragraph "b", or 32 32 section 554.9106, subsection 2, shall send to the securities 32 33 intermediary or commodity intermediary with which the security 32 34 entitlement or commodity contract is maintained an 32 35 authenticated record that releases the securities intermediary 33 1 or commodity intermediary from any further obligation to 33 2 comply with entitlement orders or directions originated by the 33 3 secured party; and 33 4 e. a secured party having control of a letter-of-credit 33 5 right under section 554.9107 shall send to each person having 33 6 an unfulfilled obligation to pay or deliver proceeds of the 33 7 letter of credit to the secured party an authenticated release 33 8 from any further obligation to pay or deliver proceeds of the 33 9 letter of credit to the secured party. 33 10 Sec. 19. NEW SECTION. 554.9209 DUTIES OF SECURED PARTY 33 11 IF ACCOUNT DEBTOR HAS BEEN NOTIFIED OF ASSIGNMENT. 33 12 1. APPLICABILITY OF SECTION. Except as otherwise provided 33 13 in subsection 3, this section applies if: 33 14 a. there is no outstanding secured obligation; and 33 15 b. the secured party is not committed to make advances, 33 16 incur obligations, or otherwise give value. 33 17 2. DUTIES OF SECURED PARTY AFTER RECEIVING DEMAND FROM 33 18 DEBTOR. Within ten days after receiving an authenticated 33 19 demand by the debtor, a secured party shall send to an account 33 20 debtor that has received notification of an assignment to the 33 21 secured party as assignee under section 554.9406, subsection 33 22 1, an authenticated record that releases the account debtor 33 23 from any further obligation to the secured party. 33 24 3. INAPPLICABILITY TO SALES. This section does not apply 33 25 to an assignment constituting the sale of an account, chattel 33 26 paper, or payment intangible. 33 27 Sec. 20. NEW SECTION. 554.9210 REQUEST FOR ACCOUNTING – 33 28 REQUEST REGARDING LIST OF COLLATERAL OR STATEMENT OF ACCOUNT. 33 29 1. DEFINITIONS. In this section: 33 30 a. "Request" means a record of a type described in 33 31 paragraph "b", "c", or "d". 33 32 b. "Request for an accounting" means a record 33 33 authenticated by a debtor requesting that the recipient 33 34 provide an accounting of the unpaid obligations secured by 33 35 collateral and reasonably identifying the transaction or 34 1 relationship that is the subject of the request. 34 2 c. "Request regarding a list of collateral" means a record 34 3 authenticated by a debtor requesting that the recipient 34 4 approve or correct a list of what the debtor believes to be 34 5 the collateral securing an obligation and reasonably 34 6 identifying the transaction or relationship that is the 34 7 subject of the request. 34 8 d. "Request regarding a statement of account" means a 34 9 record authenticated by a debtor requesting that the recipient 34 10 approve or correct a statement indicating what the debtor 34 11 believes to be the aggregate amount of unpaid obligations 34 12 secured by collateral as of a specified date and reasonably 34 13 identifying the transaction or relationship that is the 34 14 subject of the request. 34 15 2. DUTY TO RESPOND TO REQUESTS. Subject to subsections 3, 34 16 4, 5, and 6, a secured party, other than a buyer of accounts, 34 17 chattel paper, payment intangibles, or promissory notes or a 34 18 consignor, shall comply with a request within fourteen days 34 19 after receipt: 34 20 a. in the case of a request for an accounting, by 34 21 authenticating and sending to the debtor an accounting; and 34 22 b. in the case of a request regarding a list of collateral 34 23 or a request regarding a statement of account, by 34 24 authenticating and sending to the debtor an approval or 34 25 correction. 34 26 3. REQUEST REGARDING LIST OF COLLATERAL – STATEMENT 34 27 CONCERNING TYPE OF COLLATERAL. A secured party that claims a 34 28 security interest in all of a particular type of collateral 34 29 owned by the debtor may comply with a request regarding a list 34 30 of collateral by sending to the debtor an authenticated record 34 31 including a statement to that effect within fourteen days 34 32 after receipt. 34 33 4. REQUEST REGARDING LIST OF COLLATERAL – NO INTEREST 34 34 CLAIMED. A person that receives a request regarding a list of 34 35 collateral, claims no interest in the collateral when it 35 1 receives the request, and claimed an interest in the 35 2 collateral at an earlier time shall comply with the request 35 3 within fourteen days after receipt by sending to the debtor an 35 4 authenticated record: 35 5 a. disclaiming any interest in the collateral; and 35 6 b. if known to the recipient, providing the name and 35 7 mailing address of any assignee of or successor to the 35 8 recipient's interest in the collateral. 35 9 5. REQUEST FOR ACCOUNTING OR REGARDING STATEMENT OF 35 10 ACCOUNT – NO INTEREST IN OBLIGATION CLAIMED. A person that 35 11 receives a request for an accounting or a request regarding a 35 12 statement of account, claims no interest in the obligations 35 13 when it receives the request, and claimed an interest in the 35 14 obligations at an earlier time shall comply with the request 35 15 within fourteen days after receipt by sending to the debtor an 35 16 authenticated record: 35 17 a. disclaiming any interest in the obligations; and 35 18 b. if known to the recipient, providing the name and 35 19 mailing address of any assignee of or successor to the 35 20 recipient's interest in the obligations. 35 21 6. CHARGES FOR RESPONSES. A debtor is entitled without 35 22 charge to one response to a request under this section during 35 23 any six-month period. The secured party may require payment 35 24 of a charge not exceeding twenty-five dollars for each 35 25 additional response. 35 26 PART 3 35 27 PERFECTION AND PRIORITY 35 28 A. LAW GOVERNING PERFECTION AND PRIORITY 35 29 Sec. 21. NEW SECTION. 554.9301 LAW GOVERNING PERFECTION 35 30 AND PRIORITY OF SECURITY INTERESTS. 35 31 Except as otherwise provided in sections 554.9303, 35 32 554.9304, 554.9305, and 554.9306, the following rules 35 33 determine the law governing perfection, the effect of 35 34 perfection or nonperfection, and the priority of a security 35 35 interest in collateral: 36 1 1. Except as otherwise provided in this section, while a 36 2 debtor is located in a jurisdiction, the local law of that 36 3 jurisdiction governs perfection, the effect of perfection or 36 4 nonperfection, and the priority of a security interest in 36 5 collateral. 36 6 2. While collateral is located in a jurisdiction, the 36 7 local law of that jurisdiction governs perfection, the effect 36 8 of perfection or nonperfection, and the priority of a 36 9 possessory security interest in that collateral. 36 10 3. Except as otherwise provided in subsection 4, while 36 11 negotiable documents, goods, instruments, money, or tangible 36 12 chattel paper is located in a jurisdiction, the local law of 36 13 that jurisdiction governs: 36 14 a. perfection of a security interest in the goods by 36 15 filing a fixture filing; 36 16 b. perfection of a security interest in timber to be cut; 36 17 and 36 18 c. the effect of perfection or nonperfection and the 36 19 priority of a nonpossessory security interest in the 36 20 collateral. 36 21 4. The local law of the jurisdiction in which the wellhead 36 22 or minehead is located governs perfection, the effect of 36 23 perfection or nonperfection, and the priority of a security 36 24 interest in as-extracted collateral. 36 25 Sec. 22. NEW SECTION. 554.9302 LAW GOVERNING PERFECTION 36 26 AND PRIORITY OF AGRICULTURAL LIENS. 36 27 While farm products are located in a jurisdiction, the 36 28 local law of that jurisdiction governs perfection, the effect 36 29 of perfection or nonperfection, and the priority of an 36 30 agricultural lien on the farm products. 36 31 Sec. 23. NEW SECTION. 554.9303 LAW GOVERNING PERFECTION 36 32 AND PRIORITY OF SECURITY INTERESTS IN GOODS COVERED BY A 36 33 CERTIFICATE OF TITLE. 36 34 1. APPLICABILITY OF SECTION. This section applies to 36 35 goods covered by a certificate of title, even if there is no 37 1 other relationship between the jurisdiction under whose 37 2 certificate of title the goods are covered and the goods or 37 3 the debtor. 37 4 2. WHEN GOODS COVERED BY CERTIFICATE OF TITLE. Goods 37 5 become covered by a certificate of title when a valid 37 6 application for the certificate of title and the applicable 37 7 fee are delivered to the appropriate authority. Goods cease 37 8 to be covered by a certificate of title at the earlier of the 37 9 time the certificate of title ceases to be effective under the 37 10 law of the issuing jurisdiction or the time the goods become 37 11 covered subsequently by a certificate of title issued by 37 12 another jurisdiction. 37 13 3. APPLICABLE LAW. The local law of the jurisdiction 37 14 under whose certificate of title the goods are covered governs 37 15 perfection, the effect of perfection or nonperfection, and the 37 16 priority of a security interest in goods covered by a 37 17 certificate of title from the time the goods become covered by 37 18 the certificate of title until the goods cease to be covered 37 19 by the certificate of title. 37 20 Sec. 24. NEW SECTION. 554.9304 LAW GOVERNING PERFECTION 37 21 AND PRIORITY OF SECURITY INTERESTS IN DEPOSIT ACCOUNTS. 37 22 1. LAW OF BANK'S JURISDICTION GOVERNS. The local law of a 37 23 bank's jurisdiction governs perfection, the effect of 37 24 perfection or nonperfection, and the priority of a security 37 25 interest in a deposit account maintained with that bank. 37 26 2. BANK'S JURISDICTION. The following rules determine a 37 27 bank's jurisdiction for purposes of this part: 37 28 a. If an agreement between the bank and the debtor 37 29 governing the deposit account expressly provides that a 37 30 particular jurisdiction is the bank's jurisdiction for 37 31 purposes of this part, this Article, or this chapter, that 37 32 jurisdiction is the bank's jurisdiction. 37 33 b. If paragraph "a" does not apply and an agreement 37 34 between the bank and its customer governing the deposit 37 35 account expressly provides that the agreement is governed by 38 1 the law of a particular jurisdiction, that jurisdiction is the 38 2 bank's jurisdiction. 38 3 c. If neither paragraph "a" nor paragraph "b" applies and 38 4 an agreement between the bank and its customer governing the 38 5 deposit account expressly provides that the deposit account is 38 6 maintained at an office in a particular jurisdiction, that 38 7 jurisdiction is the bank's jurisdiction. 38 8 d. If none of the preceding paragraphs applies, the bank's 38 9 jurisdiction is the jurisdiction in which the office 38 10 identified in an account statement as the office serving the 38 11 customer's account is located. 38 12 e. If none of the preceding paragraphs applies, the bank's 38 13 jurisdiction is the jurisdiction in which the chief executive 38 14 office of the bank is located. 38 15 Sec. 25. NEW SECTION. 554.9305 LAW GOVERNING PERFECTION 38 16 AND PRIORITY OF SECURITY INTERESTS IN INVESTMENT PROPERTY. 38 17 1. GOVERNING LAW – GENERAL RULES. Except as otherwise 38 18 provided in subsection 3, the following rules apply: 38 19 a. While a security certificate is located in a 38 20 jurisdiction, the local law of that jurisdiction governs 38 21 perfection, the effect of perfection or nonperfection, and the 38 22 priority of a security interest in the certificated security 38 23 represented thereby. 38 24 b. The local law of the issuer's jurisdiction as specified 38 25 in section 554.8110, subsection 4, governs perfection, the 38 26 effect of perfection or nonperfection, and the priority of a 38 27 security interest in an uncertificated security. 38 28 c. The local law of the securities intermediary's 38 29 jurisdiction as specified in section 554.8110, subsection 5, 38 30 governs perfection, the effect of perfection or nonperfection, 38 31 and the priority of a security interest in a security 38 32 entitlement or securities account. 38 33 d. The local law of the commodity intermediary's 38 34 jurisdiction governs perfection, the effect of perfection or 38 35 nonperfection, and the priority of a security interest in a 39 1 commodity contract or commodity account. 39 2 2. COMMODITY INTERMEDIARY'S JURISDICTION. The following 39 3 rules determine a commodity intermediary's jurisdiction for 39 4 purposes of this part: 39 5 a. If an agreement between the commodity intermediary and 39 6 commodity customer governing the commodity account expressly 39 7 provides that a particular jurisdiction is the commodity 39 8 intermediary's jurisdiction for purposes of this part, this 39 9 Article, or this chapter, that jurisdiction is the commodity 39 10 intermediary's jurisdiction. 39 11 b. If paragraph "a" does not apply and an agreement 39 12 between the commodity intermediary and commodity customer 39 13 governing the commodity account expressly provides that the 39 14 agreement is governed by the law of a particular jurisdiction, 39 15 that jurisdiction is the commodity intermediary's 39 16 jurisdiction. 39 17 c. If neither paragraph "a" nor paragraph "b" applies and 39 18 an agreement between the commodity intermediary and commodity 39 19 customer governing the commodity account expressly provides 39 20 that the commodity account is maintained at an office in a 39 21 particular jurisdiction, that jurisdiction is the commodity 39 22 intermediary's jurisdiction. 39 23 d. If none of the preceding paragraphs applies, the 39 24 commodity intermediary's jurisdiction is the jurisdiction in 39 25 which the office identified in an account statement as the 39 26 office serving the commodity customer's account is located. 39 27 e. If none of the preceding paragraphs applies, the 39 28 commodity intermediary's jurisdiction is the jurisdiction in 39 29 which the chief executive office of the commodity intermediary 39 30 is located. 39 31 3. WHEN PERFECTION GOVERNED BY LAW OF JURISDICTION WHERE 39 32 DEBTOR LOCATED. The local law of the jurisdiction in which 39 33 the debtor is located governs: 39 34 a. perfection of a security interest in investment 39 35 property by filing; 40 1 b. automatic perfection of a security interest in 40 2 investment property created by a broker or securities 40 3 intermediary; and 40 4 c. automatic perfection of a security interest in a 40 5 commodity contract or commodity account created by a commodity 40 6 intermediary. 40 7 Sec. 26. NEW SECTION. 554.9306 LAW GOVERNING PERFECTION 40 8 AND PRIORITY OF SECURITY INTERESTS IN LETTER-OF-CREDIT RIGHTS. 40 9 1. GOVERNING LAW – ISSUER'S OR NOMINATED PERSON'S 40 10 JURISDICTION. Subject to subsection 3, the local law of the 40 11 issuer's jurisdiction or a nominated person's jurisdiction 40 12 governs perfection, the effect of perfection or nonperfection, 40 13 and the priority of a security interest in a letter-of-credit 40 14 right if the issuer's jurisdiction or nominated person's 40 15 jurisdiction is a state. 40 16 2. ISSUER'S OR NOMINATED PERSON'S JURISDICTION. For 40 17 purposes of this part, an issuer's jurisdiction or nominated 40 18 person's jurisdiction is the jurisdiction whose law governs 40 19 the liability of the issuer or nominated person with respect 40 20 to the letter-of-credit right as provided in section 554.5116. 40 21 3. WHEN SECTION NOT APPLICABLE. This section does not 40 22 apply to a security interest that is perfected only under 40 23 section 554.9308, subsection 4. 40 24 Sec. 27. NEW SECTION. 554.9307 LOCATION OF DEBTOR. 40 25 1. PLACE OF BUSINESS. In this section, "place of 40 26 business" means a place where a debtor conducts its affairs. 40 27 2. DEBTOR'S LOCATION – GENERAL RULES. Except as 40 28 otherwise provided in this section, the following rules 40 29 determine a debtor's location: 40 30 a. A debtor who is an individual is located at the 40 31 individual's principal residence. 40 32 b. A debtor that is an organization and has only one place 40 33 of business is located at its place of business. 40 34 c. A debtor that is an organization and has more than one 40 35 place of business is located at its chief executive office. 41 1 3. LIMITATION OF APPLICABILITY OF SUBSECTION 2. 41 2 Subsection 2 applies only if a debtor's residence, place of 41 3 business, or chief executive office, as applicable, is located 41 4 in a jurisdiction whose law generally requires information 41 5 concerning the existence of a nonpossessory security interest 41 6 to be made generally available in a filing, recording, or 41 7 registration system as a condition or result of the security 41 8 interest's obtaining priority over the rights of a lien 41 9 creditor with respect to the collateral. If subsection 2 does 41 10 not apply, the debtor is located in the District of Columbia. 41 11 4. CONTINUATION OF LOCATION – CESSATION OF EXISTENCE, 41 12 ETC. A person that ceases to exist, have a residence, or have 41 13 a place of business continues to be located in the 41 14 jurisdiction specified by subsections 2 and 3. 41 15 5. LOCATION OF REGISTERED ORGANIZATION ORGANIZED UNDER 41 16 STATE LAW. A registered organization that is organized under 41 17 the law of a state is located in that state. 41 18 6. LOCATION OF REGISTERED ORGANIZATION ORGANIZED UNDER 41 19 FEDERAL LAW – BANK BRANCHES AND AGENCIES. Except as 41 20 otherwise provided in subsection 9, a registered organization 41 21 that is organized under the law of the United States and a 41 22 branch or agency of a bank that is not organized under the law 41 23 of the United States or a state are located: 41 24 a. in the state that the law of the United States 41 25 designates, if the law designates a state of location; 41 26 b. in the state that the registered organization, branch, 41 27 or agency designates, if the law of the United States 41 28 authorizes the registered organization, branch, or agency to 41 29 designate its state of location; or 41 30 c. in the District of Columbia, if neither paragraph "a" 41 31 nor paragraph "b" applies. 41 32 7. CONTINUATION OF LOCATION – CHANGE IN STATUS OF 41 33 REGISTERED ORGANIZATION. A registered organization continues 41 34 to be located in the jurisdiction specified by subsection 5 or 41 35 6 notwithstanding: 42 1 a. the suspension, revocation, forfeiture, or lapse of the 42 2 registered organization's status as such in its jurisdiction 42 3 of organization; or 42 4 b. the dissolution, winding up, or cancellation of the 42 5 existence of the registered organization. 42 6 8. LOCATION OF UNITED STATES. The United States is 42 7 located in the District of Columbia. 42 8 9. LOCATION OF FOREIGN BANK BRANCH OR AGENCY IF LICENSED 42 9 IN ONLY ONE STATE. A branch or agency of a bank that is not 42 10 organized under the law of the United States or a state is 42 11 located in the state in which the branch or agency is 42 12 licensed, if all branches and agencies of the bank are 42 13 licensed in only one state. 42 14 10. LOCATION OF FOREIGN AIR CARRIER. A foreign air 42 15 carrier under the Federal Aviation Act of 1958, as amended, is 42 16 located at the designated office of the agent upon which 42 17 service of process may be made on behalf of the carrier. 42 18 11. SECTION APPLIES ONLY TO THIS PART. This section 42 19 applies only for purposes of this part. 42 20 B. PERFECTION 42 21 Sec. 28. NEW SECTION. 554.9308 WHEN SECURITY INTEREST OR 42 22 AGRICULTURAL LIEN IS PERFECTED – CONTINUITY OF PERFECTION. 42 23 1. PERFECTION OF SECURITY INTEREST. Except as otherwise 42 24 provided in this section and section 554.9309, a security 42 25 interest is perfected if it has attached and all of the 42 26 applicable requirements for perfection in sections 554.9310, 42 27 554.9311, 554.9312, 554.9313, 554.9314, 554.9315, and 554.9316 42 28 have been satisfied. A security interest is perfected when it 42 29 attaches if the applicable requirements are satisfied before 42 30 the security interest attaches. 42 31 2. PERFECTION OF AGRICULTURAL LIEN. An agricultural lien 42 32 is perfected if it has become effective and all of the 42 33 applicable requirements for perfection in section 554.9310 42 34 have been satisfied. An agricultural lien is perfected when 42 35 it becomes effective if the applicable requirements are 43 1 satisfied before the agricultural lien becomes effective. 43 2 3. CONTINUOUS PERFECTION – PERFECTION BY DIFFERENT 43 3 METHODS. A security interest or agricultural lien is 43 4 perfected continuously if it is originally perfected by one 43 5 method under this Article and is later perfected by another 43 6 method under this Article, without an intermediate period when 43 7 it was unperfected. 43 8 4. SUPPORTING OBLIGATION. Perfection of a security 43 9 interest in collateral also perfects a security interest in a 43 10 supporting obligation for the collateral. 43 11 5. LIEN SECURING RIGHT TO PAYMENT. Perfection of a 43 12 security interest in a right to payment or performance also 43 13 perfects a security interest in a security interest, mortgage, 43 14 or other lien on personal or real property securing the right. 43 15 6. SECURITY ENTITLEMENT CARRIED IN SECURITIES ACCOUNT. 43 16 Perfection of a security interest in a securities account also 43 17 perfects a security interest in the security entitlements 43 18 carried in the securities account. 43 19 7. COMMODITY CONTRACT CARRIED IN COMMODITY ACCOUNT. 43 20 Perfection of a security interest in a commodity account also 43 21 perfects a security interest in the commodity contracts 43 22 carried in the commodity account. 43 23 Sec. 29. NEW SECTION. 554.9309 SECURITY INTEREST 43 24 PERFECTED UPON ATTACHMENT. 43 25 The following security interests are perfected when they 43 26 attach: 43 27 1. a purchase-money security interest in consumer goods, 43 28 except as otherwise provided in section 554.9311, subsection 43 29 2, with respect to consumer goods that are subject to a 43 30 statute or treaty described in section 554.9311, subsection 1; 43 31 2. an assignment of accounts or payment intangibles which 43 32 does not by itself or in conjunction with other assignments to 43 33 the same assignee transfer a significant part of the 43 34 assignor's outstanding accounts or payment intangibles; 43 35 3. a sale of a payment intangible; 44 1 4. a sale of a promissory note; 44 2 5. a security interest created by the assignment of a 44 3 health-care-insurance receivable to the provider of the 44 4 health-care goods or services; 44 5 6. a security interest arising under section 554.2401, 44 6 554.2505, 554.2711, subsection 3, or section 554.13508, 44 7 subsection 5, until the debtor obtains possession of the 44 8 collateral; 44 9 7. a security interest of a collecting bank arising under 44 10 section 554.4210; 44 11 8. a security interest of an issuer or nominated person 44 12 arising under section 554.5118; 44 13 9. a security interest arising in the delivery of a 44 14 financial asset under section 554.9206, subsection 3; 44 15 10. a security interest in investment property created by 44 16 a broker or securities intermediary; 44 17 11. a security interest in a commodity contract or a 44 18 commodity account created by a commodity intermediary; 44 19 12. an assignment for the benefit of all creditors of the 44 20 transferor and subsequent transfers by the assignee 44 21 thereunder; and 44 22 13. a security interest created by an assignment of a 44 23 beneficial interest in a decedent's estate. 44 24 Sec. 30. NEW SECTION. 554.9310 WHEN FILING REQUIRED TO 44 25 PERFECT SECURITY INTEREST OR AGRICULTURAL LIEN – SECURITY 44 26 INTERESTS AND AGRICULTURAL LIENS TO WHICH FILING PROVISIONS DO 44 27 NOT APPLY. 44 28 1. GENERAL RULE – PERFECTION BY FILING. Except as 44 29 otherwise provided in subsection 2 and section 554.9312, 44 30 subsection 2, a financing statement must be filed to perfect 44 31 all security interests and agricultural liens. 44 32 2 EXCEPTIONS – FILING NOT NECESSARY. The filing of a 44 33 financing statement is not necessary to perfect a security 44 34 interest: 44 35 a. that is perfected under section 554.9308, subsection 4, 45 1 5, 6, or 7; 45 2 b. that is perfected under section 554.9309 when it 45 3 attaches; 45 4 c. in property subject to a statute, regulation, or treaty 45 5 described in section 554.9311, subsection 1; 45 6 d. in goods in possession of a bailee which is perfected 45 7 under section 554.9312, subsection 4, paragraph "a" or "b"; 45 8 e. in certificated securities, documents, goods, or 45 9 instruments which is perfected without filing or possession 45 10 under section 554.9312, subsection 5, 6, or 7; 45 11 f. in collateral in the secured party's possession under 45 12 section 554.9313; 45 13 g. in a certificated security which is perfected by 45 14 delivery of the security certificate to the secured party 45 15 under section 554.9313; 45 16 h. in deposit accounts, electronic chattel paper, 45 17 investment property, or letter-of-credit rights which is 45 18 perfected by control under section 554.9314; 45 19 i. in proceeds which is perfected under section 554.9315; 45 20 or 45 21 j. that is perfected under section 554.9316. 45 22 3. ASSIGNMENT OF PERFECTED SECURITY INTEREST. If a 45 23 secured party assigns a perfected security interest or 45 24 agricultural lien, a filing under this Article is not required 45 25 to continue the perfected status of the security interest 45 26 against creditors of and transferees from the original debtor. 45 27 Sec. 31. NEW SECTION. 554.9311 PERFECTION OF SECURITY 45 28 INTERESTS IN PROPERTY SUBJECT TO CERTAIN STATUTES, 45 29 REGULATIONS, AND TREATIES. 45 30 1. SECURITY INTEREST SUBJECT TO OTHER LAW. Except as 45 31 otherwise provided in subsection 4, the filing of a financing 45 32 statement is not necessary or effective to perfect a security 45 33 interest in property subject to: 45 34 a. a statute, regulation, or treaty of the United States 45 35 whose requirements for a security interest's obtaining 46 1 priority over the rights of a lien creditor with respect to 46 2 the property preempt section 554.9310, subsection 1; 46 3 b. any certificate-of-title statute, including as provided 46 4 in chapter 321, covering automobiles, trailers, mobile homes, 46 5 boats, farm tractors, or the like, which provides for a 46 6 security interest to be indicated on the certificate as a 46 7 condition or result of perfection; or 46 8 c. a certificate-of-title statute of another jurisdiction 46 9 which provides for a security interest to be indicated on the 46 10 certificate as a condition or result of the security 46 11 interest's obtaining priority over the rights of a lien 46 12 creditor with respect to the property. 46 13 2. COMPLIANCE WITH OTHER LAW. Compliance with the 46 14 requirements of a statute, regulation, or treaty described in 46 15 subsection 1 for obtaining priority over the rights of a lien 46 16 creditor is equivalent to the filing of a financing statement 46 17 under this Article. Except as otherwise provided in 46 18 subsection 4 and sections 554.9313 and 554.9316, subsections 4 46 19 and 5, for goods covered by a certificate of title, a security 46 20 interest in property subject to a statute, regulation, or 46 21 treaty described in subsection 1 may be perfected only by 46 22 compliance with those requirements, and a security interest so 46 23 perfected remains perfected notwithstanding a change in the 46 24 use or transfer of possession of the collateral. 46 25 3. DURATION AND RENEWAL OF PERFECTION. Except as 46 26 otherwise provided in subsection 4 and section 554.9316, 46 27 subsections 4 and 5, duration and renewal of perfection of a 46 28 security interest perfected by compliance with the 46 29 requirements prescribed by a statute, regulation, or treaty 46 30 described in subsection 1 are governed by the statute, 46 31 regulation, or treaty. In other respects, the security 46 32 interest is subject to this Article. 46 33 4. INAPPLICABILITY TO CERTAIN INVENTORY. During any 46 34 period in which collateral is inventory held for sale or lease 46 35 by a person or leased by that person as lessor and that person 47 1 is in the business of selling or leasing goods of that kind, 47 2 this section does not apply to a security interest in that 47 3 collateral created by that person as debtor. 47 4 Sec. 32. NEW SECTION. 554.9312 PERFECTION OF SECURITY 47 5 INTERESTS IN CHATTEL PAPER, DEPOSIT ACCOUNTS, DOCUMENTS, GOODS 47 6 COVERED BY DOCUMENTS, INSTRUMENTS, INVESTMENT PROPERTY, 47 7 LETTER-OF-CREDIT RIGHTS, AND MONEY – PERFECTION BY PERMISSIVE 47 8 FILING – TEMPORARY PERFECTION WITHOUT FILING OR TRANSFER OF 47 9 POSSESSION. 47 10 1. PERFECTION BY FILING PERMITTED. A security interest in 47 11 chattel paper, negotiable documents, instruments, or 47 12 investment property may be perfected by filing. 47 13 2. CONTROL OR POSSESSION OF CERTAIN COLLATERAL. Except as 47 14 otherwise provided in section 554.9315, subsections 3 and 4, 47 15 for proceeds: 47 16 a. a security interest in a deposit account may be 47 17 perfected only by control under section 554.9314; 47 18 b. and except as otherwise provided in section 554.9308, 47 19 subsection 4, a security interest in a letter-of-credit right 47 20 may be perfected only by control under section 554.9314; and 47 21 c. a security interest in money may be perfected only by 47 22 the secured party's taking possession under section 554.9313. 47 23 3. GOODS COVERED BY NEGOTIABLE DOCUMENT. While goods are 47 24 in the possession of a bailee that has issued a negotiable 47 25 document covering the goods: 47 26 a. a security interest in the goods may be perfected by 47 27 perfecting a security interest in the document; and 47 28 b. a security interest perfected in the document has 47 29 priority over any security interest that becomes perfected in 47 30 the goods by another method during that time. 47 31 4. GOODS COVERED BY NONNEGOTIABLE DOCUMENT. While goods 47 32 are in the possession of a bailee that has issued a 47 33 nonnegotiable document covering the goods, a security interest 47 34 in the goods may be perfected by: 47 35 a. issuance of a document in the name of the secured 48 1 party; 48 2 b. the bailee's receipt of notification of the secured 48 3 party's interest; or 48 4 c. filing as to the goods. 48 5 5. TEMPORARY PERFECTION – NEW VALUE. A security interest 48 6 in certificated securities, negotiable documents, or 48 7 instruments is perfected without filing or the taking of 48 8 possession for a period of twenty days from the time it 48 9 attaches to the extent that it arises for new value given 48 10 under an authenticated security agreement. 48 11 6. TEMPORARY PERFECTION – GOODS OR DOCUMENTS MADE 48 12 AVAILABLE TO DEBTOR. A perfected security interest in a 48 13 negotiable document or goods in possession of a bailee, other 48 14 than one that has issued a negotiable document for the goods, 48 15 remains perfected for twenty days without filing if the 48 16 secured party makes available to the debtor the goods or 48 17 documents representing the goods for the purpose of: 48 18 a. ultimate sale or exchange; or 48 19 b. loading, unloading, storing, shipping, transshipping, 48 20 manufacturing, processing, or otherwise dealing with them in a 48 21 manner preliminary to their sale or exchange. 48 22 7. TEMPORARY PERFECTION – DELIVERY OF SECURITY 48 23 CERTIFICATE OR INSTRUMENT TO DEBTOR. A perfected security 48 24 interest in a certificated security or instrument remains 48 25 perfected for twenty days without filing if the secured party 48 26 delivers the security certificate or instrument to the debtor 48 27 for the purpose of: 48 28 a. ultimate sale or exchange; or 48 29 b. presentation, collection, enforcement, renewal, or 48 30 registration of transfer. 48 31 8. EXPIRATION OF TEMPORARY PERFECTION. After the twenty- 48 32 day period specified in subsection 5, 6, or 7 expires, 48 33 perfection depends upon compliance with this Article. 48 34 Sec. 33. NEW SECTION. 554.9313 WHEN POSSESSION BY OR 48 35 DELIVERY TO SECURED PARTY PERFECTS SECURITY INTEREST WITHOUT 49 1 FILING. 49 2 1. PERFECTION BY POSSESSION OR DELIVERY. Except as 49 3 otherwise provided in subsection 2, a secured party may 49 4 perfect a security interest in negotiable documents, goods, 49 5 instruments, money, or tangible chattel paper by taking 49 6 possession of the collateral. A secured party may perfect a 49 7 security interest in certificated securities by taking 49 8 delivery of the certificated securities under section 49 9 554.8301. 49 10 2. GOODS COVERED BY CERTIFICATE OF TITLE. With respect to 49 11 goods covered by a certificate of title issued by this state, 49 12 a secured party may perfect a security interest in the goods 49 13 by taking possession of the goods only in the circumstances 49 14 described in section 554.9316, subsection 4. 49 15 3. COLLATERAL IN POSSESSION OF PERSON OTHER THAN DEBTOR. 49 16 With respect to collateral other than certificated securities 49 17 and goods covered by a document, a secured party takes 49 18 possession of collateral in the possession of a person other 49 19 than the debtor, the secured party, or a lessee of the 49 20 collateral from the debtor in the ordinary course of the 49 21 debtor's business, when: 49 22 a. the person in possession authenticates a record 49 23 acknowledging that it holds possession of the collateral for 49 24 the secured party's benefit; or 49 25 b. the person takes possession of the collateral after 49 26 having authenticated a record acknowledging that it will hold 49 27 possession of collateral for the secured party's benefit. 49 28 4. TIME OF PERFECTION BY POSSESSION – CONTINUATION OF 49 29 PERFECTION. If perfection of a security interest depends upon 49 30 possession of the collateral by a secured party, perfection 49 31 occurs no earlier than the time the secured party takes 49 32 possession and continues only while the secured party retains 49 33 possession. 49 34 5. TIME OF PERFECTION BY DELIVERY – CONTINUATION OF 49 35 PERFECTION. A security interest in a certificated security in 50 1 registered form is perfected by delivery when delivery of the 50 2 certificated security occurs under section 554.8301 and 50 3 remains perfected by delivery until the debtor obtains 50 4 possession of the security certificate. 50 5 6. ACKNOWLEDGMENT NOT REQUIRED. A person in possession of 50 6 collateral is not required to acknowledge that it holds 50 7 possession for a secured party's benefit. 50 8 7. EFFECTIVENESS OF ACKNOWLEDGMENT – NO DUTIES OR 50 9 CONFIRMATION. If a person acknowledges that it holds 50 10 possession for the secured party's benefit: 50 11 a. the acknowledgment is effective under subsection 3 or 50 12 section 554.8301, subsection 1, even if the acknowledgment 50 13 violates the rights of a debtor; and 50 14 b. unless the person otherwise agrees or law other than 50 15 this Article otherwise provides, the person does not owe any 50 16 duty to the secured party and is not required to confirm the 50 17 acknowledgment to another person. 50 18 8. SECURED PARTY'S DELIVERY TO PERSON OTHER THAN DEBTOR. 50 19 A secured party having possession of collateral does not 50 20 relinquish possession by delivering the collateral to a person 50 21 other than the debtor or a lessee of the collateral from the 50 22 debtor in the ordinary course of the debtor's business if the 50 23 person was instructed before the delivery or is instructed 50 24 contemporaneously with the delivery: 50 25 a. to hold possession of the collateral for the secured 50 26 party's benefit; or 50 27 b. to redeliver the collateral to the secured party. 50 28 9. EFFECT OF DELIVERY UNDER SUBSECTION 8 – NO DUTIES OR 50 29 CONFIRMATION. A secured party does not relinquish possession, 50 30 even if a delivery under subsection 8 violates the rights of a 50 31 debtor. A person to which collateral is delivered under 50 32 subsection 8 does not owe any duty to the secured party and is 50 33 not required to confirm the delivery to another person unless 50 34 the person otherwise agrees or law other than this Article 50 35 otherwise provides. 51 1 Sec. 34. NEW SECTION. 554.9314 PERFECTION BY CONTROL. 51 2 1. PERFECTION BY CONTROL. A security interest in 51 3 investment property, deposit accounts, letter-of-credit 51 4 rights, or electronic chattel paper may be perfected by 51 5 control of the collateral under section 554.9104, 554.9105, 51 6 554.9106, or 554.9107. 51 7 2. SPECIFIED COLLATERAL – TIME OF PERFECTION BY CONTROL 51 8 – CONTINUATION OF PERFECTION. A security interest in deposit 51 9 accounts, electronic chattel paper, or letter-of-credit rights 51 10 is perfected by control under section 554.9104, 554.9105, or 51 11 554.9107 when the secured party obtains control and remains 51 12 perfected by control only while the secured party retains 51 13 control. 51 14 3. INVESTMENT PROPERTY – TIME OF PERFECTION BY CONTROL – 51 15 CONTINUATION OF PERFECTION. A security interest in investment 51 16 property is perfected by control under section 554.9106 from 51 17 the time the secured party obtains control and remains 51 18 perfected by control until: 51 19 a. the secured party does not have control; and 51 20 b. one of the following occurs: 51 21 (1) if the collateral is a certificated security, the 51 22 debtor has or acquires possession of the security certificate; 51 23 (2) if the collateral is an uncertificated security, the 51 24 issuer has registered or registers the debtor as the 51 25 registered owner; or 51 26 (3) if the collateral is a security entitlement, the 51 27 debtor is or becomes the entitlement holder. 51 28 Sec. 35. NEW SECTION. 554.9315 SECURED PARTY'S RIGHTS ON 51 29 DISPOSITION OF COLLATERAL AND IN PROCEEDS. 51 30 1. DISPOSITION OF COLLATERAL – CONTINUATION OF SECURITY 51 31 INTEREST OR AGRICULTURAL LIEN – PROCEEDS. Except as 51 32 otherwise provided in this Article and in section 554.2403, 51 33 subsection 2: 51 34 a. a security interest or agricultural lien continues in 51 35 collateral notwithstanding sale, lease, license, exchange, or 52 1 other disposition thereof unless the secured party authorized 52 2 the disposition free of the security interest or agricultural 52 3 lien; and 52 4 b. a security interest attaches to any identifiable 52 5 proceeds of collateral. 52 6 2. WHEN COMMINGLED PROCEEDS IDENTIFIABLE. Proceeds that 52 7 are commingled with other property are identifiable proceeds: 52 8 a. if the proceeds are goods, to the extent provided by 52 9 section 554.9336; and 52 10 b. if the proceeds are not goods, to the extent that the 52 11 secured party identifies the proceeds by a method of tracing, 52 12 including application of equitable principles, that is 52 13 permitted under law other than this Article with respect to 52 14 commingled property of the type involved. 52 15 3. PERFECTION OF SECURITY INTEREST IN PROCEEDS. A 52 16 security interest in proceeds is a perfected security interest 52 17 if the security interest in the original collateral was 52 18 perfected. 52 19 4. CONTINUATION OF PERFECTION. A perfected security 52 20 interest in proceeds becomes unperfected on the twenty-first 52 21 day after the security interest attaches to the proceeds 52 22 unless: 52 23 a. the following conditions are satisfied: 52 24 (1) a filed financing statement covers the original 52 25 collateral; 52 26 (2) the proceeds are collateral in which a security 52 27 interest may be perfected by filing in the office in which the 52 28 financing statement has been filed; and 52 29 (3) the proceeds are not acquired with cash proceeds; 52 30 b. the proceeds are identifiable cash proceeds; or 52 31 c. the security interest in the proceeds is perfected 52 32 other than under subsection 3 when the security interest 52 33 attaches to the proceeds or within twenty days thereafter. 52 34 5. WHEN PERFECTED SECURITY INTEREST IN PROCEEDS BECOMES 52 35 UNPERFECTED. If a filed financing statement covers the 53 1 original collateral, a security interest in proceeds which 53 2 remains perfected under subsection 4, paragraph "a", becomes 53 3 unperfected at the later of: 53 4 a. when the effectiveness of the filed financing statement 53 5 lapses under section 554.9515 or is terminated under section 53 6 554.9513; or 53 7 b. the twenty-first day after the security interest 53 8 attaches to the proceeds. 53 9 Sec. 36. NEW SECTION. 554.9316 CONTINUED PERFECTION OF 53 10 SECURITY INTEREST FOLLOWING CHANGE IN GOVERNING LAW. 53 11 1. GENERAL RULE – EFFECT ON PERFECTION OF CHANGE IN 53 12 GOVERNING LAW. A security interest perfected pursuant to the 53 13 law of the jurisdiction designated in section 554.9301, 53 14 subsection 1, or section 554.9305, subsection 3, remains 53 15 perfected until the earliest of: 53 16 a. the time perfection would have ceased under the law of 53 17 that jurisdiction; 53 18 b. the expiration of four months after a change of the 53 19 debtor's location to another jurisdiction; or 53 20 c. the expiration of one year after a transfer of 53 21 collateral to a person that thereby becomes a debtor and is 53 22 located in another jurisdiction. 53 23 2. SECURITY INTEREST PERFECTED OR UNPERFECTED UNDER LAW OF 53 24 NEW JURISDICTION. If a security interest described in 53 25 subsection 1 becomes perfected under the law of the other 53 26 jurisdiction before the earliest time or event described in 53 27 that subsection, it remains perfected thereafter. If the 53 28 security interest does not become perfected under the law of 53 29 the other jurisdiction before the earliest time or event, it 53 30 becomes unperfected and is deemed never to have been perfected 53 31 as against a purchaser of the collateral for value. 53 32 3. POSSESSORY SECURITY INTEREST IN COLLATERAL MOVED TO NEW 53 33 JURISDICTION. A possessory security interest in collateral, 53 34 other than goods covered by a certificate of title and as- 53 35 extracted collateral consisting of goods, remains continuously 54 1 perfected if: 54 2 a. the collateral is located in one jurisdiction and 54 3 subject to a security interest perfected under the law of that 54 4 jurisdiction; 54 5 b. thereafter the collateral is brought into another 54 6 jurisdiction; and 54 7 c. upon entry into the other jurisdiction, the security 54 8 interest is perfected under the law of the other jurisdiction. 54 9 4. GOODS COVERED BY CERTIFICATE OF TITLE FROM THIS STATE. 54 10 Except as otherwise provided in subsection 5, a security 54 11 interest in goods covered by a certificate of title which is 54 12 perfected by any method under the law of another jurisdiction 54 13 when the goods become covered by a certificate of title from 54 14 this state remains perfected until the security interest would 54 15 have become unperfected under the law of the other 54 16 jurisdiction had the goods not become so covered. 54 17 5. WHEN SUBSECTION 4 SECURITY INTEREST BECOMES UNPERFECTED 54 18 AGAINST PURCHASERS. A security interest described in 54 19 subsection 4 becomes unperfected as against a purchaser of the 54 20 goods for value and is deemed never to have been perfected as 54 21 against a purchaser of the goods for value if the applicable 54 22 requirements for perfection under section 554.9311, subsection 54 23 2, or section 554.9313 are not satisfied before the earlier 54 24 of: 54 25 a. the time the security interest would have become 54 26 unperfected under the law of the other jurisdiction had the 54 27 goods not become covered by a certificate of title from this 54 28 state; or 54 29 b. the expiration of four months after the goods had 54 30 become so covered. 54 31 6. CHANGE IN JURISDICTION OF BANK, ISSUER, NOMINATED 54 32 PERSON, SECURITIES INTERMEDIARY, OR COMMODITY INTERMEDIARY. A 54 33 security interest in deposit accounts, letter-of-credit 54 34 rights, or investment property which is perfected under the 54 35 law of the bank's jurisdiction, the issuer's jurisdiction, a 55 1 nominated person's jurisdiction, the securities intermediary's 55 2 jurisdiction, or the commodity intermediary's jurisdiction, as 55 3 applicable, remains perfected until the earlier of: 55 4 a. the time the security interest would have become 55 5 unperfected under the law of that jurisdiction; or 55 6 b. the expiration of four months after a change of the 55 7 applicable jurisdiction to another jurisdiction. 55 8 7. SUBSECTION 6 SECURITY INTEREST PERFECTED OR UNPERFECTED 55 9 UNDER LAW OF NEW JURISDICTION. If a security interest 55 10 described in subsection 6 becomes perfected under the law of 55 11 the other jurisdiction before the earlier of the time or the 55 12 end of the period described in that subsection, it remains 55 13 perfected thereafter. If the security interest does not 55 14 become perfected under the law of the other jurisdiction 55 15 before the earlier of that time or the end of that period, it 55 16 becomes unperfected and is deemed never to have been perfected 55 17 as against a purchaser of the collateral for value. 55 18 C. PRIORITY 55 19 Sec. 37. NEW SECTION. 554.9317 INTERESTS THAT TAKE 55 20 PRIORITY OVER OR TAKE FREE OF SECURITY INTEREST OR 55 21 AGRICULTURAL LIEN. 55 22 1. CONFLICTING SECURITY INTERESTS AND RIGHTS OF LIEN 55 23 CREDITORS. A security interest or agricultural lien is 55 24 subordinate to the rights of: 55 25 a. a person entitled to priority under section 554.9322; 55 26 and 55 27 b. except as otherwise provided in subsection 5, a person 55 28 that becomes a lien creditor before the earlier of the time 55 29 the security interest or agricultural lien is perfected or a 55 30 financing statement covering the collateral is filed. 55 31 2. BUYERS THAT RECEIVE DELIVERY. Except as otherwise 55 32 provided in subsection 5, a buyer, other than a secured party, 55 33 of tangible chattel paper, documents, goods, instruments, or a 55 34 security certificate takes free of a security interest or 55 35 agricultural lien if the buyer gives value and receives 56 1 delivery of the collateral without knowledge of the security 56 2 interest or agricultural lien and before it is perfected. 56 3 3. LESSEES THAT RECEIVE DELIVERY. Except as otherwise 56 4 provided in subsection 5, a lessee of goods takes free of a 56 5 security interest or agricultural lien if the lessee gives 56 6 value and receives delivery of the collateral without 56 7 knowledge of the security interest or agricultural lien and 56 8 before it is perfected. 56 9 4. LICENSEES AND BUYERS OF CERTAIN COLLATERAL. A licensee 56 10 of a general intangible or a buyer, other than a secured 56 11 party, of accounts, electronic chattel paper, general 56 12 intangibles, or investment property other than a certificated 56 13 security takes free of a security interest if the licensee or 56 14 buyer gives value without knowledge of the security interest 56 15 and before it is perfected. 56 16 5. PURCHASE-MONEY SECURITY INTEREST. Except as otherwise 56 17 provided in sections 554.9320 and 554.9321, if a person files 56 18 a financing statement with respect to a purchase-money 56 19 security interest before or within twenty days after the 56 20 debtor receives delivery of the collateral, the security 56 21 interest takes priority over the rights of a buyer, lessee, or 56 22 lien creditor which arise between the time the security 56 23 interest attaches and the time of filing. 56 24 Sec. 38. NEW SECTION. 554.9318 NO INTEREST RETAINED IN 56 25 RIGHT TO PAYMENT THAT IS SOLD – RIGHTS AND TITLE OF SELLER OF 56 26 ACCOUNT OR CHATTEL PAPER WITH RESPECT TO CREDITORS AND 56 27 PURCHASERS. 56 28 1. SELLER RETAINS NO INTEREST. A debtor that has sold an 56 29 account, chattel paper, payment intangible, or promissory note 56 30 does not retain a legal or equitable interest in the 56 31 collateral sold. 56 32 2. DEEMED RIGHTS OF DEBTOR IF BUYER'S SECURITY INTEREST 56 33 UNPERFECTED. For purposes of determining the rights of 56 34 creditors of, and purchasers for value of an account or 56 35 chattel paper from, a debtor that has sold an account or 57 1 chattel paper, while the buyer's security interest is 57 2 unperfected, the debtor is deemed to have rights and title to 57 3 the account or chattel paper identical to those the debtor 57 4 sold. 57 5 Sec. 39. NEW SECTION. 554.9319 RIGHTS AND TITLE OF 57 6 CONSIGNEE WITH RESPECT TO CREDITORS AND PURCHASERS. 57 7 1. CONSIGNEE HAS CONSIGNOR'S RIGHTS. Except as otherwise 57 8 provided in subsection 2, for purposes of determining the 57 9 rights of creditors of, and purchasers for value of goods 57 10 from, a consignee, while the goods are in the possession of 57 11 the consignee, the consignee is deemed to have rights and 57 12 title to the goods identical to those the consignor had or had 57 13 power to transfer. 57 14 2. APPLICABILITY OF OTHER LAW. For purposes of 57 15 determining the rights of a creditor of a consignee, law other 57 16 than this Article determines the rights and title of a 57 17 consignee while goods are in the consignee's possession if, 57 18 under this part, a perfected security interest held by the 57 19 consignor would have priority over the rights of the creditor. 57 20 Sec. 40. NEW SECTION. 554.9320 BUYER OF GOODS. 57 21 1. BUYER IN ORDINARY COURSE OF BUSINESS. Except as 57 22 otherwise provided in subsection 5, a buyer in ordinary course 57 23 of business, other than a person buying farm products from a 57 24 person engaged in farming operations, takes free of a security 57 25 interest created by the buyer's seller, even if the security 57 26 interest is perfected and the buyer knows of its existence. 57 27 2. BUYER OF CONSUMER GOODS. Except as otherwise provided 57 28 in subsection 5, a buyer of goods from a person who used or 57 29 bought the goods for use primarily for personal, family, or 57 30 household purposes takes free of a security interest, even if 57 31 perfected, if the buyer buys: 57 32 a. without knowledge of the security interest; 57 33 b. for value; 57 34 c. primarily for the buyer's personal, family, or 57 35 household purposes; and 58 1 d. before the filing of a financing statement covering the 58 2 goods. 58 3 3. EFFECTIVENESS OF FILING FOR SUBSECTION 2. To the 58 4 extent that it affects the priority of a security interest 58 5 over a buyer of goods under subsection 2, the period of 58 6 effectiveness of a filing made in the jurisdiction in which 58 7 the seller is located is governed by section 554.9316, 58 8 subsections 1 and 2. 58 9 4. BUYER IN ORDINARY COURSE OF BUSINESS AT WELLHEAD OR 58 10 MINEHEAD. A buyer in ordinary course of business buying oil, 58 11 gas, or other minerals at the wellhead or minehead or after 58 12 extraction takes free of an interest arising out of an 58 13 encumbrance. 58 14 5. POSSESSORY SECURITY INTEREST NOT AFFECTED. Subsections 58 15 1 and 2 do not affect a security interest in goods in the 58 16 possession of the secured party under section 554.9313. 58 17 Sec. 41. NEW SECTION. 554.9321 LICENSEE OF GENERAL 58 18 INTANGIBLE AND LESSEE OF GOODS IN ORDINARY COURSE OF BUSINESS. 58 19 1. LICENSEE IN ORDINARY COURSE OF BUSINESS. In this 58 20 section, "licensee in ordinary course of business" means a 58 21 person that becomes a licensee of a general intangible in good 58 22 faith, without knowledge that the license violates the rights 58 23 of another person in the general intangible, and in the 58 24 ordinary course from a person in the business of licensing 58 25 general intangibles of that kind. A person becomes a licensee 58 26 in the ordinary course if the license to the person comports 58 27 with the usual or customary practices in the kind of business 58 28 in which the licensor is engaged or with the licensor's own 58 29 usual or customary practices. 58 30 2. RIGHTS OF LICENSEE IN ORDINARY COURSE OF BUSINESS. A 58 31 licensee in ordinary course of business takes its rights under 58 32 a nonexclusive license free of a security interest in the 58 33 general intangible created by the licensor, even if the 58 34 security interest is perfected and the licensee knows of its 58 35 existence. 59 1 3. RIGHTS OF LESSEE IN ORDINARY COURSE OF BUSINESS. A 59 2 lessee in ordinary course of business takes its leasehold 59 3 interest free of a security interest in the goods created by 59 4 the lessor, even if the security interest is perfected and the 59 5 lessee knows of its existence. 59 6 Sec. 42. NEW SECTION. 554.9322 PRIORITIES AMONG 59 7 CONFLICTING SECURITY INTERESTS IN AND AGRICULTURAL LIENS ON 59 8 SAME COLLATERAL. 59 9 1. GENERAL PRIORITY RULES. Except as otherwise provided 59 10 in this section, priority among conflicting security interests 59 11 and agricultural liens in the same collateral is determined 59 12 according to the following rules: 59 13 a. Conflicting perfected security interests and 59 14 agricultural liens rank according to priority in time of 59 15 filing or perfection. Priority dates from the earlier of the 59 16 time a filing covering the collateral is first made or the 59 17 security interest or agricultural lien is first perfected, if 59 18 there is no period thereafter when there is neither filing nor 59 19 perfection. 59 20 b. A perfected security interest or agricultural lien has 59 21 priority over a conflicting unperfected security interest or 59 22 agricultural lien. 59 23 c. The first security interest or agricultural lien to 59 24 attach or become effective has priority if conflicting 59 25 security interests and agricultural liens are unperfected. 59 26 2. TIME OF PERFECTION – PROCEEDS AND SUPPORTING 59 27 OBLIGATIONS. For the purposes of subsection 1, paragraph "a": 59 28 a. the time of filing or perfection as to a security 59 29 interest in collateral is also the time of filing or 59 30 perfection as to a security interest in proceeds; and 59 31 b. the time of filing or perfection as to a security 59 32 interest in collateral supported by a supporting obligation is 59 33 also the time of filing or perfection as to a security 59 34 interest in the supporting obligation. 59 35 3. SPECIAL PRIORITY RULES – PROCEEDS AND SUPPORTING 60 1 OBLIGATIONS. Except as otherwise provided in subsection 6, a 60 2 security interest in collateral which qualifies for priority 60 3 over a conflicting security interest under section 554.9327, 60 4 554.9328, 554.9329, 554.9330, or 554.9331 also has priority 60 5 over a conflicting security interest in: 60 6 a. any supporting obligation for the collateral; and 60 7 b. proceeds of the collateral if: 60 8 (1) the security interest in proceeds is perfected; 60 9 (2) the proceeds are cash proceeds or of the same type as 60 10 the collateral; and 60 11 (3) in the case of proceeds that are proceeds of proceeds, 60 12 all intervening proceeds are cash proceeds, proceeds of the 60 13 same type as the collateral, or an account relating to the 60 14 collateral. 60 15 4. FIRST-TO-FILE PRIORITY RULE FOR CERTAIN COLLATERAL. 60 16 Subject to subsection 5 and except as otherwise provided in 60 17 subsection 6, if a security interest in chattel paper, deposit 60 18 accounts, negotiable documents, instruments, investment 60 19 property, or letter-of-credit rights is perfected by a method 60 20 other than filing, conflicting perfected security interests in 60 21 proceeds of the collateral rank according to priority in time 60 22 of filing. 60 23 5. APPLICABILITY OF SUBSECTION 4. Subsection 4 applies 60 24 only if the proceeds of the collateral are not cash proceeds, 60 25 chattel paper, negotiable documents, instruments, investment 60 26 property, or letter-of-credit rights. 60 27 6. LIMITATIONS ON SUBSECTIONS 1 THROUGH 5. Subsections 1 60 28 through 5 are subject to: 60 29 a. subsection 7 and the other provisions of this part; 60 30 b. section 554.4210 with respect to a security interest of 60 31 a collecting bank; 60 32 c. section 554.5118 with respect to a security interest of 60 33 an issuer or nominated person; and 60 34 d. section 554.9110 with respect to a security interest 60 35 arising under Article 2 or 13. 61 1 7. PRIORITY UNDER AGRICULTURAL LIEN STATUTE. A perfected 61 2 agricultural lien on collateral has priority over a 61 3 conflicting security interest in or agricultural lien on the 61 4 same collateral if the statute creating the agricultural lien 61 5 so provides. 61 6 Sec. 43. NEW SECTION. 554.9323 FUTURE ADVANCES. 61 7 1. WHEN PRIORITY BASED ON TIME OF ADVANCE. Except as 61 8 otherwise provided in subsection 3, for purposes of 61 9 determining the priority of a perfected security interest 61 10 under section 554.9322, subsection 1, paragraph "a", 61 11 perfection of the security interest dates from the time an 61 12 advance is made to the extent that the security interest 61 13 secures an advance that: 61 14 a. is made while the security interest is perfected only: 61 15 (1) under section 554.9309 when it attaches; or 61 16 (2) temporarily under section 554.9312, subsection 5, 6, 61 17 or 7; and 61 18 b. is not made pursuant to a commitment entered into 61 19 before or while the security interest is perfected by a method 61 20 other than under section 554.9309 or 554.9312, subsection 5, 61 21 6, or 7. 61 22 2. LIEN CREDITOR. Except as otherwise provided in 61 23 subsection 3, a security interest is subordinate to the rights 61 24 of a person that becomes a lien creditor to the extent that 61 25 the security interest secures an advance made more than forty- 61 26 five days after the person becomes a lien creditor unless the 61 27 advance is made: 61 28 a. without knowledge of the lien; or 61 29 b. pursuant to a commitment entered into without knowledge 61 30 of the lien. 61 31 3. BUYER OF RECEIVABLES. Subsections 1 and 2 do not apply 61 32 to a security interest held by a secured party that is a buyer 61 33 of accounts, chattel paper, payment intangibles, or promissory 61 34 notes or a consignor. 61 35 4. BUYER OF GOODS. Except as otherwise provided in 62 1 subsection 5, a buyer of goods other than a buyer in ordinary 62 2 course of business takes free of a security interest to the 62 3 extent that it secures advances made after the earlier of: 62 4 a. the time the secured party acquires knowledge of the 62 5 buyer's purchase; or 62 6 b. forty-five days after the purchase. 62 7 5. ADVANCES MADE PURSUANT TO COMMITMENT – PRIORITY OF 62 8 BUYER OF GOODS. Subsection 4 does not apply if the advance is 62 9 made pursuant to a commitment entered into without knowledge 62 10 of the buyer's purchase and before the expiration of the 62 11 forty-five-day period. 62 12 6. LESSEE OF GOODS. Except as otherwise provided in 62 13 subsection 7, a lessee of goods, other than a lessee in 62 14 ordinary course of business, takes the leasehold interest free 62 15 of a security interest to the extent that it secures advances 62 16 made after the earlier of: 62 17 a. the time the secured party acquires knowledge of the 62 18 lease; or 62 19 b. forty-five days after the lease contract becomes 62 20 enforceable. 62 21 7. ADVANCES MADE PURSUANT TO COMMITMENT – PRIORITY OF 62 22 LESSEE OF GOODS. Subsection 6 does not apply if the advance 62 23 is made pursuant to a commitment entered into without 62 24 knowledge of the lease and before the expiration of the forty- 62 25 five-day period. 62 26 Sec. 44. NEW SECTION. 554.9324 PRIORITY OF PURCHASE- 62 27 MONEY SECURITY INTERESTS. 62 28 1. GENERAL RULE – PURCHASE-MONEY PRIORITY. Except as 62 29 otherwise provided in subsection 7, a perfected purchase-money 62 30 security interest in goods other than inventory or livestock 62 31 has priority over a conflicting security interest in the same 62 32 goods, and, except as otherwise provided in section 554.9327, 62 33 a perfected security interest in its identifiable proceeds 62 34 also has priority, if the purchase-money security interest is 62 35 perfected when the debtor receives possession of the 63 1 collateral or within twenty days thereafter. 63 2 2. INVENTORY PURCHASE-MONEY PRIORITY. Subject to 63 3 subsection 3 and except as otherwise provided in subsection 7, 63 4 a perfected purchase-money security interest in inventory has 63 5 priority over a conflicting security interest in the same 63 6 inventory, has priority over a conflicting security interest 63 7 in chattel paper or an instrument constituting proceeds of the 63 8 inventory and in proceeds of the chattel paper, if so provided 63 9 in section 554.9330, and, except as otherwise provided in 63 10 section 554.9327, also has priority in identifiable cash 63 11 proceeds of the inventory to the extent the identifiable cash 63 12 proceeds are received on or before the delivery of the 63 13 inventory to a buyer, if: 63 14 a. the purchase-money security interest is perfected when 63 15 the debtor receives possession of the inventory; 63 16 b. the purchase-money secured party sends an authenticated 63 17 notification to the holder of the conflicting security 63 18 interest; 63 19 c. the holder of the conflicting security interest 63 20 receives the notification within five years before the debtor 63 21 receives possession of the inventory; and 63 22 d. the notification states that the person sending the 63 23 notification has or expects to acquire a purchase-money 63 24 security interest in inventory of the debtor and describes the 63 25 inventory. 63 26 3. HOLDERS OF CONFLICTING INVENTORY SECURITY INTERESTS TO 63 27 BE NOTIFIED. Subsection 2, paragraphs "b" through "d", apply 63 28 only if the holder of the conflicting security interest had 63 29 filed a financing statement covering the same types of 63 30 inventory: 63 31 a. if the purchase-money security interest is perfected by 63 32 filing, before the date of the filing; or 63 33 b. if the purchase-money security interest is temporarily 63 34 perfected without filing or possession under section 554.9312, 63 35 subsection 6, before the beginning of the twenty-day period 64 1 thereunder. 64 2 4. LIVESTOCK PURCHASE-MONEY PRIORITY. Subject to 64 3 subsection 5 and except as otherwise provided in subsection 7, 64 4 a perfected purchase-money security interest in livestock that 64 5 are farm products has priority over a conflicting security 64 6 interest in the same livestock, and, except as otherwise 64 7 provided in section 554.9327, a perfected security interest in 64 8 their identifiable proceeds and identifiable products in their 64 9 unmanufactured states also has priority, if: 64 10 a. the purchase-money security interest is perfected when 64 11 the debtor receives possession of the livestock; 64 12 b. the purchase-money secured party sends an authenticated 64 13 notification to the holder of the conflicting security 64 14 interest; 64 15 c. the holder of the conflicting security interest 64 16 receives the notification within six months before the debtor 64 17 receives possession of the livestock; and 64 18 d. the notification states that the person sending the 64 19 notification has or expects to acquire a purchase-money 64 20 security interest in livestock of the debtor and describes the 64 21 livestock. 64 22 5. HOLDERS OF CONFLICTING LIVESTOCK SECURITY INTERESTS TO 64 23 BE NOTIFIED. Subsection 4, paragraphs "b" through "d", apply 64 24 only if the holder of the conflicting security interest had 64 25 filed a financing statement covering the same types of 64 26 livestock: 64 27 a. if the purchase-money security interest is perfected by 64 28 filing, before the date of the filing; or 64 29 b. if the purchase-money security interest is temporarily 64 30 perfected without filing or possession under section 554.9312, 64 31 subsection 6, before the beginning of the twenty-day period 64 32 thereunder. 64 33 6. SOFTWARE PURCHASE-MONEY PRIORITY. Except as otherwise 64 34 provided in subsection 7, a perfected purchase-money security 64 35 interest in software has priority over a conflicting security 65 1 interest in the same collateral, and, except as otherwise 65 2 provided in section 554.9327, a perfected security interest in 65 3 its identifiable proceeds also has priority, to the extent 65 4 that the purchase-money security interest in the goods in 65 5 which the software was acquired for use has priority in the 65 6 goods and proceeds of the goods under this section. 65 7 7. CONFLICTING PURCHASE-MONEY SECURITY INTERESTS. If more 65 8 than one security interest qualifies for priority in the same 65 9 collateral under subsection 1, 2, 4, or 6: 65 10 a. a security interest securing an obligation incurred as 65 11 all or part of the price of the collateral has priority over a 65 12 security interest securing an obligation incurred for value 65 13 given to enable the debtor to acquire rights in or the use of 65 14 collateral; and 65 15 b. in all other cases, section 554.9322, subsection 1, 65 16 applies to the qualifying security interests. 65 17 Sec. 45. NEW SECTION. 554.9325 PRIORITY OF SECURITY 65 18 INTERESTS IN TRANSFERRED COLLATERAL. 65 19 1. SUBORDINATION OF SECURITY INTEREST IN TRANSFERRED 65 20 COLLATERAL. Except as otherwise provided in subsection 2, a 65 21 security interest created by a debtor is subordinate to a 65 22 security interest in the same collateral created by another 65 23 person if: 65 24 a. the debtor acquired the collateral subject to the 65 25 security interest created by the other person; 65 26 b. the security interest created by the other person was 65 27 perfected when the debtor acquired the collateral; and 65 28 c. there is no period thereafter when the security 65 29 interest is unperfected. 65 30 2. LIMITATION OF SUBSECTION 1 SUBORDINATION. Subsection 1 65 31 subordinates a security interest only if the security 65 32 interest: 65 33 a. otherwise would have priority solely under section 65 34 554.9322, subsection 1, or section 554.9324; or 65 35 b. arose solely under section 554.2711, subsection 3, or 66 1 section 554.13508, subsection 5. 66 2 Sec. 46. NEW SECTION. 554.9326 PRIORITY OF SECURITY 66 3 INTERESTS CREATED BY NEW DEBTOR. 66 4 1. SUBORDINATION OF SECURITY INTEREST CREATED BY NEW 66 5 DEBTOR. Subject to subsection 2, a security interest created 66 6 by a new debtor which is perfected by a filed financing 66 7 statement that is effective solely under section 554.9508 in 66 8 collateral in which a new debtor has or acquires rights is 66 9 subordinate to a security interest in the same collateral 66 10 which is perfected other than by a filed financing statement 66 11 that is effective solely under section 554.9508. 66 12 2. PRIORITY UNDER OTHER PROVISIONS – MULTIPLE ORIGINAL 66 13 DEBTORS. The other provisions of this part determine the 66 14 priority among conflicting security interests in the same 66 15 collateral perfected by filed financing statements that are 66 16 effective solely under section 554.9508. However, if the 66 17 security agreements to which a new debtor became bound as 66 18 debtor were not entered into by the same original debtor, the 66 19 conflicting security interests rank according to priority in 66 20 time of the new debtor's having become bound. 66 21 Sec. 47. NEW SECTION. 554.9327 PRIORITY OF SECURITY 66 22 INTERESTS IN DEPOSIT ACCOUNT. 66 23 The following rules govern priority among conflicting 66 24 security interests in the same deposit account: 66 25 1. A security interest held by a secured party having 66 26 control of the deposit account under section 554.9104 has 66 27 priority over a conflicting security interest held by a 66 28 secured party that does not have control. 66 29 2. Except as otherwise provided in subsections 3 and 4, 66 30 security interests perfected by control under section 554.9314 66 31 rank according to priority in time of obtaining control. 66 32 3. Except as otherwise provided in subsection 4, a 66 33 security interest held by the bank with which the deposit 66 34 account is maintained has priority over a conflicting security 66 35 interest held by another secured party. 67 1 4. A security interest perfected by control under section 67 2 554.9104, subsection 1, paragraph "c", has priority over a 67 3 security interest held by the bank with which the deposit 67 4 account is maintained. 67 5 Sec. 48. NEW SECTION. 554.9328 PRIORITY OF SECURITY 67 6 INTERESTS IN INVESTMENT PROPERTY. 67 7 The following rules govern priority among conflicting 67 8 security interests in the same investment property: 67 9 1. A security interest held by a secured party having 67 10 control of investment property under section 554.9106 has 67 11 priority over a security interest held by a secured party that 67 12 does not have control of the investment property. 67 13 2. Except as otherwise provided in subsections 3 and 4, 67 14 conflicting security interests held by secured parties each of 67 15 which has control under section 554.9106 rank according to 67 16 priority in time of: 67 17 a. if the collateral is a security, obtaining control; 67 18 b. if the collateral is a security entitlement carried in 67 19 a securities account and: 67 20 (1) if the secured party obtained control under section 67 21 554.8106, subsection 4, paragraph "a", the secured party's 67 22 becoming the person for which the securities account is 67 23 maintained; 67 24 (2) if the secured party obtained control under section 67 25 554.8106, subsection 4, paragraph "b", the securities 67 26 intermediary's agreement to comply with the secured party's 67 27 entitlement orders with respect to security entitlements 67 28 carried or to be carried in the securities account; or 67 29 (3) if the secured party obtained control through another 67 30 person under section 554.8106, subsection 4, paragraph "b", 67 31 the time on which priority would be based under this 67 32 subsection if the other person were the secured party; or 67 33 c. if the collateral is a commodity contract carried with 67 34 a commodity intermediary, the satisfaction of the requirement 67 35 for control specified in section 554.9106, subsection 2, 68 1 paragraph "b", with respect to commodity contracts carried or 68 2 to be carried with the commodity intermediary. 68 3 3. A security interest held by a securities intermediary 68 4 in a security entitlement or a securities account maintained 68 5 with the securities intermediary has priority over a 68 6 conflicting security interest held by another secured party. 68 7 4. A security interest held by a commodity intermediary in 68 8 a commodity contract or a commodity account maintained with 68 9 the commodity intermediary has priority over a conflicting 68 10 security interest held by another secured party. 68 11 5. A security interest in a certificated security in 68 12 registered form which is perfected by taking delivery under 68 13 section 554.9313, subsection 1, and not by control under 68 14 section 554.9314 has priority over a conflicting security 68 15 interest perfected by a method other than control. 68 16 6. Conflicting security interests created by a broker, 68 17 securities intermediary, or commodity intermediary which are 68 18 perfected without control under section 554.9106 rank equally. 68 19 7. In all other cases, priority among conflicting security 68 20 interests in investment property is governed by sections 68 21 554.9322 and 554.9323. 68 22 Sec. 49. NEW SECTION. 554.9329 PRIORITY OF SECURITY 68 23 INTERESTS IN LETTER-OF-CREDIT RIGHT. 68 24 The following rules govern priority among conflicting 68 25 security interests in the same letter-of-credit right: 68 26 1. A security interest held by a secured party having 68 27 control of the letter-of-credit right under section 554.9107 68 28 has priority to the extent of its control over a conflicting 68 29 security interest held by a secured party that does not have 68 30 control. 68 31 2. Security interests perfected by control under section 68 32 554.9314 rank according to priority in time of obtaining 68 33 control. 68 34 Sec. 50. NEW SECTION. 554.9330 PRIORITY OF PURCHASER OF 68 35 CHATTEL PAPER OR INSTRUMENT. 69 1 1. PURCHASER'S PRIORITY – SECURITY INTEREST CLAIMED 69 2 MERELY AS PROCEEDS. A purchaser of chattel paper has priority 69 3 over a security interest in the chattel paper which is claimed 69 4 merely as proceeds of inventory subject to a security interest 69 5 if: 69 6 a. in good faith and in the ordinary course of the 69 7 purchaser's business, the purchaser gives new value and takes 69 8 possession of the chattel paper or obtains control of the 69 9 chattel paper under section 554.9105; and 69 10 b. the chattel paper does not indicate that it has been 69 11 assigned to an identified assignee other than the purchaser. 69 12 2. PURCHASER'S PRIORITY – OTHER SECURITY INTERESTS. A 69 13 purchaser of chattel paper has priority over a security 69 14 interest in the chattel paper which is claimed other than 69 15 merely as proceeds of inventory subject to a security interest 69 16 if the purchaser gives new value and takes possession of the 69 17 chattel paper or obtains control of the chattel paper under 69 18 section 554.9105 in good faith, in the ordinary course of the 69 19 purchaser's business, and without knowledge that the purchase 69 20 violates the rights of the secured party. 69 21 3. CHATTEL PAPER PURCHASER'S PRIORITY IN PROCEEDS. Except 69 22 as otherwise provided in section 554.9327, a purchaser having 69 23 priority in chattel paper under subsection 1 or 2 also has 69 24 priority in proceeds of the chattel paper to the extent that: 69 25 a. section 554.9322 provides for priority in the proceeds; 69 26 or 69 27 b. the proceeds consist of the specific goods covered by 69 28 the chattel paper or cash proceeds of the specific goods, even 69 29 if the purchaser's security interest in the proceeds is 69 30 unperfected. 69 31 4. INSTRUMENT PURCHASER'S PRIORITY. Except as otherwise 69 32 provided in section 554.9331, subsection 1, a purchaser of an 69 33 instrument has priority over a security interest in the 69 34 instrument perfected by a method other than possession if the 69 35 purchaser gives value and takes possession of the instrument 70 1 in good faith and without knowledge that the purchase violates 70 2 the rights of the secured party. 70 3 5. HOLDER OF PURCHASE-MONEY SECURITY INTEREST GIVES NEW 70 4 VALUE. For purposes of subsections 1 and 2, the holder of a 70 5 purchase-money security interest in inventory gives new value 70 6 for chattel paper constituting proceeds of the inventory. 70 7 6. INDICATION OF ASSIGNMENT GIVES KNOWLEDGE. For purposes 70 8 of subsections 2 and 4, if chattel paper or an instrument 70 9 indicates that it has been assigned to an identified secured 70 10 party other than the purchaser, a purchaser of the chattel 70 11 paper or instrument has knowledge that the purchase violates 70 12 the rights of the secured party. 70 13 Sec. 51. NEW SECTION. 554.9331 PRIORITY OF RIGHTS OF 70 14 PURCHASERS OF INSTRUMENTS, DOCUMENTS, AND SECURITIES UNDER 70 15 OTHER ARTICLES – PRIORITY OF INTERESTS IN FINANCIAL ASSETS 70 16 AND SECURITY ENTITLEMENTS UNDER ARTICLE 8. 70 17 1. RIGHTS UNDER ARTICLES 3, 7, AND 8 NOT LIMITED. This 70 18 Article does not limit the rights of a holder in due course of 70 19 a negotiable instrument, a holder to which a negotiable 70 20 document of title has been duly negotiated, or a protected 70 21 purchaser of a security. These holders or purchasers take 70 22 priority over an earlier security interest, even if perfected, 70 23 to the extent provided in Articles 3, 7, and 8. 70 24 2. PROTECTION UNDER ARTICLE 8. This Article does not 70 25 limit the rights of or impose liability on a person to the 70 26 extent that the person is protected against the assertion of a 70 27 claim under Article 8. 70 28 3. FILING NOT NOTICE. Filing under this Article does not 70 29 constitute notice of a claim or defense to the holders, or 70 30 purchasers, or persons described in subsections 1 and 2. 70 31 Sec. 52. NEW SECTION. 554.9332 TRANSFER OF MONEY – 70 32 TRANSFER OF FUNDS FROM DEPOSIT ACCOUNT. 70 33 1. TRANSFEREE OF MONEY. A transferee of money takes the 70 34 money free of a security interest unless the transferee acts 70 35 in collusion with the debtor in violating the rights of the 71 1 secured party. 71 2 2. TRANSFEREE OF FUNDS FROM DEPOSIT ACCOUNT. A transferee 71 3 of funds from a deposit account takes the funds free of a 71 4 security interest in the deposit account unless the transferee 71 5 acts in collusion with the debtor in violating the rights of 71 6 the secured party. 71 7 Sec. 53. NEW SECTION. 554.9333 PRIORITY OF CERTAIN LIENS 71 8 ARISING BY OPERATION OF LAW. 71 9 1. POSSESSORY LIEN. In this section, "possessory lien" 71 10 means an interest, other than a security interest or an 71 11 agricultural lien: 71 12 a. which secures payment or performance of an obligation 71 13 for services or materials furnished with respect to goods by a 71 14 person in the ordinary course of the person's business; 71 15 b. which is created by statute or rule of law in favor of 71 16 the person; and 71 17 c. whose effectiveness depends on the person's possession 71 18 of the goods. 71 19 2. PRIORITY OF POSSESSORY LIEN. A possessory lien on 71 20 goods has priority over a security interest in the goods 71 21 unless the lien is created by a statute that expressly 71 22 provides otherwise. 71 23 Sec. 54. NEW SECTION. 554.9334 PRIORITY OF SECURITY 71 24 INTERESTS IN FIXTURES AND CROPS. 71 25 1. SECURITY INTEREST IN FIXTURES UNDER THIS ARTICLE. A 71 26 security interest under this Article may be created in goods 71 27 that are fixtures or may continue in goods that become 71 28 fixtures. A security interest does not exist under this 71 29 Article in ordinary building materials incorporated into an 71 30 improvement on land. 71 31 2. SECURITY INTEREST IN FIXTURES UNDER REAL-PROPERTY LAW. 71 32 This Article does not prevent creation of an encumbrance upon 71 33 fixtures under real property law. 71 34 3. GENERAL RULE – SUBORDINATION OF SECURITY INTEREST IN 71 35 FIXTURES. In cases not governed by subsections 4 through 8, a 72 1 security interest in fixtures is subordinate to a conflicting 72 2 interest of an encumbrancer or owner of the related real 72 3 property other than the debtor. 72 4 4. FIXTURES PURCHASE-MONEY PRIORITY. Except as otherwise 72 5 provided in subsection 8, a perfected security interest in 72 6 fixtures has priority over a conflicting interest of an 72 7 encumbrancer or owner of the real property if the debtor has 72 8 an interest of record in or is in possession of the real 72 9 property and: 72 10 a. the security interest is a purchase-money security 72 11 interest; 72 12 b. the interest of the encumbrancer or owner arises before 72 13 the goods become fixtures; and 72 14 c. the security interest is perfected by a fixture filing 72 15 before the goods become fixtures or within twenty days 72 16 thereafter. 72 17 5. PRIORITY OF SECURITY INTEREST IN FIXTURES OVER 72 18 INTERESTS IN REAL PROPERTY. A perfected security interest in 72 19 fixtures has priority over a conflicting interest of an 72 20 encumbrancer or owner of the real property if: 72 21 a. the debtor has an interest of record in the real 72 22 property or is in possession of the real property and the 72 23 security interest: 72 24 (1) is perfected by a fixture filing before the interest 72 25 of the encumbrancer or owner is of record; and 72 26 (2) has priority over any conflicting interest of a 72 27 predecessor in title of the encumbrancer or owner; 72 28 b. before the goods become fixtures, the security interest 72 29 is perfected by any method permitted by this Article and the 72 30 fixtures are readily removable: 72 31 (1) factory or office machines; 72 32 (2) equipment that is not primarily used or leased for use 72 33 in the operation of the real property; or 72 34 (3) replacements of domestic appliances that are consumer 72 35 goods; 73 1 c. the conflicting interest is a lien on the real property 73 2 obtained by legal or equitable proceedings after the security 73 3 interest was perfected by any method permitted by this 73 4 Article; or 73 5 d. the security interest is: 73 6 (1) created in a manufactured home in a manufactured-home 73 7 transaction; and 73 8 (2) perfected pursuant to a statute described in section 73 9 554.9311, subsection 1, paragraph "b". 73 10 6. PRIORITY BASED ON CONSENT, DISCLAIMER, OR RIGHT TO 73 11 REMOVE. A security interest in fixtures, whether or not 73 12 perfected, has priority over a conflicting interest of an 73 13 encumbrancer or owner of the real property if: 73 14 a. the encumbrancer or owner has, in an authenticated 73 15 record, consented to the security interest or disclaimed an 73 16 interest in the goods as fixtures; or 73 17 b. the debtor has a right to remove the goods as against 73 18 the encumbrancer or owner. 73 19 7. CONTINUATION OF SUBSECTION 6, PARAGRAPH "b", PRIORITY. 73 20 The priority of the security interest under subsection 6, 73 21 paragraph "b", continues for a reasonable time if the debtor's 73 22 right to remove the goods as against the encumbrancer or owner 73 23 terminates. 73 24 8. PRIORITY OF CONSTRUCTION MORTGAGE. A mortgage is a 73 25 construction mortgage to the extent that it secures an 73 26 obligation incurred for the construction of an improvement on 73 27 land, including the acquisition cost of the land, if a 73 28 recorded record of the mortgage so indicates. Except as 73 29 otherwise provided in subsections 5 and 6, a security interest 73 30 in fixtures is subordinate to a construction mortgage if a 73 31 record of the mortgage is recorded before the goods become 73 32 fixtures and the goods become fixtures before the completion 73 33 of the construction. A mortgage has this priority to the same 73 34 extent as a construction mortgage to the extent that it is 73 35 given to refinance a construction mortgage. 74 1 9. PRIORITY OF SECURITY INTEREST IN CROPS. A perfected 74 2 security interest in crops growing on real property has 74 3 priority over a conflicting interest of an encumbrancer or 74 4 owner of the real property if the debtor has an interest of 74 5 record in or is in possession of the real property. 74 6 10. SUBSECTION 9 PREVAILS. Subsection 9 prevails over any 74 7 inconsistent provisions of chapter 570. 74 8 Sec. 55. NEW SECTION. 554.9335 ACCESSIONS. 74 9 1. CREATION OF SECURITY INTEREST IN ACCESSION. A security 74 10 interest may be created in an accession and continues in 74 11 collateral that becomes an accession. 74 12 2. PERFECTION OF SECURITY INTEREST. If a security 74 13 interest is perfected when the collateral becomes an 74 14 accession, the security interest remains perfected in the 74 15 collateral. 74 16 3. PRIORITY OF SECURITY INTEREST. Except as otherwise 74 17 provided in subsection 4, the other provisions of this part 74 18 determine the priority of a security interest in an accession. 74 19 4. COMPLIANCE WITH CERTIFICATE-OF-TITLE STATUTE. A 74 20 security interest in an accession is subordinate to a security 74 21 interest in the whole which is perfected by compliance with 74 22 the requirements of a certificate-of-title statute under 74 23 section 554.9311, subsection 2. 74 24 5. REMOVAL OF ACCESSION AFTER DEFAULT. After default, 74 25 subject to part 6, a secured party may remove an accession 74 26 from other goods if the security interest in the accession has 74 27 priority over the claims of every person having an interest in 74 28 the whole. 74 29 6. REIMBURSEMENT FOLLOWING REMOVAL. A secured party that 74 30 removes an accession from other goods under subsection 5 shall 74 31 promptly reimburse any holder of a security interest or other 74 32 lien on, or owner of, the whole or of the other goods, other 74 33 than the debtor, for the cost of repair of any physical injury 74 34 to the whole or the other goods. The secured party need not 74 35 reimburse the holder or owner for any diminution in value of 75 1 the whole or the other goods caused by the absence of the 75 2 accession removed or by any necessity for replacing it. A 75 3 person entitled to reimbursement may refuse permission to 75 4 remove until the secured party gives adequate assurance for 75 5 the performance of the obligation to reimburse. 75 6 Sec. 56. NEW SECTION. 554.9336 COMMINGLED GOODS. 75 7 1. COMMINGLED GOODS. In this section, "commingled goods" 75 8 means goods that are physically united with other goods in 75 9 such a manner that their identity is lost in a product or 75 10 mass. 75 11 2. NO SECURITY INTEREST IN COMMINGLED GOODS AS SUCH. A 75 12 security interest does not exist in commingled goods as such. 75 13 However, a security interest may attach to a product or mass 75 14 that results when goods become commingled goods. 75 15 3. ATTACHMENT OF SECURITY INTEREST TO PRODUCT OR MASS. If 75 16 collateral becomes commingled goods, a security interest 75 17 attaches to the product or mass. 75 18 4. PERFECTION OF SECURITY INTEREST. If a security 75 19 interest in collateral is perfected before the collateral 75 20 becomes commingled goods, the security interest that attaches 75 21 to the product or mass under subsection 3 is perfected. 75 22 5. PRIORITY OF SECURITY INTEREST. Except as otherwise 75 23 provided in subsection 6, the other provisions of this part 75 24 determine the priority of a security interest that attaches to 75 25 the product or mass under subsection 3. 75 26 6. CONFLICTING SECURITY INTERESTS IN PRODUCT OR MASS. If 75 27 more than one security interest attaches to the product or 75 28 mass under subsection 3, the following rules determine 75 29 priority: 75 30 a. A security interest that is perfected under subsection 75 31 4 has priority over a security interest that is unperfected at 75 32 the time the collateral becomes commingled goods. 75 33 b. If more than one security interest is perfected under 75 34 subsection 4, the security interests rank equally in 75 35 proportion to the value of the collateral at the time it 76 1 became commingled goods. 76 2 Sec. 57. NEW SECTION. 554.9337 PRIORITY OF SECURITY 76 3 INTERESTS IN GOODS COVERED BY CERTIFICATE OF TITLE. 76 4 If, while a security interest in goods is perfected by any 76 5 method under the law of another jurisdiction, this state 76 6 issues a certificate of title that does not show that the 76 7 goods are subject to the security interest or contain a 76 8 statement that they may be subject to security interests not 76 9 shown on the certificate: 76 10 1. a buyer of the goods, other than a person in the 76 11 business of selling goods of that kind, takes free of the 76 12 security interest if the buyer gives value and receives 76 13 delivery of the goods after issuance of the certificate and 76 14 without knowledge of the security interest; and 76 15 2. the security interest is subordinate to a conflicting 76 16 security interest in the goods that attaches, and is perfected 76 17 under section 554.9311, subsection 2, after issuance of the 76 18 certificate and without the conflicting secured party's 76 19 knowledge of the security interest. 76 20 Sec. 58. NEW SECTION. 554.9338 PRIORITY OF SECURITY 76 21 INTEREST OR AGRICULTURAL LIEN PERFECTED BY FILED FINANCING 76 22 STATEMENT PROVIDING CERTAIN INCORRECT INFORMATION. 76 23 If a security interest or agricultural lien is perfected by 76 24 a filed financing statement providing information described in 76 25 section 554.9516, subsection 2, paragraph "e", which is 76 26 incorrect at the time the financing statement is filed: 76 27 1. the security interest or agricultural lien is 76 28 subordinate to a conflicting perfected security interest in 76 29 the collateral to the extent that the holder of the 76 30 conflicting security interest gives value in reasonable 76 31 reliance upon the incorrect information; and 76 32 2. a purchaser, other than a secured party, of the 76 33 collateral takes free of the security interest or agricultural 76 34 lien to the extent that, in reasonable reliance upon the 76 35 incorrect information, the purchaser gives value and, in the 77 1 case of chattel paper, documents, goods, instruments, or a 77 2 security certificate, receives delivery of the collateral. 77 3 Sec. 59. NEW SECTION. 554.9339 PRIORITY SUBJECT TO 77 4 SUBORDINATION. 77 5 This Article does not preclude subordination by agreement 77 6 by a person entitled to priority. 77 7 D. RIGHTS OF BANK 77 8 Sec. 60. NEW SECTION. 554.9340 EFFECTIVENESS OF RIGHT OF 77 9 RECOUPMENT OR SETOFF AGAINST DEPOSIT ACCOUNT. 77 10 1. EXERCISE OF RECOUPMENT OR SETOFF. Except as otherwise 77 11 provided in subsection 3, a bank with which a deposit account 77 12 is maintained may exercise any right of recoupment or setoff 77 13 against a secured party that holds a security interest in the 77 14 deposit account. 77 15 2. RECOUPMENT OR SETOFF NOT AFFECTED BY SECURITY INTEREST. 77 16 Except as otherwise provided in subsection 3, the application 77 17 of this Article to a security interest in a deposit account 77 18 does not affect a right of recoupment or setoff of the secured 77 19 party as to a deposit account maintained with the secured 77 20 party. 77 21 3. WHEN SETOFF INEFFECTIVE. The exercise by a bank of a 77 22 setoff against a deposit account is ineffective against a 77 23 secured party that holds a security interest in the deposit 77 24 account which is perfected by control under section 554.9104, 77 25 subsection 1, paragraph "c", if the setoff is based on a claim 77 26 against the debtor. 77 27 Sec. 61. NEW SECTION. 554.9341 BANK'S RIGHTS AND DUTIES 77 28 WITH RESPECT TO DEPOSIT ACCOUNT. 77 29 Except as otherwise provided in section 554.9340, 77 30 subsection 3, and unless the bank otherwise agrees in an 77 31 authenticated record, a bank's rights and duties with respect 77 32 to a deposit account maintained with the bank are not 77 33 terminated, suspended, or modified by: 77 34 1. the creation, attachment, or perfection of a security 77 35 interest in the deposit account; 78 1 2. the bank's knowledge of the security interest; or 78 2 3. the bank's receipt of instructions from the secured 78 3 party. 78 4 Sec. 62. NEW SECTION. 554.9342 BANK'S RIGHT TO REFUSE TO 78 5 ENTER INTO OR DISCLOSE EXISTENCE OF CONTROL AGREEMENT. 78 6 This Article does not require a bank to enter into an 78 7 agreement of the kind described in section 554.9104, 78 8 subsection 1, paragraph "b", even if its customer so requests 78 9 or directs. A bank that has entered into such an agreement is 78 10 not required to confirm the existence of the agreement to 78 11 another person unless requested to do so by its customer. 78 12 PART 4 78 13 RIGHTS OF THIRD PARTIES 78 14 Sec. 63. NEW SECTION. 554.9401 ALIENABILITY OF DEBTOR'S 78 15 RIGHTS. 78 16 1. OTHER LAW GOVERNS ALIENABILITY – EXCEPTIONS. Except 78 17 as otherwise provided in subsection 2 and sections 554.9406, 78 18 554.9407, 554.9408, and 554.9409, whether a debtor's rights in 78 19 collateral may be voluntarily or involuntarily transferred is 78 20 governed by law other than this Article. 78 21 2. AGREEMENT DOES NOT PREVENT TRANSFER. An agreement 78 22 between the debtor and secured party which prohibits a 78 23 transfer of the debtor's rights in collateral or makes the 78 24 transfer a default does not prevent the transfer from taking 78 25 effect. 78 26 Sec. 64. NEW SECTION. 554.9402 SECURED PARTY NOT 78 27 OBLIGATED ON CONTRACT OF DEBTOR OR IN TORT. 78 28 The existence of a security interest, agricultural lien, or 78 29 authority given to a debtor to dispose of or use collateral, 78 30 without more, does not subject a secured party to liability in 78 31 contract or tort for the debtor's acts or omissions. 78 32 Sec. 65. NEW SECTION. 554.9403 AGREEMENT NOT TO ASSERT 78 33 DEFENSES AGAINST ASSIGNEE. 78 34 1. VALUE. In this section, "value" has the meaning 78 35 provided in section 554.3303, subsection 1. 79 1 2. AGREEMENT NOT TO ASSERT CLAIM OR DEFENSE. Except as 79 2 otherwise provided in this section, an agreement between an 79 3 account debtor and an assignor not to assert against an 79 4 assignee any claim or defense that the account debtor may have 79 5 against the assignor is enforceable by an assignee that takes 79 6 an assignment: 79 7 a. for value; 79 8 b. in good faith; 79 9 c. without notice of a claim of a property or possessory 79 10 right to the property assigned; and 79 11 d. without notice of a defense or claim in recoupment of 79 12 the type that may be asserted against a person entitled to 79 13 enforce a negotiable instrument under section 554.3305, 79 14 subsection 1. 79 15 3. WHEN SUBSECTION 2 NOT APPLICABLE. Subsection 2 does 79 16 not apply to defenses of a type that may be asserted against a 79 17 holder in due course of a negotiable instrument under section 79 18 554.3305, subsection 2. 79 19 4. OMISSION OF REQUIRED STATEMENT IN CONSUMER TRANSACTION. 79 20 In a consumer transaction, if a record evidences the account 79 21 debtor's obligation, law other than this Article requires that 79 22 the record include a statement to the effect that the rights 79 23 of an assignee are subject to claims or defenses that the 79 24 account debtor could assert against the original obligee, and 79 25 the record does not include such a statement: 79 26 a. the record has the same effect as if the record 79 27 included such a statement; and 79 28 b. the account debtor may assert against an assignee those 79 29 claims and defenses that would have been available if the 79 30 record included such a statement. 79 31 5. RULE FOR INDIVIDUAL UNDER OTHER LAW. This section is 79 32 subject to law other than this Article which establishes a 79 33 different rule for an account debtor who is an individual and 79 34 who incurred the obligation primarily for personal, family, or 79 35 household purposes. 80 1 6. OTHER LAW NOT DISPLACED. Except as otherwise provided 80 2 in subsection 4, this section does not displace law other than 80 3 this Article which gives effect to an agreement by an account 80 4 debtor not to assert a claim or defense against an assignee. 80 5 Sec. 66. NEW SECTION. 554.9404 RIGHTS ACQUIRED BY 80 6 ASSIGNEE – CLAIMS AND DEFENSES AGAINST ASSIGNEE. 80 7 1. ASSIGNEE'S RIGHTS SUBJECT TO TERMS, CLAIMS, AND 80 8 DEFENSES – EXCEPTIONS. Unless an account debtor has made an 80 9 enforceable agreement not to assert defenses or claims, and 80 10 subject to subsections 2 through 5, the rights of an assignee 80 11 are subject to: 80 12 a. all terms of the agreement between the account debtor 80 13 and assignor and any defense or claim in recoupment arising 80 14 from the transaction that gave rise to the contract; and 80 15 b. any other defense or claim of the account debtor 80 16 against the assignor which accrues before the account debtor 80 17 receives a notification of the assignment authenticated by the 80 18 assignor or the assignee. 80 19 2. ACCOUNT DEBTOR'S CLAIM REDUCES AMOUNT OWED TO ASSIGNEE. 80 20 Subject to subsection 3 and except as otherwise provided in 80 21 subsection 4, the claim of an account debtor against an 80 22 assignor may be asserted against an assignee under subsection 80 23 1 only to reduce the amount the account debtor owes. 80 24 3. RULE FOR INDIVIDUAL UNDER OTHER LAW. This section is 80 25 subject to law other than this Article which establishes a 80 26 different rule for an account debtor who is an individual and 80 27 who incurred the obligation primarily for personal, family, or 80 28 household purposes. 80 29 4. OMISSION OF REQUIRED STATEMENT IN CONSUMER TRANSACTION. 80 30 In a consumer transaction, if a record evidences the account 80 31 debtor's obligation, law other than this Article requires that 80 32 the record include a statement to the effect that the account 80 33 debtor's recovery against an assignee with respect to claims 80 34 and defenses against the assignor may not exceed amounts paid 80 35 by the account debtor under the record, and the record does 81 1 not include such a statement, the extent to which a claim of 81 2 an account debtor against the assignor may be asserted against 81 3 an assignee is determined as if the record included such a 81 4 statement. 81 5 5. INAPPLICABILITY TO HEALTH-CARE-INSURANCE RECEIVABLE. 81 6 This section does not apply to an assignment of a health-care- 81 7 insurance receivable. 81 8 Sec. 67. NEW SECTION. 554.9405 MODIFICATION OF ASSIGNED 81 9 CONTRACT. 81 10 1. EFFECT OF MODIFICATION ON ASSIGNEE. A modification of 81 11 or substitution for an assigned contract is effective against 81 12 an assignee if made in good faith. The assignee acquires 81 13 corresponding rights under the modified or substituted 81 14 contract. The assignment may provide that the modification or 81 15 substitution is a breach of contract by the assignor. This 81 16 subsection is subject to subsections 2 through 4. 81 17 2. APPLICABILITY OF SUBSECTION 1. Subsection 1 applies to 81 18 the extent that: 81 19 a. the right to payment or a part thereof under an 81 20 assigned contract has not been fully earned by performance; or 81 21 b. the right to payment or a part thereof has been fully 81 22 earned by performance and the account debtor has not received 81 23 notification of the assignment under section 554.9406, 81 24 subsection 1. 81 25 3. RULE FOR INDIVIDUAL UNDER OTHER LAW. This section is 81 26 subject to law other than this Article which establishes a 81 27 different rule for an account debtor who is an individual and 81 28 who incurred the obligation primarily for personal, family, or 81 29 household purposes. 81 30 4. INAPPLICABILITY TO HEALTH-CARE-INSURANCE RECEIVABLE. 81 31 This section does not apply to an assignment of a health-care- 81 32 insurance receivable. 81 33 Sec. 68. NEW SECTION. 554.9406 DISCHARGE OF ACCOUNT 81 34 DEBTOR – NOTIFICATION OF ASSIGNMENT – IDENTIFICATION AND 81 35 PROOF OF ASSIGNMENT – RESTRICTIONS ON ASSIGNMENT OF ACCOUNTS, 82 1 CHATTEL PAPER, PAYMENT INTANGIBLES, AND PROMISSORY NOTES 82 2 INEFFECTIVE. 82 3 1. DISCHARGE OF ACCOUNT DEBTOR – EFFECT OF NOTIFICATION. 82 4 Subject to subsections 2 through 9, an account debtor on an 82 5 account, chattel paper, or a payment intangible may discharge 82 6 its obligation by paying the assignor until, but not after, 82 7 the account debtor receives a notification, authenticated by 82 8 the assignor or the assignee, that the amount due or to become 82 9 due has been assigned and that payment is to be made to the 82 10 assignee. After receipt of the notification, the account 82 11 debtor may discharge its obligation by paying the assignee and 82 12 may not discharge the obligation by paying the assignor. 82 13 2. WHEN NOTIFICATION INEFFECTIVE. Subject to subsection 82 14 8, notification is ineffective under subsection 1: 82 15 a. if it does not reasonably identify the rights assigned; 82 16 b. to the extent that an agreement between an account 82 17 debtor and a seller of a payment intangible limits the account 82 18 debtor's duty to pay a person other than the seller and the 82 19 limitation is effective under law other than this Article; or 82 20 c. at the option of an account debtor, if the notification 82 21 notifies the account debtor to make less than the full amount 82 22 of any installment or other periodic payment to the assignee, 82 23 even if: 82 24 (1) only a portion of the account, chattel paper, or 82 25 general intangible has been assigned to that assignee; 82 26 (2) a portion has been assigned to another assignee; or 82 27 (3) the account debtor knows that the assignment to that 82 28 assignee is limited. 82 29 3. PROOF OF ASSIGNMENT. Subject to subsection 8, if 82 30 requested by the account debtor, an assignee shall seasonably 82 31 furnish reasonable proof that the assignment has been made. 82 32 Unless the assignee complies, the account debtor may discharge 82 33 its obligation by paying the assignor, even if the account 82 34 debtor has received a notification under subsection 1. 82 35 4. TERM RESTRICTING ASSIGNMENT GENERALLY INEFFECTIVE. 83 1 Except as otherwise provided in subsection 5 and sections 83 2 554.9407 and 554.13303, and subject to subsection 8, a term in 83 3 an agreement between an account debtor and an assignor or in a 83 4 promissory note is ineffective to the extent that it: 83 5 a. prohibits, restricts, or requires the consent of the 83 6 account debtor or person obligated on the promissory note to 83 7 the assignment or transfer of, or the creation, attachment, 83 8 perfection, or enforcement of a security interest in, the 83 9 account, chattel paper, payment intangible, or promissory 83 10 note; or 83 11 b. provides that the assignment or transfer or the 83 12 creation, attachment, perfection, or enforcement of the 83 13 security interest may give rise to a default, breach, right of 83 14 recoupment, claim, defense, termination, right of termination, 83 15 or remedy under the account, chattel paper, payment 83 16 intangible, or promissory note. 83 17 5. INAPPLICABILITY OF SUBSECTION 4 TO CERTAIN SALES. 83 18 Subsection 4 does not apply to the sale of a payment 83 19 intangible or promissory note. 83 20 6. LEGAL RESTRICTIONS ON ASSIGNMENT GENERALLY INEFFECTIVE. 83 21 Except as otherwise provided in sections 554.9407 and 83 22 554.13303 and subject to subsections 8 and 9, a rule of law, 83 23 statute, or regulation that prohibits, restricts, or requires 83 24 the consent of a government, governmental body or official, or 83 25 account debtor to the assignment or transfer of, or creation 83 26 of a security interest in, an account or chattel paper is 83 27 ineffective to the extent that the rule of law, statute, or 83 28 regulation: 83 29 a. prohibits, restricts, or requires the consent of the 83 30 government, governmental body or official, or account debtor 83 31 to the assignment or transfer of, or the creation, attachment, 83 32 perfection, or enforcement of a security interest in the 83 33 account or chattel paper; or 83 34 b. provides that the assignment or transfer or the 83 35 creation, attachment, perfection, or enforcement of the 84 1 security interest may give rise to a default, breach, right of 84 2 recoupment, claim, defense, termination, right of termination, 84 3 or remedy under the account or chattel paper. 84 4 7. SUBSECTION 2, PARAGRAPH "C", NOT WAIVABLE. Subject to 84 5 subsection 8, an account debtor may not waive or vary its 84 6 option under subsection 2, paragraph "c". 84 7 8. RULE FOR INDIVIDUAL UNDER OTHER LAW. This section is 84 8 subject to law other than this Article which establishes a 84 9 different rule for an account debtor who is an individual and 84 10 who incurred the obligation primarily for personal, family, or 84 11 household purposes. 84 12 9. INAPPLICABILITY TO HEALTH-CARE-INSURANCE RECEIVABLE. 84 13 This section does not apply to an assignment of a health-care- 84 14 insurance receivable. 84 15 10. SECTION PREVAILS OVER SPECIFIED INCONSISTENT LAW. 84 16 This section prevails over any inconsistent provision of an 84 17 existing or future statute, rule, or regulation of this state 84 18 unless the provision is contained in a statute of this state, 84 19 refers expressly to this section, and states that the 84 20 provision prevails over this section. 84 21 Sec. 69. NEW SECTION. 554.9407 RESTRICTIONS ON CREATION 84 22 OR ENFORCEMENT OF SECURITY INTEREST IN LEASEHOLD INTEREST OR 84 23 IN LESSOR'S RESIDUAL INTEREST. 84 24 1. TERM RESTRICTING ASSIGNMENT GENERALLY INEFFECTIVE. 84 25 Except as otherwise provided in subsection 2, a term in a 84 26 lease agreement is ineffective to the extent that it: 84 27 a. prohibits, restricts, or requires the consent of a 84 28 party to the lease to the assignment or transfer of, or the 84 29 creation, attachment, perfection, or enforcement of a security 84 30 interest in, an interest of a party under the lease contract 84 31 or in the lessor's residual interest in the goods; or 84 32 b. provides that the assignment or transfer or the 84 33 creation, attachment, perfection, or enforcement of the 84 34 security interest may give rise to a default, breach, right of 84 35 recoupment, claim, defense, termination, right of termination, 85 1 or remedy under the lease. 85 2 2. EFFECTIVENESS OF CERTAIN TERMS. Except as otherwise 85 3 provided in section 554.13303, subsection 7, a term described 85 4 in subsection 1, paragraph "b", is effective to the extent 85 5 that there is: 85 6 a. a transfer by the lessee of the lessee's right of 85 7 possession or use of the goods in violation of the term; or 85 8 b. a delegation of a material performance of either party 85 9 to the lease contract in violation of the term. 85 10 3. SECURITY INTEREST NOT MATERIAL IMPAIRMENT. The 85 11 creation, attachment, perfection, or enforcement of a security 85 12 interest in the lessor's interest under the lease contract or 85 13 the lessor's residual interest in the goods is not a transfer 85 14 that materially impairs the lessee's prospect of obtaining 85 15 return performance or materially changes the duty of or 85 16 materially increases the burden or risk imposed on the lessee 85 17 within the purview of section 554.13303, subsection 3, unless, 85 18 and then only to the extent that, enforcement actually results 85 19 in a delegation of material performance of the lessor. 85 20 Sec. 70. NEW SECTION. 554.9408 RESTRICTIONS ON 85 21 ASSIGNMENT OF PROMISSORY NOTES, HEALTH-CARE-INSURANCE 85 22 RECEIVABLES, AND CERTAIN GENERAL INTANGIBLES INEFFECTIVE. 85 23 1. TERM RESTRICTING ASSIGNMENT GENERALLY INEFFECTIVE. 85 24 Except as otherwise provided in subsection 2, a term in a 85 25 promissory note or in an agreement between an account debtor 85 26 and a debtor which relates to a health-care-insurance 85 27 receivable or a general intangible, including a contract, 85 28 permit, license, or franchise, and which term prohibits, 85 29 restricts, or requires the consent of the person obligated on 85 30 the promissory note or the account debtor to, the assignment 85 31 or transfer of, or creation, attachment, or perfection of a 85 32 security interest in, the promissory note, health-care- 85 33 insurance receivable, or general intangible, is ineffective to 85 34 the extent that the term: 85 35 a. would impair the creation, attachment, or perfection of 86 1 a security interest; or 86 2 b. provides that the assignment or transfer or the 86 3 creation, attachment, or perfection of the security interest 86 4 may give rise to a default, breach, right of recoupment, 86 5 claim, defense, termination, right of termination, or remedy 86 6 under the promissory note, health-care-insurance receivable, 86 7 or general intangible. 86 8 2. APPLICABILITY OF SUBSECTION 1 TO SALES OF CERTAIN 86 9 RIGHTS TO PAYMENT. Subsection 1 applies to a security 86 10 interest in a payment intangible or promissory note only if 86 11 the security interest arises out of a sale of the payment 86 12 intangible or promissory note. 86 13 3. LEGAL RESTRICTIONS ON ASSIGNMENT GENERALLY INEFFECTIVE. 86 14 A rule of law, statute, or regulation that prohibits, 86 15 restricts, or requires the consent of a government, 86 16 governmental body or official, person obligated on a 86 17 promissory note, or account debtor to the assignment or 86 18 transfer of, or creation of a security interest in, a 86 19 promissory note, health-care-insurance receivable, or general 86 20 intangible, including a contract, permit, license, or 86 21 franchise between an account debtor and a debtor, is 86 22 ineffective to the extent that the rule of law, statute, or 86 23 regulation: 86 24 a. would impair the creation, attachment, or perfection of 86 25 a security interest; or 86 26 b. provides that the assignment or transfer or the 86 27 creation, attachment, or perfection of the security interest 86 28 may give rise to a default, breach, right of recoupment, 86 29 claim, defense, termination, right of termination, or remedy 86 30 under the promissory note, health-care-insurance receivable, 86 31 or general intangible. 86 32 4. LIMITATION ON INEFFECTIVENESS UNDER SUBSECTIONS 1 AND 86 33 3. To the extent that a term in a promissory note or in an 86 34 agreement between an account debtor and a debtor which relates 86 35 to a health-care-insurance receivable or general intangible or 87 1 a rule of law, statute, or regulation described in subsection 87 2 3 would be effective under law other than this Article but is 87 3 ineffective under subsection 1 or 3, the creation, attachment, 87 4 or perfection of a security interest in the promissory note, 87 5 health-care-insurance receivable, or general intangible: 87 6 a. is not enforceable against the person obligated on the 87 7 promissory note or the account debtor; 87 8 b. does not impose a duty or obligation on the person 87 9 obligated on the promissory note or the account debtor; 87 10 c. does not require the person obligated on the promissory 87 11 note or the account debtor to recognize the security interest, 87 12 pay or render performance to the secured party, or accept 87 13 payment or performance from the secured party; 87 14 d. does not entitle the secured party to use or assign the 87 15 debtor's rights under the promissory note, health-care- 87 16 insurance receivable, or general intangible, including any 87 17 related information or materials furnished to the debtor in 87 18 the transaction giving rise to the promissory note, health- 87 19 care-insurance receivable, or general intangible; 87 20 e. does not entitle the secured party to use, assign, 87 21 possess, or have access to any trade secrets or confidential 87 22 information of the person obligated on the promissory note or 87 23 the account debtor; and 87 24 f. does not entitle the secured party to enforce the 87 25 security interest in the promissory note, health-care- 87 26 insurance receivable, or general intangible. 87 27 5. SECTION PREVAILS OVER SPECIFIED INCONSISTENT LAW. This 87 28 section prevails over any inconsistent provision of an 87 29 existing or future statute, rule, or regulation of this state 87 30 unless the provision is contained in a statute of this state, 87 31 refers expressly to this section, and states that the 87 32 provision prevails over this section. 87 33 Sec. 71. NEW SECTION. 554.9409 RESTRICTIONS ON 87 34 ASSIGNMENT OF LETTER-OF-CREDIT RIGHTS INEFFECTIVE. 87 35 1. TERM OR LAW RESTRICTING ASSIGNMENT GENERALLY 88 1 INEFFECTIVE. A term in a letter of credit or a rule of law, 88 2 statute, regulation, custom, or practice applicable to the 88 3 letter of credit which prohibits, restricts, or requires the 88 4 consent of an applicant, issuer, or nominated person to a 88 5 beneficiary's assignment of or creation of a security interest 88 6 in a letter-of-credit right is ineffective to the extent that 88 7 the term or rule of law, statute, regulation, custom, or 88 8 practice: 88 9 a. would impair the creation, attachment, or perfection of 88 10 a security interest in the letter-of-credit right; or 88 11 b. provides that the assignment or the creation, 88 12 attachment, or perfection of the security interest may give 88 13 rise to a default, breach, right of recoupment, claim, 88 14 defense, termination, right of termination, or remedy under 88 15 the letter-of-credit right. 88 16 2. LIMITATION ON INEFFECTIVENESS UNDER SUBSECTION 1. To 88 17 the extent that a term in a letter of credit is ineffective 88 18 under subsection 1 but would be effective under law other than 88 19 this Article or a custom or practice applicable to the letter 88 20 of credit, to the transfer of a right to draw or otherwise 88 21 demand performance under the letter of credit, or to the 88 22 assignment of a right to proceeds of the letter of credit, the 88 23 creation, attachment, or perfection of a security interest in 88 24 the letter-of-credit right: 88 25 a. is not enforceable against the applicant, issuer, 88 26 nominated person, or transferee beneficiary; 88 27 b. imposes no duties or obligations on the applicant, 88 28 issuer, nominated person, or transferee beneficiary; and 88 29 c. does not require the applicant, issuer, nominated 88 30 person, or transferee beneficiary to recognize the security 88 31 interest, pay or render performance to the secured party, or 88 32 accept payment or other performance from the secured party. 88 33 PART 5 88 34 FILING 88 35 A. FILING OFFICE – CONTENTS AND 89 1 EFFECTIVENESS OF FINANCING STATEMENT 89 2 Sec. 72. NEW SECTION. 554.9501 FILING OFFICE. 89 3 1. FILING OFFICES. Except as otherwise provided in 89 4 subsection 2, if the local law of this state governs 89 5 perfection of a security interest or agricultural lien, the 89 6 office in which to file a financing statement to perfect the 89 7 security interest or agricultural lien is: 89 8 a. the office designated for the filing or recording of a 89 9 record of a mortgage on the related real property, if: 89 10 (1) the collateral is as-extracted collateral or timber to 89 11 be cut; or 89 12 (2) the financing statement is filed as a fixture filing 89 13 and the collateral is goods that are or are to become 89 14 fixtures; or 89 15 b. the office of the secretary of state or any office duly 89 16 authorized by the office of secretary of state, in all other 89 17 cases, including a case in which the collateral is goods that 89 18 are or are to become fixtures and the financing statement is 89 19 not filed as a fixture filing. 89 20 2. FILING OFFICE FOR TRANSMITTING UTILITIES. The office 89 21 in which to file a financing statement to perfect a security 89 22 interest in collateral, including fixtures, of a transmitting 89 23 utility is the office of the secretary of state. The 89 24 financing statement also constitutes a fixture filing as to 89 25 the collateral indicated in the financing statement which is 89 26 or is to become fixtures. 89 27 Sec. 73. NEW SECTION. 554.9502 CONTENTS OF FINANCING 89 28 STATEMENT – RECORD OF MORTGAGE AS FINANCING STATEMENT – TIME 89 29 OF FILING FINANCING STATEMENT. 89 30 1. SUFFICIENCY OF FINANCING STATEMENT. Subject to 89 31 subsection 2, a financing statement is sufficient only if it: 89 32 a. provides the name of the debtor; 89 33 b. provides the name of the secured party or a 89 34 representative of the secured party; and 89 35 c. indicates the collateral covered by the financing 90 1 statement. 90 2 2. REAL-PROPERTY-RELATED FINANCING STATEMENTS. Except as 90 3 otherwise provided in section 554.9501, subsection 2, to be 90 4 sufficient, a financing statement that covers as-extracted 90 5 collateral or timber to be cut, or which is filed as a fixture 90 6 filing and covers goods that are or are to become fixtures, 90 7 must satisfy subsection 1 and also: 90 8 a. indicate that it covers this type of collateral; 90 9 b. indicate that it is to be filed for record in the real 90 10 property records; 90 11 c. provide a description of the real property to which the 90 12 collateral is related sufficient to give constructive notice 90 13 of a mortgage under the law of this state if the description 90 14 were contained in a record of the mortgage of the real 90 15 property; and 90 16 d. if the debtor does not have an interest of record in 90 17 the real property, provide the name of a record owner. 90 18 3. RECORD OF MORTGAGE AS FINANCING STATEMENT. A record of 90 19 a mortgage is effective, from the date of recording, as a 90 20 financing statement filed as a fixture filing or as a 90 21 financing statement covering as-extracted collateral or timber 90 22 to be cut only if: 90 23 a. the record indicates the goods or accounts that it 90 24 covers; 90 25 b. the goods are or are to become fixtures related to the 90 26 real property described in the record or the collateral is 90 27 related to the real property described in the record and is 90 28 as-extracted collateral or timber to be cut; 90 29 c. the record satisfies the requirements for a financing 90 30 statement in this section other than an indication that it is 90 31 to be filed in the real property records; and 90 32 d. the record is duly recorded. 90 33 4. FILING BEFORE SECURITY AGREEMENT OR ATTACHMENT. A 90 34 financing statement may be filed before a security agreement 90 35 is made or a security interest otherwise attaches. 91 1 Sec. 74. NEW SECTION. 554.9503 NAME OF DEBTOR AND 91 2 SECURED PARTY. 91 3 1. SUFFICIENCY OF DEBTOR'S NAME. A financing statement 91 4 sufficiently provides the name of the debtor: 91 5 a. if the debtor is a registered organization, only if the 91 6 financing statement provides the name of the debtor indicated 91 7 on the public record of the debtor's jurisdiction of 91 8 organization which shows the debtor to have been organized; 91 9 b. if the debtor is a decedent's estate, only if the 91 10 financing statement provides the name of the decedent and 91 11 indicates that the debtor is an estate; 91 12 c. if the debtor is a trust or a trustee acting with 91 13 respect to property held in trust, only if the financing 91 14 statement: 91 15 (1) provides the name specified for the trust in its 91 16 organic documents or, if no name is specified, provides the 91 17 name of the settlor and additional information sufficient to 91 18 distinguish the debtor from other trusts having one or more of 91 19 the same settlors; and 91 20 (2) indicates, in the debtor's name or otherwise, that the 91 21 debtor is a trust or is a trustee acting with respect to 91 22 property held in trust; and 91 23 d. in other cases: 91 24 (1) if the debtor has a name, only if it provides the 91 25 individual or organizational name of the debtor; and 91 26 (2) if the debtor does not have a name, only if it 91 27 provides the names of the partners, members, associates, or 91 28 other persons comprising the debtor. 91 29 2. ADDITIONAL DEBTOR-RELATED INFORMATION. A financing 91 30 statement that provides the name of the debtor in accordance 91 31 with subsection 1 is not rendered ineffective by the absence 91 32 of: 91 33 a. a trade name or other name of the debtor; or 91 34 b. unless required under subsection 1, paragraph "d", 91 35 subparagraph (2), names of partners, members, associates, or 92 1 other persons comprising the debtor. 92 2 3. DEBTOR'S TRADE NAME INSUFFICIENT. A financing 92 3 statement that provides only the debtor's trade name does not 92 4 sufficiently provide the name of the debtor. 92 5 4. REPRESENTATIVE CAPACITY. Failure to indicate the 92 6 representative capacity of a secured party or representative 92 7 of a secured party does not affect the sufficiency of a 92 8 financing statement. 92 9 5. MULTIPLE DEBTORS AND SECURED PARTIES. A financing 92 10 statement may provide the name of more than one debtor and the 92 11 name of more than one secured party. 92 12 Sec. 75. NEW SECTION. 554.9504 INDICATION OF COLLATERAL. 92 13 A financing statement sufficiently indicates the collateral 92 14 that it covers if the financing statement provides: 92 15 1. a description of the collateral pursuant to section 92 16 554.9108; or 92 17 2. an indication that the financing statement covers all 92 18 assets or all personal property. 92 19 Sec. 76. NEW SECTION. 554.9505 FILING AND COMPLIANCE 92 20 WITH OTHER STATUTES AND TREATIES FOR CONSIGNMENTS, LEASES, 92 21 OTHER BAILMENTS, AND OTHER TRANSACTIONS. 92 22 1. USE OF TERMS OTHER THAN DEBTOR AND SECURED PARTY. A 92 23 consignor, lessor, or other bailor of goods, a licensor, or a 92 24 buyer of a payment intangible or promissory note may file a 92 25 financing statement, or may comply with a statute or treaty 92 26 described in section 554.9311, subsection 1, using the terms 92 27 "consignor", "consignee", "lessor", "lessee", "bailor", 92 28 "bailee", "licensor", "licensee", "owner", "registered owner", 92 29 "buyer", "seller", or words of similar import, instead of the 92 30 terms "secured party" and "debtor". 92 31 2. EFFECT OF FINANCING STATEMENT UNDER SUBSECTION 1. This 92 32 part applies to the filing of a financing statement under 92 33 subsection 1 and, as appropriate, to compliance that is 92 34 equivalent to filing a financing statement under section 92 35 554.9311, subsection 2, but the filing or compliance is not of 93 1 itself a factor in determining whether the collateral secures 93 2 an obligation. If it is determined for another reason that 93 3 the collateral secures an obligation, a security interest held 93 4 by the consignor, lessor, bailor, licensor, owner, or buyer 93 5 which attaches to the collateral is perfected by the filing or 93 6 compliance. 93 7 Sec. 77. NEW SECTION. 554.9506 EFFECT OF ERRORS OR 93 8 OMISSIONS. 93 9 1. MINOR ERRORS AND OMISSIONS. A financing statement 93 10 substantially satisfying the requirements of this part is 93 11 effective, even if it has minor errors or omissions, unless 93 12 the errors or omissions make the financing statement seriously 93 13 misleading. 93 14 2. FINANCING STATEMENT SERIOUSLY MISLEADING. Except as 93 15 otherwise provided in subsection 3, a financing statement that 93 16 fails sufficiently to provide the name of the debtor in 93 17 accordance with section 554.9503, subsection 1, is seriously 93 18 misleading. 93 19 3. FINANCING STATEMENT NOT SERIOUSLY MISLEADING. If a 93 20 search of the records of the filing office under the debtor's 93 21 correct name, using the filing office's standard search logic, 93 22 if any, would disclose a financing statement that fails 93 23 sufficiently to provide the name of the debtor in accordance 93 24 with section 554.9503, subsection 1, the name provided does 93 25 not make the financing statement seriously misleading. 93 26 4. DEBTOR'S CORRECT NAME. For purposes of section 93 27 554.9508, subsection 2, the "debtor's correct name" in 93 28 subsection 3 means the correct name of the new debtor. 93 29 Sec. 78. NEW SECTION. 554.9507 EFFECT OF CERTAIN EVENTS 93 30 ON EFFECTIVENESS OF FINANCING STATEMENT. 93 31 1. DISPOSITION. A filed financing statement remains 93 32 effective with respect to collateral that is sold, exchanged, 93 33 leased, licensed, or otherwise disposed of and in which a 93 34 security interest or agricultural lien continues, even if the 93 35 secured party knows of or consents to the disposition. 94 1 2. INFORMATION BECOMING SERIOUSLY MISLEADING. Except as 94 2 otherwise provided in subsection 3 and section 554.9508, a 94 3 financing statement is not rendered ineffective if, after the 94 4 financing statement is filed, the information provided in the 94 5 financing statement becomes seriously misleading under section 94 6 554.9506. 94 7 3. CHANGE IN DEBTOR'S NAME. If a debtor so changes its 94 8 name that a filed financing statement becomes seriously 94 9 misleading under section 554.9506: 94 10 a. the financing statement is effective to perfect a 94 11 security interest in collateral acquired by the debtor before, 94 12 or within four months after, the change; and 94 13 b. the financing statement is not effective to perfect a 94 14 security interest in collateral acquired by the debtor more 94 15 than four months after the change, unless an amendment to the 94 16 financing statement which renders the financing statement not 94 17 seriously misleading is filed within four months after the 94 18 change. 94 19 Sec. 79. NEW SECTION. 554.9508 EFFECTIVENESS OF 94 20 FINANCING STATEMENT IF NEW DEBTOR BECOMES BOUND BY SECURITY 94 21 AGREEMENT. 94 22 1. FINANCING STATEMENT NAMING ORIGINAL DEBTOR. Except as 94 23 otherwise provided in this section, a filed financing 94 24 statement naming an original debtor is effective to perfect a 94 25 security interest in collateral in which a new debtor has or 94 26 acquires rights to the extent that the financing statement 94 27 would have been effective had the original debtor acquired 94 28 rights in the collateral. 94 29 2. FINANCING STATEMENT BECOMING SERIOUSLY MISLEADING. If 94 30 the difference between the name of the original debtor and 94 31 that of the new debtor causes a filed financing statement that 94 32 is effective under subsection 1 to be seriously misleading 94 33 under section 554.9506: 94 34 a. the financing statement is effective to perfect a 94 35 security interest in collateral acquired by the new debtor 95 1 before, and within four months after, the new debtor becomes 95 2 bound under section 554.9203, subsection 4; and 95 3 b. the financing statement is not effective to perfect a 95 4 security interest in collateral acquired by the new debtor 95 5 more than four months after the new debtor becomes bound under 95 6 section 554.9203, subsection 4, unless an initial financing 95 7 statement providing the name of the new debtor is filed before 95 8 the expiration of that time. 95 9 3. WHEN SECTION NOT APPLICABLE. This section does not 95 10 apply to collateral as to which a filed financing statement 95 11 remains effective against the new debtor under section 95 12 554.9507, subsection 1. 95 13 Sec. 80. NEW SECTION. 554.9509 PERSONS ENTITLED TO FILE 95 14 A RECORD. 95 15 1. PERSON ENTITLED TO FILE RECORD. A person may file an 95 16 initial financing statement, amendment that adds collateral 95 17 covered by a financing statement, or amendment that adds a 95 18 debtor to a financing statement only if: 95 19 a. the debtor authorizes the filing in an authenticated 95 20 record; or 95 21 b. the person holds an agricultural lien that has become 95 22 effective at the time of filing and the financing statement 95 23 covers only collateral in which the person holds an 95 24 agricultural lien. 95 25 2. SECURITY AGREEMENT AS AUTHORIZATION. By authenticating 95 26 or becoming bound as debtor by a security agreement, a debtor 95 27 or new debtor authorizes the filing of an initial financing 95 28 statement, and an amendment, covering: 95 29 a. the collateral described in the security agreement; and 95 30 b. property that becomes collateral under section 95 31 554.9315, subsection 1, paragraph "b", whether or not the 95 32 security agreement expressly covers proceeds. 95 33 3. ACQUISITION OF COLLATERAL AS AUTHORIZATION. By 95 34 acquiring collateral in which a security interest or 95 35 agricultural lien continues under section 554.9315, subsection 96 1 1, paragraph "a", a debtor authorizes the filing of an initial 96 2 financing statement, and an amendment, covering the collateral 96 3 and property that becomes collateral under section 554.9315, 96 4 subsection 1, paragraph "b". 96 5 4. PERSON ENTITLED TO FILE CERTAIN AMENDMENTS. A person 96 6 may file an amendment other than an amendment that adds 96 7 collateral covered by a financing statement or an amendment 96 8 that adds a debtor to a financing statement only if: 96 9 a. the secured party of record authorizes the filing; or 96 10 b. the amendment is a termination statement for a 96 11 financing statement as to which the secured party of record 96 12 has failed to file or send a termination statement as required 96 13 by section 554.9513, subsection 1 or 3, the debtor authorizes 96 14 the filing, and the termination statement indicates that the 96 15 debtor authorized it to be filed. 96 16 5. MULTIPLE SECURED PARTIES OF RECORD. If there is more 96 17 than one secured party of record for a financing statement, 96 18 each secured party of record may authorize the filing of an 96 19 amendment under subsection 4. 96 20 Sec. 81. NEW SECTION. 554.9510 EFFECTIVENESS OF FILED 96 21 RECORD. 96 22 1. FILED RECORD EFFECTIVE IF AUTHORIZED. A filed record 96 23 is effective only to the extent that it was filed by a person 96 24 that may file it under section 554.9509. 96 25 2. AUTHORIZATION BY ONE SECURED PARTY OF RECORD. A record 96 26 authorized by one secured party of record does not affect the 96 27 financing statement with respect to another secured party of 96 28 record. 96 29 3. CONTINUATION STATEMENT NOT TIMELY FILED. A 96 30 continuation statement that is not filed within the six-month 96 31 period prescribed by section 554.9515, subsection 4, is 96 32 ineffective. 96 33 Sec. 82. NEW SECTION. 554.9511 SECURED PARTY OF RECORD. 96 34 1. SECURED PARTY OF RECORD. A secured party of record 96 35 with respect to a financing statement is a person whose name 97 1 is provided as the name of the secured party or a 97 2 representative of the secured party in an initial financing 97 3 statement that has been filed. If an initial financing 97 4 statement is filed under section 554.9514, subsection 1, the 97 5 assignee named in the initial financing statement is the 97 6 secured party of record with respect to the financing 97 7 statement. 97 8 2. AMENDMENT NAMING SECURED PARTY OF RECORD. If an 97 9 amendment of a financing statement which provides the name of 97 10 a person as a secured party or a representative of a secured 97 11 party is filed, the person named in the amendment is a secured 97 12 party of record. If an amendment is filed under section 97 13 554.9514, subsection 2, the assignee named in the amendment is 97 14 a secured party of record. 97 15 3. AMENDMENT DELETING SECURED PARTY OF RECORD. A person 97 16 remains a secured party of record until the filing of an 97 17 amendment of the financing statement which deletes the person. 97 18 Sec. 83. NEW SECTION. 554.9512 AMENDMENT OF FINANCING 97 19 STATEMENT. 97 20 1. AMENDMENT OF INFORMATION IN FINANCING STATEMENT. 97 21 Subject to section 554.9509, a person may add or delete 97 22 collateral covered by, continue or terminate the effectiveness 97 23 of, or, subject to subsection 5, otherwise amend the 97 24 information provided in, a financing statement by filing an 97 25 amendment that: 97 26 a. identifies, by its file number, the initial financing 97 27 statement to which the amendment relates; and 97 28 b. if the amendment relates to an initial financing 97 29 statement filed or recorded in a filing office described in 97 30 section 554.9501, subsection 1, paragraph "a", provides the 97 31 date and time that the initial financing statement was filed 97 32 or recorded and the information specified in section 554.9502, 97 33 subsection 2. 97 34 2. PERIOD OF EFFECTIVENESS NOT AFFECTED. Except as 97 35 otherwise provided in section 554.9515, the filing of an 98 1 amendment does not extend the period of effectiveness of the 98 2 financing statement. 98 3 3. EFFECTIVENESS OF AMENDMENT ADDING COLLATERAL. A 98 4 financing statement that is amended by an amendment that adds 98 5 collateral is effective as to the added collateral only from 98 6 the date of the filing of the amendment. 98 7 4. EFFECTIVENESS OF AMENDMENT ADDING DEBTOR. A financing 98 8 statement that is amended by an amendment that adds a debtor 98 9 is effective as to the added debtor only from the date of the 98 10 filing of the amendment. 98 11 5. CERTAIN AMENDMENTS INEFFECTIVE. An amendment is 98 12 ineffective to the extent it: 98 13 a. purports to delete all debtors and fails to provide the 98 14 name of a debtor to be covered by the financing statement; or 98 15 b. purports to delete all secured parties of record and 98 16 fails to provide the name of a new secured party of record. 98 17 Sec. 84. NEW SECTION. 554.9513 TERMINATION STATEMENT. 98 18 1. CONSUMER GOODS. A secured party shall cause the 98 19 secured party of record for a financing statement to file a 98 20 termination statement for the financing statement if the 98 21 financing statement covers consumer goods and: 98 22 a. there is no obligation secured by the collateral 98 23 covered by the financing statement and no commitment to make 98 24 an advance, incur an obligation, or otherwise give value; or 98 25 b. the debtor did not authorize the filing of the initial 98 26 financing statement. 98 27 2. TIME FOR COMPLIANCE WITH SUBSECTION 1. To comply with 98 28 subsection 1, a secured party shall cause the secured party of 98 29 record to file the termination statement: 98 30 a. within one month after there is no obligation secured 98 31 by the collateral covered by the financing statement and no 98 32 commitment to make an advance, incur an obligation, or 98 33 otherwise give value; or 98 34 b. if earlier, within twenty days after the secured party 98 35 receives an authenticated demand from a debtor. 99 1 3. OTHER COLLATERAL. In cases not governed by subsection 99 2 1, within twenty days after a secured party receives an 99 3 authenticated demand from a debtor, the secured party shall 99 4 cause the secured party of record for a financing statement to 99 5 send to the debtor a termination statement for the financing 99 6 statement or file the termination statement in the filing 99 7 office if: 99 8 a. except in the case of a financing statement covering 99 9 accounts or chattel paper that has been sold or goods that are 99 10 the subject of a consignment, there is no obligation secured 99 11 by the collateral covered by the financing statement and no 99 12 commitment to make an advance, incur an obligation, or 99 13 otherwise give value; 99 14 b. the financing statement covers accounts or chattel 99 15 paper that has been sold but as to which the account debtor or 99 16 other person obligated has discharged its obligation; 99 17 c. the financing statement covers goods that were the 99 18 subject of a consignment to the debtor but are not in the 99 19 debtor's possession; or 99 20 d. the debtor did not authorize the filing of the initial 99 21 financing statement. 99 22 4. EFFECT OF FILING TERMINATION STATEMENT. Except as 99 23 otherwise provided in section 554.9510, upon the filing of a 99 24 termination statement with the filing office, the financing 99 25 statement to which the termination statement relates ceases to 99 26 be effective. 99 27 Sec. 85. NEW SECTION. 554.9514 ASSIGNMENT OF POWERS OF 99 28 SECURED PARTY OF RECORD. 99 29 1. ASSIGNMENT REFLECTED ON INITIAL FINANCING STATEMENT. 99 30 Except as otherwise provided in subsection 3, an initial 99 31 financing statement may reflect an assignment of all of the 99 32 secured party's power to authorize an amendment to the 99 33 financing statement by providing the name and mailing address 99 34 of the assignee as the name and address of the secured party. 99 35 2. ASSIGNMENT OF FILED FINANCING STATEMENT. Except as 100 1 otherwise provided in subsection 3, a secured party of record 100 2 may assign of record all or part of its power to authorize an 100 3 amendment to a financing statement by filing in the filing 100 4 office an amendment of the financing statement which: 100 5 a. identifies, by its file number, the initial financing 100 6 statement to which it relates; 100 7 b. provides the name of the assignor; and 100 8 c. provides the name and mailing address of the assignee. 100 9 3. ASSIGNMENT OF RECORD OF MORTGAGE. An assignment of 100 10 record of a security interest in a fixture covered by a record 100 11 of a mortgage which is effective as a financing statement 100 12 filed as a fixture filing under section 554.9502, subsection 100 13 3, may be made only by an assignment of record of the mortgage 100 14 in the manner provided by law of this state other than this 100 15 chapter. 100 16 Sec. 86. NEW SECTION. 554.9515 DURATION AND 100 17 EFFECTIVENESS OF FINANCING STATEMENT – EFFECT OF LAPSED 100 18 FINANCING STATEMENT. 100 19 1. FIVE-YEAR EFFECTIVENESS. Except as otherwise provided 100 20 in subsections 2, 5, 6, and 7, a filed financing statement is 100 21 effective for a period of five years after the date of filing. 100 22 2. PUBLIC-FINANCE OR MANUFACTURED-HOME TRANSACTION. 100 23 Except as otherwise provided in subsections 5, 6, and 7, an 100 24 initial financing statement filed in connection with a public- 100 25 finance transaction or manufactured-home transaction is 100 26 effective for a period of thirty years after the date of 100 27 filing if it indicates that it is filed in connection with a 100 28 public-finance transaction or manufactured-home transaction. 100 29 3. LAPSE AND CONTINUATION OF FINANCING STATEMENT. The 100 30 effectiveness of a filed financing statement lapses on the 100 31 expiration of the period of its effectiveness unless before 100 32 the lapse a continuation statement is filed pursuant to 100 33 subsection 4. Upon lapse, a financing statement ceases to be 100 34 effective and any security interest or agricultural lien that 100 35 was perfected by the financing statement becomes unperfected, 101 1 unless the security interest is perfected otherwise. If the 101 2 security interest or agricultural lien becomes unperfected 101 3 upon lapse, it is deemed never to have been perfected as 101 4 against a purchaser of the collateral for value. 101 5 4. WHEN CONTINUATION STATEMENT MAY BE FILED. A 101 6 continuation statement may be filed only within six months 101 7 before the expiration of the five-year period specified in 101 8 subsection 1 or the thirty-year period specified in subsection 101 9 2, whichever is applicable. 101 10 5. EFFECT OF FILING CONTINUATION STATEMENT. Except as 101 11 otherwise provided in section 554.9510, upon timely filing of 101 12 a continuation statement, the effectiveness of the initial 101 13 financing statement continues for a period of five years 101 14 commencing on the day on which the financing statement would 101 15 have become ineffective in the absence of the filing. Upon 101 16 the expiration of the five-year period, the financing 101 17 statement lapses in the same manner as provided in subsection 101 18 3, unless, before the lapse, another continuation statement is 101 19 filed pursuant to subsection 4. Succeeding continuation 101 20 statements may be filed in the same manner to continue the 101 21 effectiveness of the initial financing statement. 101 22 6. TRANSMITTING UTILITY FINANCING STATEMENT. If a debtor 101 23 is a transmitting utility and a filed financing statement so 101 24 indicates, the financing statement is effective until a 101 25 termination statement is filed. 101 26 7. RECORD OF MORTGAGE AS FINANCING STATEMENT. A record of 101 27 a mortgage that is effective as a financing statement filed as 101 28 a fixture filing under section 554.9502, subsection 3, remains 101 29 effective as a financing statement filed as a fixture filing 101 30 until the mortgage is released or satisfied of record or its 101 31 effectiveness otherwise terminates as to the real property. 101 32 Sec. 87. NEW SECTION. 554.9516 WHAT CONSTITUTES FILING 101 33 – EFFECTIVENESS OF FILING. 101 34 1. WHAT CONSTITUTES FILING. Except as otherwise provided 101 35 in subsection 2, communication of a record to a filing office 102 1 and tender of the filing fee or acceptance of the record by 102 2 the filing office constitutes filing. 102 3 2. REFUSAL TO ACCEPT RECORD – FILING DOES NOT OCCUR. 102 4 Filing does not occur with respect to a record that a filing 102 5 office refuses to accept because: 102 6 a. the record is not communicated by a method or medium of 102 7 communication authorized by the filing office; 102 8 b. an amount equal to or greater than the applicable 102 9 filing fee is not tendered; 102 10 c. the filing office is unable to index the record 102 11 because: 102 12 (1) in the case of an initial financing statement, the 102 13 record does not provide a name for the debtor; 102 14 (2) in the case of an amendment or correction statement, 102 15 the record: 102 16 (a) does not identify the initial financing statement as 102 17 required by section 554.9512 or 554.9518, as applicable; or 102 18 (b) identifies an initial financing statement whose 102 19 effectiveness has lapsed under section 554.9515; 102 20 (3) in the case of an initial financing statement that 102 21 provides the name of a debtor identified as an individual or 102 22 an amendment that provides a name of a debtor identified as an 102 23 individual which was not previously provided in the financing 102 24 statement to which the record relates, the record does not 102 25 identify the debtor's last name; or 102 26 (4) in the case of a record filed or recorded in the 102 27 filing office described in section 554.9501, subsection 1, 102 28 paragraph "a", the record does not provide a sufficient 102 29 description of the real property to which it relates; 102 30 d. in the case of an initial financing statement or an 102 31 amendment that adds a secured party of record, the record does 102 32 not provide a name and mailing address for the secured party 102 33 of record; 102 34 e. in the case of an initial financing statement or an 102 35 amendment that provides a name of a debtor which was not 103 1 previously provided in the financing statement to which the 103 2 amendment relates, the record does not: 103 3 (1) provide a mailing address for the debtor; 103 4 (2) indicate whether the debtor is an individual or an 103 5 organization; or 103 6 (3) if the financing statement indicates that the debtor 103 7 is an organization, provide: 103 8 (a) a type of organization for the debtor; 103 9 (b) a jurisdiction of organization for the debtor; or 103 10 (c) an organizational identification number for the debtor 103 11 or indicate that the debtor has none; 103 12 f. in the case of an assignment reflected in an initial 103 13 financing statement under section 554.9514, subsection 1, or 103 14 an amendment filed under section 554.9514, subsection 2, the 103 15 record does not provide a name and mailing address for the 103 16 assignee; or 103 17 g. in the case of a continuation statement, the record is 103 18 not filed within the six-month period prescribed by section 103 19 554.9515, subsection 4. 103 20 3. RULES APPLICABLE TO SUBSECTION 2. For purposes of 103 21 subsection 2: 103 22 a. a record does not provide information if the filing 103 23 office is unable to read or decipher the information; and 103 24 b. a record that does not indicate that it is an amendment 103 25 or identify an initial financing statement to which it 103 26 relates, as required by section 554.9512, 554.9514, or 103 27 554.9518, is an initial financing statement. 103 28 4. REFUSAL TO ACCEPT RECORD – RECORD EFFECTIVE AS FILED 103 29 RECORD. A record that is communicated to the filing office 103 30 with tender of the filing fee, but which the filing office 103 31 refuses to accept for a reason other than one set forth in 103 32 subsection 2, is effective as a filed record except as against 103 33 a purchaser of the collateral which gives value in reasonable 103 34 reliance upon the absence of the record from the files. 103 35 Sec. 88. NEW SECTION. 554.9517 EFFECT OF INDEXING 104 1 ERRORS. 104 2 The failure of the filing office to index a record 104 3 correctly does not affect the effectiveness of the filed 104 4 record. 104 5 Sec. 89. NEW SECTION. 554.9518 CLAIM CONCERNING 104 6 INACCURATE OR WRONGFULLY FILED RECORD. 104 7 1. CORRECTION STATEMENT. A person may file in the filing 104 8 office a correction statement with respect to a record indexed 104 9 there under the person's name if the person believes that the 104 10 record is inaccurate or was wrongfully filed. 104 11 2. SUFFICIENCY OF CORRECTION STATEMENT. A correction 104 12 statement must: 104 13 a. identify the record to which it relates by: 104 14 (1) the file number assigned to the initial financing 104 15 statement to which the record relates; and 104 16 (2) if the correction statement relates to a record filed 104 17 or recorded in a filing office described in section 554.9501, 104 18 subsection 1, paragraph "a", the date and time that the 104 19 initial financing statement was filed or recorded and the 104 20 information specified in section 554.9502, subsection 2; 104 21 b. indicate that it is a correction statement; and 104 22 c. provide the basis for the person's belief that the 104 23 record is inaccurate and indicate the manner in which the 104 24 person believes the record should be amended to cure any 104 25 inaccuracy or provide the basis for the person's belief that 104 26 the record was wrongfully filed. 104 27 3. RECORD NOT AFFECTED BY CORRECTION STATEMENT. The 104 28 filing of a correction statement does not affect the 104 29 effectiveness of an initial financing statement or other filed 104 30 record. 104 31 B. DUTIES AND OPERATION OF FILING OFFICE 104 32 Sec. 90. NEW SECTION. 554.9519 NUMBERING, MAINTAINING, 104 33 AND INDEXING RECORDS – COMMUNICATING INFORMATION PROVIDED IN 104 34 RECORDS. 104 35 1. FILING OFFICE DUTIES. For each record filed in a 105 1 filing office, the filing office shall: 105 2 a. assign a unique number to the filed record; 105 3 b. create a record that bears the number assigned to the 105 4 filed record and the date and time of filing; 105 5 c. maintain the filed record for public inspection; and 105 6 d. index the filed record in accordance with subsections 105 7 3, 4, and 5. 105 8 2. FILE NUMBER. A file number assigned after January 1, 105 9 2002, must include a digit that: 105 10 a. is mathematically derived from or related to the other 105 11 digits of the file number; and 105 12 b. aids the filing office in determining whether a number 105 13 communicated as the file number includes a single-digit or 105 14 transpositional error. 105 15 3. INDEXING – GENERAL. Except as otherwise provided in 105 16 subsections 4 and 5, the filing office shall: 105 17 a. index an initial financing statement according to the 105 18 name of the debtor and index all filed records relating to the 105 19 initial financing statement in a manner that associates with 105 20 one another an initial financing statement and all filed 105 21 records relating to the initial financing statement; and 105 22 b. index a record that provides a name of a debtor which 105 23 was not previously provided in the financing statement to 105 24 which the record relates also according to the name that was 105 25 not previously provided. 105 26 4. INDEXING – REAL-PROPERTY-RELATED FINANCING STATEMENT. 105 27 If a financing statement is filed as a fixture filing or 105 28 covers as-extracted collateral or timber to be cut, it must be 105 29 filed for record and the filing office shall index it: 105 30 a. under the names of the debtor and of each owner of 105 31 record shown on the financing statement as if they were the 105 32 mortgagors under a mortgage of the real property described; 105 33 and 105 34 b. to the extent that the law of this state provides for 105 35 indexing of records of mortgages under the name of the 106 1 mortgagee, under the name of the secured party as if the 106 2 secured party were the mortgagee thereunder, or, if indexing 106 3 is by description, as if the financing statement were a record 106 4 of a mortgage of the real property described. 106 5 5. INDEXING – REAL-PROPERTY-RELATED ASSIGNMENT. If a 106 6 financing statement is filed as a fixture filing or covers as- 106 7 extracted collateral or timber to be cut, the filing office 106 8 shall index an assignment filed under section 554.9514, 106 9 subsection 1, or an amendment filed under section 554.9514, 106 10 subsection 2: 106 11 a. under the name of the assignor as grantor; and 106 12 b. to the extent that the law of this state provides for 106 13 indexing a record of the assignment of a mortgage under the 106 14 name of the assignee, under the name of the assignee. 106 15 6. RETRIEVAL AND ASSOCIATION CAPABILITY. The filing 106 16 office shall maintain a capability: 106 17 a. to retrieve a record by the name of the debtor and: 106 18 (1) if the filing office is described in section 554.9501, 106 19 subsection 1, paragraph "a", by the file number assigned to 106 20 the initial financing statement to which the record relates 106 21 and the date and time that the record was filed or recorded; 106 22 or 106 23 (2) if the filing office is described in section 554.9501, 106 24 subsection 1, paragraph "b", by the file number assigned to 106 25 the initial financing statement to which the record relates; 106 26 and 106 27 b. to associate and retrieve with one another an initial 106 28 financing statement and each filed record relating to the 106 29 initial financing statement. 106 30 7. REMOVAL OF DEBTOR'S NAME. The filing office may not 106 31 remove a debtor's name from the index until one year after the 106 32 effectiveness of a financing statement naming the debtor 106 33 lapses under section 554.9515 with respect to all secured 106 34 parties of record. 106 35 8. TIMELINESS OF FILING OFFICE PERFORMANCE. The filing 107 1 office shall perform the acts required by subsections 1 107 2 through 5 at the time and in the manner prescribed by filing- 107 3 office rule, but not later than two business days after the 107 4 filing office receives the record in question. 107 5 Sec. 91. NEW SECTION. 554.9520 ACCEPTANCE AND REFUSAL TO 107 6 ACCEPT RECORD. 107 7 1. MANDATORY REFUSAL TO ACCEPT RECORD. A filing office 107 8 shall refuse to accept a record for filing for a reason set 107 9 forth in section 554.9516, subsection 2, and may refuse to 107 10 accept a record for filing only for a reason set forth in 107 11 section 554.9516, subsection 2. 107 12 2. COMMUNICATION CONCERNING REFUSAL. If a filing office 107 13 refuses to accept a record for filing, it shall communicate to 107 14 the person that presented the record the fact of and reason 107 15 for the refusal and the date and time the record would have 107 16 been filed had the filing office accepted it. The 107 17 communication must be made at the time and in the manner 107 18 prescribed by filing-office rule but in no event more than two 107 19 business days after the filing office receives the record. 107 20 3. WHEN FILED FINANCING STATEMENT EFFECTIVE. A filed 107 21 financing statement satisfying section 554.9502, subsections 1 107 22 and 2, is effective, even if the filing office is required to 107 23 refuse to accept it for filing under subsection 1. However, 107 24 section 554.9338 applies to a filed financing statement 107 25 providing information described in section 554.9516, 107 26 subsection 2, paragraph "e", which is incorrect at the time 107 27 the financing statement is filed. 107 28 4. SEPARATE APPLICATION TO MULTIPLE DEBTORS. If a record 107 29 communicated to a filing office provides information that 107 30 relates to more than one debtor, this part applies as to each 107 31 debtor separately. 107 32 Sec. 92. NEW SECTION. 554.9521 UNIFORM FORM OF WRITTEN 107 33 FINANCING STATEMENT AND AMENDMENT. 107 34 1. INITIAL FINANCING STATEMENT FORM. A filing office that 107 35 accepts written records may not refuse to accept a written 108 1 initial financing statement in a form and format approved by 108 2 the secretary of state by rule adopted pursuant to chapter 17A 108 3 except for a reason set forth in section 554.9516, subsection 108 4 2. The forms shall be consistent with forms for this section 108 5 recommended by the national conference of commissioners on 108 6 uniform state laws and the American law institute. 108 7 2. AMENDMENT FORM. A filing office that accepts written 108 8 records may not refuse to accept a written record in a form 108 9 and format approved by the secretary of state by rule adopted 108 10 pursuant to chapter 17A except for a reason set forth in 108 11 section 554.9516, subsection 2. The forms shall be consistent 108 12 with forms for this section recommended by the national 108 13 conference of commissioners on uniform state laws and the 108 14 American law institute. 108 15 Sec. 93. NEW SECTION. 554.9522 MAINTENANCE AND 108 16 DESTRUCTION OF RECORDS. 108 17 1. POST-LAPSE MAINTENANCE AND RETRIEVAL OF INFORMATION. 108 18 The filing office shall maintain a record of the information 108 19 provided in a filed financing statement for at least one year 108 20 after the effectiveness of the financing statement has lapsed 108 21 under section 554.9515 with respect to all secured parties of 108 22 record. The record must be retrievable by using the name of 108 23 the debtor and: 108 24 a. if the record was filed or recorded in the filing 108 25 office described in section 554.9501, subsection 1, paragraph 108 26 "a", by using the file number assigned to the initial 108 27 financing statement to which the record relates and the date 108 28 and time that the record was filed or recorded; or 108 29 b. if the record was filed in the filing office described 108 30 in section 554.9501, subsection 1, paragraph "b", by using the 108 31 file number assigned to the initial financing statement to 108 32 which the record relates. 108 33 2. DESTRUCTION OF WRITTEN RECORDS. Except to the extent 108 34 that a statute governing disposition of public records 108 35 provides otherwise, the filing office immediately may destroy 109 1 any written record evidencing a financing statement. However, 109 2 if the filing office destroys a written record, it shall 109 3 maintain another record of the financing statement which 109 4 complies with subsection 1. 109 5 Sec. 94. NEW SECTION. 554.9523 INFORMATION FROM FILING 109 6 OFFICE – SALE OR LICENSE OF RECORDS. 109 7 1. ACKNOWLEDGMENT OF FILING WRITTEN RECORD. If a person 109 8 that files a written record requests an acknowledgment of the 109 9 filing, the filing office shall send to the person an image of 109 10 the record showing the number assigned to the record pursuant 109 11 to section 554.9519, subsection 1, paragraph "b", and the date 109 12 and time of the filing of the record. However, if the person 109 13 furnishes a copy of the record to the filing office, the 109 14 filing office may instead: 109 15 a. note upon the copy the number assigned to the record 109 16 pursuant to section 554.9519, subsection 1, paragraph "a", and 109 17 the date and time of the filing of the record; and 109 18 b. send the copy to the person. 109 19 2. ACKNOWLEDGMENT OF FILING OTHER RECORD. If a person 109 20 files a record other than a written record, the filing office 109 21 shall communicate to the person an acknowledgment that 109 22 provides: 109 23 a. the information in the record; 109 24 b. the number assigned to the record pursuant to section 109 25 554.9519, subsection 1, paragraph "a"; and 109 26 c. the date and time of the filing of the record. 109 27 3. COMMUNICATION OF REQUESTED INFORMATION. The filing 109 28 office shall communicate or otherwise make available in a 109 29 record the following information to any person that requests 109 30 it: 109 31 a. whether there is on file on a date and time specified 109 32 by the filing office, but not a date earlier than three 109 33 business days before the filing office receives the request, 109 34 any financing statement that: 109 35 (1) designates a particular debtor or, if the request so 110 1 states, designates a particular debtor at the address 110 2 specified in the request; 110 3 (2) has not lapsed under section 554.9515 with respect to 110 4 all secured parties of record; and 110 5 (3) if the request so states, has lapsed under section 110 6 554.9515 and a record of which is maintained by the filing 110 7 office under section 554.9522, subsection 1; 110 8 b. the date and time of filing of each financing 110 9 statement; and 110 10 c. the information provided in each financing statement. 110 11 4. MEDIUM FOR COMMUNICATING INFORMATION. In complying 110 12 with its duty under subsection 3, the filing office may 110 13 communicate information in any medium. However, if requested, 110 14 the filing office shall communicate information by issuing a 110 15 record that can be admitted into evidence in the courts of 110 16 this state without extrinsic evidence of its authenticity. 110 17 5. TIMELINESS OF FILING OFFICE PERFORMANCE. The filing 110 18 office shall perform the acts required by subsections 1 110 19 through 4 at the time and in the manner prescribed by filing- 110 20 office rule, but not later than two business days after the 110 21 filing office receives the request. 110 22 6. PUBLIC AVAILABILITY OF RECORDS. At least weekly, the 110 23 filing office shall offer to sell or license to the public on 110 24 a nonexclusive basis, in bulk, copies of all records filed in 110 25 it under this part, in every medium from time to time 110 26 available to the filing office, as provided in chapter 22. 110 27 Sec. 95. NEW SECTION. 554.9524 DELAY BY FILING OFFICE. 110 28 Delay by the filing office beyond a time limit prescribed 110 29 by this part is excused if: 110 30 1. the delay is caused by interruption of communication or 110 31 computer facilities, war, emergency conditions, failure of 110 32 equipment, or other circumstances beyond control of the filing 110 33 office; and 110 34 2. the filing office exercises reasonable diligence under 110 35 the circumstances. 111 1 Sec. 96. NEW SECTION. 554.9525 FEES. 111 2 1. INITIAL FINANCING STATEMENT OR OTHER RECORD – GENERAL 111 3 RULE. Except as otherwise provided in subsection 5, fees for 111 4 services rendered by the filing office under this part must be 111 5 set by rules adopted by the secretary of state's office for 111 6 services for that office or by ordinance adopted by the county 111 7 board of supervisors for the recorders office for that county. 111 8 The rule or ordinance must set the fees for filing and 111 9 indexing a record under this part on the following basis: 111 10 a. if a record presented for filing is communicated to the 111 11 filing office in writing and consists of more than two pages, 111 12 the fee for filing and indexing the record must be at least 111 13 twice the amount of the fee for a record communicated in 111 14 writing that consists of one or two pages; and 111 15 b. if the record is communicated by another medium 111 16 authorized by the secretary of state's office or the county 111 17 board of supervisors in the county where its filing office is 111 18 located, the record must be no more than half the amount of 111 19 the fee for a record communicated in writing that consists of 111 20 one or two pages. 111 21 3. NUMBER OF NAMES. The number of names required to be 111 22 indexed does not affect the amount of the fee in subsections 1 111 23 and 2. 111 24 4. RESPONSE TO INFORMATION REQUEST. A rule or ordinance 111 25 adopted pursuant to subsection 1 must set the fee for 111 26 responding to a request for information from the filing 111 27 office, including for communicating whether there is on file 111 28 any financing statement naming a particular debtor. A fee for 111 29 responding to a request communicated in writing must be not 111 30 less than twice the amount of the fee for responding to a 111 31 request communicated by another medium authorized by the 111 32 office of secretary of state or the board of supervisors for 111 33 the filing office where its filing office is located. 111 34 5. RECORD OF MORTGAGE. This section does not require a 111 35 fee with respect to a record of a mortgage which is effective 112 1 as a financing statement filed as a fixture filing or as a 112 2 financing statement covering as-extracted collateral or timber 112 3 to be cut under section 554.9502, subsection 3. However, the 112 4 recording and satisfaction fees that otherwise would be 112 5 applicable to the record of the mortgage apply. 112 6 Sec. 97. NEW SECTION. 554.9526 FILING-OFFICE RULES. 112 7 1. ADOPTION OF FILING-OFFICE RULES. The office of 112 8 secretary of state shall adopt and publish rules to implement 112 9 this Article. The filing-office rules must be: 112 10 a. consistent with this Article; and 112 11 b. adopted and published in accordance with chapter 17A. 112 12 2. HARMONIZATION OF RULES. To keep the filing-office 112 13 rules and practices of the filing office in harmony with the 112 14 rules and practices of filing offices in other jurisdictions 112 15 that enact substantially this part, and to keep the technology 112 16 used by the filing office compatible with the technology used 112 17 by filing offices in other jurisdictions that enact 112 18 substantially this part, the office of secretary of state, so 112 19 far as is consistent with the purposes, policies, and 112 20 provisions of this Article, in adopting, amending, and 112 21 repealing filing-office rules, shall: 112 22 a. consult with filing offices in other jurisdictions that 112 23 enact substantially this part; and 112 24 b. consult the most recent version of the Model Rules 112 25 promulgated by the International Association of Corporate 112 26 Administrators or any successor organization; and 112 27 c. take into consideration the rules and practices of, and 112 28 the technology used by, filing offices in other jurisdictions 112 29 that enact substantially this part. 112 30 Sec. 98. NEW SECTION. 554.9527 DUTY TO REPORT. 112 31 The office of secretary of state shall report annually on 112 32 or before December 31 to the governor on the operation of the 112 33 filing office. The report must contain a statement of the 112 34 extent to which: 112 35 1. the filing-office rules are not in harmony with the 113 1 rules of filing offices in other jurisdictions that enact 113 2 substantially this part and the reasons for these variations; 113 3 and 113 4 2. the filing-office rules are not in harmony with the 113 5 most recent version of the Model Rules promulgated by the 113 6 International Association of Corporate Administrators, or any 113 7 successor organization, and the reasons for these variations. 113 8 PART 6 113 9 DEFAULT 113 10 A. DEFAULT AND ENFORCEMENT OF SECURITY INTEREST 113 11 Sec. 99. NEW SECTION. 554.9601 RIGHTS AFTER DEFAULT – 113 12 JUDICIAL ENFORCEMENT – CONSIGNOR OR BUYER OF ACCOUNTS, 113 13 CHATTEL PAPER, PAYMENT INTANGIBLES, OR PROMISSORY NOTES. 113 14 1. RIGHTS OF SECURED PARTY AFTER DEFAULT. After default, 113 15 a secured party has the rights provided in this part and, 113 16 except as otherwise provided in section 554.9602, those 113 17 provided by agreement of the parties. A secured party: 113 18 a. may reduce a claim to judgment, foreclose, or otherwise 113 19 enforce the claim, security interest, or agricultural lien by 113 20 any available judicial procedure; and 113 21 b. if the collateral is documents, may proceed either as 113 22 to the documents or as to the goods they cover. 113 23 2. RIGHTS AND DUTIES OF SECURED PARTY IN POSSESSION OR 113 24 CONTROL. A secured party in possession of collateral or 113 25 control of collateral under section 554.9104, 554.9105, 113 26 554.9106, or 554.9107 has the rights and duties provided in 113 27 section 554.9207. 113 28 3. RIGHTS CUMULATIVE – SIMULTANEOUS EXERCISE. The rights 113 29 under subsections 1 and 2 are cumulative and may be exercised 113 30 simultaneously. 113 31 4. RIGHTS OF DEBTOR AND OBLIGOR. Except as otherwise 113 32 provided in subsection 7 and section 554.9605, after default, 113 33 a debtor and an obligor have the rights provided in this part 113 34 and by agreement of the parties. 113 35 5. LIEN OF LEVY AFTER JUDGMENT. If a secured party has 114 1 reduced its claim to judgment, the lien of any levy that may 114 2 be made upon the collateral by virtue of an execution based 114 3 upon the judgment relates back to the earliest of: 114 4 a. the date of perfection of the security interest or 114 5 agricultural lien in the collateral; 114 6 b. the date of filing a financing statement covering the 114 7 collateral; or 114 8 c. any date specified in a statute under which the 114 9 agricultural lien was created. 114 10 6. EXECUTION SALE. A sale pursuant to an execution is a 114 11 foreclosure of the security interest or agricultural lien by 114 12 judicial procedure within the meaning of this section. A 114 13 secured party may purchase at the sale and thereafter hold the 114 14 collateral free of any other requirements of this Article. 114 15 7. CONSIGNOR OR BUYER OF CERTAIN RIGHTS TO PAYMENT. 114 16 Except as otherwise provided in section 554.9607, subsection 114 17 3, this part imposes no duties upon a secured party that is a 114 18 consignor or is a buyer of accounts, chattel paper, payment 114 19 intangibles, or promissory notes. 114 20 Sec. 100. NEW SECTION. 554.9602 WAIVER AND VARIANCE OF 114 21 RIGHTS AND DUTIES. 114 22 Except as otherwise provided in section 554.9624, to the 114 23 extent that they give rights to a debtor or obligor and impose 114 24 duties on a secured party, the debtor or obligor may not waive 114 25 or vary the rules stated in the following listed sections: 114 26 1. section 554.9207, subsection 2, paragraph "d", 114 27 subparagraph (3), which deals with use and operation of the 114 28 collateral by the secured party; 114 29 2. section 554.9210, which deals with requests for an 114 30 accounting and requests concerning a list of collateral and 114 31 statement of account; 114 32 3. section 554.9607, subsection 3, which deals with 114 33 collection and enforcement of collateral; 114 34 4. section 554.9608, subsection 1, and section 554.9615, 114 35 subsection 3, to the extent that they deal with application or 115 1 payment of noncash proceeds of collection, enforcement, or 115 2 disposition; 115 3 5. section 554.9608, subsection 1, and section 554.9615, 115 4 subsection 4, to the extent that they require accounting for 115 5 or payment of surplus proceeds of collateral; 115 6 6. section 554.9609 to the extent that it imposes upon a 115 7 secured party that takes possession of collateral without 115 8 judicial process the duty to do so without breach of the 115 9 peace; 115 10 7. section 554.9610, subsection 2, and sections 554.9611, 115 11 554.9613, and 554.9614, which deal with disposition of 115 12 collateral; 115 13 8. section 554.9615, subsection 6, which deals with 115 14 calculation of a deficiency or surplus when a disposition is 115 15 made to the secured party, a person related to the secured 115 16 party, or a secondary obligor; 115 17 9. section 554.9616, which deals with explanation of the 115 18 calculation of a surplus or deficiency; 115 19 10. sections 554.9620, 554.9621, and 554.9622, which deal 115 20 with acceptance of collateral in satisfaction of obligation; 115 21 11. section 554.9623, which deals with redemption of 115 22 collateral; 115 23 12. section 554.9624, which deals with permissible 115 24 waivers; and 115 25 13. sections 554.9625 and 554.9626, which deal with the 115 26 secured party's liability for failure to comply with this 115 27 Article. 115 28 Sec. 101. NEW SECTION. 554.9603 AGREEMENT ON STANDARDS 115 29 CONCERNING RIGHTS AND DUTIES. 115 30 1. AGREED STANDARDS. The parties may determine by 115 31 agreement the standards measuring the fulfillment of the 115 32 rights of a debtor or obligor and the duties of a secured 115 33 party under a rule stated in section 554.9602 if the standards 115 34 are not manifestly unreasonable. 115 35 2. AGREED STANDARDS INAPPLICABLE TO BREACH OF PEACE. 116 1 Subsection 1 does not apply to the duty under section 554.9609 116 2 to refrain from breaching the peace. 116 3 Sec. 102. NEW SECTION. 554.9604 PROCEDURE IF SECURITY 116 4 AGREEMENT COVERS REAL PROPERTY OR FIXTURES. 116 5 1. ENFORCEMENT – PERSONAL AND REAL PROPERTY. If a 116 6 security agreement covers both personal and real property, a 116 7 secured party may proceed: 116 8 a. under this part as to the personal property without 116 9 prejudicing any rights with respect to the real property; or 116 10 b. as to both the personal property and the real property 116 11 in accordance with the rights with respect to the real 116 12 property, in which case the other provisions of this part do 116 13 not apply. 116 14 2. ENFORCEMENT – FIXTURES. Subject to subsection 3, if a 116 15 security agreement covers goods that are or become fixtures, a 116 16 secured party may proceed: 116 17 a. under this part; or 116 18 b. in accordance with the rights with respect to real 116 19 property, in which case the other provisions of this part do 116 20 not apply. 116 21 3. REMOVAL OF FIXTURES. Subject to the other provisions 116 22 of this part, if a secured party holding a security interest 116 23 in fixtures has priority over all owners and encumbrancers of 116 24 the real property, the secured party, after default, may 116 25 remove the collateral from the real property. 116 26 4. INJURY CAUSED BY REMOVAL. A secured party that removes 116 27 collateral shall promptly reimburse any encumbrancer or owner 116 28 of the real property, other than the debtor, for the cost of 116 29 repair of any physical injury caused by the removal. The 116 30 secured party need not reimburse the encumbrancer or owner for 116 31 any diminution in value of the real property caused by the 116 32 absence of the goods removed or by any necessity of replacing 116 33 them. A person entitled to reimbursement may refuse 116 34 permission to remove until the secured party gives adequate 116 35 assurance for the performance of the obligation to reimburse. 117 1 Sec. 103. NEW SECTION. 554.9605 UNKNOWN DEBTOR OR 117 2 SECONDARY OBLIGOR. 117 3 A secured party does not owe a duty based on its status as 117 4 secured party: 117 5 1. to a person that is a debtor or obligor, unless the 117 6 secured party knows: 117 7 a. that the person is a debtor or obligor; 117 8 b. the identity of the person; and 117 9 c. how to communicate with the person; or 117 10 2. to a secured party or lienholder that has filed a 117 11 financing statement against a person, unless the secured party 117 12 knows: 117 13 a. that the person is a debtor; and 117 14 b. the identity of the person. 117 15 Sec. 104. NEW SECTION. 554.9606 TIME OF DEFAULT FOR 117 16 AGRICULTURAL LIEN. 117 17 For purposes of this part, a default occurs in connection 117 18 with an agricultural lien at the time the secured party 117 19 becomes entitled to enforce the lien in accordance with the 117 20 statute under which it was created. 117 21 Sec. 105. NEW SECTION. 554.9607 COLLECTION AND 117 22 ENFORCEMENT BY SECURED PARTY. 117 23 1. COLLECTION AND ENFORCEMENT GENERALLY. If so agreed, 117 24 and in any event after default, a secured party: 117 25 a. may notify an account debtor or other person obligated 117 26 on collateral to make payment or otherwise render performance 117 27 to or for the benefit of the secured party; 117 28 b. may take any proceeds to which the secured party is 117 29 entitled under section 554.9315; 117 30 c. may enforce the obligations of an account debtor or 117 31 other person obligated on collateral and exercise the rights 117 32 of the debtor with respect to the obligation of the account 117 33 debtor or other person obligated on collateral to make payment 117 34 or otherwise render performance to the debtor, and with 117 35 respect to any property that secures the obligations of the 118 1 account debtor or other person obligated on the collateral; 118 2 d. if it holds a security interest in a deposit account 118 3 perfected by control under section 554.9104, subsection 1, 118 4 paragraph "a", may apply the balance of the deposit account to 118 5 the obligation secured by the deposit account; and 118 6 e. if it holds a security interest in a deposit account 118 7 perfected by control under section 554.9104, subsection 1, 118 8 paragraph "b" or "c", may instruct the bank to pay the balance 118 9 of the deposit account to or for the benefit of the secured 118 10 party. 118 11 2. NONJUDICIAL ENFORCEMENT OF MORTGAGE. If necessary to 118 12 enable a secured party to exercise under subsection 1, 118 13 paragraph "c", the right of a debtor to enforce a mortgage 118 14 nonjudicially, the secured party may record in the office in 118 15 which a record of the mortgage is recorded: 118 16 a. a copy of the security agreement that creates or 118 17 provides for a security interest in the obligation secured by 118 18 the mortgage; and 118 19 b. the secured party's sworn affidavit in recordable form 118 20 stating that: 118 21 (1) a default has occurred; and 118 22 (2) the secured party is entitled to enforce the mortgage 118 23 nonjudicially. 118 24 3. COMMERCIALLY REASONABLE COLLECTION AND ENFORCEMENT. A 118 25 secured party shall proceed in a commercially reasonable 118 26 manner if the secured party: 118 27 a. undertakes to collect from or enforce an obligation of 118 28 an account debtor or other person obligated on collateral; and 118 29 b. is entitled to charge back uncollected collateral or 118 30 otherwise to full or limited recourse against the debtor or a 118 31 secondary obligor. 118 32 4. EXPENSES OF COLLECTION AND ENFORCEMENT. A secured 118 33 party may deduct from the collections made pursuant to 118 34 subsection 3 reasonable expenses of collection and 118 35 enforcement, including reasonable attorney's fees and legal 119 1 expenses incurred by the secured party. 119 2 5. DUTIES TO SECURED PARTY NOT AFFECTED. This section 119 3 does not determine whether an account debtor, bank, or other 119 4 person obligated on collateral owes a duty to a secured party. 119 5 Sec. 106. NEW SECTION. 554.9608 APPLICATION OF PROCEEDS 119 6 OF COLLECTION OR ENFORCEMENT – LIABILITY FOR DEFICIENCY AND 119 7 RIGHT TO SURPLUS. 119 8 1. APPLICATION OF PROCEEDS, SURPLUS, AND DEFICIENCY IF 119 9 OBLIGATION SECURED. If a security interest or agricultural 119 10 lien secures payment or performance of an obligation, the 119 11 following rules apply: 119 12 a. a secured party shall apply or pay over for application 119 13 the cash proceeds of collection or enforcement under this 119 14 section in the following order to: 119 15 (1) the reasonable expenses of collection and enforcement 119 16 and, to the extent provided for by agreement and not 119 17 prohibited by law, reasonable attorney's fees and legal 119 18 expenses incurred by the secured party; 119 19 (2) the satisfaction of obligations secured by the 119 20 security interest or agricultural lien under which the 119 21 collection or enforcement is made; and 119 22 (3) the satisfaction of obligations secured by any 119 23 subordinate security interest in or other lien on the 119 24 collateral subject to the security interest or agricultural 119 25 lien under which the collection or enforcement is made if the 119 26 secured party receives an authenticated demand for proceeds 119 27 before distribution of the proceeds is completed. 119 28 b. if requested by a secured party, a holder of a 119 29 subordinate security interest or other lien shall furnish 119 30 reasonable proof of the interest or lien within a reasonable 119 31 time. Unless the holder complies, the secured party need not 119 32 comply with the holder's demand under paragraph "a", 119 33 subparagraph (3). 119 34 c. a secured party need not apply or pay over for 119 35 application noncash proceeds of collection and enforcement 120 1 under this section unless the failure to do so would be 120 2 commercially unreasonable. A secured party that applies or 120 3 pays over for application noncash proceeds shall do so in a 120 4 commercially reasonable manner. 120 5 d. a secured party shall account to and pay a debtor for 120 6 any surplus, and the obligor is liable for any deficiency. 120 7 2. NO SURPLUS OR DEFICIENCY IN SALES OF CERTAIN RIGHTS TO 120 8 PAYMENT. If the underlying transaction is a sale of accounts, 120 9 chattel paper, payment intangibles, or promissory notes, the 120 10 debtor is not entitled to any surplus, and the obligor is not 120 11 liable for any deficiency. 120 12 Sec. 107. NEW SECTION. 554.9609 SECURED PARTY'S RIGHT TO 120 13 TAKE POSSESSION AFTER DEFAULT. 120 14 1. POSSESSION – RENDERING EQUIPMENT UNUSABLE – 120 15 DISPOSITION ON DEBTOR'S PREMISES. After default, a secured 120 16 party: 120 17 a. may take possession of the collateral; and 120 18 b. without removal, may render equipment unusable and 120 19 dispose of collateral on a debtor's premises under section 120 20 554.9610. 120 21 2. JUDICIAL AND NONJUDICIAL PROCESS. A secured party may 120 22 proceed under subsection 1: 120 23 a. pursuant to judicial process; or 120 24 b. without judicial process, if it proceeds without breach 120 25 of the peace. 120 26 3. ASSEMBLY OF COLLATERAL. If so agreed, and in any event 120 27 after default, a secured party may require the debtor to 120 28 assemble the collateral and make it available to the secured 120 29 party at a place to be designated by the secured party which 120 30 is reasonably convenient to both parties. 120 31 Sec. 108. NEW SECTION. 554.9610 DISPOSITION OF 120 32 COLLATERAL AFTER DEFAULT. 120 33 1. DISPOSITION AFTER DEFAULT. After default, a secured 120 34 party may sell, lease, license, or otherwise dispose of any or 120 35 all of the collateral in its present condition or following 121 1 any commercially reasonable preparation or processing. 121 2 2. COMMERCIALLY REASONABLE DISPOSITION. Every aspect of a 121 3 disposition of collateral, including the method, manner, time, 121 4 place, and other terms, must be commercially reasonable. If 121 5 commercially reasonable, a secured party may dispose of 121 6 collateral by public or private proceedings, by one or more 121 7 contracts, as a unit or in parcels, and at any time and place 121 8 and on any terms. 121 9 3. PURCHASE BY SECURED PARTY. A secured party may 121 10 purchase collateral: 121 11 a. at a public disposition; or 121 12 b. at a private disposition only if the collateral is of a 121 13 kind that is customarily sold on a recognized market or the 121 14 subject of widely distributed standard price quotations. 121 15 4. WARRANTIES ON DISPOSITION. A contract for sale, lease, 121 16 license, or other disposition includes the warranties relating 121 17 to title, possession, quiet enjoyment, and the like which by 121 18 operation of law accompany a voluntary disposition of property 121 19 of the kind subject to the contract. 121 20 5. DISCLAIMER OF WARRANTIES. A secured party may disclaim 121 21 or modify warranties under subsection 4: 121 22 a. in a manner that would be effective to disclaim or 121 23 modify the warranties in a voluntary disposition of property 121 24 of the kind subject to the contract of disposition; or 121 25 b. by communicating to the purchaser a record evidencing 121 26 the contract for disposition and including an express 121 27 disclaimer or modification of the warranties. 121 28 6. RECORD SUFFICIENT TO DISCLAIM WARRANTIES. A record is 121 29 sufficient to disclaim warranties under subsection 5 if it 121 30 indicates "There is no warranty relating to title, possession, 121 31 quiet enjoyment, or the like in this disposition" or uses 121 32 words of similar import. 121 33 Sec. 109. NEW SECTION. 554.9611 NOTIFICATION BEFORE 121 34 DISPOSITION OF COLLATERAL. 121 35 1. NOTIFICATION DATE. In this section, "notification 122 1 date" means the earlier of the date on which: 122 2 a. a secured party sends to the debtor and any secondary 122 3 obligor an authenticated notification of disposition; or 122 4 b. the debtor and any secondary obligor waive the right to 122 5 notification. 122 6 2. NOTIFICATION OF DISPOSITION REQUIRED. Except as 122 7 otherwise provided in subsection 4, a secured party that 122 8 disposes of collateral under section 554.9610 shall send to 122 9 the persons specified in subsection 3 a reasonable 122 10 authenticated notification of disposition. 122 11 3. PERSONS TO BE NOTIFIED. To comply with subsection 2, 122 12 the secured party shall send an authenticated notification of 122 13 disposition to: 122 14 a. the debtor; 122 15 b. any secondary obligor; and 122 16 c. if the collateral is other than consumer goods: 122 17 (1) any other person from which the secured party has 122 18 received, before the notification date, an authenticated 122 19 notification of a claim of an interest in the collateral; 122 20 (2) any other secured party or lienholder that, ten days 122 21 before the notification date, held a security interest in or 122 22 other lien on the collateral perfected by the filing of a 122 23 financing statement that: 122 24 (a) identified the collateral; 122 25 (b) was indexed under the debtor's name as of that date; 122 26 and 122 27 (c) was filed in the office in which to file a financing 122 28 statement against the debtor covering the collateral as of 122 29 that date; and 122 30 (3) any other secured party that, ten days before the 122 31 notification date, held a security interest in the collateral 122 32 perfected by compliance with a statute, regulation, or treaty 122 33 described in section 554.9311, subsection 1. 122 34 4. SUBSECTION 2 INAPPLICABLE – PERISHABLE COLLATERAL – 122 35 RECOGNIZED MARKET. Subsection 2 does not apply if the 123 1 collateral is perishable or threatens to decline speedily in 123 2 value or is of a type customarily sold on a recognized market. 123 3 5. COMPLIANCE WITH SUBSECTION 3, PARAGRAPH "C", 123 4 SUBPARAGRAPH (2). A secured party complies with the 123 5 requirement for notification prescribed by subsection 3, 123 6 paragraph "c", subparagraph (2), if: 123 7 a. not later than twenty days or earlier than thirty days 123 8 before the notification date, the secured party requests, in a 123 9 commercially reasonable manner, information concerning 123 10 financing statements indexed under the debtor's name in the 123 11 office indicated in subsection 3, paragraph "c", subparagraph 123 12 (2); and 123 13 b. before the notification date, the secured party: 123 14 (1) did not receive a response to the request for 123 15 information; or 123 16 (2) received a response to the request for information and 123 17 sent an authenticated notification of disposition to each 123 18 secured party or other lienholder named in that response whose 123 19 financing statement covered the collateral. 123 20 Sec. 110. NEW SECTION. 554.9612 TIMELINESS OF 123 21 NOTIFICATION BEFORE DISPOSITION OF COLLATERAL. 123 22 1. REASONABLE TIME IS QUESTION OF FACT. Except as 123 23 otherwise provided in subsection 2, whether a notification is 123 24 sent within a reasonable time is a question of fact. 123 25 2. TEN-DAY PERIOD SUFFICIENT IN NONCONSUMER TRANSACTION. 123 26 In a transaction other than a consumer transaction, a 123 27 notification of disposition sent after default and ten days or 123 28 more before the earliest time of disposition set forth in the 123 29 notification is sent within a reasonable time before the 123 30 disposition. 123 31 Sec. 111. NEW SECTION. 554.9613 CONTENTS AND FORM OF 123 32 NOTIFICATION BEFORE DISPOSITION OF COLLATERAL – GENERAL. 123 33 Except in a consumer-goods transaction, the following rules 123 34 apply: 123 35 1. The contents of a notification of disposition are 124 1 sufficient if the notification: 124 2 a. describes the debtor and the secured party; 124 3 b. describes the collateral that is the subject of the 124 4 intended disposition; 124 5 c. states the method of intended disposition; 124 6 d. states that the debtor is entitled to an accounting of 124 7 the unpaid indebtedness and states the charge, if any, for an 124 8 accounting; and 124 9 e. states the time and place of a public sale or the time 124 10 after which any other disposition is to be made. 124 11 2. Whether the contents of a notification that lacks any 124 12 of the information specified in subsection 1 are nevertheless 124 13 sufficient is a question of fact. 124 14 3. The contents of a notification providing substantially 124 15 the information specified in subsection 1 are sufficient, even 124 16 if the notification includes: 124 17 a. information not specified by that subsection; or 124 18 b. minor errors that are not seriously misleading. 124 19 4. A particular phrasing of the notification is not 124 20 required. 124 21 5. The following form of notification and the form 124 22 appearing in section 554.9614, subsection 3, when completed, 124 23 each provides sufficient information: 124 24 NOTIFICATION OF DISPOSITION OF COLLATERAL 124 25 To: [name of debtor, obligor, or other person to which the 124 26 notification is sent] 124 27 From: [name, address, and telephone number of secured 124 28 party] 124 29 Name of Debtor(s): [include only if debtor(s) are not an 124 30 addressee] 124 31 [for a public disposition:] 124 32 We will sell [or lease or license, as applicable] the 124 33 [describe collateral] [to the highest qualified bidder] in 124 34 public as follows: 124 35 Day and Date: _________ 125 1 Time: _________ 125 2 Place: _________ 125 3 [for a private disposition:] 125 4 We will sell [or lease or license, as applicable] the 125 5 [describe collateral] privately sometime after [day and 125 6 date]. 125 7 You are entitled to an accounting of the unpaid indebtedness 125 8 secured by the property that we intend to sell [or lease or 125 9 license, as applicable] [for a charge of __________ dollars]. You 125 10 may request an accounting by calling us at [telephone number]. 125 11 Sec. 112. NEW SECTION. 554.9614 CONTENTS AND FORM OF 125 12 NOTIFICATION BEFORE DISPOSITION OF COLLATERAL – CONSUMER- 125 13 GOODS TRANSACTION. 125 14 In a consumer-goods transaction, the following rules apply: 125 15 1. A notification of disposition must provide the 125 16 following information: 125 17 a. the information specified in section 554.9613, 125 18 subsection 1; 125 19 b. a description of any liability for a deficiency of the 125 20 person to which the notification is sent; 125 21 c. a telephone number from which the amount that must be 125 22 paid to the secured party to redeem the collateral under 125 23 section 554.9623 is available; and 125 24 d. a telephone number or mailing address from which 125 25 additional information concerning the disposition and the 125 26 obligation secured is available. 125 27 2. A particular phrasing of the notification is not 125 28 required. 125 29 3. The following form of notification, when completed, 125 30 provides sufficient information: 125 31 [name and address of secured party] 125 32 [date] 125 33 NOTICE OF OUR PLAN TO SELL PROPERTY 125 34 [name and address of any obligor who is also a debtor] 125 35 Subject: [identification of transaction] 126 1 We have your [describe collateral] , because you 126 2 broke promises in our agreement. 126 3 [for a public disposition:] 126 4 We will sell [describe collateral] at public sale. 126 5 A sale could include a lease or license. The sale will be held 126 6 as follows: 126 7 Date: _____________ 126 8 Time: _____________ 126 9 Place: _____________ 126 10 You may attend the sale and bring bidders if you want. 126 11 [for a private disposition:] 126 12 We will sell [describe collateral] at private sale 126 13 sometime after [date] . A sale could include a lease or 126 14 license. 126 15 The money that we get from the sale (after paying our costs) 126 16 will reduce the amount you owe. If we get less money than you 126 17 owe, you [will or will not, as applicable] still owe us 126 18 the difference. If we get more money than you owe, you will get 126 19 the extra money, unless we must pay it to someone else. 126 20 You can get the property back at any time before we sell it 126 21 by paying us the full amount you owe (not just the past due 126 22 payments), including our expenses. To learn the exact amount you 126 23 must pay, call us at [telephone number] . 126 24 If you want us to explain to you in writing how we have 126 25 figured the amount that you owe us, you may call us at 126 26 [telephone number] [or write us at [secured party's 126 27 address] ] and request a written explanation. [We will 126 28 charge you for the explanation if we sent you 126 29 another written explanation of the amount you owe us within the 126 30 last six months.] 126 31 If you need more information about the sale call us at 126 32 [telephone number] [or write us at [secured party's 126 33 address] ]. 126 34 We are sending this notice to the following other people who 126 35 have an interest in [describe collateral] or who owe 127 1 money under your agreement: 127 2 [names of all other debtors and obligors, if any] 127 3 4. A notification in the form of subsection 3 is 127 4 sufficient, even if additional information appears at the end 127 5 of the form. 127 6 5. A notification in the form of subsection 3 is 127 7 sufficient, even if it includes errors in information not 127 8 required by subsection 1, unless the error is misleading with 127 9 respect to rights arising under this Article. 127 10 6. If a notification under this section is not in the form 127 11 of subsection 3, law other than this Article determines the 127 12 effect of including information not required by subsection 1. 127 13 Sec. 113. NEW SECTION. 554.9615 APPLICATION OF PROCEEDS 127 14 OF DISPOSITION – LIABILITY FOR DEFICIENCY AND RIGHT TO 127 15 SURPLUS. 127 16 1. APPLICATION OF PROCEEDS. A secured party shall apply 127 17 or pay over for application the cash proceeds of disposition 127 18 in the following order to: 127 19 a. the reasonable expenses of retaking, holding, preparing 127 20 for disposition, processing, and disposing, and, to the extent 127 21 provided for by agreement and not prohibited by law, 127 22 reasonable attorney's fees and legal expenses incurred by the 127 23 secured party; 127 24 b. the satisfaction of obligations secured by the security 127 25 interest or agricultural lien under which the disposition is 127 26 made; 127 27 c. the satisfaction of obligations secured by any 127 28 subordinate security interest in or other subordinate lien on 127 29 the collateral if: 127 30 (1) the secured party receives from the holder of the 127 31 subordinate security interest or other lien an authenticated 127 32 demand for proceeds before distribution of the proceeds is 127 33 completed; and 127 34 (2) in a case in which a consignor has an interest in the 127 35 collateral, the subordinate security interest or other lien is 128 1 senior to the interest of the consignor; and 128 2 d. a secured party that is a consignor of the collateral 128 3 if the secured party receives from the consignor an 128 4 authenticated demand for proceeds before distribution of the 128 5 proceeds is completed. 128 6 2. PROOF OF SUBORDINATE INTEREST. If requested by a 128 7 secured party, a holder of a subordinate security interest or 128 8 other lien shall furnish reasonable proof of the interest or 128 9 lien within a reasonable time. Unless the holder does so, the 128 10 secured party need not comply with the holder's demand under 128 11 subsection 1, paragraph "c". 128 12 3. APPLICATION OF NONCASH PROCEEDS. A secured party need 128 13 not apply or pay over for application noncash proceeds of 128 14 disposition under this section unless the failure to do so 128 15 would be commercially unreasonable. A secured party that 128 16 applies or pays over for application noncash proceeds shall do 128 17 so in a commercially reasonable manner. 128 18 4. SURPLUS OR DEFICIENCY IF OBLIGATION SECURED. If the 128 19 security interest under which a disposition is made secures 128 20 payment or performance of an obligation, after making the 128 21 payments and applications required by subsection 1 and 128 22 permitted by subsection 3: 128 23 a. unless subsection 1, paragraph "d", requires the 128 24 secured party to apply or pay over cash proceeds to a 128 25 consignor, the secured party shall account to and pay a debtor 128 26 for any surplus; and 128 27 b. the obligor is liable for any deficiency. 128 28 5. NO SURPLUS OR DEFICIENCY IN SALES OF CERTAIN RIGHTS TO 128 29 PAYMENT. If the underlying transaction is a sale of accounts, 128 30 chattel paper, payment intangibles, or promissory notes: 128 31 a. the debtor is not entitled to any surplus; and 128 32 b. the obligor is not liable for any deficiency. 128 33 6. CALCULATION OF SURPLUS OR DEFICIENCY IN DISPOSITION TO 128 34 PERSON RELATED TO SECURED PARTY. The surplus or deficiency 128 35 following a disposition is calculated based on the amount of 129 1 proceeds that would have been realized in a disposition 129 2 complying with this part to a transferee other than the 129 3 secured party, a person related to the secured party, or a 129 4 secondary obligor if: 129 5 a. the transferee in the disposition is the secured party, 129 6 a person related to the secured party, or a secondary obligor; 129 7 and 129 8 b. the amount of proceeds of the disposition is 129 9 significantly below the range of proceeds that a complying 129 10 disposition to a person other than the secured party, a person 129 11 related to the secured party, or a secondary obligor would 129 12 have brought. 129 13 7. CASH PROCEEDS RECEIVED BY JUNIOR SECURED PARTY. A 129 14 secured party that receives cash proceeds of a disposition in 129 15 good faith and without knowledge that the receipt violates the 129 16 rights of the holder of a security interest or other lien that 129 17 is not subordinate to the security interest or agricultural 129 18 lien under which the disposition is made: 129 19 a. takes the cash proceeds free of the security interest 129 20 or other lien; 129 21 b. is not obligated to apply the proceeds of the 129 22 disposition to the satisfaction of obligations secured by the 129 23 security interest or other lien; and 129 24 c. is not obligated to account to or pay the holder of the 129 25 security interest or other lien for any surplus. 129 26 Sec. 114. NEW SECTION. 554.9616 EXPLANATION OF 129 27 CALCULATION OF SURPLUS OR DEFICIENCY. 129 28 1. DEFINITIONS. In this section: 129 29 a. "Explanation" means a writing that: 129 30 (1) states the amount of the surplus or deficiency; 129 31 (2) provides an explanation in accordance with subsection 129 32 3 of how the secured party calculated the surplus or 129 33 deficiency; 129 34 (3) states, if applicable, that future debits, credits, 129 35 charges, including additional credit service charges or 130 1 interest, rebates, and expenses may affect the amount of the 130 2 surplus or deficiency; and 130 3 (4) provides a telephone number or mailing address from 130 4 which additional information concerning the transaction is 130 5 available. 130 6 b. "Request" means a record: 130 7 (1) authenticated by a debtor or consumer obligor; 130 8 (2) requesting that the recipient provide an explanation; 130 9 and 130 10 (3) sent after disposition of the collateral under section 130 11 554.9610. 130 12 2. EXPLANATION OF CALCULATION. In a consumer-goods 130 13 transaction in which the debtor is entitled to a surplus or a 130 14 consumer obligor is liable for a deficiency under section 130 15 554.9615, the secured party shall: 130 16 a. send an explanation to the debtor or consumer obligor, 130 17 as applicable, after the disposition and: 130 18 (1) before or when the secured party accounts to the 130 19 debtor and pays any surplus or first makes written demand on 130 20 the consumer obligor after the disposition for payment of the 130 21 deficiency; and 130 22 (2) within fourteen days after receipt of a request; or 130 23 b. in the case of a consumer obligor who is liable for a 130 24 deficiency, within fourteen days after receipt of a request, 130 25 send to the consumer obligor a record waiving the secured 130 26 party's right to a deficiency. 130 27 3. REQUIRED INFORMATION. To comply with subsection 1, 130 28 paragraph "a", subparagraph (2), a writing must provide the 130 29 following information in the following order: 130 30 a. the aggregate amount of obligations secured by the 130 31 security interest under which the disposition was made, and, 130 32 if the amount reflects a rebate of unearned interest or credit 130 33 service charge, an indication of that fact, calculated as of a 130 34 specified date: 130 35 (1) if the secured party takes or receives possession of 131 1 the collateral after default, not more than thirty-five days 131 2 before the secured party takes or receives possession; or 131 3 (2) if the secured party takes or receives possession of 131 4 the collateral before default or does not take possession of 131 5 the collateral, not more than thirty-five days before the 131 6 disposition; 131 7 b. the amount of proceeds of the disposition; 131 8 c. the aggregate amount of the obligations after deducting 131 9 the amount of proceeds; 131 10 d. the amount, in the aggregate or by type, and types of 131 11 expenses, including expenses of retaking, holding, preparing 131 12 for disposition, processing, and disposing of the collateral, 131 13 and attorney's fees secured by the collateral which are known 131 14 to the secured party and relate to the current disposition; 131 15 e. the amount, in the aggregate or by type, and types of 131 16 credits, including rebates of interest or credit service 131 17 charges, to which the obligor is known to be entitled and 131 18 which are not reflected in the amount in paragraph "a"; and 131 19 f. the amount of the surplus or deficiency. 131 20 4. SUBSTANTIAL COMPLIANCE. A particular phrasing of the 131 21 explanation is not required. An explanation complying 131 22 substantially with the requirements of subsection 1 is 131 23 sufficient, even if it includes minor errors that are not 131 24 seriously misleading. 131 25 5. CHARGES FOR RESPONSES. A debtor or consumer obligor is 131 26 entitled without charge to one response to a request under 131 27 this section during any six-month period in which the secured 131 28 party did not send to the debtor or consumer obligor an 131 29 explanation pursuant to subsection 2, paragraph "a". The 131 30 secured party may require payment of a charge not exceeding 131 31 twenty-five dollars for each additional response. 131 32 Sec. 115. NEW SECTION. 554.9617 RIGHTS OF TRANSFEREE OF 131 33 COLLATERAL. 131 34 1. EFFECTS OF DISPOSITION. A secured party's disposition 131 35 of collateral after default: 132 1 a. transfers to a transferee for value all of the debtor's 132 2 rights in the collateral; 132 3 b. discharges the security interest under which the 132 4 disposition is made; and 132 5 c. discharges any subordinate security interest or other 132 6 subordinate lien. 132 7 2. RIGHTS OF GOOD-FAITH TRANSFEREE. A transferee that 132 8 acts in good faith takes free of the rights and interests 132 9 described in subsection 1, even if the secured party fails to 132 10 comply with this Article or the requirements of any judicial 132 11 proceeding. 132 12 3. RIGHTS OF OTHER TRANSFEREE. If a transferee does not 132 13 take free of the rights and interests described in subsection 132 14 1, the transferee takes the collateral subject to: 132 15 a. the debtor's rights in the collateral; 132 16 b. the security interest or agricultural lien under which 132 17 the disposition is made; and 132 18 c. any other security interest or other lien. 132 19 Sec. 116. NEW SECTION. 554.9618 RIGHTS AND DUTIES OF 132 20 CERTAIN SECONDARY OBLIGORS. 132 21 1. RIGHTS AND DUTIES OF SECONDARY OBLIGOR. A secondary 132 22 obligor acquires the rights and becomes obligated to perform 132 23 the duties of the secured party after the secondary obligor: 132 24 a. receives an assignment of a secured obligation from the 132 25 secured party; 132 26 b. receives a transfer of collateral from the secured 132 27 party and agrees to accept the rights and assume the duties of 132 28 the secured party; or 132 29 c. is subrogated to the rights of a secured party with 132 30 respect to collateral. 132 31 2. EFFECT OF ASSIGNMENT, TRANSFER, OR SUBROGATION. An 132 32 assignment, transfer, or subrogation described in subsection 132 33 1: 132 34 a. is not a disposition of collateral under section 132 35 554.9610; and 133 1 b. relieves the secured party of further duties under this 133 2 Article. 133 3 Sec. 117. NEW SECTION. 554.9619 TRANSFER OF RECORD OR 133 4 LEGAL TITLE. 133 5 1. TRANSFER STATEMENT. In this section, "transfer 133 6 statement" means a record authenticated by a secured party 133 7 stating: 133 8 a. that the debtor has defaulted in connection with an 133 9 obligation secured by specified collateral; 133 10 b. that the secured party has exercised its post-default 133 11 remedies with respect to the collateral; 133 12 c. that, by reason of the exercise, a transferee has 133 13 acquired the rights of the debtor in the collateral; and 133 14 d. the name and mailing address of the secured party, 133 15 debtor, and transferee. 133 16 2. EFFECT OF TRANSFER STATEMENT. A transfer statement 133 17 entitles the transferee to the transfer of record of all 133 18 rights of the debtor in the collateral specified in the 133 19 statement in any official filing, recording, registration, or 133 20 certificate-of-title system covering the collateral. If a 133 21 transfer statement is presented with the applicable fee and 133 22 request form to the official or office responsible for 133 23 maintaining the system, the official or office shall: 133 24 a. accept the transfer statement; 133 25 b. promptly amend its records to reflect the transfer; and 133 26 c. if applicable, issue a new appropriate certificate of 133 27 title in the name of the transferee. 133 28 3. TRANSFER NOT A DISPOSITION – NO RELIEF OF SECURED 133 29 PARTY'S DUTIES. A transfer of the record or legal title to 133 30 collateral to a secured party under subsection 2 or otherwise 133 31 is not of itself a disposition of collateral under this 133 32 Article and does not of itself relieve the secured party of 133 33 its duties under this Article. 133 34 Sec. 118. NEW SECTION. 554.9620 ACCEPTANCE OF COLLATERAL 133 35 IN FULL OR PARTIAL SATISFACTION OF OBLIGATION – COMPULSORY 134 1 DISPOSITION OF COLLATERAL. 134 2 1. CONDITIONS TO ACCEPTANCE IN SATISFACTION. Except as 134 3 otherwise provided in subsection 7, a secured party may accept 134 4 collateral in full or partial satisfaction of the obligation 134 5 it secures only if: 134 6 a. the debtor consents to the acceptance under subsection 134 7 3; 134 8 b. the secured party does not receive, within the time set 134 9 forth in subsection 4, a notification of objection to the 134 10 proposal authenticated by: 134 11 (1) a person to which the secured party was required to 134 12 send a proposal under section 554.9621; or 134 13 (2) any other person, other than the debtor, holding an 134 14 interest in the collateral subordinate to the security 134 15 interest that is the subject of the proposal; 134 16 c. if the collateral is consumer goods, the collateral is 134 17 not in the possession of the debtor when the debtor consents 134 18 to the acceptance; and 134 19 d. subsection 5 does not require the secured party to 134 20 dispose of the collateral or the debtor waives the requirement 134 21 pursuant to section 554.9624. 134 22 2. PURPORTED ACCEPTANCE INEFFECTIVE. A purported or 134 23 apparent acceptance of collateral under this section is 134 24 ineffective unless: 134 25 a. the secured party consents to the acceptance in an 134 26 authenticated record or sends a proposal to the debtor; and 134 27 b. the conditions of subsection 1 are met. 134 28 3. DEBTOR'S CONSENT. For purposes of this section: 134 29 a. a debtor consents to an acceptance of collateral in 134 30 partial satisfaction of the obligation it secures only if the 134 31 debtor agrees to the terms of the acceptance in a record 134 32 authenticated after default; and 134 33 b. a debtor consents to an acceptance of collateral in 134 34 full satisfaction of the obligation it secures only if the 134 35 debtor agrees to the terms of the acceptance in a record 135 1 authenticated after default or the secured party: 135 2 (1) sends to the debtor after default a proposal that is 135 3 unconditional or subject only to a condition that collateral 135 4 not in the possession of the secured party be preserved or 135 5 maintained; 135 6 (2) in the proposal, proposes to accept collateral in full 135 7 satisfaction of the obligation it secures; and 135 8 (3) does not receive a notification of objection 135 9 authenticated by the debtor within twenty days after the 135 10 proposal is sent. 135 11 4. EFFECTIVENESS OF NOTIFICATION. To be effective under 135 12 subsection 1, paragraph "b", a notification of objection must 135 13 be received by the secured party: 135 14 a. in the case of a person to which the proposal was sent 135 15 pursuant to section 554.9621, within twenty days after 135 16 notification was sent to that person; and 135 17 b. in other cases: 135 18 (1) within twenty days after the last notification was 135 19 sent pursuant to section 554.9621; or 135 20 (2) if a notification was not sent, before the debtor 135 21 consents to the acceptance under subsection 3. 135 22 5. MANDATORY DISPOSITION OF CONSUMER GOODS. A secured 135 23 party that has taken possession of collateral shall dispose of 135 24 the collateral pursuant to section 554.9610 within the time 135 25 specified in subsection 6 if: 135 26 a. sixty percent of the cash price has been paid in the 135 27 case of a purchase-money security interest in consumer goods; 135 28 or 135 29 b. sixty percent of the principal amount of the obligation 135 30 secured has been paid in the case of a non-purchase-money 135 31 security interest in consumer goods. 135 32 6. COMPLIANCE WITH MANDATORY DISPOSITION REQUIREMENT. To 135 33 comply with subsection 5, the secured party shall dispose of 135 34 the collateral: 135 35 a. within ninety days after taking possession; or 136 1 b. within any longer period to which the debtor and all 136 2 secondary obligors have agreed in an agreement to that effect 136 3 entered into and authenticated after default. 136 4 7. NO PARTIAL SATISFACTION IN CONSUMER TRANSACTION. In a 136 5 consumer transaction, a secured party may not accept 136 6 collateral in partial satisfaction of the obligation it 136 7 secures. 136 8 Sec. 119. NEW SECTION. 554.9621 NOTIFICATION OF PROPOSAL 136 9 TO ACCEPT COLLATERAL. 136 10 1. PERSONS TO WHICH PROPOSAL TO BE SENT. A secured party 136 11 that desires to accept collateral in full or partial 136 12 satisfaction of the obligation it secures shall send its 136 13 proposal to: 136 14 a. any person from which the secured party has received, 136 15 before the debtor consented to the acceptance, an 136 16 authenticated notification of a claim of an interest in the 136 17 collateral; 136 18 b. any other secured party or lienholder that, ten days 136 19 before the debtor consented to the acceptance, held a security 136 20 interest in or other lien on the collateral perfected by the 136 21 filing of a financing statement that: 136 22 (1) identified the collateral; 136 23 (2) was indexed under the debtor's name as of that date; 136 24 and 136 25 (3) was filed in the office or offices in which to file a 136 26 financing statement against the debtor covering the collateral 136 27 as of that date; and 136 28 c. any other secured party that, ten days before the 136 29 debtor consented to the acceptance, held a security interest 136 30 in the collateral perfected by compliance with a statute, 136 31 regulation, or treaty described in section 554.9311, 136 32 subsection 1. 136 33 2. PROPOSAL TO BE SENT TO SECONDARY OBLIGOR IN PARTIAL 136 34 SATISFACTION. A secured party that desires to accept 136 35 collateral in partial satisfaction of the obligation it 137 1 secures shall send its proposal to any secondary obligor in 137 2 addition to the persons described in subsection 1. 137 3 Sec. 120. NEW SECTION. 554.9622 EFFECT OF ACCEPTANCE OF 137 4 COLLATERAL. 137 5 1. EFFECT OF ACCEPTANCE. A secured party's acceptance of 137 6 collateral in full or partial satisfaction of the obligation 137 7 it secures: 137 8 a. discharges the obligation to the extent consented to by 137 9 the debtor; 137 10 b. transfers to the secured party all of a debtor's rights 137 11 in the collateral; 137 12 c. discharges the security interest or agricultural lien 137 13 that is the subject of the debtor's consent and any 137 14 subordinate security interest or other subordinate lien; and 137 15 d. terminates any other subordinate interest. 137 16 2. DISCHARGE OF SUBORDINATE INTEREST NOTWITHSTANDING 137 17 NONCOMPLIANCE. A subordinate interest is discharged or 137 18 terminated under subsection 1, even if the secured party fails 137 19 to comply with this Article. 137 20 Sec. 121. NEW SECTION. 554.9623 RIGHT TO REDEEM 137 21 COLLATERAL. 137 22 1. PERSONS THAT MAY REDEEM. A debtor, any secondary 137 23 obligor, or any other secured party or lienholder may redeem 137 24 collateral. 137 25 2. REQUIREMENTS FOR REDEMPTION. To redeem collateral, a 137 26 person shall tender: 137 27 a. fulfillment of all obligations secured by the 137 28 collateral; and 137 29 b. the reasonable expenses and attorney's fees described 137 30 in section 554.9615, subsection 1, paragraph "a". 137 31 3. WHEN REDEMPTION MAY OCCUR. A redemption may occur at 137 32 any time before a secured party: 137 33 a. has collected collateral under section 554.9607; 137 34 b. has disposed of collateral or entered into a contract 137 35 for its disposition under section 554.9610; or 138 1 c. has accepted collateral in full or partial satisfaction 138 2 of the obligation it secures under section 554.9622. 138 3 Sec. 122. NEW SECTION. 554.9624 WAIVER. 138 4 1. WAIVER OF DISPOSITION NOTIFICATION. A debtor or 138 5 secondary obligor may waive the right to notification of 138 6 disposition of collateral under section 554.9611 only by an 138 7 agreement to that effect entered into and authenticated after 138 8 default. 138 9 2. WAIVER OF MANDATORY DISPOSITION. A debtor may waive 138 10 the right to require disposition of collateral under section 138 11 554.9620, subsection 5, only by an agreement to that effect 138 12 entered into and authenticated after default. 138 13 3. WAIVER OF REDEMPTION RIGHT. Except in a consumer-goods 138 14 transaction, a debtor or secondary obligor may waive the right 138 15 to redeem collateral under section 554.9623 only by an 138 16 agreement to that effect entered into and authenticated after 138 17 default. 138 18 B. NONCOMPLIANCE WITH ARTICLE 138 19 Sec. 123. NEW SECTION. 554.9625 REMEDIES FOR SECURED 138 20 PARTY'S FAILURE TO COMPLY WITH ARTICLE. 138 21 1. JUDICIAL ORDERS CONCERNING NONCOMPLIANCE. If it is 138 22 established that a secured party is not proceeding in 138 23 accordance with this Article, a court may order or restrain 138 24 collection, enforcement, or disposition of collateral on 138 25 appropriate terms and conditions. 138 26 2. DAMAGES FOR NONCOMPLIANCE. Subject to subsections 3, 138 27 4, and 6, a person is liable for damages in the amount of any 138 28 loss caused by a failure to comply with this Article. Loss 138 29 caused by a failure to comply with a request under section 138 30 554.9210 may include loss resulting from the debtor's 138 31 inability to obtain, or increased costs of, alternative 138 32 financing. 138 33 3. PERSONS ENTITLED TO RECOVER DAMAGES – STATUTORY 138 34 DAMAGES IN CONSUMER-GOODS TRANSACTION. Except as otherwise 138 35 provided in section 554.9628: 139 1 a. a person that, at the time of the failure, was a 139 2 debtor, was an obligor, or held a security interest in or 139 3 other lien on the collateral may recover damages under 139 4 subsection 2 for its loss; and 139 5 b. if the collateral is consumer goods, a person that was 139 6 a debtor or a secondary obligor at the time a secured party 139 7 failed to comply with this part may recover for that failure 139 8 in any event an amount not less than the credit service charge 139 9 plus ten percent of the principal amount of the obligation or 139 10 the time-price differential plus ten percent of the cash 139 11 price. 139 12 4. RECOVERY WHEN DEFICIENCY ELIMINATED OR REDUCED. A 139 13 debtor whose deficiency is eliminated under section 554.9626 139 14 may recover damages for the loss of any surplus. However, a 139 15 debtor or secondary obligor whose deficiency is eliminated or 139 16 reduced under section 554.9626 may not otherwise recover under 139 17 subsection 2 for noncompliance with the provisions of this 139 18 part relating to collection, enforcement, disposition, or 139 19 acceptance. 139 20 5. STATUTORY DAMAGES – NONCOMPLIANCE WITH SPECIFIED 139 21 PROVISIONS. In addition to any damages recoverable under 139 22 subsection 2, the debtor, consumer obligor, or person named as 139 23 a debtor in a filed record, as applicable, may recover five 139 24 hundred dollars in each case from a person that: 139 25 a. fails to comply with section 554.9208; 139 26 b. fails to comply with section 554.9209; 139 27 c. files a record that the person is not entitled to file 139 28 under section 554.9509, subsection 1; 139 29 d. fails to cause the secured party of record to file or 139 30 send a termination statement as required by section 554.9513, 139 31 subsection 1 or 3; 139 32 e. fails to comply with section 554.9616, subsection 2, 139 33 paragraph "a", and whose failure is part of a pattern, or 139 34 consistent with a practice, of noncompliance; or 139 35 f. fails to comply with section 554.9616, subsection 2, 140 1 paragraph "b". 140 2 6. STATUTORY DAMAGES – NONCOMPLIANCE WITH SECTION 140 3 554.9210. A debtor or consumer obligor may recover damages 140 4 under subsection 2 and, in addition, five hundred dollars in 140 5 each case from a person that, without reasonable cause, fails 140 6 to comply with a request under section 554.9210. A recipient 140 7 of a request under section 554.9210 which never claimed an 140 8 interest in the collateral or obligations that are the subject 140 9 of a request under that section has a reasonable excuse for 140 10 failure to comply with the request within the meaning of this 140 11 subsection. 140 12 7. LIMITATION OF SECURITY INTEREST – NONCOMPLIANCE WITH 140 13 SECTION 554.9210. If a secured party fails to comply with a 140 14 request regarding a list of collateral or a statement of 140 15 account under section 554.9210, the secured party may claim a 140 16 security interest only as shown in the statement included in 140 17 the request as against a person that is reasonably misled by 140 18 the failure. 140 19 Sec. 124. NEW SECTION. 554.9626 ACTION IN WHICH 140 20 DEFICIENCY OR SURPLUS IS IN ISSUE. 140 21 1. APPLICABLE RULES IF AMOUNT OF DEFICIENCY OR SURPLUS IN 140 22 ISSUE. In an action arising from a transaction, other than a 140 23 consumer transaction, in which the amount of a deficiency or 140 24 surplus is in issue, the following rules apply: 140 25 a. a secured party need not prove compliance with the 140 26 provisions of this part relating to collection, enforcement, 140 27 disposition, or acceptance unless the debtor or a secondary 140 28 obligor places the secured party's compliance in issue. 140 29 b. if the secured party's compliance is placed in issue, 140 30 the secured party has the burden of establishing that the 140 31 collection, enforcement, disposition, or acceptance was 140 32 conducted in accordance with this part. 140 33 c. except as otherwise provided in section 554.9628, if a 140 34 secured party fails to prove that the collection, enforcement, 140 35 disposition, or acceptance was conducted in accordance with 141 1 the provisions of this part relating to collection, 141 2 enforcement, disposition, or acceptance, the liability of a 141 3 debtor or a secondary obligor for a deficiency is limited to 141 4 an amount by which the sum of the secured obligation, 141 5 expenses, and attorney's fees exceeds the greater of: 141 6 (1) the proceeds of the collection, enforcement, 141 7 disposition, or acceptance; or 141 8 (2) the amount of proceeds that would have been realized 141 9 had the noncomplying secured party proceeded in accordance 141 10 with the provisions of this part relating to collection, 141 11 enforcement, disposition, or acceptance. 141 12 d. for purposes of paragraph "c", subparagraph (2), the 141 13 amount of proceeds that would have been realized is equal to 141 14 the sum of the secured obligation, expenses, and attorney's 141 15 fees unless the secured party proves that the amount is less 141 16 than that sum. 141 17 e. if a deficiency or surplus is calculated under section 141 18 554.9615, subsection 6, the debtor or obligor has the burden 141 19 of establishing that the amount of proceeds of the disposition 141 20 is significantly below the range of prices that a complying 141 21 disposition to a person other than the secured party, a person 141 22 related to the secured party, or a secondary obligor would 141 23 have brought. 141 24 2. NONCONSUMER TRANSACTIONS – NO INFERENCE. The 141 25 limitation of the rules in subsection 1 to transactions other 141 26 than consumer transactions is intended to leave to the court 141 27 the determination of the proper rules in consumer 141 28 transactions. The court may not infer from that limitation 141 29 the nature of the proper rule in consumer transactions and may 141 30 continue to apply established approaches. 141 31 Sec. 125. NEW SECTION. 554.9627 DETERMINATION OF WHETHER 141 32 CONDUCT WAS COMMERCIALLY REASONABLE. 141 33 1. GREATER AMOUNT OBTAINABLE UNDER OTHER CIRCUMSTANCES – 141 34 NO PRECLUSION OF COMMERCIAL REASONABLENESS. The fact that a 141 35 greater amount could have been obtained by a collection, 142 1 enforcement, disposition, or acceptance at a different time or 142 2 in a different method from that selected by the secured party 142 3 is not of itself sufficient to preclude the secured party from 142 4 establishing that the collection, enforcement, disposition, or 142 5 acceptance was made in a commercially reasonable manner. 142 6 2. DISPOSITIONS THAT ARE COMMERCIALLY REASONABLE. A 142 7 disposition of collateral is made in a commercially reasonable 142 8 manner if the disposition is made: 142 9 a. in the usual manner on any recognized market; 142 10 b. at the price current in any recognized market at the 142 11 time of the disposition; or 142 12 c. otherwise in conformity with reasonable commercial 142 13 practices among dealers in the type of property that was the 142 14 subject of the disposition. 142 15 3. APPROVAL BY COURT OR ON BEHALF OF CREDITORS. A 142 16 collection, enforcement, disposition, or acceptance is 142 17 commercially reasonable if it has been approved: 142 18 a. in a judicial proceeding; 142 19 b. by a bona fide creditors' committee; 142 20 c. by a representative of creditors; or 142 21 d. by an assignee for the benefit of creditors. 142 22 4. APPROVAL UNDER SUBSECTION 3 NOT NECESSARY – ABSENCE OF 142 23 APPROVAL HAS NO EFFECT. Approval under subsection 3 need not 142 24 be obtained, and lack of approval does not mean that the 142 25 collection, enforcement, disposition, or acceptance is not 142 26 commercially reasonable. 142 27 Sec. 126. NEW SECTION. 554.9628 NONLIABILITY AND 142 28 LIMITATION ON LIABILITY OF SECURED PARTY – LIABILITY OF 142 29 SECONDARY OBLIGOR. 142 30 1. LIMITATION OF LIABILITY OF SECURED PARTY FOR 142 31 NONCOMPLIANCE WITH ARTICLE. Unless a secured party knows that 142 32 a person is a debtor or obligor, knows the identity of the 142 33 person, and knows how to communicate with the person: 142 34 a. the secured party is not liable to the person, or to a 142 35 secured party or lienholder that has filed a financing 143 1 statement against the person, for failure to comply with this 143 2 Article; and 143 3 b. the secured party's failure to comply with this Article 143 4 does not affect the liability of the person for a deficiency. 143 5 2. LIMITATION OF LIABILITY BASED ON STATUS AS SECURED 143 6 PARTY. A secured party is not liable because of its status as 143 7 secured party: 143 8 a. to a person that is a debtor or obligor, unless the 143 9 secured party knows: 143 10 (1) that the person is a debtor or obligor; 143 11 (2) the identity of the person; and 143 12 (3) how to communicate with the person; or 143 13 b. to a secured party or lienholder that has filed a 143 14 financing statement against a person, unless the secured party 143 15 knows: 143 16 (1) that the person is a debtor; and 143 17 (2) the identity of the person. 143 18 3. LIMITATION OF LIABILITY IF REASONABLE BELIEF THAT 143 19 TRANSACTION NOT A CONSUMER-GOODS TRANSACTION OR CONSUMER 143 20 TRANSACTION. A secured party is not liable to any person, and 143 21 a person's liability for a deficiency is not affected, because 143 22 of any act or omission arising out of the secured party's 143 23 reasonable belief that a transaction is not a consumer-goods 143 24 transaction or a consumer transaction or that goods are not 143 25 consumer goods, if the secured party's belief is based on its 143 26 reasonable reliance on: 143 27 a. a debtor's representation concerning the purpose for 143 28 which collateral was to be used, acquired, or held; or 143 29 b. an obligor's representation concerning the purpose for 143 30 which a secured obligation was incurred. 143 31 4. LIMITATION OF LIABILITY FOR STATUTORY DAMAGES. A 143 32 secured party is not liable to any person under section 143 33 554.9625, subsection 3, paragraph "b", for its failure to 143 34 comply with section 554.9616. 143 35 5. LIMITATION OF MULTIPLE LIABILITY FOR STATUTORY DAMAGES. 144 1 A secured party is not liable under section 554.9625, 144 2 subsection 3, paragraph "b", more than once with respect to 144 3 any one secured obligation. 144 4 PART 7 144 5 TRANSITION 144 6 Sec. 127. NEW SECTION. 554.9701 EFFECTIVE DATE. 144 7 This Article takes effect on July 1, 2001. 144 8 Sec. 128. NEW SECTION. 554.9702 SAVINGS CLAUSE. 144 9 1. PRE-EFFECTIVE-DATE TRANSACTIONS OR LIENS. Except as 144 10 otherwise provided in this part, this Act applies to a 144 11 transaction or lien within its scope, even if the transaction 144 12 or lien was entered into or created before this Act takes 144 13 effect. 144 14 2. CONTINUING VALIDITY. Except as otherwise provided in 144 15 subsection 3 and sections 554.9703, 554.9704, 554.9705, 144 16 554.9706, 554.9707, and 554.9708: 144 17 a. transactions and liens that were not governed by former 144 18 Article 9, were validly entered into or created before this 144 19 Act takes effect, and would be subject to this Act if they had 144 20 been entered into or created after this Act takes effect, and 144 21 the rights, duties, and interests flowing from those 144 22 transactions and liens remain valid after this Act takes 144 23 effect; and 144 24 b. the transactions and liens may be terminated, 144 25 completed, consummated, and enforced as required or permitted 144 26 by this Act or by the law that otherwise would apply if this 144 27 Act had not taken effect. 144 28 3. PRE-EFFECTIVE-DATE PROCEEDINGS. This Act does not 144 29 affect an action, case, or proceeding commenced before this 144 30 Act takes effect. 144 31 Sec. 129. NEW SECTION. 554.9703 SECURITY INTEREST 144 32 PERFECTED BEFORE EFFECTIVE DATE. 144 33 1. CONTINUING PRIORITY OVER LIEN CREDITOR – PERFECTION 144 34 REQUIREMENTS SATISFIED. A security interest that is 144 35 enforceable immediately before this Act takes effect and would 145 1 have priority over the rights of a person that becomes a lien 145 2 creditor at that time is a perfected security interest under 145 3 this Act if, when this Act takes effect, the applicable 145 4 requirements for enforceability and perfection under this Act 145 5 are satisfied without further action. 145 6 2. CONTINUING PRIORITY OVER LIEN CREDITOR – PERFECTION 145 7 REQUIREMENTS NOT SATISFIED. Except as otherwise provided in 145 8 section 554.9705, if, immediately before this Act takes 145 9 effect, a security interest is enforceable and would have 145 10 priority over the rights of a person that becomes a lien 145 11 creditor at that time, but the applicable requirements for 145 12 enforceability or perfection under this Act are not satisfied 145 13 when this Act takes effect, the security interest: 145 14 a. is a perfected security interest for one year after 145 15 this Act takes effect; 145 16 b. remains enforceable thereafter only if the security 145 17 interest becomes enforceable under section 554.9203 before the 145 18 year expires; and 145 19 c. remains perfected thereafter only if the applicable 145 20 requirements for perfection under this Act are satisfied 145 21 before the year expires. 145 22 Sec. 130. NEW SECTION. 554.9704 SECURITY INTEREST 145 23 UNPERFECTED BEFORE EFFECTIVE DATE. 145 24 A security interest that is enforceable immediately before 145 25 this Act takes effect but which would be subordinate to the 145 26 rights of a person that becomes a lien creditor at that time: 145 27 1. remains an enforceable security interest for one year 145 28 after this Act takes effect; 145 29 2. remains enforceable thereafter if the security interest 145 30 becomes enforceable under section 554.9203 when this Act takes 145 31 effect or within one year thereafter; and 145 32 3. becomes perfected: 145 33 a. without further action, when this Act takes effect if 145 34 the applicable requirements for perfection under this Act are 145 35 satisfied before or at that time; or 146 1 b. when the applicable requirements for perfection are 146 2 satisfied if the requirements are satisfied after that time. 146 3 Sec. 131. NEW SECTION. 554.9705 EFFECTIVENESS OF ACTION 146 4 TAKEN BEFORE EFFECTIVE DATE. 146 5 1. PRE-EFFECTIVE-DATE ACTION – ONE-YEAR PERFECTION PERIOD 146 6 UNLESS REPERFECTED. If action, other than the filing of a 146 7 financing statement, is taken before this Act takes effect and 146 8 the action would have resulted in priority of a security 146 9 interest over the rights of a person that becomes a lien 146 10 creditor had the security interest become enforceable before 146 11 this Act takes effect, the action is effective to perfect a 146 12 security interest that attaches under this Act within one year 146 13 after this Act takes effect. An attached security interest 146 14 becomes unperfected one year after this Act takes effect 146 15 unless the security interest becomes a perfected security 146 16 interest under this Act before the expiration of that period. 146 17 2. PRE-EFFECTIVE-DATE FILING. The filing of a financing 146 18 statement before this Act takes effect is effective to perfect 146 19 a security interest to the extent the filing would satisfy the 146 20 applicable requirements for perfection under this Act. 146 21 3. PRE-EFFECTIVE-DATE FILING IN JURISDICTION FORMERLY 146 22 GOVERNING PERFECTION. This Act does not render ineffective an 146 23 effective financing statement that, before this Act takes 146 24 effect, is filed and satisfies the applicable requirements for 146 25 perfection under the law of the jurisdiction governing 146 26 perfection as provided in former section 554.9103. However, 146 27 except as otherwise provided in subsections 4 and 5 and 146 28 section 554.9706, the financing statement ceases to be 146 29 effective at the earlier of: 146 30 a. the time the financing statement would have ceased to 146 31 be effective under the law of the jurisdiction in which it is 146 32 filed; or 146 33 b. June 30, 2006. 146 34 4. CONTINUATION STATEMENT. The filing of a continuation 146 35 statement after this Act takes effect does not continue the 147 1 effectiveness of the financing statement filed before this Act 147 2 takes effect. However, upon the timely filing of a 147 3 continuation statement after this Act takes effect and in 147 4 accordance with the law of the jurisdiction governing 147 5 perfection as provided in part 3, the effectiveness of a 147 6 financing statement filed in the same office in that 147 7 jurisdiction before this Act takes effect continues for the 147 8 period provided by the law of that jurisdiction. 147 9 5. APPLICATION OF SUBSECTION 3, PARAGRAPH "B", TO 147 10 TRANSMITTING UTILITY FINANCING STATEMENT. Subsection 3, 147 11 paragraph "b", applies to a financing statement that, before 147 12 this Act takes effect, is filed against a transmitting utility 147 13 and satisfies the applicable requirements for perfection under 147 14 the law of the jurisdiction governing perfection as provided 147 15 in former section 554.9103 only to the extent that part 3 147 16 provides that the law of a jurisdiction other than the 147 17 jurisdiction in which the financing statement is filed governs 147 18 perfection of a security interest in collateral covered by the 147 19 financing statement. 147 20 6. APPLICATION OF PART 5. A financing statement that 147 21 includes a financing statement filed before this Act takes 147 22 effect and a continuation statement filed after this Act takes 147 23 effect is effective only to the extent that it satisfies the 147 24 requirements of part 5 for an initial financing statement. 147 25 Sec. 132. NEW SECTION. 554.9706 WHEN INITIAL FINANCING 147 26 STATEMENT SUFFICES TO CONTINUE EFFECTIVENESS OF FINANCING 147 27 STATEMENT. 147 28 1. INITIAL FINANCING STATEMENT IN LIEU OF CONTINUATION 147 29 STATEMENT. The filing of an initial financing statement in 147 30 the office specified in section 554.9501 continues the 147 31 effectiveness of a financing statement filed before this Act 147 32 takes effect if: 147 33 a. the filing of an initial financing statement in that 147 34 office would be effective to perfect a security interest under 147 35 this Act; 148 1 b. the pre-effective-date financing statement was filed in 148 2 an office in another state or another office in this state; 148 3 and 148 4 c. the initial financing statement satisfies subsection 3. 148 5 2. PERIOD OF CONTINUED EFFECTIVENESS. The filing of an 148 6 initial financing statement under subsection 1 continues the 148 7 effectiveness of the pre-effective-date financing statement: 148 8 a. if the initial financing statement is filed before this 148 9 Act takes effect, for the period provided in former section 148 10 554.9403 with respect to a financing statement; and 148 11 b. if the initial financing statement is filed after this 148 12 Act takes effect, for the period provided in section 554.9515 148 13 with respect to an initial financing statement. 148 14 3. REQUIREMENTS FOR INITIAL FINANCING STATEMENT UNDER 148 15 SUBSECTION 1. To be effective for purposes of subsection 1, 148 16 an initial financing statement must: 148 17 a. satisfy the requirements of part 5 for an initial 148 18 financing statement; 148 19 b. identify the pre-effective-date financing statement by 148 20 indicating the office in which the financing statement was 148 21 filed and providing the dates of filing and file numbers, if 148 22 any, of the financing statement and of the most recent 148 23 continuation statement filed with respect to the financing 148 24 statement; and 148 25 c. indicate that the pre-effective-date financing 148 26 statement remains effective. 148 27 Sec. 133. NEW SECTION. 554.9707 PERSONS ENTITLED TO FILE 148 28 INITIAL FINANCING STATEMENT OR CONTINUATION STATEMENT. 148 29 A person may file an initial financing statement or a 148 30 continuation statement under this part if: 148 31 1. the secured party of record authorizes the filing; and 148 32 2. the filing is necessary under this part: 148 33 a. to continue the effectiveness of a financing statement 148 34 filed before this Act takes effect; or 148 35 b. to perfect or continue the perfection of a security 149 1 interest. 149 2 Sec. 134. NEW SECTION. 554.9708 PRIORITY. 149 3 1. LAW GOVERNING PRIORITY. This Act determines the 149 4 priority of conflicting claims to collateral. However, if the 149 5 relative priorities of the claims were established before this 149 6 Act takes effect, former Article 9 determines priority. 149 7 2. PRIORITY IF SECURITY INTEREST BECOMES ENFORCEABLE UNDER 149 8 SECTION 554.9203. For purposes of section 554.9322, 149 9 subsection 1, the priority of a security interest that becomes 149 10 enforceable under section 554.9203 of this Act dates from the 149 11 time this Act takes effect if the security interest is 149 12 perfected under this Act by the filing of a financing 149 13 statement before this Act takes effect which would not have 149 14 been effective to perfect the security interest under former 149 15 Article 9. This subsection does not apply to conflicting 149 16 security interests each of which is perfected by the filing of 149 17 such a financing statement. 149 18 Sec. 135. NEW SECTION. 554.9709 "FORMER" DEFINED. 149 19 References in this part to "former Article 9" or a former 149 20 section are to that Article or section as in effect 149 21 immediately before this Act takes effect. 149 22 DIVISION II 149 23 CONFORMING AMENDMENTS TO CODE CHAPTER 554 149 24 Sec. 136. Section 554.1105, subsection 2, Code 1999, is 149 25 amended to read as follows: 149 26 2. Where one of the following provisions of this chapter 149 27 specifies the applicable law, that provision governs and a 149 28 contrary agreement is effective only to the extent permitted 149 29 by the law (including the conflict of laws rules) so 149 30 specified: 149 31 Rights of creditors against sold goods. Section 554.2402. 149 32 Applicability of the Article on Bank Deposits and 149 33 Collections. Section 554.4102. 149 34 Letters of Credit. Section 554.5116. 149 35 Applicability of the Article on Investment Securities. 150 1 Section 554.8110. 150 2Perfection provisions of the Article on Secured150 3Transactions. Section 554.9103.150 4 Law governing perfection, the effect of perfection or 150 5 nonperfection, and the priority of security interests and 150 6 agricultural liens. Sections 554.9301, 554.9302, 554.9303, 150 7 554.9304, 554.9305, 554.9306, and 554.9307. 150 8 Governing law in the Article on Funds Transfers. Section 150 9 554.12507. 150 10 Applicability of the Article on Leases. Sections 554.13105 150 11 and 554.13106. 150 12 Sec. 137. Section 554.1201, subsections 9 and 32, Code 150 13 1999, are amended to read as follows: 150 14 9. "Buyer in ordinary course of business" means a person 150 15whothat buys goods in good faith,andwithout knowledge that 150 16 the saleto that person is in violation ofviolates the 150 17ownershiprightsor security interestofa third partyanother 150 18 person in the goodsbuys, and in the ordinary course from a 150 19 person, other than a pawnbroker, in the business of selling 150 20 goods of that kindbut does not include a pawnbroker.All150 21persons who sell minerals or the like (including oil and gas)150 22at wellhead or minehead shall be deemed to be personsA person 150 23 buys goods in the ordinary course if the sale to the person 150 24 comports with the usual or customary practices in the kind of 150 25 business in which the seller is engaged or with the seller's 150 26 own usual or customary practices. A person that sells oil, 150 27 gas, or other minerals at the wellhead or minehead is a person 150 28 in the business of selling goods of that kind."Buying"A 150 29 buyer in ordinary course of business maybebuy for cash,or150 30 by exchange of other property, or on secured or unsecured 150 31 credit, andincludes receivingmay acquire goods or documents 150 32 of title under a pre-existing contract for salebut does not150 33include a transfer in bulk or as security for or in total or150 34partial satisfaction of a money debt. Only a buyer that takes 150 35 possession of the goods or has a right to recover the goods 151 1 from the seller under article 2 may be a buyer in ordinary 151 2 course of business. A person that acquires goods in a 151 3 transfer in bulk or as security for or in total or partial 151 4 satisfaction of a money debt is not a buyer in ordinary course 151 5 of business. 151 6 32. "Purchase" means any voluntary transaction creating an 151 7 interest in property, including taking by sale, discount, 151 8 negotiation, mortgage, pledge, voluntary lien, security 151 9 interest, issue, reissue, or gift. 151 10 Sec. 138. Section 554.1201, subsection 37, paragraph a, 151 11 Code 1999, is amended to read as follows: 151 12 a. "Security interest" means an interest in personal 151 13 property or fixtures which secures payment or performance of 151 14 an obligation.The retention or reservation of title by a151 15seller of goods notwithstanding shipment or delivery to the151 16buyer (section 554.2401) is limited in effect to a reservation151 17of a "security interest".The term also includes any interest 151 18 of a consignor and a buyer of accounts,orchattel paper 151 19which, a payment intangible, or a promissory note in a 151 20 transaction that is subject to Article 9. The special 151 21 property interest of a buyer of goods on identification of 151 22 those goods to a contract for sale under section 554.2401 is 151 23 not a "security interest", but a buyer may also acquire a 151 24 "security interest" by complying with Article 9.Unless a151 25consignment is intended as security, reservation of title151 26thereunder is not a "security interest", but a consignment in151 27any event is subject to the provisions on consignment sales151 28(section 554.2326).Except as otherwise provided in section 151 29 554.2505, the right of a seller or lessor of goods under 151 30 Article 2 or 13 to retain or acquire possession of the goods 151 31 is not a "security interest", but a seller or lessor may also 151 32 acquire a "security interest" by complying with Article 9. 151 33 The retention or reservation of title by a seller of goods 151 34 notwithstanding shipment or delivery to the buyer (section 151 35 554.2401) is limited in effect to a reservation of a "security 152 1 interest". 152 2 Sec. 139. Section 554.2103, subsection 3, Code 1999, is 152 3 amended to read as follows: 152 4 3. The following definitions in other Articles apply to 152 5 this Article: 152 6 "Check" Section 554.3104 152 7 "Consignee" Section 554.7102 152 8 "Consignor" Section 554.7102 152 9 "Consumer goods"Section 554.9109152 10 Section 554.9102 152 11 "Dishonor" Section 554.3502 152 12 "Draft" Section 554.3104 152 13 Sec. 140. Section 554.2210, subsection 2, Code 1999, is 152 14 amended to read as follows: 152 15 2.UnlessExcept as otherwise provided in section 152 16 554.9406, unless otherwise agreed all rights of either seller 152 17 or buyer can be assigned except where the assignment would 152 18 materially change the duty of the other party, or increase 152 19 materially the burden of risk imposed on the other party by 152 20 the contract, or impair materially the other party's chance of 152 21 obtaining return performance. A right to damages for breach 152 22 of the whole contract or a right arising out of the assignor's 152 23 due performance of the assignor's entire obligation can be 152 24 assigned despite agreement otherwise. 152 25 Sec. 141. Section 554.2210, Code 1999, is amended by 152 26 adding the following new subsection, and renumbering 152 27 subsequent subsections: 152 28 NEW SUBSECTION. 3. The creation, attachment, perfection, 152 29 or enforcement of a security interest in the seller's interest 152 30 under a contract is not a transfer that materially changes the 152 31 duty of or increases materially the burden or risk imposed on 152 32 the buyer or impairs materially the buyer's chance of 152 33 obtaining return performance within the purview of subsection 152 34 2 unless, and then only to the extent that, enforcement 152 35 actually results in a delegation of material performance of 153 1 the seller. Even in that event, the creation, attachment, 153 2 perfection, and enforcement of the security interest remain 153 3 effective, but (i) the seller is liable to the buyer for 153 4 damages caused by the delegation to the extent that the 153 5 damages could not reasonably be prevented by the buyer, and 153 6 (ii) a court having jurisdiction may grant other appropriate 153 7 relief, including cancellation of the contract for sale or an 153 8 injunction against enforcement of the security interest or 153 9 consummation of the enforcement. 153 10 Sec. 142. Section 554.2326, Code 1999, is amended to read 153 11 as follows: 153 12 554.2326 SALE ON APPROVAL AND SALE OR RETURN – 153 13CONSIGNMENT SALES ANDRIGHTS OF CREDITORS. 153 14 1. Unless otherwise agreed, if delivered goods may be 153 15 returned by the buyer even though they conform to the 153 16 contract, the transaction is 153 17 a. a "sale on approval" if the goods are delivered 153 18 primarily for use, and 153 19 b. a "sale or return" if the goods are delivered primarily 153 20 for resale. 153 21 2.Except as provided in subsection 3, goodsGoods held on 153 22 approval are not subject to the claims of the buyer's 153 23 creditors until acceptance; goods held on sale or return are 153 24 subject to such claims while in the buyer's possession. 153 253. Where goods are delivered to a person for sale and such153 26person maintains a place of business at which that person153 27deals in goods of the kind involved, under a name other than153 28the name of the person making delivery, then with respect to153 29claims of creditors of the person conducting the business the153 30goods are deemed to be on sale or return. The provisions of153 31this subsection are applicable even though an agreement153 32purports to reserve title to the person making delivery until153 33payment or resale or uses such words as "on consignment" or153 34"on memorandum". However, this subsection is not applicable153 35if the person making delivery154 1a. complies with an applicable law providing for a154 2consignor's interest or the like to be evidenced by a sign, or154 3b. establishes that the person conducting the business is154 4generally known by creditors of the person conducting the154 5business to be substantially engaged in selling the goods of154 6others, or154 7c. complies with the filing provisions of the Article on154 8Secured Transactions (Article 9).154 94.3. Any "or return" term of a contract for sale is to be 154 10 treated as a separate contract for sale within the statute of 154 11 frauds section of this Article (section 554.2201) and as 154 12 contradicting the sale aspect of the contract within the 154 13 provisions of this Article on parol or extrinsic evidence 154 14 (section 554.2202). 154 15 Sec. 143. Section 554.2502, Code 1999, is amended to read 154 16 as follows: 154 17 554.2502 BUYER'S RIGHT TO GOODS ON SELLER'S REPUDIATION, 154 18 FAILURE TO DELIVER, OR INSOLVENCY. 154 19 1. Subject tosubsectionsubsections 2 and 3 and even 154 20 though the goods have not been shipped a buyer who has paid a 154 21 part or all of the price of goods in which the buyer has a 154 22 special property under the provisions of the immediately 154 23 preceding section may on making and keeping good a tender of 154 24 any unpaid portion of their price recover them from the seller 154 25 if: 154 26 a. in the case of goods bought for personal, family, or 154 27 household purposes, the seller repudiates or fails to deliver 154 28 as required by the contract; or 154 29 b. in all cases the seller becomes insolvent within ten 154 30 days after receipt of the first installment on their price. 154 31 2. The buyer's right to recover the goods under subsection 154 32 1, paragraph "a", vests upon acquisition of a special 154 33 property, even if the seller had not then repudiated or failed 154 34 to deliver. 154 352.3. If the identification creating the buyer's special 155 1 property has been made by the buyer, the buyer acquires the 155 2 right to recover the goods only if they conform to the 155 3 contract for sale. 155 4 Sec. 144. Section 554.2716, subsection 3, Code 1999, is 155 5 amended to read as follows: 155 6 3. The buyer has a right of replevin for goods identified 155 7 to the contract if after reasonable effort the buyer is unable 155 8 to effect cover for such goods or the circumstances reasonably 155 9 indicate that such effort will be unavailing or if the goods 155 10 have been shipped under reservation and satisfaction of the 155 11 security interest in them has been made or tendered. In the 155 12 case of goods bought for personal, family, or household 155 13 purposes, the buyer's right of replevin vests upon acquisition 155 14 of a special property, even if the seller had not then 155 15 repudiated or failed to deliver. 155 16 Sec. 145. Section 554.4210, subsection 3, paragraph a, 155 17 Code 1999, is amended to read as follows: 155 18 a. no security agreement is necessary to make the security 155 19 interest enforceable (section 554.9203, subsection12, 155 20 paragraph"a""c", subparagraph (1)); 155 21 Sec. 146. NEW SECTION. 554.5118 SECURITY INTEREST OF 155 22 ISSUER OR NOMINATED PERSON. 155 23 1. An issuer or nominated person has a security interest 155 24 in a document presented under a letter of credit to the extent 155 25 that the issuer or nominated person honors or gives value for 155 26 the presentation. 155 27 2. So long as and to the extent that an issuer or 155 28 nominated person has not been reimbursed or has not otherwise 155 29 recovered the value given with respect to a security interest 155 30 in a document under subsection 1, the security interest 155 31 continues and is subject to Article 9, but: 155 32 a. a security agreement is not necessary to make the 155 33 security interest enforceable under section 554.9203, 155 34 subsection 2, paragraph "c"; 155 35 b. if the document is presented in a medium other than a 156 1 written or other tangible medium, the security interest is 156 2 perfected; and 156 3 c. if the document is presented in a written or other 156 4 tangible medium and is not a certificated security, chattel 156 5 paper, a document of title, an instrument, or a letter of 156 6 credit, the security interest is perfected and has priority 156 7 over a conflicting security interest in the document so long 156 8 as the debtor does not have possession of the document. 156 9 Sec. 147. Section 554.7503, subsection 1, paragraph a, 156 10 Code 1999, is amended to read as follows: 156 11 a. delivered or entrusted them or any document of title 156 12 covering them to the bailor or the bailor's nominee with 156 13 actual or apparent authority to ship, store or sell or with 156 14 power to obtain delivery under this Article (section 554.7403) 156 15 or with power of disposition under this chapter (sections 156 16 554.2403 and554.9307554.9320) or other statute or rule of 156 17 law; nor 156 18 Sec. 148. Section 554.8103, subsection 6, Code 1999, is 156 19 amended to read as follows: 156 20 6. A commodity contract, as defined in section554.9115156 21 554.9102, subsection 1, paragraph "o", is not a security or a 156 22 financial asset. 156 23 Sec. 149. Section 554.8106, subsections 4 and 6, Code 156 24 1999, are amended to read as follows: 156 25 4. A purchaser has "control" of a security entitlement if: 156 26 a. the purchaser becomes the entitlement holder;or156 27 b. the securities intermediary has agreed that it will 156 28 comply with entitlement orders originated by the purchaser 156 29 without further consent by the entitlement holder.; or 156 30 c. another person has control of the security entitlement 156 31 on behalf of the purchaser or, having previously acquired 156 32 control of the security entitlement, acknowledges that it has 156 33 control on behalf of the purchaser. 156 34 6. A purchaser who has satisfied the requirements of 156 35 subsection 3, paragraph "b",orsubsection4,paragraph "b",157 1 has control, even if the registered owner in the case of 157 2 subsection 3, paragraph "b", or the entitlement holder in the 157 3 case of subsection 4,paragraph "b",retains the right to make 157 4 substitutions for the uncertificated security or security 157 5 entitlement, to originate instructions or entitlement orders 157 6 to the issuer or securities intermediary, or otherwise to deal 157 7 with the uncertificated security or security entitlement. 157 8 Sec. 150. Section 554.8110, subsection 5, paragraphs a 157 9 through d, Code 1999, are amended to read as follows: 157 10 a. if an agreement between the securities intermediary and 157 11 its entitlement holderspecifies that it is governed by the157 12law of a particular jurisdictiongoverning the securities 157 13 account expressly provides that a particular jurisdiction is 157 14 the securities intermediary's jurisdiction for purposes of 157 15 this part, this Article, or this [Act], that jurisdiction is 157 16 the securities intermediary's jurisdiction. 157 17 b. if paragraph "a" does not apply and an agreement 157 18 between the securities intermediary and its entitlement holder 157 19 governing the securities account expressly provides that the 157 20 agreement is governed by the law of a particular jurisdiction, 157 21 that jurisdiction is the securities intermediary's 157 22 jurisdiction. 157 23 c. if neither paragraph "a" nor paragraph "b" applies and 157 24 an agreement between the securities intermediary and its 157 25 entitlement holderdoes not specify the governing law as157 26provided in paragraph "a", butgoverning the securities 157 27 account expresslyspecifiesprovides that the securities 157 28 account is maintained at an office in a particular 157 29 jurisdiction, that jurisdiction is the securities 157 30 intermediary's jurisdiction. 157 31c.d. ifan agreement between the securities intermediary157 32and its entitlement holder does not specify a jurisdiction as157 33provided in paragraph "a" or "b"none of the preceding 157 34 paragraphs applies, the securities intermediary's jurisdiction 157 35 is the jurisdiction in whichis locatedthe office identified 158 1 in an account statement as the office serving the entitlement 158 2 holder's account is located. 158 3d.e. ifan agreement between the securities intermediary158 4and its entitlement holder does not specify a jurisdiction as158 5provided in paragraph "a" or "b" and an account statement does158 6not identify an office serving the entitlement holder's158 7account as provided in paragraph "c"none of the preceding 158 8 paragraphs applies, the securities intermediary's jurisdiction 158 9 is the jurisdiction in whichis locatedthe chief executive 158 10 office of the securities intermediary is located. 158 11 Sec. 151. Section 554.8301, subsection 1, paragraph c, 158 12 Code 1999, is amended to read as follows: 158 13 c. a securities intermediary acting on behalf of the 158 14 purchaser acquires possession of the security certificate, 158 15 only if the certificate is in registered form andhas beenis 158 16 (i) registered in the name of the purchaser, (ii) payable to 158 17 the order of the purchaser, or (iii) specially indorsed to the 158 18 purchaser by an effective indorsement and has not been 158 19 indorsed to the securities intermediary or in blank. 158 20 Sec. 152. Section 554.8302, subsection 1, Code 1999, is 158 21 amended to read as follows: 158 22 1. Except as otherwise provided in subsections 2 and 3, 158 23upon deliverya purchaser of a certificated or uncertificated 158 24 securityto a purchaser, the purchaseracquires all rights in 158 25 the security that the transferor had or had power to transfer. 158 26 Sec. 153. Section 554.8510, Code 1999, is amended to read 158 27 as follows: 158 28 554.8510 RIGHTS OF PURCHASER OF SECURITY ENTITLEMENT FROM 158 29 ENTITLEMENT HOLDER. 158 30 1.AnIn a case not covered by the priority rules in 158 31 Article 9 or the rules stated in subsection 3, an action based 158 32 on an adverse claim to a financial asset or security 158 33 entitlement, whether framed in conversion, replevin, 158 34 constructive trust, equitable lien, or other theory, may not 158 35 be asserted against a person who purchases a security 159 1 entitlement, or an interest therein, from an entitlement 159 2 holder if the purchaser gives value, does not have notice of 159 3 the adverse claim, and obtains control. 159 4 2. If an adverse claim could not have been asserted 159 5 against an entitlement holder under section 554.8502, the 159 6 adverse claim cannot be asserted against a person who 159 7 purchases a security entitlement, or an interest therein, from 159 8 the entitlement holder. 159 9 3. In a case not covered by the priority rules in Article 159 10 9, a purchaser for value of a security entitlement, or an 159 11 interest therein, who obtains control has priority over a 159 12 purchaser of a security entitlement, or an interest therein, 159 13 who does not obtain control.PurchasersExcept as otherwise 159 14 provided in subsection 4, purchasers who have control rank 159 15equally, except that aaccording to priority in time of: 159 16 a. the purchaser's becoming the person for whom the 159 17 securities account, in which the security entitlement is 159 18 carried, is maintained, if the purchaser obtained control 159 19 under section 554.8106, subsection 4, paragraph "a"; 159 20 b. the securities intermediary's agreement to comply with 159 21 the purchaser's entitlement orders with respect to security 159 22 entitlements carried or to be carried in the securities 159 23 account in which the security entitlement is carried, if the 159 24 purchaser obtained control under section 554.8106, subsection 159 25 4, paragraph "b"; 159 26 c. if the purchaser obtained control through another 159 27 person under section 554.8106, subsection 4, paragraph "c", 159 28 the time on which priority would be based under this 159 29 subsection if the other person were the secured party; or 159 30 4. A securities intermediary as purchaser has priority 159 31 over a conflicting purchaser who has control unless otherwise 159 32 agreed by the securities intermediary. 159 33 Sec. 154. Section 554.11108, Code 1999, is amended to read 159 34 as follows: 159 35 554.11108 PRESUMPTION THAT RULE OF LAW CONTINUES 160 1 UNCHANGED. 160 2 Unless a change in law has clearly been made, the 160 3 provisions of this chapter as amended shall be deemed 160 4 declaratory of the meaning of this chapter prior to amendment. 160 5The first sentence of section 554.9402, subsection 7, shall be160 6deemed to be a change in law.160 7 Sec. 155. Section 554.13103, subsection 3, Code 1999, is 160 8 amended to read as follows: 160 9 3. The following definitions in other Articles apply to 160 10 this Article: 160 11 "Account" Section554.9106554.9102, 160 12 subsection 1, paragraph "b" 160 13 "Between merchants" Section 554.2104, 160 14 subsection 3 160 15 "Buyer" Section 554.2103, 160 16 subsection 1, paragraph "a" 160 17 "Chattel paper" Section554.9105554.9102, 160 18 subsection 1, paragraph"b""k" 160 19 "Consumer goods" Section554.9109554.9102, 160 20 subsection 1, paragraph "w" 160 21 "Document" Section554.9105554.9102, 160 22 subsection 1, paragraph"f""ad" 160 23 "Entrusting" Section 554.2403, 160 24 subsection 3 160 25"General intangibles" Section 554.9106160 26 "General intangible" Section 554.9102, 160 27 subsection 1, paragraph "ap" 160 28 "Good faith" Section 554.2103, 160 29 subsection 1, paragraph "b" 160 30 "Instrument" Section554.9105554.9102, 160 31 subsection 1, paragraph"i""au" 160 32 "Merchant" Section 554.2104, 160 33 subsection 1 160 34 "Mortgage" Section554.9105554.9102, 160 35 subsection 1, paragraph"j""bc" 161 1 "Pursuant to commitment" Section554.9105554.9102, 161 2 subsection 1, paragraph"k""bq" 161 3 "Receipt" Section 554.2103, 161 4 subsection 1, paragraph "c" 161 5 "Sale" Section 554.2106, 161 6 subsection 1 161 7 "Sale on approval" Section 554.2326 161 8 "Sale or return" Section 554.2326 161 9 "Seller" Section 554.2103, 161 10 subsection 1, paragraph "d" 161 11 Sec. 156. Section 554.13303, subsections 1 through 5, Code 161 12 1999, are amended to read as follows: 161 13 1. As used in this section, "creation of a security 161 14 interest" includes the sale of a lease contract that is 161 15 subject to Article 9, Secured Transactions, by reason of 161 16 section554.9102554.9109, subsection 1, paragraph"b""c". 161 17 2. Except as provided insubsectionssubsection 3and 4,161 18 and section 554.9407, a provision in a lease agreement which 161 19 (i) prohibits the voluntary or involuntary transfer, including 161 20 a transfer by sale, sublease, creation or enforcement of a 161 21 security interest, or attachment, levy, or other judicial 161 22 process, of an interest of a party under the lease contract or 161 23 of the lessor's residual interest in the goods, or (ii) makes 161 24 such a transfer an event of default, gives rise to the rights 161 25 and remedies provided in subsection54, but a transfer that 161 26 is prohibited or is an event of default under the lease 161 27 agreement is otherwise effective. 161 283. A provision in a lease agreement which (i) prohibits161 29the creation or enforcement of a security interest in an161 30interest of a party under the lease contract or in the161 31lessor's residual interest in the goods, or (ii) makes such a161 32transfer an event of default, is not enforceable unless, and161 33then only to the extent that, there is an actual transfer by161 34the lessee of the lessee's right of possession or use of the161 35goods in violation of the provision or an actual delegation of162 1a material performance of either party to the lease contract162 2in violation of the provision. Neither the granting nor the162 3enforcement of a security interest in (i) the lessor's162 4interest under the lease contract or (ii) the lessor's162 5residual interest in the goods is a transfer that materially162 6impairs the prospect of obtaining return performance by,162 7materially changes the duty of, or materially increases the162 8burden or risk imposed on, the lessee within the purview of162 9subsection 5 unless, and then only to the extent that, there162 10is an actual delegation of a material performance of the162 11lessor.162 124.3. A provision in a lease agreement which (i) prohibits 162 13 a transfer of a right to damages for default with respect to 162 14 the whole lease contract or of a right to payment arising out 162 15 of the transferor's due performance of the transferor's entire 162 16 obligation, or (ii) makes such a transfer an event of default, 162 17 is not enforceable, and such a transfer is not a transfer that 162 18 materially impairs the prospect of obtaining return 162 19 performance by, materially changes the duty of, or materially 162 20 increases the burden or risk imposed on, the other party to 162 21 the lease contract within the purview of subsection54. 162 225.4. Subject tosubsectionssubsection 3 and4section 162 23 554.9407: 162 24 a. if a transfer is made which is made an event of default 162 25 under a lease agreement, the party to the lease contract not 162 26 making the transfer, unless that party waives the default or 162 27 otherwise agrees, has the rights and remedies described in 162 28 section 554.13501, subsection 2; 162 29 b. if paragraph "a" is not applicable and if a transfer is 162 30 made that (i) is prohibited under a lease agreement or (ii) 162 31 materially impairs the prospect of obtaining return 162 32 performance by, materially changes the duty of, or materially 162 33 increases the burden or risk imposed on, the other party to 162 34 the lease contract, unless the party not making the transfer 162 35 agrees at any time to the transfer in the lease contract or 163 1 otherwise, then, except as limited by contract, (i) the 163 2 transferor is liable to the party not making the transfer for 163 3 damages caused by the transfer to the extent that the damages 163 4 could not reasonably be prevented by the party not making the 163 5 transfer and (ii) a court having jurisdiction may grant other 163 6 appropriate relief, including cancellation of the lease 163 7 contract or an injunction against the transfer. 163 8 Sec. 157. Section 554.13307, subsections 1 through 4, Code 163 9 1999, are amended by striking the subsections and inserting in 163 10 lieu thereof the following: 163 11 1. Except as otherwise provided in section 554.13306, a 163 12 creditor of a lessee takes subject to the lease contract. 163 13 2. Except as otherwise provided in subsection 3 and in 163 14 sections 554.13306 and 554.13308, a creditor of a lessor takes 163 15 subject to the lease contract unless the creditor holds a lien 163 16 that attached to the goods before the lease contract became 163 17 enforceable. 163 18 3. Except as otherwise provided in sections 554.9317, 163 19 554.9321, and 554.9323, a lessee takes a leasehold interest 163 20 subject to a security interest held by a creditor of the 163 21 lessor. 163 22 Sec. 158. Section 554.13309, subsection 1, paragraph b, 163 23 Code 1999, is amended to read as follows: 163 24 b. a "fixture filing" is the filing, in the office where a 163 25 record of a mortgage on the real estate would be filed or 163 26 recorded, of a financing statement covering goods that are or 163 27 are to become fixtures and conforming to the requirements of 163 28 section554.9402554.9502,subsection 5subsections 1 and 2; 163 29 DIVISION III 163 30 AMENDMENTS IN OTHER CODE CHAPTERS 163 31 Sec. 159. Section 15E.91, subsection 7, Code 1999, is 163 32 amended to read as follows: 163 33 7. A copy of each pledge agreement by or to the 163 34 corporation, including without limitation each bond 163 35 resolution, indenture of trust, or similar agreement, or any 164 1 revisions or supplements to it shall be filed with the 164 2 secretary of state and no further filing or other action under 164 3sections 554.9101 to 554.9507chapter 554, article 9 of the 164 4 uniform commercial code, or any other law of the state is 164 5 required to perfect the security interest in the collateral or 164 6 any additions to it or substitutions for it, and the lien and 164 7 trust created are binding from and after the time made against 164 8 all parties having claims of any kind in tort, contract, or 164 9 otherwise against the pledgor. 164 10 Sec. 160. Section 16.26, subsection 7, Code 1999, is 164 11 amended to read as follows: 164 12 7. A copy of each pledge agreement by or to the authority, 164 13 including without limitation each bond resolution, indenture 164 14 of trust or similar agreement, or any revisions or supplements 164 15 to it shall be filed with the secretary of state and no 164 16 further filing or other action undersections 554.9101 to164 17554.9507chapter 554, article 9 of the uniform commercial 164 18 code, or any other law of the state shall be required to 164 19 perfect the security interest in the collateral or any 164 20 additions to it or substitutions for it, and the lien and 164 21 trust so created shall be binding from and after the time made 164 22 against all parties having claims of any kind in tort, 164 23 contract, or otherwise against the pledgor. 164 24 Sec. 161. Section 16A.9, subsection 7, Code 1999, is 164 25 amended to read as follows: 164 26 7. A copy of each pledge agreement by or to the authority, 164 27 including without limitation each obligation resolution, 164 28 indenture of trust or similar agreement, or any revisions or 164 29 supplements to it shall be filed with the secretary of state 164 30 and no further filing or other action undersections 554.9101164 31to 554.9507chapter 554, article 9 of the uniform commercial 164 32 code, or any other law of the state shall be required to 164 33 perfect the security interest in the collateral or any 164 34 additions to it or substitutions for it, and the lien and 164 35 trust so created shall be binding from and after the time made 165 1 against all parties having claims of any kind in tort, 165 2 contract, or otherwise against the pledgor. 165 3 Sec. 162. Section 203.12A, subsections 2, 7, and 9, Code 165 4 1999, are amended to read as follows: 165 5 2. "Grain dealer assets" includes proceeds received or due 165 6 a grain dealer upon the sale, including exchange, collection, 165 7 or other disposition, of grain sold by the grain dealer. As 165 8 used in this section, "proceeds" means noncash and cash 165 9 proceeds asprovideddefined in section554.9306554.9102. 165 10 "Grain dealer assets" also includes any other funds or 165 11 property of the grain dealer which can be directly traced as 165 12 being from the sale of grain by the grain dealer, or which 165 13 were utilized in the business operation of the grain dealer. 165 14 A court, upon petition by an affected party, may order that 165 15 claimed grain dealer assets are not grain dealer assets as 165 16 defined in this section. The burden of proof shall be upon 165 17 the petitioner to establish that the assets are not grain 165 18 dealer assets as defined in this section. 165 19 7. A lien statement filed under this section shall be a 165 20 security interest perfected under chapter 554 and subject to 165 21 the same priority as provided under section554.9312554.9322. 165 22 9. The board may enforce the lien in the manner provided 165 23 in chapter 554, article 9, part56, for the enforcement of 165 24 security interests. If, upon enforcement of the lien, the 165 25 lien amount is satisfied in full without exhaustion of the 165 26 grain dealer assets, the remaining assets shall be returned to 165 27 the grain dealer or, if there are competing claims to those 165 28 remaining assets by other creditors, shall place those assets 165 29 in the custody of the district court and implead the known 165 30 creditors. 165 31 For purposes of enforcement of the lien, the board is 165 32 deemed to be the secured party and the grain dealer is deemed 165 33 to be the debtor, and each has the respective rights and 165 34 duties of a secured party and a debtor as provided in chapter 165 35 554, article 9, part56. If a right or duty under chapter 166 1 554, article 9, part56, is contingent upon the existence of 166 2 express language in a security agreement, or may be waived by 166 3 express language in a security agreement, the requisite 166 4 language is deemed not to exist for purposes of enforcement of 166 5 the lien created by this section. 166 6 Sec. 163. Section 203C.12A, subsections 2, 7, and 9, Code 166 7 1999, are amended to read as follows: 166 8 2. "Warehouse operator assets" includes proceeds received 166 9 or due a warehouse operator upon the sale, including exchange, 166 10 collection, or other disposition, of grain sold by the 166 11 warehouse operator. As used in this section, "proceeds" means 166 12 noncash and cash proceeds asprovideddefined in section 166 13554.9306554.9102. "Warehouse operator assets" also includes 166 14 storage payments received or due to a warehouse operator, 166 15 grain owned by the warehouse operator, and any other funds or 166 16 property of the warehouse operator which can be directly 166 17 traced as being from the sale of grain by the warehouse 166 18 operator, or which were utilized in the business operation of 166 19 the warehouse operator. A court, upon petition by an affected 166 20 party, may order that claimed warehouse operator assets are 166 21 not warehouse operator assets as defined in this section. The 166 22 burden of proof shall be upon the petitioner to establish that 166 23 the assets are not warehouse operator assets as defined in 166 24 this section. 166 25 7. A lien statement filed under this section shall be a 166 26 security interest perfected under chapter 554 and subject to 166 27 the same priority as provided under section554.9312554.9322. 166 28 9. The Iowa grain indemnity fund board may enforce the 166 29 lien in the manner provided in chapter 554, article 9, part5166 30 6, for the enforcement of security interests. If, upon 166 31 enforcement of the lien, the lien amount is satisfied in full 166 32 without exhaustion of the warehouse operator assets, the 166 33 remaining assets shall be returned to the warehouse operator 166 34 or, if there are competing claims to those remaining assets by 166 35 other creditors, those assets shall be placed in the custody 167 1 of the district court and the known creditors impleaded. 167 2 For purposes of enforcement of the lien, the board is 167 3 deemed to be the secured party and the warehouse operator is 167 4 deemed to be the debtor, and each has the respective rights 167 5 and duties of a secured party and a debtor as provided in 167 6 chapter 554, article 9, part56. If a right or duty under 167 7 chapter 554, article 9, part56, is contingent upon the 167 8 existence of express language in a security agreement, or may 167 9 be waived by express language in a security agreement, the 167 10 requisite language is deemed not to exist for purposes of 167 11 enforcement of the lien created by this section. 167 12 Sec. 164. Section 321.47, unnumbered paragraph 2, Code 167 13 Supplement 1999, is amended to read as follows: 167 14 The persons entitled under the laws of descent and 167 15 distribution of an intestate's property to the possession and 167 16 ownership of a vehicle owned in whole or in part by a 167 17 decedent, upon filing an affidavit stating the name and date 167 18 of death of the decedent, the right to possession and 167 19 ownership of the persons filing the affidavit, and that there 167 20 has been no administration of the decedent's estate, which 167 21 instrument shall also contain an agreement to indemnify 167 22 creditors of the decedent who would be entitled to levy 167 23 execution upon the motor vehicle to the extent of the value of 167 24 the motor vehicle, are entitled upon fulfilling the other 167 25 requirements of this chapter, to the issuance of a 167 26 registration card for the interest of the decedent in the 167 27 vehicle and a certificate of title to it. If a decedent dies 167 28 testate, and either the will is not probated or is admitted to 167 29 probate without administration, the persons entitled to the 167 30 possession and ownership of a vehicle owned in whole or in 167 31 part by the decedent may file an affidavit, and upon 167 32 fulfilling the other requirements of this chapter, are 167 33 entitled to the issuance of a registration card for the 167 34 interest of the decedent in the vehicle and a certificate of 167 35 title to the vehicle. The affidavit shall contain the same 168 1 information and indemnity agreement as is required in cases of 168 2 intestacy pursuant to this section.NoA requirement of 168 3 chapter 450 or 451 shall not be considered satisfied by the 168 4 filing of the affidavit provided for in this section. If, 168 5 from the records in the office of the county treasurer, there 168 6 appear to be any liens on the vehicle, the certificate of 168 7 title shall contain a statement of the liens unless the 168 8 application is accompanied by proper evidence of their 168 9 satisfaction or extinction. Evidence of extinction may 168 10 consist of, but is not limited to, an affidavit of the 168 11 applicant stating that a security interest was foreclosed as 168 12 provided in chapter 554, article 9, part56. 168 13 Sec. 165. Section 321.50, subsection 1, Code Supplement 168 14 1999, is amended to read as follows: 168 15 1. A security interest in a vehicle subject to 168 16 registration under the laws of this state or a mobile home or 168 17 manufactured housing, except trailers whose empty weight is 168 18 two thousand pounds or less, and except new or used vehicles 168 19 held by a dealer or manufacturer as inventory for sale, is 168 20 perfected by the delivery to the county treasurer of the 168 21 county where the certificate of title was issued or, in the 168 22 case of a new certificate, to the county treasurer where the 168 23 certificate will be issued, of an application for certificate 168 24 of title which lists the security interest, or an application 168 25 for notation of security interest signed by the owner, or by 168 26 one owner of a vehicle owned jointly by more than one person, 168 27 or a certificate of title from another jurisdiction which 168 28 shows the security interest, and a fee of five dollars for 168 29 each security interest shown. If the owner or secured party 168 30 is in possession of the certificate of title, it must also be 168 31 delivered at this time in order to perfect the security 168 32 interest. If a vehicle is subject to a security interest when 168 33 brought into this state, the validity of the security interest 168 34 and the date of perfection is determined by section554.9103168 35 554.9303. Delivery as provided in this subsection is an 169 1 indication of a security interest on a certificate of title 169 2 for purposes of chapter 554. 169 3 Sec. 166. Section 322.21, Code Supplement 1999, is amended 169 4 to read as follows: 169 5 322.21 REMAINING BALANCE ON TRADE VEHICLE. 169 6 The extension of credit by a retail seller to a retail 169 7 buyer, pursuant to a retail installment contract, of the 169 8 amount actually paid or to be paid by the retail seller to 169 9 discharge a purchase money security interest, asdefined169 10 provided in section554.9107554.9103, on a motor vehicle 169 11 traded in by the retail buyer shall not subject the retail 169 12 seller to the provisions of chapter 536 or 536A. 169 13 Sec. 167. Section 331.602, subsection 28, Code Supplement 169 14 1999, is amended to read as follows: 169 15 28. Carry out duties relating to the filing of financing 169 16 statements or instruments as provided insections 554.9401 to169 17554.9408chapter 554, article 9, part 5. 169 18 Sec. 168. Section 331.609, subsection 3, paragraph a, 169 19 subparagraph (1), Code 1999, is amended to read as follows: 169 20 (1) If the filing officer is the secretary of state, the 169 21 secretary shall cause the notice to be marked, held, and 169 22 indexed in accordance with section554.9403, subsection 4169 23 554.9519, as if the notice were a financing statementwithin169 24the meaning of that sectionas provided in chapter 554, 169 25 article 9, part 5. 169 26 Sec. 169. Section 461A.6, Code 1999, is amended to read as 169 27 follows: 169 28 461A.6 COSTS – LIEN. 169 29 The cost of such removal shall be paid by the owner of said 169 30 pier, wharf, sluice, piling, wall, fence, obstruction, 169 31 erection or building, and the state shall have a lien upon the 169 32 property removed for such costs. Said costs shall be payable 169 33 at the time of removal and such lien may be enforced and 169 34 foreclosed, as provided for the foreclosure of security 169 35 interests in Uniform Commercial Code, chapter 554, article 9, 170 1 part56. 170 2 Sec. 170. Section 537.5103, subsections 2 and 3, Code 170 3 1999, are amended to read as follows: 170 4 2. If the seller repossesses or voluntarily accepts 170 5 surrender either of goods which were the subject of the sale 170 6 and in which the seller has a security interest, or of goods 170 7 which were not the subject of the sale but in which the seller 170 8 has a security interest to secure a debt arising from a sale 170 9 of goods or services or a combined sale of goods and services, 170 10 the seller's duty to dispose of the collateral is governed by 170 11 the provisions on disposition of collateral insections170 12554.9501 to 554.9507chapter 554, article 9, part 6. 170 13 3. If a lender takes possession or voluntarily accepts 170 14 surrender of goods in which the lender has a security interest 170 15 to secure a debt arising from a consumer loan, the lender's 170 16 duty to dispose of the collateral is governed by the 170 17 provisions on disposition of collateral insections 554.9501170 18to 554.9507chapter 554, article 9, part 6. 170 19 Sec. 171. Section 539.1, Code 1999, is amended to read as 170 20 follows: 170 21 539.1 ASSIGNMENT OF NONNEGOTIABLE INSTRUMENTS. 170 22 Bonds, due bills, and all instruments by which the maker 170 23 promises to pay another, without words of negotiability, a sum 170 24 of money, or by which the maker promises to pay a sum of money 170 25 in property or labor, or to pay or deliver any property or 170 26 labor, or acknowledges any money, labor, or property to be 170 27 due, are assignable by endorsement on the instrument, or by 170 28 other writing. The assignee, including a person who takes 170 29 assignment for collection in the regular course of business, 170 30 has a right of action on them in the assignee's own name, 170 31 subject to any defense or counterclaim which the maker or 170 32 debtor had against an assignor of the instrument before notice 170 33 of the assignment. In case of conflict between this section 170 34 andsectionssection 554.5112, 554.5113, 554.5114,and170 35554.9318, sections554.9404, or 554.9405, section 554.5112, 171 1 554.5113, 554.5114,and 554.9318 control554.9404, or 554.9405 171 2 controls. 171 3 Sec. 172. Section 539.2, Code 1999, is amended to read as 171 4 follows: 171 5 539.2 ASSIGNMENT PROHIBITED BY INSTRUMENT. 171 6 When by the terms of an instrument its assignment is 171 7 prohibited, an assignment thereof shall nevertheless be valid, 171 8 but the maker may make use of any defense or counterclaim 171 9 against the assignee which the maker may have against any 171 10 assignor thereof before notice of such assignment is given to 171 11 the maker in writing. In case of conflict between this 171 12 section andsectionssection 554.5112, 554.5113, 554.5114,and171 13554.9318, sections554.9404, or 554.9405, section 554.5112, 171 14 554.5113, 554.5114,and 554.9318 control554.9404, or 554.9405 171 15 controls. 171 16 Sec. 173. Section 539.3, Code 1999, is amended to read as 171 17 follows: 171 18 539.3 ASSIGNMENT OF OPEN ACCOUNT. 171 19 An open account of sums of money due on contract may be 171 20 assigned. The assignee, including a person who takes 171 21 assignment for collection in the regular course of business, 171 22 has a right of action on the account in the assignee's own 171 23 name, subject to the defenses and counterclaims allowed 171 24 against the instruments mentioned in section 539.2, before 171 25 notice of the assignment is given to the debtor in writing by 171 26 the assignee. In case of conflict Uniform Commercial Code, 171 27 section554.9318554.9404 or 554.9405, controls. 171 28 Sec. 174. Section 554B.1, Code 1999, is amended to read as 171 29 follows: 171 30 554B.1 DEFINITIONS. 171 31 As used in this chapter "transmitting utility" has the same 171 32 meaning as defined in the Uniform Commercial Code, section 171 33554.9105, subsection 1, paragraph "n"554.9102, subsection 1. 171 34 Security interests filed pursuant to this chapter prior to 171 35 January 1, 1975, which have not been terminated, are deemed to 172 1 be filed in accordance with section554.9401554.9501, 172 2 subsection52. 172 3 Sec. 175. Section 570A.4, subsection 4, Code 1999, is 172 4 amended to read as follows: 172 5 4. The secretary of state shall note the filing of a lien 172 6 statement under this section in the manner provided by chapter 172 7 554, the uniform commercial code, and shall charge a fee as 172 8 provided under section554.9403554.9525. 172 9 Sec. 176. Section 570A.6, Code 1999, is amended to read as 172 10 follows: 172 11 570A.6 ENFORCEMENT OF LIEN. 172 12 The holder of a lien perfected under this chapter may 172 13 enforce the lien in the manner providedinfor agricultural 172 14 liens pursuant to chapter 554, article 9, part56, for the 172 15 enforcement of security interests. For purposes of 172 16 enforcement of the lien, the lienholder is deemed to be the 172 17 secured party, and the farmer for whom the agricultural 172 18 chemical, seed, feed, or petroleum product was furnished is 172 19 deemed to be the debtor, and each has the respective rights 172 20 and duties of a secured party and a debtor as provided in 172 21 chapter 554, article 9, part56. Where a right or duty under 172 22 chapter 554, article 9, part56, is contingent upon the 172 23 existence of express language in a security agreement, or may 172 24 be waived by express language in a security agreement, the 172 25 requisite language is deemed not to exist for purposes of 172 26 enforcement of the lien created by this chapter. 172 27 Sec. 177. Section 571.5, Code 1999, is amended to read as 172 28 follows: 172 29 571.5FORECLOSUREENFORCEMENT OF LIEN. 172 30SaidA lien as provided in this chapter may beforeclosed172 31 enforced in the manner providedinfor agricultural liens 172 32 pursuant to the Uniform Commercial Code, chapter 554, Article 172 33 9, Part56. 172 34 Sec. 178. Section 579A.3, unnumbered paragraph 1, Code 172 35 1999, is amended to read as follows: 173 1 While the cattle are located at the custom cattle feedlot, 173 2 the custom cattle feedlot operator may foreclose a lien 173 3 created in section 579A.2 in the manner provided for the 173 4foreclosure of secured transactionsenforcement of an 173 5 agricultural lien as provided insections 554.9504, 554.9506,173 6and 554.9507chapter 554, article 9, part 6. After the cattle 173 7 have left the custom cattle feedlot, the custom cattle feedlot 173 8 operator may enforce the lien by commencing an action at law 173 9 for the amount of the lien against either of the following: 173 10 Sec. 179. Section 579B.3, subsection 1, paragraph a, 173 11 subparagraph (1), subparagraph subdivision (c), Code 173 12 Supplement 1999, is amended to read as follows: 173 13 (c) If the livestock is slaughtered by the contractor, the 173 14 lien shall be on any property of the contractor that may be 173 15 subject to a security interest as provided in section554.9102173 16 554.9109. 173 17 Sec. 180. Section 579B.3, subsection 1, paragraph a, 173 18 subparagraph (2), subparagraph subdivision (c), Code 173 19 Supplement 1999, is amended to read as follows: 173 20 (c) If the raw milk is processed by the contractor, the 173 21 lien shall be on any property of the contractor that may be 173 22 subject to a security interest as provided in section554.9102173 23 554.9109. 173 24 Sec. 181. Section 579B.3, subsection 2, paragraph a, 173 25 subparagraph (3), Code Supplement 1999, is amended to read as 173 26 follows: 173 27 (3) If the crop is processed by the contractor, the lien 173 28 shall be on any property of the contractor that may be subject 173 29 to a security interest as provided in section554.9102173 30 554.9109. 173 31 Sec. 182. Section 579B.5, Code Supplement 1999, is amended 173 32 to read as follows: 173 33 579B.5 ENFORCEMENT. 173 34 Before a commodity leaves the authority of the contract 173 35 producer as provided in section 579B.3, the contract producer 174 1 mayforecloseenforce a lien created in that section in the 174 2 manner provided for theforeclosure of secured transactions174 3 enforcement of an agricultural lien as provided insections174 4554.9504, 554.9506, and 554.9507chapter 554, article 9, part 174 5 6. After the commodity is no longer under the authority of 174 6 the contract producer, the contract producer may enforce the 174 7 lien in the manner provided in chapter 554, article 9, part5174 8 6. 174 9 DIVISION IV 174 10 REPEALS AND EFFECTIVE DATE 174 11 Sec. 183. Sections 554.9101 through 554.9507, Code 2001, 174 12 are repealed. 174 13 Sec. 184. Section 554.11105, Code 2001, is repealed. 174 14 Sec. 185. EFFECTIVE DATE. This Act takes effect July 1, 174 15 2001. 174 16 EXPLANATION 174 17 This bill adopts revisions to Article 9 of the Uniform 174 18 Commercial Code (Code chapter 554) as proposed by the national 174 19 conference of commissioners on uniform state laws, including 174 20 conforming amendments to a number of Articles within that 174 21 chapter and other chapters providing for security interests 174 22 and liens. 174 23 With limited exceptions, Article 9 governs the creation, 174 24 priority, and enforcement of creditors' consensual liens, 174 25 which are defined as security interests in personal property 174 26 and fixtures. 174 27 The Article provides generally for the effectiveness of 174 28 security agreements, the rights and duties of creditors (i.e., 174 29 secured parties), including parties having possession and 174 30 control of collateral. The Article governs the attachment and 174 31 enforceability of security interests or proceeds from the sale 174 32 of collateral. Much of the Article provides for "perfecting" 174 33 a security interest, usually accomplished by filing a 174 34 financing statement. The Article provides for the contents of 174 35 financing statements and the location where such financing 175 1 statements must be filed (e.g., with the secretary of state). 175 2 In perfecting a security interest, a debtor is generally 175 3 assured rights in the collateral which is superior to a 175 4 security interest perfected later in time. The Article 175 5 provides special rules of perfection for specific collateral 175 6 such as farm products. It provides that perfection may be 175 7 accomplished without filing (e.g., by possession). It also 175 8 provides special rules for collateral purchased by consumers. 175 9 However, a fundamental purpose of perfection is to provide 175 10 notice of rights in the collateral by the person perfecting 175 11 the interest. The Article also provides for who has priority 175 12 in controlling the collateral or proceeds from the sale of the 175 13 collateral, usually based on who first perfected a security 175 14 interest. Finally, the Article provides for enforcement of 175 15 security interests in case of a default, which includes the 175 16 right of a secured party to dispose of collateral following 175 17 notification, and the application of proceeds resulting from 175 18 the disposition. 175 19 This bill revises Article 9 for the first time since 1972, 175 20 by expanding the scope of property and transactions covered by 175 21 Article 9 and changing the manner in which security interests 175 22 are created, perfected, provided priority, and enforced. For 175 23 example, the bill provides for electronic authentication of 175 24 documents. It expands its scope to cover more property 175 25 including "accounts" and "proceeds". For example, under the 175 26 bill, the revised Article includes rights arising out of the 175 27 license of property and the distributions on stock. The bill 175 28 amends provisions governing perfection other than by filing 175 29 effective financing statements. For example, it provides that 175 30 possession or control may be used as a method to perfect 175 31 deposit accounts, letter of credit rights, and electronic 175 32 chattel paper. It also provides for the automatic perfection 175 33 of a security interest. Under the bill, revised Article 9 175 34 changes methods of filing financing statements, including by 175 35 electronic filing. The bill provides a number of changes in 176 1 which a security interest is enforced in case of default. It 176 2 provides that a low price obtained at a foreclosure sale does 176 3 not alone make the sale commercially unreasonable as required 176 4 in the Article. It provides that guarantors of an obligation 176 5 are entitled to the same notice and protections as the debtor. 176 6 The bill allows a secured party to retain collateral in 176 7 satisfaction of a debt, regardless of whether the secured 176 8 party is in possession of the collateral. 176 9 The bill amends a number of other Code provisions which 176 10 refer to Article 9. Many Code chapters provide special liens, 176 11 including liens for agricultural supply dealers (Code chapter 176 12 570A), artisans (Code chapter 577), custom cattle feedlots 176 13 (Code chapter 579A), contract producers of commodities (Code 176 14 chapter 579B), threshers and cornshellers (Code chapter 571), 176 15 and veterinarians (Code chapter 581). Some of the chapters 176 16 provide that persons filing liens created under the chapter 176 17 enjoy super priority. The bill provides special rules for 176 18 agricultural liens which become effective under statute when a 176 19 lienor files a financing statement. 176 20 LSB 6844HC 78 176 21 da/cf/24
Text: HSB00735 Text: HSB00737 Text: HSB00700 - HSB00799 Text: HSB Index Bills and Amendments: General Index Bill History: General Index
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