Senate
Study
Bill
3147
-
Introduced
SENATE
FILE
_____
BY
(PROPOSED
COMMITTEE
ON
JUDICIARY
BILL
BY
CHAIRPERSON
FRAISE)
A
BILL
FOR
An
Act
amending
provisions
in
the
uniform
commercial
code
1
relating
to
secured
transactions,
and
including
effective
2
date
provisions.
3
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
4
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_____
Section
1.
Section
554.9102,
subsection
1,
paragraph
g,
1
subparagraph
(2),
Code
2011,
is
amended
to
read
as
follows:
2
(2)
to
execute
or
otherwise
adopt
a
symbol,
or
encrypt
3
or
similarly
process
a
record
in
whole
or
in
part,
with
the
4
present
intent
of
the
authenticating
person
to
identify
the
5
person
and
adopt
or
accept
a
record
to
adopt
or
accept
a
6
record,
to
attach
to
or
logically
associate
with
the
record
an
7
electronic
sound,
symbol,
or
process
.
8
Sec.
2.
Section
554.9102,
subsection
1,
paragraphs
j,
ax,
9
and
br,
Code
2011,
are
amended
to
read
as
follows:
10
j.
“Certificate
of
title”
means
a
certificate
of
title
11
with
respect
to
which
a
statute
provides
for
the
security
12
interest
in
question
to
be
indicated
on
the
certificate
as
13
a
condition
or
result
of
the
security
interest’s
obtaining
14
priority
over
the
rights
of
a
lien
creditor
with
respect
to
the
15
collateral.
The
term
includes
another
record
maintained
as
16
an
alternative
to
a
certificate
of
title
by
the
governmental
17
unit
that
issues
certificates
of
title
if
a
statute
permits
the
18
security
interest
in
question
to
be
indicated
on
the
record
19
as
a
condition
or
result
of
the
security
interest’s
obtaining
20
priority
over
the
rights
of
a
lien
creditor
with
respect
to
the
21
collateral.
22
ax.
“Jurisdiction
of
organization”
,
with
respect
to
a
23
registered
organization,
means
the
jurisdiction
under
whose
law
24
the
organization
is
formed
or
organized.
25
br.
“Registered
organization”
means
an
organization
formed
26
or
organized
solely
under
the
law
of
a
single
state
or
the
27
United
States
and
as
to
which
the
state
or
the
United
States
28
must
maintain
a
public
record
showing
the
organization
to
have
29
been
organized
by
the
filing
of
a
public
organic
record
with,
30
the
issuance
of
a
public
organic
record
by,
or
the
enactment
31
of
legislation
by
the
state
or
the
United
States.
The
term
32
includes
a
business
trust
that
is
formed
under
the
law
of
a
33
single
state
if
a
statute
of
the
state
governing
business
34
trusts
requires
that
the
business
trust’s
organic
record
be
35
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filed
with
the
state
.
1
Sec.
3.
Section
554.9102,
subsection
1,
Code
2011,
is
2
amended
by
adding
the
following
new
paragraph:
3
NEW
PARAGRAPH
.
0bp.
“Public
organic
record”
means
a
record
4
that
is
available
to
the
public
for
inspection
and
is:
5
(1)
a
record
consisting
of
the
record
initially
filed
with
6
or
issued
by
a
state
or
the
United
States
to
form
or
organize
7
an
organization
and
any
record
filed
with
or
issued
by
the
8
state
or
the
United
States
which
amends
or
restates
the
initial
9
record;
10
(2)
an
organic
record
of
a
business
trust
consisting
of
11
the
record
initially
filed
with
a
state
and
any
record
filed
12
with
the
state
which
amends
or
restates
the
initial
record,
if
13
a
statute
of
the
state
governing
business
trusts
requires
that
14
the
record
be
filed
with
the
state;
or
15
(3)
a
record
consisting
of
legislation
enacted
by
the
16
legislature
of
a
state
or
the
Congress
of
the
United
States
17
which
forms
or
organizes
an
organization,
any
record
amending
18
the
legislation,
and
any
record
filed
with
or
issued
by
the
19
state
or
the
United
States
which
amends
or
restates
the
name
of
20
the
organization.
21
Sec.
4.
Section
554.9105,
Code
2011,
is
amended
to
read
as
22
follows:
23
554.9105
Control
of
electronic
chattel
paper.
24
1.
General
rule:
control
of
electronic
chattel
paper.
A
25
secured
party
has
control
of
electronic
chattel
paper
if
a
26
system
employed
for
evidencing
the
transfer
of
interests
in
the
27
chattel
paper
reliably
establishes
the
secured
party
as
the
28
person
to
which
the
chattel
paper
was
assigned.
29
2.
Specific
facts
giving
control.
A
system
satisfies
30
subsection
1
if
the
record
or
records
comprising
the
chattel
31
paper
are
created,
stored,
and
assigned
in
such
a
manner
that:
32
1.
a.
a
single
authoritative
copy
of
the
record
or
records
33
exists
which
is
unique,
identifiable
and,
except
as
otherwise
34
provided
in
subsections
4,
5,
and
6
paragraphs
“d”
,
“e”
,
and
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“f”
,
unalterable;
1
2.
b.
the
authoritative
copy
identifies
the
secured
party
2
as
the
assignee
of
the
record
or
records;
3
3.
c.
the
authoritative
copy
is
communicated
to
and
4
maintained
by
the
secured
party
or
its
designated
custodian;
5
4.
d.
copies
or
revisions
amendments
that
add
or
change
an
6
identified
assignee
of
the
authoritative
copy
can
be
made
only
7
with
the
participation
consent
of
the
secured
party;
8
5.
e.
each
copy
of
the
authoritative
copy
and
any
copy
9
of
a
copy
is
readily
identifiable
as
a
copy
that
is
not
the
10
authoritative
copy;
and
11
6.
f.
any
revision
amendment
of
the
authoritative
copy
is
12
readily
identifiable
as
an
authorized
or
unauthorized
revision.
13
Sec.
5.
Section
554.9307,
subsection
6,
paragraph
b,
Code
14
2011,
is
amended
to
read
as
follows:
15
b.
in
the
state
that
the
registered
organization,
branch,
or
16
agency
designates,
if
the
law
of
the
United
States
authorizes
17
the
registered
organization,
branch,
or
agency
to
designate
its
18
state
of
location
,
including
by
designating
its
main
office,
19
home
office,
or
other
comparable
office
;
or
20
Sec.
6.
Section
554.9311,
subsection
1,
paragraphs
b
and
c,
21
Code
2011,
are
amended
to
read
as
follows:
22
b.
any
certificate-of-title
statute,
including
as
provided
23
in
chapter
321
,
covering
automobiles,
trailers,
mobile
homes,
24
boats,
farm
tractors,
or
the
like,
which
provides
for
a
25
security
interest
to
be
indicated
on
the
a
certificate
of
title
26
as
a
condition
or
result
of
perfection;
or
27
c.
a
certificate-of-title
statute
of
another
jurisdiction
28
which
provides
for
a
security
interest
to
be
indicated
on
29
the
a
certificate
of
title
as
a
condition
or
result
of
the
30
security
interest’s
obtaining
priority
over
the
rights
of
a
31
lien
creditor
with
respect
to
the
property.
32
Sec.
7.
Section
554.9316,
Code
2011,
is
amended
by
adding
33
the
following
new
subsections:
34
NEW
SUBSECTION
.
8.
Effect
on
filed
financing
statement
35
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of
change
in
governing
law.
The
following
rules
apply
to
1
collateral
to
which
a
security
interest
attaches
within
2
four
months
after
the
debtor
changes
its
location
to
another
3
jurisdiction:
4
a.
A
financing
statement
filed
before
the
change
pursuant
5
to
the
law
of
the
jurisdiction
designated
in
section
554.9301,
6
subsection
1,
or
section
554.9305,
subsection
3,
is
effective
7
to
perfect
a
security
interest
in
the
collateral
if
the
8
financing
statement
would
have
been
effective
to
perfect
a
9
security
interest
in
the
collateral
had
the
debtor
not
changed
10
its
location.
11
b.
If
a
security
interest
perfected
by
a
financing
statement
12
that
is
effective
under
paragraph
“a”
becomes
perfected
under
13
the
law
of
the
other
jurisdiction
before
the
earlier
of
the
14
time
the
financing
statement
would
have
become
ineffective
15
under
the
law
of
the
jurisdiction
designated
in
section
16
554.9301,
subsection
1,
or
section
554.9305,
subsection
3,
or
17
the
expiration
of
the
four-month
period,
it
remains
perfected
18
thereafter.
If
the
security
interest
does
not
become
perfected
19
under
the
law
of
the
other
jurisdiction
before
the
earlier
time
20
or
event,
it
becomes
unperfected
and
is
deemed
never
to
have
21
been
perfected
as
against
a
purchaser
of
the
collateral
for
22
value.
23
NEW
SUBSECTION
.
9.
Effect
of
change
in
governing
law
24
on
financing
statement
filed
against
original
debtor.
If
a
25
financing
statement
naming
an
original
debtor
is
filed
pursuant
26
to
the
law
of
the
jurisdiction
designated
in
section
554.9301,
27
subsection
1,
or
section
554.9305,
subsection
3,
and
the
new
28
debtor
is
located
in
another
jurisdiction,
the
following
rules
29
apply:
30
a.
The
financing
statement
is
effective
to
perfect
a
31
security
interest
in
collateral
acquired
by
the
new
debtor
32
before,
and
within
four
months
after,
the
new
debtor
becomes
33
bound
under
section
554.9203,
subsection
4,
if
the
financing
34
statement
would
have
been
effective
to
perfect
a
security
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_____
interest
in
the
collateral
had
the
collateral
been
acquired
by
1
the
original
debtor.
2
b.
A
security
interest
perfected
by
the
financing
statement
3
and
which
becomes
perfected
under
the
law
of
the
other
4
jurisdiction
before
the
earlier
of
the
time
the
financing
5
statement
would
have
become
ineffective
under
the
law
of
6
the
jurisdiction
designated
in
section
554.9301,
subsection
7
1,
or
section
554.9305,
subsection
3,
or
the
expiration
8
of
the
four-month
period
remains
perfected
thereafter.
A
9
security
interest
that
is
perfected
by
the
financing
statement
10
but
which
does
not
become
perfected
under
the
law
of
the
11
other
jurisdiction
before
the
earlier
time
or
event
becomes
12
unperfected
and
is
deemed
never
to
have
been
perfected
as
13
against
a
purchaser
of
the
collateral
for
value.
14
Sec.
8.
Section
554.9317,
subsections
2
and
4,
Code
2011,
15
are
amended
to
read
as
follows:
16
2.
Buyers
that
receive
delivery.
Except
as
otherwise
17
provided
in
subsection
5
,
a
buyer,
other
than
a
secured
18
party,
of
tangible
chattel
paper,
tangible
documents,
goods,
19
instruments,
or
a
security
certificate
certificated
security
20
takes
free
of
a
security
interest
or
agricultural
lien
if
the
21
buyer
gives
value
and
receives
delivery
of
the
collateral
22
without
knowledge
of
the
security
interest
or
agricultural
lien
23
and
before
it
is
perfected.
24
4.
Licensees
and
buyers
of
certain
collateral.
A
licensee
of
25
a
general
intangible
or
a
buyer,
other
than
a
secured
party,
26
of
accounts,
electronic
chattel
paper,
electronic
documents,
27
general
intangibles,
or
investment
property
collateral
other
28
than
tangible
chattel
paper,
tangible
documents,
goods,
29
instruments,
or
a
certificated
security
takes
free
of
a
30
security
interest
if
the
licensee
or
buyer
gives
value
without
31
knowledge
of
the
security
interest
and
before
it
is
perfected.
32
Sec.
9.
Section
554.9326,
Code
2011,
is
amended
to
read
as
33
follows:
34
554.9326
Priority
of
security
interests
created
by
new
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debtor.
1
1.
Subordination
of
security
interest
created
by
new
2
debtor.
Subject
to
subsection
2
,
a
security
interest
that
3
is
created
by
a
new
debtor
which
is
in
collateral
in
which
4
the
new
debtor
has
or
acquires
rights
and
is
perfected
solely
5
by
a
filed
financing
statement
that
is
effective
solely
6
under
section
554.9508
in
collateral
in
which
a
new
debtor
7
has
or
acquires
rights
would
be
ineffective
to
perfect
the
8
security
interest
but
for
the
application
of
section
554.9316,
9
subsection
9,
paragraph
“a”
,
or
section
554.9508
is
subordinate
10
to
a
security
interest
in
the
same
collateral
which
is
11
perfected
other
than
by
such
a
filed
financing
statement
that
12
is
effective
solely
under
section
554.9508
.
13
2.
Priority
under
other
provisions
——
multiple
original
14
debtors.
The
other
provisions
of
this
part
determine
the
15
priority
among
conflicting
security
interests
in
the
same
16
collateral
perfected
by
filed
financing
statements
that
are
17
effective
solely
under
section
554.9508
described
in
subsection
18
1
.
However,
if
the
security
agreements
to
which
a
new
debtor
19
became
bound
as
debtor
were
not
entered
into
by
the
same
20
original
debtor,
the
conflicting
security
interests
rank
21
according
to
priority
in
time
of
the
new
debtor’s
having
become
22
bound.
23
Sec.
10.
Section
554.9406,
subsection
5,
Code
2011,
is
24
amended
to
read
as
follows:
25
5.
Inapplicability
of
subsection
4
to
certain
sales.
26
Subsection
4
does
not
apply
to
the
sale
of
a
payment
intangible
27
or
promissory
note
,
other
than
a
sale
pursuant
to
a
disposition
28
under
section
554.9610
or
an
acceptance
of
collateral
under
29
section
554.9620
.
30
Sec.
11.
Section
554.9408,
subsection
2,
Code
2011,
is
31
amended
to
read
as
follows:
32
2.
Applicability
of
subsection
1
to
sales
of
certain
rights
33
to
payment.
Subsection
1
applies
to
a
security
interest
in
34
a
payment
intangible
or
promissory
note
only
if
the
security
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_____
interest
arises
out
of
a
sale
of
the
payment
intangible
or
1
promissory
note
,
other
than
a
sale
pursuant
to
a
disposition
2
under
section
554.9610
or
an
acceptance
of
collateral
under
3
section
554.9620
.
4
Sec.
12.
Section
554.9502,
subsection
3,
paragraph
c,
Code
5
2011,
is
amended
to
read
as
follows:
6
c.
the
record
satisfies
the
requirements
for
a
financing
7
statement
in
this
section
,
other
than
an
indication
but:
8
(1)
the
record
need
not
indicate
that
it
is
to
be
filed
in
9
the
real
property
records;
and
10
(2)
the
record
sufficiently
provides
the
name
of
a
debtor
11
who
is
an
individual
if
it
provides
the
individual
name
of
the
12
debtor
or
the
surname
and
first
personal
name
of
the
debtor,
13
even
if
the
debtor
is
an
individual
to
whom
section
554.9503,
14
subsection
1,
paragraph
“d”
applies;
and
15
Sec.
13.
Section
554.9503,
subsection
1,
paragraphs
a
16
through
d,
Code
2011,
are
amended
to
read
as
follows:
17
a.
except
as
otherwise
provided
in
paragraph
“c”
,
if
the
18
debtor
is
a
registered
organization
or
if
the
collateral
is
19
held
in
a
trust
that
is
a
registered
organization
,
only
if
the
20
financing
statement
provides
the
name
of
the
debtor
indicated
21
that
is
stated
to
be
the
registered
organization’s
name
on
22
the
public
organic
record
of
most
recently
filed
with
or
23
issued
or
enacted
by
the
debtor’s
registered
organization’s
24
jurisdiction
of
organization
which
shows
the
debtor
to
have
25
been
organized
purports
to
state,
amend,
or
restate
the
26
registered
organization’s
name
;
27
b.
subject
to
subsection
6,
if
the
debtor
is
a
decedent’s
28
estate
collateral
is
being
administered
by
the
personal
29
representative
of
a
decedent
,
only
if
the
financing
statement
30
provides
,
as
the
name
of
the
debtor,
the
name
of
the
decedent
31
and
,
in
a
separate
part
of
the
financing
statement,
indicates
32
that
the
debtor
is
an
estate
collateral
is
being
administered
33
by
a
personal
representative
;
34
c.
if
the
debtor
is
a
trust
or
a
trustee
acting
with
respect
35
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_____
to
property
held
in
trust,
only
if
the
financing
statement
1
collateral
is
held
in
a
trust
that
is
not
a
registered
2
organization,
only
if
the
financing
statement
:
3
(1)
provides
as
the
name
specified
for
the
trust
in
its
4
organic
documents
or,
if
no
name
is
specified,
provides
the
5
name
of
the
settlor
and
additional
information
sufficient
to
6
distinguish
the
debtor
from
other
trusts
having
one
or
more
of
7
the
same
settlors;
and
of
the
debtor:
8
(a)
if
the
organic
record
of
the
trust
specifies
a
name
for
9
the
trust,
the
name
specified;
or
10
(b)
if
the
organic
record
of
the
trust
does
not
specify
a
11
name
for
the
trust,
the
name
of
the
settlor
or
testator;
and
12
(2)
indicates,
in
the
debtor’s
name
or
otherwise,
that
13
the
debtor
is
a
trust
or
is
a
trustee
acting
with
respect
to
14
property
held
in
trust;
and
in
a
separate
part
of
the
financing
15
statement:
16
(a)
if
the
name
is
provided
in
accordance
with
subparagraph
17
(1),
subparagraph
division
(a),
indicates
that
the
collateral
18
is
held
in
a
trust;
or
19
(b)
if
the
name
is
provided
in
accordance
with
subparagraph
20
(1),
subparagraph
division
(b),
provides
additional
information
21
sufficient
to
distinguish
the
trust
from
other
trusts
having
22
one
or
more
of
the
same
settlors
or
the
same
testator
and
23
indicates
that
the
collateral
is
held
in
a
trust,
unless
the
24
additional
information
so
indicates;
25
d.
subject
to
subsection
7,
if
the
debtor
is
an
individual
26
to
whom
this
state
has
issued
a
driver’s
license
under
chapter
27
321
that
has
not
expired,
only
if
the
financing
statement
28
provides
the
name
of
the
individual
which
is
indicated
on
the
29
driver’s
license;
30
e.
if
the
debtor
is
an
individual
to
whom
paragraph
“d”
31
does
not
apply,
only
if
the
financing
statement
provides
the
32
individual
name
of
the
debtor
or
the
surname
and
first
personal
33
name
of
the
debtor;
and
34
f.
in
other
cases:
35
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_____
(1)
if
the
debtor
has
a
name,
only
if
it
the
financing
1
statement
provides
the
individual
or
organizational
name
of
the
2
debtor;
and
3
(2)
if
the
debtor
does
not
have
a
name,
only
if
it
provides
4
the
names
of
the
partners,
members,
associates,
or
other
5
persons
comprising
the
debtor
,
in
a
manner
that
each
name
6
provided
would
be
sufficient
if
the
person
named
were
the
7
debtor
.
8
Sec.
14.
Section
554.9503,
subsection
2,
paragraph
b,
Code
9
2011,
is
amended
to
read
as
follows:
10
b.
unless
required
under
subsection
1
,
paragraph
“d”
“f”
,
11
subparagraph
(2),
names
of
partners,
members,
associates,
or
12
other
persons
comprising
the
debtor.
13
Sec.
15.
Section
554.9503,
Code
2011,
is
amended
by
adding
14
the
following
new
subsections:
15
NEW
SUBSECTION
.
6.
Name
of
decedent.
The
name
of
the
16
decedent
indicated
on
the
order
appointing
the
personal
17
representative
of
the
decedent
issued
by
the
court
having
18
jurisdiction
over
the
collateral
is
sufficient
as
the
“name
of
19
the
decedent”
under
subsection
1,
paragraph
“b”
.
20
NEW
SUBSECTION
.
7.
Multiple
driver’s
licenses.
If
this
21
state
has
issued
to
an
individual
more
than
one
driver’s
22
license
under
chapter
321
of
a
kind
described
in
subsection
1,
23
paragraph
“d”
,
the
one
that
was
issued
most
recently
is
the
one
24
to
which
subsection
1,
paragraph
“d”
refers.
25
NEW
SUBSECTION
.
8.
Definition.
In
this
section,
the
“name
26
of
the
settlor
or
testator”
means:
27
a.
if
the
settlor
is
a
registered
organization,
the
name
28
that
is
stated
to
be
the
settlor’s
name
on
the
public
organic
29
record
most
recently
filed
with
or
issued
or
enacted
by
the
30
settlor’s
jurisdiction
of
organization
which
purports
to
state,
31
amend,
or
restate
the
settlor’s
name;
or
32
b.
in
other
cases,
the
name
of
the
settlor
or
testator
33
indicated
in
the
trust’s
organic
record.
34
Sec.
16.
Section
554.9507,
subsection
3,
Code
2011,
is
35
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_____
amended
to
read
as
follows:
1
3.
Change
in
debtor’s
name.
If
a
debtor
so
changes
its
the
2
name
that
a
filed
financing
statement
provides
for
a
debtor
3
becomes
insufficient
as
the
name
of
the
debtor
under
section
4
554.9503,
subsection
1,
so
that
the
financing
statement
becomes
5
seriously
misleading
under
section
554.9506
:
6
a.
the
financing
statement
is
effective
to
perfect
a
7
security
interest
in
collateral
acquired
by
the
debtor
before,
8
or
within
four
months
after,
the
change
filed
financing
9
statement
becomes
seriously
misleading
;
and
10
b.
the
financing
statement
is
not
effective
to
perfect
a
11
security
interest
in
collateral
acquired
by
the
debtor
more
12
than
four
months
after
the
change
filed
financing
statement
13
becomes
seriously
misleading
,
unless
an
amendment
to
the
14
financing
statement
which
renders
the
financing
statement
not
15
seriously
misleading
is
filed
within
four
months
after
the
16
change
the
financing
statement
became
seriously
misleading
.
17
Sec.
17.
Section
554.9515,
subsection
6,
Code
2011,
is
18
amended
to
read
as
follows:
19
6.
Transmitting
utility
financing
statement.
If
a
debtor
is
20
a
transmitting
utility
and
a
filed
initial
financing
statement
21
so
indicates,
the
financing
statement
is
effective
until
a
22
termination
statement
is
filed.
23
Sec.
18.
Section
554.9516,
subsection
2,
paragraph
c,
24
subparagraph
(2),
unnumbered
paragraph
1,
Code
2011,
is
amended
25
to
read
as
follows:
26
in
the
case
of
an
amendment
or
correction
information
27
statement,
the
record:
28
Sec.
19.
Section
554.9516,
subsection
2,
paragraph
c,
29
subparagraph
(3),
Code
2011,
is
amended
to
read
as
follows:
30
(3)
in
the
case
of
an
initial
financing
statement
that
31
provides
the
name
of
a
debtor
identified
as
an
individual
or
32
an
amendment
that
provides
a
name
of
a
debtor
identified
as
an
33
individual
which
was
not
previously
provided
in
the
financing
34
statement
to
which
the
record
relates,
the
record
does
not
35
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_____
identify
the
debtor’s
last
name
surname
;
or
1
Sec.
20.
Section
554.9516,
subsection
2,
paragraph
e,
Code
2
2011,
is
amended
to
read
as
follows:
3
e.
in
the
case
of
an
initial
financing
statement
or
an
4
amendment
that
provides
a
name
of
a
debtor
which
was
not
5
previously
provided
in
the
financing
statement
to
which
the
6
amendment
relates,
the
record
does
not:
7
(1)
provide
a
mailing
address
for
the
debtor;
or
8
(2)
indicate
whether
the
name
provided
as
the
name
of
the
9
debtor
is
the
name
of
an
individual
or
an
organization;
or
10
(3)
if
the
financing
statement
indicates
that
the
debtor
is
11
an
organization,
provide:
12
(a)
a
type
of
organization
for
the
debtor;
13
(b)
a
jurisdiction
of
organization
for
the
debtor;
or
14
(c)
an
organizational
identification
number
for
the
debtor
15
or
indicate
that
the
debtor
has
none;
16
Sec.
21.
Section
554.9518,
Code
2011,
is
amended
to
read
as
17
follows:
18
554.9518
Claim
concerning
inaccurate
or
wrongfully
filed
19
record.
20
1.
Correction
statement
Statement
with
respect
to
record
21
indexed
under
person’s
name
.
A
person
may
file
in
the
filing
22
office
a
correction
an
information
statement
with
respect
to
23
a
record
indexed
there
under
the
person’s
name
if
the
person
24
believes
that
the
record
is
inaccurate
or
was
wrongfully
filed.
25
2.
Sufficiency
Contents
of
correction
statement
under
26
subsection
1
.
A
correction
An
information
statement
under
27
subsection
1
must:
28
a.
identify
the
record
to
which
it
relates
by:
29
(1)
by
the
file
number
assigned
to
the
initial
financing
30
statement
to
which
the
record
relates;
and
31
(2)
if
the
correction
statement
relates
to
a
record
filed
32
or
recorded
in
a
filing
office
described
in
section
554.9501,
33
subsection
1
,
paragraph
“a”
,
the
date
and
time
that
the
initial
34
financing
statement
was
filed
or
recorded
and
the
information
35
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_____
specified
in
section
554.9502,
subsection
2
;
1
b.
indicate
that
it
is
a
correction
an
information
2
statement;
and
3
c.
provide
the
basis
for
the
person’s
belief
that
the
record
4
is
inaccurate
and
indicate
the
manner
in
which
the
person
5
believes
the
record
should
be
amended
to
cure
any
inaccuracy
or
6
provide
the
basis
for
the
person’s
belief
that
the
record
was
7
wrongfully
filed.
8
3.
Statement
by
secured
party
of
record.
A
person
may
file
9
in
the
filing
office
an
information
statement
with
respect
to
a
10
record
filed
there
if
the
person
is
a
secured
party
of
record
11
with
respect
to
the
financing
statement
to
which
the
record
12
relates
and
believes
that
the
person
that
filed
the
record
was
13
not
entitled
to
do
so
under
section
554.9509,
subsection
4.
14
4.
Contents
of
statement
under
subsection
3.
An
information
15
statement
under
subsection
3
must:
16
a.
identify
the
record
to
which
it
relates
by
the
file
17
number
assigned
to
the
initial
financing
statement
to
which
the
18
record
relates;
19
b.
indicate
that
it
is
an
information
statement;
and
20
c.
provide
the
basis
for
the
person’s
belief
that
the
person
21
that
filed
the
record
was
not
entitled
to
do
so
under
section
22
554.9509,
subsection
4.
23
3.
5.
Record
not
affected
by
correction
information
24
statement.
The
filing
of
a
correction
an
information
statement
25
does
not
affect
the
effectiveness
of
an
initial
financing
26
statement
or
other
filed
record.
27
Sec.
22.
Section
554.9607,
subsection
2,
paragraph
b,
28
subparagraph
(1),
Code
2011,
is
amended
to
read
as
follows:
29
(1)
a
default
has
occurred
with
respect
to
the
obligation
30
secured
by
the
mortgage
;
and
31
Sec.
23.
Section
554.9625,
subsection
3,
Code
2011,
is
32
amended
to
read
as
follows:
33
3.
Persons
entitled
to
recover
damages
——
statutory
34
damages
in
consumer-goods
transaction
if
collateral
is
consumer
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_____
goods
.
Except
as
otherwise
provided
in
section
554.9628
:
1
a.
a
person
that,
at
the
time
of
the
failure,
was
a
debtor,
2
was
an
obligor,
or
held
a
security
interest
in
or
other
lien
3
on
the
collateral
may
recover
damages
under
subsection
2
for
4
its
loss;
and
5
b.
if
the
collateral
is
consumer
goods,
a
person
that
was
6
a
debtor
or
a
secondary
obligor
at
the
time
a
secured
party
7
failed
to
comply
with
this
part
may
recover
for
that
failure
8
in
any
event
an
amount
not
less
than
the
credit
service
charge
9
plus
ten
percent
of
the
principal
amount
of
the
obligation
or
10
the
time-price
differential
plus
ten
percent
of
the
cash
price.
11
Sec.
24.
NEW
SECTION
.
554.9801
Effective
date.
The
12
amendments
to
this
Article,
as
enacted
in
this
Act,
take
effect
13
on
July
1,
2013.
14
Sec.
25.
NEW
SECTION
.
554.9802
Savings
clause.
15
1.
Pre-effective-date
transactions
or
liens.
Except
16
as
otherwise
provided
in
this
part,
this
Act
applies
to
a
17
transaction
or
lien
within
its
scope,
even
if
the
transaction
18
or
lien
was
entered
into
or
created
before
July
1,
2013.
19
2.
Pre-effective
date
proceedings.
This
Act
does
not
affect
20
an
action,
case,
or
proceeding
commenced
before
July
1,
2013.
21
Sec.
26.
NEW
SECTION
.
554.9803
Security
interest
perfected
22
before
effective
date.
23
1.
Continuing
perfection:
perfection
requirements
24
satisfied.
A
security
interest
that
is
a
perfected
security
25
interest
immediately
before
July
1,
2013,
is
a
perfected
26
security
interest
under
this
Article,
as
amended
by
this
Act,
27
if
on
July
1,
2013,
the
applicable
requirements
for
attachment
28
and
perfection
under
this
Article,
as
amended
by
this
Act,
are
29
satisfied
without
further
action.
30
2.
Continuing
perfection:
perfection
requirements
not
31
satisfied.
Except
as
otherwise
provided
in
section
554.9805,
32
if
immediately
before
July
1,
2013,
a
security
interest
is
a
33
perfected
security
interest,
but
the
applicable
requirements
34
for
perfection
under
this
Article,
as
amended
by
this
Act,
are
35
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_____
not
satisfied
on
July
1,
2013,
the
security
interest
remains
1
perfected
thereafter
only
if
the
applicable
requirements
for
2
perfection
under
this
Article,
as
amended
by
this
Act,
are
3
satisfied
within
one
year
after
July
1,
2013.
4
Sec.
27.
NEW
SECTION
.
554.9804
Security
interest
5
unperfected
before
effective
date.
6
A
security
interest
that
is
an
unperfected
security
interest
7
immediately
before
July
1,
2013,
becomes
a
perfected
security
8
interest:
9
1.
without
further
action,
on
July
1,
2013,
if
the
10
applicable
requirements
for
perfection
under
this
Article,
as
11
amended
by
this
Act,
are
satisfied
before
or
on
July
1,
2013;
12
or
13
2.
when
the
applicable
requirements
for
perfection
are
14
satisfied
if
the
requirements
are
satisfied
after
July
1,
2013.
15
Sec.
28.
NEW
SECTION
.
554.9805
Effectiveness
of
action
16
taken
before
effective
date.
17
1.
Pre-effective-date
filing
effective.
The
filing
of
18
a
financing
statement
before
July
1,
2013,
is
effective
to
19
perfect
a
security
interest
to
the
extent
the
filing
would
20
satisfy
the
applicable
requirements
for
perfection
under
this
21
Article,
as
amended
by
this
Act.
22
2.
When
pre-effective-date
filing
becomes
ineffective.
This
23
Act
does
not
render
ineffective
an
effective
financing
24
statement
that,
before
July
1,
2013,
is
filed
and
satisfies
25
the
applicable
requirements
for
perfection
under
the
law
of
26
the
jurisdiction
governing
perfection
as
provided
in
this
27
Article,
as
it
existed
before
July
1,
2013.
However,
except
as
28
otherwise
provided
in
subsections
3
and
4
and
section
554.9806,
29
the
financing
statement
ceases
to
be
effective:
30
a.
if
the
financing
statement
is
filed
in
this
state,
at
the
31
time
the
financing
statement
would
have
ceased
to
be
effective
32
had
this
Act
not
taken
effect;
or
33
b.
if
the
financing
statement
is
filed
in
another
34
jurisdiction,
at
the
earlier
of:
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(1)
the
time
the
financing
statement
would
have
ceased
to
be
1
effective
under
the
law
of
that
jurisdiction;
or
2
(2)
June
30,
2018.
3
3.
Continuation
statement.
The
filing
of
a
continuation
4
statement
on
or
after
July
1,
2013,
does
not
continue
the
5
effectiveness
of
a
financing
statement
filed
before
July
1,
6
2013.
However,
upon
the
timely
filing
of
a
continuation
7
statement
on
or
after
July
1,
2013,
and
in
accordance
with
8
the
law
of
the
jurisdiction
governing
perfection
as
provided
9
in
this
Article,
as
amended
by
this
Act,
the
effectiveness
10
of
a
financing
statement
filed
in
the
same
office
in
that
11
jurisdiction
before
July
1,
2013,
continues
for
the
period
12
provided
by
the
law
of
that
jurisdiction.
13
4.
Application
of
subsection
2,
paragraph
“b”,
subparagraph
14
(2)
to
transmitting
utility
financing
statement.
Subsection
15
2,
paragraph
“b”
,
subparagraph
(2)
applies
to
a
financing
16
statement
that,
before
July
1,
2013,
is
filed
against
a
17
transmitting
utility
and
satisfies
the
applicable
requirements
18
for
perfection
under
the
law
of
the
jurisdiction
governing
19
perfection
as
provided
in
this
Article,
as
it
existed
before
20
July
1,
2013,
only
to
the
extent
that
this
Article,
as
amended
21
by
this
Act,
provides
that
the
law
of
a
jurisdiction
other
than
22
the
jurisdiction
in
which
the
financing
statement
is
filed
23
governs
perfection
of
a
security
interest
in
collateral
covered
24
by
the
financing
statement.
25
5.
Application
of
Part
5.
A
financing
statement
that
26
includes
a
financing
statement
filed
before
July
1,
2013,
27
and
a
continuation
statement
filed
on
or
after
July
1,
28
2013,
is
effective
only
to
the
extent
that
the
financing
29
statement
satisfies
the
requirements
of
Part
5,
as
amended
by
30
this
Act,
for
an
initial
financing
statement.
A
financing
31
statement
that
indicates
that
the
debtor
is
a
decedent’s
32
estate
indicates
that
the
collateral
is
being
administered
33
by
a
personal
representative
within
the
meaning
of
section
34
554.9503,
subsection
1,
paragraph
“b”
,
as
amended
by
this
Act.
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A
financing
statement
that
indicates
that
the
debtor
is
a
trust
1
or
is
a
trustee
acting
with
respect
to
property
held
in
trust
2
indicates
that
the
collateral
is
held
in
a
trust
within
the
3
meaning
of
section
554.9503,
subsection
1,
paragraph
“c”
,
as
4
amended
by
this
Act.
5
Sec.
29.
NEW
SECTION
.
554.9806
When
initial
financing
6
statement
suffices
to
continue
effectiveness
of
financing
7
statement.
8
1.
Initial
financing
statement
in
lieu
of
continuation
9
statement.
The
filing
of
an
initial
financing
statement
10
in
the
office
specified
in
section
554.9501
continues
the
11
effectiveness
of
a
financing
statement
filed
before
July
1,
12
2013,
if:
13
a.
the
filing
of
an
initial
financing
statement
in
that
14
office
would
be
effective
to
perfect
a
security
interest
under
15
this
Article,
as
amended
by
this
Act;
16
b.
the
pre-effective-date
financing
statement
was
filed
in
17
an
office
in
another
state;
and
18
c.
the
initial
financing
statement
satisfies
subsection
3.
19
2.
Period
of
continued
effectiveness.
The
filing
of
an
20
initial
financing
statement
under
subsection
1
continues
the
21
effectiveness
of
the
pre-effective-date
financing
statement:
22
a.
if
the
initial
financing
statement
is
filed
before
23
July
1,
2013,
for
the
period
provided
in
section
554.9515,
as
24
it
existed
before
July
1,
2013,
with
respect
to
an
initial
25
financing
statement;
and
26
b.
if
the
initial
financing
statement
is
filed
on
or
after
27
July
1,
2013,
for
the
period
provided
in
section
554.9515,
28
as
amended
by
this
Act,
with
respect
to
an
initial
financing
29
statement.
30
3.
Requirements
for
initial
financing
statement
under
31
subsection
1.
To
be
effective
for
purposes
of
subsection
1,
an
32
initial
financing
statement
must:
33
a.
satisfy
the
requirements
of
Part
5,
as
amended
by
this
34
Act,
for
an
initial
financing
statement;
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b.
identify
the
pre-effective-date
financing
statement
by
1
indicating
the
office
in
which
the
financing
statement
was
2
filed
and
providing
the
dates
of
filing
and
file
numbers,
3
if
any,
of
the
financing
statement
and
of
the
most
recent
4
continuation
statement
filed
with
respect
to
the
financing
5
statement;
and
6
c.
indicate
that
the
pre-effective-date
financing
statement
7
remains
effective.
8
Sec.
30.
NEW
SECTION
.
554.9807
Amendment
of
9
pre-effective-date
financing
statement.
10
1.
“Pre-effective-date
financing
statement”.
In
this
11
section,
“pre-effective-date
financing
statement”
means
a
12
financing
statement
filed
before
July
1,
2013.
13
2.
Applicable
law.
On
or
after
July
1,
2013,
a
person
may
14
add
or
delete
collateral
covered
by,
continue
or
terminate
the
15
effectiveness
of,
or
otherwise
amend
the
information
provided
16
in,
a
pre-effective-date
financing
statement
only
in
accordance
17
with
the
law
of
the
jurisdiction
governing
perfection
as
18
provided
in
this
Article,
as
amended
by
this
Act.
However,
19
the
effectiveness
of
a
pre-effective-date
financing
statement
20
also
may
be
terminated
in
accordance
with
the
law
of
the
21
jurisdiction
in
which
the
financing
statement
is
filed.
22
3.
Method
of
amending:
general
rule.
Except
as
otherwise
23
provided
in
subsection
4,
if
the
law
of
this
state
governs
24
perfection
of
a
security
interest,
the
information
in
a
25
pre-effective-date
financing
statement
may
be
amended
on
or
26
after
July
1,
2013,
only
if:
27
a.
the
pre-effective-date
financing
statement
and
an
28
amendment
are
filed
in
the
office
specified
in
section
29
554.9501;
30
b.
an
amendment
is
filed
in
the
office
specified
in
section
31
554.9501
concurrently
with,
or
after
the
filing
in
that
office
32
of,
an
initial
financing
statement
that
satisfies
section
33
554.9806,
subsection
3;
or
34
c.
an
initial
financing
statement
that
provides
the
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information
as
amended
and
satisfies
section
554.9806,
1
subsection
3,
is
filed
in
the
office
specified
in
section
2
554.9501.
3
4.
Method
of
amending:
continuation.
If
the
law
of
4
this
state
governs
perfection
of
a
security
interest,
the
5
effectiveness
of
a
pre-effective-date
financing
statement
may
6
be
continued
only
under
section
554.9805,
subsections
3
and
5,
7
or
section
554.9806.
8
5.
Method
of
amending:
additional
termination
rule.
Whether
9
or
not
the
law
of
this
state
governs
perfection
of
a
security
10
interest,
the
effectiveness
of
a
pre-effective-date
financing
11
statement
filed
in
this
state
may
be
terminated
on
or
after
12
July
1,
2013,
by
filing
a
termination
statement
in
the
office
13
in
which
the
pre-effective-date
financing
statement
is
filed,
14
unless
an
initial
financing
statement
that
satisfies
section
15
554.9806,
subsection
3,
has
been
filed
in
the
office
specified
16
by
the
law
of
the
jurisdiction
governing
perfection
as
provided
17
in
this
Article,
as
amended
by
this
Act,
as
the
office
in
which
18
to
file
a
financing
statement.
19
Sec.
31.
NEW
SECTION
.
554.9808
Person
entitled
to
file
20
initial
financing
statement
or
continuation
statement.
21
A
person
may
file
an
initial
financing
statement
or
a
22
continuation
statement
under
this
part
if:
23
1.
the
secured
party
of
record
authorizes
the
filing;
and
24
2.
the
filing
is
necessary
under
this
part:
25
a.
to
continue
the
effectiveness
of
a
financing
statement
26
filed
before
July
1,
2013;
or
27
b.
to
perfect
or
continue
the
perfection
of
a
security
28
interest.
29
Sec.
32.
NEW
SECTION
.
554.9809
Priority.
30
This
Act
determines
the
priority
of
conflicting
claims
to
31
collateral.
However,
if
the
relative
priorities
of
the
claims
32
were
established
before
July
1,
2013,
this
Article,
as
it
33
existed
before
July
1,
2013,
determines
priority.
34
Sec.
33.
CODE
EDITOR
DIRECTIVE.
Section
554.9316,
Code
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2011,
is
amended
by
striking
from
the
headnote
the
words
1
“Continued
perfection
of
security
interest
following
change
in
2
governing
law.”
and
inserting
in
lieu
thereof
the
words
“Effect
3
of
change
in
governing
law.”
4
Sec.
34.
REPEAL.
Sections
554.9701
through
554.9710,
Code
5
2011,
are
repealed
effective
July
1,
2017.
6
Sec.
35.
REPEAL.
Sections
554.9801
through
554.9809
are
7
repealed
effective
July
1,
2017.
8
Sec.
36.
GENERAL
SAVINGS
PROVISION.
The
repeals
of
sections
9
554.9701
through
554.9710,
and
sections
554.9801
through
10
554.9809
in
this
Act
are
subject
to
the
application
of
section
11
4.13,
relating
to
general
savings
provisions.
12
Sec.
37.
EFFECTIVE
DATE.
This
Act
takes
effect
July
1,
13
2013.
14
EXPLANATION
15
BACKGROUND.
This
bill
makes
changes
in
Article
9
of
16
the
Uniform
Commercial
Code
(UCC).
Generally,
Article
9
17
regulates
transactions
involving
the
collateralization
of
18
debt
in
personal
property
and
provides
rights
to
competing
19
creditors.
It
allows
a
creditor
to
take
a
lien
(a
security
20
interest)
in
the
collateral
with
the
possibility
of
enforcing
21
the
lien
if
the
debtor
defaults
upon
a
contractual
obligation.
22
The
Article
includes
detailed
requirements
relating
to
the
23
creation
and
perfection
of
the
creditor’s
security
interest
in
24
the
collateral,
and
the
right
to
acquire
priority
over
other
25
creditors
(e.g.,
by
filing
a
financing
statement
with
the
26
secretary
of
state,
possessing
or
controlling
the
property,
or
27
acquiring
some
form
of
automatic
attachment),
and
for
taking
28
legal
action
to
satisfy
the
debt
by
acquiring
the
collateral
or
29
rights
to
property
associated
with
the
contract.
30
BACKGROUND
——
MODEL
ACT.
Iowa’s
version
of
the
UCC
is
31
codified
in
Code
chapter
554
based
on
a
model
Act
drafted
and
32
recommended,
in
association
with
the
American
law
institute,
by
33
the
national
conference
of
commissioners
on
uniform
state
laws
34
(NCCUSL),
also
known
as
the
uniform
law
commission
(ULC),
which
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includes
Iowa
members
appointed
by
the
governor
(Code
chapter
1
5).
In
2000,
the
general
assembly
substantially
amended
2
Article
9
in
conformance
with
the
NCCUSL’s
1998
recommended
3
revisions
(2000
Iowa
Acts,
ch.
1149).
This
bill
provides
for
4
further
revisions
to
the
revised
Article
9
again
as
recommended
5
by
the
NCCUSL.
6
GENERAL
PROVISIONS
——
DEFINITIONS
(CODE
SECTION
554.9102).
7
The
bill
changes
definitional
provisions,
including
terms
8
related
to
records
produced
or
stored
in
an
electronic
format
9
including
the
authentication
of
records
and
certificates
of
10
title.
11
DEFINITIONS
——
AUTHENTICATION.
The
bill
amends
the
12
definition
of
“authenticate”
to
include
attaching
or
logically
13
associating
an
electronic
sound,
symbol,
or
process
with
a
14
record.
15
DEFINITIONS
——
CERTIFICATE
OF
TITLE.
The
law
defines
16
“record”
as
information
inscribed
on
a
tangible
medium
or
17
stored
in
an
electronic
or
other
medium
that
can
be
retrieved
18
in
a
perceivable
form.
The
bill
amends
the
definition
of
19
“certificate
of
title”
to
include
a
record
maintained
as
an
20
alternative
to
a
certificate
of
title
by
the
issuing
government
21
unit.
22
DEFINITIONS
——
PUBLIC
ORGANIC
RECORD.
The
bill
creates
a
23
new
definition
for
a
“public
organic
record”
to
mean
one
of
24
three
items:
(1)
a
record
available
for
public
inspection
that
25
is
initially
filed
with
or
issued
by
a
state
or
the
federal
26
government
to
form
an
organization;
(2)
an
organic
record
of
27
a
business
trust
initially
filed
with
a
state
or
which
amends
28
that
record;
or
(3)
a
record
consisting
of
federal
or
state
29
legislation
that
forms
an
organization.
30
DEFINITIONS
——
REGISTERED
ORGANIZATION.
Under
current
law,
31
a
“registered
organization”
is
formed
solely
under
state
or
32
federal
law
for
which
the
state
or
federal
government
must
33
maintain
a
public
record.
The
bill
provides
that
a
registered
34
organization
is
formed
in
one
of
three
ways:
(1)
by
filing
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a
public
organic
record
under
state
or
federal
law,
(2)
the
1
issuance
of
a
public
organic
record
by
a
state
or
the
federal
2
government,
or
(3)
pursuant
to
state
or
federal
legislation.
3
The
bill
specifies
that
this
expressly
includes
a
business
4
trust
(e.g.,
a
so-called
Massachusetts
business
trust)
formed
5
under
a
state
law
that
requires
public
organic
records
to
be
6
filed
with
the
state
(e.g.,
secretary
of
state).
7
ELECTRONIC
CHATTEL
PAPER
(CODE
SECTION
554.9105).
A
8
chattel
paper
transaction
involves
a
written
agreement
in
9
which
a
seller
or
lessor
transfers
possession
and
control
of
10
property
to
another
while
retaining
a
security
interest
or
11
lease
interest
in
the
property.
The
writing
evidencing
the
12
debt
constitutes
chattel
paper.
Under
current
law,
a
security
13
interest
is
perfected
by
control
of
the
paper,
and
the
UCC
14
sets
forth
a
six-factor
test
to
determine
if
a
secured
party
15
has
control
of
electronic
chattel
paper.
The
bill
retains
the
16
six-factor
test
but
allows
a
secured
party
to
establish
control
17
by
using
a
system
that
reliably
establishes
the
secured
party
18
as
the
person
to
whom
the
chattel
paper
was
assigned.
19
PERFECTION
AND
PRIORITY
——
LOCATION
OF
A
DEBTOR
(CODE
20
SECTION
554.9307).
This
provision
applies
to
either
a
21
registered
organization
formed
under
the
laws
of
the
United
22
States
or
a
branch
or
agency
of
a
bank
that
is
not
organized
23
under
the
law
of
the
United
States
or
a
state.
A
registered
24
organization
can
designate
its
state
of
location
in
a
manner
25
described
in
federal
law.
The
bill
provides
that
when
26
referenced
in
federal
law,
a
registered
organization’s
“main
27
office”
or
“home
office”
means
the
organization’s
location
(for
28
purposes
of
filing
a
financing
statement).
29
PERFECTION
AND
PRIORITY
——
PERFECTION
OF
SECURITY
INTEREST
30
IN
PROPERTY
(CODE
SECTION
554.9311).
The
bill
makes
changes
to
31
conform
with
the
bill’s
revised
definition
of
“certificate
of
32
title”
(See
Code
section
554.9101
as
amended
in
the
bill).
33
PERFECTION
AND
PRIORITY
——
EFFECT
OF
CHANGE
IN
GOVERNING
34
LAW
(CODE
SECTION
554.9316).
The
bill
provides
protection
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for
a
secured
party
whose
security
interest
in
after-acquired
1
property
would
become
unperfected
if
the
debtor
relocated
to
2
another
jurisdiction
(e.g.,
state).
Under
current
law,
by
3
comparison,
a
security
interest
that
attached
to
collateral
4
prior
to
a
debtor’s
move
to
another
jurisdiction
remains
5
perfected
for
four
months
after
the
move.
The
four-month
6
grace
period
is
limited
to
collateral
in
which
the
security
7
party’s
interest
was
perfected
at
the
time
that
the
debtor’s
8
location
changed.
The
bill
adds
the
same
grace
period
for
9
the
after-acquired
property.
It
provides
that
the
security
10
interest
attaches
within
the
four-month
period
if
the
secured
11
party
does
whatever
would
have
been
necessary
to
perfect
the
12
security
interest
in
the
original
jurisdiction.
The
collateral
13
remains
perfected
for
the
four-month
period.
The
secured
party
14
may
continue
perfection
beyond
the
four-month
period
by
filing
15
a
financing
statement
or
otherwise
perfecting
under
the
law
16
of
the
new
jurisdiction.
Similarly,
the
rule
applies
to
a
17
security
interest
in
after-acquired
property
if
a
new
debtor
18
becomes
bound
by
the
original
debtor’s
security
agreement
and
19
the
new
debtor
is
located
in
a
different
jurisdiction
from
the
20
jurisdiction
in
which
the
original
debtor
was
located.
21
PERFECTION
AND
PRIORITY
——
INTERESTS
THAT
TAKE
PRIORITY
OVER
22
OR
TAKE
FREE
OF
SECURITY
INTERESTS
(CODE
SECTION
554.9317).
23
Currently,
a
licensee
of
general
intangible
property
or
a
buyer
24
(other
than
a
secured
party)
takes
free
of
a
security
interest
25
if
the
licensee
or
buyer
gives
value
without
knowledge
of
a
26
security
interest
before
the
security
interest
is
perfected.
27
The
bill
strikes
the
list
of
types
of
property
subject
to
this
28
exclusion
(accounts,
electronic
chattel
paper,
electronic
29
documents,
general
intangibles,
or
investment
property
other
30
than
a
certificated
security)
and
provides
that
the
licensee
31
or
buyer
takes
free
of
an
unperfected
security
in
collateral
32
other
than
tangible
chattel
paper,
tangible
documents,
goods,
33
instruments,
or
a
certificated
security.
34
PERFECTION
AND
PRIORITY
——
PRIORITY
OF
SECURITY
INTERESTS
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CREATED
BY
A
NEW
DEBTOR
(CODE
SECTION
554.9326).
The
current
1
law
provides
for
contests
involving
priority
that
may
arise
2
when
a
new
debtor
becomes
bound
by
a
security
agreement
of
an
3
original
debtor
and
each
debtor
has
a
secured
creditor.
The
4
bill
makes
changes
to
correspond
to
a
change
made
in
the
bill
5
to
Code
section
554.9316.
It
provides
for
the
subordinate
6
position
of
a
secured
party
who
has
a
security
interest
in
the
7
original
debtor’s
collateral
and
who
has
filed
a
financing
8
statement
against
the
new
debtor
in
a
different
jurisdiction,
9
but
the
financing
statement
would
not
otherwise
be
sufficient
10
to
obtain
priority.
11
RIGHTS
OF
THIRD
PARTIES
——
PAYMENT
INTANGIBLES
AND
12
PROMISSORY
NOTES
(CODE
SECTIONS
554.9406
AND
554.9408).
Two
13
similar
provisions
are
affected.
Both
relate
to
a
term
14
restricting
an
assignment
in
an
agreement
between
an
account
15
debtor
and
an
assignor
or
in
a
promissory
note.
16
RIGHTS
OF
THIRD
PARTIES
——
GENERAL
PROVISION
(CODE
17
SECTION
554.9406).
The
first
section
applies
generally
to
18
accounts,
chattel
paper,
payment
intangibles,
and
promissory
19
notes,
by
making
such
a
term
ineffective
(Code
section
20
554.9406).
However,
an
exception
applies
to
the
sale
of
a
21
payment
intangible
or
promissory
note.
Under
the
bill,
this
22
exception
does
not
apply
when
the
sale
is
under
a
disposition
23
of
collateral
after
default
(Code
section
554.9610)
or
on
24
acceptance
of
collateral
in
full
or
partial
satisfaction
of
25
obligation
(Code
section
554.9620).
26
RIGHTS
OF
THIRD
PARTIES
——
SPECIFIC
PROVISION
(CODE
SECTION
27
554.9408).
The
second
section
applies
to
restrict
but
not
28
prohibit
the
assignment
of
a
general
intangible,
health
care
29
insurance
receivable,
or
promissory
note.
Under
current
law,
30
a
qualifying
restriction
applies
to
a
security
interest
in
a
31
payment
intangible
or
promissory
note
only
if
the
security
32
interest
arises
out
of
a
sale
of
the
payment
intangible
or
33
promissory
note.
The
bill
amends
this
qualification,
again
34
to
provide
that
it
does
not
apply
to
a
security
interest
that
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arises
out
of
a
sale
under
a
disposition
of
collateral
after
1
default
or
on
acceptance
of
collateral
in
full
or
partial
2
satisfaction
of
obligation.
3
FILING
——
NAME
OF
DEBTOR
AND
SECURED
PARTY
(CODE
SECTIONS
4
554.9502,
554.9503,
AND
554.9507).
The
current
law
provides
5
when
a
financing
statement
sufficiently
provides
the
correct
6
name
of
a
debtor.
The
bill
provides
that
for
a
registered
7
organization,
the
name
of
the
debtor
is
sufficient
if
it
8
matches
the
name
on
the
public
organic
record
most
recently
9
filed
in
the
jurisdiction
of
organization.
In
addition,
10
the
bill
adopts
the
so-called
model
Act’s
“Alternative
A”,
11
sometimes
known
as
the
“only-if”
rule
which
requires
the
12
financing
statement
to
include
the
name
of
the
debtor
as
it
13
appears
on
the
debtor’s
unexpired
driver’s
license.
In
lieu
of
14
the
driver’s
license
information,
a
variation
of
the
current
15
rule
applies.
Specifically,
the
financing
statement
must
use
16
the
debtor’s
legal
name
or
debtor’s
surname
and
first
personal
17
name.
18
FILING
——
DURATION
AND
EFFECTIVENESS
OF
A
FINANCING
19
STATEMENT
FOR
TRANSMITTING
UTILITIES
(CODE
SECTION
554.9515).
20
Under
current
law,
a
financing
statement
listing
a
transmitting
21
utility
as
a
debtor
does
not
lapse
but
continues
until
the
22
secured
party
files
a
termination
statement.
The
bill
requires
23
that
the
designation
of
a
debtor
as
a
transmitting
utility
must
24
be
made
on
the
initial
financing
statement.
25
FILING
——
WHAT
CONSTITUTES
FILING
——
EFFECTIVENESS
OF
FILING
26
(CODE
SECTION
554.9516).
The
bill
eliminates
a
requirement
27
that
certain
information
about
a
debtor
that
is
an
organization
28
must
be
stated
on
a
financing
statement.
The
secretary
29
of
state
is
not
required
to
reject
a
financing
statement
30
because
it
fails
to
list
type
of
organization,
jurisdiction
of
31
organization,
and
organizational
identification
number.
32
FILING
——
CLAIM
CONCERNING
INACCURATE
OR
WRONGFULLY
FILED
33
RECORD
(CODE
SECTION
554.9518).
Currently,
a
person
may
file
34
a
statement
correcting
an
incorrect
statement
on
record
(a
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so-called
UCC-5
Correction
Statement)
without
legal
effect.
1
The
bill
renames
this
document
as
an
“information
statement”
2
and
provides
that
a
secured
party
may
also
file
such
statement.
3
It
adopts
the
model
Act’s
1998
Alternative
A
version,
by
4
eliminating
a
provision
in
current
law
that
requires
the
5
statement
to
include
the
date
and
time
that
the
initial
6
financing
statement
was
filed
or
recorded.
7
FILING
——
COLLECTION
AND
ENFORCEMENT
OF
A
MORTGAGE
INTEREST
8
OUTSIDE
FORECLOSURE
(CODE
SECTION
554.9607).
Under
current
9
law,
a
secured
party
may
enforce
a
mortgage
(e.g.,
securing
10
a
promissory
note)
pursuant
to
a
nonjudicial
proceeding
11
(foreclosure
sale)
in
part
by
recording
the
security
agreement
12
and
affidavit
in
the
place
where
the
mortgage
is
recorded.
The
13
affidavit
must
include
a
provision
verifying
that
a
default
14
has
occurred.
The
bill
provides
that
the
affidavit
must
15
verify
that
the
default
involved
an
obligation
secured
by
the
16
mortgage.
17
TRANSITION
PROVISIONS
——
GENERAL.
The
bill
provides
for
the
18
scope
and
application
of
its
provisions,
including
by
referring
19
to
its
effective
date
(Code
section
554.9801)
and
including
a
20
general
savings
clause
(Code
section
554.9802).
Generally,
21
the
transition
provisions
detail
the
requirements
of
secured
22
parties
that
acquired
or
perfected
a
security
interest
prior
23
to
the
bill’s
effective
date
(pre-effective-date)
including
by
24
filing
a
pre-effective-date
financing
statement
in
this
state
25
or
another
jurisdiction
(state)
and
specifying
the
necessary
26
requirements
to
comply
with
the
bill’s
provisions
on
and
after
27
its
effective
date.
28
TRANSITION
PROVISIONS
——
SECURITY
INTERESTS.
The
bill
29
provides
that
a
pre-effective-date
security
interest
remains
30
effective
on
and
after
the
bill’s
effective
date,
unless
it
31
fails
to
satisfy
the
bill’s
requirements
with
a
one-year
grace
32
period
provided
(Code
section
554.9803).
A
pre-effective-date
33
unperfected
security
interest
will
become
perfected
upon
34
the
effective
date
if
it
satisfies
the
bill’s
perfection
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requirements.
Otherwise,
it
will
remain
unperfected
until
the
1
bill’s
perfection
requirements
are
satisfied
(Code
section
2
554.9804).
3
TRANSITION
PROVISION
——
EFFECTIVENESS
OF
FINANCING
4
AND
CONTINUATION
STATEMENTS.
The
bill
provides
that
a
5
pre-effective-date
financing
statement
continues
in
effect
6
as
long
as
it
satisfies
the
bill’s
requirements
and
other
7
provisions
applicable
to
such
financing
statements.
It
8
also
provides
that
a
financing
statement
filed
in
another
9
jurisdiction
may
remain
effective
for
as
long
as
it
would
10
remain
effective
in
the
other
jurisdiction
or
June
30,
2018
11
whichever
is
earlier
(Code
section
554.9805).
The
bill
12
provides
that
the
filing
of
an
initial
financing
statement
may
13
continue
the
effectiveness
of
a
pre-effective-date
financing
14
statement
rather
than
a
continuation
statement
that
would
15
otherwise
be
filed
(Code
section
554.9806).
Generally,
a
16
financing
statement
is
effective
for
five
years
or
until
it
17
lapses
(Code
section
554.9515).
The
bill
provides
for
the
18
amendment
or
termination
of
a
pre-effective-date
financing
19
statement
(Code
section
554.9807).
A
person
may
file
an
20
initial
financing
statement
or
a
continuation
statement
to
21
the
extent
authorized
by
the
secured
party
and
the
filing
is
22
necessary
to
comply
with
the
bill’s
transition
provisions
23
(Code
section
554.9808).
The
bill
expressly
states
that
its
24
provisions
govern
relative
priorities
of
conflicting
claims,
25
except
to
the
extent
that
the
priorities
were
established
26
before
the
bill’s
effective
date.
27
HEADNOTE
CHANGE.
The
bill
expressly
amends
a
section’s
28
headnote
to
comply
with
codification
requirements
provided
in
29
Code
section
3.3.
30
REPEAL
OF
TRANSITION
PROVISION.
The
bill
repeals
existing
31
transition
provisions
enacted
in
2000
Iowa
Acts,
chapter
1149,
32
and
transition
provisions
included
in
the
bill.
The
repeals
33
take
effect
July
1,
2017,
when
such
provisions
will
be
out
of
34
date.
The
bill
includes
a
general
savings
clause.
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EFFECTIVE
DATE.
The
bill
takes
effect
July
1,
2013,
in
the
1
same
manner
as
other
states
which
have
adopted
the
model
act.
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