S.F. _____ Section 1. Section 554.9102, subsection 4, Code 2011, is 1 amended by striking the subsection. 2 Sec. 2. Section 554.9302, Code 2011, is amended to read as 3 follows: 4 554.9302 Law governing perfection and priority of 5 agricultural liens. 6 1. While farm products are located in a jurisdiction, 7 the local law of that jurisdiction governs perfection, the 8 effect of perfection or nonperfection, and the priority of an 9 agricultural lien on the farm products. 10 2. Subsection 1 does not apply to buyers of farm products as 11 provided in chapter 554E. 12 Sec. 3. NEW SECTION . 554E.1 Definitions. 13 As used in this chapter, unless the context otherwise 14 requires: 15 1. “Buyer” means a person who, in the ordinary course of 16 business, buys farm products from a person engaged in farming 17 operations who is in the business of selling farm products. A 18 buyer includes a commission merchant and selling agent. 19 2. “Central filing system” means a system for filing 20 effective financing statements, and statements amending, 21 continuing, or terminating effective financing statements as 22 provided in section 554E.4. 23 3. “Commission merchant” means a person engaged in the 24 business of receiving any farm product for sale, on commission, 25 or for or on behalf of another person. 26 4. “Crop year” means the calendar year in which a crop is or 27 will be harvested, animals are born or acquired, or poultry or 28 eggs are or will be sold. 29 5. “Effective financing statement” means a financing 30 statement required to be filed as part of the central filing 31 system as provided in section 554E.6. 32 6. “Knows” means having actual knowledge. “Knowledge” means 33 actual knowledge. 34 7. “Secretary” means the secretary of state. 35 -1- LSB 5583XC (5) 84 da/rj 1/ 10

S.F. _____ 8. “Security interest” means an interest in farm products 1 that secures payment or performance of an obligation in the 2 same manner as provided in chapter 554. 3 9. “Selling agent” means a person, other than a commission 4 merchant, who is engaged in the business of negotiating the 5 sale and purchase of a farm product on behalf of a person 6 engaged in farming operations. 7 10. “Signature” means to sign, execute, or otherwise adopt a 8 symbol, or encrypt or similarly process a record in whole or in 9 part, with the present intent of authenticating for purposes of 10 identifying the person and adopting or accepting a record. 11 Sec. 4. NEW SECTION . 554E.2 Special definitions. 12 To every extent consistent with the application of federal 13 law, unless the context otherwise requires: 14 1. “Agricultural lien” means the same as defined in section 15 554.9102. 16 2. “Debtor” means a debtor as defined in section 554.9102 17 who has an interest other than a security interest or lien in a 18 farm product, or any other person who owns a farm product and 19 subjects it to a security interest whether or not that person 20 owes a debt to the secured party. 21 3. “Farm products” means the same as defined in section 22 554.9102. 23 4. “Farming operation” means the same as defined in section 24 554.9102. 25 5. “Secured party” means a secured party as defined in 26 section 554.9102 in whose favor a security interest in farm 27 products is created. 28 6. “Security interest” means an interest in farm products 29 that secures payment or performance of an obligation in the 30 same manner as provided in chapter 554. 31 Sec. 5. NEW SECTION . 554E.3 Uniform commercial code. 32 This chapter shall be interpreted in conjunction with 33 chapter 554, and terms and phrases used in this chapter shall, 34 to every extent practicable, be interpreted consistently with 35 -2- LSB 5583XC (5) 84 da/rj 2/ 10

S.F. _____ chapter 554, article 9. 1 Sec. 6. NEW SECTION . 554E.4 Central filing system —— 2 establishment and certification. 3 The secretary of state shall establish and administer a 4 central filing system for filing effective financing statements 5 or statements amending, continuing, or terminating effective 6 financing statements on a statewide basis. 7 1. The central filing system shall provide for the 8 electronic filing and examining of effective financing 9 statements, or statements amending, continuing, or terminating 10 effective financing statements. 11 2. The central filing system shall be designed to allow 12 persons to file and examine these documents using the internet. 13 The secretary may provide for the filing and examining of the 14 documents in a paper format. 15 3. The central financing system must comply with the 16 requirements set forth in 7 U.S.C. § 1631 which has been 17 certified by the United States secretary of agriculture prior 18 to implementation. 19 Sec. 7. NEW SECTION . 554E.5 Effective financing statements 20 —— filing requirements. 21 The secretary of state shall provide for filing effective 22 financing statements, and statements amending, continuing, or 23 terminating effective financing statements, as provided in this 24 section. The secretary shall prescribe all forms to be used 25 for filing. Presentation for filing of a statement and the 26 acceptance of the statement by the secretary constitutes filing 27 under this section. 28 1. An effective financing statement shall be valid if it 29 substantially complies with the requirements of this section 30 even though it contains minor errors that are not seriously 31 misleading. 32 2. An effective financing statement must be an original or 33 reproduced copy which is signed by the secured party and the 34 debtor. If filed electronically, the debtor is not required to 35 -3- LSB 5583XC (5) 84 da/rj 3/ 10

S.F. _____ sign the effective financing statement. The statement must be 1 filed with the secretary by the secured party. The secretary 2 shall record the date and hour of the filing of the effective 3 financing statement. The statement must contain information 4 that the secretary requires to comply with 7 U.S.C. § 1631 or 5 to administer this section. 6 3. An effective financing statement must contain all of the 7 following: 8 a. The name and address of the secured party. 9 b. The name and address of the debtor. 10 c. The social security number of the debtor or, in the case 11 of a debtor doing business other than as an individual, the 12 internal revenue service taxpayer identification number of the 13 debtor. 14 d. A description of the farm products subject to the 15 security interest, the county in Iowa where the farm products 16 are produced or will be produced, the crop year unless 17 every crop of the farm product in question for the duration 18 of the effective financing statement is to be subject to 19 the particular security interest, further details of the 20 farm product subject to the security interest if needed to 21 distinguish it from other quantities of the farm product owned 22 by the same person or persons but not subject to the particular 23 security interest, and other information that the secretary 24 requires to administer this section. The effective financing 25 statement may cover more than one farm product located in more 26 than one county. 27 4. A continuation statement shall be signed by the secured 28 party, identify the original effective financing statement by 29 file number, and state that the original financing statement 30 is still effective. 31 Sec. 8. NEW SECTION . 554E.6 Effective financing statements 32 —— effectiveness. 33 The following shall apply to an effective financing 34 statement: 35 -4- LSB 5583XC (5) 84 da/rj 4/ 10

S.F. _____ 1. The effective financing statement shall remain effective 1 for a period of five years from the date of filing, subject to 2 extensions for additional periods of five years each by filing 3 or refiling a continuation statement within six months before 4 the expiration of the five-year period. 5 2. Upon timely filing of a continuation statement, the 6 effectiveness of the original financing statement shall be 7 continued for five years after the last date to which the prior 8 filing was effective, whereupon it shall lapse unless another 9 continuation statement is filed prior to the lapse. Succeeding 10 continuation statements may be filed in the same manner to 11 continue the effectiveness of the original effective financing 12 statement. 13 3. The effective financing statement shall be amended in 14 writing to reflect a material change within three months of the 15 material change. The amendment shall be signed and filed as 16 required for an original effective financing statement. 17 4. The effective financing statement lapses upon the 18 expiration of the effective period of the effective financing 19 statement or is terminated upon the filing of a statement 20 signed by the secured party that the effective financing 21 statement is terminated. 22 a. If the effective financing statement has not lapsed or is 23 not terminated and there are no outstanding secured obligation 24 and no commitment to make advances, incur obligations, or 25 otherwise give value, the debtor may notify the secured party 26 in writing to terminate the effective financing statement. 27 b. Until the debtor instructs the secured party in writing 28 to terminate the effective financing statement, the secured 29 party has no obligation to terminate the effective financing 30 statement. 31 c. Within thirty days after receipt by the secured party 32 of the statement from the debtor to terminate the effective 33 financing statement, the secured party shall file with the 34 secretary a termination statement with respect to the effective 35 -5- LSB 5583XC (5) 84 da/rj 5/ 10

S.F. _____ financing statement. 1 Sec. 9. NEW SECTION . 554E.7 Master list —— organization and 2 contents. 3 The secretary shall compile the effective financing 4 statements into a master list subject to all of the following: 5 1. The master list shall be organized according to farm 6 products. The master list shall contain information required 7 to be contained in effective financing statements filed with 8 the secretary. The secretary shall arrange the master list for 9 each farm product as follows: 10 a. In alphabetical order according to the last name of the 11 individual debtors or, in the case of debtors doing business 12 other than as individuals, the first word in the name of such 13 debtors. 14 b. In numerical order according to the social security 15 numbers of the individual debtors or, in the case of debtors 16 doing business other than as individuals, the internal revenue 17 service taxpayer identification numbers of the debtors. 18 c. Geographically by county. 19 d. By crop year. 20 2. The master list shall include information regarding 21 buyers who register with the secretary on forms prescribed by 22 the secretary as provided in this section. 23 3. The secretary shall maintain a list of all buyers of farm 24 products who register with the secretary. A buyer registering 25 with the secretary shall complete forms requiring all of the 26 following information, as prescribed by the secretary: 27 a. The name and address of the buyer. 28 b. The interest of the buyer in receiving the list. 29 c. The farm products in which the buyer has an interest. 30 Sec. 10. NEW SECTION . 554E.8 Master list —— distribution 31 and inquiries. 32 1. The secretary shall distribute to each registered buyer a 33 copy in written, printed, or electronic form of those portions 34 of the master list relating to farm products in which the buyer 35 -6- LSB 5583XC (5) 84 da/rj 6/ 10

S.F. _____ has registered an interest. The secretary may provide for the 1 distribution of the master list or portions of the list on any 2 other medium requested by a registered buyer. If a registered 3 buyer so requests, the information provided to the buyer may be 4 limited to a county or group of counties where the farm product 5 is produced or to a crop year or crop years or to a combination 6 of those identifiers. 7 2. Distribution is subject to all of the following: 8 a. The distribution shall be by first class or electronic 9 mail. 10 b. The secretary shall, by rule, establish the dates upon 11 which the quarterly distributions will be made, the dates after 12 which a filing of an effective financing statement will not be 13 reflected on the next quarterly distribution of lists, and the 14 dates by which a buyer must complete a registration to receive 15 the next quarterly list. 16 3. The secretary shall remove information pertaining to 17 lapsed and terminated effective financing statements from the 18 master list prior to preparation of the lists required to be 19 distributed. 20 4. Upon written notice to the secretary by a registered 21 buyer requesting termination of the distribution of the 22 list to the registered buyer, the secretary shall terminate 23 distribution of the list to the registered buyer. 24 5. Oral and written inquiries by a buyer not registered 25 pursuant to section 554E.7 may be made to the secretary during 26 hours determined by the secretary. 27 a. The secretary may provide for a computerized system 28 for inquiry and confirmation which may be used in lieu of the 29 inquiry and confirmation system otherwise provided for in this 30 section. 31 b. Written confirmation of the information provided orally 32 in response to the inquiry shall be delivered by first class 33 mail or electronic mail to the buyer, at an address provided 34 by the buyer, by the secretary not later than the second 35 -7- LSB 5583XC (5) 84 da/rj 7/ 10

S.F. _____ regular business day following the day on which the inquiry was 1 received. 2 6. In order to verify the existence or nonexistence of a 3 security interest, a buyer may request a seller to disclose the 4 seller’s social security number or, in the case of a seller 5 doing business other than as an individual, the internal 6 revenue service taxpayer identification number of the seller. 7 Sec. 11. NEW SECTION . 554E.9 Perfection —— creation of 8 superior interests. 9 1. The following shall apply: 10 a. A buyer who is engaged in farming operations and who 11 buys farm products from a seller who is also engaged in farming 12 operations shall take free of a security interest created by 13 the seller, even though the security interest is perfected and 14 the buyer knows of the existence of the security interest. 15 b. Except as provided in this section, a buyer who is 16 not engaged in farming operations and who buys farm products 17 from a seller engaged in farming operations shall take free 18 of a security interest created by the seller, even though the 19 security interest is perfected and the buyer knows of the 20 existence of the security interest. 21 2. As of the date the secretary establishes an electronic 22 central filing system as provided in section 554E.4, the 23 following shall apply: 24 a. If the buyer fails to register with the secretary prior 25 to the purchase of farm products, the buyer takes subject 26 to a security interest in the farm products only if the 27 secured party has filed an effective financing statement that 28 covers the farm products being sold, and the buyer could have 29 discovered the existence of the effective financing statement 30 prior to the purchase by accessing the database containing 31 effective financing statements filed electronically with the 32 secretary. 33 b. If the buyer registers with the secretary prior to the 34 purchase of the farm products, the buyer takes subject to a 35 -8- LSB 5583XC (5) 84 da/rj 8/ 10

S.F. _____ security interest in the farm products only if the secured 1 party has filed an effective financing statement that covers 2 the farm products being sold, and the buyer does not secure a 3 waiver or release of the security interest as specified in the 4 effective financing statement. 5 Sec. 12. NEW SECTION . 554E.10 Fees. 6 The secretary shall establish fees for initially filing 7 effective financing statements, or a statement amending, 8 continuing, or terminating an effective financing statement. 9 The fees shall not be more than provided for filing financing 10 statements as provided in section 554.9525. Notwithstanding 11 section 22.3, the secretary may charge a buyer a fee for 12 registering to receive a master list or for receiving responses 13 to inquiries which are accessed in a printed format. The 14 secretary shall not charge a buyer a fee for registering to 15 receive a master list or for responding to buyer inquiries, 16 including by examining or printing effective financing 17 statements, and statements amending, continuing, or terminating 18 effective financing statements which are accessed in an 19 electronic format. All moneys received by the secretary under 20 this section shall be handled in the same manner as repayment 21 receipts as defined in section 8.2, and shall be used by the 22 secretary exclusively for the administration of this chapter. 23 Sec. 13. DIRECTIONS TO THE SECRETARY OF STATE. 24 Notwithstanding the date that all provisions of this Act 25 become applicable, the secretary of state shall adopt rules 26 necessary to implement this Act. If necessary to obtain 27 federal certification of the central filing system, additional 28 or alternative requirements made in conformity with 7 U.S.C. § 29 1631 may be imposed by the secretary of state by rule. 30 Sec. 14. CONTINGENT APPLICABILITY. The applicability 31 of the requirements of this Act are contingent upon federal 32 certification of a central filing system as provided in 33 this Act pursuant to 7 U.S.C. § 1631. The provisions of 34 this Act shall apply three months after the date of such 35 -9- LSB 5583XC (5) 84 da/rj 9/ 10

S.F. _____ certification. The secretary of state shall provide notice 1 of the applicability date in the Iowa administrative bulletin 2 in three consecutive issues prior to the applicability date. 3 Until that date, persons shall take subject to or free of a 4 security interest in the same manner and according to the same 5 procedures applicable immediately prior to the applicability 6 date. 7 EXPLANATION 8 This bill creates a centralized, statewide filing system 9 for security interests in farm products. The system is 10 administered by the secretary of state, who must provide 11 for filing effective financing statements on a statewide 12 basis. The secretary of state must produce a master list 13 of information required to be contained in the effective 14 financing statements. The bill provides requirements for the 15 contents and duration of an effective financing statement. 16 The bill provides for the distribution of information by the 17 secretary of state regarding effective financing statements 18 to interested persons by sending the information to buyers 19 registered with the secretary of state. The bill provides that 20 the secretary of state must establish an electronic system for 21 filing and accessing effective financing statements and related 22 statements. 23 The bill authorizes the secretary of state to establish 24 fees for filing effective financing statements. The bill 25 authorizes the secretary of state to establish fees for 26 distributing printed versions of the master list and responding 27 to inquiries. 28 The bill provides special contingency and applicability 29 provisions. The secretary of state is required to establish 30 the centralized filing system and obtain federal certification. 31 Once the system is certified, the bill’s provisions become 32 applicable three months after that date. Until that date the 33 current version of the direct notice procedures will continue 34 to apply. 35 -10- LSB 5583XC (5) 84 da/rj 10/ 10