House Introduced Bill 5644

HOUSE BILL No. 5644

March 10, 1998, Introduced by Reps. Baird and Richner and referred to the Committee on Commerce.

A bill to amend 1962 PA 174, entitled

"Uniform commercial code,"

by amending sections 1105, 9203, and 9402 (MCL 440.1105,

440.9203, and 440.9402), section 1105 as amended by 1992 PA 101,

section 9203 as amended by 1987 PA 16, and section 9402 as

amended by 1989 PA 216; and to repeal acts and parts of acts.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

1 Sec. 1105. (1) Except as provided hereafter in this sec-

2 tion, when IF a transaction bears a reasonable relation to this

3 state and also to another state or nation the parties may agree

4 that the law either of this state or of such THE other state or

5 nation shall govern their rights and duties. Failing such

6 agreement this act applies to transactions bearing an appropriate

7 relation to this state.

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1 (2) Where IF 1 of the following provisions of this act

2 specifies the applicable law, that provision governs and a

3 contrary agreement is effective only to the extent permitted by

4 the law (including the conflict of laws rules) so specified:

6 Rights of creditors against sold goods. Section 2402.

7 Applicability of the article on bank deposits and

8 collections. Section 4102.

9 Governing law in the article on funds transfers. Section 4A502.

10 Bulk transfers subject to the article on bulk

11 transfers. Section 6102.

12 Applicability of the article on investment

13 securities. Section 8106.

14 Applicability of the article on leases. Sections 2A105 and 2A106.

15 Perfection provisions of the article on secured

16 transactions. Section 9103.

17 Sec. 9203. (1) Subject to the provisions of section 4208

18 on the security interest of a collecting bank, section 8321 on

19 security interests in securities, and section 9113 on a security

20 interest arising under the article on sales, a security interest

21 is not enforceable against the debtor or third parties with

22 respect to the collateral and does not attach unless ALL OF THE

23 FOLLOWING ARE TRUE:

24 (a) The collateral is in the possession of the secured party

25 pursuant to agreement, or the debtor has signed a security agree-

26 ment which THAT contains a description of the collateral and in

27 addition, when the security interest covers crops growing or to

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1 be grown or timber to be cut, a description of the land

2 concerned. ; and

3 (b) Value has been given. ; and

4 (c) The debtor has rights in the collateral.

5 (2) A security interest attaches when it becomes enforceable

6 against the debtor with respect to the collateral. Attachment

7 occurs as soon as all of the events specified in subsection (1)

8 have taken place unless explicit agreement postpones the time of

9 attaching.

10 (3) Unless otherwise agreed a security agreement gives the

11 secured party the rights to proceeds provided by section 9306.

12 (4) A transaction, although subject to this article, is also

13 subject to Act No. 21 of the Public Acts of 1939, as amended,

14 being sections 493.1 to 493.26 of the Michigan Compiled Laws, Act

15 No. 305 of the Public Acts of 1939, as amended, being sections

16 566.301 and 566.302 of the Michigan Compiled Laws, and Act No. 27

17 of the Public Acts of the Extra Session of 1950, as amended,

18 being sections 492.101 to 492.141 of the Michigan Compiled Laws,

19 and in the case of THE REGULATORY LOAN ACT OF 1963, 1939 PA 21,

20 MCL 493.1 TO 493.26, 1939 PA 305, MCL 566.301 TO 566.302, AND THE

21 MOTOR VEHICLE SALES FINANCE ACT, 1950 (EX SESS) PA 27, MCL

22 492.101 TO 492.141, IF A conflict ARISES between the provisions

23 of this article and any such ANOTHER statute, the provisions

24 of such OTHER statute control CONTROLS. Failure to comply

25 with any applicable statute has only the effect which THAT is

26 specified therein IN THAT STATUTE.

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1 Sec. 9402. (1) A financing statement is sufficient if it

2 gives the names of the debtor and the secured party, in printed

3 or typewritten form, is signed by the debtor, gives an address of

4 the secured party from which information concerning the security

5 interest may be obtained, gives a mailing address of the debtor,

6 and contains a statement indicating the types or describing the

7 items of collateral. A financing statement may be filed before a

8 security agreement is made or a security interest otherwise

9 attaches. If the financing statement covers crops growing or to

10 be grown, the statement shall also contain a description of the

11 real estate concerned, and the description shall reasonably iden-

12 tify the real estate, as provided in section 9110. If the

13 financing statement covers timber to be cut, covers minerals or

14 the like SIMILAR SUBSTANCES, including oil and gas, or accounts

15 subject to section 9103(5), or if the financing statement is

16 filed as a fixture filing under section 9313 and the collateral

17 is goods which THAT are or are to become fixtures, the state-

18 ment shall also comply with subsection (5). A copy of the secur-

19 ity agreement is sufficient as a financing statement if it con-

20 tains the above information and is signed by the debtor. A legi-

21 ble carbon, photographic, or other reproduction of a security

22 agreement or a financing statement is sufficient as a financing

23 statement if the security agreement so provides or if the origi-

24 nal has been filed in this state.

25 (2) A financing statement which THAT otherwise complies

26 with subsection (1) is sufficient when IF it is signed by the

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1 secured party instead of the debtor if it is filed to perfect a

2 security interest in any of the following:

3 (a) Collateral already subject to a security interest in

4 another jurisdiction when it is brought into this state, or when

5 the debtor's location is changed to this state. The financing

6 statement shall state that the collateral was brought into this

7 state or that the debtor's location was changed to this state

8 under those circumstances.

9 (b) Proceeds under section 9306 if the security interest in

10 the original collateral was perfected. The financing statement

11 shall describe the original collateral.

12 (c) Collateral as to which the filing has lapsed.

13 (d) Collateral acquired after a change of name, identity, or

14 corporate structure of the debtor as provided in subsection (7).

15 (3) A form substantially as follows is sufficient to comply

16 with subsection (1):

17 (PRINT OR TYPE)

18 Name of debtor (or assignor).....................................

19 Address..........................................................

20 Name of secured party (or assignee)..............................

21 Social security number or federal employer tax identification number

22 of debtor (when required)........................................

23 Address..........................................................

24 1. This financing statement covers the following types or items

25 of property:

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1 (Describe)....................................................

2 2. (If applicable check box below)

3 a. The goods are to become fixtures on []

4 b. The above described timber is standing on []

5 c. The above described minerals or the like (including

6 oil and gas) are to be extracted from the wellhead

7 or minehead of the well or mine located on []

8 d. The above described accounts include accounts

9 resulting from the sale of minerals or the like

10 (including oil and gas) to be extracted from the

11 wellhead or minehead of the well or mine located on []

12 (Describe real estate)...........................................

13 If 1 of the above boxes is checked, this financing statement is to be

14 recorded in the real estate records. If the debtor does not have an

15 interest of record, the name of the record owner is..............

16 3. (If products of collateral are claimed) Products of the col-

17 lateral are also covered.

18 (Use whichever is applicable)

19 Signature of debtor (or assignor)................................

20 Signature of secured party (or assignee).........................

21 (4) A financing statement may be amended by filing a writing

22 signed by both the debtor and the secured party which THAT

23 identifies the original filing by file number and, if applicable,

24 by liber and page. An amendment also may, but is not required

25 to, include the debtor's tax identification number. An amendment

26 does not extend the period of effectiveness of a financing

27 statement. If any amendment adds collateral, it is effective as

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1 to the added collateral only from the filing date of the

2 amendment. As used in this article, unless the context otherwise

3 requires, "financing statement" means the original financing

4 statement and any amendments.

5 (5) A financing statement covering timber to be cut, cover-

6 ing minerals or the like SIMILAR SUBSTANCES, including oil and

7 gas, or accounts subject to section 9103(5), or a financing

8 statement filed as a fixture filing under section 9313 if the

9 debtor is not a transmitting utility, shall show that it covers

10 this type of collateral, recite that it is to be recorded in the

11 real estate records, and contain a description of the real estate

12 sufficient if it were contained in a mortgage of the real estate

13 to give constructive notice of the mortgage under the law of this

14 state. If the debtor does not have an interest of record in the

15 real estate, the financing statement shall show the name of a

16 record owner.

17 (6) A mortgage is effective as a financing statement filed

18 as a fixture filing from the date of its recording if all of the

19 following apply:

20 (a) The goods are described in the mortgage by item or

21 type.

22 (b) The goods are or are to become fixtures related to the

23 real estate described in the mortgage.

24 (c) The mortgage complies with the requirements for a

25 financing statement in this section other than a recital that it

26 is to be recorded in the real estate records.

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1 (d) The mortgage is duly recorded. Other than the regular

2 recording and satisfaction fees for the mortgage, a fee for the

3 financing statement is not required.

4 (7) A financing statement sufficiently shows the name of the

5 debtor if it includes the individual, partnership, or corporate

6 name of the debtor, whether or not it adds other trade names or

7 the names of partners. If the debtor changes his or her name, or

8 in the case of an organization, its name, identity, or corporate

9 structure, so that a filed financing statement becomes seriously

10 misleading, the filing is not effective to perfect a security

11 interest in collateral acquired by the debtor more than 4 months

12 after the debtor notifies the secured party in writing of the

13 change, unless a new appropriate financing statement is filed

14 before the expiration of that time. A filed financing statement

15 remains effective for collateral transferred by the debtor even

16 though the secured party knows of or consents to the transfer.

17 (8) A financing statement substantially complying with the

18 requirements of this section is effective even though it contains

19 minor errors which THAT are not seriously misleading.

20 (9) Any financing statement, indicating that it is to be

21 recorded in the real estate records, as provided in subsections

22 (3) and (5), and any continuation statement, termination state-

23 ment, amendment, or assignment relating to the statement and

24 meeting the formal requisites of this section, section 9404, and

25 section 9405, shall be recorded by the register of deeds of the

26 county in which the real property described in the financing

27 statement is located, notwithstanding the provisions for

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1 witnessing and acknowledging instruments to be recorded in the

2 real property records contained in section 47 of chapter 65 of

3 the Revised Statutes of 1846, being section 565.47 of the

4 Michigan Compiled Laws 1846 RS 65, MCL 565.47.

5 (10) Each register of deeds shall certify on every financing

6 statement indicating that it is to be recorded in the real estate

7 records, as provided in subsections (3) and (5), and any continu-

8 ation statement, termination statement, amendment, or assignment

9 relating to the statement and meeting the formal requisites of

10 this section, section 9404, and section 9405, the date and time

11 when it was received for record, and a reference to the liber and

12 page where it is recorded.

13 (11) Each register of deeds shall enter any financing state-

14 ment indicating that it is to be recorded in the real estate

15 records, as provided in subsections (3) and (5), and any continu-

16 ation statement, termination statement, amendment, or assignment

17 relating to the statement and meeting the formal requisites of

18 this section, section 9404, and section 9405, in an entry book

19 where a real estate mortgage would be entered, noting in the

20 entry book the day, hour, and minute of reception, and other par-

21 ticulars in the order in which the financing statements, continu-

22 ation statements, termination statements, amendments, and assign-

23 ments are respectively received, and each instrument shall be

24 considered recorded at the time so noted.

25 (12) Each register of deeds shall index each financing

26 statement, continuation statement, termination statement,

27 amendment, or assignment, recorded under subsection (11), in a

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1 book or card index under the name of the debtor, and, if

2 applicable, under the name of the record owner of the real

3 estate, in the same manner as recordings of real estate mortgages

4 are indexed.

5 (13) Beginning April 1, 1990 all original filings of a

6 security agreement or a financing statement tendered to the sec-

7 retary of state shall contain the tax identification number of

8 each debtor except for the following:

9 (a) A reproduction of a security agreement or of a financing

10 statement filed under the last sentence of subsection (1) if the

11 security agreement was entered into or the financing statement

12 was filed before April 1, 1990.

13 (b) A financing statement filed under subsection (2).

14 (c) A financing statement which THAT is accompanied by a

15 certificate prescribed by the secretary of state and is signed by

16 the debtor stating that the debtor does not have a tax identifi-

17 cation number.

18 (14) If an original filing of a security agreement or a

19 financing statement fails to contain the tax identification

20 number of each debtor and is not exempted under subsection (13),

21 the secretary of state shall not accept it for filing and shall

22 return it to the secured party or other person who submitted it.

23 If the records of the secretary of state indicate that a debtor's

24 tax identification number contained on a financing statement

25 received for filing is or may be incorrect, the secretary of

26 state shall nevertheless accept and file the financing

27 statement. The secretary of state may request the secured party

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1 or other person who submitted the financing statement to file an

2 amendment to the statement giving the debtor's correct tax iden-

3 tification number. The signature of the debtor shall not be

4 required on an amendment which THAT changes only the debtor's

5 tax identification number.

6 (15) Notwithstanding subsections (13) and (14), if the sec-

7 retary of state files a financing statement that does not con-

8 tain, or that incorrectly states, the debtor's tax identification

9 number and if the financing statement otherwise complies with

10 applicable requirements, the financing statement shall be consid-

11 ered sufficient, valid, and effective.

12 (16) The secretary of state shall adopt and utilize computer

13 assisted search procedures to enable the secretary of state to

14 provide information to a person making a request under

15 section 9407(2). The secretary of state shall provide the infor-

16 mation requested by a person under section 9407(2) as accurate

17 and complete as the information the person would have received if

18 the same request had been processed under the search procedures

19 followed by the secretary of state immediately before the imple-

20 mentation of computer assisted searches.

21 Enacting section 1. Article 6 and section 9111 of the uni-

22 form commercial code, 1962 PA 174, MCL 440.6101 to 440.6111 and

23 440.9111, are repealed.

24 Enacting section 2. Rights and obligations that arose under

25 article 6 before article 6 was repealed remain valid and may be

26 enforced as if article 6 had not been repealed.

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