HB-5934, As Passed Senate, December 10, 2008

SENATE SUBSTITUTE FOR

HOUSE BILL NO. 5934

A bill to amend 1962 PA 174, entitled

"Uniform commercial code,"

(MCL 440.1101 to 440.11102) by adding section 9501a.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 9501a. (1) A person identified as a debtor in a financing

statement filed with the secretary of state may file an affidavit

with the secretary of state in the form prescribed under subsection

(2) stating that the financing statement is fraudulent. A person

shall not file an affidavit under this subsection with respect to a

financing statement filed by a regulated financial institution or a

representative of a regulated financial institution.

(2) The secretary of state shall adopt and make available a

form affidavit to be used to give notice of a fraudulent financing

statement under subsection (1).

(3) On receipt of an affidavit under subsection (1), the

secretary of state shall terminate the financing statement

effective on the date the affidavit is filed.

(4) The secretary of state shall not charge a fee to file an

affidavit under this section. The secretary of state shall not

return any filing fee paid for filing the financing statement,

regardless of whether the financing statement is terminated under

this section.

(5) The secretary of state shall send notice of the

termination of a financing statement under subsection (3) to the

filer of the financing statement advising the filer that the

financing statement has been terminated. If the filer of the

financing statement believes in good faith that the statement was

legally filed and is not fraudulent, the filer may file an action

to reinstate the financing statement.

(6) If the court in an action under this section or section

9520(7) determines that the financing statement should be

reinstated or accepted, the court shall provide a copy of its order

to the secretary of state. On receipt of an order reinstating a

financing statement, the secretary of state shall file a record

that identifies by its file number the initial financing statement

to which the record relates and indicates that the financing

statement has been reinstated.

(7) On the filing of a record reinstating a financing

statement under subsection (6), the financing statement is

effective as a filed record from the initial filing date. If a

financing statement that is reinstated would have lapsed during the

period of termination, the secured party may file a continuation

statement within 30 days after the record reinstating the financing

statement is filed. The continuation statement is effective as a

filed record from the date the financing statement would have

lapsed. However, a financing or continuation statement is not

retroactive as provided in this subsection as against a purchaser

of the collateral that gives value in reasonable reliance on the

absence of the record from the files.

(8) If the court in an action under this section determines

that the financing statement is fraudulent, the filer of the

financing statement shall pay the costs and expenses incurred by

the person identified as a debtor in the financing statement in the

action.

(9) An individual who files a materially false or fraudulent

affidavit under subsection (1) is guilty of a felony punishable by

imprisonment for not more than 5 years or a $2,500.00 fine, or

both.

(10) As used in this section, "regulated financial

institution" means a financial institution subject to regulatory

oversight or examination by a state or federal agency. Regulated

financial institution includes a bank, savings bank, savings

association, building and loan association, credit union, consumer

finance company, industrial bank, industrial loan company,

insurance company, investment company, installment seller, mortgage

servicer, sales finance company, or leasing company.

Enacting section 1. This amendatory act takes effect 90 days

after the date it is enacted into law.