SB-1236, As Passed Senate, December 4, 2008

SUBSTITUTE FOR

SENATE BILL NO. 1236

      A bill to amend 1962 PA 174, entitled

"Uniform commercial code,"

by amending sections 9515, 9516, 9520, and 9521 (MCL 440.9515,

440.9516, 440.9520, and 440.9521), as added by 2000 PA 348; and

to repeal acts and parts of acts.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 1        Sec. 9515. (1) Except as otherwise provided in subsections

 2  (2), (5), (6), and (7), a filed financing statement is effective

 3  for a period of 5 years after the date of filing.

 4        (2) Except as otherwise provided in subsections (5), (6),

 5  and (7), an initial financing statement filed in connection with

 6  a manufactured-home transaction is effective for a period of 30

 7  years after the date of filing if it indicates that it is filed

 8  in connection with a manufactured-home transaction.

 1        (3) The effectiveness of a filed financing statement lapses

 2  on the expiration of the period of its effectiveness unless

 3  before the lapse a continuation statement is filed pursuant to

 4  subsection (4). Upon lapse, a financing statement ceases to be

 5  effective and any security interest or agricultural lien that was

 6  perfected by the financing statement becomes unperfected, unless

 7  the security interest is perfected otherwise. If the security

 8  interest or agricultural lien becomes unperfected upon lapse, it

 9  is deemed never to have been perfected as against a purchaser of

10  the collateral for value.

11        (4) A continuation statement may be filed only within 6

12  months before the expiration of the 5-year period specified in

13  subsection (1) or the 30-year period specified in subsection (2),

14  whichever is applicable.

15        (5) Except as otherwise provided in section 9510, upon

16  timely filing of a continuation statement, the effectiveness of

17  the initial financing statement continues for a period of 5 years

18  commencing on the day on which the financing statement would have

19  become ineffective in the absence of the filing. Upon the

20  expiration of the 5-year period, the financing statement lapses

21  in the same manner as provided in subsection (3), unless, before

22  the lapse, another continuation statement is filed pursuant to

23  subsection (4). Succeeding continuation statements may be filed

24  in the same manner to continue the effectiveness of the initial

25  financing statement.

26        (6) If a debtor is an organization identified as a

27  transmitting utility and a filed initial financing statement so

 1  indicates, the financing statement is effective until a

 2  termination statement is filed. A financing statement that is

 3  filed before the effective date of the amendatory act that added

 4  this sentence is effective for a period of 5 years after the date

 5  of filing and shall not be continued under this section if the

 6  financing statement indicates either of the following:

 7        (a) That the debtor is an individual purporting to be a

 8  transmitting utility.

 9        (b) That the debtor is an individual showing his or her name

10  as an organization and purporting to be a transmitting utility.

11        (7) A record of a mortgage that is effective as a financing

12  statement filed as a fixture filing under section 9502(3) remains

13  effective as a financing statement filed as a fixture filing

14  until the mortgage is released or satisfied of record or its

15  effectiveness otherwise terminates as to the real property.

16        Sec. 9516. (1) Except as otherwise provided in subsection

17  (2), communication of a record to a filing office and tender of

18  the filing fee or acceptance of the record by the filing office

19  constitutes filing.

20        (2) Filing does not occur with respect to a record that a

21  filing office refuses to accept because of 1 or more of the

22  following:

23        (a) The record is not communicated by a method or medium of

24  communication authorized by the filing office.

25        (b) An amount equal to or greater than the applicable filing

26  fee is not tendered.

27        (c) The filing office is unable to index the record because

 1  of 1 or more of the following:

 2        (i) In the case of an initial financing statement, the record

 3  does not provide a name for the debtor.

 4        (ii) In the case of an amendment or correction statement, the

 5  record does not identify the initial financing statement as

 6  required by section 9512 or 9518, as applicable, or identifies an

 7  initial financing statement whose effectiveness has lapsed under

 8  section 9515.

 9        (iii) In the case of an initial financing statement that

10  provides the name of a debtor identified as an individual or an

11  amendment that provides a name of a debtor identified as an

12  individual that was not previously provided in the financing

13  statement to which the record relates, the record does not

14  identify the debtor's last name.

15        (iv) In the case of a record filed or recorded in the filing

16  office described in section 9501(1)(a), the record does not

17  provide a sufficient description of the real property to which it

18  relates.

19        (d) In the case of an initial financing statement or an

20  amendment that adds a secured party of record, the record does

21  not provide a name and mailing address for the secured party of

22  record.

23        (e) In the case of an initial financing statement or an

24  amendment that provides a name of a debtor which was not

25  previously provided in the financing statement to which the

26  amendment relates, the record does not provide or indicate 1 or

27  more of the following:

 1        (i) Provide a mailing address for the debtor.

 2        (ii) Indicate whether the debtor is an individual or an

 3  organization.

 4        (iii) If the financing statement indicates that the debtor is

 5  an organization, provide 1 or more of the following:

 6        (A) A type of organization for the debtor.

 7        (B) A jurisdiction of organization for the debtor.

 8        (C) An organizational identification number for the debtor

 9  or indicate that the debtor has none.

10        (f) In the case of an assignment reflected in an initial

11  financing statement under section 9514(1) or an amendment filed

12  under section 9514(2), the record does not provide a name and

13  mailing address for the assignee.

14        (g) In the case of a continuation statement, the record is

15  not filed within the 6-month period prescribed by section

16  9515(4).

17        (3) For purposes of subsection (2), both of the following

18  apply:

19        (a) A record does not provide information if the filing

20  office is unable to read or decipher the information.

21        (b) A record that does not indicate that it is an amendment

22  or identify an initial financing statement to which it relates,

23  as required by section 9512, 9514, or 9518, is an initial

24  financing statement.

25        (4) A record that is communicated to the filing office with

26  tender of the filing fee, but which the filing office refuses to

27  accept for a reason other than one set forth in subsection (2) or

 1  section 9520(5), is effective as a filed record except as against

 2  a purchaser of the collateral which gives value in reasonable

 3  reliance upon the absence of the record from the files.

 4        Sec. 9520. (1) A filing office shall refuse to accept a

 5  record for filing for a reason set forth in section 9516(2) or,

 6  if the filing office is the secretary of state, subsection (5)

 7  and may refuse to accept a record for filing only for a reason

 8  set forth in section 9516(2) or, if the filing office is the

 9  secretary of state, subsection (5).

10        (2) If a filing office refuses to accept a record for

11  filing, it shall communicate to the person that presented the

12  record the fact of and reason for the refusal and the date and

13  time the record would have been filed had the filing office

14  accepted it. The communication must be made at the time and in

15  the manner prescribed by filing-office rule but, in the case of a

16  filing office described in section 9501(1)(b), in no event more

17  than 2 business days after the filing office receives the record.

18        (3) A filed financing statement satisfying section 9502(1)

19  and (2) is effective, even if the filing office is required to

20  refuse to accept it for filing under subsection (1). However,

21  section 9338 applies to a filed financing statement providing

22  information described in section 9516(2)(e) that is incorrect at

23  the time the financing statement is filed.

24        (4) If a record communicated to a filing office provides

25  information that relates to more than 1 debtor, this part applies

26  as to each debtor separately.

27        (5) Notwithstanding any other provision of this act, if a

 1  person presents a record to the secretary of state for filing or

 2  recording, the secretary of state may refuse to accept the record

 3  for filing or recording if 1 or more of the following

 4  circumstances exist:

 5        (a) The record is not required or authorized to be filed or

 6  recorded with the secretary of state.

 7        (b) The record is being filed or recorded for a purpose

 8  outside the scope of this article.

 9        (c) The secretary of state has reasonable cause to believe

10  the record is materially false or fraudulent.

11        (d) The record is intended for an improper purpose, such as

12  to hinder, harass, or otherwise wrongfully interfere with a

13  person. For purposes of this subsection, an improper purpose

14  includes, but is not limited to, asserting a claim against a

15  current or former employee or officer of a federal, state,

16  county, or other local governmental unit that relates to the

17  performance of the officer's or employee's public duties, and for

18  which the filer does not hold a properly executed security

19  agreement or judgment from a court of competent jurisdiction.

20        (e) The record indicates that the debtor and the secured

21  party are substantially the same or that an individual debtor is

22  a transmitting utility.

23        (6) If a correction statement filed with the secretary of

24  state under section 9518 alleges that a previously filed record

25  was wrongfully filed, the secretary of state shall, without undue

26  delay, determine whether the contested record was wrongfully

27  filed. To determine whether the record was wrongfully filed, the

 1  secretary of state may require the person who filed the

 2  correction statement or the secured party to provide any

 3  additional relevant information requested by the secretary of

 4  state, including an original or copy of a security agreement that

 5  is related to the record. If the secretary of state finds that

 6  the record was wrongfully filed, the secretary of state shall

 7  terminate the record and the record is void and ineffective. The

 8  secretary of state shall notify the secured party named in the

 9  contested record of the termination.

10        (7) If the secretary of state refuses to accept a record for

11  filing or recording pursuant to subsection (5), the person who

12  presented the record to the secretary of state may commence an

13  action under section 9501a to require the secretary of state to

14  accept the record for filing or recording. A record ordered by

15  the court to be accepted is effective as a filed record from the

16  initial filing date except as against a purchaser of the

17  collateral which gives value in reasonable reliance on the

18  absence of the record from the files.

19        (8) A filing officer who, acting in a manner that does not

20  subject the filing officer to personal liability under the

21  statutes of this state, improperly refuses to accept a record for

22  filing or recording under subsection (5) is not personally liable

23  for the improper refusal or determination.

24        (9) Subsection (5) does not apply to a financing statement

25  filed by a regulated financial institution or a representative of

26  a regulated financial institution. If a regulated financial

27  institution that is attempting to file a financing statement is

 1  organized under the law of a governmental unit other than this

 2  state, the secretary of state may request the regulated financial

 3  institution or its representative to provide verification of

 4  regulation or licensure in the jurisdiction under whose law the

 5  institution is organized. As used in this subsection, "regulated

 6  financial institution" means that term as defined in section

 7  9501a.

 8        Sec. 9521. (1) A filing office that accepts written records

 9  for filing shall not refuse to accept a written initial financing

10  statement in the following form that conforms to the current

11  format prescribed by the national conference of commissioners on

12  uniform state laws, except for a reason set forth in section

13  9516(2) : or 9520(5).

14	UCC FINANCING STATEMENT
15	FOLLOW INSTRUCTIONS (FRONT AND BACK) CAREFULLY
16	A. NAME AND PHONE OF CONTACT AT FILER [optional]
17	______________________________________________________________
18	B. SEND ACKNOWLEDGMENT TO: (Name and Address)
19	______________________________________THE ABOVE SPACE IS FOR
20	______________________________________FILING OFFICE USE ONLY
21	1. DEBTOR'S EXACT FULL LEGAL NAME – insert only 1 debtor name
22	(1a or 1b) – do not abbreviate or combine names
23	1a. ORGANIZATION'S NAME
24	______________________________________________________________
25	OR 1b. INDIVIDUAL'S LAST NAME  FIRST NAME  MIDDLE NAME  SUFFIX
26	______________________________________________________________
27	1c. MAILING ADDRESS  CITY  STATE  POSTAL CODE  COUNTRY
28	______________________________________________________________
29	1d. TAX ID. NO.   ADD'L INFO. RE   1e. TYPE OF ORGANIZATION

1	SSN OR EIN    ORGANIZATION
2	DEBTOR
3	______________   ______________    ____________________________
4	1f. JURISDICTION OF ORGANIZATION   1g. ORGANIZATIONAL
5	ID. No., if any
6	_______________________________   __________________ [  ] NONE
7	2. ADDITIONAL DEBTOR'S EXACT FULL LEGAL NAME – insert only 1
8	debtor name (2a or 2b) – do not abbreviate or combine names
9	2a. ORGANIZATION'S NAME
10	______________________________________________________________
11	OR 2b. INDIVIDUAL'S LAST NAME  FIRST NAME  MIDDLE NAME   SUFFIX
12	______________________________________________________________
13	2c. MAILING ADDRESS  CITY  STATE  POSTAL CODE  COUNTRY
14	______________________________________________________________
15	2d. TAX ID. NO.   ADD'L INFO. RE   2e. TYPE OF ORGANIZATION
16	SSN OR EIN    ORGANIZATION
17	DEBTOR
18	_____________    ______________    ____________________________
19	2f. JURISDICTION OF ORGANIZATION   2g. ORGANIZATIONAL
20	ID. No., if any
21	_______________________________   __________________ [  ] NONE
22	3. SECURED PARTY'S NAME (or name of total assignee of assignor
23	S/P) – insert only 1 secured party name (3a or 3b)
24	3a. ORGANIZATION'S NAME
25	______________________________________________________________
26	OR 3b. INDIVIDUAL'S LAST NAME  FIRST NAME  MIDDLE NAME   SUFFIX
27	______________________________________________________________
28	3c. MAILING ADDRESS  CITY  STATE  POSTAL CODE  COUNTRY
29	______________________________________________________________
30	4. This FINANCING STATEMENT covers the following collateral:
31	______________________________________________________________
32	5. ALTERNATIVE DESIGNATION [if applicable]:  [ ]  LESSEE/LESSOR
33	[ ] CONSIGNEE/CONSIGNOR [ ] BAILEE/BAILOR [ ]  SELLER/BUYER
34	[ ] AG. LIEN [ ] NON-UCC FILING
35	6. [ ] This FINANCING STATEMENT is to be filed (for record) (or
36	recorded) in the REAL ESTATE RECORDS.
37	Attach Addendum [if applicable]

1	7. Check to REQUEST SEARCH REPORT(S) on Debtor(s)
2	[ ] All Debtors [ ] Debtor 1 [ ] Debtor 2
3	[ADDITIONAL FEE]    [optional]
4	______________________________________________________________
5	8. OPTIONAL FILER REFERENCE DATA
6	______________________________________________________________
7	FILING OFFICE COPY – NATIONAL UCC FILING STATEMENT (FORM UCC 1)
8	(REV. 07/29/98)
9
10	[BACK OF FORM]
11	UCC FINANCING STATEMENT ADDENDUM
12	Follow instructions (front and back) CAREFULLY.
13	9. NAME OF FIRST DEBTOR (1a or 1b) ON RELATED FINANCING STATEMENT
14	______________________________________________________________
15	9a. ORGANIZATION'S NAME
16	______________________________________________________________
17	OR 9b. INDIVIDUAL'S LAST NAME  FIRST NAME  MIDDLE NAME   SUFFIX
18	______________________________________________________________
19	10. MISCELLANEOUS:
20	________________________________________THE ABOVE SPACE IS FOR
21	________________________________________FILING OFFICE USE ONLY
22	11. ADDITIONAL DEBTOR'S EXACT FULL LEGAL NAME – insert only 1
23	name (11a or 11b) – do not abbreviate or combine names
24	11a. ORGANIZATION'S NAME
25	______________________________________________________________
26	OR 11b. INDIVIDUAL'S LAST NAME  FIRST NAME  MIDDLE NAME   SUFFIX
27	______________________________________________________________
28	11c. MAILING ADDRESS  CITY  STATE  POSTAL CODE   COUNTRY
29	______________________________________________________________
30	11d. TAX ID. NO.  ADD'L INFO. RE  11e. TYPE OF ORGANIZATION
31	SSN OR EIN   ORGANIZATION
32	DEBTOR

1	__________   _______________   ___________________________
2	11f. JURISDICTION OF ORGANIZATION  11g. ORGANIZATIONAL
3	ID. No., if any
4	_________________________________   ___________________[ ] NONE
5	12. [ ] ADDITIONAL SECURED PARTY'S or [ ] ASSIGNOR S/P'S NAME -
6	insert only 1 name (12a or 12b).
7	12a. ORGANIZATION'S NAME
8	______________________________________________________________
9	OR 12b. INDIVIDUAL'S LAST NAME  FIRST NAME  MIDDLE NAME   SUFFIX
10	______________________________________________________________
11	12c. MAILING ADDRESS  CITY  STATE  POSTAL CODE   COUNTRY
12	______________________________________________________________
13	13. This FINANCING STATEMENT covers [ ] timber to be cut or
14	[ ] as-extracted collateral, or is filed as a [ ]  fixture
15	filing.
16	14. Description of real estate:
17	______________________________________________________________
18	15. Name and address of a RECORD OWNER of the above-described
19	real estate (if Debtor does not have record interest):
20	______________________________________________________________
21	16. Additional collateral description:
22	______________________________________________________________
23	17. Check only if applicable and check only 1 box:
24	Debtor is a [ ] Trust or [ ] Trustee acting with respect to
25	property held in trust or [ ] Decedent's Estate
26	18. Check only if applicable and check only 1 box:
27	[ ] Debtor is a TRANSMITTING UTILITY
28	[ ] Filed in connection with a Manufactured-Home Transaction
29	- effective 30 years
30	[ ] Filed in connection with a Public-Finance Transaction -
31	effective 30 years
32
33	FILING OFFICE COPY – NATIONAL UCC FILING STATEMENT (FORM UCC 1Ad)

1	(REV. 07/29/98)

 2        (2) A filing office that accepts written records for filing

 3  shall not refuse to accept a written financing statement

 4  amendment in the following form on a form that conforms to the

 5  current format prescribed by the national conference of

 6  commissioners on uniform state laws, except for a reason set

 7  forth in section 9516(2) : or 9520(5).

8	UCC FINANCING STATEMENT AMENDMENT
9	FOLLOW INSTRUCTIONS (FRONT AND BACK) CAREFULLY
10	A.  NAME AND PHONE OF CONTACT AT FILER [optional]
11	______________________________________________________________
12	B.  SEND ACKNOWLEDGMENT TO: (Name and Address)
13	_______________________________________ THE ABOVE SPACE IS FOR
14	_______________________________________ FILING OFFICE USE ONLY
15	1a. INITIAL FINANCING STATEMENT FILE NO.
16	______________________________________________________________
17	1b. [ ] This FINANCING STATEMENT AMENDMENT is to be filed  (for
18	record) (or recorded) in the REAL ESTATE RECORDS.
19	2. [ ] TERMINATION: Effectiveness of the Financing Statement
20	identified above is terminated with respect to security
21	interest(s) of the Secured Party authorizing this Termination
22	Statement.
23	3.  [ ] CONTINUATION: Effectiveness of the Financing Statement
24	identified above with respect to security interest(s) of the
25	Secured Party authorizing this Continuation Statement is con-
26	tinued for the additional period provided by applicable law.
27	4.  [ ] ASSIGNMENT (full or partial): Give name of assignee in
28	item 7a or 7b and address of assignee in item 7c; and also
29	give name of assignor in item 9.
30	______________________________________________________________
31	5.  AMENDMENT (PARTY INFORMATION): This Amendment affects
32	[ ] Debtor or [ ] Secured Party of record.  Check only 1 of
33	these 2 boxes. Also check 1 of the following three boxes and

1	provide appropriate information in items 6 and/or 7.
2	[ ] CHANGE name and/or address: Give current record name in
3	item 6a or 6b; also give new name (if name change) in
4	item 7a or 7b and/or new address (if address change)  in
5	item 7c.
6	[ ] DELETE name: Give record name to be deleted in item 6a
7	or 6b.
8	[ ] ADD name: Complete item 7a or 7b, and also item 7c; also
9	complete items 7d-7g (if applicable).
10	6. CURRENT RECORD INFORMATION:
11	6a. ORGANIZATION'S NAME
12	______________________________________________________________
13	OR 6b. INDIVIDUAL'S LAST NAME  FIRST NAME  MIDDLE NAME   SUFFIX
14	______________________________________________________________
15	7. CHANGED (NEW) OR ADDED INFORMATION:
16	7a. ORGANIZATION'S NAME
17	______________________________________________________________
18	OR 7b. INDIVIDUAL'S LAST NAME  FIRST NAME  MIDDLE NAME   SUFFIX
19	______________________________________________________________
20	7c. MAILING ADDRESS  CITY  STATE  POSTAL CODE  COUNTRY
21	______________________________________________________________
22	7d. TAX ID. NO.  ADD'L INFO. RE  7e. TYPE OF ORGANIZATION
23	SSN OR EIN   ORGANIZATION
24	DEBTOR
25	______________   _______________   ____________________________
26	7f. JURISDICTION OF ORGANIZATION  7g. ORGANIZATIONAL
27	ID. No., if any
28	________________________________  __________________ [  ] NONE
29	8. AMENDMENT (COLLATERAL CHANGE): check only 1 box
30	Describe collateral [ ] deleted or [ ] added, or give
31	entire [ ] restated collateral description, or describe
32	collateral [ ] assigned.
33	______________________________________________________________
34	9. NAME OF SECURED PARTY OF RECORD AUTHORIZING THIS AMENDMENT
35	(name of assignor, if this is an Assignment). If this is an
36	Amendment authorized by a Debtor which adds collateral or

1	adds the authorizing Debtor, or if this is a Termination
2	authorized by a Debtor, check here [ ] and enter name of
3	DEBTOR authorizing this Amendment.
4	9a. ORGANIZATION'S NAME
5	______________________________________________________________
6	OR 9b. INDIVIDUAL'S LAST NAME  FIRST NAME  MIDDLE NAME   SUFFIX
7	______________________________________________________________
8	10. OPTIONAL FILE REFERENCE DATA
9	______________________________________________________________
10
11	FILING OFFICE COPY – NATIONAL UCC FINANCING STATEMENT AMENDMENT
12	(FORM UCC3) (REV. 07/29/98)
13
14	[BACK OF FORM]
15	UCC FINANCING STATEMENT AMENDMENT ADDENDUM
16	FOLLOW INSTRUCTIONS (front and back) CAREFULLY
17	11. INITIAL FINANCING STATEMENT FILE NO. (same as item 1a on
18	Amendment form)
19	______________________________________________________________
20	12. NAME OF PARTY AUTHORIZING THIS AMENDMENT (same as item 9 on
21	Amendment form)
22	12a. ORGANIZATION'S NAME
23	______________________________________________________________
24	OR 12b. INDIVIDUAL'S LAST NAME  FIRST NAME  MIDDLE NAME   SUFFIX
25	______________________________________________________________
26	13. USE THIS SPACE FOR ADDITIONAL INFORMATION
27	____________________________________ THIS SPACE IS FOR
28	____________________________________ FILING OFFICE USE ONLY
29
30	FILING OFFICE COPY – NATIONAL UCC FINANCING STATEMENT AMENDMENT
31	ADDENDUM (FORM UCC3Ad) (REV. 07/29/98)

32        (3) A form that a filing office may not refuse to accept

 1  under subsection (1) or (2) must conform to the format prescribed

 2  for the form by the National Conference of Commissioners.

 3        Enacting section 1. Section 9527 of the uniform commercial

 4  code, 1962 PA 174, MCL 440.9527, is repealed.

 5        Enacting section 2. This amendatory act takes effect 30 days

 6  after the date it is enacted into law.

 7        Enacting section 3. This amendatory act does not take effect

 8  unless House Bill No. 5934 of the 94th Legislature is enacted

 9  into law.