HB-5083, As Passed House, January 25, 2012
SUBSTITUTE FOR
HOUSE BILL NO. 5083
A bill to amend 1962 PA 174, entitled
"Uniform commercial code,"
by amending sections 9105, 9307, 9311, 9316, 9326, 9406, 9408,
9502, 9503, 9507, 9515, 9516, 9518, 9521, and 9607 (MCL 440.9105,
440.9307, 440.9311, 440.9316, 440.9326, 440.9406, 440.9408,
440.9502, 440.9503, 440.9507, 440.9515, 440.9516, 440.9518,
440.9521, and 440.9607), sections 9105, 9307, 9316, 9406, 9408,
9502, 9503, and 9507 as amended and sections 9326, 9518, and 9607
as added by 2000 PA 348, section 9311 as amended by 2005 PA 25, and
sections 9515, 9516, and 9521 as amended by 2008 PA 383, and by
adding part 8 to article 9; and to repeal acts and parts of acts.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 9105. (1) A secured party has control of electronic
chattel paper if a system employed for evidencing the transfer of
interests in the chattel paper reliably establishes the secured
party as the person to which the chattel paper was assigned.
(2) A system satisfies subsection (1) if the record or records
comprising the chattel paper are created, stored, and assigned in
such a manner that all of the following apply:
(a) A single authoritative copy of the record or records
exists which is unique, identifiable, and, except as otherwise
provided in subdivisions (d), (e), and (f), unalterable.
(b) The authoritative copy identifies the secured party as the
assignee of the record or records.
(c) The authoritative copy is communicated to and maintained
by the secured party or its designated custodian.
(d)
Copies or revisions amendments
that add or change an
identified assignee of the authoritative copy can be made only with
the
participation consent of the secured party.
(e) Each copy of the authoritative copy and any copy of a copy
is readily identifiable as a copy that is not the authoritative
copy.
(f)
Any revision amendment of the authoritative copy is
readily
identifiable as an authorized or unauthorized. revision.
Sec. 9307. (1) As used in this section, "place of business"
means a place where a debtor conducts its affairs.
(2) Except as otherwise provided in this section, the
following rules determine a debtor's location:
(a) A debtor who is an individual is located at the
individual's principal residence.
(b) A debtor that is an organization and has only 1 place of
business is located at its place of business.
(c) A debtor that is an organization and has more than 1 place
of business is located at its chief executive office.
(3) Subsection (2) applies only if a debtor's residence, place
of business, or chief executive office, as applicable, is located
in a jurisdiction whose law generally requires information
concerning the existence of a nonpossessory security interest to be
made generally available in a filing, recording, or registration
system as a condition or result of the security interest's
obtaining priority over the rights of a lien creditor with respect
to the collateral. If subsection (2) does not apply, the debtor is
located in the District of Columbia.
(4) A person that ceases to exist, have a residence, or have a
place of business continues to be located in the jurisdiction
specified by subsections (2) and (3).
(5) A registered organization that is organized under the law
of a state is located in that state.
(6) Except as otherwise provided in subsection (9), a
registered organization that is organized under the law of the
United States and a branch or agency of a bank that is not
organized under the law of the United States or a state are located
in 1 of the following:
(a) In the state that the law of the United States designates,
if the law designates a state of location.
(b) In the state that the registered organization, branch, or
agency designates, if the law of the United States authorizes the
registered organization, branch, or agency to designate its state
of location, including by designating its main office, home office,
or other comparable office.
(c) In the District of Columbia, if neither subdivision (a)
nor (b) applies.
(7) A registered organization continues to be located in the
jurisdiction specified by subsection (5) or (6) notwithstanding the
occurrence of 1 of the following:
(a) The suspension, revocation, forfeiture, or lapse of the
registered organization's status as such in its jurisdiction of
organization.
(b) The dissolution, winding up, or cancellation of the
existence of the registered organization.
(8) The United States is located in the District of Columbia.
(9) A branch or agency of a bank that is not organized under
the law of the United States or a state is located in the state in
which the branch or agency is licensed, if all branches and
agencies of the bank are licensed in only 1 state.
(10) A foreign air carrier is located at the designated office
of the agent upon which service of process may be made on behalf of
the carrier under section 46103 of title 49 of the United States
Code,
49 U.S.C.USC 46103.
(11) This section applies only for purposes of this part.
Sec. 9311. (1) Except as otherwise provided in subsection (4),
the filing of a financing statement is not necessary or effective
to perfect a security interest in property subject to 1 or more of
the following:
(a) A statute, regulation, or treaty of the United States
whose requirements for a security interest's obtaining priority
over the rights of a lien creditor with respect to the property
preempt section 9310(1).
(b) The following statutes of this state:
(i) Chapter II of the Michigan vehicle code, 1949 PA 300, MCL
257.201 to 257.259.
(ii) Part 803 of the natural resources and environmental
protection act, 1994 PA 451, MCL 324.80301 to 324.80322.
(iii) Part 811 of the natural resources and environmental
protection act, 1994 PA 451, MCL 324.81101 to 324.81150.
(iv) Sections 30 through 30i of the mobile home commission act,
1987 PA 96, MCL 125.2330 to 125.2330i.
(c)
A certificate-of-title statute of another jurisdiction
that
provides for a security interest to be indicated on the a
certificate of title as a condition or result of the security
interest's obtaining priority over the rights of a lien creditor
with respect to the property.
(2) Compliance with the requirements of a statute, regulation,
or treaty described in subsection (1) for obtaining priority over
the rights of a lien creditor is equivalent to the filing of a
financing statement under this article. Except as otherwise
provided in subsection (4) and sections 9313 and 9316(4) and (5)
for goods covered by a certificate of title, a security interest in
property subject to a statute, regulation, or treaty described in
subsection (1) may be perfected only by compliance with those
requirements, and a security interest so perfected remains
perfected notwithstanding a change in the use or transfer of
possession of the collateral.
(3) Except as otherwise provided in subsection (4) and section
9316(4) and (5), duration and renewal of perfection of a security
interest perfected by compliance with the requirements prescribed
by a statute, regulation, or treaty described in subsection (1) are
governed by the statute, regulation, or treaty. In other respects,
the security interest is subject to this article.
(4) During any period in which collateral subject to a statute
specified in subsection (1)(b) is inventory held for sale or lease
by a person or leased by that person as lessor and that person is
in the business of selling goods of that kind, this section does
not apply to a security interest in that collateral created by that
person.
Sec. 9316. (1) A security interest perfected pursuant to the
law of the jurisdiction designated in section 9301(a) or 9305(3)
remains perfected until the earliest of the following:
(a) The time perfection would have ceased under the law of
that jurisdiction.
(b) The expiration of 4 months after a change of the debtor's
location to another jurisdiction.
(c) The expiration of 1 year after a transfer of collateral to
a person that thereby becomes a debtor and is located in another
jurisdiction.
(2) If a security interest described in subsection (1) becomes
perfected under the law of the other jurisdiction before the
earliest time or event described in that subsection, it remains
perfected thereafter. If the security interest does not become
perfected under the law of the other jurisdiction before the
earliest time or event, it becomes unperfected and is deemed never
to have been perfected as against a purchaser of the collateral for
value.
(3) A possessory security interest in collateral, other than
goods covered by a certificate of title and as-extracted collateral
consisting of goods, remains continuously perfected if all of the
following are met:
(a) The collateral is located in 1 jurisdiction and subject to
a security interest perfected under the law of that jurisdiction.
(b) Thereafter, the collateral is brought into another
jurisdiction.
(c) Upon entry of the collateral into the other jurisdiction,
the security interest is perfected under the law of the other
jurisdiction.
(4) Except as otherwise provided in subsection (5), a security
interest in goods covered by a certificate of title that is
perfected by any method under the law of another jurisdiction when
the goods become covered by a certificate of title from this state
remains perfected until the security interest would have become
unperfected under the law of the other jurisdiction had the goods
not become so covered.
(5) A security interest described in subsection (4) becomes
unperfected as against a purchaser of the goods for value and is
deemed never to have been perfected as against a purchaser of the
goods for value if the applicable requirements for perfection under
section 9311(2) or 9313 are not satisfied before the earlier of the
following:
(a) The time the security interest would have become
unperfected under the law of the other jurisdiction had the goods
not become covered by a certificate of title from this state.
(b) The expiration of 4 months after the goods had become so
covered.
(6) A security interest in deposit accounts, letter-of-credit
rights, or investment property that is perfected under the law of
the bank's jurisdiction, the issuer's jurisdiction, a nominated
person's jurisdiction, the securities intermediary's jurisdiction,
or the commodity intermediary's jurisdiction, as applicable,
remains perfected until the earlier of the following:
(a) The time the security interest would have become
unperfected under the law of that jurisdiction.
(b) The expiration of 4 months after a change of the
applicable jurisdiction to another jurisdiction.
(7) If a security interest described in subsection (6) becomes
perfected under the law of the other jurisdiction before the
earlier of the time or the end of the period described in that
subsection, it remains perfected thereafter. If the security
interest does not become perfected under the law of the other
jurisdiction before the earlier of that time or the end of that
period, it becomes unperfected and is deemed never to have been
perfected as against a purchaser of the collateral for value.
(8) The following rules apply to collateral to which a
security interest attaches within 4 months after the debtor changes
its location to another jurisdiction:
(a) A financing statement filed before the change pursuant to
the law of the jurisdiction designated in section 9301(a) or
9305(3) is effective to perfect a security interest in the
collateral if the financing statement would have been effective to
perfect a security interest in the collateral had the debtor not
changed its location.
(b) If a security interest perfected by a financing statement
that is effective under subdivision (a) becomes perfected under the
law of the other jurisdiction before the earlier of the time the
financing statement would have become ineffective under the law of
the jurisdiction designated in section 9301(a) or 9305(3) or the
expiration of the 4‑month period, it remains perfected thereafter.
If the security interest does not become perfected under the law of
the other jurisdiction before the earlier time or event, it becomes
unperfected and is deemed never to have been perfected as against a
purchaser of the collateral for value.
(9) If a financing statement naming an original debtor is
filed pursuant to the law of the jurisdiction designated in section
9301(a) or 9305(3) and the new debtor is located in another
jurisdiction, the following rules apply:
(a) The financing statement is effective to perfect a security
interest in collateral acquired by the new debtor before, and
within 4 months after, the new debtor becomes bound under section
9203(4), if the financing statement would have been effective to
perfect a security interest in the collateral had the collateral
been acquired by the original debtor.
(b) A security interest perfected by the financing statement
and which becomes perfected under the law of the other jurisdiction
before the earlier of the time the financing statement would have
become ineffective under the law of the jurisdiction designated in
section 9301(a) or 9305(3) or the expiration of the 4‑month period
remains perfected thereafter. A security interest that is perfected
by the financing statement but which does not become perfected
under the law of the other jurisdiction before the earlier time or
event becomes unperfected and is deemed never to have been
perfected as against a purchaser of the collateral for value.
Sec. 9326. (1) Subject to subsection (2), a security interest
that
is created by a new debtor that is in collateral in which the
new debtor has or acquires rights and is perfected solely by a
filed
financing statement that is effective solely under section
9508
in collateral in that a new debtor has or acquires rights
would be ineffective to perfect the security interest but for the
application of section 9316(9)(a) or 9508 is subordinate to a
security interest in the same collateral that is perfected other
than
by such a filed financing statement. that
is effective solely
under
section 9508.
(2) The other provisions of this part determine the priority
among conflicting security interests in the same collateral
perfected
by filed financing statements that are effective solely
under
section 9508. described in
subsection (1). However, if the
security agreements to which a new debtor became bound as debtor
were not entered into by the same original debtor, the conflicting
security interests rank according to priority in time of the new
debtor's having become bound.
Sec. 9406. (1) Subject to subsections (2) through (9), an
account debtor on an account, chattel paper, or a payment
intangible may discharge its obligation by paying the assignor
until, but not after, the account debtor receives a notification,
authenticated by the assignor or the assignee, that the amount due
or to become due has been assigned and that payment is to be made
to the assignee. After receipt of the notification, the account
debtor may discharge its obligation by paying the assignee and may
not discharge the obligation by paying the assignor.
(2) Subject to subsection (8), notification is ineffective
under subsection (1) if 1 or more of the following apply:
(a) If notification does not reasonably identify the rights
assigned.
(b) To the extent that an agreement between an account debtor
and a seller of a payment intangible limits the account debtor's
duty to pay a person other than the seller and the limitation is
effective under law other than this article.
(c) At the option of an account debtor, if the notification
notifies the account debtor to make less than the full amount of
any installment or other periodic payment to the assignee, even if
1 or more of the following occur:
(i) Only a portion of the account, chattel paper, or payment
intangible has been assigned to that assignee.
(ii) A portion has been assigned to another assignee.
(iii) The account debtor knows that the assignment to that
assignee is limited.
(3) Subject to subsection (8), if requested by the account
debtor, an assignee shall seasonably furnish reasonable proof that
the assignment has been made. Unless the assignee complies, the
account debtor may discharge its obligation by paying the assignor,
even if the account debtor has received a notification under
subsection (1).
(4) Except as otherwise provided in subsection (5) and
sections 2A303 and 9407, and subject to subsection (8), a term in
an agreement between an account debtor and an assignor or in a
promissory note is ineffective to the extent that it does 1 or more
of the following:
(a) Prohibits, restricts, or requires the consent of the
account debtor or person obligated on the promissory note to the
assignment or transfer of, or the creation, attachment, perfection,
or enforcement of a security interest in, the account, chattel
paper, payment intangible, or promissory note.
(b) Provides that the assignment or transfer or the creation,
attachment, perfection, or enforcement of the security interest may
give rise to a default, breach, right of recoupment, claim,
defense, termination, right of termination, or remedy under the
account, chattel paper, payment intangible, or promissory note.
(5) Subsection (4) does not apply to the following:
(a) A claim or right to receive an amount that would be
excluded from gross income under section 104(a)(1) or (2) of the
internal
revenue code, of 1986, 26 U.S.C. USC 104.
(b) A claim or right to receive benefits from a special needs
trust. For purposes of this subdivision, a "special needs trust" is
a trust described in section 1917(d)(4)(A), (B), or (C) of title
XIX
of the social security act, 42 U.S.C. USC 1396p.
(c) The sale of a payment intangible or promissory note, other
than a sale pursuant to a disposition under section 9610 or an
acceptance of collateral under section 9620.
(6) Except as otherwise provided in sections 2A303 and 9407
and subject to subsections (8) and (9), a rule of law, statute, or
regulation, that prohibits, restricts, or requires the consent of a
government, governmental body or official, or account debtor to the
assignment or transfer of, or creation of a security interest in,
an account or chattel paper is ineffective to the extent that the
rule of law, statute, or regulation does 1 or more of the
following:
(a) Prohibits, restricts, or requires the consent of the
government, governmental body or official, or account debtor to the
assignment or transfer of, or the creation, attachment, perfection,
or enforcement of a security interest in, the account or chattel
paper.
(b) Provides that the assignment or transfer or the creation,
attachment, perfection, or enforcement of the security interest may
give rise to a default, breach, right of recoupment, claim,
defense, termination, right of termination, or remedy under the
account or chattel paper.
(7) Subject to subsection (8), an account debtor may not waive
or vary its option under subsection (2)(c).
(8) This section is subject to law other than this article
that establishes a different rule for an account debtor who is an
individual and who incurred the obligation primarily for personal,
family, or household purposes.
(9) This section does not apply to an assignment of a health-
care-insurance receivable.
Sec. 9408. (1) Except as otherwise provided in subsection (2)
or (4), a term in a promissory note or in an agreement between an
account debtor and a debtor that relates to a health-care-insurance
receivable or a general intangible, including a contract, permit,
license, or franchise, and which term prohibits, restricts, or
requires the consent of the person obligated on the promissory note
or the account debtor to, the assignment or transfer of, or
creation, attachment, or perfection of a security interest in, the
promissory note, health-care-insurance receivable, or general
intangible, is ineffective to the extent that the term does 1 or
more of the following:
(a) Would impair the creation, attachment, or perfection of a
security interest.
(b) Provides that the assignment or transfer or the creation,
attachment, or perfection of the security interest may give rise to
a default, breach, right of recoupment, claim, defense,
termination, right of termination, or remedy under the promissory
note, health-care-insurance receivable, or general intangible.
(2) Subsection (1) applies to a security interest in a payment
intangible or promissory note only if the security interest arises
out of a sale of the payment intangible or promissory note, other
than a sale pursuant to a disposition under section 9610 or an
acceptance of collateral under section 9620.
(3) Except as otherwise provided in subsection (4), a rule of
law, statute, or regulation that prohibits, restricts, or requires
the consent of a government, governmental body or official, person
obligated on a promissory note, or account debtor to the assignment
or transfer of, or creation of a security interest in, a promissory
note, health-care-insurance receivable, or general intangible,
including a contract, permit, license, or franchise between an
account debtor and a debtor, is ineffective to the extent that the
rule of law, statute, or regulation does 1 or more of the
following:
(a) Would impair the creation, attachment, or perfection of a
security interest.
(b) Provides that the assignment or transfer or the creation,
attachment, or perfection of the security interest may give rise to
a default, breach, right of recoupment, claim, defense,
termination, right of termination, or remedy under the promissory
note, health-care-insurance receivable, or general intangible.
(4) To the extent that a term in a promissory note or in an
agreement between an account debtor and a debtor that relates to a
health-care-insurance receivable or general intangible or a rule of
law, statute, or regulation described in subsection (3) would be
effective under law other than this article but is ineffective
under subsection (1) or (3), the creation, attachment, or
perfection of a security interest in the promissory note, health-
care-insurance receivable, or general intangible is not or does not
do all of the following:
(a) Is not enforceable against the person obligated on the
promissory note or the account debtor.
(b) Does not impose a duty or obligation on the person
obligated on the promissory note or the account debtor.
(c) Does not require the person obligated on the promissory
note or the account debtor to recognize the security interest, pay
or render performance to the secured party, or accept payment or
performance from the secured party.
(d) Does not entitle the secured party to use or assign the
debtor's rights under the promissory note, health-care-insurance
receivable, or general intangible, including any related
information or materials furnished to the debtor in the transaction
giving rise to the promissory note, health-care-insurance
receivable, or general intangible.
(e) Does not entitle the secured party to use, assign,
possess, or have access to any trade secrets or confidential
information of the person obligated on the promissory note or the
account debtor.
(f) Does not entitle the secured party to enforce the security
interest in the promissory note, health-care-insurance receivable,
or general intangible.
(5) Subsections (1) and (3) do not apply to either of the
following:
(a) A claim or right to receive an amount that would be
excluded from gross income under section 104(a)(1) or (2) of the
internal
revenue code, of 1986, 26 U.S.C. USC 104.
(b) A claim or right to receive benefits from a special needs
trust. For purposes of this subdivision, a "special needs trust" is
a trust described in section 1917(d)(4)(A), (B), or (C) of title
XIX
of the social security act, 42 U.S.C. USC 1396p.
Sec. 9502. (1) Subject to subsection (2), a financing
statement is sufficient only if it does all of the following:
(a) Provides the name of the debtor.
(b) Provides the name of the secured party or a representative
of the secured party.
(c) Indicates the collateral covered by the financing
statement.
(2) Except as otherwise provided in section 9501(2), to be
sufficient, a financing statement that covers as-extracted
collateral or timber to be cut, or that is filed as a fixture
filing and covers goods that are or are to become fixtures, must
satisfy subsection (1) and also do all of the following:
(a) Indicate that it covers this type of collateral.
(b) Indicate that it is to be recorded in the real property
records.
(c) Provide a description of the real property to which the
collateral is related sufficient to give constructive notice of a
mortgage under the law of this state if the description were
contained in a record of the mortgage of the real property.
(d) If the debtor does not have an interest of record in the
real property, provide the name of a record owner.
(3) A record of a mortgage is effective, from the date of
recording, as a financing statement filed as a fixture filing or as
a financing statement covering as-extracted collateral or timber to
be cut only if all of the following apply:
(a) The record indicates the goods or accounts that it covers.
(b) The goods are or are to become fixtures related to the
real property described in the record or the collateral is related
to the real property described in the record and is as-extracted
collateral or timber to be cut.
(c) The record satisfies the requirements for a financing
statement
in this section, other than an indication subject to the
following:
(i) The record need not indicate that it is to be filed in the
real property records.
(ii) The record sufficiently provides the name of a debtor who
is an individual if it provides the individual name of the debtor
or the surname and first personal name of the debtor, even if the
debtor is an individual to whom section 9503(1)(d) applies.
(d) The record is duly recorded.
(4) A financing statement may be filed before a security
agreement is made or a security interest otherwise attaches.
Sec. 9503. (1) A financing statement sufficiently provides the
name of the debtor if it meets all of the following that apply to
the debtor:
(a)
If Except as otherwise
provided in subdivision (c), if the
debtor is a registered organization or the collateral is held in a
trust that is a registered organization, only if the financing
statement
provides the name of the debtor indicated on the public
record
of the debtor's jurisdiction of organization which shows the
debtor
to have been organized.that
is stated to be the registered
organization's name on the public organic record most recently
filed with or issued or enacted by the registered organization's
jurisdiction of organization which purports to state, amend, or
restate the registered organization's name.
(b)
If the debtor is a decedent's estate, only if the
financing
statement provides the name of the decedent and indicates
that
the debtor is an estate.Subject
to subsection (6), if the
collateral is being administered by the personal representative of
a decedent, only if the financing statement provides, as the name
of the debtor, the name of the decedent and, in a separate part of
the financing statement, indicates that the collateral is being
administered by a personal representative.
(c)
If the debtor is a trust or a trustee acting with respect
to
property held in trust, collateral
is held in a trust that is
not a registered organization, only if the financing statement does
both of the following:
(i) Provides the name specified for the trust in
its organic
documents
or, if no name is specified, provides the name of the
settlor
and additional information sufficient to distinguish the
debtor
from other trusts having 1 or more of the same settlors.1 of
the following as the name of the debtor:
(A) If the organic record of the trust specifies a name for
the trust, the name specified.
(B) If the organic record of the trust does not specify a name
for the trust, the name of the settlor or testator.
(ii) Indicates, in the debtor's name or otherwise,
that the
debtor
is a trust or is a trustee acting with respect to property
held
in trust. Meets 1 of the
following in a separate part of the
financing statement:
(A) If the name is provided in accordance with subparagraph
(i)(A), indicates that the collateral is held in a trust.
(B) If the name is provided in accordance with subparagraph
(i)(B), provides additional information sufficient to distinguish
the trust from other trusts having 1 or more of the same settlors
or the same testator and indicates that the collateral is held in a
trust, unless the additional information so indicates.
(d) Subject to subsection (7), if the debtor is an individual
to whom this state has issued a driver license or state personal
identification card that has not expired, only if the financing
statement provides the name of the individual which is indicated on
the driver license or state personal identification card.
(e) If the debtor is an individual to whom subdivision (d)
does not apply, only if the financing statement provides the
individual name of the debtor or the surname and first personal
name of the debtor.
(f) (d)
In other cases, satisfies 1 of the
following:
(i) If the debtor has a name, only if it the financing
statement
provides the individual or organizational
name of the
debtor.
(ii) If the debtor does not have a name, only if it provides
the names of the partners, members, associates, or other persons
comprising the debtor, in a manner that each name provided would be
sufficient if the person named were the debtor.
(2) A financing statement that provides the name of the debtor
in accordance with subsection (1) is not rendered ineffective by
the absence of 1 or more of the following:
(a) A trade name or other name of the debtor.
(b)
Unless required under subsection (1)(d)(ii), (1)(f)(ii),
names of partners, members, associates, or other persons comprising
the debtor.
(3) A financing statement that provides only the debtor's
trade name does not sufficiently provide the name of the debtor.
(4) Failure to indicate the representative capacity of a
secured party or representative of a secured party does not affect
the sufficiency of a financing statement.
(5) A financing statement may provide the name of more than 1
debtor and the name of more than 1 secured party.
(6) The name of the decedent indicated on the order appointing
the personal representative of a decedent issued by the court that
has jurisdiction over the collateral is sufficient as the "name of
the decedent" under subsection (1)(b).
(7) If this state has issued to an individual more than 1
driver license or state personal identification card of a kind
described in subsection (1)(d), the one that was issued most
recently is the one to which subsection (1)(d) refers.
(8) As used in this section, the "name of the settlor or
testator" means any of the following:
(a) If the settlor is a registered organization, the name that
is stated to be the settlor's name on the public organic record
most recently filed with or issued or enacted by the settlor's
jurisdiction of organization which purports to state, amend, or
restate the settlor's name.
(b) In other cases, the name of the settlor or testator
indicated in the trust's organic record.
Sec. 9507. (1) A filed financing statement remains effective
with respect to collateral that is sold, exchanged, leased,
licensed, or otherwise disposed of and in which a security interest
or agricultural lien continues, even if the secured party knows of
or consents to the disposition.
(2) Except as otherwise provided in subsection (3) and section
9508, a financing statement is not rendered ineffective if, after
the financing statement is filed, the information provided in the
financing statement becomes seriously misleading under section
9506.
(3)
If a debtor so changes its the
name that a filed financing
statement provides for a debtor becomes insufficient as the name of
the debtor under section 9503(1) so that the financing statement
becomes seriously misleading under section 9506, both of the
following apply:
(a) The financing statement is effective to perfect a security
interest in collateral acquired by the debtor before, or within 4
months
after, the change.filed
financing statement becomes
seriously misleading.
(b) The financing statement is not effective to perfect a
security interest in collateral acquired by the debtor more than 4
months
after the change filed
financing statement becomes seriously
misleading, unless an amendment to the financing statement that
renders the financing statement not seriously misleading is filed
within
4 months after the change.the
financing statement became
seriously misleading.
Sec. 9515. (1) Except as otherwise provided in subsections
(2), (5), (6), and (7), a filed financing statement is effective
for a period of 5 years after the date of filing.
(2) Except as otherwise provided in subsections (5), (6), and
(7), an initial financing statement filed in connection with a
manufactured-home transaction is effective for a period of 30 years
after the date of filing if it indicates that it is filed in
connection with a manufactured-home transaction.
(3) The effectiveness of a filed financing statement lapses on
the expiration of the period of its effectiveness unless before the
lapse a continuation statement is filed pursuant to subsection (4).
Upon lapse, a financing statement ceases to be effective and any
security interest or agricultural lien that was perfected by the
financing statement becomes unperfected, unless the security
interest is perfected otherwise. If the security interest or
agricultural lien becomes unperfected upon lapse, it is deemed
never to have been perfected as against a purchaser of the
collateral for value.
(4) A continuation statement may be filed only within 6 months
before the expiration of the 5-year period specified in subsection
(1) or the 30-year period specified in subsection (2), whichever is
applicable.
(5) Except as otherwise provided in section 9510, upon timely
filing of a continuation statement, the effectiveness of the
initial financing statement continues for a period of 5 years
commencing on the day on which the financing statement would have
become ineffective in the absence of the filing. Upon the
expiration of the 5-year period, the financing statement lapses in
the same manner as provided in subsection (3), unless, before the
lapse, another continuation statement is filed pursuant to
subsection (4). Succeeding continuation statements may be filed in
the same manner to continue the effectiveness of the initial
financing statement.
(6) If a debtor is an organization identified as a
transmitting utility and a filed initial financing statement so
indicates, the financing statement is effective until a termination
statement
is filed. A financing statement that is filed before the
effective
date of the amendatory act that added this sentence March
29, 2009 is effective for a period of 5 years after the date of
filing and shall not be continued under this section if the
financing statement indicates either of the following:
(a) That the debtor is an individual purporting to be a
transmitting utility.
(b) That the debtor is an individual showing his or her name
as an organization and purporting to be a transmitting utility.
(7) A record of a mortgage that is effective as a financing
statement filed as a fixture filing under section 9502(3) remains
effective as a financing statement filed as a fixture filing until
the mortgage is released or satisfied of record or its
effectiveness otherwise terminates as to the real property.
Sec. 9516. (1) Except as otherwise provided in subsection (2),
communication of a record to a filing office and tender of the
filing fee or acceptance of the record by the filing office
constitutes filing.
(2) Filing does not occur with respect to a record that a
filing office refuses to accept because of 1 or more of the
following:
(a) The record is not communicated by a method or medium of
communication authorized by the filing office.
(b) An amount equal to or greater than the applicable filing
fee is not tendered.
(c) The filing office is unable to index the record because of
1 or more of the following:
(i) In the case of an initial financing statement, the record
does not provide a name for the debtor.
(ii) In the case of an amendment or correction information
statement, the record does not identify the initial financing
statement as required by section 9512 or 9518, as applicable, or
identifies an initial financing statement whose effectiveness has
lapsed under section 9515.
(iii) In the case of an initial financing statement that
provides the name of a debtor identified as an individual or an
amendment that provides a name of a debtor identified as an
individual that was not previously provided in the financing
statement to which the record relates, the record does not identify
the
debtor's last name.surname.
(iv) In the case of a record filed or recorded in the filing
office described in section 9501(1)(a), the record does not provide
a sufficient description of the real property to which it relates.
(d) In the case of an initial financing statement or an
amendment that adds a secured party of record, the record does not
provide a name and mailing address for the secured party of record.
(e) In the case of an initial financing statement or an
amendment that provides a name of a debtor which was not previously
provided in the financing statement to which the amendment relates,
the record does not provide or indicate 1 or more of the following:
(i) Provide a mailing address for the debtor.
(ii) Indicate whether the debtor is name provided as the name
of the debtor is the name of an individual or an organization.
(iii) If the financing statement indicates that the
debtor is an
organization,
provide 1 or more of the following:
(A)
A type of organization for the debtor.
(B)
A jurisdiction of organization for the debtor.
(C)
An organizational identification number for the debtor or
indicate
that the debtor has none.
(f) In the case of an assignment reflected in an initial
financing statement under section 9514(1) or an amendment filed
under section 9514(2), the record does not provide a name and
mailing address for the assignee.
(g) In the case of a continuation statement, the record is not
filed within the 6-month period prescribed by section 9515(4).
(3) For purposes of subsection (2), both of the following
apply:
(a) A record does not provide information if the filing office
is unable to read or decipher the information.
(b) A record that does not indicate that it is an amendment or
identify an initial financing statement to which it relates, as
required by section 9512, 9514, or 9518, is an initial financing
statement.
(4) A record that is communicated to the filing office with
tender of the filing fee, but which the filing office refuses to
accept for a reason other than one set forth in subsection (2) or
section 9520(5), is effective as a filed record except as against a
purchaser of the collateral which gives value in reasonable
reliance upon the absence of the record from the files.
Sec.
9518. (1) A person may file in the filing office a
correction
an information statement with respect to a record
indexed there under the person's name if the person believes that
the record is inaccurate or was wrongfully filed.
(2)
A correction An
information statement under subsection (1)
must do all of the following:
(a) Identify the record to which it relates by both of the
following:
(i) The file number assigned to the initial financing statement
to which the record relates.
(ii) If the correction information statement relates to a
record filed or recorded in a filing office described in section
9501(1)(a), the date that the initial financing statement was filed
or recorded and the information specified in section 9502(2).
(b)
Indicate that it is a correction an information statement.
(c) Provide the basis for the person's belief that the record
is inaccurate and indicate the manner in which the person believes
the record should be amended to cure any inaccuracy or provide the
basis for the person's belief that the record was wrongfully filed.
(3) A person may file in the filing office an information
statement with respect to a record filed there if the person is a
secured party of record with respect to the financing statement to
which the record relates and believes that the person that filed
the record was not entitled to do so under section 9509(4).
(4) An information statement under subsection (3) must do all
of the following:
(a) Identify the record to which it relates by both of the
following:
(i) The file number assigned to the initial financing statement
to which the record relates.
(ii) If the information statement relates to a record filed or
recorded in a filing office described in section 9501(1)(a), the
date and time that the initial financing statement was filed or
recorded and the information specified in section 9502(2).
(b) Indicate that it is an information statement.
(c) Provide the basis for the person's belief that the person
that filed the record was not entitled to do so under section
9509(4).
(5) (3)
The filing of a correction an information statement
does not affect the effectiveness of an initial financing statement
or other filed record.
Sec.
9521. (1) A Except for a
reason set forth in section
9516(2) or 9520(5), a filing office that accepts written records
for filing shall not refuse to accept a written initial financing
statement
that conforms to the current format prescribed by the
national
conference of commissioners on uniform state laws, except
for
a reason set forth in section 9516(2) or 9520(5).form and
format of the UCC financing statement (Form UCC1)(rev. 04/20/11) or
the UCC financing statement addendum (form UCC1Ad)(rev. 04/20/11),
published by the uniform law commission, or to the form and format
of any other revision to or version of either of those forms that
are adopted by the uniform law commission and approved by rule or
order of the secretary of state.
(2)
A Except for a reason set
forth in section 9516(2) or
9520(5), a filing office that accepts written records for filing
shall not refuse to accept a written financing statement amendment
on
a form that conforms to the current format prescribed by the
national
conference of commissioners on uniform state laws, except
for
a reason set forth in section 9516(2) or 9520(5).that conforms
to the form and format of the UCC financing statement amendment
(Form UCC3)(rev. 04/20/11) or the UCC financing statement amendment
addendum (form UCC3Ad)(rev. 04/20/11), published by the uniform law
commission, or to the form and format of any other revision to or
version of either of those forms that are adopted by the uniform
law commission and approved by rule or order of the secretary of
state.
Sec. 9607. (1) If so agreed, and in any event after default, a
secured party may do 1 or more of the following:
(a) Notify an account debtor or other person obligated on
collateral to make payment or otherwise render performance to or
for the benefit of the secured party.
(b) Take any proceeds to which the secured party is entitled
under section 9315.
(c) Enforce the obligations of an account debtor or other
person obligated on collateral and exercise the rights of the
debtor with respect to the obligation of the account debtor or
other person obligated on collateral to make payment or otherwise
render performance to the debtor, and with respect to any property
that secures the obligations of the account debtor or other person
obligated on the collateral.
(d) If it holds a security interest in a deposit account
perfected by control under section 9104(1)(a), apply the balance of
the deposit account to the obligation secured by the deposit
account.
(e) If it holds a security interest in a deposit account
perfected by control under section 9104(1)(b) or (c), instruct the
bank to pay the balance of the deposit account to or for the
benefit of the secured party.
(2) If necessary to enable a secured party to exercise under
subsection (1)(c) the right of a debtor to enforce a mortgage
nonjudicially, the secured party may record both of the following
in the office in which a record of the mortgage is recorded:
(a) A copy of the security agreement that creates or provides
for a security interest in the obligation secured by the mortgage.
(b) The secured party's sworn affidavit in recordable form
stating
that both of the
following:
(i) That a default has
occurred and the with
respect to the
obligation secured by the mortgage.
(ii) That the secured party is entitled to enforce the mortgage
nonjudicially.
(3) A secured party shall proceed in a commercially reasonable
manner if the secured party meets both of the following:
(a) Undertakes to collect from or enforce an obligation of an
account debtor or other person obligated on collateral.
(b) Is entitled to charge back uncollected collateral or
otherwise to full or limited recourse against the debtor or a
secondary obligor.
(4) A secured party may deduct from the collections made
pursuant to subsection (3) reasonable expenses of collection and
enforcement, including reasonable attorney fees and legal expenses
incurred by the secured party.
(5) This section does not determine whether an account debtor,
bank, or other person obligated on collateral owes a duty to a
secured party.
PART 8
TRANSITION PROVISIONS FOR 2010 AMENDMENTS
Sec. 9801. As used in this part:
(a) "Pre‑effective‑date financing statement" means a financing
statement filed before the effective date of this amendatory act.
(b) "This amendatory act" means the amendatory act that added
this part.
(c) "This amended article" means this article as amended by
this amendatory act.
Sec. 9802. (1) Except as otherwise provided in this part, this
amendatory act applies to a transaction or lien within its scope,
even if the transaction or lien was entered into or created before
the effective date of this amendatory act.
(2) This amendatory act does not affect an action, case, or
proceeding commenced before the effective date of this amendatory
act.
Sec. 9803. (1) A security interest that is a perfected
security interest immediately before the effective date of this
amendatory act is a perfected security interest under this amended
article if, on the effective date of this amendatory act, the
applicable requirements for attachment and perfection under this
amended article are satisfied without further action.
(2) Except as otherwise provided in section 9805, if,
immediately before the effective date of this amendatory act, a
security interest is a perfected security interest, but the
applicable requirements for perfection under this amended article
are not satisfied on the effective date of this amendatory act, the
security interest remains perfected thereafter only if the
applicable requirements for perfection under this amended article
are satisfied within 1 year after the effective date of this
amendatory act.
Sec. 9804. A security interest that is an unperfected security
interest immediately before the effective date of this amendatory
act becomes a perfected security interest when either of the
following occurs:
(a) Without further action, on the effective date of this
amendatory act if the applicable requirements for perfection under
this amended article are satisfied before or at that time.
(b) When the applicable requirements for perfection are
satisfied if the requirements are satisfied after the effective
date of this amendatory act.
Sec. 9805. (1) The filing of a financing statement before the
effective date of this amendatory act is effective to perfect a
security interest to the extent that the filing would satisfy the
applicable requirements for perfection under this amended article.
(2) This amendatory act does not render ineffective an
effective financing statement that is filed before the effective
date of this amendatory act and satisfies the applicable
requirements for perfection under the law of the jurisdiction
governing perfection as provided in this article as it existed
before the effective date of this amendatory act. However, except
as otherwise provided in subsections (3) and (4) and section 9806,
the financing statement ceases to be effective at 1 of the
following times, as applicable:
(a) If the financing statement is filed in this state, at the
time the financing statement would have ceased to be effective had
this amendatory act not taken effect.
(b) If the financing statement is filed in another
jurisdiction, at the earlier of the following:
(i) The time the financing statement would have ceased to be
effective under the law of that jurisdiction.
(ii) June 30, 2018.
(3) The filing of a continuation statement after the effective
date of this amendatory act does not continue the effectiveness of
a financing statement filed before the effective date of this
amendatory act. However, upon the timely filing of a continuation
statement after the effective date of this amendatory act and in
accordance with the law of the jurisdiction governing perfection as
provided in this amended article, the effectiveness of a financing
statement filed in the same office in that jurisdiction before the
effective date of this amendatory act continues for the period
provided by the law of that jurisdiction.
(4) Subsection (2)(b)(ii) applies to a financing statement that
is filed before the effective date of this amendatory act against a
transmitting utility and satisfies the applicable requirements for
perfection under the law of the jurisdiction governing perfection
as provided in this article before the effective date of this
amendatory act, only to the extent that this amended article
provides that the law of a jurisdiction other than the jurisdiction
in which the financing statement is filed governs perfection of a
security interest in collateral covered by the financing statement.
(5) A financing statement that includes a financing statement
filed before the effective date of this amendatory act and a
continuation statement filed after the effective date of this
amendatory act is effective only to the extent that it satisfies
the requirements of part 5 as amended by this amendatory act for an
initial financing statement. A financing statement that indicates
that the debtor is a decedent's estate indicates that the
collateral is being administered by a personal representative
within the meaning of section 9503(1)(b) as amended by this
amendatory act. A financing statement that indicates that the
debtor is a trust or is a trustee acting with respect to property
held in trust indicates that the collateral is held in a trust
within the meaning of section 9503(1)(c) as amended by this
amendatory act.
Sec. 9806. (1) The filing of an initial financing statement in
the office specified in section 9501 continues the effectiveness of
a pre‑effective‑date financing statement if all of the following
are met:
(a) The filing of an initial financing statement in that
office would be effective to perfect a security interest under this
amended article.
(b) The pre‑effective‑date financing statement was filed in an
office in another state.
(c) The initial financing statement satisfies subsection (3).
(2) The filing of an initial financing statement under
subsection (1) continues the effectiveness of the
pre‑effective‑date financing statement for 1 of the following
periods:
(a) If the initial financing statement is filed before the
effective date of this amendatory act, for the period provided in
section 9515 as it existed before the effective date of this
amendatory act with respect to an initial financing statement.
(b) If the initial financing statement is filed after the
effective date of this amendatory act, for the period provided in
section 9515 as amended by this amendatory act with respect to an
initial financing statement.
(3) To be effective for purposes of subsection (1), an initial
financing statement must do all of the following:
(a) Satisfy the requirements of part 5 as amended by this
amendatory act for an initial financing statement.
(b) Identify the pre‑effective‑date financing statement by
indicating the office in which the financing statement was filed
and providing the dates of filing and file numbers, if any, of the
financing statement and of the most recent continuation statement
filed with respect to the financing statement.
(c) Indicate that the pre‑effective‑date financing statement
remains effective.
Sec. 9807. (1) After the effective date of this amendatory
act, a person may add or delete collateral covered by, continue or
terminate the effectiveness of, or otherwise amend the information
provided in, a pre‑effective‑date financing statement only in
accordance with the law of the jurisdiction governing perfection as
provided in this amended article. However, the effectiveness of a
pre‑effective‑date financing statement also may be terminated in
accordance with the law of the jurisdiction in which the financing
statement is filed.
(2) Except as otherwise provided in subsection (3), if the law
of this state governs perfection of a security interest, the
information in a pre‑effective‑date financing statement may be
amended after the effective date of this amendatory act only if 1
of the following is met:
(a) The pre‑effective‑date financing statement and an
amendment are filed in the office specified in section 9501.
(b) An amendment is filed in the office specified in section
9501 concurrently with, or after the filing in that office of, an
initial financing statement that satisfies section 9806(3).
(c) An initial financing statement that provides the
information as amended and satisfies section 9806(3) is filed in
the office specified in section 9501.
(3) If the law of this state governs perfection of a security
interest, the effectiveness of a pre‑effective‑date financing
statement may be continued only under section 9805(3) and (5) or
9806.
(4) Whether or not the law of this state governs perfection of
a security interest, the effectiveness of a pre‑effective‑date
financing statement filed in this state may be terminated after the
effective date of this amendatory act by filing a termination
statement in the office in which the pre‑effective‑date financing
statement is filed, unless an initial financing statement that
satisfies section 9806(3) has been filed in the office specified by
the law of the jurisdiction governing perfection as provided in
this amended article as the office in which to file a financing
statement.
Sec. 9808. A person may file an initial financing statement or
a continuation statement under this part if all of the following
are met:
(a) The secured party of record authorizes the filing.
(b) The filing is necessary under this part to do any of the
following:
(i) To continue the effectiveness of a financing statement
filed before the effective date of this amendatory act.
(ii) To perfect or continue the perfection of a security
interest.
Sec. 9809. This amendatory act determines the priority of
conflicting claims to collateral. However, if the relative
priorities of the claims were established before the effective date
of this amendatory act, this article as it existed before the
effective date of this amendatory act determines priority.
Enacting section 1. Article 11 of the uniform commercial code,
1962 PA 174, MCL 440.11101 to 440.11102, is repealed.
Enacting section 2. This amendatory act takes effect July 1,
2013.
Enacting section 3. This amendatory act does not take effect
unless all of the following bills of the 96th Legislature are
enacted into law:
(a) House Bill No. 5081.
(b) House Bill No. 5082.