HB-5083, As Passed Senate, March 27, 2012

SENATE 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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

~~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.

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.

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.

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),

promulgated by the American law institute and the uniform law

commission, or to the form and format of any other revision to or

version of either of those forms that are promulgated by the

American law institute and the uniform law commission and adopted

by 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), promulgated by the American

law institute and the uniform law commission, or to the form and

format of any other revision to or version of either of those forms

that are promulgated by the American law institute and the uniform

law commission and adopted by 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.

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.

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.

(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.

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).

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.