Bill Text: PA HB2159 | 2011-2012 | Regular Session | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Revising secured transaction provisions relating to definitions, to control of electronic chattel paper, to location of debtor, to perfection of security interests in property subject to certain statutes, regulations and treaties, to continued perfection of security interest following change in governing law, to interests which take priority over or take free of security interest or agricultural lien, to priority of security interests created by new debtor, to discharge of account debtor, notification of assignment, identification and proof of assignment, restrictions on assignment of accounts, chattel paper, payment intangibles and promissory notes ineffective, to restrictions on assignment of promissory notes, health-care-insurance receivables and certain general intangibles ineffective, to contents of financing statement, record of mortgage as financing statement, time of filing financing statement, to name of debtor and secured party, to effect of certain events on effectiveness of financing statement, to duration and effectiveness of financing statement, effect of lapsed financing statement, to what constitutes filing, effectiveness of filing, to claim concerning inaccurate or wrongfully filed record and to collection and enforcement by secured party; providing for transition provisions for 2012 amendments; imposing duties upon the Department of State and the Department of Transportation; and making editorial changes.

Spectrum: Moderate Partisan Bill (Republican 28-8)

Status: (Engrossed - Dead) 2012-10-02 - Re-referred to APPROPRIATIONS [HB2159 Detail]

Download: Pennsylvania-2011-HB2159-Introduced.html

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PRINTER'S NO. 3143
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 2159 Session of2012
INTRODUCED BY GRELL, AUMENT, BAKER, BARBIN, BEAR, BRENNAN, BUXTON, CAUSER, CREIGHTON, CUTLER, DENLINGER, EVERETT, GEIST, GIBBONS, GINGRICH, GROVE, HARPER, HARRIS, HELM, HESS, HORNAMAN, HUTCHINSON, M. K. KELLER, MANN, MARSHALL, PETRI, REED, SAINATO, SAYLOR, SONNEY, WATSON, MILLER, SCHRODER AND HICKERNELL, FEBRUARY 29, 2012
REFERRED TO COMMITTEE ON JUDICIARY, FEBRUARY 29, 2012
AN ACT
Amending Titles 13 (Commercial Code), 30 (Fish) and 75
(Vehicles) of the Pennsylvania Consolidated Statutes,
revising secured transaction provisions relating to
definitions, to control of electronic chattel paper, to
location of debtor, to perfection of security interests in
property subject to certain statutes, regulations and
treaties, to continued perfection of security interest
following change in governing law, to interests which take
priority over or take free of security interest or
agricultural lien, to priority of security interests created
by new debtor, to discharge of account debtor, notification
of assignment, identification and proof of assignment,
restrictions on assignment of accounts, chattel paper,
payment intangibles and promissory notes ineffective, to
restrictions on assignment of promissory notes, health-care-
insurance receivables and certain general intangibles
ineffective, to contents of financing statement, record of
mortgage as financing statement, time of filing financing
statement, to name of debtor and secured party, to effect of
certain events on effectiveness of financing statement, to
duration and effectiveness of financing statement, effect of
lapsed financing statement, to what constitutes filing,
effectiveness of filing, to claim concerning inaccurate or
wrongfully filed record and to collection and enforcement by
secured party; providing for transition provisions for 2012
amendments; imposing duties upon the Department of State and
the Department of Transportation; and making editorial
changes.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The definitions of "authenticate," "certificate
of title," "jurisdiction of organization" and "registered
organization" in section 9102(a) of Title 13 of the Pennsylvania
Consolidated Statutes are amended and the subsection is amended
by adding a definition to read:
§ 9102. Definitions and index of definitions.
(a) Division 9 definitions.--The following words and phrases
when used in this division shall have the meanings given to them
in this subsection:
* * *
"Authenticate." To:
(i) sign; or
(ii) [execute or otherwise adopt a symbol, or
encrypt or similarly process a record in whole or in
part,] with [the] present intent [of the authenticating
person to identify the person and] to adopt or accept a
record, attach to or logically associate with the record
an electrical sound, symbol or process.
* * *
"Certificate of title." A certificate of title with respect
to which a statute provides for the security interest in
question to be indicated on the certificate as a condition or
result of the security interest's obtaining priority over the
rights of a lien creditor with respect to the collateral. The
term includes another record maintained as an alternative to a
certificate of title by the governmental unit that issues
certificates of title if a statute permits the security interest
in question to be indicated on the record as a condition or
result of the security interest's obtaining priority over the
20120HB2159PN3143 - 2 -
rights of a lien creditor with respect to the collateral.
* * *
"Jurisdiction of organization." With respect to a registered
organization, the jurisdiction under whose law the organization
is formed or organized.
* * *
"Public organic record." A record that is available to the
public for inspection and is:
(1) a record consisting of the record initially filed
with or issued by a state or the United States to form or
organize an organization and any record filed with or issued
by the state or the United States which amends or restates
the initial record;
(2) an organic record of a business trust consisting of
the record initially filed with a state and any record filed
with the state which amends or restates the initial record,
if a statute of the state governing business trusts requires
that the record be filed with the state; or
(3) a record consisting of legislation enacted by the
legislature of a state or the Congress of the United States
which forms or organizes an organization, any record amending
the legislation, and any record filed with or issued by the
state or the United States which amends or restates the name
of the organization.
* * *
"Registered organization." An organization formed or
organized solely under the law of a single state or the United
States [and as to which the state or the United States must
maintain a public record showing the organization to have been
organized.] by the filing of a public organic record, with the
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issuance of a public organic record by, or the enactment of
legislation by the state or the United States. The term includes
a business trust that is formed or organized under the law of a
single state if a statute of the state governing business trusts
requires that a business trust's organic record be filed with
the state.
* * *
Section 2. Sections 9105, 9307(f)(2), 9308(a), 9310(b)(10),
9311(a)(2) and (3) and (b) and 9313(b) of Title 13 are amended
to read:
§ 9105. Control of electronic chattel paper.
(a) General rule; control of electronic chattel paper.--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.
(b) Specific facts giving control.--A system satisfies
subsection (a) if the record or records comprising the chattel
paper are created, stored and assigned in such a manner that:
(1) a single authoritative copy of the record or records
exists which is unique, identifiable and, except as otherwise
provided in paragraphs (4), (5) and (6), unalterable;
(2) the authoritative copy identifies the secured party
as the assignee of the record or records;
(3) the authoritative copy is communicated to and
maintained by the secured party or its designated custodian;
(4) copies or [revisions] amendments which add or change
an identified assignee of the authoritative copy can be made
only with the [participation] consent of the secured party;
(5) each copy of the authoritative copy and any copy of
20120HB2159PN3143 - 4 -
a copy is readily identifiable as a copy which is not the
authoritative copy; and
(6) any [revision] amendment of the authoritative copy
is readily identifiable as [an] authorized or unauthorized
[revision].
§ 9307. Location of debtor.
* * *
(f) Location of registered organization organized under
Federal law; bank branches and agencies.--Except as otherwise
provided in subsection (i), a registered organization which is
organized under the law of the United States and a branch or
agency of a bank which is not organized under the law of the
United States or a state are located:
* * *
(2) in the state which 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; or
* * *
§ 9308. When security interest or agricultural lien is
perfected; continuity of perfection.
(a) Perfection of security interest.--Except as otherwise
provided in this section and section 9309 (relating to security
interest perfected upon attachment), a security interest is
perfected if it has attached and all of the applicable
requirements for perfection in sections 9310 (relating to when
filing required to perfect security interest or agricultural
lien; security interests and agricultural liens to which filing
provisions do not apply) through 9316 (relating to [continued
20120HB2159PN3143 - 5 -
perfection of security interest following] effect of change in
governing law) have been satisfied. A security interest is
perfected when it attaches if the applicable requirements are
satisfied before the security interest attaches.
* * *
§ 9310. When filing required to perfect security interest or
agricultural lien; security interests and
agricultural liens to which filing provisions do not
apply.
* * *
(b) Exceptions: filing not necessary.--The filing of a
financing statement is not necessary to perfect a security
interest:
* * *
(10) which is perfected under section 9316 (relating to
[continued perfection of security interest following] effect
of change in governing law).
* * *
§ 9311. Perfection of security interests in property subject to
certain statutes, regulations and treaties.
(a) Security interest subject to other law.--Except as
otherwise provided in subsection (d), the filing of a financing
statement is not necessary or effective to perfect a security
interest in property subject to:
* * *
(2) a [certificate-of-title] statute of this
Commonwealth or regulations promulgated thereunder, to the
extent such statute or regulations provide for a security
interest to be indicated on [the] certificate of title as a
condition or result of perfection; or
20120HB2159PN3143 - 6 -
(3) a [certificate-of-title] statute of another
jurisdiction which 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.
(b) Compliance with other law.--Compliance with the
requirements of a statute, regulation or treaty described in
subsection (a) for obtaining priority over the rights of a lien
creditor is equivalent to the filing of a financing statement
under this division. Except as otherwise provided in subsection
(d) and sections 9313 (relating to when possession by or
delivery to secured party perfects security interest without
filing) and 9316(d) and (e) (relating to [continued perfection
of security interest following] effect of change in governing
law) for goods covered by a certificate of title, a security
interest in property subject to a statute, regulation or treaty
described in subsection (a) 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.
* * *
§ 9313. When possession by or delivery to secured party
perfects security interest without filing.
* * *
(b) Goods covered by certificate of title.--With respect to
goods covered by a certificate of title issued by the
Commonwealth, a secured party may perfect a security interest in
the goods by taking possession of the goods only in the
circumstances described in section 9316(d) (relating to
[continued perfection of security interest following] effect of
20120HB2159PN3143 - 7 -
change in governing law).
* * *
Section 3. Section 9316 heading of Title 13 is amended and
the section is amended by adding subsections to read:
§ 9316. [Continued perfection of security interest following]
Effect of change in governing law.
* * *
(h) Effect on filed financing statement of change in
governing law.--The following rules apply to collateral to which
a security interest attaches within four months after the debtor
changes its location to another jurisdiction:
(1) A financing statement filed before the change
pursuant to the law of the jurisdiction designated in section
9301(a) or 9305(c) 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.
(2) If a security interest perfected by a financing
statement that is effective under paragraph (1) 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(c) or the expiration of the four-
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.
(i) Effect of change in governing law on financing statement
filed against original debtor.--If a financing statement naming
20120HB2159PN3143 - 8 -
an original debtor is filed pursuant to the law of the
jurisdiction designated in section 9301(a) or 9305(c) and the
new debtor is located in another jurisdiction, the following
rules apply:
(1) The financing statement is effective to perfect a
security interest in collateral acquired by the new debtor
before, and within four months after, the new debtor becomes
bound under section 9203(d) (relating to attachment and
enforceability of security interest; proceeds; supporting
obligations; formal requisites), 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.
(2) 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(c) or the expiration of the four-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.
Section 4. Sections 9317(b) and (d), 9320(c), 9326, 9406(e),
9408(b) and 9502(c) of Title 13 are amended to read:
§ 9317. Interests which take priority over or take free of
security interest or agricultural lien.
* * *
20120HB2159PN3143 - 9 -
(b) Buyers that receive delivery.--Except as otherwise
provided in subsection (e), a buyer, other than a secured party,
of tangible chattel paper, tangible documents, goods,
instruments or a [security certificate] certificated security
takes free of a security interest or agricultural lien if the
buyer gives value and receives delivery of the collateral
without knowledge of the security interest or agricultural lien
and before it is perfected.
* * *
(d) Licensees and buyers of certain collateral.--A licensee
of a general intangible or a buyer, other than a secured party,
of [accounts, electronic chattel paper, electronic documents,
general intangibles or investment property] collateral other
than tangible chattel paper, tangible documents, goods,
instruments or a certificated security takes free of a security
interest if the licensee or buyer gives value without knowledge
of the security interest and before it is perfected.
* * *
§ 9320. Buyer of goods.
* * *
(c) Effectiveness of filing for subsection (b).--To the
extent that it affects the priority of a security interest over
a buyer of goods under subsection (b), the period of
effectiveness of a filing made in the jurisdiction in which the
seller is located is governed by section 9316(a) and (b)
(relating to [continued perfection of security interest
following] effect of change in governing law).
* * *
§ 9326. Priority of security interests created by new debtor.
(a) Subordination of security interest created by new
20120HB2159PN3143 - 10 -
debtor.--Subject to subsection (b), a security interest that is
created by a new debtor [which is] in collateral in which the
new debtor has or acquires rights and is perfected solely by a
filed financing statement which [is effective solely under
section 9508 (relating to effectiveness of financing statement
if new debtor becomes bound by security agreement) in collateral
in which a new debtor has or acquires rights] would be
ineffective to perfect the security interest but for the
application of section 9316(i)(1) (relating to effect of change
in governing law) or 9508 (relating to effectiveness of
financing statement if new debtor becomes bound by security
agreement) is subordinate to a security interest in the same
collateral which is perfected other than by such a filed
financing statement [which is effective solely under section
9508].
(b) Priority under other provisions; multiple original
debtors.--The other provisions of this chapter determine the
priority among conflicting security interests in the same
collateral perfected by filed financing statements [which are
effective solely under section 9508] described in subsection
(a). 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.
§ 9406. Discharge of account debtor; notification of
assignment; identification and proof of assignment;
restrictions on assignment of accounts, chattel
paper, payment intangibles and promissory notes
ineffective.
20120HB2159PN3143 - 11 -
* * *
(e) Inapplicability of subsection (d) to certain sales.--
Subsection (d) does not apply to the sale of a payment
intangible or promissory note, other than a sale pursuant to a
disposition under section 9610 (relating to disposition of
collateral after default) or an acceptance of collateral under
section 9620 (relating to acceptance of collateral in full or
partial satisfaction of obligation; compulsory disposition of
collateral).
* * *
§ 9408. Restrictions on assignment of promissory notes, health-
care-insurance receivables and certain general
intangibles ineffective.
* * *
(b) Applicability of subsection (a) to sales of certain
rights to payment.--Subsection (a) 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 (relating to disposition of collateral after
default) or an acceptance of collateral under section 9620
(relating to acceptance of collateral in full or partial
satisfaction of obligation; compulsory disposition of
collateral).
* * *
§ 9502. Contents of financing statement; record of mortgage as
financing statement; time of filing financing
statement.
* * *
(c) Record of mortgage as financing statement.--A record of
20120HB2159PN3143 - 12 -
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:
(1) [the] The record indicates the goods or accounts
which it covers[;].
(2) [the] 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[;].
(3) [the] 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[; and].
(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(a)(4)(relating to name of debtor and
secured party) applies.
(4) [the] The record is duly recorded.
* * *
Section 5. Section 9503(a) and (b)(2) of Title 13 are
amended and the section is amended by adding subsections to
read:
§ 9503. Name of debtor and secured party.
(a) Sufficiency of debtor's name.--A financing statement
sufficiently provides the name of the debtor:
(1) [If] Except as otherwise provided in paragraph (3),
20120HB2159PN3143 - 13 -
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] that is stated to be the registered organization's
name on the public organic record [of] most recently filed
with or issued or enacted by the [debtor's] registered
organization's jurisdiction of organization which [shows the
debtor to have been organized] purports to state, amend or
restate the registered organization's name.
(2) [If] Subject to subsection (f), if the [debtor is a
decedent's estate] 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 [debtor is an estate]
collateral is being administered by a personal
representative.
(3) If the [debtor is a trust or a trustee acting with
respect to property held in trust, only if the financing
statement:
(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 one or more of the same settlors; and
(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; and] collateral is
held in a trust that is not a registered organization,
only if the financing statement:
20120HB2159PN3143 - 14 -
(A) provides, as the name of the debtor:
(I) if the organic record of the trust
specifies a name for the trust, the name
specified; or
(II) if the organic record of the trust does
not specify a name for the trust, the name of the
settlor or testator; and
(B) in a separate part of the financing
statement:
(I) if the name is provided under clause
(A)(I), indicates that the collateral is held in
a trust; or
(II) if the name is provided under clause
(A)(II), provides additional information
sufficient to distinguish the trust from other
trusts having one 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.
(4) Subject to subsection (g), if the debtor is an
individual to whom the Department of Transportation has
issued a driver’s license which has not expired under 75
Pa.C.S. § 1510(a) (relating to issuance and content of
driver's license) or an identification card under 75 Pa.C.S.
§ 1510(b), only if the financing statement provides the name
of the individual which is indicated on:
(i) except as set forth in subparagraph (ii), the
driver’s license; or
(ii) if there is no driver's license, the
identification card.
20120HB2159PN3143 - 15 -
(5) If the debtor is an individual to whom paragraph (4)
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.
[(4)] (6) In other cases:
(i) if the debtor has a name, only if [it] the
financing statement provides the [individual or]
organizational name of the debtor; and
(ii) if the debtor does not have a name, only if
[it] the financing statement 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.
(b) Additional debtor-related information.--A financing
statement which provides the name of the debtor in accordance
with subsection (a) is not rendered ineffective by the absence
of:
* * *
(2) unless required under subsection [(a)(4)(ii)] (a)(6)
(ii), names of partners, members, associates or other persons
comprising the debtor.
* * *
(f) Name of decedent.--The name of the decedent indicated on
the order appointing the personal representative of the decedent
issued by the court having jurisdiction over the collateral is
sufficient as the name of the decedent under subsection (a)(2).
(g) Multiple driver’s licenses.--If the department has
issued to an individual more than one driver's license or
identification card of a kind described in subsection (a)(4),
the one that was issued most recently is the one to which
20120HB2159PN3143 - 16 -
subsection (a)(4) refers.
(h) Definition.--As used in this section, the term "name of
the settlor or testator" means:
(1) 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; or
(2) in other cases, the name of the settlor or testator
indicated in the trust's organic record.
Section 6. Sections 9507(c), 9515(f) and 9516(b)(3)(ii)
introductory paragraph and (iii) and (5)(ii) and (iii) of Title
13 are amended to read:
§ 9507. Effect of certain events on effectiveness of financing
statement.
* * *
(c) Change in debtor's name.--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(a) (relating to name of a debtor and secured party) so that
the financing statement becomes seriously misleading under
section 9506:
(1) the financing statement is effective to perfect a
security interest in collateral acquired by the debtor
before, or within four months after, the [change] filed
financing statement becomes seriously misleading; and
(2) the financing statement is not effective to perfect
a security interest in collateral acquired by the debtor more
than four months after the [change] filed financing statement
becomes seriously misleading, unless an amendment to the
20120HB2159PN3143 - 17 -
financing statement which renders the financing statement not
seriously misleading is filed within four months after the
[change] financing statement became seriously misleading.
§ 9515. Duration and effectiveness of financing statement;
effect of lapsed financing statement.
* * *
(f) Transmitting utility financing statement.--If a debtor
is a transmitting utility and a filed initial financing
statement so indicates, the financing statement is effective
until a termination statement is filed.
* * *
§ 9516. What constitutes filing; effectiveness of filing.
* * *
(b) Refusal to accept record; filing does not occur.--Filing
does not occur with respect to a record which a filing office
refuses to accept because one of the following paragraphs
applies:
* * *
(3) The filing office is unable to index the record
because of a reason stated in one of the following
subparagraphs:
* * *
(ii) In the case of an amendment or [correction]
information statement, the record:
* * *
(iii) In the case of an initial financing statement
which provides the name of a debtor identified as an
individual or an amendment which provides a name of a
debtor identified as an individual which was not
previously provided in the financing statement to which
20120HB2159PN3143 - 18 -
the record relates, the record does not identify the
debtor's [last name] surname.
* * *
(5) In the case of an initial financing statement or an
amendment which provides a name of a debtor which was not
previously provided in the financing statement to which the
amendment relates, the record does not do [one or more] both
of the following:
* * *
(ii) Indicate whether the 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:
(A) a type of organization for the debtor;
(B) a jurisdiction of organization for the
debtor; or
(C) an organizational identification number for
the debtor or indicate that the debtor has none.]
* * *
Section 7. Section 9518(a), (b)(2), (c) and (d)(1)(i) of
Title 13 are amended and the section is amended by adding
subsections to read:
§ 9518. Claim concerning inaccurate or wrongfully filed record.
(a) [Correction statement] Statement with respect to record
indexed under person's name.--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.
(b) [Sufficiency] Contents of [correction] statement under
20120HB2159PN3143 - 19 -
subsection (a).--[A correction] An information statement under
subsection (a) must:
* * *
(2) indicate that it is [a correction] an information
statement; and
* * *
(c) Statement by secured party of record.--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(d) (relating to persons
entitled to file a record).
(d) Contents of statement under subsection (c).--An
information statement under subsection (c) must:
(1) identify the record to which it relates by the file
number assigned to the initial financing statement to which
the record relates;
(2) indicate that it is an information statement; and
(3) provide the basis for the person’s belief that the
person that filed the record was not entitled to do so under
section 9509(d).
[(c)] (e) Record not affected by correction statement.--
Except as provided in subsection [(d)] (f), the filing of a
correction statement does not affect the effectiveness of an
initial financing statement or other filed record.
[(d)] (f) Fraudulent financing statements.--
(1) The Department of State may conduct an
administrative hearing to determine if an initial financing
statement was fraudulently filed in accordance with the
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following:
(i) The hearing shall be conducted in accordance
with 2 Pa.C.S. (relating to Administrative Law and
Procedure). The department shall determine the initial
financing statement to be fraudulently filed for purposes
of this subsection if it determines that no rational
basis exists under section 9509 [(relating to persons
entitled to file a record)] entitling the person to file
the initial financing statement and it appears that the
person filed the initial financing statement with intent
to annoy, harass or harm the debtor.
* * *
Section 8. Section 9607(b)(2)(i) of Title 13 is amended to
read:
§ 9607. Collection and enforcement by secured party.
* * *
(b) Nonjudicial enforcement of mortgage.--If necessary to
enable a secured party to exercise under subsection (a)(3) the
right of a debtor to enforce a mortgage nonjudicially, the
secured party may record in the office in which a record of the
mortgage is recorded:
* * *
(2) The secured party's sworn affidavit in recordable
form stating that:
(i) a default has occurred with respect to the
obligation secured by the mortgage; and
* * *
Section 9. Title 13 is amended by adding a chapter to read:
CHAPTER 98
TRANSITION PROVISIONS FOR 2012 AMENDMENTS
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Sec.
9800. Definitions.
9801. Effective date.
9802. Savings clause.
9803. Security interest perfected before effective date.
9804. Security interest unperfected before effective date.
9805. Effectiveness of action taken before effective date.
9806. When initial financing statement suffices to continue
effectiveness of financing statement.
9807. Amendment of pre-effective-date financing statement.
9808. Person entitled to file initial financing statement or
continuation statement.
9809. Priority.
§ 9800. Definitions.
The following words and phrases when used in this chapter
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"2012 Revision." The amendments which:
(1) affect this division; and
(2) are made by the act of , 2012 (P.L. ,
No. ) entitled "An act amending Titles 13 (Commercial
Code), 30 (Fish) and 75 (Vehicles) of the Pennsylvania
Consolidated Statutes, revising secured transaction
provisions relating to definitions, to control of electronic
chattel paper, to location of debtor, to perfection of
security interests in property subject to certain statutes,
regulations and treaties, to continued perfection of security
interest following change in governing law, to interests
which take priority over or take free of security interest or
agricultural lien, to priority of security interests created
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by new debtor, to discharge of account debtor, notification
of assignment, identification and proof of assignment,
restrictions on assignment of accounts, chattel paper,
payment intangibles and promissory notes ineffective, to
restrictions on assignment of promissory notes, health-care-
insurance receivables and certain general intangibles
ineffective, to contents of financing statement, record of
mortgage as financing statement, time of filing financing
statement, to name of debtor and secured party, to effect of
certain events on effectiveness of financing statement, to
duration and effectiveness of financing statement, effect of
lapsed financing statement, to what constitutes filing,
effectiveness of filing, to claim concerning inaccurate or
wrongfully filed record; to collection and enforcement by
secured party; providing for transition provisions for 2012
amendments; imposing duties upon the Department of State and
the Department of Transportation; and making editorial
changes."
§ 9801. Effective date.
The 2012 Revision takes effect July 1, 2013.
§ 9802. Savings clause.
(a) Pre-effective-date transactions or liens.--Except as
otherwise provided in this part, the 2012 Revision applies to a
transaction or lien within its scope, even if the transaction or
lien was entered into or created before the 2012 Revision takes
effect.
(b) Pre-effective-date proceedings.--The 2012 Revision does
not affect an action, case, or proceeding commenced before the
2012 Revision takes effect.
§ 9803. Security interest perfected before effective date.
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(a) Continuing perfection; perfection requirements
satisfied.--A security interest that is a perfected security
interest immediately before the 2012 Revision takes effect is a
perfected security interest under this division as amended by
the 2012 Revision if, when the 2012 Revision takes effect, the
applicable requirements for attachment and perfection under this
division as amended by the 2012 Revision are satisfied without
further action.
(b) Continuing perfection: perfection requirements not
satisfied.--Except as otherwise provided in section 9805
(relating to effectiveness of action before effective date), if,
immediately before the 2012 Revision takes effect, a security
interest is a perfected security interest, but the applicable
requirements for perfection under this division as amended by
the 2012 Revision are not satisfied when the 2012 Revision takes
effect, the security interest remains perfected thereafter only
if the applicable requirements for perfection under this
division as amended by the 2012 Revision are satisfied within
one year after the 2012 Revision takes effect.
§ 9804. Security interest unperfected before effective date.
A security interest that is an unperfected security interest
immediately before the 2012 Revision takes effect becomes a
perfected security interest:
(1) without further action, when the 2012 Revision takes
effect if the applicable requirements for perfection under
this division as amended by the 2012 Revision are satisfied
before or at that time; or
(2) when the applicable requirements for perfection are
satisfied if the requirements are satisfied after that time.
§ 9805. Effectiveness of action taken before effective date.
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(a) Pre-effective-date filing effective.--The filing of a
financing statement before the 2012 Revision takes effect is
effective to perfect a security interest to the extent the
filing would satisfy the applicable requirements for perfection
under this division as amended by the 2012 Revision.
(b) When pre-effective-date filing becomes ineffective.--The
2012 Revision does not render ineffective an effective financing
statement that, before the 2012 Revision takes effect, is filed
and satisfies the applicable requirements for perfection under
the law of the jurisdiction governing perfection as provided in
this division as it existed before amendment by the 2012
Revision. However, except as otherwise provided in subsections
(c) and (d) and section 9806 (relating to when initial financing
statement suffices to continue effectiveness of financing
statement), the financing statement ceases to be effective:
(1) if the financing statement is filed in this
Commonwealth, at the time the financing statement would have
ceased to be effective had the 2012 Revision not taken
effect; or
(2) if the financing statement is filed in another
jurisdiction, at the earlier of:
(i) the time the financing statement would have
ceased to be effective under the law of that
jurisdiction; or
(ii) June 30, 2018.
(c) Continuation statement.--The filing of a continuation
statement after the 2012 Revision takes effect does not continue
the effectiveness of a financing statement filed before the 2012
Revision takes effect. However, upon the timely filing of a
continuation statement after the 2012 Revision takes effect and
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in accordance with the law of the jurisdiction governing
perfection as provided in this division as amended by the 2012
Revision, the effectiveness of a financing statement filed in
the same office in that jurisdiction before the 2012 Revision
takes effect continues for the period provided by the law of
that jurisdiction.
(d) Application of subsection (b)(2)(ii) to transmitting
utility financing statement.--Subsection (b)(2)(ii) applies to a
financing statement that, before the 2012 Revision takes effect,
is filed against a transmitting utility and satisfies the
applicable requirements for perfection under the law of the
jurisdiction governing perfection as provided in this division
as it existed before amendment by the 2012 Revision, only to the
extent that this division as amended by the 2012 Revision
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.
(e) Application of Chapter 95.--A financing statement that
includes a financing statement filed before the 2012 Revision
takes effect and a continuation statement filed after the 2012
Revision takes effect is effective only to the extent that it
satisfies the requirements of Chapter 95 (relating to filing) as
amended by the 2012 Revision 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(a)(2) (relating to name of debtor and secured
party) as amended by the 2012 Revision. A financing statement
that indicates that the debtor is a trust or is a trustee acting
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with respect to property held in trust indicates that the
collateral is held in a trust within the meaning of section
9503(a)(3) as amended by the 2012 Revision.
§ 9806. When initial financing statement suffices to continue
effectiveness of financing statement.
(a) Initial financing statement in lieu of continuation
statement.--The filing of an initial financing statement in the
office specified in section 9501 (relating to filing office)
continues the effectiveness of a financing statement filed
before the 2012 Revision takes effect if:
(1) the filing of an initial financing statement in that
office would be effective to perfect a security interest
under this division as amended by the 2012 Revision;
(2) the pre-effective-date financing statement was filed
in an office in another state; and
(3) the initial financing statement satisfies subsection
(c).
(b) Period of continued effectiveness.--The filing of an
initial financing statement under subsection (a) continues the
effectiveness of the pre-effective-date financing statement:
(1) if the initial financing statement is filed before
the 2012 Revision takes effect, for the period provided in
section 9515(a) through (e) and (g) (relating to duration and
effectiveness of financing statement; effect of lapsed
financing statement) with respect to an initial financing
statement; and
(2) if the initial financing statement is filed after
the 2012 Revision takes effect, for the period provided in
section 9515(f) as amended by the 2012 Revision with respect
to an initial financing statement.
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(c) Requirements for initial financing statement under
subsection (a).--To be effective for purposes of subsection (a),
an initial financing statement must:
(1) satisfy the requirements of Chapter 95 (relating to
filing) as amended by the 2012 Revision for an initial
financing statement;
(2) 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; and
(3) indicate that the pre-effective-date financing
statement remains effective.
§ 9807. Amendment of pre-effective-date financing statement.
(a) Definitions.--Refer to subsection (f).
(b) Applicable law.--After the 2012 Revision takes effect, 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 division as amended by
the 2012 Revision. 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.
(c) Method of amending: general rule.-- Except as otherwise
provided in subsection (d), if the law of this Commonwealth
governs perfection of a security interest, the information in a
pre-effective-date financing statement may be amended after the
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2012 Revision takes effect only if:
(1) the pre-effective-date financing statement and an
amendment are filed in the office specified in section 9501
(relating to filing office);
(2) 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(c) (relating to when initial filing statement
suffices to continue effectiveness of financing statement);
or
(3) an initial financing statement that provides the
information as amended and satisfies section 9806(c) is filed
in the office specified in section 9501.
(d) Method of amending: continuation.--If the law of this
Commonwealth governs perfection of a security interest, the
effectiveness of a pre-effective-date financing statement may be
continued only under section 9805(c) and (e) (relating to
effectiveness of action taken before effective date) or 9806.
(e) Method of amending: additional termination rule.--
Whether or not the law of this Commonwealth governs perfection
of a security interest, the effectiveness of a pre-effective-
date financing statement filed in this Commonwealth may be
terminated after the 2012 Revision takes effect 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(c) has been filed in the
office specified by the law of the jurisdiction governing
perfection as provided in this division as amended by the 2012
Revision as the office in which to file a financing statement.
(f) Definition.--As used in this section, the term "pre-
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effective-date financing statement" means a financing statement
filed before the 2012 Revision takes effect.
§ 9808. Person entitled to file initial financing statement or
continuation statement.
A person may file an initial financing statement or a
continuation statement under this part if:
(1) the secured party of record authorizes the filing;
and
(2) the filing is necessary under this part:
(i) to continue the effectiveness of a financing
statement filed before the 2012 Revision takes effect; or
(ii) to perfect or continue the perfection of a
security interest.
§ 9809. Priority.
The 2012 Revision determines the priority of conflicting
claims to collateral. However, if the relative priorities of the
claims were established before the 2012 Revision takes effect,
this division as it existed before amendment determines
priority.
Section 10. Section 5323(b) of Title 30 is amended to read:
§ 5323. Content and effect of certificate of title.
* * *
(b) Certificate as evidence and notice.--A certificate of
title issued by the commission is prima facie evidence of the
facts appearing on the certificate. Except as otherwise provided
in 13 Pa.C.S. §§ 9311(d) (relating to perfection of security
interests in property subject to certain statutes, regulations
and treaties), 9315(c) and (d) (relating to secured party's
rights on disposition of collateral and in proceeds) and 9316(d)
and (e) (relating to [continued perfection of security interest
20120HB2159PN3143 - 30 -
following] effect of change in governing law), the certificate
shall be adequate notice to the Commonwealth, creditors,
subsequent lienholders and purchasers that a lien against the
boat exists.
Section 11. Sections 1137 and 7712.8(a) of Title 75 are
amended to read:
§ 1137. Subchapter exclusive for perfecting security interest.
The method provided in this subchapter for perfecting and
giving notice of security interests is exclusive, except as
otherwise provided in 13 Pa.C.S. §§ 9315 (relating to secured
party's rights on disposition of collateral and in proceeds) and
9316(d) and (e) (relating to [continued perfection of security
interest following] effect of change in governing law).
§ 7712.8. Perfection of security interest in a snowmobile or
ATV.
(a) Applicability of section.--Except as otherwise provided
in 13 Pa.C.S. §§ 9311(d) (relating to perfection of security
interests in property subject to certain statutes, regulations
and treaties), 9315(c) and (d) (relating to secured party's
rights on disposition of collateral and in proceeds) and 9316(d)
and (e) (relating to [continued perfection of security interest
following] effect of change in governing law), this section
provides the exclusive method of perfecting a security interest
in a snowmobile or ATV for which a certificate of title is
required under this subchapter.
* * *
Section 12. In order to implement the amendment of 13
Pa.C.S. § 9503, the Department of State and the Department of
Transportation shall coordinate development and maintenance of
electronic systems for entering and searching data.
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Section 13. This act shall take effect July 1, 2013.
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