Engrossments
Introduction		Posted on 02/14/2024

A bill for an act
relating to commerce; adopting amendments to the Uniform Commercial Code to
accommodate emerging technologies; amending Minnesota Statutes 2022, sections
336.1-201; 336.1-204; 336.1-301; 336.1-306; 336.2-102; 336.2-106; 336.2-201;
336.2-202; 336.2-203; 336.2-205; 336.2-209; 336.2A-102; 336.2A-103;
336.2A-107; 336.2A-201; 336.2A-202; 336.2A-203; 336.2A-205; 336.2A-208;
336.3-104; 336.3-105; 336.3-401; 336.3-604; 336.4A-103; 336.4A-201;
336.4A-202; 336.4A-203; 336.4A-207; 336.4A-208; 336.4A-210; 336.4A-211;
336.4A-305; 336.5-104; 336.5-116; 336.7-102; 336.7-106; 336.8-102; 336.8-103;
336.8-106; 336.8-110; 336.8-303; 336.9-102; 336.9-104; 336.9-105; 336.9-203;
336.9-204; 336.9-207; 336.9-208; 336.9-209; 336.9-210; 336.9-301; 336.9-304;
336.9-305; 336.9-310; 336.9-312; 336.9-313; 336.9-314; 336.9-316; 336.9-317;
336.9-323; 336.9-324; 336.9-330; 336.9-331; 336.9-332; 336.9-334; 336.9-341;
336.9-404; 336.9-406; 336.9-408; 336.9-509; 336.9-513; 336.9-605; 336.9-608;
336.9-611; 336.9-613; 336.9-614; 336.9-615; 336.9-616; 336.9-619; 336.9-620;
336.9-621; 336.9-624; 336.9-628; Minnesota Statutes 2023 Supplement, section
336.9-601; proposing coding for new law in Minnesota Statutes, chapter 336.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

ARTICLE 1

GENERAL PROVISIONS

Section 1.

Minnesota Statutes 2022, section 336.1-201, is amended to read:

336.1-201 GENERAL DEFINITIONS.

(a) Unless the context otherwise requires, words or phrases defined in this section, or
in the additional definitions contained in other articles of the Uniform Commercial Code
that apply to particular articles or parts thereof, have the meanings stated.

(b) Subject to definitions contained in other articles of the Uniform Commercial Code
that apply to particular articles or parts thereof:

(1) "Action," in the sense of a judicial proceeding, includes recoupment, counterclaim,
setoff, suit in equity, and any other proceeding in which rights are determined.

(2) "Aggrieved party" means a party entitled to pursue a remedy.

(3) "Agreement," as distinguished from "contract," means the bargain of the parties in
fact, as found in their language or inferred from other circumstances, including course of
performance, course of dealing, or usage of trade as provided in section 336.1-303.

(4) "Bank" means a person engaged in the business of banking and includes a savings
bank, savings and loan association, credit union, and trust company.

(5) "Bearer" means a person in control of a negotiable electronic document of title or a
person in possession of a negotiable instrument, negotiable tangible document of title, or
certificated security that is payable to bearer or indorsed in blank.

(6) "Bill of lading" means a document of title evidencing the receipt of goods for shipment
issued by a person engaged in the business of directly or indirectly transporting or forwarding
goods. The term does not include a warehouse receipt.

(7) "Branch" includes a separately incorporated foreign branch of a bank.

(8) "Burden of establishing" a fact means the burden of persuading the trier of fact that
the existence of the fact is more probable than its nonexistence.

(9) "Buyer in ordinary course of business" means a person that buys goods in good faith,
without knowledge that the sale violates the rights of another person in the goods, and in
the ordinary course from a person, other than a pawnbroker, in the business of selling goods
of that kind. A person buys goods in the ordinary course if the sale to the person comports
with the usual or customary practices in the kind of business in which the seller is engaged
or with the seller's own usual or customary practices. A person that sells oil, gas, or other
minerals at the wellhead or minehead is a person in the business of selling goods of that
kind. A buyer in ordinary course of business may buy for cash, by exchange of other property,
or on secured or unsecured credit, and may acquire goods or documents of title under a
preexisting contract for sale. Only a buyer that takes possession of the goods or has a right
to recover the goods from the seller under article 2 may be a buyer in ordinary course of
business. "Buyer in ordinary course of business" does not include a person that acquires
goods in a transfer in bulk or as security for or in total or partial satisfaction of a money
debt.

(10) "Conspicuous," with reference to a term, means so written, displayed, or presented
thatnew text begin , based on the totality of circumstances,new text end a reasonable person against which it is to operate
ought to have noticed it. Whether a term is "conspicuous" or not is a decision for the court.
deleted text begin Conspicuous terms include the following:
deleted text end

deleted text begin (A) a heading in capitals equal to or greater in size than the surrounding text, or in
contrasting type, font, or color to the surrounding text of the same or lesser size; and
deleted text end

deleted text begin (B) language in the body of a record or display in larger type than the surrounding text,
or in contrasting type, font, or color to the surrounding text of the same size, or set off from
surrounding text of the same size by symbols or other marks that call attention to the
language.
deleted text end

(11) "Consumer" means an individual who enters into a transaction primarily for personal,
family, or household purposes.

(12) "Contract," as distinguished from "agreement," means the total legal obligation that
results from the parties' agreement as determined by the Uniform Commercial Code as
supplemented by any other applicable laws.

(13) "Creditor" includes a general creditor, a secured creditor, a lien creditor, and any
representative of creditors, including an assignee for the benefit of creditors, a trustee in
bankruptcy, a receiver in equity, and an executor or administrator of an insolvent debtor's
or assignor's estate.

(14) "Defendant" includes a person in the position of defendant in a counterclaim,
cross-claim, or third-party claim.

(15) "Delivery," with respect to an electronic document of title means voluntary transfer
of control andnew text begin ,new text end with respect to an instrument, a tangible document of title, ornew text begin an authoritative
tangible copy of a record evidencingnew text end chattel paper, means voluntary transfer of possession.

(16) "Document of title" means a record (i) that in the regular course of business or
financing is treated as adequately evidencing that the person in possession or control of the
record is entitled to receive, control, hold, and dispose of the record and the goods the record
covers, and (ii) that purports to be issued by or addressed to a bailee and to cover goods in
the bailee's possession which are either identified or are fungible portions of an identified
mass. The term includes a bill of lading, transport document, dock warrant, dock receipt,
warehouse receipt, and order for delivery of goods. An electronic document of title means
a document of title evidenced by a record consisting of information stored in an electronic
medium. A tangible document of title means a document of title evidenced by a record
consisting of information that is inscribed on a tangible medium.

new text begin (16A) "Electronic" means relating to technology having electrical, digital, magnetic,
wireless, optical, electromagnetic, or similar capabilities.
new text end

(17) "Fault" means a default, breach, or wrongful act or omission.

(18) "Fungible goods" means:

(A) goods of which any unit, by nature or usage of trade, is the equivalent of any other
like unit; or

(B) goods that by agreement are treated as equivalent.

(19) "Genuine" means free of forgery or counterfeiting.

(20) "Good faith," except as otherwise provided in article 5, means honesty in fact and
the observance of reasonable commercial standards of fair dealing.

(21) "Holder" means:

(A) the person in possession of a negotiable instrument that is payable either to bearer
or to an identified person that is the person in possession;

(B) the person in possession of a negotiable tangible document of title if the goods are
deliverable either to bearer or to the order of the person in possession; or

(C) the person in controlnew text begin , other than pursuant to section 336.7-106(g),new text end of a negotiable
electronic document of title.

(22) "Insolvency proceeding" includes an assignment for the benefit of creditors or other
proceeding intended to liquidate or rehabilitate the estate of the person involved.

(23) "Insolvent" means:

(A) having generally ceased to pay debts in the ordinary course of business other than
as a result of bona fide dispute;

(B) being unable to pay debts as they become due; or

(24) "Money" means a medium of exchangenew text begin that isnew text end currently authorized or adopted by
a domestic or foreign government. The term includes a monetary unit of account established
by an intergovernmental organization or by agreement between two or more countries.new text begin The
term does not include an electronic record that is a medium of exchange recorded and
transferable in a system that existed and operated for the medium of exchange before the
medium of exchange was authorized or adopted by the government.
new text end

(25) "Organization" means a person other than an individual.

(26) "Party," as distinguished from "third party," means a person that has engaged in a
transaction or made an agreement subject to the Uniform Commercial Code.

(27) "Person" means an individual, corporation, business trust, estate, trust, partnership,
limited liability company, association, joint venture, government, governmental subdivision,
agency, or instrumentality, deleted text begin public corporation,deleted text end or any other legal or commercial entity.new text begin The
term includes a protected series, however denominated, of an entity if the protected series
is established under law other than this chapter that limits, or limits if conditions specified
under the law are satisfied, the ability of a creditor of the entity or of any other protected
series of the entity to satisfy a claim from assets of the protected series.
new text end

(28) "Present value" means the amount as of a date certain of one or more sums payable
in the future, discounted to the date certain by use of either an interest rate specified by the
parties if that rate is not manifestly unreasonable at the time the transaction is entered into
or, if an interest rate is not so specified, a commercially reasonable rate that takes into
account the facts and circumstances at the time the transaction is entered into.

(29) "Purchase" means taking by sale, lease, discount, negotiation, mortgage, pledge,
lien, security interest, issue or reissue, gift, or any other voluntary transaction creating an
interest in property.

(30) "Purchaser" means a person that takes by purchase.

(31) "Record" means information that is inscribed on a tangible medium or that is stored
in an electronic or other medium and is retrievable in perceivable form.

(32) "Remedy" means any remedial right to which an aggrieved party is entitled with
or without resort to a tribunal.

(33) "Representative" means a person empowered to act for another, including an agent,
an officer of a corporation or association, and a trustee, executor, or administrator of an
estate.

(34) "Right" includes remedy.

(35) "Security interest" means an interest in personal property or fixtures which secures
payment or performance of an obligation. "Security interest" includes any interest of a
consignor and a buyer of accounts, chattel paper, a payment intangible, or a promissory
note in a transaction that is subject to article 9. "Security interest" does not include the
special property interest of a buyer of goods on identification of those goods to a contract
for sale under section 336.2-401, but a buyer may also acquire a "security interest" by
complying with article 9. Except as otherwise provided in section 336.2-505, the right of a
seller or lessor of goods under article 2 or 2A to retain or acquire possession of the goods
is not a "security interest," but a seller or lessor may also acquire a "security interest" by
complying with article 9. The retention or reservation of title by a seller of goods
notwithstanding shipment or delivery to the buyer under section 336.2-401 is limited in
effect to a reservation of a "security interest." Whether a transaction in the form of a lease
creates a "security interest" is determined pursuant to section 336.1-203.

(36) "Sendnew text begin ,new text end " in connection with a deleted text begin writing,deleted text end recorddeleted text begin ,deleted text end or deleted text begin noticedeleted text end new text begin notification,new text end means:

(A) to deposit in the mailnew text begin ,new text end deleted text begin ordeleted text end deliver for transmissionnew text begin , or transmitnew text end by any other usual
means of communicationnew text begin ,new text end with postage or cost or transmission provided fornew text begin ,new text end deleted text begin and properly
addressed, and in the case of an instrument, to an address specified thereon or otherwise
agreed, or if there be nonedeleted text end new text begin addressednew text end to any address reasonable under the circumstances;
or

(B) deleted text begin in any other way to cause to be received any record or notice within the time it would
have arrived if properly sentdeleted text end new text begin to cause the record or notification to be received within the
time it would have been received if properly sent under subparagraph (A)new text end .

(37) deleted text begin "Signed" includes using any symbol executed or adopted with present intention to
adopt or accept a writing.deleted text end new text begin "Sign" means, with present intent to authenticate or adopt a record:
new text end

new text begin (A) execute or adopt a tangible symbol; or
new text end

new text begin (B) attach to or logically associate with the record an electronic symbol, sound, or
process.
new text end

new text begin "Signed," "signing," and "signature" have corresponding meanings.
new text end

(38) "State" means a state of the United States, the District of Columbia, Puerto Rico,
the United States Virgin Islands, or any territory or insular possession subject to the
jurisdiction of the United States.

(39) "Surety" includes a guarantor or other secondary obligor.

(40) "Term" means a portion of an agreement that relates to a particular matter.

(41) "Unauthorized signature" means a signature made without actual, implied, or
apparent authority. The term includes a forgery.

(42) "Warehouse receipt" means a document of title issued by a person engaged in the
business of storing goods for hire.

(43) "Writing" includes printing, typewriting, or any other intentional reduction to
tangible form. "Written" has a corresponding meaning.

Sec. 2.

Minnesota Statutes 2022, section 336.1-204, is amended to read:

336.1-204 VALUE.

Except as otherwise provided in articles 3, 4, deleted text begin anddeleted text end 5,new text begin and 12,new text end a person gives value for
rights if the person acquires them:

(1) in return for a binding commitment to extend credit or for the extension of
immediately available credit, whether or not drawn upon and whether or not a chargeback
is provided for in the event of difficulties in collection;

(2) as security for, or in total or partial satisfaction of, a preexisting claim;

(3) by accepting delivery under a preexisting contract for purchase; or

(4) in return for any consideration sufficient to support a simple contract.

Sec. 3.

Minnesota Statutes 2022, section 336.1-301, is amended to read:

336.1-301 TERRITORIAL APPLICABILITY; PARTIES' POWER TO CHOOSE
APPLICABLE LAW.

(a) Except as otherwise provided in this section, when a transaction bears a reasonable
relation to this state and also to another state or nation the parties may agree that the law
either of this state or of such other state or nation shall govern their rights and duties.

(b) In the absence of an agreement effective under subsection (a), and except as provided
in subsection (c), the Uniform Commercial Code applies to transactions bearing an
appropriate relation to this state.

(c) If one of the following provisions of the Uniform Commercial Code specifies the
applicable law, that provision governs and a contrary agreement is effective only to the
extent permitted by the law so specified:

(1) section 336.2-402;

(2) sections 336.2A-105 and 336.2A-106;

(3) section 336.4-102;

(4) section 336.4A-507;

(5) section 336.5-116;

(6) section 336.8-110;

(7) sections 336.9-301 through 336.9-307deleted text begin .deleted text end new text begin ;
new text end

new text begin (8) section 336.12-107.
new text end

Sec. 4.

Minnesota Statutes 2022, section 336.1-306, is amended to read:

336.1-306 WAIVER OR RENUNCIATION OF CLAIM OR RIGHT AFTER
BREACH.

A claim or right arising out of an alleged breach may be discharged in whole or in part
without consideration by agreement of the aggrieved party in deleted text begin an authenticateddeleted text end new text begin a signednew text end
record.

ARTICLE 2

SALES

Section 1.

Minnesota Statutes 2022, section 336.2-102, is amended to read:

336.2-102 SCOPE; CERTAIN SECURITY AND OTHER TRANSACTIONS
EXCLUDED FROM THIS ARTICLE.

deleted text begin Unless the context otherwise requires, this article applies to transactions in goods; it
does not apply to any transaction which although in the form of an unconditional contract
to sell or present sale is intended to operate only as a security transaction nor does this article
impair or repeal any statute regulating sales to consumers, farmers or other specified classes
of buyers.
deleted text end

new text begin (1) Unless the context otherwise requires, and except as provided in subsection (3), this
article applies to transactions in goods and, in the case of a hybrid transaction, it applies to
the extent provided in subsection (2).
new text end

new text begin (2) In a hybrid transaction:
new text end

new text begin (a) If the sale-of-goods aspects do not predominate, only the provisions of this article
which relate primarily to the sale-of-goods aspects of the transaction apply, and the provisions
that relate primarily to the transaction as a whole do not apply.
new text end

new text begin (b) If the sale-of-goods aspects predominate, this article applies to the transaction but
does not preclude application in appropriate circumstances of other law to aspects of the
transaction which do not relate to the sale of goods.
new text end

new text begin (3) This article does not:
new text end

new text begin (a) apply to a transaction that, even though in the form of an unconditional contract to
sell or present sale, operates only to create a security interest; or
new text end

new text begin (b) impair or repeal a statute regulating sales to consumers, farmers, or other specified
classes of buyers.
new text end

Sec. 2.

Minnesota Statutes 2022, section 336.2-106, is amended to read:

336.2-106 DEFINITIONS: "CONTRACT"; "AGREEMENT"; "CONTRACT
FOR SALE"; "SALE"; "PRESENT SALE"; "CONFORMING TO CONTRACT";
"TERMINATION"; "CANCELLATIONdeleted text begin .deleted text end "new text begin ; "HYBRID TRANSACTION."
new text end

(1) In this article unless the context otherwise requires "contract" and "agreement" are
limited to those relating to the present or future sale of goods. "Contract for sale" includes
both a present sale of goods and a contract to sell goods at a future time. A "sale" consists
in the passing of title from the seller to the buyer for a price (section 336.2-401). A "present
sale" means a sale which is accomplished by the making of the contract.

(2) Goods or conduct including any part of a performance are "conforming" or conform
to the contract when they are in accordance with the obligations under the contract.

(3) "Termination" occurs when either party pursuant to a power created by agreement
or law puts an end to the contract otherwise than for its breach. On "termination" all
obligations which are still executory on both sides are discharged but any right based on
prior breach or performance survives.

(4) "Cancellation" occurs when either party puts an end to the contract for breach by the
other and its effect is the same as that of "termination" except that the canceling party also
retains any remedy for breach of the whole contract or any unperformed balance.

new text begin (5) "Hybrid transaction" means a single transaction involving a sale of goods and:
new text end

new text begin (a) the provision of services;
new text end

new text begin (b) a lease of other goods; or
new text end

new text begin (c) a sale, lease, or license of property other than goods.
new text end

Sec. 3.

Minnesota Statutes 2022, section 336.2-201, is amended to read:

336.2-201 FORMAL REQUIREMENTS; STATUTE OF FRAUDS.

(1) Except as otherwise provided in this section a contract for the sale of goods for the
price of $500 or more is not enforceable by way of action or defense unless there is deleted text begin some
writingdeleted text end new text begin a recordnew text end sufficient to indicate that a contract for sale has been made between the
parties and signed by the party against whom enforcement is sought or by the party's
authorized agent or broker. A deleted text begin writingdeleted text end new text begin recordnew text end is not insufficient because it omits or incorrectly
states a term agreed upon but the contract is not enforceable under this deleted text begin paragraphdeleted text end new text begin subsectionnew text end
beyond the quantity of goods shown in deleted text begin such writingdeleted text end new text begin the recordnew text end .

(2) Between merchants if within a reasonable time a deleted text begin writingdeleted text end new text begin recordnew text end in confirmation of
the contract and sufficient against the sender is received and the party receiving it has reason
to know its contents, it satisfies the requirements of subsection (1) against deleted text begin suchdeleted text end new text begin thenew text end party
unless deleted text begin writtendeleted text end noticenew text begin in a recordnew text end of objection to its contents is given within ten days after it
is received.

(3) A contract which does not satisfy the requirements of subsection (1) but which is
valid in other respects is enforceable

(a) if the goods are to be specially manufactured for the buyer and are not suitable for
sale to others in the ordinary course of the seller's business and the seller, before notice of
repudiation is received and under circumstances which reasonably indicate that the goods
are for the buyer, has made either a substantial beginning of their manufacture or
commitments for their procurement; or

(b) if the party against whom enforcement is sought admits in pleading, testimony or
otherwise in court that a contract for sale was made, but the contract is not enforceable
under this provision beyond the quantity of goods admitted; or

(c) with respect to goods for which payment has been made and accepted or which have
been received and accepted (section 336.2-606).

Sec. 4.

Minnesota Statutes 2022, section 336.2-202, is amended to read:

336.2-202 FINAL WRITTEN EXPRESSION; PAROL OR EXTRINSIC
EVIDENCE.

Terms with respect to which the confirmatory memoranda of the parties agree or which
are otherwise set forth in a deleted text begin writingdeleted text end new text begin recordnew text end intended by the parties as a final expression of
their agreement with respect to such terms as are included therein may not be contradicted
by evidence of any prior agreement or of a contemporaneous oral agreement but may be
explained or supplementednew text begin :
new text end

(a) by course of performance, course of dealing, or usage of trade (section 336.1-303);
and

(b) by evidence of consistent additional terms unless the court finds the deleted text begin writingdeleted text end new text begin recordnew text end
to have been intended also as a complete and exclusive statement of the terms of the
agreement.

Sec. 5.

Minnesota Statutes 2022, section 336.2-203, is amended to read:

336.2-203 SEALS INOPERATIVE.

The affixing of a seal to a deleted text begin writingdeleted text end new text begin recordnew text end evidencing a contract for sale or an offer to
buy or sell goods does not constitute the deleted text begin writingdeleted text end new text begin recordnew text end a sealed instrument and the law with
respect to sealed instruments does not apply to such a contract or offer.

Sec. 6.

Minnesota Statutes 2022, section 336.2-205, is amended to read:

336.2-205 FIRM OFFERS.

An offer by a merchant to buy or sell goods in a signed deleted text begin writingdeleted text end new text begin recordnew text end which by its terms
gives assurance that it will be held open is not revocable, for lack of consideration, during
the time stated or if no time is stated for a reasonable time, but in no event may such period
of irrevocability exceed three months but any such term of assurance on a form supplied
by the offeree must be separately signed by the offeror.

Sec. 7.

Minnesota Statutes 2022, section 336.2-209, is amended to read:

336.2-209 MODIFICATION, RESCISSION AND WAIVER.

(1) An agreement modifying a contract within this article needs no consideration to be
binding.

(2) A signed agreement which excludes modification or rescission except by a signed
writingnew text begin or other signed recordnew text end cannot be otherwise modified or rescinded, but except as
between merchants such a requirement on a form supplied by the merchant must be separately
signed by the other party.

(3) The requirements of the statute of frauds section of this article (section 336.2-201)
must be satisfied if the contract as modified is within its provisions.

(4) Although an attempt at modification or rescission does not satisfy the requirements
of subsection (2) or (3) it can operate as a waiver.

(5) A party who has made a waiver affecting an executory portion of the contract may
retract the waiver by reasonable notification received by the other party that strict
performance will be required of any term waived, unless the retraction would be unjust in
view of a material change of position in reliance on the waiver.

ARTICLE 3

LEASES

Section 1.

Minnesota Statutes 2022, section 336.2A-102, is amended to read:

336.2A-102 SCOPE.

new text begin (1) new text end This article applies to any transaction, regardless of form, that creates a leasenew text begin and,
in the case of a hybrid lease, it applies to the extent provided in subsection (2)new text end .

new text begin (2) In a hybrid lease:
new text end

new text begin (a) if the lease-of-goods aspects do not predominate:
new text end

new text begin (i) only the provisions of this article which relate primarily to the lease-of-goods aspects
of the transaction apply, and the provisions that relate primarily to the transaction as a whole
do not apply;
new text end

new text begin (ii) section 336.2A-209 applies if the lease is a finance lease; and
new text end

new text begin (iii) section 336.2A-407 applies to the promises of the lessee in a finance lease to the
extent the promises are consideration for the right to possession and use of the leased goods;
and
new text end

new text begin (b) if the lease-of-goods aspects predominate, this article applies to the transaction, but
does not preclude application in appropriate circumstances of other law to aspects of the
lease which do not relate to the lease of goods.
new text end

Sec. 2.

Minnesota Statutes 2022, section 336.2A-103, is amended to read:

336.2A-103 DEFINITIONS AND INDEX OF DEFINITIONS.

(1) In this article unless the context otherwise requires:

(a) "Buyer in ordinary course of business" means a person who in good faith and without
knowledge that the sale is in violation of the ownership rights or security interest or leasehold
interest of a third party in the goods, buys in ordinary course from a person in the business
of selling goods of that kind but does not include a pawnbroker. "Buying" may be for cash
or by exchange of other property or on secured or unsecured credit and includes acquiring
goods or documents of title under a preexisting contract for sale but does not include a
transfer in bulk or as security for or in total or partial satisfaction of a money debt.

(b) "Cancellation" occurs when either party puts an end to the lease contract for default
by the other party.

(c) "Commercial unit" means a unit of goods that by commercial usage is a single whole
for purposes of lease and division of which materially impairs its character or value on the
market or in use. A commercial unit may be a single article, as a machine, or a set of articles,
as a suite of furniture or a line of machinery, or a quantity, as a gross or carload, or any
other unit treated in use or in the relevant market as a single whole.

(d) "Conforming" goods or performance under a lease contract means goods or
performance that are in accordance with the obligations under the lease contract.

(e) "Consumer lease" means a lease that a lessor regularly engaged in the business of
leasing or selling makes to a lessee who is an individual and who takes under the lease
primarily for a personal, family, or household purpose, if the total payments to be made
under the lease contract, excluding payments for options to renew or buy, do not exceed
$25,000.

(f) "Fault" means wrongful act, omission, breach, or default.

(g) "Finance lease" means a lease in which

(1) the lessor does not select, manufacture, or supply the goods,

(2) the lessor acquires the goods or the right to possession and use of the goods in
connection with the lease, and

(3) either

(i) the lessee receives a copy of the contract evidencing the lessor's purchase of the goods
or a disclaimer statement on or before signing the lease contract, or

(ii) the lessee's approval of the contract evidencing the lessor's purchase of the goods or
a disclaimer statement is a condition to effectiveness of the lease contract.

"Disclaimer statement" means a written statement that is part of or separate from the
lease contract that discloses all warranties and other rights provided to the lessee by the
lessor and supplier in connection with the lease contract and informs the lessee in a
conspicuous manner that there are no warranties or other rights provided to the lessee by
the lessor and supplier other than those disclosed in the statement.

(h) "Goods" means all things that are movable at the time of identification to the lease
contract, or are fixtures (section 336.2A-309), but the term does not include money,
documents, instruments, accounts, chattel paper, general intangibles, or minerals or the like,
including oil and gas, before extraction. The term also includes the unborn young of animals.

new text begin (h.1) "Hybrid lease" means a single transaction involving a lease of goods and:
new text end

new text begin (i) the provision of services;
new text end

new text begin (ii) a sale of other goods; or
new text end

new text begin (iii) a sale, lease, or license of property other than goods.
new text end

(i) "Installment lease contract" means a lease contract that authorizes or requires the
delivery of goods in separate lots to be separately accepted, even though the lease contract
contains a clause "each delivery is a separate lease" or its equivalent.

(j) "Lease" means a transfer of the right to possession and use of goods for a term in
return for consideration, but a sale, including a sale on approval or a sale or return, or
retention or creation of a security interest is not a lease. Unless the context clearly indicates
otherwise, the term includes a sublease.

(k) "Lease agreement" means the bargain, with respect to the lease, of the lessor and the
lessee in fact as found in their language or by implication from other circumstances including
course of dealing or usage of trade or course of performance as provided in this article.
Unless the context clearly indicates otherwise, the term includes a sublease agreement.

(l) "Lease contract" means the total legal obligation that results from the lease agreement
as affected by this article and any other applicable rules of law. Unless the context clearly
indicates otherwise, the term includes a sublease contract.

(m) "Leasehold interest" means the interest of the lessor or the lessee under a lease
contract.

(n) "Lessee" means a person who acquires the right to possession and use of goods under
a lease. Unless the context clearly indicates otherwise, the term includes a sublessee.

(o) "Lessee in ordinary course of business" means a person who in good faith and without
knowledge that the lease is in violation of the ownership rights or security interest or
leasehold interest of a third party in the goods leases in ordinary course from a person in
the business of selling or leasing goods of that kind but does not include a pawnbroker.
"Leasing" may be for cash or by exchange of other property or on secured or unsecured
credit and includes acquiring goods or documents of title under a preexisting lease contract
but does not include a transfer in bulk or as security for or in total or partial satisfaction of
a money debt.

(p) "Lessor" means a person who transfers the right to possession and use of goods under
a lease. Unless the context clearly indicates otherwise, the term includes a sublessor.

(q) "Lessor's residual interest" means the lessor's interest in the goods after expiration,
termination, or cancellation of the lease contract.

(r) "Lien" means a charge against or interest in goods to secure payment of a debt or
performance of an obligation, but the term does not include a security interest.

(s) "Lot" means a parcel or a single article that is the subject matter of a separate lease
or delivery, whether or not it is sufficient to perform the lease contract.

(t) "Merchant lessee" means a lessee that is a merchant with respect to goods of the kind
subject to the lease.

(u) "Present value" means the amount as of a date certain of one or more sums payable
in the future, discounted to the date certain. The discount is determined by the interest rate
specified by the parties if the rate was not manifestly unreasonable at the time the transaction
was entered into; otherwise, the discount is determined by a commercially reasonable rate
that takes into account the facts and circumstances of each case at the time the transaction
was entered into.

(v) "Purchase" includes taking by sale, lease, mortgage, security interest, pledge, gift,
or any other voluntary transaction creating an interest in goods.

(w) "Sublease" means a lease of goods the right to possession and use of which was
acquired by the lessor as a lessee under an existing lease.

(x) "Supplier" means a person from whom a lessor buys or leases goods to be leased
under a finance lease.

(y) "Supply contract" means a contract under which a lessor buys or leases goods to be
leased.

(z) "Termination" occurs when either party pursuant to a power created by agreement
or law puts an end to the lease contract otherwise than for default.

(2) Other definitions applying to this article and the sections in which they appear are:

"Accessions." Section 336.2A-310(1).

"Construction mortgage." Section 336.2A-309(1)(d).

"Encumbrance." Section 336.2A-309(1)(e).

"Fixtures." Section 336.2A-309(1)(a).

"Fixture filing." Section 336.2A-309(1)(b).

"Purchase money lease." Section 336.2A-309(1)(c).

(3) The following definitions in other articles apply to this article:

"Account." Section 336.9-102(a)(2).

"Between merchants." Section 336.2-104(3).

"Buyer." Section 336.2-103(1)(a).

"Chattel paper." Section 336.9-102(a)(11).

"Consumer goods." Section 336.9-102(a)(23).

"Document." Section 336.9-102(a)(30).

"Entrusting." Section 336.2-403(3).

"General intangible." Section 336.9-102(a)(42).

"Instrument." Section 336.9-102(a)(47).

"Merchant." Section 336.2-104(1).

"Mortgage." Section 336.9-102(a)(55).

"Pursuant to commitment." Section 336.9-102(a)(69).

"Receipt." Section 336.2-103(1)(c).

"Sale." Section 336.2-106(1).

"Sale on approval." Section 336.2-326.

"Sale or return." Section 336.2-326.

"Seller." Section 336.2-103(1)(d).

(4) In addition, sections 336.1-101 to 336.1-310 contain general definitions and principles
of construction and interpretation applicable throughout this article.

Sec. 3.

Minnesota Statutes 2022, section 336.2A-107, is amended to read:

336.2A-107 WAIVER OR RENUNCIATION OF CLAIM OR RIGHT AFTER
DEFAULT.

Any claim or right arising out of an alleged default or breach of warranty may be
discharged in whole or in part without consideration by a deleted text begin writtendeleted text end waiver or renunciationnew text begin in
anew text end signed deleted text begin anddeleted text end new text begin recordnew text end delivered by the aggrieved party.

Sec. 4.

Minnesota Statutes 2022, section 336.2A-201, is amended to read:

336.2A-201 STATUTE OF FRAUDS.

(1) A lease contract is not enforceable by way of action or defense unless:

(a) the total payments to be made under the lease contract, excluding payments for
options to renew or buy, are less than $1,000; or

(b) there is a deleted text begin writingdeleted text end new text begin recordnew text end , signed by the party against whom enforcement is sought
or by that party's authorized agent, sufficient to indicate that a lease contract has been made
between the parties and to describe the goods leased and the lease term.

(2) Any description of leased goods or of the lease term is sufficient and satisfies
subsection (1)(b), whether or not it is specific, if it reasonably identifies what is described.

(3) A deleted text begin writingdeleted text end new text begin recordnew text end is not insufficient because it omits or incorrectly states a term agreed
upon, but the lease contract is not enforceable under subsection (1)(b) beyond the lease term
and the quantity of goods shown in the deleted text begin writingdeleted text end new text begin recordnew text end .

(4) A lease contract that does not satisfy the requirements of subsection (1), but which
is valid in other respects, is enforceable:

(a) if the goods are to be specially manufactured or obtained for the lessee and are not
suitable for lease or sale to others in the ordinary course of the lessor's business, and the
lessor, before notice of repudiation is received and under circumstances that reasonably
indicate that the goods are for the lessee, has made either a substantial beginning of their
manufacture or commitments for their procurement;

(b) if the party against whom enforcement is sought admits in that party's pleading,
testimony, or otherwise in court that a lease contract was made, but the lease contract is not
enforceable under this provision beyond the quantity of goods admitted; or

(5) The lease term under a lease contract referred to in subsection (4) is:

(a) if there is a deleted text begin writingdeleted text end new text begin recordnew text end signed by the party against whom enforcement is sought
or by that party's authorized agent specifying the lease term, the term so specified;

(b) if the party against whom enforcement is sought admits in that party's pleading,
testimony, or otherwise in court a lease term, the term so admitted; or

Sec. 5.

Minnesota Statutes 2022, section 336.2A-202, is amended to read:

336.2A-202 FINAL deleted text begin WRITTENdeleted text end EXPRESSION; PAROL OR EXTRINSIC
EVIDENCE.

Terms with respect to which the confirmatory memoranda of the parties agree or which
are otherwise set forth in a deleted text begin writingdeleted text end new text begin recordnew text end intended by the parties as a final expression of
their agreement with respect to the included terms may not be contradicted by evidence of
any prior agreement or of a contemporaneous oral agreement but may be explained or
supplemented:

(a) by course of dealing or usage of trade or by course of performance; and

Sec. 6.

Minnesota Statutes 2022, section 336.2A-203, is amended to read:

336.2A-203 SEALS INOPERATIVE.

The affixing of a seal to a deleted text begin writingdeleted text end new text begin recordnew text end evidencing a lease contract or an offer to enter
into a lease contract does not render the deleted text begin writingdeleted text end new text begin recordnew text end a sealed instrument and the law with
respect to sealed instruments does not apply to the lease contract or offer.

Sec. 7.

Minnesota Statutes 2022, section 336.2A-205, is amended to read:

336.2A-205 FIRM OFFERS.

An offer by a merchant to lease goods to or from another person in a signed deleted text begin writingdeleted text end new text begin
recordnew text end that by its terms gives assurance it will be held open is not revocable, for lack of
consideration, during the time stated or, if no time is stated, for a reasonable time, but in no
event may the period of irrevocability exceed three months. Any term of assurance on a
form supplied by the offeree must be separately signed by the offeror.

Sec. 8.

Minnesota Statutes 2022, section 336.2A-208, is amended to read:

336.2A-208 MODIFICATION, RESCISSION AND WAIVER.

(1) An agreement modifying a lease contract needs no consideration to be binding.

(2) A signed lease agreement that excludes modification or rescission except by a signed
deleted text begin writingdeleted text end new text begin recordnew text end may not be otherwise modified or rescinded, but, except as between merchants,
this requirement on a form supplied by a merchant must be separately signed by the other
party.

(3) Although an attempt at modification or rescission does not satisfy the requirements
of subsection (2), it may operate as a waiver.

(4) A party who has made a waiver affecting an executory portion of a lease contract
may retract the waiver by reasonable notification received by the other party that strict
performance will be required of any term waived, unless the retraction would be unjust in
view of a material change of position in reliance on the waiver.

ARTICLE 4

NEGOTIABLE INSTRUMENT

Section 1.

Minnesota Statutes 2022, section 336.3-104, is amended to read:

336.3-104 NEGOTIABLE INSTRUMENT.

(a) Except as provided in subsections (c) and (d), "negotiable instrument" means an
unconditional promise or order to pay a fixed amount of money, with or without interest or
other charges described in the promise or order, if it:

(1) is payable to bearer or to order at the time it is issued or first comes into possession
of a holder;

(2) is payable on demand or at a definite time; and

(3) does not state any other undertaking or instruction by the person promising or ordering
payment to do any act in addition to the payment of money, but the promise or order may
contain (i) an undertaking or power to give, maintain, or protect collateral to secure payment,
(ii) an authorization or power to the holder to confess judgment or realize on or dispose of
collateral, deleted text begin ordeleted text end (iii) a waiver of the benefit of any law intended for the advantage or protection
of an obligornew text begin , (iv) a term that specifies the law that governs the promise or order, or (v) an
undertaking to resolve in a specified forum a dispute concerning the promise or ordernew text end .

(b) "Instrument" means a negotiable instrument.

(c) An order that meets all of the requirements of subsection (a), except paragraph (1),
and otherwise falls within the definition of "check" in subsection (f) is a negotiable instrument
and a check.

(d) A promise or order other than a check is not an instrument if, at the time it is issued
or first comes into possession of a holder, it contains a conspicuous statement, however
expressed, to the effect that the promise or order is not negotiable or is not an instrument
governed by this article.

(e) An instrument is a "note" if it is a promise and is a "draft" if it is an order. If an
instrument falls within the definition of both "note" and "draft," a person entitled to enforce
the instrument may treat it as either.

(f) "Check" means (i) a draft, other than a documentary draft, payable on demand and
drawn on a bank or (ii) a cashier's check or teller's check. An instrument may be a check
even though it is described on its face by another term, such as "money order."

(g) "Cashier's check" means a draft with respect to which the drawer and drawee are the
same bank or branches of the same bank.

(h) "Teller's check" means a draft drawn by a bank (i) on another bank, or (ii) payable
at or through a bank.

(i) "Traveler's check" means an instrument that (i) is payable on demand, (ii) is drawn
on or payable at or through a bank, (iii) is designated by the term "traveler's check" or by
a substantially similar term, and (iv) requires, as a condition to payment, a countersignature
by a person whose specimen signature appears on the instrument.

(j) "Certificate of deposit" means an instrument containing an acknowledgment by a
bank that a sum of money has been received by the bank and a promise by the bank to repay
the sum of money. A certificate of deposit is a note of the bank.

Sec. 2.

Minnesota Statutes 2022, section 336.3-105, is amended to read:

336.3-105 ISSUE OF INSTRUMENT.

(a) "Issue" meansnew text begin :
new text end

new text begin (1) new text end the first delivery of an instrument by the maker or drawer, whether to a holder or
nonholder, for the purpose of giving rights on the instrument to any persondeleted text begin .deleted text end new text begin ; or
new text end

new text begin (2) if agreed by the payee, the first transmission by the drawer to the payee of an image
of an item and information derived from the item that enables the depositary bank to collect
the item by transferring or presenting under federal law an electronic check.
new text end

(b) An unissued instrument, or an unissued incomplete instrument that is completed, is
binding on the maker or drawer, but nonissuance is a defense. An instrument that is
conditionally issued or is issued for a special purpose is binding on the maker or drawer,
but failure of the condition or special purpose to be fulfilled is a defense.

Sec. 3.

Minnesota Statutes 2022, section 336.3-401, is amended to read:

336.3-401 SIGNATUREnew text begin NECESSARY FOR LIABILITY ON INSTRUMENTnew text end .

deleted text begin (a)deleted text end A person is not liable on an instrument unless (i) the person signed the instrument,
or (ii) the person is represented by an agent or representative who signed the instrument
and the signature is binding on the represented person under section 336.3-402.

deleted text begin (b) A signature may be made (i) manually or by means of a device or machine, and (ii)
by the use of any name, including a trade or assumed name, or by a word, mark, or symbol
executed or adopted by a person with present intention to authenticate a writing.
deleted text end

Sec. 4.

Minnesota Statutes 2022, section 336.3-604, is amended to read:

336.3-604 DISCHARGE BY CANCELLATION OR RENUNCIATION.

(a) A person entitled to enforce an instrument, with or without consideration, may
discharge the obligation of a party to pay the instrument (i) by an intentional voluntary act,
such as surrender of the instrument to the party, destruction, mutilation, or cancellation of
the instrument, cancellation or striking out of the party's signature, or the addition of words
to the instrument indicating discharge, or (ii) by agreeing not to sue or otherwise renouncing
rights against the party by a signed record.new text begin The obligation of a party to pay a check is not
discharged solely by destruction of the check in connection with a process in which
information is extracted from the check and an image of the check is made and, subsequently,
the information and image are transmitted for payment.
new text end

(b) Cancellation or striking out of an endorsement pursuant to subsection (a) does not
affect the status and rights of a party derived from the endorsement.

deleted text begin (c) In this section, "signed," with respect to a record that is not a writing, includes the
attachment to or logical association with the record of an electronic symbol, sound, or
process with the present intent to adopt or accept the record.
deleted text end

ARTICLE 5

FUND TRANSFERS

Section 1.

Minnesota Statutes 2022, section 336.4A-103, is amended to read:

336.4A-103 PAYMENT ORDER-DEFINITIONS.

(a) In this article:

(1) "Payment order" means an instruction of a sender to a receiving bank, transmitted
orallydeleted text begin , electronically,deleted text end or in deleted text begin writingdeleted text end new text begin a recordnew text end , to pay, or to cause another bank to pay, a fixed
or determinable amount of money to a beneficiary if:

(i) the instruction does not state a condition to payment to the beneficiary other than
time of payment,

(ii) the receiving bank is to be reimbursed by debiting an account of, or otherwise
receiving payment from, the sender, and

(iii) the instruction is transmitted by the sender directly to the receiving bank or to an
agent, funds-transfer system, or communication system for transmittal to the receiving bank.

(2) "Beneficiary" means the person to be paid by the beneficiary's bank.

(3) "Beneficiary's bank" means the bank identified in a payment order in which an
account of the beneficiary is to be credited pursuant to the order or which otherwise is to
make payment to the beneficiary if the order does not provide for payment to an account.

(4) "Receiving bank" means the bank to which the sender's instruction is addressed.

(5) "Sender" means the person giving the instruction to the receiving bank.

(b) If an instruction complying with subsection (a)(1) is to make more than one payment
to a beneficiary, the instruction is a separate payment order with respect to each payment.

Sec. 2.

Minnesota Statutes 2022, section 336.4A-201, is amended to read:

336.4A-201 SECURITY PROCEDURE.

"Security procedure" means a procedure established by agreement of a customer and a
receiving bank for the purpose of (i) verifying that a payment order or communication
amending or canceling a payment order is that of the customer, or (ii) detecting error in the
transmission or the content of the payment order or communication. A security procedurenew text begin
may impose an obligation on the receiving bank or the customer, andnew text end may require the use
of algorithms or other codes, identifying words deleted text begin ordeleted text end new text begin ,new text end numbers,new text begin symbols, sounds, biometrics,new text end
encryption, callback procedures, or similar security devices. Comparison of a signature on
a payment order or communication with an authorized specimen signature of the customernew text begin
or requiring a payment order to be sent from a known email address, IP address, or telephone
numbernew text end is not by itself a security procedure.

Sec. 3.

Minnesota Statutes 2022, section 336.4A-202, is amended to read:

336.4A-202 AUTHORIZED AND VERIFIED PAYMENT ORDERS.

(a) A payment order received by the receiving bank is the authorized order of the person
identified as sender if that person authorized the order or is otherwise bound by it under the
law of agency.

(b) If a bank and its customer have agreed that the authenticity of payment orders issued
to the bank in the name of the customer as sender will be verified pursuant to a security
procedure, a payment order received by the receiving bank is effective as the order of the
customer, whether or not authorized, if (i) the security procedure is a commercially reasonable
method of providing security against unauthorized payment orders, and (ii) the bank proves
that it accepted the payment order in good faith and in compliance withnew text begin the bank's obligations
undernew text end the security procedure and any deleted text begin writtendeleted text end agreement or instruction of the customernew text begin ,
evidenced by a record,new text end restricting acceptance of payment orders issued in the name of the
customer. The bank is not required to follow an instruction that violates deleted text begin a writtendeleted text end new text begin annew text end
agreement with the customernew text begin , evidenced by a record,new text end or notice of which is not received at
a time and in a manner affording the bank a reasonable opportunity to act on it before the
payment order is accepted.

(c) Commercial reasonableness of a security procedure is a question of law to be
determined by considering the wishes of the customer expressed to the bank, the
circumstances of the customer known to the bank, including the size, type, and frequency
of payment orders normally issued by the customer to the bank, alternative security
procedures offered to the customer, and security procedures in general use by customers
and receiving banks similarly situated. A security procedure is deemed to be commercially
reasonable if (i) the security procedure was chosen by the customer after the bank offered,
and the customer refused, a security procedure that was commercially reasonable for that
customer, and (ii) the customer expressly agreed in deleted text begin writingdeleted text end new text begin a recordnew text end to be bound by any
payment order, whether or not authorized, issued in its name and accepted by the bank in
compliance withnew text begin the bank's obligations undernew text end the security procedure chosen by the customer.

(d) The term "sender" in this article includes the customer in whose name a payment
order is issued if the order is the authorized order of the customer under subsection (a), or
it is effective as the order of the customer under subsection (b).

(e) This section applies to amendments and cancellations of payment orders to the same
extent it applies to payment orders.

(f) Except as provided in this section and in section 336.4A-203(a)(1), rights and
obligations arising under this section or section 336.4A-203 may not be varied by agreement.

Sec. 4.

Minnesota Statutes 2022, section 336.4A-203, is amended to read:

336.4A-203 UNENFORCEABILITY OF CERTAIN VERIFIED PAYMENT
ORDERS.

(a) If an accepted payment order is not, under section 336.4A-202(a), an authorized
order of a customer identified as sender, but is effective as an order of the customer pursuant
to section 336.4A-202(b), the following rules apply:

(1) By express deleted text begin writtendeleted text end agreementnew text begin evidenced by a recordnew text end , the receiving bank may limit
the extent to which it is entitled to enforce or retain payment of the payment order.

(2) The receiving bank is not entitled to enforce or retain payment of the payment order
if the customer proves that the order was not caused, directly or indirectly, by a person (i)
entrusted at any time with duties to act for the customer with respect to payment orders or
the security procedure, or (ii) who obtained access to transmitting facilities of the customer
or who obtained, from a source controlled by the customer and without authority of the
receiving bank, information facilitating breach of the security procedure, regardless of how
the information was obtained or whether the customer was at fault. Information includes
any access device, computer software, or the like.

(b) This section applies to amendments of payment orders to the same extent it applies
to payment orders.

Sec. 5.

Minnesota Statutes 2022, section 336.4A-207, is amended to read:

336.4A-207 MISDESCRIPTION OF BENEFICIARY.

(a) Subject to subsection (b), if, in a payment order received by the beneficiary's bank,
the name, bank account number, or other identification of the beneficiary refers to a
nonexistent or unidentifiable person or account, no person has rights as a beneficiary of the
order and acceptance of the order cannot occur.

(b) If a payment order received by the beneficiary's bank identifies the beneficiary both
by name and by an identifying or bank account number and the name and number identify
different persons, the following rules apply:

(1) Except as otherwise provided in subsection (c), if the beneficiary's bank does not
know that the name and number refer to different persons, it may rely on the number as the
proper identification of the beneficiary of the order. The beneficiary's bank need not
determine whether the name and number refer to the same person.

(2) If the beneficiary's bank pays the person identified by name or knows that the name
and number identify different persons, no person has rights as beneficiary except the person
paid by the beneficiary's bank if that person was entitled to receive payment from the
originator of the funds transfer. If no person has rights as beneficiary, acceptance of the
order cannot occur.

(c) If (i) a payment order described in subsection (b) is accepted, (ii) the originator's
payment order described the beneficiary inconsistently by name and number, and (iii) the
beneficiary's bank pays the person identified by number as permitted by subsection (b)(1),
the following rules apply:

(1) If the originator is a bank, the originator is obliged to pay its order.

(2) If the originator is not a bank and proves that the person identified by number was
not entitled to receive payment from the originator, the originator is not obliged to pay its
order unless the originator's bank proves that the originator, before acceptance of the
originator's order, had notice that payment of a payment order issued by the originator might
be made by the beneficiary's bank on the basis of an identifying or bank account number
even if it identifies a person different from the named beneficiary. Proof of notice may be
made by any admissible evidence. The originator's bank satisfies the burden of proof if it
proves that the originator, before the payment order was accepted, signed a deleted text begin writingdeleted text end new text begin recordnew text end
stating the information to which the notice relates.

(d) In a case governed by subsection (b)(1), if the beneficiary's bank rightfully pays the
person identified by number and that person was not entitled to receive payment from the
originator, the amount paid may be recovered from that person to the extent allowed by the
law governing mistake and restitution as follows:

(1) If the originator is obliged to pay its payment order as stated in subsection (c), the
originator has the right to recover.

(2) If the originator is not a bank and is not obliged to pay its payment order, the
originator's bank has the right to recover.

Sec. 6.

Minnesota Statutes 2022, section 336.4A-208, is amended to read:

336.4A-208 MISDESCRIPTION OF INTERMEDIARY BANK OR
BENEFICIARY'S BANK.

(a) This subsection applies to a payment order identifying an intermediary bank or the
beneficiary's bank only by an identifying number.

(1) The receiving bank may rely on the number as the proper identification of the
intermediary or beneficiary's bank and need not determine whether the number identifies a
bank.

(2) The sender is obliged to compensate the receiving bank for any loss and expenses
incurred by the receiving bank as a result of its reliance on the number in executing or
attempting to execute the order.

(b) This subsection applies to a payment order identifying an intermediary bank or the
beneficiary's bank both by name and an identifying number if the name and number identify
different persons.

(1) If the sender is a bank, the receiving bank may rely on the number as the proper
identification of the intermediary or beneficiary's bank if the receiving bank, when it executes
the sender's order, does not know that the name and number identify different persons. The
receiving bank need not determine whether the name and number refer to the same person
or whether the number refers to a bank. The sender is obliged to compensate the receiving
bank for any loss and expenses incurred by the receiving bank as a result of its reliance on
the number in executing or attempting to execute the order.

(2) If the sender is not a bank and the receiving bank proves that the sender, before the
payment order was accepted, had notice that the receiving bank might rely on the number
as the proper identification of the intermediary or beneficiary's bank even if it identifies a
person different from the bank identified by name, the rights and obligations of the sender
and the receiving bank are governed by subsection (b)(1), as though the sender were a bank.
Proof of notice may be made by any admissible evidence. The receiving bank satisfies the
burden of proof if it proves that the sender, before the payment order was accepted, signed
a deleted text begin writingdeleted text end new text begin recordnew text end stating the information to which the notice relates.

(3) Regardless of whether the sender is a bank, the receiving bank may rely on the name
as the proper identification of the intermediary or beneficiary's bank if the receiving bank,
at the time it executes the sender's order, does not know that the name and number identify
different persons. The receiving bank need not determine whether the name and number
refer to the same person.

(4) If the receiving bank knows that the name and number identify different persons,
reliance on either the name or the number in executing the sender's payment order is a breach
of the obligation stated in section 336.4A-302(a)(1).

Sec. 7.

Minnesota Statutes 2022, section 336.4A-210, is amended to read:

336.4A-210 REJECTION OF PAYMENT ORDER.

(a) A payment order is rejected by the receiving bank by a notice of rejection transmitted
to the sender orallydeleted text begin , electronically,deleted text end or in deleted text begin writingdeleted text end new text begin a recordnew text end . A notice of rejection need not use
any particular words and is sufficient if it indicates that the receiving bank is rejecting the
order or will not execute or pay the order. Rejection is effective when the notice is given if
transmission is by a means that is reasonable in the circumstances. If notice of rejection is
given by a means that is not reasonable, rejection is effective when the notice is received.
If an agreement of the sender and receiving bank establishes the means to be used to reject
a payment order, (i) any means complying with the agreement is reasonable and (ii) any
means not complying is not reasonable unless no significant delay in receipt of the notice
resulted from the use of the noncomplying means.

(b) This subsection applies if a receiving bank other than the beneficiary's bank fails to
execute a payment order despite the existence on the execution date of a withdrawable credit
balance in an authorized account of the sender sufficient to cover the order. If the sender
does not receive notice of rejection of the order on the execution date and the authorized
account of the sender does not bear interest, the bank is obliged to pay interest to the sender
on the amount of the order for the number of days elapsing after the execution date to the
earlier of the day the order is canceled pursuant to section 336.4A-211(d) or the day the
sender receives notice or learns that the order was not executed, counting the final day of
the period as an elapsed day. If the withdrawable credit balance during that period falls
below the amount of the order, the amount of interest is reduced accordingly.

(c) If a receiving bank suspends payments, all unaccepted payment orders issued to it
are deemed rejected at the time the bank suspends payments.

(d) Acceptance of a payment order precludes a later rejection of the order. Rejection of
a payment order precludes a later acceptance of the order.

Sec. 8.

Minnesota Statutes 2022, section 336.4A-211, is amended to read:

336.4A-211 CANCELLATION AND AMENDMENT OF PAYMENT ORDER.

(a) A communication of the sender of a payment order canceling or amending the order
may be transmitted to the receiving bank orallydeleted text begin , electronically,deleted text end or in deleted text begin writingdeleted text end new text begin a recordnew text end . If a
security procedure is in effect between the sender and the receiving bank, the communication
is not effective to cancel or amend the order unless the communication is verified pursuant
to the security procedure or the bank agrees to the cancellation or amendment.

(b) Subject to subsection (a), a communication by the sender canceling or amending a
payment order is effective to cancel or amend the order if notice of the communication is
received at a time and in a manner affording the receiving bank a reasonable opportunity
to act on the communication before the bank accepts the payment order.

(c) After a payment order has been accepted, cancellation or amendment of the order is
not effective unless the receiving bank agrees or a funds-transfer system rule allows
cancellation or amendment without agreement of the bank.

(1) With respect to a payment order accepted by a receiving bank other than the
beneficiary's bank, cancellation or amendment is not effective unless a conforming
cancellation or amendment of the payment order issued by the receiving bank is also made.

(2) With respect to a payment order accepted by the beneficiary's bank, cancellation or
amendment is not effective unless the order was issued in execution of an unauthorized
payment order, or because of a mistake by a sender in the funds transfer which resulted in
the issuance of a payment order (i) that is a duplicate of a payment order previously issued
by the sender, (ii) that orders payment to a beneficiary not entitled to receive payment from
the originator, or (iii) that orders payment in an amount greater than the amount the
beneficiary was entitled to receive from the originator. If the payment order is canceled or
amended, the beneficiary's bank is entitled to recover from the beneficiary any amount paid
to the beneficiary to the extent allowed by the law governing mistake and restitution.

(d) An unaccepted payment order is canceled by operation of law at the close of the fifth
funds-transfer business day of the receiving bank after the execution date or payment date
of the order.

(e) A canceled payment order cannot be accepted. If an accepted payment order is
canceled, the acceptance is nullified and no person has any right or obligation based on the
acceptance. Amendment of a payment order is deemed to be cancellation of the original
order at the time of amendment and issue of a new payment order in the amended form at
the same time.

(f) Unless otherwise provided in an agreement of the parties or in a funds-transfer system
rule, if the receiving bank, after accepting a payment order, agrees to cancellation or
amendment of the order by the sender or is bound by a funds-transfer system rule allowing
cancellation or amendment without the bank's agreement, the sender, whether or not
cancellation or amendment is effective, is liable to the bank for any loss and expenses,
including reasonable attorney's fees, incurred by the bank as a result of the cancellation or
amendment or attempted cancellation or amendment.

(g) A payment order is not revoked by the death or legal incapacity of the sender unless
the receiving bank knows of the death or of an adjudication of incapacity by a court of
competent jurisdiction and has reasonable opportunity to act before acceptance of the order.

(h) A funds-transfer system rule is not effective to the extent it conflicts with subsection
(c)(2).

Sec. 9.

Minnesota Statutes 2022, section 336.4A-305, is amended to read:

336.4A-305 LIABILITY FOR LATE OR IMPROPER EXECUTION OR FAILURE
TO EXECUTE PAYMENT ORDER.

(a) If a funds transfer is completed but execution of a payment order by the receiving
bank in breach of section 336.4A-302 results in delay in payment to the beneficiary, the
bank is obliged to pay interest to either the originator or the beneficiary of the funds transfer
for the period of delay caused by the improper execution. Except as provided in subsection
(c), additional damages are not recoverable.

(b) If execution of a payment order by a receiving bank in breach of section 336.4A-302
results in (i) noncompletion of the funds transfer, (ii) failure to use an intermediary bank
designated by the originator, or (iii) issuance of a payment order that does not comply with
the terms of the payment order of the originator, the bank is liable to the originator for its
expenses in the funds transfer and for incidental expenses and interest losses, to the extent
not covered by subsection (a), resulting from the improper execution. Except as provided
in subsection (c), additional damages are not recoverable.

(c) In addition to the amounts payable under subsections (a) and (b), damages, including
consequential damages, are recoverable to the extent provided in an express deleted text begin writtendeleted text end
agreement of the receiving banknew text begin , evidenced by a recordnew text end .

(d) If a receiving bank fails to execute a payment order it was obliged by express
agreement to execute, the receiving bank is liable to the sender for its expenses in the
transaction and for incidental expenses and interest losses resulting from the failure to
execute. Additional damages, including consequential damages, are recoverable to the extent
provided in an express deleted text begin writtendeleted text end agreement of the receiving bank,new text begin evidenced by a record,new text end but
are not otherwise recoverable.

(e) Reasonable attorney's fees are recoverable if demand for compensation under
subsection (a) or (b) is made and refused before an action is brought on the claim. If a claim
is made for breach of an agreement under subsection (d) and the agreement does not provide
for damages, reasonable attorney's fees are recoverable if demand for compensation under
subsection (d) is made and refused before an action is brought on the claim.

(f) Except as stated in this section, the liability of a receiving bank under subsections
(a) and (b) may not be varied by agreement.

ARTICLE 6

LETTERS OF CREDIT

Section 1.

Minnesota Statutes 2022, section 336.5-104, is amended to read:

336.5-104 FORMAL REQUIREMENTS.

A letter of credit, confirmation, advice, transfer, amendment, or cancellation may be
issued in any form that is anew text begin signednew text end record deleted text begin and is authenticated (i) by a signature or (ii) in
accordance with the agreement of the parties or the standard practice referred to in section
336.5-108(e)deleted text end .

Sec. 2.

Minnesota Statutes 2022, section 336.5-116, is amended to read:

336.5-116 CHOICE OF LAW AND FORUM.

(a) The liability of an issuer, nominated person, or adviser for action or omission is
governed by the law of the jurisdiction chosen by an agreement in the form of a record
signed deleted text begin or otherwise authenticateddeleted text end by the affected parties deleted text begin in the manner provided in section
336.5-104deleted text end or by a provision in the person's letter of credit, confirmation, or other undertaking.
The jurisdiction whose law is chosen need not bear any relation to the transaction.

(b) Unless subsection (a) applies, the liability of an issuer, nominated person, or adviser
for action or omission is governed by the law of the jurisdiction in which the person is
located. The person is considered to be located at the address indicated in the person's
undertaking. If more than one address is indicated, the person is considered to be located
at the address from which the person's undertaking was issued.

new text begin (c) new text end For the purpose of jurisdiction, choice of law, and recognition of interbranch letters
of credit, but not enforcement of a judgment, all branches of a bank are considered separate
juridical entities and a bank is considered to be located at the place where its relevant branch
is considered to be located under deleted text begin thisdeleted text end subsectionnew text begin (d)new text end .

new text begin (d) A branch of a bank is considered to be located at the address indicated in the branch's
undertaking. If more than one address is indicated, the branch is considered to be located
at the address from which the undertaking was issued.
new text end

deleted text begin (c)deleted text end new text begin (e)new text end Except as otherwise provided in this subsection, the liability of an issuer,
nominated person, or adviser is governed by any rules of custom or practice, such as the
Uniform Customs and Practice for Documentary Credits, to which the letter of credit,
confirmation, or other undertaking is expressly made subject. If (i) this article would govern
the liability of an issuer, nominated person, or adviser under subsection (a) or (b), (ii) the
relevant undertaking incorporates rules of custom or practice, and (iii) there is conflict
between this article and those rules as applied to that undertaking, those rules govern except
to the extent of any conflict with the nonvariable provisions specified in section 336.5-103(c).

deleted text begin (d)deleted text end new text begin (f)new text end If there is conflict between this article and article 3, 4, 4A, or 9, this article governs.

deleted text begin (e)deleted text end new text begin (g)new text end The forum for settling disputes arising out of an undertaking within this article
may be chosen in the manner and with the binding effect that governing law may be chosen
in accordance with subsection (a).

ARTICLE 7

DOCUMENTS OF TITLE

Section 1.

Minnesota Statutes 2022, section 336.7-102, is amended to read:

336.7-102 DEFINITIONS AND INDEX OF DEFINITIONS.

(a) In this article, unless the context otherwise requires:

(1) "Bailee" means a person that by a warehouse receipt, bill of lading, or other document
of title acknowledges possession of goods and contracts to deliver them.

(2) "Carrier" means a person that issues a bill of lading.

(3) "Consignee" means a person named in a bill of lading to which or to whose order
the bill promises delivery.

(4) "Consignor" means a person named in a bill of lading as the person from which the
goods have been received for shipment.

(5) "Delivery order" means a record that contains an order to deliver goods directed to
a warehouse, carrier, or other person that in the ordinary course of business issues warehouse
receipts or bills of lading.

(6) (Reserved.)

(7) "Goods" means all things that are treated as movable for the purposes of a contract
for storage or transportation.

(8) "Issuer" means a bailee that issues a document of title or, in the case of an unaccepted
delivery order, the person that orders the possessor of goods to deliver. The term includes
a person for which an agent or employee purports to act in issuing a document if the agent
or employee has real or apparent authority to issue documents, even if the issuer did not
receive any goods, the goods were misdescribed, or in any other respect the agent or
employee violated the issuer's instructions.

(9) "Person entitled under the document" means the holder, in the case of a negotiable
document of title, or the person to which delivery of the goods is to be made by the terms
of, or pursuant to instructions in a record under, a nonnegotiable document of title.

(10) (Reserved.)

(11) deleted text begin "Sign" means, with present intent to authenticate or adopt a record:deleted text end new text begin (Reserved.)
new text end

deleted text begin (A) to execute or adopt a tangible symbol; or
deleted text end

deleted text begin (B) to attach to or logically associate with the record an electronic sound, symbol, or
process.
deleted text end

(12) "Shipper" means a person that enters into a contract of transportation with a carrier.

(13) "Warehouse" means a person engaged in the business of storing goods for hire.

(b) Definitions in other articles applying to this article and the sections in which they
appear are:

(1) "Contract for sale," section 336.2-106.

(2) "Lessee in the ordinary course of business," section 336.2A-103.

(3) "Receipt" of goods, section 336.2-103.

(c) In addition, article 1 contains general definitions and principles of construction and
interpretation applicable throughout this article.

Sec. 2.

Minnesota Statutes 2022, section 336.7-106, is amended to read:

336.7-106 CONTROL OF ELECTRONIC DOCUMENT OF TITLE.

(a) A person has control of an electronic document of title if a system employed for
evidencing the transfer of interests in the electronic document reliably establishes that person
as the person to which the electronic document was issued or transferred.

(b) A system satisfies subsection (a), and a person deleted text begin is deemed to havedeleted text end new text begin hasnew text end control of an
electronic document of title, if the document is created, stored, and deleted text begin assigneddeleted text end new text begin transferrednew text end in
deleted text begin suchdeleted text end a manner that:

(1) a single authoritative copy of the document exists which is unique, identifiable, and,
except as otherwise provided in paragraphs (4), (5), and (6), unalterable;

(2) the authoritative copy identifies the person asserting control as:

(A) the person to which the document was issued; or

(B) if the authoritative copy indicates the document has been transferred, the person to
which the document was most recently transferred;

(3) the authoritative copy is communicated to and maintained by the person asserting
control or its designated custodian;

(4) copies or amendments that add or change an identified deleted text begin assigneedeleted text end new text begin transfereenew text end of the
authoritative copy can be made only with the consent of the person asserting control;

(5) each copy of the authoritative copy and any copy of a copy is readily identifiable as
a copy that is not the authoritative copy; and

(6) any amendment of the authoritative copy is readily identifiable as authorized or
unauthorized.

new text begin (c) A system satisfies subsection (a), and a person has control of an electronic document
of title, if an authoritative electronic copy of the document, a record attached to or logically
associated with the electronic copy, or a system in which the electronic copy is recorded:
new text end

new text begin (1) enables the person readily to identify each electronic copy as either an authoritative
copy or a nonauthoritative copy;
new text end

new text begin (2) enables the person readily to identify itself in any way, including by name, identifying
number, cryptographic key, office, or account number, as the person to which each
authoritative electronic copy was issued or transferred; and
new text end

new text begin (3) gives the person exclusive power, subject to subsection (d), to:
new text end

new text begin (A) prevent others from adding or changing the person to which each authoritative
electronic copy has been issued or transferred; and
new text end

new text begin (B) transfer control of each authoritative electronic copy.
new text end

new text begin (d) Subject to subsection (e), a power is exclusive under subsection (c)(3)(A) and (B)
even if:
new text end

new text begin (1) the authoritative electronic copy, a record attached to or logically associated with
the authoritative electronic copy, or a system in which the authoritative electronic copy is
recorded limits the use of the document of title or has a protocol that is programmed to
cause a change, including a transfer or loss of control; or
new text end

new text begin (2) the power is shared with another person.
new text end

new text begin (e) A power of a person is not shared with another person under subsection (d)(2) and
the person's power is not exclusive if:
new text end

new text begin (1) the person can exercise the power only if the power also is exercised by the other
person; and
new text end

new text begin (2) the other person:
new text end

new text begin (A) can exercise the power without exercise of the power by the person; or
new text end

new text begin (B) is the transferor to the person of an interest in the document of title.
new text end

new text begin (f) If a person has the powers specified in subsection (c)(3)(A) and (B), the powers are
presumed to be exclusive.
new text end

new text begin (g) A person has control of an electronic document of title if another person, other than
the transferor to the person of an interest in the document:
new text end

new text begin (1) has control of the document and acknowledges that it has control on behalf of the
person; or
new text end

new text begin (2) obtains control of the document after having acknowledged that it will obtain control
of the document on behalf of the person.
new text end

new text begin (h) A person that has control under this section is not required to acknowledge that it
has control on behalf of another person.
new text end

new text begin (i) If a person acknowledges that it has or will obtain control on behalf of another person,
unless the person otherwise agrees or law other than this article or article 9 otherwise
provides, the person does not owe any duty to the other person and is not required to confirm
the acknowledgment to any other person.
new text end

ARTICLE 8

INVESTMENTS SECURITIES

Section 1.

Minnesota Statutes 2022, section 336.8-102, is amended to read:

336.8-102 DEFINITIONS.

(a) In this article:

(1) "Adverse claim" means a claim that a claimant has a property interest in a financial
asset and that it is a violation of the rights of the claimant for another person to hold, transfer,
or deal with the financial asset.

(2) "Bearer form," as applied to a certificated security, means a form in which the security
is payable to the bearer of the security certificate according to its terms but not by reason
of an endorsement.

(3) "Broker" means a person defined as a broker or dealer under the federal securities
laws, but without excluding a bank acting in that capacity.

(4) "Certificated security" means a security that is represented by a certificate.

(5) "Clearing corporation" means:

(i) a person that is registered as a "clearing agency" under the federal securities laws;

(ii) a federal reserve bank; or

(iii) any other person that provides clearance or settlement services with respect to
financial assets that would require it to register as a clearing agency under the federal
securities laws but for an exclusion or exemption from the registration requirement, if its
activities as a clearing corporation, including promulgation of rules, are subject to regulation
by a federal or state governmental authority.

(6) "Communicate" means to:

(i) send a signed deleted text begin writingdeleted text end new text begin recordnew text end ; or

(ii) transmit information by any mechanism agreed upon by the persons transmitting
and receiving the information.

(7) "Entitlement holder" means a person identified in the records of a securities
intermediary as the person having a security entitlement against the securities intermediary.
If a person acquires a security entitlement by virtue of section 336.8-501(b)(2) or (3), that
person is the entitlement holder.

(8) "Entitlement order" means a notification communicated to a securities intermediary
directing transfer or redemption of a financial asset to which the entitlement holder has a
security entitlement.

(9) "Financial asset," except as otherwise provided in section 336.8-103, means:

(i) a security;

(ii) an obligation of a person or a share, participation, or other interest in a person or in
property or an enterprise of a person, which is, or is of a type, dealt in or traded on financial
markets, or which is recognized in any area in which it is issued or dealt in as a medium for
investment; or

(iii) any property that is held by a securities intermediary for another person in a securities
account if the securities intermediary has expressly agreed with the other person that the
property is to be treated as a financial asset under this article.

As context requires, the term means either the interest itself or the means by which a person's
claim to it is evidenced, including a certificated or uncertificated security, a security
certificate, or a security entitlement.

(10) (Reserved.)

(11) "Endorsement" means a signature that alone or accompanied by other words is
made on a security certificate in registered form or on a separate document for the purpose
of assigning, transferring, or redeeming the security or granting a power to assign, transfer,
or redeem it.

(12) "Instruction" means a notification communicated to the issuer of an uncertificated
security which directs that the transfer of the security be registered or that the security be
redeemed.

(13) "Registered form," as applied to a certificated security, means a form in which:

(i) the security certificate specifies a person entitled to the security; and

(ii) a transfer of the security may be registered upon books maintained for that purpose
by or on behalf of the issuer, or the security certificate so states.

(14) "Securities intermediary" means:

(i) a clearing corporation; or

(ii) a person, including a bank or broker, that in the ordinary course of its business
maintains securities accounts for others and is acting in that capacity.

(15) "Security," except as otherwise provided in section 336.8-103, means an obligation
of an issuer or a share, participation, or other interest in an issuer or in property or an
enterprise of an issuer:

(i) which is represented by a security certificate in bearer or registered form, or the
transfer of which may be registered upon books maintained for that purpose by or on behalf
of the issuer;

(ii) which is one of a class or series or by its terms is divisible into a class or series of
shares, participations, interests, or obligations; and

(iii) which:

(A) is, or is of a type, dealt in or traded on securities exchanges or securities markets;
or

(B) is a medium for investment and by its terms expressly provides that it is a security
governed by this article.

(16) "Security certificate" means a certificate representing a security.

(17) "Security entitlement" means the rights and property interest of an entitlement
holder with respect to a financial asset specified in part 5.

(18) "Uncertificated security" means a security that is not represented by a certificate.

(b) deleted text begin Otherdeleted text end new text begin The followingnew text end definitions deleted text begin applying todeleted text end new text begin innew text end this article and deleted text begin the sections in which
they appear aredeleted text end new text begin other articles apply to this articlenew text end :

"Appropriate person," section 336.8-107new text begin .
new text end

"Control," section 336.8-106new text begin .
new text end

new text begin "Controllable account," section 336.9-102.
new text end

new text begin "Controllable electronic record," section 336.12-102.
new text end

new text begin "Controllable payment intangible," section 336.9-102.
new text end

"Delivery," section 336.8-301new text begin .
new text end

"Investment company security," section 336.8-103new text begin .
new text end

"Issuer," section 336.8-201new text begin .
new text end

"Overissue," section 336.8-210new text begin .
new text end

"Protected purchaser," section 336.8-303new text begin .
new text end

"Securities account," section 336.8-501new text begin .
new text end

(c) In addition, article 1 contains general definitions and principles of construction and
interpretation applicable throughout this article.

(d) The characterization of a person, business, or transaction for purposes of this article
does not determine the characterization of the person, business, or transaction for purposes
of any other law, regulation, or rule.

Sec. 2.

Minnesota Statutes 2022, section 336.8-103, is amended to read:

336.8-103 RULES FOR DETERMINING WHETHER CERTAIN OBLIGATIONS
AND INTERESTS ARE SECURITIES OR FINANCIAL ASSETS.

(a) A share or similar equity interest issued by a corporation, business trust, joint stock
company, or similar entity is a security.

(b) An "investment company security" is a security. "Investment company security"
means a share or similar equity interest issued by an entity that is registered as an investment
company under the federal investment company laws, an interest in a unit investment trust
that is so registered, or a face-amount certificate issued by a face-amount certificate company
that is so registered. Investment company security does not include an insurance policy or
endowment policy or annuity contract issued by an insurance company.

(c) An interest in a partnership or limited liability company is a general intangible and
is not a security or a financial asset, except as follows:

(1) An interest in a partnership or limited liability company is a security and is not a
general intangible if it is dealt in or traded on a securities exchange or in a securities market,
its terms expressly provide that it is a security governed by this article, or it is an investment
company security.

(2) An interest in a partnership or limited liability company is a financial asset and is
not a general intangible if it is held in a securities account.

(d) A writing that is a security certificate is governed by this article and not by article
3, even though it also meets the requirements of that article. However, a negotiable instrument
governed by article 3 is a financial asset if it is held in a securities account.

(e) An option or similar obligation issued by a clearing corporation to its participants is
not a security, but is a financial asset.

(f) A commodity contract, as defined in section 336.9-102(a)(15), is not a security or a
financial asset.

(g) A document of title is not a financial asset unless section 336.8-102(a)(9)(iii) applies.

new text begin (h) A controllable account, controllable electronic record, or controllable payment
intangible is not a financial asset unless section 336.8-102(a)(9)(iii) applies.
new text end

Sec. 3.

Minnesota Statutes 2022, section 336.8-106, is amended to read:

336.8-106 CONTROL.

(a) A purchaser has "control" of a certificated security in bearer form if the certificated
security is delivered to the purchaser.

(b) A purchaser has "control" of a certificated security in registered form if the certificated
security is delivered to the purchaser, and:

(1) the certificate is endorsed to the purchaser or in blank by an effective endorsement;
or

(2) the certificate is registered in the name of the purchaser, upon original issue or
registration of transfer by the issuer.

(1) the uncertificated security is delivered to the purchaser; or

(2) the issuer has agreed that it will comply with instructions originated by the purchaser
without further consent by the registered owner.

(d) A purchaser has "control" of a security entitlement if:

(1) the purchaser becomes the entitlement holder;

(2) the securities intermediary has agreed that it will comply with entitlement orders
originated by the purchaser without further consent by the entitlement holder; or

(3) another person deleted text begin has control of the security entitlement on behalf of the purchaser or,
having previously acquired control of the security entitlement, acknowledges that it has
control on behalf of the purchaser.deleted text end new text begin , other than the transferor to the purchaser of an interest
in the security entitlement:
new text end

new text begin (A) has control of the security entitlement and acknowledges that it has control on behalf
of the purchaser; or
new text end

new text begin (B) obtains control of the security entitlement after having acknowledged that it will
obtain control of the security entitlement on behalf of the purchaser.
new text end

(e) If an interest in a security entitlement is granted by the entitlement holder to the
entitlement holder's own securities intermediary, the securities intermediary has control.

(f) A purchaser who has satisfied the requirements of subsection (c) or (d) has control,
even if the registered owner in the case of subsection (c) or the entitlement holder in the
case of subsection (d) retains the right to make substitutions for the uncertificated security
or security entitlement, to originate instructions or entitlement orders to the issuer or securities
intermediary, or otherwise to deal with the uncertificated security or security entitlement.

(g) An issuer or a securities intermediary may not enter into an agreement of the kind
described in subsection (c)(2) or (d)(2) without the consent of the registered owner or
entitlement holder, but an issuer or a securities intermediary is not required to enter into
such an agreement even though the registered owner or entitlement holder so directs. An
issuer or securities intermediary that has entered into such an agreement is not required to
confirm the existence of the agreement to another party unless requested to do so by the
registered owner or entitlement holder.

new text begin (h) A person that has control under this section is not required to acknowledge that it
has control on behalf of a purchaser.
new text end

new text begin (i) If a person acknowledges that it has or will obtain control on behalf of a purchaser,
unless the person otherwise agrees or law other than this article or article 9 otherwise
provides, the person does not owe any duty to the purchaser and is not required to confirm
the acknowledgment to any other person.
new text end

Sec. 4.

Minnesota Statutes 2022, section 336.8-110, is amended to read:

336.8-110 APPLICABILITY; CHOICE OF LAW.

(a) The local law of the issuer's jurisdiction, as specified in subsection (d), governs:

(1) the validity of a security;

(2) the rights and duties of the issuer with respect to registration of transfer;

(3) the effectiveness of registration of transfer by the issuer;

(4) whether the issuer owes any duties to an adverse claimant to a security; and

(5) whether an adverse claim can be asserted against a person to whom transfer of a
certificated or uncertificated security is registered or a person who obtains control of an
uncertificated security.

(b) The local law of the securities intermediary's jurisdiction, as specified in subsection
(e), governs:

(1) acquisition of a security entitlement from the securities intermediary;

(2) the rights and duties of the securities intermediary and entitlement holder arising out
of a security entitlement;

(3) whether the securities intermediary owes any duties to an adverse claimant to a
security entitlement; and

(4) whether an adverse claim can be asserted against a person who acquires a security
entitlement from the securities intermediary or a person who purchases a security entitlement
or interest therein from an entitlement holder.

(c) The local law of the jurisdiction in which a security certificate is located at the time
of delivery governs whether an adverse claim can be asserted against a person to whom the
security certificate is delivered.

(d) "Issuer's jurisdiction" means the jurisdiction under which the issuer of the security
is organized or, if permitted by the law of that jurisdiction, the law of another jurisdiction
specified by the issuer. An issuer organized under the law of this state may specify the law
of another jurisdiction as the law governing the matters specified in subsection (a)(2) through
(5).

(e) The following rules determine a "securities intermediary's jurisdiction" for purposes
of this section:

(1) If an agreement between the securities intermediary and its entitlement holder
governing the securities account expressly provides that a particular jurisdiction is the
securities intermediary's jurisdiction for purposes of this part, this article, or Laws 2000,
chapter 399, that jurisdiction is the securities intermediary's jurisdiction.

(2) If paragraph (1) does not apply and an agreement between the securities intermediary
and its entitlement holder governing the securities account expressly provides that the
agreement is governed by the law of a particular jurisdiction, that jurisdiction is the securities
intermediary's jurisdiction.

(3) If neither paragraph (1) nor (2) applies and an agreement between the securities
intermediary and its entitlement holder governing the securities account expressly provides
that the securities account is maintained at an office in a particular jurisdiction, that
jurisdiction is the securities intermediary's jurisdiction.

(4) If none of the preceding paragraphs apply, the securities intermediary's jurisdiction
is the jurisdiction in which the office identified in an account statement as the office serving
the entitlement holder's account is located.

(5) If none of the preceding paragraphs apply, the securities intermediary's jurisdiction
is the jurisdiction in which the chief executive office of the securities intermediary is located.

(f) A securities intermediary's jurisdiction is not determined by the physical location of
certificates representing financial assets, or by the jurisdiction in which is organized the
issuer of the financial asset with respect to which an entitlement holder has a security
entitlement, or by the location of facilities for data processing or other record keeping
concerning the account.

new text begin (g) The local law of the issuer's jurisdiction or the securities intermediary's jurisdiction
governs a matter or transaction specified in subsection (a) or (b) even if the matter or
transaction does not bear any relation to the jurisdiction.
new text end

Sec. 5.

Minnesota Statutes 2022, section 336.8-303, is amended to read:

336.8-303 PROTECTED PURCHASER.

(a) "Protected purchaser" means a purchaser of a certificated or uncertificated security,
or of an interest therein, who:

(1) gives value;

(2) does not have notice of any adverse claim to the security; and

(3) obtains control of the certificated or uncertificated security.

(b) deleted text begin In addition to acquiring the rights of a purchaser,deleted text end A protected purchaser also acquires
its interest in the security free of any adverse claim.

ARTICLE 9

SECURED TRANSACTIONS

Section 1.

Minnesota Statutes 2022, section 336.9-102, is amended to read:

336.9-102 DEFINITIONS AND INDEX OF DEFINITIONS.

(a) Definitions. In this article:

(1) "Accession" means goods that are physically united with other goods in such a
manner that the identity of the original goods is not lost.

(2) "Account", except as used in "account fornew text begin ,new text end "deleted text begin ,deleted text end new text begin "account statement," "account to,"
"commodity account" in paragraph (14),new text end new text begin "customer's account," "deposit account" in paragraph
(29), "on account of," and "statement of account,"new text end means a right to payment of a monetary
obligation, whether or not earned by performance, (i) for property that has been or is to be
sold, leased, licensed, assigned, or otherwise disposed of, (ii) for services rendered or to be
rendered, (iii) for a policy of insurance issued or to be issued, (iv) for a secondary obligation
incurred or to be incurred, (v) for energy provided or to be provided, (vi) for the use or hire
of a vessel under a charter or other contract, (vii) arising out of the use of a credit or charge
card or information contained on or for use with the card, or (viii) as winnings in a lottery
or other game of chance operated or sponsored by a state, governmental unit of a state, or
person licensed or authorized to operate the game by a state or governmental unit of a state.
The term includesnew text begin controllable accounts andnew text end health-care-insurance receivables. The term
does not include (i) deleted text begin rights to payment evidenced bydeleted text end chattel paper deleted text begin or an instrumentdeleted text end , (ii)
commercial tort claims, (iii) deposit accounts, (iv) investment property, (v) letter of credit
rights or letters of credit, deleted text begin ordeleted text end (vi) rights to payment for money or funds advanced or sold,
other than rights arising out of the use of a credit or charge card or information contained
on or for use with the cardnew text begin , or (vii) rights to payment evidenced by an instrumentnew text end .

(3) "Account debtor" means a person obligated on an account, chattel paper, or general
intangible. The term does not include persons obligated to pay a negotiable instrument, even
if thenew text begin negotiablenew text end instrument deleted text begin constitutes part ofdeleted text end new text begin evidencesnew text end chattel paper.

(4) "Accounting", except as used in "accounting for", means a record:

(A) deleted text begin authenticateddeleted text end new text begin signednew text end by a secured party;

(B) indicating the aggregate unpaid secured obligations as of a date not more than 35
days earlier or 35 days later than the date of the record; and

(5) "Agricultural lien" means an interest, other than a security interest, in farm products:

(A) which secures payment or performance of an obligation for:

(i) goods or services furnished in connection with a debtor's farming operation; or

(ii) rent on real property leased by a debtor in connection with its farming operation;

(B) which is created by statute in favor of a person that:

(i) in the ordinary course of its business furnished goods or services to a debtor in
connection with a debtor's farming operation; or

(ii) leased real property to a debtor in connection with the debtor's farming operation;
and

(6) "As-extracted collateral" means:

(A) oil, gas, or other minerals that are subject to a security interest that:

(i) is created by a debtor having an interest in the minerals before extraction; and

(ii) attaches to the minerals as extracted; or

(B) accounts arising out of the sale at the wellhead or minehead of oil, gas, or other
minerals in which the debtor had an interest before extraction.

(7) deleted text begin "Authenticate" means:deleted text end new text begin (Reserved.)
new text end

deleted text begin (A) to sign; or
deleted text end

deleted text begin (B) with present intent to adopt or accept a record, to attach to or logically associate
with the record an electronic sound, symbol, or process.
deleted text end

new text begin (7A) "Assignee", except as used in "assignee for benefit of creditors", means a person
(i) in whose favor a security interest that secures an obligation is created or provided for
under a security agreement, whether or not the obligation is outstanding, or (ii) to which an
account, chattel paper, payment intangible, or promissory note has been sold. The term
includes a person to which a security interest has been transferred by a secured party.
new text end

new text begin (7B) "Assignor" means a person that (i) under a security agreement creates or provides
for a security interest that secures an obligation or (ii) sells an account, chattel paper, payment
intangible, or promissory note. The term includes a secured party that has transferred a
security interest to another person.
new text end

(8) "Bank" means an organization that is engaged in the business of banking. The term
includes savings banks, savings and loan associations, credit unions, and trust companies.

(9) "Cash proceeds" means proceeds that are money, checks, deposit accounts, or the
like.

(10) "Certificate of title" means 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 rights of a lien creditor with respect to the
collateral.

(11) "Chattel paper" meansnew text begin :new text end deleted text begin a record or records that evidence both a monetary obligation
and a security interest in specific goods, a security interest in specific goods and software
used in the goods, a security interest in specific goods and license of software used in the
goods, a lease of specific goods, or a lease of specific goods and license of software used
in the goods. In this paragraph, "monetary obligation" means a monetary obligation secured
by the goods or owed under a lease of the goods and includes a monetary obligation with
respect to software used in the goods. The term does not include (i) charters or other contracts
involving the use or hire of a vessel or (ii) records that evidence a right to payment arising
out of the use of a credit or charge card or information contained on or for use with the card.
If a transaction is evidenced by records that include an instrument or series of instruments,
the group of records taken together constitutes chattel paper.
deleted text end

new text begin (A) a right to payment of a monetary obligation secured by specific goods, if the right
to payment and security agreement are evidenced by a record; or
new text end

new text begin (B) a right to payment of a monetary obligation owed by a lessee under a lease agreement
with respect to specific goods and a monetary obligation owed by the lessee in connection
with the transaction giving rise to the lease, if:
new text end

new text begin (i) the right to payment and lease agreement are evidenced by a record; and
new text end

new text begin (ii) the predominant purpose of the transaction giving rise to the lease was to give the
lessee the right to possession and use of the goods.
new text end

new text begin The term does not include a right to payment arising out of a charter or other contract
involving the use or hire of a vessel or a right to payment arising out of the use of a credit
or charge card or information contained on or for use with the card.
new text end

(12) "Collateral" means the property subject to a security interest or agricultural lien.
The term includes:

(A) proceeds to which a security interest attaches;

(B) accounts, chattel paper, payment intangibles, and promissory notes that have been
sold; and

(13) "Commercial tort claim" means a claim arising in tort with respect to which:

(A) the claimant is an organization; or

(B) the claimant is an individual and the claim:

(i) arose in the course of the claimant's business or profession; and

(ii) does not include damages arising out of personal injury to or the death of an
individual.

(14) "Commodity account" means an account maintained by a commodity intermediary
in which a commodity contract is carried for a commodity customer.

(15) "Commodity contract" means a commodity futures contract, an option on a
commodity futures contract, a commodity option, or another contract if the contract or
option is:

(A) traded on or subject to the rules of a board of trade that has been designated as a
contract market for such a contract pursuant to federal commodities law; or

(B) traded on a foreign commodity board of trade, exchange, or market, and is carried
on the books of a commodity intermediary for a commodity customer.

(16) "Commodity customer" means a person for which a commodity intermediary carries
a commodity contract on its books.

(17) "Commodity intermediary" means a person that:

(A) is registered as a futures commission merchant under federal commodities law; or

(B) in the ordinary course of its business provides clearance or settlement services for
a board of trade that has been designated as a contract market pursuant to federal commodities
law.

(18) "Communicate" means:

(A) to send a written or other tangible record;

(B) to transmit a record by any means agreed upon by the persons sending and receiving
the record; or

(C) in the case of transmission of a record to or by a filing office, to transmit a record
by any means prescribed by filing office rule.

(19) "Consignee" means a merchant to which goods are delivered in a consignment.

(20) "Consignment" means a transaction, regardless of its form, in which a person delivers
goods to a merchant for the purpose of sale and:

(A) the merchant:

(i) deals in goods of that kind under a name other than the name of the person making
delivery;

(ii) is not an auctioneer; and

(iii) is not generally known by its creditors to be substantially engaged in selling the
goods of others;

(B) with respect to each delivery, the aggregate value of the goods is $1,000 or more at
the time of delivery;

(D) the transaction does not create a security interest that secures an obligation.

(21) "Consignor" means a person that delivers goods to a consignee in a consignment.

(22) "Consumer debtor" means a debtor in a consumer transaction.

(23) "Consumer goods" means goods that are used or bought for use primarily for
personal, family, or household purposes.

(24) "Consumer goods transaction" means a consumer transaction in which:

(A) an individual incurs an obligation primarily for personal, family, or household
purposes; and

(B) a security interest in consumer goods secures the obligation.

(25) "Consumer obligor" means an obligor who is an individual and who incurred the
obligation as part of a transaction entered into primarily for personal, family, or household
purposes.

(26) "Consumer transaction" means a transaction in which (i) an individual incurs an
obligation primarily for personal, family, or household purposes, (ii) a security interest
secures the obligation, and (iii) the collateral is held or acquired primarily for personal,
family, or household purposes. The term includes consumer goods transactions.

(27) "Continuation statement" means an amendment of a financing statement which:

(A) identifies, by its file number, the initial financing statement to which it relates; and

(B) indicates that it is a continuation statement for, or that it is filed to continue the
effectiveness of, the identified financing statement.

new text begin (27A) "Controllable account" means an account evidenced by a controllable electronic
record that provides that the account debtor undertakes to pay the person that has control
under section 336.12-105 of the controllable electronic record.
new text end

new text begin (27B) "Controllable payment intangible" means a payment intangible evidenced by a
controllable electronic record that provides that the account debtor undertakes to pay the
person that has control under section 336.12-105 of the controllable electronic record.
new text end

(28) "Debtor" means:

(A) a person having an interest, other than a security interest or other lien, in the collateral,
whether or not the person is an obligor;

(B) a seller of accounts, chattel paper, payment intangibles, or promissory notes; or

(29) "Deposit account" means a demand, time, savings, passbook, or similar account
maintained with a bank. The term does not include investment property or accounts evidenced
by an instrument.

(30) "Document" means a document of title or a receipt of the type described in section
336.7-201 (b).

(31) deleted text begin "Electronic chattel paper" means chattel paper evidenced by a record or records
consisting of information stored in an electronic medium.deleted text end new text begin (Reserved.)
new text end

new text begin (31A) "Electronic money" means money in an electronic form.
new text end

(32) "Encumbrance" means a right, other than an ownership interest, in real property.
The term includes mortgages and other liens on real property.

(33) "Equipment" means goods other than inventory, farm products, or consumer goods.

(34) "Farm products" means goods, other than standing timber, with respect to which
the debtor is engaged in a farming operation and which are:

(A) crops grown, growing, or to be grown, including:

(i) crops produced on trees, vines, and bushes; and

(ii) aquatic goods produced in aquacultural operations;

(B) livestock, born or unborn, including aquatic goods produced in aquacultural
operations;

(D) products of crops or livestock in their unmanufactured states.

(35) "Farming operation" means raising, cultivating, propagating, fattening, grazing, or
any other farming, livestock, or aquacultural operation.

(36) "File number" means the number assigned to an initial financing statement pursuant
to section 336.9-519 (a).

(37) "Filing office" means an office designated in section 336.9-501 as the place to file
a financing statement.

(38) "Filing office rule" means a rule adopted pursuant to Laws 2000, chapter 399, article
1, section 139.

(39) "Financing statement" means a record or records composed of an initial financing
statement and any filed record relating to the initial financing statement.

(40) "Fixture filing" means the filing of a financing statement covering goods that are
or are to become fixtures and satisfying section 336.9-502 (a) and (b). The term includes
the filing of a financing statement covering goods of a transmitting utility which are or are
to become fixtures.

(41) "Fixtures" means goods that have become so related to particular real property that
an interest in them arises under real property law.

(42) "General intangible" means any personal property, including things in action, other
than accounts, chattel paper, commercial tort claims, deposit accounts, documents, goods,
instruments, investment property, letter of credit rights, letters of credit, money, and oil,
gas, or other minerals before extraction. The term includesnew text begin controllable electronic records,new text end
payment intangiblesnew text begin ,new text end and software.

(43) [Reserved.]

(44) "Goods" means all things that are movable when a security interest attaches. The
term includes (i) fixtures, (ii) standing timber that is to be cut and removed under a
conveyance or contract for sale, (iii) the unborn young of animals, (iv) crops grown, growing,
or to be grown, even if the crops are produced on trees, vines, or bushes, and (v)
manufactured homes. The term also includes a computer program embedded in goods and
any supporting information provided in connection with a transaction relating to the program
if the program is associated with the goods in such a manner that it customarily is considered
part of the goods, or by becoming the owner of the goods, a person acquires a right to use
the program in connection with the goods. The term does not include a computer program
embedded in goods that consist solely of the medium in which the program is embedded.
The term also does not include accounts, chattel paper, commercial tort claims, deposit
accounts, documents, general intangibles, instruments, investment property, letter of credit
rights, letters of credit, money, or oil, gas, or other minerals before extraction.

(45) "Governmental unit" means a subdivision, agency, department, county, parish,
municipality, or other unit of the government of the United States, a state, or a foreign
country. The term includes an organization having a separate corporate existence if the
organization is eligible to issue debt on which interest is exempt from income taxation under
the laws of the United States.

(46) "Health-care-insurance receivable" means an interest in or claim under a policy of
insurance which is a right to payment of a monetary obligation for health-care goods or
services provided.

(47) "Instrument" means a negotiable instrument or any other writing that evidences a
right to the payment of a monetary obligation, is not itself a security agreement or lease,
and is of a type that in ordinary course of business is transferred by delivery with any
necessary endorsement or assignment. The term does not include (i) investment property,
(ii) letters of credit, deleted text begin ordeleted text end (iii) writings that evidence a right to payment arising out of the use
of a credit or charge card or information contained on or for use with the cardnew text begin , or (iv) writings
that evidence chattel papernew text end .

(48) "Inventory" means goods, other than farm products, which:

(A) are leased by a person as lessor;

(B) are held by a person for sale or lease or to be furnished under a contract of service;

(D) consist of raw materials, work in process, or materials used or consumed in a business.

(49) "Investment property" means a security, whether certificated or uncertificated,
security entitlement, securities account, commodity contract, or commodity account.

(50) "Jurisdiction of organization", with respect to a registered organization, means the
jurisdiction under whose law the organization is formed or organized.

(51) "Letter of credit right" means a right to payment or performance under a letter of
credit, whether or not the beneficiary has demanded or is at the time entitled to demand
payment or performance. The term does not include the right of a beneficiary to demand
payment or performance under a letter of credit.

(52) "Lien creditor" means:

(A) a creditor that has acquired a lien on the property involved by attachment, levy, or
the like;

(B) an assignee for benefit of creditors from the time of assignment;

(D) a receiver in equity from the time of appointment.

(53) Unless a certificate has been issued, "manufactured home" means a structure,
transportable in one or more sections, which, in the traveling mode, is eight body feet or
more in width or 40 body feet or more in length, or, when erected on site, is 320 or more
square feet, and which is built on a permanent chassis and designed to be used as a dwelling
with or without a permanent foundation when connected to the required utilities, and includes
the plumbing, heating, air-conditioning, and electrical systems contained therein. The term
includes any structure that meets all of the requirements of this paragraph except the size
requirements and with respect to which the manufacturer voluntarily files a certification
required by the United States Secretary of Housing and Urban Development and complies
with the standards established under United States Code, title 42.

A manufactured home within the meaning of this section does not include a manufactured
home for which a certificate of title as defined in section 336.9-102 (a)(10) has been issued.

(54) "Manufactured home transaction" means a secured transaction:

(A) that creates a purchase-money security interest in a manufactured home, other than
a manufactured home held as inventory; or

(B) in which a manufactured home, other than a manufactured home held as inventory,
is the primary collateral.

new text begin (54A) "Money" has the meaning in section 336.1-201(b)(24), but does not include (i) a
deposit account, or (ii) money in an electronic form that cannot be subjected to control under
section 336.9-105A.
new text end

(55) "Mortgage" means a consensual interest in real property, including fixtures, which
secures payment or performance of an obligation. Mortgage includes an executory contract
for the sale of real property or of an interest in real property that entitles the purchaser to
possession of the real property.

(56) "New debtor" means a person that becomes bound as debtor under section 336.9-203
(d) by a security agreement previously entered into by another person.

(57) "New value" means (i) money, (ii) money's worth in property, services, or new
credit, or (iii) release by a transferee of an interest in property previously transferred to the
transferee. The term does not include an obligation substituted for another obligation.

(58) "Noncash proceeds" means proceeds other than cash proceeds.

(59) "Obligor" means a person that, with respect to an obligation secured by a security
interest in or an agricultural lien on the collateral, (i) owes payment or other performance
of the obligation, (ii) has provided property other than the collateral to secure payment or
other performance of the obligation, or (iii) is otherwise accountable in whole or in part for
payment or other performance of the obligation. The term does not include issuers or
nominated persons under a letter of credit.

(60) "Original debtor," except as used in section 336.9-310 (c), means a person that, as
debtor, entered into a security agreement to which a new debtor has become bound under
section 336.9-203 (d).

(61) "Payment intangible" means a general intangible under which the account debtor's
principal obligation is a monetary obligation.new text begin The term includes a controllable payment
intangible.
new text end

(62) "Person related to," with respect to an individual, means:

(A) the spouse of the individual;

(B) a brother, brother-in-law, sister, or sister-in-law of the individual;

(D) any other relative, by blood or marriage, of the individual or the individual's spouse
who shares the same home with the individual.

(63) "Person related to," with respect to an organization, means:

(A) a person directly or indirectly controlling, controlled by, or under common control
with the organization;

(B) an officer or director of, or a person performing similar functions with respect to,
the organization;

(C) an officer or director of, or a person performing similar functions with respect to, a
person described in subparagraph (A);

(D) the spouse of an individual described in subparagraph (A), (B), or (C); or

(E) an individual who is related by blood or marriage to an individual described in
subparagraph (A), (B), (C), or (D), and shares the same home with the individual.

(64) "Proceeds," except as used in section 336.9-609 (b), means the following property:

(A) whatever is acquired upon the sale, lease, license, exchange, or other disposition of
collateral;

(B) whatever is collected on, or distributed on account of, collateral;

(D) to the extent of the value of collateral, claims arising out of the loss, nonconformity,
or interference with the use of, defects or infringement of rights in, or damage to, the
collateral; or

(E) to the extent of the value of collateral and to the extent payable to the debtor or the
secured party, insurance payable by reason of the loss or nonconformity of, defects or
infringement of rights in, or damage to, the collateral.

(65) "Promissory note" means an instrument that evidences a promise to pay a monetary
obligation, does not evidence an order to pay, and does not contain an acknowledgment by
a bank that the bank has received for deposit a sum of money or funds.

(66) "Proposal" means a record deleted text begin authenticateddeleted text end new text begin signednew text end by a secured party which includes
the terms on which the secured party is willing to accept collateral in full or partial
satisfaction of the obligation it secures pursuant to sections 336.9-620, 336.9-621, and
336.9-622.

(67) "Public-finance transaction" means a secured transaction in connection with which:

(A) debt securities are issued;

(B) all or a portion of the securities issued have an initial stated maturity of at least 20
years; and

(C) the debtor, obligor, secured party, account debtor or other person obligated on
collateral, assignor or assignee of a secured obligation, or assignor or assignee of a security
interest is a state or a governmental unit of a state.

(68) "Public organic record" means a record that is available to the public for inspection
and is:

(A) 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;

(B) 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

(C) 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.

(69) "Pursuant to commitment," with respect to an advance made or other value given
by a secured party, means pursuant to the secured party's obligation, whether or not a
subsequent event of default or other event not within the secured party's control has relieved
or may relieve the secured party from its obligation.

(70) "Record," except as used in "for record", "of record", "record or legal title", and
"record owner", means information that is inscribed on a tangible medium or which is stored
in an electronic or other medium and is retrievable in perceivable form.

(71) "Registered organization" means an organization formed or organized solely under
the law of a single state or the United States by the filing of a public organic record with,
the 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 the business
trust's organic record be filed with the state.

(72) "Secondary obligor" means an obligor to the extent that:

(A) the obligor's obligation is secondary; or

(B) the obligor has a right of recourse with respect to an obligation secured by collateral
against the debtor, another obligor, or property of either.

(73) "Secured party" means:

(A) a person in whose favor a security interest is created or provided for under a security
agreement, whether or not any obligation to be secured is outstanding;

(B) a person that holds an agricultural lien;

(D) a person to which accounts, chattel paper, payment intangibles, or promissory notes
have been sold;

(E) a trustee, indenture trustee, agent, collateral agent, or other representative in whose
favor a security interest or agricultural lien is created or provided for; or

(F) a person that holds a security interest arising under section 336.2-401, 336.2-505,
336.2-711 (3), 336.2A-508 (5), 336.4-210, or 336.5-118.

(74) "Security agreement" means an agreement that creates or provides for a security
interest.

(75) deleted text begin "Send," in connection with a record or notification, means:deleted text end new text begin (Reserved.)
new text end

deleted text begin (A) to deposit in the mail, deliver for transmission, or transmit by any other usual means
of communication, with postage or cost of transmission provided for, addressed to any
address reasonable under the circumstances; or
deleted text end

deleted text begin (B) to cause the record or notification to be received within the time that it would have
been received if properly sent under subparagraph (A).
deleted text end

(76) "Software" means a computer program and any supporting information provided
in connection with a transaction relating to the program. The term does not include a
computer program that is included in the definition of goods.

(77) "State" means a state of the United States, the District of Columbia, Puerto Rico,
the United States Virgin Islands, or any territory or insular possession subject to the
jurisdiction of the United States.

(78) "Supporting obligation" means a letter of credit right or secondary obligation that
supports the payment or performance of an account, chattel paper, a document, a general
intangible, an instrument, or investment property.

(79) deleted text begin "Tangible chattel paper" means chattel paper evidenced by a record or records
consisting of information that is inscribed on a tangible medium.deleted text end new text begin (Reserved.)
new text end

new text begin (79A) "Tangible money" means money in a tangible form.
new text end

(80) "Termination statement" means an amendment of a financing statement which:

(A) identifies, by its file number, the initial financing statement to which it relates; and

(B) indicates either that it is a termination statement or that the identified financing
statement is no longer effective.

(81) "Transmitting utility" means a person primarily engaged in the business of:

(A) operating a railroad, subway, street railway, or trolley bus;

(B) transmitting communications electrically, electromagnetically, or by light;

(D) transmitting or producing and transmitting electricity, steam, gas, or water.

A person filing a financing statement under this article and under the authority of sections
336B.01 to 336B.03, 507.327, and 507.328 is a transmitting utility for purposes of this
article.

(b) Definitions in other articles. "Control" as provided in section 336.7-106 and the
following definitions in other articles apply to this article:

	"Applicant"		Section 336.5-102new text begin . new text end
	"Beneficiary"		Section 336.5-102new text begin . new text end
	"Broker"		Section 336.8-102new text begin . new text end
	"Certificated security"		Section 336.8-102new text begin . new text end
	"Check"		Section 336.3-104new text begin . new text end
	"Clearing corporation"		Section 336.8-102new text begin . new text end
	"Contract for sale"		Section 336.2-106new text begin . new text end
	new text begin "Controllable electronic record" new text end		new text begin Section 336.12-102 new text end new text begin . new text end
	"Customer"		Section 336.4-104new text begin . new text end
	"Entitlement holder"		Section 336.8-102new text begin . new text end
	"Financial asset"		Section 336.8-102new text begin . new text end
	"Holder in due course"		Section 336.3-302new text begin . new text end
	"Issuer" (with respect to a letter of credit or letter of credit right)		Section 336.5-102new text begin . new text end
	"Issuer" (with respect to a security)		Section 336.8-201new text begin . new text end
	"Issuer" (with respect to documents of title)		Section 336.7-102new text begin . new text end
	"Lease"		Section 336.2A-103new text begin . new text end
	"Lease agreement"		Section 336.2A-103new text begin . new text end
	"Lease contract"		Section 336.2A-103new text begin . new text end
	"Leasehold interest"		Section 336.2A-103new text begin . new text end
	"Lessee"		Section 336.2A-103new text begin . new text end
	"Lessee in ordinary course of business"		Section 336.2A-103new text begin . new text end
	"Lessor"		Section 336.2A-103new text begin . new text end
	"Lessor's residual interest"		Section 336.2A-103new text begin . new text end
	"Letter of credit"		Section 336.5-102new text begin . new text end
	"Merchant"		Section 336.2-104new text begin . new text end
	"Negotiable instrument"		Section 336.3-104new text begin . new text end
	"Nominated person"		Section 336.5-102new text begin . new text end
	"Note"		Section 336.3-104new text begin . new text end
	"Proceeds of a letter of credit"		Section 336.5-114new text begin . new text end
	new text begin "Protected purchaser" new text end		new text begin Section 336.8-303 new text end new text begin . new text end
	"Prove"		Section 336.3-103new text begin . new text end
	new text begin "Qualifying purchaser" new text end		new text begin Section 336.12-102 new text end new text begin . new text end
	"Sale"		Section 336.2-106new text begin . new text end
	"Securities account"		Section 336.8-501new text begin . new text end
	"Securities intermediary"		Section 336.8-102new text begin . new text end
	"Security"		Section 336.8-102new text begin . new text end
	"Security certificate"		Section 336.8-102new text begin . new text end
	"Security entitlement"		Section 336.8-102new text begin . new text end
	"Uncertificated security"		Section 336.8-102new text begin . new text end

(c) Article 1 definitions and principles. Article 1 contains general definitions and
principles of construction and interpretation applicable throughout this article.

Sec. 2.

Minnesota Statutes 2022, section 336.9-104, is amended to read:

336.9-104 CONTROL OF DEPOSIT ACCOUNT.

(a) Requirements for control. A secured party has control of a deposit account if:

(1) the secured party is the bank with which the deposit account is maintained;

(2) the debtor, secured party, and bank have agreed in deleted text begin an authenticateddeleted text end new text begin a signednew text end record
that the bank will comply with instructions originated by the secured party directing
disposition of the funds in the deposit account without further consent by the debtor; deleted text begin or
deleted text end

(3) the secured party becomes the bank's customer with respect to the deposit accountdeleted text begin .deleted text end new text begin ;
or
new text end

new text begin (4) another person, other than the debtor:
new text end

new text begin (A) has control of the deposit account and acknowledges that it has control on behalf of
the secured party; or
new text end

new text begin (B) obtains control of the deposit account after having acknowledged that it will obtain
control of the deposit account on behalf of the secured party.
new text end

(b) Debtor's right to direct disposition. A secured party that has satisfied subsection
(a) has control, even if the debtor retains the right to direct the disposition of funds from
the deposit account.

Sec. 3.

Minnesota Statutes 2022, section 336.9-105, is amended to read:

336.9-105 CONTROL OF ELECTRONICnew text begin COPY OF RECORD EVIDENCINGnew text end
CHATTEL PAPER.

(a) General rule: control of electronicnew text begin copy of record evidencingnew text end chattel paper. A
deleted text begin secured partydeleted text end new text begin purchasernew text end has control ofnew text begin an authoritativenew text end electronicnew text begin copy of a record evidencingnew text end
chattel paper if a system employed for evidencing the deleted text begin transferdeleted text end new text begin assignmentnew text end of interests in
the chattel paper reliably establishes the deleted text begin secured partydeleted text end new text begin purchasernew text end as the person to which the
deleted text begin chattel paperdeleted text end new text begin authoritative electronic copynew text end was assigned.

(b) deleted text begin Specific facts giving controldeleted text end new text begin Single authoritative copynew text end . A system satisfies subsection
(a) if the record or records deleted text begin comprisingdeleted text end new text begin evidencingnew text end the chattel paper are created, stored, and
assigned in deleted text begin suchdeleted text end 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 deleted text begin secured partydeleted text end new text begin purchasernew text end as the assignee of the
record or records;

(3) the authoritative copy is communicated to and maintained by the deleted text begin secured partydeleted text end new text begin
purchasernew text end or its designated custodian;

(4) copies or amendments that add or change an identified assignee of the authoritative
copy can be made only with the consent of the deleted text begin secured partydeleted text end new text begin purchasernew text end ;

(5) each copy of the authoritative copy and any copy of a copy is readily identifiable as
a copy that is not the authoritative copy; and

(6) any amendment of the authoritative copy is readily identifiable as authorized or
unauthorized.

new text begin (c) One or more authoritative copies. A system satisfies subsection (a), and a purchaser
has control of an authoritative electronic copy of a record evidencing chattel paper, if the
electronic copy, a record attached to or logically associated with the electronic copy, or a
system in which the electronic copy is recorded:
new text end

new text begin (1) enables the purchaser readily to identify each electronic copy as either an authoritative
copy or a nonauthoritative copy;
new text end

new text begin (2) enables the purchaser readily to identify itself in any way, including by name,
identifying number, cryptographic key, office, or account number, as the assignee of the
authoritative electronic copy; and
new text end

new text begin (3) gives the purchaser exclusive power, subject to subsection (d), to:
new text end

new text begin (A) prevent others from adding or changing an identified assignee of the authoritative
electronic copy; and
new text end

new text begin (B) transfer control of the authoritative electronic copy.
new text end

new text begin (d) Meaning of exclusive. Subject to subsection (e), a power is exclusive under subsection
(c)(3)(A) and (B) even if:
new text end

new text begin (1) the authoritative electronic copy, a record attached to or logically associated with
the authoritative electronic copy, or a system in which the authoritative electronic copy is
recorded limits the use of the authoritative electronic copy or has a protocol programmed
to cause a change, including a transfer or loss of control; or
new text end

new text begin (2) the power is shared with another person.
new text end

new text begin (e) When power not shared with another person. A power of a purchaser is not shared
with another person under subsection (d)(2) and the purchaser's power is not exclusive if:
new text end

new text begin (1) the purchaser can exercise the power only if the power also is exercised by the other
person; and
new text end

new text begin (2) the other person:
new text end

new text begin (A) can exercise the power without exercise of the power by the purchaser; or
new text end

new text begin (B) is the transferor to the purchaser of an interest in the chattel paper.
new text end

new text begin (f) Presumption of exclusivity of certain powers. If a purchaser has the powers specified
in subsection (c)(3)(A) and (B), the powers are presumed to be exclusive.
new text end

new text begin (g) Obtaining control through another person. A purchaser has control of an
authoritative electronic copy of a record evidencing chattel paper if another person, other
than the transferor to the purchaser of an interest in the chattel paper:
new text end

new text begin (1) has control of the authoritative electronic copy and acknowledges that it has control
on behalf of the purchaser; or
new text end

new text begin (2) obtains control of the authoritative electronic copy after having acknowledged that
it will obtain control of the electronic copy on behalf of the purchaser.
new text end

Sec. 4.

new text begin [336.9-105A] CONTROL OF ELECTRONIC MONEY.
new text end

new text begin (a) General rule: control of electronic money. A person has control of electronic
money if:
new text end

new text begin (1) the electronic money, a record attached to or logically associated with the electronic
money, or a system in which the electronic money is recorded gives the person:
new text end

new text begin (A) power to avail itself of substantially all the benefit from the electronic money; and
new text end

new text begin (B) exclusive power, subject to subsection (b), to:
new text end

new text begin (i) prevent others from availing themselves of substantially all the benefit from the
electronic money; and
new text end

new text begin (ii) transfer control of the electronic money to another person or cause another person
to obtain control of other electronic money as a result of the transfer of the electronic money;
and
new text end

new text begin (2) the electronic money, a record attached to or logically associated with the electronic
money, or a system in which the electronic money is recorded enables the person readily
to identify itself in any way, including by name, identifying number, cryptographic key,
office, or account number, as having the powers under paragraph (1).
new text end

new text begin (b) Meaning of exclusive. Subject to subsection (c), a power is exclusive under subsection
(a)(1)(B)(i) and (ii) even if:
new text end

new text begin (1) the electronic money, a record attached to or logically associated with the electronic
money, or a system in which the electronic money is recorded limits the use of the electronic
money or has a protocol programmed to cause a change, including a transfer or loss of
control; or
new text end

new text begin (2) the power is shared with another person.
new text end

new text begin (c) When power not shared with another person. A power of a person is not shared
with another person under subsection (b)(2) and the person's power is not exclusive if:
new text end

new text begin (1) the person can exercise the power only if the power also is exercised by the other
person; and
new text end

new text begin (2) the other person:
new text end

new text begin (A) can exercise the power without exercise of the power by the person; or
new text end

new text begin (B) is the transferor to the person of an interest in the electronic money.
new text end

new text begin (d) Presumption of exclusivity of certain powers. If a person has the powers specified
in subsection (a)(1)(B)(i) and (ii), the powers are presumed to be exclusive.
new text end

new text begin (e) Control through another person. A person has control of electronic money if
another person, other than the transferor to the person of an interest in the electronic money:
new text end

new text begin (1) has control of the electronic money and acknowledges that it has control on behalf
of the person; or
new text end

new text begin (2) obtains control of the electronic money after having acknowledged that it will obtain
control of the electronic money on behalf of the person.
new text end

Sec. 5.

new text begin [336.9-107A] CONTROL OF CONTROLLABLE ELECTRONIC RECORD,
CONTROLLABLE ACCOUNT, OR CONTROLLABLE PAYMENT INTANGIBLE.
new text end

new text begin (a) Control under section 336.12-105. A secured party has control of a controllable
electronic record as provided in section 336.12-105.
new text end

new text begin (b) Control of controllable account and controllable payment intangible. A secured
party has control of a controllable account or controllable payment intangible if the secured
party has control of the controllable electronic record that evidences the controllable account
or controllable payment intangible.
new text end

Sec. 6.

new text begin [336.9-107B] NO REQUIREMENT TO ACKNOWLEDGE OR CONFIRM;
NO DUTIES.
new text end

new text begin (a) No requirement to acknowledge. A person that has control under section 336.9-104,
336.9-105, or 336.9-105A is not required to acknowledge that it has control on behalf of
another person.
new text end

new text begin (b) No duties or confirmation. If a person acknowledges that it has or will obtain control
on behalf of another person, unless the person otherwise agrees or law other than this article
otherwise provides, the person does not owe any duty to the other person and is not required
to confirm the acknowledgment to any other person.
new text end

Sec. 7.

Minnesota Statutes 2022, section 336.9-203, is amended to read:

336.9-203 ATTACHMENT AND ENFORCEABILITY OF SECURITY INTEREST;
PROCEEDS; SUPPORTING OBLIGATIONS; FORMAL REQUISITES.

(a) Attachment. A security interest attaches to collateral when it becomes enforceable
against the debtor with respect to the collateral, unless an agreement expressly postpones
the time of attachment.

(b) Enforceability. Except as otherwise provided in subsections (c) through (i), a security
interest is enforceable against the debtor and third parties with respect to the collateral only
if:

(1) value has been given;

(2) the debtor has rights in the collateral or the power to transfer rights in the collateral
to a secured party; and

(3) one of the following conditions is met:

(A) the debtor has deleted text begin authenticateddeleted text end new text begin signednew text end a security agreement that provides a description
of the collateral and, if the security interest covers timber to be cut, a description of the land
concerned;

(B) the collateral is not a certificated security and is in the possession of the secured
party under section 336.9-313 pursuant to the debtor's security agreement;

(C) the collateral is a certificated security in registered form and the security certificate
has been delivered to the secured party under section 336.8-301 pursuant to the debtor's
security agreement; deleted text begin or
deleted text end

(D) the collateral isnew text begin controllable accounts, controllable electronic records, controllable
payment intangibles,new text end deposit accounts, electronic deleted text begin chattel paperdeleted text end new text begin documentsnew text end ,new text begin electronic money,new text end
investment property,new text begin ornew text end letter of credit rights, deleted text begin or electronic documents,deleted text end and the secured party
has control under section 336.7-106, 336.9-104, deleted text begin 336.9-105deleted text end new text begin 336.9-105Anew text end , 336.9-106, deleted text begin ordeleted text end
336.9-107new text begin , or 336.9-107Anew text end pursuant to the debtor's security agreementdeleted text begin .deleted text end new text begin ; or
new text end

new text begin (E) the collateral is chattel paper and the secured party has possession and control under
section 336.9-314A pursuant to the debtor's security agreement.
new text end

(c) Other UCC provisions. Subsection (b) is subject to section 336.4-210 on the security
interest of a collecting bank, section 336.5-118 on the security interest of a letter of credit
issuer or nominated person, section 336.9-110 on a security interest arising under article 2
or 2A, and section 336.9-206 on security interests in investment property.

(d) When person becomes bound by another person's security agreement. A person
becomes bound as debtor by a security agreement entered into by another person if, by
operation of law other than this article or by contract:

(1) the security agreement becomes effective to create a security interest in the person's
property; or

(2) the person becomes generally obligated for the obligations of the other person,
including the obligation secured under the security agreement, and acquires or succeeds to
all or substantially all of the assets of the other person.

(e) Effect of new debtor becoming bound. If a new debtor becomes bound as debtor
by a security agreement entered into by another person:

(1) the agreement satisfies subsection (b)(3) with respect to existing or after-acquired
property of the new debtor to the extent the property is described in the agreement; and

(2) another agreement is not necessary to make a security interest in the property
enforceable.

(f) Proceeds and supporting obligations. The attachment of a security interest in
collateral gives the secured party the rights to proceeds provided by section 336.9-315 and
is also attachment of a security interest in a supporting obligation for the collateral.

(g) Lien securing right to payment. The attachment of a security interest in a right to
payment or performance secured by a security interest or other lien on personal or real
property is also attachment of a security interest in the security interest, mortgage, or other
lien. The attachment of a security interest in the mortgage or lien on real property does not
create an interest in real property.

(h) Security entitlement carried in securities account. The attachment of a security
interest in a securities account is also attachment of a security interest in the security
entitlements carried in the securities account.

(i) Commodity contracts carried in commodity account. The attachment of a security
interest in a commodity account is also attachment of a security interest in the commodity
contracts carried in the commodity account.

Sec. 8.

Minnesota Statutes 2022, section 336.9-204, is amended to read:

336.9-204 AFTER-ACQUIRED PROPERTY; FUTURE ADVANCES.

(a) After-acquired collateral. Except as otherwise provided in subsection (b), a security
agreement may create or provide for a security interest in after-acquired collateral.

(b) When after-acquired property clause not effective. new text begin Subject to subsection (b.1), new text end a
security interest does not attach under a term constituting an after-acquired property clause
to:

(1) consumer goods, other than an accession when given as additional security, unless
the debtor acquires rights in them within ten days after the secured party gives value; or

(2) a commercial tort claim.

new text begin (b.1) Limitation on subsection (b). Subsection (b) does not prevent a security interest
from attaching:
new text end

new text begin (1) to consumer goods as proceeds under section 336.9-315(a) or commingled goods
under section 336.9-336(c);
new text end

new text begin (2) to a commercial tort claim as proceeds under section 336.9-315(a); or
new text end

new text begin (3) under an after-acquired property clause to property that is proceeds of consumer
goods or a commercial tort claim.
new text end

(c) Future advances and other value. A security agreement may provide that collateral
secures, or that accounts, chattel paper, payment intangibles, or promissory notes are sold
in connection with, future advances or other value, whether or not the advances or value
are given pursuant to commitment.

Sec. 9.

Minnesota Statutes 2022, section 336.9-207, is amended to read:

336.9-207 RIGHTS AND DUTIES OF SECURED PARTY HAVING POSSESSION
OR CONTROL OF COLLATERAL.

(a) Duty of care when secured party in possession. Except as otherwise provided in
subsection (d), a secured party shall use reasonable care in the custody and preservation of
collateral in the secured party's possession. In the case of chattel paper or an instrument,
reasonable care includes taking necessary steps to preserve rights against prior parties unless
otherwise agreed.

(b) Expenses, risks, duties, and rights when secured party in possession. Except as
otherwise provided in subsection (d), if a secured party has possession of collateral:

(1) reasonable expenses, including the cost of insurance and payment of taxes or other
charges incurred in the custody, preservation, use, or operation of the collateral are chargeable
to the debtor and are secured by the collateral;

(2) the risk of accidental loss or damage is on the debtor to the extent of a deficiency in
any effective insurance coverage;

(3) the secured party shall keep the collateral identifiable, but fungible collateral may
be commingled; and

(4) the secured party may use or operate the collateral:

(A) for the purpose of preserving the collateral or its value;

(B) as permitted by an order of a court having competent jurisdiction; or

(c) Duties and rights when secured party in possession or control. Except as otherwise
provided in subsection (d), a secured party having possession of collateral or control of
collateral under section 336.7-106, 336.9-104, 336.9-105,new text begin 336.9-105A,new text end 336.9-106, deleted text begin ordeleted text end
336.9-107new text begin , or 336.9-107Anew text end :

(1) may hold as additional security any proceeds, except money or funds, received from
the collateral;

(2) shall apply money or funds received from the collateral to reduce the secured
obligation, unless remitted to the debtor; and

(3) may create a security interest in the collateral.

(d) Buyer of certain rights to payment. If the secured party is a buyer of accounts,
chattel paper, payment intangibles, or promissory notes or a consignor:

(1) subsection (a) does not apply unless the secured party is entitled under an agreement:

(A) to charge back uncollected collateral; or

(B) otherwise to full or limited recourse against the debtor or a secondary obligor based
on the nonpayment or other default of an account debtor or other obligor on the collateral;
and

(2) subsections (b) and (c) do not apply.

Sec. 10.

Minnesota Statutes 2022, section 336.9-208, is amended to read:

336.9-208 ADDITIONAL DUTIES OF SECURED PARTY HAVING CONTROL
OF COLLATERAL.

(a) Applicability of section. This section applies to cases in which there is no outstanding
secured obligation and the secured party is not committed to make advances, incur
obligations, or otherwise give value.

(1) a secured party having control of a deposit account under section 336.9-104(a)(2)
shall send to the bank with which the deposit account is maintained deleted text begin an authenticated statementdeleted text end new text begin
a signed recordnew text end that releases the bank from any further obligation to comply with instructions
originated by the secured party;

(2) a secured party having control of a deposit account under section 336.9-104(a)(3)
shall:

(A) pay the debtor the balance on deposit in the deposit account; or

(B) transfer the balance on deposit into a deposit account in the debtor's name;

(3) a secured party, other than a buyer, having control deleted text begin of electronic chattel paperdeleted text end under
section 336.9-105 new text begin of an authoritative electronic copy of a record evidencing chattel paper
new text end shalldeleted text begin :deleted text end new text begin transfer control of the electronic copy to the debtor or a person designated by the
debtor;
new text end

deleted text begin (A) communicate the authoritative copy of the electronic chattel paper to the debtor or
its designated custodian;
deleted text end

deleted text begin (B) if the debtor designates a custodian that is the designated custodian with which the
authoritative copy of the electronic chattel paper is maintained for the secured party,
communicate to the custodian an authenticated record releasing the designated custodian
from any further obligation to comply with instructions originated by the secured party and
instructing the custodian to comply with instructions originated by the debtor; and
deleted text end

deleted text begin (C) take appropriate action to enable the debtor or its designated custodian to make
copies of or revisions to the authoritative copy which add or change an identified assignee
of the authoritative copy without the consent of the secured party;
deleted text end

(4) a secured party having control of investment property under section 336.8-106(d)(2)
or 336.9-106(b) shall send to the securities intermediary or commodity intermediary with
which the security entitlement or commodity contract is maintained deleted text begin an authenticateddeleted text end new text begin a
signednew text end record that releases the securities intermediary or commodity intermediary from any
further obligation to comply with entitlement orders or directions originated by the secured
party;

(5) a secured party having control of a letter of credit right under section 336.9-107 shall
send to each person having an unfulfilled obligation to pay or deliver proceeds of the letter
of credit to the secured party deleted text begin an authenticateddeleted text end new text begin a signednew text end release from any further obligation
to pay or deliver proceeds of the letter of credit to the secured party; deleted text begin and
deleted text end

deleted text begin (6) a secured party having control of an electronic document shall:
deleted text end

deleted text begin (A) give control of the electronic document to the debtor or its designated custodian;
deleted text end

deleted text begin (B) if the debtor designates a custodian that is the designated custodian with which the
authoritative copy of the electronic document is maintained for the secured party,
communicate to the custodian an authenticated record releasing the designated custodian
from any further obligation to comply with instructions originated by the secured party and
instructing the custodian to comply with instructions originated by the debtor; and
deleted text end

new text begin (6) a secured party having control under section 336.7-106 of an authoritative electronic
copy of an electronic document of title shall transfer control of the electronic copy to the
debtor or a person designated by the debtor;
new text end

new text begin (7) a secured party having control under section 336.9-105A of electronic money shall
transfer control of the electronic money to the debtor or a person designated by the debtor;
and
new text end

new text begin (8) a secured party having control under section 336.12-105 of a controllable electronic
record, other than a buyer of a controllable account or controllable payment intangible
evidenced by the controllable electronic record, shall transfer control of the controllable
electronic record to the debtor or a person designated by the debtor.
new text end

Sec. 11.

Minnesota Statutes 2022, section 336.9-209, is amended to read:

336.9-209 DUTIES OF SECURED PARTY IF ACCOUNT DEBTOR HAS BEEN
NOTIFIED OF ASSIGNMENT.

(a) Applicability of section. Except as otherwise provided in subsection (c), this section
applies if:

(1) there is no outstanding secured obligation; and

(2) the secured party is not committed to make advances, incur obligations, or otherwise
give value.

(b) Duties of secured party after receiving demand from debtor. Within ten days
after receiving deleted text begin an authenticateddeleted text end new text begin a signednew text end demand by the debtor, a secured party shall send
to an account debtor that has received notificationnew text begin under section 336.9-406(a) or
366.12-106(b)new text end of an assignment to the secured party as assignee deleted text begin under section 336.9-406(a)
an authenticateddeleted text end new text begin a signednew text end record that releases the account debtor from any further obligation
to the secured party.

(c) Inapplicability to sales. This section does not apply to an assignment constituting
the sale of an account, chattel paper, or payment intangible.

Sec. 12.

Minnesota Statutes 2022, section 336.9-210, is amended to read:

336.9-210 REQUEST FOR ACCOUNTING; REQUEST REGARDING LIST OF
COLLATERAL OR STATEMENT OF ACCOUNT.

(a) Definitions. In this section:

(1) "Request" means a record of a type described in paragraph (2), (3), or (4).

(2) "Request for an accounting" means a record deleted text begin authenticateddeleted text end new text begin signednew text end by a debtor
requesting that the recipient provide an accounting of the unpaid obligations secured by
collateral and reasonably identifying the transaction or relationship that is the subject of the
request.

(3) "Request regarding a list of collateral" means a record deleted text begin authenticateddeleted text end new text begin signednew text end by a
debtor requesting that the recipient approve or correct a list of what the debtor believes to
be the collateral securing an obligation and reasonably identifying the transaction or
relationship that is the subject of the request.

(4) "Request regarding a statement of account" means a record deleted text begin authenticateddeleted text end new text begin signednew text end by
a debtor requesting that the recipient approve or correct a statement indicating what the
debtor believes to be the aggregate amount of unpaid obligations secured by collateral as
of a specified date and reasonably identifying the transaction or relationship that is the
subject of the request.

(b) Duty to respond to requests. Subject to subsections (c), (d), (e), and (f), a secured
party, other than a buyer of accounts, chattel paper, payment intangibles, or promissory
notes or a consignor, shall comply with a request within 14 days after receipt:

(1) in the case of a request for an accounting, by deleted text begin authenticatingdeleted text end new text begin signingnew text end and sending to
the debtor an accounting; and

(2) in the case of a request regarding a list of collateral or a request regarding a statement
of account, by deleted text begin authenticatingdeleted text end new text begin signingnew text end and sending to the debtor an approval or correction.

(c) Request regarding list of collateral; statement concerning type of collateral. A
secured party that claims a security interest in all of a particular type of collateral owned
by the debtor may comply with a request regarding a list of collateral by sending to the
debtor deleted text begin an authenticateddeleted text end new text begin a signednew text end record including a statement to that effect within 14 days
after receipt.

(d) Request regarding list of collateral; no interest claimed. A person that receives
a request regarding a list of collateral, claims no interest in the collateral when it receives
the request, and claimed an interest in the collateral at an earlier time shall comply with the
request within 14 days after receipt by sending to the debtor deleted text begin an authenticateddeleted text end new text begin a signednew text end record:

(1) disclaiming any interest in the collateral; and

(2) if known to the recipient, providing the name and mailing address of any assignee
of or successor to the recipient's interest in the collateral.

(e) Request for accounting or regarding statement of account; no interest in
obligation claimed. A person that receives a request for an accounting or a request regarding
a statement of account, claims no interest in the obligations when it receives the request,
and claimed an interest in the obligations at an earlier time shall comply with the request
within 14 days after receipt by sending to the debtor deleted text begin an authenticateddeleted text end new text begin a signednew text end record:

(1) disclaiming any interest in the obligations; and

(2) if known to the recipient, providing the name and mailing address of any assignee
of or successor to the recipient's interest in the obligations.

(f) Charges for responses. A debtor is entitled without charge to one response to a
request under this section during any six-month period. The secured party may require
payment of a charge not exceeding $25 for each additional response.

Sec. 13.

Minnesota Statutes 2022, section 336.9-301, is amended to read:

336.9-301 LAW GOVERNING PERFECTION AND PRIORITY OF SECURITY
INTERESTS.

Except as otherwise provided in sections 336.9-303 through deleted text begin 336.9-306deleted text end new text begin 336.306Bnew text end , the
following rules determine the law governing perfection, the effect of perfection or
nonperfection, and the priority of a security interest in collateral:

(1) Except as otherwise provided in this section, while a debtor is located in a jurisdiction,
the local law of that jurisdiction governs perfection, the effect of perfection or nonperfection,
and the priority of a security interest in collateral.

(2) While collateral is located in a jurisdiction, the local law of that jurisdiction governs
perfection, the effect of perfection or nonperfection, and the priority of a possessory security
interest in that collateral.

(3) Except as otherwise provided in paragraph (4), while deleted text begin tangibledeleted text end negotiablenew text begin tangiblenew text end
documents, goods, instruments,new text begin or tangiblenew text end moneydeleted text begin , or tangible chattel paperdeleted text end is located in a
jurisdiction, the local law of that jurisdiction governs:

(A) perfection of a security interest in the goods by filing a fixture filing;

(B) perfection of a security interest in timber to be cut; and

(4) The local law of the jurisdiction in which the wellhead or minehead is located governs
perfection, the effect of perfection or nonperfection, and the priority of a security interest
in as-extracted collateral.

Sec. 14.

Minnesota Statutes 2022, section 336.9-304, is amended to read:

336.9-304 LAW GOVERNING PERFECTION AND PRIORITY OF SECURITY
INTERESTS IN DEPOSIT ACCOUNTS.

(a) Law of bank's jurisdiction governs. The local law of a bank's jurisdiction governs
perfection, the effect of perfection or nonperfection, and the priority of a security interest
in a deposit account maintained with that banknew text begin even if the transaction does not bear any
relation to the bank's jurisdictionnew text end .

(b) Bank's jurisdiction. The following rules determine a bank's jurisdiction for purposes
of this part:

(1) If an agreement between the bank and the debtor governing the deposit account
expressly provides that a particular jurisdiction is the bank's jurisdiction for purposes of
this part, this article, or this chapter, that jurisdiction is the bank's jurisdiction.

(2) If paragraph (1) does not apply and an agreement between the bank and its customer
governing the deposit account expressly provides that the agreement is governed by the law
of a particular jurisdiction, that jurisdiction is the bank's jurisdiction.

(3) If neither paragraph (1) nor paragraph (2) applies and an agreement between the
bank and its customer governing the deposit account expressly provides that the deposit
account is maintained at an office in a particular jurisdiction, that jurisdiction is the bank's
jurisdiction.

(4) If none of the preceding paragraphs applies, the bank's jurisdiction is the jurisdiction
in which the office identified in an account statement as the office serving the customer's
account is located.

(5) If none of the preceding paragraphs applies, the bank's jurisdiction is the jurisdiction
in which the chief executive office of the bank is located.

Sec. 15.

Minnesota Statutes 2022, section 336.9-305, is amended to read:

336.9-305 LAW GOVERNING PERFECTION AND PRIORITY OF SECURITY
INTERESTS IN INVESTMENT PROPERTY.

(a) Governing law: general rules. Except as otherwise provided in subsection (c), the
following rules apply:

(1) While a security certificate is located in a jurisdiction, the local law of that jurisdiction
governs perfection, the effect of perfection or nonperfection, and the priority of a security
interest in the certificated security represented thereby.

(2) The local law of the issuer's jurisdiction as specified in section 336.8-110(d), governs
perfection, the effect of perfection or nonperfection, and the priority of a security interest
in an uncertificated security.

(3) The local law of the securities intermediary's jurisdiction as specified in section
336.8-110(e), governs perfection, the effect of perfection or nonperfection, and the priority
of a security interest in a security entitlement or securities account.

(4) The local law of the commodity intermediary's jurisdiction governs perfection, the
effect of perfection or nonperfection, and the priority of a security interest in a commodity
contract or commodity account.

new text begin (5) Paragraphs (2), (3), and (4) apply even if the transaction does not bear any relation
to the jurisdiction.
new text end

(b) Commodity intermediary's jurisdiction. The following rules determine a commodity
intermediary's jurisdiction for purposes of this part:

(1) If an agreement between the commodity intermediary and commodity customer
governing the commodity account expressly provides that a particular jurisdiction is the
commodity intermediary's jurisdiction for purposes of this part, this article, or this chapter,
that jurisdiction is the commodity intermediary's jurisdiction.

(2) If paragraph (1) does not apply and an agreement between the commodity intermediary
and commodity customer governing the commodity account expressly provides that the
agreement is governed by the law of a particular jurisdiction, that jurisdiction is the
commodity intermediary's jurisdiction.

(3) If neither paragraph (1) nor paragraph (2) applies and an agreement between the
commodity intermediary and commodity customer governing the commodity account
expressly provides that the commodity account is maintained at an office in a particular
jurisdiction, that jurisdiction is the commodity intermediary's jurisdiction.

(4) If none of the preceding paragraphs applies, the commodity intermediary's jurisdiction
is the jurisdiction in which the office identified in an account statement as the office serving
the commodity customer's account is located.

(5) If none of the preceding paragraphs applies, the commodity intermediary's jurisdiction
is the jurisdiction in which the chief executive office of the commodity intermediary is
located.

(c) When perfection governed by law of jurisdiction where debtor located. The local
law of the jurisdiction in which the debtor is located governs:

(1) perfection of a security interest in investment property by filing;

(2) automatic perfection of a security interest in investment property created by a broker
or securities intermediary; and

(3) automatic perfection of a security interest in a commodity contract or commodity
account created by a commodity intermediary.

Sec. 16.

new text begin [336.9-306A] LAW GOVERNING PERFECTION AND PRIORITY OF
SECURITY INTERESTS IN CHATTEL PAPER.
new text end

new text begin (a) Chattel paper evidenced by authoritative electronic copy. Except as provided in
subsection (d), if chattel paper is evidenced only by an authoritative electronic copy of the
chattel paper or is evidenced by an authoritative electronic copy and an authoritative tangible
copy, the local law of the chattel paper's jurisdiction governs perfection, the effect of
perfection or nonperfection, and the priority of a security interest in the chattel paper, even
if the transaction does not bear any relation to the chattel paper's jurisdiction.
new text end

new text begin (b) Chattel paper's jurisdiction. The following rules determine the chattel paper's
jurisdiction under this section:
new text end

new text begin (1) If the authoritative electronic copy of the record evidencing chattel paper, or a record
attached to or logically associated with the electronic copy and readily available for review,
expressly provides that a particular jurisdiction is the chattel paper's jurisdiction for purposes
of this part, this article, or this chapter, that jurisdiction is the chattel paper's jurisdiction.
new text end

new text begin (2) If paragraph (1) does not apply and the rules of the system in which the authoritative
electronic copy is recorded are readily available for review and expressly provide that a
particular jurisdiction is the chattel paper's jurisdiction for purposes of this part, this article,
or this chapter, that jurisdiction is the chattel paper's jurisdiction.
new text end

new text begin (3) If paragraphs (1) and (2) do not apply and the authoritative electronic copy, or a
record attached to or logically associated with the electronic copy and readily available for
review, expressly provides that the chattel paper is governed by the law of a particular
jurisdiction, that jurisdiction is the chattel paper's jurisdiction.
new text end

new text begin (4) If paragraphs (1), (2), and (3) do not apply and the rules of the system in which the
authoritative electronic copy is recorded are readily available for review and expressly
provide that the chattel paper or the system is governed by the law of a particular jurisdiction,
that jurisdiction is the chattel paper's jurisdiction.
new text end

new text begin (5) If paragraphs (1) through (4) do not apply, the chattel paper's jurisdiction is the
jurisdiction in which the debtor is located.
new text end

new text begin (c) Chattel paper evidenced by authoritative tangible copy. If an authoritative tangible
copy of a record evidences chattel paper and the chattel paper is not evidenced by an
authoritative electronic copy, while the authoritative tangible copy of the record evidencing
chattel paper is located in a jurisdiction, the local law of that jurisdiction governs:
new text end

new text begin (1) perfection of a security interest in the chattel paper by possession under section
336.9-314A; and
new text end

new text begin (2) the effect of perfection or nonperfection and the priority of a security interest in the
chattel paper.
new text end

new text begin (d) When perfection governed by law of jurisdiction where debtor located. The local
law of the jurisdiction in which the debtor is located governs perfection of a security interest
in chattel paper by filing.
new text end

Sec. 17.

new text begin [336.9-306B] LAW GOVERNING PERFECTION AND PRIORITY OF
SECURITY INTERESTS IN CONTROLLABLE ACCOUNTS, CONTROLLABLE
ELECTRONIC RECORDS, AND CONTROLLABLE PAYMENT INTANGIBLES.
new text end

new text begin (a) Governing law: general rules. Except as provided in subsection (b), the local law
of the controllable electronic record's jurisdiction specified in section 336.12-107(c) and
(d) governs perfection, the effect of perfection or nonperfection, and the priority of a security
interest in a controllable electronic record and a security interest in a controllable account
or controllable payment intangible evidenced by the controllable electronic record.
new text end

new text begin (b) When perfection governed by law of jurisdiction where debtor located. The local
law of the jurisdiction in which the debtor is located governs:
new text end

new text begin (1) perfection of a security interest in a controllable account, controllable electronic
record, or controllable payment intangible by filing; and
new text end

new text begin (2) automatic perfection of a security interest in a controllable payment intangible created
by a sale of the controllable payment intangible.
new text end

Sec. 18.

Minnesota Statutes 2022, section 336.9-310, is amended to read:

336.9-310 WHEN FILING REQUIRED TO PERFECT SECURITY INTEREST
OR AGRICULTURAL LIEN; SECURITY INTERESTS AND AGRICULTURAL
LIENS TO WHICH FILING PROVISIONS DO NOT APPLY.

(a) General rule: perfection by filing. Except as otherwise provided in subsection (b)
and section 336.9-312(b), a financing statement must be filed to perfect all security interests
and agricultural liens.

(b) Exceptions: filing not necessary. The filing of a financing statement is not necessary
to perfect a security interest:

(1) that is perfected under section 336.9-308(d), (e), (f), or (g);

(2) that is perfected under section 336.9-309 when it attaches;

(3) in property subject to a statute, regulation, or treaty described in section 336.9-311(a);

(4) in goods in possession of a bailee which is perfected under section 336.9-312(d)(1)
or (2);

(5) in certificated securities, documents, goods, or instruments which is perfected without
filing, control, or possession under section 336.9-312(e), (f), or (g);

(6) in collateral in the secured party's possession under section 336.9-313;

(7) in a certificated security which is perfected by delivery of the security certificate to
the secured party under section 336.9-313;

(8) innew text begin controllable accounts, controllable electronic records, controllable payment
intangibles,new text end deposit accounts, deleted text begin electronic chattel paper,deleted text end electronic documents, investment
property, or letter of credit rights which is perfected by control under section 336.9-314;

new text begin (8.1) in chattel paper which is perfected by possession and control under section
336.9-314A;
new text end

(9) in proceeds which is perfected under section 336.9-315; or

(10) that is perfected under section 336.9-316.

(c) Assignment of perfected security interest. If a secured party assigns a perfected
security interest or agricultural lien, a filing under this article is not required to continue the
perfected status of the security interest against creditors of and transferees from the original
debtor.

Sec. 19.

Minnesota Statutes 2022, section 336.9-312, is amended to read:

336.9-312 PERFECTION OF SECURITY INTERESTS IN CHATTEL PAPER,new text begin
CONTROLLABLE ACCOUNTS, CONTROLLABLE ELECTRONIC RECORDS,
CONTROLLABLE PAYMENT INTANGIBLES,new text end DEPOSIT ACCOUNTS,
DOCUMENTS, GOODS COVERED BY DOCUMENTS, INSTRUMENTS,
INVESTMENT PROPERTY, LETTER OF CREDIT RIGHTS, AND MONEY;
PERFECTION BY PERMISSIVE FILING; TEMPORARY PERFECTION WITHOUT
FILING OR TRANSFER OF POSSESSION.

(a) Perfection by filing permitted. A security interest in chattel paper, deleted text begin negotiable
documents,deleted text end new text begin controllable accounts, controllable electronic records, controllable payment
intangibles,new text end instruments, deleted text begin ordeleted text end investment propertynew text begin , or negotiable documentsnew text end may be perfected
by filing.

(b) Control or possession of certain collateral. Except as otherwise provided in section
336.9-315(c) and (d) for proceeds:

(1) a security interest in a deposit account may be perfected only by control under section
336.9-314;

(2) and except as otherwise provided in section 336.9-308(d), a security interest in a
letter of credit right may be perfected only by control under section 336.9-314; deleted text begin and
deleted text end

(3) a security interest innew text begin tangiblenew text end money may be perfected only by the secured party's
taking possession under section 336.9-313deleted text begin .deleted text end new text begin ; and
new text end

new text begin (4) a security interest in electronic money may be perfected only by control under section
336.9-314.
new text end

(c) Goods covered by negotiable document. While goods are in the possession of a
bailee that has issued a negotiable document covering the goods:

(1) a security interest in the goods may be perfected by perfecting a security interest in
the document; and

(2) a security interest perfected in the document has priority over any security interest
that becomes perfected in the goods by another method during that time.

(d) Goods covered by nonnegotiable document. While goods are in the possession of
a bailee that has issued a nonnegotiable document covering the goods, a security interest in
the goods may be perfected by:

(1) issuance of a document in the name of the secured party;

(2) the bailee's receipt of notification of the secured party's interest; or

(3) filing as to the goods.

(e) Temporary perfection: new value. A security interest in certificated securities,
negotiable documents, or instruments is perfected without filing or the taking of possession
or control for a period of 20 days from the time it attaches to the extent that it arises for new
value given under deleted text begin an authenticateddeleted text end new text begin a signednew text end security agreement.

(f) Temporary perfection: goods or documents made available to debtor. A perfected
security interest in a negotiable document or goods in possession of a bailee, other than one
that has issued a negotiable document for the goods, remains perfected for 20 days without
filing if the secured party makes available to the debtor the goods or documents representing
the goods for the purpose of:

(1) ultimate sale or exchange; or

(2) loading, unloading, storing, shipping, transshipping, manufacturing, processing, or
otherwise dealing with them in a manner preliminary to their sale or exchange.

(g) Temporary perfection: delivery of security certificate or instrument to debtor.
A perfected security interest in a certificated security or instrument remains perfected for
20 days without filing if the secured party delivers the security certificate or instrument to
the debtor for the purpose of:

(1) ultimate sale or exchange; or

(2) presentation, collection, enforcement, renewal, or registration of transfer.

(h) Expiration of temporary perfection. After the 20-day period specified in subsection
(e), (f), or (g) expires, perfection depends upon compliance with this article.

Sec. 20.

Minnesota Statutes 2022, section 336.9-313, is amended to read:

336.9-313 WHEN POSSESSION BY OR DELIVERY TO SECURED PARTY
PERFECTS SECURITY INTEREST WITHOUT FILING.

(a) Perfection by possession or delivery. Except as otherwise provided in subsection
(b), a secured party may perfect a security interest in deleted text begin tangible negotiable documents,deleted text end goods,
instruments,new text begin negotiable tangible documents, or tangiblenew text end moneydeleted text begin , or tangible chattel paperdeleted text end
by taking possession of the collateral. A secured party may perfect a security interest in
certificated securities by taking delivery of the certificated securities under section 336.8-301.

(b) Goods covered by certificate of title. With respect to goods covered by a certificate
of title issued by this state, a secured party may perfect a security interest in the goods by
taking possession of the goods only in the circumstances described in section 336.9-316(d).

(c) Collateral in possession of person other than debtor. With respect to collateral
other than certificated securities and goods covered by a document, a secured party takes
possession of collateral in the possession of a person other than the debtor, the secured
party, or a lessee of the collateral from the debtor in the ordinary course of the debtor's
business, when:

(1) the person in possession deleted text begin authenticatesdeleted text end new text begin signsnew text end a record acknowledging that it holds
possession of the collateral for the secured party's benefit; or

(2) the person takes possession of the collateral after having deleted text begin authenticateddeleted text end new text begin signednew text end a record
acknowledging that it will hold possession ofnew text begin thenew text end collateral for the secured party's benefit.

(d) Time of perfection by possession; continuation of perfection. If perfection of a
security interest depends upon possession of the collateral by a secured party, perfection
occurs deleted text begin nodeleted text end new text begin notnew text end earlier than the time the secured party takes possession and continues only
while the secured party retains possession.

(e) Time of perfection by delivery; continuation of perfection. A security interest in
a certificated security in registered form is perfected by delivery when delivery of the
certificated security occurs under section 336.8-301 and remains perfected by delivery until
the debtor obtains possession of the security certificate.

(f) Acknowledgment not required. A person in possession of collateral is not required
to acknowledge that it holds possession for a secured party's benefit.

(g) Effectiveness of acknowledgment; no duties or confirmation. If a person
acknowledges that it holds possession for the secured party's benefit:

(1) the acknowledgment is effective under subsection (c) or section 336.8-301(a), even
if the acknowledgment violates the rights of a debtor; and

(2) unless the person otherwise agrees or law other than this article otherwise provides,
the person does not owe any duty to the secured party and is not required to confirm the
acknowledgment to another person.

(h) Secured party's delivery to person other than debtor. A secured party having
possession of collateral does not relinquish possession by delivering the collateral to a person
other than the debtor or a lessee of the collateral from the debtor in the ordinary course of
the debtor's business if the person was instructed before the delivery or is instructed
contemporaneously with the delivery:

(1) to hold possession of the collateral for the secured party's benefit; or

(2) to redeliver the collateral to the secured party.

(i) Effect of delivery under subsection (h); no duties or confirmation. A secured
party does not relinquish possession, even if a delivery under subsection (h) violates the
rights of a debtor. A person to which collateral is delivered under subsection (h) does not
owe any duty to the secured party and is not required to confirm the delivery to another
person unless the person otherwise agrees or law other than this article otherwise provides.

Sec. 21.

Minnesota Statutes 2022, section 336.9-314, is amended to read:

336.9-314 PERFECTION BY CONTROL.

(a) Perfection by control. A security interest in deleted text begin investment property,deleted text end new text begin controllable
accounts, controllable electronic records, controllable payment intangibles,new text end deposit accounts,new text begin
electronic documents, electronic money, investment property, ornew text end letter of credit rightsdeleted text begin ,
electronic chattel paper, or electronic documentsdeleted text end may be perfected by control of the collateral
under section 336.7-106, 336.9-104, deleted text begin 336.9-105deleted text end new text begin 336.9-105Anew text end , 336.9-106, deleted text begin ordeleted text end 336.9-107new text begin , or
336.9-107Anew text end .

(b) Specified collateral: time of perfection by control; continuation of perfection.
A security interest innew text begin controllable accounts, controllable electronic records, controllable
payment intangibles,new text end deposit accounts, electronic deleted text begin chattel paperdeleted text end new text begin documentsnew text end ,new text begin electronic money,
ornew text end letter of credit rightsdeleted text begin , or electronic documentsdeleted text end is perfected by control under section
336.7-106, 336.9-104, deleted text begin 336.9-105deleted text end new text begin 336.9-105Anew text end , deleted text begin ordeleted text end 336.9-107new text begin , or 336.9-107Anew text end deleted text begin whendeleted text end new text begin not earlier
thannew text end the secured party obtains control and remains perfected by control only while the
secured party retains control.

(c) Investment property: time of perfection by control; continuation of perfection.
A security interest in investment property is perfected by control under section 336.9-106
deleted text begin fromdeleted text end new text begin not earlier thannew text end the time the secured party obtains control and remains perfected by
control until:

(1) the secured party does not have control; and

(2) one of the following occurs:

(A) if the collateral is a certificated security, the debtor has or acquires possession of
the security certificate;

(B) if the collateral is an uncertificated security, the issuer has registered or registers the
debtor as the registered owner; or

Sec. 22.

new text begin [336.9-314A] PERFECTION BY POSSESSION AND CONTROL OF
CHATTEL PAPER.
new text end

new text begin (a) Perfection by possession and control. A secured party may perfect a security interest
in chattel paper by taking possession of each authoritative tangible copy of the record
evidencing the chattel paper and obtaining control of each authoritative electronic copy of
the electronic record evidencing the chattel paper.
new text end

new text begin (b) Time of perfection; continuation of perfection. A security interest is perfected
under subsection (a) not earlier than the time the secured party takes possession and obtains
control and remains perfected under subsection (a) only while the secured party retains
possession and control.
new text end

new text begin (c) Application of section 336.9-313 to perfection by possession of chattel paper.
Section 336.9-313(c) and (f) through (i) applies to perfection by possession of an authoritative
tangible copy of a record evidencing chattel paper.
new text end

Sec. 23.

Minnesota Statutes 2022, section 336.9-316, is amended to read:

336.9-316 EFFECT OF CHANGE IN GOVERNING LAW.

(a) General rule: effect on perfection of change in governing law. A security interest
perfected pursuant to the law of the jurisdiction designated in section 336.9-301 (1)new text begin ,new text end deleted text begin ordeleted text end
336.9-305 (c)new text begin , 336.9-306A(d), or 336.9-306B(b)new text end remains perfected until the earliest of:

(1) the time perfection would have ceased under the law of that jurisdiction;

(2) the expiration of four months after a change of the debtor's location to another
jurisdiction; or

(3) the expiration of one year after a transfer of collateral to a person that thereby becomes
a debtor and is located in another jurisdiction.

(b) Security interest perfected or unperfected under law of new jurisdiction. If a
security interest described in subsection (a) 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.

(c) Possessory security interest in collateral moved to new jurisdiction. 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:

(1) the collateral is located in one jurisdiction and subject to a security interest perfected
under the law of that jurisdiction;

(2) thereafter the collateral is brought into another jurisdiction; and

(3) upon entry into the other jurisdiction, the security interest is perfected under the law
of the other jurisdiction.

(d) Goods covered by certificate of title from this state. Except as otherwise provided
in subsection (e), a security interest in goods covered by a certificate of title which 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.

(e) When subsection (d) security interest becomes unperfected against purchasers.
A security interest described in subsection (d) 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 336.9-311
(b) or 336.9-313 are not satisfied before the earlier of:

(1) 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;
or

(2) the expiration of four months after the goods had become so covered.

(f) Change in jurisdiction ofnew text begin chattel paper, controllable electronic record,new text end bank,
issuer, nominated person, securities intermediary, or commodity intermediary. A
security interest innew text begin chattel paper, controllable accounts, controllable electronic records,
controllable payment intangibles,new text end deposit accounts, letter of credit rights, or investment
property which is perfected under the law of thenew text begin chattel paper's jurisdiction, the controllable
electronic record's jurisdiction, thenew text end 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:

(1) the time the security interest would have become unperfected under the law of that
jurisdiction; or

(2) the expiration of four months after a change of the applicable jurisdiction to another
jurisdiction.

(g) Subsection (f) security interest perfected or unperfected under law of new
jurisdiction. If a security interest described in subsection (f) 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.

(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 336.9-301 (1) or 336.9-305 (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 336.9-301 (1) or 336.9-305 (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 an original debtor is filed pursuant to the law of
the jurisdiction designated in section 336.9-301 (1) or 336.9-305 (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 336.9-203 (d), 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
336.9-301 (1) or 336.9-305 (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.

Sec. 24.

Minnesota Statutes 2022, section 336.9-317, is amended to read:

336.9-317 INTERESTS THAT TAKE PRIORITY OVER OR TAKE FREE OF
SECURITY INTEREST OR AGRICULTURAL LIEN.

(a) Conflicting security interests and rights of lien creditors. A security interest or
agricultural lien is subordinate to the rights of:

(1) a person entitled to priority under section 336.9-322; and

(2) except as otherwise provided in subsection (e), a person that becomes a lien creditor
before the earlier of the time:

(A) the security interest or agricultural lien is perfected; or

(B) one of the conditions specified in section 336.9-203 (b)(3) is met and a financing
statement covering the collateral is filed.

(b) Buyers that receive delivery. Except as otherwise provided in subsection (e), a
buyer, other than a secured party, of deleted text begin tangible chattel paper, tangible documents,deleted text end goods,
instruments,new text begin tangible documents,new text end or a deleted text begin certificateddeleted text end securitynew text begin certificatenew text end 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.

(c) Lessees that receive delivery. Except as otherwise provided in subsection (e), a
lessee of goods takes free of a security interest or agricultural lien if the lessee 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. new text begin Subject to subsections (f) through (i),
new text end a licensee of a general intangible or a buyer, other than a secured party, of collateral other
than deleted text begin tangible chattel paper, tangible documents,deleted text end new text begin electronic money,new text end goods, instruments,new text begin
tangible documents,new text end 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.

(e) Purchase-money security interest. Except as otherwise provided in sections
336.9-320 and 336.9-321, if a person files a financing statement with respect to a
purchase-money security interest before or within 20 days after the debtor receives delivery
of the collateral, the security interest takes priority over the rights of a buyer, lessee, or lien
creditor which arise between the time the security interest attaches and the time of filing.

new text begin (f) Buyers of chattel paper. A buyer, other than a secured party, of chattel paper takes
free of a security interest if, without knowledge of the security interest and before it is
perfected, the buyer gives value and:
new text end

new text begin (1) receives delivery of each authoritative tangible copy of the record evidencing the
chattel paper; and
new text end

new text begin (2) if each authoritative electronic copy of the record evidencing the chattel paper can
be subjected to control under section 336.9-105, obtains control of each authoritative
electronic copy.
new text end

new text begin (g) Buyers of electronic documents. A buyer of an electronic document takes free of
a security interest if, without knowledge of the security interest and before it is perfected,
the buyer gives value and, if each authoritative electronic copy of the document can be
subjected to control under section 336.7-106, obtains control of each authoritative electronic
copy.
new text end

new text begin (h) Buyers of controllable electronic records. A buyer of a controllable electronic
record takes free of a security interest if, without knowledge of the security interest and
before it is perfected, the buyer gives value and obtains control of the controllable electronic
record.
new text end

new text begin (i) Buyers of controllable accounts and controllable payment intangibles. A buyer,
other than a secured party, of a controllable account or a controllable payment intangible
takes free of a security interest if, without knowledge of the security interest and before it
is perfected, the buyer gives value and obtains control of the controllable account or
controllable payment intangible.
new text end

Sec. 25.

Minnesota Statutes 2022, section 336.9-323, is amended to read:

336.9-323 FUTURE ADVANCES.

(a) When priority based on time of advance. Except as otherwise provided in subsection
(c), for purposes of determining the priority of a perfected security interest under section
336.9-322(a)(1), perfection of the security interest dates from the time an advance is made
to the extent that the security interest secures an advance that:

(1) is made while the security interest is perfected only:

(A) under section 336.9-309 when it attaches; or

(B) temporarily under section 336.9-312(e), (f), or (g); and

(2) is not made pursuant to a commitment entered into before or while the security
interest is perfected by a method other than under section 336.9-309 or 336.9-312(e), (f),
or (g).

(b) Lien creditor. Except as otherwise provided in subsection (c), a security interest is
subordinate to the rights of a person that becomes a lien creditor to the extent that the security
interest secures an advance made more than 45 days after the person becomes a lien creditor
unless the advance is made:

(1) without knowledge of the lien; or

(2) pursuant to a commitment entered into without knowledge of the lien.

(c) Buyer of receivables. Subsections (a) and (b) do not apply to a security interest held
by a secured party that is a buyer of accounts, chattel paper, payment intangibles, or
promissory notes or a consignor.

(d) Buyer of goods. Except as otherwise provided in subsection (e), a buyer of goods
deleted text begin other than a buyer in ordinary course of businessdeleted text end takes free of a security interest to the extent
that it secures advances made after the earlier of:

(1) the time the secured party acquires knowledge of the buyer's purchase; or

(2) 45 days after the purchase.

(e) Advances made pursuant to commitment: priority of buyer of goods. Subsection
(d) does not apply if the advance is made pursuant to a commitment entered into without
knowledge of the buyer's purchase and before the expiration of the 45-day period.

(f) Lessee of goods. Except as otherwise provided in subsection (g), a lessee of goodsdeleted text begin ,
other than a lessee in ordinary course of business,deleted text end takes the leasehold interest free of a
security interest to the extent that it secures advances made after the earlier of:

(1) the time the secured party acquires knowledge of the lease; or

(2) 45 days after the lease contract becomes enforceable.

(g) Advances made pursuant to commitment: priority of lessee of goods. Subsection
(f) does not apply if the advance is made pursuant to a commitment entered into without
knowledge of the lease and before the expiration of the 45-day period.

Sec. 26.

Minnesota Statutes 2022, section 336.9-324, is amended to read:

336.9-324 PRIORITY OF PURCHASE-MONEY SECURITY INTERESTS.

(a) General rule: purchase-money priority. Except as otherwise provided in subsection
(g), a perfected purchase-money security interest in goods other than inventory or livestock
has priority over a conflicting security interest in the same goods, and, except as otherwise
provided in section 336.9-327, a perfected security interest in its identifiable proceeds also
has priority, if the purchase-money security interest is perfected when the debtor receives
possession of the collateral or within 20 days thereafter.

(b) Inventory purchase-money priority. Subject to subsection (c) and except as
otherwise provided in subsection (g), a perfected purchase-money security interest in
inventory has priority over a conflicting security interest in the same inventory, has priority
over a conflicting security interest in chattel paper or an instrument constituting proceeds
of the inventory and in proceeds of the chattel paper, if so provided in section 336.9-330,
and, except as otherwise provided in section 336.9-327, also has priority in identifiable cash
proceeds of the inventory to the extent the identifiable cash proceeds are received on or
before the delivery of the inventory to a buyer, if:

(1) the purchase-money security interest is perfected when the debtor receives possession
of the inventory;

(2) the purchase-money secured party sends deleted text begin an authenticateddeleted text end new text begin a signednew text end notification to
the holder of the conflicting security interest;

(3) the holder of the conflicting security interest receives the notification within five
years before the debtor receives possession of the inventory; and

(4) the notification states that the person sending the notification has or expects to acquire
a purchase-money security interest in inventory of the debtor and describes the inventory.

(c) Holders of conflicting inventory security interests to be notified. Subsection (b)(2)
through (4) apply only if the holder of the conflicting security interest had filed a financing
statement covering the same types of inventory:

(1) if the purchase-money security interest is perfected by filing, before the date of the
filing; or

(2) if the purchase-money security interest is temporarily perfected without filing or
possession under section 336.9-312(f), before the beginning of the 20-day period thereunder.

(d) Livestock purchase-money priority. Subject to subsection (e) and except as
otherwise provided in subsection (g), a perfected purchase-money security interest in
livestock that are farm products has priority over a conflicting security interest in the same
livestock, and, except as otherwise provided in section 336.9-327, a perfected security
interest in their identifiable proceeds and identifiable products in their unmanufactured
states also has priority, if:

(1) the purchase-money security interest is perfected when the debtor receives possession
of the livestock;

(2) the purchase-money secured party sends deleted text begin an authenticateddeleted text end new text begin a signednew text end notification to
the holder of the conflicting security interest;

(3) the holder of the conflicting security interest receives the notification within six
months before the debtor receives possession of the livestock; and

(4) the notification states that the person sending the notification has or expects to acquire
a purchase-money security interest in livestock of the debtor and describes the livestock.

(e) Holders of conflicting livestock security interests to be notified. Subsection (d)(2)
through (4) apply only if the holder of the conflicting security interest had filed a financing
statement covering the same types of livestock:

(1) if the purchase-money security interest is perfected by filing, before the date of the
filing; or

(2) if the purchase-money security interest is temporarily perfected without filing or
possession under section 336.9-312(f), before the beginning of the 20-day period thereunder.

(f) Software purchase-money priority. Except as otherwise provided in subsection
(g), a perfected purchase-money security interest in software has priority over a conflicting
security interest in the same collateral, and, except as otherwise provided in section
336.9-327, a perfected security interest in its identifiable proceeds also has priority, to the
extent that the purchase-money security interest in the goods in which the software was
acquired for use has priority in the goods and proceeds of the goods under this section.

(g) Conflicting purchase-money security interests. If more than one security interest
qualifies for priority in the same collateral under subsection (a), (b), (d), or (f):

(1) a security interest securing an obligation incurred as all or part of the price of the
collateral has priority over a security interest securing an obligation incurred for value given
to enable the debtor to acquire rights in or the use of collateral; and

(2) in all other cases, section 336.9-322(a) applies to the qualifying security interests.

Sec. 27.

new text begin [336.9-326A] PRIORITY OF SECURITY INTEREST IN CONTROLLABLE
ACCOUNT, CONTROLLABLE ELECTRONIC RECORD, AND CONTROLLABLE
PAYMENT INTANGIBLE.
new text end

new text begin A security interest in a controllable account, controllable electronic record, or controllable
payment intangible held by a secured party having control of the account, electronic record,
or payment intangible has priority over a conflicting security interest held by a secured party
that does not have control.
new text end

Sec. 28.

Minnesota Statutes 2022, section 336.9-330, is amended to read:

336.9-330 PRIORITY OF PURCHASER OF CHATTEL PAPER OR
INSTRUMENT.

(a) Purchaser's priority: security interest claimed merely as proceeds. A purchaser
of chattel paper has priority over a security interest in the chattel paper which is claimed
merely as proceeds of inventory subject to a security interest if:

(1) in good faith and in the ordinary course of the purchaser's business, the purchaser
gives new valuenew text begin ,new text end deleted text begin anddeleted text end takes possession ofnew text begin each authoritative tangible copy of the record
evidencingnew text end the chattel papernew text begin ,new text end deleted text begin ordeleted text end new text begin andnew text end obtains control deleted text begin ofdeleted text end new text begin under section 336.9-105 of each
authoritative electronic copy of the record evidencingnew text end the chattel paper deleted text begin under section
336.9-105deleted text end ; and

(2) thenew text begin authoritative copies of the record evidencing thenew text end chattel paper deleted text begin doesdeleted text end new text begin donew text end not indicate
that deleted text begin itdeleted text end new text begin the chattel papernew text end has been assigned to an identified assignee other than the purchaser.

(b) Purchaser's priority: other security interests. A purchaser of chattel paper has
priority over a security interest in the chattel paper which is claimed other than merely as
proceeds of inventory subject to a security interest if the purchaser gives new valuenew text begin ,new text end deleted text begin anddeleted text end
takes possession ofnew text begin each authoritative tangible copy of the record evidencingnew text end the chattel
papernew text begin ,new text end deleted text begin ordeleted text end new text begin andnew text end obtains control deleted text begin ofdeleted text end new text begin under section 336.9-105 of each authoritative electronic
copy of the record evidencingnew text end the chattel paper deleted text begin under section 336.9-105deleted text end in good faith, in
the ordinary course of the purchaser's business, and without knowledge that the purchase
violates the rights of the secured party.

(c) Chattel paper purchaser's priority in proceeds. Except as otherwise provided in
section 336.9-327, a purchaser having priority in chattel paper under subsection (a) or (b)
also has priority in proceeds of the chattel paper to the extent that:

(1) section 336.9-322 provides for priority in the proceeds; or

(2) the proceeds consist of the specific goods covered by the chattel paper or cash
proceeds of the specific goods, even if the purchaser's security interest in the proceeds is
unperfected.

(d) Instrument purchaser's priority. Except as otherwise provided in section
336.9-331(a), a purchaser of an instrument has priority over a security interest in the
instrument perfected by a method other than possession if the purchaser gives value and
takes possession of the instrument in good faith and without knowledge that the purchase
violates the rights of the secured party.

(e) Holder of purchase-money security interest gives new value. For purposes of
subsections (a) and (b), the holder of a purchase-money security interest in inventory gives
new value for chattel paper constituting proceeds of the inventory.

(f) Indication of assignment gives knowledge. For purposes of subsections (b) and (d),
ifnew text begin the authoritative copies of the record evidencingnew text end chattel paper or an instrument deleted text begin indicatesdeleted text end new text begin
indicatenew text end that deleted text begin itdeleted text end new text begin the chattel paper or instrumentnew text end has been assigned to an identified secured
party other than the purchaser, a purchaser of the chattel paper or instrument has knowledge
that the purchase violates the rights of the secured party.

Sec. 29.

Minnesota Statutes 2022, section 336.9-331, is amended to read:

336.9-331 PRIORITY OF RIGHTS OF PURCHASERS OF deleted text begin INSTRUMENTS,deleted text end new text begin
CONTROLLABLE ACCOUNTS, CONTROLLABLE ELECTRONIC RECORDS,
CONTROLLABLE PAYMENT INTANGIBLES,new text end DOCUMENTS,new text begin INSTRUMENTS,new text end
AND SECURITIES UNDER OTHER ARTICLES; PRIORITY OF INTERESTS IN
FINANCIAL ASSETS AND SECURITY ENTITLEMENTSnew text begin AND PROTECTION
AGAINST ASSERTION OF CLAIMnew text end UNDER deleted text begin ARTICLEdeleted text end new text begin ARTICLESnew text end 8new text begin AND 12new text end .

(a) Rights under articles 3, 7, deleted text begin anddeleted text end 8new text begin , and 12new text end not limited. This article does not limit
the rights of a holder in due course of a negotiable instrument, a holder to which a negotiable
document of title has been duly negotiated, deleted text begin ordeleted text end a protected purchaser of a securitynew text begin , or a
qualifying purchaser of a controllable account, controllable electronic record, or controllable
payment intangiblenew text end . These holders or purchasers take priority over an earlier security interest,
even if perfected, to the extent provided in articles 3, 7, deleted text begin anddeleted text end 8new text begin , and 12new text end .

(b) Protection under deleted text begin articledeleted text end new text begin articlesnew text end 8new text begin and 12new text end . This article does not limit the rights of
or impose liability on a person to the extent that the person is protected against the assertion
of a claim under article 8new text begin or 12new text end .

(c) Filing not notice. Filing under this article does not constitute notice of a claim or
defense to the holders, or purchasers, or persons described in subsections (a) and (b).

Sec. 30.

Minnesota Statutes 2022, section 336.9-332, is amended to read:

336.9-332 TRANSFER OF MONEY; TRANSFER OF FUNDS FROM DEPOSIT
ACCOUNT.

(a) Transferee ofnew text begin tangiblenew text end money. A transferee ofnew text begin tangiblenew text end money takes the money free
of a security interest deleted text begin unlessdeleted text end new text begin ifnew text end the transferee deleted text begin actsdeleted text end new text begin receives possession of the money without
actingnew text end in collusion with the debtor in violating the rights of the secured party.

(b) Transferee of funds from deposit account. A transferee of funds from a deposit
account takes the funds free of a security interest in the deposit account deleted text begin unlessdeleted text end new text begin ifnew text end the transferee
deleted text begin actsdeleted text end new text begin receives the funds without actingnew text end in collusion with the debtor in violating the rights of
the secured party.

new text begin (c) Transferee of electronic money. A transferee of electronic money takes the money
free of a security interest if the transferee obtains control of the money without acting in
collusion with the debtor in violating the rights of the secured party.
new text end

Sec. 31.

Minnesota Statutes 2022, section 336.9-334, is amended to read:

336.9-334 PRIORITY OF SECURITY INTERESTS IN FIXTURES AND CROPS.

(a) Security interest in fixtures under this article. A security interest under this article
may be created in goods that are fixtures or may continue in goods that become fixtures. A
security interest does not exist under this article in ordinary building materials incorporated
into an improvement on land.

(b) Security interest in fixtures under real property law. This article does not prevent
creation of an encumbrance upon fixtures under real property law.

(c) General rule: subordination of security interest in fixtures. In cases not governed
by subsections (d) through (h), a security interest in fixtures is subordinate to a conflicting
interest of an encumbrancer or owner of the related real property other than the debtor.

(d) Fixtures purchase-money priority. Except as otherwise provided in subsection (h),
a perfected security interest in fixtures has priority over a conflicting interest of an
encumbrancer or owner of the real property if the debtor has an interest of record in or is
in possession of the real property and:

(1) the security interest is a purchase-money security interest;

(2) the interest of the encumbrancer or owner arises before the goods become fixtures;
and

(3) the security interest is perfected by a fixture filing before the goods become fixtures
or within 20 days thereafter.

(e) Priority of security interest in fixtures over interests in real property. A perfected
security interest in fixtures has priority over a conflicting interest of an encumbrancer or
owner of the real property if:

(1) the debtor has an interest of record in the real property or is in possession of the real
property and the security interest:

(A) is perfected by a fixture filing before the interest of the encumbrancer or owner is
of record; and

(B) has priority over any conflicting interest of a predecessor in title of the encumbrancer
or owner;

(2) before the goods become fixtures, the security interest is perfected by any method
permitted by this article and the fixtures are readily removable:

(A) factory or office machines;

(B) equipment that is not primarily used or leased for use in the operation of the real
property; or

(3) the conflicting interest is a lien on the real property obtained by legal or equitable
proceedings after the security interest was perfected by any method permitted by this article;
or

(4) the security interest is:

(A) created in a manufactured home in a manufactured home transaction; and

(B) perfected pursuant to a statute described in section 336.9-311(a)(2).

(f) Priority based on consent, disclaimer, or right to remove. A security interest in
fixtures, whether or not perfected, has priority over a conflicting interest of an encumbrancer
or owner of the real property if:

(1) the encumbrancer or owner has, in deleted text begin an authenticateddeleted text end new text begin a signednew text end record, consented to
the security interest or disclaimed an interest in the goods as fixtures; or

(2) the debtor has a right to remove the goods as against the encumbrancer or owner.

(g) Continuation of paragraph (f)(2) priority. The priority of the security interest
under paragraph (f)(2) continues for a reasonable time if the debtor's right to remove the
goods as against the encumbrancer or owner terminates.

(h) Priority of construction mortgage. A mortgage is a construction mortgage to the
extent that it secures an obligation incurred for the construction of an improvement on land,
including the acquisition cost of the land, if a recorded record of the mortgage so indicates.
Except as otherwise provided in subsections (e) and (f), a security interest in fixtures is
subordinate to a construction mortgage if a record of the mortgage is recorded before the
goods become fixtures and the goods become fixtures before the completion of the
construction. A mortgage has this priority to the same extent as a construction mortgage to
the extent that it is given to refinance a construction mortgage.

(i) Priority of security interest in crops. A perfected security interest in crops growing
on real property has priority over a conflicting interest of an encumbrancer or owner of the
real property except a perfected landlord's lien if the debtor has an interest of record in or
is in possession of the real property.

Sec. 32.

Minnesota Statutes 2022, section 336.9-341, is amended to read:

336.9-341 BANK'S RIGHTS AND DUTIES WITH RESPECT TO DEPOSIT
ACCOUNT.

Except as otherwise provided in section 336.9-340(c), and unless the bank otherwise
agrees in deleted text begin an authenticateddeleted text end new text begin a signednew text end record, a bank's rights and duties with respect to a deposit
account maintained with the bank are not terminated, suspended, or modified by:

(1) the creation, attachment, or perfection of a security interest in the deposit account;

(2) the bank's knowledge of the security interest; or

(3) the bank's receipt of instructions from the secured party.

Sec. 33.

Minnesota Statutes 2022, section 336.9-404, is amended to read:

336.9-404 RIGHTS ACQUIRED BY ASSIGNEE; CLAIMS AND DEFENSES
AGAINST ASSIGNEE.

(a) Assignee's rights subject to terms, claims, and defenses; exceptions. Unless an
account debtor has made an enforceable agreement not to assert defenses or claims, and
subject to subsections (b) through (e), the rights of an assignee are subject to:

(1) all terms of the agreement between the account debtor and assignor and any defense
or claim in recoupment arising from the transaction that gave rise to the contract; and

(2) any other defense or claim of the account debtor against the assignor which accrues
before the account debtor receives a notification of the assignment deleted text begin authenticateddeleted text end new text begin signednew text end by
the assignor or the assignee.

(b) Account debtor's claim reduces amount owed to assignee. Subject to subsection
(c) and except as otherwise provided in subsection (d), the claim of an account debtor against
an assignor may be asserted against an assignee under subsection (a) only to reduce the
amount the account debtor owes.

(c) Rule for individual under other law. This section is subject to law other than this
article which establishes a different rule for an account debtor who is an individual and who
incurred the obligation primarily for personal, family, or household purposes.

(d) Omission of required statement in consumer transaction. In a consumer
transaction, if a record evidences the account debtor's obligation, law other than this article
requires that the record include a statement to the effect that the account debtor's recovery
against an assignee with respect to claims and defenses against the assignor may not exceed
amounts paid by the account debtor under the record, and the record does not include such
a statement, the extent to which a claim of an account debtor against the assignor may be
asserted against an assignee is determined as if the record included such a statement.

(e) Inapplicability to health-care-insurance receivable. This section does not apply
to an assignment of a health-care-insurance receivable.

Sec. 34.

Minnesota Statutes 2022, section 336.9-406, is amended to read:

336.9-406 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.

(a) Discharge of account debtor; effect of notification. Subject to subsections (b)
through (i)new text begin and (l)new text end , 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, deleted text begin authenticateddeleted text end new text begin signednew text end 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.

(b) When notification ineffective. Subject to deleted text begin subsectiondeleted text end new text begin subsectionsnew text end (h)new text begin and (l)new text end ,
notification is ineffective under subsection (a):

(1) if it does not reasonably identify the rights assigned;

(2) 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; or

(3) at the option of an account debtor, if the notification notifies the account debtor to
make less than the full amount of any installment or other periodic payment to the assignee,
even if:

(A) only a portion of the account, chattel paper, or payment intangible has been assigned
to that assignee;

(B) a portion has been assigned to another assignee; or

(c) Proof of assignment. Subject to deleted text begin subsectiondeleted text end new text begin subsectionsnew text end (h)new text begin and (l)new text end , 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
(a).

(d) Term restricting assignment generally ineffective. new text begin In this subsection, "promissory
note" includes a negotiable instrument that evidences chattel paper. new text end Except as otherwise
provided in subsection (e) and sections 336.2A-303 and 336.9-407, and subject to subsection
(h), a term in an agreement between an account debtor and an assignor or in a promissory
note is ineffective to the extent that it:

(1) 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; or

(2) 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.

(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 336.9-610 or an acceptance of collateral under section 336.9-620.

(f) Legal restrictions on assignment generally ineffective. Except as otherwise provided
in sections 336.2A-303 and 336.9-407, and subject to subsections (h) and (i), 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:

(1) 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; or

(g) Subsection (b)(3) not waivable. Subject to deleted text begin subsectiondeleted text end new text begin subsectionsnew text end (h)new text begin and (l)new text end , an
account debtor may not waive or vary its option under subsection (b)(3).

(h) Rule for individual under other law. This section is subject to law other than this
article which establishes a different rule for an account debtor who is an individual and who
incurred the obligation primarily for personal, family, or household purposes.

(i) Inapplicability to health-care-insurance receivable. This section does not apply
to an assignment of a health-care-insurance receivable.

new text begin (j) (Reserved.)
new text end

new text begin (k) (Reserved.)
new text end

new text begin (l) Inapplicability of certain subsections. Subsections (a), (b), (c), and (g) do not apply
to a controllable account or controllable payment intangible.
new text end

Sec. 35.

Minnesota Statutes 2022, section 336.9-408, is amended to read:

336.9-408 RESTRICTIONS ON ASSIGNMENT OF PROMISSORY NOTES,
HEALTH-CARE-INSURANCE RECEIVABLES, AND CERTAIN GENERAL
INTANGIBLES INEFFECTIVE.

(a) Term restricting assignment generally ineffective. Except as otherwise provided
in subsection (b), a term in a promissory note or in an agreement between an account debtor
and a debtor which 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:

(1) would impair the creation, attachment, or perfection of a security interest; or

(2) 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.

(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 336.9-610 or an acceptance of collateral under
section 336.9-620.

(c) Legal restrictions on assignment generally ineffective. 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:

(1) would impair the creation, attachment, or perfection of a security interest; or

(d) Limitation on ineffectiveness under subsections (a) and (c). To the extent that a
term in a promissory note or in an agreement between an account debtor and a debtor which
relates to a health-care-insurance receivable or general intangible or a rule of law, statute,
or regulation described in subsection (c) would be effective under law other than this article
but is ineffective under subsection (a) or (c), the creation, attachment, or perfection of a
security interest in the promissory note, health-care-insurance receivable, or general
intangible:

(1) is not enforceable against the person obligated on the promissory note or the account
debtor;

(2) does not impose a duty or obligation on the person obligated on the promissory note
or the account debtor;

(3) does not require the person obligated on the promissory note or the account debtor
to recognize the security interest, pay or render performance to the secured party, or accept
payment or performance from the secured party;

(4) 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;

(5) 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; and

(6) does not entitle the secured party to enforce the security interest in the promissory
note, health-care-insurance receivable, or general intangible.

new text begin (e) (Reserved.)
new text end

new text begin (f) (Reserved.)
new text end

new text begin (g) "Promissory note." In this section, "promissory note" includes a negotiable
instrument that evidences chattel paper.
new text end

Sec. 36.

Minnesota Statutes 2022, section 336.9-509, is amended to read:

336.9-509 PERSONS ENTITLED TO FILE A RECORD.

(a) Person entitled to file record. A person may file an initial financing statement,
amendment that adds collateral covered by a financing statement, or amendment that adds
a debtor to a financing statement only if:

(1) the debtor authorizes the filing in deleted text begin an authenticateddeleted text end new text begin a signednew text end record or pursuant to
subsection (b) or (c); or

(2) the person holds an agricultural lien that has become effective at the time of filing
and the financing statement covers only collateral in which the person holds an agricultural
lien.

(b) Security agreement as authorization. By deleted text begin authenticatingdeleted text end new text begin signingnew text end or becoming bound
as debtor by a security agreement, a debtor or new debtor authorizes the filing of an initial
financing statement, and an amendment, covering:

(1) the collateral described in the security agreement; and

(2) property that becomes collateral under section 336.9-315(a)(2), whether or not the
security agreement expressly covers proceeds.

(c) Acquisition of collateral as authorization. By acquiring collateral in which a
security interest or agricultural lien continues under section 336.9-315(a)(1), a debtor
authorizes the filing of an initial financing statement, and an amendment, covering the
collateral and property that becomes collateral under section 336.9-315(a)(2).

(d) Person entitled to file certain amendments. A person may file an amendment other
than an amendment that adds collateral covered by a financing statement or an amendment
that adds a debtor to a financing statement only if:

(1) the secured party of record authorizes the filing; or

(2) the amendment is a termination statement for a financing statement as to which the
secured party of record has failed to file or send a termination statement as required by
section 336.9-513(a) or (c), the debtor authorizes the filing, and the termination statement
indicates that the debtor authorized it to be filed.

(e) Multiple secured parties of record. If there is more than one secured party of record
for a financing statement, each secured party of record may authorize the filing of an
amendment under subsection (d).

Sec. 37.

Minnesota Statutes 2022, section 336.9-513, is amended to read:

336.9-513 TERMINATION STATEMENT.

(a) Consumer goods. A secured party shall cause the secured party of record for a
financing statement to file a termination statement for the financing statement if the financing
statement covers consumer goods and:

(1) there is no obligation secured by the collateral covered by the financing statement
and no commitment to make an advance, incur an obligation, or otherwise give value; or

(2) the debtor did not authorize the filing of the initial financing statement.

(b) Time for compliance with subsection (a). To comply with subsection (a), a secured
party shall cause the secured party of record to file the termination statement:

(1) within one month after there is no obligation secured by the collateral covered by
the financing statement and no commitment to make an advance, incur an obligation, or
otherwise give value; or

(2) if earlier, within 20 days after the secured party receives deleted text begin an authenticateddeleted text end new text begin a signednew text end
demand from a debtor.

(c) Other collateral. In cases not governed by subsection (a), within 20 days after a
secured party receives deleted text begin an authenticateddeleted text end new text begin a signednew text end demand from a debtor, the secured party
shall cause the secured party of record for a financing statement to send to the debtor a
termination statement for the financing statement or file the termination statement in the
filing office if:

(1) except in the case of a financing statement covering accounts or chattel paper that
has been sold or goods that are the subject of a consignment, there is no obligation secured
by the collateral covered by the financing statement and no commitment to make an advance,
incur an obligation, or otherwise give value;

(2) the financing statement covers accounts or chattel paper that has been sold but as to
which the account debtor or other person obligated has discharged its obligation;

(3) the financing statement covers goods that were the subject of a consignment to the
debtor but are not in the debtor's possession; or

(4) the debtor did not authorize the filing of the initial financing statement.

(d) Effect of filing termination statement. Except as otherwise provided in section
336.9-510, upon the filing of a termination statement with the filing office, the financing
statement to which the termination statement relates ceases to be effective. Except as
otherwise provided in section 336.9-510, for purposes of sections 336.9-519(g), 336.9-522(a),
and 336.9-523(c), the filing with the filing office of a termination statement relating to a
financing statement that indicates that the debtor is a transmitting utility also causes the
effectiveness of the financing statement to lapse.

Sec. 38.

Minnesota Statutes 2023 Supplement, section 336.9-601, is amended to read:

336.9-601 RIGHTS AFTER DEFAULT; JUDICIAL ENFORCEMENT;
CONSIGNOR OR BUYER OF ACCOUNTS, CHATTEL PAPER, PAYMENT
INTANGIBLES, OR PROMISSORY NOTES.

(a) Rights of secured party after default. After default, a secured party has the rights
provided in this part and, except as otherwise provided in section 336.9-602, those provided
by agreement of the parties. A secured party:

(1) may reduce a claim to judgment, foreclose, or otherwise enforce the claim, security
interest, or agricultural lien by any available judicial procedure; and

(2) if the collateral is documents, may proceed either as to the documents or as to the
goods they cover.

(b) Rights and duties of secured party in possession or control. A secured party in
possession of collateral or control of collateral under section 336.7-106, 336.9-104,
336.9-105,new text begin 336.9-105A,new text end 336.9-106, deleted text begin ordeleted text end 336.9-107new text begin , or 336.9-107Anew text end has the rights and duties
provided in section 336.9-207.

(c) Rights cumulative; simultaneous exercise. The rights under subsections (a) and
(b) are cumulative and may be exercised simultaneously.

(d) Rights of debtor and obligor. Except as otherwise provided in subsection (g) and
section 336.9-605, after default, a debtor and an obligor have the rights provided in this part
and by agreement of the parties.

(e) Lien of levy after judgment. If a secured party has reduced its claim to judgment,
the lien of any levy that may be made upon the collateral by virtue of an execution based
upon the judgment relates back to the earliest of:

(1) the date of perfection of the security interest or agricultural lien in the collateral;

(2) the date of filing a financing statement covering the collateral; or

(3) any date specified in a statute under which the agricultural lien was created.

(f) Execution sale. A sale pursuant to an execution is a foreclosure of the security interest
or agricultural lien by judicial procedure within the meaning of this section. A secured party
may purchase at the sale and thereafter hold the collateral free of any other requirements
of this article.

(g) Consignor or buyer of certain rights to payment. Except as otherwise provided
in section 336.9-607 (c), this part imposes no duties upon a secured party that is a consignor
or is a buyer of accounts, chattel paper, payment intangibles, or promissory notes.

(h) Security interest in collateral that is agricultural property; enforcement. A
person may not begin to enforce a security interest in collateral that is agricultural property
subject to sections 583.20 to 583.32 that has secured a debt of more than the amount provided
in section 583.24, subdivision 5, unless: a mediation notice under subsection (i) is served
on the debtor after a condition of default has occurred in the security agreement and a copy
served on the director of the Minnesota extension service; and the debtor and creditor have
completed mediation under sections 583.20 to 583.32; or as otherwise allowed under sections
583.20 to 583.32.

(i) Mediation notice. A mediation notice under subsection (h) must contain the following
notice with the blanks properly filled in.

"TO: ...(Name of Debtor)...

YOU HAVE DEFAULTED ON THE ...(Debt in Default)... SECURED BY
AGRICULTURAL PROPERTY DESCRIBED AS ...(Reasonable Description of Agricultural
Property Collateral). THE AMOUNT OF THE OUTSTANDING DEBT IS ...(Amount of
Debt)...

AS A SECURED PARTY, ...(Name of Secured Party)... INTENDS TO ENFORCE
THE SECURITY AGREEMENT AGAINST THE AGRICULTURAL PROPERTY
DESCRIBED ABOVE BY REPOSSESSING, FORECLOSING ON, OR OBTAINING A
COURT JUDGMENT AGAINST THE PROPERTY.

YOU HAVE THE RIGHT TO HAVE THE DEBT REVIEWED FOR MEDIATION.
IF YOU REQUEST MEDIATION, A DEBT THAT IS IN DEFAULT WILL BE
MEDIATED ONLY ONCE. IF YOU DO NOT REQUEST MEDIATION, THIS DEBT
WILL NOT BE SUBJECT TO FUTURE MEDIATION IF THE SECURED PARTY
ENFORCES THE DEBT.

IF YOU PARTICIPATE IN MEDIATION, THE DIRECTOR OF THE MINNESOTA
EXTENSION SERVICE WILL PROVIDE AN ORIENTATION MEETING AND A
FINANCIAL ANALYST TO HELP YOU TO PREPARE FINANCIAL INFORMATION.
IF YOU DECIDE TO PARTICIPATE IN MEDIATION, IT WILL BE TO YOUR
ADVANTAGE TO ASSEMBLE YOUR FARM FINANCE AND OPERATION RECORDS
AND TO CONTACT A COUNTY EXTENSION OFFICE AS SOON AS POSSIBLE.
MEDIATION WILL ATTEMPT TO ARRIVE AT AN AGREEMENT FOR HANDLING
FUTURE FINANCIAL RELATIONS.

TO HAVE THE DEBT REVIEWED FOR MEDIATION YOU MUST FILE A
MEDIATION REQUEST WITH THE DIRECTOR WITHIN 14 DAYS AFTER YOU
RECEIVE THIS NOTICE. THE MEDIATION REQUEST FORM IS AVAILABLE FROM
THE DIRECTOR OF THE MINNESOTA EXTENSION SERVICE.

FROM: ...(Name and Address of Secured Party)..."

Sec. 39.

Minnesota Statutes 2022, section 336.9-605, is amended to read:

336.9-605 UNKNOWN DEBTOR OR SECONDARY OBLIGOR.

new text begin (a) In general: no duty owed by secured party. Except as provided in subsection (b),
new text end a secured party does not owe a duty based on its status as secured party:

(1) to a person that is a debtor or obligor, unless the secured party knows:

(A) that the person is a debtor or obligor;

(B) the identity of the person; and

(2) to a secured party or lienholder that has filed a financing statement against a person,
unless the secured party knows:

(A) that the person is a debtor; and

(B) the identity of the person.

new text begin (b) Exception: Secured party owes duty to debtor or obligor. A secured party owes
a duty based on its status as a secured party to a person if, at the time the secured party
obtains control of collateral that is a controllable account, controllable electronic record, or
controllable payment intangible or at the time the security interest attaches to the collateral,
whichever is later:
new text end

new text begin (1) the person is a debtor or obligor; and
new text end

new text begin (2) the secured party knows that the information in subsection (a)(1)(A), (B), or (C)
relating to the person is not provided by the collateral, a record attached to or logically
associated with the collateral, or the system in which the collateral is recorded.
new text end

Sec. 40.

Minnesota Statutes 2022, section 336.9-608, is amended to read:

336.9-608 APPLICATION OF PROCEEDS OF COLLECTION OR
ENFORCEMENT; LIABILITY FOR DEFICIENCY AND RIGHT TO SURPLUS.

(a) Application of proceeds, surplus, and deficiency if obligation secured. If a security
interest or agricultural lien secures payment or performance of an obligation, the following
rules apply:

(1) A secured party shall apply or pay over for application the cash proceeds of collection
or enforcement under section 336.9-607 in the following order to:

(A) the reasonable expenses of collection and enforcement and, to the extent provided
for by agreement and not prohibited by law, reasonable attorneys fees and legal expenses
incurred by the secured party;

(B) the satisfaction of obligations secured by the security interest or agricultural lien
under which the collection or enforcement is made; and

(C) the satisfaction of obligations secured by any subordinate security interest in or other
lien on the collateral subject to the security interest or agricultural lien under which the
collection or enforcement is made if the secured party receives deleted text begin an authenticateddeleted text end new text begin a signednew text end
demand for proceeds before distribution of the proceeds is completed.

(2) If requested by a secured party, a holder of a subordinate security interest or other
lien shall furnish reasonable proof of the interest or lien within a reasonable time. Unless
the holder complies, the secured party need not comply with the holder's demand under
paragraph (1)(C).

(3) A secured party need not apply or pay over for application noncash proceeds of
collection and enforcement under section 336.9-607 unless the failure to do so would be
commercially unreasonable. A secured party that applies or pays over for application noncash
proceeds shall do so in a commercially reasonable manner.

(4) A secured party shall account to and pay a debtor for any surplus, and the obligor is
liable for any deficiency.

(b) No surplus or deficiency in sales of certain rights to payment. If the underlying
transaction is a sale of accounts, chattel paper, payment intangibles, or promissory notes,
the debtor is not entitled to any surplus, and the obligor is not liable for any deficiency.

Sec. 41.

Minnesota Statutes 2022, section 336.9-611, is amended to read:

336.9-611 NOTIFICATION BEFORE DISPOSITION OF COLLATERAL.

(a) Notification date. In this section, "notification date" means the earlier of the date
on which:

(1) a secured party sends to the debtor and any secondary obligor deleted text begin an authenticateddeleted text end new text begin a
signednew text end notification of disposition; or

(2) the debtor and any secondary obligor waive the right to notification.

(b) Notification of disposition required. Except as otherwise provided in subsection
(d), a secured party that disposes of collateral under section 336.9-610 shall send to the
persons specified in subsection (c) a reasonable deleted text begin authenticateddeleted text end new text begin signednew text end notification of
disposition.

(c) Persons to be notified. To comply with subsection (b), the secured party shall send
deleted text begin an authenticateddeleted text end new text begin a signednew text end notification of disposition to:

(1) the debtor;

(2) any secondary obligor; and

(3) if the collateral is other than consumer goods:

(A) any other person from which the secured party has received, before the notification
date, deleted text begin an authenticateddeleted text end new text begin a signednew text end notification of a claim of an interest in the collateral;

(B) any other secured party or lienholder that, ten days before the notification date, held
a security interest in or other lien on the collateral perfected by the filing of a financing
statement that:

(i) identified the collateral;

(ii) was indexed under the debtor's name as of that date; and

(iii) was filed in the office in which to file a financing statement against the debtor
covering the collateral as of that date; and

(C) any other secured party that, ten days before the notification date, held a security
interest in the collateral perfected by compliance with a statute, regulation, or treaty described
in section 336.9-311(a).

(d) Subsection (b) inapplicable: perishable collateral; recognized market. Subsection
(b) does not apply if the collateral is perishable or threatens to decline speedily in value or
is of a type customarily sold on a recognized market.

(e) Compliance with subsection (c)(3)(b). A secured party complies with the requirement
for notification prescribed by subsection (c)(3)(B) if:

(1) not later than 20 days or earlier than 30 days before the notification date, the secured
party requests, in a commercially reasonable manner, information concerning financing
statements indexed under the debtor's name in the office indicated in subsection (c)(3)(B);
and

(2) before the notification date, the secured party:

(A) did not receive a response to the request for information; or

(B) received a response to the request for information and sent deleted text begin an authenticateddeleted text end new text begin a signednew text end
notification of disposition to each secured party named in that response whose financing
statement covered the collateral.

Sec. 42.

Minnesota Statutes 2022, section 336.9-613, is amended to read:

336.9-613 CONTENTS AND FORM OF NOTIFICATION BEFORE DISPOSITION
OF COLLATERAL: GENERAL.

new text begin (a) Contents and form of notification. new text end Except in a consumer goods transaction, the
following rules apply:

(1) The contents of a notification of disposition are sufficient if the notification:

(A) describes the debtor and the secured party;

(B) describes the collateral that is the subject of the intended disposition;

(D) states that the debtor is entitled to an accounting of the unpaid indebtedness and
states the charge, if any, for an accounting; and

(E) states the time and place of a public disposition or the time after which any other
disposition is to be made.

(2) Whether the contents of a notification that lacks any of the information specified in
paragraph (1) are nevertheless sufficient is a question of fact.

(3) The contents of a notification providing substantially the information specified in
paragraph (1) are sufficient, even if the notification includes:

(A) information not specified by that paragraph; or

(B) minor errors that are not seriously misleading.

(4) A particular phrasing of the notification is not required.

(5) The following form of notification and the form appearing in section deleted text begin 336.9-614(3)deleted text end new text begin
336.9-614(a)(3)new text end , when completednew text begin in accordance with the instructions in subsection (b) and
section 336.9-614(b)new text end , each provides sufficient information:

NOTIFICATION OF DISPOSITION OF COLLATERAL

deleted text begin To: deleted text end		deleted text begin (Name of debtor, obligor, or other person to which the notification is sent) deleted text end
deleted text begin From: deleted text end		deleted text begin (Name, address, and telephone number of secured party) deleted text end
deleted text begin Name of Debtor(s): deleted text end		deleted text begin (Include only if debtor(s) are not an addressee) deleted text end

deleted text begin (For a public disposition:)
deleted text end

deleted text begin We will sell (or lease or license, as applicable) the .....(describe collateral)..... (to the
highest qualified bidder) in public as follows:
deleted text end

	deleted text begin Date: deleted text end	deleted text begin . deleted text end
	deleted text begin Time: deleted text end	deleted text begin . deleted text end
	deleted text begin Place: deleted text end	deleted text begin . deleted text end

deleted text begin (For a private disposition:)
deleted text end

deleted text begin We will sell (or lease or license, as applicable) the .....(describe collateral)..... privately
sometime after ...(day and date)....
deleted text end

deleted text begin You are entitled to an accounting of the unpaid indebtedness secured by the property
that we intend to sell (or lease or license, as applicable) (for a charge of $.......). You may
request an accounting by calling us at ...(telephone number)....
deleted text end

new text begin To: new text end		new text begin (Name of debtor, obligor, or other person to which the notification is sent) new text end
new text begin From: new text end		new text begin (Name, address, and telephone number of secured party) new text end

new text begin {1} Name of any debtor that is not an addressee: (Name of each debtor)
new text end

new text begin {2} We will sell (describe collateral) (to the highest qualified bidder) at public sale. A
sale could include a lease or license. The sale will be held as follows:
new text end

	new text begin (Date) new text end	.
	new text begin (Time) new text end	.
	new text begin (Place) new text end	.

new text begin {3} We will sell (describe collateral) at private sale sometime after (date). A sale could
include a lease or license.
new text end

new text begin {4} You are entitled to an accounting of the unpaid indebtedness secured by the property
that we intend to sell or, as applicable, lease or license.
new text end

new text begin {5} If you request an accounting you must pay a charge of $ (amount).
new text end

new text begin {6} You may request an accounting by calling us at (telephone number).
new text end

new text begin (b) Instructions for form of notification. The following instructions apply to the form
of notification in subsection (a)(5):
new text end

new text begin (1) The instructions in this subsection refer to the numbers in braces before items in the
form of notification in subsection (a)(5). Do not include the numbers or braces in the
notification. The numbers and braces are used only for the purpose of these instructions.
new text end

new text begin (2) Include and complete item {1} only if there is a debtor that is not an addressee of
the notification and list the name or names.
new text end

new text begin (3) Include and complete either item {2}, if the notification relates to a public disposition
of the collateral, or item {3}, if the notification relates to a private disposition of the collateral.
If item {2} is included, include the words "to the highest qualified bidder" only if applicable.
new text end

new text begin (4) Include and complete items {4} and {6}.
new text end

new text begin (5) Include and complete item {5} only if the sender will charge the recipient for an
accounting.
new text end

Sec. 43.

Minnesota Statutes 2022, section 336.9-614, is amended to read:

336.9-614 CONTENTS AND FORM OF NOTIFICATION BEFORE DISPOSITION
OF COLLATERAL: CONSUMER GOODS TRANSACTION.

new text begin (a) Contents and form of notification. new text end In a consumer goods transaction, the following
rules apply:

(1) A notification of disposition must provide the following information:

(A) the information specified in section deleted text begin 336.9-613(1)deleted text end new text begin 336.9-613(a)(1)new text end ;

(B) a description of any liability for a deficiency of the person to which the notification
is sent;

(C) a telephone number from which the amount that must be paid to the secured party
to redeem the collateral under section 336.9-623 is available; and

(D) a telephone number or mailing address from which additional information concerning
the disposition and the obligation secured is available.

(2) A particular phrasing of the notification is not required.

(3) The following form of notification, when completednew text begin in accordance with the
instructions in subsection (b)new text end , provides sufficient information:

(Name and address of secured party)

(Date)

NOTICE OF OUR PLAN TO SELL PROPERTY

deleted text begin (Name and address of any obligor who is also a debtor)
deleted text end

deleted text begin Subject: ....(Identification of Transaction)....
deleted text end

deleted text begin We have your ...(describe collateral)..., because you broke promises in our agreement.
deleted text end

deleted text begin (For a public disposition:)
deleted text end

deleted text begin We will sell ...(describe collateral)... at public sale. A sale could include a lease or license.
The sale will be held as follows:
deleted text end

	deleted text begin Date: deleted text end	deleted text begin . deleted text end
	deleted text begin Time: deleted text end	deleted text begin . deleted text end
	deleted text begin Place: deleted text end	deleted text begin . deleted text end

deleted text begin You may attend the sale and bring bidders if you want.
deleted text end

deleted text begin (For a private disposition:)
deleted text end

deleted text begin We will sell ...(describe collateral)... at private sale sometime after ..(date)... A sale could
include a lease or license.
deleted text end

deleted text begin The money that we get from the sale (after paying our costs) will reduce the amount you
owe. If we get less money than you owe, you ..(will or will not, as applicable).. still owe us
the difference. If we get more money than you owe, you will get the extra money, unless
we must pay it to someone else.
deleted text end

deleted text begin You can get the property back at any time before we sell it by paying us the full amount
you owe (not just the past due payments), including our expenses. To learn the exact amount
you must pay, call us at ..(telephone number)...
deleted text end

deleted text begin If you want us to explain to you in writing how we have figured the amount that you
owe us, you may call us at ..(telephone number).. (or write us at ..(secured party's address)..)
and request a written explanation. (We will charge you $....... for the explanation if we sent
you another written explanation of the amount you owe us within the last six months.)
deleted text end

deleted text begin If you need more information about the sale call us at ..(telephone number).. (or write
us at ..(secured party's address)..).
deleted text end

deleted text begin We are sending this notice to the following other people who have an interest in
...(describe collateral)... or who owe money under your agreement:
deleted text end

deleted text begin ..(Names of all other debtors and obligors, if any)..
deleted text end

deleted text begin (4) A notification in the form of paragraph (3) is sufficient, even if additional information
appears at the end of the form.
deleted text end

deleted text begin (5) A notification in the form of paragraph (3) is sufficient, even if it includes errors in
information not required by paragraph (1), unless the error is misleading with respect to
rights arising under this article.
deleted text end

deleted text begin (6) If a notification under this section is not in the form of paragraph (3), law other than
this article determines the effect of including information not required by paragraph (1).
deleted text end

new text begin (Name and address of any obligor who is also a debtor)
new text end

new text begin Subject: (Identify transaction)
new text end

new text begin We have your (describe collateral), because you broke promises in our agreement.
new text end

new text begin {1} We will sell (describe collateral) at public sale. A sale could include a lease or
license. The sale will be held as follows:
new text end

	new text begin (Date) new text end	.
	new text begin (Time) new text end	.
	new text begin (Place) new text end	.

new text begin You may attend the sale and bring bidders if you want.
new text end

new text begin {2} We will sell (describe collateral) at private sale sometime after (date). A sale could
include a lease or license.
new text end

new text begin {3}The money that we get from the sale, after paying our costs, will reduce the amount
you owe. If we get less money than you owe, you (will or will not, as applicable) still owe
us the difference. If we get more money than you owe, you will get the extra money, unless
we must pay it to someone else.
new text end

new text begin {4}You can get the property back at any time before we sell it by paying us the full
amount you owe, not just the past due payments, including our expenses. To learn the exact
amount you must pay, call us at (telephone number).
new text end

new text begin {5}If you want us to explain to you in (writing) (writing or in (description of electronic
record)) (description of electronic record) how we have figured the amount that you owe
us, {6} call us at (telephone number) (or) (write us at (secured party's address)) (or contact
us by (description of electronic communication method)) {7} and request (a written
explanation) (a written explanation or an explanation in (description of electronic record))
(an explanation in (description of electronic record)).
new text end

new text begin {8}We will charge you $ (amount) for the explanation if we sent you another written
explanation of the amount you owe us within the last six months.
new text end

new text begin {9}If you need more information about the sale (call us at (telephone number)) (or)
(write us at (secured party's address)) (or contact us by (description of electronic
communication method)).
new text end

new text begin {10}We are sending this notice to the following other people who have an interest in
218 (describe collateral) or who owe money under your agreement:
new text end

new text begin (Names of all other debtors and obligors, if any)
new text end

new text begin (b) Instructions for form of notification. The following instructions apply to the form
of notification in subsection (a)(3):
new text end

new text begin (1) The instructions in this subsection refer to the numbers in braces before items in the
form of notification in subsection (a)(3). Do not include the numbers or braces in the
notification. The numbers and braces are used only for the purpose of these instructions.
new text end

new text begin (2) Include and complete either item {1}, if the notification relates to a public disposition
of the collateral, or item {2}, if the notification relates to a private disposition of the collateral.
new text end

new text begin (3) Include and complete items {3}, {4}, {5}, {6}, and {7}.
new text end

new text begin (4) In item {5}, include and complete any one of the three alternative methods for the
explanation-writing, writing or electronic record, or electronic record.
new text end

new text begin (5) In item {6}, include the telephone number. In addition, the sender may include and
complete either or both of the two additional alternative methods of communication-writing
or electronic communication-for the recipient of the notification to communicate with the
sender. Neither of the two additional methods of communication is required to be included.
new text end

new text begin (6) In item {7}, include and complete the method or methods for the explanation-writing,
writing or electronic record, or electronic record-included in item {5}.
new text end

new text begin (7) Include and complete item {8} only if a written explanation is included in item {5}
as a method for communicating the explanation and the sender will charge the recipient for
another written explanation.
new text end

new text begin (8) In item {9}, include either the telephone number or the address or both the telephone
number and the address. In addition, the sender may include and complete the additional
method of communication-electronic communication-for the recipient of the notification
to communicate with the sender. The additional method of electronic communication is not
required to be included.
new text end

new text begin (9) If item {10} does not apply, insert "None" after "agreement:".
new text end

Sec. 44.

Minnesota Statutes 2022, section 336.9-615, is amended to read:

336.9-615 APPLICATION OF PROCEEDS OF DISPOSITION; LIABILITY FOR
DEFICIENCY AND RIGHT TO SURPLUS.

(a) Application of proceeds. A secured party shall apply or pay over for application
the cash proceeds of disposition under section 336.9-610 in the following order to:

(1) the reasonable expenses of retaking, holding, preparing for disposition, processing,
and disposing, and, to the extent provided for by agreement and not prohibited by law,
reasonable attorneys fees and legal expenses incurred by the secured party;

(2) the satisfaction of obligations secured by the security interest or agricultural lien
under which the disposition is made;

(3) the satisfaction of obligations secured by any subordinate security interest in or other
subordinate lien on the collateral if:

(A) the secured party receives from the holder of the subordinate security interest or
other lien deleted text begin an authenticateddeleted text end new text begin a signednew text end demand for proceeds before distribution of the proceeds
is completed; and

(B) in a case in which a consignor has an interest in the collateral, the subordinate security
interest or other lien is senior to the interest of the consignor; and

(4) a secured party that is a consignor of the collateral if the secured party receives from
the consignor deleted text begin an authenticateddeleted text end new text begin a signednew text end demand for proceeds before distribution of the
proceeds is completed.

(b) Proof of subordinate interest. If requested by a secured party, a holder of a
subordinate security interest or other lien shall furnish reasonable proof of the interest or
lien within a reasonable time. Unless the holder does so, the secured party need not comply
with the holder's demand under subsection (a)(3).

(c) Application of noncash proceeds. A secured party need not apply or pay over for
application noncash proceeds of disposition under section 336.9-610 unless the failure to
do so would be commercially unreasonable. A secured party that applies or pays over for
application noncash proceeds shall do so in a commercially reasonable manner.

(d) Surplus or deficiency if obligation secured. If the security interest under which a
disposition is made secures payment or performance of an obligation, after making the
payments and applications required by subsection (a) and permitted by subsection (c):

(1) unless subsection (a)(4) requires the secured party to apply or pay over cash proceeds
to a consignor, the secured party shall account to and pay a debtor for any surplus; and

(2) the obligor is liable for any deficiency.

(e) No surplus or deficiency in sales of certain rights to payment. If the underlying
transaction is a sale of accounts, chattel paper, payment intangibles, or promissory notes:

(1) the debtor is not entitled to any surplus; and

(2) the obligor is not liable for any deficiency.

(f) Calculation of surplus or deficiency in disposition to person related to secured
party. The surplus or deficiency following a disposition is calculated based on the amount
of proceeds that would have been realized in a disposition complying with this part to a
transferee other than the secured party, a person related to the secured party, or a secondary
obligor if:

(1) the transferee in the disposition is the secured party, a person related to the secured
party, or a secondary obligor; and

(2) the amount of proceeds of the disposition is significantly below the range of proceeds
that a complying disposition to a person other than the secured party, a person related to
the secured party, or a secondary obligor would have brought.

(g) Cash proceeds received by junior secured party. A secured party that receives
cash proceeds of a disposition in good faith and without knowledge that the receipt violates
the rights of the holder of a security interest or other lien that is not subordinate to the
security interest or agricultural lien under which the disposition is made:

(1) takes the cash proceeds free of the security interest or other lien;

(2) is not obligated to apply the proceeds of the disposition to the satisfaction of
obligations secured by the security interest or other lien; and

(3) is not obligated to account to or pay the holder of the security interest or other lien
for any surplus.

Sec. 45.

Minnesota Statutes 2022, section 336.9-616, is amended to read:

336.9-616 EXPLANATION OF CALCULATION OF SURPLUS OR DEFICIENCY.

(a) Definitions. In this section:

(1) "Explanation" means a deleted text begin writingdeleted text end new text begin recordnew text end that:

(A) states the amount of the surplus or deficiency;

(B) provides an explanation in accordance with subsection (c) of how the secured party
calculated the surplus or deficiency;

(C) states, if applicable, that future debits, credits, charges, including additional credit
service charges or interest, rebates, and expenses may affect the amount of the surplus or
deficiency; and

(D) provides a telephone number or mailing address from which additional information
concerning the transaction is available.

(2) "Request" means a record:

(A) deleted text begin authenticateddeleted text end new text begin signednew text end by a debtor or consumer obligor;

(B) requesting that the recipient provide an explanation; and

(b) Explanation of calculation. In a consumer goods transaction in which the debtor
is entitled to a surplus or a consumer obligor is liable for a deficiency under section
336.9-615, the secured party shall:

(1) send an explanation to the debtor or consumer obligor, as applicable, after the
disposition and:

(A) before or when the secured party accounts to the debtor and pays any surplus or first
makes deleted text begin writtendeleted text end demandnew text begin in a recordnew text end on the consumer obligor after the disposition for payment
of the deficiency; and

(B) within 14 days after receipt of a request; or

(2) in the case of a consumer obligor who is liable for a deficiency, within 14 days after
receipt of a request, send to the consumer obligor a record waiving the secured party's right
to a deficiency.

(c) Required information. To comply with subsection (a)(1)(B), deleted text begin a writingdeleted text end new text begin an explanationnew text end
must provide the following information in the following order:

(1) the aggregate amount of obligations secured by the security interest under which the
disposition was made, and, if the amount reflects a rebate of unearned interest or credit
service charge, an indication of that fact, calculated as of a specified date:

(A) if the secured party takes or receives possession of the collateral after default, not
more than 35 days before the secured party takes or receives possession; or

(B) if the secured party takes or receives possession of the collateral before default or
does not take possession of the collateral, not more than 35 days before the disposition;

(2) the amount of proceeds of the disposition;

(3) the aggregate amount of the obligations after deducting the amount of proceeds;

(4) the amount, in the aggregate or by type, and types of expenses, including expenses
of retaking, holding, preparing for disposition, processing, and disposing of the collateral,
and attorneys fees secured by the collateral which are known to the secured party and relate
to the current disposition;

(5) the amount, in the aggregate or by type, and types of credits, including rebates of
interest or credit service charges, to which the obligor is known to be entitled and which
are not reflected in the amount in paragraph (1); and

(6) the amount of the surplus or deficiency.

(d) Substantial compliance. A particular phrasing of the explanation is not required.
An explanation complying substantially with the requirements of subsection (a) is sufficient,
even if it includes minor errors that are not seriously misleading.

(e) Charges for responses. A debtor or consumer obligor is entitled without charge to
one response to a request under this section during any six-month period in which the secured
party did not send to the debtor or consumer obligor an explanation pursuant to subsection
(b)(1). The secured party may require payment of a charge not exceeding $25 for each
additional response.

Sec. 46.

Minnesota Statutes 2022, section 336.9-619, is amended to read:

336.9-619 TRANSFER OF RECORD OR LEGAL TITLE.

(a) Transfer statement. (1) In this section, "transfer statement" means a record
deleted text begin authenticateddeleted text end new text begin signednew text end by a secured party stating:

(A) that the debtor has defaulted in connection with an obligation secured by specified
collateral;

(B) that the secured party has exercised its postdefault remedies with respect to the
collateral;

(D) the name and mailing address of the secured party, debtor, and transferee; and

(E) in addition, if the statement is to be filed in the real property records concerning a
mortgage or other record evidencing an interest in real property, the statement must state
the following information concerning the mortgage or other record evidencing an interest
in real property:

(i) the name and title on the record;

(ii) the date on the record;

(iii) the names of the parties on the record;

(iv) the identity of the office of the county recorder or registrar of titles where the record
is filed;

(v) the date the record was filed;

(vi) the identifying number of the record in the office of the county recorder or registrar
of titles; and

(vii) in the case of an executory contract for the sale of real property or of an interest in
real property that entitles the purchaser to possession of the real property, the legal description
of the real property subject to the contract.

(2) A transfer statement that is to be filed in the real property records must contain an
acknowledgment by the secured party in a form sufficient to satisfy the requirements of
chapter 358.

(3) If an executory contract for the sale of real property or of an interest in real property
that entitles the purchaser to possession of the real property is terminated, the secured party
may not file a transfer statement concerning that contract after the termination. If a transfer
statement is filed by the secured party after the debtor has terminated that contract, the
transfer statement is not effective as a conveyance.

(b) Effect of transfer statement. A transfer statement entitles the transferee to the
transfer of record of all rights of the debtor in the collateral specified in the statement in
any official filing, recording, registration, or certificate of title system covering the collateral.
If a transfer statement is presented with the applicable fee and request form to the official
or office responsible for maintaining the system, the official or office shall:

(1) accept the transfer statement;

(2) promptly amend its records to reflect the transfer; and

(3) if applicable,

(A) issue a new appropriate certificate of title in the name of transferee in the case of
property not subject to chapter 508 or 508A; or

(B) in the case of property subject to chapter 508 or 508A, issue a new certificate of title
upon satisfaction of the requirements of those chapters.

(c) Transfer not a disposition; no relief of secured party's duties. A transfer of the
record or legal title to collateral to a secured party under subsection (b) or otherwise is not
of itself a disposition of collateral under this article and does not of itself relieve the secured
party of its duties under this article.

(d) Transfer of certificates of title. A secured party who complies with section 86B.840,
subdivision 2, paragraph (b), or 168A.12, subdivision 2, is considered to have provided a
transfer statement for purposes of this section.

Sec. 47.

Minnesota Statutes 2022, section 336.9-620, is amended to read:

336.9-620 ACCEPTANCE OF COLLATERAL IN FULL OR PARTIAL
SATISFACTION OF OBLIGATION; COMPULSORY DISPOSITION OF
COLLATERAL.

(a) Conditions to acceptance in satisfaction. Except as otherwise provided in subsection
(g), a secured party may accept collateral in full or partial satisfaction of the obligation it
secures only if:

(1) the debtor consents to the acceptance under subsection (c);

(2) the secured party does not receive, within the time set forth in subsection (d), a
notification of objection to the proposal deleted text begin authenticateddeleted text end new text begin signednew text end by:

(A) a person to which the secured party was required to send a proposal under section
336.9-621; or

(B) any other person, other than the debtor, holding an interest in the collateral
subordinate to the security interest that is the subject of the proposal;

(3) if the collateral is consumer goods, the collateral is not in the possession of the debtor
when the debtor consents to the acceptance; and

(4) subsection (e) does not require the secured party to dispose of the collateral or the
debtor waives the requirement pursuant to section 336.9-624.

(b) Purported acceptance ineffective. A purported or apparent acceptance of collateral
under this section is ineffective unless:

(1) the secured party consents to the acceptance in deleted text begin an authenticateddeleted text end new text begin a signednew text end record or
sends a proposal to the debtor; and

(2) the conditions of subsection (a) are met.

(1) a debtor consents to an acceptance of collateral in partial satisfaction of the obligation
it secures only if the debtor agrees to the terms of the acceptance in a record deleted text begin authenticateddeleted text end new text begin
signednew text end after default; and

(2) a debtor consents to an acceptance of collateral in full satisfaction of the obligation
it secures only if the debtor agrees to the terms of the acceptance in a record deleted text begin authenticateddeleted text end new text begin
signednew text end after default or the secured party:

(A) sends to the debtor after default a proposal that is unconditional or subject only to
a condition that collateral not in the possession of the secured party be preserved or
maintained;

(B) in the proposal, proposes to accept collateral in full satisfaction of the obligation it
secures; and

(C) does not receive a notification of objection deleted text begin authenticateddeleted text end new text begin signednew text end by the debtor within
20 days after the proposal is sent.

(d) Effectiveness of notification. To be effective under subsection (a)(2), a notification
of objection must be received by the secured party:

(1) in the case of a person to which the proposal was sent pursuant to section 336.9-621,
within 20 days after notification was sent to that person; and

(2) in other cases:

(A) within 20 days after the last notification was sent pursuant to section 336.9-621; or

(B) if a notification was not sent, before the debtor consents to the acceptance under
subsection (c).

(e) Mandatory disposition of consumer goods. A secured party that has taken possession
of collateral shall dispose of the collateral pursuant to section 336.9-610 within the time
specified in subsection (f) if:

(1) 60 percent of the cash price has been paid in the case of a purchase-money security
interest in consumer goods; or

(2) 60 percent of the principal amount of the obligation secured has been paid in the
case of a non-purchase-money security interest in consumer goods.

(f) Compliance with mandatory disposition requirement. To comply with subsection
(e), the secured party shall dispose of the collateral:

(1) within 90 days after taking possession; or

(2) within any longer period to which the debtor and all secondary obligors have agreed
in an agreement to that effect entered into and deleted text begin authenticateddeleted text end new text begin signednew text end after default.

(g) No partial satisfaction in consumer transaction. In a consumer transaction, a
secured party may not accept collateral in partial satisfaction of the obligation it secures.

Sec. 48.

Minnesota Statutes 2022, section 336.9-621, is amended to read:

336.9-621 NOTIFICATION OF PROPOSAL TO ACCEPT COLLATERAL.

(a) Persons to which proposal to be sent. A secured party that desires to accept collateral
in full or partial satisfaction of the obligation it secures shall send its proposal to:

(1) any person from which the secured party has received, before the debtor consented
to the acceptance, deleted text begin an authenticateddeleted text end new text begin a signednew text end notification of a claim of an interest in the
collateral;

(2) any other secured party or lienholder that, ten days before the debtor consented to
the acceptance, held a security interest in or other lien on the collateral perfected by the
filing of a financing statement that:

(A) identified the collateral;

(B) was indexed under the debtor's name as of that date; and

(C) was filed in the office or offices in which to file a financing statement against the
debtor covering the collateral as of that date; and

(3) any other secured party that, ten days before the debtor consented to the acceptance,
held a security interest in the collateral perfected by compliance with a statute, regulation,
or treaty described in section 336.9-311(a).

(b) Proposal to be sent to secondary obligor in partial satisfaction. A secured party
that desires to accept collateral in partial satisfaction of the obligation it secures shall send
its proposal to any secondary obligor in addition to the persons described in subsection (a).

Sec. 49.

Minnesota Statutes 2022, section 336.9-624, is amended to read:

336.9-624 WAIVER.

(a) Waiver of disposition notification. A debtor or secondary obligor may waive the
right to notification of disposition of collateral under section 336.9-611 only by an agreement
to that effect entered into and deleted text begin authenticateddeleted text end new text begin signednew text end after default.

(b) Waiver of mandatory disposition. A debtor may waive the right to require
disposition of collateral under section 336.9-620(e) only by an agreement to that effect
entered into and deleted text begin authenticateddeleted text end new text begin signednew text end after default.

(c) Waiver of redemption right. Except in a consumer goods transaction, a debtor or
secondary obligor may waive the right to redeem collateral under section 336.9-623 only
by an agreement to that effect entered into and deleted text begin authenticateddeleted text end new text begin signednew text end after default.

Sec. 50.

Minnesota Statutes 2022, section 336.9-628, is amended to read:

336.9-628 NONLIABILITY AND LIMITATION ON LIABILITY OF SECURED
PARTY; LIABILITY OF SECONDARY OBLIGOR.

(a) Limitation of liability of secured party for noncompliance with article. new text begin Subject
to subsection (f), new text end unless a secured party knows that a person is a debtor or obligor, knows
the identity of the person, and knows how to communicate with the person:

(1) the secured party is not liable to the person, or to a secured party or lienholder that
has filed a financing statement against the person, for failure to comply with this article;
and

(2) the secured party's failure to comply with this article does not affect the liability of
the person for a deficiency.

(b) Limitation of liability based on status as secured party. new text begin Subject to subsection (f),
new text end a secured party is not liable because of its status as secured party:

(1) to a person that is a debtor or obligor, unless the secured party knows:

(A) that the person is a debtor or obligor;

(B) the identity of the person; and

(2) to a secured party or lienholder that has filed a financing statement against a person,
unless the secured party knows:

(A) that the person is a debtor; and

(B) the identity of the person.

(c) Limitation of liability if good faith belief that transaction is not a consumer
goods transaction or consumer transaction. A secured party is not liable to any person,
and a persons liability for a deficiency is not affected, because of any act or omission arising
out of the secured party's reasonable belief that a transaction is not a consumer goods
transaction or a consumer transaction or that goods are not consumer goods, if the secured
party's belief is based on its reasonable reliance on:

(1) a debtor's representation concerning the purpose for which collateral was to be used,
acquired, or held; or

(2) an obligor's representation concerning the purpose for which a secured obligation
was incurred.

(d) Limitation of liability for statutory damages. A secured party is not liable to any
person under section 336.9-625(c)(2) for its failure to comply with section 336.9-616.

(e) Limitation of multiple liability for statutory damages. A secured party is not liable
under section 336.9-625(c)(2) more than once with respect to any one secured obligation.

new text begin (f) Exception: Limitation of liability under subsections (a) and (b) does not apply.
Subsections (a) and (b) do not apply to limit the liability of a secured party to a person if,
at the time the secured party obtains control of collateral that is a controllable account,
controllable electronic record, or controllable payment intangible or at the time the security
interest attaches to the collateral, whichever is later:
new text end

new text begin (1) the person is a debtor or obligor; and
new text end

new text begin (2) the secured party knows that the information in subsection (b)(1)(A), (B), or (C)
relating to the person is not provided by the collateral, a record attached to or logically
associated with the collateral, or the system in which the collateral is recorded.
new text end

ARTICLE 10

CONTROLLABLE ELECTRONIC RECORDS

Section 1.

new text begin [336.12-101] TITLE.
new text end

new text begin This article may be cited as Uniform Commercial Code-Controllable Electronic Records.
new text end

Sec. 2.

new text begin [336.12-102] DEFINITIONS.
new text end

new text begin (a) Article 12 definitions. In this article:
new text end

new text begin (1) "Controllable electronic record" means a record stored in an electronic medium that
can be subjected to control under section 336.12-105. The term does not include a controllable
account, a controllable payment intangible, a deposit account, an electronic copy of a record
evidencing chattel paper, an electronic document of title, electronic money, investment
property, or a transferable record.
new text end

new text begin (2) "Qualifying purchaser" means a purchaser of a controllable electronic record or an
interest in a controllable electronic record that obtains control of the controllable electronic
record for value, in good faith, and without notice of a claim of a property right in the
controllable electronic record.
new text end

new text begin (3) "Transferable record" has the meaning provided for that term in:
new text end

new text begin (A) Section 201(a)(1) of the Electronic Signatures in Global and National Commerce
Act, United States Code, title 15, section 7021(a)(1), as amended; or
new text end

new text begin (B) section 325L.16, paragraph (a).
new text end

new text begin (4) "Value" has the meaning provided in section 336.3-303(a), as if references in that
subsection to an "instrument" were references to a controllable account, controllable
electronic record, or controllable payment intangible.
new text end

new text begin (b) Definitions in Article 9. The definitions in article 9 of "account debtor", "controllable
account", "controllable payment intangible", "chattel paper", "deposit account", "electronic
money", and "investment property" apply to this article.
new text end

new text begin (c) Article 1 definitions and principles. Article 1 contains general definitions and
principles of construction and interpretation applicable throughout this article.
new text end

Sec. 3.

new text begin [336.12-103] RELATION TO ARTICLE 9 AND CONSUMER LAWS.
new text end

new text begin (a) Article 9 governs in case of conflict. If there is conflict between this article and
article 9, article 9 governs.
new text end

new text begin (b) Applicable consumer law and other laws. A transaction subject to this article is
subject to any applicable rule of law that establishes a different rule for consumers; any
other statute or regulation that regulates the rates, charges, agreements, and practices for
loans, credit sales, or other extensions of credit; and any consumer-protection statute or
regulation.
new text end

Sec. 4.

new text begin [336.12-104] RIGHTS IN CONTROLLABLE ACCOUNT, CONTROLLABLE
ELECTRONIC RECORD, AND CONTROLLABLE PAYMENT INTANGIBLE.
new text end

new text begin (a) Applicability of section to controllable account and controllable payment
intangible. This section applies to the acquisition and purchase of rights in a controllable
account or controllable payment intangible, including the rights and benefits under
subsections (c), (d), (e), (g), and (h) of a purchaser and qualifying purchaser, in the same
manner this section applies to a controllable electronic record.
new text end

new text begin (b) Control of controllable account and controllable payment intangible. To determine
whether a purchaser of a controllable account or a controllable payment intangible is a
qualifying purchaser, the purchaser obtains control of the account or payment intangible if
it obtains control of the controllable electronic record that evidences the account or payment
intangible.
new text end

new text begin (c) Applicability of other law to acquisition of rights. Except as provided in this
section, law other than this article determines whether a person acquires a right in a
controllable electronic record and the right the person acquires.
new text end

new text begin (d) Shelter principle and purchase of limited interest. A purchaser of a controllable
electronic record acquires all rights in the controllable electronic record that the transferor
had or had power to transfer, except that a purchaser of a limited interest in a controllable
electronic record acquires rights only to the extent of the interest purchased.
new text end

new text begin (e) Rights of qualifying purchaser. A qualifying purchaser acquires its rights in the
controllable electronic record free of a claim of a property right in the controllable electronic
record.
new text end

new text begin (f) Limitation of rights of qualifying purchaser in other property. Except as provided
in subsections (a) and (e) for a controllable account and a controllable payment intangible
or law other than this article, a qualifying purchaser takes a right to payment, right to
performance, or other interest in property evidenced by the controllable electronic record
subject to a claim of a property right in the right to payment, right to performance, or other
interest in property.
new text end

new text begin (g) No-action protection for qualifying purchaser. An action may not be asserted
against a qualifying purchaser based on both a purchase by the qualifying purchaser of a
controllable electronic record and a claim of a property right in another controllable electronic
record, whether the action is framed in conversion, replevin, constructive trust, equitable
lien, or other theory.
new text end

new text begin (h) Filing not notice. Filing of a financing statement under article 9 is not notice of a
claim of a property right in a controllable electronic record.
new text end

Sec. 5.

new text begin [336.12-105] CONTROL OF CONTROLLABLE ELECTRONIC RECORD.
new text end

new text begin (a) General rule: control of controllable electronic record. A person has control of
a controllable electronic record if the electronic record, a record attached to or logically
associated with the electronic record, or a system in which the electronic record is recorded:
new text end

new text begin (1) gives the person:
new text end

new text begin (A) power to avail itself of substantially all the benefit from the electronic record; and
new text end

new text begin (B) exclusive power, subject to subsection (b), to:
new text end

new text begin (i) prevent others from availing themselves of substantially all the benefit from the
electronic record; and
new text end

new text begin (ii) transfer control of the electronic record to another person or cause another person
to obtain control of another controllable electronic record as a result of the transfer of the
electronic record; and
new text end

new text begin (2) enables the person readily to identify itself in any way, including by name, identifying
number, cryptographic key, office, or account number, as having the powers specified in
paragraph (1).
new text end

new text begin (b) Meaning of exclusive. Subject to subsection (c), a power is exclusive under subsection
(a)(1)(B)(i) and (ii) even if:
new text end

new text begin (1) the controllable electronic record, a record attached to or logically associated with
the electronic record, or a system in which the electronic record is recorded limits the use
of the electronic record or has a protocol programmed to cause a change, including a transfer
or loss of control or a modification of benefits afforded by the electronic record; or
new text end

new text begin (2) the power is shared with another person.
new text end

new text begin (1) the person can exercise the power only if the power also is exercised by the other
person; and
new text end

new text begin (2) the other person:
new text end

new text begin (A) can exercise the power without exercise of the power by the person; or
new text end

new text begin (B) is the transferor to the person of an interest in the controllable electronic record or
a controllable account or controllable payment intangible evidenced by the controllable
electronic record.
new text end

new text begin (d) Presumption of exclusivity of certain powers. If a person has the powers specified
in subsection (a)(1)(B)(i) and (ii), the powers are presumed to be exclusive.
new text end

new text begin (e) Control through another person. A person has control of a controllable electronic
record if another person, other than the transferor to the person of an interest in the
controllable electronic record or a controllable account or controllable payment intangible
evidenced by the controllable electronic record:
new text end

new text begin (1) has control of the electronic record and acknowledges that it has control on behalf
of the person; or
new text end

new text begin (2) obtains control of the electronic record after having acknowledged that it will obtain
control of the electronic record on behalf of the person.
new text end

new text begin (f) No requirement to acknowledge. A person that has control under this section is not
required to acknowledge that it has control on behalf of another person.
new text end

new text begin (g) No duties or confirmation. If a person acknowledges that it has or will obtain control
on behalf of another person, unless the person otherwise agrees or law other than this article
or article 9 otherwise provides, the person does not owe any duty to the other person and
is not required to confirm the acknowledgment to any other person.
new text end

Sec. 6.

new text begin [336.12-106] DISCHARGE OF ACCOUNT DEBTOR ON CONTROLLABLE
ACCOUNT OR CONTROLLABLE PAYMENT INTANGIBLE.
new text end

new text begin (a) Discharge of account debtor. An account debtor on a controllable account or
controllable payment intangible may discharge its obligation by paying:
new text end

new text begin (1) the person having control of the controllable electronic record that evidences the
controllable account or controllable payment intangible; or
new text end

new text begin (2) except as provided in subsection (b), a person that formerly had control of the
controllable electronic record.
new text end

new text begin (b) Content and effect of notification. Subject to subsection (d), the account debtor
may not discharge its obligation by paying a person that formerly had control of the
controllable electronic record if the account debtor receives a notification that:
new text end

new text begin (1) is signed by a person that formerly had control or the person to which control was
transferred;
new text end

new text begin (2) reasonably identifies the controllable account or controllable payment intangible;
new text end

new text begin (3) notifies the account debtor that control of the controllable electronic record that
evidences the controllable account or controllable payment intangible was transferred;
new text end

new text begin (4) identifies the transferee, in any reasonable way, including by name, identifying
number, cryptographic key, office, or account number; and
new text end

new text begin (5) provides a commercially reasonable method by which the account debtor is to pay
the transferee.
new text end

new text begin (c) Discharge following effective notification. After receipt of a notification that
complies with subsection (b), the account debtor may discharge its obligation by paying in
accordance with the notification and may not discharge the obligation by paying a person
that formerly had control.
new text end

new text begin (d) When notification ineffective. Subject to subsection (h), notification is ineffective
under subsection (b):
new text end

new text begin (1) unless, before the notification is sent, the account debtor and the person that, at that
time, had control of the controllable electronic record that evidences the controllable account
or controllable payment intangible agree in a signed record to a commercially reasonable
method by which a person may furnish reasonable proof that control has been transferred;
new text end

new text begin (2) to the extent an agreement between the account debtor and 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; or
new text end

new text begin (3) at the option of the account debtor, if the notification notifies the account debtor to:
new text end

new text begin (A) divide a payment;
new text end

new text begin (B) make less than the full amount of an installment or other periodic payment; or
new text end

new text begin (C) pay any part of a payment by more than one method or to more than one person.
new text end

new text begin (e) Proof of transfer of control. Subject to subsection (h), if requested by the account
debtor, the person giving the notification under subsection (b) seasonably shall furnish
reasonable proof, using the method in the agreement referred to in subsection (d)(1), that
control of the controllable electronic record has been transferred. Unless the person complies
with the request, the account debtor may discharge its obligation by paying a person that
formerly had control, even if the account debtor has received a notification under subsection
(b).
new text end

new text begin (f) What constitutes reasonable proof. A person furnishes reasonable proof under
subsection (e) that control has been transferred if the person demonstrates, using the method
in the agreement referred to in subsection (d)(1), that the transferee has the power to:
new text end

new text begin (1) avail itself of substantially all the benefit from the controllable electronic record;
new text end

new text begin (2) prevent others from availing themselves of substantially all the benefit from the
controllable electronic record; and
new text end

new text begin (3) transfer the powers specified in paragraphs (1) and (2) to another person.
new text end

new text begin (g) Rights not waivable. Subject to subsection (h), an account debtor may not waive
or vary its rights under subsections (d)(1) and (e) or its option under subsection (d)(3).
new text end

new text begin (h) Rule for individual under other law. This section is subject to law other than this
article which establishes a different rule for an account debtor who is an individual and who
incurred the obligation primarily for personal, family, or household purposes.
new text end

Sec. 7.

new text begin [336.12-107] GOVERNING LAW.
new text end

new text begin (a) Governing law: general rule. Except as provided in subsection (b), the local law
of a controllable electronic record's jurisdiction governs a matter covered by this article.
new text end

new text begin (b) Governing law: section 336.12-106. For a controllable electronic record that
evidences a controllable account or controllable payment intangible, the local law of the
controllable electronic record's jurisdiction governs a matter covered by section 336.12-106
unless an effective agreement determines that the local law of another jurisdiction governs.
new text end

new text begin (c) Controllable electronic record's jurisdiction. The following rules determine a
controllable electronic record's jurisdiction under this section:
new text end

new text begin (1) If the controllable electronic record, or a record attached to or logically associated
with the controllable electronic record and readily available for review, expressly provides
that a particular jurisdiction is the controllable electronic record's jurisdiction for purposes
of this article or this chapter, that jurisdiction is the controllable electronic record's
jurisdiction.
new text end

new text begin (2) If paragraph (1) does not apply and the rules of the system in which the controllable
electronic record is recorded are readily available for review and expressly provide that a
particular jurisdiction is the controllable electronic record's jurisdiction for purposes of this
article or this chapter, that jurisdiction is the controllable electronic record's jurisdiction.
new text end

new text begin (3) If paragraphs (1) and (2) do not apply and the controllable electronic record, or a
record attached to or logically associated with the controllable electronic record and readily
available for review, expressly provides that the controllable electronic record is governed
by the law of a particular jurisdiction, that jurisdiction is the controllable electronic record's
jurisdiction.
new text end

new text begin (4) If paragraphs (1), (2), and (3) do not apply and the rules of the system in which the
controllable electronic record is recorded are readily available for review and expressly
provide that the controllable electronic record or the system is governed by the law of a
particular jurisdiction, that jurisdiction is the controllable electronic record's jurisdiction.
new text end

new text begin (5) If paragraphs (1) through (4) do not apply, the controllable electronic record's
jurisdiction is the District of Columbia.
new text end

new text begin (d) Applicability of Article 12. If subsection (c)(5) applies and article 12 is not in effect
in the District of Columbia without material modification, the governing law for a matter
covered by this article is the law of the District of Columbia as though article 12 were in
effect in the District of Columbia without material modification. In this subsection, "article
12" means article 12 of Uniform Commercial Code Amendments (2022).
new text end

new text begin (e) Relation of matter or transaction to controllable electronic record's jurisdiction
not necessary. To the extent subsections (a) and (b) provide that the local law of the
controllable electronic record's jurisdiction governs a matter covered by this article, that
law governs even if the matter or a transaction to which the matter relates does not bear any
relation to the controllable electronic record's jurisdiction.
new text end

new text begin (f) Rights of purchasers determined at time of purchase. The rights acquired under
section 366.12-104 by a purchaser or qualifying purchaser are governed by the law applicable
under this section at the time of purchase.
new text end

ARTICLE 11

TRANSITIONAL PROVISIONS FOR UNIFORM COMMERCIAL CODE
AMENDMENTS, 2022

Section 1.

new text begin [336.0A-101] TITLE.
new text end

new text begin This article may be cited as Transitional Provisions for Uniform Commercial Code
Amendments, 2022.
new text end

Sec. 2.

new text begin [336.0A-102] DEFINITIONS.
new text end

new text begin (a) Article A Definitions. In this article:
new text end

new text begin (1) "Adjustment date" means August 1, 2025.
new text end

new text begin (2) "Article 12" means article 12 of this chapter.
new text end

new text begin (3) "Article 12 property" means a controllable account, controllable electronic record,
or controllable payment intangible.
new text end

new text begin (b) Definitions in other articles. The following definitions in other articles of this
chapter apply to this article.
new text end

new text begin "Controllable account." Section 336.9-102.
new text end

new text begin "Controllable electronic record." Section 336.12-102.
new text end

new text begin "Controllable payment intangible." Section 336.9-102.
new text end

new text begin "Electronic money." Section 336.9-102.
new text end

new text begin "Financing statement." Section 336.9-102.
new text end

new text begin (c) Article 1 definitions and principles. Article 1 contains general definitions and
principles of construction and interpretation applicable throughout this article.
new text end

Sec. 3.

new text begin [336.0A-201] SAVING CLAUSE.
new text end

new text begin Except as provided in sections 336.0A-301 to 336.0A-306, a transaction validly entered
into before August 1, 2024, and the rights, duties, and interests flowing from the transaction
remain valid thereafter and may be terminated, completed, consummated, or enforced as
required or permitted by law other than this chapter or, if applicable, this chapter, as though
this act had not taken effect.
new text end

Sec. 4.

new text begin [336.0A-301] SAVING CLAUSE.
new text end

new text begin (a) Pre-effective-date transaction, lien, or interest. Except as provided in this part,
article 9, as amended by this act, and article 12 apply to a transaction, lien, or other interest
in property, even if the transaction, lien, or interest was entered into, created, or acquired
before August 1, 2024.
new text end

new text begin (b) Continuing validity. Except as provided in subsection (c) and sections 336.0A-302
to 336.0A-306:
new text end

new text begin (1) a transaction, lien, or interest in property that was validly entered into, created, or
transferred before August 1, 2024, and was not governed by this chapter, but would be
subject to article 9, as amended by this act, or Article 12 if it had been entered into, created,
or transferred on or after August 1, 2024, including the rights, duties, and interests flowing
from the transaction, lien, or interest, remains valid on and after August 1, 2024; and
new text end

new text begin (2) the transaction, lien, or interest may be terminated, completed, consummated, and
enforced as required or permitted by this act or by the law that would apply if this act had
not taken effect.
new text end

new text begin (c) Pre-effective-date proceeding. This act does not affect an action, case, or proceeding
commenced before August 1, 2024.
new text end

Sec. 5.

new text begin [336.0A-302] SECURITY INTEREST PERFECTED BEFORE EFFECTIVE
DATE.
new text end

new text begin (a) Continuing perfection: perfection requirements satisfied. A security interest that
is enforceable and perfected immediately before August 1, 2024, is a perfected security
interest under this act if, on August 1, 2024, the requirements for enforceability and perfection
under this act are satisfied without further action.
new text end

new text begin (b) Continuing perfection: enforceability or perfection requirements not satisfied.
If a security interest is enforceable and perfected immediately before August 1, 2024, but
the requirements for enforceability or perfection under this act are not satisfied on August
1, 2024, the security interest:
new text end

new text begin (1) is a perfected security interest until the earlier of the time perfection would have
ceased under the law in effect immediately before August 1, 2024, or the adjustment date;
new text end

new text begin (2) remains enforceable thereafter only if the security interest satisfies the requirements
for enforceability under section 336.9-203, as amended by this act, before the adjustment
date; and
new text end

new text begin (3) remains perfected thereafter only if the requirements for perfection under this act
are satisfied before the time specified in paragraph (1).
new text end

Sec. 6.

new text begin [336.0A-303] SECURITY INTEREST UNPERFECTED BEFORE
EFFECTIVE DATE.
new text end

new text begin A security interest that is enforceable immediately before August 1, 2024, but is
unperfected at that time:
new text end

new text begin (1) remains an enforceable security interest until the adjustment date;
new text end

new text begin (2) remains enforceable thereafter if the security interest becomes enforceable under
section 336.9-203, as amended by this act, on August 1, 2024, or before the adjustment
date; and
new text end

new text begin (3) becomes perfected:
new text end

new text begin (A) without further action, on August 1, 2024, if the requirements for perfection under
this act are satisfied before or at that time; or
new text end

new text begin (B) when the requirements for perfection are satisfied if the requirements are satisfied
after that time.
new text end

Sec. 7.

new text begin [336.0A-304] EFFECTIVENESS OF ACTIONS TAKEN BEFORE
EFFECTIVE DATE.
new text end

new text begin (a) Pre-effective-date action; attachment and perfection before adjustment date. If
action, other than the filing of a financing statement, is taken before August 1, 2024, and
the action would have resulted in perfection of the security interest had the security interest
become enforceable before August 1, 2024, the action is effective to perfect a security
interest that attaches under this act before the adjustment date. An attached security interest
becomes unperfected on the adjustment date unless the security interest becomes a perfected
security interest under this act before the adjustment date.
new text end

new text begin (b) Pre-effective-date filing. The filing of a financing statement before August 1, 2024,
is effective to perfect a security interest on August 1, 2024, to the extent the filing would
satisfy the requirements for perfection under this act.
new text end

new text begin (c) Pre-effective-date enforceability action. The taking of an action before August 1,
2024, is sufficient for the enforceability of a security interest on August 1, 2024, if the action
would satisfy the requirements for enforceability under this act.
new text end

Sec. 8.

new text begin [336.0A-305] PRIORITY.
new text end

new text begin (a) Determination of priority. Subject to subsections (b) and (c), this act determines
the priority of conflicting claims to collateral.
new text end

new text begin (b) Established priorities. Subject to subsection (c), if the priorities of claims to collateral
were established before August 1, 2024, article 9, as in effect before August 1, 2024,
determines priority.
new text end

new text begin (c) Determination of certain priorities on adjustment date. On the adjustment date,
to the extent the priorities determined by article 9, as amended by this act, modify the
priorities established before August 1, 2024, the priorities of claims to article 12 property
and electronic money established before August 1, 2024, cease to apply.
new text end

Sec. 9.

new text begin [336.0A-306] PRIORITY OF CLAIMS WHEN PRIORITY RULES OF
ARTICLE 9 DO NOT APPLY.
new text end

new text begin (a) Determination of priority. Subject to subsections (b) and (c), article 12 determines
the priority of conflicting claims to article 12 property when the priority rules of article 9,
as amended by this act, do not apply.
new text end

new text begin (b) Established priorities. Subject to subsection (c), when the priority rules of article
9, as amended by this act, do not apply and the priorities of claims to article 12 property
were established before August 1, 2024, law other than article 12 determines priority.
new text end

new text begin (c) Determination of certain priorities on adjustment date. When the priority rules
of article 9, as amended by this act, do not apply, to the extent the priorities determined by
this act modify the priorities established before August 1, 2024, the priorities of claims to
article 12 property established before August 1, 2024, cease to apply on the adjustment date.
new text end

ARTICLE 12

MISCELLANEOUS

Section 1. new text begin LIMITATION.
new text end

new text begin Nothing in this act supports, endorses, creates, or implements a national digital currency.
new text end

HF 3868

Bill Text Versions

Current Version - as introduced

ARTICLE 1

GENERAL PROVISIONS

Section 1.

336.1-201 GENERAL DEFINITIONS.

Sec. 2.

336.1-204 VALUE.

Sec. 3.

336.1-301 TERRITORIAL APPLICABILITY; PARTIES' POWER TO CHOOSE APPLICABLE LAW.

Sec. 4.

336.1-306 WAIVER OR RENUNCIATION OF CLAIM OR RIGHT AFTER BREACH.

ARTICLE 2

SALES

Section 1.

336.2-102 SCOPE; CERTAIN SECURITY AND OTHER TRANSACTIONS EXCLUDED FROM THIS ARTICLE.

Sec. 2.

336.2-106 DEFINITIONS: "CONTRACT"; "AGREEMENT"; "CONTRACT FOR SALE"; "SALE"; "PRESENT SALE"; "CONFORMING TO CONTRACT"; "TERMINATION"; "CANCELLATIONdeleted text begin .deleted text end "new text begin ; "HYBRID TRANSACTION."new text end

Sec. 3.

336.2-201 FORMAL REQUIREMENTS; STATUTE OF FRAUDS.

Sec. 4.

336.2-202 FINAL WRITTEN EXPRESSION; PAROL OR EXTRINSIC EVIDENCE.

Sec. 5.

336.2-203 SEALS INOPERATIVE.

Sec. 6.

336.2-205 FIRM OFFERS.

Sec. 7.

336.2-209 MODIFICATION, RESCISSION AND WAIVER.

ARTICLE 3

LEASES

Section 1.

336.2A-102 SCOPE.

Sec. 2.

336.2A-103 DEFINITIONS AND INDEX OF DEFINITIONS.

Sec. 3.

336.2A-107 WAIVER OR RENUNCIATION OF CLAIM OR RIGHT AFTER DEFAULT.

Sec. 4.

336.2A-201 STATUTE OF FRAUDS.

Sec. 5.

336.2A-202 FINAL deleted text begin WRITTENdeleted text end EXPRESSION; PAROL OR EXTRINSIC EVIDENCE.

Sec. 6.

336.2A-203 SEALS INOPERATIVE.

Sec. 7.

336.2A-205 FIRM OFFERS.

Sec. 8.

336.2A-208 MODIFICATION, RESCISSION AND WAIVER.

ARTICLE 4

NEGOTIABLE INSTRUMENT

Section 1.

336.3-104 NEGOTIABLE INSTRUMENT.

Sec. 2.

336.3-105 ISSUE OF INSTRUMENT.

Sec. 3.

336.3-401 SIGNATUREnew text begin NECESSARY FOR LIABILITY ON INSTRUMENTnew text end .

Sec. 4.

336.3-604 DISCHARGE BY CANCELLATION OR RENUNCIATION.

ARTICLE 5

FUND TRANSFERS

Section 1.

336.4A-103 PAYMENT ORDER-DEFINITIONS.

Sec. 2.

336.4A-201 SECURITY PROCEDURE.

Sec. 3.

336.4A-202 AUTHORIZED AND VERIFIED PAYMENT ORDERS.

Sec. 4.

336.4A-203 UNENFORCEABILITY OF CERTAIN VERIFIED PAYMENT ORDERS.

Sec. 5.

336.4A-207 MISDESCRIPTION OF BENEFICIARY.

Sec. 6.

336.4A-208 MISDESCRIPTION OF INTERMEDIARY BANK OR BENEFICIARY'S BANK.

Sec. 7.

336.4A-210 REJECTION OF PAYMENT ORDER.

Sec. 8.

336.4A-211 CANCELLATION AND AMENDMENT OF PAYMENT ORDER.

Sec. 9.

336.4A-305 LIABILITY FOR LATE OR IMPROPER EXECUTION OR FAILURE TO EXECUTE PAYMENT ORDER.

ARTICLE 6

LETTERS OF CREDIT

Section 1.

336.1-301 TERRITORIAL APPLICABILITY; PARTIES' POWER TO CHOOSE
APPLICABLE LAW.

336.1-306 WAIVER OR RENUNCIATION OF CLAIM OR RIGHT AFTER
BREACH.

336.2-102 SCOPE; CERTAIN SECURITY AND OTHER TRANSACTIONS
EXCLUDED FROM THIS ARTICLE.

336.2-106 DEFINITIONS: "CONTRACT"; "AGREEMENT"; "CONTRACT
FOR SALE"; "SALE"; "PRESENT SALE"; "CONFORMING TO CONTRACT";
"TERMINATION"; "CANCELLATIONdeleted text begin .deleted text end "new text begin ; "HYBRID TRANSACTION."
new text end

336.2-202 FINAL WRITTEN EXPRESSION; PAROL OR EXTRINSIC
EVIDENCE.

336.2A-107 WAIVER OR RENUNCIATION OF CLAIM OR RIGHT AFTER
DEFAULT.

336.2A-202 FINAL deleted text begin WRITTENdeleted text end EXPRESSION; PAROL OR EXTRINSIC
EVIDENCE.

336.4A-203 UNENFORCEABILITY OF CERTAIN VERIFIED PAYMENT
ORDERS.

336.4A-208 MISDESCRIPTION OF INTERMEDIARY BANK OR
BENEFICIARY'S BANK.

336.4A-305 LIABILITY FOR LATE OR IMPROPER EXECUTION OR FAILURE
TO EXECUTE PAYMENT ORDER.

336.8-103 RULES FOR DETERMINING WHETHER CERTAIN OBLIGATIONS
AND INTERESTS ARE SECURITIES OR FINANCIAL ASSETS.

336.9-105 CONTROL OF ELECTRONICnew text begin COPY OF RECORD EVIDENCINGnew text end
CHATTEL PAPER.

new text begin [336.9-105A] CONTROL OF ELECTRONIC MONEY.
new text end

new text begin [336.9-107A] CONTROL OF CONTROLLABLE ELECTRONIC RECORD,
CONTROLLABLE ACCOUNT, OR CONTROLLABLE PAYMENT INTANGIBLE.
new text end

new text begin [336.9-107B] NO REQUIREMENT TO ACKNOWLEDGE OR CONFIRM;
NO DUTIES.
new text end

336.9-203 ATTACHMENT AND ENFORCEABILITY OF SECURITY INTEREST;
PROCEEDS; SUPPORTING OBLIGATIONS; FORMAL REQUISITES.

336.9-207 RIGHTS AND DUTIES OF SECURED PARTY HAVING POSSESSION
OR CONTROL OF COLLATERAL.

336.9-208 ADDITIONAL DUTIES OF SECURED PARTY HAVING CONTROL
OF COLLATERAL.

336.9-209 DUTIES OF SECURED PARTY IF ACCOUNT DEBTOR HAS BEEN
NOTIFIED OF ASSIGNMENT.

336.9-210 REQUEST FOR ACCOUNTING; REQUEST REGARDING LIST OF
COLLATERAL OR STATEMENT OF ACCOUNT.

336.9-301 LAW GOVERNING PERFECTION AND PRIORITY OF SECURITY
INTERESTS.

336.9-304 LAW GOVERNING PERFECTION AND PRIORITY OF SECURITY
INTERESTS IN DEPOSIT ACCOUNTS.

336.9-305 LAW GOVERNING PERFECTION AND PRIORITY OF SECURITY
INTERESTS IN INVESTMENT PROPERTY.

new text begin [336.9-306A] LAW GOVERNING PERFECTION AND PRIORITY OF
SECURITY INTERESTS IN CHATTEL PAPER.
new text end

new text begin [336.9-306B] LAW GOVERNING PERFECTION AND PRIORITY OF
SECURITY INTERESTS IN CONTROLLABLE ACCOUNTS, CONTROLLABLE
ELECTRONIC RECORDS, AND CONTROLLABLE PAYMENT INTANGIBLES.
new text end

336.9-310 WHEN FILING REQUIRED TO PERFECT SECURITY INTEREST
OR AGRICULTURAL LIEN; SECURITY INTERESTS AND AGRICULTURAL
LIENS TO WHICH FILING PROVISIONS DO NOT APPLY.

336.9-313 WHEN POSSESSION BY OR DELIVERY TO SECURED PARTY
PERFECTS SECURITY INTEREST WITHOUT FILING.

new text begin [336.9-314A] PERFECTION BY POSSESSION AND CONTROL OF
CHATTEL PAPER.
new text end