1.1                          A bill for an act
  1.2             relating to agriculture; regulating security interests 
  1.3             in agricultural crops; modifying the treatment of 
  1.4             certain collateral; amending Minnesota Statutes 1996, 
  1.5             sections 336.9-203; and 336.9-402. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  Minnesota Statutes 1996, section 336.9-203, is 
  1.8   amended to read: 
  1.9      336.9-203 [ATTACHMENT AND ENFORCEABILITY OF SECURITY 
  1.10  INTEREST; PROCEEDS; FORMAL REQUISITES.] 
  1.11     (1) Subject to the provisions of section 336.4-210 on the 
  1.12  security interest of a collecting bank, sections 336.9-115 and 
  1.13  336.9-116 on security interests in investment property and 
  1.14  section 336.9-113 on a security interest arising under the 
  1.15  article on sales, a security interest is not enforceable against 
  1.16  the debtor or third parties with respect to the collateral and 
  1.17  does not attach unless: 
  1.18     (a) the collateral is in the possession of the secured 
  1.19  party pursuant to agreement, the collateral is investment 
  1.20  property and the secured party has control pursuant to 
  1.21  agreement, or the debtor has signed a security agreement which 
  1.22  contains a description of the collateral and, in addition, when 
  1.23  the security interest covers crops growing or to be grown or 
  1.24  timber to be cut, a description of the land concerned; 
  1.25     (b) value has been given; and 
  2.1      (c) the debtor has rights in the collateral. 
  2.2      (2) A security interest attaches when it becomes 
  2.3   enforceable against the debtor with respect to the collateral.  
  2.4   Attachment occurs as soon as all of the events specified in 
  2.5   subsection (1) have taken place unless explicit agreement 
  2.6   postpones the time of attaching. 
  2.7      (3) Unless otherwise agreed a security agreement gives the 
  2.8   secured party the rights to proceeds provided by section 
  2.9   336.9-306. 
  2.10     (4) A transaction, although subject to this article, is 
  2.11  also subject to Minnesota Statutes, Sections 48.153 to 48.157; 
  2.12  Chapters 52, 53, and 56; and Sections 168.66 to 168.77, 222.13 
  2.13  to 222.16, and 334.01 to 334.06, and in the case of conflict 
  2.14  between the provisions of this article and any such statute, the 
  2.15  provisions of such statute control.  Failure to comply with any 
  2.16  applicable statute has only the effect which is specified 
  2.17  therein. 
  2.18     Sec. 2.  Minnesota Statutes 1996, section 336.9-402, is 
  2.19  amended to read: 
  2.20     336.9-402 [FORMAL REQUISITES OF FINANCING STATEMENT; 
  2.21  AMENDMENTS; MORTGAGE AS FINANCING STATEMENT.] 
  2.22     (1) A financing statement shall be filed in the Uniform 
  2.23  Commercial Code division of the recorder's office.  A financing 
  2.24  statement is sufficient if it gives the name of the debtor and 
  2.25  the secured party, is signed by the debtor, gives an address of 
  2.26  the secured party from which information concerning the security 
  2.27  interest may be obtained, gives a mailing address of the debtor, 
  2.28  gives the social security number of the debtor or, in the case 
  2.29  of a debtor doing business other than as an individual, the 
  2.30  internal revenue service taxpayer identification number of the 
  2.31  debtor, and contains a statement indicating the types or 
  2.32  describing the items, of collateral.  A financing statement may 
  2.33  be filed before a security agreement is made or a security 
  2.34  interest otherwise attaches.  When the financing statement 
  2.35  covers crops growing or to be grown, the statement must also 
  2.36  contain a description of the real estate concerned and the name 
  3.1   of the record owner thereof and the crop years that are covered 
  3.2   by the financing statement.  When the financing statement covers 
  3.3   timber to be cut or covers minerals or the like (including oil 
  3.4   and gas) or accounts subject to subsection (5) of section 
  3.5   336.9-103, or when the financing statement is filed as a fixture 
  3.6   filing (section 336.9-313) and the collateral is goods which are 
  3.7   or are to become fixtures, the statement must also comply with 
  3.8   subsection (5).  A copy of the security agreement is sufficient 
  3.9   as a financing statement if it contains the above information 
  3.10  and is signed by the debtor.  A carbon, photographic or other 
  3.11  reproduction of a security agreement or a financing statement is 
  3.12  sufficient as a financing statement if the security agreement so 
  3.13  provides or if the original has been filed in this state. 
  3.14     (2) A financing statement which otherwise complies with 
  3.15  subsection (1) is sufficient when it is signed by the secured 
  3.16  party instead of the debtor when it is filed to perfect a 
  3.17  security interest in 
  3.18     (a) collateral already subject to a security interest in 
  3.19  another jurisdiction when it is brought into this state, or when 
  3.20  the debtor's location is changed to this state.  Such a 
  3.21  financing statement must state that the collateral was brought 
  3.22  into this state or that the debtor's location was changed to 
  3.23  this state under such circumstances; or 
  3.24     (b) proceeds under section 336.9-306 if the security 
  3.25  interest in the original collateral was perfected.  Such a 
  3.26  financing statement must describe the original collateral; or 
  3.27     (c) collateral as to which the filing has lapsed within one 
  3.28  year; or 
  3.29     (d) collateral acquired after a change of name, identity or 
  3.30  corporate structure of the debtor (subsection (7)); or 
  3.31     (e) a lien filed pursuant to chapter 514; or 
  3.32     (f) collateral which is subject to a filed judgment.  
  3.33     (2a) Except for documents filed under clauses (e) and (f), 
  3.34  the reason for the omission of the debtor signature must be 
  3.35  stated on the front of the financing statement.  
  3.36     (3) A form substantially as follows is sufficient to comply 
  4.1   with subsection (1): 
  4.2      Name of debtor (or assignor) 
  4.3      .............................. 
  4.4      Address 
  4.5      .............................. 
  4.6      Debtor's Social Security Number or I.R.S. Tax I.D. Number 
  4.7      ............................... 
  4.8      Name of secured party (or assignee) 
  4.9      .............................. 
  4.10     Address 
  4.11     .............................. 
  4.12     1.  This financing statement covers the following types (or 
  4.13  items) of property: 
  4.14     (Describe) 
  4.15     .............................. 
  4.16     2.  (If collateral is crops) The above described crops are 
  4.17  growing or are to be grown on: 
  4.18     (Describe real estate and the name of the record owner 
  4.19  thereof) ...... 
  4.20     ....................................................... ....
  4.21     3.  (If applicable) The above goods are to become fixtures 
  4.22  on 
  4.23     (Describe real estate).......................... and this 
  4.24  financing statement is to be filed for record in the real estate 
  4.25  records.  (If the debtor does not have an interest of record) 
  4.26  The name of a record owner is ................. 
  4.27     4. 3.  (If products of collateral are claimed) 
  4.28     Products of the collateral are also covered. 
  4.29     Use whichever signature line is applicable. 
  4.30     Signature of debtor (or assignor) 
  4.31     ......................... 
  4.32     Signature of secured party (or assignee) 
  4.33     ......................... 
  4.34     (4) A financing statement may be amended by filing a 
  4.35  writing signed by both the debtor and the secured party.  If the 
  4.36  sole purpose of the amendment is to change the name or address 
  5.1   of the secured party, only the secured party need sign the 
  5.2   amendment.  A writing is sufficient if it sets forth the name 
  5.3   and address of the debtor and secured party as those items 
  5.4   appear on the original financing statement or the most recently 
  5.5   filed amendment, the file number and date of filing of the 
  5.6   financing statement.  An amendment does not extend the period of 
  5.7   effectiveness of a financing statement.  If any amendment adds 
  5.8   collateral, it is effective as to the added collateral only from 
  5.9   the filing date of the amendment.  In this article, unless the 
  5.10  context otherwise requires, the term "financing statement" means 
  5.11  the original financing statement and any amendments. 
  5.12     (5) A financing statement covering timber to be cut or 
  5.13  covering minerals or the like (including oil and gas) or 
  5.14  accounts subject to subsection (5) of section 336.9-103, or a 
  5.15  financing statement filed as a fixture filing (section 
  5.16  336.9-313) where the debtor is not a transmitting utility, must 
  5.17  show that it covers this type of collateral, must recite that it 
  5.18  is to be filed for record in the real estate records, and the 
  5.19  financing statement must contain a description of the real 
  5.20  estate sufficient if it were contained in a mortgage of the real 
  5.21  estate to give constructive notice of the mortgage under the law 
  5.22  of this state.  If the debtor does not have an interest of 
  5.23  record in the real estate, the financing statement must show the 
  5.24  name of a record owner.  No description of the real estate or 
  5.25  the name of the record owner thereof is required for a fixture 
  5.26  filing where the debtor is a transmitting utility. 
  5.27  Notwithstanding the foregoing a general description of the real 
  5.28  estate is sufficient for a fixture filing where a railroad is 
  5.29  the record owner of the real estate on which the fixtures are or 
  5.30  are to be located; and for the purposes of this subsection, the 
  5.31  requirement of a general description is satisfied if the fixture 
  5.32  filing (1) identifies the section, township and range numbers of 
  5.33  the county in which the land is located; (2) identifies the 
  5.34  quarter-quarter of the section that the land is located in; (3) 
  5.35  indicates the name of the record owner of the real estate; and 
  5.36  (4) states the street address of the real estate if one exists. 
  6.1      (6) A mortgage is effective as a financing statement filed 
  6.2   as a fixture filing from the date of its recording if (a) the 
  6.3   goods are described in the mortgage by item or type, (b) the 
  6.4   goods are or are to become fixtures related to the real estate 
  6.5   described in the mortgage, (c) the mortgage complies with the 
  6.6   requirements for a financing statement in this section other 
  6.7   than a recital that it is to be filed in the real estate 
  6.8   records, and (d) the mortgage is duly recorded.  No fee with 
  6.9   reference to the financing statement is required other than the 
  6.10  regular recording and satisfaction fees with respect to the 
  6.11  mortgage. 
  6.12     (7) A financing statement sufficiently shows the name of 
  6.13  the debtor if it gives the individual, partnership or corporate 
  6.14  name of the debtor, whether or not it adds other trade names or 
  6.15  the names of partners, and gives the social security number of 
  6.16  the debtor or, in the case of a debtor doing business other than 
  6.17  as an individual, the internal revenue service taxpayer 
  6.18  identification number of the debtor.  Where the debtor so 
  6.19  changes a personal name or in the case of an organization its 
  6.20  name, identity or corporate structure that a filed financing 
  6.21  statement becomes seriously misleading, the filing is not 
  6.22  effective to perfect a security interest in collateral acquired 
  6.23  by the debtor more than four months after the change, unless a 
  6.24  new appropriate financing statement is filed before the 
  6.25  expiration of that time.  A filed financing statement remains 
  6.26  effective with respect to collateral transferred by the debtor 
  6.27  even though the secured party knows of or consents to the 
  6.28  transfer. 
  6.29     (8) A financing statement, amendment, continuation, 
  6.30  assignment, release, or termination substantially complying with 
  6.31  the requirements of this section is effective even though it 
  6.32  contains minor errors which are not seriously misleading.  The 
  6.33  omission or any inaccuracy in stating the debtor's social 
  6.34  security or federal tax identification number is not, standing 
  6.35  alone, a seriously misleading error. 
  6.36     Sec. 3.  [EFFECTIVE DATE; APPLICABILITY.] 
  7.1      Sections 1 and 2 are effective August 1, 1998.  Section 1 
  7.2   applies to security agreements signed on or after August 1, 
  7.3   1998.  Section 2 applies to original financing statements filed 
  7.4   on or after August 1, 1998.