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SF 3409

2nd Engrossment - 80th Legislature (1997 - 1998) Posted on 12/15/2009 12:00am

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - 2nd Engrossment

  1.1                          A bill for an act
  1.2             relating to natural disasters; modifying provisions 
  1.3             for a timber permit extension; regulating security 
  1.4             interests in agricultural crops; modifying the 
  1.5             treatment of certain collateral; increasing use of 
  1.6             alternative dispute resolution in rural areas; 
  1.7             providing emergency financial relief for farm families 
  1.8             in certain counties; establishing a temporary program 
  1.9             of assistance for federal crop insurance premiums; 
  1.10            appropriating money; amending Minnesota Statutes 1996, 
  1.11            sections 90.193; 336.9-203; 336.9-401; and 336.9-402; 
  1.12            Laws 1986, chapter 398, article 1, section 18, as 
  1.13            amended; proposing coding for new law in Minnesota 
  1.14            Statutes, chapter 583. 
  1.15  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.16     Section 1.  Minnesota Statutes 1996, section 90.193, is 
  1.17  amended to read: 
  1.18     90.193 [EXTENSION OF TIMBER PERMITS.] 
  1.19     The commissioner may, in the case of an exceptional 
  1.20  circumstance beyond the control of the timber permit holder 
  1.21  which makes it unreasonable, impractical, and not feasible to 
  1.22  complete cutting and removal under the permit within the time 
  1.23  allowed, grant an extension of one year.  A request for the 
  1.24  extension must be received by the commissioner before the permit 
  1.25  expires.  The request must state the reason the extension is 
  1.26  necessary and be signed by the permit holder.  The value of the 
  1.27  timber remaining to be cut will be recalculated using current 
  1.28  stumpage rates.  Any timber cut during the period of extension 
  1.29  or remaining uncut at the expiration of the extension shall be 
  1.30  billed for at the stumpage rates determined at the time of 
  2.1   extension provided that in no event shall stumpage rates be less 
  2.2   than those in effect at the time of the original sale.  An 
  2.3   interest rate of eight percent will may be charged for the 
  2.4   period of extension.  
  2.5      Sec. 2.  Minnesota Statutes 1996, section 336.9-203, is 
  2.6   amended to read: 
  2.7      336.9-203 [ATTACHMENT AND ENFORCEABILITY OF SECURITY 
  2.8   INTEREST; PROCEEDS; FORMAL REQUISITES.] 
  2.9      (1) Subject to the provisions of section 336.4-210 on the 
  2.10  security interest of a collecting bank, sections 336.9-115 and 
  2.11  336.9-116 on security interests in investment property and 
  2.12  section 336.9-113 on a security interest arising under the 
  2.13  article on sales, a security interest is not enforceable against 
  2.14  the debtor or third parties with respect to the collateral and 
  2.15  does not attach unless: 
  2.16     (a) the collateral is in the possession of the secured 
  2.17  party pursuant to agreement, the collateral is investment 
  2.18  property and the secured party has control pursuant to 
  2.19  agreement, or the debtor has signed a security agreement which 
  2.20  contains a description of the collateral and, in addition, when 
  2.21  the security interest covers crops growing or to be grown or 
  2.22  timber to be cut, a description of the land concerned; 
  2.23     (b) value has been given; and 
  2.24     (c) the debtor has rights in the collateral. 
  2.25     (2) A security interest attaches when it becomes 
  2.26  enforceable against the debtor with respect to the collateral.  
  2.27  Attachment occurs as soon as all of the events specified in 
  2.28  subsection (1) have taken place unless explicit agreement 
  2.29  postpones the time of attaching. 
  2.30     (3) Unless otherwise agreed a security agreement gives the 
  2.31  secured party the rights to proceeds provided by section 
  2.32  336.9-306. 
  2.33     (4) A transaction, although subject to this article, is 
  2.34  also subject to Minnesota Statutes, Sections 48.153 to 48.157; 
  2.35  Chapters 52, 53, and 56; and Sections 168.66 to 168.77, 222.13 
  2.36  to 222.16, and 334.01 to 334.06, and in the case of conflict 
  3.1   between the provisions of this article and any such statute, the 
  3.2   provisions of such statute control.  Failure to comply with any 
  3.3   applicable statute has only the effect which is specified 
  3.4   therein. 
  3.5      Sec. 3.  Minnesota Statutes 1996, section 336.9-401, is 
  3.6   amended to read: 
  3.7      336.9-401 [PLACE OF FILING; ERRONEOUS FILING; REMOVAL OF 
  3.8   COLLATERAL.] 
  3.9      (1) The proper place to file in order to perfect a security 
  3.10  interest is as follows: 
  3.11     (a) When the collateral is consumer goods, or motor 
  3.12  vehicles which are not covered by a certificate of title, then 
  3.13  in the office of the county recorder in the county of the 
  3.14  debtor's residence if the debtor is an individual who is a 
  3.15  resident of this state but if the debtor is an individual who is 
  3.16  not a resident of this state or is a corporation, partnership or 
  3.17  other organization then in the office of the secretary of state; 
  3.18     (b) When the collateral is equipment to be used in farming 
  3.19  operations, or farm products, or accounts or general intangibles 
  3.20  arising from or relating to the sale of farm products by a 
  3.21  farmer, or crops growing or to be grown, then in the office of 
  3.22  the county recorder in the county of the debtor's residence if 
  3.23  the debtor is an individual or organization with residence in 
  3.24  this state, but if the debtor is not a resident of this state, 
  3.25  then in the office of the secretary of state; security interests 
  3.26  covering crops growing or to be grown that are to be filed with 
  3.27  the county recorder under this paragraph must be filed in the 
  3.28  Uniform Commercial Code division of the recorder's office; 
  3.29     (c) When the collateral is timber to be cut or is minerals 
  3.30  or the like (including oil and gas) or accounts subject to 
  3.31  subsection (5) of section 336.9-103, or when the financing 
  3.32  statement is filed as a fixture filing (section 336.9-313) and 
  3.33  the collateral is goods which are or are to become fixtures, 
  3.34  then in the office where a mortgage on the real estate would be 
  3.35  filed or recorded; 
  3.36     (d) In all other cases, in the office of the secretary of 
  4.1   state. 
  4.2      (2) A filing which is made in good faith in an improper 
  4.3   place or not in all of the places required by this section is 
  4.4   nevertheless effective with regard to any collateral as to which 
  4.5   the filing complied with the requirements of this article and is 
  4.6   also effective with regard to collateral covered by the 
  4.7   financing statement against any person who has knowledge of the 
  4.8   contents of such financing statement. 
  4.9      (3) A filing which is made in the proper place in this 
  4.10  state continues effective even though the debtor's residence in 
  4.11  this state or the use of the collateral, whichever controlled 
  4.12  the original filing, is thereafter changed. 
  4.13     (4) The rules stated in section 336.9-103 determine whether 
  4.14  filing is necessary in this state. 
  4.15     (5) Notwithstanding the preceding subsections, the proper 
  4.16  place to file in order to perfect a security interest in 
  4.17  collateral, including fixtures, of a transmitting utility is the 
  4.18  office of the secretary of state.  Such a filing shall not be 
  4.19  deemed a separate filing from the filings required by other 
  4.20  laws, if applicable, set forth in subsection (3) of section 
  4.21  336.9-302.  This filing constitutes a fixture filing (section 
  4.22  336.9-313) as to the collateral described therein which is or is 
  4.23  to become fixtures. 
  4.24     (6) For the purposes of this section, the residence of an 
  4.25  organization is its place of business if it has one or its chief 
  4.26  executive office if it has more than one place of business. 
  4.27     (7) "Motor vehicle" means any device propelled or drawn by 
  4.28  any power other than muscular power in, upon, or by which any 
  4.29  person or property is or may be transported or drawn upon a 
  4.30  highway, excepting building and road construction equipment and 
  4.31  vehicles that are inventory of licensed dealers. 
  4.32     Sec. 4.  Minnesota Statutes 1996, section 336.9-402, is 
  4.33  amended to read: 
  4.34     336.9-402 [FORMAL REQUISITES OF FINANCING STATEMENT; 
  4.35  AMENDMENTS; MORTGAGE AS FINANCING STATEMENT.] 
  4.36     (1) A financing statement is sufficient if it gives the 
  5.1   name of the debtor and the secured party, is signed by the 
  5.2   debtor, gives an address of the secured party from which 
  5.3   information concerning the security interest may be obtained, 
  5.4   gives a mailing address of the debtor, gives the social security 
  5.5   number of the debtor or, in the case of a debtor doing business 
  5.6   other than as an individual, the internal revenue service 
  5.7   taxpayer identification number of the debtor, and contains a 
  5.8   statement indicating the types or describing the items, of 
  5.9   collateral.  A financing statement may be filed before a 
  5.10  security agreement is made or a security interest otherwise 
  5.11  attaches.  When the financing statement covers crops growing or 
  5.12  to be grown, the statement must also contain a description of 
  5.13  the real estate concerned and the name of the record owner 
  5.14  thereof and the crop years that are covered by the financing 
  5.15  statement.  When the financing statement covers timber to be cut 
  5.16  or covers minerals or the like (including oil and gas) or 
  5.17  accounts subject to subsection (5) of section 336.9-103, or when 
  5.18  the financing statement is filed as a fixture filing (section 
  5.19  336.9-313) and the collateral is goods which are or are to 
  5.20  become fixtures, the statement must also comply with subsection 
  5.21  (5).  A copy of the security agreement is sufficient as a 
  5.22  financing statement if it contains the above information and is 
  5.23  signed by the debtor.  A carbon, photographic or other 
  5.24  reproduction of a security agreement or a financing statement is 
  5.25  sufficient as a financing statement if the security agreement so 
  5.26  provides or if the original has been filed in this state. 
  5.27     (2) A financing statement which otherwise complies with 
  5.28  subsection (1) is sufficient when it is signed by the secured 
  5.29  party instead of the debtor when it is filed to perfect a 
  5.30  security interest in 
  5.31     (a) collateral already subject to a security interest in 
  5.32  another jurisdiction when it is brought into this state, or when 
  5.33  the debtor's location is changed to this state.  Such a 
  5.34  financing statement must state that the collateral was brought 
  5.35  into this state or that the debtor's location was changed to 
  5.36  this state under such circumstances; or 
  6.1      (b) proceeds under section 336.9-306 if the security 
  6.2   interest in the original collateral was perfected.  Such a 
  6.3   financing statement must describe the original collateral; or 
  6.4      (c) collateral as to which the filing has lapsed within one 
  6.5   year; or 
  6.6      (d) collateral acquired after a change of name, identity or 
  6.7   corporate structure of the debtor (subsection (7)); or 
  6.8      (e) a lien filed pursuant to chapter 514; or 
  6.9      (f) collateral which is subject to a filed judgment.  
  6.10     (2a) Except for documents filed under clauses (e) and (f), 
  6.11  the reason for the omission of the debtor signature must be 
  6.12  stated on the front of the financing statement.  
  6.13     (3) A form substantially as follows is sufficient to comply 
  6.14  with subsection (1): 
  6.15     Name of debtor (or assignor) 
  6.16     .............................. 
  6.17     Address 
  6.18     .............................. 
  6.19     Debtor's Social Security Number or I.R.S. Tax I.D. Number 
  6.20     ............................... 
  6.21     Name of secured party (or assignee) 
  6.22     .............................. 
  6.23     Address 
  6.24     .............................. 
  6.25     1.  This financing statement covers the following types (or 
  6.26  items) of property: 
  6.27     (Describe) 
  6.28     .............................. 
  6.29     2.  (If collateral is crops) The above described crops are 
  6.30  growing or are to be grown on: 
  6.31     (Describe real estate and the name of the record owner 
  6.32  thereof) ...... 
  6.33     ....................................................... ....
  6.34     3.  (If applicable) The above goods are to become fixtures 
  6.35  on 
  6.36     (Describe real estate).......................... and this 
  7.1   financing statement is to be filed for record in the real estate 
  7.2   records.  (If the debtor does not have an interest of record) 
  7.3   The name of a record owner is ................. 
  7.4      4. 3.  (If products of collateral are claimed) 
  7.5      Products of the collateral are also covered. 
  7.6      Use whichever signature line is applicable. 
  7.7      Signature of debtor (or assignor) 
  7.8      ......................... 
  7.9      Signature of secured party (or assignee) 
  7.10     ......................... 
  7.11     (4) A financing statement may be amended by filing a 
  7.12  writing signed by both the debtor and the secured party.  If the 
  7.13  sole purpose of the amendment is to change the name or address 
  7.14  of the secured party, only the secured party need sign the 
  7.15  amendment.  A writing is sufficient if it sets forth the name 
  7.16  and address of the debtor and secured party as those items 
  7.17  appear on the original financing statement or the most recently 
  7.18  filed amendment, the file number and date of filing of the 
  7.19  financing statement.  An amendment does not extend the period of 
  7.20  effectiveness of a financing statement.  If any amendment adds 
  7.21  collateral, it is effective as to the added collateral only from 
  7.22  the filing date of the amendment.  In this article, unless the 
  7.23  context otherwise requires, the term "financing statement" means 
  7.24  the original financing statement and any amendments. 
  7.25     (5) A financing statement covering timber to be cut or 
  7.26  covering minerals or the like (including oil and gas) or 
  7.27  accounts subject to subsection (5) of section 336.9-103, or a 
  7.28  financing statement filed as a fixture filing (section 
  7.29  336.9-313) where the debtor is not a transmitting utility, must 
  7.30  show that it covers this type of collateral, must recite that it 
  7.31  is to be filed for record in the real estate records, and the 
  7.32  financing statement must contain a description of the real 
  7.33  estate sufficient if it were contained in a mortgage of the real 
  7.34  estate to give constructive notice of the mortgage under the law 
  7.35  of this state.  If the debtor does not have an interest of 
  7.36  record in the real estate, the financing statement must show the 
  8.1   name of a record owner.  No description of the real estate or 
  8.2   the name of the record owner thereof is required for a fixture 
  8.3   filing where the debtor is a transmitting utility. 
  8.4   Notwithstanding the foregoing a general description of the real 
  8.5   estate is sufficient for a fixture filing where a railroad is 
  8.6   the record owner of the real estate on which the fixtures are or 
  8.7   are to be located; and for the purposes of this subsection, the 
  8.8   requirement of a general description is satisfied if the fixture 
  8.9   filing (1) identifies the section, township and range numbers of 
  8.10  the county in which the land is located; (2) identifies the 
  8.11  quarter-quarter of the section that the land is located in; (3) 
  8.12  indicates the name of the record owner of the real estate; and 
  8.13  (4) states the street address of the real estate if one exists. 
  8.14     (6) A mortgage is effective as a financing statement filed 
  8.15  as a fixture filing from the date of its recording if (a) the 
  8.16  goods are described in the mortgage by item or type, (b) the 
  8.17  goods are or are to become fixtures related to the real estate 
  8.18  described in the mortgage, (c) the mortgage complies with the 
  8.19  requirements for a financing statement in this section other 
  8.20  than a recital that it is to be filed in the real estate 
  8.21  records, and (d) the mortgage is duly recorded.  No fee with 
  8.22  reference to the financing statement is required other than the 
  8.23  regular recording and satisfaction fees with respect to the 
  8.24  mortgage. 
  8.25     (7) A financing statement sufficiently shows the name of 
  8.26  the debtor if it gives the individual, partnership or corporate 
  8.27  name of the debtor, whether or not it adds other trade names or 
  8.28  the names of partners, and gives the social security number of 
  8.29  the debtor or, in the case of a debtor doing business other than 
  8.30  as an individual, the internal revenue service taxpayer 
  8.31  identification number of the debtor.  Where the debtor so 
  8.32  changes a personal name or in the case of an organization its 
  8.33  name, identity or corporate structure that a filed financing 
  8.34  statement becomes seriously misleading, the filing is not 
  8.35  effective to perfect a security interest in collateral acquired 
  8.36  by the debtor more than four months after the change, unless a 
  9.1   new appropriate financing statement is filed before the 
  9.2   expiration of that time.  A filed financing statement remains 
  9.3   effective with respect to collateral transferred by the debtor 
  9.4   even though the secured party knows of or consents to the 
  9.5   transfer. 
  9.6      (8) A financing statement, amendment, continuation, 
  9.7   assignment, release, or termination substantially complying with 
  9.8   the requirements of this section is effective even though it 
  9.9   contains minor errors which are not seriously misleading.  The 
  9.10  omission or any inaccuracy in stating the debtor's social 
  9.11  security or federal tax identification number is not, standing 
  9.12  alone, a seriously misleading error. 
  9.13     Sec. 5.  [583.311] [VOLUNTARY ALTERNATIVE DISPUTE 
  9.14  RESOLUTION.] 
  9.15     The administrator shall establish procedures and measures 
  9.16  to ensure maximum use of alternative dispute resolution under 
  9.17  this chapter for disputes in rural areas.  Referrals may be 
  9.18  accepted from courts, state agencies, local units of government, 
  9.19  or any party to a dispute involving rural land, regulation, 
  9.20  rural individuals, businesses, or property, or any matter 
  9.21  affecting rural quality of life.  The legislature encourages 
  9.22  state and federal agencies and governmental subdivisions to use 
  9.23  the services provided by the administrator under this chapter 
  9.24  and to cooperate fully when matters under this jurisdiction are 
  9.25  subjected to alternative dispute resolution methods.  The 
  9.26  administrator may set fees for participation in voluntary 
  9.27  procedures to pay all or part of the costs of providing the 
  9.28  services. 
  9.29     Sec. 6.  Laws 1986, chapter 398, article 1, section 18, as 
  9.30  amended by Laws 1987, chapter 292, section 37; Laws 1989, 
  9.31  chapter 350, article 16, section 8; Laws 1990, chapter 525, 
  9.32  section 1; Laws 1991, chapter 208, section 2; Laws 1993, First 
  9.33  Special Session chapter 2, article 6, section 2; Laws 1995, 
  9.34  chapter 212, article 2, section 11; and Laws 1997, chapter 183, 
  9.35  article 3, section 29, is amended to read: 
  9.36     Sec. 18.  [REPEALER.] 
 10.1      Sections 1 to 17 and Minnesota Statutes, section 336.9-501, 
 10.2   subsections (6) and (7), and sections 583.284, 583.285, 583.286, 
 10.3   and 583.305, are repealed on July 1, 1998 1999. 
 10.4      Sec. 7.  [DEFINITIONS.] 
 10.5      Subdivision 1.  [APPLICABILITY.] The definitions in this 
 10.6   section apply to sections 7 and 8. 
 10.7      Subd. 2.  [COMMISSIONER.] "Commissioner" means the 
 10.8   commissioner of agriculture. 
 10.9      Subd. 3.  [CRISIS COUNTY.] "Crisis county" means Beltrami, 
 10.10  Clay, Clearwater, Kittson, Lake of the Woods, Mahnomen, 
 10.11  Marshall, Norman, Pennington, Polk, Red Lake, or Roseau county. 
 10.12     Subd. 4.  [FARMER.] "Farmer" means a natural person 
 10.13  residing in Minnesota who operates a family farm as defined in 
 10.14  Minnesota Statutes, section 500.24, subdivision 2, located 
 10.15  wholly or in part in a crisis county.  "Farmer" also means a 
 10.16  resident who is a shareholder in a family farm corporation or a 
 10.17  partner in a family farm partnership as defined in Minnesota 
 10.18  Statutes, section 500.24, subdivision 2, located wholly or in 
 10.19  part in a crisis county. 
 10.20     Sec. 8.  [FEDERAL CROP INSURANCE ASSISTANCE.] 
 10.21     Subdivision 1.  [PROGRAM ANNOUNCEMENT.] Within 30 days 
 10.22  after the effective date of sections 7 to 9, the commissioner 
 10.23  shall announce procedures and distribute application forms for 
 10.24  the federal crop insurance assistance program. 
 10.25     Subd. 2.  [ELIGIBILITY.] A farmer is eligible for state 
 10.26  assistance under this section if: 
 10.27     (1) the farmer experienced a 50 percent or greater loss 
 10.28  from the United States Department of Agriculture, Farm Service 
 10.29  Agency, county yield average in wheat or barley yield or 
 10.30  collected an indemnity or disaster payment on wheat or barley in 
 10.31  one or more growing seasons between 1993 and 1997; 
 10.32     (2) the crop covered by the insurance was planted on land 
 10.33  located in a crisis county; and 
 10.34     (3) the farmer or the farmer's federal crop insurance agent 
 10.35  submits a properly completed application for assistance to the 
 10.36  commissioner on forms provided by the commissioner on or before 
 11.1   August 1, 1998. 
 11.2      Subd. 3.  [REIMBURSEMENT RATE, PRIORITY, AND MAXIMUM 
 11.3   ASSISTANCE.] (a) From funds appropriated for purposes of this 
 11.4   section, the commissioner shall provide reimbursement to an 
 11.5   eligible farmer for premiums and administrative fees paid for 
 11.6   federal crop insurance on wheat and barley grown in a crisis 
 11.7   county for the 1997 growing season.  The maximum reimbursement 
 11.8   available to any farmer, or in the case of a family farm 
 11.9   corporation or a family farm partnership, to the family farm 
 11.10  corporation or partnership, is $4,000. 
 11.11     (b) Properly completed applications for federal crop 
 11.12  insurance assistance take priority in the order in which they 
 11.13  are received by the commissioner. 
 11.14     (c) The farmer must be listed as the payee, or one of the 
 11.15  payees, on the reimbursement check. 
 11.16     Sec. 9.  [APPROPRIATION.] 
 11.17     $8,500,000 is appropriated from the budget reserve to the 
 11.18  commissioner of agriculture for purposes of section 8.  Up to 
 11.19  $70,000 of this appropriation is available for necessary program 
 11.20  administrative costs of the departments of agriculture and 
 11.21  revenue.  The commissioner of finance may transfer money 
 11.22  appropriated in this section to the commissioner of revenue to 
 11.23  pay for necessary program administration costs. 
 11.24     Sec. 10.  [EFFECTIVE DATE.] 
 11.25     This act is effective the day following final enactment, 
 11.26  except that section 1 is effective retroactively to January 1, 
 11.27  1998, and that sections 2 to 4 are effective August 1, 1998.  
 11.28  Section 3 applies to security agreements signed on or after 
 11.29  August 1, 1998.  Section 4 applies to original financing 
 11.30  statements filed on or after August 1, 1998.