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Key: (1) language to be deleted (2) new language

  

                         Laws of Minnesota 1985 

                        CHAPTER 233-S.F.No. 919 
           An act relating to commerce; providing for 
          registration of crop and livestock buyers and 
          wholesale produce dealers in licensing application; 
          establishing a registration system for buyers of farm 
          products; describing when farm products are purchased 
          subject to a security interest; requiring financing 
          statements covering crops to designate crop years; 
          providing that secured parties are not liable to 
          debtors for giving notice of liens; providing that 
          buyers shall limit use of lien notices received from 
          secured parties; providing that buyers shall issue 
          joint payments to debtors and secured parties under 
          certain circumstances; appropriating money; amending 
          Minnesota Statutes 1984, sections 17A.04, subdivisions 
          2, 5, and by adding a subdivision; 27.03; 223.17, by 
          adding a subdivision; 336.9-307; 336.9-402; 336.9-403; 
          386.42; proposing coding for new law as Minnesota 
          Statutes, chapter 223A; repealing Minnesota Statutes 
          1984, section 386.43. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1984, section 17A.04, is 
amended by adding a subdivision to read: 
    Subd. 1a.  [REGISTRATION OF LIVESTOCK BUYERS.] The 
commissioner shall adopt permanent and emergency rules, in 
conjunction with the license application, to register livestock 
buyers under section 386.42 in counties where the buyer selects 
to be registered.  The commissioner shall collect a $10 fee and 
a $5 per county registration fee from the buyer, register the 
buyer, and pay the county registration fee within ten days after 
the license is issued.  
    Sec. 2.  Minnesota Statutes 1984, section 17A.04, 
subdivision 2, is amended to read: 
    Subd. 2.  [APPLICATION.] Any person desiring to carry on 
the business of a livestock market agency or livestock dealer, 
or both, or a public stockyard shall make application to the 
commissioner on a form or forms provided by the commissioner. 
The form must provide for registration as a livestock buyer 
under section 386.42. 
    Sec. 3.  Minnesota Statutes 1984, section 17A.04, 
subdivision 5, is amended to read: 
    Subd. 5.  [LICENSE FEE.] The applicant shall submit to the 
commissioner the fee for the county registration as a livestock 
buyer under section 1 and the following applicable fees and 
penalties for late renewal: 
    (a) $150 for each livestock market agency and public 
stockyard license, penalty $38;  
    (b) $50 for each livestock dealer license, penalty $13;  
    (c) $30 for each agent of a livestock dealer license, 
penalty $10;  
    (d) $50 for each meat packing company license, penalty $13; 
    (e) $30 for each agent of a meat packing company license, 
penalty $10. 
    Sec. 4.  Minnesota Statutes 1984, section 27.03, is amended 
to read: 
    27.03 [DEALER LICENSED REGULATION.] 
    Subdivision 1.  [LICENSE.] No person except a wool dealer 
shall engage in, or purport to be engaged in, or hold himself 
out as being engaged in, the business of a dealer at wholesale, 
or as being a dealer at wholesale, unless he shall be licensed 
and bonded to carry on such business by the commissioner.  
    Subd. 2.  [REGISTRATION.] The commissioner shall adopt 
permanent and emergency rules in conjunction with the license 
application to register wholesale produce dealers under section 
386.42 in counties where the dealer selects to be registered.  
The commissioner shall collect a $10 fee and a $5 per county 
registration fee from the dealer, register the dealer, and pay 
the county registration fee within ten days after the license is 
issued. 
    Sec. 5.  Minnesota Statutes 1984, section 223.17, is 
amended by adding a subdivision to read: 
    Subd. 1a.  [CROP PRODUCT BUYER REGISTRATION.] The 
commissioner shall adopt permanent and emergency rules, in 
conjunction with the license application, to register a grain 
buyer as a crop product buyer under section 386.42 in the 
counties where the grain buyer desires to be registered.  The 
commissioner shall collect a $10 fee and a $5 per county 
registration fee from the buyer, register the buyer, and pay the 
county registration fee within ten days after issuing a license. 
    Sec. 6.  [223A.01] [FARM PRODUCTS THAT ARE BOUGHT SUBJECT 
TO A SECURITY INTEREST.] 
    Subdivision 1.  [REGISTERED BUYER TAKES FREE OF SECURITY 
INTEREST UNLESS NOTIFIED.] A buyer in the ordinary course of 
business who is a registered buyer in the county of the seller's 
residence under section 386.42, and who purchases farm products 
from a person engaged in farming operations takes free of a 
security interest created by the seller even though the security 
interest is perfected and the buyer knows of its existence, 
unless the buyer is notified of the security interest as 
provided in subdivision 4. 
    Subd. 2.  [BUYERS THAT PURCHASE SUBJECT TO A SECURITY 
INTEREST.] A buyer in the ordinary course of business that is 
registered under section 386.42 in the seller's county of 
residence who is notified by a secured party as provided under 
subdivision 3, purchases farm products from a person engaged in 
farming operations subject to the perfected security interest.  
A buyer who is not registered under section 386.42 in the 
seller's county of residence purchases farm products from a 
person engaged in farming operations subject to perfected 
security interests.  
    A buyer who purchases farm products subject to a security 
interest under this section shall include the name of the 
secured party as joint payee on any check or other instrument 
issued in payment for the farm products, unless the secured 
party gives the buyer written notice of waiver of this 
requirement.  Issuance of joint payment as herein required 
relieves the buyer of any further liability to the secured party.
    Subd. 3.  [NOTIFICATION OF SECURITY INTEREST.] A secured 
party may, by certified mail or another method by which receipt 
can be verified, notify a buyer that a debtor has farm products 
subject to a security interest. 
    The notification is effective upon receipt until September 
1 after the notification is made; or for a notification made 
after August 20 but before September 1, the notification is 
effective for one year beginning September 1.  A buyer who 
receives notification from a secured party under this 
subdivision shall not publicly post or disseminate to any 
person, other than its agents and employees who reasonably 
require the information for purposes related to this act, any 
information contained in the notification. 
    A secured party that furnishes to a buyer a list of debtors 
who have farm products subject to a security interest is not 
liable to a debtor whose name is on the list for furnishing the 
list. 
    Sec. 7.  Minnesota Statutes 1984, section 336.9-307, is 
amended to read: 
    336.9-307 [PROTECTION OF BUYERS OF GOODS.] 
    (1) A buyer in ordinary course of business (subsection (9) 
of section 336.1-201) other than a person buying farm products 
from a person engaged in farming operations takes free of a 
security interest created by his seller even though the security 
interest is perfected and even though the buyer knows of its 
existence, except that a buyer in the ordinary course of 
business who purchases farm products from a person engaged in 
farming operations is subject to section 386.42.  
    (2) In the case of consumer goods, a buyer takes free of a 
security interest even though perfected if he buys without 
knowledge of the security interest, for value and for his own 
personal, family or household purposes unless prior to the 
purchase the secured party has filed a financing statement 
covering such goods. 
    (3) A buyer other than a buyer in ordinary course of 
business (subsection (1) of this section) takes free of a 
security interest to the extent that it secures future advances 
made after the secured party acquires knowledge of the purchase, 
or more than 45 days after the purchase, whichever first occurs, 
unless made pursuant to a commitment entered into without 
knowledge of the purchase and before the expiration of the 45 
day period. 
    Sec. 8.  Minnesota Statutes 1984, section 336.9-402, is 
amended to read: 
    336.9-402 [FORMAL REQUISITES OF FINANCING STATEMENT; 
AMENDMENTS; MORTGAGE AS FINANCING STATEMENT.] 
    (1) A financing statement is sufficient if it gives the 
name of the debtor and the secured party, is signed by the 
debtor, gives an address of the secured party from which 
information concerning the security interest may be obtained, 
gives a mailing address of the debtor and contains a statement 
indicating the types or describing the items, of collateral.  A 
financing statement may be filed before a security agreement is 
made or a security interest otherwise attaches.  When the 
financing statement covers crops growing or to be grown, the 
statement must also contain a description of the real estate 
concerned and the name of the record owner thereof and the crop 
years which are covered by the financing statement.  When the 
financing statement covers timber to be cut or covers minerals 
or the like (including oil and gas) or accounts subject to 
subsection (5) of section 336.9-103, or when the financing 
statement is filed as a fixture filing (section 336.9-313) and 
the collateral is goods which are or are to become fixtures, the 
statement must also comply with subsection (5).  A copy of the 
security agreement is sufficient as a financing statement if it 
contains the above information and is signed by the debtor.  A 
carbon, photographic or other reproduction of a security 
agreement or a financing statement is sufficient as a financing 
statement if the security agreement so provides or if the 
original has been filed in this state. 
     (2) A financing statement which otherwise complies with 
subsection (1) is sufficient when it is signed by the secured 
party instead of the debtor when it is filed to perfect a 
security interest in 
     (a) collateral already subject to a security interest in 
another jurisdiction when it is brought into this state, or when 
the debtor's location is changed to this state.  Such a 
financing statement must state that the collateral was brought 
into this state or that the debtor's location was changed to 
this state under such circumstances; or 
     (b) proceeds under section 336.9-306 if the security 
interest in the original collateral was perfected.  Such a 
financing statement must describe the original collateral; or 
     (c) collateral as to which the filing has lapsed within one 
year; or 
     (d) collateral acquired after a change of name, identity or 
corporate structure of the debtor (subsection (7)); or 
     (e) a lien filed pursuant to Minnesota Statutes, chapter 
514; or 
      (f) collateral which is subject to a filed judgment.  
     (2a) Except for documents filed under clauses (e) and (f), 
the reason for the omission of the debtor signature must be 
stated on the front of the financing statement.  
     (3) A form substantially as follows is sufficient to comply 
with subsection (1): 
     Name of debtor (or assignor) 
     .............................. 
     Address 
     .............................. 
     Name of secured party (or assignee) 
     .............................. 
     Address 
     .............................. 
     1.  This financing statement covers the following types (or 
items) of property: 
     (Describe) 
     .............................. 
     2.  (If collateral is crops) The above described crops are 
growing or are to be grown on: 
     (Describe real estate and the name of the record owner 
thereof) ...... 
     ....................................................... ....
     3.  (If applicable) The above goods are to become fixtures 
on 
     (Describe real estate).......................... and this 
financing statement is to be filed for record in the real estate 
records.  (If the debtor does not have an interest of record) 
The name of a record owner is ................. 
     4.  (If products of collateral are claimed) 
     Products of the collateral are also covered. 
     Use whichever signature line is applicable. 
     Signature of debtor (or assignor) 
     ......................... 
     Signature of secured party (or assignee) 
     ......................... 
     (4) A financing statement may be amended by filing a 
writing signed by both the debtor and the secured party.  If the 
sole purpose of the amendment is to change the name or address 
of the secured party, only the secured party need sign the 
amendment.  A writing is sufficient if it sets forth the name 
and address of the debtor and secured party as those items 
appear on the original financing statement or the most recently 
filed amendment, the file number and date of filing of the 
financing statement.  An amendment does not extend the period of 
effectiveness of a financing statement.  If any amendment adds 
collateral, it is effective as to the added collateral only from 
the filing date of the amendment.  In this article, unless the 
context otherwise requires, the term "financing statement" means 
the original financing statement and any amendments. 
     (5) A financing statement covering timber to be cut or 
covering minerals or the like (including oil and gas) or 
accounts subject to subsection (5) of section 336.9-103, or a 
financing statement filed as a fixture filing (section 
336.9-313) where the debtor is not a transmitting utility, must 
show that it covers this type of collateral, must recite that it 
is to be filed for record in the real estate records, and the 
financing statement must contain a description of the real 
estate sufficient if it were contained in a mortgage of the real 
estate to give constructive notice of the mortgage under the law 
of this state.  If the debtor does not have an interest of 
record in the real estate, the financing statement must show the 
name of a record owner.  No description of the real estate or 
the name of the record owner thereof is required for a fixture 
filing where the debtor is a transmitting utility. 
Notwithstanding the foregoing a general description of the real 
estate is sufficient for a fixture filing where a railroad is 
the record owner of the real estate on which the fixtures are or 
are to be located; and for the purposes of this subsection, the 
requirement of a general description is satisfied if the fixture 
filing (1) identifies the section, township and range numbers of 
the county in which the land is located; (2) identifies the 
quarter-quarter of the section that the land is located in; (3) 
indicates the name of the record owner of the real estate; and 
(4) states the street address of the real estate if one exists. 
     (6) A mortgage is effective as a financing statement filed 
as a fixture filing from the date of its recording if (a) the 
goods are described in the mortgage by item or type, (b) the 
goods are or are to become fixtures related to the real estate 
described in the mortgage, (c) the mortgage complies with the 
requirements for a financing statement in this section other 
than a recital that it is to be filed in the real estate 
records, and (d) the mortgage is duly recorded.  No fee with 
reference to the financing statement is required other than the 
regular recording and satisfaction fees with respect to the 
mortgage. 
    (7) A financing statement sufficiently shows the name of 
the debtor if it gives the individual, partnership or corporate 
name of the debtor, whether or not it adds other trade names or 
the names of partners.  Where the debtor so changes his name or 
in the case of an organization its name, identity or corporate 
structure that a filed financing statement becomes seriously 
misleading, the filing is not effective to perfect a security 
interest in collateral acquired by the debtor more than four 
months after the change, unless a new appropriate financing 
statement is filed before the expiration of that time.  A filed 
financing statement remains effective with respect to collateral 
transferred by the debtor even though the secured party knows of 
or consents to the transfer. 
    (8) A financing statement, amendment, continuation, 
assignment, release, or termination substantially complying with 
the requirements of this section is effective even though it 
contains minor errors which are not seriously misleading. 
    Sec. 9.  Minnesota Statutes 1984, section 336.9-403, is 
amended to read: 
    336.9-403 [WHAT CONSTITUTES FILING; DURATION OF FILING; 
EFFECT OF LAPSED FILING; DUTIES OF FILING OFFICER.] 
     (1) Presentation for filing of a financing statement and 
tender of the filing fee or acceptance of the statement by the 
filing officer constitutes filing under this article. 
    (2) Except as provided in subsection (6) a filed financing 
statement is effective for a period of five years from the date 
of filing.  The effectiveness of a filed financing statement 
lapses on the expiration of the five year period unless a 
continuation statement is filed prior to the lapse.  If a 
security interest perfected by filing exists at the time 
insolvency proceedings are commenced by or against the debtor, 
the security interest remains perfected until termination of the 
insolvency proceedings and thereafter for a period of 60 days or 
until expiration of the five year period, whichever occurs later 
regardless of whether the financing statement filed as to that 
security interest is destroyed by the filing officer pursuant to 
subsection (3).  Upon lapse the security interest becomes 
unperfected, unless it is perfected without filing.  If the 
security interest becomes unperfected upon lapse, it is deemed 
to have been unperfected as against a person who became a 
purchaser or lien creditor before lapse. 
      (3) A continuation statement may be filed by the secured 
party within six months prior to the expiration of the five year 
period specified in subsection (2).  Any such continuation 
statement must be signed by the secured party, set forth the 
name and address of the debtor and secured party as those items 
appear on the original financing statement or the most recently 
filed amendment, identify the original statement by file number 
and filing date, and state that the original statement is still 
effective.  A continuation statement signed by a person other 
than the secured party of record must be accompanied by a 
separate written statement of assignment signed by the secured 
party of record and complying with subsection (2) of section 
336.9-405, including payment of the required fee.  Upon timely 
filing of the continuation statement, the effectiveness of the 
original statement is continued for five years after the last 
date to which the filing was effective whereupon it lapses in 
the same manner as provided in subsection (2) unless another 
continuation statement is filed prior to such lapse. Succeeding 
continuation statements may be filed in the same manner to 
continue the effectiveness of the original statement. Unless a 
statute on disposition of public records provides otherwise, the 
filing officer may remove a lapsed statement from the files and 
destroy it immediately if he has retained a microfilm or other 
photographic record, or in other cases after one year after the 
lapse.  The filing officer shall so arrange matters by physical 
annexation of financing statements to continuation statements or 
other related filings, or by other means, that if he physically 
destroys the financing statements of a period more than five 
years past, those which have been continued by a continuation 
statement or which are still effective under subsection (6) 
shall be retained.  If insolvency proceedings are commenced by 
or against the debtor, the secured party shall notify the filing 
officer both upon commencement and termination of the 
proceedings, and the filing officer shall not destroy any 
financing statements filed with respect to the debtor until 
termination of the insolvency proceedings.  The security 
interest remains perfected until termination of the insolvency 
proceedings and thereafter for a period of 60 days or until 
expiration of the five year period, whichever occurs later. 
      (4) Except as provided in subsection (7) a filing officer 
shall mark each statement with a file number and with the date 
and hour of filing and shall hold the statement or a microfilm 
or other photographic copy thereof for public inspection.  In 
addition the filing officer shall index the statements according 
to the name of the debtor and shall note in the index the file 
number and the address of the debtor given in the statement. 
      (5) The secretary of state shall prescribe uniform forms 
for statements and samples thereof shall be furnished to all 
filing officers in the state.  The uniform fee for filing and 
indexing and for stamping a copy furnished by the secured party 
to show the date and place of filing for an original financing 
statement or for a continuation statement shall be $5 if the 
statement is in the standard form prescribed by the secretary of 
state and otherwise shall be $10, plus in each case, if the 
financing statement is subject to subsection (5) of section 
336.9-402, $5.  An additional fee of $5 shall be collected if 
more than one name is required to be indexed or if the secured 
party, at his option, shows a trade name for any debtor listed.  
There shall be no fee collected for the filing of an amendment 
to a financing statement if the amendment is in the standard 
form prescribed by the secretary of state and does not add 
additional debtor names to the financing statement.  The fee for 
an amendment adding additional debtor names shall be $5 if the 
amendment is in the form prescribed by the secretary of state 
and, if otherwise, $10.  The fee for an amendment which is not 
in the form prescribed by the secretary of state but which does 
not add additional names shall be $5.  
    The secretary of state shall adopt rules for filing, 
amendment, continuation, termination, removal, and destruction 
of financing statements. 
    (6) If the debtor is a transmitting utility (subsection (5) 
of section 336.9-401) and a filed financing statement so states, 
it is effective until a termination statement is filed.  A real 
estate mortgage which is effective as a fixture filing under 
subsection (6) of section 336.9-402 remains effective as a 
fixture filing until the mortgage is released or satisfied of 
record or its effectiveness otherwise terminates as to the real 
estate. 
     (7) When a financing statement covers timber to be cut or 
covers minerals or the like (including oil and gas) or accounts 
subject to subsection (5) of section 336.9-103, or is filed as a 
fixture filing, it shall be filed for record and the filing 
officer shall index it under the names of the debtor and any 
owner of record shown on the financing statement in the same 
fashion as if they were the mortgagors in a mortgage of the real 
estate described, and, to the extent that the law of this state 
provides for indexing of mortgages under the name of the 
mortgagee, under the name of the secured party as if he were the 
mortgagee thereunder, or, for filing offices other than the 
secretary of state, where indexing is by description in the same 
fashion as if the financing statement were a mortgage of the 
real estate described.  If requested of the filing officer on 
the financing statement, a financing statement filed for record 
as a fixture filing in the same office where nonfixture filings 
are made is effective, without a dual filing, as to collateral 
listed thereon for which filing is required in such office 
pursuant to section 336.9-401 (1) (a); in such case, the filing 
officer shall also index the recorded statement in accordance 
with subsection (4) using the recording data in lieu of a file 
number. 
    (8) The fees provided for in this article shall supersede 
the fees for similar services otherwise provided for by law 
except in the case of security interests filed in connection 
with a certificate of title on a motor vehicle. 
    Sec. 10.  Minnesota Statutes 1984, section 386.42, is 
amended to read: 
    386.42 [ABSTRACT OF MORTGAGES AND LIENS ON GRAIN CROPS FOR 
ELEVATOR COMPANIES REGISTRATION OF FARM PRODUCT BUYERS.] 
    Any elevator company or grain buyer doing business in this 
state may annually make written application to the county 
recorder for an abstract of all designated mortgages and liens 
upon grains grown during the year filed with the county 
recorder.  The application shall state the name and the post 
office address of the company and be accompanied by a fee.  The 
fee shall be determined by resolution of the county board upon 
the recommendation of the county recorder based upon the 
estimated cost of providing the service. 
    Subdivision 1.  [DEFINITIONS.] The definitions in chapter 
336 apply to this section.  
    Subd. 2.  [REGISTRATION SYSTEM FOR BUYERS OF FARM 
PRODUCTS.] The county recorder shall maintain a separate 
registration system for (1) crop product buyers, (2) livestock 
buyers, and (3) wholesale produce dealers.  The county recorder 
must provide an alphabetical registration list of the names and 
mailing addresses of all persons who apply to be registered 
buyers.  A buyer is registered for one year beginning September 
1. 
    Subd. 3.  [CHANGES ON REGISTRATION LIST.] The county 
recorder must mail a copy of the proposed registration list that 
will become effective on September 1 to each buyer registered by 
August 10 if the buyer has included a stamped and addressed 
envelope with their application.  A buyer may change the name or 
address on the proposed registration list by notifying the 
county recorder before August 20. 
    Subd. 4.  [RECEIVING REGISTRATION LIST.] A person may 
receive a copy of the registration list by paying a fee of $5.  
The county recorder must mail a proposed registration list for 
the year beginning September 1 by August 20 to persons making a 
request after August 1. 
    Sec. 11.  [APPROPRIATION.] 
    There is appropriated from the general fund in the state 
treasury to the commissioner of agriculture $150,000 for each of 
the fiscal years ending June 30, 1986 and June 30, 1987, to be 
used for the purposes of sections 1 to 10. 
    Sec. 12.  [REPEALER.] 
    Minnesota Statutes 1984, section 386.43, is repealed. 
    Sec. 13.  [EFFECTIVE DATE.] 
    This act is effective July 1, 1985. 
    Approved May 24, 1985