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

                            CHAPTER 105-S.F.No. 451 
                  An act relating to agriculture; regulating security 
                  interests in agricultural crops; modifying the 
                  treatment of certain collateral; amending Minnesota 
                  Statutes 1998, sections 336.9-203; 336.9-401; and 
                  336.9-402. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  Minnesota Statutes 1998, section 336.9-203, is 
        amended to read: 
           336.9-203 [ATTACHMENT AND ENFORCEABILITY OF SECURITY 
        INTEREST; PROCEEDS; FORMAL REQUISITES.] 
           (1) Subject to the provisions of section 336.4-210 on the 
        security interest of a collecting bank, sections 336.9-115 and 
        336.9-116 on security interests in investment property and 
        section 336.9-113 on a security interest arising under the 
        article on sales, a security interest is not enforceable against 
        the debtor or third parties with respect to the collateral and 
        does not attach unless: 
           (a) the collateral is in the possession of the secured 
        party pursuant to agreement, the collateral is investment 
        property and the secured party has control pursuant to 
        agreement, or the debtor has signed a security agreement which 
        contains a description of the collateral and, in addition, when 
        the security interest covers crops growing or to be grown or 
        timber to be cut, a description of the land concerned; 
           (b) value has been given; and 
           (c) the debtor has rights in the collateral. 
           (2) A security interest attaches when it becomes 
        enforceable against the debtor with respect to the collateral.  
        Attachment occurs as soon as all of the events specified in 
        subsection (1) have taken place unless explicit agreement 
        postpones the time of attaching. 
           (3) Unless otherwise agreed a security agreement gives the 
        secured party the rights to proceeds provided by section 
        336.9-306. 
           (4) A transaction, although subject to this article, is 
        also subject to Minnesota Statutes, Sections 48.153 to 48.157; 
        Chapters 52, 53, and 56; and Sections 168.66 to 168.77, 222.13 
        to 222.16, and 334.01 to 334.06, and in the case of conflict 
        between the provisions of this article and any such statute, the 
        provisions of such statute control.  Failure to comply with any 
        applicable statute has only the effect which is specified 
        therein. 
           Sec. 2.  Minnesota Statutes 1998, section 336.9-401, is 
        amended to read: 
           336.9-401 [PLACE OF FILING; ERRONEOUS FILING; REMOVAL OF 
        COLLATERAL.] 
           (1) The proper place to file in order to perfect a security 
        interest is as follows: 
           (a) When the collateral is consumer goods, or motor 
        vehicles which are not covered by a certificate of title, then 
        in the office of the county recorder in the county of the 
        debtor's residence if the debtor is an individual who is a 
        resident of this state but if the debtor is an individual who is 
        not a resident of this state or is a corporation, partnership or 
        other organization then in the office of the secretary of state; 
           (b) When the collateral is equipment to be used in farming 
        operations, or farm products, or accounts or general intangibles 
        arising from or relating to the sale of farm products by a 
        farmer, or crops growing or to be grown, then in the office of 
        the county recorder in the county of the debtor's residence if 
        the debtor is an individual or organization with residence in 
        this state, but if the debtor is not a resident of this state, 
        then in the office of the secretary of state; security interests 
        covering crops growing or to be grown that are to be filed with 
        the county recorder under this paragraph must be filed in the 
        Uniform Commercial Code division of the recorder's office; 
           (c) When the collateral is timber to be cut or is 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, 
        then in the office where a mortgage on the real estate would be 
        filed or recorded; 
           (d) In all other cases, in the office of the secretary of 
        state. 
           (2) A filing which is made in good faith in an improper 
        place or not in all of the places required by this section is 
        nevertheless effective with regard to any collateral as to which 
        the filing complied with the requirements of this article and is 
        also effective with regard to collateral covered by the 
        financing statement against any person who has knowledge of the 
        contents of such financing statement. 
           (3) A filing which is made in the proper place in this 
        state continues effective even though the debtor's residence in 
        this state or the use of the collateral, whichever controlled 
        the original filing, is thereafter changed. 
           (4) The rules stated in section 336.9-103 determine whether 
        filing is necessary in this state. 
           (5) Notwithstanding the preceding subsections, the proper 
        place to file in order to perfect a security interest in 
        collateral, including fixtures, of a transmitting utility is the 
        office of the secretary of state.  Such a filing shall not be 
        deemed a separate filing from the filings required by other 
        laws, if applicable, set forth in subsection (3) of section 
        336.9-302.  This filing constitutes a fixture filing (section 
        336.9-313) as to the collateral described therein which is or is 
        to become fixtures. 
           (6) For the purposes of this section, the residence of an 
        organization is its place of business if it has one or its chief 
        executive office if it has more than one place of business. 
           (7) "Motor vehicle" means any device propelled or drawn by 
        any power other than muscular power in, upon, or by which any 
        person or property is or may be transported or drawn upon a 
        highway, excepting building and road construction equipment and 
        vehicles that are inventory of licensed dealers.  
           Sec. 3.  Minnesota Statutes 1998, 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, gives the social security 
        number of the debtor or, in the case of a debtor doing business 
        other than as an individual, the internal revenue service 
        taxpayer identification number 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 that 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 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 
           .............................. 
           Debtor's Social Security Number or I.R.S. Tax I.D. Number 
           ............................... 
           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. 3.  (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, and gives the social security number of 
        the debtor or, in the case of a debtor doing business other than 
        as an individual, the internal revenue service taxpayer 
        identification number of the debtor.  Where the debtor so 
        changes a personal 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.  The 
        omission or any inaccuracy in stating the debtor's social 
        security or federal tax identification number is not, standing 
        alone, a seriously misleading error. 
           Sec. 4.  [EFFECTIVE DATE; APPLICABILITY.] 
           Sections 1 to 3 are effective August 1, 1999.  Section 2 
        applies to security agreements signed on or after August 1, 
        1999.  Section 3 applies to original financing statements filed 
        on or after August 1, 1999. 
           Presented to the governor April 23, 1999 
           Signed by the governor April 27, 1999, 11:23 a.m.

Official Publication of the State of Minnesota
Revisor of Statutes