Minnesota Legislature
Office of the Revisor of Statutes
Minnesota Session Laws - 2001, Regular Session
Key: (1) language to be deleted (2) new language
CHAPTER 195-S.F.No. 1561
An act relating to commerce; revised Article 9 of the
Uniform Commercial Code; making corrective and
conforming amendments; appropriating money; amending
Minnesota Statutes 2000, sections 27.138, subdivisions
2 and 3; 86B.820, subdivisions 10 and 11; 86B.880,
subdivision 2; 168A.01, subdivisions 18 and 19;
168A.05, subdivision 8; 168A.17, subdivision 2;
169A.63, subdivisions 7 and 11; 268.058, subdivision
1; 270.69, subdivisions 2, 9, and 13; 270.7001,
subdivision 4; 272.483; 272.484; 272.488, subdivision
3; 277.20, subdivision 8; 300.112, subdivision 1;
325L.16; 336.2-210; 336.9-102; 336.9-201; 336.9-203;
336.9-311; 336.9-317; 336.9-334; 336.9-407; 336.9-509;
336.9-521; 336.9-601; 336.9-607; 336.9-617; 336.9-619;
336A.01, subdivision 4; 507.24, subdivision 2; 514.18,
subdivision 2; 514.221, subdivisions 2 and 3; 514.661,
subdivisions 3, 4, 5, and 6; 514.945, subdivisions 2,
4, and 6; 515B.3-116; 515B.3-117; 550.13; 557.12,
subdivision 5; 583.26, subdivisions 1 and 2; and
583.284; Laws 1986, chapter 398, article 1, section
18, as amended; proposing coding for new law in
Minnesota Statutes, chapters 336; 507; 508; and 508A;
repealing Minnesota Statutes 2000, sections 168A.17,
subdivision 3; 336.11-101; 336.11-102; 336.11-103;
336.11-104; 336.11-105; 336.11-106; 336.11-107; and
336.11-108; Minnesota Rules, parts 8260.0600;
8260.0700; 8260.0800; 8260.0900; 8260.1000; 8260.1100;
8270.0010; 8270.0050; 8270.0100; 8270.0105; 8270.0110;
8270.0115; 8270.0200; 8270.0205; 8270.0210; 8270.0215;
8270.0220; 8270.0225; 8270.0230; 8270.0235; 8270.0240;
8270.0245; 8270.0255; 8270.0260; 8270.0265; and
8270.0270.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
ARTICLE 1
CORRECTIVE AMENDMENTS
Section 1. Minnesota Statutes 2000, section 86B.880,
subdivision 2, is amended to read:
Subd. 2. [PERFECTION.] A security interest is perfected by
the delivery to the commissioner of the existing certificate of
title, if any, or an application for a certificate of title,
containing the name and address of the secured party, the date
of the security agreement, and the required fee. It is
perfected as of the time of its creation if the delivery is
completed within the following ten days. In other instances
it A security interest is perfected as of the time of the
delivery. The method provided in this chapter is exclusive.
Sec. 2. Minnesota Statutes 2000, section 168A.17,
subdivision 2, is amended to read:
Subd. 2. [PERFECTION.] A security interest is perfected by
the delivery to the department of the existing certificate of
title, if any, an application for a certificate of title
containing the name and address of the secured party, the date
of the secured party's security agreement and the required fee.
It A security interest is perfected as of the time of its
creation if the delivery is completed within ten days
thereafter; otherwise as of the time of the delivery.
Sec. 3. [336.1-110] [UNIFORM COMMERCIAL CODE ACCOUNT.]
The uniform commercial code account is established as an
account in the state treasury. Fees that are not expressly set
by statute but are charged by the secretary of state to offset
the costs of providing a service under this chapter must be
deposited in the state treasury and credited to the uniform
commercial code account.
Fees that are not expressly set by statute but are charged
by the secretary of state to offset the costs of providing
information contained in the computerized records maintained by
the secretary of state must be deposited in the state treasury
and credited to the uniform commercial code account.
Money in the uniform commercial code account is
continuously appropriated to the secretary of state to implement
and maintain the central filing system under this chapter and to
provide electronic access to other computerized records
maintained by the secretary of state.
Sec. 4. Minnesota Statutes 2000, section 336.2-210, is
amended to read:
336.2-210 [DELEGATION OF PERFORMANCE; ASSIGNMENT OF
RIGHTS.]
(1) A party may perform a duty through a delegate unless
otherwise agreed or unless the other party has a substantial
interest in having the original promisor perform or control the
acts required by the contract. No delegation of performance
relieves the party delegating of any duty to perform or any
liability for breach.
(2) Except as otherwise provided in section 336.9-406,
unless otherwise agreed all rights of either seller or buyer can
be assigned except where the assignment would materially change
the duty of the other party, or increase materially the burden
or risk imposed on the other party by the contract, or impair
materially the other party's chance of obtaining return
performance. A right to damages for breach of the whole
contract or a right arising out of the assignor's due
performance of the assignor's entire obligation can be assigned
despite agreement otherwise.
(3) The creation, attachment, perfection, or enforcement of
a security interest in the seller's interest under a contract is
not a transfer that materially changes the duty of or increases
materially the burden or risk imposed on the buyer or impairs
materially the buyer's chance of obtaining return performance
within the purview of subsection (2) unless, and then only to
the extent that, enforcement actually results in a delegation of
material performance of the seller. Even in that event, the
creation, attachment, perfection, and enforcement of the
security interest remain effective, but (i) the seller is liable
to the buyer for damages caused by the delegation to the extent
that the damages could not reasonably be prevented by the buyer,
and (ii) a court having jurisdiction may grant other appropriate
relief, including cancellation of the contract for sale or an
injunction against enforcement of the security interest or
consummation of the enforcement.
(4) Unless the circumstances indicate the contrary a
prohibition of assignment of "the contract" is to be construed
as barring only the delegation to the assignee of the assignor's
performance.
(5) An assignment of "the contract" or of "all my rights
under the contract" or an assignment in similar general terms is
an assignment of rights and unless the language or the
circumstances (as in an assignment for security) indicate the
contrary, it is a delegation of performance of the duties of the
assignor and its acceptance by the assignee constitutes a
promise by the assignee to perform those duties. This promise
is enforceable by either the assignor or the other party to the
original contract.
(6) The other party may treat any assignment which
delegates performance as creating reasonable grounds for
insecurity and may without prejudice to the rights of the other
party against the assignor demand assurances from the assignee
(section 336.2-609).
Sec. 5. Minnesota Statutes 2000, 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 for", 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 includes
health-care-insurance receivables. The term does not include (i)
rights to payment evidenced by chattel paper or an instrument,
(ii) commercial tort claims, (iii) deposit accounts, (iv)
investment property, (v) letter of credit rights or letters of
credit, or (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 card.
(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 the instrument constitutes part of chattel paper.
(4) "Accounting", except as used in "accounting for", means
a record:
(A) authenticated 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
(C) identifying the components of the obligations in
reasonable detail.
(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
(C) whose effectiveness does not depend on the person's
possession of the personal property.
(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) "Authenticate" means:
(A) to sign; or
(B) to execute or otherwise adopt a symbol, or encrypt or
similarly process a record in whole or in part, with the present
intent of the authenticating person to identify the person and
adopt or accept a record.
(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.
(11) "Chattel paper" means 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.
(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
(C) goods that are the subject of a consignment.
(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;
(C) the goods are not consumer goods immediately before
delivery; and
(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.
(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
(C) a consignee.
(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(2).
(31) "Electronic chattel paper" means chattel paper
evidenced by a record or records consisting of information
stored in an electronic medium.
(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;
(C) supplies used or produced in a farming operation; or
(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 includes payment intangibles and software.
(43) "Good faith" means honesty in fact and the observance
of reasonable commercial standards of fair dealing.
(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, or (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 card.
(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;
(C) are furnished by a person under a contract of service;
or
(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 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;
(C) a trustee in bankruptcy from the date of the filing of
the petition; or
(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.
(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.
(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;
(C) an ancestor or lineal descendant of the individual or
the individual's spouse; or
(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;
(C) rights arising out 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 authenticated 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) "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.
(69) "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.
(70) "Registered organization" means an organization
organized solely under the law of a single state or the United
States and as to which the state or the United States must
maintain a public record showing the organization to have been
organized.
(71) "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.
(72) "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;
(C) a consignor;
(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.
(73) "Security agreement" means an agreement that creates
or provides for a security interest.
(74) "Send", in connection with a record or notification,
means:
(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
(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).
(75) "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.
(76) "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.
(77) "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.
(78) "Tangible chattel paper" means chattel paper evidenced
by a record or records consisting of information that is
inscribed on a tangible medium.
(79) "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.
(80) "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;
(C) transmitting goods by pipeline or sewer; or
(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 300.111 to 300.115 is a
transmitting utility for purposes of this article.
(b) [DEFINITIONS IN OTHER ARTICLES.] The following
definitions in other articles apply to this article:
"Applicant" Section 336.5-102
"Beneficiary" Section 336.5-102
"Broker" Section 336.8-102
"Certificated security" Section 336.8-102
"Check" Section 336.3-104
"Clearing corporation" Section 336.8-102
"Contract for sale" Section 336.2-106
"Customer" Section 336.4-104
"Entitlement holder" Section 336.8-102
"Financial asset" Section 336.8-102
"Holder in due course" Section 336.3-302
"Issuer" (with respect to a
letter of credit or
letter of credit right) Section 336.5-102
"Issuer" (with respect to
a security) Section 336.8-201
"Lease" Section 336.2A-103
"Lease agreement" Section 336.2A-103
"Lease contract" Section 336.2A-103
"Leasehold interest" Section 336.2A-103
"Lessee" Section 336.2A-103
"Lessee in ordinary course
of business" Section 336.2A-103
"Lessor" Section 336.2A-103
"Lessor's residual interest" Section 336.2A-103
"Letter of credit" Section 336.5-102
"Merchant" Section 336.2-104
"Negotiable instrument" Section 336.3-104
"Nominated person" Section 336.5-102
"Note" Section 336.3-104
"Proceeds of a letter of
credit" Section 336.5-114
"Prove" Section 336.3-103
"Sale" Section 336.2-106
"Securities account" Section 336.8-501
"Securities intermediary" Section 336.8-102
"Security" Section 336.8-102
"Security certificate" Section 336.8-102
"Security entitlement" Section 336.8-102
"Uncertificated security" Section 336.8-102
(c) [ARTICLE 1 DEFINITIONS AND PRINCIPLES.] Article 1
contains general definitions and principles of construction and
interpretation applicable throughout this article.
Sec. 6. Minnesota Statutes 2000, section 336.9-201, is
amended to read:
336.9-201 [GENERAL EFFECTIVENESS OF SECURITY AGREEMENT.]
(a) [GENERAL EFFECTIVENESS.] Except as otherwise provided
in the Uniform Commercial Code, a security agreement is
effective according to its terms between the parties, against
purchasers of the collateral, and against creditors.
(b) [APPLICABLE CONSUMER LAWS AND OTHER LAW.] A
transaction subject to this article is subject to any applicable
rule of law which establishes a different rule for consumers and
(i) any other statute or regulation that regulates the rates,
charges, agreements, and practices for loans, credit sales, or
other extensions of credit and including but not limited to
sections 48.153 to 48.157; 168.66 to 168.77; 222.13 to 222.16;
334.01 to 334.06; and chapters 52, 53, and 56, (ii) any consumer
protection statute or rule, and (iii) the Manufactured Home
Repossession Security Act, sections 327.61 to 327.67.
(c) [OTHER APPLICABLE LAW CONTROLS.] In case of conflict
between this article and a rule of law, statute, or regulation
described in subsection (b), the rule of law, statute, or
regulation controls. Failure to comply with a statute or
regulation described in subsection (b) has only the effect the
statute or regulation specifies.
(d) [FURTHER DEFERENCE TO OTHER APPLICABLE LAW.] This
article does not:
(1) validate any rate, charge, agreement, or practice that
violates a rule of law, statute, or regulation described in
subsection (b); or
(2) extend the application of the rule of law, statute, or
regulation to a transaction not otherwise subject to it.
Sec. 7. Minnesota Statutes 2000, 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 authenticated 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; or
(D) the collateral is deposit accounts, electronic chattel
paper, investment property, or letter of credit rights, and the
secured party has control under section 336.9-104, 336.9-105,
336.9-106, or 336.9-107 pursuant to the debtor's security
agreement.
(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 2000, section 336.9-311, is
amended to read:
336.9-311 [PERFECTION OF SECURITY INTERESTS IN PROPERTY
SUBJECT TO CERTAIN STATUTES, REGULATIONS, AND TREATIES.]
(a) [SECURITY INTEREST SUBJECT TO OTHER LAW.] Except as
otherwise provided in subsection (d), the filing of a financing
statement is not necessary or effective to perfect a security
interest in property subject to:
(1) a statute, regulation, or treaty of the United States
whose requirements for a security interest's obtaining priority
over the rights of a lien creditor with respect to the property
preempt section 336.9-310(a);
(2) sections 86B.820 to 86B.920 and 168A.01 to 168A.31; but
during any period which collateral is inventory held for sale by
a person who is in the business of selling goods of that kind,
the filing provisions of this article (part 5) apply to a
security interest in the collateral created by the person as a
debtor; or sections 300.11 to 300.115; or
(3) a certificate-of-title statute of another jurisdiction
which provides for a security interest 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 property.
(b) [COMPLIANCE WITH OTHER LAW.] Compliance with the
requirements of a statute, regulation, or treaty described in
subsection (a) for obtaining priority over the rights of a lien
creditor is equivalent to the filing of a financing statement
under this article. Except as otherwise provided in subsection
(d) and sections 336.9-313 and 336.9-316(d) and (e) for goods
covered by a certificate of title, a security interest in
property subject to a statute, regulation, or treaty described
in subsection (a) may be perfected only by compliance with those
requirements, and a security interest so perfected remains
perfected notwithstanding a change in the use or transfer of
possession of the collateral.
(c) [DURATION AND RENEWAL OF PERFECTION.] Except as
otherwise provided in subsection (d) and section 336.9-316(d)
and (e), duration and renewal of perfection of a security
interest perfected by compliance with the requirements
prescribed by a statute, regulation, or treaty described in
subsection (a) are governed by the statute, regulation, or
treaty. In other respects, the security interest is subject to
this article.
(d) [INAPPLICABILITY TO CERTAIN INVENTORY.] During any
period in which collateral subject to a statute specified in
subsection (a)(2) is inventory held for sale or lease by a
person or leased by that person as lessor and that person is in
the business of selling goods of that kind, this section does
not apply to a security interest in that collateral created by
that person.
Sec. 9. Minnesota Statutes 2000, 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 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 tangible chattel paper, documents, goods, instruments, or a
security certificate 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.] A
licensee of a general intangible or a buyer, other than a
secured party, of accounts, electronic chattel paper, general
intangibles, or investment property other than 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.
Sec. 10. Minnesota Statutes 2000, 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
(C) replacements of domestic appliances that are consumer
goods;
(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 an authenticated
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.
(j) [SUBSECTION (I) PREVAILS.] Subsection (i) prevails
over any inconsistent provisions of the following statutes:
(1) section 557.12; and
(2) section 559.2091.
Sec. 11. Minnesota Statutes 2000, section 336.9-407, is
amended to read:
336.9-407 [RESTRICTIONS ON CREATION OR ENFORCEMENT OF
SECURITY INTEREST IN LEASEHOLD INTEREST OR IN LESSOR'S RESIDUAL
INTEREST.]
(a) [TERM RESTRICTING ASSIGNMENT GENERALLY INEFFECTIVE.]
Except as otherwise provided in subsection (b), a term in a
lease agreement is ineffective to the extent that it:
(1) prohibits, restricts, or requires the consent of a
party to the lease to the assignment or transfer of, or the
creation, attachment, perfection, or enforcement of a security
interest in, an interest of a party under the lease contract or
in the lessor's residual interest in the goods; 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 lease.
(b) [EFFECTIVENESS OF CERTAIN TERMS.] Except as otherwise
provided in section 336.2A-303(7), a term described in
subsection (a)(2) is effective to the extent that there is:
(1) a transfer by the lessee of the lessee's right of
possession or use of the goods in violation of the term; or
(2) a delegation of a material performance of either party
to the lease contract in violation of the term.
(c) [SECURITY INTEREST NOT MATERIAL IMPAIRMENT.] The
creation, attachment, perfection, or enforcement of a security
interest in the lessor's interest under the lease contract or
the lessor's residual interest in the goods is not a transfer
that materially impairs the lessee's prospect of obtaining
return performance or materially changes the duty of or
materially increases the burden or risk imposed on the lessee
within the purview of section 336.2A-303(4) unless, and then
only to the extent that, enforcement actually results in a
delegation of material performance of the lessor. Even in that
event, the creation, attachment, perfection, and enforcement of
the security interest remain effective.
Sec. 12. Minnesota Statutes 2000, 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 an authenticated
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
authenticating 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).
(c) (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.
(d) (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 (c) (d).
Sec. 13. Minnesota Statutes 2000, section 336.9-521, is
amended to read:
336.9-521 [UNIFORM FORM OF WRITTEN FINANCING STATEMENT AND
AMENDMENT.]
(a) [INITIAL FINANCING STATEMENT FORM.] A filing office
that accepts written records may not refuse to accept a written
initial financing statement in the form and format adopted by
the National Conference of Commissioners on Uniform State Laws,
except for a reason set forth in section 336.9-516(b).
(b) [AMENDMENT FORM.] A filing office that accepts written
records may not refuse to accept a written amendment of an
initial financing statement record in the form and format
adopted by the National Conference of Commissioners on Uniform
State Laws, except for a reason set forth in section
336.9-516(b).
Sec. 14. [336.9-5291] [ELECTRONIC ACCESS; LIABILITY;
RETENTION.]
(a) [ELECTRONIC ACCESS.] The secretary of state may allow
private parties to have electronic access to the central filing
system and to other computerized records maintained by the
secretary of state on a fee basis, except that: (1) visual
access to electronic display terminals at the public counters at
the secretary of state's office must be without charge and must
be available during public counter hours; and (2) access by law
enforcement personnel, acting in an official capacity, must be
without charge. If the central filing system allows a form of
electronic access to information regarding the obligations of
debtors, the access must be available 24 hours a day, every day
of the year. Notwithstanding section 13.49, private parties who
have electronic access to computerized records may view the
social security number information about a debtor that is of
record.
Notwithstanding section 13.49, a filing office may include
social security number information in an information request
response under section 336.9-523 or a search of other liens in
the central filing system. A filing office may also include
social security number information on a photocopy or electronic
copy of a record whether provided in an information request
response or in response to a request made under section 13.03.
(b) [LIABILITY.] The secretary of state, county recorders,
and their employees and agents are not liable for any loss or
damages arising from errors in or omissions from information
entered into the central filing system as a result of the
electronic transmission of tax lien notices under sections
268.058, subdivision 1, paragraph (c); 270.69, subdivision 2,
paragraph (b), clause (2); 272.483; and 272.488, subdivisions 1
and 3.
The state, the secretary of state, counties, county
recorders, and their employees and agents are immune from
liability that occurs as a result of errors in or omissions from
information provided from the central filing system.
(c) [RETENTION.] Once the image of a paper record has been
captured by the central filing system, the secretary of state
may remove or direct the removal from the files and destroy the
paper record.
Sec. 15. Minnesota Statutes 2000, 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 336.9-104, 336.9-105, 336.9-106, or
336.9-107 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) 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 $5,000
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
agricultural 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) 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)...
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
AGRICULTURAL 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 AT
ANY COUNTY RECORDER'S OR COUNTY EXTENSION OFFICE.
FROM: ...(Name and Address of Secured Party)..."
Sec. 16. Minnesota Statutes 2000, section 336.9-607, is
amended to read:
336.9-607 [COLLECTION AND ENFORCEMENT BY SECURED PARTY.]
(a) [COLLECTION AND ENFORCEMENT GENERALLY.] (1) If so
agreed, and in any event after default, a secured party:
(1) (A) may notify an account debtor or other person
obligated on collateral to make payment or otherwise render
performance to or for the benefit of the secured party;
(2) (B) may take any proceeds to which the secured party is
entitled under section 336.9-315;
(3) (C) may enforce the obligations of an account debtor or
other person obligated on collateral and exercise the rights of
the debtor with respect to the obligation of the account debtor
or other person obligated on collateral to make payment or
otherwise render performance to the debtor, and with respect to
any property that secures the obligations of the account debtor
or other person obligated on the collateral;
(4) (D) if it holds a security interest in a deposit
account perfected by control under section 336.9-104(a)(1), may
apply the balance of the deposit account to the obligation
secured by the deposit account; and
(5) (E) if it holds a security interest in a deposit
account perfected by control under section 336.9-104(a)(2) or
(3), may instruct the bank to pay the balance of the deposit
account to or for the benefit of the secured party; and.
(2) If a secured party exercises its rights under
subsection (a)(1), the following rules apply:
(6) (A) Except as otherwise provided in subsection (B), if
the obligation of the account debtor or other person obligated
on collateral is secured by an interest in real property and the
account debtor or other person obligated on collateral satisfies
its obligation, the secured party must furnish the account
debtor or the other person obligated on collateral with a
release or satisfaction of the interest in real property
sufficient for recording in the real property records applicable
to that real property.
(B) This subsection applies 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. If the purchaser satisfies its obligations under that
contract, the secured party shall deliver to the purchaser a
deed to the real property in accordance with the terms of the
contract.
(b) [NONJUDICIAL ENFORCEMENT OF MORTGAGE.] (1) In the case
of a mortgage that is not 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, to exercise
under subsection (a)(3)(1)(C) the right of a debtor to enforce a
mortgage nonjudicially, the secured party must record in the
office in which a record of the mortgage is recorded:
(A) an assignment of the mortgage to the secured party; or
(B) the secured party's sworn affidavit of assignment in
recordable form stating:
(i) a default has occurred under a security agreement that
creates or provides for a security interest in the obligation
secured by the mortgage;
(ii) a true and correct copy of the security agreement is
attached to the affidavit;
(iii) the secured party is entitled to enforce the mortgage
nonjudicially;
(iv) the legal description of the real property encumbered
by the mortgage;
(v) the parties to the mortgage, the date of the mortgage,
the date of recording of the mortgage, the place of recording of
the mortgage, and the identifying number or other indexing
information that identifies the mortgage in the office of the
county recorder or registrar of titles where the mortgage is
recorded;
(vi) the secured party has succeeded to the interest of the
debtor under the mortgage; and
(vii) the affidavit of assignment shall be an assignment to
the secured party of the interest of the debtor under the
mortgage.
(2) The affidavit of assignment is entitled to be recorded
with the county recorder or the registrar of titles and upon
recording, the affidavit of assignment shall be deemed an
assignment to the secured party of the interest of the debtor
under the mortgage.
(3) This subsection applies 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. To exercise under subsection (a)(1)(C) the right of a
debtor to terminate the contract nonjudicially, the secured
party shall record a transfer statement, as provided in section
336.9-619, with the county recorder or the registrar of titles
in the county where the real property is located. The
transferee is entitled to have the statement recorded with the
county recorder or the registrar of titles. When recorded, the
transfer statement is a conveyance of the interest of the debtor
under the contract.
(c) [COMMERCIALLY REASONABLE COLLECTION AND ENFORCEMENT.]
A secured party shall proceed in a commercially reasonable
manner if the secured party:
(1) undertakes to collect from or enforce an obligation of
an account debtor or other person obligated on collateral; and
(2) is entitled to charge back uncollected collateral or
otherwise to full or limited recourse against the debtor or a
secondary obligor.
(d) [EXPENSES OF COLLECTION AND ENFORCEMENT.] A secured
party may deduct from the collections made pursuant to
subsection (c) reasonable expenses of collection and
enforcement, including reasonable attorneys fees and legal
expenses incurred by the secured party.
(e) [DUTIES TO SECURED PARTY NOT AFFECTED.] This section
does not determine whether an account debtor, bank, or other
person obligated on collateral owes a duty to a secured party.
(f) [SECURED PARTY TO OBTAIN ASSIGNMENT OF DEBTOR'S
INTEREST UNDER THE MORTGAGE.] (1) This subsection applies if the
obligation of an account debtor or other person obligated on
collateral is secured by an interest in real property, the
secured party promptly after commencing exercise of any of its
rights.
(2) If the interest is under an executory contract for the
sale of real property or of an interest in real property that
entitles the account debtor to possession of the real property,
then promptly after beginning to exercise a right under this
section, the secured party shall record a transfer statement as
provided in section 336.9-619. The statement must be recorded
with the county recorder or registrar of titles in the county
where the real property is located.
(3) If the interest is not under a record described in
paragraph (2), then promptly after beginning to exercise a right
under this section, the secured party shall:
(1) (A) file an assignment of the mortgage to the secured
party;
(2) (B) proceed under section 336.9-619 and record a
transfer statement in the office of, as provided in section
336.9-619, with the county recorder or registrar of titles where
the mortgage is recorded in the county where the real property
is located; or
(3) (C) file an affidavit of assignment as provided under
subsection (b).
Sec. 17. Minnesota Statutes 2000, section 336.9-617, is
amended to read:
336.9-617 [RIGHTS OF TRANSFEREE OF COLLATERAL.]
(a) [EFFECTS OF DISPOSITION.] A secured party's
disposition of collateral after default:
(1) transfers to a transferee for value all of the debtor's
rights in the collateral;
(2) discharges the security interest under which the
disposition is made; and
(3) discharges any subordinate security interest or other
subordinate lien other than liens created under (cite acts or
statutes providing for liens, if any, that are not to be
discharged).
(b) [RIGHTS OF GOOD FAITH TRANSFEREE.] A transferee that
acts in good faith takes free of the rights and interests
described in subsection (a), even if the secured party fails to
comply with this article or the requirements of any judicial
proceeding.
(c) [RIGHTS OF OTHER TRANSFEREE.] If a transferee does not
take free of the rights and interests described in subsection
(a), the transferee takes the collateral subject to:
(1) the debtor's rights in the collateral;
(2) the security interest or agricultural lien under which
the disposition is made; and
(3) any other security interest or other lien.
Sec. 18. Minnesota Statutes 2000, 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 authenticated 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;
(C) that, by reason of the exercise, a transferee has
acquired the rights of the debtor in 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; and
(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. 19. [507.236] [TRANSFER STATEMENT FOR CONTRACT FOR
DEED.]
Subdivision 1. [DEFINITION.] In this section, "transfer
statement for a contract for deed" means a document that:
(1) is a transfer statement made in compliance with section
336.9-619(a); and
(2) transfers a seller's interest in an executory contract
for the sale of real estate or of an interest in real estate
that entitles the purchaser to possession of the real estate.
Subd. 2. [RECORDING OF STATEMENT.] A transferee under a
transfer statement for a contract for deed is entitled to have
the statement recorded as provided in section 336.9-619(b).
Recording must be with the county recorder or registrar of
titles in the county where the affected real estate is located.
Subd. 3. [EFFECTS OF RECORDING.] Subject to compliance
with any applicable provisions of section 508.491 or 508A.491,
recording a transfer statement for a contract for deed has the
following effects:
(1) it transfers from the contract seller named as debtor
in the statement to the transferee all title and interest of the
contract seller in the real estate described in the statement;
(2) it has the same effect as an assignment and a deed from
the contract seller to the transferee; and
(3) it is a conveyance within the meaning of section 507.34.
Sec. 20. Minnesota Statutes 2000, section 507.24,
subdivision 2, is amended to read:
Subd. 2. [ORIGINAL SIGNATURES REQUIRED.] Unless otherwise
provided by law, an instrument affecting real estate that is to
be recorded as provided in this section or other applicable law
must contain the original signatures of the parties who execute
it and of the notary public or other officer taking an
acknowledgment. However, a financing statement that is recorded
as a filing pursuant to section 336.9-502(b) need not contain:
(1) the signatures of the debtor or the secured party; or (2) an
acknowledgment.
Sec. 21. [508.491] [TRANSFER STATEMENT FOR CONTRACT FOR
DEED.]
Subdivision 1. [DEFINITION.] In this section, "transfer
statement for a contract for deed" means a document that:
(1) is a transfer statement made in compliance with section
336.9-619(a); and
(2) transfers a seller's interest in an executory contract
for the sale of land or of an interest in land that entitles the
purchaser to possession of the land.
Subd. 2. [REGISTRATION OF STATEMENT.] A transferee under a
transfer statement for a contract for deed is entitled to have
the statement recorded as provided in section 336.9-619(b). The
registrar shall enter a memorial of the statement on the
certificate of title for the land in which the debtor has a
registered interest.
Subd. 3. [NEW CERTIFICATE OF TITLE.] If a transferee under
a transfer statement for a contract for deed has become the
owner in fee of the land, or any part of it, the transferee may
have the title registered. To do so, the transferee must
petition the court for a new certificate of title to the land.
On receiving the petition, the court shall notify the parties in
interest and order a new certificate issued to the petitioner.
The registrar shall issue a new certificate of title to the
land, or the part of the land, the petitioner owns, as in the
case of a voluntary conveyance.
Subd. 4. [FINANCING STATEMENTS.] A financing statement
that is filed pursuant to section 336.9-502(b) need not
contain: (1) the signatures of the debtor or the secured party;
or (2) an acknowledgment, and must be filed with the registrar,
and shown as a memorial on the certificate of title.
Sec. 22. [508A.491] [TRANSFER STATEMENT FOR CONTRACT FOR
DEED.]
Subdivision 1. [DEFINITION.] In this section, "transfer
statement for a contract for deed" means a document that:
(1) is a transfer statement made in compliance with section
336.9-619(a); and
(2) transfers a seller's interest in an executory contract
for the sale of land or of an interest in land that entitles the
purchaser to possession of the land.
Subd. 2. [REGISTRATION OF STATEMENT.] A transferee under a
transfer statement for a contract for deed is entitled to have
the statement recorded as provided in section 336.9-619(b). The
registrar shall enter a memorial of the statement on the
certificate of title for the land in which the debtor has a
registered interest.
Subd. 3. [NEW CERTIFICATE OF TITLE.] If a transferee under
a transfer statement for a contract for deed has become the
owner in fee of the land, or any part of it, the transferee may
have the title registered. To do so, the transferee must
petition the court for a new certificate of title to the land.
On receiving the petition, the court shall notify the parties in
interest and order a new certificate issued to the petitioner.
The registrar shall issue a new certificate of title to the
land, or the part of the land, the petitioner owns, as in the
case of a voluntary conveyance.
Subd. 4. [FINANCING STATEMENTS.] A financing statement
that is filed pursuant to section 336.9-502(b) need not
contain: (1) the signatures of the debtor or the secured party;
or (2) an acknowledgment, and must be filed with the registrar,
and shown as a memorial on the certificate of title.
Sec. 23. Laws 1986, chapter 398, article 1, section 18, as
amended by Laws 1987, chapter 292, section 37; Laws 1989,
chapter 350, article 16, section 8; Laws 1990, chapter 525,
section 1; Laws 1991, chapter 208, section 2; Laws 1993, First
Special Session chapter 2, article 6, section 2; Laws 1995,
chapter 212, article 2, section 11; Laws 1997, chapter 183,
article 3, section 29; Laws 1998, chapter 395, section 7; Laws
1998, chapter 402, section 6; and Laws 1999, chapter 214,
article 2, section 19, is amended to read:
Sec. 18. [REPEALER.]
Sections 1 to 17 and Minnesota Statutes, section 336.9-501,
subsections (6) and (7) 336.9-601, subsections (h) and (i), and
sections 583.284, 583.285, 583.286, and 583.305, are repealed on
July 1, 2001.
Sec. 24. [USER MANUAL FOR DIRECT ACCESS SUBSCRIBERS.]
The secretary of state shall prepare a user manual for
persons who are direct access subscribers to the central filing
system. The user manual must provide information on revised
Article 9 of the Uniform Commercial Code, including information
on effective searching, filing, and practices under revised
Article 9. Copies of the user manual must be available to the
public by August 1, 2001.
Sec. 25. [REPEALER.]
(a) Minnesota Statutes 2000, section 168A.17, subdivision
3, is repealed.
(b) Minnesota Rules, parts 8260.0600; 8260.0700; 8260.0800;
8260.0900; 8260.1000; 8260.1100; 8270.0010; 8270.0050;
8270.0100; 8270.0105; 8270.0110; 8270.0115; 8270.0200;
8270.0205; 8270.0210; 8270.0215; 8270.0220; 8270.0225;
8270.0230; 8270.0235; 8270.0240; 8270.0245; 8270.0255;
8270.0260; 8270.0265; and 8270.0270, are repealed.
ARTICLE 2
CONFORMING AMENDMENTS TO MINNESOTA STATUTES
Section 1. Minnesota Statutes 2000, section 27.138,
subdivision 2, is amended to read:
Subd. 2. [SELLERS' RIGHTS TO TRUST ASSETS.] (a) An unpaid
seller may recover trust assets for the net amount unpaid after
the due date after allowing deductions of contemplated expenses
or advances made in connection with the transaction. An amount
is considered unpaid if a seller receives a payment instrument
that is dishonored.
(b) An unpaid seller may recover trust assets after filing
a beneficiaries notice with the wholesale produce dealer to whom
the produce was transferred, and the commissioner, and the
appropriate filing office after filing in the central filing
system under section 336.9-401 336.9-501 as if the trust were a
security interest in the trust assets by 40 days after the due
date for the payment to the seller or 40 days after a payment
instrument to the seller for the produce is dishonored,
whichever is later.
Sec. 2. Minnesota Statutes 2000, section 27.138,
subdivision 3, is amended to read:
Subd. 3. [BENEFICIARIES NOTICE.] (a) A beneficiaries
notice must be in writing and in a form prescribed by the
commissioner after consultation with the secretary of state.
(b) The beneficiaries notice must contain:
(1) the name and address of the seller;
(2) the name and address of the wholesale produce dealer
maintaining the trust assets;
(3) the produce, amount of produce, amount to be paid the
seller, and the due date of transactions that are unpaid or, if
appropriate, the date a payment instrument was dishonored; and
(4) a description of the trust assets.
(c) The filing officer shall enter on the beneficiaries
notice initial financing statement filed pursuant to this
section the time of day and date of filing. The filing officer
shall accept filings, amendments, and terminations of a
beneficiaries notice an initial financing statement filed
pursuant to this section and charge the same filing fees as
provided in section 336.9-403 for a financing statement
336.9-525. A beneficiaries notice An initial financing
statement filed pursuant to this section is void and may be
removed from the filing system 18 months after the date of
filing. The beneficiaries notice may be physically destroyed 30
months after the date of filing.
Sec. 3. Minnesota Statutes 2000, section 86B.820,
subdivision 10, is amended to read:
Subd. 10. [SECURED PARTY.] "Secured party" means a secured
party as defined in section 336.9-105, subsection
(1)(m) 336.9-102(a)(72), having a security interest in a
watercraft and includes a lienholder.
Sec. 4. Minnesota Statutes 2000, section 86B.820,
subdivision 11, is amended to read:
Subd. 11. [SECURITY AGREEMENT.] "Security agreement" has
the meaning given it in section 336.9-105, subsection
(1)(l) 336.9-102(a)(73).
Sec. 5. Minnesota Statutes 2000, section 168A.01,
subdivision 18, is amended to read:
Subd. 18. [SECURED PARTY.] "Secured party" means a secured
party as defined in section 336.9-105 (1)(m) 336.9-102(a)(72)
having a security interest in a vehicle.
Sec. 6. Minnesota Statutes 2000, section 168A.01,
subdivision 19, is amended to read:
Subd. 19. [SECURITY AGREEMENT.] "Security agreement" means
a security agreement as defined in section 336.9-105 (1)
(l) 336.9-102(a)(73).
Sec. 7. Minnesota Statutes 2000, section 168A.05,
subdivision 8, is amended to read:
Subd. 8. [LIENS FILED FOR ENFORCEMENT OF CHILD SUPPORT.]
This subdivision applies if the court or a public authority
responsible for child support enforcement orders or directs the
commissioner to enter a lien, as provided in section 518.551,
subdivision 14. If a certificate of title is applied for by the
owner, the department shall enter a lien on the title in the
name of the state of Minnesota or in the name of the obligee in
accordance with the notice if the value of the motor vehicle
determined in accordance with either the definitions of section
297B.01, subdivision 8, or the retail value described in the
N.A.D.A. Official Used Car Guide, Midwest Edition, for the
current year exceeds the exemption allowed in section 550.37.
The lien on the title is subordinate to any bona fide purchase
money security interest as defined in under section 336.9-107
336.9-103 regardless of when the purchase money security
interest is perfected. With respect to all other security
interests, the lien is perfected as of the date entered on the
title.
Sec. 8. Minnesota Statutes 2000, section 169A.63,
subdivision 7, is amended to read:
Subd. 7. [LIMITATIONS ON VEHICLE FORFEITURE.] (a) A
vehicle is subject to forfeiture under this section only if:
(1) the driver is convicted of the designated offense upon
which the forfeiture is based;
(2) the driver fails to appear with respect to the
designated offense charge in violation of section 609.49
(release; failure to appear); or
(3) the driver's conduct results in a designated license
revocation and the driver either fails to seek administrative or
judicial review of the revocation in a timely manner as required
by section 169A.53 (administrative and judicial review of
license revocation), or the license revocation is sustained
under section 169A.53.
(b) A vehicle encumbered by a bona fide security interest,
or subject to a lease that has a term of 180 days or more, is
subject to the interest of the secured party or lessor unless
the party or lessor had knowledge of or consented to the act
upon which the forfeiture is based. However, when the proceeds
of the sale of a seized vehicle do not equal or exceed the
outstanding loan balance, the appropriate agency shall remit all
proceeds of the sale to the secured party. If the sale of the
vehicle is conducted in a commercially reasonable manner
consistent with the provisions of section 336.9-504, clause
(3) 336.9-610, the agency is not liable to the secured party for
any amount owed on the loan in excess of the sale proceeds if
the secured party received notification of the time and place of
the sale at least three days prior to the sale.
(c) Notwithstanding paragraphs (b) and (d), the secured
party's, lessor's, or owner's interest in a vehicle is not
subject to forfeiture based solely on the secured party's,
lessor's, or owner's knowledge of the act or omission upon which
the forfeiture is based if the secured party, lessor, or owner
took reasonable steps to terminate use of the vehicle by the
offender.
(d) A motor vehicle is subject to forfeiture under this
section only if its owner knew or should have known of the
unlawful use or intended use.
(e) A vehicle subject to a security interest, based upon a
loan or other financing arranged by a financial institution, is
subject to the interest of the financial institution.
Sec. 9. Minnesota Statutes 2000, section 169A.63,
subdivision 11, is amended to read:
Subd. 11. [SALE OF FORFEITED VEHICLE BY SECURED PARTY.]
(a) A financial institution with a valid security interest in or
a valid lease covering a forfeited vehicle may choose to dispose
of the vehicle under this subdivision, in lieu of the
appropriate agency disposing of the vehicle under subdivision
9. A financial institution wishing to dispose of a vehicle
under this subdivision shall notify the appropriate agency of
its intent, in writing, within 30 days after receiving notice of
the seizure and forfeiture. The appropriate agency shall
release the vehicle to the financial institution or its agent
after the financial institution presents proof of its valid
security agreement or of its lease agreement and the financial
institution agrees not to sell the vehicle to a member of the
violator's household, unless the violator is not convicted of
the offense on which the forfeiture is based. The financial
institution shall dispose of the vehicle in a commercially
reasonable manner as defined in section 336.9-504 336.9-610.
(b) After disposing of the forfeited vehicle, the financial
institution shall reimburse the appropriate agency for its
seizure, storage, and forfeiture costs. The financial
institution may then apply the proceeds of the sale to its
storage costs, to its sale expenses, and to satisfy the lien or
the lease on the vehicle. If any proceeds remain, the financial
institution shall forward the proceeds to the state treasury,
which shall credit the appropriate fund as specified in
subdivision 9.
Sec. 10. Minnesota Statutes 2000, section 268.058,
subdivision 1, is amended to read:
Subdivision 1. [LIEN.] (a) Any taxes, unemployment benefit
overpayments, or payments in lieu of taxes due including
interest, penalties, and costs shall become a lien upon all the
property, within this state, both real and personal, of the
person liable, from the date of assessment. The term "date of
assessment" means the date the obligation was due.
(b) The lien is not enforceable against any purchaser,
mortgagee, pledgee, holder of a Uniform Commercial Code security
interest, mechanic's lien, or judgment lien creditor, until a
notice of lien has been filed with the county recorder of the
county where the property is situated, or in the case of
personal property belonging to a nonresident person in the
office of the secretary of state. When the notice of lien is
filed with the county recorder, the fee for filing and indexing
shall be as provided in sections 272.483 and 272.484.
(c) Notices of liens, lien renewals, and lien releases, in
a form prescribed by the commissioner, may be filed with the
county recorder or the secretary of state by mail, personal
delivery, or by electronic transmission into the computerized
filing system of the secretary of state under section 336.9-411.
The secretary of state shall, on any notice filed with that
office, transmit the notice electronically to the appropriate
county recorder. The filing officer, whether the county
recorder or the secretary of state, shall endorse and index a
printout of the notice as if the notice had been mailed or
delivered.
(d) County recorders and the secretary of state shall enter
information on lien notices, renewals, and releases into the
central database of the secretary of state. For notices filed
electronically with the county recorders, the date and time of
receipt of the notice and county recorder's file number, and for
notices filed electronically with the secretary of state, the
secretary of state's recording information, must be entered into
the central database before the close of the working day
following the day of the original data entry by the commissioner.
(e) The lien imposed on personal property, even though
properly filed, is not enforceable against a purchaser of
tangible personal property purchased at retail or personal
property listed as exempt in sections 550.37, 550.38, and 550.39.
(f) A notice of lien filed has priority over any security
interest arising under chapter 336, article 9, that is perfected
prior in time to the lien imposed by this subdivision, but only
if:
(1) the perfected security interest secures property not in
existence at the time the notice of lien is filed; and
(2) the property comes into existence after the 45th
calendar day following the day the notice of lien is filed, or
after the secured party has actual notice or knowledge of the
lien filing, whichever is earlier.
(g) The lien shall be enforceable from the time the lien
arises and for ten years from the date of filing the notice of
lien. A notice of lien may be renewed before expiration for an
additional ten years.
(h) The lien shall be enforceable by levy under subdivision
2 or by judgment lien foreclosure under chapter 550.
(i) The lien may be imposed upon property defined as
homestead property in chapter 510 but may be enforced only upon
the sale, transfer, or conveyance of the homestead property.
(j) The commissioner may sell and assign to a third party
the commissioner's right of redemption in specific real property
for liens filed under this subdivision. The assignee shall be
limited to the same rights of redemption as the commissioner,
except that in a bankruptcy proceeding, the assignee does not
obtain the commissioner's priority. Any proceeds from the sale
of the right of redemption shall be credited to the contingent
account. Any sale shall be by written agreement signed by an
attorney who is a classified employee of the department
designated by the commissioner for that purpose.
Sec. 11. Minnesota Statutes 2000, section 270.69,
subdivision 2, is amended to read:
Subd. 2. [FILING OF LIENS NECESSARY FOR ENFORCEABILITY
AGAINST CERTAIN PERSONS; METHODS OF FILING; FEES.] (a) The lien
imposed by subdivision 1 is not enforceable against any
purchaser, mortgagee, pledgee, holder of a Uniform Commercial
Code security interest, mechanic's lienor, or judgment lien
creditor whose interest has been duly perfected or is entitled
to protection under applicable provisions of state law, until a
notice of lien has been filed by the commissioner of revenue in
the office of the county recorder of the county in which real
property is situated, or in the case of personal property
belonging to an individual who is not a resident of this state
or to a corporation, partnership, or other organization, in the
office of the secretary of state, or in the case of personal
property belonging to a resident individual, in the office of
the county recorder of the county of residence of the individual.
(b)(1) Notices of liens, and lien releases, transcriptions,
and renewals, in a form prescribed by the commissioner of
revenue, may be filed with the county recorder or the secretary
of state by mail, personal delivery, or by electronic
transmission by the commissioner or a delegate into the
computerized filing system of the secretary of state authorized
under section 336.9-411. The secretary of state shall transmit
the notice electronically to the office of the county recorder,
if that is the place of filing, in the county or counties shown
on the computer entry. The filing officer, whether the county
recorder or the secretary of state, shall endorse and index a
printout of the notice in the same manner as if the notice had
been mailed or delivered.
(2) County recorders and the secretary of state shall enter
information relative to lien notices, transcriptions, renewals,
and releases filed in their offices into the central database of
the secretary of state. For notices filed electronically with
the county recorders, the date and time of receipt of the notice
and county recorder's file number, and for notices filed
electronically with the secretary of state, the secretary of
state's recording information, must be entered by the filing
officer into the central database before the close of the
working day following the day of the original data entry by the
department of revenue.
The filing and indexing of all notices must be in
accordance with the filing and indexing of notices of federal
liens, certificates of release, and refiled notices under
section 272.483.
(c) Notwithstanding any other law to the contrary, the
department of revenue is exempt from payment of fees when a
lien, lien renewal, or lien transcription is offered for
recording. The recording fees must be paid along with the
release fee at the end of the month in which the release of lien
is recorded, after receipt of a monthly statement from a county
recorder or the secretary of state. The department of revenue
shall add the recording fees to the delinquent tax liability of
the taxpayer. Notwithstanding any other law to the contrary,
the fee for filing or recording a notice of lien, or lien
release, transcription, or renewal is $15.
(d) There is appropriated to the commissioner of revenue an
amount representing the cost of payment of recording fees to the
county recorders and the secretary of state. The commissioner
shall keep a separate accounting of the costs and of payments
for recording fees remitted by taxpayers, and make the records
available to the legislature upon request.
Sec. 12. Minnesota Statutes 2000, section 270.69,
subdivision 9, is amended to read:
Subd. 9. [LIEN SEARCH FEES.] Upon request of any person,
the filing officer shall issue a certificate showing whether
there is recorded in that filing office, on the date and hour
stated in the certificate, any notice of lien or certificate or
notice affecting any lien filed on or after ten years before the
date of the search certificate, naming a particular person, and
giving the date and hour of filing of each notice or certificate
naming the person. The fee for a certificate shall be as
provided by section 336.9-407 336.9-525 or 357.18, subdivision
1, clause (3). Upon request, the filing officer shall furnish a
copy of any notice of state lien, or notice or certificate
affecting a state lien, for a fee of 50 cents per page.
Sec. 13. Minnesota Statutes 2000, section 270.69,
subdivision 13, is amended to read:
Subd. 13. [FORTY-FIVE DAY RULE.] A notice of tax lien
filed under this section has priority over a security interest
arising under article 9 of the Uniform Commercial Code, codified
as sections 336.9-101 to 336.9-508, that is perfected before the
date of filing of the lien imposed by this section, but only if:
(1) the perfected security interest secures property
acquired by the taxpayer or advances made by the secured party
after the notice of tax lien is filed; and
(2) the property is acquired or the advance is made after
the 45th day following the day on which the notice of tax lien
is filed, or after the secured party has actual notice or
knowledge of the tax lien filing, whichever is earlier.
Sec. 14. Minnesota Statutes 2000, section 270.7001,
subdivision 4, is amended to read:
Subd. 4. [PAYMENTS COVERED.] For purposes of this section,
the term payments does not include wages as defined in section
290.92 or funds in a deposit account as defined in
section 336.9-105 336.9-102(a)(29). The term payments does
include the following:
(1) payments due for services of independent contractors,
dividends, rents, royalties, residuals, patent rights, and
mineral or other natural resource rights;
(2) payments or credits under written or oral contracts for
services or sales whether denominated as wages, salary,
commission, bonus, or otherwise, if the payments are not covered
by section 290.92, subdivision 23; and
(3) any other periodic payments or credits resulting from
an enforceable obligation to the taxpayer, employer, or person.
Sec. 15. Minnesota Statutes 2000, section 272.483, is
amended to read:
272.483 [DUTIES OF FILING OFFICER.]
(a) If a notice of federal lien, a refiling of a notice of
federal lien, or a notice of revocation of any certificate
described in clause (b) is presented to a filing officer who is:
(1) the secretary of state; the secretary shall cause the
notice to be marked and indexed alphabetically and numerically
in the computerized filing system maintained by the secretary of
state under section 336.9-411;
(2) the county recorder; the county recorder shall endorse
identification and the date and time of filing and file and
enter it in an alphabetical index showing the name and address
of the person named in the notice, the date and time of filing,
the file number of the lien, and the total amount appearing on
the notice of lien.
Each county recorder shall enter the date and time of
filing and the file number and shall index the names of the
persons shown on the notice into the computerized database
system maintained by the secretary of state.
For notices of federal tax liens on real property, the
information in the computerized filing and database systems does
not create, release, discharge, or recreate a notice of federal
tax lien on real property in this state.
(b) If a certificate of release, nonattachment, or
subordination of any lien is presented to the secretary of state
for filing, the secretary shall:
(1) enter the information into the computerized filing
system maintained under section 336.9-411;
(2) cause a certificate of release or nonattachment to be
marked and indexed as if the certificate were a termination
statement within the meaning of the Uniform Commercial Code, but
the notice of lien to which the certificate relates may not be
removed from the files until ten years and 30 days after the
filing date of the lien; and
(3) cause a certificate of subordination to be marked and
indexed as if the certificate were a release of collateral
within the meaning of the Uniform Commercial Code.
(c) If a refiled notice of federal lien referred to in
clause (a) or any of the certificates or notices referred to in
clause (b) is presented for filing to any other filing officer
specified in section 272.481, the officer shall enter the
refiled notice or the certificate with the date and time of
filing in any alphabetical lien index where the original notice
of lien is entered and into the computerized database system.
(d) When a filing officer receives a request to search the
records for the name of a particular person, the filing officer
must issue a search certificate showing whether there is any
notice of lien or certificate or notice of lien filed on or
after ten years and 30 days before the date of the search. If a
notice or certificate is on file, the search certificate must
state the file or document number of the notice and the date and
time of filing of each notice or certificate and the date and
time the search certificate was issued. The fee for a
certificate shall be that provided by section 336.9-407
336.9-525 or 357.18, subdivision 1, clause (3).
Sec. 16. Minnesota Statutes 2000, section 272.484, is
amended to read:
272.484 [FEES.]
The fee for filing and indexing each notice of lien or
certificate or notice affecting the lien is:
(1) for a lien, certificate of discharge or subordination,
and for all other notices, including a certificate of release or
nonattachment filed with the secretary of state, the fee
provided by section 336.9-405 336.9-525, except that the filing
fee charged to the district directors of internal revenue for
filing a federal tax lien is $15 for up to two debtor names and
$15 for each additional name;
(2) for a lien, certificate of discharge or subordination,
and for all other notices, including a certificate of release or
nonattachment filed with the county recorder, the fee for filing
a real estate mortgage in the county where filed.
The officer shall bill the district directors of internal
revenue or other appropriate federal officials on a monthly
basis for fees for documents filed by them.
Sec. 17. Minnesota Statutes 2000, section 272.488,
subdivision 3, is amended to read:
Subd. 3. [FILING WITH SECRETARY OF STATE.] (a) Notices of
federal tax liens, certificates, or revocations of certificates
of release of federal tax liens, refiled notices of any of those
items, and any other notices affecting federal tax liens that
are required to be filed with the secretary of state, in a form
prescribed by the Internal Revenue Service, may be filed with
the secretary of state by mail, personal delivery, or electronic
transmission by the Secretary of the Treasury of the United
States or a delegate into the computerized filing system of the
secretary of state authorized under section 336.9-411. The
electronic record must be endorsed and indexed within the
computerized database system as required by section 272.483.
(b) For filings made pursuant to section 272.481, paragraph
(c), clause (1), with the secretary of state, when data entry is
complete as required by subdivision 2, the original document is
contained in the computerized filing system and is the official
copy from which all official copies will be made. Reproductions
of documents described in section 272.483, paragraph (a) or (b),
which are contained in the computerized filing system will be in
the same format as if the document had been filed on paper by
the Internal Revenue Service.
Sec. 18. Minnesota Statutes 2000, section 277.20,
subdivision 8, is amended to read:
Subd. 8. [LIEN SEARCH FEES.] Upon request of a person, the
filing officer shall issue a certificate showing whether there
is on file, on the date and hour stated in the certificate, any
notice of lien or certificate or notice affecting any lien filed
after December 31, 1991, naming a particular person, and giving
the date and hour of filing of each notice or certificate naming
the person. The fee for a certificate is as provided by section
336.9-407 336.9-525 or 357.18, subdivision 1, clause (3). Upon
request, the filing officer shall furnish a copy of any notice
of lien, or notice or certificate affecting a lien, for a fee of
$1 per page.
Sec. 19. Minnesota Statutes 2000, section 300.112,
subdivision 1, is amended to read:
Subdivision 1. [FILING WITH SECRETARY OF STATE.]
Notwithstanding sections 336.9-302, subsections (3) and (4);
336.9-401, subsection (1); 336.9-402; and 336.9-403 336.9-311,
336.9-501, 336.9-502, 336.9-515, and 336.9-519 of the Uniform
Commercial Code, all filings required under the Uniform
Commercial Code in order to perfect a security interest against
the personal property or fixtures of a debtor public utility, or
against the personal property or fixtures of a debtor taconite
company or a debtor semitaconite company, must be made and
maintained in the office of the secretary of state.
Sec. 20. Minnesota Statutes 2000, section 325L.16, is
amended to read:
325L.16 [TRANSFERABLE RECORD.]
(a) In this section, "transferable record" means an
electronic record that:
(1) would be a note under Article 3 of the Uniform
Commercial Code or a document under Article 7 of the Uniform
Commercial Code if the electronic record were in writing; and
(2) the issuer of the electronic record expressly has
agreed is a transferable record.
(b) A person has control of a transferable record if a
system employed for evidencing the transfer of interests in the
transferable record reliably establishes that person as the
person to which the transferable record was issued or
transferred.
(c) A system satisfies paragraph (b), and a person is
deemed to have control of a transferable record, if the
transferable record is created, stored, and assigned in such a
manner that:
(1) a single authoritative copy of the transferable record
exists which is unique, identifiable, and, except as otherwise
provided in clauses (4), (5), and (6), unalterable;
(2) the authoritative copy identifies the person asserting
control as:
(i) the person to which the transferable record was issued;
or
(ii) if the authoritative copy indicates that the
transferable record has been transferred, the person to which
the transferable record 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 revisions that add or change an identified
assignee 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 revision of the authoritative copy is readily
identifiable as authorized or unauthorized.
(d) Except as otherwise agreed, a person having control of
a transferable record is the holder, as defined in section
336.1-201(20) of the Uniform Commercial Code, of the
transferable record and has the same rights and defenses as a
holder of an equivalent record or writing under the Uniform
Commercial Code, including, if the applicable statutory
requirements under section 336.3-302(a), 336.7-501, or 336.9-308
336.9-330 of the Uniform Commercial Code are satisfied, the
rights and defenses of a holder in due course, a holder to which
a negotiable document of title has been duly negotiated, or a
purchaser, respectively. Delivery, possession, and endorsement
are not required to obtain or exercise any of the rights under
this paragraph.
(e) Except as otherwise agreed, an obligor under a
transferable record has the same rights and defenses as an
equivalent obligor under equivalent records or writings under
the Uniform Commercial Code.
(f) If requested by a person against which enforcement is
sought, the person seeking to enforce the transferable record
shall provide reasonable proof that the person is in control of
the transferable record. Proof may include access to the
authoritative copy of the transferable record and related
business records sufficient to review the terms of the
transferable record and to establish the identity of the person
having control of the transferable record.
Sec. 21. Minnesota Statutes 2000, section 336A.01,
subdivision 4, is amended to read:
Subd. 4. [COMPUTERIZED FILING SYSTEM.] "Computerized
filing system" means the system created under section 336.9-411
by the secretary of state with separate programs for filing and
giving notice of effective financing statements and farm
products statutory liens.
Sec. 22. Minnesota Statutes 2000, section 514.18,
subdivision 2, is amended to read:
Subd. 2. [NONPOSSESSORY LIEN; NOTICE.] Notwithstanding the
voluntary surrender or other loss of possession of the property
on which the lien is claimed, the person entitled thereto may
preserve the lien upon giving notice of the lien at any time
within 60 days after the surrender or loss of possession, by
filing in the appropriate filing office under the Uniform
Commercial Code, Minnesota Statutes, section 336.9-401 336.9-501
a verified statement and notice of intention to claim a lien.
The statement shall contain a description of the property upon
which the lien is claimed, the work performed or materials
furnished and the amount due.
Sec. 23. Minnesota Statutes 2000, section 514.221,
subdivision 2, is amended to read:
Subd. 2. [PERFECTION OF LIEN.] A person claiming a lien
created by this section shall, within 90 days after performing
the work or furnishing the materials, file in the appropriate
filing office under the Uniform Commercial Code,
section 336.9-401 336.9-501, a verified statement and
description of the aircraft and the work done or material
furnished. The lien shall be in force from and after the date
on which it is filed.
Sec. 24. Minnesota Statutes 2000, section 514.221,
subdivision 3, is amended to read:
Subd. 3. [PRIORITY, FORECLOSURE; LIMITATION.] A lien
created by this section is prior and paramount to all other
liens upon the aircraft except those previously filed in the
appropriate filing office. The lien shall be treated in all
respects as a secured transaction under the Uniform Commercial
Code, sections 336.9-401 336.9-501 to 336.9-508 336.9-628,
except that:
(a) any foreclosure proceedings must be instituted within
one year of the date the lien was filed; and
(b) the lien is subject to the rights of a purchaser of the
aircraft in cases where the purchaser acquired the aircraft
prior to the filing of the lien without knowledge or notice of
the rights of the person performing the work or furnishing the
material.
Sec. 25. Minnesota Statutes 2000, section 514.661,
subdivision 3, is amended to read:
Subd. 3. [PERFECTION.] To perfect a lien under this
section, the lien must attach and a person or entity entitled to
the lien must file a lien statement in the appropriate filing
office under section 336.9-401 336.9-501 during mediation or
within 30 days after the conclusion of mediation.
Sec. 26. Minnesota Statutes 2000, section 514.661,
subdivision 4, is amended to read:
Subd. 4. [DUTIES OF FILING OFFICER.] The filing officer
shall enter on the lien statement the time of day and date of
filing. The filing officer shall file, amend, terminate, note
the filing of a lien statement, and charge the fee for filing
under this section in the manner provided by section
336.9-403 sections 336.9-501 to 336.9-527 for a financing
statement, except that the social security number of an
individual debtor or the Internal Revenue Service taxpayer
identification number for a debtor other than an individual is
not required. A lien statement is void and may be removed from
the filing system 18 months after the date of filing. The lien
statement may be physically destroyed after 30 months from the
date of filing.
Sec. 27. Minnesota Statutes 2000, section 514.661,
subdivision 5, is amended to read:
Subd. 5. [PRIORITY.] (a) A perfected lien has priority
over all other liens and security interests in crops produced by
the debtor during the calendar year in which the mediation
occurs except for a perfected landlord's lien under section
514.960.
(b) An unperfected lien has the priority of an unperfected
security interest under section 336.9-312 sections 336.9-317 and
336.9-322.
Sec. 28. Minnesota Statutes 2000, section 514.661,
subdivision 6, is amended to read:
Subd. 6. [ENFORCEMENT OF LIEN.] (a) The holder of a lien
under this section may enforce the lien in the manner provided
in sections 336.9-501 336.9-601 to 336.9-508 336.9-628, subject
to section 550.17. For enforcement of the lien, the lienholder
is the secured party and the person leasing the property is the
debtor, and each has the respective rights and duties of a
secured party and a debtor under sections 336.9-501 336.9-601 to
336.9-508 336.9-628. If a right or duty under
sections 336.9-501 336.9-601 to 336.9-508 336.9-628 is
contingent upon the existence of express language in a security
agreement or may be waived by express language in a security
agreement, the requisite language does not exist.
(b) The principal amount of debt secured by seasonal use
machinery must be reduced by an amount equal to any amount paid
in satisfaction of a lien created under this section, less
interest accrued on the debt during mediation.
Sec. 29. Minnesota Statutes 2000, section 514.945,
subdivision 2, is amended to read:
Subd. 2. [PERFECTION.] An agricultural producer's lien is
perfected from the time the agricultural commodity is delivered
until 20 days after the agricultural commodity is delivered
without filing. An agricultural producer's lien may continue to
be perfected if a lien statement under subdivision 3 is filed in
the appropriate filing office under section 336.9-401 336.9-501
by 20 days after the agricultural commodity is delivered.
Sec. 30. Minnesota Statutes 2000, section 514.945,
subdivision 4, is amended to read:
Subd. 4. [PRIORITY.] (a) An agricultural producer's lien
has priority over all other liens and encumbrances in:
(1) the agricultural commodity;
(2) proceeds from the agricultural commodity;
(3) the proportionate share of the agricultural commodities
or goods with which the agricultural commodity has been
commingled; and
(4) the products manufactured or processed with the
agricultural commodity.
(b) An agricultural producer's lien that is continuously
perfected from the time of delivery has priority over other
liens and encumbrances whether they are filed before or after
the agricultural producer's lien.
(c) An agricultural producer's lien that is filed after 20
days after delivery of the agricultural commodity has priority
in the order it is filed.
(d) Priority among perfected agricultural producers' liens
is according to the first lien filed.
(e) An agricultural producer's lien that is not perfected
has the priority of an unperfected security interest under
section 336.9-312 sections 336.9-317 and 336.9-322.
Sec. 31. Minnesota Statutes 2000, section 514.945,
subdivision 6, is amended to read:
Subd. 6. [ENFORCEMENT.] The holder of an agricultural
producer's lien may enforce the lien in the manner provided in
sections 336.9-501 336.9-601 to 336.9-508 336.9-628, subject to
section 550.17. For enforcement of the lien, the lienholder is
the secured party and the person receiving the agricultural
commodity is the debtor, and each has the respective rights and
duties of a secured party and a debtor under sections 336.9-501
336.9-601 to 336.9-508 336.9-628. If a right or duty under
sections 336.9-501 336.9-601 to 336.9-508 336.9-628 is
contingent upon the existence of express language in a security
agreement or may be waived by express language in a security
agreement, the requisite language does not exist.
Sec. 32. Minnesota Statutes 2000, section 515B.3-116, is
amended to read:
515B.3-116 [LIEN FOR ASSESSMENTS.]
(a) The association has a lien on a unit for any assessment
levied against that unit from the time the assessment becomes
due. If an assessment is payable in installments, the full
amount of the assessment is a lien from the time the first
installment thereof becomes due. Unless the declaration
otherwise provides, fees, charges, late charges, fines and
interest charges pursuant to section 515B.3-102(a)(10), (11) and
(12) are liens, and are enforceable as assessments, under this
section.
(b) A lien under this section is prior to all other liens
and encumbrances on a unit except (i) liens and encumbrances
recorded before the declaration and, in a cooperative, liens and
encumbrances which the association creates, assumes, or takes
subject to, (ii) any first mortgage encumbering the fee simple
interest in the unit, or, in a cooperative, any first security
interest encumbering only the unit owner's interest in the unit,
and (iii) liens for real estate taxes and other governmental
assessments or charges against the unit. If a first mortgage on
a unit is foreclosed, the first mortgage was recorded after June
1, 1994, and no owner redeems during the owner's period of
redemption provided by chapter 580, 581, or 582, the holder of
the sheriff's certificate of sale from the foreclosure of the
first mortgage shall take title to the unit subject to a lien in
favor of the association for unpaid assessments for common
expenses levied pursuant to section 515B.3-115(a), (e)(1) to
(3), (f), and (i) which became due, without acceleration, during
the six months immediately preceding the first day following the
end of the owner's period of redemption. If a first security
interest encumbering a unit owner's interest in a cooperative
unit which is personal property is foreclosed, the secured party
or the purchaser at the sale shall take title to the unit
subject to unpaid assessments for common expenses levied
pursuant to section 515B.3-115(a), (e)(1) to (3), (f), and (i)
which became due, without acceleration, during the six months
immediately preceding the first day following either
the disposition date of sale pursuant to section 336.9-504
336.9-610 or the date on which the obligation of the unit owner
is discharged pursuant to section 336.9-505 336.9-622. This
subsection shall not affect the priority of mechanics' liens.
(c) Recording of the declaration constitutes record notice
and perfection of any lien under this section, and no further
recordation of any notice of or claim for the lien is required.
(d) Proceedings to enforce an assessment lien shall be
instituted within three years after the last installment of the
assessment becomes payable, or shall be barred.
(e) The unit owner of a unit at the time an assessment is
due shall be personally liable to the association for payment of
the assessment levied against the unit. If there are multiple
owners of the unit, they shall be jointly and severally liable.
(f) This section does not prohibit actions to recover sums
for which subsection (a) creates a lien nor prohibit an
association from taking a deed in lieu of foreclosure. The
commencement of an action to recover the sums is not an election
of remedies if it is dismissed before commencement of
foreclosure of the lien provided for by this section.
(g) The association shall furnish to a unit owner or the
owner's authorized agent upon written request of the unit owner
or the authorized agent a statement setting forth the amount of
unpaid assessments currently levied against the owner's unit.
If the unit owner's interest is real estate, the statement shall
be in recordable form. The statement shall be furnished within
ten business days after receipt of the request and is binding on
the association and every unit owner.
(h) The association's lien may be foreclosed as provided in
this subsection.
(1) In a condominium or planned community, the
association's lien may be foreclosed in a like manner as a
mortgage containing a power of sale pursuant to chapter 580, or
by action pursuant to chapter 581. The association shall have a
power of sale to foreclose the lien pursuant to chapter 580.
(2) In a cooperative whose unit owners' interests are real
estate, the association's lien shall be foreclosed in a like
manner as a mortgage on real estate as provided in paragraph (1).
(3) In a cooperative whose unit owners' interests in the
units are personal property, the association's lien shall be
foreclosed in a like manner as a security interest under article
9 of chapter 336. In any disposition pursuant to section
336.9-504 336.9-610 or retention pursuant to section
336.9-505 sections 336.9-620 to 336.9-622, the rights of the
parties shall be the same as those provided by law, except (i)
notice of sale, disposition, or retention shall be served on the
unit owner 90 days prior to sale, disposition, or retention,
(ii) the association shall be entitled to its reasonable costs
and attorney fees not exceeding the amount provided by section
582.01, subdivision 1a, (iii) the amount of the association's
lien shall be deemed to be adequate consideration for the unit
subject to disposition or retention, notwithstanding the value
of the unit, and (iv) the notice of sale, disposition, or
retention shall contain the following statement in capital
letters with the name of the association or secured party filled
in:
"THIS IS TO INFORM YOU THAT BY THIS NOTICE (fill in name of
association or secured party) HAS BEGUN PROCEEDINGS UNDER
MINNESOTA STATUTES, CHAPTER 515B, TO FORECLOSE ON YOUR INTEREST
IN YOUR UNIT FOR THE REASON SPECIFIED IN THIS NOTICE. YOUR
INTEREST IN YOUR UNIT WILL TERMINATE 90 DAYS AFTER SERVICE OF
THIS NOTICE ON YOU UNLESS BEFORE THEN:
(a) THE PERSON AUTHORIZED BY (fill in the name of
association or secured party) AND DESCRIBED IN THIS NOTICE TO
RECEIVE PAYMENTS RECEIVES FROM YOU:
(1) THE AMOUNT THIS NOTICE SAYS YOU OWE; PLUS
(2) THE COSTS INCURRED TO SERVE THIS NOTICE ON YOU; PLUS
(3) $500 TO APPLY TO ATTORNEYS FEES ACTUALLY EXPENDED OR
INCURRED; PLUS
(4) ANY ADDITIONAL AMOUNTS FOR YOUR UNIT BECOMING DUE TO
(fill in name of association or secured party) AFTER THE DATE OF
THIS NOTICE; OR
(b) YOU SECURE FROM A DISTRICT COURT AN ORDER THAT THE
FORECLOSURE OF YOUR RIGHTS TO YOUR UNIT BE SUSPENDED UNTIL YOUR
CLAIMS OR DEFENSES ARE FINALLY DISPOSED OF BY TRIAL, HEARING, OR
SETTLEMENT. YOUR ACTION MUST SPECIFICALLY STATE THOSE FACTS AND
GROUNDS THAT DEMONSTRATE YOUR CLAIMS OR DEFENSES.
IF YOU DO NOT DO ONE OR THE OTHER OF THE ABOVE THINGS
WITHIN THE TIME PERIOD SPECIFIED IN THIS NOTICE, YOUR OWNERSHIP
RIGHTS IN YOUR UNIT WILL TERMINATE AT THE END OF THE PERIOD, YOU
WILL LOSE ALL THE MONEY YOU HAVE PAID FOR YOUR UNIT, YOU WILL
LOSE YOUR RIGHT TO POSSESSION OF YOUR UNIT, YOU MAY LOSE YOUR
RIGHT TO ASSERT ANY CLAIMS OR DEFENSES THAT YOU MIGHT HAVE, AND
YOU WILL BE EVICTED. IF YOU HAVE ANY QUESTIONS ABOUT THIS
NOTICE, CONTACT AN ATTORNEY IMMEDIATELY."
(4) In any foreclosure pursuant to chapter 580, 581, or
582, the rights of the parties shall be the same as those
provided by law, except (i) the period of redemption for unit
owners shall be six months from the date of sale or a lesser
period authorized by law, (ii) in a foreclosure by advertisement
under chapter 580, the foreclosing party shall be entitled to
costs and disbursements of foreclosure and attorneys fees
authorized by the declaration or bylaws, notwithstanding the
provisions of section 582.01, subdivisions 1 and 1a, (iii) in a
foreclosure by action under chapter 581, the foreclosing party
shall be entitled to costs and disbursements of foreclosure and
attorneys fees as the court shall determine, and (iv) the amount
of the association's lien shall be deemed to be adequate
consideration for the unit subject to foreclosure,
notwithstanding the value of the unit.
(i) If a holder of a sheriff's certificate of sale, prior
to the expiration of the period of redemption, pays any past due
or current assessments, or any other charges lienable as
assessments, with respect to the unit described in the sheriff's
certificate, then the amount paid shall be a part of the sum
required to be paid to redeem under section 582.03.
(j) In a cooperative, following foreclosure, the
association may bring an action for unlawful detainer against
the unit owner and any persons in possession of the unit, and in
that case section 504B.291 shall not apply.
(k) An association may assign its lien rights in the same
manner as any other secured party.
Sec. 33. Minnesota Statutes 2000, section 515B.3-117, is
amended to read:
515B.3-117 [OTHER LIENS.]
(a) Except in a cooperative and except as otherwise
provided in this chapter or in a security instrument, an
individual unit owner may have the unit owner's unit released
from a lien if the unit owner pays the lienholder the portion of
the amount which the lien secures that is attributable to the
unit. Upon the receipt of payment, the lienholder shall
promptly deliver to the unit owner a recordable partial
satisfaction and release of lien releasing the unit from the
lien. The release shall be deemed to include a release of any
rights in the common elements appurtenant to the unit. The
portion of the amount which a lien secures that is attributable
to the unit shall be equal to the total amount which the lien
secures multiplied by a percentage calculated by dividing the
common expense liability attributable to the unit by the common
expense liability attributable to all units against which the
lien has been recorded, or in the case of a lien under
subsection (b), the units against which the lien is permitted or
required to be recorded. At the request of a lien claimant or
unit owners, the association shall provide a written statement
of the percentage of common expense liability attributable to
all units. After a unit owner's payment pursuant to this
section, the association may not assess the unit for any common
expense incurred thereafter in connection with the satisfaction
or defense against the lien.
(b) Labor performed or materials furnished for the
improvement of a unit shall be the basis for the recording of a
lien against that unit pursuant to the provisions of chapter 514
but shall not be the basis for the recording of a lien against
the common elements. Labor performed or materials furnished for
the improvement of common elements, if duly authorized by the
association, shall be deemed to be performed or furnished with
the express consent of each unit owner, and shall be perfected
by recording a lien against all the units in the common interest
community pursuant to the provisions of chapter 514, but shall
not be the basis for the recording of a lien against the common
elements. Where a lien is recorded against the units for labor
performed or material furnished for the improvement of common
elements, the association shall be deemed to be the authorized
agent of the unit owners for purposes of receiving the notices
required under sections 514.011 and 514.08, subdivision 1,
clause (2).
(c) A security interest in a cooperative whose unit owners'
interests in the units are personal property shall be perfected
by recording a financing statement in the UCC filing section of
the office of the recording officer for the county in which the
unit is located. In any disposition by a secured party pursuant
to section 336.9-504 336.9-610 or retention pursuant to section
336.9-505 sections 336.9-620 to 336.9-622, the rights of the
parties shall be the same as those provided by law, subject to
the exceptions and requirements set forth in section
515B.3-116(h)(3), and except that the unit owner has the right
to reinstate the debt owing to the secured party by paying to
the secured party, prior to the effective date of the
disposition or retention, the amount which would be required to
reinstate the debt under section 580.30 if the unit were wholly
real estate.
Sec. 34. Minnesota Statutes 2000, section 550.13, is
amended to read:
550.13 [LEVY ON BULKY ARTICLES.]
When personal property, by reason of its bulk or other
cause, cannot be immediately removed, it shall be a sufficient
levy thereon if the officer, within three days thereafter, file
in the appropriate filing office under the Uniform Commercial
Code, section 336.9-401 336.9-501, a certified copy of the
execution, and of the officer's return and levy thereon. The
officer shall pay the filing fee and include it in the charges.
Sec. 35. Minnesota Statutes 2000, section 557.12,
subdivision 5, is amended to read:
Subd. 5. [FILING AND ENFORCEMENT OF LIENS.] (a) A planting
crop owner's lien under subdivision 2 and a lien for the fair
market rental value where the crop was grown under subdivision 4
are perfected against the crop and crop products by attaching
and filing a financing statement covering the crop and crop
products as provided under sections 336.9-401 336.9-501 to
336.9-410 336.9-527 by 90 days after the planting crop owner's
right to harvest the crop is terminated. The financing
statement must include a statement indicating whether it is a
planting crop owner's lien or a lien for a crop harvested by a
planting crop owner. A perfected lien may be enforced in the
same manner as a security interest under sections 336.9-501
336.9-601 to 336.9-508 336.9-628.
(b) A lien against the real property under subdivision 2
must be recorded and foreclosed in the same manner as a
mechanics' lien under sections 514.08 to 514.15 as if the
planting crop owner was a contractor. For purposes of this
paragraph, the lien statement must be filed and served under
section 514.08, subdivision 1, by 120 days after the crop was
harvested, or if the crop was not harvested, by 12 months after
the crop was planted.
Sec. 36. Minnesota Statutes 2000, section 583.26,
subdivision 1, is amended to read:
Subdivision 1. [MEDIATION NOTICE.] (a) A creditor desiring
to start a proceeding to enforce a debt against agricultural
property under chapter 580 or 581 or sections
336.9-501 336.9-601 to 336.9-508 336.9-628, to terminate a
contract for deed to purchase agricultural property under
section 559.21, or to garnish, levy on, execute on, seize, or
attach agricultural property, must serve an applicable mediation
notice under sections 336.9-501 336.9-601, 550.365, 559.209, and
582.039 on the debtor and the director. The creditor must also
file with the director proof of the date the mediation notice
was served on the debtor. The creditor may not begin the
proceeding until the stay of the creditor's remedies is lifted
under subdivision 5, or as allowed under sections 583.20 to
583.32.
(b) For purposes of the Farmer-Lender Mediation Act,
starting a proceeding to enforce a debt means initiating a
proceeding under chapter 550, 580, or 581; sections 336.9-501
336.9-601 to 336.9-508 336.9-628; or section 559.21.
(c) The director shall combine all mediation notices for
the same debtor that are received prior to the initial mediation
meeting into one mediation proceeding.
Sec. 37. Minnesota Statutes 2000, section 583.26,
subdivision 2, is amended to read:
Subd. 2. [MEDIATION REQUEST.] (a) A debtor must file a
mediation request form with the director by 14 days after
receiving a mediation notice. The debtor must state all known
creditors with debts secured for agricultural property. The
mediation request form must include an instruction that the
debtor must state all known creditors with debts secured by
agricultural property and unsecured creditors that are necessary
for the farm operation of the debtor. It is the debtor's
discretion as to which unsecured creditors are necessary for the
farm operation. The mediation request must state the date that
the notice was served on the debtor. The director shall make
mediation request forms available in the county recorder's and
county extension office of each county.
(b) Except as provided in section 583.24, subdivision 4,
paragraph (a), clause (3), a debtor who fails to file a timely
mediation request waives the right to mediation for that debt
under the Farmer-Lender Mediation Act. The director shall
notify the creditor who served the mediation notice stating that
the creditor may proceed against the agricultural property
because the debtor has failed to file a mediation request.
(c) If a debtor has not received a mediation notice and is
subject to a proceeding of a creditor enforcing a debt against
agricultural property under chapter 580 or 581 or sections
336.9-501 336.9-601 to 336.9-508 336.9-628, terminating a
contract for deed to purchase agricultural property under
section 559.21, or garnishing, levying on, executing on,
seizing, or attaching agricultural property, the debtor may file
a mediation request with the director. The mediation request
form must indicate that the debtor has not received a mediation
notice.
Sec. 38. Minnesota Statutes 2000, section 583.284, is
amended to read:
583.284 [RETENTION OF PURCHASE MONEY SECURITY INTEREST.]
If a creditor has a purchase money security interest as
defined in under section 336.9-107 336.9-103, and renegotiates
the debt under the Farmer-Lender Mediation Act to reduce the
principal balance or the interest rate or to extend the
repayment period, the creditor retains the purchase money
security interest for the renegotiated debt.
Sec. 39. [REPEALER.]
Minnesota Statutes 2000, sections 336.11-101; 336.11-102;
336.11-103; 336.11-104; 336.11-105; 336.11-106; 336.11-107; and
336.11-108, are repealed.
Sec. 40. [EFFECTIVE DATE.]
This act is effective July 1, 2001.
Presented to the governor May 23, 2001
Signed by the governor May 25, 2001, 12:05 p.m.
Official Publication of the State of Minnesota
Revisor of Statutes