1.1                          A bill for an act 
  1.2             relating to commerce; revised Article 9 of the Uniform 
  1.3             Commercial Code; making corrective and conforming 
  1.4             amendments; appropriating money; amending Minnesota 
  1.5             Statutes 2000, sections 27.138, subdivisions 2 and 3; 
  1.6             86B.820, subdivisions 10 and 11; 86B.880, subdivision 
  1.7             2; 168A.01, subdivisions 18 and 19; 168A.05, 
  1.8             subdivision 8; 168A.17, subdivision 2; 169A.63, 
  1.9             subdivisions 7 and 11; 268.058, subdivision 1; 270.69, 
  1.10            subdivisions 2, 9, and 13; 270.7001, subdivision 4; 
  1.11            272.483; 272.484; 272.488, subdivision 3; 277.20, 
  1.12            subdivision 8; 300.112, subdivision 1; 325L.16; 
  1.13            336.2-210; 336.9-102; 336.9-201; 336.9-203; 336.9-311; 
  1.14            336.9-317; 336.9-334; 336.9-407; 336.9-509; 336.9-521; 
  1.15            336.9-601; 336.9-607; 336.9-617; 336.9-619; 336A.01, 
  1.16            subdivision 4; 507.24, subdivision 2; 514.18, 
  1.17            subdivision 2; 514.221, subdivisions 2 and 3; 514.661, 
  1.18            subdivisions 3, 4, 5, and 6; 514.945, subdivisions 2, 
  1.19            4, and 6; 515B.3-116; 515B.3-117; 550.13; 557.12, 
  1.20            subdivision 5; 583.26, subdivisions 1 and 2; and 
  1.21            583.284; Laws 1986, chapter 398, article 1, section 
  1.22            18, as amended; proposing coding for new law in 
  1.23            Minnesota Statutes, chapters 336; 507; 508; and 508A; 
  1.24            repealing Minnesota Statutes 2000, sections 168A.17, 
  1.25            subdivision 3; 336.11-101; 336.11-102; 336.11-103; 
  1.26            336.11-104; 336.11-105; 336.11-106; 336.11-107; and 
  1.27            336.11-108; Minnesota Rules, parts 8260.0600; 
  1.28            8260.0700; 8260.0800; 8260.0900; 8260.1000; 8260.1100; 
  1.29            8270.0010; 8270.0050; 8270.0100; 8270.0105; 8270.0110; 
  1.30            8270.0115; 8270.0200; 8270.0205; 8270.0210; 8270.0215; 
  1.31            8270.0220; 827.0225; 8270.0230; 8270.0235; 8270.0240; 
  1.32            8270.0245; 8270.0255; 8270.0260; 8270.0265; and 
  1.33            8270.0270.  
  1.34  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.35                             ARTICLE 1 
  1.36                       CORRECTIVE AMENDMENTS 
  1.37     Section 1.  Minnesota Statutes 2000, section 86B.880, 
  1.38  subdivision 2, is amended to read: 
  1.39     Subd. 2.  [PERFECTION.] A security interest is perfected by 
  2.1   the delivery to the commissioner of the existing certificate of 
  2.2   title, if any, or an application for a certificate of title, 
  2.3   containing the name and address of the secured party, the date 
  2.4   of the security agreement, and the required fee.  ~~It is~~ 
  2.5   ~~perfected as of the time of its creation if the delivery is~~ 
  2.6   ~~completed within the following ten days.  In other instances~~ 
  2.7   ~~it~~ A security interest is perfected as of the time of the 
  2.8   delivery.  The method provided in this chapter is exclusive.  
  2.9      Sec. 2.  Minnesota Statutes 2000, section 168A.17, 
  2.10  subdivision 2, is amended to read: 
  2.11     Subd. 2.  [PERFECTION.] A security interest is perfected by 
  2.12  the delivery to the department of the existing certificate of 
  2.13  title, if any, an application for a certificate of title 
  2.14  containing the name and address of the secured party, the date 
  2.15  of the secured party's security agreement and the required fee.  
  2.16  ~~It~~ A security interest is perfected ~~as of the time of its~~ 
  2.17  ~~creation if the delivery is completed within ten days~~ 
  2.18  ~~thereafter; otherwise~~ as of the time of the delivery. 
  2.19     Sec. 3.  Minnesota Statutes 2000, section 336.2-210, is 
  2.20  amended to read: 
  2.21     336.2-210 [DELEGATION OF PERFORMANCE; ASSIGNMENT OF 
  2.22  RIGHTS.] 
  2.23     (1) A party may perform a duty through a delegate unless 
  2.24  otherwise agreed or unless the other party has a substantial 
  2.25  interest in having the original promisor perform or control the 
  2.26  acts required by the contract.  No delegation of performance 
  2.27  relieves the party delegating of any duty to perform or any 
  2.28  liability for breach.  
  2.29     (2) Except as otherwise provided in section 336.9-406, 
  2.30  unless otherwise agreed all rights of either seller or buyer can 
  2.31  be assigned except where the assignment would materially change 
  2.32  the duty of the other party, or increase materially the burden 
  2.33  or risk imposed on the other party by the contract, or impair 
  2.34  materially the other party's chance of obtaining return 
  2.35  performance.  A right to damages for breach of the whole 
  2.36  contract or a right arising out of the assignor's due 
  3.1   performance of the assignor's entire obligation can be assigned 
  3.2   despite agreement otherwise.  
  3.3      (3) The creation, attachment, perfection, or enforcement of 
  3.4   a security interest in the seller's interest under a contract is 
  3.5   not a transfer that materially changes the duty of or increases 
  3.6   materially the burden or risk imposed on the buyer or impairs 
  3.7   materially the buyer's chance of obtaining return performance 
  3.8   within the purview of subsection (2) unless, and then only to 
  3.9   the extent that, enforcement actually results in a delegation of 
  3.10  material performance of the seller.  Even in that event, the 
  3.11  creation, attachment, perfection, and enforcement of the 
  3.12  security interest remain effective, but (i) the seller is liable 
  3.13  to the buyer for damages caused by the delegation to the extent 
  3.14  that the damages could not reasonably be prevented by the buyer, 
  3.15  and (ii) a court having jurisdiction may grant other appropriate 
  3.16  relief, including cancellation of the contract for sale or an 
  3.17  injunction against enforcement of the security interest or 
  3.18  consummation of the enforcement. 
  3.19     (4) Unless the circumstances indicate the contrary a 
  3.20  prohibition of assignment of "the contract" is to be construed 
  3.21  as barring only the delegation to the assignee of the assignor's 
  3.22  performance.  
  3.23     (5) An assignment of "the contract" or of "all my rights 
  3.24  under the contract" or an assignment in similar general terms is 
  3.25  an assignment of rights and unless the language or the 
  3.26  circumstances (as in an assignment for security) indicate the 
  3.27  contrary, it is a delegation of performance of the duties of the 
  3.28  assignor and its acceptance by the assignee constitutes a 
  3.29  promise by the assignee to perform those duties.  This promise 
  3.30  is enforceable by either the assignor or the other party to the 
  3.31  original contract.  
  3.32     (6) The other party may treat any assignment which 
  3.33  delegates performance as creating reasonable grounds for 
  3.34  insecurity and may without prejudice to the rights of the other 
  3.35  party against the assignor demand assurances from the assignee 
  3.36  (section 336.2-609). 
  4.1      Sec. 4.  Minnesota Statutes 2000, section 336.9-102, is 
  4.2   amended to read: 
  4.3      336.9-102 [DEFINITIONS AND INDEX OF DEFINITIONS.] 
  4.4      (a)  [DEFINITIONS.] In this article: 
  4.5      (1) "Accession" means goods that are physically united with 
  4.6   other goods in such a manner that the identity of the original 
  4.7   goods is not lost. 
  4.8      (2) "Account", except as used in "account for", means a 
  4.9   right to payment of a monetary obligation, whether or not earned 
  4.10  by performance, (i) for property that has been or is to be sold, 
  4.11  leased, licensed, assigned, or otherwise disposed of, (ii) for 
  4.12  services rendered or to be rendered, (iii) for a policy of 
  4.13  insurance issued or to be issued, (iv) for a secondary 
  4.14  obligation incurred or to be incurred, (v) for energy provided 
  4.15  or to be provided, (vi) for the use or hire of a vessel under a 
  4.16  charter or other contract, (vii) arising out of the use of a 
  4.17  credit or charge card or information contained on or for use 
  4.18  with the card, or (viii) as winnings in a lottery or other game 
  4.19  of chance operated or sponsored by a state, governmental unit of 
  4.20  a state, or person licensed or authorized to operate the game by 
  4.21  a state or governmental unit of a state.  The term includes 
  4.22  health-care-insurance receivables.  The term does not include (i)
  4.23  rights to payment evidenced by chattel paper or an instrument, 
  4.24  (ii) commercial tort claims, (iii) deposit accounts, (iv) 
  4.25  investment property, (v) letter of credit rights or letters of 
  4.26  credit, or (vi) rights to payment for money or funds advanced or 
  4.27  sold, other than rights arising out of the use of a credit or 
  4.28  charge card or information contained on or for use with the card.
  4.29     (3) "Account debtor" means a person obligated on an 
  4.30  account, chattel paper, or general intangible.  The term does 
  4.31  not include persons obligated to pay a negotiable instrument, 
  4.32  even if the instrument constitutes part of chattel paper. 
  4.33     (4) "Accounting", except as used in "accounting for", means 
  4.34  a record: 
  4.35     (A) authenticated by a secured party; 
  4.36     (B) indicating the aggregate unpaid secured obligations as 
  5.1   of a date not more than 35 days earlier or 35 days later than 
  5.2   the date of the record; and 
  5.3      (C) identifying the components of the obligations in 
  5.4   reasonable detail. 
  5.5      (5) "Agricultural lien" means an interest, other than a 
  5.6   security interest, in farm products: 
  5.7      (A) which secures payment or performance of an obligation 
  5.8   for: 
  5.9      (i) goods or services furnished in connection with a 
  5.10  debtor's farming operation; or 
  5.11     (ii) rent on real property leased by a debtor in connection 
  5.12  with its farming operation; 
  5.13     (B) which is created by statute in favor of a person that: 
  5.14     (i) in the ordinary course of its business furnished goods 
  5.15  or services to a debtor in connection with a debtor's farming 
  5.16  operation; or 
  5.17     (ii) leased real property to a debtor in connection with 
  5.18  the debtor's farming operation; and 
  5.19     (C) whose effectiveness does not depend on the person's 
  5.20  possession of the personal property. 
  5.21     (6) "As-extracted collateral" means: 
  5.22     (A) oil, gas, or other minerals that are subject to a 
  5.23  security interest that: 
  5.24     (i) is created by a debtor having an interest in the 
  5.25  minerals before extraction; and 
  5.26     (ii) attaches to the minerals as extracted; or 
  5.27     (B) accounts arising out of the sale at the wellhead or 
  5.28  minehead of oil, gas, or other minerals in which the debtor had 
  5.29  an interest before extraction. 
  5.30     (7) "Authenticate" means: 
  5.31     (A) to sign; or 
  5.32     (B) to execute or otherwise adopt a symbol, or encrypt or 
  5.33  similarly process a record in whole or in part, with the present 
  5.34  intent of the authenticating person to identify the person and 
  5.35  adopt or accept a record. 
  5.36     (8) "Bank" means an organization that is engaged in the 
  6.1   business of banking.  The term includes savings banks, savings 
  6.2   and loan associations, credit unions, and trust companies. 
  6.3      (9) "Cash proceeds" means proceeds that are money, checks, 
  6.4   deposit accounts, or the like. 
  6.5      (10) "Certificate of title" means a certificate of title 
  6.6   with respect to which a statute provides for the security 
  6.7   interest in question to be indicated on the certificate as a 
  6.8   condition or result of the security interest's obtaining 
  6.9   priority over the rights of a lien creditor with respect to the 
  6.10  collateral. 
  6.11     (11) "Chattel paper" means a record or records that 
  6.12  evidence both a monetary obligation and a security interest in 
  6.13  specific goods, a security interest in specific goods and 
  6.14  software used in the goods, a security interest in specific 
  6.15  goods and license of software used in the goods, a lease of 
  6.16  specific goods, or a lease of specific goods and license of 
  6.17  software used in the goods.  In this paragraph, "monetary 
  6.18  obligation" means a monetary obligation secured by the goods or 
  6.19  owed under a lease of the goods and includes a monetary 
  6.20  obligation with respect to software used in the goods.  The term 
  6.21  does not include (i) charters or other contracts involving the 
  6.22  use or hire of a vessel or (ii) records that evidence a right to 
  6.23  payment arising out of the use of a credit or charge card or 
  6.24  information contained on or for use with the card.  If a 
  6.25  transaction is evidenced by records that include an instrument 
  6.26  or series of instruments, the group of records taken together 
  6.27  constitutes chattel paper. 
  6.28     (12) "Collateral" means the property subject to a security 
  6.29  interest or agricultural lien.  The term includes: 
  6.30     (A) proceeds to which a security interest attaches; 
  6.31     (B) accounts, chattel paper, payment intangibles, and 
  6.32  promissory notes that have been sold; and 
  6.33     (C) goods that are the subject of a consignment. 
  6.34     (13) "Commercial tort claim" means a claim arising in tort 
  6.35  with respect to which: 
  6.36     (A) the claimant is an organization; or 
  7.1      (B) the claimant is an individual and the claim: 
  7.2      (i) arose in the course of the claimant's business or 
  7.3   profession; and 
  7.4      (ii) does not include damages arising out of personal 
  7.5   injury to or the death of an individual. 
  7.6      (14) "Commodity account" means an account maintained by a 
  7.7   commodity intermediary in which a commodity contract is carried 
  7.8   for a commodity customer. 
  7.9      (15) "Commodity contract" means a commodity futures 
  7.10  contract, an option on a commodity futures contract, a commodity 
  7.11  option, or another contract if the contract or option is: 
  7.12     (A) traded on or subject to the rules of a board of trade 
  7.13  that has been designated as a contract market for such a 
  7.14  contract pursuant to federal commodities law; or 
  7.15     (B) traded on a foreign commodity board of trade, exchange, 
  7.16  or market, and is carried on the books of a commodity 
  7.17  intermediary for a commodity customer. 
  7.18     (16) "Commodity customer" means a person for which a 
  7.19  commodity intermediary carries a commodity contract on its books.
  7.20     (17) "Commodity intermediary" means a person that: 
  7.21     (A) is registered as a futures commission merchant under 
  7.22  federal commodities law; or 
  7.23     (B) in the ordinary course of its business provides 
  7.24  clearance or settlement services for a board of trade that has 
  7.25  been designated as a contract market pursuant to federal 
  7.26  commodities law. 
  7.27     (18) "Communicate" means: 
  7.28     (A) to send a written or other tangible record; 
  7.29     (B) to transmit a record by any means agreed upon by the 
  7.30  persons sending and receiving the record; or 
  7.31     (C) in the case of transmission of a record to or by a 
  7.32  filing office, to transmit a record by any means prescribed by 
  7.33  filing office rule. 
  7.34     (19) "Consignee" means a merchant to which goods are 
  7.35  delivered in a consignment. 
  7.36     (20) "Consignment" means a transaction, regardless of its 
  8.1   form, in which a person delivers goods to a merchant for the 
  8.2   purpose of sale and: 
  8.3      (A) the merchant: 
  8.4      (i) deals in goods of that kind under a name other than the 
  8.5   name of the person making delivery; 
  8.6      (ii) is not an auctioneer; and 
  8.7      (iii) is not generally known by its creditors to be 
  8.8   substantially engaged in selling the goods of others; 
  8.9      (B) with respect to each delivery, the aggregate value of 
  8.10  the goods is $1,000 or more at the time of delivery; 
  8.11     (C) the goods are not consumer goods immediately before 
  8.12  delivery; and 
  8.13     (D) the transaction does not create a security interest 
  8.14  that secures an obligation. 
  8.15     (21) "Consignor" means a person that delivers goods to a 
  8.16  consignee in a consignment. 
  8.17     (22) "Consumer debtor" means a debtor in a consumer 
  8.18  transaction. 
  8.19     (23) "Consumer goods" means goods that are used or bought 
  8.20  for use primarily for personal, family, or household purposes. 
  8.21     (24) "Consumer goods transaction" means a consumer 
  8.22  transaction in which: 
  8.23     (A) an individual incurs an obligation primarily for 
  8.24  personal, family, or household purposes; and 
  8.25     (B) a security interest in consumer goods secures the 
  8.26  obligation. 
  8.27     (25) "Consumer obligor" means an obligor who is an 
  8.28  individual and who incurred the obligation as part of a 
  8.29  transaction entered into primarily for personal, family, or 
  8.30  household purposes. 
  8.31     (26) "Consumer transaction" means a transaction in which (i)
  8.32  an individual incurs an obligation primarily for personal, 
  8.33  family, or household purposes, (ii) a security interest secures 
  8.34  the obligation, and (iii) the collateral is held or acquired 
  8.35  primarily for personal, family, or household purposes.  The term 
  8.36  includes consumer goods transactions. 
  9.1      (27) "Continuation statement" means an amendment of a 
  9.2   financing statement which: 
  9.3      (A) identifies, by its file number, the initial financing 
  9.4   statement to which it relates; and 
  9.5      (B) indicates that it is a continuation statement for, or 
  9.6   that it is filed to continue the effectiveness of, the 
  9.7   identified financing statement. 
  9.8      (28) "Debtor" means: 
  9.9      (A) a person having an interest, other than a security 
  9.10  interest or other lien, in the collateral, whether or not the 
  9.11  person is an obligor; 
  9.12     (B) a seller of accounts, chattel paper, payment 
  9.13  intangibles, or promissory notes; or 
  9.14     (C) a consignee. 
  9.15     (29) "Deposit account" means a demand, time, savings, 
  9.16  passbook, or similar account maintained with a bank.  The term 
  9.17  does not include investment property or accounts evidenced by an 
  9.18  instrument. 
  9.19     (30) "Document" means a document of title or a receipt of 
  9.20  the type described in section 336.7-201(2). 
  9.21     (31) "Electronic chattel paper" means chattel paper 
  9.22  evidenced by a record or records consisting of information 
  9.23  stored in an electronic medium. 
  9.24     (32) "Encumbrance" means a right, other than an ownership 
  9.25  interest, in real property.  The term includes mortgages and 
  9.26  other liens on real property. 
  9.27     (33) "Equipment" means goods other than inventory, farm 
  9.28  products, or consumer goods. 
  9.29     (34) "Farm products" means goods, other than standing 
  9.30  timber, with respect to which the debtor is engaged in a farming 
  9.31  operation and which are: 
  9.32     (A) crops grown, growing, or to be grown, including: 
  9.33     (i) crops produced on trees, vines, and bushes; and 
  9.34     (ii) aquatic goods produced in aquacultural operations; 
  9.35     (B) livestock, born or unborn, including aquatic goods 
  9.36  produced in aquacultural operations; 
 10.1      (C) supplies used or produced in a farming operation; or 
 10.2      (D) products of crops or livestock in their unmanufactured 
 10.3   states. 
 10.4      (35) "Farming operation" means raising, cultivating, 
 10.5   propagating, fattening, grazing, or any other farming, 
 10.6   livestock, or aquacultural operation. 
 10.7      (36) "File number" means the number assigned to an initial 
 10.8   financing statement pursuant to section 336.9-519(a). 
 10.9      (37) "Filing office" means an office designated in section 
 10.10  336.9-501 as the place to file a financing statement. 
 10.11     (38) "Filing office rule" means a rule adopted pursuant to 
 10.12  Laws 2000, chapter 399, article 1, section 139. 
 10.13     (39) "Financing statement" means a record or records 
 10.14  composed of an initial financing statement and any filed record 
 10.15  relating to the initial financing statement. 
 10.16     (40) "Fixture filing" means the filing of a financing 
 10.17  statement covering goods that are or are to become fixtures and 
 10.18  satisfying section 336.9-502(a) and (b).  The term includes the 
 10.19  filing of a financing statement covering goods of a transmitting 
 10.20  utility which are or are to become fixtures. 
 10.21     (41) "Fixtures" means goods that have become so related to 
 10.22  particular real property that an interest in them arises under 
 10.23  real property law. 
 10.24     (42) "General intangible" means any personal property, 
 10.25  including things in action, other than accounts, chattel paper, 
 10.26  commercial tort claims, deposit accounts, documents, goods, 
 10.27  instruments, investment property, letter of credit rights, 
 10.28  letters of credit, money, and oil, gas, or other minerals before 
 10.29  extraction.  The term includes payment intangibles and software. 
 10.30     (43) "Good faith" means honesty in fact and the observance 
 10.31  of reasonable commercial standards of fair dealing. 
 10.32     (44) "Goods" means all things that are movable when a 
 10.33  security interest attaches.  The term includes (i) fixtures, 
 10.34  (ii) standing timber that is to be cut and removed under a 
 10.35  conveyance or contract for sale, (iii) the unborn young of 
 10.36  animals, (iv) crops grown, growing, or to be grown, even if the 
 11.1   crops are produced on trees, vines, or bushes, and (v) 
 11.2   manufactured homes.  The term also includes a computer program 
 11.3   embedded in goods and any supporting information provided in 
 11.4   connection with a transaction relating to the program if the 
 11.5   program is associated with the goods in such a manner that it 
 11.6   customarily is considered part of the goods, or by becoming the 
 11.7   owner of the goods, a person acquires a right to use the program 
 11.8   in connection with the goods.  The term does not include a 
 11.9   computer program embedded in goods that consist solely of the 
 11.10  medium in which the program is embedded.  The term also does not 
 11.11  include accounts, chattel paper, commercial tort claims, deposit 
 11.12  accounts, documents, general intangibles, instruments, 
 11.13  investment property, letter of credit rights, letters of credit, 
 11.14  money, or oil, gas, or other minerals before extraction. 
 11.15     (45) "Governmental unit" means a subdivision, agency, 
 11.16  department, county, parish, municipality, or other unit of the 
 11.17  government of the United States, a state, or a foreign country.  
 11.18  The term includes an organization having a separate corporate 
 11.19  existence if the organization is eligible to issue debt on which 
 11.20  interest is exempt from income taxation under the laws of the 
 11.21  United States. 
 11.22     (46) "Health-care-insurance receivable" means an interest 
 11.23  in or claim under a policy of insurance which is a right to 
 11.24  payment of a monetary obligation for health-care goods or 
 11.25  services provided. 
 11.26     (47) "Instrument" means a negotiable instrument or any 
 11.27  other writing that evidences a right to the payment of a 
 11.28  monetary obligation, is not itself a security agreement or 
 11.29  lease, and is of a type that in ordinary course of business is 
 11.30  transferred by delivery with any necessary endorsement or 
 11.31  assignment.  The term does not include (i) investment property, 
 11.32  (ii) letters of credit, or (iii) writings that evidence a right 
 11.33  to payment arising out of the use of a credit or charge card or 
 11.34  information contained on or for use with the card. 
 11.35     (48) "Inventory" means goods, other than farm products, 
 11.36  which: 
 12.1      (A) are leased by a person as lessor; 
 12.2      (B) are held by a person for sale or lease or to be 
 12.3   furnished under a contract of service; 
 12.4      (C) are furnished by a person under a contract of service; 
 12.5   or 
 12.6      (D) consist of raw materials, work in process, or materials 
 12.7   used or consumed in a business. 
 12.8      (49) "Investment property" means a security, whether 
 12.9   certificated or uncertificated, security entitlement, securities 
 12.10  account, commodity contract, or commodity account. 
 12.11     (50) "Jurisdiction of organization", with respect to a 
 12.12  registered organization, means the jurisdiction under whose law 
 12.13  the organization is organized. 
 12.14     (51) "Letter of credit right" means a right to payment or 
 12.15  performance under a letter of credit, whether or not the 
 12.16  beneficiary has demanded or is at the time entitled to demand 
 12.17  payment or performance.  The term does not include the right of 
 12.18  a beneficiary to demand payment or performance under a letter of 
 12.19  credit. 
 12.20     (52) "Lien creditor" means: 
 12.21     (A) a creditor that has acquired a lien on the property 
 12.22  involved by attachment, levy, or the like; 
 12.23     (B) an assignee for benefit of creditors from the time of 
 12.24  assignment; 
 12.25     (C) a trustee in bankruptcy from the date of the filing of 
 12.26  the petition; or 
 12.27     (D) a receiver in equity from the time of appointment. 
 12.28     (53) Unless a certificate has been issued, "manufactured 
 12.29  home" means a structure, transportable in one or more sections, 
 12.30  which, in the traveling mode, is eight body feet or more in 
 12.31  width or 40 body feet or more in length, or, when erected on 
 12.32  site, is 320 or more square feet, and which is built on a 
 12.33  permanent chassis and designed to be used as a dwelling with or 
 12.34  without a permanent foundation when connected to the required 
 12.35  utilities, and includes the plumbing, heating, air-conditioning, 
 12.36  and electrical systems contained therein.  The term includes any 
 13.1   structure that meets all of the requirements of this paragraph 
 13.2   except the size requirements and with respect to which the 
 13.3   manufacturer voluntarily files a certification required by the 
 13.4   United States Secretary of Housing and Urban Development and 
 13.5   complies with the standards established under United States 
 13.6   Code, title 42.  
 13.7      A manufactured home within the meaning of this section does 
 13.8   not include a manufactured home for which a certificate of title 
 13.9   as defined in section 336.9-102(a)(10) has been issued.  
 13.10     (54) "Manufactured home transaction" means a secured 
 13.11  transaction: 
 13.12     (A) that creates a purchase-money security interest in a 
 13.13  manufactured home, other than a manufactured home held as 
 13.14  inventory; or 
 13.15     (B) in which a manufactured home, other than a manufactured 
 13.16  home held as inventory, is the primary collateral. 
 13.17     (55) "Mortgage" means a consensual interest in real 
 13.18  property, including fixtures, which secures payment or 
 13.19  performance of an obligation.  Mortgage includes an executory 
 13.20  contract for the sale of real property or of an interest in real 
 13.21  property that entitles the purchaser to possession of the real 
 13.22  property. 
 13.23     (56) "New debtor" means a person that becomes bound as 
 13.24  debtor under section 336.9-203(d) by a security agreement 
 13.25  previously entered into by another person. 
 13.26     (57) "New value" means (i) money, (ii) money's worth in 
 13.27  property, services, or new credit, or (iii) release by a 
 13.28  transferee of an interest in property previously transferred to 
 13.29  the transferee.  The term does not include an obligation 
 13.30  substituted for another obligation. 
 13.31     (58) "Noncash proceeds" means proceeds other than cash 
 13.32  proceeds. 
 13.33     (59) "Obligor" means a person that, with respect to an 
 13.34  obligation secured by a security interest in or an agricultural 
 13.35  lien on the collateral, (i) owes payment or other performance of 
 13.36  the obligation, (ii) has provided property other than the 
 14.1   collateral to secure payment or other performance of the 
 14.2   obligation, or (iii) is otherwise accountable in whole or in 
 14.3   part for payment or other performance of the obligation.  The 
 14.4   term does not include issuers or nominated persons under a 
 14.5   letter of credit. 
 14.6      (60) "Original debtor", except as used in section 
 14.7   336.9-310(c), means a person that, as debtor, entered into a 
 14.8   security agreement to which a new debtor has become bound under 
 14.9   section 336.9-203(d). 
 14.10     (61) "Payment intangible" means a general intangible under 
 14.11  which the account debtor's principal obligation is a monetary 
 14.12  obligation. 
 14.13     (62) "Person related to", with respect to an individual, 
 14.14  means: 
 14.15     (A) the spouse of the individual; 
 14.16     (B) a brother, brother-in-law, sister, or sister-in-law of 
 14.17  the individual; 
 14.18     (C) an ancestor or lineal descendant of the individual or 
 14.19  the individual's spouse; or 
 14.20     (D) any other relative, by blood or marriage, of the 
 14.21  individual or the individual's spouse who shares the same home 
 14.22  with the individual. 
 14.23     (63) "Person related to", with respect to an organization, 
 14.24  means: 
 14.25     (A) a person directly or indirectly controlling, controlled 
 14.26  by, or under common control with the organization; 
 14.27     (B) an officer or director of, or a person performing 
 14.28  similar functions with respect to, the organization; 
 14.29     (C) an officer or director of, or a person performing 
 14.30  similar functions with respect to, a person described in 
 14.31  subparagraph (A); 
 14.32     (D) the spouse of an individual described in subparagraph 
 14.33  (A), (B), or (C); or 
 14.34     (E) an individual who is related by blood or marriage to an 
 14.35  individual described in subparagraph (A), (B), (C), or (D), and 
 14.36  shares the same home with the individual. 
 15.1      (64) "Proceeds", except as used in section 336.9-609(b), 
 15.2   means the following property: 
 15.3      (A) whatever is acquired upon the sale, lease, license, 
 15.4   exchange, or other disposition of collateral; 
 15.5      (B) whatever is collected on, or distributed on account of, 
 15.6   collateral; 
 15.7      (C) rights arising out of collateral; 
 15.8      (D) to the extent of the value of collateral, claims 
 15.9   arising out of the loss, nonconformity, or interference with the 
 15.10  use of, defects or infringement of rights in, or damage to, the 
 15.11  collateral; or 
 15.12     (E) to the extent of the value of collateral and to the 
 15.13  extent payable to the debtor or the secured party, insurance 
 15.14  payable by reason of the loss or nonconformity of, defects or 
 15.15  infringement of rights in, or damage to, the collateral. 
 15.16     (65) "Promissory note" means an instrument that evidences a 
 15.17  promise to pay a monetary obligation, does not evidence an order 
 15.18  to pay, and does not contain an acknowledgment by a bank that 
 15.19  the bank has received for deposit a sum of money or funds. 
 15.20     (66) "Proposal" means a record authenticated by a secured 
 15.21  party which includes the terms on which the secured party is 
 15.22  willing to accept collateral in full or partial satisfaction of 
 15.23  the obligation it secures pursuant to sections 336.9-620, 
 15.24  336.9-621, and 336.9-622. 
 15.25     (67) "Public-finance transaction" means a secured 
 15.26  transaction in connection with which: 
 15.27     (A) debt securities are issued; 
 15.28     (B) all or a portion of the securities issued have an 
 15.29  initial stated maturity of at least 20 years; and 
 15.30     (C) the debtor, obligor, secured party, account debtor or 
 15.31  other person obligated on collateral, assignor or assignee of a 
 15.32  secured obligation, or assignor or assignee of a security 
 15.33  interest is a state or a governmental unit of a state. 
 15.34     (68) "Pursuant to commitment", with respect to an advance 
 15.35  made or other value given by a secured party, means pursuant to 
 15.36  the secured party's obligation, whether or not a subsequent 
 16.1   event of default or other event not within the secured party's 
 16.2   control has relieved or may relieve the secured party from its 
 16.3   obligation. 
 16.4      (69) "Record", except as used in "for record", "of record", 
 16.5   "record or legal title", and "record owner", means information 
 16.6   that is inscribed on a tangible medium or which is stored in an 
 16.7   electronic or other medium and is retrievable in perceivable 
 16.8   form. 
 16.9      (70) "Registered organization" means an organization 
 16.10  organized solely under the law of a single state or the United 
 16.11  States and as to which the state or the United States must 
 16.12  maintain a public record showing the organization to have been 
 16.13  organized. 
 16.14     (71) "Secondary obligor" means an obligor to the extent 
 16.15  that: 
 16.16     (A) the obligor's obligation is secondary; or 
 16.17     (B) the obligor has a right of recourse with respect to an 
 16.18  obligation secured by collateral against the debtor, another 
 16.19  obligor, or property of either. 
 16.20     (72) "Secured party" means: 
 16.21     (A) a person in whose favor a security interest is created 
 16.22  or provided for under a security agreement, whether or not any 
 16.23  obligation to be secured is outstanding; 
 16.24     (B) a person that holds an agricultural lien; 
 16.25     (C) a consignor; 
 16.26     (D) a person to which accounts, chattel paper, payment 
 16.27  intangibles, or promissory notes have been sold; 
 16.28     (E) a trustee, indenture trustee, agent, collateral agent, 
 16.29  or other representative in whose favor a security interest or 
 16.30  agricultural lien is created or provided for; or 
 16.31     (F) a person that holds a security interest arising under 
 16.32  section 336.2-401, 336.2-505, 336.2-711(3), 336.2A-508(5), 
 16.33  336.4-210, or 336.5-118. 
 16.34     (73) "Security agreement" means an agreement that creates 
 16.35  or provides for a security interest. 
 16.36     (74) "Send", in connection with a record or notification, 
 17.1   means: 
 17.2      (A) to deposit in the mail, deliver for transmission, or 
 17.3   transmit by any other usual means of communication, with postage 
 17.4   or cost of transmission provided for, addressed to any address 
 17.5   reasonable under the circumstances; or 
 17.6      (B) to cause the record or notification to be received 
 17.7   within the time that it would have been received if properly 
 17.8   sent under subparagraph (A). 
 17.9      (75) "Software" means a computer program and any supporting 
 17.10  information provided in connection with a transaction relating 
 17.11  to the program.  The term does not include a computer program 
 17.12  that is included in the definition of goods. 
 17.13     (76) "State" means a state of the United States, the 
 17.14  District of Columbia, Puerto Rico, the United States Virgin 
 17.15  Islands, or any territory or insular possession subject to the 
 17.16  jurisdiction of the United States. 
 17.17     (77) "Supporting obligation" means a letter of credit right 
 17.18  or secondary obligation that supports the payment or performance 
 17.19  of an account, chattel paper, a document, a general intangible, 
 17.20  an instrument, or investment property. 
 17.21     (78) "Tangible chattel paper" means chattel paper evidenced 
 17.22  by a record or records consisting of information that is 
 17.23  inscribed on a tangible medium. 
 17.24     (79) "Termination statement" means an amendment of a 
 17.25  financing statement which: 
 17.26     (A) identifies, by its file number, the initial financing 
 17.27  statement to which it relates; and 
 17.28     (B) indicates either that it is a termination statement or 
 17.29  that the identified financing statement is no longer effective. 
 17.30     (80) "Transmitting utility" means a person primarily 
 17.31  engaged in the business of: 
 17.32     (A) operating a railroad, subway, street railway, or 
 17.33  trolley bus; 
 17.34     (B) transmitting communications electrically, 
 17.35  electromagnetically, or by light; 
 17.36     (C) transmitting goods by pipeline or sewer; or 
 18.1      (D) transmitting or producing and transmitting electricity, 
 18.2   steam, gas, or water. 
 18.3      A person filing a financing statement under this article 
 18.4   and under the authority of sections 300.111 to 300.115 is a 
 18.5   transmitting utility for purposes of this article. 
 18.6      (b)  [DEFINITIONS IN OTHER ARTICLES.] The following 
 18.7   definitions in other articles apply to this article: 
 18.8        "Applicant"                    Section 336.5-102
 18.9        "Beneficiary"                  Section 336.5-102
 18.10       "Broker"                       Section 336.8-102
 18.11       "Certificated security"        Section 336.8-102
 18.12       "Check"                        Section 336.3-104
 18.13       "Clearing corporation"         Section 336.8-102
 18.14       "Contract for sale"            Section 336.2-106
 18.15       "Customer"                     Section 336.4-104
 18.16       "Entitlement holder"           Section 336.8-102
 18.17       "Financial asset"              Section 336.8-102
 18.18       "Holder in due course"         Section 336.3-302
 18.19       "Issuer" (with respect to a    
 18.20        letter of credit or
 18.21        letter of credit right)       Section 336.5-102
 18.22       "Issuer" (with respect to
 18.23        a security)                   Section 336.8-201
 18.24       "Lease"                        Section 336.2A-103
 18.25       "Lease agreement"              Section 336.2A-103
 18.26       "Lease contract"               Section 336.2A-103
 18.27       "Leasehold interest"           Section 336.2A-103
 18.28       "Lessee"                       Section 336.2A-103
 18.29       "Lessee in ordinary course
 18.30        of business"                  Section 336.2A-103
 18.31       "Lessor"                       Section 336.2A-103
 18.32       "Lessor's residual interest"   Section 336.2A-103
 18.33       "Letter of credit"             Section 336.5-102
 18.34       "Merchant"                     Section 336.2-104
 18.35       "Negotiable instrument"        Section 336.3-104
 18.36       "Nominated person"             Section 336.5-102
 19.1        "Note"                         Section 336.3-104
 19.2        "Proceeds of a letter of
 19.3         credit"                       Section 336.5-114
 19.4        "Prove"                        Section 336.3-103
 19.5        "Sale"                         Section 336.2-106
 19.6        "Securities account"           Section 336.8-501
 19.7        "Securities intermediary"      Section 336.8-102
 19.8        "Security"                     Section 336.8-102
 19.9        "Security certificate"         Section 336.8-102
 19.10       "Security entitlement"         Section 336.8-102
 19.11       "Uncertificated security"      Section 336.8-102
 19.12     (c)  [ARTICLE 1 DEFINITIONS AND PRINCIPLES.] Article 1 
 19.13  contains general definitions and principles of construction and 
 19.14  interpretation applicable throughout this article. 
 19.15     Sec. 5.  Minnesota Statutes 2000, section 336.9-201, is 
 19.16  amended to read: 
 19.17     336.9-201 [GENERAL EFFECTIVENESS OF SECURITY AGREEMENT.] 
 19.18     (a)  [GENERAL EFFECTIVENESS.] Except as otherwise provided 
 19.19  in the Uniform Commercial Code, a security agreement is 
 19.20  effective according to its terms between the parties, against 
 19.21  purchasers of the collateral, and against creditors. 
 19.22     (b)  [APPLICABLE CONSUMER LAWS AND OTHER LAW.] A 
 19.23  transaction subject to this article is subject to any applicable 
 19.24  rule of law which establishes a different rule for consumers and 
 19.25  (i) any other statute or regulation that regulates the rates, 
 19.26  charges, agreements, and practices for loans, credit sales, or 
 19.27  other extensions of credit ~~and~~ including but not limited to 
 19.28  sections 48.153 to 48.157; 168.66 to 168.77; 222.13 to 222.16; 
 19.29  334.01 to 334.06; and chapters 52, 53, and 56, (ii) any consumer 
 19.30  protection statute or rule, and (iii) the Manufactured Home 
 19.31  Repossession Security Act, sections 327.61 to 327.67. 
 19.32     (c)  [OTHER APPLICABLE LAW CONTROLS.] In case of conflict 
 19.33  between this article and a rule of law, statute, or regulation 
 19.34  described in subsection (b), the rule of law, statute, or 
 19.35  regulation controls.  Failure to comply with a statute or 
 19.36  regulation described in subsection (b) has only the effect the 
 20.1   statute or regulation specifies. 
 20.2      (d)  [FURTHER DEFERENCE TO OTHER APPLICABLE LAW.] This 
 20.3   article does not: 
 20.4      (1) validate any rate, charge, agreement, or practice that 
 20.5   violates a rule of law, statute, or regulation described in 
 20.6   subsection (b); or 
 20.7      (2) extend the application of the rule of law, statute, or 
 20.8   regulation to a transaction not otherwise subject to it. 
 20.9      Sec. 6.  Minnesota Statutes 2000, section 336.9-203, is 
 20.10  amended to read: 
 20.11     336.9-203 [ATTACHMENT AND ENFORCEABILITY OF SECURITY 
 20.12  INTEREST; PROCEEDS; SUPPORTING OBLIGATIONS; FORMAL REQUISITES.] 
 20.13     (a)  [ATTACHMENT.] A security interest attaches to 
 20.14  collateral when it becomes enforceable against the debtor with 
 20.15  respect to the collateral, unless an agreement expressly 
 20.16  postpones the time of attachment. 
 20.17     (b)  [ENFORCEABILITY.] Except as otherwise provided in 
 20.18  subsections (c) through (i), a security interest is enforceable 
 20.19  against the debtor and third parties with respect to the 
 20.20  collateral only if: 
 20.21     (1) value has been given; 
 20.22     (2) the debtor has rights in the collateral or the power to 
 20.23  transfer rights in the collateral to a secured party; and 
 20.24     (3) one of the following conditions is met: 
 20.25     (A) the debtor has authenticated a security agreement that 
 20.26  provides a description of the collateral and, if the security 
 20.27  interest covers timber to be cut, a description of the land 
 20.28  concerned; 
 20.29     (B) the collateral is not a certificated security and is in 
 20.30  the possession of the secured party under section 336.9-313 
 20.31  pursuant to the debtor's security agreement; 
 20.32     (C) the collateral is a certificated security in registered 
 20.33  form and the security certificate has been delivered to the 
 20.34  secured party under section 336.8-301 pursuant to the debtor's 
 20.35  security agreement; or 
 20.36     (D) the collateral is deposit accounts, electronic chattel 
 21.1   paper, investment property, or letter of credit rights, and the 
 21.2   secured party has control under section 336.9-104, 336.9-105, 
 21.3   336.9-106, or 336.9-107 pursuant to the debtor's security 
 21.4   agreement. 
 21.5      (c)  [OTHER UCC PROVISIONS.] Subsection (b) is subject to 
 21.6   section 336.4-210 on the security interest of a collecting bank, 
 21.7   section 336.5-118 on the security interest of a letter of credit 
 21.8   issuer or nominated person, section 336.9-110 on a security 
 21.9   interest arising under article 2 or 2A, and section 336.9-206 on 
 21.10  security interests in investment property. 
 21.11     (d)  [WHEN PERSON BECOMES BOUND BY ANOTHER PERSON'S 
 21.12  SECURITY AGREEMENT.] A person becomes bound as debtor by a 
 21.13  security agreement entered into by another person if, by 
 21.14  operation of law other than this article or by contract: 
 21.15     (1) the security agreement becomes effective to create a 
 21.16  security interest in the person's property; or 
 21.17     (2) the person becomes generally obligated for the 
 21.18  obligations of the other person, including the obligation 
 21.19  secured under the security agreement, and acquires or succeeds 
 21.20  to all or substantially all of the assets of the other person. 
 21.21     (e)  [EFFECT OF NEW DEBTOR BECOMING BOUND.] If a new debtor 
 21.22  becomes bound as debtor by a security agreement entered into by 
 21.23  another person: 
 21.24     (1) the agreement satisfies subsection (b)(3) with respect 
 21.25  to existing or after-acquired property of the new debtor to the 
 21.26  extent the property is described in the agreement; and 
 21.27     (2) another agreement is not necessary to make a security 
 21.28  interest in the property enforceable. 
 21.29     (f)  [PROCEEDS AND SUPPORTING OBLIGATIONS.] The attachment 
 21.30  of a security interest in collateral gives the secured party the 
 21.31  rights to proceeds provided by section 336.9-315 and is also 
 21.32  attachment of a security interest in a supporting obligation for 
 21.33  the collateral. 
 21.34     (g)  [LIEN SECURING RIGHT TO PAYMENT.] The attachment of a 
 21.35  security interest in a right to payment or performance secured 
 21.36  by a security interest or other lien on personal or real 
 22.1   property is also attachment of a security interest in the 
 22.2   security interest, mortgage, or other lien.  The attachment of a 
 22.3   security interest in the mortgage or lien on real property does 
 22.4   not create an interest in real property.  
 22.5      (h)  [SECURITY ENTITLEMENT CARRIED IN SECURITIES ACCOUNT.] 
 22.6   The attachment of a security interest in a securities account is 
 22.7   also attachment of a security interest in the security 
 22.8   entitlements carried in the securities account. 
 22.9      (i)  [COMMODITY CONTRACTS CARRIED IN COMMODITY ACCOUNT.] 
 22.10  The attachment of a security interest in a commodity account is 
 22.11  also attachment of a security interest in the commodity 
 22.12  contracts carried in the commodity account. 
 22.13     Sec. 7.  Minnesota Statutes 2000, section 336.9-311, is 
 22.14  amended to read: 
 22.15     336.9-311 [PERFECTION OF SECURITY INTERESTS IN PROPERTY 
 22.16  SUBJECT TO CERTAIN STATUTES, REGULATIONS, AND TREATIES.] 
 22.17     (a)  [SECURITY INTEREST SUBJECT TO OTHER LAW.] Except as 
 22.18  otherwise provided in subsection (d), the filing of a financing 
 22.19  statement is not necessary or effective to perfect a security 
 22.20  interest in property subject to: 
 22.21     (1) a statute, regulation, or treaty of the United States 
 22.22  whose requirements for a security interest's obtaining priority 
 22.23  over the rights of a lien creditor with respect to the property 
 22.24  preempt section 336.9-310(a); 
 22.25     (2) sections 86B.820 to 86B.920 and 168A.01 to 168A.31; ~~but~~ 
 22.26  ~~during any period which collateral is inventory held for sale by~~ 
 22.27  ~~a person who is in the business of selling goods of that kind,~~ 
 22.28  ~~the filing provisions of this article (part 5) apply to a~~ 
 22.29  ~~security interest in the collateral created by the person as a~~ 
 22.30  ~~debtor;~~ or sections 300.11 to 300.115; or 
 22.31     (3) a certificate-of-title statute of another jurisdiction 
 22.32  which provides for a security interest to be indicated on the 
 22.33  certificate as a condition or result of the security interest's 
 22.34  obtaining priority over the rights of a lien creditor with 
 22.35  respect to the property. 
 22.36     (b)  [COMPLIANCE WITH OTHER LAW.] Compliance with the 
 23.1   requirements of a statute, regulation, or treaty described in 
 23.2   subsection (a) for obtaining priority over the rights of a lien 
 23.3   creditor is equivalent to the filing of a financing statement 
 23.4   under this article.  Except as otherwise provided in subsection 
 23.5   (d) and sections 336.9-313 and 336.9-316(d) and (e) for goods 
 23.6   covered by a certificate of title, a security interest in 
 23.7   property subject to a statute, regulation, or treaty described 
 23.8   in subsection (a) may be perfected only by compliance with those 
 23.9   requirements, and a security interest so perfected remains 
 23.10  perfected notwithstanding a change in the use or transfer of 
 23.11  possession of the collateral. 
 23.12     (c)  [DURATION AND RENEWAL OF PERFECTION.] Except as 
 23.13  otherwise provided in subsection (d) and section 336.9-316(d) 
 23.14  and (e), duration and renewal of perfection of a security 
 23.15  interest perfected by compliance with the requirements 
 23.16  prescribed by a statute, regulation, or treaty described in 
 23.17  subsection (a) are governed by the statute, regulation, or 
 23.18  treaty.  In other respects, the security interest is subject to 
 23.19  this article. 
 23.20     (d)  [INAPPLICABILITY TO CERTAIN INVENTORY.] During any 
 23.21  period in which collateral subject to a statute specified in 
 23.22  subsection (a)(2) is inventory held for sale or lease by a 
 23.23  person or leased by that person as lessor and that person is in 
 23.24  the business of selling goods of that kind, this section does 
 23.25  not apply to a security interest in that collateral created by 
 23.26  that person. 
 23.27     Sec. 8.  Minnesota Statutes 2000, section 336.9-317, is 
 23.28  amended to read: 
 23.29     336.9-317 [INTERESTS THAT TAKE PRIORITY OVER OR TAKE FREE 
 23.30  OF SECURITY INTEREST OR AGRICULTURAL LIEN.] 
 23.31     (a)  [CONFLICTING SECURITY INTERESTS AND RIGHTS OF LIEN 
 23.32  CREDITORS.] A security interest or agricultural lien is 
 23.33  subordinate to the rights of: 
 23.34     (1) a person entitled to priority under section 336.9-322; 
 23.35  and 
 23.36     (2) except as otherwise provided in subsection (e), a 
 24.1   person that becomes a lien creditor before the earlier of the 
 24.2   time: 
 24.3      (A) the security interest or agricultural lien is 
 24.4   perfected; or 
 24.5      (B) ~~one of the conditions specified in section~~ 
 24.6   ~~336.9-203(b)(3) is met~~ 
 24.7   ~~and a financing statement covering the collateral is filed~~ one 
 24.8   of the conditions specified in section 336.9-203(b)(3) is met 
 24.9   and a financing statement covering the collateral is filed. 
 24.10     (b)  [BUYERS THAT RECEIVE DELIVERY.] Except as otherwise 
 24.11  provided in subsection (e), a buyer, other than a secured party, 
 24.12  of tangible chattel paper, documents, goods, instruments, or a 
 24.13  security certificate takes free of a security interest or 
 24.14  agricultural lien if the buyer gives value and receives delivery 
 24.15  of the collateral without knowledge of the security interest or 
 24.16  agricultural lien and before it is perfected. 
 24.17     (c)  [LESSEES THAT RECEIVE DELIVERY.] Except as otherwise 
 24.18  provided in subsection (e), a lessee of goods takes free of a 
 24.19  security interest or agricultural lien if the lessee gives value 
 24.20  and receives delivery of the collateral without knowledge of the 
 24.21  security interest or agricultural lien and before it is 
 24.22  perfected. 
 24.23     (d)  [LICENSEES AND BUYERS OF CERTAIN COLLATERAL.] A 
 24.24  licensee of a general intangible or a buyer, other than a 
 24.25  secured party, of accounts, electronic chattel paper, general 
 24.26  intangibles, or investment property other than a certificated 
 24.27  security takes free of a security interest if the licensee or 
 24.28  buyer gives value without knowledge of the security interest and 
 24.29  before it is perfected. 
 24.30     (e)  [PURCHASE-MONEY SECURITY INTEREST.] Except as 
 24.31  otherwise provided in sections 336.9-320 and 336.9-321, if a 
 24.32  person files a financing statement with respect to a 
 24.33  purchase-money security interest before or within 20 days after 
 24.34  the debtor receives delivery of the collateral, the security 
 24.35  interest takes priority over the rights of a buyer, lessee, or 
 24.36  lien creditor which arise between the time the security interest 
 25.1   attaches and the time of filing. 
 25.2      Sec. 9.  Minnesota Statutes 2000, section 336.9-334, is 
 25.3   amended to read: 
 25.4      336.9-334 [PRIORITY OF SECURITY INTERESTS IN FIXTURES AND 
 25.5   CROPS.] 
 25.6      (a)  [SECURITY INTEREST IN FIXTURES UNDER THIS ARTICLE.] A 
 25.7   security interest under this article may be created in goods 
 25.8   that are fixtures or may continue in goods that become 
 25.9   fixtures.  A security interest does not exist under this article 
 25.10  in ordinary building materials incorporated into an improvement 
 25.11  on land. 
 25.12     (b)  [SECURITY INTEREST IN FIXTURES UNDER REAL PROPERTY 
 25.13  LAW.] This article does not prevent creation of an encumbrance 
 25.14  upon fixtures under real property law. 
 25.15     (c)  [GENERAL RULE:  SUBORDINATION OF SECURITY INTEREST IN 
 25.16  FIXTURES.] In cases not governed by subsections (d) through (h), 
 25.17  a security interest in fixtures is subordinate to a conflicting 
 25.18  interest of an encumbrancer or owner of the related real 
 25.19  property other than the debtor. 
 25.20     (d)  [FIXTURES PURCHASE-MONEY PRIORITY.] Except as 
 25.21  otherwise provided in subsection (h), a perfected security 
 25.22  interest in fixtures has priority over a conflicting interest of 
 25.23  an encumbrancer or owner of the real property if the debtor has 
 25.24  an interest of record in or is in possession of the real 
 25.25  property and: 
 25.26     (1) the security interest is a purchase-money security 
 25.27  interest; 
 25.28     (2) the interest of the encumbrancer or owner arises before 
 25.29  the goods become fixtures; and 
 25.30     (3) the security interest is perfected by a fixture filing 
 25.31  before the goods become fixtures or within 20 days thereafter. 
 25.32     (e)  [PRIORITY OF SECURITY INTEREST IN FIXTURES OVER 
 25.33  INTERESTS IN REAL PROPERTY.] A perfected security interest in 
 25.34  fixtures has priority over a conflicting interest of an 
 25.35  encumbrancer or owner of the real property if: 
 25.36     (1) the debtor has an interest of record in the real 
 26.1   property or is in possession of the real property and the 
 26.2   security interest: 
 26.3      (A) is perfected by a fixture filing before the interest of 
 26.4   the encumbrancer or owner is of record; and 
 26.5      (B) has priority over any conflicting interest of a 
 26.6   predecessor in title of the encumbrancer or owner; 
 26.7      (2) before the goods become fixtures, the security interest 
 26.8   is perfected by any method permitted by this article and the 
 26.9   fixtures are readily removable: 
 26.10     (A) factory or office machines; 
 26.11     (B) equipment that is not primarily used or leased for use 
 26.12  in the operation of the real property; or 
 26.13     (C) replacements of domestic appliances that are consumer 
 26.14  goods; 
 26.15     (3) the conflicting interest is a lien on the real property 
 26.16  obtained by legal or equitable proceedings after the security 
 26.17  interest was perfected by any method permitted by this article; 
 26.18  or 
 26.19     (4) the security interest is: 
 26.20     (A) created in a manufactured home in a manufactured home 
 26.21  transaction; and 
 26.22     (B) perfected pursuant to a statute described in section 
 26.23  336.9-311(a)(2). 
 26.24     (f)  [PRIORITY BASED ON CONSENT, DISCLAIMER, OR RIGHT TO 
 26.25  REMOVE.] A security interest in fixtures, whether or not 
 26.26  perfected, has priority over a conflicting interest of an 
 26.27  encumbrancer or owner of the real property if: 
 26.28     (1) the encumbrancer or owner has, in an authenticated 
 26.29  record, consented to the security interest or disclaimed an 
 26.30  interest in the goods as fixtures; or 
 26.31     (2) the debtor has a right to remove the goods as against 
 26.32  the encumbrancer or owner. 
 26.33     (g)  [CONTINUATION OF PARAGRAPH (F)(2) PRIORITY.] The 
 26.34  priority of the security interest under paragraph (f)(2) 
 26.35  continues for a reasonable time if the debtor's right to remove 
 26.36  the goods as against the encumbrancer or owner terminates. 
 27.1      (h)  [PRIORITY OF CONSTRUCTION MORTGAGE.] A mortgage is a 
 27.2   construction mortgage to the extent that it secures an 
 27.3   obligation incurred for the construction of an improvement on 
 27.4   land, including the acquisition cost of the land, if a recorded 
 27.5   record of the mortgage so indicates.  Except as otherwise 
 27.6   provided in subsections (e) and (f), a security interest in 
 27.7   fixtures is subordinate to a construction mortgage if a record 
 27.8   of the mortgage is recorded before the goods become fixtures and 
 27.9   the goods become fixtures before the completion of the 
 27.10  construction.  A mortgage has this priority to the same extent 
 27.11  as a construction mortgage to the extent that it is given to 
 27.12  refinance a construction mortgage. 
 27.13     (i)  [PRIORITY OF SECURITY INTEREST IN CROPS.] A perfected 
 27.14  security interest in crops growing on real property has priority 
 27.15  over a conflicting interest of an encumbrancer or owner of the 
 27.16  real property except a perfected landlord's lien if the debtor 
 27.17  has an interest of record in or is in possession of the real 
 27.18  property. 
 27.19     (j)  [SUBSECTION (I) PREVAILS.] Subsection (i) prevails 
 27.20  over any inconsistent provisions of the following statutes: 
 27.21     (1) section 557.12; and 
 27.22     (2) section 559.2091. 
 27.23     Sec. 10.  Minnesota Statutes 2000, section 336.9-407, is 
 27.24  amended to read: 
 27.25     336.9-407 [RESTRICTIONS ON CREATION OR ENFORCEMENT OF 
 27.26  SECURITY INTEREST IN LEASEHOLD INTEREST OR IN LESSOR'S RESIDUAL 
 27.27  INTEREST.] 
 27.28     (a)  [TERM RESTRICTING ASSIGNMENT GENERALLY INEFFECTIVE.] 
 27.29  Except as otherwise provided in subsection (b), a term in a 
 27.30  lease agreement is ineffective to the extent that it: 
 27.31     (1) prohibits, restricts, or requires the consent of a 
 27.32  party to the lease to the assignment or transfer of, or the 
 27.33  creation, attachment, perfection, or enforcement of a security 
 27.34  interest in, an interest of a party under the lease contract or 
 27.35  in the lessor's residual interest in the goods; or 
 27.36     (2) provides that the assignment or transfer or the 
 28.1   creation, attachment, perfection, or enforcement of the security 
 28.2   interest may give rise to a default, breach, right of 
 28.3   recoupment, claim, defense, termination, right of termination, 
 28.4   or remedy under the lease. 
 28.5      (b)  [EFFECTIVENESS OF CERTAIN TERMS.] Except as otherwise 
 28.6   provided in section 336.2A-303(7), a term described in 
 28.7   subsection (a)(2) is effective to the extent that there is: 
 28.8      (1) a transfer by the lessee of the lessee's right of 
 28.9   possession or use of the goods in violation of the term; or 
 28.10     (2) a delegation of a material performance of either party 
 28.11  to the lease contract in violation of the term. 
 28.12     (c)  [SECURITY INTEREST NOT MATERIAL IMPAIRMENT.] The 
 28.13  creation, attachment, perfection, or enforcement of a security 
 28.14  interest in the lessor's interest under the lease contract or 
 28.15  the lessor's residual interest in the goods is not a transfer 
 28.16  that materially impairs the lessee's prospect of obtaining 
 28.17  return performance or materially changes the duty of or 
 28.18  materially increases the burden or risk imposed on the lessee 
 28.19  within the purview of section 336.2A-303(4) unless, and then 
 28.20  only to the extent that, enforcement actually results in a 
 28.21  delegation of material performance of the lessor.  ~~Even in that~~ 
 28.22  ~~event, the creation, attachment, perfection, and enforcement of~~ 
 28.23  ~~the security interest remain effective.~~ 
 28.24     Sec. 11.  Minnesota Statutes 2000, section 336.9-509, is 
 28.25  amended to read: 
 28.26     336.9-509 [PERSONS ENTITLED TO FILE A RECORD.] 
 28.27     (a)  [PERSON ENTITLED TO FILE RECORD.] A person may file an 
 28.28  initial financing statement, amendment that adds collateral 
 28.29  covered by a financing statement, or amendment that adds a 
 28.30  debtor to a financing statement only if: 
 28.31     (1) the debtor authorizes the filing in an authenticated 
 28.32  record or pursuant to subsection (b) or (c); or 
 28.33     (2) the person holds an agricultural lien that has become 
 28.34  effective at the time of filing and the financing statement 
 28.35  covers only collateral in which the person holds an agricultural 
 28.36  lien. 
 29.1      (b)  [SECURITY AGREEMENT AS AUTHORIZATION.] By 
 29.2   authenticating or becoming bound as debtor by a security 
 29.3   agreement, a debtor or new debtor authorizes the filing of an 
 29.4   initial financing statement, and an amendment, covering: 
 29.5      (1) the collateral described in the security agreement; and 
 29.6      (2) property that becomes collateral under section 
 29.7   336.9-315(a)(2), whether or not the security agreement expressly 
 29.8   covers proceeds. 
 29.9      (c)  [ACQUISITION OF COLLATERAL AS AUTHORIZATION.] By 
 29.10  acquiring collateral in which a security interest or 
 29.11  agricultural lien continues under section 336.9-315(a)(1), a 
 29.12  debtor authorizes the filing of an initial financing statement, 
 29.13  and an amendment, covering the collateral and property that 
 29.14  becomes collateral under section 336.9-315(a)(2). 
 29.15     ~~(c)~~ (d)  [PERSON ENTITLED TO FILE CERTAIN AMENDMENTS.] A 
 29.16  person may file an amendment other than an amendment that adds 
 29.17  collateral covered by a financing statement or an amendment that 
 29.18  adds a debtor to a financing statement only if: 
 29.19     (1) the secured party of record authorizes the filing; or 
 29.20     (2) the amendment is a termination statement for a 
 29.21  financing statement as to which the secured party of record has 
 29.22  failed to file or send a termination statement as required by 
 29.23  section 336.9-513(a) or (c), the debtor authorizes the filing, 
 29.24  and the termination statement indicates that the debtor 
 29.25  authorized it to be filed. 
 29.26     ~~(d)~~ (e)  [MULTIPLE SECURED PARTIES OF RECORD.] If there is 
 29.27  more than one secured party of record for a financing statement, 
 29.28  each secured party of record may authorize the filing of an 
 29.29  amendment under subsection ~~(c)~~ (d). 
 29.30     Sec. 12.  Minnesota Statutes 2000, section 336.9-521, is 
 29.31  amended to read: 
 29.32     336.9-521 [UNIFORM FORM OF WRITTEN FINANCING STATEMENT AND 
 29.33  AMENDMENT.] 
 29.34     (a)  [INITIAL FINANCING STATEMENT FORM.] A filing office 
 29.35  that accepts written records may not refuse to accept a written 
 29.36  initial financing statement in the form and format adopted by 
 30.1   the National Conference of Commissioners on Uniform State Laws, 
 30.2   except for a reason set forth in section 336.9-516(b). 
 30.3      (b)  [AMENDMENT FORM.] A filing office that accepts written 
 30.4   records may not refuse to accept a written amendment of an 
 30.5   initial financing statement record in the form and format 
 30.6   adopted by the National Conference of Commissioners on Uniform 
 30.7   State Laws, except for a reason set forth in section 
 30.8   336.9-516(b). 
 30.9      Sec. 13.  [336.9-5291] [ELECTRONIC ACCESS; LIABILITY; 
 30.10  RETENTION; UNIFORM COMMERCIAL CODE ACCOUNT.] 
 30.11     (a)  [ELECTRONIC ACCESS.] The secretary of state may allow 
 30.12  private parties to have electronic access to the central filing 
 30.13  system and to other computerized records maintained by the 
 30.14  secretary of state on a fee basis, except that:  (1) visual 
 30.15  access to electronic display terminals at the public counters at 
 30.16  the secretary of state's office must be without charge and must 
 30.17  be available during public counter hours; and (2) access by law 
 30.18  enforcement personnel, acting in an official capacity, must be 
 30.19  without charge.  If the central filing system allows a form of 
 30.20  electronic access to information regarding the obligations of 
 30.21  debtors, the access must be available 24 hours a day, every day 
 30.22  of the year.  Notwithstanding section 13.49, private parties who 
 30.23  have electronic access to computerized records may view the 
 30.24  social security number information about a debtor that is of 
 30.25  record.  
 30.26     (b)  [LIABILITY.] The secretary of state, county recorders, 
 30.27  and their employees and agents are not liable for any loss or 
 30.28  damages arising from errors in or omissions from information 
 30.29  entered into the central filing system as a result of the 
 30.30  electronic transmission of tax lien notices under sections 
 30.31  268.058, subdivision 1, paragraph (c); 270.69, subdivision 2, 
 30.32  paragraph (b), clause (2); 272.483; and 272.488, subdivisions 1 
 30.33  and 3.  
 30.34     The state, the secretary of state, counties, county 
 30.35  recorders, and their employees and agents are immune from 
 30.36  liability that occurs as a result of errors in or omissions from 
 31.1   information provided from the central filing system.  
 31.2      (c)  [RETENTION.] Once the image of a paper record has been 
 31.3   captured by the central filing system, the secretary of state 
 31.4   may remove or direct the removal from the files and destroy the 
 31.5   paper record.  
 31.6      (d)  [UNIFORM COMMERCIAL CODE ACCOUNT.] The Uniform 
 31.7   Commercial Code account is established as an account in the 
 31.8   state treasury.  Fees that are not expressly set by statute but 
 31.9   are charged by the secretary of state to offset the costs of 
 31.10  providing a service under chapter 336 must be deposited in the 
 31.11  state treasury and credited to the Uniform Commercial Code 
 31.12  account.  
 31.13     Fees that are not expressly set by statute but are charged 
 31.14  by the secretary of state to offset the costs of providing 
 31.15  information contained in the computerized records maintained by 
 31.16  the secretary of state must be deposited in the state treasury 
 31.17  and credited to the Uniform Commercial Code account. 
 31.18     Money in the Uniform Commercial Code account is 
 31.19  continuously appropriated to the secretary of state to implement 
 31.20  and maintain the central filing system under chapter 336 and to 
 31.21  provide electronic access to other computerized records 
 31.22  maintained by the secretary of state.  
 31.23     Sec. 14.  Minnesota Statutes 2000, section 336.9-601, is 
 31.24  amended to read: 
 31.25     336.9-601 [RIGHTS AFTER DEFAULT; JUDICIAL ENFORCEMENT; 
 31.26  CONSIGNOR OR BUYER OF ACCOUNTS, CHATTEL PAPER, PAYMENT 
 31.27  INTANGIBLES, OR PROMISSORY NOTES.] 
 31.28     (a)  [RIGHTS OF SECURED PARTY AFTER DEFAULT.] After 
 31.29  default, a secured party has the rights provided in this part 
 31.30  and, except as otherwise provided in section 336.9-602, those 
 31.31  provided by agreement of the parties.  A secured party: 
 31.32     (1) may reduce a claim to judgment, foreclose, or otherwise 
 31.33  enforce the claim, security interest, or agricultural lien by 
 31.34  any available judicial procedure; and 
 31.35     (2) if the collateral is documents, may proceed either as 
 31.36  to the documents or as to the goods they cover. 
 32.1      (b)  [RIGHTS AND DUTIES OF SECURED PARTY IN POSSESSION OR 
 32.2   CONTROL.] A secured party in possession of collateral or control 
 32.3   of collateral under section 336.9-104, 336.9-105, 336.9-106, or 
 32.4   336.9-107 has the rights and duties provided in section 
 32.5   336.9-207. 
 32.6      (c)  [RIGHTS CUMULATIVE; SIMULTANEOUS EXERCISE.] The rights 
 32.7   under subsections (a) and (b) are cumulative and may be 
 32.8   exercised simultaneously. 
 32.9      (d)  [RIGHTS OF DEBTOR AND OBLIGOR.] Except as otherwise 
 32.10  provided in subsection (g) and section 336.9-605, after default, 
 32.11  a debtor and an obligor have the rights provided in this part 
 32.12  and by agreement of the parties. 
 32.13     (e)  [LIEN OF LEVY AFTER JUDGMENT.] If a secured party has 
 32.14  reduced its claim to judgment, the lien of any levy that may be 
 32.15  made upon the collateral by virtue of an execution based upon 
 32.16  the judgment relates back to the earliest of: 
 32.17     (1) the date of perfection of the security interest or 
 32.18  agricultural lien in the collateral; 
 32.19     (2) the date of filing a financing statement covering the 
 32.20  collateral; or 
 32.21     (3) any date specified in a statute under which the 
 32.22  agricultural lien was created. 
 32.23     (f)  [EXECUTION SALE.] A sale pursuant to an execution is a 
 32.24  foreclosure of the security interest or agricultural lien by 
 32.25  judicial procedure within the meaning of this section.  A 
 32.26  secured party may purchase at the sale and thereafter hold the 
 32.27  collateral free of any other requirements of this article. 
 32.28     (g)  [CONSIGNOR OR BUYER OF CERTAIN RIGHTS TO PAYMENT.] 
 32.29  Except as otherwise provided in section 336.9-607(c), this part 
 32.30  imposes no duties upon a secured party that is a consignor or is 
 32.31  a buyer of accounts, chattel paper, payment intangibles, or 
 32.32  promissory notes. 
 32.33     (h) A person may not begin to enforce a security interest 
 32.34  in collateral that is agricultural property subject to sections 
 32.35  583.20 to 583.32 that has secured a debt of more than $5,000 
 32.36  unless:  a mediation notice under subsection (i) is served on 
 33.1   the debtor after a condition of default has occurred in the 
 33.2   security agreement and a copy served on the director of the 
 33.3   agricultural extension service; and the debtor and creditor have 
 33.4   completed mediation under sections 583.20 to 583.32; or as 
 33.5   otherwise allowed under sections 583.20 to 583.32. 
 33.6      (i) A mediation notice under subsection (h) must contain 
 33.7   the following notice with the blanks properly filled in. 
 33.8      "TO:  ...(Name of Debtor)... 
 33.9      YOU HAVE DEFAULTED ON THE ...(Debt in Default)... SECURED 
 33.10  BY AGRICULTURAL PROPERTY DESCRIBED AS ...(Reasonable Description 
 33.11  of Agricultural Property Collateral)... 
 33.12     AS A SECURED PARTY, ...(Name of Secured Party)... INTENDS 
 33.13  TO ENFORCE THE SECURITY AGREEMENT AGAINST THE AGRICULTURAL 
 33.14  PROPERTY DESCRIBED ABOVE BY REPOSSESSING, FORECLOSING ON, OR 
 33.15  OBTAINING A COURT JUDGMENT AGAINST THE PROPERTY. 
 33.16     YOU HAVE THE RIGHT TO HAVE THE DEBT REVIEWED FOR 
 33.17  MEDIATION.  IF YOU REQUEST MEDIATION, A DEBT THAT IS IN DEFAULT 
 33.18  WILL BE MEDIATED ONLY ONCE.  IF YOU DO NOT REQUEST MEDIATION, 
 33.19  THIS DEBT WILL NOT BE SUBJECT TO FUTURE MEDIATION IF THE SECURED 
 33.20  PARTY ENFORCES THE DEBT. 
 33.21     IF YOU PARTICIPATE IN MEDIATION, THE DIRECTOR OF THE 
 33.22  AGRICULTURAL EXTENSION SERVICE WILL PROVIDE AN ORIENTATION 
 33.23  MEETING AND A FINANCIAL ANALYST TO HELP YOU TO PREPARE FINANCIAL 
 33.24  INFORMATION.  IF YOU DECIDE TO PARTICIPATE IN MEDIATION, IT WILL 
 33.25  BE TO YOUR ADVANTAGE TO ASSEMBLE YOUR FARM FINANCE AND OPERATION 
 33.26  RECORDS AND TO CONTACT A COUNTY EXTENSION OFFICE AS SOON AS 
 33.27  POSSIBLE.  MEDIATION WILL ATTEMPT TO ARRIVE AT AN AGREEMENT FOR 
 33.28  HANDLING FUTURE FINANCIAL RELATIONS. 
 33.29     TO HAVE THE DEBT REVIEWED FOR MEDIATION YOU MUST FILE A 
 33.30  MEDIATION REQUEST WITH THE DIRECTOR WITHIN 14 DAYS AFTER YOU 
 33.31  RECEIVE THIS NOTICE.  THE MEDIATION REQUEST FORM IS AVAILABLE AT 
 33.32  ANY COUNTY RECORDER'S OR COUNTY EXTENSION OFFICE. 
 33.33     FROM:  ...(Name and Address of Secured Party)..." 
 33.34     Sec. 15.  Minnesota Statutes 2000, section 336.9-607, is 
 33.35  amended to read: 
 33.36     336.9-607 [COLLECTION AND ENFORCEMENT BY SECURED PARTY.] 
 34.1      (a)  [COLLECTION AND ENFORCEMENT GENERALLY.] (1) If so 
 34.2   agreed, and in any event after default, a secured party: 
 34.3      ~~(1)~~ (A) may notify an account debtor or other person 
 34.4   obligated on collateral to make payment or otherwise render 
 34.5   performance to or for the benefit of the secured party; 
 34.6      ~~(2)~~ (B) may take any proceeds to which the secured party is 
 34.7   entitled under section 336.9-315; 
 34.8      ~~(3)~~ (C) may enforce the obligations of an account debtor or 
 34.9   other person obligated on collateral and exercise the rights of 
 34.10  the debtor with respect to the obligation of the account debtor 
 34.11  or other person obligated on collateral to make payment or 
 34.12  otherwise render performance to the debtor, and with respect to 
 34.13  any property that secures the obligations of the account debtor 
 34.14  or other person obligated on the collateral; 
 34.15     ~~(4)~~ (D) if it holds a security interest in a deposit 
 34.16  account perfected by control under section 336.9-104(a)(1), may 
 34.17  apply the balance of the deposit account to the obligation 
 34.18  secured by the deposit account; and 
 34.19     ~~(5)~~ (E) if it holds a security interest in a deposit 
 34.20  account perfected by control under section 336.9-104(a)(2) or 
 34.21  (3), may instruct the bank to pay the balance of the deposit 
 34.22  account to or for the benefit of the secured party~~; and~~. 
 34.23     (2) If a secured party exercises its rights under 
 34.24  subsection (a)(1), the following rules apply: 
 34.25     ~~(6)~~ (A) Except as otherwise provided in subsection (B), if 
 34.26  the obligation of the account debtor or other person obligated 
 34.27  on collateral is secured by an interest in real property and the 
 34.28  account debtor or other person obligated on collateral satisfies 
 34.29  its obligation, the secured party must furnish the account 
 34.30  debtor or the other person obligated on collateral with a 
 34.31  release or satisfaction of the interest in real property 
 34.32  sufficient for recording in the real property records applicable 
 34.33  to that real property.  
 34.34     (B) This subsection applies in the case of an executory 
 34.35  contract for the sale of real property or of an interest in real 
 34.36  property that entitles the purchaser to possession of the real 
 35.1   property.  If the purchaser satisfies its obligations under that 
 35.2   contract, the secured party shall deliver to the purchaser a 
 35.3   deed to the real property in accordance with the terms of the 
 35.4   contract.  
 35.5      (b)  [NONJUDICIAL ENFORCEMENT OF MORTGAGE.] (1) In the case 
 35.6   of a mortgage that is not an executory contract for the sale of 
 35.7   real property or of an interest in real property that entitles 
 35.8   the purchaser to possession of the real property, to exercise 
 35.9   under subsection (a)~~(3)~~(1)(C) the right of a debtor to enforce a 
 35.10  mortgage nonjudicially, the secured party must record in the 
 35.11  office in which a record of the mortgage is recorded: 
 35.12     (A) an assignment of the mortgage to the secured party; or 
 35.13     (B) the secured party's sworn affidavit of assignment in 
 35.14  recordable form stating: 
 35.15     (i) a default has occurred under a security agreement that 
 35.16  creates or provides for a security interest in the obligation 
 35.17  secured by the mortgage; 
 35.18     (ii) a true and correct copy of the security agreement is 
 35.19  attached to the affidavit; 
 35.20     (iii) the secured party is entitled to enforce the mortgage 
 35.21  nonjudicially; 
 35.22     (iv) the legal description of the real property encumbered 
 35.23  by the mortgage; 
 35.24     (v) the parties to the mortgage, the date of the mortgage, 
 35.25  the date of recording of the mortgage, the place of recording of 
 35.26  the mortgage, and the identifying number or other indexing 
 35.27  information that identifies the mortgage in the office of the 
 35.28  county recorder or registrar of titles where the mortgage is 
 35.29  recorded; 
 35.30     (vi) the secured party has succeeded to the interest of the 
 35.31  debtor under the mortgage; and 
 35.32     (vii) the affidavit of assignment shall be an assignment to 
 35.33  the secured party of the interest of the debtor under the 
 35.34  mortgage. 
 35.35     (2) The affidavit of assignment is entitled to be recorded 
 35.36  with the county recorder or the registrar of titles and upon 
 36.1   recording, the affidavit of assignment shall be deemed an 
 36.2   assignment to the secured party of the interest of the debtor 
 36.3   under the mortgage. 
 36.4      (3) This subsection applies in the case of an executory 
 36.5   contract for the sale of real property or of an interest in real 
 36.6   property that entitles the purchaser to possession of the real 
 36.7   property.  To exercise under subsection (a)(1)(C) the right of a 
 36.8   debtor to terminate the contract nonjudicially, the secured 
 36.9   party shall record a transfer statement, as provided in section 
 36.10  336.9-619, with the county recorder or the registrar of titles 
 36.11  in the county where the real property is located.  The 
 36.12  transferee is entitled to have the statement recorded with the 
 36.13  county recorder or the registrar of titles.  When recorded, the 
 36.14  transfer statement is a conveyance of the interest of the debtor 
 36.15  under the contract.  
 36.16     (c)  [COMMERCIALLY REASONABLE COLLECTION AND ENFORCEMENT.] 
 36.17  A secured party shall proceed in a commercially reasonable 
 36.18  manner if the secured party: 
 36.19     (1) undertakes to collect from or enforce an obligation of 
 36.20  an account debtor or other person obligated on collateral; and 
 36.21     (2) is entitled to charge back uncollected collateral or 
 36.22  otherwise to full or limited recourse against the debtor or a 
 36.23  secondary obligor. 
 36.24     (d)  [EXPENSES OF COLLECTION AND ENFORCEMENT.] A secured 
 36.25  party may deduct from the collections made pursuant to 
 36.26  subsection (c) reasonable expenses of collection and 
 36.27  enforcement, including reasonable attorneys fees and legal 
 36.28  expenses incurred by the secured party. 
 36.29     (e)  [DUTIES TO SECURED PARTY NOT AFFECTED.] This section 
 36.30  does not determine whether an account debtor, bank, or other 
 36.31  person obligated on collateral owes a duty to a secured party. 
 36.32     (f)  [SECURED PARTY TO OBTAIN ASSIGNMENT OF DEBTOR'S 
 36.33  INTEREST UNDER THE MORTGAGE.] (1) This subsection applies if the 
 36.34  obligation of an account debtor or other person obligated on 
 36.35  collateral is secured by an interest in real property~~, the~~ 
 36.36  ~~secured party promptly after commencing exercise of any of its~~ 
 37.1   ~~rights~~. 
 37.2      (2) If the interest is under an executory contract for the 
 37.3   sale of real property or of an interest in real property that 
 37.4   entitles the account debtor to possession of the real property, 
 37.5   then promptly after beginning to exercise a right under this 
 37.6   section, the secured party shall record a transfer statement as 
 37.7   provided in section 336.9-619.  The statement must be recorded 
 37.8   with the county recorder or registrar of titles in the county 
 37.9   where the real property is located.  
 37.10     (3) If the interest is not under a document described in 
 37.11  paragraph (2), then promptly after beginning to exercise a right 
 37.12  under this section, the secured party shall: 
 37.13     ~~(1)~~ (A) file an assignment of the mortgage to the secured 
 37.14  party; 
 37.15     ~~(2)~~ (B) ~~proceed under section 336.9-619 and~~ record a 
 37.16  transfer statement ~~in the office of~~, as provided in section 
 37.17  336.9-619, with the county recorder or registrar of titles ~~where~~ 
 37.18  ~~the mortgage is recorded~~ in the county where the real property 
 37.19  is located; or 
 37.20     ~~(3)~~ (C) file an affidavit of assignment as provided under 
 37.21  subsection (b). 
 37.22     Sec. 16.  Minnesota Statutes 2000, section 336.9-617, is 
 37.23  amended to read: 
 37.24     336.9-617 [RIGHTS OF TRANSFEREE OF COLLATERAL.] 
 37.25     (a)  [EFFECTS OF DISPOSITION.] A secured party's 
 37.26  disposition of collateral after default: 
 37.27     (1) transfers to a transferee for value all of the debtor's 
 37.28  rights in the collateral; 
 37.29     (2) discharges the security interest under which the 
 37.30  disposition is made; and 
 37.31     (3) discharges any subordinate security interest or other 
 37.32  subordinate lien ~~other than liens created under (cite acts or~~ 
 37.33  ~~statutes providing for liens, if any, that are not to be~~ 
 37.34  ~~discharged)~~. 
 37.35     (b)  [RIGHTS OF GOOD FAITH TRANSFEREE.] A transferee that 
 37.36  acts in good faith takes free of the rights and interests 
 38.1   described in subsection (a), even if the secured party fails to 
 38.2   comply with this article or the requirements of any judicial 
 38.3   proceeding. 
 38.4      (c)  [RIGHTS OF OTHER TRANSFEREE.] If a transferee does not 
 38.5   take free of the rights and interests described in subsection 
 38.6   (a), the transferee takes the collateral subject to: 
 38.7      (1) the debtor's rights in the collateral; 
 38.8      (2) the security interest or agricultural lien under which 
 38.9   the disposition is made; and 
 38.10     (3) any other security interest or other lien. 
 38.11     Sec. 17.  Minnesota Statutes 2000, section 336.9-619, is 
 38.12  amended to read: 
 38.13     336.9-619 [TRANSFER OF RECORD OR LEGAL TITLE.] 
 38.14     (a)  [TRANSFER STATEMENT.] (1) In this section, "transfer 
 38.15  statement" means a record authenticated by a secured party 
 38.16  stating: 
 38.17     (A) that the debtor has defaulted in connection with an 
 38.18  obligation secured by specified collateral; 
 38.19     (B) that the secured party has exercised its postdefault 
 38.20  remedies with respect to the collateral; 
 38.21     (C) that, by reason of the exercise, a transferee has 
 38.22  acquired the rights of the debtor in the collateral; 
 38.23     (D) the name and mailing address of the secured party, 
 38.24  debtor, and transferee; and 
 38.25     (E) in addition, if the statement is to be filed in the 
 38.26  real property records concerning a mortgage or other record 
 38.27  evidencing an interest in real property, the statement must 
 38.28  state the following information concerning the mortgage or other 
 38.29  record evidencing an interest in real property: 
 38.30     (i) the name and title on the record; 
 38.31     (ii) the date on the record; 
 38.32     (iii) the names of the parties on the record; 
 38.33     (iv) the identity of the office of the county recorder or 
 38.34  registrar of titles where the record is filed; 
 38.35     (v) the date the record was filed; ~~and~~ 
 38.36     (vi) the identifying number of the record in the office of 
 39.1   the county recorder or registrar of titles; and 
 39.2      (vii) in the case of an executory contract for the sale of 
 39.3   real property or of an interest in real property that entitles 
 39.4   the purchaser to possession of the real property, the legal 
 39.5   description of the real property subject to the contract. 
 39.6      (2) A transfer statement that is to be filed in the real 
 39.7   property records must contain an acknowledgment by the secured 
 39.8   party in a form sufficient to satisfy the requirements of 
 39.9   chapter 358. 
 39.10     (3) If an executory contract for the sale of real property 
 39.11  or of an interest in real property that entitles the purchaser 
 39.12  to possession of the real property is terminated, the secured 
 39.13  party may not file a transfer statement concerning that contract 
 39.14  after the termination.  If a transfer statement is filed by the 
 39.15  secured party after the debtor has terminated that contract, the 
 39.16  transfer statement is not effective as a conveyance.  
 39.17     (b)  [EFFECT OF TRANSFER STATEMENT.] A transfer statement 
 39.18  entitles the transferee to the transfer of record of all rights 
 39.19  of the debtor in the collateral specified in the statement in 
 39.20  any official filing, recording, registration, or certificate of 
 39.21  title system covering the collateral.  If a transfer statement 
 39.22  is presented with the applicable fee and request form to the 
 39.23  official or office responsible for maintaining the system, the 
 39.24  official or office shall: 
 39.25     (1) accept the transfer statement; 
 39.26     (2) promptly amend its records to reflect the transfer; and 
 39.27     (3) if applicable, 
 39.28     (A) issue a new appropriate certificate of title in the 
 39.29  name of transferee in the case of property not subject to 
 39.30  chapter 508 or 508A; or 
 39.31     (B) in the case of property subject to chapter 508 or 508A, 
 39.32  issue a new certificate of title upon satisfaction of the 
 39.33  requirements of those chapters. 
 39.34     (c)  [TRANSFER NOT A DISPOSITION; NO RELIEF OF SECURED 
 39.35  PARTY'S DUTIES.] A transfer of the record or legal title to 
 39.36  collateral to a secured party under subsection (b) or otherwise 
 40.1   is not of itself a disposition of collateral under this article 
 40.2   and does not of itself relieve the secured party of its duties 
 40.3   under this article. 
 40.4      (d)  [TRANSFER OF CERTIFICATES OF TITLE.] A secured party 
 40.5   who complies with section 86B.840, subdivision 2, paragraph (b), 
 40.6   or 168A.12, subdivision 2, is considered to have provided a 
 40.7   transfer statement for purposes of this section.  
 40.8      Sec. 18.  [507.236] [TRANSFER STATEMENT FOR CONTRACT FOR 
 40.9   DEED.] 
 40.10     Subdivision 1.  [DEFINITION.] In this section, "transfer 
 40.11  statement for a contract for deed" means a document that: 
 40.12     (1) is a transfer statement made in compliance with section 
 40.13  336.9-619(a); and 
 40.14     (2) transfers a seller's interest in an executory contract 
 40.15  for the sale of real estate or of an interest in real estate 
 40.16  that entitles the purchaser to possession of the real estate. 
 40.17     Subd. 2.  [RECORDING OF STATEMENT.] A transferee under a 
 40.18  transfer statement for a contract for deed is entitled to have 
 40.19  the statement recorded as provided in section 336.9-619(b).  
 40.20  Recording must be with the county recorder or registrar of 
 40.21  titles in the county where the affected real estate is located.  
 40.22     Subd. 3.  [EFFECTS OF RECORDING.] Subject to compliance 
 40.23  with any applicable provisions of section 508.491 or 508A.491, 
 40.24  recording a transfer statement for a contract for deed has the 
 40.25  following effects: 
 40.26     (1) it transfers from the contract seller named as debtor 
 40.27  in the statement to the transferee all title and interest of the 
 40.28  contract seller in the real estate described in the statement; 
 40.29     (2) it has the same effect as an assignment and a deed from 
 40.30  the contract seller to the transferee; and 
 40.31     (3) it is a conveyance within the meaning of section 507.34.
 40.32     Sec. 19.  Minnesota Statutes 2000, section 507.24, 
 40.33  subdivision 2, is amended to read: 
 40.34     Subd. 2.  [ORIGINAL SIGNATURES REQUIRED.] Unless otherwise 
 40.35  provided by law, an instrument affecting real estate that is to 
 40.36  be recorded as provided in this section or other applicable law 
 41.1   must contain the original signatures of the parties who execute 
 41.2   it and of the notary public or other officer taking an 
 41.3   acknowledgment.  However, a financing statement that is recorded 
 41.4   as a fixture filing pursuant to section 336.9-502(b) need not 
 41.5   contain:  (1) the signatures of the debtor or the secured party; 
 41.6   or (2) an acknowledgment. 
 41.7      Sec. 20.  [508.491] [TRANSFER STATEMENT FOR CONTRACT FOR 
 41.8   DEED.] 
 41.9      Subdivision 1.  [DEFINITION.] In this section, "transfer 
 41.10  statement for a contract for deed" means a document that: 
 41.11     (1) is a transfer statement made in compliance with section 
 41.12  336.9-619(a); and 
 41.13     (2) transfers a seller's interest in an executory contract 
 41.14  for the sale of land or of an interest in land that entitles the 
 41.15  purchaser to possession of the land.  
 41.16     Subd. 2.  [REGISTRATION OF STATEMENT.] A transferee under a 
 41.17  transfer statement for a contract for deed is entitled to have 
 41.18  the statement recorded as provided in section 336.9-619(b).  The 
 41.19  registrar shall enter a memorial of the statement on the 
 41.20  certificate of title for the land in which the debtor has a 
 41.21  registered interest.  
 41.22     Subd. 3.  [NEW CERTIFICATE OF TITLE.] If a transferee under 
 41.23  a transfer statement for a contract for deed has become the 
 41.24  owner in fee of the land, or any part of it, the transferee may 
 41.25  have the title registered.  To do so, the transferee must 
 41.26  petition the court for a new certificate of title to the land.  
 41.27  On receiving the petition, the court shall notify the parties in 
 41.28  interest and order a new certificate issued to the petitioner.  
 41.29  The registrar shall issue a new certificate of title to the 
 41.30  land, or the part of the land, the petitioner owns, as in the 
 41.31  case of a voluntary conveyance.  
 41.32     Subd. 4.  [FIXTURE FINANCING STATEMENTS.] A financing 
 41.33  statement that is filed as a fixture filing pursuant to section 
 41.34  336.9-502(b) need not contain:  (1) the signatures of the debtor 
 41.35  or the secured party; or (2) an acknowledgment, and must be 
 41.36  filed with the registrar, and shown as a memorial on the 
 42.1   certificate of title. 
 42.2      Sec. 21.  [508A.491] [TRANSFER STATEMENT FOR CONTRACT FOR 
 42.3   DEED.] 
 42.4      Subdivision 1.  [DEFINITION.] In this section, "transfer 
 42.5   statement for a contract for deed" means a document that: 
 42.6      (1) is a transfer statement made in compliance with section 
 42.7   336.9-619(a); and 
 42.8      (2) transfers a seller's interest in an executory contract 
 42.9   for the sale of land or of an interest in land that entitles the 
 42.10  purchaser to possession of the land.  
 42.11     Subd. 2.  [REGISTRATION OF STATEMENT.] A transferee under a 
 42.12  transfer statement for a contract for deed is entitled to have 
 42.13  the statement recorded as provided in section 336.9-619(b).  The 
 42.14  registrar shall enter a memorial of the statement on the 
 42.15  certificate of title for the land in which the debtor has a 
 42.16  registered interest.  
 42.17     Subd. 3.  [NEW CERTIFICATE OF TITLE.] If a transferee under 
 42.18  a transfer statement for a contract for deed has become the 
 42.19  owner in fee of the land, or any part of it, the transferee may 
 42.20  have the title registered.  To do so, the transferee must 
 42.21  petition the court for a new certificate of title to the land.  
 42.22  On receiving the petition, the court shall notify the parties in 
 42.23  interest and order a new certificate issued to the petitioner.  
 42.24  The registrar shall issue a new certificate of title to the 
 42.25  land, or the part of the land, the petitioner owns, as in the 
 42.26  case of a voluntary conveyance.  
 42.27     Subd. 4.  [FIXTURE FINANCING STATEMENTS.] A financing 
 42.28  statement that is filed as a fixture filing pursuant to section 
 42.29  336.9-502(b) need not contain:  (1) the signatures of the debtor 
 42.30  or the secured party; or (2) an acknowledgment, and must be 
 42.31  filed with the registrar, and shown as a memorial on the 
 42.32  certificate of title. 
 42.33     Sec. 22.  Laws 1986, chapter 398, article 1, section 18, as 
 42.34  amended by Laws 1987, chapter 292, section 37; Laws 1989, 
 42.35  chapter 350, article 16, section 8; Laws 1990, chapter 525, 
 42.36  section 1; Laws 1991, chapter 208, section 2; Laws 1993, First 
 43.1   Special Session chapter 2, article 6, section 2; Laws 1995, 
 43.2   chapter 212, article 2, section 11; Laws 1997, chapter 183, 
 43.3   article 3, section 29; Laws 1998, chapter 395, section 7; Laws 
 43.4   1998, chapter 402, section 6; and Laws 1999, chapter 214, 
 43.5   article 2, section 19, is amended to read: 
 43.6      Sec. 18.  [REPEALER.] 
 43.7      Sections 1 to 17 and Minnesota Statutes, section ~~336.9-501,~~ 
 43.8   ~~subsections (6) and (7)~~ 336.9-601, subsections (h) and (i), and 
 43.9   sections 583.284, 583.285, 583.286, and 583.305, are repealed on 
 43.10  July 1, 2001. 
 43.11     Sec. 23.  [REPEALER.] 
 43.12     (a) Minnesota Statutes 2000, section 168A.17, subdivision 
 43.13  3, is repealed.  
 43.14     (b) Minnesota Rules, parts 8260.0600; 8260.0700; 8260.0800; 
 43.15  8260.0900; 8260.1000; 8260.1100; 8270.0010; 8270.0050; 
 43.16  8270.0100; 8270.0105; 8270.0110; 8270.0115; 8270.0200; 
 43.17  8270.0205; 8270.0210; 8270.0215; 8270.0220; 827.0225; 8270.0230; 
 43.18  8270.0235; 8270.0240; 8270.0245; 8270.0255; 8270.0260; 
 43.19  8270.0265; and 8270.0270, are repealed.  
 43.20                             ARTICLE 2
 43.21            CONFORMING AMENDMENTS TO MINNESOTA STATUTES
 43.22     Section 1.  Minnesota Statutes 2000, section 27.138, 
 43.23  subdivision 2, is amended to read: 
 43.24     Subd. 2.  [SELLERS' RIGHTS TO TRUST ASSETS.] (a) An unpaid 
 43.25  seller may recover trust assets for the net amount unpaid after 
 43.26  the due date after allowing deductions of contemplated expenses 
 43.27  or advances made in connection with the transaction.  An amount 
 43.28  is considered unpaid if a seller receives a payment instrument 
 43.29  that is dishonored.  
 43.30     (b) An unpaid seller may recover trust assets after filing 
 43.31  a beneficiaries notice with the wholesale produce dealer to whom 
 43.32  the produce was transferred~~,~~ and the commissioner, and ~~the~~ 
 43.33  ~~appropriate filing office~~ after filing in the central filing 
 43.34  system under section ~~336.9-401~~ 336.9-501 as if the trust were a 
 43.35  security interest in the trust assets by 40 days after the due 
 43.36  date for the payment to the seller or 40 days after a payment 
 44.1   instrument to the seller for the produce is dishonored, 
 44.2   whichever is later.  
 44.3      Sec. 2.  Minnesota Statutes 2000, section 27.138, 
 44.4   subdivision 3, is amended to read: 
 44.5      Subd. 3.  [BENEFICIARIES NOTICE.] (a) A beneficiaries 
 44.6   notice must be in writing and in a form prescribed by the 
 44.7   commissioner ~~after consultation with the secretary of state~~.  
 44.8      (b) The beneficiaries notice must contain:  
 44.9      (1) the name and address of the seller; 
 44.10     (2) the name and address of the wholesale produce dealer 
 44.11  maintaining the trust assets; 
 44.12     (3) the produce, amount of produce, amount to be paid the 
 44.13  seller, and the due date of transactions that are unpaid or, if 
 44.14  appropriate, the date a payment instrument was dishonored; and 
 44.15     (4) a description of the trust assets.  
 44.16     (c) The filing officer shall enter on the ~~beneficiaries~~ 
 44.17  ~~notice~~ initial financing statement filed pursuant to this 
 44.18  section the time of day and date of filing.  The filing officer 
 44.19  shall accept filings, amendments, and terminations of ~~a~~ 
 44.20  ~~beneficiaries notice~~ an initial financing statement filed 
 44.21  pursuant to this section and charge the same filing fees as 
 44.22  provided in section ~~336.9-403 for a financing statement~~ 
 44.23  336.9-525.  ~~A beneficiaries notice~~ An initial financing 
 44.24  statement filed pursuant to this section is void and may be 
 44.25  removed from the filing system 18 months after the date of 
 44.26  filing.  The beneficiaries notice may be physically destroyed 30 
 44.27  months after the date of filing.  
 44.28     Sec. 3.  Minnesota Statutes 2000, section 86B.820, 
 44.29  subdivision 10, is amended to read: 
 44.30     Subd. 10.  [SECURED PARTY.] "Secured party" means a secured 
 44.31  party as defined in section ~~336.9-105, subsection~~ 
 44.32  ~~(1)(m)~~ 336.9-102(a)(72), having a security interest in a 
 44.33  watercraft and includes a lienholder. 
 44.34     Sec. 4.  Minnesota Statutes 2000, section 86B.820, 
 44.35  subdivision 11, is amended to read: 
 44.36     Subd. 11.  [SECURITY AGREEMENT.] "Security agreement" has 
 45.1   the meaning given it in section ~~336.9-105, subsection~~ 
 45.2   ~~(1)(l)~~ 336.9-102(a)(73). 
 45.3      Sec. 5.  Minnesota Statutes 2000, section 168A.01, 
 45.4   subdivision 18, is amended to read: 
 45.5      Subd. 18.  [SECURED PARTY.] "Secured party" means a secured 
 45.6   party as defined in section ~~336.9-105 (1)(m)~~ 336.9-102(a)(72) 
 45.7   having a security interest in a vehicle. 
 45.8      Sec. 6.  Minnesota Statutes 2000, section 168A.01, 
 45.9   subdivision 19, is amended to read: 
 45.10     Subd. 19.  [SECURITY AGREEMENT.] "Security agreement" means 
 45.11  a security agreement as defined in section ~~336.9-105 (1)~~ 
 45.12  ~~(l)~~ 336.9-102(a)(73). 
 45.13     Sec. 7.  Minnesota Statutes 2000, section 168A.05, 
 45.14  subdivision 8, is amended to read: 
 45.15     Subd. 8.  [LIENS FILED FOR ENFORCEMENT OF CHILD SUPPORT.] 
 45.16  This subdivision applies if the court or a public authority 
 45.17  responsible for child support enforcement orders or directs the 
 45.18  commissioner to enter a lien, as provided in section 518.551, 
 45.19  subdivision 14.  If a certificate of title is applied for by the 
 45.20  owner, the department shall enter a lien on the title in the 
 45.21  name of the state of Minnesota or in the name of the obligee in 
 45.22  accordance with the notice if the value of the motor vehicle 
 45.23  determined in accordance with either the definitions of section 
 45.24  297B.01, subdivision 8, or the retail value described in the 
 45.25  N.A.D.A. Official Used Car Guide, Midwest Edition, for the 
 45.26  current year exceeds the exemption allowed in section 550.37.  
 45.27  The lien on the title is subordinate to any bona fide purchase 
 45.28  money security interest ~~as defined in~~ under section ~~336.9-107~~ 
 45.29  336.9-103 regardless of when the purchase money security 
 45.30  interest is perfected.  With respect to all other security 
 45.31  interests, the lien is perfected as of the date entered on the 
 45.32  title.  
 45.33     Sec. 8.  Minnesota Statutes 2000, section 169A.63, 
 45.34  subdivision 7, is amended to read: 
 45.35     Subd. 7.  [LIMITATIONS ON VEHICLE FORFEITURE.] (a) A 
 45.36  vehicle is subject to forfeiture under this section only if: 
 46.1      (1) the driver is convicted of the designated offense upon 
 46.2   which the forfeiture is based; 
 46.3      (2) the driver fails to appear with respect to the 
 46.4   designated offense charge in violation of section 609.49 
 46.5   (release; failure to appear); or 
 46.6      (3) the driver's conduct results in a designated license 
 46.7   revocation and the driver either fails to seek administrative or 
 46.8   judicial review of the revocation in a timely manner as required 
 46.9   by section 169A.53 (administrative and judicial review of 
 46.10  license revocation), or the license revocation is sustained 
 46.11  under section 169A.53. 
 46.12     (b) A vehicle encumbered by a bona fide security interest, 
 46.13  or subject to a lease that has a term of 180 days or more, is 
 46.14  subject to the interest of the secured party or lessor unless 
 46.15  the party or lessor had knowledge of or consented to the act 
 46.16  upon which the forfeiture is based.  However, when the proceeds 
 46.17  of the sale of a seized vehicle do not equal or exceed the 
 46.18  outstanding loan balance, the appropriate agency shall remit all 
 46.19  proceeds of the sale to the secured party.  If the sale of the 
 46.20  vehicle is conducted in a commercially reasonable manner 
 46.21  consistent with the provisions of section ~~336.9-504, clause~~ 
 46.22  ~~(3)~~ 336.9-610, the agency is not liable to the secured party for 
 46.23  any amount owed on the loan in excess of the sale proceeds if 
 46.24  the secured party received notification of the time and place of 
 46.25  the sale at least three days prior to the sale. 
 46.26     (c) Notwithstanding paragraphs (b) and (d), the secured 
 46.27  party's, lessor's, or owner's interest in a vehicle is not 
 46.28  subject to forfeiture based solely on the secured party's, 
 46.29  lessor's, or owner's knowledge of the act or omission upon which 
 46.30  the forfeiture is based if the secured party, lessor, or owner 
 46.31  took reasonable steps to terminate use of the vehicle by the 
 46.32  offender. 
 46.33     (d) A motor vehicle is subject to forfeiture under this 
 46.34  section only if its owner knew or should have known of the 
 46.35  unlawful use or intended use. 
 46.36     (e) A vehicle subject to a security interest, based upon a 
 47.1   loan or other financing arranged by a financial institution, is 
 47.2   subject to the interest of the financial institution. 
 47.3      Sec. 9.  Minnesota Statutes 2000, section 169A.63, 
 47.4   subdivision 11, is amended to read: 
 47.5      Subd. 11.  [SALE OF FORFEITED VEHICLE BY SECURED PARTY.] 
 47.6   (a) A financial institution with a valid security interest in or 
 47.7   a valid lease covering a forfeited vehicle may choose to dispose 
 47.8   of the vehicle under this subdivision, in lieu of the 
 47.9   appropriate agency disposing of the vehicle under subdivision 
 47.10  9.  A financial institution wishing to dispose of a vehicle 
 47.11  under this subdivision shall notify the appropriate agency of 
 47.12  its intent, in writing, within 30 days after receiving notice of 
 47.13  the seizure and forfeiture.  The appropriate agency shall 
 47.14  release the vehicle to the financial institution or its agent 
 47.15  after the financial institution presents proof of its valid 
 47.16  security agreement or of its lease agreement and the financial 
 47.17  institution agrees not to sell the vehicle to a member of the 
 47.18  violator's household, unless the violator is not convicted of 
 47.19  the offense on which the forfeiture is based.  The financial 
 47.20  institution shall dispose of the vehicle in a commercially 
 47.21  reasonable manner as defined in section ~~336.9-504~~ 336.9-610. 
 47.22     (b) After disposing of the forfeited vehicle, the financial 
 47.23  institution shall reimburse the appropriate agency for its 
 47.24  seizure, storage, and forfeiture costs.  The financial 
 47.25  institution may then apply the proceeds of the sale to its 
 47.26  storage costs, to its sale expenses, and to satisfy the lien or 
 47.27  the lease on the vehicle.  If any proceeds remain, the financial 
 47.28  institution shall forward the proceeds to the state treasury, 
 47.29  which shall credit the appropriate fund as specified in 
 47.30  subdivision 9. 
 47.31     Sec. 10.  Minnesota Statutes 2000, section 268.058, 
 47.32  subdivision 1, is amended to read: 
 47.33     Subdivision 1.  [LIEN.] (a) Any taxes, unemployment benefit 
 47.34  overpayments, or payments in lieu of taxes due including 
 47.35  interest, penalties, and costs shall become a lien upon all the 
 47.36  property, within this state, both real and personal, of the 
 48.1   person liable, from the date of assessment.  The term "date of 
 48.2   assessment" means the date the obligation was due. 
 48.3      (b) The lien is not enforceable against any purchaser, 
 48.4   mortgagee, pledgee, holder of a Uniform Commercial Code security 
 48.5   interest, mechanic's lien, or judgment lien creditor, until a 
 48.6   notice of lien has been filed with the county recorder of the 
 48.7   county where the property is situated, or in the case of 
 48.8   personal property belonging to a nonresident person in the 
 48.9   office of the secretary of state.  When the notice of lien is 
 48.10  filed with the county recorder, the fee for filing and indexing 
 48.11  shall be as provided in sections 272.483 and 272.484.  
 48.12     (c) Notices of liens, lien renewals, and lien releases, in 
 48.13  a form prescribed by the commissioner, may be filed with the 
 48.14  county recorder or the secretary of state by mail, personal 
 48.15  delivery, or by electronic transmission into the computerized 
 48.16  filing system of the secretary of state ~~under section 336.9-411~~. 
 48.17  The secretary of state shall, on any notice filed with that 
 48.18  office, transmit the notice electronically to the appropriate 
 48.19  county recorder.  The filing officer, whether the county 
 48.20  recorder or the secretary of state, shall endorse and index a 
 48.21  printout of the notice as if the notice had been mailed or 
 48.22  delivered.  
 48.23     (d) County recorders and the secretary of state shall enter 
 48.24  information on lien notices, renewals, and releases into the 
 48.25  central database of the secretary of state.  For notices filed 
 48.26  electronically with the county recorders, the date and time of 
 48.27  receipt of the notice and county recorder's file number, and for 
 48.28  notices filed electronically with the secretary of state, the 
 48.29  secretary of state's recording information, must be entered into 
 48.30  the central database before the close of the working day 
 48.31  following the day of the original data entry by the commissioner.
 48.32     (e) The lien imposed on personal property, even though 
 48.33  properly filed, is not enforceable against a purchaser of 
 48.34  tangible personal property purchased at retail or personal 
 48.35  property listed as exempt in sections 550.37, 550.38, and 550.39.
 48.36     (f) A notice of lien filed has priority over any security 
 49.1   interest arising under chapter 336, article 9, that is perfected 
 49.2   prior in time to the lien imposed by this subdivision, but only 
 49.3   if:  
 49.4      (1) the perfected security interest secures property not in 
 49.5   existence at the time the notice of lien is filed; and 
 49.6      (2) the property comes into existence after the 45th 
 49.7   calendar day following the day the notice of lien is filed, or 
 49.8   after the secured party has actual notice or knowledge of the 
 49.9   lien filing, whichever is earlier. 
 49.10     (g) The lien shall be enforceable from the time the lien 
 49.11  arises and for ten years from the date of filing the notice of 
 49.12  lien.  A notice of lien may be renewed before expiration for an 
 49.13  additional ten years.  
 49.14     (h) The lien shall be enforceable by levy under subdivision 
 49.15  2 or by judgment lien foreclosure under chapter 550.  
 49.16     (i) The lien may be imposed upon property defined as 
 49.17  homestead property in chapter 510 but may be enforced only upon 
 49.18  the sale, transfer, or conveyance of the homestead property. 
 49.19     (j) The commissioner may sell and assign to a third party 
 49.20  the commissioner's right of redemption in specific real property 
 49.21  for liens filed under this subdivision.  The assignee shall be 
 49.22  limited to the same rights of redemption as the commissioner, 
 49.23  except that in a bankruptcy proceeding, the assignee does not 
 49.24  obtain the commissioner's priority.  Any proceeds from the sale 
 49.25  of the right of redemption shall be credited to the contingent 
 49.26  account.  Any sale shall be by written agreement signed by an 
 49.27  attorney who is a classified employee of the department 
 49.28  designated by the commissioner for that purpose. 
 49.29     Sec. 11.  Minnesota Statutes 2000, section 270.69, 
 49.30  subdivision 2, is amended to read: 
 49.31     Subd. 2.  [FILING OF LIENS NECESSARY FOR ENFORCEABILITY 
 49.32  AGAINST CERTAIN PERSONS; METHODS OF FILING; FEES.] (a) The lien 
 49.33  imposed by subdivision 1 is not enforceable against any 
 49.34  purchaser, mortgagee, pledgee, holder of a Uniform Commercial 
 49.35  Code security interest, mechanic's lienor, or judgment lien 
 49.36  creditor whose interest has been duly perfected or is entitled 
 50.1   to protection under applicable provisions of state law, until a 
 50.2   notice of lien has been filed by the commissioner of revenue in 
 50.3   the office of the county recorder of the county in which real 
 50.4   property is situated, or in the case of personal property 
 50.5   belonging to an individual who is not a resident of this state 
 50.6   or to a corporation, partnership, or other organization, in the 
 50.7   office of the secretary of state, or in the case of personal 
 50.8   property belonging to a resident individual, in the office of 
 50.9   the county recorder of the county of residence of the individual.
 50.10     (b)(1) Notices of liens, and lien releases, transcriptions, 
 50.11  and renewals, in a form prescribed by the commissioner of 
 50.12  revenue, may be filed with the county recorder or the secretary 
 50.13  of state by mail, personal delivery, or by electronic 
 50.14  transmission by the commissioner or a delegate into the 
 50.15  computerized filing system of the secretary of state ~~authorized~~ 
 50.16  ~~under section 336.9-411~~.  The secretary of state shall transmit 
 50.17  the notice electronically to the office of the county recorder, 
 50.18  if that is the place of filing, in the county or counties shown 
 50.19  on the computer entry.  The filing officer, whether the county 
 50.20  recorder or the secretary of state, shall endorse and index a 
 50.21  printout of the notice in the same manner as if the notice had 
 50.22  been mailed or delivered.  
 50.23     (2) County recorders and the secretary of state shall enter 
 50.24  information relative to lien notices, transcriptions, renewals, 
 50.25  and releases filed in their offices into the central database of 
 50.26  the secretary of state.  For notices filed electronically with 
 50.27  the county recorders, the date and time of receipt of the notice 
 50.28  and county recorder's file number, and for notices filed 
 50.29  electronically with the secretary of state, the secretary of 
 50.30  state's recording information, must be entered by the filing 
 50.31  officer into the central database before the close of the 
 50.32  working day following the day of the original data entry by the 
 50.33  department of revenue.  
 50.34     The filing and indexing of all notices must be in 
 50.35  accordance with the filing and indexing of notices of federal 
 50.36  liens, certificates of release, and refiled notices under 
 51.1   section 272.483.  
 51.2      (c) Notwithstanding any other law to the contrary, the 
 51.3   department of revenue is exempt from payment of fees when a 
 51.4   lien, lien renewal, or lien transcription is offered for 
 51.5   recording.  The recording fees must be paid along with the 
 51.6   release fee at the end of the month in which the release of lien 
 51.7   is recorded, after receipt of a monthly statement from a county 
 51.8   recorder or the secretary of state.  The department of revenue 
 51.9   shall add the recording fees to the delinquent tax liability of 
 51.10  the taxpayer.  Notwithstanding any other law to the contrary, 
 51.11  the fee for filing or recording a notice of lien, or lien 
 51.12  release, transcription, or renewal is $15.  
 51.13     (d) There is appropriated to the commissioner of revenue an 
 51.14  amount representing the cost of payment of recording fees to the 
 51.15  county recorders and the secretary of state.  The commissioner 
 51.16  shall keep a separate accounting of the costs and of payments 
 51.17  for recording fees remitted by taxpayers, and make the records 
 51.18  available to the legislature upon request.  
 51.19     Sec. 12.  Minnesota Statutes 2000, section 270.69, 
 51.20  subdivision 9, is amended to read: 
 51.21     Subd. 9.  [LIEN SEARCH FEES.] Upon request of any person, 
 51.22  the filing officer shall issue a certificate showing whether 
 51.23  there is recorded in that filing office, on the date and hour 
 51.24  stated in the certificate, any notice of lien or certificate or 
 51.25  notice affecting any lien filed on or after ten years before the 
 51.26  date of the search certificate, naming a particular person, and 
 51.27  giving the date and hour of filing of each notice or certificate 
 51.28  naming the person.  The fee for a certificate shall be as 
 51.29  provided by section ~~336.9-407~~ 336.9-525 or 357.18, subdivision 
 51.30  1, clause (3).  Upon request, the filing officer shall furnish a 
 51.31  copy of any notice of state lien, or notice or certificate 
 51.32  affecting a state lien, for a fee of 50 cents per page. 
 51.33     Sec. 13.  Minnesota Statutes 2000, section 270.69, 
 51.34  subdivision 13, is amended to read: 
 51.35     Subd. 13.  [FORTY-FIVE DAY RULE.] A notice of tax lien 
 51.36  filed under this section has priority over a security interest 
 52.1   arising under article 9 of the Uniform Commercial Code~~, codified~~ 
 52.2   ~~as sections 336.9-101 to 336.9-508,~~ that is perfected before the 
 52.3   date of filing of the lien imposed by this section, but only if: 
 52.4      (1) the perfected security interest secures property 
 52.5   acquired by the taxpayer or advances made by the secured party 
 52.6   after the notice of tax lien is filed; and 
 52.7      (2) the property is acquired or the advance is made after 
 52.8   the 45th day following the day on which the notice of tax lien 
 52.9   is filed, or after the secured party has actual notice or 
 52.10  knowledge of the tax lien filing, whichever is earlier.  
 52.11     Sec. 14.  Minnesota Statutes 2000, section 270.7001, 
 52.12  subdivision 4, is amended to read: 
 52.13     Subd. 4.  [PAYMENTS COVERED.] For purposes of this section, 
 52.14  the term payments does not include wages as defined in section 
 52.15  290.92 or funds in a deposit account as defined in 
 52.16  section ~~336.9-105~~ 336.9-102(a)(29).  The term payments does 
 52.17  include the following: 
 52.18     (1) payments due for services of independent contractors, 
 52.19  dividends, rents, royalties, residuals, patent rights, and 
 52.20  mineral or other natural resource rights; 
 52.21     (2) payments or credits under written or oral contracts for 
 52.22  services or sales whether denominated as wages, salary, 
 52.23  commission, bonus, or otherwise, if the payments are not covered 
 52.24  by section 290.92, subdivision 23; and 
 52.25     (3) any other periodic payments or credits resulting from 
 52.26  an enforceable obligation to the taxpayer, employer, or person. 
 52.27     Sec. 15.  Minnesota Statutes 2000, section 272.483, is 
 52.28  amended to read: 
 52.29     272.483 [DUTIES OF FILING OFFICER.] 
 52.30     (a) If a notice of federal lien, a refiling of a notice of 
 52.31  federal lien, or a notice of revocation of any certificate 
 52.32  described in clause (b) is presented to a filing officer who is: 
 52.33     (1) the secretary of state; the secretary shall cause the 
 52.34  notice to be marked and indexed alphabetically and numerically 
 52.35  in the computerized filing system maintained by the secretary of 
 52.36  state ~~under section 336.9-411~~; 
 53.1      (2) the county recorder; the county recorder shall endorse 
 53.2   identification and the date and time of filing and file and 
 53.3   enter it in an alphabetical index showing the name and address 
 53.4   of the person named in the notice, the date and time of filing, 
 53.5   the file number of the lien, and the total amount appearing on 
 53.6   the notice of lien.  
 53.7      Each county recorder shall enter the date and time of 
 53.8   filing and the file number and shall index the names of the 
 53.9   persons shown on the notice into the computerized database 
 53.10  system maintained by the secretary of state.  
 53.11     For notices of federal tax liens on real property, the 
 53.12  information in the computerized filing and database systems does 
 53.13  not create, release, discharge, or recreate a notice of federal 
 53.14  tax lien on real property in this state. 
 53.15     (b) If a certificate of release, nonattachment, or 
 53.16  subordination of any lien is presented to the secretary of state 
 53.17  for filing, the secretary shall: 
 53.18     (1) enter the information into the computerized filing 
 53.19  system ~~maintained under section 336.9-411~~; 
 53.20     (2) cause a certificate of release or nonattachment to be 
 53.21  marked and indexed as if the certificate were a termination 
 53.22  statement within the meaning of the Uniform Commercial Code, but 
 53.23  the notice of lien to which the certificate relates may not be 
 53.24  removed from the files until ten years and 30 days after the 
 53.25  filing date of the lien; and 
 53.26     (3) cause a certificate of subordination to be marked and 
 53.27  indexed as if the certificate were a release of collateral 
 53.28  within the meaning of the Uniform Commercial Code. 
 53.29     (c) If a refiled notice of federal lien referred to in 
 53.30  clause (a) or any of the certificates or notices referred to in 
 53.31  clause (b) is presented for filing to any other filing officer 
 53.32  specified in section 272.481, the officer shall enter the 
 53.33  refiled notice or the certificate with the date and time of 
 53.34  filing in any alphabetical lien index where the original notice 
 53.35  of lien is entered ~~and into the computerized database system~~. 
 53.36     (d) When a filing officer receives a request to search the 
 54.1   records for the name of a particular person, the filing officer 
 54.2   must issue a search certificate showing whether there is any 
 54.3   notice of lien or certificate or notice of lien filed on or 
 54.4   after ten years and 30 days before the date of the search.  If a 
 54.5   notice or certificate is on file, the search certificate must 
 54.6   state the file or document number of the notice and the date and 
 54.7   time of filing of each notice or certificate and the date and 
 54.8   time the search certificate was issued.  The fee for a 
 54.9   certificate shall be that provided by section ~~336.9-407~~ 
 54.10  336.9-525 or 357.18, subdivision 1, clause (3).  
 54.11     Sec. 16.  Minnesota Statutes 2000, section 272.484, is 
 54.12  amended to read: 
 54.13     272.484 [FEES.] 
 54.14     The fee for filing and indexing each notice of lien or 
 54.15  certificate or notice affecting the lien is: 
 54.16     (1) for a lien, certificate of discharge or subordination, 
 54.17  and for all other notices, including a certificate of release or 
 54.18  nonattachment filed with the secretary of state, the fee 
 54.19  provided by section ~~336.9-405~~ 336.9-525; 
 54.20     (2) for a lien, certificate of discharge or subordination, 
 54.21  and for all other notices, including a certificate of release or 
 54.22  nonattachment filed with the county recorder, the fee for filing 
 54.23  a real estate mortgage in the county where filed. 
 54.24     The officer shall bill the district directors of internal 
 54.25  revenue or other appropriate federal officials on a monthly 
 54.26  basis for fees for documents filed by them. 
 54.27     Sec. 17.  Minnesota Statutes 2000, section 272.488, 
 54.28  subdivision 3, is amended to read: 
 54.29     Subd. 3.  [FILING WITH SECRETARY OF STATE.] ~~(a)~~ Notices of 
 54.30  federal tax liens, certificates, or revocations of certificates 
 54.31  of release of federal tax liens, refiled notices of any of those 
 54.32  items, and any other notices affecting federal tax liens that 
 54.33  are required to be filed with the secretary of state, in a form 
 54.34  prescribed by the Internal Revenue Service, may be filed with 
 54.35  the secretary of state by mail, personal delivery, or electronic 
 54.36  transmission by the Secretary of the Treasury of the United 
 55.1   States or a delegate into the computerized filing system of the 
 55.2   secretary of state ~~authorized under section 336.9-411~~.  The 
 55.3   electronic record must be endorsed and indexed within the 
 55.4   computerized database system as required by section 272.483. 
 55.5      (b) For filings made pursuant to section 272.481, paragraph 
 55.6   (c), clause (1), with the secretary of state, when data entry is 
 55.7   complete as required by subdivision 2, the original document is 
 55.8   contained in the computerized filing system and is the official 
 55.9   copy from which all official copies will be made.  Reproductions 
 55.10  of documents described in section 272.483, paragraph (a) or (b), 
 55.11  which are contained in the computerized filing system will be in 
 55.12  the same format as if the document had been filed on paper by 
 55.13  the Internal Revenue Service. 
 55.14     Sec. 18.  Minnesota Statutes 2000, section 277.20, 
 55.15  subdivision 8, is amended to read: 
 55.16     Subd. 8.  [LIEN SEARCH FEES.] Upon request of a person, the 
 55.17  filing officer shall issue a certificate showing whether there 
 55.18  is on file, on the date and hour stated in the certificate, any 
 55.19  notice of lien or certificate or notice affecting any lien filed 
 55.20  after December 31, 1991, naming a particular person, and giving 
 55.21  the date and hour of filing of each notice or certificate naming 
 55.22  the person.  The fee for a certificate is as provided by section 
 55.23  ~~336.9-407~~ 336.9-525 or 357.18, subdivision 1, clause (3).  Upon 
 55.24  request, the filing officer shall furnish a copy of any notice 
 55.25  of lien, or notice or certificate affecting a lien, for a fee of 
 55.26  $1 per page. 
 55.27     Sec. 19.  Minnesota Statutes 2000, section 300.112, 
 55.28  subdivision 1, is amended to read: 
 55.29     Subdivision 1.  [FILING WITH SECRETARY OF STATE.] 
 55.30  Notwithstanding sections ~~336.9-302, subsections (3) and (4);~~ 
 55.31  ~~336.9-401, subsection (1); 336.9-402; and 336.9-403~~ 336.9-311, 
 55.32  336.9-501, 336.9-502, 336.9-515, and 336.9-519 of the Uniform 
 55.33  Commercial Code, all filings required under the Uniform 
 55.34  Commercial Code in order to perfect a security interest against 
 55.35  the personal property or fixtures of a debtor public utility, or 
 55.36  against the personal property or fixtures of a debtor taconite 
 56.1   company or a debtor semitaconite company, must be made and 
 56.2   maintained in the office of the secretary of state.  
 56.3      Sec. 20.  Minnesota Statutes 2000, section 325L.16, is 
 56.4   amended to read: 
 56.5      325L.16 [TRANSFERABLE RECORD.] 
 56.6      (a) In this section, "transferable record" means an 
 56.7   electronic record that: 
 56.8      (1) would be a note under Article 3 of the Uniform 
 56.9   Commercial Code or a document under Article 7 of the Uniform 
 56.10  Commercial Code if the electronic record were in writing; and 
 56.11     (2) the issuer of the electronic record expressly has 
 56.12  agreed is a transferable record. 
 56.13     (b) A person has control of a transferable record if a 
 56.14  system employed for evidencing the transfer of interests in the 
 56.15  transferable record reliably establishes that person as the 
 56.16  person to which the transferable record was issued or 
 56.17  transferred. 
 56.18     (c) A system satisfies paragraph (b), and a person is 
 56.19  deemed to have control of a transferable record, if the 
 56.20  transferable record is created, stored, and assigned in such a 
 56.21  manner that: 
 56.22     (1) a single authoritative copy of the transferable record 
 56.23  exists which is unique, identifiable, and, except as otherwise 
 56.24  provided in clauses (4), (5), and (6), unalterable; 
 56.25     (2) the authoritative copy identifies the person asserting 
 56.26  control as: 
 56.27     (i) the person to which the transferable record was issued; 
 56.28  or 
 56.29     (ii) if the authoritative copy indicates that the 
 56.30  transferable record has been transferred, the person to which 
 56.31  the transferable record was most recently transferred; 
 56.32     (3) the authoritative copy is communicated to and 
 56.33  maintained by the person asserting control or its designated 
 56.34  custodian; 
 56.35     (4) copies or revisions that add or change an identified 
 56.36  assignee of the authoritative copy can be made only with the 
 57.1   consent of the person asserting control; 
 57.2      (5) each copy of the authoritative copy and any copy of a 
 57.3   copy is readily identifiable as a copy that is not the 
 57.4   authoritative copy; and 
 57.5      (6) any revision of the authoritative copy is readily 
 57.6   identifiable as authorized or unauthorized. 
 57.7      (d) Except as otherwise agreed, a person having control of 
 57.8   a transferable record is the holder, as defined in section 
 57.9   336.1-201(20) of the Uniform Commercial Code, of the 
 57.10  transferable record and has the same rights and defenses as a 
 57.11  holder of an equivalent record or writing under the Uniform 
 57.12  Commercial Code, including, if the applicable statutory 
 57.13  requirements under section 336.3-302(a), 336.7-501, or ~~336.9-308~~ 
 57.14  336.9-330 of the Uniform Commercial Code are satisfied, the 
 57.15  rights and defenses of a holder in due course, a holder to which 
 57.16  a negotiable document of title has been duly negotiated, or a 
 57.17  purchaser, respectively.  Delivery, possession, and endorsement 
 57.18  are not required to obtain or exercise any of the rights under 
 57.19  this paragraph. 
 57.20     (e) Except as otherwise agreed, an obligor under a 
 57.21  transferable record has the same rights and defenses as an 
 57.22  equivalent obligor under equivalent records or writings under 
 57.23  the Uniform Commercial Code. 
 57.24     (f) If requested by a person against which enforcement is 
 57.25  sought, the person seeking to enforce the transferable record 
 57.26  shall provide reasonable proof that the person is in control of 
 57.27  the transferable record.  Proof may include access to the 
 57.28  authoritative copy of the transferable record and related 
 57.29  business records sufficient to review the terms of the 
 57.30  transferable record and to establish the identity of the person 
 57.31  having control of the transferable record. 
 57.32     Sec. 21.  Minnesota Statutes 2000, section 336A.01, 
 57.33  subdivision 4, is amended to read: 
 57.34     Subd. 4.  [COMPUTERIZED FILING SYSTEM.] "Computerized 
 57.35  filing system" means the system created ~~under section 336.9-411~~ 
 57.36  by the secretary of state with separate programs for filing and 
 58.1   giving notice of effective financing statements and farm 
 58.2   products statutory liens.  
 58.3      Sec. 22.  Minnesota Statutes 2000, section 514.18, 
 58.4   subdivision 2, is amended to read: 
 58.5      Subd. 2.  [NONPOSSESSORY LIEN; NOTICE.] Notwithstanding the 
 58.6   voluntary surrender or other loss of possession of the property 
 58.7   on which the lien is claimed, the person entitled thereto may 
 58.8   preserve the lien upon giving notice of the lien at any time 
 58.9   within 60 days after the surrender or loss of possession, by 
 58.10  filing in the appropriate filing office under the Uniform 
 58.11  Commercial Code, Minnesota Statutes, section ~~336.9-401~~ 336.9-501 
 58.12  a verified statement and notice of intention to claim a lien. 
 58.13  The statement shall contain a description of the property upon 
 58.14  which the lien is claimed, the work performed or materials 
 58.15  furnished and the amount due.  
 58.16     Sec. 23.  Minnesota Statutes 2000, section 514.221, 
 58.17  subdivision 2, is amended to read: 
 58.18     Subd. 2.  [PERFECTION OF LIEN.] A person claiming a lien 
 58.19  created by this section shall, within 90 days after performing 
 58.20  the work or furnishing the materials, file in the appropriate 
 58.21  filing office under the Uniform Commercial Code, 
 58.22  section ~~336.9-401~~ 336.9-501, a verified statement and 
 58.23  description of the aircraft and the work done or material 
 58.24  furnished.  The lien shall be in force from and after the date 
 58.25  on which it is filed.  
 58.26     Sec. 24.  Minnesota Statutes 2000, section 514.221, 
 58.27  subdivision 3, is amended to read: 
 58.28     Subd. 3.  [PRIORITY, FORECLOSURE; LIMITATION.] A lien 
 58.29  created by this section is prior and paramount to all other 
 58.30  liens upon the aircraft except those previously filed in the 
 58.31  appropriate filing office.  The lien shall be treated in all 
 58.32  respects as a secured transaction under the Uniform Commercial 
 58.33  Code, sections ~~336.9-401~~ 336.9-501 to ~~336.9-508~~ 336.9-628, 
 58.34  except that:  
 58.35     (a) any foreclosure proceedings must be instituted within 
 58.36  one year of the date the lien was filed; and 
 59.1      (b) the lien is subject to the rights of a purchaser of the 
 59.2   aircraft in cases where the purchaser acquired the aircraft 
 59.3   prior to the filing of the lien without knowledge or notice of 
 59.4   the rights of the person performing the work or furnishing the 
 59.5   material. 
 59.6      Sec. 25.  Minnesota Statutes 2000, section 514.661, 
 59.7   subdivision 3, is amended to read: 
 59.8      Subd. 3.  [PERFECTION.] To perfect a lien under this 
 59.9   section, the lien must attach and a person or entity entitled to 
 59.10  the lien must file a lien statement in the appropriate filing 
 59.11  office under section ~~336.9-401~~ 336.9-501 during mediation or 
 59.12  within 30 days after the conclusion of mediation.  
 59.13     Sec. 26.  Minnesota Statutes 2000, section 514.661, 
 59.14  subdivision 4, is amended to read: 
 59.15     Subd. 4.  [DUTIES OF FILING OFFICER.] The filing officer 
 59.16  shall enter on the lien statement the time of day and date of 
 59.17  filing.  The filing officer shall file, amend, terminate, note 
 59.18  the filing of a lien statement, and charge the fee for filing 
 59.19  under this section in the manner provided by ~~section~~ 
 59.20  ~~336.9-403~~ sections 336.9-501 to 336.9-527 for a financing 
 59.21  statement~~, except that the social security number of an~~ 
 59.22  ~~individual debtor or the Internal Revenue Service taxpayer~~ 
 59.23  ~~identification number for a debtor other than an individual is~~ 
 59.24  ~~not required~~.  A lien statement is void and may be removed from 
 59.25  the filing system 18 months after the date of filing.  The lien 
 59.26  statement may be physically destroyed after 30 months from the 
 59.27  date of filing.  
 59.28     Sec. 27.  Minnesota Statutes 2000, section 514.661, 
 59.29  subdivision 5, is amended to read: 
 59.30     Subd. 5.  [PRIORITY.] (a) A perfected lien has priority 
 59.31  over all other liens and security interests in crops produced by 
 59.32  the debtor during the calendar year in which the mediation 
 59.33  occurs except for a perfected landlord's lien under section 
 59.34  514.960.  
 59.35     (b) An unperfected lien has the priority of an unperfected 
 59.36  security interest under ~~section 336.9-312~~ sections 336.9-317 and 
 60.1   336.9-322.  
 60.2      Sec. 28.  Minnesota Statutes 2000, section 514.661, 
 60.3   subdivision 6, is amended to read: 
 60.4      Subd. 6.  [ENFORCEMENT OF LIEN.] (a) The holder of a lien 
 60.5   under this section may enforce the lien in the manner provided 
 60.6   in sections ~~336.9-501~~ 336.9-601 to ~~336.9-508~~ 336.9-628, subject 
 60.7   to section 550.17.  For enforcement of the lien, the lienholder 
 60.8   is the secured party and the person leasing the property is the 
 60.9   debtor, and each has the respective rights and duties of a 
 60.10  secured party and a debtor under sections ~~336.9-501~~ 336.9-601 to 
 60.11  ~~336.9-508~~ 336.9-628.  If a right or duty under 
 60.12  sections ~~336.9-501~~ 336.9-601 to ~~336.9-508~~ 336.9-628 is 
 60.13  contingent upon the existence of express language in a security 
 60.14  agreement or may be waived by express language in a security 
 60.15  agreement, the requisite language does not exist.  
 60.16     (b) The principal amount of debt secured by seasonal use 
 60.17  machinery must be reduced by an amount equal to any amount paid 
 60.18  in satisfaction of a lien created under this section, less 
 60.19  interest accrued on the debt during mediation.  
 60.20     Sec. 29.  Minnesota Statutes 2000, section 514.945, 
 60.21  subdivision 2, is amended to read: 
 60.22     Subd. 2.  [PERFECTION.] An agricultural producer's lien is 
 60.23  perfected from the time the agricultural commodity is delivered 
 60.24  until 20 days after the agricultural commodity is delivered 
 60.25  without filing.  An agricultural producer's lien may continue to 
 60.26  be perfected if a lien statement under subdivision 3 is filed in 
 60.27  the appropriate filing office under section ~~336.9-401~~ 336.9-501 
 60.28  by 20 days after the agricultural commodity is delivered. 
 60.29     Sec. 30.  Minnesota Statutes 2000, section 514.945, 
 60.30  subdivision 4, is amended to read: 
 60.31     Subd. 4.  [PRIORITY.] (a) An agricultural producer's lien 
 60.32  has priority over all other liens and encumbrances in: 
 60.33     (1) the agricultural commodity; 
 60.34     (2) proceeds from the agricultural commodity; 
 60.35     (3) the proportionate share of the agricultural commodities 
 60.36  or goods with which the agricultural commodity has been 
 61.1   commingled; and 
 61.2      (4) the products manufactured or processed with the 
 61.3   agricultural commodity. 
 61.4      (b) An agricultural producer's lien that is continuously 
 61.5   perfected from the time of delivery has priority over other 
 61.6   liens and encumbrances whether they are filed before or after 
 61.7   the agricultural producer's lien. 
 61.8      (c) An agricultural producer's lien that is filed after 20 
 61.9   days after delivery of the agricultural commodity has priority 
 61.10  in the order it is filed. 
 61.11     (d) Priority among perfected agricultural producers' liens 
 61.12  is according to the first lien filed. 
 61.13     (e) An agricultural producer's lien that is not perfected 
 61.14  has the priority of an unperfected security interest under 
 61.15  ~~section 336.9-312~~ sections 336.9-317 and 336.9-322. 
 61.16     Sec. 31.  Minnesota Statutes 2000, section 514.945, 
 61.17  subdivision 6, is amended to read: 
 61.18     Subd. 6.  [ENFORCEMENT.] The holder of an agricultural 
 61.19  producer's lien may enforce the lien in the manner provided in 
 61.20  sections ~~336.9-501~~ 336.9-601 to ~~336.9-508~~ 336.9-628, subject to 
 61.21  section 550.17.  For enforcement of the lien, the lienholder is 
 61.22  the secured party and the person receiving the agricultural 
 61.23  commodity is the debtor, and each has the respective rights and 
 61.24  duties of a secured party and a debtor under sections ~~336.9-501~~ 
 61.25  336.9-601 to ~~336.9-508~~ 336.9-628.  If a right or duty under 
 61.26  sections ~~336.9-501~~ 336.9-601 to ~~336.9-508~~ 336.9-628 is 
 61.27  contingent upon the existence of express language in a security 
 61.28  agreement or may be waived by express language in a security 
 61.29  agreement, the requisite language does not exist. 
 61.30     Sec. 32.  Minnesota Statutes 2000, section 515B.3-116, is 
 61.31  amended to read: 
 61.32     515B.3-116 [LIEN FOR ASSESSMENTS.] 
 61.33     (a) The association has a lien on a unit for any assessment 
 61.34  levied against that unit from the time the assessment becomes 
 61.35  due.  If an assessment is payable in installments, the full 
 61.36  amount of the assessment is a lien from the time the first 
 62.1   installment thereof becomes due.  Unless the declaration 
 62.2   otherwise provides, fees, charges, late charges, fines and 
 62.3   interest charges pursuant to section 515B.3-102(a)(10), (11) and 
 62.4   (12) are liens, and are enforceable as assessments, under this 
 62.5   section.  
 62.6      (b) A lien under this section is prior to all other liens 
 62.7   and encumbrances on a unit except (i) liens and encumbrances 
 62.8   recorded before the declaration and, in a cooperative, liens and 
 62.9   encumbrances which the association creates, assumes, or takes 
 62.10  subject to, (ii) any first mortgage encumbering the fee simple 
 62.11  interest in the unit, or, in a cooperative, any first security 
 62.12  interest encumbering only the unit owner's interest in the unit, 
 62.13  and (iii) liens for real estate taxes and other governmental 
 62.14  assessments or charges against the unit.  If a first mortgage on 
 62.15  a unit is foreclosed, the first mortgage was recorded after June 
 62.16  1, 1994, and no owner redeems during the owner's period of 
 62.17  redemption provided by chapter 580, 581, or 582, the holder of 
 62.18  the sheriff's certificate of sale from the foreclosure of the 
 62.19  first mortgage shall take title to the unit subject to a lien in 
 62.20  favor of the association for unpaid assessments for common 
 62.21  expenses levied pursuant to section 515B.3-115(a), (e)(1) to 
 62.22  (3), (f), and (i) which became due, without acceleration, during 
 62.23  the six months immediately preceding the first day following the 
 62.24  end of the owner's period of redemption.  If a first security 
 62.25  interest encumbering a unit owner's interest in a cooperative 
 62.26  unit which is personal property is foreclosed, the secured party 
 62.27  or the purchaser at the sale shall take title to the unit 
 62.28  subject to unpaid assessments for common expenses levied 
 62.29  pursuant to section 515B.3-115(a), (e)(1) to (3), (f), and (i) 
 62.30  which became due, without acceleration, during the six months 
 62.31  immediately preceding the first day following either 
 62.32  the disposition date ~~of sale~~ pursuant to section ~~336.9-504~~ 
 62.33  336.9-610 or the date on which the obligation of the unit owner 
 62.34  is discharged pursuant to section ~~336.9-505~~ 336.9-622.  This 
 62.35  subsection shall not affect the priority of mechanics' liens. 
 62.36     (c) Recording of the declaration constitutes record notice 
 63.1   and perfection of any lien under this section, and no further 
 63.2   recordation of any notice of or claim for the lien is required. 
 63.3      (d) Proceedings to enforce an assessment lien shall be 
 63.4   instituted within three years after the last installment of the 
 63.5   assessment becomes payable, or shall be barred. 
 63.6      (e) The unit owner of a unit at the time an assessment is 
 63.7   due shall be personally liable to the association for payment of 
 63.8   the assessment levied against the unit.  If there are multiple 
 63.9   owners of the unit, they shall be jointly and severally liable. 
 63.10     (f) This section does not prohibit actions to recover sums 
 63.11  for which subsection (a) creates a lien nor prohibit an 
 63.12  association from taking a deed in lieu of foreclosure.  The 
 63.13  commencement of an action to recover the sums is not an election 
 63.14  of remedies if it is dismissed before commencement of 
 63.15  foreclosure of the lien provided for by this section.  
 63.16     (g) The association shall furnish to a unit owner or the 
 63.17  owner's authorized agent upon written request of the unit owner 
 63.18  or the authorized agent a statement setting forth the amount of 
 63.19  unpaid assessments currently levied against the owner's unit.  
 63.20  If the unit owner's interest is real estate, the statement shall 
 63.21  be in recordable form.  The statement shall be furnished within 
 63.22  ten business days after receipt of the request and is binding on 
 63.23  the association and every unit owner. 
 63.24     (h) The association's lien may be foreclosed as provided in 
 63.25  this subsection. 
 63.26     (1) In a condominium or planned community, the 
 63.27  association's lien may be foreclosed in a like manner as a 
 63.28  mortgage containing a power of sale pursuant to chapter 580, or 
 63.29  by action pursuant to chapter 581.  The association shall have a 
 63.30  power of sale to foreclose the lien pursuant to chapter 580.  
 63.31     (2) In a cooperative whose unit owners' interests are real 
 63.32  estate, the association's lien shall be foreclosed in a like 
 63.33  manner as a mortgage on real estate as provided in paragraph (1).
 63.34     (3) In a cooperative whose unit owners' interests in the 
 63.35  units are personal property, the association's lien shall be 
 63.36  foreclosed in a like manner as a security interest under article 
 64.1   9 of chapter 336.  In any disposition pursuant to section 
 64.2   ~~336.9-504~~ 336.9-610 or retention pursuant to ~~section~~ 
 64.3   ~~336.9-505~~ sections 336.9-620 to 336.9-622, the rights of the 
 64.4   parties shall be the same as those provided by law, except (i) 
 64.5   notice of sale, disposition, or retention shall be served on the 
 64.6   unit owner 90 days prior to sale, disposition, or retention, 
 64.7   (ii) the association shall be entitled to its reasonable costs 
 64.8   and attorney fees not exceeding the amount provided by section 
 64.9   582.01, subdivision 1a, (iii) the amount of the association's 
 64.10  lien shall be deemed to be adequate consideration for the unit 
 64.11  subject to disposition or retention, notwithstanding the value 
 64.12  of the unit, and (iv) the notice of sale, disposition, or 
 64.13  retention shall contain the following statement in capital 
 64.14  letters with the name of the association or secured party filled 
 64.15  in: 
 64.16     "THIS IS TO INFORM YOU THAT BY THIS NOTICE (fill in name of 
 64.17  association or secured party) HAS BEGUN PROCEEDINGS UNDER 
 64.18  MINNESOTA STATUTES, CHAPTER 515B, TO FORECLOSE ON YOUR INTEREST 
 64.19  IN YOUR UNIT FOR THE REASON SPECIFIED IN THIS NOTICE.  YOUR 
 64.20  INTEREST IN YOUR UNIT WILL TERMINATE 90 DAYS AFTER SERVICE OF 
 64.21  THIS NOTICE ON YOU UNLESS BEFORE THEN: 
 64.22     (a) THE PERSON AUTHORIZED BY (fill in the name of 
 64.23  association or secured party) AND DESCRIBED IN THIS NOTICE TO 
 64.24  RECEIVE PAYMENTS RECEIVES FROM YOU: 
 64.25     (1) THE AMOUNT THIS NOTICE SAYS YOU OWE; PLUS 
 64.26     (2) THE COSTS INCURRED TO SERVE THIS NOTICE ON YOU; PLUS 
 64.27     (3) $500 TO APPLY TO ATTORNEYS FEES ACTUALLY EXPENDED OR 
 64.28  INCURRED; PLUS 
 64.29     (4) ANY ADDITIONAL AMOUNTS FOR YOUR UNIT BECOMING DUE TO 
 64.30  (fill in name of association or secured party) AFTER THE DATE OF 
 64.31  THIS NOTICE; OR 
 64.32     (b) YOU SECURE FROM A DISTRICT COURT AN ORDER THAT THE 
 64.33  FORECLOSURE OF YOUR RIGHTS TO YOUR UNIT BE SUSPENDED UNTIL YOUR 
 64.34  CLAIMS OR DEFENSES ARE FINALLY DISPOSED OF BY TRIAL, HEARING, OR 
 64.35  SETTLEMENT.  YOUR ACTION MUST SPECIFICALLY STATE THOSE FACTS AND 
 64.36  GROUNDS THAT DEMONSTRATE YOUR CLAIMS OR DEFENSES. 
 65.1      IF YOU DO NOT DO ONE OR THE OTHER OF THE ABOVE THINGS 
 65.2   WITHIN THE TIME PERIOD SPECIFIED IN THIS NOTICE, YOUR OWNERSHIP 
 65.3   RIGHTS IN YOUR UNIT WILL TERMINATE AT THE END OF THE PERIOD, YOU 
 65.4   WILL LOSE ALL THE MONEY YOU HAVE PAID FOR YOUR UNIT, YOU WILL 
 65.5   LOSE YOUR RIGHT TO POSSESSION OF YOUR UNIT, YOU MAY LOSE YOUR 
 65.6   RIGHT TO ASSERT ANY CLAIMS OR DEFENSES THAT YOU MIGHT HAVE, AND 
 65.7   YOU WILL BE EVICTED.  IF YOU HAVE ANY QUESTIONS ABOUT THIS 
 65.8   NOTICE, CONTACT AN ATTORNEY IMMEDIATELY." 
 65.9      (4) In any foreclosure pursuant to chapter 580, 581, or 
 65.10  582, the rights of the parties shall be the same as those 
 65.11  provided by law, except (i) the period of redemption for unit 
 65.12  owners shall be six months from the date of sale or a lesser 
 65.13  period authorized by law, (ii) in a foreclosure by advertisement 
 65.14  under chapter 580, the foreclosing party shall be entitled to 
 65.15  costs and disbursements of foreclosure and attorneys fees 
 65.16  authorized by the declaration or bylaws, notwithstanding the 
 65.17  provisions of section 582.01, subdivisions 1 and 1a, (iii) in a 
 65.18  foreclosure by action under chapter 581, the foreclosing party 
 65.19  shall be entitled to costs and disbursements of foreclosure and 
 65.20  attorneys fees as the court shall determine, and (iv) the amount 
 65.21  of the association's lien shall be deemed to be adequate 
 65.22  consideration for the unit subject to foreclosure, 
 65.23  notwithstanding the value of the unit. 
 65.24     (i) If a holder of a sheriff's certificate of sale, prior 
 65.25  to the expiration of the period of redemption, pays any past due 
 65.26  or current assessments, or any other charges lienable as 
 65.27  assessments, with respect to the unit described in the sheriff's 
 65.28  certificate, then the amount paid shall be a part of the sum 
 65.29  required to be paid to redeem under section 582.03. 
 65.30     (j) In a cooperative, following foreclosure, the 
 65.31  association may bring an action for unlawful detainer against 
 65.32  the unit owner and any persons in possession of the unit, and in 
 65.33  that case section 504B.291 shall not apply. 
 65.34     (k) An association may assign its lien rights in the same 
 65.35  manner as any other secured party. 
 65.36     Sec. 33.  Minnesota Statutes 2000, section 515B.3-117, is 
 66.1   amended to read: 
 66.2      515B.3-117 [OTHER LIENS.] 
 66.3      (a) Except in a cooperative and except as otherwise 
 66.4   provided in this chapter or in a security instrument, an 
 66.5   individual unit owner may have the unit owner's unit released 
 66.6   from a lien if the unit owner pays the lienholder the portion of 
 66.7   the amount which the lien secures that is attributable to the 
 66.8   unit.  Upon the receipt of payment, the lienholder shall 
 66.9   promptly deliver to the unit owner a recordable partial 
 66.10  satisfaction and release of lien releasing the unit from the 
 66.11  lien.  The release shall be deemed to include a release of any 
 66.12  rights in the common elements appurtenant to the unit.  The 
 66.13  portion of the amount which a lien secures that is attributable 
 66.14  to the unit shall be equal to the total amount which the lien 
 66.15  secures multiplied by a percentage calculated by dividing the 
 66.16  common expense liability attributable to the unit by the common 
 66.17  expense liability attributable to all units against which the 
 66.18  lien has been recorded, or in the case of a lien under 
 66.19  subsection (b), the units against which the lien is permitted or 
 66.20  required to be recorded.  At the request of a lien claimant or 
 66.21  unit owners, the association shall provide a written statement 
 66.22  of the percentage of common expense liability attributable to 
 66.23  all units.  After a unit owner's payment pursuant to this 
 66.24  section, the association may not assess the unit for any common 
 66.25  expense incurred thereafter in connection with the satisfaction 
 66.26  or defense against the lien. 
 66.27     (b) Labor performed or materials furnished for the 
 66.28  improvement of a unit shall be the basis for the recording of a 
 66.29  lien against that unit pursuant to the provisions of chapter 514 
 66.30  but shall not be the basis for the recording of a lien against 
 66.31  the common elements.  Labor performed or materials furnished for 
 66.32  the improvement of common elements, if duly authorized by the 
 66.33  association, shall be deemed to be performed or furnished with 
 66.34  the express consent of each unit owner, and shall be perfected 
 66.35  by recording a lien against all the units in the common interest 
 66.36  community pursuant to the provisions of chapter 514, but shall 
 67.1   not be the basis for the recording of a lien against the common 
 67.2   elements.  Where a lien is recorded against the units for labor 
 67.3   performed or material furnished for the improvement of common 
 67.4   elements, the association shall be deemed to be the authorized 
 67.5   agent of the unit owners for purposes of receiving the notices 
 67.6   required under sections 514.011 and 514.08, subdivision 1, 
 67.7   clause (2). 
 67.8      (c) A security interest in a cooperative whose unit owners' 
 67.9   interests in the units are personal property shall be perfected 
 67.10  by recording a financing statement in the UCC filing section of 
 67.11  the office of the recording officer for the county in which the 
 67.12  unit is located.  In any disposition by a secured party pursuant 
 67.13  to section ~~336.9-504~~ 336.9-610 or retention pursuant to ~~section~~ 
 67.14  ~~336.9-505~~ sections 336.9-620 to 336.9-622, the rights of the 
 67.15  parties shall be the same as those provided by law, subject to 
 67.16  the exceptions and requirements set forth in section 
 67.17  515B.3-116(h)(3), and except that the unit owner has the right 
 67.18  to reinstate the debt owing to the secured party by paying to 
 67.19  the secured party, prior to the effective date of the 
 67.20  disposition or retention, the amount which would be required to 
 67.21  reinstate the debt under section 580.30 if the unit were wholly 
 67.22  real estate. 
 67.23     Sec. 34.  Minnesota Statutes 2000, section 550.13, is 
 67.24  amended to read: 
 67.25     550.13 [LEVY ON BULKY ARTICLES.] 
 67.26     When personal property, by reason of its bulk or other 
 67.27  cause, cannot be immediately removed, it shall be a sufficient 
 67.28  levy thereon if the officer, within three days thereafter, file 
 67.29  in the appropriate filing office under the Uniform Commercial 
 67.30  Code, section ~~336.9-401~~ 336.9-501, a certified copy of the 
 67.31  execution, and of the officer's return and levy thereon.  The 
 67.32  officer shall pay the filing fee and include it in the charges. 
 67.33     Sec. 35.  Minnesota Statutes 2000, section 557.12, 
 67.34  subdivision 5, is amended to read: 
 67.35     Subd. 5.  [FILING AND ENFORCEMENT OF LIENS.] (a) A planting 
 67.36  crop owner's lien under subdivision 2 and a lien for the fair 
 68.1   market rental value where the crop was grown under subdivision 4 
 68.2   are perfected against the crop and crop products by attaching 
 68.3   and filing a financing statement covering the crop and crop 
 68.4   products as provided under sections ~~336.9-401~~ 336.9-501 to 
 68.5   ~~336.9-410~~ 336.9-527 by 90 days after the planting crop owner's 
 68.6   right to harvest the crop is terminated.  The financing 
 68.7   statement must include a statement indicating whether it is a 
 68.8   planting crop owner's lien or a lien for a crop harvested by a 
 68.9   planting crop owner.  A perfected lien may be enforced in the 
 68.10  same manner as a security interest under sections ~~336.9-501~~ 
 68.11  336.9-601 to ~~336.9-508~~ 336.9-628. 
 68.12     (b) A lien against the real property under subdivision 2 
 68.13  must be recorded and foreclosed in the same manner as a 
 68.14  mechanics' lien under sections 514.08 to 514.15 as if the 
 68.15  planting crop owner was a contractor.  For purposes of this 
 68.16  paragraph, the lien statement must be filed and served under 
 68.17  section 514.08, subdivision 1, by 120 days after the crop was 
 68.18  harvested, or if the crop was not harvested, by 12 months after 
 68.19  the crop was planted. 
 68.20     Sec. 36.  Minnesota Statutes 2000, section 583.26, 
 68.21  subdivision 1, is amended to read: 
 68.22     Subdivision 1.  [MEDIATION NOTICE.] (a) A creditor desiring 
 68.23  to start a proceeding to enforce a debt against agricultural 
 68.24  property under chapter 580 or 581 or sections 
 68.25  ~~336.9-501~~ 336.9-601 to ~~336.9-508~~ 336.9-628, to terminate a 
 68.26  contract for deed to purchase agricultural property under 
 68.27  section 559.21, or to garnish, levy on, execute on, seize, or 
 68.28  attach agricultural property, must serve an applicable mediation 
 68.29  notice under sections ~~336.9-501~~ 336.9-601, 550.365, 559.209, and 
 68.30  582.039 on the debtor and the director.  The creditor must also 
 68.31  file with the director proof of the date the mediation notice 
 68.32  was served on the debtor.  The creditor may not begin the 
 68.33  proceeding until the stay of the creditor's remedies is lifted 
 68.34  under subdivision 5, or as allowed under sections 583.20 to 
 68.35  583.32. 
 68.36     (b) For purposes of the Farmer-Lender Mediation Act, 
 69.1   starting a proceeding to enforce a debt means initiating a 
 69.2   proceeding under chapter 550, 580, or 581; sections ~~336.9-501~~ 
 69.3   336.9-601 to ~~336.9-508~~ 336.9-628; or section 559.21.  
 69.4      (c) The director shall combine all mediation notices for 
 69.5   the same debtor that are received prior to the initial mediation 
 69.6   meeting into one mediation proceeding.  
 69.7      Sec. 37.  Minnesota Statutes 2000, section 583.26, 
 69.8   subdivision 2, is amended to read: 
 69.9      Subd. 2.  [MEDIATION REQUEST.] (a) A debtor must file a 
 69.10  mediation request form with the director by 14 days after 
 69.11  receiving a mediation notice.  The debtor must state all known 
 69.12  creditors with debts secured for agricultural property.  The 
 69.13  mediation request form must include an instruction that the 
 69.14  debtor must state all known creditors with debts secured by 
 69.15  agricultural property and unsecured creditors that are necessary 
 69.16  for the farm operation of the debtor.  It is the debtor's 
 69.17  discretion as to which unsecured creditors are necessary for the 
 69.18  farm operation.  The mediation request must state the date that 
 69.19  the notice was served on the debtor.  The director shall make 
 69.20  mediation request forms available in the county recorder's and 
 69.21  county extension office of each county. 
 69.22     (b) Except as provided in section 583.24, subdivision 4, 
 69.23  paragraph (a), clause (3), a debtor who fails to file a timely 
 69.24  mediation request waives the right to mediation for that debt 
 69.25  under the Farmer-Lender Mediation Act.  The director shall 
 69.26  notify the creditor who served the mediation notice stating that 
 69.27  the creditor may proceed against the agricultural property 
 69.28  because the debtor has failed to file a mediation request. 
 69.29     (c) If a debtor has not received a mediation notice and is 
 69.30  subject to a proceeding of a creditor enforcing a debt against 
 69.31  agricultural property under chapter 580 or 581 or sections 
 69.32  ~~336.9-501~~ 336.9-601 to ~~336.9-508~~ 336.9-628, terminating a 
 69.33  contract for deed to purchase agricultural property under 
 69.34  section 559.21, or garnishing, levying on, executing on, 
 69.35  seizing, or attaching agricultural property, the debtor may file 
 69.36  a mediation request with the director.  The mediation request 
 70.1   form must indicate that the debtor has not received a mediation 
 70.2   notice. 
 70.3      Sec. 38.  Minnesota Statutes 2000, section 583.284, is 
 70.4   amended to read: 
 70.5      583.284 [RETENTION OF PURCHASE MONEY SECURITY INTEREST.] 
 70.6      If a creditor has a purchase money security interest ~~as~~ 
 70.7   ~~defined in~~ under section ~~336.9-107~~ 336.9-103, and renegotiates 
 70.8   the debt under the Farmer-Lender Mediation Act to reduce the 
 70.9   principal balance or the interest rate or to extend the 
 70.10  repayment period, the creditor retains the purchase money 
 70.11  security interest for the renegotiated debt. 
 70.12     Sec. 39.  [REPEALER.] 
 70.13     Minnesota Statutes 2000, sections 336.11-101; 336.11-102; 
 70.14  336.11-103; 336.11-104; 336.11-105; 336.11-106; 336.11-107; and 
 70.15  336.11-108, are repealed. 
 70.16     Sec. 40.  [EFFECTIVE DATE.] 
 70.17     This act is effective July 1, 2001.