AN
ACT Relating to technical amendments and corrections to Article 9A of the
Uniform Commercial Code and related statutes; amending RCW 19.40.081,
43.163.130, 60.10.010, 60.11.030, 60.11.904, 60.56.015, 62A.1‑105,
62A.1-201, 62A.2A-303, 62A.2A-306, 62A.3-102, 62A.4-210, 62A.8-110, 62A.8‑510,
62A.9A‑102, 62A.9A-104, 62A.9A-105, 62A.9A-107, 62A.9A-201, 62A.9A-208,
62A.9A-301, 62A.9A-305, 62A.9A-306, 62A.9A-311, 62A.9A-313, 62A.9A-317,
62A.9A-322, 62A.9A-328, 62A.9A-331, 62A.9A-333, 62A.9A-334, 62A.9A-336, 62A.9A-406,
62A.9A-407, 62A.9A-509, 62A.9A.513, 62A.9A-516, 62A.9A-520, 62A.9A-523,
62A.9A-608, 62A.9A-613, 62A.9A-615, 62A.9A-625, 62A.9A-628, 62A.9A-702,
62A.9A-703, 62A.9A-704, 62A.9A-705, 62A.9A-706, 62A.9A-707, and 62A.9A-708;
reenacting and amending RCW 60.13.040; adding a new section to Article 62A.9A
RCW; repealing RCW 60.11.9001; providing an effective date; and declaring an
emergency.
BE IT
ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec.
1. RCW
19.40.081 and 1987 c 444 s 8 are each amended to read as follows:
DEFENSES,
LIABILITY, AND PROTECTION OF TRANSFEREE. (a) A transfer or
obligation is not voidable under RCW 19.40.041(a)(1) against a person who took
in good faith and for a reasonably equivalent value or against any subsequent
transferee or obligee.
(b)
Except as otherwise provided in this section, to the extent a transfer is
voidable in an action by a creditor under RCW 19.40.071(a)(1), the creditor may
recover judgment for the value of the asset transferred, as adjusted under
subsection (c) of this section, or the amount necessary to satisfy the
creditor's claim, whichever is less. The judgment may be entered against:
(1)
The first transferee of the asset or the person for whose benefit the transfer was
made; or
(2)
Any subsequent transferee other than a good-faith transferee or obligee who
took for value or from any subsequent transferee or obligee.
(c)
If the judgment under subsection (b) of this section is based upon the value of
the asset transferred, the judgment must be for an amount equal to the value of
the asset at the time of the transfer, subject to adjustment as the equities
may require.
(d)
Notwithstanding voidability of a transfer or an obligation under this chapter,
a good-faith transferee or obligee is entitled, to the extent of the value
given the debtor for the transfer or obligation, to:
(1)
A lien on or a right to retain any interest in the asset transferred;
(2)
Enforcement of any obligation incurred; or
(3)
A reduction in the amount of the liability on the judgment.
(e)
A transfer is not voidable under RCW 19.40.041(a)(2) or 19.40.051 if the
transfer results from:
(1)
Termination of a lease upon default by the debtor when the termination is
pursuant to the lease and applicable law; or
(2)
Enforcement of a security interest in compliance with Article ((9)) 9A
of Title 62A RCW.
(f)
A transfer is not voidable under RCW 19.40.051(b):
(1)
To the extent the insider gave new value to or for the benefit of the debtor
after the transfer was made unless the new value was secured by a valid lien;
(2)
If made in the ordinary course of business or financial affairs of the debtor
and the insider; or
(3)
If made pursuant to a good-faith effort to rehabilitate the debtor and the
transfer secured present value given for that purpose as well as an antecedent
debt of the debtor.
Sec.
2. RCW
43.163.130 and 1998 c 48 s 1 are each amended to read as follows:
NONRECOURSE
REVENUE BONDS‑-ISSUANCE. (1) The authority may issue its nonrecourse
revenue bonds in order to obtain the funds to carry out the programs authorized
in this chapter. The bonds shall be special obligations of the authority,
payable solely out of the special fund or funds established by the authority
for their repayment.
(2)
Any bonds issued under this chapter may be secured by a financing document
between the authority and the purchasers or owners of such bonds or between the
authority and a corporate trustee, which may be any trust company or bank
having the powers of a trust company within or without the state.
(a)
The financing document may pledge or assign, in whole or in part, the revenues
and funds held or to be received by the authority, any present or future
contract or other rights to receive the same, and the proceeds thereof.
(b)
The financing document may contain such provisions for protecting and enforcing
the rights, security, and remedies of bondowners as may be reasonable and
proper, including, without limiting the generality of the foregoing, provisions
defining defaults and providing for remedies in the event of default which may
include the acceleration of maturities, restrictions on the individual rights
of action by bondowners, and covenants setting forth duties of and limitations
on the authority in conduct of its programs and the management of its property.
(c)
In addition to other security provided in this chapter or otherwise by law,
bonds issued by the authority may be secured, in whole or in part, by financial
guaranties, by insurance or by letters of credit issued to the authority or a
trustee or any other person, by any bank, trust company, insurance or surety
company or other financial institution, within or without the state. The
authority may pledge or assign, in whole or in part, the revenues and funds
held or to be received by the authority, any present or future contract or
other rights to receive the same, and the proceeds thereof, as security for
such guaranties or insurance or for the reimbursement by the authority to any
issuer of such letter of credit of any payments made under such letter of
credit.
(3)
Without limiting the powers of the authority contained in this chapter, in
connection with each issue of its obligation bonds, the authority shall create
and establish one or more special funds, including, but not limited to debt
service and sinking funds, reserve funds, project funds, and such other special
funds as the authority deems necessary, useful, or convenient.
(4)
Any security interest created against the unexpended bond proceeds and against
the special funds created by the authority shall be immediately valid and
binding against the money and any securities in which the money may be invested
without authority or trustee possession. The security interest shall be prior
to any party having any competing claim against the moneys or securities,
without filing or recording under Article ((9)) 9A of the Uniform
Commercial Code, Title 62A RCW, and regardless of whether the party has notice
of the security interest.
(5)
The bonds may be issued as serial bonds, term bonds or any other type of bond
instrument consistent with the provisions of this chapter. The bonds shall bear
such date or dates; mature at such time or times; bear interest at such rate or
rates, either fixed or variable; be payable at such time or times; be in such
denominations; be in such form; bear such privileges of transferability,
exchangeability, and interchangeability; be subject to such terms of
redemption; and be sold at public or private sale, in such manner, at such time
or times, and at such price or prices as the authority shall determine. The
bonds shall be executed by the manual or facsimile signatures of the
authority's chair and either its secretary or executive director, and may be
authenticated by the trustee (if the authority determines to use a trustee) or
any registrar which may be designated for the bonds by the authority.
(6)
Bonds may be issued by the authority to refund other outstanding authority
bonds, at or prior to maturity of, and to pay any redemption premium on, the
outstanding bonds. Bonds issued for refunding purposes may be combined with
bonds issued for the financing or refinancing of new projects. Pending the
application of the proceeds of the refunding bonds to the redemption of the
bonds to be redeemed, the authority may enter into an agreement or agreements
with a corporate trustee regarding the interim investment of the proceeds and
the application of the proceeds and the earnings on the proceeds to the payment
of the principal of and interest on, and the redemption of, the bonds to be
redeemed.
(7)
The bonds of the authority may be negotiable instruments under Title 62A RCW.
(8)
Neither the members of the authority, nor its employees or agents, nor any
person executing the bonds shall be personally liable on the bonds or be
subject to any personal liability or accountability by reason of the issuance
of the bonds.
(9)
The authority may purchase its bonds with any of its funds available for the
purchase. The authority may hold, pledge, cancel or resell the bonds subject
to and in accordance with agreements with bondowners.
(10)
The authority shall not exceed five hundred million dollars in total
outstanding debt at any time.
(11)
The state finance committee shall be notified in advance of the issuance of
bonds by the authority in order to promote the orderly offering of obligations
in the financial markets.
(12)
The authority may not issue any bonds after June 30, 2004.
Sec.
3. RCW
60.10.010 and 1969 c 82 s 2 are each amended to read as follows:
DEFINITIONS.
As used in this chapter:
(1)
The term "lien debtor" means the person who is obligated, owes
payment or other performance. Where the lien debtor and the owner of the
collateral are not the same person, the term "lien debtor" means the
owner of the collateral.
(2)
"Collateral" means the property subject to a statutory lien.
(3)
"Lien holder" means a person who, by statute, has acquired a lien on
the property of the lien debtor, or such person's successor in interest.
(4)
"Secured party" has the same meaning as used in Article ((9)) 9A
of the Uniform Commercial Code (Title 62A RCW).
Sec.
4. RCW
60.11.030 and 2000 c 250 s 9A-826 are each amended to read as follows:
ATTACHMENT
AND EFFECTIVENESS OF LIEN ON CROPS AND PROCEEDS‑-FILING. (1) Upon the
later of both: (a) Execution of the lease or other agreement, or commencement
of delivery of such supplies, and/or of provision of such services giving rise
to the crop lien; and (b) filing a financing statement as required by RCW
62A.9A-310 and subsection (3) of this section, the crop liens described in RCW
60.11.020 (1) and (2) shall become effective and attach to the subject crop for
all sums then and thereafter due and owing the lien holder under this chapter,
and those liens shall continue in all identifiable cash proceeds of the crop.
(2)
Upon the delivery of an orchard crop by the lien debtor or another handler to a
handler without the necessity of filing, the crop lien described in RCW
60.11.020(3) shall become effective and attach to and be perfected in the
delivered orchard crop for all sums then and thereafter due and owing the lien
holder under this chapter, and the lien shall continue and be perfected in all
proceeds of the orchard crop. ((Upon filing a financing statement as
required by RCW 62A.9A‑310 and subsection (3) of this section, an effective
crop lien described in RCW 60.11.020(3) that has attached to the delivered
orchard crop shall be perfected.))
(3)
Except as provided in RCW 60.11.040(4) with respect to the lien of a landlord,
and except for the lien of a handler on orchard crops as provided in RCW
60.11.020(3), the lien holder must file the required financing statement during
the period after the commencement of delivery of such supplies and/or of
provision of such services, but before the completion of the harvest of the
crops for which the lien is claimed, or in the case of a lien for furnishing
work or labor, before the end of the fortieth day after the cessation of the
work or labor for which the lien is claimed. If the lien holder under the crop
liens described in RCW 60.11.020 (1) or (2) is to be allowed costs,
disbursements, and attorneys' fees, the lien holder must also mail a copy of
such financing statement to the last known address of the debtor by certified
mail, return receipt requested, within ten days after filing the financing
statement.
Sec.
5. RCW
60.11.904 and 2000 c 250 s 9A-835 are each amended to read as follows:
All
statements filed with the department of licensing under this chapter ((prior
to)) before July 1, 2001, shall satisfy the requirements of RCW
62A.9A-310 and 60.11.030 for filing a financing statement ((for up to five
years from the date they were originally filed if and so long as they are found
and reported in a search of financing statements performed by the department of
licensing)).
Sec.
6. RCW
60.13.040 and 1987 c 189 s 7 and 1987 c 148 s 3 are each reenacted and amended
to read as follows:
(1)
A producer or commercial fisherman claiming a processor or preparer lien may
file a statement evidencing the lien with the department of licensing after
payment from the processor, conditioner, or preparer to the producer or
fisherman is due and remains unpaid. For purposes of this subsection and RCW
60.13.050, payment is due on the date specified in the contract, or if not
specified, then within thirty days from time of delivery.
(2)
The statement shall be in ((writing, verified)) a record,
authenticated by the producer or fisherman, and shall contain in substance
the following information:
(a)
A true statement of the amount demanded after deducting all credits and
offsets;
(b)
The name of the processor, conditioner, or preparer who received the
agricultural product or fish to be charged with the lien;
(c)
A description sufficient to identify the agricultural product or fish to be
charged with the lien;
(d)
A statement that the amount claimed is a true and bona fide existing debt as of
the date of the filing of the notice evidencing the lien;
(e)
The date on which payment was due for the agricultural product or fish to be
charged with the lien; and
(f)
The department of licensing may by rule prescribe standard filing forms, fees,
and uniform procedures for filing with, and obtaining information from, filing
officers.
Sec.
7. RCW
60.56.015 and 1993 c 53 s 3 are each amended to read as follows:
An
agister who holds a lien under RCW 60.56.010 shall perfect the lien by (1)
posting notice of the lien in a conspicuous location on the premises where the
lien holder is keeping the animal or animals, (2) providing a copy of the
posted notice to the owner of the animal or animals, and (3) providing a copy
of the posted notice to any lien creditor as defined in RCW ((62A.9-301(3)))
62A.9A-102(52) if the amount of the agister lien is in excess of one
thousand five hundred dollars. A lien creditor may be determined through a
search under RCW ((62A.9-409)) 62A.9A-523 and 62A.9A-526. The
lien holder is entitled to collect from the buyer, the seller, or the person
selling on a commission basis if there is a failure to make payment to the
perfected lien holder.
Sec.
8. RCW
62A.1-105 and 2000 c 250 s 9A-801 are each amended to read as follows:
TERRITORIAL
APPLICATION OF THE TITLE; PARTIES' POWER TO CHOOSE APPLICABLE LAW. (1) Except
as provided hereafter in this section, when a transaction bears a reasonable
relation to this state and also to another state or nation the parties may
agree that the law either of this state or of such other state or nation shall
govern their rights and duties. Failing such agreement this Title applies to
transactions bearing an appropriate relation to this state.
(2)
Where one of the following provisions of this Title specifies the applicable
law, that provision governs and a contrary agreement is effective only to the
extent permitted by the law (including the conflict of laws rules) so
specified:
Rights
of creditors against sold goods. RCW 62A.2-402.
Applicability
of the Article on Leases. RCW 62A.2A-105 and 62A.2A‑106.
Applicability
of the Article on Bank Deposits and Collections. RCW 62A.4-102.
Governing
law in the Article on Funds Transfers. RCW 62A.4A‑507.
Letters
of Credit. RCW 62A.5-116.
Applicability
of the Article on Investment Securities. RCW 62A.8‑110.
Law
governing perfection, the effect of perfection or nonperfection, and the
priority of security interests and agricultural liens. RCW 62A.9A‑301
through 62A.9A‑307.
Sec.
9. RCW
62A.1-201 and 2000 c 250 s 9A-802 are each amended to read as follows:
GENERAL
DEFINITIONS. Subject to additional definitions contained in the subsequent
Articles of this Title which are applicable to specific Articles or Parts
thereof, and unless the context otherwise requires, in this Title:
(1)
"Action" in the sense of a judicial proceeding includes recoupment,
counterclaim, set-off, suit in equity and any other proceedings in which rights
are determined.
(2)
"Aggrieved party" means a party entitled to resort to a remedy.
(3)
"Agreement" means the bargain of the parties in fact as found in
their language or by implication from other circumstances including course of
dealing or usage of trade or course of performance as provided in this Title
(RCW 62A.1-205, RCW 62A.2-208, and RCW 62A.2A‑207). Whether an agreement
has legal consequences is determined by the provisions of this Title, if
applicable; otherwise by the law of contracts (RCW 62A.1-103). (Compare
"Contract".)
(4)
"Bank" means any person engaged in the business of banking.
(5)
"Bearer" means the person in possession of an instrument, document of
title, or certificated security payable to bearer or indorsed in blank.
(6)
"Bill of lading" means a document evidencing the receipt of goods for
shipment issued by a person engaged in the business of transporting or
forwarding goods, and includes an airbill. "Airbill" means a
document serving for air transportation as a bill of lading does for marine or
rail transportation, and includes an air consignment note or air waybill.
(7)
"Branch" includes a separately incorporated foreign branch of a bank.
(8)
"Burden of establishing" a fact means the burden of persuading the
triers of fact that the existence of the fact is more probable than its
non-existence.
(9)
"Buyer in ordinary course of business" means a person that buys goods
in good faith, without knowledge that the sale violates the rights of another
person in the goods, and in the ordinary course from a person, other than a
pawnbroker, in the business of selling goods of that kind. A person buys goods
in the ordinary course if the sale to the person comports with the usual or
customary practices in the kind of business in which the seller is engaged or
with the seller's own usual or customary practices. A person that sells oil,
gas, or other minerals at the wellhead or minehead is a person in the business
of selling goods of that kind. A buyer in ordinary course of business may buy
for cash, by exchange of other property, or on secured or unsecured credit, and
may acquire goods or documents of title under a pre-existing contract for
sale. Only a buyer that takes possession of the goods or has a right to
recover the goods from the seller under Article 62A.2 RCW may be a buyer in
ordinary course of business. A person that acquires goods in a transfer in
bulk or as security for or in total or partial satisfaction of a money debt is
not a buyer in ordinary course of business.
(10)
"Conspicuous": A term or clause is conspicuous when it is so written
that a reasonable person against whom it is to operate ought to have noticed
it. A printed heading in capitals (as: NON-NEGOTIABLE BILL OF LADING) is
conspicuous. Language in the body of a form is "conspicuous" if it
is in larger or other contrasting type or color. But in a telegram any stated
term is "conspicuous". Whether a term or clause is
"conspicuous" or not is for decision by the court.
(11)
"Contract" means the total legal obligation which results from the
parties' agreement as affected by this Title and any other applicable rules of
law. (Compare "Agreement".)
(12)
"Creditor" includes a general creditor, a secured creditor, a lien
creditor and any representative of creditors, including an assignee for the
benefit of creditors, a trustee in bankruptcy, a receiver in equity and an
executor or administrator of an insolvent debtor's or assignor's estate.
(13)
"Defendant" includes a person in the position of defendant in a
cross-action or counterclaim.
(14)
"Delivery" with respect to instruments, documents of title, chattel
paper, or certificated securities means voluntary transfer of possession.
(15)
"Document of title" includes bill of lading, dock warrant, dock
receipt, warehouse receipt or order for the delivery of goods, and also any
other document which in the regular course of business or financing is treated
as adequately evidencing that the person in possession of it is entitled to
receive, hold and dispose of the document and the goods it covers. To be a
document of title a document must purport to be issued by or addressed to a
bailee and purport to cover goods in the bailee's possession which are either
identified or are fungible portions of an identified mass.
(16)
"Fault" means wrongful act, omission or breach.
(17)
"Fungible" with respect to goods or securities means goods or
securities of which any unit is, by nature or usage of trade, the equivalent of
any other like unit. Goods which are not fungible shall be deemed fungible for
the purposes of this Title to the extent that under a particular agreement or
document unlike units are treated as equivalents.
(18)
"Genuine" means free of forgery or counterfeiting.
(19)
"Good faith" means honesty in fact in the conduct or transaction
concerned.
(20)
"Holder" with respect to a negotiable instrument, means the person in
possession if the instrument is payable to bearer or, in the case of an
instrument payable to an identified person, if the identified person is in
possession. "Holder" with respect to a document of title means the
person in possession if the goods are deliverable to bearer or to the order of
the person in possession.
(21)
To "honor" is to pay or to accept and pay, or where a credit so
engages to purchase or discount a draft complying with the terms of the credit.
(22)
"Insolvency proceedings" includes any assignment for the benefit of
creditors or other proceedings intended to liquidate or rehabilitate the estate
of the person involved.
(23)
A person is "insolvent" who either has ceased to pay his or her debts
in the ordinary course of business or cannot pay his or her debts as they
become due or is insolvent within the meaning of the federal bankruptcy law.
(24)
"Money" means a medium of exchange authorized or adopted by a
domestic or foreign government and includes a monetary unit of account
established by an intergovernmental organization or by agreement between two or
more nations.
(25)
A person has "notice" of a fact when
(a)
he or she has actual knowledge of it; or
(b)
he or she has received a notice or notification of it; or
(c)
from all the facts and circumstances known to him or her at the time in
question he or she has reason to know that it exists.
A
person "knows" or has "knowledge" of a fact when he or she
has actual knowledge of it. "Discover" or "learn" or a
word or phrase of similar import refers to knowledge rather than to reason to
know. The time and circumstances under which a notice or notification may
cease to be effective are not determined by this Title.
(26)
A person "notifies" or "gives" a notice or notification to
another by taking such steps as may be reasonably required to inform the other
in ordinary course whether or not such other actually comes to know of it. A
person "receives" a notice or notification when
(a)
it comes to his or her attention; or
(b)
it is duly delivered at the place of business through which the contract was
made or at any other place held out by him or her as the place for receipt of
such communications.
(27)
Notice, knowledge or a notice or notification received by an organization is
effective for a particular transaction from the time when it is brought to the
attention of the individual conducting that transaction, and in any event from
the time when it would have been brought to his or her attention if the
organization had exercised due diligence. An organization exercises due
diligence if it maintains reasonable routines for communicating significant
information to the person conducting the transaction and there is reasonable
compliance with the routines. Due diligence does not require an individual
acting for the organization to communicate information unless such
communication is part of his or her regular duties or unless he or she has
reason to know of the transaction and that the transaction would be materially
affected by the information.
(28)
"Organization" includes a corporation, government or governmental
subdivision or agency, business trust, estate, trust, partnership or
association, two or more persons having a joint or common interest, or any
other legal or commercial entity.
(29)
"Party", as distinct from "third party", means a person who
has engaged in a transaction or made an agreement within this Title.
(30)
"Person" includes an individual or an organization (See RCW
62A.1-102).
(31)
"Presumption" or "presumed" means that the trier of fact
must find the existence of the fact presumed unless and until evidence is
introduced which would support a finding of its nonexistence.
(32)
"Purchase" includes taking by sale, discount, negotiation, mortgage,
pledge, lien, security interest, issue or re-issue, gift or any other voluntary
transaction creating an interest in property.
(33)
"Purchaser" means a person who takes by purchase.
(34)
"Remedy" means any remedial right to which an aggrieved party is
entitled with or without resort to a tribunal.
(35)
"Representative" includes an agent, an officer of a corporation or
association, and a trustee, executor or administrator of an estate, or any
other person empowered to act for another.
(36)
"Rights" includes remedies.
(37)
"Security interest" means an interest in personal property or
fixtures which secures payment or performance of an obligation, except for
lease-purchase agreements under chapter 63.19 RCW. The term also includes any
interest of a consignor and a buyer of accounts, chattel paper, a payment
intangible, or a promissory note in a transaction that is subject to Article ((9[A]))
9A. The special property interest of a buyer of goods on identification
of such goods to a contract for sale under RCW 62A.2-401 is not a
"security interest", but a buyer may also acquire a "security
interest" by complying with Article ((9[A])) 9A. Except as
otherwise provided in RCW 62A.2-505, the right of a seller or lessor of goods
under Article 2 or 2A to retain or acquire possession of the goods is not a
"security interest," but a seller or lessor may also acquire a
"security interest" by complying with Article ((9[A])) 9A.
The retention or reservation of title by a seller of goods notwithstanding
shipment or delivery to the buyer (RCW 62A.2-401) is limited in effect to a
reservation of a "security interest."
Whether
a transaction creates a lease or security interest is determined by the facts
of each case. However, a transaction creates a security interest if the
consideration the lessee is to pay the lessor for the right to possession and
use of the goods is an obligation for the term of the lease not subject to
termination by the lessee, and:
(a)
The original term of the lease is equal to or greater than the remaining
economic life of the goods;
(b)
The lessee is bound to renew the lease for the remaining economic life of the
goods or is bound to become the owner of the goods;
(c)
The lessee has an option to renew the lease for the remaining economic life of
the goods for no additional consideration or nominal additional consideration
upon compliance with the lease agreement; or
(d)
The lessee has an option to become the owner of the goods for no additional
consideration or nominal additional consideration upon compliance with the
lease agreement.
A transaction
does not create a security interest merely because it provides that:
(a)
The present value of the consideration the lessee is obligated to pay the
lessor for the right to possession and use of the goods is substantially equal
to or is greater than the fair market value of the goods at the time the lease
is entered into;
(b)
The lessee assumes risk of loss of the goods, or agrees to pay taxes,
insurance, filing, recording, or registration fees, or service or maintenance
costs with respect to the goods;
(c)
The lessee has an option to renew the lease or to become the owner of the
goods;
(d)
The lessee has an option to renew the lease for a fixed rent that is equal to
or greater than the reasonably predictable fair market rent for the use of the goods
for the term of the renewal at the time the option is to be performed;
(e)
The lessee has an option to become the owner of the goods for a fixed price
that is equal to or greater than the reasonably predictable fair market value
of the goods at the time the option is to be performed; or
(f)
The amount of rental payments may or will be increased or decreased by
reference to the amount realized by the lessor upon sale or disposition of the
goods.
For
purposes of this subsection (37):
(a)
Additional consideration is not nominal if (i) when the option to renew the
lease is granted to the lessee the rent is stated to be the fair market rent
for the use of the goods for the term of the renewal determined at the time the
option is to be performed, or (ii) when the option to become the owner of the
goods is granted to the lessee the price is stated to be the fair market value
of the goods determined at the time the option is to be performed. Additional
consideration is nominal if it is less than the lessee's reasonably predictable
cost of performing under the lease agreement if the option is not exercised;
(b)
"Reasonably predictable" and "remaining economic life of the
goods" are to be determined with reference to the facts and circumstances
at the time the transaction is entered into; and
(c)
"Present value" means the amount as of a date certain of one or more
sums payable in the future, discounted to the date certain. The discount is
determined by the interest rate specified by the parties if the rate is not
manifestly unreasonable at the time the transaction is entered into; otherwise,
the discount is determined by a commercially reasonable rate that takes into
account the facts and circumstances of each case at the time the transaction
was entered into.
(38)
"Send" in connection with any writing or notice means to deposit in
the mail or deliver for transmission by any other usual means of communication
with postage or cost of transmission provided for and properly addressed and in
the case of an instrument to an address specified thereon or otherwise agreed,
or if there be none to any address reasonable under the circumstances. The
receipt of any writing or notice within the time at which it would have arrived
if properly sent has the effect of a proper sending.
(39)
"Signed" includes any symbol executed or adopted by a party with
present intention to authenticate a writing.
(40)
"Surety" includes guarantor.
(41)
"Telegram" includes a message transmitted by radio, teletype, cable,
any mechanical method of transmission, or the like.
(42)
"Term" means that portion of an agreement which relates to a
particular matter.
(43)
"Unauthorized" signature means one made without actual, implied or
apparent authority and includes a forgery.
(44)
"Value". Except as otherwise provided with respect to negotiable
instruments and bank collections (RCW 62A.3-303, RCW 62A.4‑210, and RCW
62A.4-211) a person gives "value" for rights if he or she acquires
them
(a)
in return for a binding commitment to extend credit or for the extension of
immediately available credit whether or not drawn upon and whether or not a
charge-back is provided for in the event of difficulties in collection; or
(b)
as security for or in total or partial satisfaction of a preexisting claim; or
(c)
by accepting delivery pursuant to a pre-existing contract for purchase; or
(d)
generally, in return for any consideration sufficient to support a simple
contract.
(45)
"Warehouse receipt" means a receipt issued by a person engaged in the
business of storing goods for hire.
(46)
"Written" or "writing" includes printing, typewriting or
any other intentional reduction to tangible form.
Sec.
10. RCW
62A.2A-303 and 2000 c 250 s 9A-809 are each amended to read as follows:
ALIENABILITY
OF PARTY'S INTEREST UNDER LEASE CONTRACT OR OF LESSOR'S RESIDUAL INTEREST IN
GOODS; DELEGATION OF PERFORMANCE; TRANSFER OF RIGHTS. (1) As used in this
section, "creation of a security interest" includes the sale of a
lease contract that is subject to Article ((9[A])) 9A, Secured
Transactions, by reason of RCW 62A.9A‑109(a)(3).
(2)
Except as provided in subsection (3) of this section and RCW 62A.9A‑407,
a provision in a lease agreement which (a) prohibits the voluntary or involuntary
transfer, including a transfer by sale, sublease, creation or enforcement of a
security interest, or attachment, levy, or other judicial process, of an
interest of a party under the lease contract or of the lessor's residual
interest in the goods, or (b) makes such a transfer an event of default, gives
rise to the rights and remedies provided in subsection (4) of this section, but
a transfer that is prohibited or is an event of default under the lease
agreement is otherwise effective.
(3)
A provision in a lease agreement which (((i)[(a)])) (a) prohibits
a transfer of a right to damages for default with respect to the whole lease
contract or of a right to payment arising out of the transferor's due
performance of the transferor's entire obligation, or (((ii)[(b)])) (b)
makes such a transfer an event of default, is not enforceable, and such a
transfer is not a transfer that materially impairs the prospect of obtaining
return performance by, materially changes the duty of, or materially increases
the burden or risk imposed on, the other party to the lease contract within the
purview of subsection (4) of this section.
(4)
Subject to subsection (3) of this section and RCW 62A.9A‑407:
(a)
If a transfer is made which is made an event of default under a lease
agreement, the party to the lease contract not making the transfer, unless that
party waives the default or otherwise agrees, has the rights and remedies
described in RCW 62A.2A-501(2);
(b)
If subsection (4)(a) of this section is not applicable and if a transfer is
made that (i) is prohibited under a lease agreement or (ii) materially impairs
the prospect of obtaining return performance by, materially changes the duty
of, or materially increases the burden or risk imposed on, the other party to
the lease contract, unless the party not making the transfer agrees at any time
to the transfer in the lease contract or otherwise, then, except as limited by
contract, (A) the transferor is liable to the party not making the transfer for
damages caused by the transfer to the extent that the damages could not
reasonably be prevented by the party not making the transfer and (B) a court
having jurisdiction may grant other appropriate relief, including cancellation
of the lease contract or an injunction against the transfer.
(5)
A transfer of "the lease" or of "all my rights under the
lease," or a transfer in similar general terms, is a transfer of rights
and, unless the language or the circumstances, as in a transfer for security,
indicate the contrary, the transfer is a delegation of duties by the transferor
to the transferee. Acceptance by the transferee constitutes a promise by the
transferee to perform those duties. The promise is enforceable by either the
transferor or the other party to the lease contract.
(6)
Unless otherwise agreed by the lessor and the lessee, a delegation of
performance does not relieve the transferor as against the other party of any
duty to perform or of any liability for default.
(7)
In a consumer lease, to prohibit the transfer of an interest of a party under
the lease contract or to make a transfer an event of default, the language must
be specific, by a writing, and conspicuous.
Sec.
11. RCW
62A.2A-306 and 1993 c 230 s 2A-306 are each amended to read as follows:
PRIORITY
OF CERTAIN LIENS ARISING BY OPERATION OF LAW. ((If a person in the ordinary
course of his or her business furnishes services or materials with respect to
goods subject to a lease contract, a lien upon those goods in the possession of
that person given by statute or rule of law for those materials or services
takes priority over any interest of the lessor or lessee under the lease
contract or this Article unless the lien is created by statute and the statute
provides otherwise or unless the lien is created by rule of law and the rule of
law provides otherwise.)) (a) "Possessory lien." In
this section, "possessory lien" has the meaning defined in RCW
62A.9A-333.
(b)
Priority of possessory lien. A possessory lien on goods subject to a
lease contract has priority over any interest of the lessor or the lessee under
the lease contract or this Article only if the lien is created by a statute
that expressly so provides.
(c)
A preparer lien or processor lien properly created pursuant to chapter 60.13
RCW or a depositor's lien created pursuant to chapter 22.09 RCW takes priority
over any perfected or unperfected security interest.
Sec.
12. RCW
62A.3-102 and 1993 c 229 s 4 are each amended to read as follows:
SUBJECT
MATTER. (a) This Article applies to negotiable instruments. It does not apply
to money, to payment orders governed by Article 4A, or to securities governed
by Article 8.
(b)
If there is conflict between this Article and Article 4 or ((9)) 9A,
Articles 4 and ((9)) 9A govern.
(c)
Regulations of the Board of Governors of the Federal Reserve System and
operating circulars of the Federal Reserve Banks supersede any inconsistent
provision of this Article to the extent of the inconsistency.
Sec.
13. RCW
62A.4-210 and 2000 c 250 s 9A-813 are each amended to read as follows:
SECURITY
INTEREST OF COLLECTING BANK IN ITEMS, ACCOMPANYING DOCUMENTS AND PROCEEDS. (a)
A collecting bank has a security interest in an item and any accompanying
documents or the proceeds of either:
(1)
In case of an item deposited in an account, to the extent to which credit given
for the item has been withdrawn or applied;
(2)
In case of an item for which it has given credit available for withdrawal as of
right, to the extent of the credit given whether or not the credit is drawn
upon or there is a right of charge-back; or
(3)
If it makes an advance on or against the item.
(b)
If credit given for several items received at one time or pursuant to a single
agreement is withdrawn or applied in part, the security interest remains upon
all the items, any accompanying documents or the proceeds of either. For the
purpose of this section, credits first given are first withdrawn.
(c)
Receipt by a collecting bank of a final settlement for an item is a realization
on its security interest in the item, accompanying documents, and proceeds. So
long as the bank does not receive final settlement for the item or give up
possession of the item or accompanying documents for purposes other than
collection, the security interest continues to that extent and is subject to
Article ((9[A])) 9A, but:
(1)
No security agreement is necessary to make the security interest enforceable
RCW 62A.9A‑203(b)(3)(A);
(2)
No filing is required to perfect the security interest; and
(3) The security interest has priority over conflicting perfected
security interests in the item, accompanying documents, or proceeds.
Sec.
14. RCW
62A.8-110 and 2000 c 250 s 9A-817 are each amended to read as follows:
APPLICABILITY; CHOICE OF LAW. (1) The local law of the issuer's
jurisdiction, as specified in subsection (4) of this section, governs:
(a)
The validity of a security;
(b)
The rights and duties of the issuer with respect to registration of transfer;
(c)
The effectiveness of registration of transfer by the issuer;
(d)
Whether the issuer owes any duties to an adverse claimant to a security; and
(e)
Whether an adverse claim can be asserted against a person to whom transfer of a
certificated or uncertificated security is registered or a person who obtains
control of an uncertificated security.
(2)
The local law of the securities intermediary's jurisdiction, as specified in
subsection (5) of this section, governs:
(a)
Acquisition of a security entitlement from the securities intermediary;
(b)
The rights and duties of the securities intermediary and entitlement holder
arising out of a security entitlement;
(c)
Whether the securities intermediary owes any duties to an adverse claimant to a
security entitlement; and
(d)
Whether an adverse claim can be asserted against a person who acquires a
security entitlement from the securities intermediary or a person who purchases
a security entitlement or interest therein from an entitlement holder.
(3)
The local law of the jurisdiction in which a security certificate is located at
the time of delivery governs whether an adverse claim can be asserted against a
person to whom the security certificate is delivered.
(4)
"Issuer's jurisdiction" means the jurisdiction under which the issuer
of the security is organized or, if permitted by the law of that jurisdiction,
the law of another jurisdiction specified by the issuer. An issuer organized
under the law of this state may specify the law of another jurisdiction as the
law governing the matters specified in subsection (1)(b) through (e) of this
section.
(5)
The following rules determine a "securities intermediary's
jurisdiction" for purposes of this section:
(a)
If an agreement between the securities intermediary and its entitlement holder
governing the securities account expressly provides that a particular
jurisdiction is the securities intermediary's jurisdiction for purposes of this
part, this Article, or ((chapter 250, Laws of 2000)) Article 62A.9A
RCW, that jurisdiction is the securities intermediary's jurisdiction.
(b)
If (((5)))(a) of this ((section [(a) of this subsection])) subsection
does not apply and an agreement between the securities intermediary and its
entitlement holder governing the securities account expressly provides that the
agreement is governed by the law of a particular jurisdiction, that
jurisdiction is the securities intermediary's jurisdiction.
(c)
If neither (((5)))(a) nor (b) of this ((section [(a) nor (b) of this
subsection])) subsection applies, and an agreement between the
securities intermediary and its entitlement holder governing the securities
account expressly provides that the securities account is maintained at an
office in a particular jurisdiction, that jurisdiction is the securities
intermediary's jurisdiction.
(d)
If (((5)))(a), (b), and (c) of this ((section [(a), (b), and (c) of
this subsection])) subsection do not apply, the securities
intermediary's jurisdiction is the jurisdiction in which the office identified
in an account statement as the office serving the entitlement holder's account
is located.
(e)
If (a), (b), (c), and (d) of this subsection do not apply, the securities
intermediary's jurisdiction is the jurisdiction in which the chief executive
office of the securities intermediary is located.
(6) A securities intermediary's jurisdiction is not determined by
the physical location of certificates representing financial assets, or by the
jurisdiction in which is organized the issuer of the financial asset with
respect to which an entitlement holder has a security entitlement, or by the
location of facilities for data processing or other recordkeeping concerning
the account.
Sec.
15. RCW
62A.8-510 and 2000 c 250 s 9A-820 are each amended to read as follows:
RIGHTS
OF PURCHASER OF SECURITY ENTITLEMENT FROM ENTITLEMENT HOLDER. (1) In a case
not covered by the priority rules in Article ((9[A])) 9A or the
rules stated in subsection (3) of this section, an action based on an adverse
claim to a financial asset or security entitlement, whether framed in
conversion, replevin, constructive trust, equitable lien, or other theory, may
not be asserted against a person who purchases a security entitlement, or an
interest therein, from an entitlement holder if the purchaser gives value, does
not have notice of the adverse claim, and obtains control.
(2)
If an adverse claim could not have been asserted against an entitlement holder
under RCW 62A.8-502, the adverse claim cannot be asserted against a person who
purchases a security entitlement, or an interest therein, from the entitlement
holder.
(3)
In a case not covered by the priority rules in Article ((9[A])) 9A,
a purchaser for value of a security entitlement, or an interest therein, who
obtains control has priority over a purchaser of a security entitlement, or an
interest therein, who does not obtain control. Except as otherwise provided in
subsection (4) of this section, purchasers who have control rank according to
priority in time of:
(a)
The purchaser's becoming the person for whom the securities account, in which
the security entitlement is carried, is maintained, if the purchaser obtained
control under RCW 62A.8‑106(((d)(1) [(4)(a)])) (4)(a);
(b)
The securities intermediary's agreement to comply with the purchaser's
entitlement orders with respect to security entitlements carried or to be
carried in the securities account in which the security entitlement is carried,
if the purchaser obtained control under RCW 62A.8‑106(((d)(2) [(4)(b)]))
(4)(b); or
(c)
If the purchaser obtained control through another person under RCW 62A.8‑106(((d)(3)
[(4)(c)])) (4)(c), the time on which priority would be based under
this subsection if the other person were the secured party.
(4) A securities intermediary as purchaser has priority over a
conflicting purchaser who has control unless otherwise agreed by the securities
intermediary.
Sec.
16. RCW
62A.9A-102 and 2000 c 250 s 9A-102 are each amended to read as follows:
DEFINITIONS
AND INDEX OF DEFINITIONS. (a) Article ((9[A])) 9A
definitions. In this Article:
(1)
"Accession" means goods that are physically united with other goods
in such a manner that the identity of the original goods is not lost.
(2)(A)
"Account," except as used in "account for," means a right
to payment of a monetary obligation, whether or not earned by performance, (i)
for property that has been or is to be sold, leased, licensed, assigned, or
otherwise disposed of, (ii) for services rendered or to be rendered, (iii) for
a policy of insurance issued or to be issued, (iv) for a secondary obligation
incurred or to be incurred, (v) for energy provided or to be provided, (vi) for
the use or hire of a vessel under a charter or other contract, (vii) arising
out of the use of a credit or charge card or information contained on or for
use with the card, or (viii) as winnings in a lottery or other game of chance
operated or sponsored by a state, governmental unit of a state, or person
licensed or authorized to operate the game by a state or governmental unit of a
state. The term includes health-care-insurance receivables.
(B)
The term does not include (i) rights to payment evidenced by chattel paper or
an instrument, (ii) commercial tort claims, (iii) deposit accounts, (iv)
investment property, (v) letter-of-credit rights or letters of credit, or (vi)
rights to payment for money or funds advanced or sold, other than rights
arising out of the use of a credit or charge card or information contained on
or for use with the card.
(3)
"Account debtor" means a person obligated on an account, chattel
paper, or general intangible. The term does not include persons obligated to
pay a negotiable instrument, even if the instrument constitutes part of chattel
paper.
(4)
"Accounting," except as used in "accounting for," means a
record:
(A)
Authenticated by a secured party;
(B)
Indicating the aggregate unpaid secured obligations as of a date not more than
thirty-five days earlier or thirty-five days later than the date of the record;
and
(C)
Identifying the components of the obligations in reasonable detail.
(5)
"Agricultural lien" means an interest, other than a security
interest, in farm products:
(A)
Which secures payment or performance of an obligation for:
(i)
Goods or services furnished in connection with a debtor's farming operation; or
(ii)
Rent on real property leased by a debtor in connection with its farming
operation;
(B)
Which is created by statute in favor of a person that:
(i)
In the ordinary course of its business, furnished goods or services to a debtor
in connection with a debtor's farming operation; or
(ii)
Leased real property to a debtor in connection with the debtor's farming
operation; and
(C)
Whose effectiveness does not depend on the person's possession of the personal
property.
(6)
"As-extracted collateral" means:
(A)
Oil, gas, or other minerals that are subject to a security interest that:
(i)
Is created by a debtor having an interest in the minerals before extraction;
and
(ii)
Attaches to the minerals as extracted; or
(B)
Accounts arising out of the sale at the wellhead or minehead of oil, gas, or
other minerals in which the debtor had an interest before extraction.
(7)
"Authenticate" means:
(A)
To sign; or
(B)
To execute or otherwise adopt a symbol, or encrypt or similarly process a
record in whole or in part, with the present intent of the authenticating
person to identify the person and adopt or accept a record.
(8)
"Bank" means an organization that is engaged in the business of
banking. The term includes savings banks, savings and loan associations,
credit unions, and trust companies.
(9)
"Cash proceeds" means proceeds that are money, checks, deposit
accounts, or the like.
(10)
"Certificate of title" means a certificate of title with respect to
which a statute provides for the security interest in question to be indicated
on the certificate as a condition or result of the security interest's
obtaining priority over the rights of a lien creditor with respect to the
collateral.
(11)
"Chattel paper" means a record or records that evidence both a
monetary obligation and a security interest in specific goods, a security
interest in specific goods and software used in the goods, a security interest
in specific goods and license of software used in the goods, a lease of
specific goods, or a lease of specific goods and license of software used in
the goods. In this subsection, "monetary obligation" means a
monetary obligation secured by the goods or owed under a lease of the goods and
includes a monetary obligation with respect to software used in the goods. The
term "chattel paper" does not include (A) charters or other
contracts involving the use or hire of a vessel or (B) records that evidence
a right to payment arising out of the use of a credit or charge card or
information contained on or for use with the card. If a transaction is
evidenced by records that include an instrument or series of instruments, the
group of records taken together constitutes chattel paper.
(12)
"Collateral" means the property subject to a security interest or
agricultural lien. The term includes:
(A)
Proceeds to which a security interest attaches;
(B)
Accounts, chattel paper, payment intangibles, and promissory notes that have
been sold; and
(C)
Goods that are the subject of a consignment.
(13)
"Commercial tort claim" means a claim arising in tort with respect to
which:
(A)
The claimant is an organization; or
(B)
The claimant is an individual, and the claim:
(i)
Arose in the course of the claimant's business or profession; and
(ii)
Does not include damages arising out of personal injury to, or the death of, an
individual.
(14)
"Commodity account" means an account maintained by a commodity intermediary
in which a commodity contract is carried for a commodity customer.
(15)
"Commodity contract" means a commodity futures contract, an option on
a commodity futures contract, a commodity option, or another contract if the
contract or option is:
(A)
Traded on or subject to the rules of a board of trade that has been designated
as a contract market for such a contract pursuant to federal commodities laws;
or
(B)
Traded on a foreign commodity board of trade, exchange, or market, and is
carried on the books of a commodity intermediary for a commodity customer.
(16)
"Commodity customer" means a person for which a commodity
intermediary carries a commodity contract on its books.
(17)
"Commodity intermediary" means a person that:
(A)
Is registered as a futures commission merchant under federal commodities law;
or
(B)
In the ordinary course of its business, provides clearance or settlement
services for a board of trade that has been designated as a contract market
pursuant to federal commodities law.
(18)
"Communicate" means:
(A)
To send a written or other tangible record;
(B)
To transmit a record by any means agreed upon by the persons sending and
receiving the record; or
(C)
In the case of transmission of a record to or by a filing office, to transmit a
record by any means prescribed by filing-office rule.
(19)
"Consignee" means a merchant to which goods are delivered in a
consignment.
(20)
"Consignment" means a transaction, regardless of its form, in which a
person delivers goods to a merchant for the purpose of sale and:
(A)
The merchant:
(i)
Deals in goods of that kind under a name other than the name of the person
making delivery;
(ii)
Is not an auctioneer; and
(iii)
Is not generally known by its creditors to be substantially engaged in selling
the goods of others;
(B)
With respect to each delivery, the aggregate value of the goods is one thousand
dollars or more at the time of delivery;
(C)
The goods are not consumer goods immediately before delivery; and
(D)
The transaction does not create a security interest that secures an obligation.
(21)
"Consignor" means a person that delivers goods to a consignee in a
consignment.
(22)
"Consumer debtor" means a debtor in a consumer transaction.
(23)
"Consumer goods" means goods that are used or bought for use
primarily for personal, family, or household purposes.
(24)
"Consumer-goods transaction" means a consumer transaction in which:
(A)
An individual incurs a consumer obligation; and
(B)
A security interest in consumer goods secures the obligation.
(25)
"Consumer obligation" means an obligation which:
(A)
Is incurred as part of a transaction entered into primarily for personal, family,
or household purposes; and
(B)
Arises from an extension of credit, or commitment to extend credit, in an
aggregate amount not exceeding forty thousand dollars, or is secured by
personal property used or expected to be used as a principal dwelling.
"Consumer
obligor" means an obligor who is an individual and who incurred a consumer
obligation.
(26)
"Consumer transaction" means a transaction in which (A) an individual
incurs a consumer obligation, (B) a security interest secures the obligation,
and (C) the collateral is held or acquired primarily for personal, family, or
household purposes. The term includes consumer-goods transactions.
(27)
"Continuation statement" means an amendment of a financing statement
which:
(A)
Identifies, by its file number, the initial financing statement to which it
relates; and
(B)
Indicates that it is a continuation statement for, or that it is filed to
continue the effectiveness of, the identified financing statement.
(28)
"Debtor" means:
(A)
A person having an interest, other than a security interest or other lien, in
the collateral, whether or not the person is an obligor;
(B)
A seller of accounts, chattel paper, payment intangibles, or promissory notes;
or
(C)
A consignee.
(29)
"Deposit account" means a demand, time, savings, passbook, or similar
account maintained with a bank. The term does not include investment property
or accounts evidenced by an instrument.
(30)
"Document" means a document of title or a receipt of the type
described in RCW 62A.7‑201(2).
(31)
"Electronic chattel paper" means chattel paper evidenced by a record
or records consisting of information stored in an electronic medium.
(32)
"Encumbrance" means a right, other than an ownership interest, in real
property. The term includes mortgages and other liens on real property.
(33)
"Equipment" means goods other than inventory, farm products, or
consumer goods.
(34)
"Farm products" means goods, other than standing timber, with respect
to which the debtor is engaged in a farming operation and which are:
(A)
Crops grown, growing, or to be grown, including:
(i)
Crops produced on trees, vines, and bushes; and
(ii)
Aquatic goods produced in aquacultural operations;
(B)
Livestock, born or unborn, including aquatic goods produced in aquacultural
operations;
(C)
Supplies used or produced in a farming operation; or
(D)
Products of crops or livestock in their unmanufactured states.
(35)
"Farming operation" means raising, cultivating, propagating,
fattening, grazing, or any other farming, livestock, or aquacultural operation.
(36)
"File number" means the number assigned to an initial financing
statement pursuant to RCW 62A.9A‑519(a).
(37)
"Filing office" means an office designated in RCW 62A.9A‑501 as
the place to file a financing statement.
(38)
"Filing-office rule" means a rule adopted pursuant to RCW 62A.9A‑526.
(39)
"Financing statement" means a record or records composed of an
initial financing statement and any filed record relating to the initial financing
statement.
(40)
"Fixture filing" means the filing of a financing statement covering
goods that are or are to become fixtures and satisfying RCW 62A.9A‑502
(a) and (b). The term includes the filing of a financing statement covering
goods of a transmitting utility which are or are to become fixtures.
(41)
"Fixtures" means goods that have become so related to particular real
property that an interest in them arises under real property law.
(42)
"General intangible" means any personal property, including things in
action, other than accounts, chattel paper, commercial tort claims, deposit
accounts, documents, goods, instruments, investment property, letter-of-credit
rights, letters of credit, money, and oil, gas, or other minerals before
extraction. The term includes payment intangibles and software.
(43)
"Good faith" means honesty in fact and the observance of reasonable
commercial standards of fair dealing.
(44)
"Goods" means all things that are movable when a security interest
attaches. The term includes (A) fixtures, (B) standing timber that is to be
cut and removed under a conveyance or contract for sale, (C) the unborn young
of animals, (D) crops grown, growing, or to be grown, even if the crops are
produced on trees, vines, or bushes, and (E) manufactured homes. The term also
includes a computer program embedded in goods and any supporting information
provided in connection with a transaction relating to the program if (i) the
program is associated with the goods in such a manner that it customarily is
considered part of the goods, or (ii) by becoming the owner of the goods, a
person acquires a right to use the program in connection with the goods. The
term does not include a computer program embedded in goods that consist solely
of the medium in which the program is embedded. The term also does not include
accounts, chattel paper, commercial tort claims, deposit accounts, documents,
general intangibles, instruments, investment property, letter-of-credit rights,
letters of credit, money, or oil, gas, or other minerals before extraction or a
manufactured home converted to real property under chapter 65.20 RCW.
(45)
"Governmental unit" means a subdivision, agency, department, county,
parish, municipality, or other unit of the government of the United States, a
state, or a foreign country. The term includes an organization having a
separate corporate existence if the organization is eligible to issue debt on
which interest is exempt from income taxation under the laws of the United
States.
(46)
"Health-care-insurance receivable" means an interest in or claim
under a policy of insurance which is a right to payment of a monetary
obligation for health-care goods or services provided.
(47)
"Instrument" means a negotiable instrument or any other writing that
evidences a right to the payment of a monetary obligation, is not itself a
security agreement or lease, and is of a type that in ordinary course of
business is transferred by delivery with any necessary indorsement or
assignment. The term does not include (A) investment property, (B) letters of
credit, (C) writings that evidence a right to payment arising out of the use of
a credit or charge card or information contained on or for use with the card,
(D) writings that do not contain a promise or order to pay, or (E) writings
that are expressly nontransferable or nonassignable.
(48)
"Inventory" means goods, other than farm products, which:
(A)
Are leased by a person as lessor;
(B)
Are held by a person for sale or lease or to be furnished under a contract of
service;
(C)
Are furnished by a person under a contract of service; or
(D)
Consist of raw materials, work in process, or materials used or consumed in a
business.
(49)
"Investment property" means a security, whether certificated or
uncertificated, security entitlement, securities account, commodity contract,
or commodity account.
(50)
"Jurisdiction of organization," with respect to a registered
organization, means the jurisdiction under whose law the organization is
organized.
(51)
"Letter-of-credit right" means a right to payment or performance
under a letter of credit, whether or not the beneficiary has demanded or is at
the time entitled to demand payment or performance. The term does not include
the right of a beneficiary to demand payment or performance under a letter of
credit.
(52)
"Lien creditor" means:
(A)
A creditor that has acquired a lien on the property involved by attachment,
levy, or the like;
(B)
An assignee for benefit of creditors from the time of assignment;
(C)
A trustee in bankruptcy from the date of the filing of the petition; or
(D)
A receiver in equity from the time of appointment.
(53)
"Manufactured home" means a manufactured home or mobile home as defined
in RCW 46.04.302.
(54)
[Reserved]
(55)
"Mortgage" means a consensual interest in real property, including
fixtures, which secures payment or performance of an obligation.
(56)
"New debtor" means a person that becomes bound as debtor under RCW 62A.9A‑203(d)
by a security agreement previously entered into by another person.
(57)
"New value" means (A) money, (B) money's worth in property, services,
or new credit, or (C) release by a transferee of an interest in property
previously transferred to the transferee. The term does not include an
obligation substituted for another obligation.
(58)
"Noncash proceeds" means proceeds other than cash proceeds.
(59)
"Obligor" means a person that, with respect to an obligation secured
by a security interest in or an agricultural lien on the collateral, (A) owes
payment or other performance of the obligation, (B) has provided property other
than the collateral to secure payment or other performance of the obligation,
or (C) is otherwise accountable in whole or in part for payment or other
performance of the obligation. The term does not include issuers or nominated
persons under a letter of credit.
(60)
"Original debtor", except as used in RCW 62A.9A-310(c), means
a person that, as debtor, entered into a security agreement to which a new
debtor has become bound under RCW 62A.9A‑203(d).
(61)
"Payment intangible" means a general intangible under which the
account debtor's principal obligation is a monetary obligation.
(62)
"Person related to," with respect to an individual, means:
(A)
The spouse of the individual;
(B)
A brother, brother-in-law, sister, or sister-in-law of the individual;
(C)
An ancestor or lineal descendant of the individual or the individual's spouse;
or
(D)
Any other relative, by blood or marriage, of the individual or the individual's
spouse who shares the same home with the individual.
(63)
"Person related to," with respect to an organization, means:
(A)
A person directly or indirectly controlling, controlled by, or under common
control with the organization;
(B)
An officer or director of, or a person performing similar functions with
respect to, the organization;
(C)
An officer or director of, or a person performing similar functions with
respect to, a person described in (((64) [(63)])) (63)(A) of this
subsection;
(D)
The spouse of an individual described in (((64) [(63)])) (63)(A),
(B), or (C) of this subsection; or
(E)
An individual who is related by blood or marriage to an individual described in
(((64) [(63)])) (63)(A), (B), (C), or (D) of this subsection and
shares the same home with the individual.
(64)
"Proceeds", except as used in RCW 62A.9A-609(b), means the
following property:
(A)
Whatever is acquired upon the sale, lease, license, exchange, or other
disposition of collateral;
(B)
Whatever is collected on, or distributed on account of, collateral;
(C)
Rights arising out of collateral;
(D)
To the extent of the value of collateral, claims arising out of the loss,
nonconformity, or interference with the use of, defects or infringement of
rights in, or damage to, the collateral; or
(E)
To the extent of the value of collateral and to the extent payable to the
debtor or the secured party, insurance payable by reason of the loss or
nonconformity of, defects or infringement of rights in, or damage to, the
collateral.
(65)
"Promissory note" means an instrument that evidences a promise to pay
a monetary obligation, does not evidence an order to pay, and does not contain
an acknowledgment by a bank that the bank has received for deposit a sum of
money or funds.
(66)
"Proposal" means a record authenticated by a secured party, which
includes the terms on which the secured party is willing to accept collateral
in full or partial satisfaction of the obligation it secures pursuant to RCW
62A.9A‑620, 62A.9A‑621, and 62A.9A‑622.
(67)
"Public-finance transaction" means a secured transaction in
connection with which:
(A)
Debt securities are issued;
(B)
All or a portion of the securities issued have an initial stated maturity of at
least twenty years; and
(C)
The debtor, obligor, secured party, account debtor or other person obligated on
collateral, assignor or assignee of a secured obligation, or assignor or
assignee of a security interest is a state or a governmental unit of a state.
(68)
"Pursuant to commitment," with respect to an advance made or other
value given by a secured party, means pursuant to the secured party's
obligation, whether or not a subsequent event of default or other event not within
the secured party's control has relieved or may relieve the secured party from
its obligation.
(69)
"Record," except as used in "for record," "of
record," "record or legal title," and "record owner,"
means information that is inscribed on a tangible medium or which is stored in
an electronic or other medium and is retrievable in perceivable form.
(70)
"Registered organization" means an organization organized solely
under the law of a single state or the United States and as to which the state
or the United States must maintain a public record showing the organization to
have been organized.
(71)
"Secondary obligor" means an obligor to the extent that:
(A)
The obligor's obligation is secondary; or
(B)
The obligor has a right of recourse with respect to an obligation secured by
collateral against the debtor, another obligor, or property of either.
(72)
"Secured party" means:
(A)
A person in whose favor a security interest is created or provided for under a
security agreement, whether or not any obligation to be secured is outstanding;
(B)
A person that holds an agricultural lien;
(C)
A consignor;
(D)
A person to which accounts, chattel paper, payment intangibles, or promissory
notes have been sold;
(E)
A trustee, indenture trustee, agent, collateral agent, or other representative
in whose favor a security interest or agricultural lien is created or provided
for; or
(F)
A person that holds a security interest arising under RCW 62A.2‑401,
62A.2‑505, 62A.2‑711(3), 62A.2A‑508(5), 62A.4‑210, or
62A.5‑118.
(73)
"Security agreement" means an agreement that creates or provides for
a security interest.
(74)
"Send," in connection with a record or notification, means:
(A)
To deposit in the mail, deliver for transmission, or transmit by any other usual
means of communication, with postage or cost of transmission provided for,
addressed to any address reasonable under the circumstances; or
(B)
To cause the record or notification to be received within the time that it
would have been received if properly sent under (((75) [(74)])) (A) of
this subsection.
(75)
"Software" means a computer program and any supporting information
provided in connection with a transaction relating to the program. The term
does not include a computer program that is included in the definition of
goods.
(76)
"State" means a state of the United States, the District of Columbia,
Puerto Rico, the United States Virgin Islands, or any territory or insular
possession subject to the jurisdiction of the United States.
(77)
"Supporting obligation" means a letter-of-credit right or secondary
obligation that supports the payment or performance of an account, chattel
paper, a document, a general intangible, an instrument, or investment property.
(78)
"Tangible chattel paper" means chattel paper evidenced by a record or
records consisting of information that is inscribed on a tangible medium.
(79)
"Termination statement" means an amendment of a financing statement
which:
(A)
Identifies, by its file number, the initial financing statement to which it
relates; and
(B)
Indicates either that it is a termination statement or that the identified
financing statement is no longer effective.
(80)
"Transmitting utility" means a person primarily engaged in the
business of:
(A)
Operating a railroad, subway, street railway, or trolley bus;
(B)
Transmitting communications electrically, electromagnetically, or by light;
(C)
Transmitting goods by pipeline or sewer; or
(D)
Transmitting or producing and transmitting electricity, steam, gas, or water.
(b)
Definitions in other Articles. The following definitions in other
Articles apply to this Article:
"Applicant." RCW
62A.5‑102.
"Beneficiary." RCW
62A.5‑102.
"Broker." RCW
62A.8‑102.
"Certificated
security." RCW 62A.8‑102.
"Check." RCW
62A.3‑104.
"Clearing
corporation." RCW 62A.8‑102.
"Contract
for sale." RCW 62A.2‑106.
"Customer." RCW
62A.4‑104.
"Entitlement
holder." RCW 62A.8‑102.
"Financial
asset." RCW 62A.8‑102.
"Holder
in due course." RCW 62A.3‑302.
"Issuer"
with respect to
a
letter of credit
or
letter-of-credit right. RCW 62A.5‑102.
"Issuer"
with respect to a
security. RCW
62A.8‑201.
"Lease." RCW
62A.2A‑103.
"Lease
agreement." RCW 62A.2A‑103.
"Lease
contract." RCW 62A.2A‑103.
"Leasehold
interest." RCW 62A.2A‑103.
"Lessee." RCW
62A.2A‑103.
"Lessee
in ordinary course
of
business." RCW 62A.2A‑103.
"Lessor." RCW
62A.2A‑103.
"Lessor's
residual
interest." RCW
62A.2A‑103.
"Letter
of credit." RCW 62A.5‑102.
"Merchant." RCW
62A.2‑104.
"Negotiable
instrument." RCW 62A.3‑104.
"Nominated
person." RCW 62A.5‑102.
"Note." RCW
62A.3‑104.
"Proceeds
of a letter
of
credit." RCW 62A.5‑114.
"Prove." RCW
62A.3‑103.
"Sale." RCW
62A.2‑106.
"Securities
account." RCW 62A.8‑501.
"Securities
intermediary." RCW 62A.8‑102.
"Security." RCW
62A.8‑102.
"Security
certificate." RCW 62A.8‑102.
"Security
entitlement." RCW 62A.8‑102.
"Uncertificated
security." RCW 62A.8‑102.
(c)
Article 1 definitions and principles. Article 1 contains general
definitions and principles of construction and interpretation applicable
throughout this Article.
Sec.
17. RCW
62A.9A-104 and 2000 c 250 s 9A-104 are each amended to read as follows:
CONTROL
OF DEPOSIT ACCOUNT. (a) Requirements for control. A secured party has
control of a deposit account if:
(1)
The secured party is the bank with which the deposit account is maintained;
(2)
The debtor, secured party, and bank have agreed in an authenticated record that
the bank will comply with instructions originated by the secured party
directing disposition of the funds in the deposit account without
further consent by the debtor; or
(3)
The secured party becomes the bank's customer with respect to the deposit
account.
(b)
Debtor's right to direct disposition. A secured party that has
satisfied subsection (a) of this section has control, even if the debtor
retains the right to direct the disposition of funds from the deposit account.
Sec.
18. RCW
62A.9A-105 and 2000 c 250 s 9A-105 are each amended to read as follows:
CONTROL
OF ELECTRONIC CHATTEL PAPER. A secured party has control of electronic chattel
paper if the record or records comprising the chattel paper are created,
stored, and assigned in such a manner that:
(1)
A single authoritative copy of the record or records exists which is unique,
identifiable and, except as otherwise provided in (([subsections])) subsections
(4), (5), and (6) of this section, unalterable;
(2)
The authoritative copy identifies the secured party as the assignee of the
record or records;
(3)
The authoritative copy is communicated to and maintained by the secured party
or its designated custodian;
(4)
Copies or revisions that add or change an identified assignee of the
authoritative copy can be made only with the participation of the secured
party;
(5)
Each copy of the authoritative copy and any copy of a copy is readily identifiable
as a copy that is not the authoritative copy; and
(6)
Any revision of the authoritative copy is readily identifiable as an authorized
or unauthorized revision.
Sec.
19. RCW
62A.9A-107 and 2000 c 250 s 9A-107 are each amended to read as follows:
CONTROL
OF LETTER-OF-CREDIT RIGHT. A secured party has control of a letter-of-credit
right to the extent of any right to payment or performance by the issuer or any
nominated person if the issuer or nominated person has consented to an
assignment of proceeds of the letter of credit under RCW 62A.5‑114(((c)
[(3)])) (3) or otherwise applicable law or practice.
Sec.
20. RCW
62A.9A-201 and 2000 c 250 s 9A-201 are each amended to read as follows:
GENERAL
EFFECTIVENESS OF SECURITY AGREEMENT. (a) General effectiveness. Except
as otherwise provided in the Uniform Commercial Code, a security agreement is
effective according to its terms between the parties, against purchasers of the
collateral, and against creditors.
(b)
Applicable consumer laws and other law. A transaction subject to this
Article is subject to any applicable rule of law which establishes a different
rule for consumers and (((i) [(1)])) (1) any other statute or
regulation that regulates the rates, charges, agreements, and practices for
loans, credit sales, or other extensions of credit and (((ii) [(2)])) (2)
any consumer-protection statute or regulation.
(c)
Other applicable law controls. In case of conflict between this Article
and a rule of law, statute, or regulation described in subsection (b) of this
section, the rule of law, statute, or regulation controls. Failure to comply
with a statute or regulation described in subsection (b) of this section has
only the effect the statute or regulation specifies.
(d)
Further deference to other applicable law. This Article does not:
(1)
Validate any rate, charge, agreement, or practice that violates a rule of law,
statute, or regulation described in subsection (b) of this section; or
(2)
Extend the application of the rule of law, statute, or regulation to a
transaction not otherwise subject to it.
Sec.
21. RCW
62A.9A-208 and 2000 c 250 s 9A-208 are each amended to read as follows:
ADDITIONAL
DUTIES OF SECURED PARTY HAVING CONTROL OF COLLATERAL. (a) Applicability of
section. This section applies to cases in which there is no outstanding
secured obligation and the secured party is not committed to make advances,
incur obligations, or otherwise give value.
(b)
Duties of secured party after receiving demand from debtor. Within ten
days after receiving an authenticated demand by the debtor:
(1)
A secured party having control of a deposit account under RCW 62A.9A‑104(a)(2)
shall send to the bank with which the deposit account is maintained an
authenticated statement that releases the bank from any further obligation to
comply with instructions originated by the secured party;
(2)
A secured party having control of a deposit account under RCW 62A.9A‑104(a)(3)
shall:
(A)
Pay the debtor the balance on deposit in the deposit account; or
(B)
Transfer the balance on deposit into a deposit account in the debtor's name;
(3)
A secured party, other than a buyer, having control of electronic chattel paper
under RCW 62A.9A‑105 shall:
(A)
Communicate the authoritative copy of the electronic chattel paper to the
debtor or its designated custodian;
(B)
If the debtor designates a custodian that is the designated custodian with
which the authoritative copy of the electronic chattel paper is maintained for
the secured party, communicate to the custodian an authenticated record
releasing the designated custodian from any further obligation to comply with
instructions originated by the secured party and instructing the custodian to
comply with instructions originated by the debtor; and
(C)
Take appropriate action to enable the debtor or its designated custodian to
make copies of or revisions to the authoritative copy which add or change an
identified assignee of the authoritative copy without the consent of the
secured party;
(4)
A secured party having control of investment property under RCW 62A.8‑106(((d)(2)
[(4)(b)])) (4)(b) or 62A.9A‑106(b) shall send to the
securities intermediary or commodity intermediary with which the security
entitlement or commodity contract is maintained an authenticated record that
releases the securities intermediary or commodity intermediary from any further
obligation to comply with entitlement orders or directions originated by the
secured party; and
(5)
A secured party having control of a letter-of-credit right under RCW 62A.9A‑107
shall send to each person having an unfulfilled obligation to pay or deliver
proceeds of the letter of credit to the secured party an authenticated release
from any further obligation to pay or deliver proceeds of the letter of credit
to the secured party.
Sec.
22. RCW
62A.9A-301 and 2000 c 250 s 9A-301 are each amended to read as follows:
LAW
GOVERNING PERFECTION AND PRIORITY OF SECURITY INTERESTS. Except as otherwise
provided in RCW 62A.9A‑303 through 62A.9A‑306, the following rules
determine the law governing perfection, the effect of perfection or
nonperfection, and the priority of a security interest in collateral:
(1)
Except as otherwise provided in this section, while a debtor is located in a
jurisdiction, the local law of that jurisdiction governs perfection, the effect
of perfection or nonperfection, and the priority of a security interest in
collateral.
(2)
While collateral is located in a jurisdiction, the local law of that
jurisdiction governs perfection, the effect of perfection or nonperfection, and
the priority of a possessory security interest in that collateral.
(3)
Except as otherwise provided in (([subsection])) subsection (4)
of this section, while negotiable documents, goods, instruments, money, or
tangible chattel paper is located in a jurisdiction, the local law of that
jurisdiction governs:
(A)
Perfection of a security interest in the goods by filing a fixture filing;
(B)
Perfection of a security interest in timber to be cut; and
(C)
The effect of perfection or nonperfection and the priority of a nonpossessory
security interest in the collateral.
(4)
The local law of the jurisdiction in which the wellhead or minehead is located
governs perfection, the effect of perfection or nonperfection, and the priority
of a security interest in as-extracted collateral.
Sec.
23. RCW
62A.9A-305 and 2000 c 250 s 9A-305 are each amended to read as follows:
LAW
GOVERNING PERFECTION AND PRIORITY OF SECURITY INTERESTS IN INVESTMENT
PROPERTY. (a) Governing law: General rules. Except as otherwise
provided in subsection (c) of this section, the following rules apply:
(1)
While a security certificate is located in a jurisdiction, the local law of
that jurisdiction governs perfection, the effect of perfection or
nonperfection, and the priority of a security interest in the certificated
security represented thereby.
(2)
The local law of the issuer's jurisdiction as specified in RCW 62A.8‑110(((d)
[(4)])) (4) governs perfection, the effect of perfection or
nonperfection, and the priority of a security interest in an uncertificated
security.
(3)
The local law of the securities intermediary's jurisdiction as specified in RCW
62A.8‑110(((e) [(5)])) (5) governs perfection, the effect
of perfection or nonperfection, and the priority of a security interest in a
security entitlement or securities account.
(4)
The local law of the commodity intermediary's jurisdiction governs perfection,
the effect of perfection or nonperfection, and the priority of a security
interest in a commodity contract or commodity account.
(b)
Commodity intermediary's jurisdiction. The following rules determine a
commodity intermediary's jurisdiction for purposes of this part:
(1)
If an agreement between the commodity intermediary and commodity customer
governing the commodity account expressly provides that a particular
jurisdiction is the commodity intermediary's jurisdiction for purposes of this
part, this Article, or the Uniform Commercial Code, that jurisdiction is the
commodity intermediary's jurisdiction.
(2)
If (1) of this subsection does not apply and an agreement between the commodity
intermediary and commodity customer governing the commodity account expressly
provides that the agreement is governed by the law of a particular
jurisdiction, that jurisdiction is the commodity intermediary's jurisdiction.
(3)
If neither (1) nor (2) of this subsection applies and an agreement between the
commodity intermediary and commodity customer governing the commodity account
expressly provides that the commodity account is maintained at an office in a
particular jurisdiction, that jurisdiction is the commodity intermediary's
jurisdiction.
(4)
If (1) through (3) of this subsection do not apply, the commodity
intermediary's jurisdiction is the jurisdiction in which the office identified
in an account statement as the office serving the commodity customer's account
is located.
(5)
If (1) through (4) of this subsection do not apply, the commodity
intermediary's jurisdiction is the jurisdiction in which the chief executive
office of the commodity intermediary is located.
(c)
When perfection governed by law of jurisdiction where debtor located. The
local law of the jurisdiction in which the debtor is located governs:
(1)
Perfection of a security interest in investment property by filing;
(2)
Automatic perfection of a security interest in investment property created by a
broker or securities intermediary; and
(3)
Automatic perfection of a security interest in a commodity contract or
commodity account created by a commodity intermediary.
Sec.
24. RCW
62A.9A-306 and 2000 c 250 s 9A-306 are each amended to read as follows:
LAW
GOVERNING PERFECTION AND PRIORITY OF SECURITY INTERESTS IN LETTER-OF-CREDIT
RIGHTS. (a) Governing law: ((Issuers)) Issuer's or nominated
person's jurisdiction. Subject to subsection (c) of this section, the
local law of the issuer's jurisdiction or a nominated person's jurisdiction
governs perfection, the effect of perfection or nonperfection, and the priority
of a security interest in a letter-of-credit right if the issuer's jurisdiction
or nominated person's jurisdiction is a state.
(b)
Issuer's or nominated person's jurisdiction. For purposes of this part, an
issuer's jurisdiction or nominated person's jurisdiction is the jurisdiction
whose law governs the liability of the issuer or nominated person with respect
to the letter-of-credit right as provided in RCW 62A.5‑116.
(c)
When section not applicable. This section does not apply to a security
interest that is perfected only under RCW 62A.9A‑308(d).
Sec.
25. RCW
62A.9A-311 and 2000 c 250 s 9A-311 are each amended to read as follows:
PERFECTION
OF SECURITY INTERESTS IN PROPERTY SUBJECT TO CERTAIN STATUTES, REGULATIONS, AND
TREATIES. (a) Security interest subject to other law. Except as
otherwise provided in subsection (d) of this section, the filing of a financing
statement is not necessary or effective to perfect a security interest in
property subject to:
(1)
A statute, regulation, or treaty of the United States whose requirements for a
security interest's obtaining priority over the rights of a lien creditor with
respect to the property preempt RCW 62A.9A‑310(a);
(2)
RCW 46.12.095 or 88.02.070, or chapter 65.12 RCW; or
(3)
A certificate-of-title statute of another jurisdiction which provides for a
security interest to be indicated on the certificate as a condition or result
of the security interest's obtaining priority over the rights of a lien
creditor with respect to the property.
(b)
Compliance with other law. Compliance with the requirements of a statute,
regulation, or treaty described in subsection (a) of this section for obtaining
priority over the rights of a lien creditor is equivalent to the filing of a
financing statement under this Article. Except as otherwise provided in
subsection (d) of this section, RCW 62A.9A‑313, and 62A.9A‑316 (d)
and (e) for goods covered by a certificate of title, a security interest in
property subject to a statute, regulation, or treaty described in subsection
(a) of this section may be perfected only by compliance with those
requirements, and a security interest so perfected remains perfected
notwithstanding a change in the use or transfer of possession of the
collateral.
(c)
Duration and renewal of perfection. Except as otherwise provided in
subsection (d) of this section and RCW 62A.9A‑316 (d) and (e), duration
and renewal of perfection of a security interest perfected by compliance with
the requirements prescribed by a statute, regulation, or treaty described in
subsection (a) of this section are governed by the statute, regulation, or
treaty. In other respects, the security interest is subject to this Article.
(d)
Inapplicability to certain inventory. During any period in which
collateral subject to RCW 46.12.095 or 88.02.070, or chapter 65.12 RCW
is inventory held for sale or lease by a person or leased by that person as
lessor and that person is in the business of selling ((or leasing))
goods of that kind, this section does not apply to a security interest in that
collateral created by that person ((as debtor)).
Sec.
26. RCW
62A.9A-313 and 2000 c 250 s 9A-313 are each amended to read as follows:
WHEN
POSSESSION BY OR DELIVERY TO SECURED PARTY PERFECTS SECURITY INTEREST WITHOUT
FILING. (a) Perfection by possession or delivery. Except as otherwise
provided in subsection (b) of this section, a secured party may perfect a
security interest in negotiable documents, goods, instruments, money, or tangible
chattel paper by taking possession of the collateral. A secured party may
perfect a security interest in certificated securities by taking delivery of
the certificated securities under RCW 62A.8‑301.
(b)
Goods covered by certificate of title. With respect to goods covered by
a certificate of title issued by this state, a secured party may perfect a
security interest in the goods by taking possession of the goods only in the
circumstances described in RCW 62A.9A‑316(d).
(c)
Collateral in possession of person other than debtor. With respect to
collateral other than certificated securities and goods covered by a document,
a secured party takes possession of collateral in the possession of a person
other than the debtor, the secured party, or a lessee of the collateral from
the debtor in the ordinary course of the debtor's business, when:
(1)
The person in possession authenticates a record acknowledging that it holds
possession of the collateral for the secured party's benefit; or
(2)
The person takes possession of the collateral after having authenticated a
record acknowledging that it will hold possession of collateral for the secured
party's benefit.
(d)
Time of perfection by possession; continuation of perfection. If
perfection of a security interest depends upon possession of the collateral by
a secured party, perfection occurs no earlier than the time the secured party
takes possession and continues only while the secured party retains possession.
(e)
Time of perfection by delivery; continuation of perfection. A security
interest in a certificated security in registered form is perfected by delivery
when delivery of the certificated security occurs under RCW 62A.8‑301 and
remains perfected by delivery until the debtor obtains possession of the
security certificate.
(f)
Acknowledgment not required. A person in possession of collateral is not
required to acknowledge that it holds possession for a secured party's benefit.
(g)
Effectiveness of acknowledgment; no duties or confirmation. If a person
acknowledges that it holds possession for the secured party's benefit:
(1)
The acknowledgment is effective under subsection (c) of this section or RCW
62A.8‑301(([(1)](a))) (1), even if the acknowledgment
violates the rights of a debtor; and
(2)
Unless the person otherwise agrees or law other than this Article otherwise
provides, the person does not owe any duty to the secured party and is not
required to confirm the acknowledgment to another person.
(h)
Secured party's delivery to person other than debtor. A secured party
having possession of collateral does not relinquish possession by delivering
the collateral to a person other than the debtor or a lessee of the collateral
from the debtor in the ordinary course of the debtor's business if the person
was instructed before the delivery or is instructed contemporaneously with the
delivery:
(1)
To hold possession of the collateral for the secured party's benefit; or
(2)
To redeliver the collateral to the secured party.
(i)
Effect of delivery under subsection (h); no duties or confirmation. A
secured party does not relinquish possession, even if a delivery under
subsection (h) of this section violates the rights of a debtor. A person to
which collateral is delivered under subsection (h) of this section does not owe
any duty to the secured party and is not required to confirm the delivery to
another person unless the person otherwise agrees or law other than this
Article otherwise provides.
Sec.
27. RCW
62A.9A-317 and 2000 c 250 s 9A-317 are each amended to read as follows:
INTERESTS
THAT TAKE PRIORITY OVER OR TAKE FREE OF SECURITY INTEREST OR AGRICULTURAL
LIEN. (a) Conflicting security interests and rights of lien creditors.
A security interest or agricultural lien is subordinate to the rights of:
(1)
A person entitled to priority under RCW 62A.9A‑322; and
(2)
Except as otherwise provided in subsection (e) of this section, a person that
becomes a lien creditor before the earlier of the time:
(A)
The security interest or agricultural lien is perfected; or
(B)
One of the conditions specified in RCW 62A.9A-203(b)(3) is met and a
financing statement covering the collateral is filed.
(b)
Buyers that receive delivery. Except as otherwise provided in subsection
(e) of this section, a buyer, other than a secured party, of tangible chattel
paper, documents, goods, instruments, or a security certificate takes free of a
security interest or agricultural lien if the buyer gives value and receives
delivery of the collateral without knowledge of the security interest or
agricultural lien and before it is perfected.
(c)
Lessees that receive delivery. Except as otherwise provided in subsection
(e) of this section, a lessee of goods takes free of a security interest or
agricultural lien if the lessee gives value and receives delivery of the
collateral without knowledge of the security interest or agricultural lien and
before it is perfected.
(d)
Licensees and buyers of certain collateral. A licensee of a general
intangible or a buyer, other than a secured party, of accounts, electronic
chattel paper, general intangibles, or investment property other than a
certificated security takes free of a security interest if the licensee or
buyer gives value without knowledge of the security interest and before it is
perfected.
(e)
Purchase-money security interest. Except as otherwise provided in RCW
62A.9A‑320 and 62A.9A‑321, if a person files a financing statement
with respect to a purchase-money security interest before or within twenty days
after the debtor receives delivery of the collateral, the security interest
takes priority over the rights of a buyer, lessee, or lien creditor which arise
between the time the security interest attaches and the time of filing.
Sec.
28. RCW
62A.9A-322 and 2000 c 250 s 9A-322 are each amended to read as follows:
PRIORITIES
AMONG CONFLICTING SECURITY INTERESTS IN AND AGRICULTURAL LIENS ON SAME
COLLATERAL. (a) General priority rules. Except as otherwise provided
in this section, priority among conflicting security interests and agricultural
liens in the same collateral is determined according to the following rules:
(1)
Conflicting perfected security interests and agricultural liens rank according
to priority in time of filing or perfection. Priority dates from the earlier
of the time a filing covering the collateral is first made or the security
interest or agricultural lien is first perfected, if there is no period thereafter
when there is neither filing nor perfection.
(2)
A perfected security interest or agricultural lien has priority over a
conflicting unperfected security interest or agricultural lien.
(3)
The first security interest or agricultural lien to attach or become effective
has priority if conflicting security interests and agricultural liens are
unperfected.
(b)
Time of perfection: Proceeds and supporting obligations. For the
purposes (([of])) of subsection (a)(1) of this section:
(1)
The time of filing or perfection as to a security interest in collateral is
also the time of filing or perfection as to a security interest in proceeds;
and
(2)
The time of filing or perfection as to a security interest in collateral
supported by a supporting obligation is also the time of filing or perfection
as to a security interest in the supporting obligation.
(c)
Special priority rules: Proceeds and supporting obligations. Except as
otherwise provided in subsection (f) of this section, a security interest in collateral
which qualifies for priority over a conflicting security interest under RCW
62A.9A‑327, 62A.9A‑328, 62A.9A‑329, 62A.9A‑330, or
62A.9A‑331 also has priority over a conflicting security interest in:
(1)
Any supporting obligation for the collateral; and
(2)
Proceeds of the collateral if:
(A)
The security interest in proceeds is perfected;
(B)
The proceeds are cash proceeds or of the same type as the collateral; and
(C)
In the case of proceeds that are proceeds of proceeds, all intervening proceeds
are cash proceeds, proceeds of the same type as the collateral, or an account
relating to the collateral.
(d)
First-to-file priority rule for certain collateral. Subject to
subsection (e) of this section and except as otherwise provided in subsection (f)
of this section, if a security interest in chattel paper, deposit accounts,
negotiable documents, instruments, investment property, or letter-of-credit
rights is perfected by a method other than filing, conflicting perfected
security interests in proceeds of the collateral rank according to priority in
time of filing.
(e)
Applicability of subsection (d) of this section. Subsection (d) of this
section applies only if the proceeds of the collateral are not cash proceeds,
chattel paper, negotiable documents, instruments, investment property, or
letter-of-credit rights.
(f)
Limitations on subsections (a) through (e) of this section. Subsections
(a) through (e) of this section are subject to:
(1)
Subsection (g) of this section and the other provisions of this part;
(2)
RCW 62A.4‑210 with respect to a security interest of a collecting bank;
(3)
RCW 62A.5‑118 with respect to a security interest of an issuer or
nominated person; and
(4)
RCW 62A.9A‑110 with respect to a security interest arising under Article
2 or 2A.
(g)
Priority under agricultural lien statute. A perfected agricultural lien
on collateral has priority over a conflicting security interest in or
agricultural lien on the same collateral if the statute creating the
agricultural lien so provides. Conflicts as to priority between and among
security interests in crops and agricultural liens subject to chapter 60.11 RCW
are governed by the provisions of that chapter.
Sec.
29. RCW
62A.9A-328 and 2000 c 250 s 9A-328 are each amended to read as follows:
PRIORITY
OF SECURITY INTERESTS IN INVESTMENT PROPERTY. The following rules govern
priority among conflicting security interests in the same investment property:
(1)
A security interest held by a secured party having control of investment
property under RCW 62A.9A‑106 has priority over a security interest held
by a secured party that does not have control of the investment property.
(2)
Except as otherwise provided in (([subsections])) subsections (3)
and (4) of this section, conflicting security interests held by secured parties
each of which has control under RCW 62A.9A‑106 rank according to priority
in time of:
(a)
If the collateral is a security, obtaining control;
(b)
If the collateral is a security entitlement carried in a securities account
and:
(i)
If the secured party obtained control under RCW 62A.8‑106(((d)(1)
[(4)(a)])) (4)(a), the secured party's becoming the person for which
the securities account is maintained;
(ii)
If the secured party obtained control under RCW 62A.8‑106(((d)(2)
[(4)(b)])) (4)(b), the securities intermediary's agreement to comply
with the secured party's entitlement orders with respect to security
entitlements carried or to be carried in the securities account; or
(iii)
If the secured party obtained control through another person under RCW 62A.8‑106(((d)(3)
[(4)(c)])) (4)(c), the time on which priority would be based under
this paragraph if the other person were the secured party; or
(C)
If the collateral is a commodity contract carried with a commodity
intermediary, the satisfaction of the requirement for control specified in RCW
62A.9A‑106(b)(2) with respect to commodity contracts carried or to be
carried with the commodity intermediary.
(3)
A security interest held by a securities intermediary in a security entitlement
or a securities account maintained with the securities intermediary has
priority over a conflicting security interest held by another secured party.
(4)
A security interest held by a commodity intermediary in a commodity contract or
a commodity account maintained with the commodity intermediary has priority
over a conflicting security interest held by another secured party.
(5)
A security interest in a certificated security in registered form which is
perfected by taking delivery under RCW 62A.9A‑313(a) and not by control
under RCW 62A.9A‑314 has priority over a conflicting security interest
perfected by a method other than control.
(6)
Conflicting security interests created by a broker, securities intermediary, or
commodity intermediary which are perfected without control under RCW 62A.9A‑106
rank equally.
(7)
In all other cases, priority among conflicting security interests in investment
property is governed by RCW 62A.9A‑322 and 62A.9A‑323.
Sec.
30. RCW
62A.9A-331 and 2000 c 250 s 9A-331 are each amended to read as follows:
PRIORITY
OF RIGHTS OF PURCHASERS OF INSTRUMENTS, DOCUMENTS, AND SECURITIES UNDER OTHER
ARTICLES; PRIORITY OF INTERESTS IN FINANCIAL ASSETS AND SECURITY ENTITLEMENTS
UNDER ARTICLE 8. (a) Rights under Articles 3, 7, and 8 not limited.
This Article does not limit the rights of a holder in due course of a
negotiable instrument, a holder to which a negotiable document of title has
been duly negotiated, or a protected purchaser of a security. These holders or
purchasers take priority over an earlier security interest, even if perfected,
to the extent provided in Articles 3, 7, and 8.
(b)
Protection under Article 8. This Article does not limit the rights of
or impose liability on a person to the extent that the person is protected
against the assertion of ((an adverse)) a claim under Article 8.
(c)
Filing not notice. Filing under this Article does not constitute notice
of a claim or defense to the holders, or purchasers, or persons described in
subsections (a) and (b) of this section.
Sec.
31. RCW
62A.9A-333 and 2000 c 250 s 9A-333 are each amended to read as follows:
PRIORITY
OF CERTAIN LIENS ARISING BY OPERATION OF LAW. (a) "Possessory
lien." In this section, "possessory lien" means an
interest, other than a security interest or an agricultural lien:
(1)
Which secures payment or performance of an obligation for services or materials
furnished with respect to goods by a person in the ordinary course of the
person's business;
(2)
Which is created by statute or rule of law in favor of the person; and
(3)
Whose effectiveness depends on the person's possession of the goods.
(b)
Priority of possessory lien. A possessory lien on goods has priority
over a security interest in the goods only if the lien is created by a statute
that expressly so provides ((otherwise)).
(c)
A preparer lien or processor lien properly created pursuant to chapter 60.13
RCW or a depositor's lien created pursuant to chapter 22.09 RCW takes priority
over any perfected or unperfected security interest.
Sec.
32. RCW
62A.9A-334 and 2000 c 250 s 9A-334 are each amended to read as follows:
PRIORITY
OF SECURITY INTERESTS IN FIXTURES AND CROPS. (a) Security interest in
fixtures under this Article. A security interest under this Article may be
created in goods that are fixtures or may continue in goods that become
fixtures. A security interest does not exist under this Article in ordinary
building materials incorporated into an improvement on land.
(b)
Security interest in fixtures under real-property law. This Article does
not prevent creation of an encumbrance upon fixtures under real property law.
(c)
General rule: Subordination of security interest in fixtures. In cases
not governed by subsections (d) through (h) of this section, a security
interest in fixtures is subordinate to a conflicting interest of an
encumbrancer or owner of the related real property other than the debtor.
(d)
Fixtures purchase-money priority. Except as otherwise provided in
subsection (h) of this section, a perfected security interest in fixtures has
priority over a conflicting interest of an encumbrancer or owner of the real
property if the debtor has an interest of record in, or is in possession of,
the real property and:
(1)
The security interest is a purchase-money security interest;
(2)
The interest of the encumbrancer or owner arises before the goods become
fixtures; and
(3)
The security interest is perfected by a fixture filing before the goods become
fixtures or within twenty days thereafter.
(e)
Priority of security interest in fixtures over interests in real property.
A perfected security interest in fixtures has priority over a conflicting
interest of an encumbrancer or owner of the real property if:
(1)
The debtor has an interest of record in the real property or is in possession
of the real property and the security interest:
(A)
Is perfected by a fixture filing before the interest of the encumbrancer or
owner is of record; and
(B)
Has priority over any conflicting interest of a predecessor in title of the
encumbrancer or owner;
(2)
Before the goods become fixtures, the security interest is perfected by any
method permitted by this Article and the fixtures are readily removable:
(A)
Factory or office machines;
(B)
Equipment that is not primarily used or leased for use in the operation of the
real property; or
(C)
Replacements of domestic appliances that are consumer goods; or
(3)
The conflicting interest is a lien on the real property obtained by legal or
equitable proceedings after the security interest was perfected by any method
permitted by this Article.
(f)
Priority based on consent, disclaimer, or right to remove. A security
interest in fixtures, whether or not perfected, has priority over a conflicting
interest of an encumbrancer or owner of the real property if:
(1)
The encumbrancer or owner has, in an authenticated record, consented to the
security interest or disclaimed an interest in the goods as fixtures; or
(2)
The debtor has a right to remove the goods as against the encumbrancer or
owner.
(g)
Continuation of subsection (f)(2) priority. The priority of the
security interest under subsection (f)(2) of this section continues for
a reasonable time if the debtor's right to remove the goods as against the
encumbrancer or owner terminates.
(h)
Priority of construction mortgage. A mortgage is a construction
mortgage to the extent that it secures an obligation incurred for the
construction of an improvement on land, including the acquisition cost of the
land, if a recorded record of the mortgage so indicates. Except as otherwise
provided in subsections (e) and (f) of this section, a security interest in
fixtures is subordinate to a construction mortgage if a record of the mortgage
is recorded before the goods become fixtures and the goods become fixtures before
the completion of the construction. A mortgage has this priority to the same
extent as a construction mortgage to the extent that it is given to refinance a
construction mortgage.
(i)
Priority of security interest in crops. A perfected security interest
in crops growing on real property has priority over a conflicting interest of
an encumbrancer or owner of the real property if the debtor has an interest of
record in or is in possession of the real property.
(j)
Subsection (i) prevails. Subsection (i) of this section prevails over
inconsistent provisions of any other statute except RCW 60.11.050.
Sec.
33. RCW
62A.9A-336 and 2000 c 250 s 9A-336 are each amended to read as follows:
COMMINGLED
GOODS. (a) "Commingled goods." In this section,
"commingled goods" means goods that are physically united with other
goods in such a manner that their identity is lost in a product or mass.
(b)
No security interest in commingled goods as such. A security interest
does not exist in commingled goods as such. However, a security interest may
attach to a product or mass that results when goods become commingled goods.
(c)
Attachment of security interest to product or mass. If collateral
becomes commingled goods, a security interest attaches to the product or mass.
(d)
Perfection of security interest. If a security interest in collateral
is perfected before the collateral becomes commingled goods, the security
interest that attaches to the product or mass under subsection (c) of this
section is perfected.
(e)
Priority of security interest. Except as otherwise provided in
subsection (f) of this section, the other provisions of this part determine the
priority of a security interest that attaches to the product or mass under
subsection (c) of this section.
(f)
Conflicting security interests in product or mass. If more than one
security interest attaches to the product or mass under subsection (c) of this
section, the following rules determine priority:
(1)
A security interest that is perfected under subsection (d) of this section has
priority over a security interest that is unperfected at the time the
collateral becomes commingled goods.
(2)
If more than one security interest is perfected under subsection (d) of this
section, the security interests rank equally in proportion to the value
of the collateral at the time it became commingled goods.
Sec.
34. RCW
62A.9A-406 and 2000 c 250 s 9A-406 are each amended to read as follows:
DISCHARGE
OF ACCOUNT DEBTOR; NOTIFICATION OF ASSIGNMENT; IDENTIFICATION AND PROOF OF
ASSIGNMENT; RESTRICTIONS ON ASSIGNMENT OF ACCOUNTS, CHATTEL PAPER, PAYMENT
INTANGIBLES, AND PROMISSORY NOTES INEFFECTIVE. (a) Discharge of account
debtor; effect of notification. Subject to subsections (b) through (i) of
this section, an account debtor on an account, chattel paper, or a payment
intangible may discharge its obligation by paying the assignor until, but not
after, the account debtor receives a notification, authenticated by the assignor
or the assignee, that the amount due or to become due has been assigned and
that payment is to be made to the assignee. After receipt of the notification,
the account debtor may discharge its obligation by paying the assignee and may
not discharge the obligation by paying the assignor.
(b)
When notification ineffective. Subject to subsection (h) of this
section, notification is ineffective under subsection (a) of this section:
(1)
If it does not reasonably identify the rights assigned;
(2)
To the extent that an agreement between an account debtor and a seller of a
payment intangible limits the account debtor's duty to pay a person other than
the seller and the limitation is effective under law other than this Article;
or
(3)
At the option of an account debtor, if the notification notifies the account
debtor to make less than the full amount of any installment or other periodic
payment to the assignee, even if:
(A)
Only a portion of the account, chattel paper, or ((general)) payment
intangible has been assigned to that assignee;
(B)
A portion has been assigned to another assignee; or
(C)
The account debtor knows that the assignment to that assignee is limited.
(c)
Proof of assignment. Subject to subsection (h) of this section, if
requested by the account debtor, an assignee shall seasonably furnish
reasonable proof that the assignment has been made. Unless the assignee
complies, the account debtor may discharge its obligation by paying the
assignor, even if the account debtor has received a notification under
subsection (a) of this section.
(d)
Term restricting assignment generally ineffective. Except as otherwise
provided in subsection (e) of this section and RCW 62A.2A‑303 and 62A.9A‑407,
and subject to subsection (h) of this section, a term in an agreement between
an account debtor and an assignor or in a promissory note is ineffective to the
extent that it:
(1)
Prohibits, restricts, or requires the consent of the account debtor or person
obligated on the promissory note to the assignment or transfer of, or the
creation, attachment, perfection, or enforcement of a security interest in, the
account, chattel paper, payment intangible, or promissory note; or
(2)
Provides that the assignment or transfer or the creation, attachment,
perfection, or enforcement of the security interest may give rise to a default,
breach, right of recoupment, claim, defense, termination, right of termination,
or remedy under the account, chattel paper, payment intangible, or promissory
note.
(e)
Inapplicability of subsection (d) to certain sales. Subsection (d) of
this section does not apply to the sale of a payment intangible or promissory
note.
(f)
[Reserved]
(g)
Subsection (b)(3) not waivable. Subject to subsection (h) of this
section, an account debtor may not waive or vary its option under subsection
(b)(3) of this section.
(h)
Rule for individual under other law. This section is subject to law
other than this Article which establishes a different rule for an account
debtor who is an individual and who incurred the obligation primarily for
personal, family, or household purposes.
(i)
Inapplicability to health-care-insurance receivable. This section does
not apply to an assignment of a health-care-insurance receivable.
Sec.
35. RCW
62A.9A-407 and 2000 c 250 s 9A-407 are each amended to read as follows:
RESTRICTIONS
ON CREATION OR ENFORCEMENT OF SECURITY INTEREST IN LEASEHOLD INTEREST OR IN
LESSOR'S RESIDUAL INTEREST. (a) Term restricting assignment generally
ineffective. Except as otherwise provided in subsection (b) of this
section, a term in a lease agreement is ineffective to the extent that it:
(1)
Prohibits, restricts, or requires the consent of a party to the lease to the
assignment or transfer of, or the creation, attachment, perfection, or
enforcement of a security interest in, an interest of a party under the
lease contract or in the lessor's residual interest in the goods; or
(2)
Provides that the assignment or transfer or the creation, attachment,
perfection, or enforcement of the security interest may give rise to a default,
breach, right of recoupment, claim, defense, termination, right of termination,
or remedy under the lease.
(b)
Effectiveness of certain terms. Except as otherwise provided in RCW
62A.2A‑303(7), a term described in subsection (a)(2) of this section is
effective to the extent that there is:
(1)
A transfer by the lessee of the lessee's right of possession or use of the
goods in violation of the term; or
(2)
A delegation of a material performance of either party to the lease contract in
violation of the term.
(c)
Security interest not material impairment. The creation, attachment,
perfection, or enforcement of a security interest in the lessor's interest
under the lease contract or the lessor's residual interest in the goods is not
a transfer that materially impairs the lessee's prospect of obtaining return
performance or materially changes the duty of or materially increases the burden
or risk imposed on the lessee within the purview of RCW 62A.2A‑303(4)
unless, and then only to the extent that, enforcement actually results in a
delegation of material performance of the lessor.
Sec.
36. RCW
62A.9A-509 and 2000 c 250 s 9A-509 are each amended to read as follows:
PERSONS
ENTITLED TO FILE A RECORD. (a) Person entitled to file record. A
person may file an initial financing statement, amendment that adds collateral
covered by a financing statement, or amendment that adds a debtor to a
financing statement only if:
(1)
The debtor authorizes the filing in an authenticated record or pursuant to
subsection (b) or (c) of this section; or
(2)
The person holds an agricultural lien that has become effective at the time of
filing and the financing statement covers only collateral in which the person
holds an agricultural lien.
(b)
Security agreement as authorization. By authenticating or becoming
bound as debtor by a security agreement, a debtor or new debtor authorizes the
filing of an initial financing statement, and an amendment, covering:
(1)
The collateral described in the security agreement; and
(2)
Property that becomes collateral under RCW 62A.9A‑315(a)(2), whether or
not the security agreement expressly covers proceeds.
(c)
Acquisition of collateral as authorization. By acquiring collateral in
which a security interest or agricultural lien continues under RCW 62A.9A‑315(a)(1),
a debtor authorizes the filing of an initial financing statement, and an
amendment, covering the collateral and property that becomes collateral under
RCW 62A.9A‑315(a)(2).
(d)
Person entitled to file certain amendments. A person may file an
amendment other than an amendment that adds collateral covered by a financing
statement or an amendment that adds a debtor to a financing statement only if:
(1)
The secured party of record authorizes the filing; or
(2)
The amendment is a termination statement for a financing statement as to which
the secured party of record has failed to file or send a termination statement
as required by RCW 62A.9A‑513 (a) or (c), the debtor authorizes the
filing, and the termination statement indicates that the debtor authorized it
to be filed.
(e)
Multiple secured parties of record. If there is more than one secured
party of record for a financing statement, each secured party of record may
authorize the filing of an amendment under subsection (d) of this section.
Sec.
37. RCW
62A.9A-513 and 2000 c 250 s 9A-513 are each amended to read as follows:
TERMINATION
STATEMENT. (a) Consumer goods. A secured party shall cause the secured
party of record for a financing statement to file a termination statement for
the financing statement if the financing statement covers consumer goods and:
(1)
There is no obligation secured by the collateral covered by the financing
statement and no commitment to make an advance, incur an obligation, or
otherwise give value; or
(2)
The debtor did not authorize the filing of the initial financing statement.
(b)
Time for compliance with subsection (a) of this section. To comply with
subsection (a) of this section, a secured party shall cause the secured party
of record to file the termination statement:
(1)
Within one month after there is no obligation secured by the collateral covered
by the financing statement and no commitment to make an advance, incur an
obligation, or otherwise give value; or
(2)
If earlier, within twenty days after the secured party receives an
authenticated demand from a debtor.
(c)
Other collateral. In cases not governed by subsection (a) of this
section, within twenty days after a secured party receives an authenticated
demand from a debtor, the secured party shall cause the secured party of record
for a financing statement to send to the debtor a termination statement for the
financing statement or file the termination statement in the filing office if:
(1)
Except in the case of a financing statement covering accounts or chattel paper
that has been sold or goods that are the subject of a consignment, there is no
obligation secured by the collateral covered by the financing statement and no
commitment to make an advance, incur an obligation, or otherwise give value;
(2)
The financing statement covers accounts or chattel paper that has been sold but
as to which the account debtor or other person obligated has discharged its
obligation;
(3)
The financing statement covers goods that were the subject of a consignment to
the debtor but are not in the debtor's possession; or
(4)
The debtor did not authorize the filing of the initial financing statement.
(d)
Effect of filing termination statement. Except as otherwise provided in
RCW 62A.9A‑510, upon the filing of a termination statement with the
filing office, the financing statement to which the termination statement
relates ceases to be effective. Except as otherwise provided in RCW
62A.9A-510, for purposes of RCW 62A.9A‑519(g), 62A.9A-522(a), and 62A.9A-523(c),
the filing with the filing office of a termination statement relating to a
financing statement that indicates that the debtor is a transmitting utility
also causes the effectiveness of the financing statement to lapse.
Sec.
38. RCW
62A.9A-516 and 2000 c 250 s 9A-516 are each amended to read as follows:
WHAT
CONSTITUTES FILING; EFFECTIVENESS OF FILING. (a) What constitutes filing.
Except as otherwise provided in subsection (b) of this section, communication
of a record to a filing office and tender of the filing fee or acceptance of
the record by the filing office constitutes filing.
(b)
Refusal to accept record; filing does not occur. Filing does not occur
with respect to a record that a filing office refuses to accept because:
(1)
The record is not communicated by a method or medium of communication
authorized by the filing office;
(2)
An amount equal to or greater than the applicable filing fee is not tendered or,
in the case of a filing office described in RCW 62A.9A-501(a)(1), an amount
equal to the applicable filing fee is not tendered;
(3)
The filing office is unable to index the record because:
(A)
In the case of an initial financing statement, the record does not provide a
name for the debtor;
(B)
In the case of an amendment or correction statement, the record:
(i)
Does not identify the initial financing statement as required by RCW 62A.9A‑512
or 62A.9A‑518, as applicable; or
(ii)
Identifies an initial financing statement whose effectiveness has lapsed under
RCW 62A.9A‑515;
(C)
In the case of an initial financing statement that provides the name of a
debtor identified as an individual or an amendment that provides a name of a
debtor identified as an individual which was not previously provided in the
financing statement to which the record relates, the record does not identify
the debtor's last name; or
(D)
In the case of a record filed or recorded in the filing office described in RCW
62A.9A‑501(a)(1), the record does not provide a name for the debtor or
a sufficient description of the real property to which ((it)) the
record relates;
(4)
In the case of an initial financing statement or an amendment that adds a
secured party of record, the record does not provide a name and mailing address
for the secured party of record;
(5)
In the case of an initial financing statement or an amendment that provides a
name of a debtor which was not previously provided in the financing statement
to which the amendment relates, the record does not:
(A)
Provide a mailing address for the debtor;
(B)
Indicate whether the debtor is an individual or an organization; or
(C)
If the financing statement indicates that the debtor is an organization,
provide:
(i)
A type of organization for the debtor;
(ii)
A jurisdiction of organization for the debtor; or
(iii)
An organizational identification number for the debtor or indicate that the
debtor has none;
(6)
In the case of an assignment reflected in an initial financing statement under
RCW 62A.9A‑514(a) or an amendment filed under RCW 62A.9A‑514(b),
the record does not provide a name and mailing address for the assignee; or
(7)
In the case of a continuation statement, the record is not filed within the
six-month period prescribed by RCW 62A.9A‑515(d).
(c)
Rules applicable to subsection (b) of this section. For purposes of
subsection (b) of this section:
(1)
A record does not provide information if the filing office is unable to read or
decipher the information; and
(2)
A record that does not indicate that it is an amendment or identify an initial
financing statement to which it relates, as required by RCW 62A.9A‑512,
62A.9A‑514, or 62A.9A‑518, is an initial financing statement.
(d)
Refusal to accept record; record effective as filed record. A record
that is communicated to the filing office with tender of the filing fee, but
which the filing office refuses to accept for a reason other than one set forth
in subsection (b) of this section, is effective as a filed record except as
against a purchaser of the collateral which gives value in reasonable reliance
upon the absence of the record from the files.
Sec.
39. RCW
62A.9A-520 and 2000 c 250 s 9A-520 are each amended to read as follows:
ACCEPTANCE
AND REFUSAL TO ACCEPT RECORD. (a) Mandatory refusal to accept record.
((A)) The filing office described in RCW 62A.9A-501(a)(2)
shall refuse to accept a record for filing for a reason set forth in RCW 62A.9A‑516(b)
((and)). A filing office described in RCW 62A.9A-501(a)(1) shall
refuse to accept a record for filing for a reason set forth in RCW
62A.9A-516(b) (1) through (4) and any filing office may refuse to accept a
record for filing only for a reason set forth in RCW 62A.9A‑516(b).
(b)
Communication concerning refusal. If a filing office refuses to accept
a record for filing, it shall communicate to the person that presented the
record the fact of and reason for the refusal and the date and time the record
would have been filed had the filing office accepted it. The communication
must be made at the time and in the manner prescribed by filing-office rule
but, in the case of a filing office described in RCW 62A.9A‑501(a)(2), in
no event more than two business days after the filing office receives the
record.
(c)
When filed financing statement effective. A filed financing statement
satisfying RCW 62A.9A‑502 (a) and (b) is effective, even if the filing
office is required to refuse to accept it for filing under subsection (a) of
this section. However, RCW 62A.9A‑338 applies to a filed financing
statement providing information described in RCW 62A.9A‑516(b)(5) which
is incorrect at the time the financing statement is filed.
(d)
Separate application to multiple debtors. If a record communicated to a
filing office provides information that relates to more than one debtor, this
part applies as to each debtor separately.
Sec.
40. RCW
62A.9A-523 and 2000 c 250 s 9A-523 are each amended to read as follows:
INFORMATION
FROM FILING OFFICE; SALE OR LICENSE OF RECORDS. (a) Acknowledgment of
filing written record. If a person that files a written record requests an
acknowledgment of the filing, the filing office shall send to the person an
image of the record showing the number assigned to the record pursuant to RCW
62A.9A‑519(a)(1) and the date and time of the filing of the record.
However, if the person furnishes a copy of the record to the filing office, the
filing office may instead:
(1)
Note upon the copy the number assigned to the record pursuant to RCW 62A.9A‑519(a)(1)
and the date and time of the filing of the record; and
(2)
Send the copy to the person.
(b)
Acknowledgment of filing other record. If a person files a record other
than a written record, the filing office shall communicate to the person an
acknowledgment that provides:
(1)
The information in the record;
(2)
The number assigned to the record pursuant to RCW 62A.9A‑519(a)(1); and
(3)
The date and time of the filing of the record.
(c)
Communication of requested information. The filing office shall
communicate or otherwise make available in a record the following information
to any person that requests it:
(1)
Whether there is on file on a date and time specified by the filing office, but
not a date earlier than three business days before the filing office receives
the request, any financing statement that:
(A)
Designates a particular debtor or, if the request so states, designates a
particular debtor at the address specified in the request;
(B)
Has not lapsed under RCW 62A.9A‑515 with respect to all secured parties
of record; and
(C)
If the request so states, has lapsed under RCW 62A.9A‑515 and a record of
which is maintained by the filing office under RCW 62A.9A‑522(a);
(2)
The date and time of filing of each financing statement; and
(3)
The information provided in each financing statement.
(d)
Medium for communicating information. In complying with its duty under
subsection (c) of this section, the filing office may communicate information
in any medium. However, if requested, the filing office shall communicate
information by issuing a record that can be admitted into evidence in the
courts of this state without extrinsic evidence of its authenticity.
(e)
Timeliness of filing office performance. The filing office described
in RCW 62A.9A-501(a)(2) shall perform the acts required by subsections (a)
through (d) of this section at the time and in the manner prescribed by
filing-office rule, but not later than two business days after the filing
office receives the request.
(f)
Public availability of records. At least weekly, the filing office described
in RCW 62A.9A-501(a)(2) shall offer to sell or license to the public on a
nonexclusive basis, in bulk, copies of all records filed in it under this part,
in every medium from time to time available to the filing office. If
information provided pursuant to this section includes a list of individuals,
disclosure of the list is specifically authorized.
Sec.
41. RCW
62A.9A-608 and 2000 c 250 s 9A-608 are each amended to read as follows:
APPLICATION
OF PROCEEDS OF COLLECTION OR ENFORCEMENT; LIABILITY FOR DEFICIENCY AND RIGHT TO
SURPLUS. (a) Application of proceeds, surplus, and deficiency if obligation
secured. If a security interest or agricultural lien secures payment or
performance of an obligation, the following rules apply:
(1)
A secured party shall apply or pay over for application the cash proceeds of
collection or enforcement under ((this section)) RCW 62A.9A-607
in the following order to:
(A)
The reasonable expenses of collection and enforcement and, to the extent
provided for by agreement and not prohibited by law, reasonable attorneys' fees
and legal expenses incurred by the secured party;
(B)
The satisfaction of obligations secured by the security interest or
agricultural lien under which the collection or enforcement is made; and
(C)
The satisfaction of obligations secured by any subordinate security interest in
or other lien on the collateral subject to the security interest or
agricultural lien under which the collection or enforcement is made if the
secured party receives an authenticated demand for proceeds before distribution
of the proceeds is completed.
(2)
If requested by a secured party, a holder of a subordinate security interest or
other lien shall furnish reasonable proof of the interest or lien within a
reasonable time. Unless the holder complies, the secured party need not comply
with the holder's demand under (1)(C) of this subsection.
(3)
A secured party need not apply or pay over for application noncash proceeds of
collection and enforcement under ((this section)) RCW 62A.9A-607
unless the failure to do so would be commercially unreasonable. A secured
party that applies or pays over for application noncash proceeds shall do so in
a commercially reasonable manner.
(4)
A secured party shall account to and pay a debtor for any surplus, and the
obligor is liable for any deficiency.
(b)
No surplus or deficiency in sales of certain rights to payment. If the
underlying transaction is a sale of accounts, chattel paper, payment
intangibles, or promissory notes, the debtor is not entitled to any surplus,
and the obligor is not liable for any deficiency.
Sec.
42. RCW
62A.9A-613 and 2000 c 250 s 9A-613 are each amended to read as follows:
CONTENTS
AND FORM OF NOTIFICATION BEFORE DISPOSITION OF COLLATERAL: GENERAL. Except in
a consumer-goods transaction, the following rules apply:
(1)
The contents of a notification of disposition are sufficient if the
notification:
(A)
Describes the debtor and the secured party;
(B)
Describes the collateral that is the subject of the intended disposition;
(C)
States the method of intended disposition;
(D)
States that the debtor is entitled to an accounting of the unpaid indebtedness
and states the charge, if any, for an accounting; and
(E)
States the time and place of a public ((sale)) disposition or the
time after which any other disposition is to be made.
(2)
Whether the contents of a notification that lacks any of the information
specified in (([subsection])) subsection (1) of this section are
nevertheless sufficient is a question of fact.
(3)
The contents of a notification providing substantially the information
specified in (([subsection])) subsection (1) of this section are
sufficient, even if the notification includes:
(A)
Information not specified by (([subsection])) subsection (1) of
this section; or
(B)
Minor errors that are not seriously misleading.
(4)
A particular phrasing of the notification is not required.
(5)
The following form of notification and the form appearing in RCW 62A.9A‑614(3),
when completed, each provides sufficient information:
NOTIFICATION
OF DISPOSITION OF COLLATERAL
To: [Name of
debtor, obligor, or other person to which the notification is sent]
From: [Name,
address, and telephone number of secured party]
Name
of Debtor(s): [Include
only if debtor(s) are not an addressee]
[For
a public disposition:]
We
will sell [or lease or license, as applicable] the [describe
collateral] [to the highest qualified
bidder] in public as follows:
Day
and Date:
Time:
Place:
[For
a private disposition:]
We
will sell [or lease or license, as applicable] the [describe
collateral] privately sometime after [day and
date] .
You
are entitled to an accounting of the unpaid indebtedness secured by the
property that we intend to sell [or lease or license, as applicable] [for
a charge of $ ]. You
may request an accounting by calling us at [telephone
number] .
Sec.
43. RCW
62A.9A-615 and 2000 c 250 s 9A-615 are each amended to read as follows:
APPLICATION
OF PROCEEDS OF DISPOSITION; LIABILITY FOR DEFICIENCY AND RIGHT TO SURPLUS. (a)
Application of proceeds. A secured party shall apply or pay over for
application the cash proceeds of disposition under RCW 62A.9A-610 in the
following order to:
(1)
The reasonable expenses of retaking, holding, preparing for disposition,
processing, and disposing, and, to the extent provided for by agreement and not
prohibited by law, reasonable attorneys' fees and legal expenses incurred by
the secured party;
(2)
The satisfaction of obligations secured by the security interest or
agricultural lien under which the disposition is made;
(3)
The satisfaction of obligations secured by any subordinate security interest in
or other subordinate lien on the collateral if:
(A)
The secured party receives from the holder of the subordinate security interest
or other lien an authenticated demand for proceeds before distribution of the
proceeds is completed; and
(B)
In a case in which a consignor has an interest in the collateral, the subordinate
security interest or other lien is senior to the interest of the consignor; and
(4)
A secured party that is a consignor of the collateral if the secured party
receives from the consignor an authenticated demand for proceeds before
distribution of the proceeds is completed.
(b)
Proof of subordinate interest. If requested by a secured party, a
holder of a subordinate security interest or other lien shall furnish
reasonable proof of the interest or lien within a reasonable time. Unless the
holder does so, the secured party need not comply with the holder's demand
under subsection (a)(3) of this section.
(c)
Application of noncash proceeds. A secured party need not apply or pay
over for application noncash proceeds of disposition under ((this section))
RCW 62A.9A-610 unless the failure to do so would be commercially
unreasonable. A secured party that applies or pays over for application
noncash proceeds shall do so in a commercially reasonable manner.
(d)
Surplus or deficiency if obligation secured. If the security interest
under which a disposition is made secures payment or performance of an
obligation, after making the payments and applications required by subsection
(a) of this section and permitted by subsection (c) of this section:
(1)
Unless subsection (a)(4) of this section requires the secured party to apply or
pay over cash proceeds to a consignor, the secured party shall account to and
pay a debtor for any surplus; and
(2)
The obligor is liable for any deficiency.
(e)
No surplus or deficiency in sales of certain rights to payment. If the
underlying transaction is a sale of accounts, chattel paper, payment
intangibles, or promissory notes:
(1)
The debtor is not entitled to any surplus; and
(2)
The obligor is not liable for any deficiency.
(f)
[Reserved]
(g)
Cash proceeds received by junior secured party. A secured party that
receives cash proceeds of a disposition in good faith and without knowledge
that the receipt violates the rights of the holder of a security interest or
other lien that is not subordinate to the security interest or agricultural
lien under which the disposition is made:
(1)
Takes the cash proceeds free of the security interest or other lien;
(2)
Is not obligated to apply the proceeds of the disposition to the satisfaction
of obligations secured by the security interest or other lien; and
(3)
Is not obligated to account to or pay the holder of the security interest or
other lien for any surplus.
Sec.
44. RCW
62A.9A-625 and 2000 c 250 s 9A-625 are each amended to read as follows:
REMEDIES
FOR SECURED PARTY'S FAILURE TO COMPLY WITH ARTICLE. (a) Judicial orders
concerning noncompliance. If it is established that a secured party is not
proceeding in accordance with this Article, a court may order or restrain
collection, enforcement, or disposition of collateral on appropriate terms and
conditions.
(b)
Damages for noncompliance. Subject to subsections (c), (d), and (f) of
this section, a person is liable for damages in the amount of any loss caused
by a failure to comply with this Article or by filing a false statement under
RCW 62A.9A-607(b) or 62A.9A-619. Loss caused by a failure to comply ((with
a request under RCW 62A.9A‑210)) may include loss resulting from the
debtor's inability to obtain, or increased costs of, alternative financing.
(c)
Persons entitled to recover damages; statutory damages in consumer-goods
transaction. Except as otherwise provided in RCW 62A.9A‑628:
(1)
A person that, at the time of the failure, was a debtor, was an obligor, or
held a security interest in or other lien on the collateral may recover damages
under subsection (b) of this section for its loss; and
(2)
If the collateral is consumer goods, a person that was a debtor or a secondary
obligor at the time a secured party failed to comply with this part may recover
for that failure in any event an amount not less than the credit service charge
plus ten percent of the principal amount of the obligation or the time-price differential
plus ten percent of the cash price.
(d)
Recovery when deficiency eliminated or reduced. A debtor whose
deficiency is eliminated under RCW 62A.9A‑626 may recover damages for the
loss of any surplus. However, a debtor or secondary obligor ((whose
deficiency is eliminated or reduced under RCW 62A.9A‑626)) may not ((otherwise))
recover under subsection (b) or (c)(2) of this section for noncompliance
with the provisions of this part relating to collection, enforcement,
disposition, or acceptance to the extent that its deficiency is eliminated
or reduced under RCW 62A.9A-626.
(e)
Statutory damages: Noncompliance with specified provisions. In
addition to any damages recoverable under subsection (b) of this section, the
debtor, consumer obligor, or person named as a debtor in a filed record, as
applicable, may recover five hundred dollars in each case from a person that:
(1)
Fails to comply with RCW 62A.9A‑208;
(2)
Fails to comply with RCW 62A.9A‑209;
(3)
Files a record that the person is not entitled to file under RCW 62A.9A‑509(a);
(4)
Fails to cause the secured party of record to file or send a termination
statement as required by RCW 62A.9A‑513 (a) or (c) within twenty days
after the secured party receives an authenticated demand from a debtor;
(5)
Fails to comply with RCW 62A.9A‑616(b)(1) and whose failure is part of a
pattern, or consistent with a practice, of noncompliance; or
(6)
Fails to comply with RCW 62A.9A‑616(b)(2).
(f)
Statutory damages: Noncompliance with RCW 62A.9A‑210. A debtor
or consumer obligor may recover damages under subsection (b) of this section
and, in addition, five hundred dollars in each case from a person that, without
reasonable cause, fails to comply with a request under RCW 62A.9A‑210. A
recipient of a request under RCW 62A.9A‑210 which never claimed an
interest in the collateral or obligations that are the subject of a request
under RCW 62A.9A‑210 has a reasonable excuse for failure to comply with
the request within the meaning of this subsection.
(g)
Limitation of security interest: Noncompliance with RCW 62A.9A‑210.
If a secured party fails to comply with a request regarding a list of
collateral or a statement of account under RCW 62A.9A‑210, the secured
party may claim a security interest only as shown in the list or
statement included in the request as against a person that is reasonably misled
by the failure.
Sec.
45. RCW
62A.9A-628 and 2000 c 250 s 9A-628 are each amended to read as follows:
NONLIABILITY
AND LIMITATION ON LIABILITY OF SECURED PARTY; LIABILITY OF SECONDARY OBLIGOR.
(a) Limitation of liability ((to debtor or obligor)) of secured
party for noncompliance with article. Unless a secured party knows
that a person is a debtor or obligor, knows the identity of the person, and
knows how to communicate with the person:
(1)
The secured party is not liable to the person, or to a secured party or
lienholder that has filed a financing statement against the person, for failure
to comply with this Article; and
(2)
The secured party's failure to comply with this Article does not affect the
liability of the person for a deficiency.
(b)
Limitation of liability ((to debtor, obligor, another secured party, or
lienholder)) based on status as secured party. A secured party
is not liable because of its status as secured party:
(1)
To a person that is a debtor or obligor, unless the secured party knows:
(A)
That the person is a debtor or obligor;
(B)
The identity of the person; and
(C)
How to communicate with the person; or
(2)
To a secured party or lienholder that has filed a financing statement against a
person, unless the secured party knows:
(A)
That the person is a debtor; and
(B)
The identity of the person.
(c)
Limitation of liability if reasonable belief that transaction not a
consumer-goods transaction or consumer transaction. A secured party is not
liable to any person, and a person's liability for a deficiency is not
affected, because of any act or omission arising out of the secured party's
reasonable belief that a transaction is not a consumer-goods transaction or a
consumer transaction or that goods are not consumer goods, if the secured
party's belief is based on its reasonable reliance on:
(1)
A debtor's representation concerning the purpose for which collateral was to be
used, acquired, or held; or
(2)
An obligor's representation concerning the purpose for which a secured
obligation was incurred.
(d)
Limitation of liability for statutory damages. A secured party is not
liable to any person under RCW 62A.9A‑625(c)(2) for its failure to comply
with RCW 62A.9A‑616.
(e)
Limitation of multiple liability for statutory damages. A secured party
is not liable under RCW 62A.9A‑625(c)(2) more than once with respect to
any one secured obligation.
Sec.
46. RCW
62A.9A-702 and 2000 c 250 s 9A-702 are each amended to read as follows:
SAVINGS
CLAUSE. (a) Preeffective-date transactions or liens. Except as
otherwise provided in this section, ((chapter 250, Laws of 2000)) Article
62A.9A RCW applies to a transaction or lien within its scope, even if the
transaction or lien was entered into or created before July 1, 2001.
(b)
Continuing validity. Except as otherwise provided in subsection (c) of
this section and RCW 62A.9A‑703 through ((62A.9A‑708)) section
53 of this act:
(1)
Transactions and liens that were not governed by Article 62A.9 RCW, were
validly entered into or created before July 1, 2001, and would be subject to ((chapter
250, Laws of 2000)) Article 62A.9A RCW if they had been entered into
or created after July 1, 2001, and the rights, duties, and interests flowing
from those transactions and liens remain valid after July 1, 2001; and
(2)
The transactions and liens may be terminated, completed, consummated, and
enforced as required or permitted by ((chapter 250, Laws of 2000)) Article
62A.9A RCW or by the law that otherwise would apply if ((chapter 250,
Laws of 2000)) Article 62A.9A RCW had not taken effect.
(c)
Preeffective-date proceedings. ((Chapter 250, Laws of 2000)) Article
62A.9A RCW does not affect an action, case, or proceeding commenced before
July 1, 2001.
Sec.
47. RCW
62A.9A-703 and 2000 c 250 s 9A-703 are each amended to read as follows:
SECURITY
INTEREST PERFECTED BEFORE EFFECTIVE DATE. (a) Continuing priority over lien
creditor: Perfection requirements satisfied. A security interest that is
enforceable immediately before July 1, 2001, and would have priority over the
rights of a person that becomes a lien creditor at that time is a perfected
security interest under ((chapter 250, Laws of 2000)) Article 62A.9A
RCW if, ((when [on or before])) on or before July 1, 2001,
the applicable requirements for enforceability and perfection under ((chapter
250, Laws of 2000)) Article 62A.9A RCW are satisfied without further
action.
(b)
Continuing priority over lien creditor: Perfection requirements not
satisfied. Except as otherwise provided in RCW 62A.9A‑705, if,
immediately before July 1, 2001, a security interest is enforceable and would
have priority over the rights of a person that becomes a lien creditor at that
time, but the applicable requirements for enforceability or perfection under ((chapter
250, Laws of 2000)) Article 62A.9A RCW are not satisfied ((when
[on or before])) on or before July 1, 2001, the security interest:
(1)
Is a perfected security interest for one year after July 1, 2001;
(2)
Remains enforceable thereafter only if the security interest becomes
enforceable under RCW 62A.9A‑203 before the year expires; and
(3)
Remains perfected thereafter only if the applicable requirements for perfection
under ((chapter 250, Laws of 2000)) Article 62A.9A RCW are
satisfied before the year expires.
Sec.
48. RCW
62A.9A-704 and 2000 c 250 s 9A-704 are each amended to read as follows:
SECURITY
INTEREST UNPERFECTED BEFORE EFFECTIVE DATE. A security interest that is
enforceable immediately before July 1, 2001, but which would be subordinate to
the rights of a person that becomes a lien creditor at that time:
(1)
Remains an enforceable security interest for one year after July 1, 2001;
(2)
Remains enforceable thereafter if the security interest becomes enforceable
under RCW 62A.9A‑203 ((when [on or before])) on or before
July 1, 2001, or within one year thereafter; and
(3)
Becomes perfected:
(A)
Without further action, ((when [on or before])) on July 1, 2001,
if the applicable requirements for perfection under ((chapter 250, Laws of
2000)) Article 62A.9A RCW are satisfied before or at that time; or
(B)
When the applicable requirements for perfection are satisfied if the
requirements are satisfied after that time.
Sec.
49. RCW
62A.9A-705 and 2000 c 250 s 9A-705 are each amended to read as follows:
EFFECTIVENESS
OF ACTION TAKEN BEFORE EFFECTIVE DATE. (a) Preeffective-date action;
one-year perfection period unless reperfected. If action, other than the
filing of a financing statement, is taken before July 1, 2001, and the action
would have resulted in priority of a security interest over the rights of a
person that becomes a lien creditor had the security interest become
enforceable before July 1, 2001, the action is effective to perfect a security
interest that attaches under ((chapter 250, Laws of 2000)) Article
62A.9A RCW within one year after July 1, 2001. An attached security
interest becomes unperfected one year after July 1, 2001, unless the security
interest becomes a perfected security interest under ((chapter 250, Laws of
2000)) Article 62A.9A RCW before the expiration of that period.
(b)
Preeffective-date filing. The filing of a financing statement before
July 1, 2001, is effective to perfect a security interest to the extent the
filing would satisfy the applicable requirements for perfection under ((chapter
250, Laws of 2000)) Article 62A.9A RCW.
(c)
Preeffective-date filing in jurisdiction formerly governing perfection.
((Chapter 250, Laws of 2000)) Article 62A.9A RCW does not render
ineffective an effective financing statement that, before July 1, 2001, is
filed and satisfies the applicable requirements for perfection under the law of
the jurisdiction governing perfection as provided in former RCW ((62A.9A‑103))
62A.9-103. However, except as otherwise provided in subsections (d) and
(e) of this section and RCW 62A.9A‑706, the financing statement ceases to
be effective at the earlier of:
(1)
The time the financing statement would have ceased to be effective under the
law of the jurisdiction in which it is filed; or
(2)
June 30, 2006.
(d)
Continuation statement. The filing of a continuation statement after
July 1, 2001, does not continue the effectiveness of the financing statement
filed before July 1, 2001. However, upon the timely filing of a continuation
statement after July 1, 2001, and in accordance with the law of the
jurisdiction governing perfection as provided in Part 3, the effectiveness of a
financing statement filed in the same office in that jurisdiction before July
1, 2001, continues for the period provided by the law of that jurisdiction.
(e)
Application of subsection (c)(2) of this section to transmitting utility
financing statement. Subsection (c)(2) of this section applies to a
financing statement that, before July 1, 2001, is filed against a transmitting
utility and satisfies the applicable requirements for perfection under the law
of the jurisdiction governing perfection as provided in former RCW ((62A.9A‑103))
62A.9-103 only to the extent that Part 3 provides that the law of a
jurisdiction other than the jurisdiction in which the financing statement is
filed governs perfection of a security interest in collateral covered by the
financing statement.
(f)
Application of Part 5. A financing statement that includes a financing
statement filed before July 1, 2001, and a continuation statement filed after
July 1, 2001, is effective only to the extent that it satisfies the
requirements of Part 5 for an initial financing statement.
Sec.
50. RCW
62A.9A-706 and 2000 c 250 s 9A-706 are each amended to read as follows:
WHEN
INITIAL FINANCING STATEMENT SUFFICES TO CONTINUE EFFECTIVENESS OF FINANCING
STATEMENT. (a) Initial financing statement in lieu of continuation
statement. The filing of an initial financing statement in the office
specified in RCW 62A.9A‑501 continues the effectiveness of a financing
statement filed before July 1, 2001, if:
(1)
The filing of an initial financing statement in that office would be effective
to perfect a security interest under ((chapter 250, Laws of 2000)) Article
62A.9A RCW;
(2)
The preeffective-date financing statement was filed in an office in another
state or another office in this state; and
(3)
The initial financing statement satisfies subsection (c) of this section.
(b)
Period of continued effectiveness. The filing of an initial financing
statement under subsection (a) of this section continues the effectiveness of
the preeffective-date financing statement:
(1)
If the initial financing statement is filed before July 1, 2001, for the period
provided in RCW 62A.9‑403 with respect to a financing statement; and
(2)
If the initial financing statement is filed after July 1, 2001, for the period
provided in RCW 62A.9A‑515 with respect to an initial financing
statement.
(c)
Requirements for initial financing statement under subsection (a) of this
section. To be effective for purposes of subsection (a) of this section,
an initial financing statement must:
(1)
Satisfy the requirements of Part 5 for an initial financing statement;
(2)
Identify the preeffective-date financing statement by indicating the office in
which the financing statement was filed and providing the dates of filing and
file numbers, if any, of the financing statement and of the most recent
continuation statement filed with respect to the financing statement; and
(3)
Indicate that the preeffective-date financing statement remains effective.
Sec.
51. RCW
62A.9A-707 and 2000 c 250 s 9A-707 are each amended to read as follows:
((PERSONS
ENTITLED TO FILE INITIAL FINANCING STATEMENT OR CONTINUATION STATEMENT. A
person may file an initial financing statement or a continuation statement
under this part if:
(1)
The secured party of record authorizes the filing; and
(2)
The filing is necessary under this part:
(A)
To continue the effectiveness of a financing statement filed before July 1,
2001; or
(B)
To perfect or continue the perfection of a security interest.))
AMENDMENT
OF PREEFFECTIVE-DATE FINANCING STATEMENT. (a) Preeffective-date financing
statement. In this section, "preeffective-date financing
statement" means a financing statement filed before July 1, 2001.
(b)
Applicable law. On or after July 1, 2001, a person may add or delete
collateral covered by, continue or terminate the effectiveness of, or otherwise
amend the information provided in, a preeffective-date financing statement only
in accordance with the law of the jurisdiction governing perfection as provided
in Part 3. However, the effectiveness of a preeffective-date financing
statement also may be terminated in accordance with the law of the jurisdiction
in which the financing statement is filed.
(c)
Method of amending: General rule. Except as otherwise provided in
subsection (d) of this section, if the law of this state governs perfection of
a security interest, the information in a preeffective-date financing statement
may be amended on or after July 1, 2001 only if:
(1)
The preeffective-date financing statement and an amendment are filed in the
office specified in RCW 62A.9A-501;
(2)
An amendment is filed in the office specified in RCW 62A.9A‑501 concurrently
with, or after the filing in that office of, an initial financing statement
that satisfies RCW 62A.9A-706(c); or
(3)
An initial financing statement that provides the information as amended and
satisfies RCW 62A.9A-706(c) is filed in the office specified in RCW 62A.9A-501.
(d)
Method of amending: Continuation. If the law of this state governs
perfection of a security interest, the effectiveness of a preeffective-date
financing statement may be continued only under RCW 62A.9A-705 (d) and (f) or 62A.9A-706.
(e)
Method of amending: Additional termination rule. Whether or not the
law of this state governs perfection of a security interest, the effectiveness
of a preeffective-date financing statement filed in this state may be
terminated on or after July 1, 2001, by filing a termination statement in the
office in which the preeffective-date financing statement is filed, unless an
initial financing statement that satisfies RCW 62A.9A‑706(c) has been
filed in the office specified by the law of the jurisdiction governing
perfection as provided in Part 3 as the office in which to file a financing
statement.
Sec.
52. RCW
62A.9A-708 and 2000 c 250 s 9A-708 are each amended to read as follows:
((PRIORITY.
(a) Law governing priority. Chapter 250, Laws of 2000 determines the
priority of conflicting claims to collateral. However, if the relative
priorities of the claims were established before July 1, 2001, Article 62A.9
RCW determines priority.
(b)
Priority if security interest becomes enforceable under RCW 62A.9A‑203.
For purposes of RCW 62A.9A‑322(a), the priority of a security interest
that becomes enforceable under RCW 62A.9A‑203 dates from July 1, 2001, if
the security interest is perfected under chapter 250, Laws of 2000 by the
filing of a financing statement before July 1, 2001, which would not have been
effective to perfect the security interest under Article 62A.9 RCW. This
subsection does not apply to conflicting security interests each of which is perfected
by the filing of such a financing statement.)) PERSONS
ENTITLED TO FILE INITIAL FINANCING STATEMENT OR CONTINUATION STATEMENT. A
person may file an initial financing statement or a continuation statement
under this part if:
(1)
The secured party of record authorizes the filing; and
(2)
The filing is necessary under this part:
(A)
To continue the effectiveness of a financing statement filed before July 1,
2001; or
(B)
To perfect or continue the perfection of a security interest.
NEW
SECTION. Sec. 53. A
new section is added to Article 62A.9A RCW, to be codified as RCW 62A.9A-709,
to read as follows:
PRIORITY.
(a) Law governing priority. Article 62A.9A RCW determines the priority
of conflicting claims to collateral. However, if the relative priorities of
the claims were established before July 1, 2001, Article 62A.9 RCW determines
priority.
(b)
Priority if security interest becomes enforceable under RCW 62A.9A‑203.
For purposes of RCW 62A.9A‑322(a), the priority of a security interest
that becomes enforceable under RCW 62A.9A‑203 dates from July 1, 2001, if
the security interest is perfected under Article 62A.9A RCW by the filing of a
financing statement before July 1, 2001, which would not have been effective to
perfect the security interest under Article 62A.9 RCW. This subsection does
not apply to conflicting security interests each of which is perfected by the
filing of such a financing statement.
NEW
SECTION. Sec. 54. RCW
60.11.9001 (Transition rule for existing filings) and 2000 c 250 s
1 are each repealed.
NEW
SECTION. Sec. 55. This
act is necessary for the immediate preservation of the public peace, health, or
safety, or support of the state government and its existing public
institutions, and takes effect July 1, 2001.
