WSR 98-23-074

PROPOSED RULES

DEPARTMENT OF LICENSING

(Uniform Commercial Code)

[Filed November 17, 1998, 9:27 a.m.]

Original Notice.

Preproposal statement of inquiry was filed as WSR 98-14-057.

Proposal is exempt under RCW 34.05.310(4).

Title of Rule: (1) Chapter 308-400 WAC, Standardized filing forms and procedures--Uniform Commercial Code, crop liens, and processor and preparer liens for agricultural dairy and commercial fish products and certain federal liens and (2) chapter 308-410 WAC, Uniform Commercial Code field access.

Purpose: (1) Repeals unnecessary WACs; clarifies verbiage for existing rules; sets fees in rule; amends rule to include fee increases for filings and searches; and (2) repeal unnecessary rule (WAC 308-410-050); and clarify rule language pertaining to field access fees.

Statutory Authority for Adoption: Chapters 62A.9, 60.11, 60.13, and 60.68 RCW.

Statute Being Implemented: RCW 62A.9-409, 60.11.040, 60.13.040, chapter 60.68 RCW.

Summary: (1) Removes standard filing form requirement, amends form approval requirements, amends filing day acceptance, amends UCC-3 signature requirements, amends rule to reflect fee increase, establishes fee for counter search service, clarifies existing rules, repeals rules; and (2) repeals WAC 308-410-050; clarifies field access fee in WAC 308-410-070.

Reasons Supporting Proposal: RCW 62A.9-409, chapters 60.11, 60.13 and 60.68 RCW, give the Department of Licensing authority to prescribe all filing forms, fees, and procedures for filing with and obtaining information from filing officers. Fees are being increased, as provided by statutory authority, to support program operations.

Name of Agency Personnel Responsible for Drafting, Implementation and Enforcement: Shirley Wheelock, 405 Black Lake Boulevard, Olympia, WA, (360) 753-2523.

Name of Proponent: Department of Licensing, Uniform Commercial Code, governmental.

Rule is not necessitated by federal law, federal or state court decision.

Explanation of Rule, its Purpose, and Anticipated Effects: WAC 308-400-030 Definitions; eliminates need for standard filing forms. WAC 308-400-050 Official approval of standard forms; repeals need for standard filing forms. WAC 308-400-053 Acceptance of documents for filing; clarifies when filing document is accepted by filing office. WAC 308-400-054 Power of attorney; repeals POA document need. WAC 308-400-058 Signature requirements; eliminates original signature requirement on UCC-3 document. WAC 308-400-059 Termination statement; corrects document name from federal lien to current notice of federal lien. WAC 308-400-062 Incompatible actions; clarifies verbiage. WAC 308-400-070 Request for certificate of information; repeals rule. WAC 308-400-095 Fees; reflect filing and search document fee increase, and set in rule the fee for counter search service. WAC 308-400-120 Forms, fees. Filing federal liens; corrects document name from federal lien to current notice of federal lien. WAC 308-410-050 Standard for allocating users; repeals rule. WAC 308-410-070 Fees; clarifies rule language.

The overall purpose is to repeal unnecessary rules and clarify existing rule language. We anticipate the impact will be to assist clientele and the filing office with clearer rules for ease in understanding.

Proposal Changes the Following Existing Rules: WAC 308-400-030, removes standard filing form requirement. WAC 308-400-050, repeals rule. WAC 308-400-053, amends filing day acceptance. WAC 308-400-054, repeals rule. WAC 308-400-058, amends UCC-3 signature requirement. WAC 308-400-059 and 308-400-120, clarifies notice of federal lien verbiage. WAC 308-400-062, clarifies verbiage for UCC-3 change statement requirement. WAC 308-400-070, repeals rule. WAC 308-400-095, amends rule to reflect fee increases for filing and searches, and establishes fee for counter search service. Repeal of WAC 308-410-050, clarifies rule language in WAC 308-410-070.

No small business economic impact statement has been prepared under chapter 19.85 RCW. Increased filing and search document costs are $1.00 or less and in compliance with I-601 fiscal year growth factor; and new costs are minimal - $5.00 or less for counter search document service.

RCW 34.05.328 does not apply to this rule adoption. Rules regarding the filing with or obtaining information from filing officers are not regulatory.

Hearing Location: Department of Licensing, Business and Professions Division, 405 Black Lake Boulevard, Building #2, Conference Room #1, Olympia, WA 98502, on December 22, 1998, at 2:00 p.m.

Assistance for Persons with Disabilities: Contact Theresa Layne by December 4, 1998, TDD (360) 586-2788, or (360) 753-2523.

Submit Written Comments to: Shirley Wheelock, Uniform Commercial Code, P.O. Box 9660, Olympia, WA 98507-9660.

Date of Intended Adoption: December 28, 1998.

November 13, 1998

Shirley Wheelock

Administrator

OTS-2651.2

AMENDATORY SECTION (Amending Order BLS 130, filed 3/1/89)

WAC 308-400-030 Definitions. As used in this regulation: "Filing officer" means the director of the department of licensing or the county auditor or any person commissioned by them to act on their behalf in a Uniform Commercial Code or crop lien or processor or preparer filing procedure.

"Person" includes groups of persons, corporations, cooperatives, business trusts and all other entities capable of holding title to property.

"Filings" includes all financing statements and related documents, or documents submitted to a filing officer in lieu of financing statements under Title 62A RCW and chapters 60.11, 60.13, and 60.68 RCW.

"Claimant" means a person who claims or asserts a right, demand, or claim.

"Secured" means supported or backed by security or collateral.

((~~"Standard filing forms" mean the filing forms approved by the department of licensing.~~))

[Statutory Authority: RCW 62A.9-409, 60.11.040, 60.13.040 and chapter 60.68 RCW as amended by 1988 c 73. 89-06-078 (Order BLS 130), § 308-400-030, filed 3/1/89. Statutory Authority: RCW 62A.9-408(1) and 60.11.040(3). 86-24-055 (Order BLS 105), § 308-400-030, filed 12/2/86, effective 1/1/87. Statutory Authority: RCW 62A.9-409(1). 82-05-014 (Order 659-DOL), § 308-400-030, filed 2/9/82. Formerly WAC 434-16-030.]

AMENDATORY SECTION (Amending Order BLS 105, filed 12/2/86, effective 1/1/87)

WAC 308-400-053 Acceptance of documents for filing. (1) The department of licensing, Uniform Commercial Code section, does not, by accepting or rejecting a document submitted for filing, determine the legal validity of the document.

(2) When proper filing fees are submitted, the filing officer will accept for filing, documents that meet the basic filing requirements described by statute.

(3) The filing officer will return, without filing, any continuation that is received after the expiration of the original financing statement. ((~~No exception will be made for continuation statements which are received following a weekend or holiday during which the original statement or previous continuation statement expired.~~)) Documents must be received on the business day immediately following a Sunday or holiday.

[Statutory Authority: RCW 62A.9-408(1) and 60.11.040(3). 86-24-055 (Order BLS 105), § 308-400-053, filed 12/2/86, effective 1/1/87.]

AMENDATORY SECTION (Amending Order BLS 130, filed 3/1/89)

WAC 308-400-058 Signature requirements. (1) A financing statement must be signed by each person listed by name as the debtor.

(2) If a financing statement or filing form lists collateral clearly identified to multiple secured parties, either on the original financing statement or by partial assignment, individual secured parties may terminate their clearly identified security interest(s) without the signature(s) of the remaining secured parties.

(3) ((~~All required signatures on UCC-3 actions must be original.~~

~~(4)~~)) When a filing form is signed by someone in a representative capacity, the signer must be identified as the representative.

[Statutory Authority: RCW 62A.9-409, 60.11.040, 60.13.040 and chapter 60.68 RCW as amended by 1988 c 73. 89-06-078 (Order BLS 130), § 308-400-058, filed 3/1/89. Statutory Authority: RCW 62A.9-408(1) and 60.11.040(3). 86-24-055 (Order BLS 105), § 308-400-058, filed 12/2/86, effective 1/1/87. Statutory Authority: RCW 62A.9-409(1). 82-13-030 (Order 674-DOL), § 308-400-058, filed 6/9/82.]

AMENDATORY SECTION (Amending Order BLS 130, filed 3/1/89)

WAC 308-400-059 Termination statement, statement of discharge lien termination statement and certificate of release. (1) A "termination statement" is used to terminate a security interest under a financing statement (RCW 62A.9-404). A "statement of discharge" is used to discharge a processor or preparer lien which has been filed with a filing officer (RCW 60.13.060). A "lien termination statement" is used for terminating a crop lien pursuant to chapter 60.11 RCW.

(2) For a security interest under a financing statement, whenever there is no outstanding secured obligation and no commitment to make advances, incur obligations or otherwise give value, a secured party must on written demand by the debtor send the debtor, for each filing officer with whom the financing statement was filed, a properly signed termination statement to the effect that he no longer claims a security interest under the financing statement, which shall be identified by file number. A secured party's failure to file such a termination statement or to send such a termination statement within ten days after proper demand therefor, the secured party shall be liable to the debtor for one hundred dollars plus any damages caused to the debtor by such failure.

(3) For a processor or preparer lien which has been filed with the filing officer, if the producer has received full payment for the obligation, the producer shall promptly file with the filing officer a statement declaring that full payment has been received and that the lien is discharged. If, after payment, the producer fails to file such statement of discharge within ten days following a request to do so, the producer shall be liable to the processor, conditioner or preparer in the sum of one hundred dollars plus actual damages caused by the failure.

(4) For a crop lien, the lienholder shall file with the filing officer a lien termination statement within fifteen days following receipt of full payment of the amount of the lien. Failure to file a lien termination statement by the lienholder or its assignee shall cause the lienholder or its assignee to be liable to the debtor for the attorneys' fees and costs incurred by the debtor to have the lien terminated plus damages incurred by the debtor due to the failure of the lienholder to terminate the lien.

(5) Failure to file a statement of discharge or a lien termination statement with the department of licensing may result in retention of filings records beyond the duration of the secured interest or the lien.

(6) Certificate of release of notice of federal lien. Federal certificates of release shall be filed in accordance with provisions of the Uniform Federal Lien Registration Act, chapter 60.68 RCW.

[Statutory Authority: RCW 62A.9-409, 60.11.040, 60.13.040 and chapter 60.68 RCW as amended by 1988 c 73. 89-06-078 (Order BLS 130), § 308-400-059, filed 3/1/89. Statutory Authority: RCW 62A.9-408(1) and 60.11.040(3). 86-24-055 (Order BLS 105), § 308-400-059, filed 12/2/86, effective 1/1/87.]

AMENDATORY SECTION (Amending Order 674-DOL, filed 6/9/82)

WAC 308-400-062 Incompatible actions. The department will reject any UCC-3 change statement where incompatible actions, such as simultaneous release and termination, are requested on the same statement. ((~~The parties may not submit a corrected UCC-3 statement, but must submit a new signed UCC-3 statement indicating the desired action to be taken.~~))

[Statutory Authority: RCW 62A.9-409(1). 82-13-030 (Order 674-DOL), § 308-400-062, filed 6/9/82.]

AMENDATORY SECTION (Amending WSR 93-01-061, filed 12/11/92, effective 7/1/93)

WAC 308-400-095 Fees. (1) Beginning July 1, 1993, a fee of twelve dollars and fifty cents shall be charged for filing and indexing each of the following types of statements:

(a) Original financing statement pursuant to RCW 62A.9-403;

(b) Deed of trust or mortgage pursuant to RCW 62A.9-302;

(d) Separate statement of assignment pursuant to RCW 62A.9-405;

(e) Statement of partial release pursuant to RCW 62A.9-406;

(f) Statement of amendment pursuant to RCW 62A.9-402;

(g) Processor or preparer lien pursuant to chapter 60.13 RCW;

(h) Crop lien pursuant to chapter 60.11 RCW;

(i) Notice of federal tax lien pursuant to chapter 60.68 RCW.

(2) A fee of seventeen dollars and seventy-one cents shall be charged for a certificate of information pursuant to RCW 62A.9-407.

(3) A fee of ((~~twenty-four~~)) twenty-five dollars shall be charged for certificate of information and copies of any filed financing and related statements naming a particular debtor.

(4) An additional fee ((~~(as specified by contractual agreement between the purchaser and the department)~~)) shall be charged for each page transmitted to the purchaser by facsimile. The fee amount shall be one dollar per page for the first five pages, and fifty cents per page for the sixth page and subsequent pages.

(5) A fee of five dollars shall be charged for each debtor name look up.

(6) A fee of two dollars shall be charged for each computer printout of filing information.

(7) A fee of two dollars shall be charged for each microfilm copy.

(8) A fee of two dollars shall be charged for the certification of each document copy.

(9) Data base information shall be made available on magnetic tape and microfilm pursuant to contract between the department and purchaser. Costs will be specified in the contract.

[Statutory Authority: RCW 43.24.086, 62A.9-409, 60.11.040, 60.13.040 and 60.68.035. 93-01-061, § 308-400-095, filed 12/11/92, effective 7/1/93. Statutory Authority: RCW 62A.9-409(1) and 36.18.010. 90-04-050, § 308-400-095, filed 2/1/90, effective 3/4/90. Statutory Authority: RCW 62A.9-409(1), 60.11.040(3), 60.13.040 (2)(f), 60.68.035(2) and 34.05.220. 89-24-022, § 308-400-095, filed 11/30/89, effective 12/31/89. Statutory Authority: RCW 62A.9-409, 60.11.040, 60.13.040 and chapter 60.68 RCW as amended by 1988 c 73. 89-06-078 (Order BLS 130), § 308-400-095, filed 3/1/89. Statutory Authority: RCW 60.11.040, 62A.9-409 as amended by 1987 c 189 § 6, RCW 60.13.040 as amended by 1987 c 189 § 7 and 1987 c 148 § 3. 87-16-059 (Order BLS 115), § 308-400-095, filed 7/30/87.]

AMENDATORY SECTION (Amending Order BLS 130, filed 3/1/89)

WAC 308-400-120 Forms, fees, and procedures--Filing federal liens. The filing fees and procedures for filing information with and obtaining information from the department of licensing pertaining to notice of federal liens pursuant to chapter 60.68 RCW shall correspond to the filing fees and procedures prescribed by the department of licensing pursuant to Article 62A.9 RCW. The filing forms shall be those forms approved between the department of licensing and the Internal Revenue Service.

[Statutory Authority: RCW 62A.9-409, 60.11.040, 60.13.040 and chapter 60.68 RCW as amended by 1988 c 73. 89-06-078 (Order BLS 130), § 308-400-120, filed 3/1/89.]

REPEALER

The following sections of the Washington Administrative Code are repealed:

WAC 308-400-050 Official approval of standard forms.

WAC 308-400-054 Power of attorney.

WAC 308-400-070 Request for certificate of information.

OTS-2654.1

AMENDATORY SECTION (Amending Order BLS 115, filed 1/19/88)

WAC 308-410-070 Fees. The fees for use of the Uniform Commercial Code field access system shall be based on ((~~the established~~)) a preestablished rate per hour for use of mainframe computer time. ((~~The fee for access to the Uniform Commercial Code field access system shall be based on the prevailing rate for surface transmission telephone line use.~~)) The specific fees for access and use shall be contained in the user contract.

[Statutory Authority: RCW 62A.9-409, 60.11.040(3) and 60.13.040, as amended by 1987 c 189 § 7. 88-03-037 (Order BLS 115), § 308-410-070, filed 1/19/88.]

REPEALER

The following section of the Washington Administrative Code is repealed:

WAC 308-410-050 Standard for allocating users.