Senate Bill No. 474–Committee on Judiciary

 

March 23, 2001

____________

 

Referred to Committee on Judiciary

 

SUMMARY—Revises provisions of Uniform Commercial Code governing secured transactions. (BDR 8‑453)

 

FISCAL NOTE:            Effect on Local Government: No.

                                     Effect on the State: No.

 

~

 

EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.

 

AN ACT relating to commercial transactions; revising the provisions of the Uniform Commercial Code governing secured transactions; and providing other matters properly relating thereto.

 

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN

SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

 

1-1    Section 1. Chapter 104 of NRS is hereby amended by adding thereto a

1-2  new section to read as follows:

1-3    1.  In this section, “pre-effective-date financing statement” means a

1-4  financing statement filed before July 1, 2001.

1-5    2.  A person may add or delete collateral covered by, continue or

1-6  terminate the effectiveness of, or otherwise amend the information

1-7  provided in, a pre-effective-date financing statement pursuant to the law

1-8  of the jurisdiction governing perfection as provided in part 3. The

1-9  effectiveness of a pre-effective-date financing statement also may be

1-10  terminated in accordance with the law of the jurisdiction in which the

1-11  financing statement is filed.

1-12    3.  Except as otherwise provided in subsection 4, if the law of this

1-13  state governs perfection of a security interest, the information in a pre-

1-14  effective-date financing statement may be amended on or after July 1,

1-15  2001, if:

1-16    (a) The pre-effective-date financing statement and an amendment are

1-17  filed in the office specified in NRS 104.9501;

1-18    (b) An amendment is filed in the office specified in NRS 104.9501

1-19  concurrently with, or after the filing in that office of, an initial financing

1-20  statement that satisfies the requirements of subsection 3 of NRS

1-21  104.9706; or

2-1    (c) An initial financing statement that provides the information as

2-2  amended and satisfies the requirements of subsection 3 of NRS 104.9706

2-3  is filed in the office specified in NRS 104.9501.

2-4    4.  If the law of this state governs perfection of a security interest, the

2-5  effectiveness of a pre-effective-date financing statement may be

2-6  continued only under subsections 4 and 6 of NRS 104.9705 or 104.9706.

2-7    5.  Whether or not the law of this state governs perfection of a

2-8  security interest, the effectiveness of a pre-effective-date financing

2-9  statement filed in this state may be terminated on or after July 1, 2001, by

2-10  filing a termination statement in the office in which the pre-effective-date

2-11  financing statement is filed, unless an initial financing statement that

2-12  satisfies the requirements of subsection 3 of NRS 104.9706 has been filed

2-13  in the office specified by the law of the jurisdiction governing perfection

2-14  as provided in part 3.

2-15    Sec. 2.  NRS 104.1105 is hereby amended to read as follows:

2-16    104.1105  1.  Except as otherwise provided in this section, when a

2-17  transaction bears a reasonable relation to this state and also to another state

2-18  or nation, the parties may agree that the law of this state or of such other

2-19  state or nation governs their rights and duties. Failing such agreement, this

2-20  chapter applies to transactions bearing an appropriate relation to this state.

2-21    2.  Where one of the following provisions of this chapter specifies the

2-22  applicable law, that provision governs and a contrary agreement is

2-23  effective only to the extent permitted by the law (including the conflict of

2-24  laws rules) so specified:

2-25  Rights of creditors against sold goods. NRS 104.2402.

2-26  Applicability of the article on leases. NRS 104A.2105 and

2-27  104A.2106.

2-28  Applicability of the article on bank deposits and collections. NRS

2-29  104.4102.

2-30  Letters of credit. NRS 104.5116.

2-31  Applicability of the article on investment securities. NRS 104.8110.

2-32  Law governing perfection, the effect of perfection or nonperfection

2-33  and the priority of security interests[.] and agricultural liens. NRS

2-34  104.9301 to 104.9307, inclusive.

2-35  Governing law in the article on funds transfers. NRS 104A.4507.

2-36    Sec. 3.  NRS 104.2502 is hereby amended to read as follows:

2-37    104.2502  1.  Subject to [subsection 2] subsections 2 and 3, and even

2-38  though the goods have not been shipped, a buyer who has paid a part or all

2-39  of the price of goods in which he has a special property under the

2-40  provisions of the immediately preceding section may on making and

2-41  keeping good a tender of any unpaid portion of their price recover them

2-42  from the seller if:

2-43    (a) In the case of goods bought for personal, family or household

2-44  purposes, the seller repudiates or fails to deliver as required by the

2-45  contract; or

2-46    (b) In all cases, the seller becomes insolvent within 10 days after receipt

2-47  of the first installment on their price.

3-1    2.  The right of the buyer to recover the goods under subsection 1

3-2  vests upon acquisition of a special property even if the seller has not then

3-3  repudiated or failed to deliver.

3-4    3.  If the identification creating his special property has been made by

3-5  the buyer he acquires the right to recover the goods only if they conform to

3-6  the contract for sale.

3-7    Sec. 4.  NRS 104.9102 is hereby amended to read as follows:

3-8    104.9102  1.  In this article:

3-9    (a) “Accession” means goods that are physically united with other

3-10  goods in such a manner that the identity of the original goods is not lost.

3-11    (b) “Account,” except as used in “account for,” means a right to

3-12  payment of a monetary obligation, whether or not earned by performance,

3-13  for property that has been or is to be sold, leased, licensed, assigned, or

3-14  otherwise disposed of; for services rendered or to be rendered; for a policy

3-15  of insurance issued or to be issued; for a secondary obligation incurred or

3-16  to be incurred; for energy provided or to be provided; for the use or hire of

3-17  a vessel under a charter or other contract; arising out of the use of a credit

3-18  or charge card or information contained on or for use with the card; or as

3-19  winnings in a lottery or other game of chance operated or sponsored by a

3-20  state, governmental unit of a state, or person licensed or authorized to

3-21  operate the game by a state or governmental unit of a state. The term

3-22  includes health-care-insurance receivables. The term does not include

3-23  rights to payment evidenced by chattel paper or an instrument; commercial

3-24  tort claims; deposit accounts; investment property; letter-of-credit rights or

3-25  letters of credit; or rights to payment for money or funds advanced or sold,

3-26  other than rights arising out of the use of a credit or charge card or

3-27  information contained on or for use with the card.

3-28    (c) “Account debtor” means a person obligated on an account, chattel

3-29  paper or general intangible. The term does not include persons obligated to

3-30  pay a negotiable instrument, even if the instrument constitutes part of

3-31  chattel paper.

3-32    (d) “Accounting,” except as used in “accounting for,” means a record:

3-33      (1) Authenticated by a secured party;

3-34      (2) Indicating the aggregate unpaid secured obligations as of a date

3-35  not more than 35 days earlier or 35 days later than the date of the record;

3-36  and

3-37      (3) Identifying the components of the obligations in reasonable detail.

3-38    (e) “Agricultural lien” means an interest, other than a security interest,

3-39  in farm products:

3-40      (1) Which secures payment or performance of an obligation for:

3-41        (I) Goods or services furnished in connection with a debtor’s

3-42  farming operation; or

3-43        (II) Rent on real property leased by a debtor in connection with its

3-44  farming operation;

3-45      (2) Which is created by statute in favor of a person that:

3-46        (I) In the ordinary course of its business furnished goods or

3-47  services to a debtor in connection with his farming operation; or

3-48        (II) Leased real property to a debtor in connection with his farming

3-49  operation; and

4-1       (3) Whose effectiveness does not depend on the person’s possession

4-2  of the personal property.

4-3    (f) “As-extracted collateral” means:

4-4       (1) Oil, gas or other minerals that are subject to a security interest

4-5  that:

4-6         (I) Is created by a debtor having an interest in the minerals before

4-7  extraction; and

4-8         (II) Attaches to the minerals as extracted; or

4-9       (2) Accounts arising out of the sale at the wellhead or minehead of

4-10  oil, gas or other minerals in which the debtor had an interest before

4-11  extraction.

4-12    (g) “Authenticate” means:

4-13      (1) To sign; or

4-14      (2) To execute or otherwise adopt a symbol, or encrypt or similarly

4-15  process a record in whole or in part, with the present intent of the

4-16  authenticating person to identify himself and adopt or accept a record.

4-17    (h) “Bank” means an organization that is engaged in the business of

4-18  banking. The term includes savings banks, savings and loan associations,

4-19  credit unions and trust companies.

4-20    (i) “Cash proceeds” means proceeds that are money, checks, deposit

4-21  accounts or the like.

4-22    (j) “Certificate of title” means a certificate of title with respect to which

4-23  a statute provides for the security interest in question to be indicated on the

4-24  certificate as a condition or result of the security interest’s obtaining

4-25  priority over the rights of a lien creditor with respect to the collateral.

4-26    (k) “Chattel paper” means a record or records that evidence both a

4-27  monetary obligation and a security interest in or a lease of specific goods

4-28  or of specific goods and software used in the goods[.] , or a security

4-29  interest in or a lease of specific goods and a license of software used in

4-30  the goods. The term does not include charters or other contracts involving

4-31  the use or hire of a vessel[.] , or records that evidence a right to payment

4-32  arising out of the use of a credit or charge card or information contained

4-33  on or for use with the card. If a transaction is evidenced [both by a

4-34  security agreement or lease and] by records that include an instrument or

4-35  series of instruments, the group of records taken together constitutes chattel

4-36  paper. As used in this paragraph, “monetary obligation” means a

4-37  monetary obligation secured by the goods or owed under a lease of the

4-38  goods and includes a monetary obligation with respect to software used

4-39  in the goods.

4-40    (l) “Collateral” means the property subject to a security interest or

4-41  agricultural lien. The term includes:

4-42      (1) Proceeds to which a security interest attaches;

4-43      (2) Accounts, chattel paper, payment intangibles and promissory

4-44  notes that have been sold; and

4-45      (3) Goods that are the subject of a consignment.

4-46    (m) “Commercial tort claim” means a claim arising in tort with respect

4-47  to which:

4-48      (1) The claimant is an organization; or

4-49      (2) The claimant is a natural person and the claim:

5-1         (I) Arose in the course of his business or profession; and

5-2         (II) Does not include damages arising out of personal injury to or

5-3  the death of a natural person.

5-4    (n) “Commodity account” means an account maintained by a

5-5  commodity intermediary in which a commodity contract is carried for a

5-6  commodity customer.

5-7    (o) “Commodity contract” means a commodity futures contract, an

5-8  option on a commodity futures contract, a commodity option or another

5-9  contract if the contract or option is:

5-10      (1) Traded on or subject to the rules of a board of trade that has been

5-11  designated as a contract market for such a contract pursuant to federal

5-12  commodities laws; or

5-13      (2) Traded on a foreign commodity board of trade, exchange or

5-14  market, and is carried on the books of a commodity intermediary for a

5-15  commodity customer.

5-16    (p) “Commodity customer” means a person for which a commodity

5-17  intermediary carries a commodity contract on its books.

5-18    (q) “Commodity intermediary” means a person that:

5-19      (1) Is registered as a futures commission merchant under federal

5-20  commodities law; or

5-21      (2) In the ordinary course of its business provides clearance or

5-22  settlement services for a board of trade that has been designated as a

5-23  contract market pursuant to federal commodities law.

5-24    (r) “Communicate” means:

5-25      (1) To send a written or other tangible record;

5-26      (2) To transmit a record by any means agreed upon by the persons

5-27  sending and receiving the record; or

5-28      (3) In the case of transmission of a record to or by a filing office, to

5-29  transmit a record by any means prescribed by filing-office rule.

5-30    (s) “Consignee” means a merchant to which goods are delivered in a

5-31  consignment.

5-32    (t) “Consignment” means a transaction, regardless of its form, in which

5-33  a person delivers goods to a merchant for the purpose of sale and:

5-34      (1) The merchant:

5-35        (I) Deals in goods of that kind under a name other than the name of

5-36  the person making delivery;

5-37        (II) Is not an auctioneer; and

5-38        (III) Is not generally known by its creditors to be substantially

5-39  engaged in selling the goods of others;

5-40      (2) With respect to each delivery, the aggregate value of the goods is

5-41  $1,000 or more at the time of delivery;

5-42      (3) The goods are not consumer goods immediately before delivery;

5-43  and

5-44      (4) The transaction does not create a security interest that secures an

5-45  obligation.

5-46    (u) “Consignor” means a person that delivers goods to a consignee in a

5-47  consignment.

5-48    (v) “Consumer debtor” means a debtor in a consumer transaction.

6-1    (w) “Consumer goods” means goods that are used or bought for use

6-2  primarily for personal, family or household purposes.

6-3    (x) “Consumer-goods transaction” means a consumer transaction to the

6-4  extent that:

6-5       (1) A natural person incurs an obligation primarily for personal,

6-6  family or household purposes; and

6-7       (2) A security interest in consumer goods or in consumer goods and

6-8  software that is held or acquired primarily for personal, family or

6-9  household purposes secures the obligation.

6-10    (y) “Consumer obligor” means an obligor who is a natural person and

6-11  who incurred the obligation as part of a transaction entered into primarily

6-12  for personal, family or household purposes.

6-13    (z) “Consumer transaction” means a transaction to the extent that a

6-14  natural person incurs an obligation primarily for personal, family or

6-15  household purposes; a security interest secures the obligation; and the

6-16  collateral is held or acquired primarily for personal, family or household

6-17  purposes. The term includes consumer-goods transactions.

6-18    (aa) “Continuation statement” means a change of a financing statement

6-19  which:

6-20      (1) Identifies, by its file number, the initial financing statement to

6-21  which it relates; and

6-22      (2) Indicates that it is a continuation statement for, or that it is filed to

6-23  continue the effectiveness of, the identified financing statement.

6-24    (bb) “Debtor” means:

6-25      (1) A person having an interest, other than a security interest or other

6-26  lien, in the collateral, whether or not he is an obligor;

6-27      (2) A seller of accounts, chattel paper, payment intangibles or

6-28  promissory notes; or

6-29      (3) A consignee.

6-30    (cc) “Deposit account” means a demand, time, savings, passbook or

6-31  similar account maintained with a bank. The term does not include

6-32  investment property or accounts evidenced by an instrument.

6-33    (dd) “Document” means a document of title or a receipt of the type

6-34  described in subsection 2 of NRS 104.7201.

6-35    (ee) “Electronic chattel paper” means chattel paper evidenced by a

6-36  record or records consisting of information stored in an electronic medium.

6-37    (ff) “Encumbrance” means a right, other than an ownership interest, in

6-38  real property. The term includes mortgages and other liens on real

6-39  property.

6-40    (gg) “Equipment” means goods other than inventory, farm products or

6-41  consumer goods.

6-42    (hh) “Farm products” means goods, other than standing timber, with

6-43  respect to which the debtor is engaged in a farming operation and which

6-44  are:

6-45      (1) Crops grown, growing or to be grown, including:

6-46        (I) Crops produced on trees, vines and bushes; and

6-47        (II) Aquatic goods produced in aquacultural operations;

6-48      (2) Livestock, born or unborn, including aquatic goods produced in

6-49  aquacultural operations;

7-1       (3) Supplies used or produced in a farming operation; or

7-2       (4) Products of crops or livestock in their unmanufactured states.

7-3    (ii) “Farming operation” means raising, cultivating, propagating,

7-4  fattening, grazing, or any other farming, livestock, or aquacultural

7-5  operation.

7-6    (jj) “File number” means the number assigned to an initial financing

7-7  statement pursuant to subsection 1 of NRS 104.9519.

7-8    (kk) “Filing office” means an office designated in NRS 104.9501 as the

7-9  place to file a financing statement.

7-10    (ll) “Filing-office rule” means a rule adopted pursuant to NRS

7-11  104.9526.

7-12    (mm) “Financing statement” means a record or records composed of an

7-13  initial financing statement and any filed record relating to the initial

7-14  financing statement.

7-15    (nn) “Fixture filing” means the filing of a financing statement covering

7-16  goods that are or are to become fixtures and satisfying subsections 1 and 2

7-17  of NRS 104.9502. The term includes the filing of a financing statement

7-18  covering goods of a transmitting utility which are or are to become

7-19  fixtures.

7-20    (oo) “Fixtures” means goods that have become so related to particular

7-21  real property that an interest in them arises under real property law.

7-22    (pp) “General intangible” means any personal property, including things

7-23  in action, other than accounts, chattel paper, commercial tort claims,

7-24  deposit accounts, documents, goods, instruments, investment property,

7-25  letter-of-credit rights, letters of credit, money, and oil, gas or other

7-26  minerals before extraction. The term includes payment intangibles and

7-27  software.

7-28    (qq) “Good faith” means honesty in fact and the observance of

7-29  reasonable commercial standards of fair dealing.

7-30    (rr) “Goods” means all things that are movable when a security interest

7-31  attaches. The term includes fixtures; standing timber that is to be cut and

7-32  removed under a conveyance or contract for sale; the unborn young of

7-33  animals; crops grown, growing, or to be grown, even if the crops are

7-34  produced on trees, vines, or bushes; and manufactured homes. The term

7-35  also includes a computer program embedded in goods and any supporting

7-36  information provided in connection with a transaction relating to the

7-37  program if the program is associated with the goods in such a manner that

7-38  it customarily is considered part of the goods, or by becoming the owner of

7-39  the goods, a person acquires a right to use the program in connection with

7-40  the goods. The term does not include a computer program embedded in

7-41  goods that consist solely of the medium in which the program is embedded.

7-42  The term also does not include accounts, chattel paper, commercial tort

7-43  claims, deposit accounts, documents, general intangibles, instruments,

7-44  investment property, letter-of-credit rights, letters of credit, money, or oil,

7-45  gas or other minerals before extraction.

7-46    (ss) “Governmental unit” means a subdivision, agency, department,

7-47  county, parish, municipality, or other unit of the government of the United

7-48  States, a state, or a foreign country. The term includes an organization

7-49  having a separate corporate existence if the organization is eligible to issue

8-1  debt on which interest is exempt from income taxation under the laws of

8-2  the United States.

8-3    (tt) “Health-care-insurance receivable” means an interest in or claim

8-4  under a policy of insurance which is a right to payment of a monetary

8-5  obligation for health-care goods or services provided.

8-6    (uu) “Instrument” means a negotiable instrument or any other writing

8-7  that evidences a right to the payment of a monetary obligation, is not itself

8-8  a security agreement or lease, and is of a type that in ordinary course of

8-9  business is transferred by delivery with any necessary endorsement or

8-10  assignment. The term does not include investment property, letters of credit

8-11  or writings that evidence a right to payment arising out of the use of a

8-12  credit or charge card or information contained on or for use with the card.

8-13    (vv) “Inventory” means goods, other than farm products, which:

8-14      (1) Are leased by a person as lessor;

8-15      (2) Are held by a person for sale or lease or to be furnished under a

8-16  contract of service;

8-17      (3) Are furnished by a person under a contract of service; or

8-18      (4) Consist of raw materials, work in process, or materials used or

8-19  consumed in a business.

8-20    (ww) “Investment property” means a security, whether certificated or

8-21  uncertificated, security entitlement, securities account, commodity

8-22  contract, or commodity account.

8-23    (xx) “Jurisdiction of organization,” with respect to a registered

8-24  organization, means the jurisdiction under whose law the organization is

8-25  organized.

8-26    (yy) “Letter-of-credit right” means a right to payment or performance

8-27  under a letter of credit, whether or not the beneficiary has demanded or is

8-28  at the time entitled to demand payment or performance. The term does not

8-29  include the right of a beneficiary to demand payment or performance under

8-30  a letter of credit.

8-31    (zz) “Lien creditor” means:

8-32      (1) A creditor that has acquired a lien on the property involved by

8-33  attachment, levy or the like;

8-34      (2) An assignee for benefit of creditors from the time of assignment;

8-35      (3) A trustee in bankruptcy from the date of the filing of the petition;

8-36  or

8-37      (4) A receiver in equity from the time of appointment.

8-38    (aaa) “Manufactured home” means a structure, transportable in one or

8-39  more sections, which in the traveling mode, is 8 feet or more in body width

8-40  or 40 feet or more in body length, or, when erected on site, is 320 or more

8-41  square feet, and which is built on a permanent chassis and designed to be

8-42  used as a dwelling with or without a permanent foundation when connected

8-43  to the required utilities, and includes the plumbing, heating, air-

8-44  conditioning and electrical systems contained therein. The term includes

8-45  any structure that meets all of the requirements of this paragraph except the

8-46  size requirements and with respect to which the manufacturer voluntarily

8-47  files a certification required by the United States Secretary of Housing and

8-48  Urban Development and complies with the standards established under

8-49  Title 42 of the United States Code.

9-1    (bbb) “Manufactured-home transaction” means a secured transaction:

9-2       (1) That creates a purchase-money security interest in a manufactured

9-3  home, other than a manufactured home held as inventory; or

9-4       (2) In which a manufactured home, other than a manufactured home

9-5  held as inventory, is the primary collateral.

9-6    (ccc) “Mortgage” means a consensual interest in real property,

9-7  including fixtures, which is created by a mortgage, deed of trust, or similar

9-8  transaction.

9-9    (ddd) “New debtor” means a person that becomes bound as debtor

9-10  under subsection 4 of NRS 104.9203 by a security agreement previously

9-11  entered into by another person.

9-12    (eee) “New value” means money; money’s worth in property, services

9-13  or new credit; or release by a transferee of an interest in property

9-14  previously transferred to the transferee. The term does not include an

9-15  obligation substituted for another obligation.

9-16    (fff) “Noncash proceeds” means proceeds other than cash proceeds.

9-17    (ggg) “Obligor” means a person that, with respect to an obligation

9-18  secured by a security interest in or an agricultural lien on the collateral,

9-19  owes payment or other performance of the obligation, has provided

9-20  property other than the collateral to secure payment or other performance

9-21  of the obligation, or is otherwise accountable in whole or in part for

9-22  payment or other performance of the obligation. The term does not include

9-23  an issuer or a nominated person under a letter of credit.

9-24    (hhh) “Original debtor” means , except as used in subsection 3 of NRS

9-25  104.9310, a person that, as debtor, entered into a security agreement to

9-26  which a new debtor has become bound under subsection 4 of NRS

9-27  104.9203.

9-28    (iii) “Payment intangible” means a general intangible under which the

9-29  account debtor’s principal obligation is a monetary obligation.

9-30    (jjj) “Person related to,” with respect to a natural person, means:

9-31      (1) His spouse;

9-32      (2) His brother, brother-in-law, sister or sister-in-law;

9-33      (3) His or his spouse’s ancestor or lineal descendant; or

9-34      (4) Any other relative, by blood or marriage, of the person or his

9-35  spouse who shares the same home with him.

9-36    (kkk) “Person related to,” with respect to an organization, means:

9-37      (1) A person directly or indirectly controlling, controlled by or under

9-38  common control with the organization;

9-39      (2) An officer or director of, or a person performing similar functions

9-40  with respect to, the organization;

9-41      (3) An officer or director of, or a person performing similar functions

9-42  with respect to, a person described in subparagraph (1);

9-43      (4) The spouse of a natural person described in subparagraph (1), (2)

9-44  or (3); or

9-45      (5) A person who is related by blood or marriage to a person

9-46  described in subparagraph (1), (2), (3) or (4) and shares the same home

9-47  with that person.

9-48    (lll) “Proceeds” means , except as used in subsection 2 of NRS

9-49  104.9609, the following property:

10-1      (1) Whatever is acquired upon the sale, lease, license, exchange or

10-2  other disposition of collateral;

10-3      (2) Whatever is collected on, or distributed on account of, collateral;

10-4      (3) Rights arising out of collateral;

10-5      (4) To the extent of the value of collateral, claims arising out of the

10-6  loss, nonconformity, or interference with the use of, defects or

10-7  infringement of rights in, or damage to, the collateral; and

10-8      (5) To the extent of the value of collateral and to the extent payable to

10-9  the debtor or the secured party, insurance payable by reason of the loss or

10-10  nonconformity of, defects or infringement of rights in, or damage to, the

10-11  collateral.

10-12  (mmm) “Promissory note” means an instrument that evidences a

10-13  promise to pay a monetary obligation, does not evidence an order to pay,

10-14  and does not contain an acknowledgment by a bank that the bank has

10-15  received for deposit a sum of money or funds.

10-16  (nnn) “Proposal” means a record authenticated by a secured party which

10-17  includes the terms on which the secured party is willing to accept collateral

10-18  in full or partial satisfaction of the obligation it secures pursuant to NRS

10-19  104.9620, 104.9621 and 104.9622.

10-20  (ooo) “Public-finance transaction” means a secured transaction in

10-21  connection with which:

10-22     (1) Debt securities are issued;

10-23     (2) All or a portion of the securities issued have an initial stated

10-24  maturity of at least 20 years; and

10-25     (3) The debtor, the obligor, the secured party, the account debtor or

10-26  other person obligated on collateral, the assignor or assignee of a secured

10-27  obligation, or the assignor or assignee of a security interest is a state or a

10-28  governmental unit of a state.

10-29  (ppp) “Pursuant to commitment,” with respect to an advance made or

10-30  other value given by a secured party, means pursuant to the secured party’s

10-31  obligation, whether or not a subsequent event of default or other event not

10-32  within the secured party’s control has relieved or may relieve the secured

10-33  party from its obligation.

10-34  (qqq) “Record,” except as used in “for record,” “of record,” “record or

10-35  legal title,” and “record owner,” means information that is inscribed on a

10-36  tangible medium or which is stored in an electronic or other medium and is

10-37  retrievable in perceivable form.

10-38  (rrr) “Registered organization” means an organization organized solely

10-39  under the law of a single state or the United States and as to which the state

10-40  or the United States must maintain a public record showing the

10-41  organization to have been organized.

10-42  (sss) “Secondary obligor” means an obligor to the extent that:

10-43     (1) The obligor’s obligation is secondary; or

10-44     (2) The obligor has a right of recourse with respect to an obligation

10-45  secured by collateral against the debtor, another obligor or property of

10-46  either.

10-47  (ttt) “Secured party” means:

11-1      (1) A person in whose favor a security interest is created or provided

11-2  for under a security agreement, whether or not any obligation to be secured

11-3  is outstanding;

11-4      (2) A person that holds an agricultural lien;

11-5      (3) A consignor;

11-6      (4) A person to which accounts, chattel paper, payment intangibles or

11-7  promissory notes have been sold;

11-8      (5) A trustee, indenture trustee, agent, collateral agent or other

11-9  representative in whose favor a security interest or agricultural lien is

11-10  created or provided for; or

11-11     (6) A person that holds a security interest arising under NRS

11-12  104.2401, 104.2505, subsection 3 of NRS 104.2711, NRS 104.4210,

11-13  104.5118 or subsection 5 of NRS 104A.2508.

11-14  (uuu) “Security agreement” means an agreement that creates or provides

11-15  for a security interest.

11-16  (vvv) “Send,” in connection with a record or notification, means:

11-17     (1) To deposit in the mail, deliver for transmission or transmit by any

11-18  other usual means of communication, with postage or cost of transmission

11-19  provided for, addressed to any address reasonable under the circumstances;

11-20  or

11-21     (2) To cause the record or notification to be received within the time

11-22  that it would have been received if properly sent under subparagraph (1).

11-23  (www) “Software” means a computer program and any supporting

11-24  information provided in connection with a transaction relating to the

11-25  program. The term does not include a computer program that is contained

11-26  in goods unless the goods are a computer or computer peripheral.

11-27  (xxx) “State” means a state of the United States, the District of

11-28  Columbia, Puerto Rico, the United States Virgin Islands, or any territory or

11-29  insular possession subject to the jurisdiction of the United States.

11-30  (yyy) “Supporting obligation” means a letter-of-credit right or

11-31  secondary obligation that supports the payment or performance of an

11-32  account, chattel paper, document, general intangible, instrument or

11-33  investment property.

11-34  (zzz) “Tangible chattel paper” means chattel paper evidenced by a

11-35  record or records consisting of information that is inscribed on a tangible

11-36  medium.

11-37  (aaaa) “Termination statement” means a subsequent filing which:

11-38     (1) Identifies, by its file number, the initial financing statement to

11-39  which it relates; and

11-40     (2) Indicates either that it is a termination statement or that the

11-41  identified financing statement is no longer effective.

11-42  (bbbb) “Transmitting utility” means a person primarily engaged in the

11-43  business of:

11-44     (1) Operating a railroad, subway, street railway or trolley bus;

11-45     (2) Transmitting communications electrically, electromagnetically or

11-46  by light;

11-47     (3) Transmitting goods by pipeline;

11-48     (4) Providing sewerage; or

12-1      (5) Transmitting or producing and transmitting electricity, steam, gas

12-2  or water.

12-3    2.  The following definitions in other articles apply to this article:

12-4  “Applicant.” NRS 104.5102.

12-5  “Beneficiary.” NRS 104.5102.

12-6  “Broker.” NRS 104.8102.

12-7  “Certificated security.” NRS 104.8102.

12-8  “Check.” NRS 104.3104.

12-9  “Clearing corporation.” NRS 104.8102.

12-10  “Contract for sale.” NRS 104.2106.

12-11  “Customer.” NRS 104.4104.

12-12  “Entitlement holder.” NRS 104.8102.

12-13  “Financial asset.” NRS 104.8102.

12-14  “Holder in due course.” NRS 104.3302.

12-15  “Issuer.” NRS 104.5102.

12-16  “Lease.” NRS 104A.2103.

12-17  “Lease agreement.” NRS 104A.2103.

12-18  “Lease contract.” NRS 104A.2103.

12-19  “Leasehold interest.” NRS 104A.2103.

12-20  “Lessee.” NRS 104A.2103.

12-21  “Lessee in ordinary course of business.” NRS 104A.2103.

12-22  “Lessor.” NRS 104A.2103.

12-23  “Lessor’s residual interest.” NRS 104A.2103.

12-24  “Letter of credit.” NRS 104.5102.

12-25  “Merchant.” NRS 104.2104.

12-26  “Negotiable instrument.” NRS 104.3104.

12-27  “Nominated person.” NRS 104.5102.

12-28  “Note.” NRS 104.3104.

12-29  “Proceeds of a letter of credit.” NRS 104.5114.

12-30  “Prove.” NRS 104.3103.

12-31  “Sale.” NRS 104.2106.

12-32  “Securities account.” NRS 104.8501.

12-33  “Securities intermediary.” NRS 104.8102.

12-34  “Security.” NRS 104.8102.

12-35  “Security certificate.” NRS 104.8102.

12-36  “Security entitlement.” NRS 104.8102.

12-37  “Uncertificated security.” NRS 104.8102.

12-38  3.  Article 1 contains general definitions and principles of construction

12-39  and interpretation applicable throughout this article.

12-40  Sec. 5.  NRS 104.9104 is hereby amended to read as follows:

12-41  104.9104  1.  A secured party has control of a deposit account if:

12-42  (a) The secured party is the bank with which the deposit account is

12-43  maintained;

12-44  (b) The debtor, secured party and bank have agreed in an authenticated

12-45  record that the bank will comply with instructions originated by the

12-46  secured party directing disposition of the funds in the deposit account

12-47  without further consent by the debtor; or

12-48  (c) The secured party becomes the bank’s customer with respect to the

12-49  deposit account.

13-1    2.  A secured party that has satisfied subsection 1 has control, even if

13-2  the debtor retains the right to direct the disposition of funds from the

13-3  deposit account.

13-4    Sec. 6.  NRS 104.9210 is hereby amended to read as follows:

13-5    104.9210  1.  In this section:

13-6    (a) “Request” means a record of a type described in paragraph (b), (c) or

13-7  (d).

13-8    (b) “Request for an accounting” means a record authenticated by a

13-9  debtor requesting that the recipient provide an accounting of the unpaid

13-10  obligations secured by collateral and reasonably identifying the transaction

13-11  or relationship that is the subject of the request.

13-12  (c) “Request regarding a list of collateral” means a record authenticated

13-13  by a debtor requesting that the recipient approve or correct a list of what

13-14  the debtor believes to be the collateral securing an obligation and

13-15  reasonably identifying the transaction or relationship that is the subject of

13-16  the request.

13-17  (d) “Request regarding a statement of account” means a record

13-18  authenticated by a debtor requesting that the recipient approve or correct a

13-19  statement indicating what the debtor believes to be the aggregate amount of

13-20  unpaid obligations secured by collateral as of a specified date and

13-21  reasonably identifying the transaction or relationship that is the subject of

13-22  the request.

13-23  2.  Subject to subsections 3 to 6, inclusive, a secured party, other than a

13-24  buyer of accounts, chattel paper, payment intangibles, or promissory notes

13-25  or a consignor, shall comply with a request within 14 days after receipt:

13-26  (a) In the case of a request for an accounting, by authenticating and

13-27  sending to the debtor an accounting; and

13-28  (b) In the case of a request regarding a list of collateral or a request

13-29  regarding a statement of account, by authenticating and sending to the

13-30  debtor an approval or correction.

13-31  3.  A secured party that claims a security interest in all of a particular

13-32  type of collateral owned by the debtor may comply with a request

13-33  regarding a list of collateral by sending to the debtor an authenticated

13-34  record including a statement to that effect within 14 days after receipt.

13-35  4.  A person that receives a request regarding a list of collateral, claims

13-36  no interest in the collateral when it receives the request, and claimed an

13-37  interest in the collateral at an earlier time shall comply with the request

13-38  within 14 days after receipt by sending to the debtor an authenticated

13-39  record:

13-40  (a) Disclaiming any interest in the collateral; and

13-41  (b) If known to the recipient, providing the name and mailing address of

13-42  any assignee of or successor to the recipient’s [security] interest in the

13-43  collateral.

13-44  5.  A person that receives a request for an accounting or a request

13-45  regarding a statement of account, claims no interest in the obligations when

13-46  it receives the request, and claimed an interest in the obligations at an

13-47  earlier time shall comply with the request within 14 days after receipt by

13-48  sending to the debtor an authenticated record:

13-49  (a) Disclaiming any interest in the obligations; and

14-1    (b) If known to the recipient, providing the name and mailing address of

14-2  any assignee of or successor to the recipient’s interest in the obligations.

14-3    6.  A debtor is entitled without charge to one response to a request

14-4  under this section during any 6-month period. The secured party may

14-5  require payment of a charge not exceeding $25 for each additional

14-6  response.

14-7    Sec. 7.  NRS 104.9311 is hereby amended to read as follows:

14-8    104.9311  1.  Except as otherwise provided in subsection 4, the filing

14-9  of a financing statement is not necessary or effective to perfect a security

14-10  interest in property subject to:

14-11  (a) A statute, regulation or treaty of the United States whose

14-12  requirements for a security interest’s obtaining priority over the rights of a

14-13  lien creditor with respect to the property preempt subsection 1 of NRS

14-14  104.9310;

14-15  (b) Chapter 105 of NRS, NRS 482.423 to 482.431, inclusive, 488.1793

14-16  to 488.1827, inclusive, and 489.501 to 489.581, inclusive; or

14-17  (c) A certificate-of-title statute of another jurisdiction which provides

14-18  for a security interest to be indicated on the certificate as a condition or

14-19  result of the security interest’s obtaining priority over the rights of a lien

14-20  creditor with respect to the property.

14-21  2.  Compliance with the requirements of a statute, regulation or treaty

14-22  described in subsection 1 for obtaining priority over the rights of a lien

14-23  creditor is equivalent to the filing of a financing statement under this

14-24  article. Except as otherwise provided in subsection 4, NRS 104.9313 and

14-25  subsections 4 and 5 of NRS 104.9316 for goods covered by a certificate of

14-26  title, a security interest in property subject to a statute, regulation or treaty

14-27  described in subsection 1 may be perfected only by compliance with those

14-28  requirements, and a security interest so perfected remains perfected

14-29  notwithstanding a change in the use or transfer of possession of the

14-30  collateral.

14-31  3.  Except as otherwise provided in subsection 4 and subsections 4 and

14-32  5 of NRS 104.9316, duration and renewal of perfection of a security

14-33  interest perfected by compliance with the requirements prescribed by a

14-34  statute, regulation or treaty described in subsection 1 are governed by the

14-35  statute, regulation or treaty. In other respects, the security interest is subject

14-36  to this article.

14-37  4.  During any period in which collateral subject to a statute specified

14-38  in paragraph (b) of subsection 1 is inventory held for sale or lease by a

14-39  person or leased by that person as lessor and that person is in the business

14-40  of selling [or leasing] goods of that kind, this section does not apply to a

14-41  security interest in that collateral created by that person . [as debtor.]

14-42  Sec. 8.  NRS 104.9317 is hereby amended to read as follows:

14-43  104.9317  1.  [An unperfected] A security interest or agricultural lien

14-44  is subordinate to the rights of:

14-45  (a) A person entitled to priority under NRS 104.9322; and

14-46  (b) A person that becomes a lien creditor before the earlier of the time

14-47  [the] :

14-48     (1) The security interest or agricultural lien is perfected ; or

15-1      (2) One of the conditions specified in paragraph (c) of subsection 2

15-2  of NRS 104.9203 is met and a financing statement covering the collateral

15-3  is filed.

15-4    2.  Except as otherwise provided in subsection 5, a buyer, other than a

15-5  secured party, of chattel paper, documents, goods, instruments, or a

15-6  security certificate takes free of a security interest or agricultural lien if the

15-7  buyer gives value and receives delivery of the collateral without knowledge

15-8  of the security interest or agricultural lien and before it is perfected.

15-9    3.  Except as otherwise provided in subsection 5, a lessee of goods

15-10  takes free of a security interest or agricultural lien if he gives value and

15-11  receives delivery of the collateral without knowledge of the security

15-12  interest or agricultural lien and before it is perfected.

15-13  4.  A licensee of a general intangible or a buyer, other than a secured

15-14  party, of accounts, general intangibles or investment property other than a

15-15  certificated security takes free of a security interest if he gives value

15-16  without knowledge of the security interest and before it is perfected.

15-17  5.  Except as otherwise provided in NRS 104.9320 and 104.9321, if a

15-18  person files a financing statement with respect to a purchase-money

15-19  security interest before or within 20 days after the debtor receives delivery

15-20  of the collateral, the security interest takes priority over the rights of a

15-21  buyer, lessee or lien creditor which arise between the time the security

15-22  interest attaches and the time of filing.

15-23  Sec. 9.  NRS 104.9323 is hereby amended to read as follows:

15-24  104.9323  1.  Except as otherwise provided in subsection 3, for

15-25  purposes of determining the priority of a perfected security interest under

15-26  subsection 1 of NRS 104.9322, perfection of the security interest dates

15-27  from the time an advance is made to the extent that the security interest

15-28  secures an advance that:

15-29  (a) Is made while the security interest is perfected only:

15-30     (1) Under NRS 104.9309 when it attaches; or

15-31     (2) Temporarily under subsection 5, 6 or 7 of NRS 104.9312; and

15-32  (b) Is not made pursuant to a commitment entered into before or while

15-33  the security interest is perfected by a method other than under NRS

15-34  104.9309 or subsection 5, 6 or 7 of NRS 104.9312.

15-35  2.  Except as otherwise provided in subsection 3, a security interest is

15-36  subordinate to the rights of a person that becomes a lien creditor [while the

15-37  security interest is perfected only] to the extent that [it secures advances]

15-38  the security interest secures an advance made more than 45 days after he

15-39  becomes a lien creditor unless the advance is made:

15-40  (a) Without knowledge of the lien; or

15-41  (b) Pursuant to a commitment entered into without knowledge of the

15-42  lien.

15-43  3.  Subsections 1 and 2 do not apply to a security interest held by a

15-44  secured party that is a buyer of accounts, chattel paper, payment

15-45  intangibles, or promissory notes or a consignor.

15-46  4.  Except as otherwise provided in subsection 5, a buyer of goods

15-47  other than a buyer in the ordinary course of business takes free of a security

15-48  interest to the extent that it secures advances made after the earlier of:

16-1    (a) The time the secured party acquires knowledge of the buyer’s

16-2  purchase; or

16-3    (b) Forty-five days after the purchase.

16-4    5.  Subsection 4 does not apply if the advance is made pursuant to a

16-5  commitment entered into without knowledge of the buyer’s purchase and

16-6  before the expiration of the 45‑day period.

16-7    6.  Except as otherwise provided in subsection 7, a lessee of goods,

16-8  other than a lessee in ordinary course of business, takes the leasehold free

16-9  of a security interest to the extent that it secures advances made after the

16-10  earlier of:

16-11  (a) The time the secured party acquires knowledge of the lease; or

16-12  (b) Forty-five days after the lease contract becomes enforceable.

16-13  7.  Subsection 6 does not apply if the advance is made pursuant to a

16-14  commitment entered into without knowledge of the lease and before the

16-15  expiration of the 45‑day period.

16-16  Sec. 10.  NRS 104.9331 is hereby amended to read as follows:

16-17  104.9331  1.  This article does not limit the rights of a holder in due

16-18  course of a negotiable instrument, a holder to which a negotiable document

16-19  of title has been duly negotiated, or a protected purchaser of a security.

16-20  These holders or purchasers take priority over an earlier security interest,

16-21  even if perfected, to the extent provided in articles 3, 7 and 8.

16-22  2.  This article does not limit the rights of or impose liability on a

16-23  person to the extent that the person is protected against the assertion of [an

16-24  adverse] a claim under article 8.

16-25  3.  Filing under this article does not constitute notice of a claim or

16-26  defense to the holders, or purchasers, or persons described in subsections 1

16-27  and 2.

16-28  Sec. 11.  NRS 104.9334 is hereby amended to read as follows:

16-29  104.9334  1.  A security interest under this article may be created in

16-30  goods that are fixtures or may continue in goods that become fixtures. A

16-31  security interest does not exist under this article in ordinary building

16-32  materials incorporated into an improvement on land.

16-33  2.  This article does not prevent creation of an encumbrance upon

16-34  fixtures under real property law.

16-35  3.  In cases not governed by subsections 4 to 8, inclusive, a security

16-36  interest in fixtures is subordinate to a conflicting interest of an

16-37  encumbrancer or owner of the related real property other than the debtor.

16-38  4.  Except as otherwise provided in subsection 8, a perfected security

16-39  interest in fixtures has priority over a conflicting interest of an

16-40  encumbrancer or owner of the real property if the debtor has an interest of

16-41  record in or is in possession of the real property and:

16-42  (a) The security interest is a purchase-money security interest;

16-43  (b) The interest of the encumbrancer or owner arises before the goods

16-44  become fixtures; and

16-45  (c) The security interest is perfected by a fixture filing before the goods

16-46  become fixtures or within 20 days thereafter.

16-47  5.  A perfected security interest in fixtures has priority over a

16-48  conflicting interest of an encumbrancer or owner of the real property if:

17-1    (a) The debtor has an interest of record in the real property or is in

17-2  possession of the real property and the security interest:

17-3      (1) Is perfected by a fixture filing before the interest of the

17-4  encumbrancer or owner is of record; and

17-5      (2) Has priority over any conflicting interest of a predecessor in title

17-6  of the encumbrancer or owner;

17-7    (b) Before the goods become fixtures, the security interest is perfected

17-8  by any method permitted by this article and the fixtures are readily

17-9  removable:

17-10     (1) Factory or office machines;

17-11     (2) Equipment that is not primarily used or leased for use in the

17-12  operation of the real property; or

17-13     (3) Replacements of domestic appliances that are consumer goods;

17-14  (c) The conflicting interest is a lien on the real property obtained by

17-15  legal or equitable proceedings after the security interest was perfected by

17-16  any method permitted by this article; or

17-17  (d) The security interest is:

17-18     (1) Created in a manufactured home in a manufactured-home

17-19  transaction; and

17-20     (2) Perfected pursuant to a statute described in paragraph (b) of

17-21  subsection 1 of NRS 104.9311.

17-22  6.  A security interest in fixtures, whether or not perfected, has priority

17-23  over a conflicting interest of an encumbrancer or owner of the real property

17-24  if:

17-25  (a) The encumbrancer or owner has, in an authenticated record,

17-26  consented to the security interest or disclaimed an interest in the goods as

17-27  fixtures; or

17-28  (b) The debtor has a right to remove the goods as against the

17-29  encumbrancer or owner.

17-30  7.  The priority of the security interest under paragraph (b) of

17-31  subsection 6 continues for a reasonable time if the debtor’s right to remove

17-32  the goods as against the encumbrancer or owner terminates.

17-33  8.  A mortgage is a construction mortgage to the extent that it secures

17-34  an obligation incurred for the construction of an improvement on land,

17-35  including the acquisition cost of the land, if the recorded record so

17-36  indicates. Except as otherwise provided in subsections 5 and 6, a security

17-37  interest in fixtures is subordinate to a construction mortgage recorded

17-38  before the goods become fixtures if the goods become fixtures before the

17-39  completion of the construction. A mortgage has this priority to the same

17-40  extent as a construction mortgage to the extent that it is given to refinance a

17-41  construction mortgage.

17-42  9.  A perfected security interest in crops growing on real property has

17-43  priority over a conflicting interest of an encumbrancer or owner of the real

17-44  property if the debtor has an interest of record in or is in possession of the

17-45  real property.

17-46  Sec. 12.  NRS 104.9336 is hereby amended to read as follows:

17-47  104.9336  1.  In this section, “commingled goods” means goods that

17-48  are physically united with other goods in such a manner that their identity

17-49  is lost in a product or mass.

18-1    2.  A security interest does not exist in commingled goods as such.

18-2  However, a security interest may attach to a product or mass that results

18-3  when goods become commingled goods.

18-4    3.  If collateral becomes commingled goods, a security interest attaches

18-5  to the product or mass.

18-6    4.  If a security interest in collateral is perfected before the collateral

18-7  becomes commingled goods, the security interest that attaches to the

18-8  product or mass under subsection 3 is perfected.

18-9    5.  Except as otherwise provided in subsection 6, the other provisions

18-10  of this part determine the priority of a security interest that attaches to the

18-11  product or mass under subsection 3.

18-12  6.  If more than one security interest attaches to the product or mass

18-13  under subsection 3, the following rules determine priority:

18-14  (a) A security interest that is perfected under subsection 4 has priority

18-15  over a security interest that is unperfected at the time the collateral

18-16  becomes commingled goods.

18-17  (b) If more than one security interest is perfected under subsection 4,

18-18  the security interests rank equally in proportion to the value of the

18-19  collateral at the time it became commingled goods.

18-20  Sec. 13.  NRS 104.9406 is hereby amended to read as follows:

18-21  104.9406  1.  Subject to subsections 2 to 8, inclusive, an account

18-22  debtor on an account, chattel paper or a payment intangible may discharge

18-23  its obligation by paying the assignor until, but not after, the account debtor

18-24  receives a notification, authenticated by the assignor or the assignee, that

18-25  the amount due or to become due has been assigned and that payment is to

18-26  be made to the assignee. After receipt of the notification, the account

18-27  debtor may discharge its obligation by paying the assignee and may not

18-28  discharge the obligation by paying the assignor.

18-29  2.  Subject to subsection 8, notification is ineffective under
subsection 1:

18-30  (a) If it does not reasonably identify the rights assigned;

18-31  (b) To the extent that an agreement between an account debtor and a

18-32  seller of a payment intangible limits the account debtor’s duty to pay a

18-33  person other than the seller and the limitation is effective under law other

18-34  than this article; or

18-35  (c) At the option of an account debtor, if the notification notifies the

18-36  account debtor to make less than the full amount of any installment or

18-37  other periodic payment to the assignee, even if:

18-38     (1) Only a portion of the account, chattel paper or [general] payment

18-39  intangible has been assigned to that assignee;

18-40     (2) A portion has been assigned to another assignee; or

18-41     (3) The account debtor knows that the assignment to that assignee is

18-42  limited.

18-43  3.  Subject to subsection 8, if requested by the account debtor, an

18-44  assignee shall seasonably furnish reasonable proof that the assignment has

18-45  been made. Unless the assignee complies, the account debtor may

18-46  discharge its obligation by paying the assignor, even if the account debtor

18-47  has received a notification under subsection 1.

19-1    4.  Except as otherwise provided in subsection 5 and NRS 104.9407

19-2  and 104A.2303, and subject to subsection 8, a term in an agreement

19-3  between an account debtor and an assignor or in a promissory note is

19-4  ineffective to the extent that it:

19-5    (a) Prohibits, restricts or requires the consent of the account debtor or

19-6  person obligated on the promissory note to the assignment or transfer of, or

19-7  the creation, attachment, perfection or enforcement of a security interest in,

19-8  the account, chattel paper, payment intangible or promissory note; or

19-9    (b) Provides that the assignment or transfer, or the creation,

19-10  attachment, perfection or enforcement of the security interest may give rise

19-11  to a default, breach, right of recoupment, claim, defense, termination, right

19-12  of termination, or remedy under the account, chattel paper, payment

19-13  intangible or promissory note.

19-14  5.  Subsection 4 does not apply to the sale of a payment intangible or

19-15  promissory note.

19-16  6.  Subject to subsections 7 and 8, a rule of law, statute, or regulation,

19-17  that prohibits, restricts, or requires the consent of a government,

19-18  governmental body or official, or account debtor to the assignment or

19-19  transfer of, or creation of a security interest in, an account or chattel paper

19-20  is ineffective to the extent that the rule of law, statute or regulation:

19-21  (a) Prohibits, restricts, or requires the consent of the government,

19-22  governmental body or official, or account debtor to the assignment or

19-23  transfer of, or the creation, attachment, perfection, or enforcement of a

19-24  security interest in, the account or chattel paper; or

19-25  (b) Provides that the assignment or transfer, or the creation,

19-26  attachment, perfection, or enforcement of the security interest may give

19-27  rise to a default, breach, right of recoupment, claim, defense, termination,

19-28  right of termination, or remedy under the account or chattel paper.

19-29  7.  Subject to subsection 8, an account debtor may not waive or vary its

19-30  option under paragraph (c) of subsection 2.

19-31  8.  This section is subject to law other than this article which

19-32  establishes a different rule for an account debtor who is an individual and

19-33  who incurred the obligation primarily for personal, family or household

19-34  purposes.

19-35  9.  This section does not apply to an assignment of a health-care-

19-36  insurance receivable.

19-37  Sec. 14.  NRS 104.9407 is hereby amended to read as follows:

19-38  104.9407  1.  Except as otherwise provided in subsection 2, a term in

19-39  a lease agreement is ineffective to the extent that it:

19-40  (a) Prohibits, restricts, or requires the consent of a party to the lease to

19-41  the assignment or transfer, or the creation, attachment, perfection, or

19-42  enforcement of a security interest in an interest of a party under the lease

19-43  contract or in the lessor’s residual interest in the goods; or

19-44  (b) Provides that the assignment or transfer, or the creation,

19-45  attachment, perfection, or enforcement of the security interest may give

19-46  rise to a default, breach, right of recoupment, claim, defense, termination,

19-47  right of termination or remedy under the lease.

20-1    2.  Except as otherwise provided in subsection 7 of NRS 104A.2303, a

20-2  term described in paragraph (b) of subsection 1 is effective to the extent

20-3  that there is:

20-4    (a) A transfer by the lessee of the lessee’s right of possession or use of

20-5  the goods in violation of the term; or

20-6    (b) A delegation of a material performance of either party to the lease

20-7  contract in violation of the term.

20-8    3.  The creation, attachment, perfection, or enforcement of a security

20-9  interest in the lessor’s interest under the lease contract or the lessor’s

20-10  residual interest in the goods is not a transfer that materially impairs the

20-11  lessee’s prospect of obtaining return performance or materially changes the

20-12  duty of or materially increases the burden or risk imposed on the lessee

20-13  within the purview of subsection 4 of NRS 104A.2303 unless, and then

20-14  only to the extent that, enforcement results in a delegation of a material

20-15  performance of the lessor. Even in that event, the creation, attachment,

20-16  perfection and enforcement of the security interest remain effective.

20-17  Sec. 15.  NRS 104.9408 is hereby amended to read as follows:

20-18  104.9408  1.  Except as otherwise provided in subsection 2, a term in

20-19  a promissory note or in an agreement between an account debtor and a

20-20  debtor which relates to a health-care-insurance receivable or a general

20-21  intangible, including a contract, permit, license or franchise, and prohibits,

20-22  restricts or requires the consent of the person obligated on the promissory

20-23  note or the account debtor to, the assignment or transfer of, or creation,

20-24  attachment, or perfection of a security interest in, the promissory note,

20-25  health-care-insurance receivable or general intangible, is ineffective to the

20-26  extent that the term:

20-27  (a) Would impair the creation, attachment or perfection of a security

20-28  interest; or

20-29  (b) Provides that the assignment or transfer, or the creation, attachment

20-30  or perfection of the security interest may give rise to a default, breach, right

20-31  of recoupment, claim, defense, termination, right of termination or remedy

20-32  under the promissory note, health-care-insurance receivable or general

20-33  intangible.

20-34  2.  Subsection 1 applies to a security interest in a payment intangible or

20-35  promissory note only if the security interest arises out of a sale of the

20-36  payment intangible or promissory note.

20-37  3.  A rule of law, statute, or regulation that prohibits, restricts, or

20-38  requires the consent of a government, governmental body or official,

20-39  person obligated on a promissory note, or account debtor to the assignment

20-40  or transfer of, or creation of a security interest in, a promissory note,

20-41  health-care-insurance receivable or general intangible, including a contract,

20-42  permit, license or franchise between an account debtor and a debtor, is

20-43  ineffective to the extent that the rule of law, statute or regulation:

20-44  (a) Would impair the creation, attachment or perfection of a security

20-45  interest; or

20-46  (b) Provides that the assignment or transfer, or the creation, attachment

20-47  or perfection of the security interest may give rise to a default, breach, right

20-48  of recoupment, claim, defense, termination, right of termination or remedy

21-1  under the promissory note, health-care-insurance receivable or general

21-2  intangible.

21-3    4.  To the extent that a term in a promissory note or in an agreement

21-4  between an account debtor and a debtor which relates to a health-care-

21-5  insurance receivable or general intangible or a rule of law, statute, or

21-6  regulation described in subsection 3 would be effective under law other

21-7  than this article but is ineffective under subsection 1 or 3, the creation,

21-8  attachment or perfection of a security interest in the promissory note,

21-9  health-care-insurance receivable or general intangible:

21-10  (a) Is not enforceable against the person obligated on the promissory

21-11  note or the account debtor;

21-12  (b) Does not impose a duty or obligation on the person obligated on the

21-13  promissory note or the account debtor;

21-14  (c) Does not require the person obligated on the promissory note or the

21-15  account debtor to recognize the security interest, pay or render

21-16  performance to the secured party or accept payment or performance from

21-17  the secured party;

21-18  (d) Does not entitle the secured party to use or assign the debtor’s rights

21-19  under the promissory note, health-care-insurance receivable or general

21-20  intangible, including any related information or materials furnished to the

21-21  debtor in the transaction giving rise to the promissory note, health-care-

21-22  insurance receivable or general intangible;

21-23  (e) Does not entitle the secured party to use, assign, possess or have

21-24  access to any trade secrets or confidential information of the person

21-25  obligated on the promissory note or the account debtor; and

21-26  (f) Does not entitle the secured party to enforce the security interest in

21-27  the promissory note, health-care-insurance receivable or general intangible.

21-28  Sec. 16.  NRS 104.9409 is hereby amended to read as follows:

21-29  104.9409  1.  A term in a letter of credit or a rule of law, statute,

21-30  regulation, custom or practice applicable to the letter of credit which

21-31  prohibits, restricts or requires the consent of an applicant, issuer, or

21-32  nominated person to a beneficiary’s assignment of or creation of a security

21-33  interest in a letter-of-credit right is ineffective to the extent that the term or

21-34  rule of law, statute, regulation, custom or practice:

21-35  (a) Would impair the creation, attachment or perfection of a security

21-36  interest in the letter-of-credit right; or

21-37  (b) Provides that the assignment or the creation, attachment or

21-38  perfection of the security interest may give rise to a default, breach, right of

21-39  recoupment, claim, defense, termination, right of termination or remedy

21-40  under the letter-of-credit right.

21-41  2.  To the extent that a term in a letter of credit is ineffective under

21-42  subsection 1 but would be effective under law other than this article or a

21-43  custom or practice applicable to the letter of credit, to the transfer of a right

21-44  to draw or otherwise demand performance under the letter of credit, or to

21-45  the assignment of a right to proceeds of the letter of credit, the creation,

21-46  attachment or perfection of a security interest in the letter-of-credit right:

21-47  (a) Is not enforceable against the applicant, issuer, nominated person or

21-48  transferee beneficiary;

22-1    (b) Imposes no duties or obligations on the applicant, issuer, nominated

22-2  person or transferee beneficiary; and

22-3    (c) Does not require the applicant, issuer, nominated person or

22-4  transferee beneficiary to recognize the security interest, pay or render

22-5  performance to the secured party or accept payment or other performance

22-6  from the secured party.

22-7    Sec. 17.  NRS 104.9504 is hereby amended to read as follows:

22-8    104.9504  A financing statement sufficiently indicates the collateral

22-9  that it covers [only] if the financing statement provides:

22-10  1.  A description of the collateral pursuant to NRS 104.9108; or

22-11  2.  An indication that the financing statement covers all assets or all

22-12  personal property.

22-13  Sec. 18.  NRS 104.9509 is hereby amended to read as follows:

22-14  104.9509  1.  A person may file an initial financing statement,

22-15  amendment that adds collateral covered by a financing statement or

22-16  amendment that adds a debtor to a financing statement only if:

22-17  (a) The debtor authorizes the filing in an authenticated record; [or]

22-18  (b) The person holds an agricultural lien that has become effective at the

22-19  time of filing and the financing statement covers only collateral in which

22-20  he holds an agricultural lien[.] ; or

22-21  (c) Otherwise authorized by subsection 2 or 3.

22-22  2.  By authenticating or becoming bound as debtor by a security

22-23  agreement, a debtor or new debtor authorizes the filing of an initial

22-24  financing statement, and an amendment, covering:

22-25  (a) The collateral described in the security agreement; and

22-26  (b) Property that becomes collateral under paragraph (b) of subsection 1

22-27  of NRS 104.9315, whether or not the security agreement expressly covers

22-28  proceeds.

22-29  3.  A person may file an amendment other than an amendment that

22-30  adds collateral covered by a financing statement or an amendment that

22-31  adds a debtor to a financing statement only if:

22-32  (a) The secured party of record authorizes the filing; or

22-33  (b) The change is a termination statement for a financing statement as to

22-34  which the secured party of record has failed to file or send a termination

22-35  statement as required by subsection 1 or 3 of NRS 104.9513.

22-36  4.  If there is more than one secured party of record for a financing

22-37  statement, each secured party of record may authorize the filing of an

22-38  amendment under subsection 3.

22-39  Sec. 19.  NRS 104.9513 is hereby amended to read as follows:

22-40  104.9513  1.  A secured party shall cause the secured party of record

22-41  for a financing statement to file a termination statement for the financing

22-42  statement if the financing statement covers consumer goods and:

22-43  (a) There is no obligation secured by the collateral covered by the

22-44  financing statement and no commitment to make an advance, incur an

22-45  obligation or otherwise give value; or

22-46  (b) The debtor did not authorize the filing of the initial financing

22-47  statement.

22-48  2.  To comply with subsection 1, a secured party shall cause the

22-49  secured party of record to file the termination statement:

23-1    (a) Within 1 month after there is no obligation secured by the collateral

23-2  covered by the financing statement and no commitment to make an

23-3  advance, incur an obligation or otherwise give value; or

23-4    (b) If earlier, within 20 days after the secured party receives an

23-5  authenticated demand from a debtor.

23-6    3.  In cases not governed by subsection 1, within 20 days after a

23-7  secured party receives an authenticated demand from a debtor, the secured

23-8  party shall cause the secured party of record for a financing statement to

23-9  send to the debtor a termination statement for the financing statement or

23-10  file the termination statement in the filing office if:

23-11  (a) Except in the case of a financing statement covering accounts or

23-12  chattel paper that has been sold or goods that are the subject of a

23-13  consignment, there is no obligation secured by the collateral covered by the

23-14  financing statement and no commitment to make an advance, incur an

23-15  obligation or otherwise give value;

23-16  (b) The financing statement covers accounts or chattel paper that has

23-17  been sold but as to which the account debtor or other person obligated has

23-18  discharged its obligation;

23-19  (c) The financing statement covers goods that were the subject of a

23-20  consignment to the debtor but are not in the debtor’s possession; or

23-21  (d) The debtor did not authorize the filing of the initial financing

23-22  statement.

23-23  4.  Except as otherwise provided in NRS 104.9510, upon the filing of a

23-24  termination statement with the filing office[,the] :

23-25  (a) The financing statement to which the termination statement relates

23-26  ceases to be effective.

23-27  (b) For the purposes of subsection 7 of NRS 104.9519, subsection 1 of

23-28  NRS 104.9522 and subsection 3 of NRS 104.9523, a financing statement

23-29  that indicates that the debtor is a transmitting utility causes the

23-30  effectiveness of the financing statement to lapse.

23-31  Sec. 20.  NRS 104.9519 is hereby amended to read as follows:

23-32  104.9519  1.  For each record filed in a filing office, the filing office

23-33  shall:

23-34  (a) Assign a unique number to the filed record;

23-35  (b) Create a record that bears the number assigned to the filed record

23-36  and the date and time of filing;

23-37  (c) Maintain the filed record for public inspection; and

23-38  (d) Index the filed record in accordance with subsections 3, 4 and 5.

23-39  2.  Except as otherwise provided in subsection 9, a file number

23-40  assigned after January 1, 2002, may include a digit that:

23-41  (a) Is mathematically derived from or related to the other digits of the

23-42  file number; and

23-43  (b) Enables the filing office to detect whether a number communicated

23-44  as the file number includes a single-digit or transpositional error.

23-45  3.  Except as otherwise provided in subsections 4 and 5, the filing

23-46  office shall:

23-47  (a) Index an initial financing statement according to the name of the

23-48  debtor and index all filed records relating to the initial financing statement

24-1  in a manner that associates with one another an initial financing statement

24-2  and all filed records relating to the initial financing statement; and

24-3    (b) Index a record that provides a name of a debtor which was not

24-4  previously provided in the financing statement to which the record relates

24-5  also according to the name that was not previously provided.

24-6    4.  If a financing statement is filed as a fixture filing or covers as-

24-7  extracted collateral or timber to be cut, it must be filed for record and the

24-8  filing office shall index it:

24-9    (a) Under the names of the debtor and of each owner of record shown

24-10  on the financing statement as if they were the mortgagors under a mortgage

24-11  of the real property described; and

24-12  (b) To the extent that the law of this state provides for indexing of

24-13  mortgages under the name of the mortgagee, under the name of the secured

24-14  party as if the secured party were the mortgagee thereunder.

24-15  5.  If a financing statement is filed as a fixture filing or covers as-

24-16  extracted collateral or timber to be cut, the filing office shall index an

24-17  assignment filed under subsection 1 of NRS 104.9514 or an amendment

24-18  filed under subsection 2 of that section:

24-19  (a) Under the name of the assignor as grantor; and

24-20  (b) To the extent that the law of this state provides for indexing the

24-21  assignment of a mortgage of real property under the name of the assignee,

24-22  under the name of the assignee.

24-23  6.  The filing office shall maintain a capability:

24-24  (a) To retrieve a record by the name of the debtor and:

24-25     (1) If the filing office is described in paragraph (a) of subsection 1 of

24-26  NRS 104.9501, by the file number assigned to the initial financing

24-27  statement to which the record relates and the date and time that the record

24-28  was filed or recorded; or

24-29     (2) If the filing office is described in paragraph (b) of subsection 1 of

24-30  NRS 104.9501, by the file number assigned to the initial financing

24-31  statement to which the record relates; and

24-32  (b) To associate and retrieve with one another an initial financing

24-33  statement and each filed record relating to the initial financing statement.

24-34  7.  The filing office may not remove a debtor’s name from the index

24-35  until 1 year after the effectiveness of a financing statement naming the

24-36  debtor lapses under NRS 104.9515 with respect to all secured parties of

24-37  record.

24-38  8.  The filing office shall perform the acts required by subsections 1 to

24-39  5, inclusive, within a reasonable time and in the manner prescribed by

24-40  filing-office rule.

24-41  9.  [Subsection 2 does] Subsections 2 and 8 do not apply to a filing

24-42  office described in paragraph (a) of subsection 1 of NRS 104.9501.

24-43  Sec. 21.  NRS 104.9525 is hereby amended to read as follows:

24-44  104.9525  1.  Except as otherwise provided in subsection 5, the fee for

24-45  filing and indexing a record under this part, other than an initial financing

24-46  statement of the kind described in subsection [3] 2 of NRS 104.9502, is:

24-47  (a) Twenty dollars if the record is communicated in writing and consists

24-48  of one or two pages;

25-1    (b) Forty dollars if the record is communicated in writing and consists

25-2  of more than two pages, and $1 for each page over 20 pages;

25-3    (c) Ten dollars if the record is communicated by another medium

25-4  authorized by filing-office rule; and

25-5    (d) One dollar for each additional debtor, trade name or reference to

25-6  another name under which business is done.

25-7    2.  The filing officer may charge and collect $1 for each page of copy

25-8  or record of filings produced by him at the request of any person.

25-9    3.  Except as otherwise provided in subsection 5, the fee for filing and

25-10  indexing an initial financing statement of the kind described in subsection

25-11  3 of NRS 104.9502 is:

25-12  (a) Forty dollars if the financing statement indicates that it is filed in

25-13  connection with a public-finance transaction; and

25-14  (b) Twenty dollars if the financing statement indicates that it is filed in

25-15  connection with a manufactured-home transaction.

25-16  4.  The fee for responding to a request for information from the filing

25-17  office, including for issuing a certificate showing whether there is on file

25-18  any financing statement naming a particular debtor, is:

25-19  (a) Twenty dollars if the request is communicated in writing; and

25-20  (b) Fifteen dollars if the request is communicated by another medium

25-21  authorized by filing-office rule.

25-22  5.  This section does not require a fee with respect to a mortgage that is

25-23  effective as a financing statement filed as a fixture filing or as a financing

25-24  statement covering as-extracted collateral or timber to be cut under

25-25  subsection 3 of NRS 104.9502. However, the fees for recording and

25-26  satisfaction which otherwise would be applicable to the mortgage apply.

25-27  Sec. 22.  NRS 104.9608 is hereby amended to read as follows:

25-28  104.9608  1.  If a security interest or agricultural lien secures payment

25-29  or performance of an obligation, the following rules apply:

25-30  (a) A secured party shall apply or pay over for application the cash

25-31  proceeds of collection or enforcement under [this section] NRS 104.9607

25-32  in the following order to:

25-33     (1) The reasonable expenses of collection and enforcement and, to

25-34  the extent provided for by agreement and not prohibited by law, reasonable

25-35  attorney’s fees and legal expenses incurred by the secured party;

25-36     (2) The satisfaction of obligations secured by the security interest or

25-37  agricultural lien under which the collection or enforcement is made; and

25-38     (3) The satisfaction of obligations secured by any subordinate

25-39  security interest in or other lien on the collateral subject to the security

25-40  interest or agricultural lien under which the collection or enforcement is

25-41  made if the secured party receives an authenticated demand for proceeds

25-42  before distribution of the proceeds is completed.

25-43  (b) If requested by a secured party, a holder of a subordinate security

25-44  interest or other lien shall furnish reasonable proof of the interest or lien

25-45  within a reasonable time. Unless the holder complies, the secured party

25-46  need not comply with the holder’s demand under subparagraph (3) of

25-47  paragraph (a).

25-48  (c) A secured party need not apply or pay over for application noncash

25-49  proceeds of collection and enforcement under [this section] NRS 104.9607

26-1  unless the failure to do so would be commercially unreasonable. A secured

26-2  party that applies or pays over for application noncash proceeds shall do so

26-3  in a commercially reasonable manner.

26-4    (d) A secured party shall account to and pay a debtor for any surplus,

26-5  and the obligor is liable for any deficiency.

26-6    2.  If the underlying transaction is a sale of accounts, chattel paper,

26-7  payment intangibles or promissory notes, the debtor is not entitled to any

26-8  surplus, and the obligor is not liable for any deficiency.

26-9    Sec. 23.  NRS 104.9613 is hereby amended to read as follows:

26-10  104.9613  Except in a consumer-goods transaction, the following rules

26-11  apply:

26-12  1.  The contents of a notification of disposition are sufficient if the

26-13  notification:

26-14  (a) Describes the debtor and the secured party;

26-15  (b) Describes the collateral that is the subject of the intended

26-16  disposition;

26-17  (c) States the method of intended disposition;

26-18  (d) States that the debtor is entitled to an accounting of the unpaid

26-19  indebtedness and states the charge, if any, for an accounting; and

26-20  (e) States the time and place of a public [sale] disposition or the time

26-21  after which any other disposition is to be made.

26-22  2.  Whether the contents of a notification that lacks any of the

26-23  information specified in subsection 1 are nevertheless sufficient is a

26-24  question of fact.

26-25  3.  The contents of a notification providing substantially the

26-26  information specified in subsection 1 are sufficient, even if the notification

26-27  includes:

26-28  (a) Information not specified by that subsection; or

26-29  (b) Minor errors that are not seriously misleading.

26-30  4.  A particular phrasing of the notification is not required.

26-31  5.  The following form of notification and the form appearing in

26-32  subsection 3 of NRS 104.9614, when completed, each provides sufficient

26-33  information:

26-34  NOTIFICATION OF DISPOSITION OF COLLATERAL

26-35                       To:      [Name of debtor, obligor, or other person to

26-36  which the notification is sent]

26-37                       From:  [Name, address, and telephone number of

26-38  secured party]

26-39                    Name of Debtor(s):[Include only if debtor(s) are not an addressee]

 

26-40  [For a public disposition:]

26-41  We will sell [or lease or license, as applicable] the [describe collateral]

26-42  [to the highest qualified bidder] in public as follows:

 

26-43  Day and Date: .........

26-44  Time: ......................

26-45  Place: ......................

 

26-46  [For a private disposition:]

27-1    We will sell [or lease or license, as applicable] the [describe collateral]

27-2  privately sometime after [day and date].

 

27-3    You are entitled to an accounting of the unpaid indebtedness secured by

27-4  the property that we intend to sell [or lease or license, as applicable] [for a

27-5  charge of $___]. You may request an accounting by calling us at

27-6  [telephone number].

27-7    Sec. 24.  NRS 104.9615 is hereby amended to read as follows:

27-8    104.9615  1.  A secured party shall apply or pay over for application

27-9  the cash proceeds of disposition under NRS 104.9610 in the following

27-10  order to:

27-11  (a) The reasonable expenses of retaking, holding, preparing for

27-12  disposition, processing and disposing, and, to the extent provided for by

27-13  agreement and not prohibited by law, reasonable attorney’s fees and legal

27-14  expenses incurred by the secured party;

27-15  (b) The satisfaction of obligations secured by the security interest or

27-16  agricultural lien under which the disposition is made;

27-17  (c) The satisfaction of obligations secured by any subordinate security

27-18  interest in or other subordinate lien on the collateral if:

27-19     (1) The secured party receives from the holder of the subordinate

27-20  security interest or other lien an authenticated demand for proceeds before

27-21  distribution of the proceeds is completed; and

27-22     (2) In a case in which a consignor has an interest in the collateral, the

27-23  subordinate security interest or other lien is senior to the interest of the

27-24  consignor; and

27-25  (d) A secured party that is a consignor of the collateral if the secured

27-26  party receives from the consignor an authenticated demand for proceeds

27-27  before distribution of the proceeds is completed.

27-28  2.  If requested by a secured party, a holder of a subordinate security

27-29  interest or other lien shall furnish reasonable proof of the interest or lien

27-30  within a reasonable time. Unless the holder does so, the secured party need

27-31  not comply with the holder’s demand under paragraph (c) of subsection 1.

27-32  3.  A secured party need not apply or pay over for application noncash

27-33  proceeds of disposition under [this section] NRS 104.9610 unless the

27-34  failure to do so would be commercially unreasonable. A secured party that

27-35  applies or pays over for application noncash proceeds shall do so in a

27-36  commercially reasonable manner.

27-37  4.  If the security interest under which a disposition is made secures

27-38  payment or performance of an obligation, after making the payments and

27-39  applications required by subsection 1 and permitted by subsection 3:

27-40  (a) Unless paragraph (d) of subsection 1 requires the secured party to

27-41  apply or pay over cash proceeds to a consignor, the secured party shall

27-42  account to and pay a debtor for any surplus; and

27-43  (b) The obligor is liable for any deficiency.

27-44  5.  If the underlying transaction is a sale of accounts, chattel paper,

27-45  payment intangibles or promissory notes:

27-46  (a) The debtor is not entitled to any surplus; and

27-47  (b) The obligor is not liable for any deficiency.

28-1    6.  The surplus or deficiency following a disposition is calculated based

28-2  on the amount of proceeds that would have been realized in a disposition

28-3  complying with this part to a transferee other than the secured party, a

28-4  person related to the secured party or a secondary obligor if:

28-5    (a) The transferee in the disposition is the secured party, a person

28-6  related to the secured party or a secondary obligor; and

28-7    (b) The amount of proceeds of the disposition is significantly below the

28-8  range of proceeds that a complying disposition to a person other than the

28-9  secured party, a person related to the secured party or a secondary obligor

28-10  would have brought.

28-11  7.  A secured party that receives cash proceeds of a disposition in good

28-12  faith and without knowledge that the receipt violates the rights of the

28-13  holder of a security interest or other lien that is not subordinate to the

28-14  security interest or agricultural lien under which the disposition is made:

28-15  (a) Takes the cash proceeds free of the security interest or other lien;

28-16  (b) Is not obligated to apply the proceeds of the disposition to the

28-17  satisfaction of obligations secured by the security interest or other lien; and

28-18  (c) Is not obligated to account to or pay the holder of the security

28-19  interest or other lien for any surplus.

28-20  Sec. 25.  NRS 104.9625 is hereby amended to read as follows:

28-21  104.9625  1.  If it is established that a secured party is not proceeding

28-22  in accordance with this article, a court may order or restrain collection,

28-23  enforcement or disposition of collateral on appropriate terms and

28-24  conditions.

28-25  2.  Subject to subsections 3, 4 and 6, a person is liable for damages in

28-26  the amount of any loss caused by a failure to comply with this article. Loss

28-27  caused by a failure to comply [with a request under NRS 104.9210] may

28-28  include loss resulting from the debtor’s inability to obtain, or increased

28-29  costs of, alternative financing.

28-30  3.  Except as otherwise provided in NRS 104.9628:

28-31  (a) A person that, at the time of the failure, was a debtor, was an obligor

28-32  or held a security interest in or other lien on the collateral may recover

28-33  damages under subsection 2 for its loss; and

28-34  (b) If the collateral is consumer goods, a person that was a debtor or a

28-35  secondary obligor at the time a secured party failed to comply with this

28-36  part may recover for that failure in any event an amount not less than the

28-37  credit service charge plus 10 percent of the principal amount of the

28-38  obligation or the time-price differential plus 10 percent of the cash price.

28-39  4.  A debtor whose deficiency is eliminated under NRS 104.9626 may

28-40  recover damages for the loss of any surplus. However, a debtor or

28-41  secondary obligor whose deficiency is eliminated or reduced under that

28-42  section may not otherwise recover under subsection 2 for noncompliance

28-43  with the provisions of this part relating to collection, enforcement,

28-44  disposition or acceptance.

28-45  5.  In addition to any damages recoverable under subsection 2, the

28-46  debtor, consumer obligor or person named as a debtor in a filed record, as

28-47  applicable, may recover $500 in each case from a person that:

28-48  (a) Fails to comply with NRS 104.9208;

28-49  (b) Fails to comply with NRS 104.9209;

29-1    (c) Files a record that he is not entitled to file under subsection 1 of

29-2  NRS 104.9509;

29-3    (d) Fails to cause the secured party of record to file or send a

29-4  termination statement as required by subsection 1 or 3 of NRS 104.9513;

29-5    (e) Fails to comply with paragraph (a) of subsection 2 of NRS 104.9616

29-6  and whose failure is part of a pattern, or consistent with a practice, of

29-7  noncompliance; or

29-8    (f) Fails to comply with paragraph (b) of subsection 2 of NRS 104.9616.

29-9    6.  A debtor or consumer obligor may recover damages under

29-10  subsection 2 and, in addition, $500 in each case from a person that, without

29-11  reasonable cause, fails to comply with a request under NRS 104.9210. A

29-12  recipient of a request under that section which never claimed an interest in

29-13  the collateral or obligations that are the subject of a request under that

29-14  section has a reasonable excuse for failure to comply with the request

29-15  within the meaning of this subsection.

29-16  7.  If a secured party fails to comply with a request regarding a list of

29-17  collateral or a statement of account under NRS 104.9210, the secured party

29-18  may claim a security interest only as shown in the list or statement

29-19  included in the request as against a person that is reasonably misled by the

29-20  failure.

29-21  Sec. 26.  NRS 104.9705 is hereby amended to read as follows:

29-22  104.9705  1.  If action, other than the filing of a financing statement,

29-23  is taken before July 1, 2001, and the action would have resulted in priority

29-24  of a security interest over the rights of a person that becomes a lien creditor

29-25  had the security interest become enforceable before that date, the action is

29-26  effective to perfect a security interest that attaches under this article as

29-27  amended within 1 year after that date. An attached security interest

29-28  becomes unperfected 1 year after July 1, 2001, unless the security interest

29-29  becomes a perfected security interest under this article as amended before

29-30  the expiration of that period.

29-31  2.  The filing of a financing statement before July 1, 2001, is effective

29-32  to perfect a security interest to the extent the filing would satisfy the

29-33  applicable requirements for perfection under this article as amended.

29-34  3.  This article as amended does not render ineffective an effective

29-35  financing statement that was filed before July 1, 2001, and satisfied the

29-36  applicable requirements for perfection under the law of the jurisdiction

29-37  governing perfection as provided in NRS 104.9103 as that section read at

29-38  the time of filing. However, except as otherwise provided in subsections 4

29-39  and 5 and NRS 104.9706, the financing statement ceases to be effective at

29-40  the earlier of:

29-41  (a) The time the financing statement would have ceased to be effective

29-42  under the law of the jurisdiction in which it is filed; or

29-43  (b) June 30, 2006.

29-44  4.  The filing of a continuation statement on or after July 1, 2001, does

29-45  not continue the effectiveness of the financing statement filed before that

29-46  date. However, upon the timely filing of a continuation statement after that

29-47  date and in accordance with the law of the jurisdiction governing

29-48  perfection as provided in part 3, the effectiveness of a financing statement

30-1  filed in the same office in that jurisdiction before that date continues for the

30-2  period provided by the law of that jurisdiction.

30-3    5.  Paragraph (b) of subsection 3 applies to a financing statement that

30-4  was filed against a transmitting utility before July 1, 2001, and satisfied the

30-5  applicable requirements for perfection under the law of the jurisdiction

30-6  governing perfection as provided in NRS 104.9103 as that section read at

30-7  the time of filing only to the extent that part 3 provides that the law of a

30-8  jurisdiction other than the jurisdiction in which the financing statement is

30-9  filed governs perfection of a security interest in collateral covered by the

30-10  financing statement.

30-11  6.  A financing statement that includes a financing statement filed

30-12  before July 1, 2001, and a continuation statement filed after that date are

30-13  effective only to the extent that the financing statement satisfies the

30-14  requirements of part 5 for an initial financing statement.

30-15  Sec. 27.  This act becomes effective at 12:01 a.m. on July 1, 2001.

 

30-16  H