sb474_EN

Senate Bill No. 474–Committee on Judiciary

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:

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

new section to read as follows:

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

financing statement filed before July 1, 2001.

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

terminate the effectiveness of, or otherwise amend the information

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

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

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

terminated in accordance with the law of the jurisdiction in which the

financing statement is filed.

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

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

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

2001, if:

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

filed in the office specified in NRS 104.9501;

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

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

statement that satisfies the requirements of subsection 3 of NRS

104.9706; or

amended and satisfies the requirements of subsection 3 of NRS 104.9706

is filed in the office specified in NRS 104.9501.

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

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

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

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

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

statement filed in this state may be terminated on or after July 1, 2001,

by filing a termination statement in the office in which the pre-effective

-date financing statement is filed, unless an initial financing statement

that satisfies the requirements of subsection 3 of NRS 104.9706 has been

filed in the office specified by the law of the jurisdiction governing

perfection as provided in part 3.

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

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

transaction bears a reasonable relation to this state and also to another state

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

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

chapter applies to transactions bearing an appropriate relation to this state.

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

applicable law, that provision governs and a contrary agreement is

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

laws rules) so specified:

Rights of creditors against sold goods. NRS 104.2402.

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

104A.2106.

Applicability of the article on bank deposits and collections. NRS

104.4102.

Letters of credit. NRS 104.5116.

Applicability of the article on investment securities. NRS 104.8110.

Law governing perfection, the effect of perfection or nonperfection

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

104.9301 to 104.9307, inclusive.

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

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

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

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

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

provisions of the immediately preceding section may on making and

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

from the seller if:

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

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

contract; or

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

of the first installment on their price.

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

vests upon acquisition of a special property even if the seller has not

then repudiated or failed to deliver.

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

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

to the contract for sale.

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

104.9102 1. In this article:

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

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

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

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

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

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

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

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

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

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

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

state, governmental unit of a state, or person licensed or authorized to

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

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

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

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

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

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

information contained on or for use with the card.

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

pay a negotiable instrument, even if the instrument constitutes part of

chattel paper.

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

(1) Authenticated by a secured party;

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

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

and

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

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

in farm products:

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

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

farming operation; or

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

farming operation;

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

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

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

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

operation; and

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

of the personal property.

(f) “As-extracted collateral” means:

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

that:

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

extraction; and

(II) Attaches to the minerals as extracted; or

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

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

extraction.

(g) “Authenticate” means:

(1) To sign; or

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

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

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

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

banking. The term includes savings banks, savings and loan associations,

credit unions and trust companies.

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

accounts or the like.

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

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

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

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

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

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

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

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

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

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

arising out of the use of a credit or charge card or information

contained on or for use with the card. If a transaction is evidenced [both

by a security agreement or lease and] by records that include an

instrument or series of instruments, the group of records taken together

constitutes chattel paper. As used in this paragraph, “monetary

obligation” means a monetary obligation secured by the goods or owed

under a lease of the goods and includes a monetary obligation with

respect to software used in the goods.

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

agricultural lien. The term includes:

(1) Proceeds to which a security interest attaches;

(2) Accounts, chattel paper, payment intangibles and promissory

notes that have been sold; and

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

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

to which:

(1) The claimant is an organization; or

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

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

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

the death of a natural person.

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

commodity intermediary in which a commodity contract is carried for a

commodity customer.

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

option on a commodity futures contract, a commodity option or another

contract if the contract or option is:

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

designated as a contract market for such a contract pursuant to federal

commodities laws; or

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

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

commodity customer.

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

intermediary carries a commodity contract on its books.

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

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

commodities law; or

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

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

contract market pursuant to federal commodities law.

(r) “Communicate” means:

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

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

sending and receiving the record; or

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

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

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

consignment.

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

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

(1) The merchant:

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

the person making delivery;

(II) Is not an auctioneer; and

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

engaged in selling the goods of others;

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

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

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

and

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

obligation.

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

consignment.

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

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

primarily for personal, family or household purposes.

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

extent that:

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

family or household purposes; and

(2) A security interest in consumer goods or in consumer goods and

software that is held or acquired primarily for personal, family or

household purposes secures the obligation.

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

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

for personal, family or household purposes.

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

natural person incurs an obligation primarily for personal, family or

household purposes; a security interest secures the obligation; and the

collateral is held or acquired primarily for personal, family or household

purposes. The term includes consumer-goods transactions.

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

which:

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

which it relates; and

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

continue the effectiveness of, the identified financing statement.

(bb) “Debtor” means:

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

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

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

promissory notes; or

(3) A consignee.

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

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

investment property or accounts evidenced by an instrument.

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

described in subsection 2 of NRS 104.7201.

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

record or records consisting of information stored in an electronic

medium.

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

real property. The term includes mortgages and other liens on real

property.

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

consumer goods.

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

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

are:

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

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

(II) Aquatic goods produced in aquacultural operations;

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

aquacultural operations;

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

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

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

fattening, grazing, or any other farming, livestock, or aquacultural

operation.

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

statement pursuant to subsection 1 of NRS 104.9519.

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

place to file a financing statement.

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

104.9526.

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

initial financing statement and any filed record relating to the initial

financing statement.

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

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

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

covering goods of a transmitting utility which are or are to become

fixtures.

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

real property that an interest in them arises under real property law.

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

in action, other than accounts, chattel paper, commercial tort claims,

deposit accounts, documents, goods, instruments, investment property,

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

minerals before extraction. The term includes payment intangibles and

software.

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

reasonable commercial standards of fair dealing.

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

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

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

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

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

also includes a computer program embedded in goods and any supporting

information provided in connection with a transaction relating to the

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

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

of the goods, a person acquires a right to use the program in connection

with the goods. The term does not include a computer program embedded

in goods that consist solely of the medium in which the program is

embedded. The term also does not include accounts, chattel paper,

commercial tort claims, deposit accounts, documents, general intangibles,

instruments, investment property, letter-of-credit rights, letters of credit,

money, or oil, gas or other minerals before extraction.

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

county, parish, municipality, or other unit of the government of the United

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

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

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

the United States.

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

under a policy of insurance which is a right to payment of a monetary

obligation for health-care goods or services provided.

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

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

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

business is transferred by delivery with any necessary endorsement or

assignment. The term does not include investment property, letters of

credit or writings that evidence a right to payment arising out of the use of

a credit or charge card or information contained on or for use with the

card.

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

(1) Are leased by a person as lessor;

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

contract of service;

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

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

consumed in a business.

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

uncertificated, security entitlement, securities account, commodity

contract, or commodity account.

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

organization, means the jurisdiction under whose law the organization is

organized.

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

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

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

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

a letter of credit.

(zz) “Lien creditor” means:

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

attachment, levy or the like;

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

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

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

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

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

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

more square feet, and which is built on a permanent chassis and designed

to be used as a dwelling with or without a permanent foundation when

connected to the required utilities, and includes the plumbing, heating, air

-conditioning and electrical systems contained therein. The term includes

any structure that meets all of the requirements of this paragraph except

the size requirements and with respect to which the manufacturer

voluntarily files a certification required by the United States Secretary of

Housing and Urban Development and complies with the standards

established under Title 42 of the United States Code.

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

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

home, other than a manufactured home held as inventory; or

(2) In which a manufactured home, other than a manufactured home

held as inventory, is the primary collateral.

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

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

transaction.

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

under subsection 4 of NRS 104.9203 by a security agreement previously

entered into by another person.

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

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

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

obligation substituted for another obligation.

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

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

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

owes payment or other performance of the obligation, has provided

property other than the collateral to secure payment or other performance

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

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

an issuer or a nominated person under a letter of credit.

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

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

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

104.9203.

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

account debtor’s principal obligation is a monetary obligation.

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

(1) His spouse;

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

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

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

spouse who shares the same home with him.

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

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

common control with the organization;

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

with respect to, the organization;

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

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

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

or (3); or

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

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

with that person.

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

104.9609, the following property:

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

other disposition of collateral;

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

(3) Rights arising out of collateral;

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

loss, nonconformity, or interference with the use of, defects or

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

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

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

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

collateral.

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

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

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

received for deposit a sum of money or funds.

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

includes the terms on which the secured party is willing to accept

collateral in full or partial satisfaction of the obligation it secures pursuant

to NRS 104.9620, 104.9621 and 104.9622.

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

connection with which:

(1) Debt securities are issued;

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

maturity of at least 20 years; and

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

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

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

governmental unit of a state.

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

other value given by a secured party, means pursuant to the secured

party’s

obligation, whether or not a subsequent event of default or other event not

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

party from its obligation.

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

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

tangible medium or which is stored in an electronic or other medium and

is retrievable in perceivable form.

(rrr) “Registered organization” means an organization organized solely

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

state or the United States must maintain a public record showing the

organization to have been organized.

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

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

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

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

either.

(ttt) “Secured party” means:

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

for under a security agreement, whether or not any obligation to be

secured is outstanding;

(2) A person that holds an agricultural lien;

(3) A consignor;

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

promissory notes have been sold;

(5) A trustee, indenture trustee, agent, collateral agent or other

representative in whose favor a security interest or agricultural lien is

created or provided for; or

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

104.2401, 104.2505, subsection 3 of NRS 104.2711, NRS 104.4210,

104.5118 or subsection 5 of NRS 104A.2508.

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

for a security interest.

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

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

other usual means of communication, with postage or cost of transmission

provided for, addressed to any address reasonable under the

circumstances; or

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

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

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

information provided in connection with a transaction relating to the

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

in goods unless the goods are a computer or computer peripheral.

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

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

or insular possession subject to the jurisdiction of the United States.

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

secondary obligation that supports the payment or performance of an

account, chattel paper, document, general intangible, instrument or

investment property.

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

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

medium.

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

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

which it relates; and

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

identified financing statement is no longer effective.

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

business of:

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

(2) Transmitting communications electrically, electromagnetically or

by light;

(3) Transmitting goods by pipeline;

(4) Providing sewerage; or

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

or water.

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

“Applicant.” NRS 104.5102.

“Beneficiary.” NRS 104.5102.

“Broker.” NRS 104.8102.

“Certificated security.” NRS 104.8102.

“Check.” NRS 104.3104.

“Clearing corporation.” NRS 104.8102.

“Contract for sale.” NRS 104.2106.

“Customer.” NRS 104.4104.

“Entitlement holder.” NRS 104.8102.

“Financial asset.” NRS 104.8102.

“Holder in due course.” NRS 104.3302.

“Issuer.” NRS 104.5102.

“Lease.” NRS 104A.2103.

“Lease agreement.” NRS 104A.2103.

“Lease contract.” NRS 104A.2103.

“Leasehold interest.” NRS 104A.2103.

“Lessee.” NRS 104A.2103.

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

“Lessor.” NRS 104A.2103.

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

“Letter of credit.” NRS 104.5102.

“Merchant.” NRS 104.2104.

“Negotiable instrument.” NRS 104.3104.

“Nominated person.” NRS 104.5102.

“Note.” NRS 104.3104.

“Proceeds of a letter of credit.” NRS 104.5114.

“Prove.” NRS 104.3103.

“Sale.” NRS 104.2106.

“Securities account.” NRS 104.8501.

“Securities intermediary.” NRS 104.8102.

“Security.” NRS 104.8102.

“Security certificate.” NRS 104.8102.

“Security entitlement.” NRS 104.8102.

“Uncertificated security.” NRS 104.8102.

3. Article 1 contains general definitions and principles of construction

and interpretation applicable throughout this article.

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

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

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

maintained;

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

record that the bank will comply with instructions originated by the

secured party directing disposition of the funds in the deposit account

without further consent by the debtor; or

deposit account.

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

the debtor retains the right to direct the disposition of funds from the

deposit account.

Sec. 6. NRS 104.9109 is hereby amended to read as follows:

104.9109 1. Except as otherwise provided in subsections 3 and 4,

this article applies to:

(a) A transaction, regardless of its form, that creates a security interest

in personal property or fixtures by contract;

(b) An agricultural lien;

notes;

(d) A consignment;

(e) A security interest arising under NRS 104.2401, 104.2505,

subsection 3 of NRS 104.2711 [,] or subsection 5 of NRS 104A.2508, as

provided in NRS 104.9110; and

(f) A security interest arising under NRS 104.4210 or 104.5118.

2. The application of this article to a security interest in a secured

obligation is not affected by the fact that the obligation is itself secured by

a transaction or interest to which this article does not apply.

3. This article does not apply to the extent that:

(a) A statute, regulation or treaty of the United States preempts this

article; or

(b) [Another statute of this state expressly governs the creation,

perfection, priority or enforcement of a security interest created by this

state or a governmental unit of this state;

of another state or a foreign country, other than a statute generally

applicable to security interests, expressly governs creation, perfection,

priority, or enforcement of a security interest created by the state, country,

or governmental unit; or

(d)] The rights of a transferee beneficiary or nominated person under a

letter of credit are independent and superior under NRS 104.5114.

4. This article does not apply to:

(a) A landlord’s lien, other than an agricultural lien;

(b) A lien, other than an agricultural lien, given by statute or other rule

of law for services or materials, but NRS 104.9333 applies with respect to

priority of the lien;

an employee;

(d) A sale of accounts, chattel paper, payment intangibles or promissory

notes as part of a sale of the business out of which they arose;

(e) An assignment of accounts, chattel paper, payment intangibles or

promissory notes which is for the purpose of collection only;

(f) An assignment of a right to payment under a contract to an assignee

that is also obligated to perform under the contract;

(g) An assignment of a single account, payment intangible or

promissory note to an assignee in full or partial satisfaction of a

preexisting indebtedness;

(h) A transfer of an interest in or an assignment of a claim under a

policy of insurance, other than an assignment by or to a health-care

provider of a health-care-insurance receivable and any subsequent

assignment of the right to payment, but NRS 104.9315 and 104.9322

apply with respect to proceeds and priorities in proceeds;

(i) An assignment of a right represented by a judgment, other than a

judgment taken on a right to payment that was collateral;

(j) A right of recoupment or set-off, but:

(1) NRS 104.9340 applies with respect to the effectiveness of rights

of recoupment or set-off against deposit accounts; and

(2) NRS 104.9404 applies with respect to defenses or claims of an

account debtor;

(k) The creation or transfer of an interest in or lien on real property,

including a lease or rents thereunder, except to the extent that provision is

made for:

(1) Liens on real property in NRS 104.9203 and 104.9308;

(2) Fixtures in NRS 104.9334;

(3) Fixture filings in NRS 104.9501, 104.9502, 104.9512, 104.9516

and 104.9519; and

(4) Security agreements covering personal and real property in NRS

104.9604;

(l) An assignment of a claim arising in tort, other than a commercial tort

claim, but NRS 104.9315 and 104.9322 apply with respect to proceeds and

priorities in proceeds; [or]

(m) An assignment of a deposit account in a consumer transaction, but

NRS 104.9315 and 104.9322 apply with respect to proceeds and priorities

in proceeds [.] ; or

(n) A transfer by a government or governmental unit.

Sec. 7. NRS 104.9210 is hereby amended to read as follows:

104.9210 1. In this section:

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

(d).

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

debtor requesting that the recipient provide an accounting of the unpaid

obligations secured by collateral and reasonably identifying the transaction

or relationship that is the subject of the request.

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

the debtor believes to be the collateral securing an obligation and

reasonably identifying the transaction or relationship that is the subject of

the request.

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

authenticated by a debtor requesting that the recipient approve or correct a

statement indicating what the debtor believes to be the aggregate amount

of unpaid obligations secured by collateral as of a specified date and

reasonably identifying the transaction or relationship that is the subject of

the request.

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

buyer of accounts, chattel paper, payment intangibles, or promissory notes

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

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

sending to the debtor an accounting; and

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

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

debtor an approval or correction.

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

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

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

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

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

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

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

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

record:

(a) Disclaiming any interest in the collateral; and

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

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

collateral.

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

regarding a statement of account, claims no interest in the obligations

when it receives the request, and claimed an interest in the obligations at

an earlier time shall comply with the request within 14 days after receipt

by sending to the debtor an authenticated record:

(a) Disclaiming any interest in the obligations; and

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

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

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

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

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

response.

Sec. 8. NRS 104.9311 is hereby amended to read as follows:

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

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

interest in property subject to:

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

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

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

104.9310;

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

to 488.1827, inclusive, and 489.501 to 489.581, inclusive; or

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

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

creditor with respect to the property.

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

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

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

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

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

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

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

requirements, and a security interest so perfected remains perfected

notwithstanding a change in the use or transfer of possession of the

collateral.

3. Except as otherwise provided in subsection 4 and subsections 4 and

5 of NRS 104.9316, duration and renewal of perfection of a security

interest perfected by compliance with the requirements prescribed by a

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

statute, regulation or treaty. In other respects, the security interest is

subject to this article.

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

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

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

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

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

Sec. 9. NRS 104.9317 is hereby amended to read as follows:

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

is subordinate to the rights of:

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

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

[the] :

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

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

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

is filed.

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

secured party, of chattel paper, documents, goods, instruments, or a

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

buyer gives value and receives delivery of the collateral without

knowledge of the security interest or agricultural lien and before it is

perfected.

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

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

receives delivery of the collateral without knowledge of the security

interest or agricultural lien and before it is perfected.

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

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

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

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

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

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

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

of the collateral, the security interest takes priority over the rights of a

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

interest attaches and the time of filing.

Sec. 10. NRS 104.9323 is hereby amended to read as follows:

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

purposes of determining the priority of a perfected security interest under

subsection 1 of NRS 104.9322, perfection of the security interest dates

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

secures an advance that:

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

(1) Under NRS 104.9309 when it attaches; or

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

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

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

104.9309 or subsection 5, 6 or 7 of NRS 104.9312.

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

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

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

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

becomes a lien creditor unless the advance is made:

(a) Without knowledge of the lien; or

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

lien.

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

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

intangibles, or promissory notes or a consignor.

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

other than a buyer in the ordinary course of business takes free of a

security interest to the extent that it secures advances made after the earlier

of:

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

purchase; or

(b) Forty-five days after the purchase.

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

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

before the expiration of the 45‑day period.

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

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

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

earlier of:

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

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

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

commitment entered into without knowledge of the lease and before the

expiration of the 45‑day period.

Sec. 11. NRS 104.9331 is hereby amended to read as follows:

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

course of a negotiable instrument, a holder to which a negotiable

document of title has been duly negotiated, or a protected purchaser of a

security. These holders or purchasers take priority over an earlier security

interest, even if perfected, to the extent provided in articles 3, 7 and 8.

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

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

adverse] a claim under article 8.

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

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

and 2.

Sec. 12. NRS 104.9334 is hereby amended to read as follows:

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

goods that are fixtures or may continue in goods that become fixtures. A

security interest does not exist under this article in ordinary building

materials incorporated into an improvement on land.

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

fixtures under real property law.

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

interest in fixtures is subordinate to a conflicting interest of an

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

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

interest in fixtures has priority over a conflicting interest of an

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

record in or is in possession of the real property and:

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

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

become fixtures; and

become fixtures or within 20 days thereafter.

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

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

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

possession of the real property and the security interest:

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

encumbrancer or owner is of record; and

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

of the encumbrancer or owner;

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

by any method permitted by this article and the fixtures are readily

removable:

(1) Factory or office machines;

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

operation of the real property; or

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

legal or equitable proceedings after the security interest was perfected by

any method permitted by this article; or

(d) The security interest is:

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

transaction; and

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

subsection 1 of NRS 104.9311.

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

over a conflicting interest of an encumbrancer or owner of the real

property if:

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

consented to the security interest or disclaimed an interest in the goods as

fixtures; or

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

encumbrancer or owner.

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

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

the goods as against the encumbrancer or owner terminates.

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

an obligation incurred for the construction of an improvement on land,

including the acquisition cost of the land, if the recorded record so

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

interest in fixtures is subordinate to a construction mortgage recorded

before the goods become fixtures if the goods become fixtures before the

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

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

a construction mortgage.

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

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

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

real property.

Sec. 13. NRS 104.9336 is hereby amended to read as follows:

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

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

is lost in a product or mass.

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

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

when goods become commingled goods.

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

to the product or mass.

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

becomes commingled goods, the security interest that attaches to the

product or mass under subsection 3 is perfected.

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

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

product or mass under subsection 3.

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

under subsection 3, the following rules determine priority:

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

over a security interest that is unperfected at the time the collateral

becomes commingled goods.

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

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

collateral at the time it became commingled goods.

Sec. 14. NRS 104.9406 is hereby amended to read as follows:

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

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

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

receives a notification, authenticated by the assignor or the assignee, that

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

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

debtor may discharge its obligation by paying the assignee and may not

discharge the obligation by paying the assignor.

2. Subject to subsection 8, notification is ineffective under

subsection 1:

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

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

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

person other than the seller and the limitation is effective under law other

than this article; or

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

other periodic payment to the assignee, even if:

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

intangible has been assigned to that assignee;

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

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

limited.

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

assignee shall seasonably furnish reasonable proof that the assignment has

been made. Unless the assignee complies, the account debtor may

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

has received a notification under subsection 1.

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

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

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

ineffective to the extent that it:

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

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

or the creation, attachment, perfection or enforcement of a security interest

in, the account, chattel paper, payment intangible or promissory note; or

(b) Provides that the assignment or transfer, or the creation,

attachment, perfection or enforcement of the security interest may give

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

right of termination, or remedy under the account, chattel paper, payment

intangible or promissory note.

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

promissory note.

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

that prohibits, restricts, or requires the consent of a government,

governmental body or official, or account debtor to the assignment or

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

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

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

governmental body or official, or account debtor to the assignment or

transfer of, or the creation, attachment, perfection, or enforcement of a

security interest in, the account or chattel paper; or

(b) Provides that the assignment or transfer, or the creation,

attachment, perfection, or enforcement of the security interest may give

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

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

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

option under paragraph (c) of subsection 2.

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

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

who incurred the obligation primarily for personal, family or household

purposes.

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

-insurance receivable.

Sec. 15. NRS 104.9407 is hereby amended to read as follows:

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

a lease agreement is ineffective to the extent that it:

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

the assignment or transfer, or the creation, attachment, perfection, or

enforcement of a security interest in an interest of a party under the lease

contract or in the lessor’s residual interest in the goods; or

(b) Provides that the assignment or transfer, or the creation,

attachment, perfection, or enforcement of the security interest may give

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

right of termination or remedy under the lease.

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

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

that there is:

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

the goods in violation of the term; or

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

contract in violation of the term.

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

interest in the lessor’s interest under the lease contract or the lessor’s

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

lessee’s prospect of obtaining return performance or materially changes

the duty of or materially increases the burden or risk imposed on the lessee

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

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

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

perfection and enforcement of the security interest remain effective.

Sec. 16. NRS 104.9408 is hereby amended to read as follows:

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

a promissory note or in an agreement between an account debtor and a

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

intangible, including a contract, permit, license or franchise, and prohibits,

restricts or requires the consent of the person obligated on the promissory

note or the account debtor to, the assignment or transfer of, or creation,

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

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

extent that the term:

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

interest; or

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

or perfection of the security interest may give rise to a default, breach,

right of recoupment, claim, defense, termination, right of termination or

remedy under the promissory note, health-care-insurance receivable or

general intangible.

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

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

payment intangible or promissory note.

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

requires the consent of a government, governmental body or official,

person obligated on a promissory note, or account debtor to the

assignment or transfer of, or creation of a security interest in, a promissory

note, health-care-insurance receivable or general intangible, including a

contract, permit, license or franchise between an account debtor and a

debtor, is ineffective to the extent that the rule of law, statute or regulation:

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

interest; or

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

or perfection of the security interest may give rise to a default, breach,

right of recoupment, claim, defense, termination, right of termination or

remedy under the promissory note, health-care-insurance receivable or

general intangible.

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

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

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

regulation described in subsection 3 would be effective under law other

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

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

health-care-insurance receivable or general intangible:

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

note or the account debtor;

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

promissory note or the account debtor;

account debtor to recognize the security interest, pay or render

performance to the secured party or accept payment or performance from

the secured party;

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

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

intangible, including any related information or materials furnished to the

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

-insurance receivable or general intangible;

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

access to any trade secrets or confidential information of the person

obligated on the promissory note or the account debtor; and

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

the promissory note, health-care-insurance receivable or general

intangible.

Sec. 17. NRS 104.9409 is hereby amended to read as follows:

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

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

prohibits, restricts or requires the consent of an applicant, issuer, or

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

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

rule of law, statute, regulation, custom or practice:

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

interest in the letter-of-credit right; or

(b) Provides that the assignment or the creation, attachment or

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

of recoupment, claim, defense, termination, right of termination or remedy

under the letter-of-credit right.

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

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

custom or practice applicable to the letter of credit, to the transfer of a

right to draw or otherwise demand performance under the letter of credit,

or to the assignment of a right to proceeds of the letter of credit, the

creation, attachment or perfection of a security interest in the letter-of

-credit right:

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

transferee beneficiary;

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

person or transferee beneficiary; and

transferee beneficiary to recognize the security interest, pay or render

performance to the secured party or accept payment or other performance

from the secured party.

Sec. 18. NRS 104.9504 is hereby amended to read as follows:

104.9504 A financing statement sufficiently indicates the collateral

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

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

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

personal property.

Sec. 19. NRS 104.9509 is hereby amended to read as follows:

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

amendment that adds collateral covered by a financing statement or

amendment that adds a debtor to a financing statement only if:

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

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

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

he holds an agricultural lien[.] ; or

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

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

financing statement, and an amendment, covering:

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

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

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

proceeds.

3. A person may file an amendment other than an amendment that

adds collateral covered by a financing statement or an amendment that

adds a debtor to a financing statement only if:

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

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

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

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

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

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

amendment under subsection 3.

Sec. 20. NRS 104.9513 is hereby amended to read as follows:

104.9513 1. A secured party shall cause the secured party of record

for a financing statement to file a termination statement for the financing

statement if the financing statement covers consumer goods and:

(a) There is no obligation secured by the collateral covered by the

financing statement and no commitment to make an advance, incur an

obligation or otherwise give value; or

(b) The debtor did not authorize the filing of the initial financing

statement.

2. To comply with subsection 1, a secured party shall cause the

secured party of record to file the termination statement:

(a) Within 1 month after there is no obligation secured by the collateral

covered by the financing statement and no commitment to make an

advance, incur an obligation or otherwise give value; or

(b) If earlier, within 20 days after the secured party receives an

authenticated demand from a debtor.

3. In cases not governed by subsection 1, within 20 days after a

secured party receives an authenticated demand from a debtor, the secured

party shall cause the secured party of record for a financing statement to

send to the debtor a termination statement for the financing statement or

file the termination statement in the filing office if:

(a) Except in the case of a financing statement covering accounts or

chattel paper that has been sold or goods that are the subject of a

consignment, there is no obligation secured by the collateral covered by

the financing statement and no commitment to make an advance, incur an

obligation or otherwise give value;

(b) The financing statement covers accounts or chattel paper that has

been sold but as to which the account debtor or other person obligated has

discharged its obligation;

consignment to the debtor but are not in the debtor’s possession; or

(d) The debtor did not authorize the filing of the initial financing

statement.

4. Except as otherwise provided in NRS 104.9510, upon the filing of a

termination statement with the filing office[,the] :

(a) The financing statement to which the termination statement relates

ceases to be effective.

(b) For the purposes of subsection 7 of NRS 104.9519, subsection 1 of

NRS 104.9522 and subsection 3 of NRS 104.9523, a financing statement

that indicates that the debtor is a transmitting utility causes the

effectiveness of the financing statement to lapse.

Sec. 21. NRS 104.9519 is hereby amended to read as follows:

104.9519 1. For each record filed in a filing office, the filing office

shall:

(a) Assign a unique number to the filed record;

(b) Create a record that bears the number assigned to the filed record

and the date and time of filing;

(d) Index the filed record in accordance with subsections 3, 4 and 5.

2. Except as otherwise provided in subsection 9, a file number

assigned after January 1, 2002, may include a digit that:

(a) Is mathematically derived from or related to the other digits of the

file number; and

(b) Enables the filing office to detect whether a number communicated

as the file number includes a single-digit or transpositional error.

3. Except as otherwise provided in subsections 4 and 5, the filing

office shall:

(a) Index an initial financing statement according to the name of the

debtor and index all filed records relating to the initial financing statement

in a manner that associates with one another an initial financing statement

and all filed records relating to the initial financing statement; and

(b) Index a record that provides a name of a debtor which was not

previously provided in the financing statement to which the record relates

also according to the name that was not previously provided.

4. If a financing statement is filed as a fixture filing or covers as

-extracted collateral or timber to be cut, it must be filed for record and the

filing office shall index it:

(a) Under the names of the debtor and of each owner of record shown

on the financing statement as if they were the mortgagors under a

mortgage of the real property described; and

(b) To the extent that the law of this state provides for indexing of

mortgages under the name of the mortgagee, under the name of the

secured party as if the secured party were the mortgagee thereunder.

5. If a financing statement is filed as a fixture filing or covers as

-extracted collateral or timber to be cut, the filing office shall index an

assignment filed under subsection 1 of NRS 104.9514 or an amendment

filed under subsection 2 of that section:

(a) Under the name of the assignor as grantor; and

(b) To the extent that the law of this state provides for indexing the

assignment of a mortgage of real property under the name of the assignee,

under the name of the assignee.

6. The filing office shall maintain a capability:

(a) To retrieve a record by the name of the debtor and:

(1) If the filing office is described in paragraph (a) of subsection 1 of

NRS 104.9501, by the file number assigned to the initial financing

statement to which the record relates and the date and time that the record

was filed or recorded; or

(2) If the filing office is described in paragraph (b) of subsection 1 of

NRS 104.9501, by the file number assigned to the initial financing

statement to which the record relates; and

(b) To associate and retrieve with one another an initial financing

statement and each filed record relating to the initial financing statement.

7. The filing office may not remove a debtor’s name from the index

until 1 year after the effectiveness of a financing statement naming the

debtor lapses under NRS 104.9515 with respect to all secured parties of

record.

8. The filing office shall perform the acts required by subsections 1 to

5, inclusive, within a reasonable time and in the manner prescribed by

filing-office rule.

9. [Subsection 2 does] Subsections 2 and 8 do not apply to a filing

office described in paragraph (a) of subsection 1 of NRS 104.9501.

Sec. 22. NRS 104.9525 is hereby amended to read as follows:

104.9525 1. Except as otherwise provided in subsection 5, the fee for

filing and indexing a record under this part, other than an initial financing

statement of the kind described in subsection [3] 2 of NRS 104.9502, is:

(a) Twenty dollars if the record is communicated in writing and consists

of one or two pages;

(b) Forty dollars if the record is communicated in writing and consists

of more than two pages, and $1 for each page over 20 pages;

authorized by filing-office rule; and

(d) One dollar for each additional debtor, trade name or reference to

another name under which business is done.

2. The filing officer may charge and collect $1 for each page of copy

or record of filings produced by him at the request of any person.

3. Except as otherwise provided in subsection 5, the fee for filing and

indexing an initial financing statement of the kind described in subsection

3 of NRS 104.9502 is:

(a) Forty dollars if the financing statement indicates that it is filed in

connection with a public-finance transaction; and

(b) Twenty dollars if the financing statement indicates that it is filed in

connection with a manufactured-home transaction.

4. The fee for responding to a request for information from the filing

office, including for issuing a certificate showing whether there is on file

any financing statement naming a particular debtor, is:

(a) Twenty dollars if the request is communicated in writing; and

(b) Fifteen dollars if the request is communicated by another medium

authorized by filing-office rule.

5. This section does not require a fee with respect to a mortgage that is

effective as a financing statement filed as a fixture filing or as a financing

statement covering as-extracted collateral or timber to be cut under

subsection 3 of NRS 104.9502. However, the fees for recording and

satisfaction which otherwise would be applicable to the mortgage apply.

Sec. 23. NRS 104.9608 is hereby amended to read as follows:

104.9608 1. If a security interest or agricultural lien secures payment

or performance of an obligation, the following rules apply:

(a) A secured party shall apply or pay over for application the cash

proceeds of collection or enforcement under [this section] NRS 104.9607

in the following order to:

(1) The reasonable expenses of collection and enforcement and, to

the extent provided for by agreement and not prohibited by law,

reasonable attorney’s fees and legal expenses incurred by the secured

party;

(2) The satisfaction of obligations secured by the security interest or

agricultural lien under which the collection or enforcement is made; and

(3) The satisfaction of obligations secured by any subordinate

security interest in or other lien on the collateral subject to the security

interest or agricultural lien under which the collection or enforcement is

made if the secured party receives an authenticated demand for proceeds

before distribution of the proceeds is completed.

(b) If requested by a secured party, a holder of a subordinate security

interest or other lien shall furnish reasonable proof of the interest or lien

within a reasonable time. Unless the holder complies, the secured party

need not comply with the holder’s demand under subparagraph (3) of

paragraph (a).

proceeds of collection and enforcement under [this section] NRS 104.9607

unless the failure to do so would be commercially unreasonable. A secured

party that applies or pays over for application noncash proceeds shall do

so in a commercially reasonable manner.

(d) A secured party shall account to and pay a debtor for any surplus,

and the obligor is liable for any deficiency.

2. If the underlying transaction is a sale of accounts, chattel paper,

payment intangibles or promissory notes, the debtor is not entitled to any

surplus, and the obligor is not liable for any deficiency.

Sec. 24. NRS 104.9613 is hereby amended to read as follows:

104.9613 Except in a consumer-goods transaction, the following rules

apply:

1. The contents of a notification of disposition are sufficient if the

notification:

(a) Describes the debtor and the secured party;

(b) Describes the collateral that is the subject of the intended

disposition;

(d) States that the debtor is entitled to an accounting of the unpaid

indebtedness and states the charge, if any, for an accounting; and

(e) States the time and place of a public [sale] disposition or the time

after which any other disposition is to be made.

2. Whether the contents of a notification that lacks any of the

information specified in subsection 1 are nevertheless sufficient is a

question of fact.

3. The contents of a notification providing substantially the

information specified in subsection 1 are sufficient, even if the notification

includes:

(a) Information not specified by that subsection; or

(b) Minor errors that are not seriously misleading.

4. A particular phrasing of the notification is not required.

5. The following form of notification and the form appearing in

subsection 3 of NRS 104.9614, when completed, each provides sufficient

information:

NOTIFICATION OF DISPOSITION OF COLLATERAL

To:[Name of debtor, obligor, or other person to

which the notification is sent]

From:[Name, address, and telephone number of

secured party]

Name of Debtor(s):[Include only if debtor(s) are not an addressee]

[For a public disposition:]

We will sell [or lease or license, as applicable] the [describe collateral]

[to the highest qualified bidder] in public as follows:

Day and Date: ....

Time: .

Place:

[For a private disposition:]

We will sell [or lease or license, as applicable] the [describe collateral]

privately sometime after [day and date].

You are entitled to an accounting of the unpaid indebtedness secured by

the property that we intend to sell [or lease or license, as applicable] [for a

charge of $___]. You may request an accounting by calling us at

[telephone number].

Sec. 25. NRS 104.9615 is hereby amended to read as follows:

104.9615 1. A secured party shall apply or pay over for application

the cash proceeds of disposition under NRS 104.9610 in the following

order to:

(a) The reasonable expenses of retaking, holding, preparing for

disposition, processing and disposing, and, to the extent provided for by

agreement and not prohibited by law, reasonable attorney’s fees and legal

expenses incurred by the secured party;

(b) The satisfaction of obligations secured by the security interest or

agricultural lien under which the disposition is made;

interest in or other subordinate lien on the collateral if:

(1) The secured party receives from the holder of the subordinate

security interest or other lien an authenticated demand for proceeds before

distribution of the proceeds is completed; and

(2) In a case in which a consignor has an interest in the collateral, the

subordinate security interest or other lien is senior to the interest of the

consignor; and

(d) A secured party that is a consignor of the collateral if the secured

party receives from the consignor an authenticated demand for proceeds

before distribution of the proceeds is completed.

2. If requested by a secured party, a holder of a subordinate security

interest or other lien shall furnish reasonable proof of the interest or lien

within a reasonable time. Unless the holder does so, the secured party need

not comply with the holder’s demand under paragraph (c) of subsection 1.

3. A secured party need not apply or pay over for application noncash

proceeds of disposition under [this section] NRS 104.9610 unless the

failure to do so would be commercially unreasonable. A secured party that

applies or pays over for application noncash proceeds shall do so in a

commercially reasonable manner.

4. If the security interest under which a disposition is made secures

payment or performance of an obligation, after making the payments and

applications required by subsection 1 and permitted by subsection 3:

(a) Unless paragraph (d) of subsection 1 requires the secured party to

apply or pay over cash proceeds to a consignor, the secured party shall

account to and pay a debtor for any surplus; and

(b) The obligor is liable for any deficiency.

5. If the underlying transaction is a sale of accounts, chattel paper,

payment intangibles or promissory notes:

(a) The debtor is not entitled to any surplus; and

(b) The obligor is not liable for any deficiency.

6. The surplus or deficiency following a disposition is calculated based

on the amount of proceeds that would have been realized in a disposition

complying with this part to a transferee other than the secured party, a

person related to the secured party or a secondary obligor if:

(a) The transferee in the disposition is the secured party, a person

related to the secured party or a secondary obligor; and

(b) The amount of proceeds of the disposition is significantly below the

range of proceeds that a complying disposition to a person other than the

secured party, a person related to the secured party or a secondary obligor

would have brought.

7. A secured party that receives cash proceeds of a disposition in good

faith and without knowledge that the receipt violates the rights of the

holder of a security interest or other lien that is not subordinate to the

security interest or agricultural lien under which the disposition is made:

(a) Takes the cash proceeds free of the security interest or other lien;

(b) Is not obligated to apply the proceeds of the disposition to the

satisfaction of obligations secured by the security interest or other lien;

and

interest or other lien for any surplus.

Sec. 26. NRS 104.9625 is hereby amended to read as follows:

104.9625 1. If it is established that a secured party is not proceeding

in accordance with this article, a court may order or restrain collection,

enforcement or disposition of collateral on appropriate terms and

conditions.

2. Subject to subsections 3, 4 and 6, a person is liable for damages in

the amount of any loss caused by a failure to comply with this article. Loss

caused by a failure to comply [with a request under NRS 104.9210] may

include loss resulting from the debtor’s inability to obtain, or increased

costs of, alternative financing.

3. Except as otherwise provided in NRS 104.9628:

(a) A person that, at the time of the failure, was a debtor, was an obligor

or held a security interest in or other lien on the collateral may recover

damages under subsection 2 for its loss; and

(b) If the collateral is consumer goods, a person that was a debtor or a

secondary obligor at the time a secured party failed to comply with this

part may recover for that failure in any event an amount not less than the

credit service charge plus 10 percent of the principal amount of the

obligation or the time-price differential plus 10 percent of the cash price.

4. A debtor whose deficiency is eliminated under NRS 104.9626 may

recover damages for the loss of any surplus. However, a debtor or

secondary obligor whose deficiency is eliminated or reduced under that

section may not otherwise recover under subsection 2 for noncompliance

with the provisions of this part relating to collection, enforcement,

disposition or acceptance.

5. In addition to any damages recoverable under subsection 2, the

debtor, consumer obligor or person named as a debtor in a filed record, as

applicable, may recover $500 in each case from a person that:

(a) Fails to comply with NRS 104.9208;

(b) Fails to comply with NRS 104.9209;

NRS 104.9509;

(d) Fails to cause the secured party of record to file or send a

termination statement as required by subsection 1 or 3 of NRS 104.9513;

(e) Fails to comply with paragraph (a) of subsection 2 of NRS 104.9616

and whose failure is part of a pattern, or consistent with a practice, of

noncompliance; or

(f) Fails to comply with paragraph (b) of subsection 2 of NRS 104.9616.

6. A debtor or consumer obligor may recover damages under

subsection 2 and, in addition, $500 in each case from a person that,

without reasonable cause, fails to comply with a request under NRS

104.9210. A recipient of a request under that section which never claimed

an interest in the collateral or obligations that are the subject of a request

under that section has a reasonable excuse for failure to comply with the

request within the meaning of this subsection.

7. If a secured party fails to comply with a request regarding a list of

collateral or a statement of account under NRS 104.9210, the secured

party may claim a security interest only as shown in the list or statement

included in the request as against a person that is reasonably misled by the

failure.

Sec. 27. NRS 104.9705 is hereby amended to read as follows:

104.9705 1. If action, other than the filing of a financing statement,

is taken before July 1, 2001, and the action would have resulted in priority

of a security interest over the rights of a person that becomes a lien

creditor had the security interest become enforceable before that date, the

action is effective to perfect a security interest that attaches under this

article as amended within 1 year after that date. An attached security

interest becomes unperfected 1 year after July 1, 2001, unless the security

interest

becomes a perfected security interest under this article as amended before

the expiration of that period.

2. The filing of a financing statement before July 1, 2001, is effective

to perfect a security interest to the extent the filing would satisfy the

applicable requirements for perfection under this article as amended.

3. This article as amended does not render ineffective an effective

financing statement that was filed before July 1, 2001, and satisfied the

applicable requirements for perfection under the law of the jurisdiction

governing perfection as provided in NRS 104.9103 as that section read at

the time of filing. However, except as otherwise provided in subsections 4

and 5 and NRS 104.9706, the financing statement ceases to be effective at

the earlier of:

(a) The time the financing statement would have ceased to be effective

under the law of the jurisdiction in which it is filed; or

(b) June 30, 2006.

4. The filing of a continuation statement on or after July 1, 2001, does

not continue the effectiveness of the financing statement filed before that

date. However, upon the timely filing of a continuation statement after that

date and in accordance with the law of the jurisdiction governing

perfection as provided in part 3, the effectiveness of a financing statement

filed in the same office in that jurisdiction before that date continues for

the period provided by the law of that jurisdiction.

5. Paragraph (b) of subsection 3 applies to a financing statement that

was filed against a transmitting utility before July 1, 2001, and satisfied

the applicable requirements for perfection under the law of the jurisdiction

governing perfection as provided in NRS 104.9103 as that section read at

the time of filing only to the extent that part 3 provides that the law of a

jurisdiction other than the jurisdiction in which the financing statement is

filed governs perfection of a security interest in collateral covered by the

financing statement.

6. A financing statement that includes a financing statement filed

before July 1, 2001, and a continuation statement filed after that date are

effective only to the extent that the financing statement satisfies the

requirements of part 5 for an initial financing statement.

Sec. 28. This act becomes effective at 12:01 a.m. on July 1, 2001.

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