(REPRINTED WITH ADOPTED AMENDMENTS)

 

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 104.9109 is hereby amended to read as follows:

13-5    104.9109  1.  Except as otherwise provided in subsections 3 and 4,

13-6  this article applies to:

13-7    (a) A transaction, regardless of its form, that creates a security interest

13-8  in personal property or fixtures by contract;

13-9    (b) An agricultural lien;

13-10  (c) A sale of accounts, chattel paper, payment intangibles or promissory

13-11  notes;

13-12  (d) A consignment;

13-13  (e) A security interest arising under NRS 104.2401, 104.2505,

13-14  subsection 3 of NRS 104.2711 [,] or subsection 5 of NRS 104A.2508, as

13-15  provided in NRS 104.9110; and

13-16  (f) A security interest arising under NRS 104.4210 or 104.5118.

13-17  2.  The application of this article to a security interest in a secured

13-18  obligation is not affected by the fact that the obligation is itself secured by

13-19  a transaction or interest to which this article does not apply.

13-20  3.  This article does not apply to the extent that:

13-21  (a) A statute, regulation or treaty of the United States preempts this

13-22  article; or

13-23  (b) [Another statute of this state expressly governs the creation,

13-24  perfection, priority or enforcement of a security interest created by this

13-25  state or a governmental unit of this state;

13-26  (c) A statute of another state, a foreign country, or a governmental unit

13-27  of another state or a foreign country, other than a statute generally

13-28  applicable to security interests, expressly governs creation, perfection,

13-29  priority, or enforcement of a security interest created by the state, country,

13-30  or governmental unit; or

13-31  (d)] The rights of a transferee beneficiary or nominated person under a

13-32  letter of credit are independent and superior under NRS 104.5114.

13-33  4.  This article does not apply to:

13-34  (a) A landlord’s lien, other than an agricultural lien;

13-35  (b) A lien, other than an agricultural lien, given by statute or other rule

13-36  of law for services or materials, but NRS 104.9333 applies with respect to

13-37  priority of the lien;

13-38  (c) An assignment of a claim for wages, salary or other compensation of

13-39  an employee;

13-40  (d) A sale of accounts, chattel paper, payment intangibles or promissory

13-41  notes as part of a sale of the business out of which they arose;

13-42  (e) An assignment of accounts, chattel paper, payment intangibles or

13-43  promissory notes which is for the purpose of collection only;

13-44  (f) An assignment of a right to payment under a contract to an assignee

13-45  that is also obligated to perform under the contract;

13-46  (g) An assignment of a single account, payment intangible or

13-47  promissory note to an assignee in full or partial satisfaction of a preexisting

13-48  indebtedness;

14-1    (h) A transfer of an interest in or an assignment of a claim under a

14-2  policy of insurance, other than an assignment by or to a health-care

14-3  provider of a health-care-insurance receivable and any subsequent

14-4  assignment of the right to payment, but NRS 104.9315 and 104.9322 apply

14-5  with respect to proceeds and priorities in proceeds;

14-6    (i) An assignment of a right represented by a judgment, other than a

14-7  judgment taken on a right to payment that was collateral;

14-8    (j) A right of recoupment or set-off, but:

14-9      (1) NRS 104.9340 applies with respect to the effectiveness of rights

14-10  of recoupment or set-off against deposit accounts; and

14-11     (2) NRS 104.9404 applies with respect to defenses or claims of an

14-12  account debtor;

14-13  (k) The creation or transfer of an interest in or lien on real property,

14-14  including a lease or rents thereunder, except to the extent that provision is

14-15  made for:

14-16     (1) Liens on real property in NRS 104.9203 and 104.9308;

14-17     (2) Fixtures in NRS 104.9334;

14-18     (3) Fixture filings in NRS 104.9501, 104.9502, 104.9512, 104.9516

14-19  and 104.9519; and

14-20     (4) Security agreements covering personal and real property in NRS

14-21  104.9604;

14-22  (l) An assignment of a claim arising in tort, other than a commercial tort

14-23  claim, but NRS 104.9315 and 104.9322 apply with respect to proceeds and

14-24  priorities in proceeds; [or]

14-25  (m) An assignment of a deposit account in a consumer transaction, but

14-26  NRS 104.9315 and 104.9322 apply with respect to proceeds and priorities

14-27  in proceeds [.] ; or

14-28  (n) A transfer by a government or governmental unit.

14-29  Sec. 7.  NRS 104.9210 is hereby amended to read as follows:

14-30  104.9210  1.  In this section:

14-31  (a) “Request” means a record of a type described in paragraph (b), (c) or

14-32  (d).

14-33  (b) “Request for an accounting” means a record authenticated by a

14-34  debtor requesting that the recipient provide an accounting of the unpaid

14-35  obligations secured by collateral and reasonably identifying the transaction

14-36  or relationship that is the subject of the request.

14-37  (c) “Request regarding a list of collateral” means a record authenticated

14-38  by a debtor requesting that the recipient approve or correct a list of what

14-39  the debtor believes to be the collateral securing an obligation and

14-40  reasonably identifying the transaction or relationship that is the subject of

14-41  the request.

14-42  (d) “Request regarding a statement of account” means a record

14-43  authenticated by a debtor requesting that the recipient approve or correct a

14-44  statement indicating what the debtor believes to be the aggregate amount of

14-45  unpaid obligations secured by collateral as of a specified date and

14-46  reasonably identifying the transaction or relationship that is the subject of

14-47  the request.

15-1    2.  Subject to subsections 3 to 6, inclusive, a secured party, other than a

15-2  buyer of accounts, chattel paper, payment intangibles, or promissory notes

15-3  or a consignor, shall comply with a request within 14 days after receipt:

15-4    (a) In the case of a request for an accounting, by authenticating and

15-5  sending to the debtor an accounting; and

15-6    (b) In the case of a request regarding a list of collateral or a request

15-7  regarding a statement of account, by authenticating and sending to the

15-8  debtor an approval or correction.

15-9    3.  A secured party that claims a security interest in all of a particular

15-10  type of collateral owned by the debtor may comply with a request

15-11  regarding a list of collateral by sending to the debtor an authenticated

15-12  record including a statement to that effect within 14 days after receipt.

15-13  4.  A person that receives a request regarding a list of collateral, claims

15-14  no interest in the collateral when it receives the request, and claimed an

15-15  interest in the collateral at an earlier time shall comply with the request

15-16  within 14 days after receipt by sending to the debtor an authenticated

15-17  record:

15-18  (a) Disclaiming any interest in the collateral; and

15-19  (b) If known to the recipient, providing the name and mailing address of

15-20  any assignee of or successor to the recipient’s [security] interest in the

15-21  collateral.

15-22  5.  A person that receives a request for an accounting or a request

15-23  regarding a statement of account, claims no interest in the obligations when

15-24  it receives the request, and claimed an interest in the obligations at an

15-25  earlier time shall comply with the request within 14 days after receipt by

15-26  sending to the debtor an authenticated record:

15-27  (a) Disclaiming any interest in the obligations; and

15-28  (b) If known to the recipient, providing the name and mailing address of

15-29  any assignee of or successor to the recipient’s interest in the obligations.

15-30  6.  A debtor is entitled without charge to one response to a request

15-31  under this section during any 6-month period. The secured party may

15-32  require payment of a charge not exceeding $25 for each additional

15-33  response.

15-34  Sec. 8.  NRS 104.9311 is hereby amended to read as follows:

15-35  104.9311  1.  Except as otherwise provided in subsection 4, the filing

15-36  of a financing statement is not necessary or effective to perfect a security

15-37  interest in property subject to:

15-38  (a) A statute, regulation or treaty of the United States whose

15-39  requirements for a security interest’s obtaining priority over the rights of a

15-40  lien creditor with respect to the property preempt subsection 1 of NRS

15-41  104.9310;

15-42  (b) Chapter 105 of NRS, NRS 482.423 to 482.431, inclusive, 488.1793

15-43  to 488.1827, inclusive, and 489.501 to 489.581, inclusive; or

15-44  (c) A certificate-of-title statute of another jurisdiction which provides

15-45  for a security interest to be indicated on the certificate as a condition or

15-46  result of the security interest’s obtaining priority over the rights of a lien

15-47  creditor with respect to the property.

15-48  2.  Compliance with the requirements of a statute, regulation or treaty

15-49  described in subsection 1 for obtaining priority over the rights of a lien

16-1  creditor is equivalent to the filing of a financing statement under this

16-2  article. Except as otherwise provided in subsection 4, NRS 104.9313 and

16-3  subsections 4 and 5 of NRS 104.9316 for goods covered by a certificate of

16-4  title, a security interest in property subject to a statute, regulation or treaty

16-5  described in subsection 1 may be perfected only by compliance with those

16-6  requirements, and a security interest so perfected remains perfected

16-7  notwithstanding a change in the use or transfer of possession of the

16-8  collateral.

16-9    3.  Except as otherwise provided in subsection 4 and subsections 4 and

16-10  5 of NRS 104.9316, duration and renewal of perfection of a security

16-11  interest perfected by compliance with the requirements prescribed by a

16-12  statute, regulation or treaty described in subsection 1 are governed by the

16-13  statute, regulation or treaty. In other respects, the security interest is subject

16-14  to this article.

16-15  4.  During any period in which collateral subject to a statute specified

16-16  in paragraph (b) of subsection 1 is inventory held for sale or lease by a

16-17  person or leased by that person as lessor and that person is in the business

16-18  of selling [or leasing] goods of that kind, this section does not apply to a

16-19  security interest in that collateral created by that person . [as debtor.]

16-20  Sec. 9.  NRS 104.9317 is hereby amended to read as follows:

16-21  104.9317  1.  [An unperfected] A security interest or agricultural lien

16-22  is subordinate to the rights of:

16-23  (a) A person entitled to priority under NRS 104.9322; and

16-24  (b) A person that becomes a lien creditor before the earlier of the time

16-25  [the] :

16-26     (1) The security interest or agricultural lien is perfected ; or

16-27     (2) One of the conditions specified in paragraph (c) of subsection 2

16-28  of NRS 104.9203 is met and a financing statement covering the collateral

16-29  is filed.

16-30  2.  Except as otherwise provided in subsection 5, a buyer, other than a

16-31  secured party, of chattel paper, documents, goods, instruments, or a

16-32  security certificate takes free of a security interest or agricultural lien if the

16-33  buyer gives value and receives delivery of the collateral without knowledge

16-34  of the security interest or agricultural lien and before it is perfected.

16-35  3.  Except as otherwise provided in subsection 5, a lessee of goods

16-36  takes free of a security interest or agricultural lien if he gives value and

16-37  receives delivery of the collateral without knowledge of the security

16-38  interest or agricultural lien and before it is perfected.

16-39  4.  A licensee of a general intangible or a buyer, other than a secured

16-40  party, of accounts, general intangibles or investment property other than a

16-41  certificated security takes free of a security interest if he gives value

16-42  without knowledge of the security interest and before it is perfected.

16-43  5.  Except as otherwise provided in NRS 104.9320 and 104.9321, if a

16-44  person files a financing statement with respect to a purchase-money

16-45  security interest before or within 20 days after the debtor receives delivery

16-46  of the collateral, the security interest takes priority over the rights of a

16-47  buyer, lessee or lien creditor which arise between the time the security

16-48  interest attaches and the time of filing.

 

17-1    Sec. 10.  NRS 104.9323 is hereby amended to read as follows:

17-2    104.9323  1.  Except as otherwise provided in subsection 3, for

17-3  purposes of determining the priority of a perfected security interest under

17-4  subsection 1 of NRS 104.9322, perfection of the security interest dates

17-5  from the time an advance is made to the extent that the security interest

17-6  secures an advance that:

17-7    (a) Is made while the security interest is perfected only:

17-8      (1) Under NRS 104.9309 when it attaches; or

17-9      (2) Temporarily under subsection 5, 6 or 7 of NRS 104.9312; and

17-10  (b) Is not made pursuant to a commitment entered into before or while

17-11  the security interest is perfected by a method other than under NRS

17-12  104.9309 or subsection 5, 6 or 7 of NRS 104.9312.

17-13  2.  Except as otherwise provided in subsection 3, a security interest is

17-14  subordinate to the rights of a person that becomes a lien creditor [while the

17-15  security interest is perfected only] to the extent that [it secures advances]

17-16  the security interest secures an advance made more than 45 days after he

17-17  becomes a lien creditor unless the advance is made:

17-18  (a) Without knowledge of the lien; or

17-19  (b) Pursuant to a commitment entered into without knowledge of the

17-20  lien.

17-21  3.  Subsections 1 and 2 do not apply to a security interest held by a

17-22  secured party that is a buyer of accounts, chattel paper, payment

17-23  intangibles, or promissory notes or a consignor.

17-24  4.  Except as otherwise provided in subsection 5, a buyer of goods

17-25  other than a buyer in the ordinary course of business takes free of a security

17-26  interest to the extent that it secures advances made after the earlier of:

17-27  (a) The time the secured party acquires knowledge of the buyer’s

17-28  purchase; or

17-29  (b) Forty-five days after the purchase.

17-30  5.  Subsection 4 does not apply if the advance is made pursuant to a

17-31  commitment entered into without knowledge of the buyer’s purchase and

17-32  before the expiration of the 45‑day period.

17-33  6.  Except as otherwise provided in subsection 7, a lessee of goods,

17-34  other than a lessee in ordinary course of business, takes the leasehold free

17-35  of a security interest to the extent that it secures advances made after the

17-36  earlier of:

17-37  (a) The time the secured party acquires knowledge of the lease; or

17-38  (b) Forty-five days after the lease contract becomes enforceable.

17-39  7.  Subsection 6 does not apply if the advance is made pursuant to a

17-40  commitment entered into without knowledge of the lease and before the

17-41  expiration of the 45‑day period.

17-42  Sec. 11.  NRS 104.9331 is hereby amended to read as follows:

17-43  104.9331  1.  This article does not limit the rights of a holder in due

17-44  course of a negotiable instrument, a holder to which a negotiable document

17-45  of title has been duly negotiated, or a protected purchaser of a security.

17-46  These holders or purchasers take priority over an earlier security interest,

17-47  even if perfected, to the extent provided in articles 3, 7 and 8.

18-1    2.  This article does not limit the rights of or impose liability on a

18-2  person to the extent that the person is protected against the assertion of [an

18-3  adverse] a claim under article 8.

18-4    3.  Filing under this article does not constitute notice of a claim or

18-5  defense to the holders, or purchasers, or persons described in subsections 1

18-6  and 2.

18-7    Sec. 12.  NRS 104.9334 is hereby amended to read as follows:

18-8    104.9334  1.  A security interest under this article may be created in

18-9  goods that are fixtures or may continue in goods that become fixtures. A

18-10  security interest does not exist under this article in ordinary building

18-11  materials incorporated into an improvement on land.

18-12  2.  This article does not prevent creation of an encumbrance upon

18-13  fixtures under real property law.

18-14  3.  In cases not governed by subsections 4 to 8, inclusive, a security

18-15  interest in fixtures is subordinate to a conflicting interest of an

18-16  encumbrancer or owner of the related real property other than the debtor.

18-17  4.  Except as otherwise provided in subsection 8, a perfected security

18-18  interest in fixtures has priority over a conflicting interest of an

18-19  encumbrancer or owner of the real property if the debtor has an interest of

18-20  record in or is in possession of the real property and:

18-21  (a) The security interest is a purchase-money security interest;

18-22  (b) The interest of the encumbrancer or owner arises before the goods

18-23  become fixtures; and

18-24  (c) The security interest is perfected by a fixture filing before the goods

18-25  become fixtures or within 20 days thereafter.

18-26  5.  A perfected security interest in fixtures has priority over a

18-27  conflicting interest of an encumbrancer or owner of the real property if:

18-28  (a) The debtor has an interest of record in the real property or is in

18-29  possession of the real property and the security interest:

18-30     (1) Is perfected by a fixture filing before the interest of the

18-31  encumbrancer or owner is of record; and

18-32     (2) Has priority over any conflicting interest of a predecessor in title

18-33  of the encumbrancer or owner;

18-34  (b) Before the goods become fixtures, the security interest is perfected

18-35  by any method permitted by this article and the fixtures are readily

18-36  removable:

18-37     (1) Factory or office machines;

18-38     (2) Equipment that is not primarily used or leased for use in the

18-39  operation of the real property; or

18-40     (3) Replacements of domestic appliances that are consumer goods;

18-41  (c) The conflicting interest is a lien on the real property obtained by

18-42  legal or equitable proceedings after the security interest was perfected by

18-43  any method permitted by this article; or

18-44  (d) The security interest is:

18-45     (1) Created in a manufactured home in a manufactured-home

18-46  transaction; and

18-47     (2) Perfected pursuant to a statute described in paragraph (b) of

18-48  subsection 1 of NRS 104.9311.

19-1    6.  A security interest in fixtures, whether or not perfected, has priority

19-2  over a conflicting interest of an encumbrancer or owner of the real property

19-3  if:

19-4    (a) The encumbrancer or owner has, in an authenticated record,

19-5  consented to the security interest or disclaimed an interest in the goods as

19-6  fixtures; or

19-7    (b) The debtor has a right to remove the goods as against the

19-8  encumbrancer or owner.

19-9    7.  The priority of the security interest under paragraph (b) of

19-10  subsection 6 continues for a reasonable time if the debtor’s right to remove

19-11  the goods as against the encumbrancer or owner terminates.

19-12  8.  A mortgage is a construction mortgage to the extent that it secures

19-13  an obligation incurred for the construction of an improvement on land,

19-14  including the acquisition cost of the land, if the recorded record so

19-15  indicates. Except as otherwise provided in subsections 5 and 6, a security

19-16  interest in fixtures is subordinate to a construction mortgage recorded

19-17  before the goods become fixtures if the goods become fixtures before the

19-18  completion of the construction. A mortgage has this priority to the same

19-19  extent as a construction mortgage to the extent that it is given to refinance a

19-20  construction mortgage.

19-21  9.  A perfected security interest in crops growing on real property has

19-22  priority over a conflicting interest of an encumbrancer or owner of the real

19-23  property if the debtor has an interest of record in or is in possession of the

19-24  real property.

19-25  Sec. 13.  NRS 104.9336 is hereby amended to read as follows:

19-26  104.9336  1.  In this section, “commingled goods” means goods that

19-27  are physically united with other goods in such a manner that their identity

19-28  is lost in a product or mass.

19-29  2.  A security interest does not exist in commingled goods as such.

19-30  However, a security interest may attach to a product or mass that results

19-31  when goods become commingled goods.

19-32  3.  If collateral becomes commingled goods, a security interest attaches

19-33  to the product or mass.

19-34  4.  If a security interest in collateral is perfected before the collateral

19-35  becomes commingled goods, the security interest that attaches to the

19-36  product or mass under subsection 3 is perfected.

19-37  5.  Except as otherwise provided in subsection 6, the other provisions

19-38  of this part determine the priority of a security interest that attaches to the

19-39  product or mass under subsection 3.

19-40  6.  If more than one security interest attaches to the product or mass

19-41  under subsection 3, the following rules determine priority:

19-42  (a) A security interest that is perfected under subsection 4 has priority

19-43  over a security interest that is unperfected at the time the collateral

19-44  becomes commingled goods.

19-45  (b) If more than one security interest is perfected under subsection 4,

19-46  the security interests rank equally in proportion to the value of the

19-47  collateral at the time it became commingled goods.

 

 

20-1    Sec. 14.  NRS 104.9406 is hereby amended to read as follows:

20-2    104.9406  1.  Subject to subsections 2 to 8, inclusive, an account

20-3  debtor on an account, chattel paper or a payment intangible may discharge

20-4  its obligation by paying the assignor until, but not after, the account debtor

20-5  receives a notification, authenticated by the assignor or the assignee, that

20-6  the amount due or to become due has been assigned and that payment is to

20-7  be made to the assignee. After receipt of the notification, the account

20-8  debtor may discharge its obligation by paying the assignee and may not

20-9  discharge the obligation by paying the assignor.

20-10  2.  Subject to subsection 8, notification is ineffective under

20-11  subsection 1:

20-12  (a) If it does not reasonably identify the rights assigned;

20-13  (b) To the extent that an agreement between an account debtor and a

20-14  seller of a payment intangible limits the account debtor’s duty to pay a

20-15  person other than the seller and the limitation is effective under law other

20-16  than this article; or

20-17  (c) At the option of an account debtor, if the notification notifies the

20-18  account debtor to make less than the full amount of any installment or

20-19  other periodic payment to the assignee, even if:

20-20     (1) Only a portion of the account, chattel paper or [general] payment

20-21  intangible has been assigned to that assignee;

20-22     (2) A portion has been assigned to another assignee; or

20-23     (3) The account debtor knows that the assignment to that assignee is

20-24  limited.

20-25  3.  Subject to subsection 8, if requested by the account debtor, an

20-26  assignee shall seasonably furnish reasonable proof that the assignment has

20-27  been made. Unless the assignee complies, the account debtor may

20-28  discharge its obligation by paying the assignor, even if the account debtor

20-29  has received a notification under subsection 1.

20-30  4.  Except as otherwise provided in subsection 5 and NRS 104.9407

20-31  and 104A.2303, and subject to subsection 8, a term in an agreement

20-32  between an account debtor and an assignor or in a promissory note is

20-33  ineffective to the extent that it:

20-34  (a) Prohibits, restricts or requires the consent of the account debtor or

20-35  person obligated on the promissory note to the assignment or transfer of, or

20-36  the creation, attachment, perfection or enforcement of a security interest in,

20-37  the account, chattel paper, payment intangible or promissory note; or

20-38  (b) Provides that the assignment or transfer, or the creation,

20-39  attachment, perfection or enforcement of the security interest may give rise

20-40  to a default, breach, right of recoupment, claim, defense, termination, right

20-41  of termination, or remedy under the account, chattel paper, payment

20-42  intangible or promissory note.

20-43  5.  Subsection 4 does not apply to the sale of a payment intangible or

20-44  promissory note.

20-45  6.  Subject to subsections 7 and 8, a rule of law, statute, or regulation,

20-46  that prohibits, restricts, or requires the consent of a government,

20-47  governmental body or official, or account debtor to the assignment or

20-48  transfer of, or creation of a security interest in, an account or chattel paper

20-49  is ineffective to the extent that the rule of law, statute or regulation:

21-1    (a) Prohibits, restricts, or requires the consent of the government,

21-2  governmental body or official, or account debtor to the assignment or

21-3  transfer of, or the creation, attachment, perfection, or enforcement of a

21-4  security interest in, the account or chattel paper; or

21-5    (b) Provides that the assignment or transfer, or the creation,

21-6  attachment, perfection, or enforcement of the security interest may give

21-7  rise to a default, breach, right of recoupment, claim, defense, termination,

21-8  right of termination, or remedy under the account or chattel paper.

21-9    7.  Subject to subsection 8, an account debtor may not waive or vary its

21-10  option under paragraph (c) of subsection 2.

21-11  8.  This section is subject to law other than this article which

21-12  establishes a different rule for an account debtor who is an individual and

21-13  who incurred the obligation primarily for personal, family or household

21-14  purposes.

21-15  9.  This section does not apply to an assignment of a health-care-

21-16  insurance receivable.

21-17  Sec. 15.  NRS 104.9407 is hereby amended to read as follows:

21-18  104.9407  1.  Except as otherwise provided in subsection 2, a term in

21-19  a lease agreement is ineffective to the extent that it:

21-20  (a) Prohibits, restricts, or requires the consent of a party to the lease to

21-21  the assignment or transfer, or the creation, attachment, perfection, or

21-22  enforcement of a security interest in an interest of a party under the lease

21-23  contract or in the lessor’s residual interest in the goods; or

21-24  (b) Provides that the assignment or transfer, or the creation,

21-25  attachment, perfection, or enforcement of the security interest may give

21-26  rise to a default, breach, right of recoupment, claim, defense, termination,

21-27  right of termination or remedy under the lease.

21-28  2.  Except as otherwise provided in subsection 7 of NRS 104A.2303, a

21-29  term described in paragraph (b) of subsection 1 is effective to the extent

21-30  that there is:

21-31  (a) A transfer by the lessee of the lessee’s right of possession or use of

21-32  the goods in violation of the term; or

21-33  (b) A delegation of a material performance of either party to the lease

21-34  contract in violation of the term.

21-35  3.  The creation, attachment, perfection, or enforcement of a security

21-36  interest in the lessor’s interest under the lease contract or the lessor’s

21-37  residual interest in the goods is not a transfer that materially impairs the

21-38  lessee’s prospect of obtaining return performance or materially changes the

21-39  duty of or materially increases the burden or risk imposed on the lessee

21-40  within the purview of subsection 4 of NRS 104A.2303 unless, and then

21-41  only to the extent that, enforcement results in a delegation of a material

21-42  performance of the lessor. Even in that event, the creation, attachment,

21-43  perfection and enforcement of the security interest remain effective.

21-44  Sec. 16.  NRS 104.9408 is hereby amended to read as follows:

21-45  104.9408  1.  Except as otherwise provided in subsection 2, a term in

21-46  a promissory note or in an agreement between an account debtor and a

21-47  debtor which relates to a health-care-insurance receivable or a general

21-48  intangible, including a contract, permit, license or franchise, and prohibits,

21-49  restricts or requires the consent of the person obligated on the promissory

22-1  note or the account debtor to, the assignment or transfer of, or creation,

22-2  attachment, or perfection of a security interest in, the promissory note,

22-3  health-care-insurance receivable or general intangible, is ineffective to the

22-4  extent that the term:

22-5    (a) Would impair the creation, attachment or perfection of a security

22-6  interest; or

22-7    (b) Provides that the assignment or transfer, or the creation, attachment

22-8  or perfection of the security interest may give rise to a default, breach, right

22-9  of recoupment, claim, defense, termination, right of termination or remedy

22-10  under the promissory note, health-care-insurance receivable or general

22-11  intangible.

22-12  2.  Subsection 1 applies to a security interest in a payment intangible or

22-13  promissory note only if the security interest arises out of a sale of the

22-14  payment intangible or promissory note.

22-15  3.  A rule of law, statute, or regulation that prohibits, restricts, or

22-16  requires the consent of a government, governmental body or official,

22-17  person obligated on a promissory note, or account debtor to the assignment

22-18  or transfer of, or creation of a security interest in, a promissory note,

22-19  health-care-insurance receivable or general intangible, including a contract,

22-20  permit, license or franchise between an account debtor and a debtor, is

22-21  ineffective to the extent that the rule of law, statute or regulation:

22-22  (a) Would impair the creation, attachment or perfection of a security

22-23  interest; or

22-24  (b) Provides that the assignment or transfer, or the creation, attachment

22-25  or perfection of the security interest may give rise to a default, breach, right

22-26  of recoupment, claim, defense, termination, right of termination or remedy

22-27  under the promissory note, health-care-insurance receivable or general

22-28  intangible.

22-29  4.  To the extent that a term in a promissory note or in an agreement

22-30  between an account debtor and a debtor which relates to a health-care-

22-31  insurance receivable or general intangible or a rule of law, statute, or

22-32  regulation described in subsection 3 would be effective under law other

22-33  than this article but is ineffective under subsection 1 or 3, the creation,

22-34  attachment or perfection of a security interest in the promissory note,

22-35  health-care-insurance receivable or general intangible:

22-36  (a) Is not enforceable against the person obligated on the promissory

22-37  note or the account debtor;

22-38  (b) Does not impose a duty or obligation on the person obligated on the

22-39  promissory note or the account debtor;

22-40  (c) Does not require the person obligated on the promissory note or the

22-41  account debtor to recognize the security interest, pay or render

22-42  performance to the secured party or accept payment or performance from

22-43  the secured party;

22-44  (d) Does not entitle the secured party to use or assign the debtor’s rights

22-45  under the promissory note, health-care-insurance receivable or general

22-46  intangible, including any related information or materials furnished to the

22-47  debtor in the transaction giving rise to the promissory note, health-care-

22-48  insurance receivable or general intangible;

23-1    (e) Does not entitle the secured party to use, assign, possess or have

23-2  access to any trade secrets or confidential information of the person

23-3  obligated on the promissory note or the account debtor; and

23-4    (f) Does not entitle the secured party to enforce the security interest in

23-5  the promissory note, health-care-insurance receivable or general intangible.

23-6    Sec. 17.  NRS 104.9409 is hereby amended to read as follows:

23-7    104.9409  1.  A term in a letter of credit or a rule of law, statute,

23-8  regulation, custom or practice applicable to the letter of credit which

23-9  prohibits, restricts or requires the consent of an applicant, issuer, or

23-10  nominated person to a beneficiary’s assignment of or creation of a security

23-11  interest in a letter-of-credit right is ineffective to the extent that the term or

23-12  rule of law, statute, regulation, custom or practice:

23-13  (a) Would impair the creation, attachment or perfection of a security

23-14  interest in the letter-of-credit right; or

23-15  (b) Provides that the assignment or the creation, attachment or

23-16  perfection of the security interest may give rise to a default, breach, right of

23-17  recoupment, claim, defense, termination, right of termination or remedy

23-18  under the letter-of-credit right.

23-19  2.  To the extent that a term in a letter of credit is ineffective under

23-20  subsection 1 but would be effective under law other than this article or a

23-21  custom or practice applicable to the letter of credit, to the transfer of a right

23-22  to draw or otherwise demand performance under the letter of credit, or to

23-23  the assignment of a right to proceeds of the letter of credit, the creation,

23-24  attachment or perfection of a security interest in the letter-of-credit right:

23-25  (a) Is not enforceable against the applicant, issuer, nominated person or

23-26  transferee beneficiary;

23-27  (b) Imposes no duties or obligations on the applicant, issuer, nominated

23-28  person or transferee beneficiary; and

23-29  (c) Does not require the applicant, issuer, nominated person or

23-30  transferee beneficiary to recognize the security interest, pay or render

23-31  performance to the secured party or accept payment or other performance

23-32  from the secured party.

23-33  Sec. 18.  NRS 104.9504 is hereby amended to read as follows:

23-34  104.9504  A financing statement sufficiently indicates the collateral

23-35  that it covers [only] if the financing statement provides:

23-36  1.  A description of the collateral pursuant to NRS 104.9108; or

23-37  2.  An indication that the financing statement covers all assets or all

23-38  personal property.

23-39  Sec. 19.  NRS 104.9509 is hereby amended to read as follows:

23-40  104.9509  1.  A person may file an initial financing statement,

23-41  amendment that adds collateral covered by a financing statement or

23-42  amendment that adds a debtor to a financing statement only if:

23-43  (a) The debtor authorizes the filing in an authenticated record; [or]

23-44  (b) The person holds an agricultural lien that has become effective at the

23-45  time of filing and the financing statement covers only collateral in which

23-46  he holds an agricultural lien[.] ; or

23-47  (c) Otherwise authorized by subsection 2 or 3.

24-1    2.  By authenticating or becoming bound as debtor by a security

24-2  agreement, a debtor or new debtor authorizes the filing of an initial

24-3  financing statement, and an amendment, covering:

24-4    (a) The collateral described in the security agreement; and

24-5    (b) Property that becomes collateral under paragraph (b) of subsection 1

24-6  of NRS 104.9315, whether or not the security agreement expressly covers

24-7  proceeds.

24-8    3.  A person may file an amendment other than an amendment that

24-9  adds collateral covered by a financing statement or an amendment that

24-10  adds a debtor to a financing statement only if:

24-11  (a) The secured party of record authorizes the filing; or

24-12  (b) The change is a termination statement for a financing statement as to

24-13  which the secured party of record has failed to file or send a termination

24-14  statement as required by subsection 1 or 3 of NRS 104.9513.

24-15  4.  If there is more than one secured party of record for a financing

24-16  statement, each secured party of record may authorize the filing of an

24-17  amendment under subsection 3.

24-18  Sec. 20.  NRS 104.9513 is hereby amended to read as follows:

24-19  104.9513  1.  A secured party shall cause the secured party of record

24-20  for a financing statement to file a termination statement for the financing

24-21  statement if the financing statement covers consumer goods and:

24-22  (a) There is no obligation secured by the collateral covered by the

24-23  financing statement and no commitment to make an advance, incur an

24-24  obligation or otherwise give value; or

24-25  (b) The debtor did not authorize the filing of the initial financing

24-26  statement.

24-27  2.  To comply with subsection 1, a secured party shall cause the

24-28  secured party of record to file the termination statement:

24-29  (a) Within 1 month after there is no obligation secured by the collateral

24-30  covered by the financing statement and no commitment to make an

24-31  advance, incur an obligation or otherwise give value; or

24-32  (b) If earlier, within 20 days after the secured party receives an

24-33  authenticated demand from a debtor.

24-34  3.  In cases not governed by subsection 1, within 20 days after a

24-35  secured party receives an authenticated demand from a debtor, the secured

24-36  party shall cause the secured party of record for a financing statement to

24-37  send to the debtor a termination statement for the financing statement or

24-38  file the termination statement in the filing office if:

24-39  (a) Except in the case of a financing statement covering accounts or

24-40  chattel paper that has been sold or goods that are the subject of a

24-41  consignment, there is no obligation secured by the collateral covered by the

24-42  financing statement and no commitment to make an advance, incur an

24-43  obligation or otherwise give value;

24-44  (b) The financing statement covers accounts or chattel paper that has

24-45  been sold but as to which the account debtor or other person obligated has

24-46  discharged its obligation;

24-47  (c) The financing statement covers goods that were the subject of a

24-48  consignment to the debtor but are not in the debtor’s possession; or

25-1    (d) The debtor did not authorize the filing of the initial financing

25-2  statement.

25-3    4.  Except as otherwise provided in NRS 104.9510, upon the filing of a

25-4  termination statement with the filing office[,the] :

25-5    (a) The financing statement to which the termination statement relates

25-6  ceases to be effective.

25-7    (b) For the purposes of subsection 7 of NRS 104.9519, subsection 1 of

25-8  NRS 104.9522 and subsection 3 of NRS 104.9523, a financing statement

25-9  that indicates that the debtor is a transmitting utility causes the

25-10  effectiveness of the financing statement to lapse.

25-11  Sec. 21.  NRS 104.9519 is hereby amended to read as follows:

25-12  104.9519  1.  For each record filed in a filing office, the filing office

25-13  shall:

25-14  (a) Assign a unique number to the filed record;

25-15  (b) Create a record that bears the number assigned to the filed record

25-16  and the date and time of filing;

25-17  (c) Maintain the filed record for public inspection; and

25-18  (d) Index the filed record in accordance with subsections 3, 4 and 5.

25-19  2.  Except as otherwise provided in subsection 9, a file number

25-20  assigned after January 1, 2002, may include a digit that:

25-21  (a) Is mathematically derived from or related to the other digits of the

25-22  file number; and

25-23  (b) Enables the filing office to detect whether a number communicated

25-24  as the file number includes a single-digit or transpositional error.

25-25  3.  Except as otherwise provided in subsections 4 and 5, the filing

25-26  office shall:

25-27  (a) Index an initial financing statement according to the name of the

25-28  debtor and index all filed records relating to the initial financing statement

25-29  in a manner that associates with one another an initial financing statement

25-30  and all filed records relating to the initial financing statement; and

25-31  (b) Index a record that provides a name of a debtor which was not

25-32  previously provided in the financing statement to which the record relates

25-33  also according to the name that was not previously provided.

25-34  4.  If a financing statement is filed as a fixture filing or covers as-

25-35  extracted collateral or timber to be cut, it must be filed for record and the

25-36  filing office shall index it:

25-37  (a) Under the names of the debtor and of each owner of record shown

25-38  on the financing statement as if they were the mortgagors under a mortgage

25-39  of the real property described; and

25-40  (b) To the extent that the law of this state provides for indexing of

25-41  mortgages under the name of the mortgagee, under the name of the secured

25-42  party as if the secured party were the mortgagee thereunder.

25-43  5.  If a financing statement is filed as a fixture filing or covers as-

25-44  extracted collateral or timber to be cut, the filing office shall index an

25-45  assignment filed under subsection 1 of NRS 104.9514 or an amendment

25-46  filed under subsection 2 of that section:

25-47  (a) Under the name of the assignor as grantor; and

26-1    (b) To the extent that the law of this state provides for indexing the

26-2  assignment of a mortgage of real property under the name of the assignee,

26-3  under the name of the assignee.

26-4    6.  The filing office shall maintain a capability:

26-5    (a) To retrieve a record by the name of the debtor and:

26-6      (1) If the filing office is described in paragraph (a) of subsection 1 of

26-7  NRS 104.9501, by the file number assigned to the initial financing

26-8  statement to which the record relates and the date and time that the record

26-9  was filed or recorded; or

26-10     (2) If the filing office is described in paragraph (b) of subsection 1 of

26-11  NRS 104.9501, by the file number assigned to the initial financing

26-12  statement to which the record relates; and

26-13  (b) To associate and retrieve with one another an initial financing

26-14  statement and each filed record relating to the initial financing statement.

26-15  7.  The filing office may not remove a debtor’s name from the index

26-16  until 1 year after the effectiveness of a financing statement naming the

26-17  debtor lapses under NRS 104.9515 with respect to all secured parties of

26-18  record.

26-19  8.  The filing office shall perform the acts required by subsections 1 to

26-20  5, inclusive, within a reasonable time and in the manner prescribed by

26-21  filing-office rule.

26-22  9.  [Subsection 2 does] Subsections 2 and 8 do not apply to a filing

26-23  office described in paragraph (a) of subsection 1 of NRS 104.9501.

26-24  Sec. 22.  NRS 104.9525 is hereby amended to read as follows:

26-25  104.9525  1.  Except as otherwise provided in subsection 5, the fee for

26-26  filing and indexing a record under this part, other than an initial financing

26-27  statement of the kind described in subsection [3] 2 of NRS 104.9502, is:

26-28  (a) Twenty dollars if the record is communicated in writing and consists

26-29  of one or two pages;

26-30  (b) Forty dollars if the record is communicated in writing and consists

26-31  of more than two pages, and $1 for each page over 20 pages;

26-32  (c) Ten dollars if the record is communicated by another medium

26-33  authorized by filing-office rule; and

26-34  (d) One dollar for each additional debtor, trade name or reference to

26-35  another name under which business is done.

26-36  2.  The filing officer may charge and collect $1 for each page of copy

26-37  or record of filings produced by him at the request of any person.

26-38  3.  Except as otherwise provided in subsection 5, the fee for filing and

26-39  indexing an initial financing statement of the kind described in subsection

26-40  3 of NRS 104.9502 is:

26-41  (a) Forty dollars if the financing statement indicates that it is filed in

26-42  connection with a public-finance transaction; and

26-43  (b) Twenty dollars if the financing statement indicates that it is filed in

26-44  connection with a manufactured-home transaction.

26-45  4.  The fee for responding to a request for information from the filing

26-46  office, including for issuing a certificate showing whether there is on file

26-47  any financing statement naming a particular debtor, is:

26-48  (a) Twenty dollars if the request is communicated in writing; and

27-1    (b) Fifteen dollars if the request is communicated by another medium

27-2  authorized by filing-office rule.

27-3    5.  This section does not require a fee with respect to a mortgage that is

27-4  effective as a financing statement filed as a fixture filing or as a financing

27-5  statement covering as-extracted collateral or timber to be cut under

27-6  subsection 3 of NRS 104.9502. However, the fees for recording and

27-7  satisfaction which otherwise would be applicable to the mortgage apply.

27-8    Sec. 23.  NRS 104.9608 is hereby amended to read as follows:

27-9    104.9608  1.  If a security interest or agricultural lien secures payment

27-10  or performance of an obligation, the following rules apply:

27-11  (a) A secured party shall apply or pay over for application the cash

27-12  proceeds of collection or enforcement under [this section] NRS 104.9607

27-13  in the following order to:

27-14     (1) The reasonable expenses of collection and enforcement and, to

27-15  the extent provided for by agreement and not prohibited by law, reasonable

27-16  attorney’s fees and legal expenses incurred by the secured party;

27-17     (2) The satisfaction of obligations secured by the security interest or

27-18  agricultural lien under which the collection or enforcement is made; and

27-19     (3) The satisfaction of obligations secured by any subordinate

27-20  security interest in or other lien on the collateral subject to the security

27-21  interest or agricultural lien under which the collection or enforcement is

27-22  made if the secured party receives an authenticated demand for proceeds

27-23  before distribution of the proceeds is completed.

27-24  (b) If requested by a secured party, a holder of a subordinate security

27-25  interest or other lien shall furnish reasonable proof of the interest or lien

27-26  within a reasonable time. Unless the holder complies, the secured party

27-27  need not comply with the holder’s demand under subparagraph (3) of

27-28  paragraph (a).

27-29  (c) A secured party need not apply or pay over for application noncash

27-30  proceeds of collection and enforcement under [this section] NRS 104.9607

27-31  unless the failure to do so would be commercially unreasonable. A secured

27-32  party that applies or pays over for application noncash proceeds shall do so

27-33  in a commercially reasonable manner.

27-34  (d) A secured party shall account to and pay a debtor for any surplus,

27-35  and the obligor is liable for any deficiency.

27-36  2.  If the underlying transaction is a sale of accounts, chattel paper,

27-37  payment intangibles or promissory notes, the debtor is not entitled to any

27-38  surplus, and the obligor is not liable for any deficiency.

27-39  Sec. 24.  NRS 104.9613 is hereby amended to read as follows:

27-40  104.9613  Except in a consumer-goods transaction, the following rules

27-41  apply:

27-42  1.  The contents of a notification of disposition are sufficient if the

27-43  notification:

27-44  (a) Describes the debtor and the secured party;

27-45  (b) Describes the collateral that is the subject of the intended

27-46  disposition;

27-47  (c) States the method of intended disposition;

27-48  (d) States that the debtor is entitled to an accounting of the unpaid

27-49  indebtedness and states the charge, if any, for an accounting; and

28-1    (e) States the time and place of a public [sale] disposition or the time

28-2  after which any other disposition is to be made.

28-3    2.  Whether the contents of a notification that lacks any of the

28-4  information specified in subsection 1 are nevertheless sufficient is a

28-5  question of fact.

28-6    3.  The contents of a notification providing substantially the

28-7  information specified in subsection 1 are sufficient, even if the notification

28-8  includes:

28-9    (a) Information not specified by that subsection; or

28-10  (b) Minor errors that are not seriously misleading.

28-11  4.  A particular phrasing of the notification is not required.

28-12  5.  The following form of notification and the form appearing in

28-13  subsection 3 of NRS 104.9614, when completed, each provides sufficient

28-14  information:

 

28-15  NOTIFICATION OF DISPOSITION OF COLLATERAL

28-16                       To:      [Name of debtor, obligor, or other person to

28-17  which the notification is sent]

28-18                       From:  [Name, address, and telephone number of

28-19  secured party]

28-20                    Name of Debtor(s):[Include only if debtor(s) are not an addressee]

 

28-21  [For a public disposition:]

28-22  We will sell [or lease or license, as applicable] the [describe collateral]

28-23  [to the highest qualified bidder] in public as follows:

 

28-24  Day and Date: .........

28-25  Time: ......................

28-26  Place: ......................

 

28-27  [For a private disposition:]

 

28-28  We will sell [or lease or license, as applicable] the [describe collateral]

28-29  privately sometime after [day and date].

 

28-30  You are entitled to an accounting of the unpaid indebtedness secured by

28-31  the property that we intend to sell [or lease or license, as applicable] [for a

28-32  charge of $___]. You may request an accounting by calling us at

28-33  [telephone number].

28-34  Sec. 25.  NRS 104.9615 is hereby amended to read as follows:

28-35  104.9615  1.  A secured party shall apply or pay over for application

28-36  the cash proceeds of disposition under NRS 104.9610 in the following

28-37  order to:

28-38  (a) The reasonable expenses of retaking, holding, preparing for

28-39  disposition, processing and disposing, and, to the extent provided for by

28-40  agreement and not prohibited by law, reasonable attorney’s fees and legal

28-41  expenses incurred by the secured party;

28-42  (b) The satisfaction of obligations secured by the security interest or

28-43  agricultural lien under which the disposition is made;

29-1    (c) The satisfaction of obligations secured by any subordinate security

29-2  interest in or other subordinate lien on the collateral if:

29-3      (1) The secured party receives from the holder of the subordinate

29-4  security interest or other lien an authenticated demand for proceeds before

29-5  distribution of the proceeds is completed; and

29-6      (2) In a case in which a consignor has an interest in the collateral, the

29-7  subordinate security interest or other lien is senior to the interest of the

29-8  consignor; and

29-9    (d) A secured party that is a consignor of the collateral if the secured

29-10  party receives from the consignor an authenticated demand for proceeds

29-11  before distribution of the proceeds is completed.

29-12  2.  If requested by a secured party, a holder of a subordinate security

29-13  interest or other lien shall furnish reasonable proof of the interest or lien

29-14  within a reasonable time. Unless the holder does so, the secured party need

29-15  not comply with the holder’s demand under paragraph (c) of subsection 1.

29-16  3.  A secured party need not apply or pay over for application noncash

29-17  proceeds of disposition under [this section] NRS 104.9610 unless the

29-18  failure to do so would be commercially unreasonable. A secured party that

29-19  applies or pays over for application noncash proceeds shall do so in a

29-20  commercially reasonable manner.

29-21  4.  If the security interest under which a disposition is made secures

29-22  payment or performance of an obligation, after making the payments and

29-23  applications required by subsection 1 and permitted by subsection 3:

29-24  (a) Unless paragraph (d) of subsection 1 requires the secured party to

29-25  apply or pay over cash proceeds to a consignor, the secured party shall

29-26  account to and pay a debtor for any surplus; and

29-27  (b) The obligor is liable for any deficiency.

29-28  5.  If the underlying transaction is a sale of accounts, chattel paper,

29-29  payment intangibles or promissory notes:

29-30  (a) The debtor is not entitled to any surplus; and

29-31  (b) The obligor is not liable for any deficiency.

29-32  6.  The surplus or deficiency following a disposition is calculated based

29-33  on the amount of proceeds that would have been realized in a disposition

29-34  complying with this part to a transferee other than the secured party, a

29-35  person related to the secured party or a secondary obligor if:

29-36  (a) The transferee in the disposition is the secured party, a person

29-37  related to the secured party or a secondary obligor; and

29-38  (b) The amount of proceeds of the disposition is significantly below the

29-39  range of proceeds that a complying disposition to a person other than the

29-40  secured party, a person related to the secured party or a secondary obligor

29-41  would have brought.

29-42  7.  A secured party that receives cash proceeds of a disposition in good

29-43  faith and without knowledge that the receipt violates the rights of the

29-44  holder of a security interest or other lien that is not subordinate to the

29-45  security interest or agricultural lien under which the disposition is made:

29-46  (a) Takes the cash proceeds free of the security interest or other lien;

29-47  (b) Is not obligated to apply the proceeds of the disposition to the

29-48  satisfaction of obligations secured by the security interest or other lien; and

30-1    (c) Is not obligated to account to or pay the holder of the security

30-2  interest or other lien for any surplus.

30-3    Sec. 26.  NRS 104.9625 is hereby amended to read as follows:

30-4    104.9625  1.  If it is established that a secured party is not proceeding

30-5  in accordance with this article, a court may order or restrain collection,

30-6  enforcement or disposition of collateral on appropriate terms and

30-7  conditions.

30-8    2.  Subject to subsections 3, 4 and 6, a person is liable for damages in

30-9  the amount of any loss caused by a failure to comply with this article. Loss

30-10  caused by a failure to comply [with a request under NRS 104.9210] may

30-11  include loss resulting from the debtor’s inability to obtain, or increased

30-12  costs of, alternative financing.

30-13  3.  Except as otherwise provided in NRS 104.9628:

30-14  (a) A person that, at the time of the failure, was a debtor, was an obligor

30-15  or held a security interest in or other lien on the collateral may recover

30-16  damages under subsection 2 for its loss; and

30-17  (b) If the collateral is consumer goods, a person that was a debtor or a

30-18  secondary obligor at the time a secured party failed to comply with this

30-19  part may recover for that failure in any event an amount not less than the

30-20  credit service charge plus 10 percent of the principal amount of the

30-21  obligation or the time-price differential plus 10 percent of the cash price.

30-22  4.  A debtor whose deficiency is eliminated under NRS 104.9626 may

30-23  recover damages for the loss of any surplus. However, a debtor or

30-24  secondary obligor whose deficiency is eliminated or reduced under that

30-25  section may not otherwise recover under subsection 2 for noncompliance

30-26  with the provisions of this part relating to collection, enforcement,

30-27  disposition or acceptance.

30-28  5.  In addition to any damages recoverable under subsection 2, the

30-29  debtor, consumer obligor or person named as a debtor in a filed record, as

30-30  applicable, may recover $500 in each case from a person that:

30-31  (a) Fails to comply with NRS 104.9208;

30-32  (b) Fails to comply with NRS 104.9209;

30-33  (c) Files a record that he is not entitled to file under subsection 1 of

30-34  NRS 104.9509;

30-35  (d) Fails to cause the secured party of record to file or send a

30-36  termination statement as required by subsection 1 or 3 of NRS 104.9513;

30-37  (e) Fails to comply with paragraph (a) of subsection 2 of NRS 104.9616

30-38  and whose failure is part of a pattern, or consistent with a practice, of

30-39  noncompliance; or

30-40  (f) Fails to comply with paragraph (b) of subsection 2 of NRS 104.9616.

30-41  6.  A debtor or consumer obligor may recover damages under

30-42  subsection 2 and, in addition, $500 in each case from a person that, without

30-43  reasonable cause, fails to comply with a request under NRS 104.9210. A

30-44  recipient of a request under that section which never claimed an interest in

30-45  the collateral or obligations that are the subject of a request under that

30-46  section has a reasonable excuse for failure to comply with the request

30-47  within the meaning of this subsection.

30-48  7.  If a secured party fails to comply with a request regarding a list of

30-49  collateral or a statement of account under NRS 104.9210, the secured party

31-1  may claim a security interest only as shown in the list or statement

31-2  included in the request as against a person that is reasonably misled by the

31-3  failure.

31-4    Sec. 27.  NRS 104.9705 is hereby amended to read as follows:

31-5    104.9705  1.  If action, other than the filing of a financing statement,

31-6  is taken before July 1, 2001, and the action would have resulted in priority

31-7  of a security interest over the rights of a person that becomes a lien creditor

31-8  had the security interest become enforceable before that date, the action is

31-9  effective to perfect a security interest that attaches under this article as

31-10  amended within 1 year after that date. An attached security interest

31-11  becomes unperfected 1 year after July 1, 2001, unless the security interest

31-12  becomes a perfected security interest under this article as amended before

31-13  the expiration of that period.

31-14  2.  The filing of a financing statement before July 1, 2001, is effective

31-15  to perfect a security interest to the extent the filing would satisfy the

31-16  applicable requirements for perfection under this article as amended.

31-17  3.  This article as amended does not render ineffective an effective

31-18  financing statement that was filed before July 1, 2001, and satisfied the

31-19  applicable requirements for perfection under the law of the jurisdiction

31-20  governing perfection as provided in NRS 104.9103 as that section read at

31-21  the time of filing. However, except as otherwise provided in subsections 4

31-22  and 5 and NRS 104.9706, the financing statement ceases to be effective at

31-23  the earlier of:

31-24  (a) The time the financing statement would have ceased to be effective

31-25  under the law of the jurisdiction in which it is filed; or

31-26  (b) June 30, 2006.

31-27  4.  The filing of a continuation statement on or after July 1, 2001, does

31-28  not continue the effectiveness of the financing statement filed before that

31-29  date. However, upon the timely filing of a continuation statement after that

31-30  date and in accordance with the law of the jurisdiction governing

31-31  perfection as provided in part 3, the effectiveness of a financing statement

31-32  filed in the same office in that jurisdiction before that date continues for the

31-33  period provided by the law of that jurisdiction.

31-34  5.  Paragraph (b) of subsection 3 applies to a financing statement that

31-35  was filed against a transmitting utility before July 1, 2001, and satisfied the

31-36  applicable requirements for perfection under the law of the jurisdiction

31-37  governing perfection as provided in NRS 104.9103 as that section read at

31-38  the time of filing only to the extent that part 3 provides that the law of a

31-39  jurisdiction other than the jurisdiction in which the financing statement is

31-40  filed governs perfection of a security interest in collateral covered by the

31-41  financing statement.

31-42  6.  A financing statement that includes a financing statement filed

31-43  before July 1, 2001, and a continuation statement filed after that date are

31-44  effective only to the extent that the financing statement satisfies the

31-45  requirements of part 5 for an initial financing statement.

31-46  Sec. 28.  This act becomes effective at 12:01 a.m. on July 1, 2001.

 

31-47  H