Senate Bill sb0386c1

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    Florida Senate - 2001                            CS for SB 386

    By the Committee on Judiciary and Senator Campbell





    308-1808-01

  1                      A bill to be entitled

  2         An act relating to the Uniform Commercial Code;

  3         revising ch. 679, F.S., relating to secured

  4         transactions; creating ss. 679.1011, 679.1021,

  5         679.1031, 679.1041, 679.1051, 679.1061,

  6         679.1071, 679.1081, 679.1091, 679.1101, F.S.;

  7         providing a short title, definitions, and

  8         general concepts; creating ss. 679.2011,

  9         679.2021, 679.2031, 679.2041, 679.2051,

10         679.2061, 679.2071, 679.2081, 679.209, 679.210,

11         F.S.; providing for the effectiveness and

12         attachment of security agreements; prescribing

13         rights and duties of secured parties; creating

14         ss. 679.3011, 679.3021, 679.3031, 679.3041,

15         679.3051, 679.3061, 679.3071, 679.3081,

16         679.091, 679.3101, 679.3111, 679.3121,

17         679.3131, 679.3141, 679.3151, 679.3161,

18         679.3171, 679.3181, 679.319, 679.320, 679.321,

19         679.322, 679.323, 679.324, 679.325, 679.326,

20         679.327, 679.328, 679.329, 679.330, 679.331,

21         679.332, 679.333, 679.334, 679.335, 679.336,

22         679.337, 679.338, 679.340, 679.341, 679.342,

23         F.S.; providing for perfection and priority of

24         security interests; creating ss. 679.40111,

25         679.4021, 679.4031, 679.4041, 679.4051,

26         679.4061, 679.4071, 679.4081, 679.409, F.S.;

27         prescribing rights of third parties; providing

28         legislative findings; creating ss. 679.5011,

29         679.5021, 679.5031, 679.5041, 679.5051,

30         679.5061, 679.5071, 679.508, 679.509, 679.510,

31         679.511, 679.512, 679.513, 679.524, 679.515,

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    Florida Senate - 2001                            CS for SB 386
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  1         679.516, 679.517, 679.518, 679.519, 679.520,

  2         679.521, 679.522, 679.523, 679.524, 679.525,

  3         679.526, 679.527, F.S.; prescribing filing

  4         procedures for perfection of a security

  5         interest; providing forms; providing duties and

  6         operation of filing office; providing authority

  7         for the Secretary of State to delegate certain

  8         filing functions to a private filing agency

  9         under certain circumstances; providing

10         criteria, requirements, procedures, and

11         limitations; creating ss. 679.601, 679.602,

12         679.603, 679.604, 679.605, 679.606, 679.607,

13         679.608, 679.609, 679.610, 679.611, 679.612,

14         679.613, 679.614, 679.615, 679.616, 679.617,

15         679.618, 679.619, 679.620, 679.621, 679.622,

16         679.623, 679.624, 679.625, 679.626, 679.627,

17         F.S.; prescribing procedures for default and

18         enforcement of security interests; providing

19         for forms; creating ss. 679.701, 679.702,

20         679.703, 679.704, 679.705, 679.706, 679.707,

21         679.708, 679.709, F.S.; providing transitional

22         effective dates and savings clause for

23         perfected and unperfected security interests,

24         specified actions, and financing statements;

25         specifying priority of conflicting claims;

26         amending s. 671.105, F.S.; specifying the

27         precedence of law governing the perfection, the

28         effect of perfection or nonperfection, and the

29         priority of security interests and agricultural

30         liens; amending s. 671.201, F.S.; revising

31         definitions used in the Uniform Commercial

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  1         Code; amending s. 672.103, F.S.; conforming a

  2         cross-reference; amending s. 672.210, F.S.;

  3         providing that the creation, attachment,

  4         perfection, or enforcement of a security

  5         interest in the seller's interest under a

  6         contract is not a transfer that materially

  7         affects the buyer unless the enforcement

  8         actually results in a delegation of material

  9         performance of the seller; amending s. 672.326,

10         F.S.; eliminating provisions relating to

11         consignment sales; amending s. 672.502, F.S.;

12         modifying buyers' rights to goods on a seller's

13         repudiation, failure to deliver, or insolvency;

14         amending s. 672.716, F.S.; providing that, for

15         goods bought for personal, family, or household

16         purposes, the buyer's right of replevin vests

17         upon acquisition of a special property;

18         amending s. 674.2101, F.S.; conforming a

19         cross-reference; creating s. 675.1181, F.S.;

20         specifying conditions under which an issuer or

21         nominated person has a security interest in a

22         document presented under a letter of credit;

23         amending ss. 677.503, 678.1031, F.S.;

24         conforming cross-references; amending s.

25         678.1061, F.S.; specifying a condition under

26         which a purchaser has control of a security

27         entitlement; amending s. 678.1101, F.S.;

28         modifying rules that determine a securities

29         intermediary's jurisdiction; amending s.

30         678.3011, F.S.; providing for delivery of a

31         certificated security to a purchaser; amending

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  1         s. 678.3021, F.S.; eliminating a requirement

  2         that a purchaser of a certificated or

  3         uncertificated security receive delivery prior

  4         to acquiring all rights in the security;

  5         amending s. 678.5101, F.S.; prescribing rights

  6         of a purchaser of a security entitlement from

  7         an entitlement holder; amending ss. 680.1031,

  8         680.303, 680.307, 680.309, F.S.; conforming

  9         cross-references; repealing ss. 679.101,

10         679.102, 679.103, 679.104, 679.105, 679.106,

11         679.107, 679.108, 679.109, 679.110, 679.112,

12         679.113, 679.114, 679.115, 679.116, F.S.,

13         relating to the short title, applicability, and

14         definitions of ch. 679, F.S.; repealing ss.

15         679.201, 679.202, 679.203, 679.204, 679.205,

16         679.206, 679.207, 679.208, F.S., relating to

17         the validity of security agreements and the

18         rights of parties to such agreements; repealing

19         ss. 679.301, 679.302, 679,303, 679.304,

20         679.305, 679.306, 679.307, 679.308, 679.309,

21         679.310, 679.311, 679.312, 679.313, 679.314,

22         679.315, 679.316, 679.317, 679.318, F.S.,

23         relating to rights of third parties, perfected

24         and unperfected security interests, and rules

25         of priority; repealing ss. 679.401, 679.4011,

26         679.402, 679.403, 679.404, 679.405, 679.406,

27         679.407, 679.408, F.S., relating to filing of

28         security interests; repealing ss. 679.501,

29         679.502, 679.503, 679.504, 679.505, 679.506,

30         679.507, F.S., relating to rights of the

31

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    Florida Senate - 2001                            CS for SB 386
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  1         parties upon default under a security

  2         agreement; providing effective dates.

  3

  4  Be It Enacted by the Legislature of the State of Florida:

  5

  6         Section 1.  Part I of chapter 679, Florida Statutes,

  7  consisting of sections 679.101, 679.102, 679.103, 679.104,

  8  679.105, 679.106, 679.107, 679.108, 679.109, 679.110, 679.112,

  9  679.113, 679.114, 679.115, and 679.116, Florida Statutes, is

10  repealed and a new part I of that chapter, consisting of

11  sections 679.1011, 679.1021, 679.1031, 679.1041, 679.1051,

12  679.1061, 679.1071, 679.1081, 679.1091, and 679.1101, Florida

13  Statutes, is created to read:

14                              PART I

15                        GENERAL PROVISIONS

16         679.1011 Short title.--This chapter may be cited as

17  Uniform Commercial Code-Secured Transactions.

18         679.1021  Definitions and index of definitions.--

19         (1)  In this chapter, the term:

20         (a)  "Accession" means goods that are physically united

21  with other goods in such a manner that the identity of the

22  original goods is not lost.

23         (b)  "Account," except as used in "account for," means

24  a right to payment of a monetary obligation, whether or not

25  earned by performance, for property that has been or is to be

26  sold, leased, licensed, assigned, or otherwise disposed of;

27  for services rendered or to be rendered; for a policy of

28  insurance issued or to be issued; for a secondary obligation

29  incurred or to be incurred; for energy provided or to be

30  provided; for the use or hire of a vessel under a charter or

31  other contract; arising out of the use of a credit or charge

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  1  card or information contained on or for use with the card; or

  2  as winnings in a lottery or other game of chance operated or

  3  sponsored by a state, governmental unit of a state, or person

  4  licensed or authorized to operate the game by a state or

  5  governmental unit of a state.  The term includes

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

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

  8  commercial tort claims; deposit accounts; investment property;

  9  letter-of-credit rights or letters of credit; or rights to

10  payment for money or funds advanced or sold, other than rights

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

12  information contained on or for use with the card.

13         (c)  "Account debtor" means a person obligated on an

14  account, chattel paper, or general intangible.  The term does

15  not include persons obligated to pay a negotiable instrument,

16  even if the instrument constitutes part of chattel paper.

17         (d)  "Accounting," except as used in the term

18  "accounting for," means a record:

19         1.  Authenticated by a secured party;

20         2.  Indicating the aggregate unpaid secured obligations

21  as of a date not more than 35 days earlier or 35 days later

22  than the date of the record; and

23         3.  Identifying the components of the obligations in

24  reasonable detail.

25         (e)  "Agricultural lien" means an interest, other than

26  a security interest, in farm products:

27         1.  Which secures payment or performance of an

28  obligation for:

29         a.  Goods or services furnished in connection with a

30  debtor's farming operation; or

31

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  1         b.  Rent on real property leased by a debtor in

  2  connection with the debtor's farming operation;

  3         2.  Which is created by statute in favor of a person

  4  who:

  5         a.  In the ordinary course of the person's business

  6  furnished goods or services to a debtor in connection with a

  7  debtor's farming operation; or

  8         b.  Leased real property to a debtor in connection with

  9  the debtor's farming operation; and

10         3.  Whose effectiveness does not depend on the person's

11  possession of the personal property.

12         (f)  "As-extracted collateral" means:

13         1.  Oil, gas, or other minerals that are subject to a

14  security interest that:

15         a.  Is created by a debtor having an interest in the

16  minerals before extraction; and

17         b.  Attaches to the minerals as extracted; or

18         2.  Accounts arising out of the sale at the wellhead or

19  minehead of oil, gas, or other minerals in which the debtor

20  had an interest before extraction.

21         (g)  "Authenticate" means:

22         1.  To sign; or

23         2.  To execute or otherwise adopt a symbol, or encrypt

24  or similarly process a record in whole or in part, with the

25  present intent of the authenticating person to identify the

26  person and adopt or accept a record.

27         (h)  "Bank" means an organization that is engaged in

28  the business of banking. The term includes savings banks,

29  savings and loan associations, credit unions, and trust

30  companies.

31

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  1         (i)  "Cash proceeds" means proceeds that are money,

  2  checks, deposit accounts, or the like.

  3         (j)  "Certificate of title" means a certificate of

  4  title with respect to which a statute provides for the

  5  security interest in question to be indicated on the

  6  certificate as a condition or result of the security

  7  interest's obtaining priority over the rights of a lien

  8  creditor with respect to the collateral.

  9         (k)  "Chattel paper" means a record or records that

10  evidence both a monetary obligation and a security interest in

11  specific goods, a security interest in specific goods and

12  software used in the goods, a security interest in specific

13  goods and license of software used in the goods, a lease of

14  specific goods, or a lease of specific goods and license of

15  software used in the goods.  In this paragraph, "monetary

16  obligation" means a monetary obligation secured by the goods

17  or owed under a lease of the goods and includes a monetary

18  obligation with respect to software used in the goods. The

19  term does not include charters or other contracts involving

20  the use or hire of a vessel or records that evidence a right

21  to payment arising out of the use of a credit or charge card

22  or information contained on or for use with the card.  If a

23  transaction is evidenced by records that include an instrument

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

25  constitutes chattel paper.

26         (l)  "Collateral" means the property subject to a

27  security interest or agricultural lien.  The term includes:

28         1.  Proceeds to which a security interest attaches;

29         2.  Accounts, chattel paper, payment intangibles, and

30  promissory notes that have been sold; and

31         3.  Goods that are the subject of a consignment.

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  1         (m)  "Commercial tort claim" means a claim arising in

  2  tort with respect to which:

  3         1.  The claimant is an organization; or

  4         2.  The claimant is an individual and the claim:

  5         a.  Arose in the course of the claimant's business or

  6  profession; and

  7         b.  Does not include damages arising out of personal

  8  injury to or the death of an individual.

  9         (n)  "Commodity account" means an account maintained by

10  a commodity intermediary in which a commodity contract is

11  carried for a commodity customer.

12         (o)  "Commodity contract" means a commodity futures

13  contract, an option on a commodity futures contract, a

14  commodity option, or another contract if the contract or

15  option is:

16         1.  Traded on or subject to the rules of a board of

17  trade that has been designated as a contract market for such a

18  contract pursuant to federal commodities laws; or

19         2.  Traded on a foreign commodity board of trade,

20  exchange, or market, and is carried on the books of a

21  commodity intermediary for a commodity customer.

22         (p)  "Commodity customer" means a person for which a

23  commodity intermediary carries a commodity contract on its

24  books.

25         (q)  "Commodity intermediary" means a person who:

26         1.  Is registered as a futures commission merchant

27  under federal commodities law; or

28         2.  In the ordinary course of the person's business

29  provides clearance or settlement services for a board of trade

30  that has been designated as a contract market pursuant to

31  federal commodities law.

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  1         (r)  "Communicate" means:

  2         1.  To send a written or other tangible record;

  3         2.  To transmit a record by any means agreed upon by

  4  the persons sending and receiving the record; or

  5         3.  In the case of transmission of a record to or by a

  6  filing office, to transmit a record by any means prescribed by

  7  filing-office rule.

  8         (s)  "Consignee" means a merchant to which goods are

  9  delivered in a consignment.

10         (t)  "Consignment" means a transaction, regardless of

11  its form, in which a person delivers goods to a merchant for

12  the purpose of sale and:

13         1.  The merchant:

14         a.  Deals in goods of that kind under a name other than

15  the name of the person making delivery;

16         b.  Is not an auctioneer; and

17         c.  Is not generally known by its creditors to be

18  substantially engaged in selling the goods of others;

19         2.  With respect to each delivery, the aggregate value

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

21         3.  The goods are not consumer goods immediately before

22  delivery; and

23         4.  The transaction does not create a security interest

24  that secures an obligation.

25         (u)  "Consignor" means a person who delivers goods to a

26  consignee in a consignment.

27         (v)  "Consumer debtor" means a debtor in a consumer

28  transaction.

29         (w)  "Consumer goods" means goods that are used or

30  bought for use primarily for personal, family, or household

31  purposes.

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  1         (x)  "Consumer-goods transaction" means a consumer

  2  transaction in which:

  3         1.  An individual incurs an obligation primarily for

  4  personal, family, or household purposes; and

  5         2.  A security interest in consumer goods secures the

  6  obligation.

  7         (y)  "Consumer obligor" means an obligor who is an

  8  individual and who incurred the obligation as part of a

  9  transaction entered into primarily for personal, family, or

10  household purposes.

11         (z)  "Consumer transaction" means a transaction in

12  which an individual incurs an obligation primarily for

13  personal, family, or household purposes; a security interest

14  secures the obligation; and the collateral is held or acquired

15  primarily for personal, family, or household purposes.  The

16  term includes consumer-goods transactions.

17         (aa)  "Continuation statement" means an amendment of a

18  financing statement which:

19         1.  Identifies, by its file number, the initial

20  financing statement to which it relates; and

21         2.  Indicates that it is a continuation statement for,

22  or that it is filed to continue the effectiveness of, the

23  identified financing statement.

24         (bb)  "Debtor" means:

25         1.  A person having an interest, other than a security

26  interest or other lien, in the collateral, whether or not the

27  person is an obligor;

28         2.  A seller of accounts, chattel paper, payment

29  intangibles, or promissory notes; or

30         3.  A consignee.

31

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  1         (cc)  "Deposit account" means a demand, time, savings,

  2  passbook, or similar account maintained with a bank.  The term

  3  does not include investment property or accounts evidenced by

  4  an instrument.

  5         (dd)  "Document" means a document of title or a receipt

  6  of the type described in s. 677.201(2).

  7         (ee)  "Electronic chattel paper" means chattel paper

  8  evidenced by a record or records consisting of information

  9  stored in an electronic medium.

10         (ff)  "Encumbrance" means a right, other than an

11  ownership interest, in real property.  The term includes

12  mortgages and other liens on real property.

13         (gg)  "Equipment" means goods other than inventory,

14  farm products, or consumer goods.

15         (hh)  "Farm products" means goods, other than standing

16  timber, with respect to which the debtor is engaged in a

17  farming operation and which are:

18         1.  Crops grown, growing, or to be grown, including:

19         a.  Crops produced on trees, vines, and bushes; and

20         b.  Aquatic goods produced in aquacultural operations;

21         2.  Livestock, born or unborn, including aquatic goods

22  produced in aquacultural operations;

23         3.  Supplies used or produced in a farming operation;

24  or

25         4.  Products of crops or livestock in their

26  unmanufactured states.

27         (ii)  "Farming operation" means raising, cultivating,

28  propagating, fattening, grazing, or any other farming,

29  livestock, or aquacultural operation.

30         (jj)  "File number" means the number assigned to an

31  initial financing statement pursuant to s. 679.519(1).

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  1         (kk)  "Filing office" means an office designated in s.

  2  679.5011 as the place to file a financing statement.

  3         (ll)  "Filing-office rule" means a rule adopted

  4  pursuant to s. 679.526.

  5         (mm)  "Financing statement" means a record or records

  6  composed of an initial financing statement and any filed

  7  record relating to the initial financing statement.

  8         (nn)  "Fixture filing" means the filing of a financing

  9  statement covering goods that are or are to become fixtures

10  and satisfying s. 679.502(1) and (2).  The term includes the

11  filing of a financing statement covering goods of a

12  transmitting utility which are or are to become fixtures.

13         (oo)  "Fixtures" means goods that have become so

14  related to particular real property that an interest in them

15  arises under real property law.

16         (pp)  "General intangible" means any personal property,

17  including things in action, other than accounts, chattel

18  paper, commercial tort claims, deposit accounts, documents,

19  goods, instruments, investment property, letter-of-credit

20  rights, letters of credit, money, and oil, gas, or other

21  minerals before extraction.  The term includes payment

22  intangibles and software.

23         (qq)  "Good faith" means honesty in fact and the

24  observance of reasonable commercial standards of fair dealing.

25         (rr)  "Goods" means all things that are movable when a

26  security interest attaches.  The term includes fixtures;

27  standing timber that is to be cut and removed under a

28  conveyance or contract for sale; the unborn young of animals;

29  crops grown, growing, or to be grown, even if the crops are

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

31  The term also includes a computer program embedded in goods

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  1  and any supporting information provided in connection with a

  2  transaction relating to the program if the program is

  3  associated with the goods in such a manner that it customarily

  4  is considered part of the goods, or by becoming the owner of

  5  the goods, a person acquires a right to use the program in

  6  connection with the goods.  The term does not include a

  7  computer program embedded in goods that consist solely of the

  8  medium in which the program is embedded.  The term also does

  9  not include accounts, chattel paper, commercial tort claims,

10  deposit accounts, documents, general intangibles, instruments,

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

12  credit, money, or oil, gas, or other minerals before

13  extraction.

14         (ss)  "Governmental unit" means a subdivision, agency,

15  department, county, parish, municipality, or other unit of the

16  government of the United States, a state, or a foreign

17  country.  The term includes an organization having a separate

18  corporate existence if the organization is eligible to issue

19  debt on which interest is exempt from income taxation under

20  the laws of the United States.

21         (tt)  "Health-care-insurance receivable" means an

22  interest in or claim under a policy of insurance which is a

23  right to payment of a monetary obligation for health-care

24  goods or services provided.

25         (uu)  "Instrument" means a negotiable instrument or any

26  other writing that evidences a right to the payment of a

27  monetary obligation, is not itself a security agreement or

28  lease, and is of a type that in the ordinary course of

29  business is transferred by delivery with any necessary

30  indorsement or assignment.  The term does not include

31  investment property, letters of credit, or writings that

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  1  evidence a right to payment arising out of the use of a credit

  2  or charge card or information contained on or for use with the

  3  card.

  4         (vv)  "Inventory" means goods, other than farm

  5  products, which:

  6         1.  Are leased by a person as lessor;

  7         2.  Are held by a person for sale or lease or to be

  8  furnished under a contract of service;

  9         3.  Are furnished by a person under a contract of

10  service; or

11         4.  Consist of raw materials, work in process, or

12  materials used or consumed in a business.

13         (ww)  "Investment property" means a security, whether

14  certificated or uncertificated, security entitlement,

15  securities account, commodity contract, or commodity account.

16         (xx)  "Jurisdiction of organization," with respect to a

17  registered organization, means the jurisdiction under whose

18  law the organization is organized.

19         (yy)  "Letter-of-credit right" means a right to payment

20  or performance under a letter of credit, whether or not the

21  beneficiary has demanded or is at the time entitled to demand

22  payment or performance.  The term does not include the right

23  of a beneficiary to demand payment or performance under a

24  letter of credit.

25         (zz)  "Lien creditor" means:

26         1.  A creditor that has acquired a lien on the property

27  involved by attachment, levy, or the like;

28         2.  An assignee for benefit of creditors from the time

29  of assignment;

30         3.  A trustee in bankruptcy from the date of the filing

31  of the petition; or

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  1         4.  A receiver in equity from the time of appointment.

  2         (aaa)  "Manufactured home" means a structure,

  3  transportable in one or more sections, which, in the traveling

  4  mode, is eight body feet or more in width or 40 body feet or

  5  more in length, or, when erected on site, is 320 or more

  6  square feet, and which is built on a permanent chassis and

  7  designed to be used as a dwelling with or without a permanent

  8  foundation when connected to the required utilities, and

  9  includes the plumbing, heating, air-conditioning, and

10  electrical systems contained therein.  The term includes any

11  structure that meets all of the requirements of this paragraph

12  except the size requirements and with respect to which the

13  manufacturer voluntarily files a certification required by the

14  United States Secretary of Housing and Urban Development and

15  complies with the standards established under Title 42 of the

16  United States Code.

17         (bbb)  "Manufactured-home transaction" means a secured

18  transaction:

19         1.  That creates a purchase-money security interest in

20  a manufactured home, other than a manufactured home held as

21  inventory; or

22         2.  In which a manufactured home, other than a

23  manufactured home held as inventory, is the primary

24  collateral.

25         (ccc)  "Mortgage" means a consensual interest in real

26  property, including fixtures, which secures payment or

27  performance of an obligation, which interest was created or

28  derived from an instrument described in s. 697.01.

29         (ddd)  "New debtor" means a person who becomes bound as

30  debtor under s. 679.2031(4) by a security agreement previously

31  entered into by another person.

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  1         (eee)  "New value" means money; money's worth in

  2  property, services, or new credit; or release by a transferee

  3  of an interest in property previously transferred to the

  4  transferee.  The term does not include an obligation

  5  substituted for another obligation.

  6         (fff)  "Noncash proceeds" means proceeds other than

  7  cash proceeds.

  8         (ggg)  "Obligor" means a person who, with respect to an

  9  obligation secured by a security interest in or an

10  agricultural lien on the collateral, owes payment or other

11  performance of the obligation, has provided property other

12  than the collateral to secure payment or other performance of

13  the obligation, or is otherwise accountable in whole or in

14  part for payment or other performance of the obligation.  The

15  term does not include issuers or nominated persons under a

16  letter of credit.

17         (hhh)  "Original debtor," except as used in s.

18  679.3101(3), means a person who, as debtor, entered into a

19  security agreement to which a new debtor has become bound

20  under s. 679.2031(4).

21         (iii)  "Payment intangible" means a general intangible

22  under which the account debtor's principal obligation is a

23  monetary obligation.

24         (jjj)  "Person related to," with respect to an

25  individual, means:

26         1.  The spouse of the individual;

27         2.  A brother, brother-in-law, sister, or sister-in-law

28  of the individual;

29         3.  An ancestor or lineal descendant of the individual

30  or the individual's spouse; or

31

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  1         4.  Any other relative, by blood or marriage, of the

  2  individual or the individual's spouse who shares the same home

  3  with the individual.

  4         (kkk)  "Person related to," with respect to an

  5  organization, means:

  6         1.  A person directly or indirectly controlling,

  7  controlled by, or under common control with the organization;

  8         2.  An officer or director of, or a person performing

  9  similar functions with respect to, the organization;

10         3.  An officer or director of, or a person performing

11  similar functions with respect to, a person described in

12  subparagraph 1.;

13         4.  The spouse of an individual described in

14  subparagraph 1., subparagraph 2., or subparagraph 3.; or

15         5.  An individual who is related by blood or marriage

16  to an individual described in subparagraph 1., subparagraph

17  2., subparagraph 3., or subparagraph 4. and shares the same

18  home with the individual.

19         (lll)  "Proceeds," except as used in s. 679.609(2),

20  means the following property:

21         1.  Whatever is acquired upon the sale, lease, license,

22  exchange, or other disposition of collateral;

23         2.  Whatever is collected on, or distributed on account

24  of, collateral;

25         3.  Rights arising out of collateral;

26         4.  To the extent of the value of collateral, claims

27  arising out of the loss, nonconformity, or interference with

28  the use of, defects or infringement of rights in, or damage

29  to, the collateral; or

30         5.  To the extent of the value of collateral and to the

31  extent payable to the debtor or the secured party, insurance

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  1  payable by reason of the loss or nonconformity of, defects or

  2  infringement of rights in, or damage to, the collateral.

  3         (mmm)  "Promissory note" means an instrument that

  4  evidences a promise to pay a monetary obligation, does not

  5  evidence an order to pay, and does not contain an

  6  acknowledgment by a bank that the bank has received for

  7  deposit a sum of money or funds.

  8         (nnn)  "Proposal" means a record authenticated by a

  9  secured party which includes the terms on which the secured

10  party is willing to accept collateral in full or partial

11  satisfaction of the obligation it secures pursuant to ss.

12  679.620, 679.621, and 679.622.

13         (ooo)  "Pursuant to commitment," with respect to an

14  advance made or other value given by a secured party, means

15  pursuant to the secured party's obligation, whether or not a

16  subsequent event of default or other event not within the

17  secured party's control has relieved or may relieve the

18  secured party from its obligation.

19         (ppp)  "Record," except as used in the terms "for

20  record," "of record," "record or legal title," and "record

21  owner," means information that is inscribed on a tangible

22  medium or that is stored in an electronic or other medium and

23  is retrievable in perceivable form.

24         (qqq)  "Registered organization" means an organization

25  organized solely under the law of a single state or the United

26  States and as to which the state or the United States must

27  maintain a public record showing the organization to have been

28  organized.

29         (rrr)  "Secondary obligor" means an obligor to the

30  extent that:

31         1.  The obligor's obligation is secondary; or

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  1         2.  The obligor has a right of recourse with respect to

  2  an obligation secured by collateral against the debtor,

  3  another obligor, or property of either.

  4         (sss)  "Secured party" means:

  5         1.  A person in whose favor a security interest is

  6  created or provided for under a security agreement, whether or

  7  not any obligation to be secured is outstanding;

  8         2.  A person who holds an agricultural lien;

  9         3.  A consignor;

10         4.  A person to whom accounts, chattel paper, payment

11  intangibles, or promissory notes have been sold;

12         5.  A trustee, indenture trustee, agent, collateral

13  agent, or other representative in whose favor a security

14  interest or agricultural lien is created or provided for; or

15         6.  A person who holds a security interest arising

16  under s. 672.401, s. 672.505, s. 672.711(3), s. 680.508(5), s.

17  674.2101, or s. 675.118.

18         (ttt)  "Security agreement" means an agreement that

19  creates or provides for a security interest.

20         (uuu)  "Send," in connection with a record or

21  notification, means:

22         1.  To deposit in the mail, deliver for transmission,

23  or transmit by any other usual means of communication, with

24  postage or cost of transmission provided for, addressed to any

25  address reasonable under the circumstances; or

26         2.  To cause the record or notification to be received

27  within the time that it would have been received if properly

28  sent under subparagraph 1.

29         (vvv)  "Software" means a computer program and any

30  supporting information provided in connection with a

31  transaction relating to the program. The term does not include

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  1  a computer program that is included in the definition of

  2  goods.

  3         (www)  "State" means a state of the United States, the

  4  District of Columbia, Puerto Rico, the United States Virgin

  5  Islands, or any territory or insular possession subject to the

  6  jurisdiction of the United States.

  7         (xxx)  "Supporting obligation" means a letter-of-credit

  8  right or secondary obligation that supports the payment or

  9  performance of an account, chattel paper, a document, a

10  general intangible, an instrument, or investment property.

11         (yyy)  "Tangible chattel paper" means chattel paper

12  evidenced by a record or records consisting of information

13  that is inscribed on a tangible medium.

14         (zzz)  "Termination statement" means an amendment of a

15  financing statement which:

16         1.  Identifies, by its file number, or if a fixture

17  filing, by the official records book and page number, the

18  initial financing statement to which it relates; and

19         2.  Indicates either that it is a termination statement

20  or that the identified financing statement is no longer

21  effective.

22         (aaaa)  "Transmitting utility" means a person primarily

23  engaged in the business of:

24         1.  Operating a railroad, subway, street railway, or

25  trolley bus;

26         2.  Transmitting communications electrically,

27  electromagnetically, or by light;

28         3.  Transmitting goods by pipeline or sewer; or

29         4.  Transmitting or producing and transmitting

30  electricity, steam, gas, or water.

31

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  1         (2)  The following definitions in other chapters apply

  2  to this chapter:

  3         "Applicant"                                 s. 675.103.

  4         "Beneficiary"                               s. 675.103.

  5         "Broker"                                   s. 678.1021.

  6         "Certificated security"                    s. 678.1021.

  7         "Check"                                    s. 673.1041.

  8         "Clearing corporation"                     s. 678.1021.

  9         "Contract for sale"                         s. 672.106.

10         "Customer"                                  s. 674.104.

11         "Entitlement holder"                       s. 678.1021.

12         "Financial asset"                          s. 678.1021.

13         "Holder in due course"                     s. 673.3021.

14         "Issuer" (with respect to a letter of credit or

15  letter-of-credit right)                            s. 675.103.

16         "Issuer" (with respect to a security)      s. 678.2011.

17         "Lease"                                    s. 680.1031.

18         "Lease agreement"                          s. 680.1031.

19         "Lease contract"                           s. 680.1031.

20         "Leasehold interest"                       s. 680.1031.

21         "Lessee"                                   s. 680.1031.

22         "Lessee in ordinary course of business"    s. 680.1031.

23         "Lessor"                                   s. 680.1031.

24         "Lessor's residual interest"               s. 680.1031.

25         "Letter of credit"                          s. 675.103.

26         "Merchant"                                  s. 672.104.

27         "Negotiable instrument"                    s. 673.1041.

28         "Nominated person"                          s. 675.103.

29         "Note"                                     s. 673.1041.

30         "Proceeds of a letter of credit"            s. 675.114.

31         "Prove"                                    s. 673.1031.

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  1         "Sale"                                      s. 672.106.

  2         "Securities account"                       s. 678.5011.

  3         "Securities intermediary"                  s. 678.1021.

  4         "Security"                                 s. 678.1021.

  5         "Security certificate"                     s. 678.1021.

  6         "Security entitlement"                     s. 678.1021.

  7         "Uncertificated security"                  s. 678.1021.

  8         (3)  Chapter 671 contains general definitions and

  9  principles of construction and interpretation applicable

10  throughout this chapter.

11         679.1031  Purchase-money security interest; application

12  of payments; burden of establishing.--

13         (1)  In this section, the term:

14         (a)  "Purchase-money collateral" means goods or

15  software that secures a purchase-money obligation incurred

16  with respect to that collateral.

17         (b)  "Purchase-money obligation" means an obligation of

18  an obligor incurred as all or part of the price of the

19  collateral or for value given to enable the debtor to acquire

20  rights in or the use of the collateral if the value is in fact

21  so used.

22         (2)  A security interest in goods is a purchase-money

23  security interest:

24         (a)  To the extent that the goods are purchase-money

25  collateral with respect to that security interest;

26         (b)  If the security interest is in inventory that is

27  or was purchase-money collateral, also to the extent that the

28  security interest secures a purchase-money obligation incurred

29  with respect to other inventory in which the secured party

30  holds or held a purchase-money security interest; and

31

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  1         (c)  Also to the extent that the security interest

  2  secures a purchase-money obligation incurred with respect to

  3  software in which the secured party holds or held a

  4  purchase-money security interest.

  5         (3)  A security interest in software is a

  6  purchase-money security interest to the extent that the

  7  security interest also secures a purchase-money obligation

  8  incurred with respect to goods in which the secured party

  9  holds or held a purchase-money security interest if:

10         (a)  The debtor acquired interest in the software in an

11  integrated transaction in which the debtor acquired an

12  interest in the goods; and

13         (b)  The debtor acquired interest in the software for

14  the principal purpose of using the software in the goods.

15         (4)  The security interest of a consignor in goods that

16  are the subject of a consignment is a purchase-money security

17  interest in inventory.

18         (5)  If the extent to which a security interest is a

19  purchase-money security interest depends on the application of

20  a payment to a particular obligation, the payment must be

21  applied:

22         (a)  In accordance with any reasonable method of

23  application to which the parties agree;

24         (b)  In the absence of the parties' agreement to a

25  reasonable method, in accordance with any intention of the

26  obligor manifested at or before the time of payment; or

27         (c)  In the absence of an agreement to a reasonable

28  method and a timely manifestation of the obligor's intention,

29  in the following order:

30         1.  To obligations that are not secured; and

31

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  1         2.  If more than one obligation is secured, to

  2  obligations secured by purchase-money security interests in

  3  the order in which those obligations were incurred.

  4         (6)  A purchase-money security interest does not lose

  5  its status as such, even if:

  6         (a)  The purchase-money collateral also secures an

  7  obligation that is not a purchase-money obligation;

  8         (b)  Collateral that is not purchase-money collateral

  9  also secures the purchase-money obligation; or

10         (c)  The purchase-money obligation has been renewed,

11  refinanced, consolidated, or restructured.

12         (7)  A secured party claiming a purchase-money security

13  interest has the burden of establishing the extent to which

14  the security interest is a purchase-money security interest.

15         679.1041  Control of deposit account.--

16         (1)  A secured party has control of a deposit account

17  if:

18         (a)  The secured party is the bank with which the

19  deposit account is maintained;

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

21  an authenticated record that the bank will comply with

22  instructions originated by the secured party directing

23  disposition of the funds in the deposit account without

24  further consent by the debtor; or

25         (c)  The secured party becomes the bank's customer with

26  respect to the deposit account.

27         (2)  A secured party that has satisfied subsection (1)

28  has control, even if the debtor retains the right to direct

29  the disposition of funds from the deposit account.

30         679.1051  Control of electronic chattel paper.--A

31  secured party has control of electronic chattel paper if the

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  1  record or records comprising the chattel paper are created,

  2  stored, and assigned in such a manner that:

  3         (1)  A single authoritative copy of the record or

  4  records exists which is unique, identifiable and, except as

  5  otherwise provided in subsections (4), (5), and (6),

  6  unalterable;

  7         (2)  The authoritative copy identifies the secured

  8  party as the assignee of the record or records;

  9         (3)  The authoritative copy is communicated to and

10  maintained by the secured party or its designated custodian;

11         (4)  Copies or revisions that add or change an

12  identified assignee of the authoritative copy can be made only

13  with the participation of the secured party;

14         (5)  Each copy of the authoritative copy and any copy

15  of a copy is readily identifiable as a copy that is not the

16  authoritative copy; and

17         (6)  Any revision of the authoritative copy is readily

18  identifiable as an authorized or unauthorized revision.

19         679.1061  Control of investment property.--

20         (1)  A person has control of a certificated security,

21  uncertificated security, or security entitlement as provided

22  in s. 678.1061.

23         (2)  A secured party has control of a commodity

24  contract if:

25         (a)  The secured party is the commodity intermediary

26  with which the commodity contract is carried; or

27         (b)  The commodity customer, secured party, and

28  commodity intermediary have agreed that the commodity

29  intermediary will apply any value distributed on account of

30  the commodity contract as directed by the secured party

31  without further consent by the commodity customer.

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  1         (3)  A secured party having control of all security

  2  entitlements or commodity contracts carried in a securities

  3  account or commodity account has control over the securities

  4  account or commodity account.

  5         679.1071  Control of letter-of-credit right.--A secured

  6  party has control of a letter-of-credit right to the extent of

  7  any right to payment or performance by the issuer or any

  8  nominated person if the issuer or nominated person has

  9  consented to an assignment of proceeds of the letter of credit

10  under s. 675.114(3) or otherwise applicable law or practice.

11         679.1081  Sufficiency of description.--

12         (1)  Except as otherwise provided herein and in

13  subsections (3), (4), and (5), a description of personal or

14  real property is sufficient, whether or not it is specific, if

15  it reasonably identifies what is described. A description of

16  real estate in a record filed to perfect a security interest

17  in crops growing or to be grown or goods which are or are to

18  become fixtures shall be sufficient only if the filing or

19  recording of the same constitutes constructive notice under

20  the laws of this state, other than this chapter, which are

21  applicable to the filing or recording of a record of a

22  mortgage, and a mailing or street address alone shall not be

23  sufficient.

24         (2)  Except as otherwise provided in subsection (4), a

25  description of collateral reasonably identifies the collateral

26  if it identifies the collateral by:

27         (a)  Specific listing;

28         (b)  Category;

29         (c)  Except as otherwise provided in subsection (5), a

30  type of collateral defined in the Uniform Commercial Code;

31         (d)  Quantity;

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  1         (e)  Computational or allocational formula or

  2  procedure; or

  3         (f)  Except as otherwise provided in subsection (3),

  4  any other method, if the identity of the collateral is

  5  objectively determinable.

  6         (3)  A description of collateral as "all the debtor's

  7  assets" or "all the debtor's personal property" or using words

  8  of similar import does not reasonably identify the collateral

  9  for purposes of the security agreement.

10         (4)  Except as otherwise provided in subsection (5), a

11  description of a security entitlement, securities account, or

12  commodity account is sufficient if it describes:

13         (a)  The collateral by those terms or as investment

14  property; or

15         (b)  The underlying financial asset or commodity

16  contract.

17         (5)  A description only by type of collateral defined

18  in the Uniform Commercial Code is an insufficient description

19  of:

20         (a)  A commercial tort claim; or

21         (b)  In a consumer transaction, consumer goods, a

22  security entitlement, a securities account, or a commodity

23  account.

24         679.1091  Scope.--

25         (1)  Except as otherwise provided in subsections (3)

26  and (4), this chapter applies to:

27         (a)  A transaction, regardless of its form, that

28  creates a security interest in personal property or fixtures

29  by contract;

30         (b)  An agricultural lien;

31

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  1         (c)  A sale of accounts, chattel paper, payment

  2  intangibles, or promissory notes;

  3         (d)  A consignment;

  4         (e)  A security interest arising under s. 672.401, s.

  5  672.502, s. 672.711, or s. 680.508(5), as provided in s.

  6  679.1101; and

  7         (f)  A security interest arising under s. 674.2101 or

  8  s. 675.118.

  9         (2)  The application of this chapter to a security

10  interest in a secured obligation is not affected by the fact

11  that the obligation is itself secured by a transaction or

12  interest to which this chapter does not apply.

13         (3)  This chapter does not apply to the extent that:

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

15  States preempts this chapter; or

16         (b)  The rights of a transferee beneficiary or

17  nominated person under a letter of credit are independent and

18  superior under s. 675.114.

19         (4)  This chapter does not apply to:

20         (a)  A landlord's lien, other than an agricultural

21  lien;

22         (b)  A lien, other than an agricultural lien, given by

23  statute or other rule of law for services or materials, but s.

24  679.333 applies with respect to priority of the lien;

25         (c)  An assignment of a claim for wages, salary, or

26  other compensation of an employee;

27         (d)  A sale of accounts, chattel paper, payment

28  intangibles, or promissory notes as part of a sale of the

29  business out of which they arose;

30

31

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  1         (e)  An assignment of accounts, chattel paper, payment

  2  intangibles, or promissory notes which is for the purpose of

  3  collection only;

  4         (f)  An assignment of a right to payment under a

  5  contract to an assignee that is also obligated to perform

  6  under the contract;

  7         (g)  An assignment of a single account, payment

  8  intangible, or promissory note to an assignee in full or

  9  partial satisfaction of a preexisting indebtedness;

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

11  claim under a policy of insurance, other than an assignment by

12  or to a health-care provider of a health-care-insurance

13  receivable and any subsequent assignment of the right to

14  payment, but ss. 679.3151 and 679.322 apply with respect to

15  proceeds and priorities in proceeds;

16         (i)  An assignment of a right represented by a

17  judgment, other than a judgment taken on a right to payment

18  that was collateral;

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

20         1.  Section 679.340 applies with respect to the

21  effectiveness of rights of recoupment or set-off against

22  deposit accounts; and

23         2.  Section 679.4041 applies with respect to defenses

24  or claims of an account debtor;

25         (k)  The creation or transfer of an interest in or lien

26  on real property, including a lease or rents thereunder,

27  except to the extent that provision is made for:

28         1.  Liens on real property in ss. 679.2031 and

29  679.3081;

30         2.  Fixtures in s. 679.334;

31

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  1         3.  Fixture filings in ss. 679.5011, 679.5021, 679.512,

  2  679.516, and 679.519; and

  3         4.  Security agreements covering personal and real

  4  property in s. 679.604;

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

  6  than a commercial tort claim, but ss. 679.3151 and 679.322

  7  apply with respect to proceeds and priorities in proceeds;

  8         (m)  An assignment of a deposit account in a consumer

  9  transaction, but ss. 679.3151 and 679.322 apply with respect

10  to proceeds and priorities in proceeds; or

11         (n)  Any transfer by a government or governmental unit.

12         679.1101  Security interests arising under chapter 672

13  or chapter 680.--A security interest arising under s. 672.401,

14  s. 672.505, s. 672.711(3), or s. 680.508(5) is subject to this

15  chapter.  However, until the debtor obtains possession of the

16  goods:

17         (1)  The security interest is enforceable, even if s.

18  679.2031(2)(c) has not been satisfied;

19         (2)  Filing is not required to perfect the security

20  interest;

21         (3)  The rights of the secured party after default by

22  the debtor are governed by chapter 672 or chapter 680; and

23         (4)  The security interest has priority over a

24  conflicting security interest created by the debtor.

25         Section 2.  Part II of chapter 679, Florida Statutes,

26  consisting of sections 679.201, 679.202, 679.203, 679.204,

27  679.205, 679.206, 679.207, and 679.208, Florida Statutes, is

28  repealed and a new part II of that chapter, consisting of

29  sections 679.2011, 679.2021, 679.2031, 670.2041, 679.2051,

30  679.2061, 679.2071, 679.2081, 679.209, and 679.210, Florida

31  Statutes, is created to read:

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  1                             PART II

  2               EFFECTIVENESS OF SECURITY AGREEMENT;

  3                 ATTACHMENT OF SECURITY INTEREST;

  4             RIGHTS OF PARTIES TO SECURITY AGREEMENT

  5         679.2011  General effectiveness of security

  6  agreement.--

  7         (1)  Except as otherwise provided in the Uniform

  8  Commercial Code, a security agreement is effective according

  9  to its terms between the parties, against purchasers of the

10  collateral, and against creditors.

11         (2)  Nothing in this chapter validates any charge or

12  practice illegal under any statute or regulation thereunder

13  governing usury, small loans, retail installment sales, or the

14  like, or extends the application of any such statute or

15  regulation to any transaction not otherwise subject thereto.

16  A transaction, although subject to this chapter, is also

17  subject to chapters 516 and 520, and in the case of conflict

18  between the provisions of this chapter and any such statute,

19  the provisions of such statute shall control.  Failure to

20  comply with any applicable statute has only the effect which

21  is specified therein.

22         679.2021  Title to collateral immaterial.--Except as

23  otherwise provided with respect to consignments or sales of

24  accounts, chattel paper, payment intangibles, or promissory

25  notes, the provisions of this chapter with regard to rights

26  and obligations apply whether title to collateral is in the

27  secured party or the debtor.

28         679.2031  Attachment and enforceability of security

29  interest; proceeds; supporting obligations; formal

30  requisites.--

31

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  1         (1)  A security interest attaches to collateral when it

  2  becomes enforceable against the debtor with respect to the

  3  collateral, unless an agreement expressly postpones the time

  4  of attachment.

  5         (2)  Except as otherwise provided in subsections (3)

  6  through (9), a security interest is enforceable against the

  7  debtor and third parties with respect to the collateral only

  8  if:

  9         (a)  Value has been given;

10         (b)  The debtor has rights in the collateral or the

11  power to transfer rights in the collateral to a secured party;

12  and

13         (c)  One of the following conditions is met:

14         1.  The debtor has authenticated a security agreement

15  that provides a description of the collateral and, if the

16  security interest covers timber to be cut, a description of

17  the land concerned;

18         2.  The collateral is not a certificated security and

19  is in the possession of the secured party under s. 679.3131

20  pursuant to the debtor's security agreement;

21         3.  The collateral is a certificated security in

22  registered form and the security certificate has been

23  delivered to the secured party under S. 678.3011 pursuant to

24  the debtor's security agreement; or

25         4.  The collateral is deposit accounts, electronic

26  chattel paper, investment property, or letter-of-credit

27  rights, and the secured party has control under s. 679.1041,

28  s. 679.1051, s. 679.1061, or s. 679.1071 pursuant to the

29  debtor's security agreement.

30         (3)  Subsection (2) is subject to s. 674.2101 on the

31  security interest of a collecting bank, s. 675.118 on the

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  1  security interest of a letter-of-credit issuer or nominated

  2  person, s. 679.1101 on a security interest arising under

  3  chapter 672 or chapter 680, and s. 679.2061 on security

  4  interests in investment property.

  5         (4)  A person becomes bound as debtor by a security

  6  agreement entered into by another person if, by operation of

  7  law other than this chapter or by contract:

  8         (a)  The security agreement becomes effective to create

  9  a security interest in the person's property; or

10         (b)  The person becomes generally obligated for the

11  obligations of the other person, including the obligation

12  secured under the security agreement, and acquires or succeeds

13  to all or substantially all of the assets of the other person.

14         (5)  If a new debtor becomes bound as debtor by a

15  security agreement entered into by another person:

16         (a)  The agreement satisfies subsection (2)(c) with

17  respect to existing or after-acquired property of the new

18  debtor to the extent the property is described in the

19  agreement; and

20         (b)  Another agreement is not necessary to make a

21  security interest in the property enforceable.

22         (6)  The attachment of a security interest in

23  collateral gives the secured party the rights to proceeds

24  provided by s. 679.3151 and is also attachment of a security

25  interest in a supporting obligation for the collateral.

26         (7)  The attachment of a security interest in a right

27  to payment or performance secured by a security interest or

28  other lien on personal or real property is also attachment of

29  a security interest in the security interest, mortgage, or

30  other lien.

31

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  1         (8)  The attachment of a security interest in a

  2  securities account is also attachment of a security interest

  3  in the security entitlements carried in the securities

  4  account.

  5         (9)  The attachment of a security interest in a

  6  commodity account is also attachment of a security interest in

  7  the commodity contracts carried in the commodity account.

  8         679.2041  After-acquired property; future advances.--

  9         (1)  Except as otherwise provided in subsection (2), a

10  security agreement may create or provide for a security

11  interest in after-acquired collateral.

12         (2)  A security interest does not attach under a term

13  constituting an after-acquired property clause to:

14         (a)  Consumer goods, other than an accession when given

15  as additional security, unless the debtor acquires rights in

16  them within 10 days after the secured party gives value; or

17         (b)  A commercial tort claim.

18         (3)  A security agreement may provide that collateral

19  secures, or that accounts, chattel paper, payment intangibles,

20  or promissory notes are sold in connection with, future

21  advances or other value, whether or not the advances or value

22  are given pursuant to commitment.

23         679.2051  Use or disposition of collateral

24  permissible.--

25         (1)  A security interest is not invalid or fraudulent

26  against creditors solely because:

27         (a)  The debtor has the right or ability to:

28         1.  Use, commingle, or dispose of all or part of the

29  collateral, including returned or repossessed goods;

30         2.  Collect, compromise, enforce, or otherwise deal

31  with collateral;

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  1         3.  Accept the return of collateral or make

  2  repossessions; or

  3         4.  Use, commingle, or dispose of proceeds; or

  4         (b)  The secured party fails to require the debtor to

  5  account for proceeds or replace collateral.

  6         (2)  This section does not relax the requirements of

  7  possession if attachment, perfection, or enforcement of a

  8  security interest depends upon possession of the collateral by

  9  the secured party.

10         679.2061  Security interest arising in purchase or

11  delivery of financial asset.--

12         (1)  A security interest in favor of a securities

13  intermediary attaches to a person's security entitlement if:

14         (a)  The person buys a financial asset through the

15  securities intermediary in a transaction in which the person

16  is obligated to pay the purchase price to the securities

17  intermediary at the time of the purchase; and

18         (b)  The securities intermediary credits the financial

19  asset to the buyer's securities account before the buyer pays

20  the securities intermediary.

21         (2)  The security interest described in subsection (1)

22  secures the person's obligation to pay for the financial

23  asset.

24         (3)  A security interest in favor of a person who

25  delivers a certificated security or other financial asset

26  represented by a writing attaches to the security or other

27  financial asset if:

28         (a)  The security or other financial asset:

29         1.  In the ordinary course of business is transferred

30  by delivery with any necessary indorsement or assignment; and

31

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  1         2.  Is delivered under an agreement between persons in

  2  the business of dealing with such securities or financial

  3  assets; and

  4         (b)  The agreement calls for delivery against payment.

  5         (4)  The security interest described in subsection (3)

  6  secures the obligation to make payment for the delivery.

  7         679.2071  Rights and duties of secured party having

  8  possession or control of collateral.--

  9         (1)  Except as otherwise provided in subsection (4), a

10  secured party shall use reasonable care in the custody and

11  preservation of collateral in the secured party's possession.

12  In the case of chattel paper or an instrument, reasonable care

13  includes taking necessary steps to preserve rights against

14  prior parties unless otherwise agreed.

15         (2)  Except as otherwise provided in subsection (4), if

16  a secured party has possession of collateral:

17         (a)  Reasonable expenses, including the cost of

18  insurance and payment of taxes or other charges, incurred in

19  the custody, preservation, use, or operation of the collateral

20  are chargeable to the debtor and are secured by the

21  collateral;

22         (b)  The risk of accidental loss or damage is on the

23  debtor to the extent of a deficiency in any effective

24  insurance coverage;

25         (c)  The secured party shall keep the collateral

26  identifiable, but fungible collateral may be commingled; and

27         (d)  The secured party may use or operate the

28  collateral:

29         1.  For the purpose of preserving the collateral or its

30  value;

31

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  1         2.  As permitted by an order of a court having

  2  competent jurisdiction; or

  3         3.  Except in the case of consumer goods, in the manner

  4  and to the extent agreed by the debtor.

  5         (3)  Except as otherwise provided in subsection (4), a

  6  secured party having possession of collateral or control of

  7  collateral under s. 679.1041, s. 679.1051, s. 679.1061, or s.

  8  679.1071:

  9         (a)  May hold as additional security any proceeds,

10  except money or funds, received from the collateral;

11         (b)  Shall apply money or funds received from the

12  collateral to reduce the secured obligation, unless remitted

13  to the debtor; and

14         (c)  May create a security interest in the collateral.

15         (4)  If the secured party is a buyer of accounts,

16  chattel paper, payment intangibles, or promissory notes or a

17  consignor:

18         (a)  Subsection (1) does not apply unless the secured

19  party is entitled under an agreement:

20         1.  To charge back uncollected collateral; or

21         2.  Otherwise to full or limited recourse against the

22  debtor or a secondary obligor based on the nonpayment or other

23  default of an account debtor or other obligor on the

24  collateral; and

25         (b)  Subsections (2) and (3) do not apply.

26         679.2081  Additional duties of secured party having

27  control of collateral.--

28         (1)  This section applies to cases in which there is no

29  outstanding secured obligation and the secured party is not

30  committed to make advances, incur obligations, or otherwise

31  give value.

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  1         (2)  Within 10 days after receiving an authenticated

  2  demand by the debtor:

  3         (a)  A secured party having control of a deposit

  4  account under s. 679.1041(1)(b) shall send to the bank with

  5  which the deposit account is maintained an authenticated

  6  statement that releases the bank from any further obligation

  7  to comply with instructions originated by the secured party;

  8         (b)  A secured party having control of a deposit

  9  account under s. 679.1041(1)(c) shall:

10         1.  Pay the debtor the balance on deposit in the

11  deposit account; or

12         2.  Transfer the balance on deposit into a deposit

13  account in the debtor's name;

14         (c)  A secured party, other than a buyer, having

15  control of electronic chattel paper under s. 679.1051 shall:

16         1.  Communicate the authoritative copy of the

17  electronic chattel paper to the debtor or its designated

18  custodian;

19         2.  If the debtor designates a custodian that is the

20  designated custodian with which the authoritative copy of the

21  electronic chattel paper is maintained for the secured party,

22  communicate to the custodian an authenticated record releasing

23  the designated custodian from any further obligation to comply

24  with instructions originated by the secured party and

25  instructing the custodian to comply with instructions

26  originated by the debtor; and

27         3.  Take appropriate action to enable the debtor or the

28  debtor's designated custodian to make copies of or revisions

29  to the authoritative copy which add or change an identified

30  assignee of the authoritative copy without the consent of the

31  secured party;

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  1         (d)  A secured party having control of investment

  2  property under s. 678.1061(4)(b) or s. 679.1061(2) shall send

  3  to the securities intermediary or commodity intermediary with

  4  which the security entitlement or commodity contract is

  5  maintained an authenticated record that releases the

  6  securities intermediary or commodity intermediary from any

  7  further obligation to comply with entitlement orders or

  8  directions originated by the secured party; and

  9         (e)  A secured party having control of a

10  letter-of-credit right under s. 679.1071 shall send to each

11  person having an unfulfilled obligation to pay or deliver

12  proceeds of the letter of credit to the secured party an

13  authenticated release from any further obligation to pay or

14  deliver proceeds of the letter of credit to the secured party.

15         679.209  Duties of secured party if account debtor has

16  been notified of assignment.--

17         (1)  Except as otherwise provided in subsection (3),

18  this section applies if:

19         (a)  There is no outstanding secured obligation; and

20         (b)  The secured party is not committed to make

21  advances, incur obligations, or otherwise give value.

22         (2)  Within 10 days after receiving an authenticated

23  demand by the debtor, a secured party shall send to an account

24  debtor that has received notification of an assignment to the

25  secured party as assignee under s. 679.4061(1) an

26  authenticated record that releases the account debtor from any

27  further obligation to the secured party.

28         (3)  This section does not apply to an assignment

29  constituting the sale of an account, chattel paper, or payment

30  intangible.

31

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  1         679.210  Request for accounting; request regarding list

  2  of collateral or statement of account.--

  3         (1)  In this section, the term:

  4         (a)  "Request" means a record of a type described in

  5  paragraph (b), paragraph (c), or paragraph (d).

  6         (b)  "Request for an accounting" means a record

  7  authenticated by a debtor requesting that the recipient

  8  provide an accounting of the unpaid obligations secured by

  9  collateral and reasonably identifying the transaction or

10  relationship that is the subject of the request.

11         (c)  "Request regarding a list of collateral" means a

12  record authenticated by a debtor requesting that the recipient

13  approve or correct a list of what the debtor believes to be

14  the collateral securing an obligation and reasonably

15  identifying the transaction or relationship that is the

16  subject of the request.

17         (d)  "Request regarding a statement of account" means a

18  record authenticated by a debtor requesting that the recipient

19  approve or correct a statement indicating what the debtor

20  believes to be the aggregate amount of unpaid obligations

21  secured by collateral as of a specified date and reasonably

22  identifying the transaction or relationship that is the

23  subject of the request.

24         (e)  "Reasonably identifying the transaction or

25  relationship" means that the request provides information

26  sufficient for the person to identify the transaction or

27  relationship and respond to the request.  Pursuant to s.

28  679.603(1), a secured party and debtor may determine by

29  agreement the standards for measuring fulfillment of this

30  duty.

31

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  1         (f)  "Person" means a person or entity that is or was a

  2  secured party or otherwise claims or has claimed an interest

  3  in the collateral.

  4         (2)  Subject to subsections (3), (4), (5), and (6), a

  5  secured party, other than a buyer of accounts, chattel paper,

  6  payment intangibles, or promissory notes or a consignor, shall

  7  comply with a request within 14 days after receipt:

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

  9  authenticating and sending to the debtor an accounting; and

10         (b)  In the case of a request regarding a list of

11  collateral or a request regarding a statement of account, by

12  authenticating and sending to the debtor an approval or

13  correction.

14         (3)  A secured party that claims a security interest in

15  all of a particular type of collateral owned by the debtor may

16  comply with a request regarding a list of collateral by

17  sending to the debtor an authenticated record including a

18  statement to that effect within 14 days after receipt.

19         (4)  A person who receives a request regarding a list

20  of collateral, claims no interest in the collateral when the

21  request is received, and claimed an interest in the collateral

22  at an earlier time shall comply with the request within 14

23  days after receipt by sending to the debtor an authenticated

24  record:

25         (a)  Disclaiming any interest in the collateral; and

26         (b)  If known to the recipient, providing the name and

27  mailing address of any assignee of or successor to the

28  recipient's interest in the collateral.

29         (5)  A person who receives a request for an accounting

30  or a request regarding a statement of account, claims no

31  interest in the obligations when the request is received, and

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  1  claimed an interest in the obligations at an earlier time

  2  shall comply with the request within 14 days after receipt by

  3  sending to the debtor an authenticated record:

  4         (a)  Disclaiming any interest in the obligations; and

  5         (b)  If known to the recipient, providing the name and

  6  mailing address of any assignee of or successor to the

  7  recipient's interest in the obligations.

  8         (6)  A debtor is entitled under this section without

  9  charge to one response to a request for an accounting or a

10  request regarding a statement of account for each secured

11  obligation during any 6-month period. A debtor in a consumer

12  transaction is entitled to a single response to a request

13  regarding a list of collateral, for a transaction other than a

14  consumer transaction, without charge during any 6-month

15  period. The secured party may require payment of a charge not

16  exceeding $25 for each additional response to a request for an

17  accounting, a request regarding a statement of account, or a

18  request regarding a list of collateral for a consumer

19  transaction.  To the extent provided in an authenticated

20  record, the secured party may require the payment of

21  reasonable expenses, including attorney's fees, reasonably

22  incurred in providing a response to a request regarding a list

23  of collateral for a transaction other than a consumer

24  transaction under this section; otherwise, the secured party

25  may not charge more than $25 for each request regarding a list

26  of collateral.  Excluding a request related to a proposed

27  satisfaction of the secured obligation, a secured party is not

28  required to respond to more than 12 of each of the permitted

29  requests in any 12-month period.

30         Section 3.  Part III of chapter 679, Florida Statutes,

31  consisting of sections 679.301, 679.302, 679.303, 679.304,

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  1  690.305, 679.306, 679.307, 679.308, 679.309, 679.310, 679.311,

  2  679.312, 679.313, 679.314, 679.315, 679.316, 679.317, and

  3  679.318, Florida Statutes, is repealed and a new part III of

  4  that chapter, consisting of sections 679.3011, 679.3021,

  5  679.3031, 679.3041, 690.3051, 679.3061, 679.3071, 679.3081,

  6  679.3091, 679.3101, 679.3111, 679.3121, 679.3131, 679.3141,

  7  679.3151, 679.3161, 679.3171, 679.3181, 679.319, 679.320,

  8  679.321, 679.322, 679.323, 679.324, 679.325, 679.326, 679.327,

  9  679.328, 679.329, 679.330, 679.331, 679.332, 679.333, 679.334,

10  679.335, 679.336, 679.337, 679.3381, 679.339, 679.340,

11  679.341, and 679.342, Florida Statutes, is created to read:

12                             PART III

13                     PERFECTION AND PRIORITY

14         679.3011  Law governing perfection and priority of

15  security interests.--Except as otherwise provided in ss.

16  679.1091, 679.3031, 679.3041, 679.3051, and 679.3061, the

17  following rules determine the law governing perfection, the

18  effect of perfection or nonperfection, and the priority of a

19  security interest in collateral:

20         (1)  Except as otherwise provided in this section,

21  while a debtor is located in a jurisdiction, the local law of

22  that jurisdiction governs perfection, the effect of perfection

23  or nonperfection, and the priority of a security interest in

24  collateral.

25         (2)  While collateral is located in a jurisdiction, the

26  local law of that jurisdiction governs perfection, the effect

27  of perfection or nonperfection, and the priority of a

28  possessory security interest in that collateral.

29         (3)  Except as otherwise provided in subsection (4),

30  while negotiable documents, goods, instruments, money, or

31

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  1  tangible chattel paper is located in a jurisdiction, the local

  2  law of that jurisdiction governs:

  3         (a)  Perfection of a security interest in the goods by

  4  filing a fixture filing;

  5         (b)  Perfection of a security interest in timber to be

  6  cut; and

  7         (c)  The effect of perfection or nonperfection and the

  8  priority of a nonpossessory security interest in the

  9  collateral.

10         (4)  The local law of the jurisdiction in which the

11  wellhead or minehead is located governs perfection, the effect

12  of perfection or nonperfection, and the priority of a security

13  interest in as-extracted collateral.

14         679.3021  Law governing perfection and priority of

15  agricultural liens.--While farm products are located in a

16  jurisdiction, the local law of that jurisdiction governs

17  perfection, the effect of perfection or nonperfection, and the

18  priority of an agricultural lien on the farm products.

19         679.3031  Law governing perfection and priority of

20  security interests in goods covered by a certificate of

21  title.--

22         (1)  This section applies to goods covered by a

23  certificate of title, even if there is no other relationship

24  between the jurisdiction under whose certificate of title the

25  goods are covered and the goods or the debtor.

26         (2)  Goods become covered by a certificate of title

27  when a valid application for the certificate of title and the

28  applicable fee are delivered to the appropriate authority.

29  Goods cease to be covered by a certificate of title at the

30  earlier of the time the certificate of title ceases to be

31  effective under the law of the issuing jurisdiction or the

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  1  time the goods become covered subsequently by a certificate of

  2  title issued by another jurisdiction.

  3         (3)  The local law of the jurisdiction under whose

  4  certificate of title the goods are covered governs perfection,

  5  the effect of perfection or nonperfection, and the priority of

  6  a security interest in goods covered by a certificate of title

  7  from the time the goods become covered by the certificate of

  8  title until the goods cease to be covered by the certificate

  9  of title.

10         679.3041  Law governing perfection and priority of

11  security interests in deposit accounts.--

12         (1)  The local law of a bank's jurisdiction governs

13  perfection, the effect of perfection or nonperfection, and the

14  priority of a security interest in a deposit account

15  maintained with that bank.

16         (2)  The following rules determine a bank's

17  jurisdiction for purposes of this part:

18         (a)  If an agreement between the bank and the debtor

19  governing the deposit account expressly provides that a

20  particular jurisdiction is the bank's jurisdiction for

21  purposes of this part, this chapter, or the Uniform Commercial

22  Code, that jurisdiction is the bank's jurisdiction.

23         (b)  If paragraph (a) does not apply and an agreement

24  between the bank and its customer governing the deposit

25  account expressly provides that the agreement is governed by

26  the law of a particular jurisdiction, that jurisdiction is the

27  bank's jurisdiction.

28         (c)  If neither paragraph (a) nor paragraph (b) applies

29  and an agreement between the bank and its customer governing

30  the deposit account expressly provides that the deposit

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  1  account is maintained at an office in a particular

  2  jurisdiction, that jurisdiction is the bank's jurisdiction.

  3         (d)  If none of the preceding paragraphs applies, the

  4  bank's jurisdiction is the jurisdiction in which the office

  5  identified in an account statement as the office serving the

  6  customer's account is located.

  7         (e)  If none of the preceding paragraphs applies, the

  8  bank's jurisdiction is the jurisdiction in which the chief

  9  executive office of the bank is located.

10         679.3051  Law governing perfection and priority of

11  security interests in investment property.--

12         (1)  Except as otherwise provided in subsection (3),

13  the following rules apply:

14         (a)  While a security certificate is located in a

15  jurisdiction, the local law of that jurisdiction governs

16  perfection, the effect of perfection or nonperfection, and the

17  priority of a security interest in the certificated security

18  represented thereby.

19         (b)  The local law of the issuer's jurisdiction as

20  specified in s. 678.1101(4) governs perfection, the effect of

21  perfection or nonperfection, and the priority of a security

22  interest in an uncertificated security.

23         (c)  The local law of the securities intermediary's

24  jurisdiction as specified in s. 678.1101(5) governs

25  perfection, the effect of perfection or nonperfection, and the

26  priority of a security interest in a security entitlement or

27  securities account.

28         (d)  The local law of the commodity intermediary's

29  jurisdiction governs perfection, the effect of perfection or

30  nonperfection, and the priority of a security interest in a

31  commodity contract or commodity account.

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  1         (2)  The following rules determine a commodity

  2  intermediary's jurisdiction for purposes of this part:

  3         (a)  If an agreement between the commodity intermediary

  4  and commodity customer governing the commodity account

  5  expressly provides that a particular jurisdiction is the

  6  commodity intermediary's jurisdiction for purposes of this

  7  part, this chapter, or the Uniform Commercial Code, that

  8  jurisdiction is the commodity intermediary's jurisdiction.

  9         (b)  If paragraph (a) does not apply and an agreement

10  between the commodity intermediary and commodity customer

11  governing the commodity account expressly provides that the

12  agreement is governed by the law of a particular jurisdiction,

13  that jurisdiction is the commodity intermediary's

14  jurisdiction.

15         (c)  If neither paragraph (a) nor paragraph (b) applies

16  and an agreement between the commodity intermediary and

17  commodity customer governing the commodity account expressly

18  provides that the commodity account is maintained at an office

19  in a particular jurisdiction, that jurisdiction is the

20  commodity intermediary's jurisdiction.

21         (d)  If none of the preceding paragraphs applies, the

22  commodity intermediary's jurisdiction is the jurisdiction in

23  which the office identified in an account statement as the

24  office serving the commodity customer's account is located.

25         (e)  If none of the preceding paragraphs applies, the

26  commodity intermediary's jurisdiction is the jurisdiction in

27  which the chief executive office of the commodity intermediary

28  is located.

29         (3)  The local law of the jurisdiction in which the

30  debtor is located governs:

31

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  1         (a)  Perfection of a security interest in investment

  2  property by filing;

  3         (b)  Automatic perfection of a security interest in

  4  investment property created by a broker or securities

  5  intermediary; and

  6         (c)  Automatic perfection of a security interest in a

  7  commodity contract or commodity account created by a commodity

  8  intermediary.

  9         679.3061  Law governing perfection and priority of

10  security interests in letter-of-credit rights.--

11         (1)  Subject to subsection (3), the local law of the

12  issuer's jurisdiction or a nominated person's jurisdiction

13  governs perfection, the effect of perfection or nonperfection,

14  and the priority of a security interest in a letter-of-credit

15  right if the issuer's jurisdiction or nominated person's

16  jurisdiction is a state.

17         (2)  For purposes of this part, an issuer's

18  jurisdiction or nominated person's jurisdiction is the

19  jurisdiction whose law governs the liability of the issuer or

20  nominated person with respect to the letter-of-credit right as

21  provided in s. 675.116.

22         (3)  This section does not apply to a security interest

23  that is perfected only under s. 679.3081(4).

24         679.3071  Location of debtor.--

25         (1)  In this section, the term "place of business"

26  means a place where a debtor conducts its affairs.

27         (2)  Except as otherwise provided in this section, the

28  following rules determine a debtor's location:

29         (a)  A debtor who is an individual is located at the

30  individual's principal residence.

31

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  1         (b)  A debtor that is an organization and has only one

  2  place of business is located at its place of business.

  3         (c)  A debtor that is an organization and has more than

  4  one place of business is located at its chief executive

  5  office.

  6         (3)  Subsection (2) applies only if a debtor's

  7  residence, place of business, or chief executive office, as

  8  applicable, is located in a jurisdiction whose law generally

  9  requires information concerning the existence of a

10  nonpossessory security interest to be made generally available

11  in a filing, recording, or registration system as a condition

12  or result of the security interest's obtaining priority over

13  the rights of a lien creditor with respect to the collateral.

14  If subsection (2) does not apply, the debtor is located in the

15  District of Columbia.

16         (4)  A person who ceases to exist, have a residence, or

17  have a place of business continues to be located in the

18  jurisdiction specified by subsections (2) and (3).

19         (5)  A registered organization that is organized under

20  the law of a state is located in that state.

21         (6)  Except as otherwise provided in subsection (9), a

22  registered organization that is organized under the law of the

23  United States and a branch or agency of a bank that is not

24  organized under the law of the United States or a state are

25  located:

26         (a)  In the state that the law of the United States

27  designates, if the law designates a state of location;

28         (b)  In the state that the registered organization,

29  branch, or agency designates, if the law of the United States

30  authorizes the registered organization, branch, or agency to

31  designate its state of location; or

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  1         (c)  In the District of Columbia, if neither paragraph

  2  (a) nor paragraph (b) applies.

  3         (7)  A registered organization continues to be located

  4  in the jurisdiction specified by subsection (5) or subsection

  5  (6) notwithstanding:

  6         (a)  The suspension, revocation, forfeiture, or lapse

  7  of the registered organization's status as such in its

  8  jurisdiction of organization; or

  9         (b)  The dissolution, winding up, or cancellation of

10  the existence of the registered organization.

11         (8)  The United States is located in the District of

12  Columbia.

13         (9)  A branch or agency of a bank that is not organized

14  under the law of the United States or a state is located in

15  the state in which the branch or agency is licensed, if all

16  branches and agencies of the bank are licensed in only one

17  state.

18         (10)  A foreign air carrier under the Federal Aviation

19  Act of 1958, as amended, is located at the designated office

20  of the agent upon which service of process may be made on

21  behalf of the carrier.

22         (11)  This section applies only for purposes of this

23  part.

24         679.3081  When security interest or agricultural lien

25  is perfected; continuity of perfection.--

26         (1)  Except as otherwise provided in this section and

27  s. 679.3091, a security interest is perfected if it has

28  attached and all of the applicable requirements for perfection

29  in ss. 679.3101-679.3161 have been satisfied.  A security

30  interest is perfected when it attaches if the applicable

31

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  1  requirements are satisfied before the security interest

  2  attaches.

  3         (2)  An agricultural lien is perfected if it has become

  4  effective and all of the applicable requirements for

  5  perfection in s. 679.3101 have been satisfied.  An

  6  agricultural lien is perfected when it becomes effective if

  7  the applicable requirements are satisfied before the

  8  agricultural lien becomes effective.

  9         (3)  A security interest or agricultural lien is

10  perfected continuously if it is originally perfected by one

11  method under this chapter and is later perfected by another

12  method under this chapter, without an intermediate period

13  during which it was unperfected.

14         (4)  Perfection of a security interest in collateral

15  also perfects a security interest in a supporting obligation

16  for the collateral.

17         (5)  Perfection of a security interest in a right to

18  payment or performance also perfects a security interest in a

19  security interest, mortgage, or other lien on personal or real

20  property securing the right.

21         (6)  Perfection of a security interest in a securities

22  account also perfects a security interest in the security

23  entitlements carried in the securities account.

24         (7)  Perfection of a security interest in a commodity

25  account also perfects a security interest in the commodity

26  contracts carried in the commodity account.

27         679.3091  Security interest perfected upon

28  attachment.--The following security interests are perfected

29  when they attach:

30         (1)  A purchase-money security interest in consumer

31  goods, except as otherwise provided in s. 679.3111(2) with

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  1  respect to consumer goods that are subject to a statute or

  2  treaty described in s. 679.3111(1);

  3         (2)  An assignment of accounts or payment intangibles

  4  which does not by itself or in conjunction with other

  5  assignments to the same assignee transfer a significant part

  6  of the assignor's outstanding accounts or payment intangibles;

  7         (3)  A sale of a payment intangible;

  8         (4)  A sale of a promissory note;

  9         (5)  A security interest created by the assignment of a

10  health-care-insurance receivable to the provider of the

11  health-care goods or services;

12         (6)  A security interest arising under s. 672.401, s.

13  672.505, s. 672.711(3), or s. 680.508(5), until the debtor

14  obtains possession of the collateral;

15         (7)  A security interest of a collecting bank arising

16  under s. 674.2101;

17         (8)  A security interest of an issuer or nominated

18  person arising under s. 675.118;

19         (9)  A security interest arising in the delivery of a

20  financial asset under s. 679.2061(3);

21         (10)  A security interest in investment property

22  created by a broker or securities intermediary;

23         (11)  A security interest in a commodity contract or a

24  commodity account created by a commodity intermediary;

25         (12)  An assignment for the benefit of all creditors of

26  the transferor and subsequent transfers by the assignee

27  thereunder; and

28         (13)  A security interest created by an assignment of a

29  beneficial interest in a decedent's estate.

30

31

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  1         679.3101  When filing required to perfect security

  2  interest or agricultural lien; security interests and

  3  agricultural liens to which filing provisions do not apply.--

  4         (1)  Except as otherwise provided in subsection (2) and

  5  s. 679.3121(2), a financing statement must be filed to perfect

  6  all security interests and agricultural liens.

  7         (2)  The filing of a financing statement is not

  8  necessary to perfect a security interest:

  9         (a)  That is perfected under s. 679.3081(4), (5), (6),

10  or (7);

11         (b)  That is perfected under s. 679.3091 when it

12  attaches;

13         (c)  In property subject to a statute, regulation, or

14  treaty described in s. 679.3111(1);

15         (d)  In goods in possession of a bailee which is

16  perfected under s. 679.3121(4)(a) or (b);

17         (e)  In certificated securities, documents, goods, or

18  instruments which is perfected without filing or possession

19  under s. 679.3121(5), (6), or (7);

20         (f)  In collateral in the secured party's possession

21  under s. 679.3131;

22         (g)  In a certificated security which is perfected by

23  delivery of the security certificate to the secured party

24  under s. 679.3131;

25         (h)  In deposit accounts, electronic chattel paper,

26  investment property, or letter-of-credit rights which is

27  perfected by control under s. 679.3141;

28         (i)  In proceeds which is perfected under s. 679.3151;

29  or

30         (j)  That is perfected under s. 679.3161.

31

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  1         (3)  If a secured party assigns a perfected security

  2  interest or agricultural lien, a filing under this chapter is

  3  not required to continue the perfected status of the security

  4  interest against creditors of and transferees from the

  5  original debtor.

  6         679.3111  Perfection of security interests in property

  7  subject to certain statutes, regulations, and treaties.--

  8         (1)  Except as otherwise provided in subsection (4),

  9  the filing of a financing statement is not necessary or

10  effective to perfect a security interest in property subject

11  to:

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

13  States whose requirements for a security interest's obtaining

14  priority over the rights of a lien creditor with respect to

15  the property preempt s. 679.3101(1);

16         (b)  A statute covering automobiles, trailers, mobile

17  homes, boats, farm tractors, or the like, which provides for a

18  security interest to be indicated on a certificate of title of

19  such property as a condition or result of perfection, and any

20  non-Uniform Commercial Code central filing statute; or

21         (c)  A certificate-of-title statute of another

22  jurisdiction which provides for a security interest to be

23  indicated on the certificate as a condition or result of the

24  security interest's obtaining priority over the rights of a

25  lien creditor with respect to the property.

26         (2)  Compliance with the requirements of a statute,

27  regulation, or treaty described in paragraph (1) for obtaining

28  priority over the rights of a lien creditor is equivalent to

29  the filing of a financing statement under this chapter.

30  Except as otherwise provided in subsection (4) and ss.

31  679.3131 and 679.3161(4) and (5) for goods covered by a

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  1  certificate of title, a security interest in property subject

  2  to a statute, regulation, or treaty described in subsection

  3  (1) may be perfected only by compliance with those

  4  requirements, and a security interest so perfected remains

  5  perfected notwithstanding a change in the use or transfer of

  6  possession of the collateral.

  7         (3)  Except as otherwise provided in subsection (4) and

  8  s. 679.3161(4) and (5), duration and renewal of perfection of

  9  a security interest perfected by compliance with the

10  requirements prescribed by a statute, regulation, or treaty

11  described in subsection (1) are governed by the statute,

12  regulation, or treaty.  In other respects, the security

13  interest is subject to this chapter.

14         (4)  During any period in which collateral subject to a

15  statute specified in paragraph (1)(b) is inventory held for

16  sale or lease by a person or leased by that person as lessor

17  and that person is in the business of selling goods of that

18  kind, this section does not apply to a security interest in

19  that collateral created by that person.

20         679.3121  Perfection of security interests in chattel

21  paper, deposit accounts, documents, goods covered by

22  documents, instruments, investment property, letter-of-credit

23  rights, and money; perfection by permissive filing; temporary

24  perfection without filing or transfer of possession.--

25         (1)  A security interest in chattel paper, negotiable

26  documents, instruments, or investment property may be

27  perfected by filing.

28         (2)  Except as otherwise provided in s. 679.3151(3) and

29  (4) for proceeds:

30         (a)  A security interest in a deposit account may be

31  perfected only by control under s. 679.3141.

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  1         (b)  And except as otherwise provided in s.

  2  679.3081(4), a security interest in a letter-of-credit right

  3  may be perfected only by control under s. 679.3141.

  4         (c)  A security interest in money may be perfected only

  5  by the secured party's taking possession under s. 679.3131.

  6         (3)  While goods are in the possession of a bailee that

  7  has issued a negotiable document covering the goods:

  8         (a)  A security interest in the goods may be perfected

  9  by perfecting a security interest in the document; and

10         (b)  A security interest perfected in the document has

11  priority over any security interest that becomes perfected in

12  the goods by another method during that time.

13         (4)  While goods are in the possession of a bailee that

14  has issued a nonnegotiable document covering the goods, a

15  security interest in the goods may be perfected by:

16         (a)  Issuance of a document in the name of the secured

17  party;

18         (b)  The bailee's receipt of notification of the

19  secured party's interest; or

20         (c)  Filing as to the goods.

21         (5)  A security interest in certificated securities,

22  negotiable documents, or instruments is perfected without

23  filing or the taking of possession for a period of 20 days

24  from the time it attaches to the extent that it arises for new

25  value given under an authenticated security agreement.

26         (6)  A perfected security interest in a negotiable

27  document or goods in possession of a bailee, other than one

28  that has issued a negotiable document for the goods, remains

29  perfected for 20 days without filing if the secured party

30  makes available to the debtor the goods or documents

31  representing the goods for the purpose of:

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  1         (a)  Ultimate sale or exchange; or

  2         (b)  Loading, unloading, storing, shipping,

  3  transshipping, manufacturing, processing, or otherwise dealing

  4  with them in a manner preliminary to their sale or exchange.

  5         (7)  A perfected security interest in a certificated

  6  security or instrument remains perfected for 20 days without

  7  filing if the secured party delivers the security certificate

  8  or instrument to the debtor for the purpose of:

  9         (a)  Ultimate sale or exchange; or

10         (b)  Presentation, collection, enforcement, renewal, or

11  registration of transfer.

12         (8)  After the 20-day period specified in subsection

13  (5), subsection (6), or subsection (7) expires, perfection

14  depends upon compliance with this chapter.

15         679.3131  When possession by or delivery to secured

16  party perfects security interest without filing.--

17         (1)  Except as otherwise provided in subsection (2), a

18  secured party may perfect a security interest in negotiable

19  documents, goods, instruments, money, or tangible chattel

20  paper by taking possession of the collateral.  A secured party

21  may perfect a security interest in certificated securities by

22  taking delivery of the certificated securities under s.

23  678.3011.

24         (2)  With respect to goods covered by a certificate of

25  title issued by this state, a secured party may perfect a

26  security interest in the goods by taking possession of the

27  goods only in the circumstances described in s. 679.3161(4).

28         (3)  With respect to collateral other than certificated

29  securities and goods covered by a document, a secured party

30  takes possession of collateral in the possession of a person

31  other than the debtor, the secured party, or a lessee of the

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  1  collateral from the debtor in the ordinary course of the

  2  debtor's business, when:

  3         (a)  The person in possession authenticates a record

  4  acknowledging that it holds possession of the collateral for

  5  the secured party's benefit; or

  6         (b)  The person takes possession of the collateral

  7  after having authenticated a record acknowledging that the

  8  person will hold possession of collateral for the secured

  9  party's benefit.

10         (4)  If perfection of a security interest depends upon

11  possession of the collateral by a secured party, perfection

12  occurs no earlier than the time the secured party takes

13  possession and continues only while the secured party retains

14  possession.

15         (5)  A security interest in a certificated security in

16  registered form is perfected by delivery when delivery of the

17  certificated security occurs under s. 678.3011 and remains

18  perfected by delivery until the debtor obtains possession of

19  the security certificate.

20         (6)  A person in possession of collateral is not

21  required to acknowledge that the person holds possession for a

22  secured party's benefit.

23         (7)  If a person acknowledges that the person holds

24  possession for the secured party's benefit:

25         (a)  The acknowledgment is effective under subsection

26  (3) or s. 678.3011(1), even if the acknowledgment violates the

27  rights of a debtor; and

28         (b)  Unless the person otherwise agrees or law other

29  than this chapter otherwise provides, the person does not owe

30  any duty to the secured party and is not required to confirm

31  the acknowledgment to another person.

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  1         (8)  A secured party having possession of collateral

  2  does not relinquish possession by delivering the collateral to

  3  a person other than the debtor or a lessee of the collateral

  4  from the debtor in the ordinary course of the debtor's

  5  business if the person was instructed before the delivery or

  6  is instructed contemporaneously with the delivery:

  7         (a)  To hold possession of the collateral for the

  8  secured party's benefit; or

  9         (b)  To redeliver the collateral to the secured party.

10         (9)  A secured party does not relinquish possession,

11  even if a delivery under subsection (8) violates the rights of

12  a debtor.  A person to whom collateral is delivered under

13  subsection (8) does not owe any duty to the secured party and

14  is not required to confirm the delivery to another person

15  unless the person otherwise agrees or law other than this

16  chapter otherwise provides.

17         679.3141  Perfection by control.--

18         (1)  A security interest in investment property,

19  deposit accounts, letter-of-credit rights, or electronic

20  chattel paper may be perfected by control of the collateral

21  under s. 679.1041, s. 679.1051, s. 679.1061, or s. 679.1071.

22         (2)  A security interest in deposit accounts,

23  electronic chattel paper, or letter-of-credit rights is

24  perfected by control under s. 679.1041, s. 679.1051, or s.

25  679.1071 when the secured party obtains control and remains

26  perfected by control only while the secured party retains

27  control.

28         (3)  A security interest in investment property is

29  perfected by control under s. 679.1061 from the time the

30  secured party obtains control and remains perfected by control

31  until:

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  1         (a)  The secured party does not have control; and

  2         (b)  One of the following occurs:

  3         1.  If the collateral is a certificated security, the

  4  debtor has or acquires possession of the security certificate;

  5         2.  If the collateral is an uncertificated security,

  6  the issuer has registered or registers the debtor as the

  7  registered owner; or

  8         3.  If the collateral is a security entitlement, the

  9  debtor is or becomes the entitlement holder.

10         679.3151  Secured party's rights on disposition of

11  collateral and in proceeds.--

12         (1)  Except as otherwise provided in this chapter and

13  in s. 672.403(2):

14         (a)  A security interest or agricultural lien continues

15  in collateral notwithstanding sale, lease, license, exchange,

16  or other disposition thereof unless the secured party

17  authorized the disposition free of the security interest or

18  agricultural lien; and

19         (b)  A security interest attaches to any identifiable

20  proceeds of collateral.

21         (2)  Proceeds that are commingled with other property

22  are identifiable proceeds:

23         (a)  If the proceeds are goods, to the extent provided

24  by s. 679.336; and

25         (b)  If the proceeds are not goods, to the extent that

26  the secured party identifies the proceeds by a method of

27  tracing, including application of equitable principles, that

28  is permitted under law other than this chapter with respect to

29  commingled property of the type involved.

30

31

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  1         (3)  A security interest in proceeds is a perfected

  2  security interest if the security interest in the original

  3  collateral was perfected.

  4         (4)  A perfected security interest in proceeds becomes

  5  unperfected on the 21st day after the security interest

  6  attaches to the proceeds unless:

  7         (a)  The following conditions are satisfied:

  8         1.  A filed financing statement covers the original

  9  collateral;

10         2.  The proceeds are collateral in which a security

11  interest may be perfected by filing in the office in which the

12  financing statement has been filed; and

13         3.  The proceeds are not acquired with cash proceeds;

14         (b)  The proceeds are identifiable cash proceeds; or

15         (c)  The security interest in the proceeds is perfected

16  other than under subsection (3) when the security interest

17  attaches to the proceeds or within 20 days thereafter.

18         (5)  If a filed financing statement covers the original

19  collateral, a security interest in proceeds which remains

20  perfected under paragraph (4)(a) becomes unperfected at the

21  later of:

22         (a)  When the effectiveness of the filed financing

23  statement lapses under s. 679.515 or is terminated under s.

24  679.513; or

25         (b)  The 21st day after the security interest attaches

26  to the proceeds.

27         679.3161  Continued perfection of security interest

28  following change in governing law.--

29         (1)  A security interest perfected pursuant to the law

30  of the jurisdiction designated in s. 679.3011(1) or s.

31  679.3051(3) remains perfected until the earliest of:

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  1         (a)  The time perfection would have ceased under the

  2  law of that jurisdiction;

  3         (b)  The expiration of 4 months after a change of the

  4  debtor's location to another jurisdiction; or

  5         (c)  The expiration of 1 year after a transfer of

  6  collateral to a person who thereby becomes a debtor and is

  7  located in another jurisdiction.

  8         (2)  If a security interest described in subsection (1)

  9  becomes perfected under the law of the other jurisdiction

10  before the earliest time or event described in that

11  subsection, it remains perfected thereafter. If the security

12  interest does not become perfected under the law of the other

13  jurisdiction before the earliest time or event, it becomes

14  unperfected and is deemed never to have been perfected as

15  against a purchaser of the collateral for value.

16         (3)  A possessory security interest in collateral,

17  other than goods covered by a certificate of title and

18  as-extracted collateral consisting of goods, remains

19  continuously perfected if:

20         (a)  The collateral is located in one jurisdiction and

21  subject to a security interest perfected under the law of that

22  jurisdiction;

23         (b)  Thereafter the collateral is brought into another

24  jurisdiction; and

25         (c)  Upon entry into the other jurisdiction, the

26  security interest is perfected under the law of the other

27  jurisdiction.

28         (4)  Except as otherwise provided in subsection (5), a

29  security interest in goods covered by a certificate of title

30  which is perfected by any method under the law of another

31  jurisdiction when the goods become covered by a certificate of

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  1  title from this state remains perfected until the security

  2  interest would have become unperfected under the law of the

  3  other jurisdiction had the goods not become so covered.

  4         (5)  A security interest described in subsection (4)

  5  becomes unperfected as against a purchaser of the goods for

  6  value and is deemed never to have been perfected as against a

  7  purchaser of the goods for value if the applicable

  8  requirements for perfection under s. 679.3111(2) or s.

  9  679.3131 are not satisfied before the earlier of:

10         (a)  The time the security interest would have become

11  unperfected under the law of the other jurisdiction had the

12  goods not become covered by a certificate of title from this

13  state; or

14         (b)  The expiration of 4 months after the goods had

15  become so covered.

16         (6)  A security interest in deposit accounts,

17  letter-of-credit rights, or investment property which is

18  perfected under the law of the bank's jurisdiction, the

19  issuer's jurisdiction, a nominated person's jurisdiction, the

20  securities intermediary's jurisdiction, or the commodity

21  intermediary's jurisdiction, as applicable, remains perfected

22  until the earlier of:

23         (a)  The time the security interest would have become

24  unperfected under the law of that jurisdiction; or

25         (b)  The expiration of 4 months after a change of the

26  applicable jurisdiction to another jurisdiction.

27         (7)  If a security interest described in subsection (6)

28  becomes perfected under the law of the other jurisdiction

29  before the earlier of the time or the end of the period

30  described in that subsection, it remains perfected thereafter.

31  If the security interest does not become perfected under the

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  1  law of the other jurisdiction before the earlier of that time

  2  or the end of that period, it becomes unperfected and is

  3  deemed never to have been perfected as against a purchaser of

  4  the collateral for value.

  5         679.3171  Interests that take priority over or take

  6  free of security interest or agricultural lien.--

  7         (1)  A security interest or agricultural lien is

  8  subordinate to the rights of:

  9         (a)  A person entitled to priority under s. 679.322;

10  and

11         (b)  Except as otherwise provided in subsection (5), a

12  person who becomes a lien creditor before the earlier of the

13  time:

14         1.  The security interest or agricultural lien is

15  perfected; or

16         2.  One of the conditions specified in s.

17  679.2031(2)(c) is met and a financing statement covering the

18  collateral is filed.

19         (2)  Except as otherwise provided in subsection (5), a

20  buyer, other than a secured party, of tangible chattel paper,

21  documents, goods, instruments, or a security certificate takes

22  free of a security interest or agricultural lien if the buyer

23  gives value and receives delivery of the collateral without

24  knowledge of the security interest or agricultural lien and

25  before it is perfected.

26         (3)  Except as otherwise provided in subsection (5), a

27  lessee of goods takes free of a security interest or

28  agricultural lien if the lessee gives value and receives

29  delivery of the collateral without knowledge of the security

30  interest or agricultural lien and before it is perfected.

31

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  1         (4)  A licensee of a general intangible or a buyer,

  2  other than a secured party, of accounts, electronic chattel

  3  paper, general intangibles, or investment property other than

  4  a certificated security takes free of a security interest if

  5  the licensee or buyer gives value without knowledge of the

  6  security interest and before it is perfected.

  7         (5)  Except as otherwise provided in ss. 679.320 and

  8  679.321, if a person files a financing statement with respect

  9  to a purchase-money security interest before or within 20 days

10  after the debtor receives delivery of the collateral, the

11  security interest takes priority over the rights of a buyer,

12  lessee, or lien creditor which arise between the time the

13  security interest attaches and the time of filing.

14         679.3181  No interest retained in right to payment that

15  is sold; rights and title of seller of account or chattel

16  paper with respect to creditors and purchasers.--

17         (1)  A debtor who has sold an account, chattel paper,

18  payment intangible, or promissory note does not retain a legal

19  or equitable interest in the collateral sold.

20         (2)  For purposes of determining the rights of

21  creditors of, and purchasers for value of an account or

22  chattel paper from, a debtor who has sold an account or

23  chattel paper, while the buyer's security interest is

24  unperfected, the debtor is deemed to have rights and title to

25  the account or chattel paper identical to those the debtor

26  sold.

27         679.319  Rights and title of consignee with respect to

28  creditors and purchasers.--

29         (1)  Except as otherwise provided in subsection (2),

30  for purposes of determining the rights of creditors of, and

31  purchasers for value of goods from, a consignee, while the

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  1  goods are in the possession of the consignee, the consignee is

  2  deemed to have rights and title to the goods identical to

  3  those the consignor had or had power to transfer.

  4         (2)  For purposes of determining the rights of a

  5  creditor of a consignee, law other than this chapter

  6  determines the rights and title of a consignee while goods are

  7  in the consignee's possession if, under this part, a perfected

  8  security interest held by the consignor would have priority

  9  over the rights of the creditor.

10         679.320  Buyer of goods.--

11         (1)  Except as otherwise provided in subsection (5), a

12  buyer in ordinary course of business, other than a person

13  buying farm products from a person engaged in farming

14  operations, takes free of a security interest created by the

15  buyer's seller, even if the security interest is perfected and

16  the buyer knows of its existence.

17         (2)  Except as otherwise provided in subsection (5), a

18  buyer of goods from a person who used or bought the goods for

19  use primarily for personal, family, or household purposes

20  takes free of a security interest, even if perfected, if the

21  buyer buys:

22         (a)  Without knowledge of the security interest;

23         (b)  For value;

24         (c)  Primarily for the buyer's personal, family, or

25  household purposes; and

26         (d)  Before the filing of a financing statement

27  covering the goods.

28         (3)  To the extent that it affects the priority of a

29  security interest over a buyer of goods under subsection (2),

30  the period of effectiveness of a filing made in the

31

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  1  jurisdiction in which the seller is located is governed by s.

  2  679.3161(1) and (2).

  3         (4)  A buyer in ordinary course of business buying oil,

  4  gas, or other minerals at the wellhead or minehead or after

  5  extraction takes free of an interest arising out of an

  6  encumbrance.

  7         (5)  Subsections (1) and (2) do not affect a security

  8  interest in goods in the possession of the secured party under

  9  s. 679.3131.

10         679.321  Licensee of general intangible and lessee of

11  goods in ordinary course of business.--

12         (1)  In this section, the term "licensee in ordinary

13  course of business" means a person who becomes a licensee of a

14  general intangible in good faith, without knowledge that the

15  license violates the rights of another person in the general

16  intangible, and in the ordinary course from a person in the

17  business of licensing general intangibles of that kind.  A

18  person becomes a licensee in the ordinary course if the

19  license to the person comports with the usual or customary

20  practices in the kind of business in which the licensor is

21  engaged or with the licensor's own usual or customary

22  practices.

23         (2)  A licensee in ordinary course of business takes

24  its rights under a nonexclusive license free of a security

25  interest in the general intangible created by the licensor,

26  even if the security interest is perfected and the licensee

27  knows of its existence.

28         (3)  A lessee in ordinary course of business takes its

29  leasehold interest free of a security interest in the goods

30  created by the lessor, even if the security interest is

31  perfected and the lessee knows of its existence.

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  1         679.322  Priorities among conflicting security

  2  interests in and agricultural liens on same collateral.--

  3         (1)  Except as otherwise provided in this section,

  4  priority among conflicting security interests and agricultural

  5  liens in the same collateral is determined according to the

  6  following rules:

  7         (a)  Conflicting perfected security interests and

  8  agricultural liens rank according to priority in time of

  9  filing or perfection.  Priority dates from the earlier of the

10  time a filing covering the collateral is first made or the

11  security interest or agricultural lien is first perfected, if

12  there is no period thereafter during which is neither filing

13  nor perfection.

14         (b)  A perfected security interest or agricultural lien

15  has priority over a conflicting unperfected security interest

16  or agricultural lien.

17         (c)  The first security interest or agricultural lien

18  to attach or become effective has priority if conflicting

19  security interests and agricultural liens are unperfected.

20         (2)  For the purposes of paragraph (1)(a):

21         (a)  The time of filing or perfection as to a security

22  interest in collateral is also the time of filing or

23  perfection as to a security interest in proceeds; and

24         (b)  The time of filing or perfection as to a security

25  interest in collateral supported by a supporting obligation is

26  also the time of filing or perfection as to a security

27  interest in the supporting obligation.

28         (3)  Except as otherwise provided in subsection (6), a

29  security interest in collateral which qualifies for priority

30  over a conflicting security interest under s. 679.327, s.

31

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  1  679.328, s. 679.329, s. 679.330, or s. 679.331 also has

  2  priority over a conflicting security interest in:

  3         (a)  Any supporting obligation for the collateral; and

  4         (b)  Proceeds of the collateral if:

  5         1.  The security interest in proceeds is perfected;

  6         2.  The proceeds are cash proceeds or of the same type

  7  as the collateral; and

  8         3.  In the case of proceeds that are proceeds of

  9  proceeds, all intervening proceeds are cash proceeds, proceeds

10  of the same type as the collateral, or an account relating to

11  the collateral.

12         (4)  Subject to subsection (5) and except as otherwise

13  provided in subsection (6), if a security interest in chattel

14  paper, deposit accounts, negotiable documents, instruments,

15  investment property, or letter-of-credit rights is perfected

16  by a method other than filing, conflicting perfected security

17  interests in proceeds of the collateral rank according to

18  priority in time of filing.

19         (5)  Subsection (4) applies only if the proceeds of the

20  collateral are not cash proceeds, chattel paper, negotiable

21  documents, instruments, investment property, or

22  letter-of-credit rights.

23         (6)  Subsections (1) through (5) are subject to:

24         (a)  Subsection (7) and the other provisions of this

25  part;

26         (b)  Section 674.2101 with respect to a security

27  interest of a collecting bank;

28         (c)  Section 675.118 with respect to a security

29  interest of an issuer or nominated person; and

30         (d)  Section 679.1101 with respect to a security

31  interest arising under chapter 672 or chapter 680.

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  1         (7)  A perfected agricultural lien on collateral has

  2  priority over a conflicting security interest in or

  3  agricultural lien on the same collateral if the statute

  4  creating the agricultural lien so provides.

  5         679.323  Future advances.--

  6         (1)  Except as otherwise provided in subsection (3),

  7  for purposes of determining the priority of a perfected

  8  security interest under s. 679.322(1)(a), perfection of the

  9  security interest dates from the time an advance is made to

10  the extent that the security interest secures an advance that:

11         (a)  Is made while the security interest is perfected

12  only:

13         1.  Under s. 679.3091 when it attaches; or

14         2.  Temporarily under s. 679.3121(5), (6), or (7); and

15         (b)  Is not made pursuant to a commitment entered into

16  before or while the security interest is perfected by a method

17  other than under s. 679.3091 or s. 679.3121(5), (6), or (7).

18         (2)  Except as otherwise provided in subsection (3), a

19  security interest is subordinate to the rights of a person who

20  becomes a lien creditor to the extent that the security

21  interest secures an advance made more than 45 days after the

22  person becomes a lien creditor unless the advance is made:

23         (a)  Without knowledge of the lien; or

24         (b)  Pursuant to a commitment entered into without

25  knowledge of the lien.

26         (3)  Subsections (1) and (2) do not apply to a security

27  interest held by a secured party that is a buyer of accounts,

28  chattel paper, payment intangibles, or promissory notes or a

29  consignor.

30         (4)  Except as otherwise provided in subsection (5), a

31  buyer of goods other than a buyer in ordinary course of

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  1  business takes free of a security interest to the extent that

  2  it secures advances made after the earlier of:

  3         (a)  The time the secured party acquires knowledge of

  4  the buyer's purchase; or

  5         (b)  Forty-five days after the purchase.

  6         (5)  Subsection (4) does not apply if the advance is

  7  made pursuant to a commitment entered into without knowledge

  8  of the buyer's purchase and before the expiration of the

  9  45-day period.

10         (6)  Except as otherwise provided in subsection (7), a

11  lessee of goods, other than a lessee in ordinary course of

12  business, takes the leasehold interest free of a security

13  interest to the extent that it secures advances made after the

14  earlier of:

15         (a)  The time the secured party acquires knowledge of

16  the lease; or

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

18  enforceable.

19         (7)  Subsection (6) does not apply if the advance is

20  made pursuant to a commitment entered into without knowledge

21  of the lease and before the expiration of the 45-day period.

22         679.324  Priority of purchase-money security

23  interests.--

24         (1)  Except as otherwise provided in subsection (7), a

25  perfected purchase-money security interest in goods other than

26  inventory or livestock has priority over a conflicting

27  security interest in the same goods, and, except as otherwise

28  provided in s. 679.327, a perfected security interest in its

29  identifiable proceeds also has priority, if the purchase-money

30  security interest is perfected when the debtor receives

31  possession of the collateral or within 20 days thereafter.

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  1         (2)  Subject to subsection (3) and except as otherwise

  2  provided in subsection (7), a perfected purchase-money

  3  security interest in inventory has priority over a conflicting

  4  security interest in the same inventory, has priority over a

  5  conflicting security interest in chattel paper or an

  6  instrument constituting proceeds of the inventory and in

  7  proceeds of the chattel paper, if so provided in s. 679.330,

  8  and, except as otherwise provided in s. 679.327, also has

  9  priority in identifiable cash proceeds of the inventory to the

10  extent the identifiable cash proceeds are received on or

11  before the delivery of the inventory to a buyer, if:

12         (a)  The purchase-money security interest is perfected

13  when the debtor receives possession of the inventory;

14         (b)  The purchase-money secured party sends an

15  authenticated notification to the holder of the conflicting

16  security interest;

17         (c)  The holder of the conflicting security interest

18  receives the notification within 5 years before the debtor

19  receives possession of the inventory; and

20         (d)  The notification states that the person sending

21  the notification has or expects to acquire a purchase-money

22  security interest in inventory of the debtor and describes the

23  inventory.

24         (3)  Paragraphs (2)(b), (c), and (d) apply only if the

25  holder of the conflicting security interest had filed a

26  financing statement covering the same types of inventory:

27         (a)  If the purchase-money security interest is

28  perfected by filing, before the date of the filing; or

29         (b)  If the purchase-money security interest is

30  temporarily perfected without filing or possession under s.

31

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  1  679.3121(6), before the beginning of the 20-day period

  2  thereunder.

  3         (4)  Subject to subsection (5) and except as otherwise

  4  provided in subsection (7), a perfected purchase-money

  5  security interest in livestock that are farm products has

  6  priority over a conflicting security interest in the same

  7  livestock, and, except as otherwise provided in s. 679.327, a

  8  perfected security interest in their identifiable proceeds and

  9  identifiable products in their unmanufactured states also has

10  priority, if:

11         (a)  The purchase-money security interest is perfected

12  when the debtor receives possession of the livestock;

13         (b)  The purchase-money secured party sends an

14  authenticated notification to the holder of the conflicting

15  security interest;

16         (c)  The holder of the conflicting security interest

17  receives the notification within 6 months before the debtor

18  receives possession of the livestock; and

19         (d)  The notification states that the person sending

20  the notification has or expects to acquire a purchase-money

21  security interest in livestock of the debtor and describes the

22  livestock.

23         (5)  Paragraphs (4)(b), (c), and (d) apply only if the

24  holder of the conflicting security interest had filed a

25  financing statement covering the same types of livestock:

26         (a)  If the purchase-money security interest is

27  perfected by filing, before the date of the filing; or

28         (b)  If the purchase-money security interest is

29  temporarily perfected without filing or possession under s.

30  679.3121(6), before the beginning of the 20-day period

31  thereunder.

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  1         (6)  Except as otherwise provided in subsection (7), a

  2  perfected purchase-money security interest in software has

  3  priority over a conflicting security interest in the same

  4  collateral, and, except as otherwise provided in s. 679.327, a

  5  perfected security interest in its identifiable proceeds also

  6  has priority, to the extent that the purchase-money security

  7  interest in the goods in which the software was acquired for

  8  use has priority in the goods and proceeds of the goods under

  9  this section.

10         (7)  If more than one security interest qualifies for

11  priority in the same collateral under subsection (1),

12  subsection (2), subsection (4), or subsection (6):

13         (a)  A security interest securing an obligation

14  incurred as all or part of the price of the collateral has

15  priority over a security interest securing an obligation

16  incurred for value given to enable the debtor to acquire

17  rights in or the use of collateral; and

18         (b)  In all other cases, s. 679.322(1) applies to the

19  qualifying security interests.

20         679.325  Priority of security interests in transferred

21  collateral.--

22         (1)  Except as otherwise provided in subsection (2), a

23  security interest created by a debtor is subordinate to a

24  security interest in the same collateral created by another

25  person if:

26         (a)  The debtor acquired the collateral subject to the

27  security interest created by the other person;

28         (b)  The security interest created by the other person

29  was perfected when the debtor acquired the collateral; and

30         (c)  There is no period thereafter during which the

31  security interest is unperfected.

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  1         (2)  Subsection (1) subordinates a security interest

  2  only if the security interest:

  3         (a)  Otherwise would have priority solely under s.

  4  679.322(1) or s. 679.324; or

  5         (b)  Arose solely under s. 672.711(3) or s. 680.508(5).

  6         679.326  Priority of security interests created by new

  7  debtor.--

  8         (1)  Subject to subsection (2), a security interest

  9  created by a new debtor which is perfected by a filed

10  financing statement that is effective solely under s. 679.508

11  in collateral in which a new debtor has or acquires rights is

12  subordinate to a security interest in the same collateral

13  which is perfected other than by a filed financing statement

14  that is effective solely under s. 679.508.

15         (2)  The other provisions of this part determine the

16  priority among conflicting security interests in the same

17  collateral perfected by filed financing statements that are

18  effective solely under s. 679.508.  However, if the security

19  agreements to which a new debtor became bound as debtor were

20  not entered into by the same original debtor, the conflicting

21  security interests rank according to priority in time of the

22  new debtor's having become bound.

23         679.327  Priority of security interests in deposit

24  account.--The following rules govern priority among

25  conflicting security interests in the same deposit account: 

26         (1)  A security interest held by a secured party having

27  control of the deposit account under s. 679.1041 has priority

28  over a conflicting security interest held by a secured party

29  that does not have control.

30         (2)  Except as otherwise provided in subsections (3)

31  and (4), security interests perfected by control under s.

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  1  679.3141 rank according to priority in time of obtaining

  2  control.

  3         (3)  Except as otherwise provided in subsection (4), a

  4  security interest held by the bank with which the deposit

  5  account is maintained has priority over a conflicting security

  6  interest held by another secured party.

  7         (4)  A security interest perfected by control under s.

  8  679.1041(1)(c) has priority over a security interest held by

  9  the bank with which the deposit account is maintained.

10         679.328  Priority of security interests in investment

11  property.--The following rules govern priority among

12  conflicting security interests in the same investment

13  property:

14         (1)  A security interest held by a secured party having

15  control of investment property under s. 679.1061 has priority

16  over a security interest held by a secured party that does not

17  have control of the investment property.

18         (2)  Except as otherwise provided in subsections (3)

19  and (4), conflicting security interests held by secured

20  parties each of which has control under s. 679.1061 rank

21  according to priority in time of:

22         (a)  If the collateral is a security, obtaining

23  control;

24         (b)  If the collateral is a security entitlement

25  carried in a securities account and:

26         1.  If the secured party obtained control under s.

27  678.1061(4)(a), the secured party's becoming the person for

28  which the securities account is maintained;

29         2.  If the secured party obtained control under s.

30  678.1061(4)(b), the securities intermediary's agreement to

31  comply with the secured party's entitlement orders with

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  1  respect to security entitlements carried or to be carried in

  2  the securities account; or

  3         3.  If the secured party obtained control through

  4  another person under s. 678.1061(4)(c), the time on which

  5  priority would be based under this paragraph if the other

  6  person were the secured party; or

  7         (c)  If the collateral is a commodity contract carried

  8  with a commodity intermediary, the satisfaction of the

  9  requirement for control specified in s. 679.1061(2)(b) with

10  respect to commodity contracts carried or to be carried with

11  the commodity intermediary.

12         (3)  A security interest held by a securities

13  intermediary in a security entitlement or a securities account

14  maintained with the securities intermediary has priority over

15  a conflicting security interest held by another secured party.

16         (4)  A security interest held by a commodity

17  intermediary in a commodity contract or a commodity account

18  maintained with the commodity intermediary has priority over a

19  conflicting security interest held by another secured party.

20         (5)  A security interest in a certificated security in

21  registered form which is perfected by taking delivery under s.

22  679.3131(1) and not by control under s. 679.3141 has priority

23  over a conflicting security interest perfected by a method

24  other than control.

25         (6)  Conflicting security interests created by a

26  broker, securities intermediary, or commodity intermediary

27  which are perfected without control under s. 679.1061 rank

28  equally.

29         (7)  In all other cases, priority among conflicting

30  security interests in investment property is governed by ss.

31  679.322 and 679.323.

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  1         679.329  Priority of security interests in

  2  letter-of-credit right.--The following rules govern priority

  3  among conflicting security interests in the same

  4  letter-of-credit right:

  5         (1)  A security interest held by a secured party having

  6  control of the letter-of-credit right under s. 679.1071 has

  7  priority to the extent of its control over a conflicting

  8  security interest held by a secured party that does not have

  9  control.

10         (2)  Security interests perfected by control under s.

11  679.3141 rank according to priority in time of obtaining

12  control.

13         679.330  Priority of purchaser of chattel paper or

14  instrument.--

15         (1)  A purchaser of chattel paper has priority over a

16  security interest in the chattel paper which is claimed merely

17  as proceeds of inventory subject to a security interest if:

18         (a)  In good faith and in the ordinary course of the

19  purchaser's business, the purchaser gives new value and takes

20  possession of the chattel paper or obtains control of the

21  chattel paper under s. 679.1051; and

22         (b)  The chattel paper does not indicate that it has

23  been assigned to an identified assignee other than the

24  purchaser.

25         (2)  A purchaser of chattel paper has priority over a

26  security interest in the chattel paper which is claimed other

27  than merely as proceeds of inventory subject to a security

28  interest if the purchaser gives new value and takes possession

29  of the chattel paper or obtains control of the chattel paper

30  under s. 679.1051 in good faith, in the ordinary course of the

31

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  1  purchaser's business, and without knowledge that the purchase

  2  violates the rights of the secured party.

  3         (3)  Except as otherwise provided in s. 679.327, a

  4  purchaser having priority in chattel paper under subsection

  5  (1) or subsection (2) also has priority in proceeds of the

  6  chattel paper to the extent that:

  7         (a)  Section 679.322 provides for priority in the

  8  proceeds; or

  9         (b)  The proceeds consist of the specific goods covered

10  by the chattel paper or cash proceeds of the specific goods,

11  even if the purchaser's security interest in the proceeds is

12  unperfected.

13         (4)  Except as otherwise provided in s. 679.331(1), a

14  purchaser of an instrument has priority over a security

15  interest in the instrument perfected by a method other than

16  possession if the purchaser gives value and takes possession

17  of the instrument in good faith and without knowledge that the

18  purchase violates the rights of the secured party.

19         (5)  For purposes of subsections (1) and (2), the

20  holder of a purchase-money security interest in inventory

21  gives new value for chattel paper constituting proceeds of the

22  inventory.

23         (6)  For purposes of subsections (2) and (4), if

24  chattel paper or an instrument indicates that it has been

25  assigned to an identified secured party other than the

26  purchaser, a purchaser of the chattel paper or instrument has

27  knowledge that the purchase violates the rights of the secured

28  party.

29         679.331  Priority of rights of purchasers of

30  instruments, documents, and securities under other articles;

31

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  1  priority of interests in financial assets and security

  2  entitlements under chapter 678.--

  3         (1)  This chapter does not limit the rights of a holder

  4  in due course of a negotiable instrument, a holder to which a

  5  negotiable document of title has been duly negotiated, or a

  6  protected purchaser of a security.  These holders or

  7  purchasers take priority over an earlier security interest,

  8  even if perfected, to the extent provided in chapters 673,

  9  677, and 678.

10         (2)  This chapter does not limit the rights of or

11  impose liability on a person to the extent that the person is

12  protected against the assertion of an adverse claim under

13  chapter 678.

14         (3)  Filing under this chapter does not constitute

15  notice of a claim or defense to the holders, purchasers, or

16  persons described in subsections (1) and (2).

17         679.332  Transfer of money; transfer of funds from

18  deposit account.--

19         (1)  A transferee of money takes the money free of a

20  security interest unless the transferee acts in collusion with

21  the debtor in violating the rights of the secured party.

22         (2)  A transferee of funds from a deposit account takes

23  the funds free of a security interest in the deposit account

24  unless the transferee acts in collusion with the debtor in

25  violating the rights of the secured party.

26         679.333  Priority of certain liens arising by operation

27  of law.--

28         (1)  In this section, the term "possessory lien" means

29  an interest, other than a security interest or an agricultural

30  lien:

31

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  1         (a)  Which secures payment or performance of an

  2  obligation for services or materials furnished with respect to

  3  goods by a person in the ordinary course of the person's

  4  business;

  5         (b)  Which is created by statute or rule of law in

  6  favor of the person; and

  7         (c)  The effectiveness of which depends on the person's

  8  possession of the goods.

  9         (2)  A possessory lien on goods has priority over a

10  security interest in the goods unless the lien is created by a

11  statute that expressly provides otherwise.

12         679.334  Priority of security interests in fixtures and

13  crops.--

14         (1)  A security interest under this chapter may be

15  created in goods that are fixtures or may continue in goods

16  that become fixtures.  A security interest does not exist

17  under this chapter in ordinary building materials incorporated

18  into an improvement on land.

19         (2)  This chapter does not prevent creation of an

20  encumbrance upon fixtures under real property law.

21         (3)  A security interest in goods that are or become

22  fixtures is invalid against any person with an interest in the

23  real property at the time the security interest in the goods

24  is perfected or at the time the goods are affixed to the real

25  property, whichever occurs later, unless such person has

26  consented to the security interest or disclaimed an interest

27  in the goods as fixtures.

28         (4)  A security interest in goods that are or become

29  fixtures takes priority as to the goods over the claims of all

30  persons acquiring an interest in the real property subsequent

31

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  1  to the perfection of such security interest or the affixing of

  2  the goods to the real property, whichever occurs later.

  3         (5)  A perfected security interest in fixtures has

  4  priority over a conflicting interest of an encumbrancer or

  5  owner of the real property if the security is:

  6         (a)  Created in a manufactured home in a manufactured

  7  home transaction; and

  8         (b)  Perfected pursuant to a statute described in s.

  9  679.3111(1)(b).

10         (6)  A perfected security interest in crops growing on

11  real property has priority over a conflicting interest of an

12  encumbrancer or owner of the real property if the debtor has

13  an interest of record in or is in possession of the real

14  property.

15         (7)  Subsection (6) prevails over any inconsistent

16  provisions of the statutes.

17         679.335  Accessions.--

18         (1)  A security interest may be created in an accession

19  and continues in collateral that becomes an accession.

20         (2)  If a security interest is perfected when the

21  collateral becomes an accession, the security interest remains

22  perfected in the collateral.

23         (3)  Except as otherwise provided in subsection (4),

24  the other provisions of this part determine the priority of a

25  security interest in an accession.

26         (4)  A security interest in an accession is subordinate

27  to a security interest in the whole which is perfected by

28  compliance with the requirements of a certificate-of-title

29  statute under s. 679.3111(2).

30         (5)  After default, subject to part VI, a secured party

31  may remove an accession from other goods if the security

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  1  interest in the accession has priority over the claims of

  2  every person having an interest in the whole.

  3         (6)  A secured party that removes an accession from

  4  other goods under subsection (5) shall promptly reimburse any

  5  holder of a security interest or other lien on, or owner of,

  6  the whole or of the other goods, other than the debtor, for

  7  the cost of repair of any physical injury to the whole or the

  8  other goods.  The secured party need not reimburse the holder

  9  or owner for any diminution in value of the whole or the other

10  goods caused by the absence of the accession removed or by any

11  necessity for replacing it.  A person entitled to

12  reimbursement may refuse permission to remove until the

13  secured party gives adequate assurance for the performance of

14  the obligation to reimburse.

15         679.336  Commingled goods.--

16         (1)  In this section, the term "commingled goods" means

17  goods that are physically united with other goods in such a

18  manner that their identity is lost in a product or mass.

19         (2)  A security interest does not exist in commingled

20  goods as such.  However, a security interest may attach to a

21  product or mass that results when goods become commingled

22  goods.

23         (3)  If collateral becomes commingled goods, a security

24  interest attaches to the product or mass.

25         (4)  If a security interest in collateral is perfected

26  before the collateral becomes commingled goods, the security

27  interest that attaches to the product or mass under subsection

28  (3) is perfected.

29         (5)  Except as otherwise provided in subsection (6),

30  the other provisions of this part determine the priority of a

31

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  1  security interest that attaches to the product or mass under

  2  subsection (3).

  3         (6)  If more than one security interest attaches to the

  4  product or mass under subsection (3), the following rules

  5  determine priority:

  6         (a)  A security interest that is perfected under

  7  subsection (4) has priority over a security interest that is

  8  unperfected at the time the collateral becomes commingled

  9  goods.

10         (b)  If more than one security interest is perfected

11  under subsection (4), the security interests rank equally in

12  proportion to value of the collateral at the time it became

13  commingled goods.

14         679.337  Priority of security interests in goods

15  covered by certificate of title.--If, while a security

16  interest in goods is perfected by any method under the law of

17  another jurisdiction, this state issues a certificate of title

18  that does not show that the goods are subject to the security

19  interest or contain a statement that they may be subject to

20  security interests not shown on the certificate:

21         (1)  A buyer of the goods, other than a person in the

22  business of selling goods of that kind, takes free of the

23  security interest if the buyer gives value and receives

24  delivery of the goods after issuance of the certificate and

25  without knowledge of the security interest; and

26         (2)  The security interest is subordinate to a

27  conflicting security interest in the goods that attaches, and

28  is perfected under s. 679.3111(2), after issuance of the

29  certificate and without the conflicting secured party's

30  knowledge of the security interest.

31

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  1         679.338  Priority of security interest or agricultural

  2  lien perfected by filed financing statement providing certain

  3  incorrect information.--If a security interest or agricultural

  4  lien is perfected by a filed financing statement providing

  5  information described in s. 679.516(2)(e) which is incorrect

  6  at the time the financing statement is filed:

  7         (1)  The security interest or agricultural lien is

  8  subordinate to a conflicting perfected security interest in

  9  the collateral to the extent that the holder of the

10  conflicting security interest gives value in reasonable

11  reliance upon the incorrect information; and

12         (2)  A purchaser, other than a secured party, of the

13  collateral takes free of the security interest or agricultural

14  lien to the extent that, in reasonable reliance upon the

15  incorrect information, the purchaser gives value and, in the

16  case of chattel paper, documents, goods, instruments, or a

17  security certificate, receives delivery of the collateral.

18         679.339  Priority subject to subordination.--This

19  chapter does not preclude subordination by agreement by a

20  person entitled to priority.

21         679.340  Effectiveness of right of recoupment or

22  set-off against deposit account.--

23         (1)  Except as otherwise provided in subsection (3), a

24  bank with which a deposit account is maintained may exercise

25  any right of recoupment or set-off against a secured party

26  that holds a security interest in the deposit account.

27         (2)  Except as otherwise provided in subsection (3),

28  the application of this chapter to a security interest in a

29  deposit account does not affect a right of recoupment or

30  set-off of the secured party as to a deposit account

31  maintained with the secured party.

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  1         (3)  The exercise by a bank of a set-off against a

  2  deposit account is ineffective against a secured party that

  3  holds a security interest in the deposit account which is

  4  perfected by control under s. 679.1041(1)(c), if the set-off

  5  is based on a claim against the debtor.

  6         679.341  Bank's rights and duties with respect to

  7  deposit account.--Except as otherwise provided in s.

  8  679.340(3), and unless the bank otherwise agrees in an

  9  authenticated record, a bank's rights and duties with respect

10  to a deposit account maintained with the bank are not

11  terminated, suspended, or modified by:

12         (1)  The creation, attachment, or perfection of a

13  security interest in the deposit account;

14         (2)  The bank's knowledge of the security interest; or

15         (3)  The bank's receipt of instructions from the

16  secured party.

17         679.342  Bank's right to refuse to enter into or

18  disclose existence of control agreement.--This chapter does

19  not require a bank to enter into an agreement of the kind

20  described in s. 679.1041(1)(b), even if its customer so

21  requests or directs.  A bank that has entered into such an

22  agreement is not required to confirm the existence of the

23  agreement to another person unless requested to do so by its

24  customer.

25         Section 4.  Part IV of chapter 679, Florida Statutes,

26  consisting of sections 679.401, 679.4011, 679.402, 679.403,

27  679.404, 679.405, 679.406, 679.407, and 679.408, Florida

28  Statutes, is repealed and a new part IV, consisting of

29  sections 679.40111, 679.4021, 679.4031, 679.4041, 679.4051,

30  679.4061, 679.4071, 679.4081, and 679.409, Florida Statutes,

31  is created to read:

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  1                             PART IV

  2                     RIGHTS OF THIRD PARTIES

  3         679.40111  Alienability of debtor's rights.--

  4         (1)  Except as otherwise provided in subsection (2) and

  5  ss. 679.4061, 679.4071, 679.4081, and 679.409, whether a

  6  debtor's rights in collateral may be voluntarily or

  7  involuntarily transferred is governed by law other than this

  8  chapter.

  9         (2)  An agreement between the debtor and secured party

10  which prohibits a transfer of the debtor's rights in

11  collateral or makes the transfer a default does not prevent

12  the transfer from taking effect.

13         679.4021  Secured party not obligated on contract of

14  debtor or in tort.--The existence of a security interest,

15  agricultural lien, or authority given to a debtor to dispose

16  of or use collateral, without more, does not subject a secured

17  party to liability in contract or tort for the debtor's acts

18  or omissions.

19         679.4031  Agreement not to assert defenses against

20  assignee.--

21         (1)  In this section, the term "value" has the meaning

22  provided in s. 673.3031(1).

23         (2)  Except as otherwise provided in this section, an

24  agreement between an account debtor and an assignor not to

25  assert against an assignee any claim or defense that the

26  account debtor may have against the assignor is enforceable by

27  an assignee that takes an assignment:

28         (a)  For value;

29         (b)  In good faith;

30         (c)  Without notice of a claim of a property or

31  possessory right to the property assigned; and

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  1         (d)  Without notice of a defense or claim in recoupment

  2  of the type that may be asserted against a person entitled to

  3  enforce a negotiable instrument under s. 673.3031(1).

  4         (3)  Subsection (2) does not apply to defenses of a

  5  type that may be asserted against a holder in due course of a

  6  negotiable instrument under s. 673.3031(2).

  7         (4)  In a consumer transaction, if a record evidences

  8  the account debtor's obligation, law other than this chapter

  9  requires that the record include a statement to the effect

10  that the rights of an assignee are subject to claims or

11  defenses that the account debtor could assert against the

12  original obligee, and the record does not include such a

13  statement:

14         (a)  The record has the same effect as if the record

15  included such a statement; and

16         (b)  The account debtor may assert against an assignee

17  those claims and defenses that would have been available if

18  the record included such a statement.

19         (5)  This section is subject to law other than this

20  chapter which establishes a different rule for an account

21  debtor who is an individual and who incurred the obligation

22  primarily for personal, family, or household purposes.

23         (6)  Except as otherwise provided in subsection (4),

24  this section does not displace law other than this chapter

25  which gives effect to an agreement by an account debtor not to

26  assert a claim or defense against an assignee.

27         679.4041  Rights acquired by assignee; claims and

28  defenses against assignee.--

29         (1)  Unless an account debtor has made an enforceable

30  agreement not to assert defenses or claims, and subject to

31

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  1  subsections (2) through (5), the rights of an assignee are

  2  subject to:

  3         (a)  All terms of the agreement between the account

  4  debtor and assignor and any defense or claim in recoupment

  5  arising from the transaction that gave rise to the contract;

  6  and

  7         (b)  Any other defense or claim of the account debtor

  8  against the assignor which accrues before the account debtor

  9  receives a notification of the assignment authenticated by the

10  assignor or the assignee.

11         (2)  Subject to subsection (3) and except as otherwise

12  provided in subsection (4), the claim of an account debtor

13  against an assignor may be asserted against an assignee under

14  subsection (1) only to reduce the amount the account debtor

15  owes.

16         (3)  This section is subject to law other than this

17  chapter which establishes a different rule for an account

18  debtor who is an individual and who incurred the obligation

19  primarily for personal, family, or household purposes.

20         (4)  In a consumer transaction, if a record evidences

21  the account debtor's obligation, law other than this chapter

22  requires that the record include a statement to the effect

23  that the account debtor's recovery against an assignee with

24  respect to claims and defenses against the assignor may not

25  exceed amounts paid by the account debtor under the record,

26  and the record does not include such a statement, the extent

27  to which a claim of an account debtor against the assignor may

28  be asserted against an assignee is determined as if the record

29  included such a statement.

30         (5)  This section does not apply to an assignment of a

31  health-care-insurance receivable.

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  1         679.4051  Modification of assigned contract.--

  2         (1)  A modification of or substitution for an assigned

  3  contract is effective against an assignee if made in good

  4  faith.  The assignee acquires corresponding rights under the

  5  modified or substituted contract.  The assignment may provide

  6  that the modification or substitution is a breach of contract

  7  by the assignor.  This subsection is subject to subsections

  8  (2) through (4).

  9         (2)  Subsection (1) applies to the extent that:

10         (a)  The right to payment or a part thereof under an

11  assigned contract has not been fully earned by performance; or

12         (b)  The right to payment or a part thereof has been

13  fully earned by performance and the account debtor has not

14  received notification of the assignment under s. 679.4061(1).

15         (3)  This section is subject to law other than this

16  chapter which establishes a different rule for an account

17  debtor who is an individual and who incurred the obligation

18  primarily for personal, family, or household purposes.

19         (4)  This section does not apply to an assignment of a

20  health-care-insurance receivable.

21         679.4061  Discharge of account debtor; notification of

22  assignment; identification and proof of assignment;

23  restrictions on assignment of accounts, chattel paper, payment

24  intangibles, and promissory notes ineffective.--

25         (1)  Subject to subsections (2) through (9), an account

26  debtor on an account, chattel paper, or a payment intangible

27  may discharge its obligation by paying the assignor until, but

28  not after, the account debtor receives a notification,

29  authenticated by the assignor or the assignee, that the amount

30  due or to become due has been assigned and that payment is to

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

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  1  the account debtor may discharge its obligation by paying the

  2  assignee and may not discharge the obligation by paying the

  3  assignor.

  4         (2)  Subject to subsection (8), notification is

  5  ineffective under subsection (1):

  6         (a)  If it does not reasonably identify the rights

  7  assigned;

  8         (b)  To the extent that an agreement between an account

  9  debtor and a seller of a payment intangible limits the account

10  debtor's duty to pay a person other than the seller and the

11  limitation is effective under law other than this chapter; or

12         (c)  At the option of an account debtor, if the

13  notification notifies the account debtor to make less than the

14  full amount of any installment or other periodic payment to

15  the assignee, even if:

16         1.  Only a portion of the account, chattel paper, or

17  payment intangible has been assigned to that assignee;

18         2.  A portion has been assigned to another assignee; or

19         3.  The account debtor knows that the assignment to

20  that assignee is limited.

21         (3)  Subject to subsection (8), if requested by the

22  account debtor, an assignee shall seasonably furnish

23  reasonable proof that the assignment has been made.  Unless

24  the assignee complies, the account debtor may discharge its

25  obligation by paying the assignor, even if the account debtor

26  has received a notification under subsection (1).

27         (4)  Except as otherwise provided in subsection (5) and

28  ss. 680.303 and 679.4071, and subject to subsection (8), a

29  term in an agreement between an account debtor and an assignor

30  or in a promissory note is ineffective to the extent that it:

31

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

  2  the account debtor or person obligated on the promissory note

  3  to the assignment or transfer of, or the creation, attachment,

  4  perfection, or enforcement of a security interest in, the

  5  account, chattel paper, payment intangible, or promissory

  6  note; or

  7         (b)  Provides that the assignment or transfer or the

  8  creation, attachment, perfection, or enforcement of the

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

10  recoupment, claim, defense, termination, right of termination,

11  or remedy under the account, chattel paper, payment

12  intangible, or promissory note.

13         (5)  Subsection (4) does not apply to the sale of a

14  payment intangible or promissory note.

15         (6)  Except as otherwise provided in ss. 680.303 and

16  679.4071 and subject to subsections (8) and (9), a rule of

17  law, statute, or regulation that prohibits, restricts, or

18  requires the consent of a government, governmental body or

19  official, or account debtor to the assignment or transfer of,

20  or creation of a security interest in, an account or chattel

21  paper is ineffective to the extent that the rule of law,

22  statute, or regulation:

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

24  the government, governmental body or official, or account

25  debtor to the assignment or transfer of, or the creation,

26  attachment, perfection, or enforcement of a security interest

27  in the account or chattel paper; or

28         (b)  Provides that the assignment or transfer or the

29  creation, attachment, perfection, or enforcement of the

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

31

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  1  recoupment, claim, defense, termination, right of termination,

  2  or remedy under the account or chattel paper.

  3         (7)  Subject to subsection (8), an account debtor may

  4  not waive or vary its option under paragraph (2)(c).

  5         (8)  This section is subject to law other than this

  6  chapter which establishes a different rule for an account

  7  debtor who is an individual and who incurred the obligation

  8  primarily for personal, family, or household purposes.

  9  Subsection (6) does not apply to the creation, attachment,

10  perfection, or enforcement of a security interest in:

11         (a)  A claim of a debtor who is a natural person

12  against an employer to receive compensation for injuries or

13  sickness while an employee.

14         (b)  The interest of a debtor who is a natural person

15  in unemployment, alimony, disability, pension, or retirement

16  benefits or victim compensation funds.

17         (c)  The interest of a debtor who is a natural person

18  in other benefits which are designated solely for his or her

19  maintenance, support, or education, the assignability of which

20  is expressly prohibited or restricted by any statute.

21

22  However, this provision shall not preclude such debtor's

23  creation, attachment, perfection, or enforcement of a security

24  interest in a settlement arising from a personal injury claim

25  other than one against an employer arising out of the debtor's

26  employment.

27         (9)  This section does not apply to an assignment of a

28  health-care-insurance receivable.

29         (10)  This section prevails over any inconsistent

30  statute, rule, or regulation.

31

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  1         679.4071  Restrictions on creation or enforcement of

  2  security interest in leasehold interest or in lessor's

  3  residual interest.--

  4         (1)  Except as otherwise provided in subsection (2), a

  5  term in a lease agreement is ineffective to the extent that

  6  it:

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

  8  party to the lease to the assignment or transfer of, or the

  9  creation, attachment, perfection, or enforcement of a security

10  interest in, an interest of a party under the lease contract

11  or in the lessor's residual interest in the goods; or

12         (b)  Provides that the assignment or transfer or the

13  creation, attachment, perfection, or enforcement of the

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

15  recoupment, claim, defense, termination, right of termination,

16  or remedy under the lease.

17         (2)  Except as otherwise provided in s. 680.303(7), a

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

19  that there is:

20         (a)  A transfer by the lessee of the lessee's right of

21  possession or use of the goods in violation of the term; or

22         (b)  A delegation of a material performance of either

23  party to the lease contract in violation of the term.

24         (3)  The creation, attachment, perfection, or

25  enforcement of a security interest in the lessor's interest

26  under the lease contract or the lessor's residual interest in

27  the goods is not a transfer that materially impairs the

28  lessee's prospect of obtaining return performance or

29  materially changes the duty of or materially increases the

30  burden or risk imposed on the lessee within the purview of s.

31  680.303(4) unless, and then only to the extent that,

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  1  enforcement actually results in a delegation of material

  2  performance of the lessor.

  3         679.4081  Restrictions on assignment of promissory

  4  notes, health-care-insurance receivables, and certain general

  5  intangibles ineffective.--

  6         (1)  Except as otherwise provided in subsection (2), a

  7  term in a promissory note or in an agreement between an

  8  account debtor and a debtor which relates to a

  9  health-care-insurance receivable or a general intangible,

10  including a contract, permit, license, or franchise, and which

11  term prohibits, restricts, or requires the consent of the

12  person obligated on the promissory note or the account debtor

13  to, the assignment or transfer of, or creation, attachment, or

14  perfection of a security interest in, the promissory note,

15  health-care-insurance receivable, or general intangible, is

16  ineffective to the extent that the term:

17         (a)  Would impair the creation, attachment, or

18  perfection of a security interest; or

19         (b)  Provides that the assignment or transfer or the

20  creation, attachment, or perfection of the security interest

21  may give rise to a default, breach, right of recoupment,

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

23  under the promissory note, health-care-insurance receivable,

24  or general intangible.

25         (2)  Subsection (1) applies to a security interest in a

26  payment intangible or promissory note only if the security

27  interest arises out of a sale of the payment intangible or

28  promissory note.

29         (3)  A rule of law, statute, or regulation that

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

31  governmental body or official, person obligated on a

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  1  promissory note, or account debtor to the assignment or

  2  transfer of, or creation of a security interest in, a

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

  4  intangible, including a contract, permit, license, or

  5  franchise between an account debtor and a debtor, is

  6  ineffective to the extent that the rule of law, statute, or

  7  regulation:

  8         (a)  Would impair the creation, attachment, or

  9  perfection of a security interest; or

10         (b)  Provides that the assignment or transfer or the

11  creation, attachment, or perfection of the security interest

12  may give rise to a default, breach, right of recoupment,

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

14  under the promissory note, health-care-insurance receivable,

15  or general intangible.

16         (4)  To the extent that a term in a promissory note or

17  in an agreement between an account debtor and a debtor which

18  relates to a health-care-insurance receivable or general

19  intangible or a rule of law, statute, or regulation described

20  in subsection (3) would be effective under law other than this

21  chapter but is ineffective under subsection (1) or subsection

22  (3), the creation, attachment, or perfection of a security

23  interest in the promissory note, health-care-insurance

24  receivable, or general intangible:

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

26  the promissory note or the account debtor;

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

28  obligated on the promissory note or the account debtor;

29         (c)  Does not require the person obligated on the

30  promissory note or the account debtor to recognize the

31  security interest, pay or render performance to the secured

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  1  party, or accept payment or performance from the secured

  2  party;

  3         (d)  Does not entitle the secured party to use or

  4  assign the debtor's rights under the promissory note,

  5  health-care-insurance receivable, or general intangible,

  6  including any related information or materials furnished to

  7  the debtor in the transaction giving rise to the promissory

  8  note, health-care-insurance receivable, or general intangible;

  9         (e)  Does not entitle the secured party to use, assign,

10  possess, or have access to any trade secrets or confidential

11  information of the person obligated on the promissory note or

12  the account debtor; and

13         (f)  Does not entitle the secured party to enforce the

14  security interest in the promissory note,

15  health-care-insurance receivable, or general intangible. 

16         (5)  This section prevails over any inconsistent

17  statute, rule, or regulation.

18         (6)  Subsection (3) does not apply to the creation,

19  attachment, perfection, or enforcement of a security interest

20  in:

21         (a)  A claim of a debtor who is a natural person

22  against an employer to receive compensation for injuries or

23  sickness while an employee.

24         (b)  The interest of a debtor who is a natural person

25  in unemployment, alimony, disability, pension, or retirement

26  benefits or victim compensation funds.

27         (c)  The interest of a debtor who is a natural person

28  in other benefits which are designated solely for his or her

29  maintenance or support, the assignability of which is

30  expressly prohibited or restricted by any statute.

31

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  1  However, this provision shall not preclude such debtor's

  2  creation, attachment, perfection, or enforcement of a security

  3  interest in a settlement arising from a personal injury claim

  4  other than one against an employer arising out of the debtor's

  5  employment.

  6         679.409  Restrictions on assignment of letter-of-credit

  7  rights ineffective.--

  8         (1)  A term in a letter of credit or a rule of law,

  9  statute, regulation, custom, or practice applicable to the

10  letter of credit which prohibits, restricts, or requires the

11  consent of an applicant, issuer, or nominated person to a

12  beneficiary's assignment of or creation of a security interest

13  in a letter-of-credit right is ineffective to the extent that

14  the term or rule of law, statute, regulation, custom, or

15  practice:

16         (a)  Would impair the creation, attachment, or

17  perfection of a security interest in the letter-of-credit

18  right; or

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

20  attachment, or perfection of the security interest may give

21  rise to a default, breach, right of recoupment, claim,

22  defense, termination, right of termination, or remedy under

23  the letter-of-credit right.

24         (2)  To the extent that a term in a letter of credit is

25  ineffective under subsection (1) but would be effective under

26  law other than this chapter or a custom or practice applicable

27  to the letter of credit, to the transfer of a right to draw or

28  otherwise demand performance under the letter of credit, or to

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

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

31  in the letter-of-credit right:

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  1         (a)  Is not enforceable against the applicant, issuer,

  2  nominated person, or transferee beneficiary;

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

  4  issuer, nominated person, or transferee beneficiary; and

  5         (c)  Does not require the applicant, issuer, nominated

  6  person, or transferee beneficiary to recognize the security

  7  interest, pay or render performance to the secured party, or

  8  accept payment or other performance from the secured party.

  9         Section 5.  (1)  The Legislature finds that it is in

10  the best interest of the citizens and businesses of this state

11  to adopt Part V of Revised Article 9 of the Uniform Commercial

12  Code as proposed by the National Conference of Commissioners

13  on Uniform State Law, "revised Article 9," subject to specific

14  modifications, as revised chapter 679, Florida Statutes. Such

15  revised Article 9 almost exclusively affects secured

16  transactions and the relationships between and among secured

17  creditors, debtors, other creditors, and purchasers of

18  personal property subject to a security interest.  Both

19  individuals and business entities are intended to benefit from

20  the enactment of revised Article 9.

21         (2)  The Legislature also finds that, among other

22  things, revised Article 9 contemplates a more straightforward

23  and efficient system for documenting the perfection,

24  amendment, continuance, termination, assignment, and transfer

25  of security interests and requires less governmental

26  involvement than necessary under existing law.  Revised

27  Article 9 suggests the possibility that states may delegate

28  their historical administrative and operational

29  responsibilities over financing statement filings to a

30  nongovernmental entity.  This principle complements the

31  legislative policy of reducing government's detailed

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  1  regulation and involvement with private commerce and business

  2  transactions. Consistent with other revisions to current

  3  chapter 679, Florida Statutes, being adopted by this act, the

  4  requirement for exclusive administration and operation by this

  5  state of the system of filing and maintaining documents

  6  evidencing secured transactions no longer exists. However, the

  7  carrying out of the duties of the filing office and filing

  8  officer are very important to the uninterrupted flow of

  9  secured transactions and the Secretary of State shall retain

10  oversight over the private filing agency to which the filing

11  office and filing officer duties under revised Article 9, as

12  revised chapter 679, Florida Statutes, may be delegated.

13         Section 6.  Part V of chapter 679, Florida Statutes,

14  consisting of sections 679.501, 679.502, 679.503, 679.504,

15  679.505, 679.506, and 679.507, Florida Statutes, is repealed

16  and a new part V, consisting of sections 679.5011, 679.5021,

17  679.5031. 679.5041, 679.5051, 679.5061, 679.5071, 679.508,

18  679.509, 679.510, 679.511, 679.512, 679.513, 671.514, 679.515,

19  679.516, 679.517, 679.518, 679.519, 679.520, 679.521, 679.522,

20  679.523, 679.524, 679.525, 679.526, and 679.527, Florida

21  Statutes, is created to read:

22                              PART V

23                              FILING

24         679.5011  Filing office.--

25         (1)  Except as otherwise provided in subsection (2),

26  the office in which to file a financing statement to perfect a

27  security interest or agricultural lien is:

28         (a)  The office of the clerk of the circuit court, if:

29         1.  The collateral is as-extracted collateral or timber

30  to be cut; or

31

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  1         2.  The financing statement is filed as a fixture

  2  filing and the collateral is goods that are or are to become

  3  fixtures; or

  4         (b)  The office of the Secretary of State, in

  5  accordance with ss. 679.3011-679.3071, in all other cases.

  6         (2)  The office in which to file a financing statement

  7  to perfect a security interest in collateral, including

  8  fixtures, of a transmitting utility is the office of the

  9  Secretary of State.  The financing statement also constitutes

10  a fixture filing as to the collateral indicated in the

11  financing statement which is or is to become fixtures.

12         679.5021  Contents of financing statement; record of

13  mortgage as financing statement; time of filing financing

14  statement.--

15         (1)  Subject to subsection (2), a financing statement

16  is sufficient only if it:

17         (a)  Provides the name of the debtor;

18         (b)  Provides the name of the secured party or a

19  representative of the secured party; and

20         (c)  Indicates the collateral covered by the financing

21  statement.

22         (2)  Except as otherwise provided in s. 679.5011(2), to

23  be sufficient, a financing statement that covers as-extracted

24  collateral or timber to be cut, or that is filed as a fixture

25  filing and covers goods that are or are to become fixtures,

26  must comply with the requirements of subsection (1) and also:

27         (a)  Indicate that it covers this type of collateral;

28         (b)  Indicate that it is to be filed in the real

29  property records;

30         (c)  Provide a description of the real property to

31  which the collateral is related; and

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  1         (d)  If the debtor does not have an interest of record

  2  in the real property, provide the name of a record owner.

  3         (3)  A record of a mortgage satisfying the requirements

  4  of chapter 697 is effective, from the date of recording, as a

  5  financing statement filed as a fixture filing or as a

  6  financing statement covering as-extracted collateral or timber

  7  to be cut only if:

  8         (a)  The record of a mortgage indicates the goods or

  9  accounts that it covers;

10         (b)  The goods are or are to become fixtures related to

11  the real property described in the record of a mortgage or the

12  collateral is related to the real property described in the

13  mortgage and is as-extracted collateral or timber to be cut;

14         (c)  The record of a mortgage complies with the

15  requirements for a financing statement in this section other

16  than an indication that it is to be filed in the real property

17  records; and

18         (d)  The record of a mortgage is recorded as required

19  by chapter 697.

20         (4)  A financing statement may be filed before a

21  security agreement is made or a security interest otherwise

22  attaches.

23         679.5031  Name of debtor and secured party.--

24         (1)  A financing statement sufficiently provides the

25  name of the debtor:

26         (a)  If the debtor is a registered organization, only

27  if the financing statement provides the name of the debtor

28  indicated on the public record of the debtor's jurisdiction of

29  organization which shows the debtor to have been organized;

30

31

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  1         (b)  If the debtor is a decedent's estate, only if the

  2  financing statement provides the name of the decedent and

  3  indicates that the debtor is an estate;

  4         (c)  If the debtor is a trust or a trustee acting with

  5  respect to property held in trust, only if the financing

  6  statement:

  7         1.  Provides the name, if any, specified for the trust

  8  in its organic documents or, if no name is specified, provides

  9  the name of the settlor and additional information sufficient

10  to distinguish a debtor from other trusts having one or more

11  of the same settlors; and

12         2.  Indicates, in the debtor's name or otherwise, that

13  the debtor is a trust or is a trustee acting with respect to

14  property held in trust; and

15         (d)  In other cases:

16         1.  If the debtor has a name, only if it provides the

17  individual or organizational name of the debtor; and

18         2.  If the debtor does not have a name, only if it

19  provides the names of the partners, members, associates, or

20  other persons comprising the debtor.

21         (2)  A financing statement that provides the name of

22  the debtor in accordance with subsection (1) is not rendered

23  ineffective by the absence of:

24         (a)  A trade name or other name of the debtor; or

25         (b)  Unless required under subparagraph (1)(d)2., names

26  of partners, members, associates, or other persons comprising

27  the debtor.

28         (3)  A financing statement that provides only the

29  debtor's trade name does not sufficiently provide the name of

30  the debtor.

31

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  1         (4)  Failure to indicate the representative capacity of

  2  a secured party or representative of a secured party does not

  3  affect the sufficiency of a financing statement.

  4         (5)  A financing statement may provide the name of more

  5  than one debtor and the name of more than one secured party.

  6         679.5041  Indication of collateral.--A financing

  7  statement sufficiently indicates the collateral that it covers

  8  if the financing statement provides:

  9         (1)  A description of the collateral pursuant to s.

10  679.1081; or

11         (2)  If the security agreement grants a security

12  interest in all of the debtor's personal property and such

13  property is reasonably identified in the security agreement,

14  as permitted by s. 679.1081, an indication that the financing

15  statement covers all assets or all personal property.

16         679.5051  Filing and compliance with other statutes and

17  treaties for consignments, leases, bailments, and other

18  transactions.--

19         (1)  A consignor, lessor, or bailor of goods, a

20  licensor, or a buyer of a payment intangible or promissory

21  note may file a financing statement, or may comply with a

22  statute or treaty described in s. 679.3111(1), using the terms

23  "consignor," "consignee," "lessor," "lessee," "bailor,"

24  "bailee," "licensor," "licensee," "owner," "registered owner,"

25  "buyer," "seller," or words of similar import, instead of the

26  terms "secured party" and "debtor."

27         (2)  This part applies to the filing of a financing

28  statement under subsection (1) and, as appropriate, to

29  compliance that is equivalent to filing a financing statement

30  under s. 679.3111(2), but the filing or compliance is not of

31  itself a factor in determining whether the collateral secures

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  1  an obligation. If it is determined for another reason that the

  2  collateral secures an obligation, a security interest held by

  3  the consignor, lessor, bailor, licensor, owner, or buyer which

  4  attaches to the collateral is perfected by the filing or

  5  compliance.

  6         679.5061  Effect of errors or omissions.--

  7         (1)  A financing statement substantially complying with

  8  the requirements of this part is effective, even if it has

  9  minor errors or omissions, unless the errors or omissions make

10  the financing statement seriously misleading.

11         (2)  Except as otherwise provided in subsection (3), a

12  financing statement that fails sufficiently to provide the

13  name of the debtor in accordance with s. 679.5031(1) is

14  seriously misleading.

15         (3)  If a search of the records of the filing office

16  under the debtor's correct name, using the filing office's

17  standard search logic, if any, would disclose a financing

18  statement that fails sufficiently to provide the name of the

19  debtor in accordance with s. 679.5031(1), the name provided

20  does not make the financing statement seriously misleading.

21         (4)  For purposes of s. 679.508(2), the term "debtor's

22  correct name" as used in subsection (3) means the correct name

23  of the new debtor.

24         679.5071  Effect of certain events on effectiveness of

25  financing statement.--

26         (1)  A filed financing statement remains effective with

27  respect to collateral that is sold, exchanged, leased,

28  licensed, or otherwise disposed of and in which a security

29  interest or agricultural lien continues, even if the secured

30  party knows of or consents to the disposition.

31

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  1         (2)  Except as otherwise provided in subsection (3) and

  2  s. 679.508, a financing statement is not rendered ineffective

  3  if, after the financing statement is filed, the information

  4  provided in the financing statement becomes seriously

  5  misleading under the standard set forth in s. 679.5061.

  6         (3)  If a debtor so changes its name that a filed

  7  financing statement becomes seriously misleading under the

  8  standard set forth in s. 679.5061:

  9         (a)  The financing statement is effective to perfect a

10  security interest in collateral acquired by the debtor before,

11  or within 4 months after, the change; and

12         (b)  The financing statement is not effective to

13  perfect a security interest in collateral acquired by the

14  debtor more than 4 months after the change, unless an

15  amendment to the financing statement which renders the

16  financing statement not seriously misleading is filed within 4

17  months after the change.

18         679.508  Effectiveness of financing statement if new

19  debtor becomes bound by security agreement.--

20         (1)  Except as otherwise provided in this section, a

21  filed financing statement naming an original debtor is

22  effective to perfect a security interest in collateral in

23  which a new debtor has or acquires rights to the extent that

24  the financing statement would have been effective had the

25  original debtor acquired rights in the collateral.

26         (2)  If the difference between the name of the original

27  debtor and that of the new debtor causes a filed financing

28  statement that is effective under subsection (1) to be

29  seriously misleading under the standard set forth in s.

30  679.5061:

31

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  1         (a)  The financing statement is effective to perfect a

  2  security interest in collateral acquired by the new debtor

  3  before, and within 4 months after, the new debtor becomes

  4  bound under s. 679.2031(4); and

  5         (b)  The financing statement is not effective to

  6  perfect a security interest in collateral acquired by the new

  7  debtor more than 4 months after the new debtor becomes bound

  8  under s. 679.2031(4) unless an initial financing statement

  9  providing the name of the new debtor is filed before the

10  expiration of that time.

11         (3)  This section does not apply to collateral as to

12  which a filed financing statement remains effective against

13  the new debtor under s. 679.5071(1).

14         679.509  Persons entitled to file a record.--

15         (1)  A person may file an initial financing statement,

16  amendment that adds collateral covered by a financing

17  statement, or amendment that adds a debtor to a financing

18  statement only if:

19         (a)  The debtor authorizes the filing in an

20  authenticated record or pursuant to subsection (2) or

21  subsection (3); or

22         (b)  The person holds an agricultural lien that has

23  become effective at the time of filing and the financing

24  statement covers only collateral in which the person holds an

25  agricultural lien.

26         (2)  By authenticating or becoming bound as a debtor by

27  a security agreement, a debtor or new debtor authorizes the

28  filing of an initial financing statement, and an amendment,

29  covering:

30         (a)  The collateral described in the security

31  agreement; and

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  1         (b)  Property that becomes collateral under s.

  2  679.3151(1)(b), whether or not the security agreement

  3  expressly covers proceeds.

  4         (3)  A person may file an amendment other than an

  5  amendment that adds collateral covered by a financing

  6  statement or an amendment that adds a debtor to a financing

  7  statement only if:

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

  9  or

10         (b)  The amendment is a termination statement for a

11  financing statement as to which the secured party of record

12  has failed to file or send a termination statement as required

13  by s. 679.5131(1) or (3).

14         (4)  If there is more than one secured party of record

15  for a financing statement, each secured party of record may

16  authorize the filing of an amendment under subsection (3).

17         (5)  By acquiring collateral in which a security

18  interest or agricultural lien continues under s. 679.3151(1),

19  a debtor authorizes the filing of an initial financing, and an

20  amendment, covering the collateral and property that become

21  collateral under s. 679.3151(1)(b).

22         679.510  Effectiveness of filed record.--

23         (1)  Subject to subsection (3), a filed record is

24  effective only to the extent that it was filed by a person who

25  may file it under s. 679.509.

26         (2)  A record authorized by one secured party of record

27  does not affect the financing statement with respect to

28  another secured party of record.

29         (3)  If a person may file a termination statement only

30  under s. 679.509(3)(b), the filed termination statement is

31  effective only if the debtor authorizes the filing and the

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  1  termination statement indicates that the debtor authorized it

  2  to be filed.

  3         (4)  A continuation statement that is not filed within

  4  the 6-month period prescribed by s. 679.515(4) is ineffective.

  5         679.511  Secured party of record.--

  6         (1)  A secured party of record with respect to a

  7  financing statement is a person whose name is provided as the

  8  name of the secured party or a representative of the secured

  9  party in an initial financing statement that has been filed.

10  If an initial financing statement is filed under s.

11  679.514(1), the assignee named in the initial financing

12  statement is the secured party of record with respect to the

13  financing statement.

14         (2)  If an amendment of a financing statement which

15  provides the name of a person as a secured party or a

16  representative of a secured party is filed, the person named

17  in the amendment is a secured party of record.  If an

18  amendment is filed under s. 679.514(2), the assignee named in

19  the amendment is a secured party of record.

20         (3)  A person remains a secured party of record until

21  the filing of an amendment of the financing statement which

22  deletes the person.

23         679.512  Amendment of financing statement.--

24         (1)  Subject to s. 679.509, a person may add or delete

25  collateral covered by, continue or terminate the effectiveness

26  of, or, subject to subsection (5), otherwise amend the

27  information provided in, a financing statement by filing an

28  amendment that:

29         (a)  Identifies, by its correct file number, if any,

30  the initial financing statement to which the amendment

31

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  1  relates, and the name of the debtor and the secured party of

  2  record; and

  3         (b)  If the amendment relates to an initial financing

  4  statement filed or recorded in a filing office described in s.

  5  679.5011(1)(a), provides the information specified in s.

  6  679.5021(2), the official records book and page number of the

  7  initial financing statement to which the amendment relates,

  8  and the name of the debtor and secured party of record.

  9         (2)  Except as otherwise provided in s. 679.515, the

10  filing of an amendment does not extend the period of

11  effectiveness of the financing statement.

12         (3)  A financing statement that is amended by an

13  amendment that adds collateral is effective as to the added

14  collateral only from the date of the filing of the amendment.

15         (4)  A financing statement that is amended by an

16  amendment that adds a debtor is effective as to the added

17  debtor only from the date of the filing of the amendment.

18         (5)  An amendment is ineffective to the extent it:

19         (a)  Purports to delete all debtors and fails to

20  provide the name of a debtor to be covered by the financing

21  statement; or

22         (b)  Purports to delete all secured parties of record

23  and fails to provide the name of a new secured party of

24  record.

25         679.513  Termination statement.--

26         (1)  A secured party shall cause the secured party of

27  record for a financing statement to file a termination

28  statement for the financing statement if the financing

29  statement covers consumer goods and:

30

31

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

  2  covered by the financing statement and no commitment to make

  3  an advance, incur an obligation, or otherwise give value; or

  4         (b)  The debtor did not authorize the filing of the

  5  initial financing statement.

  6         (2)  To comply with subsection (1), a secured party

  7  shall cause the secured party of record to file the

  8  termination statement:

  9         (a)  Within 1 month after there is no obligation

10  secured by the collateral covered by the financing statement

11  and no commitment to make an advance, incur an obligation, or

12  otherwise give value; or

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

14  receives an authenticated demand from a debtor.

15         (3)  In cases not governed by subsection (1), within 20

16  days after a secured party receives an authenticated demand

17  from a debtor, the secured party shall cause the secured party

18  of record for a financing statement to send to the debtor a

19  termination statement for the financing statement or file the

20  termination statement in the filing office if:

21         (a)  Except in the case of a financing statement

22  covering accounts or chattel paper that has been sold or goods

23  that are the subject of a consignment, there is no obligation

24  secured by the collateral covered by the financing statement

25  and no commitment to make an advance, incur an obligation, or

26  otherwise give value;

27         (b)  The financing statement covers accounts or chattel

28  paper that has been sold but as to which the account debtor or

29  other person obligated has discharged its obligation;

30

31

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  1         (c)  The financing statement covers goods that were the

  2  subject of a consignment to the debtor but are not in the

  3  debtor's possession; or

  4         (d)  The debtor did not authorize the filing of the

  5  initial financing statement.

  6         (4)  Except as otherwise provided in s. 679.510, upon

  7  the filing of a termination statement with the filing office,

  8  the financing statement to which the termination statement

  9  relates ceases to be effective. Except as otherwise provided

10  in s. 679.510, for purposes of ss. 679.519(7) and 679.522(1),

11  the filing with the filing office of a termination statement

12  relating to a financing statement that indicates that the

13  debtor is a transmitting utility also causes the effectiveness

14  of the financing statement to lapse.

15         679.514  Assignment of powers of secured party of

16  record.--

17         (1)  Except as otherwise provided in subsection (3), an

18  initial financing statement may reflect an assignment of all

19  of the secured party's power to authorize an amendment to the

20  financing statement by providing the name and mailing address

21  of the assignee as the name and address of the secured party.

22         (2)  Except as otherwise provided in subsection (3), a

23  secured party of record may assign of record all or part of

24  its power to authorize an amendment to a financing statement

25  by filing in the filing office an amendment of the financing

26  statement which:

27         (a)  Identifies, by its correct file number and the

28  secured party of record, the initial financing statement to

29  which it relates;

30         (b)  Provides the names of the assignor and debtor; and

31

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  1         (c)  Provides the name and mailing address of the

  2  assignee.

  3         (3)  An assignment of record of a security interest in

  4  a fixture covered by a real property mortgage that is

  5  effective as a fixture filing under s. 679.5021(3) may be made

  6  only by an assignment of record of the mortgage in the manner

  7  provided by s. 701.02.

  8         679.515  Duration and effectiveness of financing

  9  statement; effect of lapsed financing statement.--

10         (1)  Except as otherwise provided in subsections (2),

11  (5), (6), and (7), a filed financing statement is effective

12  for a period of 5 years after the date of filing.

13         (2)  Except as otherwise provided in subsections (5),

14  (6), and (7), an initial financing statement filed in

15  connection with a manufactured-home transaction is effective

16  for a period of 30 years after the date of filing if it

17  indicates that it is filed in connection with a

18  manufactured-home transaction.

19         (3)  The effectiveness of a filed financing statement

20  lapses on the expiration of the period of its effectiveness

21  unless, before the lapse, a continuation statement is filed

22  pursuant to subsection (4).  Upon lapse, a financing statement

23  ceases to be effective and any security interest or

24  agricultural lien that was perfected by the financing

25  statement becomes unperfected, unless the security interest is

26  perfected without filing.  If the security interest or

27  agricultural lien becomes unperfected upon lapse, it is deemed

28  never to have been perfected as against a purchaser of the

29  collateral for value.

30         (4)  A continuation statement may be filed only within

31  6 months before the expiration of the 5-year period specified

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  1  in subsection (1) or the 30-year period specified in

  2  subsection (2), whichever is applicable.

  3         (5)  Except as otherwise provided in s. 679.510, upon

  4  timely filing of a continuation statement, the effectiveness

  5  of the initial financing statement continues for a period of 5

  6  years commencing on the day on which the financing statement

  7  would have become ineffective in the absence of the filing.

  8  Upon the expiration of the 5-year period, the financing

  9  statement lapses in the same manner as provided in subsection

10  (3), unless, before the lapse, another continuation statement

11  is filed pursuant to subsection (4).  Succeeding continuation

12  statements may be filed in the same manner to continue the

13  effectiveness of the initial financing statement.

14         (6)  If a debtor is a transmitting utility and a filed

15  financing statement so indicates, the financing statement is

16  effective until a termination statement is filed.

17         (7)  A record of a mortgage satisfying the requirements

18  of chapter 697 that is effective as a fixture filing under s.

19  679.5021(3) remains effective as a financing statement filed

20  as a fixture filing until the mortgage is released or

21  satisfied of record or its effectiveness otherwise terminates

22  as to the real property.

23         679.516  What constitutes filing; effectiveness of

24  filing.--

25         (1)  Except as otherwise provided in subsection (2),

26  communication of a record to a filing office, tender of the

27  processing fee, or acceptance of the record by the filing

28  office constitutes filing.

29         (2)  Filing does not occur with respect to a record

30  that a filing office refuses to accept because:

31

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  1         (a)  The record is not communicated by a method or

  2  medium of communication authorized by the filing office;

  3         (b)  An amount equal to or greater than the applicable

  4  processing fee is not tendered;

  5         (c)  The record does not include the notation required

  6  by s. 201.22 indicating that the excise tax required by

  7  chapter 201 had been paid or is not required;

  8         (d)  The filing office is unable to index the record

  9  because:

10         1.  In the case of an initial financing statement, the

11  record does not provide an organization's name or, if an

12  individual, the individual's last name and first name or

13  initial;

14         2.  In the case of an amendment or correction

15  statement, the record:

16         a.  Does not correctly identify the initial financing

17  statement as required by s. 679.512 or s. 679.518, as

18  applicable; or

19         b.  Identifies an initial financing statement the

20  effectiveness of which has lapsed under s. 679.515;

21         3.  In the case of an initial financing statement that

22  provides the name of a debtor identified as an individual or

23  an amendment that provides a name of a debtor identified as an

24  individual which was not previously provided in the financing

25  statement to which the record relates, the record does not

26  identify the debtor's last name and first name or initial; or

27         4.  In the case of a record filed or recorded in the

28  filing office described in s. 679.5011(1)(a), the record does

29  not provide a sufficient description of the real property to

30  which it relates;

31

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  1         (e)  In the case of an initial financing statement or

  2  an amendment that adds a secured party of record, the record

  3  does not provide an organization's name or, if an individual,

  4  the individual's last name and first name or initial and

  5  mailing address for the secured party of record;

  6         (f)  In the case of an initial financing statement or

  7  an amendment that provides a name of a debtor which was not

  8  previously provided in the financing statement to which the

  9  amendment relates, the record does not:

10         1.  Provide a mailing address for the debtor;

11         2.  Indicate whether the debtor is an individual or an

12  organization; or

13         3.  If the financing statement indicates that the

14  debtor is an organization, provide:

15         a.  A type of organization for the debtor;

16         b.  A jurisdiction of organization for the debtor; or

17         c.  An organizational identification number for the

18  debtor or indicate that the debtor has none;

19         (g)  In the case of an assignment reflected in an

20  initial financing statement under s. 679.514(1) or an

21  amendment filed under s. 679.514(2), the record does not

22  provide an organization's name or, if an individual, the

23  individual's last name and first name or initial and mailing

24  address for the assignee;

25         (h)  In the case of a continuation statement, the

26  record is not filed within the 6-month period prescribed by s.

27  679.515(4);

28         (i)  In the case of an initial financing statement or

29  an amendment, which amendment requires the inclusion of a

30  collateral statement but the record does not provide any, the

31  record does not provide a statement of collateral; or

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  1         (3)  For purposes of subsection (2):

  2         (a)  A record does not provide information if the

  3  filing office is unable to read or decipher the information;

  4  and

  5         (b)  A record that does not indicate that it is an

  6  amendment or identify an initial financing statement to which

  7  it relates, as required by s. 679.512, s. 679.514, or s.

  8  679.518, is an initial financing statement.

  9         (4)  A record that is communicated to the filing office

10  with tender of the filing fee, but that the filing office

11  refuses to accept for a reason other than one set forth in

12  subsection (2), is effective as a filed record except as

13  against a purchaser of the collateral which gives value in

14  reasonable reliance upon the absence of the record from the

15  files.

16         (5)(a)  If the Secretary of State reasonably and in

17  good faith believes that:

18         1.  A financing statement submitted for filing has been

19  tendered to the wrong office; or

20         2.  An exhibit or attachment specifically mentioned in

21  the record as being attached is not attached; or

22         (b)  If the filing office is unable to index the record

23  because an amendment or correction statement was previously

24  terminated under s. 679.513,

25

26  the filing office shall nevertheless conditionally accept the

27  filing and give the financing statement a conditional filing

28  number and record the date of filing as of the date it is

29  received, the "conditional filing date," if it otherwise

30  complies with this part.  However, the financing statement may

31  be rejected and the filing number and filing date purged from

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  1  the filing office records if the person submitting the

  2  financing statement does not provide the filing office with

  3  information or documents satisfying the requirements of this

  4  part within 20 business days after the filing office sends an

  5  authenticated record stating an objection to the financing

  6  statement as permitted herein, which objection shall be sent

  7  within 3 business days after the financing statement is

  8  received by the filing office.  If not rejected in accordance

  9  with this provision, the effective date of a conditionally

10  accepted financing statement shall be the conditional filing

11  date.

12         (6)  If the Secretary of State reasonably and in good

13  faith believes that a financing statement submitted for filing

14  is fraudulent, the filing office shall nevertheless

15  conditionally accept the filing and give the financing

16  statement a conditional filing number and record the date of

17  filing as the date it is received, the "conditional filing

18  date," if it otherwise complies with this part.  However, the

19  financing statement may be rejected and the filing number and

20  filing date purged from the filing office records if the

21  person submitting the financing statement does not provide the

22  filing office with information or documents supporting the

23  legitimacy of the financing statement within 20 business days

24  after the filing office sends an authenticated record stating

25  an objection to the financing statement as permitted herein,

26  which objection shall be sent within 3 business days after the

27  financing statement is received by the filing office.  If not

28  rejected in accordance with this provision, the effective date

29  of a conditionally accepted financing statement shall be the

30  conditional filing date.

31

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  1         679.517  Effect of indexing errors.--The failure of the

  2  filing office to index a record correctly does not affect the

  3  effectiveness of the filed record.

  4         679.518  Claim concerning inaccurate or wrongfully

  5  filed record.--

  6         (1)  A person may file in the filing office a

  7  correction statement with respect to a record indexed there

  8  under the person's name if the person believes that the record

  9  is inaccurate or was wrongfully filed.

10         (2)  A correction statement must:

11         (a)  Identify the record to which it relates by the

12  file number assigned to the initial financing statement, the

13  debtor, and the secured party of record to which the record

14  relates;

15         (b)  Indicate that it is a correction statement; and

16         (c)  Provide the basis for the person's belief that the

17  record is inaccurate and indicate the manner in which the

18  person believes the record should be amended to cure any

19  inaccuracy or provide the basis for the person's belief that

20  the record was wrongfully filed.

21         (3)  The filing of a correction statement does not

22  affect the effectiveness of an initial financing statement or

23  other filed record.

24         679.519  Numbering, maintaining, and indexing records;

25  communicating information provided in records.--

26         (1)  For each record filed in a filing office, the

27  filing office shall, in accordance with such other laws

28  applicable to the recording of instruments by a filing office

29  described in s. 679.5011(1)(a):

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

31

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

  2  the filed record and the date and time of filing;

  3         (c)  Maintain the filed record for public inspection;

  4  and

  5         (d)  Index the filed record in accordance with

  6  subsections (3), (4), and (5).

  7         (2)  Except as otherwise provided in subsection (9), a

  8  file number assigned after January 1, 2002, must include a

  9  digit that:

10         (a)  Is mathematically derived from or related to the

11  other digits of the file number; and

12         (b)  Enables the filing office to detect whether a

13  number communicated as the file number includes a single-digit

14  or transpositional error.

15         (3)  Except as otherwise provided in subsections (4)

16  and (5), the filing office shall:

17         (a)  Index an initial financing statement according to

18  the name of the debtor and shall index all filed records

19  relating to the initial financing statement in a manner that

20  associates with one another an initial financing statement and

21  all filed records relating to the initial financing statement;

22  and

23         (b)  Index a record that provides a name of a debtor

24  which was not previously provided in the financing statement

25  to which the record relates also according to the name that

26  was not previously provided.

27         (4)  If a financing statement is filed as a fixture

28  filing or covers as-extracted collateral or timber to be cut,

29  the filing office shall index it:

30         (a)  Under the names of the debtor and of each owner of

31  record shown on the financing statement as if they were the

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  1  mortgagors under a mortgage of the real property described;

  2  and

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

  4  for indexing of mortgages under the name of the mortgagee,

  5  under the name of the secured party as if the secured party

  6  were the mortgagee thereunder, or, if indexing is by

  7  description, as if the financing statement were a mortgage of

  8  the real property described.

  9         (5)  If a financing statement is filed as a fixture

10  filing or covers as-extracted collateral or timber to be cut,

11  the filing office shall index an assignment filed under s.

12  679.514(1) or an amendment filed under s. 679.514(2):

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

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

15  for indexing the assignment of a real property mortgage under

16  the name of the assignee, under the name of the assignee.

17         (6)  The filing office shall maintain a capability for:

18         (a)  Retrieving a record by the name of the debtor and

19  by the file number assigned to the initial financing statement

20  to which the record relates; and

21         (b)  Associating and retrieving with one another an

22  initial financing statement and each filed record relating to

23  the initial financing statement.

24         (7)  The filing office may not remove a debtor's name

25  from the index until 1 year after the effectiveness of a

26  financing statement naming the debtor lapses under s. 679.515

27  with respect to all secured parties of record.

28         (8)  Except as otherwise provided in subsection (9),

29  the filing office shall perform the acts required by

30  subsections (1) through (5) at the time and in the manner

31  prescribed by any filing-office rule, but not later than 3

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  1  business days after the filing office receives the record in

  2  question, if practical.

  3         (9)  Subsections (1), (2), and (8) do not apply to a

  4  filing office described in s. 679.5011(1)(a).

  5         679.520  Acceptance and refusal to accept record.--

  6         (1)  A filing office shall refuse to accept a record

  7  for filing for a reason set forth in s. 679.516(2) and may

  8  refuse to accept a record for filing only for a reason set

  9  forth in s. 679.516(2).

10         (2)  If a filing office refuses to accept a record for

11  filing, it shall communicate to the person that presented the

12  record the fact of and reason for the refusal and the date and

13  time the record would have been filed had the filing office

14  accepted it.  The communication must be made at the time and

15  in the manner prescribed by any filing-office rule but, in the

16  case of a filing office described in s. 679.5011(1)(b), in no

17  event more than 3 business days after the filing office

18  receives the record, if practical.

19         (3)  A filed financing statement satisfying s.

20  679.5021(1) and (2) is effective, even if the filing office is

21  required to refuse to accept it for filing under subsection

22  (1).  However, s. 679.338 applies to a filed financing

23  statement providing information described in s. 679.516(2)(e)

24  which is incorrect at the time the financing statement is

25  filed.

26         (4)  If a record communicated to a filing office

27  provides information that relates to more than one debtor,

28  this part applies as to each debtor separately.

29         679.521  Uniform form of written financing statement

30  and amendment.--The Secretary of State shall develop or

31  approve mandatory forms for use in filing under this chapter.

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  1  Such forms must be in accord with the requirements of Florida

  2  law, including s. 201.22. The secretary may, if he or she

  3  finds that such forms meet these requirements, approve the use

  4  of a standard national form for this purpose.

  5         679.522  Maintenance and destruction of records.--

  6         (1)  The filing office shall maintain a record of the

  7  information provided in a filed financing statement for at

  8  least 1 year after the effectiveness of the financing

  9  statement has lapsed under s. 679.515 with respect to all

10  secured parties of record.  The record must be retrievable by

11  using the name of the debtor and by using the file number, or

12  official records book and page number if a fixture filing,

13  assigned to the initial financing statement to which the

14  record relates.

15         (2)  Except to the extent that chapter 119 governing

16  disposition of public records provides otherwise, the filing

17  office immediately may destroy any written record evidencing a

18  financing statement.  However, if the filing office destroys a

19  written record, it shall maintain another record of the

20  financing statement which complies with subsection (1).

21         679.523  Information from filing office; sale or

22  license of records.--

23         (1)  If a person files a written record, the filing

24  office shall make available, on the database, an image of the

25  record showing the number assigned to the record pursuant to

26  s. 679.519(1)(a) and the date of the filing of the record or,

27  if requested, send to the person a separate printed

28  acknowledgement indicating the debtor's name, the number

29  assigned to the record pursuant to s. 679.519(1)(a), and the

30  date of the filing of the record.

31

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  1         (2)  If a person files a record other than a written

  2  record, the filing office described in s. 679.5011(l)(b) shall

  3  communicate to the person an image that provides:

  4         (a)  The information in the record;

  5         (b)  The number assigned to the record pursuant to s.

  6  679.519(1)(a); and

  7         (c)  The date and time of the filing of the record.

  8         (3)  In complying with its duty under this chapter, the

  9  filing office described in s. 679.5011(1)(b) may communicate

10  information in any medium.  However, if requested, the filing

11  office shall communicate information by issuing its written

12  certificate or a record that can be admitted into evidence in

13  the courts of the state without extrinsic evidence of its

14  authenticity.

15         (4)  The filing office described in s. 679.5011(1)(b)

16  shall perform the acts required by subsections (1) and (2) at

17  the time and in the manner prescribed by any filing-office

18  rule, but not later than 3 business days after the filing

19  office receives the request, if practical.

20         679.524  Delay by filing office.--Delay by the filing

21  office beyond a time limit prescribed by this part is excused

22  if:

23         (1)  The delay is caused by interruption of

24  communication or computer facilities, war, emergency

25  conditions, failure of equipment, or other circumstances

26  beyond control of the filing office; and

27         (2)  The filing office exercises reasonable diligence

28  under the circumstances.

29         679.525  Processing fees.--

30         (1)  Except as otherwise provided in subsection (3),

31  the nonrefundable processing fee for filing and indexing a

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  1  record under this part, other than an initial financing

  2  statement of the kind described in s. 679.5021(3), is:

  3         (a)  For filing a financing statement, $25 for the

  4  first page, which shall include the cost of filing a

  5  termination statement for the financing statement;

  6         (b)  For filing an amendment, $12 for the first page;

  7         (c)  For indexing by additional debtor, secured party,

  8  or assignee, $3 per additional name indexed;

  9         (d)  For use of a nonapproved form, $5;

10         (e)  For each additional facing page attached to a

11  record, $3;

12         (f)  For filing a financing statement communicated by

13  an electronic filing process authorized by the filing office,

14  $15 with no additional fees for multiple names or attached

15  pages;

16         (g)  For filing an amendment communicated by an

17  electronic filing process authorized by the filing office, $5

18  with no additional fees for multiple names or attached pages;

19         (h)  For a certified copy of a financing statement and

20  any and all associated amendments, $30; and

21         (i)  For a photocopy of a filed record, $1 per page.

22         (2)  Except as otherwise provided in subsection (3),

23  the fee for filing and indexing an initial financing statement

24  of the kind described in s. 679.5021(3) is the amount

25  specified in chapter 28.

26         (3)  This section does not require a fee with respect

27  to a mortgage that is effective as a financing statement filed

28  as a fixture filing or as a financing statement covering

29  as-extracted collateral or timber to be cut under s.

30  679.5021(3).  However, the recording and satisfaction fees

31  that otherwise would be applicable to the mortgage apply.

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  1         679.526  Filing-office rules.--The Department of State

  2  may adopt and publish rules to administer this chapter.  The

  3  filing-office rules must be:

  4         (1)  Consistent with this chapter.

  5         (2)  Adopted and published in accordance with the

  6  Administrative Procedure Act.

  7         679.527  Authority to delegate.--

  8         (1)  Except as otherwise provided in this section, the

  9  Secretary of State may delegate the duties of the filing

10  office and filing officer under this chapter to a private

11  filing agency qualified to transact business in this state

12  which otherwise has satisfied all other requirements of law

13  and has entered into an approved written contract with the

14  Department of State.  Upon the effective date of such

15  contract, the private filing agency shall, subject to the

16  review of the Secretary of State or his or her designee, fully

17  and diligently perform and carry out the responsibilities of

18  the filing office and filing officer under this chapter,

19  except as proscribed in the contract or this chapter.

20         (2)  Notwithstanding any contract with the private

21  filing agency, the Secretary of State, or his or her designee

22  who is an employee of the Department of State, shall retain

23  the sole authority to conditionally accept and later reject a

24  purportedly fraudulent financing statement as permitted under

25  s. 679.515.  The decision to reject shall be made within 3

26  business days after the financing statement is received by the

27  filing office.  However, the private filing agency may

28  recommend to the Secretary of State or his or her designee

29  action as to any purportedly fraudulent financing statement

30  and shall send to the party submitting the financing statement

31  immediately after the decision is made an authenticated record

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  1  of any determination of conditional acceptance or rejection

  2  made by the Secretary of State or his or her designee.

  3  Further, notwithstanding any such contract, the Secretary of

  4  State or his or her designee also may review and reverse any

  5  decision by the private filing agency to reject a financing

  6  statement under this chapter.

  7         (3)  The Secretary of State shall immediately after the

  8  effective date of this act develop and issue a request for

  9  qualifications seeking qualified entities to perform the

10  duties of the filing officer and filing office under this

11  chapter which are delegable.

12         (a)  The qualifications and any contract shall, at a

13  minimum, require:

14         1.  The creation and maintenance of a central filing,

15  recording, retrieval, and response system that is capable of

16  fully satisfying the filing officer and filing office

17  requirements under this chapter.

18         2.  Record maintenance in compliance with chapter 119.

19         3.  Oversight by the Department of State, including

20  compliance audits of the performance standards described in

21  subsection (5).

22         4.  Access by the public, including review at no charge

23  through the Internet or such other substitute medium, of all

24  financing statements maintained by the Department of State

25  under chapter 679 existing as of the date of the enactment of

26  this act, and of all financing statements filed after the

27  effective date of this act, subject to any requirements or

28  limitations of chapter 119 and this chapter.

29         5.  Maintenance for at least 5 years of the type and

30  amount of fees and procedures for the deposit of revenues, net

31

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  1  of operating costs, prescribed by the Department of State as

  2  of the effective date of this act, consistent with chapter 15.

  3         (4)  Notwithstanding the requirements of chapter 287,

  4  the Secretary of State or his or her designee may determine

  5  and select the most qualified respondent to the request for

  6  qualifications as the private filing agency under this

  7  chapter.

  8         (5)  The Secretary of State or his or her designee

  9  shall develop performance standards to assure that the system

10  to be used and actually used by the private filing agency is

11  accurate, efficient, and complete and that the system

12  satisfies the responsibilities of the filing office and filing

13  officer under this chapter and meets the needs of various

14  persons and entities using or affected by the filing system.

15         (6)  Because of the unique role the filing office and

16  filing officer have in administering and overseeing the system

17  of filing, amending, terminating, and assigning financing

18  statements, and the importance to commerce within this state

19  of uninterrupted, consistent, and credible service to parties

20  affected by the filing system, any contract between the

21  Department of State and the private filing agency shall not be

22  assignable without the express written consent of the

23  Secretary of State, which consent may be withheld in his or

24  her sole and absolute discretion.

25         (7)  If:

26         (a)  The private filing agency ceases, is unable, or

27  fails to perform all of the duties required under this chapter

28  required of the filing office and filing officer or as

29  provided for in any contract, as determined by the Secretary

30  of State in his or her sole discretion;

31

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  1         (b)  An assignee for the benefit of creditor is

  2  appointed for the private filing agency or its assets or a

  3  receiver is appointed for the private filing agency or its

  4  assets other than by the Secretary of State;

  5         (c)  Bankruptcy or other insolvency proceedings are

  6  commenced by the private filing agency; or

  7         (d)  An involuntary bankruptcy case is commenced

  8  against the private filing agency and the case is not

  9  dismissed within 5 business days after the filing of the

10  petition,

11

12  the Secretary of State shall, immediately or as soon as

13  practicable thereafter, assume the duties of the filing office

14  and filing officer under this chapter; appoint a receiver for

15  the private filing agency to fulfill the duties of the filing

16  office and filing officer under this chapter and any existing

17  contract; or redelegate such duties to a new private filing

18  agency that meets the requirements of this section and enters

19  into a new approved contract with the Secretary of State. Upon

20  any assumption, appointment, or redelegation by the Secretary

21  of State under this subsection, any rights of the private

22  filing agency pertaining to the contract or otherwise with

23  respect to this chapter shall immediately terminate.

24         (8)  All financing statements, logs, or indices

25  evidencing information regarding the filing, amendment,

26  continuation, termination, or assignment of financing

27  statements, and all other records pertaining to financing

28  statements received or sent by the private filing agency,

29  regardless of the form in which they are maintained, shall be

30  and remain the property of this state, and upon demand shall

31  be immediately turned over to the Secretary of State upon the

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  1  occurrence of any event described in paragraph (7)(a),

  2  paragraph (7)(b), paragraph (7)(c), or paragraph (7)(d).  The

  3  Secretary of State shall be entitled to injunctive relief on

  4  an emergency basis if the private filing agency fails to turn

  5  over any of such records.

  6         Section 7.  Part VI of chapter 679, Florida Statutes,

  7  consisting of sections 679.601, 679.602, 679.603, 679.604,

  8  679.605, 679.606, 679.607, 679.608, 679.609, 679.610, 679.611,

  9  679.612, 679.613, 679.614, 679.615, 679.616, 679.617, 679.618,

10  679.619, 679.620, 679.621, 679.622, 679.623, 679.624, 679.625,

11  679.626, 679.627, and 679.628, Florida Statutes, is created to

12  read:

13                             PART VI

14                             DEFAULT

15         679.601  Rights after default; judicial enforcement;

16  consignor or buyer of accounts, chattel paper, payment

17  intangibles, or promissory notes.--

18         (1)  After default, a secured party has the rights

19  provided in this part and, except as otherwise provided in s.

20  679.602, those provided by agreement of the parties. A secured

21  party:

22         (a)  May reduce a claim to judgment, foreclose, or

23  otherwise enforce the claim, security interest, or

24  agricultural lien by any available judicial procedure; and

25         (b)  If the collateral is documents, may proceed either

26  as to the documents or as to the goods they cover.

27         (2)  A secured party in possession of collateral or

28  control of collateral under s. 679.1041, s. 679.1051, s.

29  679.1061, or s. 679.1071 has the rights and duties provided in

30  s. 679.2071.

31

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  1         (3)  The rights under subsections (1) and (2) are

  2  cumulative and may be exercised simultaneously.

  3         (4)  Except as otherwise provided in subsection (7) and

  4  s. 679.605, after default, a debtor and an obligor have the

  5  rights provided in this part and by agreement of the parties.

  6         (5)  If a secured party has reduced its claim to

  7  judgment, the lien of any levy that may be made upon the

  8  collateral by virtue of an execution based upon the judgment

  9  relates back to the earliest of:

10         (a)  The date of perfection of the security interest or

11  agricultural lien in the collateral;

12         (b)  The date of filing a financing statement covering

13  the collateral; or

14         (c)  Any date specified in a statute under which the

15  agricultural lien was created.

16         (6)  A sale pursuant to an execution is a foreclosure

17  of the security interest or agricultural lien by judicial

18  procedure within the meaning of this section.  A secured party

19  may purchase at the sale and thereafter hold the collateral

20  free of any other requirements of this chapter.

21         (7)  Except as otherwise provided in s. 679.607(3),

22  this part imposes no duties upon a secured party that is a

23  consignor or is a buyer of accounts, chattel paper, payment

24  intangibles, or promissory notes.

25         679.602  Waiver and variance of rights and

26  duties.--Except as otherwise provided in s. 679.624, to the

27  extent that they give rights to a debtor or obligor and impose

28  duties on a secured party, the debtor or obligor may not waive

29  or vary the rules stated in the following listed sections:

30         (1)  Section 679.2071(2)(d)3., which deals with use and

31  operation of the collateral by the secured party;

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  1         (2)  Section 679.210, which deals with requests for an

  2  accounting and requests concerning a list of collateral and

  3  statement of account;

  4         (3)  Section 679.607(3), which deals with collection

  5  and enforcement of collateral;

  6         (4)  Sections 679.608(1) and 679.615(3) to the extent

  7  that they deal with application or payment of noncash proceeds

  8  of collection, enforcement, or disposition;

  9         (5)  Sections 679.608(1) and 679.615(4) to the extent

10  that they require accounting for or payment of surplus

11  proceeds of collateral;

12         (6)  Section 679.609 to the extent that it imposes upon

13  a secured party that takes possession of collateral without

14  judicial process the duty to do so without breach of the

15  peace;

16         (7)  Sections 679.610(2), 679.611, 679.613, and

17  679.614, which deal with disposition of collateral;

18         (8)  Section 679.615(6), which deals with calculation

19  of a deficiency or surplus when a disposition is made to the

20  secured party, a person related to the secured party, or a

21  secondary obligor;

22         (9)  Section 679.616, which deals with explanation of

23  the calculation of a surplus or deficiency;

24         (10)  Sections 679.620, 679.621, and 679.622, which

25  deal with acceptance of collateral in satisfaction of

26  obligation;

27         (11)  Section 679.623, which deals with redemption of

28  collateral;

29         (12)  Section 679.624, which deals with permissible

30  waivers; and

31

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  1         (13)  Sections 679.625 and 679.626, which deal with the

  2  secured party's liability for failure to comply with this

  3  article.

  4         679.603  Agreement on standards concerning rights and

  5  duties.--

  6         (1)  The parties may determine by agreement the

  7  standards measuring the fulfillment of the rights of a debtor

  8  or obligor and the duties of a secured party under a rule

  9  stated in s. 679.602 if the standards are not manifestly

10  unreasonable.

11         (2)  Subsection (1) does not apply to the duty under s.

12  679.609 to refrain from breaching the peace.

13         679.604  Procedure if security agreement covers real

14  property or fixtures.--

15         (1)  If a security agreement covers both personal and

16  real property, a secured party may proceed:

17         (a)  Under this part as to the personal property

18  without prejudicing any rights with respect to the real

19  property; or

20         (b)  As to both the personal property and the real

21  property in accordance with the rights with respect to the

22  real property, in which case the other provisions of this part

23  do not apply.

24         (2)  Subject to subsection (3), if a security agreement

25  covers goods that are or become fixtures, a secured party may

26  proceed:

27         (a)  Under this part; or

28         (b)  In accordance with the rights with respect to real

29  property, in which case the other provisions of this part do

30  not apply.

31

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  1         (3)  Subject to the other provisions of this part, if a

  2  secured party holding a security interest in fixtures has

  3  priority over all owners and encumbrancers of the real

  4  property, the secured party, after default, may remove the

  5  collateral from the real property. The secured party shall

  6  give reasonable notification of its intent to remove the

  7  collateral to all persons entitled to reimbursement under

  8  subsection (4).

  9         (4)  A secured party that removes collateral shall

10  promptly reimburse any encumbrancer or owner of the real

11  property, other than the debtor, for the cost of repair of any

12  physical injury caused by the removal.  The secured party need

13  not reimburse the encumbrancer or owner for any diminution in

14  value of the real property caused by the absence of the goods

15  removed or by any necessity of replacing them.  A person

16  entitled to reimbursement may refuse permission to remove

17  until the secured party gives adequate assurance for the

18  performance of the obligation to reimburse. This subsection

19  does not prohibit a secured party and the person entitled to

20  reimbursement from entering into an authenticated record

21  providing for the removal of fixtures and reimbursement for

22  any damage caused thereby.

23         679.605  Unknown debtor or secondary obligor.--A

24  secured party does not owe a duty based on its status as

25  secured party:

26         (1)  To a person who is a debtor or obligor, unless the

27  secured party knows:

28         (a)  That the person is a debtor or obligor;

29         (b)  The identity of the person; and

30         (c)  How to communicate with the person; or

31

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  1         (2)  To a secured party or lienholder that has filed a

  2  financing statement against a person, unless the secured party

  3  knows:

  4         (a)  That the person is a debtor; and

  5         (b)  The identity of the person.

  6         679.606  Time of default for agricultural lien.--For

  7  purposes of this part, a default occurs in connection with an

  8  agricultural lien at the time the secured party becomes

  9  entitled to enforce the lien in accordance with the statute

10  under which it was created.

11         679.607  Collection and enforcement by secured party.--

12         (1)  If so agreed, and in any event after default, a

13  secured party:

14         (a)  May notify an account debtor or other person

15  obligated on collateral to make payment or otherwise render

16  performance to or for the benefit of the secured party;

17         (b)  May take any proceeds to which the secured party

18  is entitled under s. 679.3151;

19         (c)  May enforce the obligations of an account debtor

20  or other person obligated on collateral and exercise the

21  rights of the debtor with respect to the obligation of the

22  account debtor or other person obligated on collateral to make

23  payment or otherwise render performance to the debtor, and

24  with respect to any property that secures the obligations of

25  the account debtor or other person obligated on the

26  collateral;

27         (d)  If it holds a security interest in a deposit

28  account perfected by control under s. 679.1041(1)(a), may

29  apply the balance of the deposit account to the obligation

30  secured by the deposit account; and

31

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  1         (e)  If it holds a security interest in a deposit

  2  account perfected by control under s. 679.1041(1)(b) or (c),

  3  may instruct the bank to pay the balance of the deposit

  4  account to or for the benefit of the secured party.

  5         (2)  If necessary to enable a secured party to exercise

  6  under paragraph (1)(c) the right of a debtor to enforce a

  7  mortgage nonjudicially outside this state, the secured party

  8  may record in the office in which a record of the mortgage is

  9  recorded:

10         (a)  A copy of the security agreement that creates or

11  provides for a security interest in the obligation secured by

12  the mortgage; and

13         (b)  The secured party's sworn affidavit in recordable

14  form stating that:

15         1.  A default has occurred; and

16         2.  The secured party is entitled to enforce the

17  mortgage nonjudicially outside this state.

18         (3)  A secured party shall proceed in a commercially

19  reasonable manner if the secured party:

20         (a)  Undertakes to collect from or enforce an

21  obligation of an account debtor or other person obligated on

22  collateral; and

23         (b)  Is entitled to charge back uncollected collateral

24  or otherwise to full or limited recourse against the debtor or

25  a secondary obligor.

26         (4)  A secured party may deduct from the collections

27  made pursuant to subsection (3) reasonable expenses of

28  collection and enforcement, including reasonable attorney's

29  fees and legal expenses incurred by the secured party.

30

31

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  1         (5)  This section does not determine whether an account

  2  debtor, bank, or other person obligated on collateral owes a

  3  duty to a secured party.

  4         (6)  Nothing in subsection (2) is intended to create a

  5  right of nonjudicial foreclosure in this state.

  6         679.608  Application of proceeds of collection or

  7  enforcement; liability for deficiency and right to surplus.--

  8         (1)  If a security interest or agricultural lien

  9  secures payment or performance of an obligation, the following

10  rules apply:

11         (a)  A secured party shall apply or pay over for

12  application the cash proceeds of collection or enforcement

13  under s. 679.607 in the following order to:

14         1.  The reasonable expenses of collection and

15  enforcement and, to the extent provided for by agreement and

16  not prohibited by law, reasonable attorney's fees and legal

17  expenses incurred by the secured party;

18         2.  The satisfaction of obligations secured by the

19  security interest or agricultural lien under which the

20  collection or enforcement is made; and

21         3.  The satisfaction of obligations secured by any

22  subordinate security interest in or other lien on the

23  collateral subject to the security interest or agricultural

24  lien under which the collection or enforcement is made if the

25  secured party receives an authenticated demand for proceeds

26  before distribution of the proceeds is completed.

27         (b)  If requested by a secured party, a holder of a

28  subordinate security interest or other lien shall furnish

29  reasonable proof of the interest or lien within a reasonable

30  time and agree to indemnify the secured party on reasonable

31  terms acceptable to the secured party for damages, including

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  1  reasonable attorney's fees and costs, incurred or suffered by

  2  the secured party if the subordinate holder did not have the

  3  right to receive the amounts to be paid to it. Unless the

  4  holder complies, the secured party need not comply with the

  5  holder's demand under subparagraph (a)3.

  6         (c)  A secured party need not apply or pay over for

  7  application noncash proceeds of collection and enforcement

  8  under s. 679.607 unless the failure to do so would be

  9  commercially unreasonable.  A secured party that applies or

10  pays over for application noncash proceeds shall do so in a

11  commercially reasonable manner.

12         (d)  A secured party shall account to and pay a debtor

13  for any surplus, and the obligor is liable for any deficiency.

14         (2)  If the underlying transaction is a sale of

15  accounts, chattel paper, payment intangibles, or promissory

16  notes, the debtor is not entitled to any surplus, and the

17  obligor is not liable for any deficiency.

18         (3)  If the secured party in good faith cannot

19  determine the validity, extent, or priority of a subordinate

20  security interest or other lien or there are conflicting

21  claims of subordinate interests or liens, the secured party

22  may commence an interpleader action with respect to remaining

23  proceeds in excess of $2,500 in the circuit or county court,

24  as applicable based upon the amount to be deposited, where the

25  collateral was located or collected or in the county where the

26  debtor has its chief executive office or principal residence

27  in this state, as applicable. If authorized in an

28  authenticated record, the interpleading secured party is

29  entitled to be paid from the remaining proceeds the actual

30  costs of the filing fee and an attorney's fee in the amount of

31  $250 incurred in connection with filing the interpleader

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  1  action and obtaining an order approving the interpleader of

  2  funds.  The debtor in a consumer transaction may not be

  3  assessed for the attorney's fees and costs incurred in the

  4  interpleader action by the holders of subordinate security

  5  interests or other liens based upon disputes among said

  6  holders, and a debtor in a transaction other than a consumer

  7  transaction may only recover such fees and costs to the extent

  8  provided for in an authenticated record.  If authorized in an

  9  authenticated record, the court in the interpleader action may

10  award reasonable attorney's fees and costs to the prevailing

11  party in a dispute between the debtor and a holder of a

12  security interest or lien which claims an interest in the

13  remaining interplead proceeds, but only if the debtor

14  challenges the validity, priority, or extent of said security

15  interest or lien.  Except as provided in this subsection, a

16  debtor may not be assessed attorney's fees and costs incurred

17  by any party in an interpleader action commenced under this

18  section.

19         679.609  Secured party's right to take possession after

20  default.--

21         (1)  After default, a secured party:

22         (a)  May take possession of the collateral; and

23         (b)  Without removal, may render equipment unusable and

24  dispose of collateral on a debtor's premises under s. 679.610.

25         (2)  A secured party may proceed under subsection (1):

26         (a)  Pursuant to judicial process; or

27         (b)  Without judicial process, if it proceeds without

28  breach of the peace.

29         (3)  If so agreed, and in any event after default, a

30  secured party may require the debtor to assemble the

31  collateral and make it available to the secured party at a

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  1  place to be designated by the secured party which is

  2  reasonably convenient to both parties.

  3         679.610  Disposition of collateral after default.--

  4         (1)  After default, a secured party may sell, lease,

  5  license, or otherwise dispose of any or all of the collateral

  6  in its present condition or following any commercially

  7  reasonable preparation or processing.

  8         (2)  Every aspect of a disposition of collateral,

  9  including the method, manner, time, place, and other terms,

10  must be commercially reasonable.  If commercially reasonable,

11  a secured party may dispose of collateral by public or private

12  proceedings, by one or more contracts, as a unit or in

13  parcels, and at any time and place and on any terms.

14         (3)  A secured party may purchase collateral:

15         (a)  At a public disposition; or

16         (b)  At a private disposition only if the collateral is

17  of a kind that is customarily sold on a recognized market or

18  the subject of widely distributed standard price quotations.

19         (4)  A contract for sale, lease, license, or other

20  disposition includes the warranties relating to title,

21  possession, quiet enjoyment, and the like which by operation

22  of law accompany a voluntary disposition of property of the

23  kind subject to the contract.

24         (5)  A secured party may disclaim or modify warranties

25  under subsection (4):

26         (a)  In a manner that would be effective to disclaim or

27  modify the warranties in a voluntary disposition of property

28  of the kind subject to the contract of disposition; or

29         (b)  By communicating to the purchaser a record

30  evidencing the contract for disposition and including an

31  express disclaimer or modification of the warranties.

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  1         (6)  A record is sufficient to disclaim warranties

  2  under subsection (5) if it indicates that "there is no

  3  warranty relating to title, possession, quiet enjoyment, or

  4  the like in this disposition" or uses words of similar import.

  5         679.611  Notification before disposition of

  6  collateral.--

  7         (1)  In this section, the term "notification date"

  8  means the earlier of the date on which:

  9         (a)  A secured party sends to the debtor and any

10  secondary obligor an authenticated notification of

11  disposition; or

12         (b)  The debtor and any secondary obligor waive the

13  right to notification.

14         (2)  Except as otherwise provided in subsection (4), a

15  secured party that disposes of collateral under s. 679.610

16  shall send to the persons specified in subsection (3) a

17  reasonable authenticated notification of disposition.

18         (3)  To comply with subsection (2), the secured party

19  shall send an authenticated notification of disposition to:

20         (a)  The debtor;

21         (b)  Any secondary obligor; and

22         (c)  If the collateral is other than consumer goods:

23         1.  Any other person from whom the secured party has

24  received, before the notification date, an authenticated

25  notification of a claim of an interest in the collateral;

26         2.  Any other secured party or lienholder that, 10 days

27  before the notification date, held a security interest in or

28  other lien on the collateral perfected by the filing of a

29  financing statement that:

30         a.  Identified the collateral;

31

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  1         b.  Was indexed under the debtor's name as of that

  2  date; and

  3         c.  Was filed in the office in which to file a

  4  financing statement against the debtor covering the collateral

  5  as of that date; and

  6         3.  Any other secured party that, 10 days before the

  7  notification date, held a security interest in the collateral

  8  perfected by compliance with a statute, regulation, or treaty

  9  described in s. 679.3111(1).

10         (4)  Subsection (2) does not apply if the collateral is

11  perishable or threatens to decline speedily in value or is of

12  a type customarily sold on a recognized market.

13         (5)  A secured party complies with the requirement for

14  notification prescribed by subparagraph (3)(c)2. if:

15         (a)  Not later than 20 days or earlier than 30 days

16  before the notification date, the secured party requests, in a

17  commercially reasonable manner, information concerning

18  financing statements indexed under the debtor's name in the

19  office indicated in subparagraph (3)(c)2.; and

20         (b)  Before the notification date, the secured party:

21         1.  Did not receive a response to the request for

22  information; or

23         2.  Received a response to the request for information

24  and sent an authenticated notification of disposition to each

25  secured party or other lienholder named in that response whose

26  financing statement covered the collateral.

27         (6)  For purposes of subsection (3), the secured party

28  may send the authenticated notification as follows:

29         (a)  If the collateral is other than consumer goods, to

30  the debtor at the address in the financing statement, unless

31  the secured party has received an authenticated record from

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  1  the debtor notifying the secured party of a different address

  2  for such notification purposes or the secured party has actual

  3  knowledge of the address of the debtor's chief executive

  4  office or principal residence, as applicable, at the time the

  5  notification is sent;

  6         (b)  If the collateral is other than consumer goods, to

  7  any secondary obligor at the address, if any, in the

  8  authenticated agreement, unless the secured party has received

  9  an authenticated record from the secondary obligor notifying

10  the secured party of a different address for such notification

11  purposes or the secured party has actual knowledge of the

12  address of the secondary obligor's chief executive office or

13  principal residence, as applicable, at the time the

14  notification is sent; and

15         (c)  If the collateral is other than consumer goods:

16         1.  To the person described in subparagraph (3)(c)1.,

17  at the address stated in the notification;

18         2.  To the person described in subparagraph (3)(c)2.,

19  at the address stated in the financing statement;

20         3.  To the person described in subparagraph (3)(c)3.,

21  at the address stated in the official records of the recording

22  or registration agency.

23         679.612  Timeliness of notification before disposition

24  of collateral.--

25         (1)  Except as otherwise provided in subsection (2),

26  whether a notification is sent within a reasonable time is a

27  question of fact.

28         (2)  A notification of disposition sent after default

29  and 10 days or more before the earliest time of disposition

30  set forth in the notification is sent within a reasonable time

31  before the disposition.

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  1         679.613  Contents and form of notification before

  2  disposition of collateral; general.--Except in a

  3  consumer-goods transaction, the following rules apply:

  4         (1)  The contents of a notification of disposition are

  5  sufficient if the notification:

  6         (a)  Describes the debtor and the secured party;

  7         (b)  Describes the collateral that is the subject of

  8  the intended disposition;

  9         (c)  States the method of intended disposition;

10         (d)  States that the debtor is entitled to an

11  accounting of the unpaid indebtedness and states the charge,

12  if any, for an accounting; and

13         (e)  States the time and place of a public disposition

14  or the time after which any other disposition is to be made.

15         (2)  Whether the contents of a notification that lacks

16  any of the information specified in subsection (1) are

17  nevertheless sufficient is a question of fact.

18         (3)  The contents of a notification providing

19  substantially the information specified in subsection (1) are

20  sufficient, even if the notification includes:

21         (a)  Information not specified by that paragraph; or

22         (b)  Minor errors that are not seriously misleading.

23         (4)  A particular phrasing of the notification is not

24  required.

25         (5)  The following form of notification and the form

26  appearing in s. 679.614(3), when completed, each provides

27  sufficient information:

28            NOTIFICATION OF DISPOSITION OF COLLATERAL

29  To:....(Name of debtor, obligor, or other person to which the

30  notification is sent)....

31

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  1  From:....(Name, address, and telephone number of secured

  2  party)....

  3  Name of Debtor(s):....(Include only if debtor(s) are not an

  4  addressee)....

  5  [For a public disposition:]

  6         We will sell [or lease or license, as applicable] the

  7  ....(describe collateral)....to the highest qualified bidder

  8  in public as follows:

  9  Day and Date:

10  Time:

11  Place:

12  [For a private disposition:]

13         We will sell [or lease or license, as applicable] the

14  ....(describe collateral).... privately sometime after

15  ....(day and date).....

16         You are entitled to an accounting of the unpaid

17  indebtedness secured by the property that we intend to sell

18  [or lease or license, as applicable] for a charge of $______.

19  You may request an accounting by calling us at ....(telephone

20  number).....

21         679.614  Contents and form of notification before

22  disposition of collateral; consumer-goods transaction.--In a

23  consumer-goods transaction, the following rules apply:

24         (1)  A notification of disposition must provide the

25  following information:

26         (a)  The information specified in s. 679.613(1);

27         (b)  A description of any liability for a deficiency of

28  the person to whom the notification is sent;

29         (c)  A telephone number from which the amount that must

30  be paid to the secured party to redeem the collateral under s.

31  679.623 is available; and

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  1         (d)  A telephone number or mailing address from which

  2  additional information concerning the disposition and the

  3  obligation secured is available.

  4         (2)  A particular phrasing of the notification is not

  5  required.

  6         (3)  The following form of notification, when

  7  completed, provides sufficient information:

  8  ....(Name and address of secured party)....

  9  .... (Date)....

10               NOTICE OF OUR PLAN TO SELL PROPERTY

11  .... (Name and address of any obligor who is also a

12  debtor)....

13  Subject:....(Identification of Transaction)....

14  We have your ....(describe collateral)...., because you broke

15  promises in our agreement.

16

17  [For a public disposition:]

18  We will sell ....(describe collateral).... at public sale. A

19  sale could include a lease or license. The sale will be held

20  as follows:

21         Date:

22         Time:

23         Place:

24  You may attend the sale and bring bidders if you want.

25  [For a private disposition:]

26  We will sell ....(describe collateral).... at private sale

27  sometime after ....(date)..... A sale could include a lease or

28  license.

29

30  The money that we get from the sale (after paying our costs)

31  will reduce the amount you owe.  If we get less money than you

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  1  owe, you ....(will or will not, as applicable).... still owe

  2  us the difference. If we get more money than you owe, you will

  3  get the extra money, unless we must pay it to someone else.

  4

  5  You can get the property back at any time before we sell it by

  6  paying us the full amount you owe (not just the past due

  7  payments), including our expenses. To learn the exact amount

  8  you must pay, call us at ....(telephone number).....

  9

10  If you want us to explain to you in writing how we have

11  figured the amount that you owe us, you may call us at

12  ....(telephone number).... or write us at ....(secured party's

13  address).... and request a written explanation. We will charge

14  you $_____  for the explanation if we sent you another written

15  explanation of the amount you owe us within the last 6 months.

16

17  If you need more information about the sale, call us at

18  ....(telephone number).... or write us at ....(secured party's

19  address).....

20

21  We are sending this notice to the following other people who

22  have an interest in ....(describe collateral).... or who owe

23  money under your agreement:

24  ....(Names of all other debtors and obligors, if any)....

25         (4)  A notification in the form of subsection (3) is

26  sufficient, even if additional information appears at the end

27  of the form.

28         (5)  A notification in the form of subsection (3) is

29  sufficient, even if it includes errors in information not

30  required by subsection (1), unless the error is misleading

31  with respect to rights arising under this chapter.

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  1         (6)  If a notification under this section is not in the

  2  form of subsection (3), law other than this chapter determines

  3  the effect of including information not required by subsection

  4  (1).

  5         679.615  Application of proceeds of disposition;

  6  liability for deficiency and right to surplus.--

  7         (1)  A secured party shall apply or pay over for

  8  application the cash proceeds of disposition under s. 679.610

  9  in the following order to:

10         (a)  The reasonable expenses of retaking, holding,

11  preparing for disposition, processing, and disposing, and, to

12  the extent provided for by agreement and not prohibited by

13  law, reasonable attorney's fees and legal expenses incurred by

14  the secured party;

15         (b)  The satisfaction of obligations secured by the

16  security interest or agricultural lien under which the

17  disposition is made;

18         (c)  The satisfaction of obligations secured by any

19  subordinate security interest in or other subordinate lien on

20  the collateral if:

21         1.  The secured party receives from the holder of the

22  subordinate security interest or other lien an authenticated

23  demand for proceeds before distribution of the proceeds is

24  completed; and

25         2.  In a case in which a consignor has an interest in

26  the collateral, the subordinate security interest or other

27  lien is senior to the interest of the consignor; and

28         (d)  A secured party that is a consignor of the

29  collateral if the secured party receives from the consignor an

30  authenticated demand for proceeds before distribution of the

31  proceeds is completed.

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  1         (2)  If requested by a secured party, a holder of a

  2  subordinate security interest or other lien shall furnish

  3  reasonable proof of the interest or lien within a reasonable

  4  time after receipt of the request and agree to indemnify the

  5  secured party on reasonable terms acceptable to the secured

  6  party for damages, including reasonable attorney's fees and

  7  costs, incurred or suffered by the secured party if the

  8  subordinate holder did not have the right to receive the

  9  amounts to be paid to it. Unless the holder complies, the

10  secured party need not comply with the holder's demand under

11  paragraph (1)(c).

12         (3)  A secured party need not apply or pay over for

13  application noncash proceeds of disposition under s. 679.610

14  unless the failure to do so would be commercially

15  unreasonable. A secured party that applies or pays over for

16  application noncash proceeds shall do so in a commercially

17  reasonable manner.

18         (4)  If the security interest under which a disposition

19  is made secures payment or performance of an obligation, after

20  making the payments and applications required by subsection

21  (1) and permitted by subsection (3):

22         (a)  Unless paragraph (1)(d) requires the secured party

23  to apply or pay over cash proceeds to a consignor, the secured

24  party shall account to and pay a debtor for any surplus; and

25         (b)  The obligor is liable for any deficiency.

26         (5)  If the underlying transaction is a sale of

27  accounts, chattel paper, payment intangibles, or promissory

28  notes:

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

30         (b)  The obligor is not liable for any deficiency.

31

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  1         (6)  The surplus or deficiency following a disposition

  2  is calculated based on the amount of proceeds that would have

  3  been realized in a disposition complying with this part to a

  4  transferee other than the secured party, a person related to

  5  the secured party, or a secondary obligor if:

  6         (a)  The transferee in the disposition is the secured

  7  party, a person related to the secured party, or a secondary

  8  obligor; and

  9         (b)  The amount of proceeds of the disposition is

10  significantly below the range of proceeds that a complying

11  disposition to a person other than the secured party, a person

12  related to the secured party, or a secondary obligor would

13  have brought.

14         (7)  A secured party that receives cash proceeds of a

15  disposition in good faith and without knowledge that the

16  receipt violates the rights of the holder of a security

17  interest or other lien that is not subordinate to the security

18  interest or agricultural lien under which the disposition is

19  made:

20         (a)  Takes the cash proceeds free of the security

21  interest or other lien;

22         (b)  Is not obligated to apply the proceeds of the

23  disposition to the satisfaction of obligations secured by the

24  security interest or other lien; and

25         (c)  Is not obligated to account to or pay the holder

26  of the security interest or other lien for any surplus.

27         (8)  If the secured party in good faith cannot

28  determine the validity, extent, or priority of a subordinate

29  security interest or other lien or there are conflicting

30  claims of subordinate interests or liens, the secured party

31  may commence an interpleader action with respect to remaining

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  1  proceeds in excess of $2,500 in the circuit or county court,

  2  as applicable based upon the amount to be deposited, where the

  3  collateral was located or collected or in the county where the

  4  debtor's chief executive office or principal residence is

  5  located in this state, as applicable.  The interpleading

  6  secured party and any other parties in the interpleader action

  7  shall only be entitled to recover attorney's fees and costs as

  8  permitted in s. 679.608(3).

  9         679.616  Explanation of calculation of surplus or

10  deficiency.--

11         (1)  In this section, the term:

12         (a)  "Explanation" means a writing that:

13         1.  States the amount of the surplus or deficiency;

14         2.  Provides an explanation in accordance with

15  subsection (3) of how the secured party calculated the surplus

16  or deficiency;

17         3.  States, if applicable, that future debits, credits,

18  charges, including additional credit service charges or

19  interest, rebates, and expenses may affect the amount of the

20  surplus or deficiency; and

21         4.  Provides a telephone number or mailing address from

22  which additional information concerning the transaction is

23  available.

24         (b)  "Request" means a record:

25         1.  Authenticated by a debtor or consumer obligor;

26         2.  Requesting that the recipient provide an

27  explanation; and

28         3.  Sent after disposition of the collateral under s.

29  679.610.

30         (2)  In a consumer-goods transaction in which the

31  debtor is entitled to a surplus or a consumer obligor is

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  1  liable for a deficiency under s. 679.615, the secured party

  2  shall:

  3         (a)  Send an explanation to the debtor or consumer

  4  obligor, as applicable, after the disposition and:

  5         1.  Before or when the secured party accounts to the

  6  debtor and pays any surplus or first makes written demand on

  7  the consumer obligor after the disposition for payment of the

  8  deficiency; and

  9         2.  Within 14 days after receipt of a request; or

10         (b)  In the case of a consumer obligor who is liable

11  for a deficiency, within 14 days after receipt of a request,

12  send to the consumer obligor a record waiving the secured

13  party's right to a deficiency.

14         (3)  To comply with subparagraph (1)(a)2., a writing

15  must provide the following information in the following order:

16         (a)  The aggregate amount of obligations secured by the

17  security interest under which the disposition was made, and,

18  if the amount reflects a rebate of unearned interest or credit

19  service charge, an indication of that fact, calculated as of a

20  specified date:

21         1.  If the secured party takes or receives possession

22  of the collateral after default, not more than 35 days before

23  the secured party takes or receives possession; or

24         2.  If the secured party takes or receives possession

25  of the collateral before default or does not take possession

26  of the collateral, not more than 35 days before the

27  disposition;

28         (b)  The amount of proceeds of the disposition;

29         (c)  The aggregate amount of the obligations after

30  deducting the amount of proceeds;

31

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  1         (d)  The amount, in the aggregate or by type, and types

  2  of expenses, including expenses of retaking, holding,

  3  preparing for disposition, processing, and disposing of the

  4  collateral, and attorney's fees secured by the collateral

  5  which are known to the secured party and relate to the current

  6  disposition;

  7         (e)  The amount, in the aggregate or by type, and types

  8  of credits, including rebates of interest or credit service

  9  charges, to which the obligor is known to be entitled and

10  which are not reflected in the amount in paragraph (a); and

11         (f)  The amount of the surplus or deficiency.

12         (4)  A particular phrasing of the explanation is not

13  required.  An explanation complying substantially with the

14  requirements of subsection (1) is sufficient, even if it

15  includes minor errors that are not seriously misleading.

16         (5)  A debtor or consumer obligor is entitled without

17  charge to one response to a request under this section during

18  any 6-month period in which the secured party did not send to

19  the debtor or consumer obligor an explanation pursuant to

20  paragraph (2)(a). The secured party may require payment of a

21  charge not exceeding $25 for each additional response.

22         679.617  Rights of transferee of collateral.--

23         (1)  A secured party's disposition of collateral after

24  default:

25         (a)  Transfers to a transferee for value all of the

26  debtor's rights in the collateral;

27         (b)  Discharges the security interest under which the

28  disposition is made; and

29         (c)  Discharges any subordinate security interest or

30  other subordinate lien other than liens created under statutes

31  providing for liens, if any, that are not to be discharged.

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  1         (2)  A transferee that acts in good faith takes free of

  2  the rights and interests described in subsection (1), even if

  3  the secured party fails to comply with this chapter or the

  4  requirements of any judicial proceeding.

  5         (3)  If a transferee does not take free of the rights

  6  and interests described in subsection (1), the transferee

  7  takes the collateral subject to:

  8         (a)  The debtor's rights in the collateral;

  9         (b)  The security interest or agricultural lien under

10  which the disposition is made; and

11         (c)  Any other security interest or other lien.

12         679.618  Rights and duties of certain secondary

13  obligors.--

14         (1)  A secondary obligor acquires the rights and

15  becomes obligated to perform the duties of the secured party

16  after the secondary obligor:

17         (a)  Receives an assignment of a secured obligation

18  from the secured party;

19         (b)  Receives a transfer of collateral from the secured

20  party and agrees to accept the rights and assume the duties of

21  the secured party; or

22         (c)  Is subrogated to the rights of a secured party

23  with respect to collateral.

24         (2)  An assignment, transfer, or subrogation described

25  in subsection (1):

26         (a)  Is not a disposition of collateral under s.

27  679.610; and

28         (b)  Relieves the secured party of further duties under

29  this chapter.

30         679.619  Transfer of record or legal title.--

31

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  1         (1)  In this section, the term "transfer statement"

  2  means a record authenticated by a secured party stating:

  3         (a)  That the debtor has defaulted in connection with

  4  an obligation secured by specified collateral;

  5         (b)  That the secured party has exercised its

  6  post-default remedies with respect to the collateral;

  7         (c)  That, by reason of the exercise, a transferee has

  8  acquired the rights of the debtor in the collateral; and

  9         (d)  The name and mailing address of the secured party,

10  debtor, and transferee.

11         (2)  A transfer statement entitles the transferee to

12  the transfer of record of all rights of the debtor in the

13  collateral specified in the statement in any official filing,

14  recording, registration, or certificate-of-title system

15  covering the collateral. If a transfer statement is presented

16  with the applicable fee and request form to the official or

17  office responsible for maintaining the system, the official or

18  office shall:

19         (a)  Accept the transfer statement;

20         (b)  Promptly amend its records to reflect the

21  transfer; and

22         (c)  If applicable, issue a new appropriate certificate

23  of title in the name of the transferee.

24         (3)  A transfer of the record or legal title to

25  collateral to a secured party under subsection (2) or

26  otherwise is not of itself a disposition of collateral under

27  this chapter and does not of itself relieve the secured party

28  of its duties under this chapter.

29         679.620  Acceptance of collateral in full or partial

30  satisfaction of obligation; compulsory dispostion of

31  collateral.--

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  1         (1)  Except as otherwise provided in subsection (7), a

  2  secured party may accept collateral in full or partial

  3  satisfaction of the obligation it secures only if:

  4         (a)  The debtor consents to the acceptance under

  5  subsection (3);

  6         (b)  The secured party does not receive, within the

  7  time set forth in subsection (4), a notification of objection

  8  to the proposal authenticated by:

  9         1.  A person to whom the secured party was required to

10  send a proposal under s. 679.621; or

11         2.  Any other person, other than the debtor, holding an

12  interest in the collateral subordinate to the security

13  interest that is the subject of the proposal;

14         (c)  If the collateral is consumer goods, the

15  collateral is not in the possession of the debtor when the

16  debtor consents to the acceptance; and

17         (d)  Subsection (5) does not require the secured party

18  to dispose of the collateral or the debtor waives the

19  requirement pursuant to s. 679.624.

20         (2)  A purported or apparent acceptance of collateral

21  under this section is ineffective unless:

22         (a)  The secured party consents to the acceptance in an

23  authenticated record or sends a proposal to the debtor; and

24         (b)  The conditions of subsection (1) are met.

25         (3)  For purposes of this section:

26         (a)  A debtor consents to an acceptance of collateral

27  in partial satisfaction of the obligation it secures only if

28  the debtor agrees to the terms of the acceptance in a record

29  authenticated after default; and

30         (b)  A debtor consents to an acceptance of collateral

31  in full satisfaction of the obligation it secures only if the

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  1  debtor agrees to the terms of the acceptance in a record

  2  authenticated after default or the secured party:

  3         1.  Sends to the debtor after default a proposal that

  4  is unconditional or subject only to a condition that

  5  collateral not in the possession of the secured party be

  6  preserved or maintained;

  7         2.  In the proposal, proposes to accept collateral in

  8  full satisfaction of the obligation it secures, and, in a

  9  consumer transaction, provides notice that the proposal will

10  be deemed accepted if it is not objected to by an

11  authenticated notice within 30 days after the date the

12  proposal is sent by the secured party; and

13         3.  Does not receive a notification of objection

14  authenticated by the debtor within 30 days after the proposal

15  is sent.

16         (4)  To be effective under paragraph (1)(b), a

17  notification of objection must be received by the secured

18  party:

19         (a)  In the case of a person to whom the proposal was

20  sent pursuant to s. 679.621, within 20 days after notification

21  was sent to that person; and

22         (b)  In other cases:

23         1.  Within 20 days after the last notification was sent

24  pursuant to s. 679.621; or

25         2.  If a notification was not sent, before the debtor

26  consents to the acceptance under subsection (3).

27         (5)  A secured party that has taken possession of

28  collateral shall dispose of the collateral pursuant to s.

29  679.610 within the time specified in subsection (6) if:

30

31

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  1         (a)  Sixty percent of the cash price has been paid in

  2  the case of a purchase-money security interest in consumer

  3  goods; or

  4         (b)  Sixty percent of the principal amount of the

  5  obligation secured has been paid in the case of a

  6  non-purchase-money security interest in consumer goods.

  7         (6)  To comply with subsection (5), the secured party

  8  shall dispose of the collateral:

  9         (a)  Within 90 days after taking possession; or

10         (b)  Within any longer period to which the debtor and

11  all secondary obligors have agreed in an agreement to that

12  effect entered into and authenticated after default.

13         (7)  In a consumer transaction, a secured party may not

14  accept collateral in partial satisfaction of the obligation it

15  secures.

16         679.621  Notification of proposal to accept

17  collateral.--

18         (1)  A secured party that desires to accept collateral

19  in full or partial satisfaction of the obligation it secures

20  shall send its proposal to:

21         (a)  Any person from whom the secured party has

22  received, before the debtor consented to the acceptance, an

23  authenticated notification of a claim of an interest in the

24  collateral;

25         (b)  Any other secured party or lienholder that, 10

26  days before the debtor consented to the acceptance, held a

27  security interest in or other lien on the collateral perfected

28  by the filing of a financing statement that:

29         1.  Identified the collateral;

30         2.  Was indexed under the debtor's name as of that

31  date; and

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  1         3.  Was filed in the office or offices in which to file

  2  a financing statement against the debtor covering the

  3  collateral as of that date; and

  4         (c)  Any other secured party that, 10 days before the

  5  debtor consented to the acceptance, held a security interest

  6  in the collateral perfected by compliance with a statute,

  7  regulation, or treaty described in s. 679.3111(1).

  8         (2)  A secured party that desires to accept collateral

  9  in partial satisfaction of the obligation it secures shall

10  send its proposal to any secondary obligor in addition to the

11  persons described in subsection (1).

12         (3)  A secured party shall send its proposal under s.

13  679.621(1) or (2) to the affected party at the address

14  prescribed in s. 679.611(6).

15         679.622  Effect of acceptance of collateral.--

16         (1)  A secured party's acceptance of collateral in full

17  or partial satisfaction of the obligation it secures:

18         (a)  Discharges the obligation to the extent consented

19  to by the debtor;

20         (b)  Transfers to the secured party all of a debtor's

21  rights in the collateral;

22         (c)  Discharges the security interest or agricultural

23  lien that is the subject of the debtor's consent and any

24  subordinate security interest or other subordinate lien; and

25         (d)  Terminates any other subordinate interest.

26         (2)  A subordinate interest is discharged or terminated

27  under subsection (1), even if the secured party fails to

28  comply with this chapter.

29         679.623  Right to redeem collateral.--

30         (1)  A debtor, any secondary obligor, or any other

31  secured party or lienholder may redeem collateral.

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  1         (2)  To redeem collateral, a person shall tender:

  2         (a)  Fulfillment of all obligations secured by the

  3  collateral; and

  4         (b)  The reasonable expenses and attorney's fees

  5  described in s. 679.615(1)(a).

  6         (3)  A redemption may occur at any time before a

  7  secured party:

  8         (a)  Has collected collateral under s. 679.607;

  9         (b)  Has disposed of collateral or entered into a

10  contract for its disposition under s. 679.610; or

11         (c)  Has accepted collateral in full or partial

12  satisfaction of the obligation it secures under s. 679.622.

13         679.624  Waiver.--

14         (1)  A debtor or secondary obligor may waive the right

15  to notification of disposition of collateral under s. 679.611

16  only by an agreement to that effect entered into and

17  authenticated after default.

18         (2)  A debtor may waive the right to require

19  disposition of collateral under s. 679.620(5) only by an

20  agreement to that effect entered into and authenticated after

21  default.

22         (3)  Except in a consumer-goods transaction, a debtor

23  or secondary obligor may waive the right to redeem collateral

24  under s. 679.623 only by an agreement to that effect entered

25  into and authenticated after default.

26         679.625  Remedies for failure to comply with article.--

27         (1)  If it is established that a secured party is not

28  proceeding in accordance with this chapter, a court may order

29  or restrain collection, enforcement, or disposition of

30  collateral on appropriate terms and conditions. This

31  subsection shall not preclude a debtor other than a consumer

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  1  and a secured party, or two or more secured parties in other

  2  than a consumer transaction, from agreeing in an authenticated

  3  record that the debtor or secured party must first provide to

  4  the alleged offending secured party notice of a violation of

  5  this chapter and opportunity to cure before commencing any

  6  legal proceeding under this section.

  7         (2)  Subject to subsections (3), (4), and (6), a person

  8  is liable for damages in the amount of any loss caused by a

  9  failure to comply with this chapter, including damages

10  suffered by the debtor resulting from the debtor's inability

11  to obtain, or increased costs of, alternative financing, but

12  not including consequential, special, or penal damages, unless

13  the conduct giving rise to the failure constitutes an

14  independent claim under the laws of this state other than this

15  chapter and then only to the extent otherwise recoverable

16  under law.

17         (3)  Except as otherwise provided in s. 671.628:

18         (a)  A person who, at the time of the failure, was a

19  debtor, was an obligor, or held a security interest in or

20  other lien on the collateral may recover damages under

21  subsection (2) for the person's loss; and

22         (b)  If the collateral is consumer goods, a person who

23  was a debtor or a secondary obligor at the time a secured

24  party failed to comply with this part may recover for that

25  failure in any event an amount not less than the credit

26  service charge plus 10 percent of the principal amount of the

27  obligation or the time-price differential plus 10 percent of

28  the cash price.

29         (4)  A debtor whose deficiency is eliminated under s.

30  679.626 may recover damages for the loss of any surplus.

31  However, a debtor or secondary obligor whose deficiency is

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  1  eliminated or reduced under s. 679.626 may not otherwise

  2  recover under subsection (2) for noncompliance with the

  3  provisions of this part relating to collection, enforcement,

  4  disposition, or acceptance.

  5         (5)  In lieu of damages recoverable under subsection

  6  (2), the debtor, consumer obligor, or person named as a debtor

  7  in a filed record, as applicable, may recover $500 in each

  8  case from a person who:

  9         (a)  Fails to comply with s. 679.2081;

10         (b)  Fails to comply with s. 679.209;

11         (c)  Files a record that the person is not entitled to

12  file under s. 679.509(1);

13         (d)  Fails to cause the secured party of record to file

14  or send a termination statement as required by s. 679.513(1)

15  or (3) after receipt of an authenticated record notifying the

16  person of such noncompliance;

17         (e)  Fails to comply with s. 679.616(2)(a) and whose

18  failure is part of a pattern, or consistent with a practice,

19  of noncompliance; or

20         (f)  Fails to comply with s. 679.616(2)(b) with respect

21  to a consumer transaction, and with respect to a transaction

22  other than a consumer transaction, after receipt of an

23  authenticated record notifying the person of such

24  noncompliance.

25         (6)  A debtor or consumer obligor may recover damages

26  under subsection (2) and, in addition, $500 in each case from

27  a person who, without reasonable cause, fails to comply with a

28  request under s. 679.210.  A recipient of a request under s.

29  679.210 which never claimed an interest in the collateral or

30  obligations that are the subject of a request under that

31

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  1  section has a reasonable excuse for failure to comply with the

  2  request within the meaning of this subsection.

  3         (7)  If a secured party fails to comply with a request

  4  regarding a list of collateral or a statement of account under

  5  S. 679.210, the secured party may claim a security interest

  6  only as shown in the list or statement included in the request

  7  as against a person who is reasonably misled by the failure.

  8         679.626  Action in which deficiency or surplus is in

  9  issue.--In an action arising from a transaction in which the

10  amount of a deficiency or surplus is in issue, the following

11  rules apply:

12         (1)  A secured party need not prove compliance with the

13  provisions of this part relating to collection, enforcement,

14  disposition, or acceptance unless the debtor or a secondary

15  obligor places the secured party's compliance in issue.

16         (2)  If the secured party's compliance is placed in

17  issue, the secured party has the burden of establishing that

18  the collection, enforcement, disposition, or acceptance was

19  conducted in accordance with this part.

20         (3)  Except as otherwise provided in s. 679.628, if a

21  secured party fails to prove that the collection, enforcement,

22  disposition, or acceptance was conducted in accordance with

23  the provisions of this part relating to collection,

24  enforcement, disposition, or acceptance, the liability of a

25  debtor or a secondary obligor for a deficiency is limited to

26  an amount by which the sum of the secured obligation,

27  reasonable expenses, and, to the extent provided for by

28  agreement and not prohibited by law, attorney's fees exceeds

29  the greater of:

30         (a)  The proceeds of the collection, enforcement,

31  disposition, or acceptance; or

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  1         (b)  The amount of proceeds that would have been

  2  realized had the noncomplying secured party proceeded in

  3  accordance with the provisions of this part relating to

  4  collection, enforcement, disposition, or acceptance.

  5         (4)  For purposes of paragraph (3)(b), the amount of

  6  proceeds that would have been realized is equal to the sum of

  7  the secured obligation, expenses, and attorney's fees unless

  8  the secured party proves that the amount is less than that

  9  sum.

10         (5)  If a deficiency or surplus is calculated under s.

11  679.615(6), the debtor or obligor has the burden of

12  establishing that the amount of proceeds of the disposition is

13  significantly below the range of prices that a complying

14  disposition to a person other than the secured party, a person

15  related to the secured party, or a secondary obligor would

16  have brought.

17         679.627  Determination of whether conduct was

18  commercially reasonable.--

19         (1)  The fact that a greater amount could have been

20  obtained by a collection, enforcement, disposition, or

21  acceptance at a different time or in a different method from

22  that selected by the secured party is not of itself sufficient

23  to preclude the secured party from establishing that the

24  collection, enforcement, disposition, or acceptance was made

25  in a commercially reasonable manner.

26         (2)  A disposition of collateral is made in a

27  commercially reasonable manner if the disposition is made:

28         (a)  In the usual manner on any recognized market;

29         (b)  At the price current in any recognized market at

30  the time of the disposition; or

31

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  1         (c)  Otherwise in conformity with reasonable commercial

  2  practices among dealers in the type of property that was the

  3  subject of the disposition.

  4         (3)  A collection, enforcement, disposition, or

  5  acceptance is commercially reasonable if it has been approved:

  6         (a)  In a judicial proceeding;

  7         (b)  By a bona fide creditors' committee;

  8         (c)  By a representative of creditors; or

  9         (d)  By an assignee for the benefit of creditors.

10         (4)  Approval under subsection (3) need not be

11  obtained, and lack of approval does not mean that the

12  collection, enforcement, disposition, or acceptance is not

13  commercially reasonable.

14         679.628  Nonliability and limitation on liability of

15  secured party; liability of secondary obligor.--

16         (1)  Unless a secured party knows that a person is a

17  debtor or obligor, knows the identity of the person, and knows

18  how to communicate with the person:

19         (a)  The secured party is not liable to the person, or

20  to a secured party or lienholder that has filed a financing

21  statement against the person, for failure to comply with this

22  chapter; and

23         (b)  The secured party's failure to comply with this

24  chapter does not affect the liability of the person for a

25  deficiency.

26         (2)  A secured party is not liable because of its

27  status as a secured party:

28         (a)  To a person who is a debtor or obligor, unless the

29  secured party knows:

30         1.  That the person is a debtor or obligor;

31         2.  The identity of the person; and

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  1         3.  How to communicate with the person; or

  2         (b)  To a secured party or lienholder that has filed a

  3  financing statement against a person, unless the secured party

  4  knows:

  5         1.  That the person is a debtor; and

  6         2.  The identity of the person.

  7         (3)  A secured party is not liable to any person, and a

  8  person's liability for a deficiency is not affected, because

  9  of any act or omission arising out of the secured party's

10  reasonable belief that a transaction is not a consumer-goods

11  transaction or a consumer transaction or that goods are not

12  consumer goods, if the secured party's belief is based on its

13  reasonable reliance on:

14         (a)  A debtor's representation concerning the purpose

15  for which collateral was to be used, acquired, or held; or

16         (b)  an obligor's representation concerning the purpose

17  for which a secured obligation was incurred.

18         (4)  A secured party is not liable to any person under

19  s. 679.625(3)(b) for its failure to comply with s. 679.616.

20         (5)  A secured party is not liable under s.

21  679.625(3)(b) more than once with respect to any one secured

22  obligation.

23         Section 8.  Part VII of chapter 679, Florida Statutes,

24  consisting of sections 679.701, 679.702, 679.703, 679.704,

25  679.705, 679.706, 679.707, 679.708, and 679.709, Florida

26  Statutes, is created to read:

27                             PART VII

28                            TRANSITION

29         679.701  Effective date.--This act takes effect July 1,

30  2001.

31         679.702  Savings clause.--

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  1         (1)  Except as otherwise provided in this part, this

  2  act applies to a transaction or lien within its scope, even if

  3  the transaction or lien was entered into or created before

  4  this act takes effect.

  5         (2)  Except as otherwise provided in subsection (3) and

  6  ss. 679.703-679.709:

  7         (a)  Transactions and liens that were not governed by

  8  chapter 679, Florida Statutes 2000, were validly entered into

  9  or created before this act takes effect, and would be subject

10  to this act if they had been entered into or created after

11  this act takes effect, and the rights, duties, and interests

12  flowing from those transactions and liens remain valid after

13  this act takes effect; and

14         (b)  The transactions and liens may be terminated,

15  completed, consummated, and enforced as required or permitted

16  by this act or by the law that otherwise would apply if this

17  act had not taken effect.

18         (3)  This act does not affect an action, case, or

19  proceeding commenced before this act takes effect.

20         679.703  Security interest perfected before effective

21  date.--

22         (1)  A security interest that is enforceable

23  immediately before this act takes effect and would have

24  priority over the rights of a person who becomes a lien

25  creditor at that time is a perfected security interest under

26  this act if, when this act takes effect, the applicable

27  requirements for enforceability and perfection under this act

28  are satisfied without further action.

29         (2)  Except as otherwise provided in s. 679.705, if,

30  immediately before this act takes effect, a security interest

31  is enforceable and would have priority over the rights of a

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  1  person who becomes a lien creditor at that time, but the

  2  applicable requirements for enforceability or perfection under

  3  this act are not satisfied when this act takes effect, the

  4  security interest:

  5         (a)  Is a perfected security interest for 1 year after

  6  this act takes effect;

  7         (b)  Remains enforceable thereafter only if the

  8  security interest becomes enforceable under s. 679.203 before

  9  the year expires; and

10         (c)  Remains perfected thereafter only if the

11  applicable requirements for perfection under this act are

12  satisfied before the year expires.

13         679.704  Security interest unperfected before effective

14  date.--A security interest that is enforceable immediately

15  before this act takes effect but that would be subordinate to

16  the rights of a person who becomes a lien creditor at that

17  time:

18         (1)  Remains an enforceable security interest for 1

19  year after this act takes effect;

20         (2)  Remains enforceable thereafter if the security

21  interest becomes enforceable under s. 679.203 when this act

22  takes effect or within 1 year thereafter; and

23         (3)  Becomes perfected:

24         (a)  Without further action when this act takes effect

25  if the applicable requirements for perfection under this act

26  are satisfied before or at that time; or

27         (b)  When the applicable requirements for perfection

28  are satisfied if the requirements are satisfied after that

29  time.

30         679.705  Effectiveness of action taken before effective

31  date.--

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  1         (1)  If action, other than the filing of a financing

  2  statement, is taken before this act takes effect and the

  3  action would have resulted in priority of a security interest

  4  over the rights of a person who becomes a lien creditor had

  5  the security interest become enforceable before this act takes

  6  effect, the action is effective to perfect a security interest

  7  that attaches under this act within 1 year after this act

  8  takes effect.  An attached security interest becomes

  9  unperfected 1 year after this act takes effect unless the

10  security interest becomes a perfected security interest under

11  this act before the expiration of that period.

12         (2)  The filing of a financing statement before this

13  act takes effect is effective to perfect a security interest

14  to the extent the filing would satisfy the applicable

15  requirements for perfection under this act.

16         (3)  This act does not render ineffective an effective

17  financing statement that, before this act takes effect, is

18  filed and satisfies the applicable requirements for perfection

19  under the law of the jurisdiction governing perfection as

20  provided in s. 679.103, Florida Statutes 2000.  However,

21  except as otherwise provided in subsections (4) and (5) and s.

22  679.706, the financing statement ceases to be effective at the

23  earlier of:

24         (a)  The time the financing statement would have ceased

25  to be effective under the law of the jurisdiction in which it

26  is filed; or

27         (b)  June 30, 2006.

28         (4)  The filing of a continuation statement after this

29  act takes effect does not continue the effectiveness of the

30  financing statement filed before this act takes effect.

31  However, upon the timely filing of a continuation statement

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  1  after this act takes effect and in accordance with the law of

  2  the jurisdiction governing perfection as provided in part III,

  3  the effectiveness of a financing statement filed in the same

  4  office in that jurisdiction before this act takes effect

  5  continues for the period provided by the law of that

  6  jurisdiction.

  7         (5)  Paragraph (3)(b) applies to a financing statement

  8  that, before this act takes effect, is filed against a

  9  transmitting utility and satisfies the applicable requirements

10  for perfection under the law of the jurisdiction governing

11  perfection as provided in s. 679.103, Florida Statutes 2000,

12  only to the extent that part III provides that the law of a

13  jurisdiction other than the jurisdiction in which the

14  financing statement is filed governs perfection of a security

15  interest in collateral covered by the financing statement.

16         (6)  A financing statement that includes a financing

17  statement filed before this act takes effect and a

18  continuation statement filed after this act takes effect is

19  effective only to the extent that it satisfies the

20  requirements of part V for an initial financing statement.

21         679.706  When initial financing statement suffices to

22  continue effectiveness of financing statement.--

23         (1)  The filing of an initial financing statement in

24  the office specified in s. 679.5011 continues the

25  effectiveness of a financing statement filed before this act

26  takes effect if:

27         (a)  The filing of an initial financing statement in

28  that office would be effective to perfect a security interest

29  under this act;

30

31

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  1         (b)  The pre-effective date financing statement was

  2  filed in an office in another state or another office in this

  3  state; and

  4         (c)  The initial financing statement satisfies

  5  subsection (3).

  6         (2)  The filing of an initial financing statement under

  7  subsection (1) continues the effectiveness of the

  8  pre-effective date financing statement:

  9         (a)  If the initial financing statement is filed before

10  this act takes effect, for the period provided in s. 679.403,

11  Florida Statutes 2000, with respect to a financing statement;

12  and

13         (b)  If the initial financing statement is filed after

14  this act takes effect, for the period provided in s. 679.515

15  with respect to an initial financing statement.

16         (3)  To be effective for purposes of subsection (1), an

17  initial financing statement must:

18         (a)  Satisfy the requirements of part V for an initial

19  financing statement;

20         (b)  Identify the pre-effective date financing

21  statement by indicating the office in which the financing

22  statement was filed and providing the dates of filing and file

23  numbers, if any, of the financing statement and of the most

24  recent continuation statement filed with respect to the

25  financing statement; and

26         (c)  Indicate that the pre-effective date financing

27  statement remains effective.

28         679.707  Amendment or pre-effective date financing

29  statement.--

30

31

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  1         (1)  In this section, the term "pre-effective date

  2  financing statement" means a financing statement filed before

  3  this act takes effect.

  4         (2)  After this act takes effect, a person may add or

  5  delete collateral covered by, continue or terminate the

  6  effectiveness of, or otherwise amend the information provided

  7  in a pre-effective date financing statement only in accordance

  8  with the law of the jurisdiction governing perfection as

  9  provided in part III.  However, the effectiveness of a

10  pre-effective date financing statement also may be terminated

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

12  financing statement is filed.

13         (3)  Except as otherwise provided in subsection (4), if

14  the law of this state governs perfection of a security

15  interest, the information in a pre-effective date financing

16  statement may be amended after this act takes effect only if:

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

18  amendment are filed in the office specified in s. 679.5011;

19         (b)  An amendment is filed in the office specified in

20  s. 679.5011 concurrently with, or after the filing in that

21  office of, an initial financing statement that satisfies s.

22  671.706(3); or

23         (c)  An initial financing statement that provides the

24  information as amended and satisfies s. 679.706(3) is filed in

25  the office specified in s. 679.5011.

26         (4)  If the law of this state governs perfection of a

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

28  financing statement may be continued only under s. 679.705(4)

29  and (6) or s. 679.706.

30         (5)  Whether or not the law of this state governs

31  perfection of a security interest, the effectiveness of a

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  1  pre-effective date financing statement filed in this state may

  2  be terminated after this act takes effect by filing a

  3  termination statement in the office in which the pre-effective

  4  date financing statement is filed, unless an initial financing

  5  statement that satisfies s. 679.706(3) has been filed in the

  6  office specified by the law of the jurisdiction governing

  7  perfection as provided in part III as the office in which to

  8  file a financing statement.

  9         679.708  Persons entitled to file initial financing

10  statement or continuation statement.--A person may file an

11  initial financing statement or a continuation statement under

12  this part if:

13         (1)  The secured party of record authorizes the filing;

14  and

15         (2)  The filing is necessary under this part:

16         (a)  To continue the effectiveness of a financing

17  statement filed before this act takes effect; or

18         (b)  To perfect or continue the perfection of a

19  security interest.

20         679.709  Priority.--

21         (1)  This act determines the priority of conflicting

22  claims to collateral.  However, if the relative priorities of

23  the claims were established before this act takes effect,

24  chapter 679, Florida Statutes 2000, determines priority.

25         (2)  For purposes of s. 679.322(1), the priority of a

26  security interest that becomes enforceable under s. 679.2031

27  of this act dates from the time this act takes effect if the

28  security interest is perfected under this act by the filing of

29  a financing statement before this act takes effect which would

30  not have been effective to perfect the security interest under

31  chapter 679, Florida Statutes 2000. This subsection does not

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  1  apply to conflicting security interests each of which is

  2  perfected by the filing of such a financing statement.

  3         Section 9.  Subsection (2) of section 671.105, Florida

  4  Statutes, is amended to read:

  5         671.105  Territorial application of the code; parties'

  6  power to choose applicable law.--

  7         (2)  When one of the following provisions of this code

  8  specifies the applicable law, that provision governs; and a

  9  contrary agreement is effective only to the extent permitted

10  by the law (including the conflict-of-laws rules) so

11  specified:

12         (a)  Governing law in the chapter on funds transfers.

13  (s. 670.507)

14         (b)  Rights of sellers' creditors against sold goods.

15  (s. 672.402)

16         (c)  Applicability of the chapter on bank deposits and

17  collections. (s. 674.102)

18         (d)  Applicability of the chapter on letters of credit.

19  (s. 675.116)

20         (e)  Applicability of the chapter on investment

21  securities. (s. 678.1101)

22         (f)  Law governing perfection, the effect provisions of

23  perfection or nonperfection, and the priority of security

24  interests and agricultural liens chapter on secured

25  transactions. (ss. 679.3011-679.3071)  (s. 679.103)

26         (g)  Applicability of the chapter on leases. (ss.

27  680.1051 and 680.1061)

28         Section 10.  Subsections (9), (32), and (37) of section

29  671.201, Florida Statutes, are amended to read:

30         671.201  General definitions.--Subject to additional

31  definitions contained in the subsequent chapters of this code

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  1  which are applicable to specific chapters or parts thereof,

  2  and unless the context otherwise requires, in this code:

  3         (9)  "Buyer in ordinary course of business" means a

  4  person who buys goods in good faith and without knowledge that

  5  the sale violates to him or her is in violation of the

  6  ownership rights or security interest of another person a

  7  third party in the goods, and buys in the ordinary course from

  8  a person, other than a pawnbroker, in the business of selling

  9  goods of that kind but does not include a pawnbroker.  A

10  person buys goods in the ordinary course if the sale to the

11  person comports with the usual or customary practices in the

12  kind of business in which the seller is engaged or with the

13  seller's own usual or customary practices. A person who sells

14  oil, gas, or other minerals at the wellhead or minehead is a

15  person All persons who sell minerals or the like (including

16  oil and gas) at wellhead or minehead shall be deemed to be

17  persons in the business of selling goods of that kind. A buyer

18  in the ordinary course of business "Buying" may buy be for

19  cash, or by exchange of other property, or on secured or

20  unsecured credit and may acquire includes receiving goods or

21  documents of title under a preexisting contract for sale but

22  does not include a transfer in bulk or as security for or in

23  total or partial satisfaction of a money debt. Only a buyer

24  who takes possession of the goods or has a right to recover

25  the goods from the seller under chapter 672 may be a buyer in

26  the ordinary course of business. A person who acquires goods

27  in a transfer in bulk or as security for or in total or

28  partial satisfaction of a money debt is not a buyer in the

29  ordinary course of business.

30         (32)  "Purchase" includes taking by sale, discount,

31  negotiation, mortgage, pledge, lien, security interest, issue

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  1  or reissue, gift or any other voluntary transaction creating

  2  an interest in property.

  3         (37)  "Security interest" means an interest in personal

  4  property or fixtures which secures payment or performance of

  5  an obligation. The retention or reservation of title by a

  6  seller of goods notwithstanding shipment or delivery to the

  7  buyer (s. 672.401) is limited in effect to a reservation of a

  8  security interest. The term also includes any interest of a

  9  consignor and a buyer of accounts, or chattel paper, a payment

10  intangible, or a promissory note in a transaction which is

11  subject to chapter 679.  The special property interest of a

12  buyer of goods on identification of those goods to a contract

13  for sale under s. 672.401 is not a security interest, but a

14  buyer may also acquire a security interest by complying with

15  chapter 679. Except as otherwise provided in s. 672.505, the

16  right of a seller or lessor of goods under chapter 672 or

17  chapter 680 to retain or acquire possession of the goods is

18  not a security interest, but a seller or lessor may also

19  acquire a security interest by complying with chapter 679. The

20  retention or reservation of title by a seller of goods,

21  notwithstanding shipment or delivery to the buyer (s.

22  672.401), is limited in effect to a reservation of a security

23  interest. Unless a consignment is intended as security,

24  reservation of title thereunder is not a security interest,

25  but a consignment is in any event subject to the provisions on

26  consignment sales (s. 672.326).  Whether a transaction creates

27  a lease or security interest is determined by the facts of

28  each case; however:

29         (a)  A transaction creates a security interest if the

30  consideration the lessee is to pay the lessor for the right to

31

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  1  possession and use of the goods is an obligation for the term

  2  of the lease not subject to termination by the lessee, and;

  3         1.  The original term of the lease is equal to or

  4  greater than the remaining economic life of the goods;

  5         2.  The lessee is bound to renew the lease for the

  6  remaining economic life of the goods or is bound to become the

  7  owner of the goods;

  8         3.  The lessee has an option to renew the lease for the

  9  remaining economic life of the goods for no additional

10  consideration or nominal additional consideration upon

11  compliance with the lease agreement; or

12         4.  The lessee has an option to become the owner of the

13  goods for no additional consideration or nominal additional

14  consideration upon compliance with the lease agreement.

15         (b)  A transaction does not create a security interest

16  merely because it provides that:

17         1.  The present value of the consideration the lessee

18  is obligated to pay the lessor for the right to possession and

19  use of the goods is substantially equal to or is greater than

20  the fair market value of the goods at the time the lease is

21  entered into;

22         2.  The lessee assumes the risk of loss of the goods or

23  agrees to pay taxes; insurance; filing, recording, or

24  registration fees; or service or maintenance costs with

25  respect to the goods;

26         3.  The lessee has an option to renew the lease or to

27  become the owner of the goods;

28         4.  The lessee has an option to renew the lease for a

29  fixed rent that is equal to or greater than the reasonably

30  predictable fair market rent for the use of the goods for the

31

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  1  term of the renewal at the time the option is to be performed;

  2  or

  3         5.  The lessee has an option to become the owner of the

  4  goods for a fixed price that is equal to or greater than the

  5  reasonably predictable fair market value of the goods at the

  6  time the option is to be performed.

  7         (c)  For purposes of this subsection:

  8         1.  Additional consideration is not nominal if, when

  9  the option to renew the lease is granted to the lessee, the

10  rent is stated to be the fair market rent for the use of the

11  goods for the term of the renewal determined at the time the

12  option is to be performed or if, when the option to become the

13  owner of the goods is granted to the lessee, the price is

14  stated to be the fair market value of the goods determined at

15  the time the option is to be performed.  Additional

16  consideration is nominal if it is less than the lessee's

17  reasonably predictable cost of performing under the lease

18  agreement if the option is not exercised.

19         2.  "Reasonably predictable" and "remaining economic

20  life of the goods" are to be determined with reference to the

21  facts and circumstances at the time the transaction is entered

22  into.

23         3.  "Present value" means the amount as of a date

24  certain of one or more sums payable in the future, discounted

25  to the date certain.  The discount is determined by the

26  interest rate specified by the parties if the rate is not

27  manifestly unreasonable at the time the transaction is entered

28  into; otherwise, the discount is determined by a commercially

29  reasonable rate that takes into account the facts and

30  circumstances of each case at the time the transaction was

31  entered into.

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  1         Section 11.  Subsection (3) of section 672.103, Florida

  2  Statutes, is amended to read:

  3         672.103  Definitions and index of definitions.--

  4         (3)  The following definitions in other chapters apply

  5  to this chapter:

  6         "Check," s. 673.1041.

  7         "Consignee," s. 677.102.

  8         "Consignor," s. 677.102.

  9         "Consumer goods," s. 679.1021 679.109.

10         "Dishonor," s. 673.5021.

11         "Draft," s. 673.1041.

12         Section 12.  Section 672.210, Florida Statutes, is

13  amended to read:

14         672.210  Delegation of performance; assignment of

15  rights.--

16         (1)  A party may perform her or his duty through a

17  delegate unless otherwise agreed or unless the other party has

18  a substantial interest in having her or his original promisor

19  perform or control the acts required by the contract.  No

20  delegation of performance relieves the party delegating of any

21  duty to perform or any liability for breach.

22         (2)  Except as otherwise provided in s. 679.4061,

23  unless otherwise agreed all rights of either seller or buyer

24  can be assigned except where the assignment would materially

25  change the duty of the other party, or increase materially the

26  burden or risk imposed on her or him by her or his contract,

27  or impair materially her or his chance of obtaining return

28  performance.  A right to damages for breach of the whole

29  contract or a right arising out of the assignor's due

30  performance of her or his entire obligation can be assigned

31  despite agreement otherwise.

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  1         (3)  The creation, attachment, perfection, or

  2  enforcement of a security interest in the seller's interest

  3  under a contract is not a transfer that materially changes the

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

  5  the buyer or impairs materially the buyer's chance of

  6  obtaining return performance within the purview of subsection

  7  (2) unless, and then only to the extent that, enforcement

  8  actually results in a delegation of material performance of

  9  the seller. Even in that event, the creation, attachment,

10  perfection, and enforcement of the security interest remain

11  effective, but the seller is liable to the buyer for damages

12  caused by the delegation to the extent that the damages could

13  not reasonably be prevented by the buyer. A court having

14  jurisdiction may grant other appropriate relief, including

15  cancellation of the contract for sale or an injunction against

16  enforcement of the security interest or consummation of the

17  enforcement.

18         (4)(3)  Unless the circumstances indicate the contrary

19  a prohibition of assignment of "the contract" is to be

20  construed as barring only the delegation to the assignee of

21  the assignor's performance.

22         (5)(4)  An assignment of "the contract" or of "all my

23  rights under the contract" or an assignment in similar general

24  terms is an assignment of rights and unless the language or

25  the circumstances (as in an assignment for security) indicate

26  the contrary, it is a delegation of performance of the duties

27  of the assignor and its acceptance by the assignee constitutes

28  a promise by her or him to perform those duties.  This promise

29  is enforceable by either the assignor or the other party to

30  the original contract.

31

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  1         (6)(5)  The other party may treat any assignment which

  2  delegates performance as creating reasonable grounds for

  3  insecurity and may without prejudice to her or his rights

  4  against the assignor demand assurances from the assignee (s.

  5  672.609).

  6         Section 13.  Section 672.326, Florida Statutes, is

  7  amended to read:

  8         672.326  Sale on approval and sale or return;

  9  consignment sales and rights of creditors.--

10         (1)  Unless otherwise agreed, if delivered goods may be

11  returned by the buyer even though they conform to the

12  contract, the transaction is:

13         (a)  A "sale on approval" if the goods are delivered

14  primarily for use, and

15         (b)  A "sale or return" if the goods are delivered

16  primarily for resale.

17         (2)  Except as provided in subsection (3), Goods held

18  on approval are not subject to the claims of the buyer's

19  creditors until acceptance; goods held on sale or return are

20  subject to such claims while in the buyer's possession.

21         (3)  Where goods are delivered to a person for sale and

22  such person maintains a place of business at which she or he

23  deals in goods of the kind involved, under a name other than

24  the name of the person making delivery, then with respect to

25  claims of creditors of the person conducting the business the

26  goods are deemed to be on sale or return.  The provisions of

27  this subsection are applicable even though an agreement

28  purports to reserve title to the person making delivery until

29  payment or resale or uses such words as "on consignment" or

30  "on memorandum." However, this subsection is not applicable if

31  the person making delivery:

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  1         (a)  Complies with an applicable law providing for a

  2  consignor's interest or the like to be evidenced by a sign, or

  3         (b)  Establishes that the person conducting the

  4  business is generally known by her or his creditors to be

  5  substantially engaged in selling the goods of others, or

  6         (c)  Complies with the filing provisions of the chapter

  7  on secured transactions (chapter 679).

  8         (3)(4)  Any "or return" term of a contract for sale is

  9  to be treated as a separate contract for sale within the

10  statute of frauds section of this chapter (s. 672.201) and as

11  contradicting the sale aspect of the contract within the

12  provisions of this chapter on parol or extrinsic evidence (s.

13  672.202).

14         Section 14.  Section 672.502, Florida Statutes, is

15  amended to read:

16         672.502  Buyer's right to goods on seller's

17  repudiation, failure to deliver, or insolvency.--

18         (1)  Subject to subsections subsection (2) and (3), and

19  even though the goods have not been shipped, a buyer who has

20  paid a part or all of the price of goods in which she or he

21  has a special property under the provisions of the immediately

22  preceding section may on making and keeping good a tender of

23  any unpaid portion of their price recover them from the seller

24  if:

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

26  or household purposes, the seller repudiates or fails to

27  deliver as required by the contract; or

28         (b)  In all cases, the seller becomes insolvent within

29  ten days after receipt of the first installment on their

30  price.

31

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  1         (2)  The buyer's right to recover the goods under

  2  paragraph (1)(a) vests upon acquisition of a special property,

  3  even if the seller has not then repudiated or failed to

  4  deliver.

  5         (3)(2)  If the identification creating her or his

  6  special property has been made by the buyer she or he acquires

  7  the right to recover the goods only if they conform to the

  8  contract for sale.

  9         Section 15.  Section 672.716, Florida Statutes, is

10  amended to read:

11         672.716  Buyer's right to specific performance or

12  replevin.--

13         (1)  Specific performance may be decreed where the

14  goods are unique or in other proper circumstances.

15         (2)  The decree for specific performance may include

16  such terms and conditions as to payment of the price, damages,

17  or other relief as the court may deem just.

18         (3)  The buyer has a right of replevin for goods

19  identified to the contract if after reasonable effort she or

20  he is unable to effect cover for such goods or the

21  circumstances reasonably indicate that such effort will be

22  unavailing or if the goods have been shipped under reservation

23  and satisfaction of the security interest in them has been

24  made or tendered. In the case of goods bought for personal,

25  family, or household purposes, the buyer's right of replevin

26  vests upon acquisition of a special property, even if the

27  seller had not then repudiated or failed to deliver.

28         Section 16.  Subsection (3) of section 674.2101,

29  Florida Statutes, is amended to read:

30         674.2101  Security interest of collecting bank in

31  items, accompanying documents, and proceeds.--

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  1         (3)  Receipt by a collecting bank of a final settlement

  2  for an item is a realization on its security interest in the

  3  item, accompanying documents, and proceeds.  So long as the

  4  bank does not receive final settlement for the item or give up

  5  possession of the item or accompanying documents for purposes

  6  other than collection, the security interest continues to that

  7  extent and is subject to chapter 679, but:

  8         (a)  No security agreement is necessary to make the

  9  security interest enforceable (s. 679.2031(2)(c)1.

10  679.203(1)(a));

11         (b)  No filing is required to perfect the security

12  interest; and

13         (c)  The security interest has priority over

14  conflicting perfected security interests in the item,

15  accompanying documents, or proceeds.

16         Section 17.  Section 675.1181, Florida Statutes, is

17  created to read:

18         675.1181  Security interest of issuer of nominated

19  person.--

20         (1)  An issuer or nominated person has a security

21  interest in a document presented under a letter of credit to

22  the extent that the issuer or nominated person honors or gives

23  value for the presentation.

24         (2)  As long as and to the extent that an issuer or

25  nominated person has not been reimbursed or has not otherwise

26  recovered the value given with respect to a security interest

27  in a document under subsection (1), the security interest

28  continues and is subject to chapter 679, but a security

29  agreement is not necessary to make the security interest

30  enforceable under s. 679.2031(2)(c):

31

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  1         (a)  If the document is presented in a medium other

  2  than a written or other tangible medium, the security interest

  3  is perfected; and

  4         (b)  If the document is presented in a written or other

  5  tangible medium and is not a certificated security, chattel

  6  paper, a document of title, an instrument, or a letter of

  7  credit, the security interest is perfected and has priority

  8  over a conflicting security interest in the document so long

  9  as the debtor does not have possession of the document.

10         Section 18.  Subsection (1) of section 677.503, Florida

11  Statutes, is amended to read:

12         677.503  Document of title to goods defeated in certain

13  cases.--

14         (1)  A document of title confers no right in goods

15  against a person who before issuance of the document had a

16  legal interest or a perfected security interest in them and

17  who neither:

18         (a)  Delivered or entrusted them or any document of

19  title covering them to the bailor or the bailor's nominee with

20  actual or apparent authority to ship, store or sell or with

21  power to obtain delivery under this chapter (s. 677.403) or

22  with power of disposition under this code (ss. 672.403 and

23  679.320 679.307) or other statute or rule of law; nor

24         (b)  Acquiesced in the procurement by the bailor or the

25  bailor's nominee of any document of title.

26         Section 19.  Subsection (6) of section 678.1031,

27  Florida Statutes, is amended to read:

28         678.1031  Rules for determining whether certain

29  obligations and interests are securities or financial

30  assets.--

31

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  1         (6)  A commodity contract, as defined in s.

  2  679.1021(1)(o) 679.115, is not a security or a financial

  3  asset.

  4         Section 20.  Subsections (4) and (6) of section

  5  678.1061, Florida Statutes, are amended to read:

  6         678.1061  Control.--

  7         (4)  A purchaser has "control" of a security

  8  entitlement if:

  9         (a)  The purchaser becomes the entitlement holder; or

10         (b)  The securities intermediary has agreed that it

11  will comply with entitlement orders originated by the

12  purchaser without further consent by the entitlement holder;

13  or.

14         (c)  Another person has control of the security

15  entitlement on behalf of the purchaser or, having previously

16  acquired control of the security entitlement, acknowledges

17  that the person has control on behalf of the purchaser.

18         (6)  A purchaser who has satisfied the requirements of

19  subsection paragraph (3)(b) or subsection paragraph (4)(b) has

20  control, even if the registered owner in the case of

21  subsection paragraph (3)(b) or the entitlement holder in the

22  case of subsection paragraph (4)(b) retains the right to make

23  substitutions for the uncertificated security or security

24  entitlement, to originate instructions or entitlement orders

25  to the issuer or securities intermediary, or otherwise to deal

26  with the uncertificated security or security entitlement.

27         Section 21.  Subsection (5) of section 678.1101,

28  Florida Statutes, is amended to read:

29         678.1101  Applicability; choice of law.--

30         (5)  The following rules determine a "securities

31  intermediary's jurisdiction" for purposes of this section:

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  1         (a)  If an agreement between the securities

  2  intermediary and its entitlement holder governing the

  3  securities account expressly provides that a particular

  4  jurisdiction is the securities intermediary's jurisdiction for

  5  purposes of this part, this chapter, or this code specifies

  6  that it is governed by the law of a particular jurisdiction,

  7  that jurisdiction is the securities intermediary's

  8  jurisdiction.

  9         (b)  If paragraph (a) does not apply and an agreement

10  between the securities intermediary and its entitlement holder

11  governing the securities account expressly provides that the

12  agreement is governed by the law of a particular jurisdiction,

13  that jurisdiction is the securities intermediary's

14  jurisdiction.

15         (c)(b)  If neither paragraph (a) nor paragraph (b)

16  applies and an agreement between the securities intermediary

17  and its entitlement holder governing the securities account

18  does not specify the governing law as provided in paragraph

19  (a), but expressly provides specifies that the securities

20  account is maintained at an office in a particular

21  jurisdiction, that jurisdiction is the securities

22  intermediary's jurisdiction.

23         (d)(c)  If none of the preceding paragraphs applies an

24  agreement between the securities intermediary and its

25  entitlement holder does not specify a jurisdiction as provided

26  in paragraph (a) or paragraph (b), the securities

27  intermediary's jurisdiction is the jurisdiction in which is

28  located the office identified in an account statement as the

29  office serving the entitlement holder's account is located.

30         (e)(d)  If none of the preceding paragraphs applies an

31  agreement between the securities intermediary and its

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  1  entitlement holder does not specify a jurisdiction as provided

  2  in paragraph (a) or paragraph (b) and an account statement

  3  does not identify an office serving the entitlement holder's

  4  account as provided in paragraph (c), the securities

  5  intermediary's jurisdiction is the jurisdiction in which is

  6  located the chief executive office of the securities

  7  intermediary is located.

  8         Section 22.  Subsection (1) of section 678.3011,

  9  Florida Statutes, is amended to read:

10         678.3011  Delivery.--

11         (1)  Delivery of a certificated security to a purchaser

12  occurs when:

13         (a)  The purchaser acquires possession of the security

14  certificate;

15         (b)  Another person, other than a securities

16  intermediary, either acquires possession of the security

17  certificate on behalf of the purchaser or, having previously

18  acquired possession of the certificate, acknowledges that it

19  holds for the purchaser; or

20         (c)  A securities intermediary acting on behalf of the

21  purchaser acquires possession of the security certificate,

22  only if the certificate is in registered form and is

23  registered in the name of the purchaser, payable to the order

24  of the purchaser, or has been specially indorsed to the

25  purchaser by an effective indorsement and has not been

26  endorsed to the securities intermediary or in blank.

27         Section 23.  Section 678.3021, Florida Statutes, is

28  amended to read:

29         678.3021  Rights of purchaser.--

30         (1)  Except as otherwise provided in subsections (2)

31  and (3), a purchaser upon delivery of a certificated or

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  1  uncertificated security to a purchaser, the purchaser acquires

  2  all rights in the security that the transferor had or had

  3  power to transfer.

  4         (2)  A purchaser of a limited interest acquires rights

  5  only to the extent of the interest purchased.

  6         (3)  A purchaser of a certificated security who as a

  7  previous holder had notice of an adverse claim does not

  8  improve its position by taking from a protected purchaser.

  9         Section 24.  Section 678.5101, Florida Statutes, is

10  amended to read:

11         678.5101  Rights of purchaser of security entitlement

12  from entitlement holder.--

13         (1)  In a case not covered by the priority rules in

14  chapter 679 or the rules stated in subsection (3), an action

15  based on an adverse claim to a financial asset or security

16  entitlement, whether framed in conversion, replevin,

17  constructive trust, equitable lien, or other theory, may not

18  be asserted against a person who purchases a security

19  entitlement, or an interest therein, from an entitlement

20  holder if the purchaser gives value, does not have notice of

21  the adverse claim, and obtains control.

22         (2)  If an adverse claim could not have been asserted

23  against an entitlement holder under s. 678.5021, the adverse

24  claim cannot be asserted against a person who purchases a

25  security entitlement, or an interest therein, from the

26  entitlement holder.

27         (3)  In a case not covered by the priority rules in

28  chapter 679, a purchaser for value of a security entitlement,

29  or an interest therein, who obtains control has priority over

30  a purchaser of a security entitlement, or an interest therein,

31  who does not obtain control. Except as otherwise provided in

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  1  subsection (4), purchasers who have control rank according to

  2  priority in time of:

  3         (a)  The purchaser's becoming the person for whom the

  4  securities account, in which the security entitlement is

  5  carried, is maintained, if the purchaser obtained control

  6  under s. 678.1061(4)(a);

  7         (b)  The securities intermediary's agreement to comply

  8  with the purchaser's entitlement orders with respect to

  9  security entitlements carried or to be carried in the

10  securities account in which the security entitlement is

11  carried, if the purchaser obtained control under s.

12  678.1061(4)(b); or

13         (c)  If the purchaser obtained control through another

14  person under s. 678.1061(4)(c), the time on which priority

15  would be based under this subsection if the other person were

16  the secured party. equally, except that

17         (4)  A securities intermediary as purchaser has

18  priority over a conflicting purchaser who has control unless

19  otherwise agreed by the securities intermediary.

20         Section 25.  Subsection (3) of section 680.1031,

21  Florida Statutes, is amended to read:

22         680.1031  Definitions and index of definitions.--

23         (3)  The following definitions in other chapters of

24  this code apply to this chapter:

25         (a)  "Account," s. 679.1021(1)(b) 679.106.

26         (b)  "Between merchants," s. 672.104(3).

27         (c)  "Buyer," s. 672.103(1)(a).

28         (d)  "Chattel paper," s. 679.1021(1)(k) 679.105(1)(b).

29         (e)  "Consumer goods," s. 679.1021(1)(w) 679.109(1).

30         (f)  "Document," s. 679.1021(1)(dd) 679.105(1)(f).

31         (g)  "Entrusting," s. 672.403(3).

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  1         (h)  "General intangible intangibles," s.

  2  679.1021(1)(pp) 679.106.

  3         (i)  "Good faith," s. 672.103(1)(b).

  4         (j)  "Instrument," s. 679.1021(1)(uu) 679.105(1)(i).

  5         (k)  "Merchant," s. 672.104(1).

  6         (l)  "Mortgage," s. 679.1021(1)(ccc) 679.105(1)(j).

  7         (m)  "Pursuant to a commitment," s. 679.1021(1)(ppp)

  8  679.105(1)(k).

  9         (n)  "Receipt," s. 672.103(1)(c).

10         (o)  "Sale," s. 672.106(1).

11         (p)  "Sale on approval," s. 672.326(1).

12         (q)  "Sale or return," s. 672.326(1).

13         (r)  "Seller," s. 672.103(1)(d).

14         Section 26.  Section 680.303, Florida Statutes, is

15  amended to read:

16         680.303  Alienability of party's interest under lease

17  contract or of lessor's residual interest in goods; delegation

18  of performance; transfer of rights.--

19         (1)  As used in this section, "creation of a security

20  interest" includes the sale of a lease contract that is

21  subject to chapter 679 by reason of s. 679.1091(1)(c).

22         (2)  Except as provided in subsection subsections (3)

23  and s. 679.4071(4), a provision in a lease agreement which:

24         (a)  Prohibits the voluntary or involuntary transfer,

25  including a transfer by sale, sublease, creation or

26  enforcement of a security interest, or attachment, levy, or

27  other judicial process, of an interest of a party under the

28  lease contract or of the lessor's residual interest in the

29  goods; or

30         (b)  Makes such a transfer an event of default, gives

31  rise to the rights and remedies provided in subsection (4)

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  1  (5), but a transfer that is prohibited or is an event of

  2  default under the lease agreement is otherwise effective.

  3         (3)  A provision in a lease agreement which:

  4         (a)  Prohibits the creation or enforcement of a

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

  6  contract or in the lessor's residual interest in the goods; or

  7         (b)  Makes such a transfer an event of default, is not

  8  enforceable unless, and then only to the extent that, there is

  9  an actual transfer by the lessee of the lessee's right of

10  possession or use of the goods in violation of the provision

11  or an actual delegation of a material performance of either

12  party to the lease contract in violation of the provision.

13  Neither the granting nor the enforcement of a security

14  interest in the lessor's interest under the lease contract or

15  the lessor's residual interest in the goods is a transfer that

16  materially impairs the prospect of obtaining return

17  performance by, materially changes the duty of, or materially

18  increases the burden or risk imposed on, the lessee within the

19  purview of subsection (5) unless, and then only to the extent

20  that, there is an actual delegation of a material performance

21  of the lessor.

22         (3)(4)  A provision in a lease agreement which:

23         (a)  Prohibits a transfer of a right to damages for

24  default with respect to the whole lease contract or of a right

25  to payment arising out of the transferor's due performance of

26  the transferor's entire obligation; or

27         (b)  Makes such a transfer an event of default, is not

28  enforceable, and such a transfer is not a transfer that

29  materially impairs the prospect of obtaining return

30  performance by, materially changes the duty of, or materially

31

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  1  increases the burden or risk imposed on, the other party to

  2  the lease contract within the purview of subsection (4) (5).

  3         (4)(5)  Subject to subsection subsections (3) and s.

  4  679.4071(4):

  5         (a)  If a transfer is made which is made an event of

  6  default under a lease agreement, the party to the lease

  7  contract not making the transfer, unless that party waives the

  8  default or otherwise agrees, has the rights and remedies

  9  described in s. 680.501(2);

10         (b)  If paragraph (a) is not applicable and if a

11  transfer is made that is prohibited under a lease agreement or

12  materially impairs the prospect of obtaining return

13  performance by, materially changes the duty of, or materially

14  increases the burden or risk imposed on, the other party to

15  the lease contract, unless the party not making the transfer

16  agrees at any time to the transfer in the lease contract or

17  otherwise, then, except as limited by contract, the transferor

18  is liable to the party not making the transfer for damages

19  caused by the transfer to the extent that the damages could

20  not reasonably be prevented by the party not making the

21  transfer and a court having jurisdiction may grant other

22  appropriate relief, including cancellation of the lease

23  contract or an injunction against the transfer.

24         (5)(6)  A transfer of "the lease" or of "all my rights

25  under the lease" or a transfer in similar general terms is a

26  transfer of rights, and unless the language or the

27  circumstances, as in a transfer for security, indicate the

28  contrary, the transfer is a delegation of duties by the

29  transferor to the transferee. Acceptance by the transferee

30  constitutes a promise by the transferee to perform those

31

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  1  duties. The promise is enforceable by either the transferor or

  2  the other party to the lease contract.

  3         (6)(7)  Unless otherwise agreed by the lessor and the

  4  lessee, a delegation of performance does not relieve the

  5  transferor as against the other party of any duty to perform

  6  or of any liability for default.

  7         (7)(8)  In a consumer lease, to prohibit the transfer

  8  of an interest of a party under the lease contract or to make

  9  a transfer an event of default, the language must be specific,

10  by a writing, and conspicuous.

11         Section 27.  Section 680.307, Florida Statutes, is

12  amended to read:

13         680.307  Priority of liens arising by attachment or

14  levy on, security interests in, and other claims to goods.--

15         (1)  Except as otherwise provided in s. 680.306, a

16  creditor of a lessee takes subject to the lease contract.

17         (2)  Except as otherwise provided in subsection

18  subsections (3) and (4) and in ss. 680.306 and 680.308, a

19  creditor of a lessor takes subject to the lease contract

20  unless:

21         (a)  the creditor holds a lien that attached to the

22  goods before the lease contract became enforceable.;

23         (b)  The creditor holds a security interest in the

24  goods and the lessee did not give value and receive delivery

25  of the goods without knowledge of the security interests; or

26         (c)  The creditor holds a security interest in the

27  goods which was perfected (s. 679.303) before the lease

28  contract became enforceable.

29         (3)  Except as otherwise provided in ss. 679.3171,

30  679.321, and 679.323, a lessee takes a leasehold interest

31  subject to a security interest held by a creditor or lessor. A

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  1  lessee in the ordinary course of business takes the leasehold

  2  interest free of a security interest in the goods created by

  3  the lessor even though the security interest is perfected (s.

  4  679.303) and the lessee knows of its existence.

  5         (4)  A lessee other than a lessee in the ordinary

  6  course of business takes the leasehold interest free of a

  7  security interest to the extent that it secures future

  8  advances made after the secured party acquires knowledge of

  9  the lease or more than 45 days after the lease contract

10  becomes enforceable, whichever first occurs, unless the future

11  advances are made pursuant to a commitment entered into

12  without knowledge of the lease and before the expiration of

13  the 45-day period.

14         Section 28.  Paragraph (b) of subsection (1) of section

15  680.309, Florida Statutes, is amended to read:

16         680.309  Lessor's and lessee's rights when goods become

17  fixtures.--

18         (1)  In this section:

19         (b)  A "fixture filing" is the filing, in the office

20  where a mortgage on the real estate would be filed or

21  recorded, of a financing statement covering goods that are or

22  are to become fixtures and conforming to the requirements of

23  s. 679.5021(1) and (2) 679.402(5).

24         Section 29.  This act shall take effect January 1,

25  2002.

26

27

28

29

30

31

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  1          STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
                       COMMITTEE SUBSTITUTE FOR
  2                              SB 386

  3

  4  Modifies the provisions regarding fixtures to provide that
    fixture filings must be filed in the county's public records
  5  office rather than with the Florida Secretary of State.

  6  Clarifies that a financing statement relating to crops and
    fixtures must contain a legal description so that the affected
  7  real estate can be found by a title search.

  8  Restores the uniform law language that requires a creditor to
    provide a consumer debtor, upon request and without charge,
  9  once during any six month period, a list of collateral
    securing the loan. A creditor may charge up to $25 for a
10  second or later request from the debtor for a list of
    collateral.
11
    Provides for the conditional filing of a financing statement
12  upon rejection by the Secretary of State.

13  Provides additional procedures regarding interpleader between
    competing creditors. Provides that the debtor is not
14  responsible for attorney's fees incurred in such interpleader
    unless the debtor intentionally intervenes in the case.
15
    Changes from two to three days the time within which the
16  Secretary of State must examine a filing. Much of the fiscal
    impact is eliminated with this change.
17
    Provides that the Secretary of State may delegate the filing
18  and recording function to an outside vendor.

19  Maintains current law by providing that a debtor may authorize
    a lien against a certificate of deposit.
20

21

22

23

24

25

26

27

28

29

30

31

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