Conformity in uniform code

Unanimous House approval was given to a bill that would revise provisions of Article 9 of the Uniform Commercial Code that have proved troublesome during the decade since it was last amended.

HF444/ SF194* updates the section of the code that applies to “secured transactions,” or commercial transactions that involve the creation of a security interest, or lien, on collateral such as business inventory, livestock, equipment and accounts.

Rep. Pat Mazorol (R-Bloomington), who sponsors the bill with Sen. Dave Thompson (R-Lakeville), said the changes were recommended by uniform law commissioners and supported by the Minnesota State Bar Association to bring Minnesota into conformity with other state’s practices. Passed by the House 134-0, the bill now goes to the governor’s desk.

Among other changes, the bill would require a filing form for a personal property lien to include the filer’s name as it appears on a driver’s license or state-issued identification.

“It may strike you as being just a trivial thing, but I can assure you that in many cases there are millions, maybe billions, of dollars at stake if these things are misfiled. Because in bankruptcy you lose your lien if these things are not properly filed,” Gene Hennig, a member of the National Conference of Commissioners on Uniform State Laws, told the House Commerce and Regulatory Reform Committee March 9.