Bill Text: CA AB1858 | 2013-2014 | Regular Session | Chaptered
Bill Title: Commercial law: secured transactions.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2014-08-25 - Chaptered by Secretary of State - Chapter 284, Statutes of 2014. [AB1858 Detail]
Download: California-2013-AB1858-Chaptered.html
BILL NUMBER: AB 1858 CHAPTERED
BILL TEXT
CHAPTER 284
FILED WITH SECRETARY OF STATE AUGUST 25, 2014
APPROVED BY GOVERNOR AUGUST 25, 2014
PASSED THE SENATE AUGUST 7, 2014
PASSED THE ASSEMBLY AUGUST 11, 2014
AMENDED IN SENATE JULY 1, 2014
AMENDED IN SENATE JUNE 15, 2014
AMENDED IN ASSEMBLY MAY 19, 2014
AMENDED IN ASSEMBLY MAY 13, 2014
INTRODUCED BY Assembly Member Perea
FEBRUARY 19, 2014
An act to amend Section 9503 of, and to add Chapter 9 (commencing
with Section 9901) to Division 9 of, the Commercial Code, relating to
secured transactions.
LEGISLATIVE COUNSEL'S DIGEST
AB 1858, Perea. Commercial law: secured transactions.
The Uniform Commercial Code - Secured Transactions governs
security interests in collateral, including personal property and
fixtures, as well as certain sales of accounts, contract rights, and
chattel paper. That code, among other things, specifies requirements
and procedures regarding perfecting a security interest, including
the filing of a financing statement with the Secretary of State.
Existing law specifies that a financing statement sufficiently
provides the name of a debtor, where the debtor is an individual, if
it provides the individual name of the debtor or the surname and
first personal name of the debtor.
This bill would revise the manner in which a financing statement
sufficiently provides the name of the debtor, where that debtor is an
individual, to provide that, where the Department of Motor Vehicles
has issued a driver's license that has not expired or identification
card that has not expired to the individual, the statement
sufficiently provides the name of the debtor only if the statement
provides the name of the individual indicated on the license or card
and, if the individual has not been issued a driver's license or
identification card, the statement sufficiently provides the name of
the debtor if it provides the individual name of the debtor or the
surname and first personal name of the debtor. The bill would also
implement transitional rules for carrying out these provisions.
Existing provisions of the Unruh Civil Rights Act, with certain
exceptions, prohibit various forms of arbitrary discrimination by
business establishments.
This bill would make it a violation of the Unruh Civil Rights Act
for a secured party or proposed secured party to decline to provide
credit to a debtor or proposed debtor, or offer to make the terms and
conditions of such credit less favorable to the debtor or proposed
debtor, if that decision was based on the fact that the debtor's name
to be included on the financing statement is or would be that
provided by a debtor to whom the Department of Motor Vehicles has not
issued a driver's license that has not expired or an identification
card that has not expired and all elements that would be required to
establish a claim for violation of the Unruh Civil Rights Act are
established.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 9503 of the Commercial Code, as amended by
Section 16 of Chapter 531 of the Statutes of 2013, is amended to
read:
9503. (a) A financing statement sufficiently provides the name of
the debtor only if it does so in accordance with the following
rules:
(1) Except as otherwise provided in paragraph (3), if the debtor
is a registered organization or the collateral is held in a trust
that is a registered organization, only if the financing statement
provides the name that is stated to be the registered organization's
name on the public organic record most recently filed with or issued
or enacted by the registered organization's jurisdiction of
organization which purports to state, amend, or restate the
registered organization's name.
(2) Subject to subdivision (f), if the collateral is being
administered by the personal representative of a decedent, only if
the financing statement provides, as the name of the debtor, the name
of the decedent and, in a separate part of the financing statement,
indicates that the collateral is being administered by a personal
representative.
(3) If the collateral is held in a trust that is not a registered
organization, only if the financing statement satisfies both of the
following conditions:
(A) Provides, as the name of the debtor, either of the following:
(i) If the organic record of the trust specifies a name for the
trust, the name specified.
(ii) If the organic record of the trust does not specify a name
for the trust, the name of the settlor or testator.
(B) In a separate part of the financing statement, the following
information is provided, as applicable:
(i) If the name is provided in accordance with clause (i) of
subparagraph (A), the financing statement indicates that the
collateral is held in a trust.
(ii) If the name is provided in accordance with clause (ii) of
subparagraph (A), the financing statement provides additional
information sufficient to distinguish the trust from other trusts
having one or more of the same settlors or the same testator and
indicates that the collateral is held in a trust, unless the
additional information so indicates.
(4) Subject to subdivision (g), if the debtor is an individual to
whom the Department of Motor Vehicles has issued a driver's license
that has not expired or an identification card that has not expired,
only if the financing statement provides the name of the individual
indicated on that driver's license or identification card.
(5) If debtor is an individual to whom paragraph (4) does not
apply, only if the financing statement provides the individual name
of the debtor or the surname and first personal name of the debtor.
(6) In other cases, according to the following rules:
(A) If the debtor has a name, only if the financing statement
provides the organizational name of the debtor.
(B) If the debtor does not have a name, only if the financing
statement provides the names of the partners, members, associates, or
other persons comprising the debtor, in a manner that each name
provided would be sufficient if the person named were the debtor.
(7) Subject to the following sentence of this paragraph, it is a
violation of Section 51 of the Civil Code for a secured party or
proposed secured party to decline to provide credit to a debtor or
proposed debtor, or offer to make the terms and conditions of the
credit less favorable to the debtor or proposed debtor if (A) that
decision was based on the fact that the debtor's name to be included
on the financing statement is or would be that provided under
paragraph (5) rather than under paragraph (4), and (B) all elements
that would be required to establish a claim for violation of Section
51 of the Civil Code are established. Any affirmative defenses that
would be available to a claim under Section 51 of the Civil Code
would be affirmative defenses to a claim under this paragraph.
Nothing in this paragraph shall be construed to alter, expand, limit,
or negate any other rights, defenses, or remedies under Section 51
of the Civil Code.
(b) A financing statement that provides the name of the debtor in
accordance with subdivision (a) is not rendered ineffective by the
absence of either of the following:
(1) A trade name or other name of the debtor.
(2) Unless required under subparagraph (B) of paragraph (6) of
subdivision (a), names of partners, members, associates, or other
persons comprising the debtor.
(c) A financing statement that provides only the debtor's trade
name does not sufficiently provide the name of the debtor.
(d) Failure to indicate the representative capacity of a secured
party or representative of a secured party does not affect the
sufficiency of a financing statement.
(e) A financing statement may provide the name of more than one
debtor and the name of more than one secured party.
(f) The name of the decedent indicated on the order appointing the
personal representative of the decedent issued by the court having
jurisdiction over the collateral is sufficient as the "name of the
decedent" under paragraph (2) of subdivision (a).
(g) If the Department of Motor Vehicles has issued to an
individual more than one driver's licenses or identification cards of
a kind described in paragraph (4) of subdivision (a), paragraph (4)
of subdivision (a) refers to the most recently issued license or
card.
(h) For purposes of this section:
(1) "Driver's license" includes a driver's license issued pursuant
to subdivision (a) of Section 12801.9 of the Vehicle Code.
(2) "Name of the settlor or testator" means either of the
following:
(A) If the settlor is a registered organization, the name that is
stated to be the settlor's name on the public organic record most
recently filed with or issued or enacted by the settlor's
jurisdiction of organization which purports to state, amend, or
restate the settlor's name.
(B) In other cases, the name of the settlor or testator indicated
in the trust's organic record.
SEC. 2. Chapter 9 (commencing with Section 9901) is added to
Division 9 of the Commercial Code, to read:
CHAPTER 9. TRANSITION PROVISIONS FOR 2014 AMENDMENTS
9901. (a) The changes to this division made by the act adding
this chapter become operative on January 1, 2015.
(b) This chapter applies to a security interest only to the extent
that, with respect to such security interest, both of the following
apply:
(1) A debtor is an individual.
(2) A financing statement filed before January 1, 2015, provides
the name of an individual as a debtor.
(c) If a security interest is within the scope of Chapter 8
(commencing with Section 9801), that chapter continues to apply. To
the extent there is a conflict between Chapter 8 (commencing with
Section 9801) and this chapter, this chapter governs.
9902. (a) Except as otherwise provided in this chapter, the
changes to this division made by the act adding this chapter apply to
a transaction or lien within its scope, even if the transaction or
lien was entered into or created before January 1, 2015.
(b) The changes to this division made by the act adding this
chapter do not affect an action, case, or proceeding commenced before
January 1, 2015.
9903. A security interest that is a perfected security interest
immediately before January 1, 2015, is a perfected security interest
under this division as amended by this act if, as of January 1, 2015,
the applicable requirements for attachment and perfection under this
division as of that date are satisfied without further action.
9904. A security interest that is an unperfected security
interest immediately before January 1, 2015, becomes a perfected
security interest as follows:
(a) Without further action, on January 1, 2015, if the applicable
requirements for perfection under this division as amended by this
act are satisfied before or at that time.
(b) When the applicable requirements for perfection are satisfied
if the requirements are satisfied after that time.
9905. (a) The filing of a financing statement before January 1,
2015, is effective to perfect a security interest to the extent the
filing would satisfy the applicable requirements for perfection under
this division as amended by this act.
(b) The changes to this division made by the act adding this
chapter do not render ineffective an effective financing statement
that, before January 1, 2015, is filed and satisfies the applicable
requirements for perfection under this division (including giving
effect to Chapter 8 (commencing with Section 9801)) as it existed
before giving effect to the changes to this division made by the act
adding this chapter. However, except as otherwise provided in
subdivision (c), the financing statement ceases to be effective at
the time the financing statement would have ceased to be effective
had the changes to this division made by the act adding this chapter
not become effective and operative.
(c) The timely filing of a continuation statement on or after
January 1, 2015, continues the effectiveness of a financing statement
filed before January 1, 2015, if the financing statement (including
any amendments) contains the name of the debtor in accordance with
the requirements of Chapter 5 (commencing with Section 9501) as
amended by the act adding this chapter for an initial financing
statement.
(d) A financing statement (including any amendments) that includes
a financing statement filed before January 1, 2015, and a
continuation statement filed after January 1, 2015, is effective only
to the extent that they satisfy the requirements of Chapter 5
(commencing with Section 9501) as amended by the act adding this
chapter for an initial financing statement.
9906. A person may file an initial financing statement or a
continuation statement under this chapter if the following conditions
are satisfied:
(a) The secured party of record authorizes the filing.
(b) The filing is necessary under this division to accomplish
either of the following:
(1) To continue the effectiveness of a financing statement filed
before January 1, 2015.
(2) To perfect or continue the perfection of a security interest.
9907. The changes to this division made by the act adding this
chapter determine the priority of conflicting claims to the
collateral. However, if the relative priorities of the claims were
established before those changes become effective and operative on
January 1, 2015, this division as it existed before those changes
become effective and operative determines priority.
