Bill Text: MI SB0518 | 2017-2018 | 99th Legislature | Introduced

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Bill Title: Commercial code; secured transactions; enforcement of security interest in agricultural property; provide opportunity for mediation. Amends sec. 9601 of 1962 PA 174 (MCL 440.9601). TIE BAR WITH: SB 0517'17

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2017-09-06 - Referred To Committee On Banking And Financial Institutions [SB0518 Detail]

Download: Michigan-2017-SB0518-Introduced.html

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SENATE BILL No. 518

 

 

September 6, 2017, Introduced by Senator SCHMIDT and referred to the Committee on Banking and Financial Institutions.

 

 

     A bill to amend 1962 PA 174, entitled

 

"Uniform commercial code,"

 

by amending section 9601 (MCL 440.9601), as amended by 2012 PA 87.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 9601. (1) After default, a secured party has the rights

 

provided in this part and, except as otherwise provided in section

 

9602, those provided by agreement of the parties. A Subject to

 

subsection (8), a secured party may do 1 or more of the following:

 

     (a) May reduce Reduce a claim to judgment, foreclose, or

 

otherwise enforce the claim, security interest, or agricultural

 

lien by any available judicial procedure.

 

     (b) If the collateral is documents, may proceed either as to

 

the documents or as to the goods they cover.

 

     (2) A secured party in possession of collateral or control of

 

collateral under section 7106, 9104, 9105, 9106, or 9107 has the

 

rights and duties provided in section 9207.

 

     (3) The rights under subsections (1) and (2) are cumulative

 

and may be exercised simultaneously.

 

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

 

9605, after default, a debtor and an obligor have the rights

 

provided in this part and by agreement of the parties.

 

     (5) If a secured party has reduced its claim to judgment, the

 

lien of any levy that may be made upon the collateral by virtue of

 

an execution based upon the judgment relates back to the earliest

 

of the following:

 

     (a) The date of perfection of the security interest or

 

agricultural lien in the collateral.

 

     (b) The date of filing a financing statement covering the

 

collateral.

 

     (c) Any date specified in a statute under which the

 

agricultural lien was created.

 

     (6) A sale pursuant to an execution is a foreclosure of the

 

security interest or agricultural lien by judicial procedure within

 

the meaning of this section. A secured party may purchase at the

 

sale and thereafter hold the collateral free of any other

 

requirements of this article.

 

     (7) Except as otherwise provided in section 9607(3), this part

 

imposes no duties upon a secured party that is a consignor or is a

 

buyer of accounts, chattel paper, payment intangibles, or

promissory notes.

 

     (8) A person shall not begin to enforce a security interest in

 

collateral if the farm loan mediation act applies to the debt on

 

which the security interest is based unless  both of the following

 

have occurred:

 

     (a) The person has served a mediation notice under subsection

 

(9) on the debtor and a copy on the director of the department of

 

agriculture and rural development.

 

     (b) Enforcement of the security interest is allowed under the

 

farm loan mediation act.

 

     (9) A mediation notice under subsection (8) must contain the

 

following notice with the blanks properly filled in:

 

To: ....(name of debtor)....

 

You have defaulted on the....(debt in default)....secured by

 

agricultural property described as....(reasonable description of

 

agricultural property collateral). The amount of the outstanding

 

debt is....(amount of debt)....

 

As a secured party,....(name of secured party)....intends to

 

enforce the security agreement against the agricultural property

 

described above by repossessing, foreclosing on, or obtaining a

 

court judgment against the property.

 

You have the right to have the debt reviewed for mediation under

 

the farm loan mediation act. If you request mediation, a debt that

 

is in default will be mediated only once. If you do not request

 

mediation, this debt will not be subject to future mediation if the

 

secured party enforces the debt.

 

If you participate in mediation, the Director of the Department of

Agriculture and Rural Development will provide an orientation

 

meeting and a financial analyst to help you prepare financial

 

information. If you decide to participate in mediation, it will be

 

to your advantage to assemble your farm finance and operation

 

records and to contact the Director of the Department of

 

Agriculture and Rural Development or an MSU Extension county office

 

as soon as possible. Mediation will be an attempt to arrive at an

 

agreement for handling future financial relations.

 

To have the debt reviewed for mediation, you must file a mediation

 

request with the Director within 14 days after you receive this

 

notice. The mediation request form may be obtained from the

 

Department of Agriculture and Rural Development's website or any

 

MSU Extension county office.

 

From: ....(name and address of secured party)....

 

     Enacting section 1. This amendatory act takes effect 90 days

 

after the date it is enacted into law.

 

     Enacting section 2. This amendatory act does not take effect

 

unless Senate Bill No. 517                                    

 

          of the 99th Legislature is enacted into law.