GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2001
S	1
SENATE BILL 257

 
 
Short Title:	UCC Article 9 Amendments-AB.	()	
Sponsors:	Senator Hartsell.	
Referred to:	Judiciary I.	
February 27, 2001

A BILL TO BE ENTITLED
AN ACT to revise article 9 of the uniform commercial code to give the secretary of state the authority to prevent fraudulent filings against public employees or officials.

The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 25‑9‑516(b) reads as rewritten:
"(b)	Refusal to accept record; filing does not occur. – Filing does not occur with respect to a record that a filing office refuses to accept because:
(1)	The record is not communicated by a method or medium of communication authorized by the filing office.
(2)	An amount equal to or greater than the applicable filing fee is not tendered.
(3)	The filing office is unable to index the record because:
a.	In the case of an initial financing statement, the record does not provide a name for the debtor;
b.	In the case of an amendment or correction statement, the record:
1.	Does not identify the initial financing statement as required by G.S. 25‑9‑512 or G.S. 25‑9‑518, as applicable; or
2.	Identifies an initial financing statement whose effectiveness has lapsed under G.S. 25‑9‑515;
c.	In the case of an initial financing statement that provides the name of a debtor identified as an individual or an amendment that provides a name of a debtor identified as an individual which was not previously provided in the financing statement to which the record relates, the record does not identify the debtor's last name; or
d.	In the case of a record filed in the filing office described in G.S. 25‑9‑501(a)(1), the record does not provide a sufficient description of the real property to which it relates.
(4)	In the case of an initial financing statement or an amendment that adds a secured party of record, the record does not provide a name and mailing address for the secured party of record.
(5)	In the case of an initial financing statement or an amendment that provides a name of a debtor which was not previously provided in the financing statement to which the amendment relates, the record does not:
a.	Provide a mailing address for the debtor;
b.	Indicate whether the debtor is an individual or an organization; or
c.	If the financing statement indicates that the debtor is an organization, provide:
1.	A type of organization for the debtor;
2.	A jurisdiction of organization for the debtor; or
3.	An organizational identification number for the debtor or indicate that the debtor has none.
(6)	In the case of an assignment reflected in an initial financing statement under G.S. 25‑9‑514(a) or an amendment filed under G.S. 25‑9‑514(b), the record does not provide a name and mailing address for the assignee.
(7)	In the case of a continuation statement, the record is not filed within the six‑month period prescribed by G.S. 25‑9‑515(d).
(8)	In the case of a record presented for filing at the Office of the Secretary of State, the Secretary of State determines that (i) the record identifies as a debtor any person who is currently an employee of the United States of America, or any state, county, or local government thereof, and (ii) the record is not related to a security agreement that is valid on its face or is otherwise intended for an improper purpose, such as to hinder or harass the employee, or to interfere with the employee in the performance of a public duty."
SECTION 2.  G.S. 25‑9‑518(b)(3) reads as rewritten:
"(3)	Provide the basis for the person's belief that the record is inaccurate and indicate the manner in which the person believes the record should be amended to cure any inaccuracy or provide the basis for the person's belief that the record was wrongfully filed. A correction statement that is subject to the provisions of subsection (b1) of this section shall include a written certification, under oath, by the employee that the contents of the correction statement are true and accurate to the best of the employee's knowledge."
SECTION 3.  G.S. 25‑9‑518 is amended by adding a new subsection to read:
"(b1)	In the case of a correction statement alleging that a previously filed record was wrongfully filed and that it should have been rejected under G.S. 25-9-516(b)(8), the Secretary of State shall, without undue delay, determine whether the contested record was wrongfully filed and should have been rejected. If the Secretary of State finds that the record was wrongfully filed and should have been rejected under G.S. 25-9-516(b)(8), the Secretary of State shall cancel the record and it shall be void and of no effect."
SECTION 4.  G.S.25‑9‑520 reads as rewritten:
"§ 25‑9‑520.  Acceptance, refusal to accept record and cancellation of record.
(a)	Mandatory refusal to accept record. – A filing office shall refuse to accept a record for filing for a reason set forth in G.S. 25‑9‑516(b) and may refuse to accept a record for filing only for a reason set forth in G.S. 25‑9‑516(b).
(b)	Communication concerning refusal. – If a filing office refuses to accept a record for filing, it shall communicate to the person that presented the record the fact of and reason for the refusal and the date and time the record would have been filed had the filing office accepted it. The communication must be made at the time and in the manner prescribed by filing‑office rule but in no event more than three business days after the filing office receives the record.
(c)	When filed financing statement effective. – A filed financing statement satisfying G.S. 25‑9‑502(a) and (b) is effective, even if the filing office is required to refuse to accept it for filing under subsection (a) of this section. However, G.S. 25‑9‑338 applies to a filed financing statement providing information described in G.S. 25‑9‑516(b)(5) which is incorrect at the time the financing statement is filed.
(d)	Separate application to multiple debtors. – If a record communicated to a filing office provides information that relates to more than one debtor, this Part applies as to each debtor separately.
(e)	Appeal.
(1)	If the Secretary of State refuses to accept a record for filing pursuant to G.S. 25-9-516(b)(8), or cancels a wrongfully filed record pursuant to G.S. 25-9-518(b1), the secured party may file an appeal within 30 days after the refusal or cancellation in the Superior Court of Wake County. Filing a petition requesting to be allowed to file the document commences the appeal. The petition shall be filed with the court and with the Secretary of State and shall have the record attached to it. Upon the commencement of an appeal, it shall be set for hearing at the earliest possible time and shall take precedence over all matters except older matters of the same character. The appeal to the Superior Court is not governed by Article 3, 3A, or 4 of Chapter 150B of the General Statutes, and shall be determined upon such further notice and opportunity to be heard, if any, as the court may deem appropriate under the circumstances. The court shall permit the joinder of any interested party that would be allowed under the Rules of Civil Procedure.
(2)	Upon consideration of the petition and other appropriate pleadings, the court may order the Secretary of State to file the record or take other action the court considers appropriate, including the entry of orders affirming, reversing, or otherwise modifying the decision of the Secretary of State. The court may order any other relief, including equitable relief, as may be appropriate.
(3)	The court's final decision may be appealed as in other civil proceedings.
(4)	The court shall not enter an order awarding costs and attorneys' fees against the Secretary of State."
SECTION 5.  This act becomes effective October 1, 2001, and applies to documents filed on or after that date.