North Carolina § 25-9-710 - Special transitional provision for maintaining and searching local-filing office records.

§ 25-9-710. Special transitional provision for maintaining and searching local-filing office records.

In this section: "Former-Article-9 records" means: Financing statements and other records that have been filed in the local-filing office before July 1, 2001, and that are, or upon processing and indexing will be, reflected in the index maintained, as of June 30, 2001, by the local-filing office for financing statements and other records filed in the local-filing office before July 1, 2001; and The index as of June 30, 2001. "Local-filing office" means a filing office, other than the office of the Secretary of State, that is designated as the proper place to file a financing statement under G.S. 25-9-401(1) of former Article 9. The term applies only with respect to a record that covers a type of collateral as to which the filing office is designated in that section as the proper place to file. A local-filing office must not accept for filing a record presented after June 30, 2001, whether or not the record relates to a financing statement filed in the local-filing office before July 1, 2001. This subsection does not apply, with respect to financing statements and other records, to a filing office in which mortgages or records of mortgages on real property are required to be filed or recorded, if: The collateral is timber to be cut or as-extracted collateral; or The record is or relates to a financing statement filed as a fixture and the collateral is goods that are or are to become fixtures. Until July 1, 2008, each local-filing office must maintain all former-Article-9 records in accordance with former Article 9. A former-Article-9 record that is not reflected on the index maintained at June 30, 2001, by the local-filing office must be processed and indexed, and reflected on the index as of June 30, 2001, as soon as practicable but in any event no later than July 30, 2001. Until at least June 30, 2008, each local-filing office must respond to requests for information with respect to former-Article-9 records relating to a debtor and issue certificates, in accordance with former Article 9. The fees charged for responding to requests for information relating to a debtor and issuing certificates with respect to former-Article-9 records must be the fees in effect under former Article 9 on June 30,2001. After June 30, 2008, each local-filing office may remove and destroy, in accordance with any then applicable record retention law of this State, all former-Article-9 records, including the related index. Repealed by Session Laws 2001-231, s. 7, effective July 1, 2001. Without further action, when this act becomes effective if the applicable requirements for perfection under Article 9 of Chapter 25 of the General Statutes as amended by this act are satisfied before or at that time; or When the applicable requirements for perfection are satisfied if the requirements are satisfied after that time. The time the financing statement would have ceased to be effective under the law of that jurisdiction; or June 30, 2018. The initial financing statement satisfies subsection (c) of this section. To continue the effectiveness of a financing statement filed before this act becomes effective [July 1, 2013]; or To perfect or continue the perfection of a security interest. The term does not include records presented to a local-filing office for filing after June 30, 2001, whether or not the records relate to financing statements filed in the local-filing office before July 1, 2001. History (2000-169, s. 1; 2001-231, s. 7.) NORTH CAROLINA COMMENT This section has no counterpart in the uniform text. Appendix Transition Provisions for 2010 Amendments to Article 9. APPENDIX TRANSITION PROVISIONS FOR 2010 AMENDMENTS TO ARTICLE 9 (SESSION LAWS 2012-70) Editor's Note. - Session Laws 2012-70 enacted various amendments to Article 9 of Chapter 25 , as approved by the Uniform Law Commission and the American Law Institute. These amendments are commonly referred to as the "2010 Amendments" to Article 9, 2010 being the year of promulgation by those bodies. Part I of Session Laws 2012-70 contains amendments to the following statutes: G.S. 25-9-102 G.S. 25-9-326 G.S. 25-9-515 25-9-105 25-9-406 25-9-516 25-9-307 25-9-408 25-9-518 25-9-311 25-9-502 25-9-521 25-9-316 25-9-503 25-9-607 25-9-317 25-9-507 25-9-625 Part II of Session Laws 2012-70 sets out transition provisions related to these amendments. Part III of Session Laws 2012-70 sets out provisions pertaining to applicability, effective date, and other general matters related to these amendments. References to the "act" in Parts II and III are to Session Laws 2012-70. PART II. TRANSITION PROVISIONS. SECURITY INTEREST PERFECTED BEFORE EFFECTIVE DATE. SECTION 19.(a) Continuing Perfection: Perfection Requirements Satisfied. - A security interest that is a perfected security interest immediately before the effective date of this act [July 1, 2013] is a perfected security interest under Article 9 of Chapter 25 of the General Statutes as amended by this act if, when this act becomes effective, the applicable requirements for attachment and perfection under Article 9 of Chapter 25 of the General Statutes as amended by this act are satisfied without further action. SECTION 19.(b) Continuing Perfection: Perfection Requirements Not Satisfied. - Except as otherwise provided in Section 21 of this act, if, immediately before this act becomes effective [July 1, 2013], a security interest is a perfected security interest, but the applicable requirements for perfection under Article 9 of Chapter 25 of the General Statutes as amended by this act are not satisfied when this act becomes effective, the security interest remains perfected thereafter only if the applicable requirements for perfection under Article 9 of Chapter 25 of the General Statutes as amended by this act are satisfied within one year after this act becomes effective [July 1, 2013]. SECURITY INTEREST UNPERFECTED BEFORE EFFECTIVE DATE SECTION 20. Security Interest Unperfected Before Effective Date. - A security interest that is an unperfected security interest immediately before this act becomes effective [July 1, 2013] becomes a perfected security interest: EFFECTIVENESS OF ACTION TAKEN BEFORE EFFECTIVE DATE. SECTION 21.(a) Pre-Effective-Date Filing Effective. - The filing of a financing statement before this act becomes effective [July 1, 2013] is effective to perfect a security interest to the extent the filing would satisfy the applicable requirements for perfection under Article 9 of Chapter 25 of the General Statutes as amended by this act. SECTION 21.(b) When Pre-Effective-Date Filing Becomes Ineffective. - This act does not render ineffective an effective financing statement that, before this act becomes effective [July 1, 2013], is filed and satisfies the applicable requirements for perfection under the law of the jurisdiction governing perfection as provided in Article 9 of Chapter 25 of the General Statutes as it existed before amendment. However, except as otherwise provided in subsections (c) and (d) of this section and Section 22 of this act, the financing statement ceases to be effective: (1) If the financing statement is filed in this State, at the time the financing statement would have ceased to be effective had this act not become effective; or (2) If the financing statement is filed in another jurisdiction, at the earlier of: SECTION 21.(c) Continuation Statement. - The filing of a continuation statement after this act becomes effective [July 1, 2013] does not continue the effectiveness of a financing statement filed before this act becomes effective [July 1, 2013]. However, upon the timely filing of a continuation statement after this act becomes effective [July 1, 2013] and in accordance with the law of the jurisdiction governing perfection as provided in Article 9 of Chapter 25 of the General Statutes as amended by this act, the effectiveness of a financing statement filed in the same office in that jurisdiction before this act becomes effective [July 1, 2013] continues for the period provided by the law of that jurisdiction. SECTION 21.(d) Application of Sub-Subdivision (b)(2)b. to Transmitting Utility Financing Statement. - Sub-subdivision (b)(2)b. of this section applies to a financing statement that, before this act becomes effective [July 1, 2013], is filed against a transmitting utility and satisfies the applicable requirements for perfection under the law of the jurisdiction governing perfection as provided in Article 9 of Chapter 25 of the General Statutes as it existed before amendment, only to the extent that Article 9 of Chapter 25 of the General Statutes as amended by this act provides that the law of a jurisdiction other than the jurisdiction in which the financing statement is filed governs perfection of a security interest in collateral covered by the financing statement. SECTION 21.(e) Application of Part 5 of Article 9 of Chapter 25 of the General Statutes. - A financing statement that includes a financing statement filed before this act becomes effective [July 1, 2013] and a continuation statement filed after this act becomes effective [July 1, 2013] is effective only to the extent that it satisfies the requirements of Part 5 of Article 9 of Chapter 25 of the General Statutes as amended by this act for an initial financing statement. A financing statement that indicates that the debtor is a decedent's estate indicates that the collateral is being administered by a personal representative within the meaning of G.S. 25-9-503(a)(2) as amended by this act. A financing statement that indicates that the debtor is a trust or is a trustee acting with respect to property held in trust indicates that the collateral is held in a trust within the meaning of G.S. 25-9-503(a)(3) as amended by this act. WHEN INITIAL FINANCING STATEMENT SUFFICES TO CONTINUE EFFECTIVENESS OF FINANCING STATEMENT. SECTION 22.(a) Initial Financing Statement in Lieu of Continuation Statement. - The filing of an initial financing statement in the office specified in G.S. 25-9-501 continues the effectiveness of a financing statement filed before this act becomes effective [July 1, 2013] if: (1) The filing of an initial financing statement in that office would be effective to perfect a security interest under Article 9 of Chapter 25 of the General Statutes as amended by this act; (2) The pre-effective-date financing statement was filed in an office in another State; and SECTION 22.(b) Period of Continued Effectiveness. - The filing of an initial financing statement under subsection (a) of this section continues the effectiveness of the pre-effective-date financing statement: (1) If the initial financing statement is filed before this act becomes effective [July 1, 2013], for the period provided in G.S. 25-9-515 as it read prior to the amendment by Section 13 of this act with respect to an initial financing statement; and (2) If the initial financing statement is filed after this act becomes effective [July 1, 2013], for the period provided in G.S. 25-9-515 as amended by this act with respect to an initial financing statement. SECTION 22.(c) Requirements for Initial Financing Statement Under Subsection (a). - To be effective for purposes of subsection (a) of this section, an initial financing statement must: (1) Satisfy the requirements of Part 5 of Article 9 of Chapter 25 of the General Statutes as amended by this act for an initial financing statement; (2) Identify the pre-effective-date financing statement by indicating the office in which the financing statement was filed and providing the dates of filing and file numbers, if any, of the financing statement and of the most recent continuation statement filed with respect to the financing statement; and (3) Indicate that the pre-effective-date financing statement remains effective. AMENDMENT OF PRE-EFFECTIVE-DATE FINANCING STATEMENT. SECTION 23.(a) "Pre-Effective-Date Financing Statement." - In this section, "pre-effective-date financing statement" means a financing statement filed before this act becomes effective [July 1, 2013]. SECTION 23.(b) Applicable Law. - After this act becomes effective [July 1, 2013], a person may add or delete collateral covered by, continue or terminate the effectiveness of, or otherwise amend the information provided in, a pre-effective-date financing statement only in accordance with the law of the jurisdiction governing perfection as provided in Article 9 of Chapter 25 of the General Statutes as amended by this act. However, the effectiveness of a pre-effective-date financing statement also may be terminated in accordance with the law of the jurisdiction in which the financing statement is filed. SECTION 23.(c) Method of Amending: General Rule. - Except as otherwise provided in subsection (d) of this section, if the law of this State governs perfection of a security interest, the information in a pre-effective-date financing statement may be amended after this act becomes effective [July 1, 2013] only if: (1) The pre-effective-date financing statement and an amendment are filed in the office specified in G.S. 25-9-501 ; (2) An amendment is filed in the office specified in G.S. 25-9-501 concurrently with, or after the filing in that office of, an initial financing statement that satisfies subsection (c) of Section 22 of this act; or (3) An initial financing statement that provides the information as amended and satisfies subsection (c) of Section 22 of this act is filed in the office specified in G.S. 25-9-501 . SECTION 23.(d) Method of Amending: Continuation. - If the law of this State governs perfection of a security interest, the effectiveness of a pre-effective-date financing statement may be continued only under subsections (c) and (e) of Section 21 of this act or Section 22 of this act. SECTION 23.(e) Method of Amending: Additional Termination Rule. - Whether or not the law of this State governs perfection of a security interest, the effectiveness of a pre-effective-date financing statement filed in this State may be terminated after this act becomes effective [July 1, 2013] by filing a termination statement in the office in which the pre-effective-date financing statement is filed, unless an initial financing statement that satisfies subsection (c) of Section 22 of this act has been filed in the office specified by the law of the jurisdiction governing perfection as provided in Article 9 of Chapter 25 of the General Statutes as amended by this act as the office in which to file a financing statement. PERSON ENTITLED TO FILE INITIAL FINANCING STATEMENT OR CONTINUATION STATEMENT. SECTION 24. Person Entitled to File Initial Financing Statement or Continuation Statement. - A person may file an initial financing statement or a continuation statement under this Part if (1) The secured party of record authorizes the filing; and (2) The filing is necessary under this Part: PRIORITY. SECTION 25. This act determines the priority of conflicting claims to collateral. However, if the relative priorities of the claims were established before this act becomes effective [July 1, 2013], Article 9 of Chapter 25 of the General Statutes as it existed before this act becomes effective [July 1, 2013] determines priority. PART III. APPLICABILITY, EFFECTIVE DATE, AND OTHER PROVISIONS. APPLICABILITY. SECTION 26.(a) Pre-Effective-Date Transactions or Liens. - Except as otherwise provided in Part II of this act, this act applies to a transaction or lien within its scope, even if the transaction or lien was entered into or created before this act becomes effective [July 1, 2013]. SECTION 26.(b) Pre-Effective-Date Proceedings. - This act does not affect an action, case, or proceeding commenced before this act becomes effective [July 1, 2013]. AUTHORIZATION FOR PRINTING OF COMMENTS. SECTION 27. The Revisor of Statutes shall cause to be printed, as annotations to the published General Statutes, all relevant portions of the Official Comments to the 2010 Amendments to Article 9 of the Uniform Commercial Code and all explanatory comments of the drafters of this act as the Revisor may deem appropriate. EFFECTIVE DATE. SECTION 28. This act becomes effective July 1, 2013. Below is the Official Comment for section 9-801 of the UCC, which is equivalent to Parts II and III of Session Laws 2012-70. Where the Official Comment refers to a section in Part 8 of the UCC, the corresponding section of Part II or III of Session Laws 2012-70 is inserted in brackets to assist the reader. Official Comment These transition provisions largely track the provisions of Part 7, which govern the transition to the 1998 revision of this Article. The Comments to the sections of Part 7 generally are relevant to the corresponding sections of Part 8 [Parts II and II of Session Laws 2012-70 (Parts II and III)]. The 2010 amendments are less far-reaching than the 1998 revision. Although Part 8 [Parts II and III] does not carry forward those Part 7 provisions that clearly would have no application to the transition to the amendments, as a matter of prudence Part 8 [Parts II and III] does carry forward all Part 7 provisions that are even arguably relevant to the transition. The most significant transition problem raised by the 2010 amendments arises from changes to Section 9-503(a), concerning the name of the debtor that must be provided for a financing statement to be sufficient. Sections 9-805 and 9-806 [Session Laws 2012-7, ss. 21 and 22] address this problem. Example: On November 8, 2012, Debtor, an individual whose "individual name" is "Lon Debtor" and whose principal residence is located in State A, creates a security interest in certain manufacturing equipment. On November 15, 2012, SP perfects a security interest in the equipment under Article 9 (as in effect prior to the 2010 amendments) by filing a financing statement against "Lon Debtor" in the State A filing office. On July 1, 2013, the 2010 amendments, including Alternative A to Section 9-503(a), take effect in State A. Debtor's unexpired State A driver's indicates that Debtor's name is "Polonius Debtor." Assuming that a search under "Polonius Debtor" using the filing office's standard search logic would not disclose the filed financing statement, the financing statement would be insufficient under amended Section 9-503(a)(4) (Alt. A). However, Section 9-805(b) [Session Laws 2012-70, s. 21(b)] provides that the 2010 amendments do not render the financing statement ineffective. Rather, the financing statement remains effective - even if it has become seriously misleading - until it would have ceased to be effective had the amendments not taken effect. See Section 9-805(b)(1) [Session Laws 2012-70, s. 21(b)(1)]. SP can continue the effectiveness of the financing statement by filing a continuation statement with the State A filing office. To do so, however, SP must amend Debtor's name on the financing statement to provide the name that is sufficient under Section 9-503(a)(4) (Alt. A) at the time the continuation statement is filed. See Section 9-805(c), (e) [Session Laws 2012-70, s. 21(c), (d)]. The most significant transition problem addressed by the 1998 revision arose from the change in the choice-of-law rules governing where to file a financing statement. The 2010 amendments do not change the choice-of-law rules. Even so, the amendments will change the place to file in a few cases, because certain entities that were not previously classified as "registered organizations" would fall within that category under the amendments. Tables of Comparable Sections for Article 9. TABLES OF COMPARABLE SECTIONS FOR