AN ACT

 

1Amending Titles 13 (Commercial Code), 30 (Fish) and 75
2(Vehicles) of the Pennsylvania Consolidated Statutes,
3revising secured transaction provisions relating to
4definitions, to control of electronic chattel paper, to
5location of debtor, to perfection of security interests in
6property subject to certain statutes, regulations and
7treaties, to continued perfection of security interest
8following change in governing law, to interests which take
9priority over or take free of security interest or
10agricultural lien, to priority of security interests created
11by new debtor, to discharge of account debtor, notification
12of assignment, identification and proof of assignment,
13restrictions on assignment of accounts, chattel paper,
14payment intangibles and promissory notes ineffective, to
15restrictions on assignment of promissory notes, health-care-
16insurance receivables and certain general intangibles
17ineffective, to contents of financing statement, record of
18mortgage as financing statement, time of filing financing
19statement, to name of debtor and secured party, to effect of
20certain events on effectiveness of financing statement, to
21duration and effectiveness of financing statement, effect of
22lapsed financing statement, to what constitutes filing,
23effectiveness of filing, to claim concerning inaccurate or
24wrongfully filed record and to collection and enforcement by
25secured party; providing for transition provisions for 2013
26amendments; imposing duties upon the Department of State and
27the Department of Transportation; and making editorial
28changes.

29The General Assembly of the Commonwealth of Pennsylvania
30hereby enacts as follows:

1Section 1.  The definitions of "authenticate," "certificate
2of title," "jurisdiction of organization" and "registered
3organization" in section 9102(a) of Title 13 of the Pennsylvania
4Consolidated Statutes are amended and the subsection is amended
5by adding a definition to read:

6§ 9102.  Definitions and index of definitions.

7(a)  Division 9 definitions.--The following words and phrases
8when used in this division shall have the meanings given to them
9in this subsection:

10* * *

11"Authenticate."  To:

12(i)  sign; or

13(ii)  [execute or otherwise adopt a symbol, or
14encrypt or similarly process a record in whole or in
15part,] with [the] present intent [of the authenticating
16person to identify the person and] to adopt or accept a
17record, attach to or logically associate with the record 
18an electrical sound, symbol or process.

19* * *

20"Certificate of title."  A certificate of title with respect
21to which a statute provides for the security interest in
22question to be indicated on the certificate as a condition or
23result of the security interest's obtaining priority over the
24rights of a lien creditor with respect to the collateral. The 
25term includes another record maintained as an alternative to a 
26certificate of title by the governmental unit that issues 
27certificates of title if a statute permits the security interest 
28in question to be indicated on the record as a condition or 
29result of the security interest's obtaining priority over the 
30rights of a lien creditor with respect to the collateral.

1* * *

2"Jurisdiction of organization."  With respect to a registered
3organization, the jurisdiction under whose law the organization
4is formed or organized.

5* * *

6"Public organic record."  A record that is available to the
7public for inspection and is:

8(1)  a record consisting of the record initially filed
9with or issued by a state or the United States to form or
10organize an organization and any record filed with or issued
11by the state or the United States which amends or restates
12the initial record;

13(2)  an organic record of a business trust consisting of
14the record initially filed with a state and any record filed
15with the state which amends or restates the initial record,
16if a statute of the state governing business trusts requires
17that the record be filed with the state; or

18(3)  a record consisting of legislation enacted by the
19legislature of a state or the Congress of the United States
20which forms or organizes an organization, any record amending
21the legislation, and any record filed with or issued by the
22state or the United States which amends or restates the name
23of the organization.

24* * *

25"Registered organization."  An organization formed or 
26organized solely under the law of a single state or the United
27States [and as to which the state or the United States must
28maintain a public record showing the organization to have been
29organized.] by the filing of a public organic record, with the 
30issuance of a public organic record by, or the enactment of 

1legislation by the state or the United States. The term includes 
2a business trust that is formed or organized under the law of a 
3single state if a statute of the state governing business trusts 
4requires that a business trust's organic record be filed with 
5the state.

6* * *

7Section 2.  Sections 9105, 9307(f)(2), 9308(a), 9310(b)(10),
89311(a)(2) and (3) and (b) and 9313(b) of Title 13 are amended
9to read:

10§ 9105.  Control of electronic chattel paper.

11(a)  General rule; control of electronic chattel paper.--A
12secured party has control of electronic chattel paper if a 
13system employed for evidencing the transfer of interests in the 
14chattel paper reliably establishes the secured party as the 
15person to which the chattel paper was assigned.

16(b)  Specific facts giving control.--A system satisfies 
17subsection (a) if the record or records comprising the chattel
18paper are created, stored and assigned in such a manner that:

19(1)  a single authoritative copy of the record or records
20exists which is unique, identifiable and, except as otherwise
21provided in paragraphs (4), (5) and (6), unalterable;

22(2)  the authoritative copy identifies the secured party
23as the assignee of the record or records;

24(3)  the authoritative copy is communicated to and
25maintained by the secured party or its designated custodian;

26(4)  copies or [revisions] amendments which add or change
27an identified assignee of the authoritative copy can be made
28only with the [participation] consent of the secured party;

29(5)  each copy of the authoritative copy and any copy of
30a copy is readily identifiable as a copy which is not the

1authoritative copy; and

2(6)  any [revision] amendment of the authoritative copy
3is readily identifiable as [an] authorized or unauthorized
4[revision].

5§ 9307.  Location of debtor.

6* * *

7(f)  Location of registered organization organized under
8Federal law; bank branches and agencies.--Except as otherwise
9provided in subsection (i), a registered organization which is
10organized under the law of the United States and a branch or
11agency of a bank which is not organized under the law of the
12United States or a state are located:

13* * *

14(2)  in the state which the registered organization,
15branch or agency designates, if the law of the United States
16authorizes the registered organization, branch or agency to
17designate its state of location, including by designating its 
18main office, home office or other comparable office; or

19* * *

20§ 9308.  When security interest or agricultural lien is
21perfected; continuity of perfection.

22(a)  Perfection of security interest.--Except as otherwise
23provided in this section and section 9309 (relating to security
24interest perfected upon attachment), a security interest is
25perfected if it has attached and all of the applicable
26requirements for perfection in sections 9310 (relating to when
27filing required to perfect security interest or agricultural
28lien; security interests and agricultural liens to which filing
29provisions do not apply) through 9316 (relating to [continued
30perfection of security interest following] effect of change in

1governing law) have been satisfied. A security interest is
2perfected when it attaches if the applicable requirements are
3satisfied before the security interest attaches.

4* * *

5§ 9310.  When filing required to perfect security interest or
6agricultural lien; security interests and
7agricultural liens to which filing provisions do not
8apply.

9* * *

10(b)  Exceptions: filing not necessary.--The filing of a
11financing statement is not necessary to perfect a security
12interest:

13* * *

14(10)  which is perfected under section 9316 (relating to
15[continued perfection of security interest following] effect 
16of change in governing law).

17* * *

18§ 9311.  Perfection of security interests in property subject to
19certain statutes, regulations and treaties.

20(a)  Security interest subject to other law.--Except as
21otherwise provided in subsection (d), the filing of a financing
22statement is not necessary or effective to perfect a security
23interest in property subject to:

24* * *

25(2)  a [certificate-of-title] statute of this
26Commonwealth or regulations promulgated thereunder, to the
27extent such statute or regulations provide for a security
28interest to be indicated on [the] certificate of title as a
29condition or result of perfection; or

30(3)  a [certificate-of-title] statute of another

1jurisdiction which provides for a security interest to be
2indicated on [the] a certificate of title as a condition or
3result of the security interest's obtaining priority over the
4rights of a lien creditor with respect to the property.

5(b)  Compliance with other law.--Compliance with the
6requirements of a statute, regulation or treaty described in
7subsection (a) for obtaining priority over the rights of a lien
8creditor is equivalent to the filing of a financing statement
9under this division. Except as otherwise provided in subsection
10(d) and sections 9313 (relating to when possession by or
11delivery to secured party perfects security interest without
12filing) and 9316(d) and (e) (relating to [continued perfection
13of security interest following] effect of change in governing
14law) for goods covered by a certificate of title, a security
15interest in property subject to a statute, regulation or treaty
16described in subsection (a) may be perfected only by compliance
17with those requirements, and a security interest so perfected
18remains perfected notwithstanding a change in the use or
19transfer of possession of the collateral.

20* * *

21§ 9313.  When possession by or delivery to secured party
22perfects security interest without filing.

23* * *

24(b)  Goods covered by certificate of title.--With respect to
25goods covered by a certificate of title issued by the
26Commonwealth, a secured party may perfect a security interest in
27the goods by taking possession of the goods only in the
28circumstances described in section 9316(d) (relating to
29[continued perfection of security interest following] effect of
30change in governing law).

1* * *

2Section 3.  Section 9316 heading of Title 13 is amended and
3the section is amended by adding subsections to read:

4§ 9316.  [Continued perfection of security interest following]
5Effect of change in governing law.

6* * *

7(h)  Effect on filed financing statement of change in
8governing law.--The following rules apply to collateral to which
9a security interest attaches within four months after the debtor
10changes its location to another jurisdiction:

11(1)  A financing statement filed before the change
12pursuant to the law of the jurisdiction designated in section
139301(a) or 9305(c) is effective to perfect a security
14interest in the collateral if the financing statement would
15have been effective to perfect a security interest in the
16collateral had the debtor not changed its location.

17(2)  If a security interest perfected by a financing
18statement that is effective under paragraph (1) becomes
19perfected under the law of the other jurisdiction before the
20earlier of the time the financing statement would have become
21ineffective under the law of the jurisdiction designated in
22section 9301(a) or 9305(c) or the expiration of the four-
23month period, it remains perfected thereafter. If the
24security interest does not become perfected under the law of
25the other jurisdiction before the earlier time or event, it
26becomes unperfected and is deemed never to have been
27perfected as against a purchaser of the collateral for value.

28(i)  Effect of change in governing law on financing statement
29filed against original debtor.--If a financing statement naming
30an original debtor is filed pursuant to the law of the

1jurisdiction designated in section 9301(a) or 9305(c) and the
2new debtor is located in another jurisdiction, the following
3rules apply:

4(1) The financing statement is effective to perfect a
5security interest in collateral acquired by the new debtor
6before, and within four months after, the new debtor becomes
7bound under section 9203(d) (relating to attachment and
8enforceability of security interest; proceeds; supporting
9obligations; formal requisites), if the financing statement
10would have been effective to perfect a security interest in
11the collateral had the collateral been acquired by the
12original debtor.

13(2)  A security interest perfected by the financing
14statement and which becomes perfected under the law of the
15other jurisdiction before the earlier of the time the
16financing statement would have become ineffective under the
17law of the jurisdiction designated in section 9301(a) or
189305(c) or the expiration of the four-month period remains
19perfected thereafter. A security interest that is perfected
20by the financing statement but which does not become
21perfected under the law of the other jurisdiction before the
22earlier time or event becomes unperfected and is deemed never
23to have been perfected as against a purchaser of the
24collateral for value.

25Section 4.  Sections 9317(b) and (d), 9320(c), 9326, 9406(e),
269408(b) and 9502(c) of Title 13 are amended to read:

27§ 9317.  Interests which take priority over or take free of
28security interest or agricultural lien.

29* * *

30(b)  Buyers that receive delivery.--Except as otherwise

1provided in subsection (e), a buyer, other than a secured party,
2of tangible chattel paper, tangible documents, goods,
3instruments or a [security certificate] certificated security
4takes free of a security interest or agricultural lien if the
5buyer gives value and receives delivery of the collateral
6without knowledge of the security interest or agricultural lien
7and before it is perfected.

8* * *

9(d)  Licensees and buyers of certain collateral.--A licensee
10of a general intangible or a buyer, other than a secured party,
11of [accounts, electronic chattel paper, electronic documents,
12general intangibles or investment property] collateral other
13than tangible chattel paper, tangible documents, goods, 
14instruments or a certificated security takes free of a security
15interest if the licensee or buyer gives value without knowledge
16of the security interest and before it is perfected.

17* * *

18§ 9320.  Buyer of goods.

19* * *

20(c)  Effectiveness of filing for subsection (b).--To the
21extent that it affects the priority of a security interest over
22a buyer of goods under subsection (b), the period of
23effectiveness of a filing made in the jurisdiction in which the
24seller is located is governed by section 9316(a) and (b)
25(relating to [continued perfection of security interest
26following] effect of change in governing law).

27* * *

28§ 9326.  Priority of security interests created by new debtor.

29(a)  Subordination of security interest created by new
30debtor.--Subject to subsection (b), a security interest that is

1created by a new debtor [which is] in collateral in which the 
2new debtor has or acquires rights and is perfected solely by a
3filed financing statement which [is effective solely under
4section 9508 (relating to effectiveness of financing statement
5if new debtor becomes bound by security agreement) in collateral
6in which a new debtor has or acquires rights] would be 
7ineffective to perfect the security interest but for the 
8application of section 9316(i)(1) (relating to effect of change 
9in governing law) or 9508 (relating to effectiveness of 
10financing statement if new debtor becomes bound by security 
11agreement) is subordinate to a security interest in the same
12collateral which is perfected other than by such a filed
13financing statement [which is effective solely under section
149508].

15(b)  Priority under other provisions; multiple original
16debtors.--The other provisions of this chapter determine the
17priority among conflicting security interests in the same
18collateral perfected by filed financing statements [which are
19effective solely under section 9508] described in subsection 
20(a). However, if the security agreements to which a new debtor
21became bound as debtor were not entered into by the same
22original debtor, the conflicting security interests rank
23according to priority in time of the new debtor's having become
24bound.

25§ 9406.  Discharge of account debtor; notification of
26assignment; identification and proof of assignment;
27restrictions on assignment of accounts, chattel
28paper, payment intangibles and promissory notes
29ineffective.

30* * *

1(e)  Inapplicability of subsection (d) to certain sales.--
2Subsection (d) does not apply to the sale of a payment
3intangible or promissory note, other than a sale pursuant to a 
4disposition under section 9610 (relating to disposition of 
5collateral after default) or an acceptance of collateral under 
6section 9620 (relating to acceptance of collateral in full or 
7partial satisfaction of obligation; compulsory disposition of 
8collateral).

9* * *

10§ 9408.  Restrictions on assignment of promissory notes, health-
11care-insurance receivables and certain general
12intangibles ineffective.

13* * *

14(b)  Applicability of subsection (a) to sales of certain
15rights to payment.--Subsection (a) applies to a security
16interest in a payment intangible or promissory note only if the
17security interest arises out of a sale of the payment intangible
18or promissory note, other than a sale pursuant to a disposition 
19under section 9610 (relating to disposition of collateral after 
20default) or an acceptance of collateral under section 9620 
21(relating to acceptance of collateral in full or partial 
22satisfaction of obligation; compulsory disposition of 
23collateral).

24* * *

25§ 9502.  Contents of financing statement; record of mortgage as
26financing statement; time of filing financing
27statement.

28* * *

29(c)  Record of mortgage as financing statement.--A record of
30a mortgage is effective, from the date of recording, as a

1financing statement filed as a fixture filing or as a financing
2statement covering as-extracted collateral or timber to be cut
3only if all of the following apply:

4(1)  [the] The record indicates the goods or accounts
5which it covers[;].

6(2)  [the] The goods are or are to become fixtures
7related to the real property described in the record, or the
8collateral is related to the real property described in the
9record and is as-extracted collateral or timber to be cut[;].

10(3)  [the] The record satisfies the requirements for a
11financing statement in this section [other than an
12indication] subject to the following:

13(i)  The record need not indicate that it is to be
14filed in the real property records[; and].

15(ii)  The record sufficiently provides the name of a
16debtor who is an individual if it provides the individual
17name of the debtor or the surname and first personal name
18of the debtor, even if the debtor is an individual to
19whom section 9503(a)(4)(relating to name of debtor and
20secured party) applies.

21(4)  [the] The record is duly recorded.

22* * *

23Section 5.  Section 9503(a) and (b)(2) of Title 13 are
24amended and the section is amended by adding subsections to
25read:

26§ 9503.  Name of debtor and secured party.

27(a)  Sufficiency of debtor's name.--A financing statement
28sufficiently provides the name of the debtor:

29(1)  [If] Except as otherwise provided in paragraph (3), 
30if the debtor is a registered organization or the collateral 

1is held in a trust that is a registered organization, only if
2the financing statement provides the name [of the debtor
3indicated] that is stated to be the registered organization's 
4name on the public organic record [of] most recently filed 
5with or issued or enacted by the [debtor's] registered 
6organization's jurisdiction of organization which [shows the
7debtor to have been organized] purports to state, amend or 
8restate the registered organization's name.

9(2)  [If] Subject to subsection (f), if the [debtor is a
10decedent's estate] collateral is being administered by the 
11personal representative of a decedent, only if the financing
12statement provides, as the name of the debtor, the name of
13the decedent and, in a separate part of the financing 
14statement, indicates that the [debtor is an estate]
15collateral is being administered by a personal 
16representative.

17(3)  If the [debtor is a trust or a trustee acting with
18respect to property held in trust, only if the financing
19statement:

20(i)  provides the name specified for the trust in its
21organic documents or, if no name is specified, provides
22the name of the settlor and additional information
23sufficient to distinguish the debtor from other trusts
24having one or more of the same settlors; and

25(ii)  indicates, in the debtor's name or otherwise,
26that the debtor is a trust or is a trustee acting with
27respect to property held in trust; and] collateral is 
28held in a trust that is not a registered organization, 
29only if the financing statement:

30(A)  provides, as the name of the debtor:

1(I)  if the organic record of the trust
2specifies a name for the trust, the name
3specified; or

4(II)  if the organic record of the trust does
5not specify a name for the trust, the name of the
6settlor or testator; and

7(B)  in a separate part of the financing
8statement:

9(I)  if the name is provided under clause
10(A)(I), indicates that the collateral is held in
11a trust; or

12(II)  if the name is provided under clause
13(A)(II), provides additional information
14sufficient to distinguish the trust from other
15trusts having one or more of the same settlors or
16the same testator and indicates that the
17collateral is held in a trust, unless the
18additional information so indicates.

19(4)  Subject to subsection (g), if the debtor is an
20individual to whom the Department of Transportation has
21issued a driver's license which has not expired under 75
22Pa.C.S. § 1510(a) (relating to issuance and content of
23driver's license) or an identification card under 75 Pa.C.S.
24§ 1510(b), only if the financing statement provides the name
25of the individual which is indicated on:

26(i)  except as set forth in subparagraph (ii), the
27driver's license; or

28(ii)  if there is no driver's license, the
29identification card.

30(5)  If the debtor is an individual to whom paragraph (4)

1does not apply, only if the financing statement provides the
2individual name of the debtor or the surname and first
3personal name of the debtor.

4[(4)] (6) In other cases:

5(i)  if the debtor has a name, only if [it] the 
6financing statement provides the [individual or]
7organizational name of the debtor; and

8(ii)  if the debtor does not have a name, only if
9[it] the financing statement provides the names of the
10partners, members, associates or other persons comprising
11the debtor, in a manner that each name provided would be 
12sufficient if the person named were the debtor.

13(b)  Additional debtor-related information.--A financing
14statement which provides the name of the debtor in accordance
15with subsection (a) is not rendered ineffective by the absence
16of:

17* * *

18(2)  unless required under subsection [(a)(4)(ii)] (a)(6)
19(ii), names of partners, members, associates or other persons
20comprising the debtor.

21* * *

22(f)  Name of decedent.--The name of the decedent indicated on
23the order appointing the personal representative of the decedent
24issued by the court having jurisdiction over the collateral is
25sufficient as the name of the decedent under subsection (a)(2).

26(g)  Multiple driver's licenses.--If the department has
27issued to an individual more than one driver's license or
28identification card of a kind described in subsection (a)(4),
29the one that was issued most recently is the one to which
30subsection (a)(4) refers.

1(h)  Definition.--As used in this section, the term "name of
2the settlor or testator" means:

3(1)  if the settlor is a registered organization, the
4name that is stated to be the settlor's name on the public
5organic record most recently filed with or issued or enacted
6by the settlor's jurisdiction of organization which purports
7to state, amend or restate the settlor's name; or

8(2)  in other cases, the name of the settlor or testator
9indicated in the trust's organic record.

10Section 6.  Sections 9507(c), 9515(f) and 9516(b)(3)(ii)
11introductory paragraph and (iii) and (5)(ii) and (iii) of Title
1213 are amended to read:

13§ 9507.  Effect of certain events on effectiveness of financing
14statement.

15* * *

16(c)  Change in debtor's name.--If [a debtor so changes its]
17the name that a filed financing statement provides for a debtor 
18becomes insufficient as the name of the debtor under section 
199503(a) (relating to name of a debtor and secured party) so that 
20the financing statement becomes seriously misleading under
21section 9506:

22(1)  the financing statement is effective to perfect a
23security interest in collateral acquired by the debtor
24before, or within four months after, the [change] filed 
25financing statement becomes seriously misleading; and

26(2)  the financing statement is not effective to perfect
27a security interest in collateral acquired by the debtor more
28than four months after the [change] filed financing statement 
29becomes seriously misleading, unless an amendment to the
30financing statement which renders the financing statement not

1seriously misleading is filed within four months after the
2[change] financing statement became seriously misleading.

3§ 9515.  Duration and effectiveness of financing statement;
4effect of lapsed financing statement.

5* * *

6(f)  Transmitting utility financing statement.--If a debtor
7is a transmitting utility and a filed initial financing
8statement so indicates, the financing statement is effective
9until a termination statement is filed.

10* * *

11§ 9516.  What constitutes filing; effectiveness of filing.

12* * *

13(b)  Refusal to accept record; filing does not occur.--Filing
14does not occur with respect to a record which a filing office
15refuses to accept because one of the following paragraphs
16applies:

17* * *

18(3)  The filing office is unable to index the record
19because of a reason stated in one of the following
20subparagraphs:

21* * *

22(ii)  In the case of an amendment or [correction]
23information statement, the record:

24* * *

25(iii)  In the case of an initial financing statement
26which provides the name of a debtor identified as an
27individual or an amendment which provides a name of a
28debtor identified as an individual which was not
29previously provided in the financing statement to which
30the record relates, the record does not identify the

1debtor's [last name] surname.

2* * *

3(5)  In the case of an initial financing statement or an
4amendment which provides a name of a debtor which was not
5previously provided in the financing statement to which the
6amendment relates, the record does not do [one or more] both
7of the following:

8* * *

9(ii)  Indicate whether the name provided as the name 
10of the debtor is the name of an individual or an
11organization.

12[(iii)  If the financing statement indicates that the
13debtor is an organization, provide:

14(A)  a type of organization for the debtor;

15(B)  a jurisdiction of organization for the
16debtor; or

17(C)  an organizational identification number for
18the debtor or indicate that the debtor has none.]

19* * *

20Section 7.  In section 9518 of Title 13, subsection (a) and
21subsection (b) heading, introductory paragraph and (2) are
22amended, subsections are added, subsection (c) is relettered and
23amended and subsection (d) is relettered and paragraphs (1)(i),
24(ii) introductory paragraph, (iii), (v) introductory paragraph
25and (A), (vi) and (2) are amended to read:

26§ 9518.  Claim concerning inaccurate or wrongfully filed record.

27(a)  [Correction statement] Statement with respect to record 
28indexed under person's name.--A person may file in the filing
29office [a correction] an information statement with respect to a
30record indexed there under the person's name if the person

1believes that the record is inaccurate or was wrongfully filed.

2(b)  [Sufficiency] Contents of [correction] statement under 
3subsection (a).--[A correction] An information statement under 
4subsection (a) must:

5* * *

6(2)  indicate that it is [a correction] an information
7statement; and

8* * *

9(c)  Statement by secured party of record.--A person may file
10in the filing office an information statement with respect to a
11record filed there if the person is a secured party of record
12with respect to the financing statement to which the record
13relates and believes that the person that filed the record was
14not entitled to do so under section 9509(d) (relating to persons
15entitled to file a record).

16(d)  Contents of statement under subsection (c).--An
17information statement under subsection (c) must:

18(1)  identify the record to which it relates by the file
19number assigned to the initial financing statement to which
20the record relates;

21(2)  indicate that it is an information statement; and

22(3)  provide the basis for the person's belief that the
23person that filed the record was not entitled to do so under
24section 9509(d).

25[(c)] (e)  Record not affected by [correction] information
26statement.--Except as provided in subsection [(d)] (f), the
27filing of [a correction] an information statement does not
28affect the effectiveness of an initial financing statement or
29other filed record.

30[(d)] (f) Fraudulent financing statements.--

1(1)  The Department of State may conduct an
2administrative hearing to determine if an initial financing
3statement was fraudulently filed in accordance with the
4following:

5(i)  The hearing shall be conducted in accordance
6with 2 Pa.C.S. (relating to Administrative Law and
7Procedure). The department shall determine the initial
8financing statement to be fraudulently filed for purposes
9of this subsection if it determines that no rational
10basis exists under section 9509 [(relating to persons
11entitled to file a record)] entitling the person to file
12the initial financing statement and it appears that the
13person filed the initial financing statement with intent
14to annoy, harass or harm the debtor.

15(ii)  If the department determines that the initial
16financing statement was fraudulently filed and no timely
17appeal of the determination was filed, the department
18shall file [a correction] an information statement with
19respect to the initial financing statement indexed there.
20In addition to complying with the requirements of
21subsection (b), the [correction] information statement
22filed by the department under this paragraph shall state
23all of the following:

24* * *

25(iii)  [A correction] An information statement filed
26by the department in accordance with paragraph (ii)
27creates a rebuttable presumption that the initial
28financing statement found to be fraudulently filed is
29ineffective.

30* * *

1(v)  If the department determines that the initial
2financing statement was fraudulently filed and the
3determination is appealed to Commonwealth Court, the
4department shall file [a correction] an information
5statement with respect to the initial financing statement
6indexed there only upon affirmation by the court of its
7determination. In addition to complying with the
8requirements of subsection (b), the [correction]
9information statement shall state all of the following:

10(A)  the [correction] information statement was
11filed by the department under this subsection;

12* * *

13(vi)  If the department files [a correction] an 
14information statement with respect to the initial
15financing statement indexed there under this subsection,
16it shall refer the matter for criminal prosecution to the
17Office of Attorney General pursuant to 18 Pa.C.S. § 4911
18(relating to tampering with public records or
19information).

20(2)  Nothing in this subsection limits the rights or
21remedies the debtor may have with respect to an initial
22financing statement that has been fraudulently filed. Nothing
23in this subsection limits the effectiveness of [a] any
24termination or [correction] information statement filed by a
25debtor under sections 9509(d)(2) and 9513 (relating to
26termination statement) or the rights of a debtor under
27section 9625 (relating to remedies for secured party's
28failure to comply with division).

29Section 8.  Section 9607(b)(2)(i) of Title 13 is amended to
30read:

1§ 9607.  Collection and enforcement by secured party.

2* * *

3(b)  Nonjudicial enforcement of mortgage.--If necessary to
4enable a secured party to exercise under subsection (a)(3) the
5right of a debtor to enforce a mortgage nonjudicially, the
6secured party may record in the office in which a record of the
7mortgage is recorded:

8* * *

9(2)  The secured party's sworn affidavit in recordable
10form stating that:

11(i)  a default has occurred with respect to the 
12obligation secured by the mortgage; and

13* * *

14Section 9.  Title 13 is amended by adding a chapter to read:

15CHAPTER 98

16TRANSITION PROVISIONS FOR 2013 AMENDMENTS

17Sec.

189800.  Definitions.

199801.  Effective date.

209802.  Savings clause.

219803.  Security interest perfected before effective date.

229804.  Security interest unperfected before effective date.

239805.  Effectiveness of action taken before effective date.

249806.  When initial financing statement suffices to continue
25effectiveness of financing statement.

269807.  Amendment of pre-effective-date financing statement.

279808.  Person entitled to file initial financing statement or
28continuation statement.

299809.  Priority.

30§ 9800.  Definitions.

1The following words and phrases when used in this chapter
2shall have the meanings given to them in this section unless the
3context clearly indicates otherwise:

4"2013 Revision."  The amendments which:

5(1)  affect this division; and

6(2)  are made by the act of     , 2013 (P.L.    ,
7No.    ) entitled "An act amending Titles 13 (Commercial
8Code), 30 (Fish) and 75 (Vehicles) of the Pennsylvania
9Consolidated Statutes, revising secured transaction
10provisions relating to definitions, to control of electronic
11chattel paper, to location of debtor, to perfection of
12security interests in property subject to certain statutes,
13regulations and treaties, to continued perfection of security
14interest following change in governing law, to interests
15which take priority over or take free of security interest or
16agricultural lien, to priority of security interests created
17by new debtor, to discharge of account debtor, notification
18of assignment, identification and proof of assignment,
19restrictions on assignment of accounts, chattel paper,
20payment intangibles and promissory notes ineffective, to
21restrictions on assignment of promissory notes, health-care-
22insurance receivables and certain general intangibles
23ineffective, to contents of financing statement, record of
24mortgage as financing statement, time of filing financing
25statement, to name of debtor and secured party, to effect of
26certain events on effectiveness of financing statement, to
27duration and effectiveness of financing statement, effect of
28lapsed financing statement, to what constitutes filing,
29effectiveness of filing, to claim concerning inaccurate or
30wrongfully filed record; to collection and enforcement by

1secured party; providing for transition provisions for 2013
2amendments; imposing duties upon the Department of State and
3the Department of Transportation; and making editorial
4changes."

5§ 9801.  Effective date.

6The 2013 Revision takes effect July 1, 2013.

7§ 9802.  Savings clause.

8(a)  Pre-effective-date transactions or liens.--Except as
9otherwise provided in this part, the 2013 Revision applies to a
10transaction or lien within its scope, even if the transaction or
11lien was entered into or created before the 2013 Revision takes
12effect.

13(b)  Pre-effective-date proceedings.--The 2013 Revision does
14not affect an action, case, or proceeding commenced before the
152013 Revision takes effect.

16§ 9803.  Security interest perfected before effective date.

17(a)  Continuing perfection; perfection requirements
18satisfied.--A security interest that is a perfected security
19interest immediately before the 2013 Revision takes effect is a
20perfected security interest under this division as amended by
21the 2013 Revision if, when the 2013 Revision takes effect, the
22applicable requirements for attachment and perfection under this
23division as amended by the 2013 Revision are satisfied without
24further action.

25(b)  Continuing perfection: perfection requirements not
26satisfied.--Except as otherwise provided in section 9805
27(relating to effectiveness of action before effective date), if,
28immediately before the 2013 Revision takes effect, a security
29interest is a perfected security interest, but the applicable
30requirements for perfection under this division as amended by

1the 2013 Revision are not satisfied when the 2013 Revision takes
2effect, the security interest remains perfected thereafter only
3if the applicable requirements for perfection under this
4division as amended by the 2013 Revision are satisfied within
5one year after the 2013 Revision takes effect.

6§ 9804.  Security interest unperfected before effective date.

7A security interest that is an unperfected security interest
8immediately before the 2013 Revision takes effect becomes a
9perfected security interest:

10(1)  without further action, when the 2013 Revision takes
11effect if the applicable requirements for perfection under
12this division as amended by the 2013 Revision are satisfied
13before or at that time; or

14(2)  when the applicable requirements for perfection are
15satisfied if the requirements are satisfied after that time.

16§ 9805.  Effectiveness of action taken before effective date.

17(a)  Pre-effective-date filing effective.--The filing of a
18financing statement before the 2013 Revision takes effect is
19effective to perfect a security interest to the extent the
20filing would satisfy the applicable requirements for perfection
21under this division as amended by the 2013 Revision.

22(b)  When pre-effective-date filing becomes ineffective.--The
232013 Revision does not render ineffective an effective financing
24statement that, before the 2013 Revision takes effect, is filed
25and satisfies the applicable requirements for perfection under
26the law of the jurisdiction governing perfection as provided in
27this division as it existed before amendment by the 2013
28Revision. However, except as otherwise provided in subsections
29(c) and (d) and section 9806 (relating to when initial financing
30statement suffices to continue effectiveness of financing

1statement), the financing statement ceases to be effective:

2(1)  if the financing statement is filed in this
3Commonwealth, at the time the financing statement would have
4ceased to be effective had the 2013 Revision not taken
5effect; or

6(2)  if the financing statement is filed in another
7jurisdiction, at the earlier of:

8(i)  the time the financing statement would have
9ceased to be effective under the law of that
10jurisdiction; or

11(ii)  June 30, 2018.

12(c)  Continuation statement.--The filing of a continuation
13statement after the 2013 Revision takes effect does not continue
14the effectiveness of a financing statement filed before the 2013
15Revision takes effect. However, upon the timely filing of a
16continuation statement after the 2013 Revision takes effect and
17in accordance with the law of the jurisdiction governing
18perfection as provided in this division as amended by the 2013
19Revision, the effectiveness of a financing statement filed in
20the same office in that jurisdiction before the 2013 Revision
21takes effect continues for the period provided by the law of
22that jurisdiction.

23(d)  Application of subsection (b)(2)(ii) to transmitting
24utility financing statement.--Subsection (b)(2)(ii) applies to a
25financing statement that, before the 2013 Revision takes effect,
26is filed against a transmitting utility and satisfies the
27applicable requirements for perfection under the law of the
28jurisdiction governing perfection as provided in this division
29as it existed before amendment by the 2013 Revision, only to the
30extent that this division as amended by the 2013 Revision

1provides that the law of a jurisdiction other than the
2jurisdiction in which the financing statement is filed governs
3perfection of a security interest in collateral covered by the
4financing statement.

5(e)  Application of Chapter 95.--A financing statement that
6includes a financing statement filed before the 2013 Revision
7takes effect and a continuation statement filed after the 2013
8Revision takes effect is effective only to the extent that it
9satisfies the requirements of Chapter 95 (relating to filing) as
10amended by the 2013 Revision for an initial financing statement.
11A financing statement that indicates that the debtor is a
12decedent's estate indicates that the collateral is being
13administered by a personal representative within the meaning of
14section 9503(a)(2) (relating to name of debtor and secured
15party) as amended by the 2013 Revision. A financing statement
16that indicates that the debtor is a trust or is a trustee acting
17with respect to property held in trust indicates that the
18collateral is held in a trust within the meaning of section
199503(a)(3) as amended by the 2013 Revision.

20§ 9806.  When initial financing statement suffices to continue
21effectiveness of financing statement.

22(a)  Initial financing statement in lieu of continuation
23statement.--The filing of an initial financing statement in the
24office specified in section 9501 (relating to filing office)
25continues the effectiveness of a financing statement filed
26before the 2013 Revision takes effect if:

27(1)  the filing of an initial financing statement in that
28office would be effective to perfect a security interest
29under this division as amended by the 2013 Revision;

30(2)  the pre-effective-date financing statement was filed

1in an office in another state; and

2(3)  the initial financing statement satisfies subsection
3(c).

4(b)  Period of continued effectiveness.--The filing of an
5initial financing statement under subsection (a) continues the
6effectiveness of the pre-effective-date financing statement:

7(1)  if the initial financing statement is filed before
8the 2013 Revision takes effect, for the period provided in
9section 9515(a) through (e) and (g) (relating to duration and
10effectiveness of financing statement; effect of lapsed
11financing statement) with respect to an initial financing
12statement; and

13(2)  if the initial financing statement is filed after
14the 2013 Revision takes effect, for the period provided in
15section 9515(f) as amended by the 2013 Revision with respect
16to an initial financing statement.

17(c)  Requirements for initial financing statement under
18subsection (a).--To be effective for purposes of subsection (a),
19an initial financing statement must:

20(1)  satisfy the requirements of Chapter 95 (relating to
21filing) as amended by the 2013 Revision for an initial
22financing statement;

23(2)  identify the pre-effective-date financing statement
24by indicating the office in which the financing statement was
25filed and providing the dates of filing and file numbers, if
26any, of the financing statement and of the most recent
27continuation statement filed with respect to the financing
28statement; and

29(3)  indicate that the pre-effective-date financing
30statement remains effective.

1§ 9807.  Amendment of pre-effective-date financing statement.

2(a)  Definitions.--Refer to subsection (f).

3(b)  Applicable law.--After the 2013 Revision takes effect, a
4person may add or delete collateral covered by, continue or
5terminate the effectiveness of, or otherwise amend the
6information provided in, a pre-effective-date financing
7statement only in accordance with the law of the jurisdiction
8governing perfection as provided in this division as amended by
9the 2013 Revision. However, the effectiveness of a pre-
10effective-date financing statement also may be terminated in
11accordance with the law of the jurisdiction in which the
12financing statement is filed.

13(c)  Method of amending: general rule.--Except as otherwise
14provided in subsection (d), if the law of this Commonwealth
15governs perfection of a security interest, the information in a
16pre-effective-date financing statement may be amended after the
172013 Revision takes effect only if:

18(1)  the pre-effective-date financing statement and an
19amendment are filed in the office specified in section 9501
20(relating to filing office);

21(2)  an amendment is filed in the office specified in
22section 9501 concurrently with, or after the filing in that
23office of, an initial financing statement that satisfies
24section 9806(c) (relating to when initial filing statement
25suffices to continue effectiveness of financing statement);
26or

27(3)  an initial financing statement that provides the
28information as amended and satisfies section 9806(c) is filed
29in the office specified in section 9501.

30(d)  Method of amending: continuation.--If the law of this

1Commonwealth governs perfection of a security interest, the
2effectiveness of a pre-effective-date financing statement may be
3continued only under section 9805(c) and (e) (relating to
4effectiveness of action taken before effective date) or 9806.

5(e)  Method of amending: additional termination rule.--
6Whether or not the law of this Commonwealth governs perfection
7of a security interest, the effectiveness of a pre-effective-
8date financing statement filed in this Commonwealth may be
9terminated after the 2013 Revision takes effect by filing a
10termination statement in the office in which the pre-effective-
11date financing statement is filed, unless an initial financing
12statement that satisfies section 9806(c) has been filed in the
13office specified by the law of the jurisdiction governing
14perfection as provided in this division as amended by the 2013
15Revision as the office in which to file a financing statement.

16(f)  Definition.--As used in this section, the term "pre-
17effective-date financing statement" means a financing statement
18filed before the 2013 Revision takes effect.

19§ 9808.  Person entitled to file initial financing statement or
20continuation statement.

21A person may file an initial financing statement or a
22continuation statement under this part if:

23(1)  the secured party of record authorizes the filing;
24and

25(2)  the filing is necessary under this part:

26(i)  to continue the effectiveness of a financing
27statement filed before the 2013 Revision takes effect; or

28(ii)  to perfect or continue the perfection of a
29security interest.

30§ 9809.  Priority.

1The 2013 Revision determines the priority of conflicting
2claims to collateral. However, if the relative priorities of the
3claims were established before the 2013 Revision takes effect,
4this division as it existed before amendment determines
5priority.

6Section 10.  Section 5323(b) of Title 30 is amended to read:

7§ 5323.  Content and effect of certificate of title.

8* * *

9(b)  Certificate as evidence and notice.--A certificate of
10title issued by the commission is prima facie evidence of the
11facts appearing on the certificate. Except as otherwise provided 
12in 13 Pa.C.S. §§ 9311(d) (relating to perfection of security
13interests in property subject to certain statutes, regulations
14and treaties), 9315(c) and (d) (relating to secured party's
15rights on disposition of collateral and in proceeds) and 9316(d)
16and (e) (relating to [continued perfection of security interest
17following] effect of change in governing law), the certificate
18shall be adequate notice to the Commonwealth, creditors,
19subsequent lienholders and purchasers that a lien against the
20boat exists.

21Section 11.  Sections 1137 and 7712.8(a) of Title 75 are
22amended to read:

23§ 1137.  Subchapter exclusive for perfecting security interest.

24The method provided in this subchapter for perfecting and
25giving notice of security interests is exclusive, except as
26otherwise provided in 13 Pa.C.S. §§ 9315 (relating to secured
27party's rights on disposition of collateral and in proceeds) and
289316(d) and (e) (relating to [continued perfection of security
29interest following] effect of change in governing law).

30§ 7712.8.  Perfection of security interest in a snowmobile or

1ATV.

2(a)  Applicability of section.--Except as otherwise provided
3in 13 Pa.C.S. §§ 9311(d) (relating to perfection of security
4interests in property subject to certain statutes, regulations
5and treaties), 9315(c) and (d) (relating to secured party's
6rights on disposition of collateral and in proceeds) and 9316(d)
7and (e) (relating to [continued perfection of security interest
8following] effect of change in governing law), this section
9provides the exclusive method of perfecting a security interest
10in a snowmobile or ATV for which a certificate of title is
11required under this subchapter.

12* * *

13Section 12.  In order to implement the amendment of 13
14Pa.C.S. § 9503, the Department of State and the Department of
15Transportation shall coordinate development and maintenance of
16electronic systems for entering and searching data.

17Section 13.  This act shall take effect July 1, 2013.