THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY GRELL, AUMENT, BAKER, BARBIN, BEAR, BRENNAN, BUXTON, CAUSER, CREIGHTON, CUTLER, DENLINGER, EVERETT, GEIST, GIBBONS, GINGRICH, GROVE, HARPER, HARRIS, HELM, HESS, HORNAMAN, HUTCHINSON, M. K. KELLER, MANN, MARSHALL, PETRI, REED, SAINATO, SAYLOR, SONNEY, WATSON, MILLER, SCHRODER, HICKERNELL, DELOZIER AND CALTAGIRONE, FEBRUARY 29, 2012

AS REPORTED FROM COMMITTEE ON JUDICIARY, HOUSE OF REPRESENTATIVES, AS AMENDED, JUNE 19, 2012   

AN ACT

Amending Titles 13 (Commercial Code), 30 (Fish) and 75

(Vehicles) of the Pennsylvania Consolidated Statutes,

revising secured transaction provisions relating to

definitions, to control of electronic chattel paper, to

location of debtor, to perfection of security interests in

property subject to certain statutes, regulations and

treaties, to continued perfection of security interest

following change in governing law, to interests which take

priority over or take free of security interest or

agricultural lien, to priority of security interests created

by new debtor, to discharge of account debtor, notification

of assignment, identification and proof of assignment,

restrictions on assignment of accounts, chattel paper,

payment intangibles and promissory notes ineffective, to

restrictions on assignment of promissory notes, health-care-

insurance receivables and certain general intangibles

ineffective, to contents of financing statement, record of

mortgage as financing statement, time of filing financing

statement, to name of debtor and secured party, to effect of

certain events on effectiveness of financing statement, to

duration and effectiveness of financing statement, effect of

lapsed financing statement, to what constitutes filing,

effectiveness of filing, to claim concerning inaccurate or

wrongfully filed record and to collection and enforcement by

secured party; providing for transition provisions for 2012

amendments; imposing duties upon the Department of State and

the Department of Transportation; and making editorial

changes.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  The definitions of "authenticate," "certificate

of title," "jurisdiction of organization" and "registered

organization" in section 9102(a) of Title 13 of the Pennsylvania

Consolidated Statutes are amended and the subsection is amended

by adding a definition to read:

§ 9102.  Definitions and index of definitions.

(a)  Division 9 definitions.--The following words and phrases

when used in this division shall have the meanings given to them

in this subsection:

* * *

"Authenticate."  To:

(i)  sign; or

(ii)  [execute or otherwise adopt a symbol, or

encrypt or similarly process a record in whole or in

part,] with [the] present intent [of the authenticating

person to identify the person and] to adopt or accept a

record, attach to or logically associate with the record

an electrical sound, symbol or process.

* * *

"Certificate of title."  A certificate of title with respect

to which a statute provides for the security interest in

question to be indicated on the certificate as a condition or

result of the security interest's obtaining priority over the

rights of a lien creditor with respect to the collateral. The

term includes another record maintained as an alternative to a

certificate of title by the governmental unit that issues

certificates of title if a statute permits the security interest

in question to be indicated on the record as a condition or

result of the security interest's obtaining priority over the

rights of a lien creditor with respect to the collateral.

* * *

"Jurisdiction of organization."  With respect to a registered

organization, the jurisdiction under whose law the organization

is formed or organized.

* * *

"Public organic record."  A record that is available to the

public for inspection and is:

(1)  a record consisting of the record initially filed

with or issued by a state or the United States to form or

organize an organization and any record filed with or issued

by the state or the United States which amends or restates

the initial record;

(2)  an organic record of a business trust consisting of

the record initially filed with a state and any record filed

with the state which amends or restates the initial record,

if a statute of the state governing business trusts requires

that the record be filed with the state; or

(3)  a record consisting of legislation enacted by the

legislature of a state or the Congress of the United States

which forms or organizes an organization, any record amending

the legislation, and any record filed with or issued by the

state or the United States which amends or restates the name

of the organization.

* * *

"Registered organization."  An organization formed or

organized solely under the law of a single state or the United

States [and as to which the state or the United States must

maintain a public record showing the organization to have been

organized.] by the filing of a public organic record, with the

issuance of a public organic record by, or the enactment of

legislation by the state or the United States. The term includes

a business trust that is formed or organized under the law of a

single state if a statute of the state governing business trusts

requires that a business trust's organic record be filed with

the state.

* * *

Section 2.  Sections 9105, 9307(f)(2), 9308(a), 9310(b)(10),

9311(a)(2) and (3) and (b) and 9313(b) of Title 13 are amended

to read:

§ 9105.  Control of electronic chattel paper.

(a)  General rule; control of electronic chattel paper.--A

secured party has control of electronic chattel paper if a

system employed for evidencing the transfer of interests in the

chattel paper reliably establishes the secured party as the

person to which the chattel paper was assigned.

(b)  Specific facts giving control.--A system satisfies

subsection (a) if the record or records comprising the chattel

paper are created, stored and assigned in such a manner that:

(1)  a single authoritative copy of the record or records

exists which is unique, identifiable and, except as otherwise

provided in paragraphs (4), (5) and (6), unalterable;

(2)  the authoritative copy identifies the secured party

as the assignee of the record or records;

(3)  the authoritative copy is communicated to and

maintained by the secured party or its designated custodian;

(4)  copies or [revisions] amendments which add or change

an identified assignee of the authoritative copy can be made

only with the [participation] consent of the secured party;

(5)  each copy of the authoritative copy and any copy of

a copy is readily identifiable as a copy which is not the

authoritative copy; and

(6)  any [revision] amendment of the authoritative copy

is readily identifiable as [an] authorized or unauthorized

[revision].

§ 9307.  Location of debtor.

* * *

(f)  Location of registered organization organized under

Federal law; bank branches and agencies.--Except as otherwise

provided in subsection (i), a registered organization which is

organized under the law of the United States and a branch or

agency of a bank which is not organized under the law of the

United States or a state are located:

* * *

(2)  in the state which the registered organization,

branch or agency designates, if the law of the United States

authorizes the registered organization, branch or agency to

designate its state of location, including by designating its

main office, home office or other comparable office; or

* * *

§ 9308.  When security interest or agricultural lien is

perfected; continuity of perfection.

(a)  Perfection of security interest.--Except as otherwise

provided in this section and section 9309 (relating to security

interest perfected upon attachment), a security interest is

perfected if it has attached and all of the applicable

requirements for perfection in sections 9310 (relating to when

filing required to perfect security interest or agricultural

lien; security interests and agricultural liens to which filing

provisions do not apply) through 9316 (relating to [continued

perfection of security interest following] effect of change in

governing law) have been satisfied. A security interest is

perfected when it attaches if the applicable requirements are

satisfied before the security interest attaches.

* * *

§ 9310.  When filing required to perfect security interest or

agricultural lien; security interests and

agricultural liens to which filing provisions do not

apply.

* * *

(b)  Exceptions: filing not necessary.--The filing of a

financing statement is not necessary to perfect a security

interest:

* * *

(10)  which is perfected under section 9316 (relating to

[continued perfection of security interest following] effect

of change in governing law).

* * *

§ 9311.  Perfection of security interests in property subject to

certain statutes, regulations and treaties.

(a)  Security interest subject to other law.--Except as

otherwise provided in subsection (d), the filing of a financing

statement is not necessary or effective to perfect a security

interest in property subject to:

* * *

(2)  a [certificate-of-title] statute of this

Commonwealth or regulations promulgated thereunder, to the

extent such statute or regulations provide for a security

interest to be indicated on [the] certificate of title as a

condition or result of perfection; or

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

jurisdiction which provides for a security interest to be

indicated on [the] a certificate of title as a condition or

result of the security interest's obtaining priority over the

rights of a lien creditor with respect to the property.

(b)  Compliance with other law.--Compliance with the

requirements of a statute, regulation or treaty described in

subsection (a) for obtaining priority over the rights of a lien

creditor is equivalent to the filing of a financing statement

under this division. Except as otherwise provided in subsection

(d) and sections 9313 (relating to when possession by or

delivery to secured party perfects security interest without

filing) and 9316(d) and (e) (relating to [continued perfection

of security interest following] effect of change in governing

law) for goods covered by a certificate of title, a security

interest in property subject to a statute, regulation or treaty

described in subsection (a) may be perfected only by compliance

with those requirements, and a security interest so perfected

remains perfected notwithstanding a change in the use or

transfer of possession of the collateral.

* * *

§ 9313.  When possession by or delivery to secured party

perfects security interest without filing.

* * *

(b)  Goods covered by certificate of title.--With respect to

goods covered by a certificate of title issued by the

Commonwealth, a secured party may perfect a security interest in

the goods by taking possession of the goods only in the

circumstances described in section 9316(d) (relating to

[continued perfection of security interest following] effect of 

change in governing law).

* * *

Section 3.  Section 9316 heading of Title 13 is amended and

the section is amended by adding subsections to read:

§ 9316.  [Continued perfection of security interest following]

Effect of change in governing law.

* * *

(h)  Effect on filed financing statement of change in

governing law.--The following rules apply to collateral to which

a security interest attaches within four months after the debtor

changes its location to another jurisdiction:

(1)  A financing statement filed before the change

pursuant to the law of the jurisdiction designated in section

9301(a) or 9305(c) is effective to perfect a security

interest in the collateral if the financing statement would

have been effective to perfect a security interest in the

collateral had the debtor not changed its location.

(2)  If a security interest perfected by a financing

statement that is effective under paragraph (1) becomes

perfected under the law of the other jurisdiction before the

earlier of the time the financing statement would have become

ineffective under the law of the jurisdiction designated in

section 9301(a) or 9305(c) or the expiration of the four-

month period, it remains perfected thereafter. If the

security interest does not become perfected under the law of

the other jurisdiction before the earlier time or event, it

becomes unperfected and is deemed never to have been

perfected as against a purchaser of the collateral for value.

(i)  Effect of change in governing law on financing statement

filed against original debtor.--If a financing statement naming

an original debtor is filed pursuant to the law of the

jurisdiction designated in section 9301(a) or 9305(c) and the

new debtor is located in another jurisdiction, the following

rules apply:

(1) The financing statement is effective to perfect a

security interest in collateral acquired by the new debtor

before, and within four months after, the new debtor becomes

bound under section 9203(d) (relating to attachment and

enforceability of security interest; proceeds; supporting

obligations; formal requisites), if the financing statement

would have been effective to perfect a security interest in

the collateral had the collateral been acquired by the

original debtor.

(2)  A security interest perfected by the financing

statement and which becomes perfected under the law of the

other jurisdiction before the earlier of the time the

financing statement would have become ineffective under the

law of the jurisdiction designated in section 9301(a) or

9305(c) or the expiration of the four-month period remains

perfected thereafter. A security interest that is perfected

by the financing statement but which does not become

perfected under the law of the other jurisdiction before the

earlier time or event becomes unperfected and is deemed never

to have been perfected as against a purchaser of the

collateral for value.

Section 4.  Sections 9317(b) and (d), 9320(c), 9326, 9406(e),

9408(b) and 9502(c) of Title 13 are amended to read:

§ 9317.  Interests which take priority over or take free of

security interest or agricultural lien.

* * *

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

provided in subsection (e), a buyer, other than a secured party,

of tangible chattel paper, tangible documents, goods,

instruments or a [security certificate] certificated security 

takes free of a security interest or agricultural lien if the

buyer gives value and receives delivery of the collateral

without knowledge of the security interest or agricultural lien

and before it is perfected.

* * *

(d)  Licensees and buyers of certain collateral.--A licensee

of a general intangible or a buyer, other than a secured party,

of [accounts, electronic chattel paper, electronic documents,

general intangibles or investment property] collateral other

than tangible chattel paper, tangible documents, goods,

instruments or a certificated security takes free of a security

interest if the licensee or buyer gives value without knowledge

of the security interest and before it is perfected.

* * *

§ 9320.  Buyer of goods.

* * *

(c)  Effectiveness of filing for subsection (b).--To the

extent that it affects the priority of a security interest over

a buyer of goods under subsection (b), the period of

effectiveness of a filing made in the jurisdiction in which the

seller is located is governed by section 9316(a) and (b)

(relating to [continued perfection of security interest

following] effect of change in governing law).

* * *

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

(a)  Subordination of security interest created by new

debtor.--Subject to subsection (b), a security interest that is 

created by a new debtor [which is] in collateral in which the

new debtor has or acquires rights and is perfected solely by a

filed financing statement which [is effective solely under

section 9508 (relating to effectiveness of financing statement

if new debtor becomes bound by security agreement) in collateral

in which a new debtor has or acquires rights] would be

ineffective to perfect the security interest but for the

application of section 9316(i)(1) (relating to effect of change

in governing law) or 9508 (relating to effectiveness of

financing statement if new debtor becomes bound by security

agreement) is subordinate to a security interest in the same

collateral which is perfected other than by such a filed

financing statement [which is effective solely under section

9508].

(b)  Priority under other provisions; multiple original

debtors.--The other provisions of this chapter determine the

priority among conflicting security interests in the same

collateral perfected by filed financing statements [which are

effective solely under section 9508] described in subsection

(a). However, if the security agreements to which a new debtor

became bound as debtor were not entered into by the same

original debtor, the conflicting security interests rank

according to priority in time of the new debtor's having become

bound.

§ 9406.  Discharge of account debtor; notification of

assignment; identification and proof of assignment;

restrictions on assignment of accounts, chattel

paper, payment intangibles and promissory notes

ineffective.

* * *

(e)  Inapplicability of subsection (d) to certain sales.--

Subsection (d) does not apply to the sale of a payment

intangible or promissory note, other than a sale pursuant to a

disposition under section 9610 (relating to disposition of

collateral after default) or an acceptance of collateral under

section 9620 (relating to acceptance of collateral in full or

partial satisfaction of obligation; compulsory disposition of

collateral).

* * *

§ 9408.  Restrictions on assignment of promissory notes, health-

care-insurance receivables and certain general

intangibles ineffective.

* * *

(b)  Applicability of subsection (a) to sales of certain

rights to payment.--Subsection (a) applies to a security

interest in a payment intangible or promissory note only if the

security interest arises out of a sale of the payment intangible

or promissory note, other than a sale pursuant to a disposition

under section 9610 (relating to disposition of collateral after

default) or an acceptance of collateral under section 9620

(relating to acceptance of collateral in full or partial

satisfaction of obligation; compulsory disposition of

collateral).

* * *

§ 9502.  Contents of financing statement; record of mortgage as

financing statement; time of filing financing

statement.

* * *

(c)  Record of mortgage as financing statement.--A record of

a mortgage is effective, from the date of recording, as a

financing statement filed as a fixture filing or as a financing

statement covering as-extracted collateral or timber to be cut

only if all of the following apply:

(1)  [the] The record indicates the goods or accounts

which it covers[;].

(2)  [the] The goods are or are to become fixtures

related to the real property described in the record, or the

collateral is related to the real property described in the

record and is as-extracted collateral or timber to be cut[;].

(3)  [the] The record satisfies the requirements for a

financing statement in this section [other than an

indication] subject to the following:

(i)  The record need not indicate that it is to be

filed in the real property records[; and].

(ii)  The record sufficiently provides the name of a

debtor who is an individual if it provides the individual

name of the debtor or the surname and first personal name

of the debtor, even if the debtor is an individual to

whom section 9503(a)(4)(relating to name of debtor and

secured party) applies.

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

* * *

Section 5.  Section 9503(a) and (b)(2) of Title 13 are

amended and the section is amended by adding subsections to

read: 

§ 9503.  Name of debtor and secured party.

(a)  Sufficiency of debtor's name.--A financing statement

sufficiently provides the name of the debtor:

(1)  [If] 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 [of the debtor

indicated] that is stated to be the registered organization's

name on the public organic record [of] most recently filed

with or issued or enacted by the [debtor's] registered

organization's jurisdiction of organization which [shows the

debtor to have been organized] purports to state, amend or

restate the registered organization's name.

(2)  [If] Subject to subsection (f), if the [debtor is a

decedent's estate] 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 [debtor is an estate]

collateral is being administered by a personal

representative.

(3)  If the [debtor is a trust or a trustee acting with

respect to property held in trust, only if the financing

statement:

(i)  provides the name specified for the trust in its

organic documents or, if no name is specified, provides

the name of the settlor and additional information

sufficient to distinguish the debtor from other trusts

having one or more of the same settlors; and

(ii)  indicates, in the debtor's name or otherwise,

that the debtor is a trust or is a trustee acting with

respect to property held in trust; and] collateral is

held in a trust that is not a registered organization,

only if the financing statement:

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

(I)  if the organic record of the trust

specifies a name for the trust, the name

specified; or

(II)  if the organic record of the trust does

not specify a name for the trust, the name of the

settlor or testator; and

(B)  in a separate part of the financing

statement:

(I)  if the name is provided under clause

(A)(I), indicates that the collateral is held in

a trust; or

(II)  if the name is provided under clause

(A)(II), 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 subsection (g), if the debtor is an

individual to whom the Department of Transportation has

issued a driver’s license which has not expired under 75

Pa.C.S. § 1510(a) (relating to issuance and content of

driver's license) or an identification card under 75 Pa.C.S.

§ 1510(b), only if the financing statement provides the name

of the individual which is indicated on:

(i)  except as set forth in subparagraph (ii), the

driver’s license; or

(ii)  if there is no driver's license, the

identification card.

(5)  If the 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.

[(4)] (6) In other cases:

(i)  if the debtor has a name, only if [it] the

financing statement provides the [individual or]

organizational name of the debtor; and

(ii)  if the debtor does not have a name, only if

[it] 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.

(b)  Additional debtor-related information.--A financing

statement which provides the name of the debtor in accordance

with subsection (a) is not rendered ineffective by the absence

of:

* * *

(2)  unless required under subsection [(a)(4)(ii)] (a)(6)

(ii), names of partners, members, associates or other persons

comprising the debtor.

* * *

(f)  Name of decedent.--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 subsection (a)(2).

(g)  Multiple driver’s licenses.--If the department has

issued to an individual more than one driver's license or

identification card of a kind described in subsection (a)(4),

the one that was issued most recently is the one to which

subsection (a)(4) refers.

(h)  Definition.--As used in this section, the term "name of

the settlor or testator" means:

(1)  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; or

(2)  in other cases, the name of the settlor or testator

indicated in the trust's organic record.

Section 6.  Sections 9507(c), 9515(f) and 9516(b)(3)(ii)

introductory paragraph and (iii) and (5)(ii) and (iii) of Title

13 are amended to read:

§ 9507.  Effect of certain events on effectiveness of financing

statement.

* * *

(c)  Change in debtor's name.--If [a debtor so changes its]

the name that a filed financing statement provides for a debtor

becomes insufficient as the name of the debtor under section

9503(a) (relating to name of a debtor and secured party) so that

the financing statement becomes seriously misleading under

section 9506:

(1)  the financing statement is effective to perfect a

security interest in collateral acquired by the debtor

before, or within four months after, the [change] filed

financing statement becomes seriously misleading; and

(2)  the financing statement is not effective to perfect

a security interest in collateral acquired by the debtor more

than four months after the [change] filed financing statement

becomes seriously misleading, unless an amendment to the

financing statement which renders the financing statement not

seriously misleading is filed within four months after the

[change] financing statement became seriously misleading.

§ 9515.  Duration and effectiveness of financing statement;

effect of lapsed financing statement.

* * *

(f)  Transmitting utility financing statement.--If a debtor

is a transmitting utility and a filed initial financing

statement so indicates, the financing statement is effective

until a termination statement is filed.

* * *

§ 9516.  What constitutes filing; effectiveness of filing.

* * *

(b)  Refusal to accept record; filing does not occur.--Filing

does not occur with respect to a record which a filing office

refuses to accept because one of the following paragraphs

applies:

* * *

(3)  The filing office is unable to index the record

because of a reason stated in one of the following

subparagraphs:

* * *

(ii)  In the case of an amendment or [correction]

information statement, the record:

* * *

(iii)  In the case of an initial financing statement

which provides the name of a debtor identified as an

individual or an amendment which 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] surname.

* * *

(5)  In the case of an initial financing statement or an

amendment which provides a name of a debtor which was not

previously provided in the financing statement to which the

amendment relates, the record does not do [one or more] both 

of the following:

* * *

(ii)  Indicate whether the name provided as the name

of the debtor is the name of an individual or an

organization.

[(iii)  If the financing statement indicates that the

debtor is an organization, provide:

(A)  a type of organization for the debtor;

(B)  a jurisdiction of organization for the

debtor; or

(C)  an organizational identification number for

the debtor or indicate that the debtor has none.]

* * *

Section 7.  Section 9518(a), (b)(2), (c) and (d)(1)(i) of

<--

Title 13 are amended and the section is amended by adding

subsections to read:

Section 7.  In section 9518 of Title 13, subsection (a) and

<--

subsection (b) heading, introductory paragraph and (2) are

amended, subsections are added, subsection (c) is relettered and

amended and subsection (d) is relettered and paragraphs (1)(i),

(ii) introductory paragraph, (iii), (v) introductory paragraph

and (A), (vi) and (2) are amended to read:

§ 9518.  Claim concerning inaccurate or wrongfully filed record.

(a)  [Correction statement] Statement with respect to record

indexed under person's name.--A person may file in the filing

office [a correction] an information statement with respect to a

record indexed there under the person's name if the person

believes that the record is inaccurate or was wrongfully filed.

(b)  [Sufficiency] Contents of [correction] statement under

subsection (a).--[A correction] An information statement under

subsection (a) must:

* * *

(2)  indicate that it is [a correction] an information 

statement; and

* * *

(c)  Statement by secured party of record.--A person may file

in the filing office an information statement with respect to a

record filed there if the person is a secured party of record

with respect to the financing statement to which the record

relates and believes that the person that filed the record was

not entitled to do so under section 9509(d) (relating to persons

entitled to file a record).

(d)  Contents of statement under subsection (c).--An

information statement under subsection (c) must:

(1)  identify the record to which it relates by the file

number assigned to the initial financing statement to which

the record relates;

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

(3)  provide the basis for the person’s belief that the

person that filed the record was not entitled to do so under

section 9509(d).

[(c)] (e)  Record not affected by [correction] information 

<--

statement.--Except as provided in subsection [(d)] (f), the

filing of [a correction] an information statement does not

<--

affect the effectiveness of an initial financing statement or

other filed record.

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

(1)  The Department of State may conduct an

administrative hearing to determine if an initial financing

statement was fraudulently filed in accordance with the

following:

(i)  The hearing shall be conducted in accordance

with 2 Pa.C.S. (relating to Administrative Law and

Procedure). The department shall determine the initial

financing statement to be fraudulently filed for purposes

of this subsection if it determines that no rational

basis exists under section 9509 [(relating to persons

entitled to file a record)] entitling the person to file

the initial financing statement and it appears that the

person filed the initial financing statement with intent

to annoy, harass or harm the debtor.

* * *

<--

(ii)  If the department determines that the initial

<--

financing statement was fraudulently filed and no timely

appeal of the determination was filed, the department

shall file [a correction] an information statement with

respect to the initial financing statement indexed there.

In addition to complying with the requirements of

subsection (b), the [correction] information statement

filed by the department under this paragraph shall state

all of the following:

* * *

(iii)  [A correction] An information statement filed

by the department in accordance with paragraph (ii)

creates a rebuttable presumption that the initial

financing statement found to be fraudulently filed is

ineffective.

* * *

(v)  If the department determines that the initial

financing statement was fraudulently filed and the

determination is appealed to Commonwealth Court, the

department shall file [a correction] an information 

statement with respect to the initial financing statement

indexed there only upon affirmation by the court of its

determination. In addition to complying with the

requirements of subsection (b), the [correction]

information statement shall state all of the following:

(A)  the [correction] information statement was

filed by the department under this subsection;

* * *

(vi)  If the department files [a correction] an

information statement with respect to the initial

financing statement indexed there under this subsection,

it shall refer the matter for criminal prosecution to the

Office of Attorney General pursuant to 18 Pa.C.S. § 4911 

(relating to tampering with public records or

information).

(2)  Nothing in this subsection limits the rights or

remedies the debtor may have with respect to an initial

financing statement that has been fraudulently filed. Nothing

in this subsection limits the effectiveness of [a] any 

termination or [correction] information statement filed by a

debtor under sections 9509(d)(2) and 9513 (relating to

termination statement) or the rights of a debtor under

section 9625 (relating to remedies for secured party's

failure to comply with division).

Section 8.  Section 9607(b)(2)(i) of Title 13 is amended to

read:

§ 9607.  Collection and enforcement by secured party.

* * *

(b)  Nonjudicial enforcement of mortgage.--If necessary to

enable a secured party to exercise under subsection (a)(3) the

right of a debtor to enforce a mortgage nonjudicially, the

secured party may record in the office in which a record of the

mortgage is recorded:

* * *

(2)  The secured party's sworn affidavit in recordable

form stating that:

(i)  a default has occurred with respect to the

obligation secured by the mortgage; and

* * *

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

CHAPTER 98

TRANSITION PROVISIONS FOR 2012 AMENDMENTS

Sec.

9800.  Definitions.

9801.  Effective date.

9802.  Savings clause.

9803.  Security interest perfected before effective date.

9804.  Security interest unperfected before effective date.

9805.  Effectiveness of action taken before effective date.

9806.  When initial financing statement suffices to continue

effectiveness of financing statement.

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

9808.  Person entitled to file initial financing statement or

continuation statement.

9809.  Priority.

§ 9800.  Definitions.

The following words and phrases when used in this chapter

shall have the meanings given to them in this section unless the

context clearly indicates otherwise:

"2012 Revision."  The amendments which:

(1)  affect this division; and

(2)  are made by the act of     , 2012 (P.L.    ,

No.    ) entitled "An act amending Titles 13 (Commercial

Code), 30 (Fish) and 75 (Vehicles) of the Pennsylvania

Consolidated Statutes, revising secured transaction

provisions relating to definitions, to control of electronic

chattel paper, to location of debtor, to perfection of

security interests in property subject to certain statutes,

regulations and treaties, to continued perfection of security

interest following change in governing law, to interests

which take priority over or take free of security interest or

agricultural lien, to priority of security interests created

by new debtor, to discharge of account debtor, notification

of assignment, identification and proof of assignment,

restrictions on assignment of accounts, chattel paper,

payment intangibles and promissory notes ineffective, to

restrictions on assignment of promissory notes, health-care-

insurance receivables and certain general intangibles

ineffective, to contents of financing statement, record of

mortgage as financing statement, time of filing financing

statement, to name of debtor and secured party, to effect of

certain events on effectiveness of financing statement, to

duration and effectiveness of financing statement, effect of

lapsed financing statement, to what constitutes filing,

effectiveness of filing, to claim concerning inaccurate or

wrongfully filed record; to collection and enforcement by

secured party; providing for transition provisions for 2012

amendments; imposing duties upon the Department of State and

the Department of Transportation; and making editorial

changes."

§ 9801.  Effective date.

The 2012 Revision takes effect July 1, 2013.

§ 9802.  Savings clause.

(a)  Pre-effective-date transactions or liens.--Except as

otherwise provided in this part, the 2012 Revision applies to a

transaction or lien within its scope, even if the transaction or

lien was entered into or created before the 2012 Revision takes

effect.

(b)  Pre-effective-date proceedings.--The 2012 Revision does

not affect an action, case, or proceeding commenced before the

2012 Revision takes effect.

§ 9803.  Security interest perfected before effective date.

(a)  Continuing perfection; perfection requirements

satisfied.--A security interest that is a perfected security

interest immediately before the 2012 Revision takes effect is a

perfected security interest under this division as amended by

the 2012 Revision if, when the 2012 Revision takes effect, the

applicable requirements for attachment and perfection under this

division as amended by the 2012 Revision are satisfied without

further action.

(b)  Continuing perfection: perfection requirements not

satisfied.--Except as otherwise provided in section 9805

(relating to effectiveness of action before effective date), if,

immediately before the 2012 Revision takes effect, a security

interest is a perfected security interest, but the applicable

requirements for perfection under this division as amended by

the 2012 Revision are not satisfied when the 2012 Revision takes

effect, the security interest remains perfected thereafter only

if the applicable requirements for perfection under this

division as amended by the 2012 Revision are satisfied within

one year after the 2012 Revision takes effect.

§ 9804.  Security interest unperfected before effective date.

A security interest that is an unperfected security interest

immediately before the 2012 Revision takes effect becomes a

perfected security interest:

(1)  without further action, when the 2012 Revision takes

effect if the applicable requirements for perfection under

this division as amended by the 2012 Revision are satisfied

before or at that time; or

(2)  when the applicable requirements for perfection are

satisfied if the requirements are satisfied after that time.

§ 9805.  Effectiveness of action taken before effective date.

(a)  Pre-effective-date filing effective.--The filing of a

financing statement before the 2012 Revision takes effect 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 the 2012 Revision.

(b)  When pre-effective-date filing becomes ineffective.--The

2012 Revision does not render ineffective an effective financing

statement that, before the 2012 Revision takes effect, is filed

and satisfies the applicable requirements for perfection under

the law of the jurisdiction governing perfection as provided in

this division as it existed before amendment by the 2012

Revision. However, except as otherwise provided in subsections

(c) and (d) and section 9806 (relating to when initial financing

statement suffices to continue effectiveness of financing

statement), the financing statement ceases to be effective:

(1)  if the financing statement is filed in this

Commonwealth, at the time the financing statement would have

ceased to be effective had the 2012 Revision not taken

effect; or

(2)  if the financing statement is filed in another

jurisdiction, at the earlier of:

(i)  the time the financing statement would have

ceased to be effective under the law of that

jurisdiction; or

(ii)  June 30, 2018.

(c)  Continuation statement.--The filing of a continuation

statement after the 2012 Revision takes effect does not continue

the effectiveness of a financing statement filed before the 2012

Revision takes effect. However, upon the timely filing of a

continuation statement after the 2012 Revision takes effect and

in accordance with the law of the jurisdiction governing

perfection as provided in this division as amended by the 2012

Revision, the effectiveness of a financing statement filed in

the same office in that jurisdiction before the 2012 Revision

takes effect continues for the period provided by the law of

that jurisdiction.

(d)  Application of subsection (b)(2)(ii) to transmitting

utility financing statement.--Subsection (b)(2)(ii) applies to a

financing statement that, before the 2012 Revision takes effect,

is filed against a transmitting utility and satisfies the

applicable requirements for perfection under the law of the

jurisdiction governing perfection as provided in this division

as it existed before amendment by the 2012 Revision, only to the

extent that this division as amended by the 2012 Revision

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.

(e)  Application of Chapter 95.--A financing statement that

includes a financing statement filed before the 2012 Revision

takes effect and a continuation statement filed after the 2012

Revision takes effect is effective only to the extent that it

satisfies the requirements of Chapter 95 (relating to filing) as

amended by the 2012 Revision 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

section 9503(a)(2) (relating to name of debtor and secured

party) as amended by the 2012 Revision. 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 section

9503(a)(3) as amended by the 2012 Revision.

§ 9806.  When initial financing statement suffices to continue

effectiveness of financing statement.

(a)  Initial financing statement in lieu of continuation

statement.--The filing of an initial financing statement in the

office specified in section 9501 (relating to filing office)

continues the effectiveness of a financing statement filed

before the 2012 Revision takes effect if:

(1)  the filing of an initial financing statement in that

office would be effective to perfect a security interest

under this division as amended by the 2012 Revision;

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

in an office in another state; and

(3)  the initial financing statement satisfies subsection

(c).

(b)  Period of continued effectiveness.--The filing of an

initial financing statement under subsection (a) continues the

effectiveness of the pre-effective-date financing statement:

(1)  if the initial financing statement is filed before

the 2012 Revision takes effect, for the period provided in

section 9515(a) through (e) and (g) (relating to duration and

effectiveness of financing statement; effect of lapsed

financing statement) with respect to an initial financing

statement; and

(2)  if the initial financing statement is filed after

the 2012 Revision takes effect, for the period provided in

section 9515(f) as amended by the 2012 Revision with respect

to an initial financing statement.

(c)  Requirements for initial financing statement under

subsection (a).--To be effective for purposes of subsection (a),

an initial financing statement must:

(1)  satisfy the requirements of Chapter 95 (relating to

filing) as amended by the 2012 Revision 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.

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

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

(b)  Applicable law.--After the 2012 Revision takes effect, 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 this division as amended by

the 2012 Revision. 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.

(c)  Method of amending: general rule.-- Except as otherwise

provided in subsection (d), if the law of this Commonwealth

governs perfection of a security interest, the information in a

pre-effective-date financing statement may be amended after the

2012 Revision takes effect only if:

(1)  the pre-effective-date financing statement and an

amendment are filed in the office specified in section 9501

(relating to filing office);

(2)  an amendment is filed in the office specified in

section 9501 concurrently with, or after the filing in that

office of, an initial financing statement that satisfies

section 9806(c) (relating to when initial filing statement

suffices to continue effectiveness of financing statement);

or

(3)  an initial financing statement that provides the

information as amended and satisfies section 9806(c) is filed

in the office specified in section 9501.

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

Commonwealth governs perfection of a security interest, the

effectiveness of a pre-effective-date financing statement may be

continued only under section 9805(c) and (e) (relating to

effectiveness of action taken before effective date) or 9806.

(e)  Method of amending: additional termination rule.--

Whether or not the law of this Commonwealth governs perfection

of a security interest, the effectiveness of a pre-effective-

date financing statement filed in this Commonwealth may be

terminated after the 2012 Revision takes effect 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 section 9806(c) has been filed in the

office specified by the law of the jurisdiction governing

perfection as provided in this division as amended by the 2012

Revision as the office in which to file a financing statement.

(f)  Definition.--As used in this section, the term "pre-

effective-date financing statement" means a financing statement

filed before the 2012 Revision takes effect.

§ 9808.  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:

(i)  to continue the effectiveness of a financing

statement filed before the 2012 Revision takes effect; or

(ii)  to perfect or continue the perfection of a

security interest.

§ 9809.  Priority.

The 2012 Revision determines the priority of conflicting

claims to collateral. However, if the relative priorities of the

claims were established before the 2012 Revision takes effect,

this division as it existed before amendment determines

priority.

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

§ 5323.  Content and effect of certificate of title.

* * *

(b)  Certificate as evidence and notice.--A certificate of

title issued by the commission is prima facie evidence of the

facts appearing on the certificate. Except as otherwise provided

in 13 Pa.C.S. §§ 9311(d) (relating to perfection of security

interests in property subject to certain statutes, regulations

and treaties), 9315(c) and (d) (relating to secured party's

rights on disposition of collateral and in proceeds) and 9316(d)

and (e) (relating to [continued perfection of security interest

following] effect of change in governing law), the certificate

shall be adequate notice to the Commonwealth, creditors,

subsequent lienholders and purchasers that a lien against the

boat exists.

Section 11.  Sections 1137 and 7712.8(a) of Title 75 are

amended to read:

§ 1137.  Subchapter exclusive for perfecting security interest.

The method provided in this subchapter for perfecting and

giving notice of security interests is exclusive, except as

otherwise provided in 13 Pa.C.S. §§ 9315 (relating to secured

party's rights on disposition of collateral and in proceeds) and

9316(d) and (e) (relating to [continued perfection of security

interest following] effect of change in governing law).

§ 7712.8.  Perfection of security interest in a snowmobile or

ATV.

(a)  Applicability of section.--Except as otherwise provided

in 13 Pa.C.S. §§ 9311(d) (relating to perfection of security

interests in property subject to certain statutes, regulations

and treaties), 9315(c) and (d) (relating to secured party's

rights on disposition of collateral and in proceeds) and 9316(d)

and (e) (relating to [continued perfection of security interest

following] effect of change in governing law), this section

provides the exclusive method of perfecting a security interest

in a snowmobile or ATV for which a certificate of title is

required under this subchapter.

* * *

Section 12.  In order to implement the amendment of 13

Pa.C.S. § 9503, the Department of State and the Department of

Transportation shall coordinate development and maintenance of

electronic systems for entering and searching data.

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