The Kentuckylegislation introduced Senate Bill 97 on January 11, 2012 to adopt the 2010 Amendments to UCC Article 9. The legislature passed the 2010 Amendments last year, but the governor vetoed the legislation over sections of the bill unrelated to Article 9.
Senate Bill 97 adopts the Alternative A “Only If” approach for individual debtor name sufficiency in Section 9-503(a)(4). The bill also provides the uniform effective date of July 1, 2013. The bill drafting systems used by some states, including Kentucky cannot incorporate images into bill drafts. Consequently, Section 9-521 does not contain either the text or images of the safe harbor forms. Instead, Section 9-521 accomplishes the same end by providing that filing offices must accept written records in the form and format set forth in the official text of the 2010 Amendments.
There are few non-uniform departures from the official text of the 2010 Amendments in SB 97. However, there are some significant additions designed to address the problem of fraudulent financing statements. New Section 9-513A provides remedies for a current and former public official who is named as a debtor on a financing statement filed to harass, hinder or defraud the person. New Section 9-516A grants the filing office discretion to reject a UCC record if it appears that the filer was not authorized under Section 9-509 and other conditions are met. Both Section 9-513A and Section 9-516A provide the secured party with expedited administrative and judicial review of adverse filing office decisions. Finally, Section 9-518 substantially adopts the official text of the 2010 Amendments, but retains a non-uniform provision that gives effect to an information statement if it was filed by a bank or its subsidiary.
As with any proposed law, SB 97 may be amended at any point during the legislative process. CSC will continue to provide updates of any significant developments with all state Article 9 legislation.