AB111: Bill Text

AB111,59,14 (4) Security interest secures obligation to pay for delivery. The security interest described in sub. (3) secures the obligation to make payment for the delivery.

AB111,59,20 409.207 Rights and duties of secured party having possession or control of collateral. (1) Duty of care when secured party in possession. Except as otherwise provided in sub. (4), a secured party shall use reasonable care in the custody and preservation of collateral in the secured party's possession. In the case of chattel paper or an instrument, reasonable care includes taking necessary steps to preserve rights against prior parties unless otherwise agreed.

AB111,59,23 (2) Expenses, risks, duties, and rights when secured party in possession. Except as otherwise provided in sub. (4), if a secured party has possession of collateral:

AB111,60,3 (a) Reasonable expenses, including the cost of insurance and payment of taxes or other charges, incurred in the custody, preservation, use, or operation of the collateral are chargeable to the debtor and are secured by the collateral;

AB111,60,5 (b) The risk of accidental loss or damage is on the debtor to the extent of a deficiency in any effective insurance coverage;

AB111,60,7 (c) The secured party shall keep the collateral identifiable, but fungible collateral may be commingled; and

AB111,60,8 (d) The secured party may use or operate the collateral:

AB111,60,9 1. For the purpose of preserving the collateral or its value;

AB111,60,10 2. As permitted by an order of a court having competent jurisdiction; or

AB111,60,12 3. Except in the case of consumer goods, in the manner and to the extent agreed by the debtor.

AB111,60,15 (3) Duties and rights when secured party in possession or control. Except as otherwise provided in sub. (4), a secured party having possession of collateral or control of collateral under s. 409.104, 409.105, 409.106, or 409.107:

AB111,60,17 (a) May hold as additional security any proceeds, except money or funds, received from the collateral;

AB111,60,19 (b) Shall apply money or funds received from the collateral to reduce the secured obligation, unless remitted to the debtor; and

AB111,60,20 (c) May create a security interest in the collateral.

AB111,60,22 (4) Buyer of certain rights to payment. If the secured party is a buyer of accounts, chattel paper, payment intangibles, or promissory notes or a consignor:

AB111,60,24 (a) Subsection (1) does not apply unless the secured party is entitled under an agreement:

AB111,60,25 1. To charge back uncollected collateral; or

AB111,61,3 2. Otherwise to full or limited recourse against the debtor or a secondary obligor based on the nonpayment or other default of an account debtor or other obligor on the collateral; and

AB111,61,4 (b) Subsections (1) and (2) do not apply.

AB111,61,8 409.208 Additional duties of secured party having control of collateral. (1) Applicability of section. This section applies to cases in which there is no outstanding secured obligation and the secured party is not committed to make advances, incur obligations, or otherwise give value.

AB111,61,10 (2) Duties of secured party after receiving demand from debtor. Within 10 days after receiving an authenticated demand by the debtor:

AB111,61,14 (a) A secured party having control of a deposit account under s. 409.104 (1) (b) shall send to the bank with which the deposit account is maintained an authenticated statement that releases the bank from any further obligation to comply with instructions originated by the secured party;

AB111,61,16 (b) A secured party having control of a deposit account under s. 409.104 (1) (c) shall:

AB111,61,17 1. Pay the debtor the balance on deposit in the deposit account; or

AB111,61,18 2. Transfer the balance on deposit into a deposit account in the debtor's name;

AB111,61,20 (c) A secured party, other than a buyer, having control of electronic chattel paper under s. 409.105 shall:

AB111,61,22 1. Communicate the authoritative copy of the electronic chattel paper to the debtor or its designated custodian;

AB111,62,3 2. If the debtor designates a custodian that is the designated custodian with which the authoritative copy of the electronic chattel paper is maintained for the secured party, communicate to the custodian an authenticated record releasing the designated custodian from any further obligation to comply with instructions originated by the secured party and instructing the custodian to comply with instructions originated by the debtor; and

AB111,62,6 3. Take appropriate action to enable the debtor or its designated custodian to make copies of or revisions to the authoritative copy which add or change an identified assignee of the authoritative copy without the consent of the secured party;

AB111,62,12 (d) A secured party having control of investment property under s. 408.106 (4) (b) or 409.106 (2) shall send to the securities intermediary or commodity intermediary with which the security entitlement or commodity contract is maintained an authenticated record that releases the securities intermediary or commodity intermediary from any further obligation to comply with entitlement orders or directions originated by the secured party; and

AB111,62,16 (e) A secured party having control of a letter-of-credit right under s. 409.107 shall send to each person having an unfulfilled obligation to pay or deliver proceeds of the letter of credit to the secured party an authenticated release from any further obligation to pay or deliver proceeds of the letter of credit to the secured party.

AB111,62,19 409.209 Duties of secured party if account debtor has been notified of assignment. (1) Applicability of section. Except as otherwise provided in sub. (3), this section applies if:

AB111,62,20 (a) There is no outstanding secured obligation; and

AB111,62,22 (b) The secured party is not committed to make advances, incur obligations, or otherwise give value.

AB111,63,2 (2) Duties of secured party after receiving demand from debtor. Within 10 days after receiving an authenticated demand by the debtor, a secured party shall send to an account debtor that has received notification of an assignment to the secured party as assignee under s. 409.406 (1) an authenticated record that releases the account debtor from any further obligation to the secured party.

AB111,63,4 (3) Inapplicability to sales. This section does not apply to an assignment constituting the sale of an account, chattel paper, or payment intangible.

AB111,63,6 409.210 Request for accounting; request regarding list of collateral or statement of account. (1) Definitions. In this section:

AB111,63,7 (a) "Request" means a record of a type described in par. (b), (c), or (d).

AB111,63,11 (b) "Request for an accounting" means a record authenticated by a debtor requesting that the recipient provide an accounting of the unpaid obligations secured by collateral and reasonably identifying the transaction or relationship that is the subject of the request.

AB111,63,15 (c) "Request regarding a list of collateral" means a record authenticated by a debtor requesting that the recipient approve or correct a list of what the debtor believes to be the collateral securing an obligation and reasonably identifying the transaction or relationship that is the subject of the request.

AB111,63,20 (d) "Request regarding a statement of account" means a record authenticated by a debtor requesting that the recipient approve or correct a statement indicating what the debtor believes to be the aggregate amount of unpaid obligations secured by collateral as of a specified date and reasonably identifying the transaction or relationship that is the subject of the request.

AB111,63,23 (2) Duty to respond to requests. Subject to subs. (3) to (6), a secured party, other than a buyer of accounts, chattel paper, payment intangibles, or promissory notes or a consignor, shall comply with a request within 14 days after receipt:

AB111,63,25 (a) In the case of a request for an accounting, by authenticating and sending to the debtor an accounting; and

AB111,64,3 (b) In the case of a request regarding a list of collateral or a request regarding a statement of account, by authenticating and sending to the debtor an approval or correction.

AB111,64,8 (3) Request regarding list of collateral; statement concerning type of collateral. A secured party that claims a security interest in all of a particular type of collateral owned by the debtor may comply with a request regarding a list of collateral by sending to the debtor an authenticated record including a statement to that effect within 14 days after receipt.

AB111,64,13 (4) Request regarding list of collateral; no interest claimed. A person that receives a request regarding a list of collateral, claims no interest in the collateral when it receives the request, and claimed an interest in the collateral at an earlier time shall comply with the request within 14 days after receipt by sending to the debtor an authenticated record:

AB111,64,14 (a) Disclaiming any interest in the collateral; and

AB111,64,16 (b) If known to the recipient, providing the name and mailing address of any assignee of or successor to the recipient's interest in the collateral.

AB111,64,22 (5) Request for accounting or regarding statement of account; no interest in obligation claimed. A person that receives a request for an accounting or a request regarding a statement of account, claims no interest in the obligations when it receives the request, and claimed an interest in the obligations at an earlier time shall comply with the request within 14 days after receipt by sending to the debtor an authenticated record:

AB111,64,23 (a) Disclaiming any interest in the obligations; and

AB111,64,25 (b) If known to the recipient, providing the name and mailing address of any assignee of or successor to the recipient's interest in the obligations.

AB111,65,3 (6) Charges for responses. A debtor is entitled without charge to one response to a request under this section during any 6-month period. The secured party may require payment of a charge not exceeding $25 for each additional response.

AB111,65,5 subchapter III PERFECTION AND PRIORITY

AB111,65,9 409.301 Law governing perfection and priority of security interests. Except as otherwise provided in ss. 409.303 to 409.306, the following rules determine the law governing perfection, the effect of perfection or nonperfection, and the priority of a security interest in collateral:

AB111,65,13 (1) Location of debtor. Except as otherwise provided in this section, while a debtor is located in a jurisdiction, the local law of that jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in collateral.

AB111,65,16 (2) Location of collateral. While collateral is located in a jurisdiction, the local law of that jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of a possessory security interest in that collateral.

AB111,65,19 (3) Location of property. Except as otherwise provided in sub. (4), while negotiable documents, goods, instruments, money, or tangible chattel paper is located in a jurisdiction, the local law of that jurisdiction governs:

AB111,65,20 (a) Perfection of a security interest in the goods by filing a fixture filing;

AB111,65,21 (b) Perfection of a security interest in timber to be cut; and

AB111,65,23 (c) The effect of perfection or nonperfection and the priority of a nonpossessory security interest in the collateral.

AB111,66,3 (4) Location of wellhead or minehead. The local law of the jurisdiction in which the wellhead or minehead is located governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in as-extracted collateral.

AB111,66,7 409.302 Law governing perfection and priority of agricultural liens. While farm products are located in a jurisdiction, the local law of that jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of an agricultural lien on the farm products.

AB111,66,12 409.303 Law governing perfection and priority of security interests in goods covered by a certificate of title. (1) Applicability of section. This section applies to goods covered by a certificate of title, even if there is no other relationship between the jurisdiction under whose certificate of title the goods are covered and the goods or the debtor.

AB111,66,18 (2) When goods covered by certificate of title. Goods become covered by a certificate of title when a valid application for the certificate of title and the applicable fee are delivered to the appropriate authority. Goods cease to be covered by a certificate of title at the earlier of the time the certificate of title ceases to be effective under the law of the issuing jurisdiction or the time the goods become covered subsequently by a certificate of title issued by another jurisdiction.

AB111,66,23 (3) Applicable law. The local law of the jurisdiction under whose certificate of title the goods are covered governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in goods covered by a certificate of title from the time the goods become covered by the certificate of title until the goods cease to be covered by the certificate of title.

AB111,67,2 409.304 Law governing perfection and priority of security interests in deposit accounts. (1) Law of bank's jurisdiction governs. The local law of a bank's jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in a deposit account maintained with that bank.

AB111,67,4 (2) Bank's jurisdiction. The following rules determine a bank's jurisdiction for purposes of this subchapter:

AB111,67,8 (a) If an agreement between the bank and the debtor governing the deposit account expressly provides that a particular jurisdiction is the bank's jurisdiction for purposes of this subchapter, this chapter, or chs. 401 to 411, that jurisdiction is the bank's jurisdiction.

AB111,67,12 (b) If par. (a) does not apply and an agreement between the bank and its customer governing the deposit account expressly provides that the agreement is governed by the law of a particular jurisdiction, that jurisdiction is the bank's jurisdiction.

AB111,67,16 (c) If neither par. (a) nor par. (b) applies and an agreement between the bank and its customer governing the deposit account expressly provides that the deposit account is maintained at an office in a particular jurisdiction, that jurisdiction is the bank's jurisdiction.

AB111,67,19 (d) If none of pars. (a) to (c) applies, the bank's jurisdiction is the jurisdiction in which the office identified in an account statement as the office serving the customer's account is located.

AB111,67,21 (e) If none of pars. (a) to (d) applies, the bank's jurisdiction is the jurisdiction in which the chief executive office of the bank is located.

AB111,67,24 409.305 Law governing perfection and priority of security interests in investment property. (1) Governing law: general rules. Except as otherwise provided in sub. (3), the following rules apply:

AB111,68,3 (a) While a security certificate is located in a jurisdiction, the local law of that jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in the certificated security represented thereby.

AB111,68,6 (b) The local law of the issuer's jurisdiction as specified in s. 408.110 (4) governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in an uncertificated security.

AB111,68,9 (c) The local law of the securities intermediary's jurisdiction as specified in s. 408.110 (5) governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in a security entitlement or securities account.

AB111,68,12 (d) The local law of the commodity intermediary's jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in a commodity contract or commodity account.

AB111,68,14 (2) Commodity intermediary's jurisdiction. The following rules determine a commodity intermediary's jurisdiction for purposes of this subchapter:

AB111,68,19 (a) If an agreement between the commodity intermediary and commodity customer governing the commodity account expressly provides that a particular jurisdiction is the commodity intermediary's jurisdiction for purposes of this subchapter, this chapter, or chs. 401 to 411, that jurisdiction is the commodity intermediary's jurisdiction.

AB111,68,23 (b) If par. (a) does not apply and an agreement between the commodity intermediary and commodity customer governing the commodity account expressly provides that the agreement is governed by the law of a particular jurisdiction, that jurisdiction is the commodity intermediary's jurisdiction.

AB111,69,3 (c) If neither par. (a) nor par. (b) applies and an agreement between the commodity intermediary and commodity customer governing the commodity account expressly provides that the commodity account is maintained at an office in a particular jurisdiction, that jurisdiction is the commodity intermediary's jurisdiction.

AB111,69,6 (d) If none of pars. (a) to (c) applies, the commodity intermediary's jurisdiction is the jurisdiction in which the office identified in an account statement as the office serving the commodity customer's account is located.

AB111,69,9 (e) If none of pars. (a) to (d) applies, the commodity intermediary's jurisdiction is the jurisdiction in which the chief executive office of the commodity intermediary is located.

AB111,69,11 (3) When perfection governed by law of jurisdiction where debtor located. The local law of the jurisdiction in which the debtor is located governs:

AB111,69,12 (a) Perfection of a security interest in investment property by filing;

AB111,69,14 (b) Automatic perfection of a security interest in investment property created by a broker or securities intermediary; and

AB111,69,16 (c) Automatic perfection of a security interest in a commodity contract or commodity account created by a commodity intermediary.

AB111,69,22 409.306 Law governing perfection and priority of security interests in letter-of-credit rights. (1) Governing law: issuer's or nominated person's jurisdiction. Subject to sub. (3), the local law of the issuer's jurisdiction or a nominated person's jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in a letter-of-credit right if the issuer's jurisdiction or nominated person's jurisdiction is a state.

AB111,70,2 (2) Issuer's or nominated person's jurisdiction. For purposes of this subchapter, an issuer's jurisdiction or nominated person's jurisdiction is the jurisdiction whose law governs the liability of the issuer or nominated person with respect to the letter-of-credit right as provided in ch. 405.