SB9: Bill Text

SB9,19,25 401.201 (37) (a) "Security interest" means an interest in personal property or fixtures that which secures payment or performance of an obligation. The retention or reservation of title by a seller of goods notwithstanding shipment or delivery to the buyer is limited in effect to a reservation of a "security interest". The term also includes any interest of a consignor and a buyer of accounts or, chattel paper, a payment intangible, or a promissory note in a transaction that is subject to ch. 409. The special property interest of a buyer of goods on identification of such those goods to a contract for sale under s. 402.401 is not a "security interest", but a buyer may also acquire a "security interest" by complying with ch. 409. Unless a lease or consignment is intended as security, reservation of title thereunder is not a "security interest" but a consignment is in any event subject to s. 402.326 Except as otherwise provided in s. 402.505, the right of a seller or lessor of goods under ch. 402 or 411 to retain or acquire possession of the goods is not a security interest, but a seller or lessor may also acquire a security interest by complying with ch. 409. The retention or reservation of title by a seller of goods notwithstanding shipment or delivery to the buyer under s. 402.401 is limited in effect to a reservation of a security interest.

SB9, s. 45 Section 45. 402.103 (3) (d) of the statutes is amended to read:

SB9,20,2 402.103 (3) (d) "Consumer goods" — s. 409.109 409.102.

SB9, s. 46 Section 46. 402.210 (3) of the statutes is renumbered 402.210 (4).

SB9, s. 47 Section 47. 402.210 (3) of the statutes is created to read:

SB9,20,12 402.210 (3) The creation, attachment, perfection, or enforcement of a security interest in the seller's interest under a contract is not a transfer that materially changes the duty of or increases materially the burden or risk imposed on the buyer or impairs materially the buyer's chance of obtaining return performance within the purview of sub. (2) unless, and then only to the extent that, enforcement actually results in a delegation of material performance of the seller. Even in that event, the creation, attachment, perfection, and enforcement of the security interest remain effective, but:

SB9,20,14 (a) The seller is liable to the buyer for damages caused by the delegation to the extent that the damages could not reasonably be prevented by the buyer; and

SB9,20,17 (b) A court having jurisdiction may grant other appropriate relief, including cancellation of the contract for sale or an injunction against enforcement of the security interest or consummation of the enforcement.

SB9, s. 48 Section 48. 402.210 (4) of the statutes is renumbered 402.210 (5).

SB9, s. 49 Section 49. 402.210 (5) of the statutes is renumbered 402.210 (6).

SB9, s. 50 Section 50. 402.326 (title) of the statutes is amended to read:

SB9,20,22 402.326 (title) Sale on approval and sale or return; consignment sales and rights of creditors.

SB9, s. 51 Section 51. 402.326 (2) of the statutes is amended to read:

SB9,21,3 402.326 (2) Except as provided in sub. (3), goods Goods held on approval are not subject to the claims of the buyer's creditors until acceptance; goods held on sale or return are subject to such claims while in the buyer's possession.

SB9, s. 52 Section 52. 402.326 (3) of the statutes is repealed.

SB9, s. 53 Section 53. 402.502 (title) of the statutes is amended to read:

SB9,21,7 402.502 (title) Buyer's right to goods on seller's repudiation, failure to deliver, or insolvency.

SB9, s. 54 Section 54. 402.502 (1) of the statutes is renumbered 402.502 (1) (intro.) and amended to read:

SB9,21,13 402.502 (1) (intro.) Subject to sub. subs. (2) and (3) and even though the goods have not been shipped a buyer who has paid a part or all of the price of goods in which the buyer has a special property under s. 402.501 may on making and keeping good a tender of any unpaid portion of their price recover them from the seller if:

SB9,21,15 (b) In all cases, the seller becomes insolvent within 10 days after receipt of the first instalment installment on their price.

SB9, s. 55 Section 55. 402.502 (1) (a) of the statutes is created to read:

SB9,21,18 402.502 (1) (a) In the case of goods bought for personal, family, or household purposes, the seller repudiates or fails to deliver as required by the contract; or

SB9, s. 56 Section 56. 402.502 (2) of the statutes is renumbered 402.502 (3).

SB9, s. 57 Section 57. 402.502 (2) of the statutes is created to read:

SB9,21,23 402.502 (2) The buyer's right to recover the goods under sub. (1) (a) vests upon acquisition of a special property, even if the seller had not then repudiated or failed to deliver.

SB9, s. 58 Section 58. 402.716 (3) of the statutes is amended to read:

SB9,22,7 402.716 (3) The buyer has a right of replevin for goods identified to the contract if after reasonable effort the buyer is unable to effect cover for such goods or the circumstances reasonably indicate that such effort will be unavailing or if the goods have been shipped under reservation and satisfaction of the security interest in them has been made or tendered. In the case of goods bought for personal, family, or household purposes, the buyer's right of replevin vests upon acquisition of a special property, even if the seller had not then repudiated or failed to deliver.

SB9, s. 59 Section 59. 405.118 of the statutes is created to read:

SB9,22,12 405.118 Security interest of issuer or nominated person. (1) An issuer or nominated person has a security interest in a document presented under a letter of credit to the extent that the issuer or nominated person honors or gives value for the presentation.

SB9,22,16 (2) So long as and to the extent that an issuer or nominated person has not been reimbursed or has not otherwise recovered the value given with respect to a security interest in a document under sub. (1), the security interest continues and is subject to ch. 409, but:

SB9,22,18 (a) A security agreement is not necessary to make the security interest enforceable under s. 409.203 (2) (c);

SB9,22,20 (b) If the document is presented in a medium other than a written or other tangible medium, the security interest is perfected; and

SB9,22,25 (c) If the document is presented in a written or other tangible medium and is not a certificated security, chattel paper, a document of title, an instrument, or a letter of credit, the security interest is perfected and has priority over a conflicting security interest in the document so long as the debtor does not have possession of the document.

SB9, s. 60 Section 60. 406.102 (1) of the statutes is amended to read:

SB9,23,4 406.102 (1) A "bulk transfer" is any transfer in bulk and not in the ordinary course of the transferor's business of a major part in value of the inventory (s. 409.109), as defined in s. 409.102 (1) (Ls), of an enterprise subject to this chapter.

SB9, s. 61 Section 61. 406.102 (2) of the statutes is amended to read:

SB9,23,8 406.102 (2) A transfer of a substantial part of the equipment (s. 409.109), as defined in s. 409.102 (1) (i), of such an enterprise is a bulk transfer if it is made in connection with a bulk transfer of inventory, but not otherwise.

SB9, s. 62 Section 62. 407.503 (1) (a) of the statutes is amended to read:

SB9,23,13 407.503 (1) (a) Delivered or entrusted them or any document of title covering them to the bailor or the bailor's nominee with actual or apparent authority to ship, store, or sell or with power to obtain delivery under s. 407.403 or with power of disposition under ss. s. 402.403 or 409.307 409.320 or other statute or rule of law; nor

SB9, s. 63 Section 63. 408.103 (6) of the statutes is amended to read:

SB9,23,16 408.103 (6) A commodity contract, as defined in s. 409.115 (1) (b) 409.102 (1) (dm), is not a security or a financial asset.

SB9, s. 64 Section 64. 408.106 (4) (a) and (b) of the statutes are amended to read:

SB9,23,18 408.106 (4) (a) The purchaser becomes the entitlement holder; or

SB9,23,21 (b) The securities intermediary has agreed that it will comply with entitlement orders originated by the purchaser without further consent by the entitlement holder.; or

SB9, s. 65 Section 65. 408.106 (4) (c) of the statutes is created to read:

SB9,23,25 408.106 (4) (c) Another person has control of the security entitlement on behalf of the purchaser or, having previously acquired control of the security entitlement, acknowledges that it has control on behalf of the purchaser.

SB9, s. 66 Section 66. 408.106 (6) of the statutes is amended to read:

SB9,24,7 408.106 (6) A purchaser who has satisfied the requirements of sub. (3) (b) or (4) (b) has control even if the registered owner in the case of sub. (3) (b) or the entitlement holder in the case of sub. (4) (b) retains the right to make substitutions for the uncertificated security or security entitlement, to originate instructions or entitlement orders to the issuer or securities intermediary, or otherwise to deal with the uncertificated security or security entitlement.

SB9, s. 67 Section 67. 408.110 (5) (a) of the statutes is amended to read:

SB9,24,14 408.110 (5) (a) If an agreement between the securities intermediary and its entitlement holder specifies that it is governed by the law of a particular jurisdiction governing the securities account expressly provides that a particular jurisdiction is the securities intermediary's jurisdiction for purposes of this subchapter, this chapter, or chs. 401 to 411, that jurisdiction is the securities intermediary's jurisdiction.

SB9, s. 68 Section 68. 408.110 (5) (b) of the statutes is renumbered 408.110 (5) (c) and amended to read:

SB9,24,21 408.110 (5) (c) If neither par. (a) nor par. (b) applies and an agreement between the securities intermediary and its entitlement holder does not specify the governing law as provided in par. (a), but governing the securities account expressly specifies provides that the securities account is maintained at an office in a particular jurisdiction, that jurisdiction is the securities intermediary's jurisdiction.

SB9, s. 69 Section 69. 408.110 (5) (b) of the statutes is created to read:

SB9,25,2 408.110 (5) (b) If par. (a) does not apply and an agreement between the securities intermediary and its entitlement holder governing the securities account expressly provides that the agreement is governed by the law of a particular jurisdiction, that jurisdiction is the securities intermediary's jurisdiction.

SB9, s. 70 Section 70. 408.110 (5) (c) of the statutes is renumbered 408.110 (5) (d) and amended to read:

SB9,25,9 408.110 (5) (d) If an agreement between the securities intermediary and its entitlement holder does not specify a jurisdiction as provided in par. (a) or (b) none of pars. (a) to (c) applies, the securities intermediary's jurisdiction is the jurisdiction in which is located the office, identified in an account statement as the office serving the entitlement holder's account, is located.

SB9, s. 71 Section 71. 408.110 (5) (d) of the statutes is renumbered 408.110 (5) (e) and amended to read:

SB9,25,17 408.110 (5) (e) If an agreement between the securities intermediary and its entitlement holder does not specify a jurisdiction as provided in par. (a) or (b) and an account statement does not identify an office serving the entitlement holder's account as provided in par. (c) none of pars. (a) to (d) applies, the securities intermediary's jurisdiction is the jurisdiction in which is located the chief executive office of the securities intermediary is located.

SB9, s. 72 Section 72. 408.301 (1) (c) of the statutes is renumbered 408.301 (1) (c) (intro.) and amended to read:

SB9,25,22 408.301 (1) (c) (intro.) A securities intermediary acting on behalf of the purchaser acquires possession of the security certificate, only if the certificate is in registered form and has been specially is:

SB9,25,24 3. Specially endorsed to the purchaser by an effective endorsement and has not been endorsed to the securities intermediary or in blank.

SB9, s. 73 Section 73. 408.301 (1) (c) 1. and 2. of the statutes are created to read:

SB9,26,1 408.301 (1) (c) 1. Registered in the name of the purchaser;

SB9,26,2 2. Payable to the order of the purchaser; or

SB9, s. 74 Section 74. 408.302 (1) of the statutes is amended to read:

SB9,26,6 408.302 (1) Except as otherwise provided in subs. (2) and (3), upon delivery a purchaser of a certificated or uncertificated security to a purchaser, the purchaser acquires all rights in the security that the transferor had or had power to transfer.

SB9, s. 75 Section 75. 408.510 (1) of the statutes is amended to read:

SB9,26,13 408.510 (1) An In a case not covered by the priority rules in ch. 409 or the rules stated in sub. (3), an action based on an adverse claim to a financial asset or security entitlement, whether framed in conversion, replevin, constructive trust, equitable lien, or other theory, may not be asserted against a person who purchases a security entitlement, or an interest therein, from an entitlement holder if the purchaser gives value, does not have notice of the adverse claim, and obtains control.

SB9, s. 76 Section 76. 408.510 (3) of the statutes is renumbered 408.510 (3) (intro.) and amended to read:

SB9,26,21 408.510 (3) (intro.) In a case not covered by the priority rules in ch. 409, a purchaser for value of a security entitlement, or an interest therein, who obtains control has priority over a purchaser of a security entitlement, or an interest therein, who does not obtain control. Purchasers Except as otherwise provided in sub. (4), purchasers who have control rank equally, except that a according to priority in time of:

SB9,26,23 (4) A securities intermediary as purchaser has priority over a conflicting purchaser who has control unless otherwise agreed by the securities intermediary.

SB9, s. 77 Section 77. 408.510 (3) (a) to (c) of the statutes are created to read:

SB9,27,3 408.510 (3) (a) The purchaser's becoming the person for whom the securities account, in which the security entitlement is carried, is maintained, if the purchaser obtained control under s. 408.106 (4) (a);

SB9,27,7 (b) The securities intermediary's agreement to comply with the purchaser's entitlement orders with respect to security entitlements carried or to be carried in the securities account in which the security entitlement is carried, if the purchaser obtained control under s. 408.106 (4) (b); or

SB9,27,10 (c) If the purchaser obtained control through another person under s. 408.106 (4) (c), the time on which priority would be based under this subsection if the other person were the secured party.

SB9, s. 78 Section 78. Chapter 409 of the statutes is repealed and recreated to read:

SB9,27,14 Chapter 409 uniform commercial code — secured transactions

SB9,27,16 Subchapter I GENERAL PROVISIONS

SB9,27,18 409.101 Short title. This chapter may be cited as uniform commercial code — secured transactions.

SB9,27,20 409.102 Definitions and index of definitions. (1) Chapter 409 definitions. In this chapter:

SB9,27,22 (a) "Accession" means goods that are physically united with other goods in such a manner that the identity of the original goods is not lost.

SB9,28,12 (ag) "Account", except as used in "account for", means a right to payment of a monetary obligation, whether or not earned by performance; for property that has been or is to be sold, leased, licensed, assigned, or otherwise disposed of; for services rendered or to be rendered; for a policy of insurance issued or to be issued; for a secondary obligation incurred or to be incurred; for energy provided or to be provided; for the use or hire of a vessel under a charter or other contract; arising out of the use of a credit or charge card or information contained on or for use with the card; or as winnings in a lottery or other game of chance operated or sponsored by a state, governmental unit of a state, or person licensed or authorized to operate the game by a state or governmental unit of a state. The term includes health-care-insurance receivables. The term does not include rights to payment evidenced by chattel paper or an instrument; commercial tort claims; deposit accounts; investment property; letter-of-credit rights or letters of credit; or rights to payment for money or funds advanced or sold, other than rights arising out of the use of a credit or charge card or information contained on or for use with the card.

SB9,28,15 (am) "Account debtor" means a person obligated on an account, chattel paper, or general intangible. The term does not include persons obligated to pay a negotiable instrument, even if the instrument constitutes part of chattel paper.

SB9,28,16 (as) "Accounting", except as used in "accounting for", means a record:

SB9,28,17 1. Authenticated by a secured party;

SB9,28,19 2. Indicating the aggregate unpaid secured obligations as of a date not more than 35 days earlier or 35 days later than the date of the record; and

SB9,28,20 3. Identifying the components of the obligations in reasonable detail.

SB9,28,22 (b) "Agricultural lien" means an interest, other than a security interest, in farm products:

SB9,28,23 1. Which secures payment or performance of an obligation for: