HB0303

HOUSE BILL 303

50th legislature - STATE OF NEW MEXICO - second session, 2012

INTRODUCED BY

Nate Gentry

AN ACT

RELATING TO SECURED TRANSACTIONS UNDER THE UNIFORM COMMERCIAL CODE; AMENDING AND ADDING DEFINITIONS; CLARIFYING WHEN A SECURED PARTY HAS CONTROL OF ELECTRONIC CHATTEL PAPER; CLARIFYING THE EFFECT ON FINANCING STATEMENTS BY A CHANGE IN THE GOVERNING LAW; CLARIFYING FILING RULES; AMENDING, REPEALING AND ENACTING SECTIONS OF THE NMSA 1978.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

SECTION 1. Section 14-16-3 NMSA 1978 (being Laws 2001, Chapter 131, Section 3, as amended) is amended to read:

"14-16-3. SCOPE.--

[(a)] A. Except as otherwise provided in Subsection [(b)] B, the Uniform Electronic Transactions Act applies to electronic records and electronic signatures relating to a transaction.

[(b)] B. The Uniform Electronic Transactions Act does not apply to:

(1) a transaction to the extent it is governed by:

[(i)] (a) a law governing the creation and execution of wills, codicils or testamentary trusts;

[(ii)] (b) the Uniform Commercial Code, other than [Sections 55-1-107 and 55-1-206] Section 55-1-306 NMSA 1978 and Chapter 55, Articles 2 and 2A NMSA 1978; or

[(iii)] (c) court orders, notices or official court documents, including briefs, pleadings and other records, required to be executed in connection with court proceedings;

(2) a notice concerning:

[(i)] (a) the cancellation or termination of utility services, including water, gas, heat or power services;

[(ii)] (b) default, acceleration, repossession, foreclosure, eviction or the right to cure, under a credit agreement secured by or a rental agreement for a primary residence of an individual; or

[(iii)] (c) the cancellation or termination of health insurance or benefits or life insurance or benefits, but not including annuities; or

(3) any document required to accompany any transportation or handling of hazardous materials, pesticides or other toxic or dangerous materials.

[(c)] C. The Uniform Electronic Transactions Act applies to an electronic record or electronic signature otherwise excluded from the application of that act under Subsection [(b)] B of this section to the extent it is governed by a law other than those specified in Subsection [(b)] B of this section.

[(d)] D. A transaction subject to the Uniform Electronic Transactions Act is also subject to other applicable substantive law."

SECTION 2. Section 55-2A-103 NMSA 1978 (being Laws 1992, Chapter 114, Section 10, as amended) is amended to read:

"55-2A-103. DEFINITIONS AND INDEX OF DEFINITIONS.--

(1) In this article unless the context otherwise requires:

(a) "buyer in ordinary course of business" means a person who, in good faith and without knowledge that the sale to that person is in violation of the ownership rights or security interest or leasehold interest of a third party in the goods, buys in ordinary course from a person in the business of selling goods of that kind, but does not include a pawnbroker. "Buying" may be for cash or by exchange of other property or on secured or unsecured credit and includes acquiring goods or documents of title under a preexisting contract for sale but does not include a transfer in bulk or as security for or in total or partial satisfaction of a money debt;

(b) "cancellation" occurs when either party puts an end to the lease contract for default by the other party;

(c) "commercial unit" means such a unit of goods as by commercial usage is a single whole for purposes of lease and division of which materially impairs its character or value on the market or in use. A commercial unit may be a single article, as a machine, or a set of articles, as a suite of furniture or a line of machinery, or a quantity, as a gross or carload, or any other unit treated in use or in the relevant market as a single whole;

(d) "conforming" goods or performance under a lease contract means goods or performance that are in accordance with the obligations under the lease contract;

(e) "consumer lease" means a lease that a lessor regularly engaged in the business of leasing or selling makes to a lessee who is an individual and who takes under the lease primarily for a personal, family or household purpose;

(f) "fault" means wrongful act, omission, breach or default;

(g) "finance lease" means a lease with respect to which:

(i) the lessor does not select, manufacture or supply the goods;

(ii) the lessor acquires the goods or the right to possession and use of the goods in connection with the lease; and

(iii) one of the following occurs:

(A) the lessee receives a copy of the contract by which the lessor acquired the goods or the right to possession and use of the goods before signing the lease contract;

(B) the lessee's approval of the contract by which the lessor acquired the goods or the right to possession and use of the goods is a condition to effectiveness of the lease contract;

(C) the lessee, before signing the lease contract, receives an accurate and complete statement designating the promises and warranties, and any disclaimers of warranties, limitations or modifications of remedies, or liquidated damages, including those of a third party, such as the manufacturer of the goods, provided to the lessor by the person supplying the goods in connection with or as part of the contract by which the lessor acquired the goods or the right to possession and use of the goods; or

(D) if the lease is not a consumer lease, the lessor, before the lessee signs the lease contract, informs the lessee in writing (a) of the identity of the person supplying the goods to the lessor, unless the lessee has selected that person and directed the lessor to acquire the goods or the right to possession and use of the goods from that person; (b) that the lessee is entitled under this article to the promises and warranties, including those of any third party, provided to the lessor by the person supplying the goods in connection with or as part of the contract by which the lessor acquired the goods or the right to possession and use of the goods; and (c) that the lessee may communicate with the person supplying the goods to the lessor and receive an accurate and complete statement of those promises and warranties, including any disclaimers and limitations of them or of remedies;

(h) "goods" means all things that are movable at the time of identification to the lease contract or are fixtures (Section 55-2A-309 NMSA 1978), but the term does not include money, documents, instruments, accounts, chattel paper, general intangibles or minerals or the like, including oil and gas, before extraction. The term also includes the unborn young of animals;

(i) "installment lease contract" means a lease contract that authorizes or requires the delivery of goods in separate lots to be separately accepted, even though the lease contract contains a clause "each delivery is a separate lease" or its equivalent;

(j) "lease" means a transfer of the right to possession and use of goods for a term in return for consideration, but a sale, including a sale on approval or a sale or return, or retention or creation of a security interest is not a lease; unless the context clearly indicates otherwise, the term includes a sublease;

(k) "lease agreement" means the bargain, with respect to the lease, of the lessor and the lessee in fact as found in their language or by implication from other circumstances, including course of dealing or usage or trade or course of performance as provided in this article; unless the context clearly indicates otherwise, the term includes a sublease agreement;

(l) "lease contract" means the total legal obligation that results from the lease agreement as affected by this article and any other applicable rules of law; unless the context clearly indicates otherwise, the term includes a sublease contract;

(m) "leasehold interest" means the interest of the lessor or the lessee under a lease contract;

(n) "lessee" means a person who acquires the right to possession and use of goods under a lease; unless the context clearly indicates otherwise, the term includes a sublessee;

(o) "lessee in ordinary course of business" means a person who in good faith and without knowledge that the lease to that person is in violation of the ownership rights or security interest or leasehold interest of a third party in the goods, leases in ordinary course from a person in the business of selling or leasing goods of that kind, but does not include a pawnbroker; "leasing" may be for cash or by exchange of other property or on secured or unsecured credit and includes acquiring goods or documents of title under a preexisting lease contract but does not include a transfer in bulk or as security for or in total or partial satisfaction of a money debt;

(p) "lessor" means a person who transfers the right to possession and use of goods under a lease; unless the context clearly indicates otherwise, the term includes a sublessor;

(q) "lessor's residual interest" means the lessor's interest in the goods after expiration, termination or cancellation of the lease contract;

(r) "lien" means a charge against or interest in goods to secure payment of a debt or performance of an obligation, but the term does not include a security interest;

(s) "lot" means a parcel or a single article that is the subject matter of a separate lease or delivery whether or not it is sufficient to perform the lease contract;

(t) "merchant lessee" means a lessee that is a merchant with respect to goods of the kind subject to the lease;

(u) "present value" means the amount as of a date certain of one or more sums payable in the future, discounted to the date certain. The discount is determined by the interest rate specified by the parties if the rate was not manifestly unreasonable at the time the transaction was entered into; otherwise, the discount is determined by a commercially reasonable rate that takes into account the facts and circumstances of each case at the time the transaction was entered into;

(v) "purchase" includes taking by sale, lease, mortgage, security interest, pledge, gift or any other voluntary transaction creating an interest in goods;

(w) "sublease" means a lease of goods the right to possession and use of which was acquired by the lessor as a lessee under an existing lease;

(x) "supplier" means a person from whom a lessor buys or leases goods to be leased under a finance lease;

(y) "supply contract" means a contract under which a lessor buys or leases goods to be leased; and

(z) "termination" occurs when either party pursuant to a power created by agreement or law puts an end to the lease contract otherwise than for default.

(2) Other definitions applying to this article and the sections in which they appear are:

"accessions". . . . . . . . . . . . . . . . .Section

55-2A-310 NMSA 1978;

"construction mortgage". . . . . . . . . . . Section

55-2A-309 NMSA 1978;

"encumbrance". . . . . . . . . . . . . . . . Section

55-2A-309 NMSA 1978;

"fixtures". . . . . . . . . . . . . . . . . .Section

55-2A-309 NMSA 1978;

"fixture filing". . . . . . . . . . . . . . .Section

55-2A-309 NMSA 1978; and

"purchase money lease". . . . . . . . . . . .Section

55-2A-309 NMSA 1978.

(3) The following definitions in other articles apply to this article:

"account" . . . . . . . . . . . . . . Paragraph (2) of Subsection (a) of Section 55-9-102 NMSA 1978;

"between merchants". . . . . . . . . .Subsection (3)

of Section 55-2-104 NMSA 1978;

"buyer". . . . . . . . . . . . . . . . Paragraph (a)

of Subsection (1) of Section 55-2-103 NMSA 1978;

"chattel paper". . . . . . . . . . . .Paragraph (11)

of Subsection (a) of Section 55-9-102 NMSA 1978;

"consumer goods" . . . . . . . . . . . Paragraph (23)

of Subsection (a) of Section 55-9-102 NMSA 1978;

"document". . . . . . . . . . . . . . Paragraph (30)

of Subsection (a) of Section 55-9-102 NMSA 1978;

"entrusting" . . . . . . . . . . . . . Subsection (3)

of Section 55-2-403 NMSA 1978;

"general intangible". . . . . . . . . Paragraph (42)

of Subsection (a) of Section 55-9-102 NMSA 1978;

"instrument". . . . . . . . . . . . . Paragraph (47)

of Subsection (a) of Section 55-9-102 NMSA 1978;

"merchant". . . . . . . . . . . . . . Subsection (1)

of Section 55-2-104 NMSA 1978;

"mortgage". . . . . . . . . . . . . . Paragraph (55)

of Subsection (a) of Section 55-9-102 NMSA 1978;

"pursuant to commitment". . . . . . Paragraph [(68)]

(69) of Subsection (a) of Section 55-9-102 NMSA 1978;

"receipt". . . . . . . . . . . . . . . Paragraph (c)

of Subsection (1) of Section 55-2-103 NMSA 1978;

"sale". . . . . . . . . . . . . . . . Subsection (1)

of Section 55-2-106 NMSA 1978;

"sale on approval". . . . . . . . . . . . . .Section

55-2-326 NMSA 1978;

"sale or return". . . . . . . . . . . . . . .Section

55-2-326 NMSA 1978; and

"seller". . . . . . . . . . . . . . . .Paragraph (d)

of Subsection (1) of Section 55-2-103 NMSA 1978.

(4) In addition, Chapter 55, Article 1 NMSA 1978 contains general definitions and principles of construction and interpretation applicable throughout this article."

SECTION 3. Section 55-9-102 NMSA 1978 (being Laws 2001, Chapter 139, Section 2, as amended) is amended to read:

"55-9-102. DEFINITIONS AND INDEX OF DEFINITIONS.--

(a) In Chapter 55, Article 9 NMSA 1978:

(1) "accession" means goods that are physically united with other goods in such a manner that the identity of the original goods is not lost;

(2) "account", except as used in "account for":

(A) means a right to payment of a monetary obligation, whether or not earned by performance:

(i) for property that has been or is to be sold, leased, licensed, assigned or otherwise disposed of;

(ii) for services rendered or to be rendered;

(iii) for a policy of insurance issued or to be issued;

(iv) for a secondary obligation incurred or to be incurred;

(v) for energy provided or to be

provided;

(vi) for the use or hire of a vessel under a charter or other contract;

(vii) arising out of the use of a credit or charge card or information contained on or for use with the card; or

(viii) 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; and

(B) includes health-care-insurance receivables; but

(i) rights to payment evidenced by chattel paper or an instrument;

(ii) commercial tort claims;

(iii) deposit accounts;

(iv) investment property;

(v) letter-of-credit rights or letters of credit; or

(vi) 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;

(3) "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;

(4) "accounting", except as used in "accounting for", means a record:

(A) authenticated by a secured party;

(B) indicating the aggregate unpaid secured obligations as of a date not more than thirty-five days earlier or thirty-five days later than the date of the record; and

(5) "agricultural lien" means an interest in farm products:

(A) that secures payment or performance of an obligation for:

(i) goods or services furnished in connection with a debtor's farming operation; or

(ii) rent on real property leased by a debtor in connection with its farming operation;

(B) that is created by statute in favor of a person that:

(i) in the ordinary course of its business furnished goods or services to a debtor in connection with a debtor's farming operation; or

(ii) leased real property to a debtor in connection with the debtor's farming operation; and

(6) "as-extracted collateral" means:

(A) oil, gas or other minerals that are subject to a security interest that:

(i) is created by a debtor having an interest in the minerals before extraction; and

(ii) attaches to the minerals as extracted; or

(B) accounts arising out of the sale at the wellhead or minehead of oil, gas or other minerals in which the debtor had an interest before extraction;

(7) "authenticate" means to:

(A) sign; or

(B) [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 adopt or accept a record] with present intent to adopt or accept a record or to attach to or logically associate with the record an electronic sound, symbol or process;

(8) "bank" means an organization that is engaged in the business of banking and includes savings banks, savings and loan associations, credit unions and trust companies;

(9) "cash proceeds" means proceeds that are money, checks, deposit accounts or the like;

(10) "certificate of title" means 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;

(11) "chattel paper" means a record or records that evidence both a monetary obligation and a security interest in specific goods, a security interest in specific goods and software used in the goods, a security interest in specific goods and license of software used in the goods, a lease of specific goods or a lease of specific goods and license of software used in the goods. In this paragraph, "monetary obligation" means a monetary obligation secured by the goods or owed under a lease of the goods and includes a monetary obligation with respect to software used in the goods. The term does not include:

(A) charters or other contracts involving the use or hire of a vessel; or

(B) records that evidence a right to payment arising out of the use of a credit or charge card or information contained on or for use with the card. If a transaction is evidenced by records that include an instrument or series of instruments, the group of records taken together constitutes chattel paper;

(12) "collateral" means the property subject to a security interest or agricultural lien and includes:

(A) proceeds to which a security interest attaches;

(B) accounts, chattel paper, payment intangibles and promissory notes that have been sold; and

(13) "commercial tort claim" means a claim arising in tort with respect to which:

(A) the claimant is an organization; or

(B) the claimant is an individual and the claim:

(i) arose in the course of the claimant's business or profession; and

(ii) does not include damages arising out of personal injury to or the death of an individual;

(14) "commodity account" means an account maintained by a commodity intermediary in which a commodity contract is carried for a commodity customer;

(15) "commodity contract" means a commodity futures contract, an option on a commodity futures contract, a commodity option or another contract if the contract or option is:

(A) traded on or subject to the rules of a board of trade that has been designated as a contract market for such a contract pursuant to federal commodities laws; or

(B) traded on a foreign commodity board of trade, exchange or market, and is carried on the books of a commodity intermediary for a commodity customer;

(16) "commodity customer" means a person for which a commodity intermediary carries a commodity contract on its books;

(17) "commodity intermediary" means a person that:

(A) is registered as a futures commission merchant under federal commodities law; or

(B) in the ordinary course of its business provides clearance or settlement services for a board of trade that has been designated as a contract market pursuant to federal commodities law;

(18) "communicate" means:

(A) to send a written or other tangible record;

(B) to transmit a record by any means agreed upon by the persons sending and receiving the record; or

(C) in the case of transmission of a record to or by a filing office, to transmit a record by any means prescribed by filing-office rule;

(19) "consignee" means a merchant to which goods are delivered in a consignment;

(20) "consignment" means a transaction, regardless of its form, in which a person delivers goods to a merchant for the purpose of sale and:

(A) the merchant:

(i) deals in goods of that kind under a name other than the name of the person making delivery;

(ii) is not an auctioneer; and

(iii) is not generally known by its creditors to be substantially engaged in selling the goods of others;

(B) with respect to each delivery, the aggregate value of the goods is one thousand dollars ($1,000) or more at the time of delivery;

(D) the transaction does not create a security interest that secures an obligation;

(21) "consignor" means a person that delivers goods to a consignee in a consignment;

(22) "consumer debtor" means a debtor in a consumer transaction;

(23) "consumer goods" means goods that are used or bought for use primarily for personal, family or household purposes;

(24) "consumer-goods transaction" means a consumer transaction in which:

(A) an individual incurs an obligation primarily for personal, family or household purposes; and

(B) a security interest in consumer goods secures the obligation;

(25) "consumer obligor" means an obligor who is an individual and who incurred the obligation as part of a transaction entered into primarily for personal, family or household purposes;

(26) "consumer transaction" means a transaction in which:

(A) an individual incurs an obligation primarily for personal, family or household purposes;

(B) a security interest secures the obligation; and

(C) the collateral is held or acquired primarily for personal, family or household purposes. The term includes consumer-goods transactions;

(27) "continuation statement" means an amendment of a financing statement that:

(A) identifies, by its file number, the initial financing statement to which it relates; and

(B) indicates that it is a continuation statement for, or that it is filed to continue the effectiveness of, the identified financing statement;

(28) "debtor" means:

(A) a person having an interest, other than a security interest or other lien, in the collateral, whether or not the person is an obligor;

(B) a seller of accounts, chattel paper, payment intangibles or promissory notes; or

(29) "deposit account" means a demand, time, savings, passbook or similar account maintained with a bank. The term does not include investment property or accounts evidenced by an instrument;

(30) "document" means a document of title or a receipt of the type described in Subsection (b) of Section 55-7-201 NMSA 1978;

(31) "electronic chattel paper" means chattel paper evidenced by a record or records consisting of information stored in an electronic medium;

(32) "encumbrance" means a right, other than an ownership interest, in real property. The term includes mortgages and other liens on real property;

(33) "equipment" means goods other than inventory, farm products or consumer goods;

(34) "farm products" means goods, other than standing timber, with respect to which the debtor is engaged in a farming operation and that are:

(A) crops grown, growing or to be grown, including:

(i) crops produced on trees, vines and bushes; and

(ii) aquatic goods produced in aquacultural operations;

(B) livestock, born or unborn, including aquatic goods produced in aquacultural operations;

(D) products of crops or livestock in their unmanufactured states;

(35) "farming operation" means raising, cultivating, propagating, fattening, grazing or any other farming, livestock or aquacultural operation;

(36) "file number" means the number assigned to an initial financing statement pursuant to Subsection (a) of Section 55-9-519 NMSA 1978;

(37) "filing office" means an office designated in Section 55-9-501 NMSA 1978 as the place to file a financing statement;

(38) "filing-office rule" means a rule adopted pursuant to Section 55-9-526 NMSA 1978;

(39) "financing statement" means a record or records composed of an initial financing statement and any filed record relating to the initial financing statement;

(40) "fixture filing" means the filing of a financing statement covering goods that are or are to become fixtures and satisfying Subsections (a) and (b) of Section 55-9-502 NMSA 1978. The term includes the filing of a financing statement covering goods of a transmitting utility that are or are to become fixtures;

(41) "fixtures" means goods that have become so related to particular real property that an interest in them arises under real property law;

(42) "general intangible" means any personal property, including things in action, other than accounts, chattel paper, commercial tort claims, deposit accounts, documents, goods, instruments, investment property, letter-of-credit rights, letters of credit, money and oil, gas or other minerals before extraction. The term includes payment intangibles and software;

(43) [Reserved];

(44) "goods" means all things that are movable when a security interest attaches and:

(A) includes:

(i) fixtures;

(ii) standing timber that is to be cut and removed under a conveyance or contract for sale;

(iii) the unborn young of animals;

(iv) crops grown, growing or to be grown, even if the crops are produced on trees, vines or bushes;

(v) manufactured homes; and

(vi) a computer program embedded in goods and any supporting information provided in connection with a transaction relating to the program if the program is associated with the goods in such a manner that it customarily is considered part of the goods, or by becoming the owner of the goods, a person acquires a right to use the program in connection with the goods; but

(B) does not include:

(i) a computer program embedded in goods that consist solely of the medium in which the program is embedded; or

(ii) accounts, chattel paper, commercial tort claims, deposit accounts, documents, general intangibles, instruments, investment property, letter-of-credit rights, letters of credit, money or oil, gas or other minerals before extraction;

(45) "governmental unit" means a subdivision, agency, department, county, parish, municipality or other unit of the government of the United States, a state or a foreign country. The term includes an organization having a separate corporate existence if the organization is eligible to issue debt on which interest is exempt from income taxation under the laws of the United States;

(46) "health-care-insurance receivable" means an interest in or claim under a policy of insurance that is a right to payment of a monetary obligation for health care goods or services provided or to be provided;

(47) "instrument" means a negotiable instrument or any other writing that evidences a right to the payment of a monetary obligation, is not itself a security agreement or lease and is of a type that in ordinary course of business is transferred by delivery with any necessary indorsement or assignment. The term does not include:

(A) investment property;

(B) letters of credit; or

(C) writings that evidence a right to payment arising out of the use of a credit or charge card or information contained on or for use with the card;

(48) "inventory" means goods, other than farm products, that:

(A) are leased by a person as lessor;

(B) are held by a person for sale or lease or to be furnished under a contract of service;

(D) consist of raw materials, work in process or materials used or consumed in a business;

(49) "investment property" means a security, whether certificated or uncertificated, security entitlement, securities account, commodity contract or commodity account;

(50) "jurisdiction of organization", with respect to a registered organization, means the jurisdiction under whose law the organization is formed or organized;

(51) "letter-of-credit right" means a right to payment or performance under a letter of credit, whether or not the beneficiary has demanded or is at the time entitled to demand payment or performance. The term does not include the right of a beneficiary to demand payment or performance under a letter of credit;

(52) "lien creditor" means:

(A) a creditor that has acquired a lien on the property involved by attachment, levy or the like;

(B) an assignee for benefit of creditors from the time of assignment;

(D) a receiver in equity from the time of appointment;

(53) "manufactured home" means a structure, transportable in one or more sections, which, in the traveling mode, is eight body feet or more in width or forty body feet or more in length, or, when erected on site, is three hundred twenty or more square feet, and which is built on a permanent chassis and designed to be used as a dwelling with or without a permanent foundation when connected to the required utilities, and includes the plumbing, heating, air-conditioning and electrical systems contained therein. The term includes any structure that meets all of the requirements of this paragraph except the size requirements and with respect to which the manufacturer voluntarily files a certification required by the United States secretary of housing and urban development and complies with the standards established under 42 USCA;

(54) "manufactured-home transaction" means a secured transaction:

(A) that creates a purchase-money security interest in a manufactured home, other than a manufactured home held as inventory; or

(B) in which a manufactured home, other than a manufactured home held as inventory, is the primary collateral;

(55) "mortgage" means a consensual interest in real property, including fixtures, that secures payment or performance of an obligation;

(56) "new debtor" means a person that becomes bound as debtor under Subsection (d) of Section 55-9-203 NMSA 1978 by a security agreement previously entered into by another person;

(57) "new value" means:

(A) money;

(B) money's worth in property, services or new credit; or

(C) release by a transferee of an interest in property previously transferred to the transferee. The term does not include an obligation substituted for another obligation;

(58) "noncash proceeds" means proceeds other than cash proceeds;

(59) "obligor" means a person that, with respect to an obligation secured by a security interest in or an agricultural lien on the collateral:

(A) owes payment or other performance of the obligation;

(B) has provided property other than the collateral to secure payment or other performance of the obligation; or

(C) is otherwise accountable in whole or in part for payment or other performance of the obligation. The term does not include issuers or nominated persons under a letter of credit;

(60) "original debtor", except as used in Subsection (c) of Section 55-9-310 NMSA 1978, means a person that, as debtor, entered into a security agreement to which a new debtor has become bound under Subsection (d) of Section 55-9-203 NMSA 1978;

(61) "payment intangible" means a general intangible under which the account debtor's principal obligation is a monetary obligation;

(62) "person related to", with respect to an individual, means:

(A) the spouse of the individual;

(B) a brother, brother-in-law, sister or sister-in-law of the individual;

(D) any other relative, by blood or marriage, of the individual or the individual's spouse who shares the same home with the individual;

(63) "person related to", with respect to an organization, means:

(A) a person directly or indirectly controlling, controlled by or under common control with the organization;

(B) an officer or director of, or a person performing similar functions with respect to, the organization;

(C) an officer or director of, or a person performing similar functions with respect to, a person described in Subparagraph (A) of this paragraph;

(D) the spouse of an individual described in Subparagraph (A), (B) or (C) of this paragraph; or

(E) an individual who is related by blood or marriage to an individual described in Subparagraph (A), (B), (C) or (D) of this paragraph and shares the same home with the individual;

(64) "proceeds", except as used in Subsection (b) of Section 55-9-609 NMSA 1978, means:

(A) whatever is acquired upon the sale, lease, license, exchange or other disposition of collateral;

(B) whatever is collected on, or distributed on account of, collateral;

(D) to the extent of the value of collateral, claims arising out of the loss, nonconformity or interference with the use of, defects or infringement of rights in, or damage to, the collateral; or

(E) to the extent of the value of collateral and to the extent payable to the debtor or the secured party, insurance payable by reason of the loss or nonconformity of, defects or infringement of rights in, or damage to, the collateral;

(65) "promissory note" means an instrument that evidences a promise to pay a monetary obligation, does not evidence an order to pay and does not contain an acknowledgment by a bank that the bank has received for deposit a sum of money or funds;

(66) "proposal" means a record authenticated by a secured party, which record includes the terms on which the secured party is willing to accept collateral in full or partial satisfaction of the obligation it secures pursuant to Sections 55-9-620 through 55-9-622 NMSA 1978;

(67) "public-finance transaction" means a secured transaction in connection with which:

(A) debt securities are issued;

(B) all or a portion of the securities issued have an initial stated maturity of at least twenty years; and

(C) the debtor, obligor, secured party, account debtor or other person obligated on collateral, the assignor or assignee of a secured obligation or the assignor or assignee of a security interest is a state or a governmental unit of a state;

(68) "public organic record" means a record that is available to the public for inspection and is:

(A) 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 that amends or restates the initial record;

(B) an organic record of a business trust consisting of the record initially filed with a state and any record filed with the state that 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

(C) a record consisting of legislation enacted by the legislature of a state or the congress of the United States that forms or organizes an organization; any record amending the legislation; and any record filed with or issued by the state or the United States that amends or restates the name of the organization;

[(67)] (69) "pursuant to commitment", with respect to an advance made or other value given by a secured party, means pursuant to the secured party's obligation, whether or not a subsequent event of default or other event not within the secured party's control has relieved or may relieve the secured party from its obligation;

[(68)] (70) "record", except as used in "for record", "of record", "record or legal title" and "record owner", means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form;

[(69)] (71) "registered organization" means 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 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 the business trust's organic record be filed with the state;

[(70)] (72) "secondary obligor" means an obligor to the extent that:

(A) the obligor's obligation is secondary; or

(B) the obligor has a right of recourse with respect to an obligation secured by collateral against the debtor, another obligor or property of either;

[(71)] (73) "secured party" means:

(A) a person in whose favor a security interest is created or provided for under a security agreement, whether or not any obligation to be secured is outstanding;

(B) a person that holds an agricultural lien;

(D) a person to which accounts, chattel paper, payment intangibles or promissory notes have been sold;

(E) a trustee, indenture trustee, agent, collateral agent or other representative in whose favor a security interest or agricultural lien is created or provided for; or

(F) a person that holds a security interest arising under Section 55-2-401, Section 55-2-505, Subsection (3) of Section 55-2-711, Subsection (5) of Section 55-2A-508, Section 55-4-210 or Section 55-5-118 NMSA 1978;

[(72)] (74) "security agreement" means an agreement that creates or provides for a security interest;

[(73)] (75) "send", in connection with a record or notification, means:

(A) to deposit in the mail, deliver for transmission or transmit by any other usual means of communication, with postage or cost of transmission provided for, addressed to any address reasonable under the circumstances; or

(B) to cause the record or notification to be received within the time that it would have been received if properly sent under Subparagraph (A) of this paragraph;

[(74)] (76) "software" means a computer program and any supporting information provided in connection with a transaction relating to the program. The term does not include a computer program that is included in the definition of goods;

[(75)] (77) "state" means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands or any territory or insular possession subject to the jurisdiction of the United States;

[(76)] (78) "supporting obligation" means a letter-of-credit right or secondary obligation that supports the payment or performance of an account, chattel paper, a document, a general intangible, an instrument or investment property;

[(77)] (79) "tangible chattel paper" means chattel paper evidenced by a record or records consisting of information that is inscribed on a tangible medium;

[(78)] (80) "termination statement" means an amendment of a financing statement that:

(A) identifies, by its file number, the initial financing statement to which it relates; and

(B) indicates either that it is a termination statement or that the identified financing statement is no longer effective; and

[(79)] (81) "transmitting utility" means a person primarily engaged in the business of:

(A) operating a railroad, subway, street railway or trolley bus;

(B) transmitting communications electrically, electromagnetically or by light;

(D) transmitting or producing and transmitting electricity, steam, gas or water.

(b) "Control", as provided in Section 55-7-106 NMSA 1978, and the following definitions in other articles apply to this article:

"applicant". . . . . . . . . . . . . . . . . Section

55-5-102 NMSA 1978;

"beneficiary". . . . . . . . . . . . . . . . Section

55-5-102 NMSA 1978;

"broker". . . . . . . . . . . . . . . . . . .Section

55-8-102 NMSA 1978;

"certificated security". . . . . . . . . . . Section

55-8-102 NMSA 1978;

"check". . . . . . . . . . . . . . . . . . . Section

55-3-104 NMSA 1978;

"clearing corporation". . . . . . . . . . . .Section

55-8-102 NMSA 1978;

"contract for sale". . . . . . . . . . . . . Section

55-2-106 NMSA 1978;

"customer". . . . . . . . . . . . . . . . . .Section

55-4-104 NMSA 1978;

"entitlement holder". . . . . . . . . . . . .Section

55-8-102 NMSA 1978;

"financial asset". . . . . . . . . . . . . . Section

55-8-102 NMSA 1978;

"holder in due course". . . . . . . . . . . .Section

55-3-302 NMSA 1978;

"issuer" (with respect to a letter of credit or letter-of-credit right). . . . . . . . . . . . . . . . .Section

55-5-102 NMSA 1978;

"issuer" (with respect to a security). . . . Section

55-8-201 NMSA 1978;

"issuer" (with respect to documents

of title). . . . . . . . . . . . . . . . . . . . . . . .Section

55-7-102 NMSA 1978;

"lease". . . . . . . . . . . . . . . . . . . Section

55-2A-103 NMSA 1978;

"lease agreement". . . . . . . . . . . . . . Section

55-2A-103 NMSA 1978;

"lease contract". . . . . . . . . . . . . . .Section

55-2A-103 NMSA 1978;

"leasehold interest". . . . . . . . . . . . .Section

55-2A-103 NMSA 1978;

"lessee". . . . . . . . . . . . . . . . . . .Section

55-2A-103 NMSA 1978;

"lessee in ordinary course of business". . . Section

55-2A-103 NMSA 1978;

"lessor". . . . . . . . . . . . . . . . . . .Section

55-2A-103 NMSA 1978;

"lessor's residual interest". . . . . . . . .Section

55-2A-103 NMSA 1978;

"letter of credit". . . . . . . . . . . . . .Section

55-5-102 NMSA 1978;

"merchant". . . . . . . . . . . . . . . . . .Section

55-2-104 NMSA 1978;

"negotiable instrument". . . . . . . . . . . Section

55-3-104 NMSA 1978;

"nominated person". . . . . . . . . . . . . .Section

55-5-102 NMSA 1978;

"note". . . . . . . . . . . . . . . . . . . .Section

55-3-104 NMSA 1978;

"proceeds of a letter of credit". . . . . . .Section

55-5-114 NMSA 1978;

"prove". . . . . . . . . . . . . . . . . . . Section

55-3-103 NMSA 1978;

"sale". . . . . . . . . . . . . . . . . . . .Section

55-2-106 NMSA 1978;

"securities account". . . . . . . . . . . . .Section

55-8-501 NMSA 1978;

"securities intermediary". . . . . . . . . . Section

55-8-102 NMSA 1978;

"security". . . . . . . . . . . . . . . . . .Section

55-8-102 NMSA 1978;

"security certificate". . . . . . . . . . . .Section

55-8-102 NMSA 1978;

"security entitlement". . . . . . . . . . . .Section

55-8-102 NMSA 1978; and

"uncertificated security". . . . . . . . . . Section

55-8-102 NMSA 1978.

(c) Chapter 12, Article 2A and Chapter 55, Article 1 NMSA 1978 contain general definitions and principles of construction and interpretation applicable throughout Chapter 55, Article 9 NMSA 1978."

SECTION 4. Section 55-9-105 NMSA 1978 (being Laws 2001, Chapter 130, Section 5) is amended to read:

"55-9-105. 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 and the record or records comprising the chattel paper are created, stored and assigned in such a manner that:

(a) a single authoritative copy of the record or records exists which is unique, identifiable and, except as otherwise provided in Subsections (d) through (f) of this section, unalterable;

(b) the authoritative copy identifies the secured party as the assignee of the record or records;

(d) copies or [revisions] amendments that add or change an identified assignee of the authoritative copy can be made only with the [participation] consent of the secured party;

(e) each copy of the authoritative copy and any copy of a copy is readily identifiable as a copy that is not the authoritative copy; and

(f) any [revision] amendment of the authoritative copy is readily identifiable as [an] authorized or unauthorized [revision]."

SECTION 5. Section 55-9-307 NMSA 1978 (being Laws 2001, Chapter 139, Section 27) is amended to read:

"55-9-307. LOCATION OF DEBTOR.--

(a) In this section, "place of business" means a place where a debtor conducts its affairs.

(b) Except as otherwise provided in this section, the following rules determine a debtor's location:

(1) a debtor who is an individual is located at the individual's principal residence;

(2) a debtor that is an organization and has only one place of business is located at its place of business; and

(3) a debtor that is an organization and has more than one place of business is located at its chief executive office.

(c) Subsection (b) of this section applies only if a debtor's residence, place of business or chief executive office, as applicable, is located in a jurisdiction whose law generally requires information concerning the existence of a nonpossessory security interest to be made generally available in a filing, recording or registration system as a condition or result of the security interest's obtaining priority over the rights of a lien creditor with respect to the collateral. If Subsection (b) of this section does not apply, the debtor is located in the District of Columbia.

(d) A person that ceases to exist, have a residence or have a place of business continues to be located in the jurisdiction specified by Subsections (b) and (c) of this section.

(e) A registered organization that is organized under the law of a state is located in that state.

(f) Except as otherwise provided in Subsection (i) of this section, a registered organization that is organized under the law of the United States and a branch or agency of a bank that is not organized under the law of the United States or a state are located:

(1) in the state that the law of the United States designates if the law designates a state of location;

(2) in the state that 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

(3) in the District of Columbia if neither Paragraph (1) nor Paragraph (2) of this subsection applies.

(g) A registered organization continues to be located in the jurisdiction specified by Subsection (e) or (f) of this section notwithstanding:

(1) the suspension, revocation, forfeiture or lapse of the registered organization's status as such in its jurisdiction of organization; or

(2) the dissolution, winding up or cancellation of the existence of the registered organization.

(h) The United States is located in the District of Columbia.

(i) A branch or agency of a bank that is not organized under the law of the United States or a state is located in the state in which the branch or agency is licensed if all branches and agencies of the bank are licensed in only one state.

(j) A foreign air carrier under the Federal Aviation Act of 1958, as amended, is located at the designated office of the agent upon which service of process may be made on behalf of the carrier.

(k) This section applies only for purposes of Sections 55-9-301 through 55-9-342 NMSA 1978."

SECTION 6. Section 55-9-311 NMSA 1978 (being Laws 2001, Chapter 139, Section 31) is amended to read:

"55-9-311. PERFECTION OF SECURITY INTERESTS IN PROPERTY SUBJECT TO CERTAIN STATUTES, REGULATIONS AND TREATIES.--

(a) Except as otherwise provided in Subsection (d) of this section, the filing of a financing statement is not necessary or effective to perfect a security interest in property subject to:

(1) a statute, regulation or treaty of the United States whose requirements for a security interest's obtaining priority over the rights of a lien creditor with respect to the property preempt Subsection (a) of Section 55-9-310 NMSA 1978;

(2) the provisions of Chapter 66 NMSA 1978; 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 the requirements of a statute, regulation or treaty described in Subsection (a) of this section for obtaining priority over the rights of a lien creditor is equivalent to the filing of a financing statement under Chapter 55, Article 9 NMSA 1978. Except as otherwise provided in Subsection (d) of this section and in Section 55-9-313 and Subsections (d) and (e) of Section 55-9-316 NMSA 1978 for goods covered by a certificate of title, a security interest in property subject to a statute, regulation or treaty described in Subsection (a) of this section 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.

(c) Except as otherwise provided in Subsection (d) of this section and Subsections (d) and (e) of Section 55-9-316 NMSA 1978, duration and renewal of perfection of a security interest perfected by compliance with the requirements prescribed by a statute, regulation or treaty described in Subsection (a) of this section are governed by the statute, regulation or treaty. In other respects, the security interest is subject to Chapter 55, Article 9 NMSA 1978.

(d) During any period in which collateral subject to a statute specified in Paragraph (2) of Subsection (a) of this section is inventory held for sale or lease by a person or leased by that person as lessor and that person is in the business of selling goods of that kind, this section does not apply to a security interest in that collateral created by that person."

SECTION 7. Section 55-9-316 NMSA 1978 (being Laws 2001, Chapter 139, Section 36) is amended to read:

"55-9-316. [CONTINUED PERFECTION OF SECURITY INTEREST FOLLOWING] EFFECTS OF CHANGE IN GOVERNING LAW.--

(a) A security interest perfected pursuant to the law of the jurisdiction designated in Subsection (1) of Section 55-9-301 or Subsection (c) of Section 55-9-305 NMSA 1978 remains perfected until the earliest of:

(1) the time perfection would have ceased under the law of that jurisdiction;

(2) the expiration of four months after a change of the debtor's location to another jurisdiction; or

(3) the expiration of one year after a transfer of collateral to a person that thereby becomes a debtor and is located in another jurisdiction.

(b) If a security interest described in Subsection (a) of this section becomes perfected under the law of the other jurisdiction before the earliest time or event described in that subsection, it remains perfected thereafter. If the security interest does not become perfected under the law of the other jurisdiction before the earliest time or event, it becomes unperfected and is deemed never to have been perfected as against a purchaser of the collateral for value.

(c) A possessory security interest in collateral, other than goods covered by a certificate of title and as-extracted collateral consisting of goods, remains continuously perfected if:

(1) the collateral is located in one jurisdiction and subject to a security interest perfected under the law of that jurisdiction;

(2) thereafter the collateral is brought into another jurisdiction; and

(3) upon entry into the other jurisdiction, the security interest is perfected under the law of the other jurisdiction.

(d) Except as otherwise provided in Subsection (e) of this section, a security interest in goods covered by a certificate of title which is perfected by any method under the law of another jurisdiction when the goods become covered by a certificate of title from this state remains perfected until the security interest would have become unperfected under the law of the other jurisdiction had the goods not become so covered.

(e) A security interest described in Subsection (d) of this section becomes unperfected as against a purchaser of the goods for value and is deemed never to have been perfected as against a purchaser of the goods for value if the applicable requirements for perfection under Subsection (b) of Section 55-9-311 or Section 55-9-313 NMSA 1978 are not satisfied before the earlier of:

(1) the time the security interest would have become unperfected under the law of the other jurisdiction had the goods not become covered by a certificate of title from this state; or

(2) the expiration of four months after the goods had become so covered.

(f) A security interest in deposit accounts, letter-of-credit rights or investment property which is perfected under the law of the bank's jurisdiction, the issuer's jurisdiction, a nominated person's jurisdiction, the securities intermediary's jurisdiction or the commodity intermediary's jurisdiction, as applicable, remains perfected until the earlier of:

(1) the time the security interest would have become unperfected under the law of that jurisdiction; or

(2) the expiration of four months after a change of the applicable jurisdiction to another jurisdiction.

(g) If a security interest described in Subsection (f) of this section becomes perfected under the law of the other jurisdiction before the earlier of the time or the end of the period described in that subsection, it remains perfected thereafter. If the security interest does not become perfected under the law of the other jurisdiction before the earlier of that time or the end of that period, it becomes unperfected and is deemed never to have been perfected as against a purchaser of the collateral for value.

(h) 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 Paragraph (1) of Section 55-9-301 or Subsection (c) of Section 55-9-305 NMSA 1978 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; and

(2) if a security interest perfected by a financing statement that is effective under Paragraph (1) of this subsection 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 Paragraph (1) of Section 55-9-301 or Subsection (c) of Section 55-9-305 NMSA 1978 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) If a financing statement naming an original debtor is filed pursuant to the law of the jurisdiction designated in Paragraph (1) of Section 55-9-301 or Subsection (c) of Section 55-9-305 NMSA 1978 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 Subsection (d) of Section 55-9-203 NMSA 1978 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; and

(2) a security interest perfected by the financing statement that 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 Paragraph (1) of Section 55-9-301 or Subsection (c) of Section 55-9-305 NMSA 1978 or the expiration of the four-month period remains perfected thereafter. A security interest that is perfected by the financing statement but that 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 8. Section 55-9-317 NMSA 1978 (being Laws 2001, Chapter 139, Section 37, as amended) is amended to read:

"55-9-317. INTERESTS THAT TAKE PRIORITY OVER OR TAKE FREE OF SECURITY INTEREST OR AGRICULTURAL LIEN.--

(a) A security interest or agricultural lien is subordinate to the rights of:

(1) a person entitled to priority under Section 55-9-322 NMSA 1978; and

(2) except as otherwise provided in Subsection (e) of this section, a person that becomes a lien creditor before the earlier of the time:

(A) the security interest or agricultural lien is perfected; or

(B) one of the conditions specified in Paragraph (3) of Subsection (b) of Section 55-9-203 NMSA 1978 is met and a financing statement covering the collateral is filed.

(b) Except as otherwise provided in Subsection (e) of this section, a buyer, other than a secured party, of tangible chattel paper, tangible documents, goods, instruments or a security certificate 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.

(c) Except as otherwise provided in Subsection (e) of this section, a lessee of goods takes free of a security interest or agricultural lien if the lessee gives value and receives delivery of the collateral without knowledge of the security interest or agricultural lien and before it is perfected.

(d) 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.

(e) Except as otherwise provided in Sections 55-9-320 and 55-9-321 NMSA 1978, if a person files a financing statement with respect to a purchase-money security interest before or within twenty days after the debtor receives delivery of the collateral, the security interest takes priority over the rights of a buyer, lessee or lien creditor that arise between the time the security interest attaches and the time of filing."

SECTION 9. Section 55-9-326 NMSA 1978 (being Laws 2001, Chapter 139, Section 46) is amended to read:

"55-9-326. PRIORITY OF SECURITY INTERESTS CREATED BY NEW DEBTOR.--

(a) Subject to Subsection (b) of this section, 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 that [is effective solely under Section 55-9-508 NMSA 1978 in collateral in which a new debtor has or acquires rights] would be ineffective to perfect the security interest but for the application of Paragraph (1) of Subsection (i) of Section 55-9-316 or Section 55-9-508 NMSA 1978 is subordinate to a security interest in the same collateral which is perfected other than by such a filed financing statement [that is effective solely under Section 55-9-508 NMSA 1978].

(b) The other provisions of Sections 55-9-301 through 55-9-342 NMSA 1978 determine the priority among conflicting security interests in the same collateral perfected by filed financing statements [that are effective solely under Section 55-9-508 NMSA 1978] described in Subsection (a) of this section. 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 having become bound."

SECTION 10. Section 55-9-406 NMSA 1978 (being Laws 2001, Chapter 139, Section 68) is amended to read:

"55-9-406. 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.--

(a) Subject to Subsections (b) through (i) of this section, an account debtor on an account, chattel paper or a payment intangible may discharge its obligation by paying the assignor until, but not after, the account debtor receives a notification, authenticated by the assignor or the assignee, that the amount due or to become due has been assigned and that payment is to be made to the assignee. After receipt of the notification, the account debtor may discharge its obligation by paying the assignee and may not discharge the obligation by paying the assignor.

(b) Subject to Subsection (h) of this section, notification is ineffective under Subsection (a) of this section:

(1) if it does not reasonably identify the rights assigned;

(2) to the extent that an agreement between an account debtor and a seller of a payment intangible limits the account debtor's duty to pay a person other than the seller and the limitation is effective under law other than Chapter 55, Article 9 NMSA 1978; or

(3) at the option of an account debtor, if the notification notifies the account debtor to make less than the full amount of any installment or other periodic payment to the assignee, even if:

(A) only a portion of the account, chattel paper or payment intangible has been assigned to that assignee;

(B) a portion has been assigned to another assignee; or

(c) Subject to Subsection (h) of this section, if requested by the account debtor, an assignee shall seasonably furnish reasonable proof that the assignment has been made. Unless the assignee complies, the account debtor may discharge its obligation by paying the assignor, even if the account debtor has received a notification under Subsection (a) of this section.

(d) Except as otherwise provided in Subsection (e) of this section and Sections 55-2A-303 and 55-9-407 NMSA 1978, and subject to Subsection (h) of this section, a term in an agreement between an account debtor and an assignor or in a promissory note is ineffective to the extent that it:

(1) prohibits, restricts or requires the consent of the account debtor or person obligated on the promissory note to the assignment or transfer of, or the creation, attachment, perfection or enforcement of a security interest in, the account, chattel paper, payment intangible or promissory note; or

(2) provides that the assignment or transfer or the creation, attachment, perfection or enforcement of the security interest may give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination or remedy under the account, chattel paper, payment intangible or promissory note.

(e) Subsection (d) of this section does not apply to the sale of a payment intangible or promissory note, other than a sale pursuant to a disposition under Section 55-9-610 NMSA 1978 or an acceptance of collateral under Section 55-9-620 NMSA 1978.

(f) Except as otherwise provided in Sections 55-2A-303 and 55-9-407 NMSA 1978 and subject to Subsections (h) and (i) of this section, a rule of law, statute or regulation that prohibits, restricts or requires the consent of a government, governmental body or official, or account debtor to the assignment or transfer of, or creation of a security interest in, an account or chattel paper is ineffective to the extent that the rule of law, statute or regulation:

(1) prohibits, restricts or requires the consent of the government, governmental body or official, or account debtor to the assignment or transfer of, or the creation, attachment, perfection or enforcement of a security interest in the account or chattel paper; or

(g) Subject to Subsection (h) of this section, an account debtor may not waive or vary its option under Paragraph (3) of Subsection (b) of this section.

(h) This section is subject to law other than Chapter 55, Article 9 NMSA 1978 which establishes a different rule for an account debtor who is an individual and who incurred the obligation primarily for personal, family or household purposes.

(i) This section does not apply to an assignment of a health-care-insurance receivable.

(j) This section is subject to laws other than Chapter 55, Article 9 NMSA 1978 to the extent that those laws prohibit or restrict the assignment, transfer of or creation of a security interest in benefits, compensation, any other account or chattel paper."

SECTION 11. Section 55-9-408 NMSA 1978 (being Laws 2001, Chapter 139, Section 70) is amended to read:

"55-9-408. RESTRICTIONS ON ASSIGNMENT OF PROMISSORY NOTES, HEALTH-CARE-INSURANCE RECEIVABLES AND CERTAIN GENERAL INTANGIBLES INEFFECTIVE.--

(a) Except as otherwise provided in Subsection (b) of this section, a term in a promissory note or in an agreement between an account debtor and a debtor, which relates to a health-care-insurance receivable or a general intangible, including a contract, permit, license or franchise, and which [term] prohibits, restricts or requires the consent of the person obligated on the promissory note or the account debtor to the assignment or transfer of, or creation, attachment or perfection of a security interest in, the promissory note, health-care-insurance receivable or general intangible, is ineffective to the extent that the term:

(1) would impair the creation, attachment or perfection of a security interest; or

(2) provides that the assignment or transfer or the creation, attachment or perfection of the security interest may give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination or remedy under the promissory note, health-care-insurance receivable or general intangible.

(b) Subsection (a) of this section 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 55-9-610 NMSA 1978 or an acceptance of collateral under Section 55-9-620 NMSA 1978.

(c) A rule of law, statute or regulation that prohibits, restricts or requires the consent of a government, governmental body or official, person obligated on a promissory note or account debtor to the assignment or transfer of, or creation of a security interest in, a promissory note, health-care-insurance receivable or general intangible, including a contract, permit, license or franchise between an account debtor and a debtor, is ineffective to the extent that the rule of law, statute or regulation:

(1) would impair the creation, attachment or perfection of a security interest; or

(d) To the extent that a term in a promissory note or in an agreement between an account debtor and a debtor which relates to a health-care-insurance receivable or general intangible or a rule of law, statute or regulation described in Subsection (c) of this section would be effective under law other than Chapter 55, Article 9 NMSA 1978 but is ineffective under Subsection (a) or (c) of this section, the creation, attachment or perfection of a security interest in the promissory note, health-care-insurance receivable or general intangible:

(1) is not enforceable against the person obligated on the promissory note or the account debtor;

(2) does not impose a duty or obligation on the person obligated on the promissory note or the account debtor;

(3) does not require the person obligated on the promissory note or the account debtor to recognize the security interest, pay or render performance to the secured party or accept payment or performance from the secured party;

(4) does not entitle the secured party to use or assign the debtor's rights under the promissory note, health-care-insurance receivable or general intangible, including any related information or materials furnished to the debtor in the transaction giving rise to the promissory note, health-care-insurance receivable or general intangible;

(5) does not entitle the secured party to use, assign, possess or have access to any trade secrets or confidential information of the person obligated on the promissory note or the account debtor; and

(6) does not entitle the secured party to enforce the security interest in the promissory note, health-care-insurance receivable or general intangible. The provisions of this section shall prevail over an inconsistent provision of an existing or future statute or rule of this state, unless the inconsistent provision is set forth in a statute of this state that refers expressly to this section and states that the inconsistent provision shall prevail over the provisions of this section."

SECTION 12. Section 55-9-502 NMSA 1978 (being Laws 2001, Chapter 139, Section 73) is amended to read:

"55-9-502. CONTENTS OF FINANCING STATEMENT--RECORD OF MORTGAGE AS FINANCING STATEMENT--TIME OF FILING FINANCING STATEMENT.--

(a) Subject to Subsection (b) of this section, a financing statement is sufficient only if it:

(1) provides the name of the debtor;

(2) provides the name of the secured party or a representative of the secured party; and

(3) indicates the collateral covered by the financing statement.

(b) Except as otherwise provided in Subsection (b) of Section 55-9-501 NMSA 1978, to be sufficient a financing statement that covers as-extracted collateral or timber to be cut, or which is filed as a fixture filing and covers goods that are or are to become fixtures, must satisfy Subsection (a) of this section and also:

(1) indicate that it covers this type of collateral;

(2) indicate that it is to be filed for record in the real property records;

(3) provide a description of the real property to which the collateral is related sufficient to give constructive notice of a mortgage pursuant to the laws of this state if the description were contained in a record of the mortgage of the real property; and

(4) if the debtor does not have an interest of record in the real property, provide the name of a record owner.

(c) A record of a mortgage is effective, from the date it is filed for record, 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:

(1) the record indicates the goods or accounts that it covers;

(2) 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 record satisfies the requirements for a financing statement in this section [other than an indication] but:

(A) the record need not indicate that it is to be filed for record in the real property records; and

(B) 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 Paragraph (4) of Subsection (a) of Section 55-9-503 NMSA 1978 applies; and

(4) the record is recorded.

(d) A financing statement may be filed before a security agreement is made or a security interest otherwise attaches."

SECTION 13. Section 55-9-503 NMSA 1978 (being Laws 2001, Chapter 139, Section 74) is amended to read:

"55-9-503. NAME OF DEBTOR AND SECURED PARTY.--

(a) A financing statement sufficiently provides the name of the debtor:

(1) except as otherwise provided in Paragraph (3) of this section, 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) subject to Subsection (f) of this section, 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:

(A) 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

(B) 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] 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 in accordance with Subparagraph (A)(i) of this paragraph, indicates that the collateral is held in a trust; or

(ii) if the name is provided in accordance with Subparagraph (A)(ii) of this paragraph, 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) of this section, if the debtor is an individual to whom this state has issued a driver's license that has not expired, only if the financing statement provides the name of the individual indicated on the driver's license;

(5) if the debtor is an individual to whom Paragraph (4) of this subsection 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; and

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

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

(B) if the debtor does not have a name, only if it provides the names of the partners, members, associates or other persons comprising the debtor in a manner such that each name provided would be sufficient if the person named were the debtor.

(b) A financing statement that provides the name of the debtor in accordance with Subsection (a) of this section is not rendered ineffective by the absence of:

(1) a trade name or other name of the debtor; or

(2) unless required under Subparagraph (B) of Paragraph [(4)] (6) of Subsection (a) of this section, names of partners, members, associates or other persons comprising the debtor.

(c) A financing statement that provides only the debtor's trade name does not sufficiently provide the name of the debtor.

(d) Failure to indicate the representative capacity of a secured party or representative of a secured party does not affect the sufficiency of a financing statement.

(e) A financing statement may provide the name of more than one debtor and the name of more than one secured party.

(f) 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 Paragraph (2) of Subsection (a) of this section.

(g) If this state has issued to an individual more than one driver's license of a kind described in Paragraph (4) of Subsection (a) of this section, the one that was issued most recently is the one to which Paragraph (4) of Subsection (a) of this section refers.

(h) As used in this section, "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 that 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 14. Section 55-9-507 NMSA 1978 (being Laws 2001, Chapter 139, Section 78) is amended to read:

"55-9-507. EFFECT OF CERTAIN EVENTS ON EFFECTIVENESS OF FINANCING STATEMENT.--

(a) A filed financing statement remains effective with respect to collateral that is sold, exchanged, leased, licensed or otherwise disposed of and in which a security interest or agricultural lien continues, even if the secured party knows of or consents to the disposition.

(b) Except as otherwise provided in Subsection (c) of this section and Section 55-9-508 NMSA 1978, a financing statement is not rendered ineffective if, after the financing statement is filed, the information provided in the financing statement becomes seriously misleading under Section 55-9-506 NMSA 1978.

(c) 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 Subsection (a) of Section 55-9-503 NMSA 1978 such that the financing statement becomes seriously misleading under Section 55-9-506 NMSA 1978:

(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] that renders the financing statement not seriously misleading is filed within four months after the [change] financing statement became seriously misleading."

SECTION 15. Section 55-9-510 NMSA 1978 (being Laws 2001, Chapter 139, Section 81) is amended to read:

"55-9-510. EFFECTIVENESS OF FILED RECORD.--

(a) A filed record is effective only to the extent that it was filed by a person that may file it under Section 55-9-509 NMSA 1978 or by the filing office under Subsection (a) of Section 55-9-513 NMSA 1978.

(b) A record authorized by one secured party of record does not affect the financing statement with respect to another secured party of record.

(c) A continuation statement that is not filed within the six-month period prescribed by Subsection (d) of Section 55-9-515 NMSA 1978 is ineffective."

SECTION 16. A new section of the Uniform Commercial Code-Secure Transactions, Section 55-9-513.1 NMSA 1978, is enacted to read:

"55-9-513.1. [NEW MATERIAL] UNAUTHORIZED FILING OF FINANCING STATEMENT--AFFIDAVIT REQUIRED--CIVIL PENALTIES.--

(a) No person shall communicate a financing statement to a filing office for filing that is:

(1) not authorized or permitted under Section 55-9-509 or 55-9-808 NMSA 1978;

(2) not related to a valid existing or potential commercial or financial transaction; and

(3) filed with the intent to harass, hinder or defraud a qualified person identified as an individual debtor in the financing statement.

(b) A qualified person may file in the office of the secretary of state a notarized affidavit, signed under penalty of perjury, stating that:

(1) the affiant is a qualified person;

(2) none of the secured parties of record is a financial institution as defined in Subsection (o) of this section;

(3) all secured parties of record are individuals; and

(4) the financing statement was filed by an individual not authorized or permitted to do so under Section 55-9-509 or 55-9-808 NMSA 1978.

(2) The filing office shall not charge a fee for the filing of an affidavit or a termination statement under this section. The filing office shall not return any fee paid for filing the financing statement identified in the affidavit, whether or not the financing statement is subsequently reinstated.

(3) In a case in which Section 55-9-501 NMSA 1978 provides that the proper office to file a financing statement is the office designated for the filing or recording of a record of a mortgage on real property, the secretary of state shall promptly transmit to that office copies of all communications regarding an affidavit filed under this section, including the affidavit itself, any termination statement filed under Subsection (d) of this section and any amendment filed or preliminary or final court order received pursuant to Subsection (g) or (h) of this section, and upon receipt the receiving office shall take the actions described herein.

(d) If an affidavit is filed under Subsection (b) of this section, the filing office shall promptly file a termination statement with respect to the financing statement identified in the affidavit and the qualified person who filed the affidavit. The termination statement shall indicate that it was filed pursuant to this section. Except as provided in Subsections (g) and (h) of this section, a termination statement filed under this subsection shall take effect thirty days after it is filed.

(e) On or before the next business day after a filing office files a termination statement under Subsection (d) of this section, it shall send to each secured party of record for the financing statement a notice advising the secured party of record that the termination statement has been filed. The notice shall be sent by certified mail, return receipt requested, to the address provided for the secured party in the financing statement.

(f) An individual indicated as a secured party of record on a financing statement for which a termination statement has been filed under Subsection (d) of this section may, before or after the termination statement takes effect, bring an action against the individual who filed the affidavit under Subsection (b) of this section seeking a determination that the financing statement was filed by a person entitled to do so under Section 55-9-509 or 55-9-808 NMSA 1978. No filing office nor any officer or employee of a filing office is a necessary party to any such action. An action under this subsection shall have priority on the court's calendar and shall proceed by expedited hearing. If the individual who filed the affidavit resides in this state, the exclusive venue in this state for the action shall be in the district court for the county where the individual principally resides in this state. If the individual who filed the affidavit does not reside in this state, the exclusive venue in this state shall be in the district court for the county where the filing office in which the financing statement was filed is located.

(g) In an action brought pursuant to Subsection (f) of this section, a court may, in appropriate circumstances, order preliminary relief, including but not limited to an order precluding the termination statement from taking effect or directing a party to take action to prevent the termination statement from taking effect. If the court issues such an order and the filing office receives a certified copy of the order before the termination statement takes effect as provided in Subsection (d) of this section, the termination statement shall not take effect and the filing office shall promptly file an amendment to the financing statement that indicates that an order has prevented the termination statement from taking effect. If such an order ceases to be effective by reason of a subsequent order or a final judgment of that court or by an order issued by another court, and the filing office receives a certified copy of the subsequent judgment or order, the termination statement shall become effective immediately upon receipt of the certified copy, and the filing office shall promptly file an amendment to the financing statement indicating that the termination statement is effective.

(h) If a court determines in an action brought pursuant to Subsection (f) of this section that the financing statement was filed by a person entitled to do so under Sections 55-9-509 and 55-9-808 NMSA 1978 and the filing office receives a certified copy of the court's final judgment or order before the termination statement takes effect, the termination statement shall not take effect and the filing office shall remove the termination statement and any amendments filed under Subsection (g) of this section from the files. If the filing office receives the certified copy after the termination statement takes effect and within thirty days after the final judgment or order was entered, the filing office shall promptly file an amendment to the financing statement that indicates that the financing statement has been reinstated.

(i) Except as provided in Subsection (j) of this section, upon the filing of an amendment reinstating a financing statement under Subsection (h) of this section, the effectiveness of the financing statement is retroactively reinstated and the financing statement shall be considered never to have been ineffective against all persons and for all purposes.

(j) A financing statement whose effectiveness was terminated under Subsection (d) of this section and has been reinstated under Subsection (h) of this section shall not be effective as against a person that purchased the collateral in good faith between the time the termination statement was filed and the time of the filing of the amendment reinstating the financing statement, to the extent that the person gave new value in reliance on the termination statement.

(k) (1) A person who violates Subsection (a) of this section shall be civilly liable to an injured qualified person for:

(A) actual damages caused by the violation;

(B) reasonable attorney fees; and

(2) Civil damages under Paragraph (1) of this subsection are in addition to any recovery to which the qualified person is entitled under Section 55-9-625 NMSA 1978, or under law other than this article.

(l) Neither the filing office nor any of its employees shall be subject to liability for the termination or amendment of a financing statement in the lawful performance of the duties of the office under this section.

(m) A person may not file an affidavit under this section with respect to a financing statement filed by a financial institution, as defined in Subsection (o) of this section or a representative of a financial institution.

(n) In this section, the term "qualified person" means an individual who, at the time the financing statement referred to in Subsection (b) of this section was filed, or within ten years prior to the time of filing, was:

(1) an elected or appointed official of this state or a governmental unit of this state as defined in Subsection (1) of Section 55-9-102 NMSA 1978 or an employee of such an official;

(2) an officer or employee of a federal, state or local judicial, prosecutorial or public defender office or program;

(3) an officer or employee of a federal, state or local law enforcement office, including a correctional, probation or parole officer or employee; or

(4) an officer or employee of an office designated in Section 55-9-501 NMSA 1978 as a place to file a financing statement.

(o) In this section, the term "financial institution" means a person that:

(1) is in the business of extending credit and servicing loans, including acquiring, purchasing, selling and brokering, or other extensions of credit; and

(2) where applicable, holds whatever license, charter or registration that is required to engage in such business.

The term includes banks, savings banks, savings associations, building and loan associations, credit unions, consumer and commercial finance companies, industrial banks, industrial loan companies, insurance companies, investment companies, installment sellers, mortgage servicers, sales finance companies and leasing companies.

(p) This section applies only to a filed financing statement that identifies as a debtor a qualified person and that was filed by a person not authorized to do so under Section 55-9-509 or 55-9-808 NMSA 1978. If the financing statement identifies more than one debtor, this section applies only to a debtor who is a qualified person."

SECTION 17. Section 55-9-515 NMSA 1978 (being Laws 2001, Chapter 139, Section 86, as amended) is amended to read:

"55-9-515. DURATION AND EFFECTIVENESS OF FINANCING STATEMENT--EFFECT OF LAPSED FINANCING STATEMENT.--

(a) Except as otherwise provided in Subsections (b), (e), (f) and (g) of this section, a filed financing statement is effective for a period of five years after the date of filing.

(b) Except as otherwise provided in Subsections (e), (f) and (g) of this section, an initial financing statement filed in connection with a manufactured-home transaction is effective for a period of thirty years after the date of filing if it indicates that it is filed in connection with a manufactured-home transaction.

(c) The effectiveness of a filed financing statement lapses on the expiration of the period of its effectiveness unless before the lapse a continuation statement is filed pursuant to Subsection (d) of this section. Upon lapse, a financing statement ceases to be effective and any security interest or agricultural lien that was perfected by the financing statement becomes unperfected unless the security interest is perfected otherwise. If the security interest or agricultural lien becomes unperfected upon lapse, it is deemed never to have been perfected as against a purchaser of the collateral for value.

(d) A continuation statement may be filed only within six months before the expiration of the five-year period specified in Subsection (a) of this section or the thirty-year period specified in Subsection (b) of this section, whichever is applicable.

(e) Except as otherwise provided in Section 55-9-510 NMSA 1978, upon timely filing of a continuation statement, the effectiveness of the initial financing statement continues for a period of five years commencing on the day on which the financing statement would have become ineffective in the absence of the filing. Upon the expiration of the five-year period, the financing statement lapses in the same manner as provided in Subsection (c) of this section, unless, before the lapse, another continuation statement is filed pursuant to Subsection (d) of this section. Succeeding continuation statements may be filed in the same manner to continue the effectiveness of the initial financing statement.

(f) 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. The filing officer may require proof of the debtor's authority to operate as a transmitting utility as a condition of filing the financing statement or an amendment.

(g) A record of a mortgage that is effective as a financing statement filed as a fixture filing under Subsection (c) of Section 55-9-502 NMSA 1978 remains effective as a financing statement filed as a fixture filing until the mortgage is released or satisfied of record or its effectiveness otherwise terminates as to the real property."

SECTION 18. Section 55-9-516 NMSA 1978 (being Laws 2001, Chapter 139, Section 87) is amended to read:

"55-9-516. WHAT CONSTITUTES FILING--EFFECTIVENESS OF FILING.--

(a) Except as otherwise provided in Subsection (b) of this section, communication of a record to a filing office and tender of the filing fee or acceptance of the record by the filing office constitutes filing.

(b) Filing does not occur with respect to a record that the secretary of state refuses to accept because:

(1) the record is not communicated by a method or medium of communication authorized by the filing office;

(2) an amount equal to or greater than the applicable filing fee is not tendered;

(3) the filing office is unable to index the record because:

(A) in the case of an initial financing statement, the record does not provide a name for the debtor; [or]

(B) in the case of an amendment or [correction] information statement, the record:

(i) does not identify the initial financing statement as required by Section 55-9-512 or 55-9-518 NMSA 1978, as applicable; or

(ii) identifies an initial financing statement whose effectiveness has lapsed under Section 55-9-515 NMSA 1978;

(C) in the case of an initial financing statement that provides the name of a debtor identified as an individual or an amendment that provides a name of a debtor identified as an individual that was not previously provided in the financing statement to which the record relates, the record does not identify the debtor's surname; or

(D) in the case of a record filed or recorded in the filing office described in Paragraph (1) of Subsection (a) of Section 55-9-501 NMSA 1978, the record does not provide a sufficient description of the real property to which it relates;

(4) in the case of an initial financing statement or an amendment that adds a secured party of record, the record does not provide a name and mailing address for the secured party of record;

(5) in the case of an initial financing statement or an amendment that provides a name of a debtor [which] that was not previously provided in the financing statement to which the amendment relates, the record does not:

(A) provide a mailing address for the debtor; or

(B) indicate whether the name provided as the name of the debtor is the name of an individual or an organization; [or

(i) a type of organization for the debtor;

(ii) a jurisdiction of organization for the debtor; and

(iii) an organizational identification number for the debtor or indicate that the debtor has none]

(6) in the case of an assignment reflected in an initial financing statement under Subsection (a) of Section 55-9-514 NMSA 1978 or an amendment filed under Subsection (b) of Section 55-9-514 NMSA 1978, the record does not provide a name and mailing address for the assignee; or

(7) in the case of a continuation statement, the record is not filed within the six-month period prescribed by Subsection (d) of Section 55-9-515 NMSA 1978.

(1) a record does not provide information if the secretary of state is unable to read or decipher the information; and

(2) a record that does not indicate that it is an amendment or identify an initial financing statement to which it relates, as required by Section 55-9-512, 55-9-514 or 55-9-518 NMSA 1978, is an initial financing statement.

(d) A record that is communicated to the filing office with tender of the filing fee, but which the secretary of state refuses to accept for a reason other than one set forth in Subsection (b) of this section, is effective as a filed record except as against a purchaser of the collateral [which] that gives value in reasonable reliance upon the absence of the record from the files."

SECTION 19. Section 55-9-518 NMSA 1978 (being Laws 2001, Chapter 139, Section 89) is amended to read:

"55-9-518. CLAIM CONCERNING INACCURATE OR WRONGFULLY FILED RECORD.--

(a) 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) [A correction] An information statement under Subsection (a) of this section 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 [a correction] an information statement; and

(3) provide the basis for the person's belief that the record is inaccurate and indicate the manner in which the person believes the record should be amended to cure any inaccuracy or provide the basis for the person's belief that the record was wrongfully filed.

(c) 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 Subsection (d) of Section 55-9-509 NMSA 1978.

(d) An information statement under Subsection (c) of this section 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 Subsection (d) of Section 55-9-509 NMSA 1978.

[(c)] (e) The filing of [a correction] an information statement does not affect the effectiveness of an initial financing statement or other filed record."

SECTION 20. Section 55-9-521 NMSA 1978 (being Laws 2001, Chapter 139, Section 92) is repealed and a new Section 55-9-521 NMSA 1978 is enacted to read:

"55-9-521. [NEW MATERIAL] FORM OF FINANCING STATEMENT AND AMENDMENT--RECORDS.--

(a) A filing office that accepts written records may not refuse to accept a written initial financing statement that is in the following form and format, except for a reason set forth in Subsection (b) of Section 55-9-516 NMSA 1978:

"UCC FINANCING STATEMENT

FOLLOW INSTRUCTIONS

A. NAME & PHONE OF CONTACT AT FILER (optional)

_________________________________________________

B. E-MAIL CONTACT AT FILER (optional)

__________________________________________________

C. SEND ACKNOWLEDGMENT TO: (Name and Address)

__________________________________________________

THE ABOVE SPACE IS FOR FILING OFFICE USE ONLY

1. DEBTOR'S NAME: Provide only one Debtor name (1a or 1b) (use exact, full name; do not omit, modify, or abbreviate any part of the Debtor's name), if any part of the individual Debtor's name will not fit in line 1b, leave all of item 1 blank, check here □ and provide the Individual Debtor information in item 10 of the Financing Statement Addendum (Form UCC1Ad)

1a. ORGANIZATION'S NAME

__________________________________________________________

OR 1b. INDIVIDUAL'S SURNAME

__________________________________________________________

FIRST PERSONAL NAME

_______________________________________________________

ADDITIONAL NAME(S)/INITIAL(S) SUFFIX

_______________________________________________________

1c. MAILING ADDRESS

_______________________________________________________

CITY STATE POSTAL CODE COUNTRY

_______________________________________________________

2. DEBTOR'S NAME: Provide only one Debtor name (2a or 2b) (use exact, full name; do not omit, modify, or abreviate any part of the Debtor's name), if any part of the Individual Debtor's name will not fit in line 2b, leave all of item 2 blank, check here □ and provide the Individual Debtor information in item 10 of the Financing Statement Addendum (Form UCC1Ad)

2a. ORGANIZATION'S NAME

_______________________________________________________

OR 2b. INDIVIDUAL'S SURNAME

_______________________________________________________

FIRST PERSONAL NAME

_______________________________________________________

ADDITIONAL NAME(S)/INITIALS(S) SUFFIX

_______________________________________________________

2c. MAILING ADDRESS

_______________________________________________________

CITY STATE POSTAL CODE COUNTRY

_______________________________________________________

3. SECURED PARTY'S NAME (or NAME of ASSIGNEE of ASSIGNOR SECURED PARTY) Provide only one Secured Party name (3a or 3b)

3a. ORGANIZATION'S NAME

_______________________________________________________

OR 3b. INDIVIDUAL'S SURNAME FIRST PERSONAL NAME

_______________________________________________________

ADDITIONAL NAME(S)/INITIAL(S) SUFFIX

_______________________________________________________

3c. MAILING ADDRESS

_______________________________________________________

CITY STATE POSTAL CODE COUNTRY

_______________________________________________________

4. COLLATERAL: This financing statement covers the following collateral

_______________________________________________________

5. Check only if applicable and check only one box. Collateral is

□ held in a Trust (see UCC1Ad, item 17 and instructions)

□ being administered by a Decedent's Personal

Representative

6a. Check only if applicable and check only one box.

□ Public-Finance Transaction

□ Manufactured-Home Transaction

□ A Debtor is a Transmitting Utility

6b. Check only if applicable and check only one box

□ Agricultural Lien

□ Non-UCC Filing

7. ALTERNATIVE DESIGNATION (if applicable)

□ Lessee/Lessor

□ Consignee/Consignor

□ Seller/Buyer

□ Bailee/Bailor

□ Licensee/Licensor

8. OPTIONAL FILER REFERENCE DATA:

_______________________________________________________

UCC FINANCING STATEMENT (Form UCC1)(Rev. 04/20/11)

UCC FINANCING STATEMENT ADDENDUM

FOLLOW INSTRUCTIONS

9. NAME OF FIRST DEBTOR: Same as line

1a or 1b on Financing Statement; if

line 1b was left blank because

individual Debtor name did not fit,

check here ____

9a. ORGANIZATION'S NAME

____________________________________ ____________________________________

OR 9b. INDIVIDUAL'S SURNAME

____________________________________

FIRST PERSONAL NAME

____________________________________

ADDITIONAL NAME(S)/INITIAL(S) SUFFIX THE ABOVE SPACE IS ____________________________________ FOR FILING

OFFICE USE ONLY

10. DEBTOR'S NAME: Provide (10a or 10b) only one additional Debtor name or Debtor name that did not fit in line 1b or 2b of the Financing Statement (Form UCC1)(use exact, full name; do not omit, modify, or abbreviate any part of the Debtor's name) and enter the mailing address in line 10c

10a. ORGANIZATION'S NAME

_______________________________________________________

OR 10b. INDIVIDUAL'S SURNAME

_______________________________________________________

INDIVIDUAL'S FIRST PERSONAL NAME

_______________________________________________________

INDIVIDUAL'S ADDITIONAL NAME(S)/INITIAL(S) SUFFIX

_______________________________________________________

10c. MAILING ADDRESS

_______________________________________________________

CITY STATE POSTAL CODE COUNTRY

_______________________________________________________

11. ___ ADDITIONAL SECURED PARTY'S NAME or

___ ASSIGNOR SECURED PARTY'S NAME: Provide only one

name (11a or 11b)

11a. ORGANIZATION'S NAME

_______________________________________________________

OR 11b. INDIVIDUAL'S SURNAME FIRST PERSONAL NAME

_______________________________________________________

ADDITIONAL NAME(S)/INITIAL(S) SUFFIX

_______________________________________________________

11c. MAILING ADDRESS

_______________________________________________________

CITY STATE POSTAL CODE COUNTRY

_______________________________________________________

12. ADDITIONAL SPACE FOR ITEM 4 (Collateral):

_______________________________________________________

13. ___ This FINANCING STATEMENT is to be filed [for record] (or recorded) in the REAL ESTATE RECORDS (if applicable)

14. This FINANCING STATEMENT:

___ covers timber to be cut

___ covers as-extracted collateral

___ is filed as a fixture filing

15. Name and address of a RECORD OWNER of real estate described in Item 16 (if Debtor does not have a record interest):

_______________________________________________________

16. Description of real estate:

_______________________________________________________

17. MISCELLANEOUS:

_______________________________________________________

UCC FINANCING STATEMENT ADDENDUM (Form UCC1Ad)(Rev. 04/20/11)".

(b) A filing office that accepts written records may not refuse to accept a written record in the following form and format except for a reason set forth in Subsection (b) of Section 55-9-516 NMSA 1978:

UCC FINANCING STATEMENT AMENDMENT

FOLLOW INSTRUCTIONS

A. NAME & PHONE OF CONTACT AT FILER (optional)

_______________________________

B. E-MAIL CONTACT AT FILER (optional)

_______________________________

C. SEND ACKNOWLEDGMENT TO: (Name THE ABOVE SPACE IS FOR

and Address) FILING OFFICE USE ONLY

_______________________________

1a. INITIAL FINANCING STATEMENT FILE NUMBER

_______________________________

1b.___ This FINANCING STATEMENT AMENDMENT is to be filed [for record] (or recorded) in the REAL ESTATE RECORDS

Filer: attach Amendment Addendum (Form UCC3Ad) and provide Debtor's name in item 13

2. ___ TERMINATION: Effectiveness of the Financing Statement identified above is terminated with respect to the security interest(s) of Secured Party authorizing this Termination Statement.

3. ___ ASSIGNMENT (full or partial): Provide name of Assignee in item 7a or 7b, and address of Assignee in item 7c and name of Assignor in item 9. For partial assignment, complete items 7 and 9 and also indicate affected collateral in item 8.

4. ___ CONTINUATION: Effectiveness of the Financing Statement identified above with respect to the security interest(s) of Secured Party authorizing this Continuation Statement is continued for the additional period provided by applicable law.

5. PARTY INFORMATION CHANGE:

Check one of these two boxes:

This change affects ___ Debtor or ___ Secured Party of record

AND Check one of these three boxes to:

___ CHANGE name and/or address: Complete item 6a or 6b; and item 7a or 7b and item 7c

___ ADD name: Complete item 7a or 7b, and item 7c

___ DELETE name: Give record name to be deleted in item 6a or 6b

6. CURRENT RECORD INFORMATION: Complete for Party Information Change - provide only one name (6a or 6b)

6a. ORGANIZATION'S NAME

_______________________________

OR 6b. INDIVIDUAL'S SURNAME FIRST PERSONAL NAME

_________________________________________________________

ADDITIONAL NAME(S)/INITIAL(S) SUFFIX _________________________________________________________

7. CHANGED OR ADDED INFORMATION: Complete for Assignment or Party Information Change - provide only one name (7a or 7b) (use exact, full name; do not omit, modify, or abbreviate any part of the Debtor's name)

7a. ORGANIZATION'S NAME

_________________________________

OR 7b. INDIVIDUAL'S SURNAME FIRST PERSONAL NAME

__________________________________________________________

ADDITIONAL NAME(S)/INITIAL(S) SUFFIX __________________________________________________________

7c. MAILING ADDRESS

__________________________________________________________

CITY STATE POSTAL CODE COUNTRY

__________________________________________________________

8. ___ COLLATERAL CHANGE: Also check one of these four boxes:

___ ADD collateral ___ DELETE collateral

___ RESTATE covered collateral ___ ASSIGN collateral

Indicate collateral: _________________________________

9. NAME OF SECURED PARTY OF RECORD AUTHORIZING THIS AMENDMENT: Provide only one name (9a or 9b) (name of Assignor, if this is an Assignment)

If this is an Amendment authorized by a DEBTOR, check here ___ and provide name of authorizing Debtor

9a. ORGANIZATION'S NAME

_______________________________

OR 9b. INDIVIDUAL'S SURNAME FIRST PERSONAL NAME

__________________________________________________________

ADDITIONAL NAME(S)/INITIAL(S) SUFFIX

__________________________________________________________

10. OPTIONAL FILER REFERENCE DATA:

_______________________________

UCC FINANCING STATEMENT AMENDMENT ADDENDUM

FOLLOW INSTRUCTIONS

11. INITIAL FINANCING STATEMENT FILE NUMBER: Same as item 1a on Amendment form

_______________________________

12. NAME OF PARTY AUTHORIZING THIS AMENDMENT: Same as item 9 on Amendment form

12a. ORGANIZATION'S NAME

______________________________

OR 12b. INDIVIDUAL'S SURNAME FIRST PERSONAL NAME

______________________________________________________

ADDITIONAL NAME(S)/INITIAL(S)

_______________________________THE ABOVE SPACE IS

SUFFIX FOR FILING

_______________________________ OFFICE USE ONLY

13. Name of DEBTOR on related financing statement (Name of a current Debtor of record required for indexing purposes only in some filing offices — see Instruction item 13). Provide only one Debtor name (13a or 13b) (use exact, full name; do not omit, modify, or abbreviate any part of the Debtor's name). See instructions if name does not fit.

13a. ORGANIZATION'S NAME

_______________________________

OR 13b. INDIVIDUAL'S SURNAME FIRST PERSONAL NAME

__________________________________________________________

ADDITIONAL NAME(S)/INITIAL(S) SUFFIX

__________________________________________________________

14. ADDITIONAL SPACE FOR ITEM 8 (Collateral):

__________________________________________________________

15. This FINANCING STATEMENT AMENDMENT:

__ covers timber to be cut, __ covers as-extracted collateral, __ is filled as a fixture filing

16. Name and address of a RECORD OWNER of real estate described in item 17 (if Debtor does not have a record interest):

__________________________________________________________

17. Description of real estate:

__________________________________________________________

18. MISCELLANEOUS

______________________________________

UCC FINANCING STATEMENT AMENDMENT ADDENDUM

(Form UCC3Ad) (Rev 04/20/11)"."

SECTION 21. Section 55-9-607 NMSA 1978 (being Laws 2001, Chapter 139, Section 104) is amended to read:

"55-9-607. COLLECTION AND ENFORCEMENT BY SECURED PARTY.--

(a) If so agreed, and in any event after default, a secured party:

(1) may notify an account debtor or other person obligated on collateral to make payment or otherwise render performance to or for the benefit of the secured party;

(2) may take any proceeds to which the secured party is entitled under Section 55-9-315 NMSA 1978;

(3) may enforce the obligations of an account debtor or other person obligated on collateral and exercise the rights of the debtor with respect to the obligation of the account debtor or other person obligated on collateral to make payment or otherwise render performance to the debtor, and with respect to any property that secures the obligations of the account debtor or other person obligated on the collateral;

(4) if it holds a security interest in a deposit account perfected by control under Paragraph (1) of Subsection (a) of Section 55-9-104 NMSA 1978, may apply the balance of the deposit account to the obligation secured by the deposit account; and

(5) if it holds a security interest in a deposit account perfected by control under [Paragraphs] Paragraph (2) or (3) of Subsection (a) of Section 55-9-104 NMSA 1978, may instruct the bank to pay the balance of the deposit account to or for the benefit of the secured party.

(b) If necessary to enable a secured party to exercise under Paragraph (3) of Subsection (a) of this section 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:

(1) a copy of the security agreement that creates or provides for a security interest in the obligation secured by the mortgage; and

(2) the secured party's sworn affidavit in recordable form stating that:

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

(B) the secured party is entitled to enforce the mortgage nonjudicially.

(1) undertakes to collect from or enforce an obligation of an account debtor or other person obligated on collateral; and

(2) is entitled to charge back uncollected collateral or otherwise to full or limited recourse against the debtor or a secondary obligor.

(d) A secured party may deduct from the collections made pursuant to Subsection (c) of this section reasonable expenses of collection and enforcement, including reasonable attorney fees and legal expenses incurred by the secured party.

(e) This section does not determine whether an account debtor, bank or other person obligated on collateral owes a duty to a secured party."

SECTION 22. A new Section 55-9-801 NMSA 1978 is enacted to read:

"55-9-801. [NEW MATERIAL] EFFECTIVE DATE.--The effective date of the provisions of this 2012 act is July 1, 2013."

SECTION 23. A new Section 55-9-802 NMSA 1978 is enacted to read:

"55-9-802. [NEW MATERIAL] APPLICABILITY.--

(a) Except as otherwise provided in this part, this 2012 act applies to a transaction or lien within its scope, even if the transaction or lien was entered into or created before this 2012 act takes effect.

(b) This 2012 act does not affect an action, case, or proceeding commenced before this 2012 act takes effect."

SECTION 24. A new Section 55-9-803 NMSA 1978 is enacted to read:

"55-9-803. [NEW MATERIAL] SECURITY INTEREST PERFECTED BEFORE EFFECTIVE DATE.--

(a) A security interest that is a perfected security interest immediately before this 2012 act takes effect is a perfected security interest under Chapter 55, Article 9 NMSA 1978, as amended by this 2012 act, if, when this 2012 act takes effect, the applicable requirements for attachment and perfection under Chapter 55, Article 9 NMSA 1978, as amended by this 2012 act, are satisfied without further action.

(b) Except as otherwise provided in Section 55-9-805 NMSA 1978, if, immediately before this 2012 act takes effect, a security interest is a perfected security interest but the applicable requirements for perfection under Chapter 55, Article 9 NMSA 1978, as amended by this 2012 act, are not satisfied when this act takes effect, the security interest remains perfected thereafter only if the applicable requirements for perfection under Chapter 55, Article 9 NMSA 1978, as amended by this 2012 act, are satisfied within one year after this 2012 act takes effect."

SECTION 25. A new Section 55-9-804 NMSA 1978 is enacted to read:

"55-9-804. [NEW MATERIAL] SECURITY INTEREST UNPERFECTED BEFORE EFFECTIVE DATE.--A security interest that is an unperfected security interest immediately before this 2012 act takes effect becomes a perfected security interest:

(a) without further action, when this 2012 act takes effect, if the applicable requirements for perfection under Chapter 55, Article 9 NMSA 1978, as amended by this 2012 act, are satisfied before or at that time; or

(b) when the applicable requirements for perfection are satisfied if the requirements are satisfied after that time."

SECTION 26. A new Section 55-9-805 NMSA 1978 is enacted to read:

"55-9-805. [NEW MATERIAL] EFFECTIVENESS OF ACTION TAKEN BEFORE EFFECTIVE DATE.--

(a) The filing of a financing statement before this 2012 act takes effect is effective to perfect a security interest to the extent the filing would satisfy the applicable requirements for perfection under Chapter 55, Article 9 NMSA 1978, as amended by this 2012 act.

(b) This 2012 act does not render ineffective an effective financing statement that, before this 2012 act takes effect, is filed and satisfies the applicable requirements for perfection under the law of the jurisdiction governing perfection as provided in Chapter 55, Article 9 NMSA 1978 as it existed before amendment. However, except as otherwise provided in Subsections (c) and (d) of this section and Section 55-9-806 NMSA 1978, the financing statement ceases to be effective:

(1) if the financing statement is filed in this state at the time the financing statement would have ceased to be effective had this 2012 act not taken effect; or

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

(A) the time the financing statement would have ceased to be effective under the law of that jurisdiction; or

(B) June 30, 2018.

(c) The filing of a continuation statement after this 2012 act takes effect does not continue the effectiveness of a financing statement filed before this 2012 act takes effect. However, upon the timely filing of a continuation statement after this 2012 act takes effect, and in accordance with the law of the jurisdiction governing perfection as provided in Chapter 55, Article 9 NMSA 1978, as amended by this 2012 act, the effectiveness of a financing statement filed in the same office in that jurisdiction before this 2012 act takes effect continues for the period provided by the law of that jurisdiction.

(d) Subparagraph (B) of Paragraph (2) of Subsection (b) of this section applies to a financing statement that, before this 2012 act 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 Chapter 55, Article 9 NMSA 1978, as it existed before amendment, only to the extent that Chapter 55, Article 9 NMSA 1978, as amended by this 2012 act, 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) A financing statement that includes a financing statement filed before this 2012 act takes effect and a continuation statement filed after this 2012 act takes effect is effective only to the extent that it satisfies the requirements of Part 5, as amended by this 2012 act, 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 Paragraph (2) of Subsection (a) of Section 55-9-503 NMSA 1978, as amended by this 2012 act. 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 Paragraph (3) of Subsection (a) of Section 55-9-503 NMSA 1978, as amended by this 2012 act."

SECTION 27. A new Section 55-9-806 NMSA 1978 is enacted to read:

"55-9-806. [NEW MATERIAL] WHEN INITIAL FINANCING STATEMENT SUFFICES TO CONTINUE EFFECTIVENESS OF FINANCING STATEMENT.--

(a) The filing of an initial financing statement in the office specified in Section 55-9-501 NMSA 1978 continues the effectiveness of a financing statement filed before this 2012 act takes effect if:

(1) the filing of an initial financing statement in that office would be effective to perfect a security interest under Chapter 55, Article 9 NMSA 1978, as amended by this 2012 act;

(2) the pre-effective-date financing statement was filed in an office in another state; and

(3) the initial financing statement satisfies Subsection (c) of this section.

(b) The filing of an initial financing statement under Subsection (a) of this section continues the effectiveness of the pre-effective-date financing statement:

(1) if the initial financing statement is filed before this 2012 act takes effect, for the period provided in unamended Section 55-9-515 NMSA 1978 with respect to an initial financing statement; and

(2) if the initial financing statement is filed after this 2012 act takes effect, for the period provided in Section 55-9-515 NMSA 1978, as amended by this 2012 act, with respect to an initial financing statement.

(1) satisfy the requirements of Part 5, as amended by this 2012 act, 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."

SECTION 28. A new Section 55-9-807 NMSA 1978 is enacted to read:

"55-9-807. [NEW MATERIAL] AMENDMENT OF PRE-EFFECTIVE-DATE FINANCING STATEMENT.--

(a) As used in this section, "pre-effective-date financing statement" means a financing statement filed before this 2012 act takes effect.

(b) After this 2012 act 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 Chapter 55, Article 9 NMSA 1978, as amended by this 2012 act. 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) Except as otherwise provided in Subsection (d) of this section, if the law of this state governs perfection of a security interest, the information in a pre-effective-date financing statement may be amended after this 2012 act takes effect only if:

(1) the pre-effective-date financing statement and an amendment are filed in the office specified in Section 55-9-501 NMSA 1978;

(2) an amendment is filed in the office specified in Section 55-9-501 NMSA 1978 concurrently with, or after the filing in that office of, an initial financing statement that satisfies Subsection (c) of Section 55-9-806 NMSA 1978; or

(3) an initial financing statement that provides the information as amended and that satisfies Subsections (c) of Section 55-9-806 NMSA 1978, is filed in the office specified in Section 55-9-501 NMSA 1978.

(d) If the law of this state governs perfection of a security interest, the effectiveness of a pre-effective-date financing statement may be continued only pursuant to Subsections (c) and (e) of Section 55-9-805 or Section 55-9-806 NMSA 1978.

(e) Whether or not the law of this state governs perfection of a security interest, the effectiveness of a pre-effective-date financing statement filed in this state may be terminated after this 2012 act 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 Subsection (c) of Section 55-9-806 NMSA 1978 has been filed in the office specified by the law of the jurisdiction governing perfection as provided in Chapter 55, Article 9 NMSA 1978, as amended by this 2012 act as the office in which to file a financing statement."

SECTION 29. A new Section 55-9-808 NMSA 1978 is enacted to read:

"55-9-808. [NEW MATERIAL] 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:

(a) the secured party of record authorizes the filing; and

(b) the filing is necessary under this part:

(1) to continue the effectiveness of a financing statement filed before this 2012 act takes effect; or

(2) to perfect or continue the perfection of a security interest."

SECTION 30. A new Section 55-9-809 NMSA 1978 is enacted to read:

"55-9-809. [NEW MATERIAL] PRIORITY.--This 2012 act determines the priority of conflicting claims to collateral. However, if the relative priorities of the claims are established before this 2012 act takes effect, Chapter 55, Article 9 NMSA 1978, as it existed before amendment, determines priority."

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